By Arnold Kling
Does the absence of a bottom line affect government behavior? Consider this story from the Washington Post about the “busy season” for GTSI, a company that sells technology products to government agencies.
Fall is coming, and for GTSI that means the end of the federal fiscal year is approaching and that civil servants are rushing to spend department funds before they revert to the U.S. Treasury on Oct. 1…
In September, GTSI’s distribution warehouse adds 15 or 20 workers to its usual staff of 45 to 50 people to handle accelerated shipments of computers and networking equipment. By next Monday, the company will begin staying open three hours later, until 9 p.m., so that its sales force can field last-minute calls from customers.
By the middle of the month, the company will extend its hours to 11 p.m. and open its doors on weekends as well. On the last day of the month, administrators and executives will join workers in the warehouse to help check orders for defects and load boxes before the midnight deadline.
“We sell as much on the last day of September as we do in the whole month of January,” said M. Dendy Young, chief executive of GTSI.
During the rush, the company’s largest suppliers, giants such as Cisco Systems Inc., Microsoft Corp. and Sun Microsystems Inc., usually pay for catered lunches and dinners for the 356 salespeople.
For Discussion. Bureaucrats believe that failure to spend money before the end of the fiscal year will lead to cuts in their budgets the following year. What rules might the government adopt that would produce a more rational incentive system for spending money?