The Antiplanner’s Law of Good Government

Many libertarians argue that state governments do a better job than the federal government, and local governments are the best of all. Anyone who has dealt with a city council or planning commission, however, soon realizes that cities can be as inefficient and undemocratic as the feds.

Advocates of small government argue that government would work better if only it weren’t so large. Yet students of nineteenth century American history know that the federal government, though tiny then compared with today, was subject to proportionately as much pork barrel and waste as it is today.

After more than three decades looking at government and government planning, I’ve come to realize the flaw in these arguments. And so I’ve formulated the Antiplanner’s Law of Good Government.

Good government depends not on its size or geographic scope but on the narrowness of its mission and the alignment of its incentives with that mission.

A government agency with a single, narrowly defined goal is going to work far better than one with nebulous or numerous goals. Tell the U.S. military to defeat another country’s army, and they can do it. Tell it to resolve centuries-old religious conflicts and bring democracy to a region that can barely be considered a nation, and it will falter.

Peter Drucker traced the downfall of U.S. education to the time when the federal government decided schools should teach more than the three-Rs; that they should also be the venue for assimilating blacks and other minorities into white society.

“Government will malperform if an activity is under pressure to satisfy different constituencies with different values and different demands,” wrote Drucker. “Performance requires concentration on one goal.”

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In the short run, an agency with a narrow mission can accomplish a lot. But in the long run, if that agency’s incentives are not aligned with its mission, it will have problems. It will suffer mission creep.

Mission creep begins when someone discovers that the rewards for doing something that is not a part of the agency’s mission are greater than those for fulfilling the mission. Agency leaders soon come to believe that their real mission is to do those things that are most rewarding, not whatever was its original goal.

In 1952, the Forest Service was proud of the fact that it was one of the few federal agencies that actually made money. It viewed this profit as evidence that it was successfully accomplishing its mission of managing the national forests in the public interest. But over the next two decades, forest managers learned that they could keep a nearly unlimited share of timber receipts. Money-losing timber sales became more rewarding than ones that made money.

By 1976, most national forests lost money and the Forest Service as a whole was on its way to losing $1 billion per year. (Today it loses something like $4 billion per year.) Rather than take this as evidence that they were doing something wrong, forest managers piously observed that, “We’re the government. We’re not supposed to make money.”

In 1960, hundreds of thousands of people were locked up in state mental homes. But new medicines made it possible for these people to function normally. So the federal government encouraged the states to close these hospitals and promised that the National Mental Health Service would monitor them to make sure they took their medication.

However, as the former assistant director of the Mental Health Service documented in a book titled Nowhere to Go, the mental health clinics soon realized that mentally-ill people do not provide a very powerful political constituency. So the clinics started serving middle-class people — people Torrey described as the “worried well” — with marriage counseling and other therapies. Eventually, the clinics forgot about most of the truly mentally ill, who eventually made up much of the homeless population in our cities in the 1970s and 1980s.

If we can’t give an agency a narrow mission and find a way to align its incentives with that mission, we would be better off not having the agency. It will do more harm than good.

In an urban context, this means it makes sense to have local sewer districts, water districts, and so forth. As soon as we start talking about regional districts with broad authority over lots of different urban services, the mission gets so vague that it becomes certain that the agencies will founder. Their decisions will be based on politics — which special-interest group has the most power — rather than science or engineering.

Unlike some, I am not anti-government. I just believe that government can only work in certain narrow contexts and that the Antiplanner’s Law of Good Government provides the best definition of those contexts.