Monday, June 29, 2009

"Revolution at the Roots" by William Eggers and John O'Leary

William D. Eggers and John O’Leary. Revolution at the Roots: Marking Our Government Smaller, Better, and Closer to Home. New York: The Free Press, 1995.

The authors argue that smaller sized governments are more efficient. They argue government should concentrate on its primary functions. It should decentralize functions and shift more political power to the communities and to people. It should limit how much it can be allowed to grow. It should find ways to encourage competition among public functions.

Public employees are generally efficient, and they work best if their efforts are targeted towards when most needs to be done. While many advocates of smaller government concentrate on getting rid of waste, the authors argue that one also needs to look at how to make the good portions of government work more efficiently at smaller sizes.

Voters are rejecting higher taxes, as noted by several examples where Governors who raised taxes were defeated for reelection.

An example of wasteful management was when the Indianapolis Parks and Recreation Department sought to spend all the funds at the end of their budget year, so they pre-purchased chalk for lining sports fields by ordering 40 tons of chalk. Then the Department began spray painting fields instead, leaving the mass purchase of chalk to waste. The Mayor, Stephen Goldsmith, observed this was the result of a system that encourages budgets to be spent, or else they are cut in future years, and used this to redesign how city government should operate. Performance and productivity are what matters, not spending.

The authors stress we should not only seeking making government operate better but seeing that government reaches goals that is important. They encourage debate over what government should seek to accomplish.

The authors applaud efforts of government officials to be entrepreneurs yet warn they are using public money, not private funds. The risk in the public sector is taxpayers may be hurt, which public managers do not appreciate as directly as do private sector managers who risk their firm’s funds. Government should focus on its core objectives rather than seeking new functions beyond their scope, according to the authors. They note how the city government of Visalia, California sought to increase revenues by going into the hotel business and spent $24 million for a hotel that was appraised for $10 million.

It is hard to remove an inefficient government unit as its benefits are often more easily seen than are its costs. The authors recommend being cautious when creating new programs. Government should have a guiding philosophy as to what it is meant to do and it should stick to its accomplishing its overall aims.

The authors note that in 1990, 14.4% of Gross National Product was spent on government social spending compared to 6.7% in 1960. In 1991, there were 75.8 violent crimes per 10,000 people compared to 16.1 in 1960.

The authors favor increasing competition within government services. They believe this can be accomplished through such techniques as bidding out services, allowing private sector competition to government services, providing vouchers for holders to choose private sector offerings, selling or leasing government assets, decentralizing services to more community level organizations, assistant private infrastructure development, increased deregulation of the private sector, etc. Mayor Ed Rendell of Philadelphia claimed he opened over twenty agencies to competition which has led to annual savings of over $34 million.

The politicization of government creates a resistance to making it more efficient. Public officials often put politics ahead of efficiency.

Government should work to solve the root of problems rather than treat the symptoms of the problem. Managers should examine how to solve problems.

The authors argue that business location and expansion would be better assisted by the public sector by easing the permitting process better. This could be done by simplifying regulatory, tax, and legal requirements. The authors believe this is more important to businesses than offers of financial assistance and providing job training programs.


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