Waiting For Perfection From The Public Sector Is A Recipe For Inefficiency

I’ve been waiting a while for a good pretext to present my case that we ought to care less about fraud and abuse in public services, and conservative education policy expert Rick Hess making the case for being meaner to teachers actually illustrates the point perfectly:

I trust that few RHSU readers will mistake my concerns for squeamishness or kind-heartedness. Any evaluation system will entail some misidentification. Some individuals will be unfairly terminated. That’s the way of the world, and I can live with that. I’m not worried about imperfections and I’m not holding out hope for a perfectly “fair” system.

That’s exactly right. If you have a system that tells you who to fire and who to give a raise to that’s easy to implement and gives the right answer 15 percent of the time, that’s a very useful system. On balance, it’ll improve the performance of your organization. And it’ll also lead to some unfair terminations and undeserved promotions. And that’s fine. A myopic focus on never making a mistake is going to be counterproductive.

But this is a much more generally applicable point about the public sector. Private sector employers take it for granted that some waste, fraud, and abuse is going to happen. I use CAP envelops for my personal mailing needs. If you go to Nado’s Peri-Peri in my neighborhood and ask for a glass of water with your meal, they’ll give you the same empty glass that they’d give you if you ordered a soda and nothing’s stopping you from filling up at the soda fountain. In both cases, the view is that perfectly safeguarding against abuse by employees or customers would be counterproductive. The costs in terms of monitoring, compliance, and lost morale would be worse than accepting a small amount of waste. But in the public sector, any quantity of “waste” becomes a big scandal even though seeking perfect compliance is often much more time consuming and costly than just accepting that you may have some small quantity of fraud in your food stamp rolls.