Wednesday 8 May 2024

Predatory Bureaus and Sunset Commissions

WHEN GOVERNMENT SPENDING IS OUT OF control, it might seem odd to propose more spending.

When the place is already over-endowed with bureaucrats, it might seem just as puzzling for libertarians to propose another bureaucracy.

But some have. Here's two. And a related idea ...

The first is what economists John Baden and Rodney Fort called a "Predatory Bureau," whose mission is "to reduce the budgets of other agencies, with its ongoing income depending on its success."
We contend [they say] that elections fail to control government size and growth due to specific failures in the representative system. One major failure has been the concentrated focus of political activities within bureaucracies.
In other words, the bureaucratic system of governance tends to concentrate  real power in the hands of 'Sir Humphries,' whose motivation for their departments is not efficiency, but engorgement. This is not inevitable, however, say Baden and Fort. "Through the restructuring of incentives, i.e. by re-rigging the game, bureaucratic outcomes can be made to approach the elusive social optimal. This device has been named the Predatory Bureaucracy."
The literature on bureaucratic pathology is voluminous and growing rapidly. ... The bottom line of studies from each of these areas remains fairly consistent with the following: bureaucrats operate to increase their discretionary control over resources. In sum, they operate to expand their budget. ...
    [C]urrent institutional setting fails to provide those incentives requisite to successful efforts at budgetary reduction. Yet there are grounds for caucious optimism.... The fundamental issue is one of designing an institutional environment that will provide incentives to utilize information errosive to agency budgets.
    A predator is an animal (or occasionally a plant) that captures and extracts his sustenance from other     animals. Could this mode of existence be replicated and introduced in a bureaucratic environment to provide a negative feedback to the propensity for bureaucratic growth? Conceptually the answer is yes ...
[A]ssume that this agency is established with a one time appropriation that will carry it for two years only. ... Continual funding, and hence survival and growth, are dependent upon predation of other agencies budgetary requests ...
(A good principle there, that much bureaucracy and law should contain within it a mechanism for being self-extinguishing.)

The job of the Predatory Burueau is very simple: to claw in its own funding by pulling down funding from other more profligate budgets. If something particularly egregious and profligate is proposed by one bureau, it's the job of this one to oppose it by every means necessary. It's reward is its own continued existence.

How would it work? Let's say that, through its own efforts, our Bureau overturns a major policy proposal costing billions. 
First the Bureau receives one percent of the requested budgetary item. Second, the proposing agency ...  suffers a budget cut of one percent of the projects proposed operating costs from its operating budget. ... 
    The major advantage of this proposed system is that it counters the problem of legislation concentrating benefits while diffusing costs. Further, it builds into the appropriation process a spokesman for the public interest — more importantly, a spokesman who does good while doing well. In sum, by employing this system we rely upon self-interest to advance the public interest.
Sounds good, right? 

SO NOW, LET'S GO BACK to that thing about being self-extinguishing ....

That's incorporated into something called a Sunset Commission, something that was proposed in the US back in 2005 (and something that, of course, would face opposition by the Predatory Bureau).
Government programmes are the only sign of eternal life on Earth. Once they are created, they often attract large constituencies that are ready to complain loudly about their “essential” services should anyone try to reduce their funding or, worse, end them altogether…
    The Sunset Commission would review the effectiveness of each [government] programme. Programmes and agencies would automatically cease unless [the legislature] took specific action to continue them. [A] Results Commission would work to uncover duplication of services in government programmes, of which there are many.
    The need for these commissions should be evident when one considers that about one-third of the fiscal 2005 discretionary budget is unauthorised. Comprehensive reviews of spending might save taxpayers hundreds of billions of dollars.
    [Government] spending is out of control. It must be properly monitored by an entity that places the interests of those who earn the money over those who didn’t earn it and can spend it with little accountability.
    If taxpayers want to keep more of the money they earn, they must also work to become less dependent on a government check. We look to government too often and to ourselves not enough. When that dynamic reverses, our need of government will be reflected in less government. That will benefit the economy and the government more than additional revenue.
And like the Predatory Bureau, its income should be dependent on its success.

THAT PRINCIPLE OF BEING self-extinguishing should also be followed through with legislation. One of the very best things about the COVID legislation was the incorporation of a Sunset Clause.

Good, huh! (And I bet you a small sum you didn't know that was there, did you.) 

Every new law should have one. And why not?!  Imagine if that was at the head of all new legislation instead of clauses about the Treaty of Waitangi! Imagine if, instead of parliament spending all their time writing and ranting about new laws and regulation (when there are already so many goddamn pages cluttering up law libraries) they spent their time justifying to each other (and to us) the continuation of existing law!

So there's three viable proposals to savage the bureaucracy and its ever-growing bureaucracies, budgets and regulatory thickets — or that the very least to keep them pruned.

Go and tell the Minister for Regulation.

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