Yes, More Efficient Government Helps Taxpayers

(cc photo by rollingrck)

(cc photo by rollingrck)

One of the most unfortunate trends in American politics is the tendency of the conservative and libertarian types who are ideologically predisposed to be aware of the problems with public sector programs to be totally uninterested in actually making the public sector work better. Thus you get things like Tad DeHaven from the Cato Institute launching an on attack on public sector leaders who try to make the public sector more efficient that condemns recommendations of a “pie-in-the-sky ‘good government’ variety,” ignoring considerable evidence that good government is a key driver of prosperity.

DeHaven even winds up advancing the odd assertion that “[m]aking government ‘more efficient’ is all well and good, but if the “savings” just get plowed into other programs – as has been the case in Indiana – then taxpayers aren’t any better off.” That’s nuts. Consider a state that spends money on different programs that are supposed to reduce the level of crime. The state has prisons. The state has police officers. The state has parole officers. And within those broad fields of endeavor, different kinds of things are happening. It matters a great deal to taxpayers whether resources are being allocated efficiently inside that system. If it turns out that the marginal dollar spent on police salaries is less valuable than the marginal dollar spent on literacy education programs for prisoners, then cutting the size of the police force and expanding literacy education will reduce crime, thus benefitting taxpayers. Alternatively, if it turns out that reducing spending on prison and increasing the number of police officers will reduce crime, that would also benefit taxpayers.

You could go on like this. If we’re considering two transportation proposals, and one costs 20 percent more but is much more useful than agreeing to the net increase in spending is probably the more beneficial choice for taxpayers.

Debates about the overall size and costliness of the public are inevitable and healthy. But what’s not healthy is to have a politics that’s completely dominated by this question to the exclusion of all others. There’s a huge difference between dollars spent on useful infrastructure and dollars spent on pointless boondoggles. There’s a big difference between dollars spent on schools that help kids learn and schools that don’t. There’s a big difference between paying the salary of a barber cartel enforcer and paying the salary of a regulator who’s preventing deadly oil spills. This stuff matters enormously, but if our overall political conversation insists on ignoring it we’re bound to get it wrong.