4 ms·

If you think about it, it really shouldn't be surprising. James Bond and other spy movies have convinced us that the government just has endless amounts of mone

If you think about it, it really shouldn't be surprising. James Bond and other spy movies have convinced us that the government just has endless amounts of money to throw at hard problems. But they don't. Even though the numbers involved are staggering, government departments fight tooth and nail for allocations. The cash you do get, you have to spend most of it on things that make your department look good rather than what will make you better at your job. Then there's plain ole' fraud, waste and abuse, trying to instill an ethic of frugality into someone who is in charge of more taxpayer money a month than they make in a year, well a lot of times that's just going to fall on deaf ears. Spy departments derive effectiveness mostly from having the ability to skirt the law rather than training or having better equipment. The government does have people that really know what they're doing. But their time and attention is limited, again mostly to projects that make their departments look good. As a result it's much easier than you'd think to get away with a lot more than you would think you could.

Spooky23 6y ago
I think that’s a common, but flawed outlook on it. Early in my career I worked for a social services department, a department that was constantly kicked around in the press for various “scandals”, incompetence, etc. It certainly wasn’t the most efficient organization that I’ve seen, but it was not much worse than fortune 100 companies that I’ve worked for or done business with. And For all of the woes, it was very good at what it did. Benefit payments were made, enrollments done, procurements procured, hearings adjudicated, audits completed. It’s easy to get caught up in the noise and determine that these organizations are incompetent and ineffective. The reality is that usually the machine of state is very good at what it does, but they measure many aspects of success with a different measure (compliance) than a company (profit).
- dcolkitt 6y ago
  Systematic research using large datasets shows that public sector organizations are associated with significantly worse management practices.[1] Public sector organizations are nearly as poorly managed as the worse category of private sector firms: those run by the heirs of the original founder. In particular public sector organizations have significantly worse incentive structures, are much more likely to promote based on tenure rather than competence, and are much more likely to retain low performing employees. [1] https://www.nber.org/papers/w17850.pdf https://www.nber.org/papers/w17850.pdf
  - walshemj 6y ago
    Ah and the UK probation service and crime lab privatisations worked so well. And those Private US prisons are the envy of the world ( that's sarcasm btw)
  - Spooky23 6y ago
    The paper reads McKinsey work product with McKinsey graphs in the appendix. I’d want to more deeply understand the biases of their methodology before using this as a guide.
    - QuesnayJr 6y ago
      Nick Bloom is a well-regarded economist. I'm not familiar with the others. He has a couple of papers on this theme that the advantage of some countries is superior management. I haven't read the papers, but people seem to not regard the idea as laughable. The paper does rely data from McKinsey and Accenture, for what that's worth.
  - lmm 6y ago
    > In particular public sector organizations have significantly worse incentive structures, are much more likely to promote based on tenure rather than competence, and are much more likely to retain low performing employees. Have these practices been measured to cause worse outcomes? Not so long ago there was a paper here that said most companies would be better off promoting at random than the measures they actually use, and we all know how practices like stack ranking can destroy team cohesion.
    - n4r9 6y ago
      That is the question. From early on in the paper: > we define “best” management practices as those that continuously collect and analyze performance information, that set challenging and interlinked short- and long-run targets, and that reward high performers and retrain/ fire low performers It appears that the purpose of the paper is to apply a set of normative judgements in order to validate at a shallow level the types of preconceptions that GP was questioning. It's not a surprise that government organisations aren't operating in a cut throat manner.
- vinceguidry 6y ago
  Social services are an interesting case because rather than attracting the worst possible job candidates, the kind of people who want power over others and don't really care about service, social service attracts the sorts of people who really care about doing a good job and helping people, and are capable of wringing good economics out of even tighter budgets than other gov orgs. I'm not surprised your experience was different there.
- jackcosgrove 6y ago
  All large organizations are the same. There are hidden experts who keep the machine running, and there are outward showmen who generate a lot of heat and light. Pareto suggests the hidden workers are 20% of the total, and I believe it. Not only are they in the minority, the people who know what they're doing often are passed over for promotion because the system would fall apart if they moved from their role.

Spooky23 6y ago

I think that’s a common, but flawed outlook on it. Early in my career I worked for a social services department, a department that was constantly kicked around in the press for various “scandals”, incompetence, etc. It certainly wasn’t the most efficient organization that I’ve seen, but it was not much worse than fortune 100 companies that I’ve worked for or done business with. And For all of the woes, it was very good at what it did. Benefit payments were made, enrollments done, procurements procured, hearings adjudicated, audits completed. It’s easy to get caught up in the noise and determine that these organizations are incompetent and ineffective. The reality is that usually the machine of state is very good at what it does, but they measure many aspects of success with a different measure (compliance) than a company (profit).

dcolkitt 6y ago
Systematic research using large datasets shows that public sector organizations are associated with significantly worse management practices.[1] Public sector organizations are nearly as poorly managed as the worse category of private sector firms: those run by the heirs of the original founder. In particular public sector organizations have significantly worse incentive structures, are much more likely to promote based on tenure rather than competence, and are much more likely to retain low performing employees. [1] https://www.nber.org/papers/w17850.pdf https://www.nber.org/papers/w17850.pdf
- walshemj 6y ago
  Ah and the UK probation service and crime lab privatisations worked so well. And those Private US prisons are the envy of the world ( that's sarcasm btw)
- Spooky23 6y ago
  The paper reads McKinsey work product with McKinsey graphs in the appendix. I’d want to more deeply understand the biases of their methodology before using this as a guide.
  - QuesnayJr 6y ago
    Nick Bloom is a well-regarded economist. I'm not familiar with the others. He has a couple of papers on this theme that the advantage of some countries is superior management. I haven't read the papers, but people seem to not regard the idea as laughable. The paper does rely data from McKinsey and Accenture, for what that's worth.
- lmm 6y ago
  > In particular public sector organizations have significantly worse incentive structures, are much more likely to promote based on tenure rather than competence, and are much more likely to retain low performing employees. Have these practices been measured to cause worse outcomes? Not so long ago there was a paper here that said most companies would be better off promoting at random than the measures they actually use, and we all know how practices like stack ranking can destroy team cohesion.
  - n4r9 6y ago
    That is the question. From early on in the paper: > we define “best” management practices as those that continuously collect and analyze performance information, that set challenging and interlinked short- and long-run targets, and that reward high performers and retrain/ fire low performers It appears that the purpose of the paper is to apply a set of normative judgements in order to validate at a shallow level the types of preconceptions that GP was questioning. It's not a surprise that government organisations aren't operating in a cut throat manner.
vinceguidry 6y ago
Social services are an interesting case because rather than attracting the worst possible job candidates, the kind of people who want power over others and don't really care about service, social service attracts the sorts of people who really care about doing a good job and helping people, and are capable of wringing good economics out of even tighter budgets than other gov orgs. I'm not surprised your experience was different there.
jackcosgrove 6y ago
All large organizations are the same. There are hidden experts who keep the machine running, and there are outward showmen who generate a lot of heat and light. Pareto suggests the hidden workers are 20% of the total, and I believe it. Not only are they in the minority, the people who know what they're doing often are passed over for promotion because the system would fall apart if they moved from their role.