April 26, 2004

Bureaucracy, Democracy, Ideology and Policy

Amritas puts these words in the mouths of Hawaii’s politicians:

Your view is inherently less valid, you mere voter. We votees are superior! If we weren't, why did you vote for us? Because we were the right color?

Anything that is done by a bureaucracy is done less efficiently and with poorer quality than if it had been done by the free market (monopolies don’t count). There are two reasons for this: lack of bandwidth, and lack of external control.

Lack of bandwidth refers to the inability of decision-makers to know everything they need to know in order to make correct decisions. All big organizations suffer from this problem, and management theory is largely the study of ways of coping with it. Nevertheless, the larger the organization, the bigger the problem. This is why there is a continual turnover of companies in the market – big companies fail, and small companies sometimes succeed. It is the single advantage that small companies have over big companies.

Lack of external control refers to the promotion of bureaucrats within the system, and the inability to measure their success. In the private sector, success is clear: success equals profits. Any company that doesn’t make a profit (however small) will not be able to continue. The most profitable companies will be able to expand and grow. In successful companies, people are promoted (tend to be promoted) by how much they contribute to profitability. Companies that base promotion on something else will eventually fail.

Government bureaucracies don’t have this simple measure of success. It would be bad enough if this were the only problem, however, the problem is compounded – promotion of bureaucrats within the system, not being based on measurable success, is inevitably based on the needs of the system itself. All bureaucracies, lacking external control, no matter how noble their initial cause, will end up serving themselves.

As systems of government go, democracies have an advantage – not only because they are morally superior, but because they are structurally superior. In particular, they do have external control, however remote. Instead of the market, they have the voters. Success is not measured by profits, but by popularity. Government bureaucracy is ultimately responsible to something external to the system.

But for democracy to work, the voters have to be able to make the right decisions. My observation is that voters aren’t particularly good at doing this. However, in successful democracies, they at least want to. In places where people don’t base their vote on ideology or policy – but on clan, race, ethnicity, or some other irrelevant factor – democracy won’t work.

Posted by David Boxenhorn at April 26, 2004 03:05 PM
Comments & Trackbacks

× Network: