The state of California faces a $42 billion budget deficit, and a writer for the Sacramento Bee suggests that the solution is performance-based budgeting. In other words, set “clear and measurable goals and objectives” for each government program and “hold managers accountable” to those goals.
Sounds like a great idea . . . except the federal government already tried it and it didn’t work. In 1993, Congress passed the Government Performance Results Act (GPRA). In essence, GPRA directed every federal agency to set “results-oriented goals” and then to write annual reports revealing how well they met those goals. The only practical effect of this law is to add to the red tape that agency officials must deal with every year.
One problem is that many if not most of the goals set by the agencies are not results-oriented, i.e., outputs, but are inputs. The Forest Service, for example, has a goal of reducing fire hazards on so many acres each year. That’s an input. The output might be how many acres of wildfire burn each year, but the Forest Service doesn’t want to be held responsible for that.
One answer to that is to have the legislature, not the agencies, define the goals. In theory, that makes more sense, but it doesn’t solve the underlying problem, which is that the goals of legislators are often quite different from those of the taxpayers. Legislators see nothing wrong with taking as much money from general taxpayers as possible and spending it in their states or districts. Since every legislator wants to do this, it inevitably leads to budget deficits.
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Performance-based budgeting provides a weak check against government agencies that aren’t doing a worthwhile job. But it provides no check against legislators who are doing their job — at least, as most of them perceive their job, which is to funnel as much tax money into their districts as possible so they will get re-elected.
It is easy to say that, if the voters don’t like it, they can vote the legislators out. That’s hard to do when the incumbents get campaign contributions from the special interests who benefit from the pork. Even without that barrier, too many voters are likely to put the benefits they get from pork over the costs to the state or nation as a whole.
The lesson, which most Americans understood until about a century ago, is to keep government small. As stated in a quote attributed to several nineteenth-century writers but whose source is really unknown, democracy “can only exist until the voters discover that they can vote themselves largesse from the public treasury.”
The United States kept such largesse to a minimum for more than a century. But in the last 60 years, it has gotten out of control. Our future is bleak unless we can get it under control, and performance-based budgeting, while a part of the answer, is not the real solution, which is to shrink the size of government.
Why not just outlaw fractional reserve banking instead.
The confusion with inputs versus outputs seems to be a design characteristic of the human brain (or at least a characteristic of those who seek public sector employment). I have been a quality manager on public works projects for nine years. The confusion between inputs and outputs is a consistent characteristic of these projects, as is the confusion between performance criteria and prescriptive requirements. In a paper on quality control and quality assurance several years ago, I called this the “Better ingredients, better pizza,” fallacy.
I’m with wetmore.
I lived in CA for many years in Sacto. The lege cannot govern due to the numerous conflicting initiatives tying their hands. Among other things.
Perf-based budgeting will not fix the many broken wheels in that government, nor will a recall, nor will switching the party in power, nor will shrinking the size of government without working for at least a half-century to change the way we are educated, the way our society wastes everything, the live-work gap, etc.
As for so many other prescriptions offered here, dropping everything in a day and installing the preferred ideological solution won’t work without much pain – the cure is worse than the disease.
DS
You know, for all the kerfuffle on this site from the ideologues about waste and growth in th’ gummint, there sure is a blind eye toward the waste and growth in their favorite fetish:
here
Jus’ sayin’.
DS
The image shows in preview. Much more compelling that way. I tried.
DS
I wonder if performance based budgeting might have the perverse effect of substantially increase expenditure in an environment where the performance of government is consistently over-estimated and politicians’ ideals far exceed the reality of what a bureaucracy can achieve. A program’s failure to reach a clear target will tend to increase demand for resources for that program. If you put all the programs and list their objectives on a spreadsheet and find fails next to 90% of them – isn’t that a signal for more spending rather than less?
Highwayman: fail. As usual.
And just in case there is any doubt that governments are extraordinarily and consistently bad at what they do, consider the following interview of Ronald Coase (1991 Nobel prize economist) in Reason. And this was in 1997, when government was smaller:
Reason: Can you give us an example of what you consider to be a good regulation and then an example of what you consider to be a not-so-good regulation?
Coase: This is a very interesting question because one can’t give an answer to it. When I was editor of The Journal of Law and Economics, we published a whole series of studies of regulation and its effects. Almost all the studies–perhaps all the studies–suggested that the results of regulation had been bad, that the prices were higher, that the product was worse adapted to the needs of consumers, than it otherwise would have been. I was not willing to accept the view that all regulation was bound to produce these results. Therefore, what was my explanation for the results we had? I argued that the most probable explanation was that the government now operates on such a massive scale that it had reached the stage of what economists call negative marginal returns. Anything additional it does, it messes up. But that doesn’t mean that if we reduce the size of government considerably, we wouldn’t find then that there were some activities it did well. Until we reduce the size of government, we won’t know what they are.
Reason: What’s an example of bad regulation?
Coase: I can’t remember one that’s good. Regulation of transport, regulation of agriculture– agriculture is a, zoning is z. You know, you go from a to z, they are all bad. There were so many studies, and the result was quite universal: The effects were bad.
Thanks a lot asshole.
Nice, very nice.
It’s bullshit with you libertarians, you all preach about this ultra capitalism crap, mean while you exploit the public domain to it’s fullest!
If Randal O’Toole or Wendel Cox were putting out constructive criticism, that would be great. Though that would mean being fair, reasonable and not attacking railroads & transit for the sake of them being railroads & transit.