In last night’s debate, Michele Bachmann raised a not-so-trivial question: was Gov. Rick Perry’s Gardasil decision influenced by the fact that his former chief of staff had gone to work for Merck? Perry’s quick-on-his-feet reply was that having raised $30 million for his gubernatorial campaign, he couldn’t be bought for a mere $5,000 donation from Merck.

But wait a second. What about personal loyalty? A chief of staff is a consigliere. You don’t put someone in that job unless you know and trust her to manage traffic, to provide strategic guidance, and much else. Is it at least possible that Perry was influenced by his former chief of staff, and inclined to think well of a business enterprise that provided his former chief of staff with a lucrative new job opportunity? This has nothing to do with a campaign donation. It has to do with the ways in which the revolving door between government and the regulated private sector shapes the worldview of people in both worlds.

In a similar vein, many private contractors are veterans of government service. Defense contractors, for example, often hire retired military personnel, including very senior retired military personnel. One reason why “government” might not be such a shrewd customer is that “government” refers to actual human beings who have actual relationships with “private contractors,” who could very well be former comrades-in-arms, veterans of campaign battles, etc. And of course many people working in “government” are cognizant of the fact that they might find lucrative job opportunities in the “private sector” in the future.

In 1998, Edward Glaeser and Anne Morrison Piehl wrote a fascinating paper on a related subject:

This paper presents a model of prosecutors’ decision-making processes in which prosecutors (both federal and state) internalize some of the benefits of reducing crime, but also care about developing their own human capital. Since U.S. attorneys make their decision first, they have the opportunity to take the cases that will further their human capital development, knowing that the local district attorneys will handle the other cases. Using two surveys on prison admissions, we find that defendants who are better educated, richer, married, white, have higher-paying occupations more likely to be incarcerated in the federal system. Conversely, state prisons are more likely to incarcerate individuals who are particularly likely to be difficult prisoners, despite the supposed advantages of federal prisons in dealing with the most dangerous criminals. [Emphasis added]

POGO is advancing a model in which there is something called the federal government and another thing called private contractors, and the former is better at doing tasks X, Y, and Z than the latter. My take is that both the federal government and the private sector are congeries of institutions and incentive structures, some of which work much better than others. The public sector suffers from a structural lack of transparency and accountability because the incentive structures tend to be very rigid and profit in the system is of the hidden rather than the explicit variety. And the cost-consciousness that tends to restrain private firms contracting with other private firms is badly undermined when government contracts with private firms.