Our government’s “incomprehensible failures”

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The federal Auditor General’s latest report speaks of “incomprehensible failures” in Canada’s government, specifically the Phoenix pay system and “the federal government to influence better conditions for Indigenous people in Canada”.  They’re certainly massive and appalling.  But if they’re really “incomprehensible” we’re in a heap of trouble because then we’d have no idea how to fix them.  And indeed to hear politicians talk, the only way government could possibly fail is if we elected their opponents.

In fact governments are currently failing in so many ways that to begin to list them would try your patience and my fingers.  I cited a few in a recent piece for Farmer’s Forum, from provincially approved drivers’ courses that result in more crashes to a collapsed program to create Canadian food for astronauts to the inability to scrap a ship.  These examples have an undeniable “Yes Minister” quality to them.  But they’re just minor comic instances of tragic failures on a massive scale on things like the aboriginal file and budget deficits.

I realize government has never worked perfectly and never will.  For starters, no human contrivance can escape the various faults of intelligence and will inherent in the human condition.  But government failings have a special quality and particular causes that we must understand if we are to push back and make improvements.

Hence this casual reference to them as “inexplicable” is worrying.  The Auditor-General, after all, did not just fall off a turnip truck.  He has held his present post since November 2011, and before that various senior jobs in the New Brunswick government including deputy minister of finance.  Surely he has some theory about government failure.

I use the term in its technical sense here.  For years economists spoke of “market failure”, meaning not dumb decisions by individual consumers or business executives due to inattention, arrogance, intoxication or ineptitude but specific factors that prevented the normal efficiency of markets from operating in some particular area like, say, national defence.  They were generally put under three headings: “free riders”, “holdouts” and “transaction costs” and it was believed that only government intervention could correct them.

After decades of making this valid point, and watching governments expand dramatically, at least some economists began to recognize that governments have failures of their own.  Far from being omniscient, they are less able to process huge amounts of information than private markets because they lack prices that summarize in one simple public number all the factors that go into producing something.  Far from being disinterested, politicians and bureaucrats are just as self-interested as merchants and customers.  And finally, where companies are constrained in their tendency toward selfishness by the need to keep customers happy, governments generally forbid competition and thus deny citizens the fabled “exit option” of shopping somewhere else that requires them to keep costs down and quality up.

None of these are themselves “government failure”.  Rather, they are necessary aspects of government.  The failures that result are self-serving conduct from excessive compensation to slow unfriendly service to paralyzing risk aversion.  As a result, even when government must do something, like defence or policing, it does it in characteristically unsatisfactory ways.  (Where’s the private equivalent of health care waiting lists?)

Now some readers may object that all this analysis is old news.  And by now it is.  Except to those, it seems, in public life.  When is the last time you heard a politician speak as if they knew about these problems, or saw one act as if they did?

Even someone like Kathleen Wynne, with long experience wielding executive power, does not appear to realize that government is inherently fallible.  Andrea Horwath speaks of expanding the health system to cover dental care without an apparent inkling that anything beyond lack of money has created the waiting lists and other distressing flaws in socialized medicine.  And Doug Ford breezily promises “efficiencies” as though government were not demonstrably highly efficiency-resistant for structural reasons.

Perhaps they are bluffing on the campaign trail.  But even the federal Auditor General, who spends his life studying government failure, apparently regards its recurring patterns as a great mystery.

I’m not suggesting that fixing Phoenix would be easy if you did get this branch of economics off-puttingly named “public choice theory”, let alone improving the lives of Canada’s aboriginals.  But you might at least grasp that the latter suffer, and have long suffered, from too much government, not too little.  You might be more cautious about what you undertook and how you undertook it.  You might watch Yes Minister not for comic relief but for valuable instruction.  Yet even the Auditor General stumbles in his reports over example after example of standard government failure, and seems surprised and baffled as well as frustrated by each of them.

Which truly is inexplicable.

Photo Credit: The Chronicle-Herald

More from John Robson.    Follow John on Twitter at @thejohnrobson

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