Gov Star
Last month, McKinsey put out a nice paper on the productivity, or lack thereof, of US government. After all, productivity gains are the only thing that is going to allow us citizens to get both lower taxes and better services, and in an increasingly complex world, that's just what everyone is clamoring for.
Easier said than done, though, right? It doesn't take a hardcore capitalist to know that one of the main drivers of productivity in the private sector is competition. That is, if you've got two companies duking it out for your business, they'll get more and more efficient in delivering their product or service to you. But governments are often in the business of doing things no one else can do, like defending the homeland or inspecting drugs or preserving wildlife ranges. Absent competition, and the spoils of victory for those who succeed and the threat of oblivion for those who fail, governments often do not innovate or improve the way we citizens would want them to.
In some cases, you can introduce competition into government work, and I would argue that you should where you can. But in some cases you can't. So what's left to juice the productivity equation? The brainiacs at McKinsey offer another prod that's used by the private sector: accountability.
Publicly-traded companies, for example, have services like Morningstar, which dissect a company's performance, management, and financials for potential equity investors. Ratings agencies like S&P and Moody do the same for bond issues. There's even an equivalent service for non-profits, called Guidestar, whose users are potential funders, whether individual or institutional, who want to know which charities are well-run and get an objective look at their missions, strategies, and numbers.
The authors of the McKinsey paper wonder why there can't be a "Gov Star" that does the same for government agencies. In fact, those same ratings agencies mentioned above who shine a spotlight on corporations who float a bond issue do this whenever a government entity wants to do the same, thus performing a valuable public service (which the floater pays for) by informing the investing community about what they're getting into if they decide to put up the money to buy a muni bond.
That sort of transparency is invaluable in compelling issuers to get their act together: looking sloppy translates into a poor rating from the ratings agencies, which increases the cost of floating a bond. Could not this principle work for government agencies in general?
Performance measurement may not be the sexiest of cocktail party topics, and (as you can imagine) career bureaucrats tremble at the thought of having the spotlight shone on their heretofore hidden corner of the world. But absent competition, which effectively rewards good performance and punishes bad performance, the transparency that comes from accountability via publicly reported performance measures isn't a bad Plan B.
Last month, McKinsey put out a nice paper on the productivity, or lack thereof, of US government. After all, productivity gains are the only thing that is going to allow us citizens to get both lower taxes and better services, and in an increasingly complex world, that's just what everyone is clamoring for.
Easier said than done, though, right? It doesn't take a hardcore capitalist to know that one of the main drivers of productivity in the private sector is competition. That is, if you've got two companies duking it out for your business, they'll get more and more efficient in delivering their product or service to you. But governments are often in the business of doing things no one else can do, like defending the homeland or inspecting drugs or preserving wildlife ranges. Absent competition, and the spoils of victory for those who succeed and the threat of oblivion for those who fail, governments often do not innovate or improve the way we citizens would want them to.
In some cases, you can introduce competition into government work, and I would argue that you should where you can. But in some cases you can't. So what's left to juice the productivity equation? The brainiacs at McKinsey offer another prod that's used by the private sector: accountability.
Publicly-traded companies, for example, have services like Morningstar, which dissect a company's performance, management, and financials for potential equity investors. Ratings agencies like S&P and Moody do the same for bond issues. There's even an equivalent service for non-profits, called Guidestar, whose users are potential funders, whether individual or institutional, who want to know which charities are well-run and get an objective look at their missions, strategies, and numbers.
The authors of the McKinsey paper wonder why there can't be a "Gov Star" that does the same for government agencies. In fact, those same ratings agencies mentioned above who shine a spotlight on corporations who float a bond issue do this whenever a government entity wants to do the same, thus performing a valuable public service (which the floater pays for) by informing the investing community about what they're getting into if they decide to put up the money to buy a muni bond.
That sort of transparency is invaluable in compelling issuers to get their act together: looking sloppy translates into a poor rating from the ratings agencies, which increases the cost of floating a bond. Could not this principle work for government agencies in general?
Performance measurement may not be the sexiest of cocktail party topics, and (as you can imagine) career bureaucrats tremble at the thought of having the spotlight shone on their heretofore hidden corner of the world. But absent competition, which effectively rewards good performance and punishes bad performance, the transparency that comes from accountability via publicly reported performance measures isn't a bad Plan B.
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