Government Should Do a Few Things and Do Them Well

by James Sherk

Matthew Yglesias should know better.

Yglesias is an intelligent liberal whose writings on occupational licensing and regulatory capture are hard to top. However, as Reihan Salam noted, Yglesias badly misunderstood conservative thinking when he recently opined that the Right would generally “prefer to see tax dollars wasted than well spent.” According to Yglesias, cost-effective government spending increases the demand for government, so conservatives would rather see the money wasted.

I’ve worked at the Heritage Foundation for seven years. I cannot recall ever hearing anyone in the conservative movement make that argument, publicly or privately. Indeed conservatives often try to make government operate more efficiently — only to face fierce liberal opposition.

Had Yglesias thought more about one of his examples, he would have seen this:

Liberals often argue that the government should spend more on transportation infrastructure. The best counterargument to this is that America has the highest cost structure for civil engineering projects in the world so spending more would lead to tons of waste. If some future reformers were to step up and bring U.S. costs down to French or Spanish levels, then suddenly the number of projects that pass cost-benefit scrutiny would soar and the public appetite for new infrastructure investments would soar with it. If you’re committed to keeping the government small, your best bet is to opportunistically align with rent-seeking elements and try to ensure that when public money is spent it’s spent wastefully.

Contra Yglesias’s thesis, conservatives routinely line up against the principal rent-seekers in the civil-engineering world: the building and trades unions. The Davis-Bacon Act effectively requires paying above-market wages and using union work rules on all federal construction projects. This inflates federal construction costs by 10 percent.

Repealing Davis-Bacon would make new federal constructions projects much more affordable for taxpayers. So what do conservatives do? They routinely support repealing or curtailing the Davis-Bacon Act, while liberals routinely oppose doing so.

Broadly speaking, conservatives want the government to do a few things and do them well. It is the providers of government services, especially unions, that have a financial stake in government inefficiency. They fight tooth and nail reforms that would make government more cost effective.

— James Sherk is senior policy analyst in labor economics at the Heritage Foundation.