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Are Government Managers Less Concerned with Efficiency than Private Sector Managers?  

The views expressed are those of the author and do not necessarily reflect the views of ASPA as an organization.

By John Pearson
August 13, 2018

We often hear that government is not efficient, that there is just not the same pressure on government managers to achieve efficiency as there is in the private sector. A PATimes article published on July 30, 2018, summarizes this belief:

Efficiency is built into the culture of every private organization – it must or the organization will quickly cease to exist.

This same pressure for efficiency does not exist with government.

I would argue that there is tremendous pressure on most government managers to use their resources efficiently.

Government managers feel pressure to produce from the legislature, the courts, the press, individual customers, interest groups and stakeholders. Pressure for greater efficiency builds up especially when an agency experiences a backlog or otherwise isn’t meeting its objectives.

Near the end of my career, I observed some government employees working so hard they burned out and had to switch jobs. I saw some people consistently putting in extra hours per week. I saw people talking fast, typing fast, trying to squeeze out a little extra production every day – one more memo, one more email answered, one more meeting.

Many government employees act like amateur economists. They recommend what they believe are high return investments in IT, training or other areas. They make recommendations to alter work methods to save money. They question the priority given to certain efforts. They suggest allocating personnel or other resources in a different way to achieve more output. All of these behaviors indicate government employees are very aware of efficiency issues and want to improve their agency’s output.

We must keep in mind that a great deal of government work now is carried out by contract employees who work for profit-making organizations. They most certainly are under pressure to keep costs down—to find efficient methods of production—so their companies can make a profit. I saw contract employees work all night several times to meet deadlines.

Think of the managers of the firefighters we see on TV who are responding to the fires in western states. We can be sure they are trying to deploy their resources efficiently – to get those fires out as quickly and safely as possible with the resources at hand.

We can be pretty sure the managers at the Transportation Safety Administration are doing all they can to keep air travel safe from terrorist attack. And at the Federal Aviation Administration, they are trying hard to maintain their great record of airline safety. Some have charged that these agencies could operate more efficiently – achieve the same high quality outcomes for less cost. That’s certainly a possibility. We can observe the high quality outcomes. We can be less certain efficiency can be improved at these agencies.

The courts are one area of government where efficiency counts for little. The courts decide what the constitution or the statutes mean. They are applying a legal process. They aren’t looking for the most efficient solution to issues.

Legislators know they must make decisions that have the greatest utility for their constituents. Legislators are utility maximizers which means they are very concerned with efficiency.

The recent experience of the Thai government officials (charged with rescuing 12 boys and their coach trapped for 10 days deep in a flooded cave) demonstrates that circumstances can push government managers to achieve exceptional performance. Thai officials had the good fortune of having experts in under water cave rescue available from the U.S., Australia, the U.K. and other countries. But Thai government officials were ultimately in charge. The situation was dire. Every day threatened more flooding and lowered the chances of rescue. The rescue team analyzed the situation and determined the most promising rescue method. The boys were not trained scuba divers and might panic if forced to dive. The team analyzed their options and practiced the chosen option before putting it action. The solution included sedating the boys and individually escorting them two and a half miles with full-face masks for five hours through dangerous caves that were totally underwater in places. No underwater cave rescue of this complexity had ever been achieved — but all 12 boys and their coach were rescued.

Having said all this, I have also observed some employees who did not work so hard, who took advantage of the job security of government jobs. I suspect that in some cases government employees receive higher-than-market rates of pay and benefits or benefit from more lenient work rules. In such situations, it is hard for government managers to achieve the efficiency of private organizations.

I would never argue that government organizations are going to equal or outperform private businesses. The economic performance of the former Soviet Union and the communist satellite countries that practiced state socialism was consistently dismal. One major reason why the communist bloc fell apart in Eastern Europe in the late 80’s was that people wanted a chance at better economic performance with a free market approach.

In summary, government managers are under great pressure to produce efficiently, but they do not necessarily achieve the efficiency found in the private sector.

Author: John Pearson recently retired from a lengthy career in the federal government where he was a program analyst. He has an MPA and a bachelor’s degree in economics. He now writes columns reflecting on his experience in government. His email is [email protected].

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