Why the Federal Government Fails - Cato Institute Policy Analysis 777 - Chris Edwards | Executive Summary:
July 27, 2015 - "Most Americans think that the federal government is incompetent and wasteful.... Scholarly studies support the idea that many federal activities are misguided and harmful. A recent book on federal performance by Yale University law professor Peter Schuck concluded that failure is 'endemic.'
"What causes all the failures?
"First, federal policies rely on top-down planning and coercion. That tends to create winners and losers, which is unlike the mutually beneficial relationships of markets. It also means that federal policies are based on guesswork because there is no price system to guide decisionmaking. A further problem is that failed policies are not weeded out because they are funded by taxes, which are compulsory and not contingent on performance.
"Second, the government lacks knowledge about our complex society. That ignorance is behind many unintended and harmful side effects of federal policies....
"Third, legislators often act counter to the general public interest. They use debt, an opaque tax system, and other techniques to hide the full costs of programs. Furthermore, they use logrolling to pass harmful policies that do not have broad public support.
"Fourth, civil servants act within a bureaucratic system that rewards inertia, not the creation of value....
"Fifth, the federal government has grown enormous in size and scope.... Failure has increased
as legislators have become overloaded by the vast array of programs they have created. Today’s federal budget is 100 times larger than the average state budget, and it is far too large to adequately oversee.
"Management reforms and changes to budget rules might reduce some types of failure. But the only way to create a major improvement in performance is to cut the overall size of the federal government."
Read more: http://object.cato.org/sites/cato.org/files/pubs/pdf/pa777.pdf
July 27, 2015 - "Most Americans think that the federal government is incompetent and wasteful.... Scholarly studies support the idea that many federal activities are misguided and harmful. A recent book on federal performance by Yale University law professor Peter Schuck concluded that failure is 'endemic.'
"What causes all the failures?
"First, federal policies rely on top-down planning and coercion. That tends to create winners and losers, which is unlike the mutually beneficial relationships of markets. It also means that federal policies are based on guesswork because there is no price system to guide decisionmaking. A further problem is that failed policies are not weeded out because they are funded by taxes, which are compulsory and not contingent on performance.
"Second, the government lacks knowledge about our complex society. That ignorance is behind many unintended and harmful side effects of federal policies....
"Third, legislators often act counter to the general public interest. They use debt, an opaque tax system, and other techniques to hide the full costs of programs. Furthermore, they use logrolling to pass harmful policies that do not have broad public support.
"Fourth, civil servants act within a bureaucratic system that rewards inertia, not the creation of value....
"Fifth, the federal government has grown enormous in size and scope.... Failure has increased
as legislators have become overloaded by the vast array of programs they have created. Today’s federal budget is 100 times larger than the average state budget, and it is far too large to adequately oversee.
"Management reforms and changes to budget rules might reduce some types of failure. But the only way to create a major improvement in performance is to cut the overall size of the federal government."
Read more: http://object.cato.org/sites/cato.org/files/pubs/pdf/pa777.pdf
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