Kate Marshall & Elliott Parker: Gov’t. doesn’t need to remove crabgrass, it just needs to work

The humorist P.J. O’Rourke once said, “The Democrats are the party that says government will make you smarter, taller, richer, and remove the crabgrass on your lawn. The Republicans are the party that says government doesn’t work and then they get elected and prove it.” How can we find a middle ground between overpromising and underperforming?

Americans have a history of distrusting government that dates back to at least the Revolution. But we also know government is necessary, and countries without well-functioning governments are terrible places to live.

Competitive private markets are good at many things, and the profit motive provides a clear reward structure. But private markets don’t consider the many ways one person’s actions can affect another, and some markets are not competitive, leading to higher prices and lower quality of goods and services. We distrust big corporations and big money just as much as we distrust big government, and our state government can be a small but effective counterbalance.

We complain about government being ineffective, and it certainly can be. But sometimes this is because we give government responsibility for fixing problems the private sector left undone or really screwed up, and then we assume government created the problems in the first place.

We complain about government bureaucracy, but the legislators we elect write detailed rules to prevent abuse of power, and agency managers are afraid of being embarrassed by scandal. Government employees learn they must follow the rules carefully, to avoid taking risks for which there are no rewards. Government often spends $1,000 to prevent $100 from being misused.

We complain about government employees having protected jobs, but this system was created for a reason. The federal civil service was created after the civil war to prevent political parties from treating government jobs as the spoils of war. We wanted to professionalize government service, and to reduce nepotism, partisanship, and favoritism. Elected politicians can make terrible managers, but sometimes the rules which insulate government employees from the politicians can also insulate some of them from being held accountable for their performance.

Though Americans spend less on government than those in most other developed countries, we still complain about the cost. Some of this is simply due to the nature of the services government provides, but much of it is due to the way our legislature structures incentives.

Our legislators don’t allocate funds for long-term investment in infrastructure, and then act shocked to discover agencies are using outdated technologies and their facilities are in disrepair.

To stabilize the budget, we need to save during good times in order to mitigate budget cuts and tax hikes in bad times. Yet, we sweep unspent funds from government agencies at the end of the year, and cut their budgets if they don’t spend them. This provides no incentive for agencies to cooperate in reducing costs, and we are then surprised when they waste money buying things they don’t need in order to preserve their budgets.

We want our government to be effective and our resources to be allocated efficiently, but to be successful our leaders cannot continually frame their proposals as an attack on public employees and on government itself.

Nevada can certainly do better than this.

People don’t spend other people’s money as frugally as they spend their own, and this is true for government agencies and large private companies. Regular audits are important to make sure public money is well spent.

However, nobody has a monopoly on good ideas, and if you want to know what really needs fixing, you need the cooperation of those who actually do the work. If you will just using audits and other means of investigation to embarrass public employees or justify deep budget cuts, you will have trouble really knowing what needs fixing. If you will make it clear audits will be used to reallocate existing resources from what doesn’t work to what does, then you will have lots of help.

We need to bring together all stakeholders, and we should engage the private sector as well as the public sector employees who work in the area of concern. We need to create a government culture that’s customer-service oriented, but you can’t do that if reform is seen as just an excuse for a purge.

We need to pay public servants a good wage, and then set high standards for integrity and accountability. We should also offer to pay our teachers well, in return for standards of performance that can weed out the small share of poor teachers who give the rest a bad name and that can place the focus on improved measurable outcomes for our children.

Longer-term decision making is important. The two-year election cycle creates poor incentives for elected politicians, particularly when they have only a few months to do their work. We need legislators to take more responsibility for the future. We need a different way of accounting for spending on infrastructure, perhaps like the private sector does, so money spent to get a future return is not treated like money wasted. Top priorities such as education require long-term strategic planning and the ability to rely on a revenue stream to reach such long term goals. One-shot projects create good sound bites but not necessarily good long term outcomes.

Finally, we should also look for lessons from other states, and stop trying to re-create the wheel. Other states have likely dealt with similar issues, such as tax policy or water rights, and we should start any discussion by looking at the experience of other states. Where the experience of other states provides little guidance, we should experiment with a range of pilot programs to determine what works best, and take the time necessary to do the job right.

Kate Marshall recently completed two terms as Nevada State Treasurer. Elliott Parker is professor of economics at the University of Nevada, Reno.