Government Mismanagement: Incentives or Culture?

February 5, 2018

As a general matter, governments are poorly managed compared to businesses in competitive markets. They tend to spend money on low-value activities, put up with sloth and waste, and follow failed policies for years without a course correction. I have examined the structural causes of federal waste and mismanagement in studies on Congress and the executive branch.

Many of the federal government’s structural problems also bedevil state governments. Yesterday, Washington Post editor, Gene Park, described some of the dysfunction in Hawaii’s government that led to the false missile alert last month.

I could not figure out whether Park was mainly blaming institutional problems—such as union job protections—for government failures, or whether he was blaming the general culture of Hawaii and its government.

Certainly, the two factors are related. Flawed institutions such as labor unions create bad incentives and spawn a culture of waste. I would guess that people are similar everywhere, but different institutions across societies have shaped differing cultures or general behaviors. Of course, within societies people have many different personality traits, and governments likely attract workers seeking an environment of high job security and low performance expectations.

Is Hawaii’s government more mismanaged than other state governments? If so, is it because high unionization and other features of its government have created bad incentives, or is it because people in the state hold attitudes that undermine government efficiency?

Anyway, see what you think about Park’s article. Here are some excerpts:

This past week, we learned that the man responsible for the bogus Hawaii missile alert last month had kept his job for a decade, even though he had a history of performance problems and had been “a source of concern,” according to a Federal Communications Commission report. His fellow employees had expressed discomfort about his work, and the FCC said that he was “unable to comprehend the situation at hand and has confused real life events and drills on at least two separate occasions.” Although the emergency management worker, who remains unnamed, was a union member, he could’ve been fired at will. “Why, then,” Gizmodo understandably wondered, “was the employee in a position to send a false missile alarm to a couple of million people?”

As we say in the islands, e komo mai (welcome) to Hawaii.

I worked as a Hawaii state employee for a short time, serving as spokesman for a division of the Hawaii Department of Commerce and Consumer Affairs, and then spent more than seven years dealing with the government as a journalist. Anyone who knows how Honolulu functions can’t have been surprised by the FCC’s revelations. The sad part is that the worker’s ineptitude and the chaos he caused have exposed to the world old, ugly tropes about Hawaiian accountability and competence that residents would love nothing more than to shake off. “How many more non effective employees are on the job here in Hawaii?” asked a local on Hawaii News Now’s Facebook page.

There’s a strong assumption in the islands that once you enter the state government system, you’re set for life. … The prevailing notion is: You don’t have to work that hard.

And there is often no cost for screwing up. Vern Miyagi, the emergency management chief who resigned in the wake of the FCC report Tuesday, had made his reluctance to fire the alert author clear: “You’ve got to know this guy feels bad, right? I mean, he’s not doing this on purpose.” …

Culturally, Hawaii tends to reward seniority, not competence. Careers often advance only when incumbent workers resign or die. …

That’s a sentiment young people (and apparently 54-year-old members of Congress) hear often in Hawaii. The author of that 2006 newspaper column rued how “local values” insist on deference and conformity. …

I often heard residents of my old state parrot a Japanese saying: The nail that sticks out gets hammered down. And people who want reform, or just want to try something new, hear a common refrain in Hawaii’s private and public sectors: “That’s not how things have been done before.” Play your role, and you’ll be rewarded when you’re good and old.

That attitude has consequences. The FCC report shows it was no secret that the missile alert’s author was inept. Yet he somehow landed the critical job of telling an entire state whether its people could die in a nuclear blast. While 10 years passed, his supervisors did nothing to remove him from a job they knew he was unqualified for, nor did they implement procedures for what to do if someone accidentally sent a missile alert. It took a national embarrassment to dislodge him from his job.

More on the causes of government failure here and here.

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