Bureaucracy without Monopoly
If we can't pry certain functions out of the hands of government, then is there
still some way we apply some basic economics? Would government "services" become
more efficient if we fragmented agencies, set elegant incentives, and then forced
the pieces to compete with each other for market share and survival?
"Trust Busting" Applied to Government
Imagine this: Welfare bureaucracy is split into 5 overlapping distributors,
each given a grub stake and then competing by rules something like the following:
- Each year, Congress sets a monthly subsidy that each distributor receives
for each of its subscribers (or various subsidy levels for various classes
- Subscribers are free to switch whenever they like to whomever they like.
- Distributors can pay out as much or as little as they want in cash, coupons,
- States and/or counties may augment the subsidy for certain subscribers (usually
those residing within their own borders for a specified length of time.)
- Distributors may attach whatever strings they want.
- Distributors can make their operations as convenient or inconvenient as
- Distributors can advertise.
- Distributors can open new offices or close old ones.
- If fraud is proven, the leaky distributor will be fined one year's per capita
subsidy for each fraudulent subscription plus the amount (or double or triple)
of proven fraud.
- A whistle blower, who could be anyone, gets 10% of the fine as a bounty
for a tip that leads to a conviction, provided that s/he isn't in on the
- If a distributor goes bankrupt, its property will be auctioned off to the
world at large, and then the distributor with the most subscribers will be
asked to spin off a part of itself thusly:
- Upper management divides its offices and personnel (except upper management
itself) into two workable companies.
- The president or Congress builds a new management team that does
not include any upper managers from the failed distributor. The new
team then chooses one company for itself leaving the other to the upper
management of the former whole.
- Upper management gets annual incentive bonuses for *gaining* market share,
but is fined when fraud is found.
Did I leave anything out?
Similar arrangements could be made for other government functions.
Copyright 2003-2008 by Jeffry R. Fisher: Permission is granted to reproduce
this article in whole, but only in combination with attribution, the
original title, the original URL, and this copyright notice.