Is Government Inefficiency Desirable?
Government inefficiency is not a metaphysical mystery nor an ideological incantation. It originates in two causes: the incentives of politicians and bureaucrats; and the need to constrain the capabilities of these government actors lest they become a full-fledged Leviathan. If one includes this last requirement, constrained government is efficient at a superior level, because tyranny is worse than inefficiency. Efficiency in a narrow economic sense requires entrepreneurship and discretion; in the case of government, this means arbitrary power.
Whoever said something like “fortunately we don’t have the government we pay for” was right. (The aphorism has been attributed to many sources, but my friend and co-blogger David Henderson thinks the original author was Charles “Boss” Kettering, the head of GM.)
This becomes more obvious as government power grows. On the one hand, more power means more opportunities to abuse it, that is, to use it in ways that certain citizens love but that harm other citizens; in other words, more state power means more official discrimination against certain citizens. On the other hand, the more power needs to be (hopefully) constrained, the most likely that Leviathan will be unable to supply simple public services in acceptable quality.
A column in the Wall Street Journal just gave a good illustration. Laura Saunders, a Wall Street Journal columnist who happened to have a tax issue with the IRS, recounts her recent adventures (“The Saturday I Spent Five-and-a-Half Hours in Line Waiting for the IRS,” Wall Street Journal, May 20, 2022). A taxpayer must make an appointment to meet an IRS bureaucrat, but there is no way to do it online and only 10% of phone callers get through. The alternative is a walk-in, only available on certain days and at certain places (by now, no walk-in days are available for the rest of 2022). From 8:30 in the morning on May 14, Mrs. Saunders waited in line for five hours and a half, mostly in a queue that stretched one block outside the building. Only five bureaucrats were assigned to that waiting line. One of Saunders’ companions in the queue, with whom she had exchanged email addresses, tested positive for Covid the next day…
A broader but certainly related question is how, ceteris paribus, a minimum level of decency, morality, propriety is encouraged or discouraged by different political regimes.