Waste & decentralization, por Chris Dillow:
It’s especially hard to cut waste if you try to do so by top-down management. I say this for two generic reasons, which are central to understanding any organization.
1. Bounded knowledge. Any sentient being who works in the public sector could identify some waste - an inefficient process, a malingering colleague. There is, therefore, vast knowledge of government waste. But this is fragmentary and dispersed. Top-down management doesn’t gather it. And workers have little incentive to offer it - for fear of rocking the boat, being identified as a trouble-maker by their boss, or simply not wishing to grass up a co-worker.
The upshot of this is that government doesn’t know what’s waste and what’s not. To them, public spending is like the old joke about advertising spending; half of it is wasted, but we haven’t a clue which half.
2. Bureaucratic capture. If government asks departmental managers to identify waste, guess what? They’ll never say that management is wasteful. The people who’ll lose their jobs under “efficiency savings” aren’t the ones who are useless, but the ones who are powerless.
There are, therefore, severe limits on how far top-down, command-and-control management can cut “waste.”
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