Re: public and private expense

[Lou Sternberg <loustern@primenet.com>]

This is from a related topic (the Moscow pool), but the response is really
about public vs. private expense, so here goes:

Briana wrote (and I think some others concur):
> government generally
>does MORE than necessary on any given project (road, swimming pool,
>outhouse, whatever) if given the opportunity.  It does what IT wants
>to do. 
>The private sector, on the other hand, does what is demanded of it. 
>If it (a store, a contractor, a school, etc.) doesn't, it dies.

As I read it, the preceding explains why the private sector is more cost
effective than the public sector.  

Is the private sector more cost effective?

1.  The price that the city of Moscow pays for a law enforcement officer,
for example, is far less than the price one would pay to obtain equivalent
services in the private sector.

2.  I doubt that the public administrative price of processing a piece of
paperwork is less than than incurred in the private sector.  I doubt, too,
that the private sector could operate an equivalent lending library system
for less than that expended by Latah County.  Although one could argue that
libraries are a waste of public funds since they do not generate offsetting
revenue.  Thank goodness for state lotteries? 

3.  The public sector is able to obtain valuable professional expertise at
little or no cost to taxtpayers (e.g., the P&Z Commission).  

The public sector, however, has often been unable to obtain cost effective
services from the private sector.  Remember -- the public sector rarely
builds roadways, swimming pools, monuments, schools, military equipment,
etc.  They contract with the private sector for these services.  And often
the cost of services seems exorbitant.  [I am still awed by the fact that a
recently constructed I-84 overpass and access at Cole Road in Boise cost $40
million.  A single interstate juncture!]  

My easy answer is that we need campaign financing reform -- as long as
business funds the political process, they will continue to reap the rewards
from the procurement process.  The more difficult answer involves the
increase in public sector savvy at procurring goods and services from the
private sector.  It is definitely necessary.  The federal government
provides some good examples -- although their efforts often involve two
steps forward (competitive bidding requirements) and one step backward
(increased administrative costs due to rigid bureaucratic procurement
procedures). 

I would also like to add that I reject the notion that the private sector is
more effecient simply because it responds more directly to the public
wishes.  Come visit me in Boise, and we will take a survey of the first
class passengers arriving and departing at the Boise Airport.  I will
guarantee you that the majority of first class tickets are paid for out of
private sector funds, and not out of public sector funds.  (Phil Batt flies
coach -- need I say more?)  And is this because the public is demanding that
the suppliers of their goods and services feel luxurious, or is it simply
because many competitors in the private sector are able to pass on their
non-essential costs to their consumers? 

Finally, I would like to note that government is not an "IT" that does what
is wants.  To paraphrase Pogo, IT is WE.

Peace, 

Lou






 
Lou Sternberg, Ph.D.             (208)343-0555
5017 Bel Air                     loustern@primenet.com
Boise ID 83705-2777