The US Army’s incorporation of mission orders into its combined arms doctrine described in an earlier post was an example of a government agency that was delegated an appropriate degree of bureaucratic autonomy, a delegation that extended down to the lowest levels of the organization. This kind of delegation is extremely rare in government operations, however, and could occur only because of the importance and visibility of combat operations. It does not characterize other aspects of the peacetime Army, for example, or military procurement more broadly. The former is highly rule-bound, and the latter both rule-bound (under the Federal Acquisitions Regulations, or FAR) and at the same time highly politicized. In the case of the procurement of big-ticket items like the Air Force’s F-22 or F-35 programs, Congress, working in cahoots with the prime contractors, has seen fit to divvy the work up across multiple legislative districts and subcontractors so as to make the projects virtually unkillable. The Defense Department thus has virtually no autonomy with regard to how the planes are built, or even in how many to buy.
The detailed procurement rules in the FAR run to thousands of pages. Compliance with these rules vastly drives up the cost of government contracting, and requires large contractors like Lockheed Martin and Boeing to maintain huge legal staffs in their compliance departments. This in turn serves as a barrier against spin-on technologies, since smaller companies that could bid on government contracts don’t want the hassle of dealing with all the red tape. No procurement department in any private company would ever operate so inefficiently.
So why does the FAR exist? It’s not because government bureaucrats somehow enjoy writing and living by mindlessly detailed rules. The FAR exists because Congress has mandated a zero-defects approach to contracting, in which rules substitute for discretion in response to some long-forgotten scandal. Congress has also seen fit to pile on requirements for small-, minority-, and women-owned businesses to get a piece of the action, and mandated as well an almost endless right of recusal for losing contract bidders. There’s a famous story about an RFP put out to provide US troops in Kuwait with Christmas cakes prior to the 1991 Gulf War, which wasn’t finally contracted and fulfilled until several months after the war’s ceasefire the following year.
When many Americans think about what’s wrong with their government, they usually conjure up out-of-control bureaucrats writing detailed and pointless regulations that interfere with the private sector’s ability to innovate and grow. That is, they imagine that the problem lies with the bureaucratic agents being given excessive degrees of autonomy. The entire Public Choice approach of James Buchanan and company is predicated on the idea that bureaucrats are self-interested, maximizing individuals who will inevitably seek to expand their perks and authority at the expense of everyone else.
I would argue, however, that that is not the fundamental problem with most bureaucracies. Bureaucratic dysfunctions can almost always be traced back to a badly-conceived mandate from the political principal to the bureaucratic agent, which prevents the agent from exercising an appropriate degree of autonomous judgment.
The American Interest recently published a good case of this in the article by Mario Loyola and Richard Epstein on the regulatory nightmare created by the Americans with Disabilities Act or ADA. The underlying problem with the ADA was in the mandate from Congress, which essentially directs the government to compensate disabled Americans for their disadvantages with no offsetting considerations of cost or efficacy. Loyola and Epstein point out how burdensome compliance with these regulations is for small businesses, which are prevented from choosing more efficient ways of serving the disabled by the open-ended character of the mandate.
I saw a great example of this in my old neighborhood in McLean, Virginia a few years ago. That part of McLean was a typical Washington suburb in which everyone got in their cars to go anywhere. About half to a third of the houses had a sidewalk in front of them, while the rest had lawns coming out to the street, making the sidewalks discontinuous. While plenty of people like me jogged in the street, there were hardly any pedestrians. One year, however, Fairfax County came along and installed concrete wheelchair ramps on the short stretches of sidewalk that existed. All of this was of course a ridiculous waste of money. Anyone in a wheelchair could go down the sidewalk for perhaps fifty feet, and then have to go into the street for the next fifty feet, get back on the sidewalk when it reappeared, and so on.
Why did this happen? Was it because there were crazed bureaucrats in the Fairfax County government dying to show off their power? I really doubt it. Virtually anyone in the county government–which is by and large pretty competent–could have thought of a hundred better ways to use the money than to install these wheelchair ramps. The problem is that the legislative mandate does not permit local officials to use their own discretion on how to implement the ADA. Under our system of government, private individuals are given standing in the courts to force agencies to implement laws. If local officials thought wheelchair ramps didn’t make sense, they would face a blizzard of lawsuits like the ones described by Loyola and Epstein, where a single individual named Theodore Pinnock forced every mom-and-pop store in little Julian, California to remodel their facilities to accommodate his wheelchair. So the problem here is not excessive autonomy, it’s complete lack of autonomy in complying with a senseless legislative mandate that takes no account of the need for discretionary tradeoffs against competing goods.
In developing countries, one of the biggest failures of governments lies in public utilities that are supposed to provide water, sewage, and electricity. The problem here is not that these utilities are publicly owned–the record of privatized utilities in Britain, El Salvador, Bolivia, and other countries is highly mixed. By contrast, there are certain very well-run publicly-owned utilities like the Empresas Publicas de Medellín in Colombia which are so profitable and efficient that they have funded many other government services over the decades. The problem with the bad utilities has to do with bad mandates from the politicians, that make even the best-run organization unable to comply. The next post will describe one such case in Hyderabad, India.