Quotulatiousness

June 27, 2016

The twisted incentive system for government bureaucrats

Filed under: Bureaucracy, Business, Government — Tags: — Nicholas @ 02:00

At Coyote Blog, Warren Meyer explains why bureaucrats so often make what appear to be incomprehensible decisions and then double-down on the decision despite any irrational, economically destructive, or humanitarian consequences:

I want to take an aside here on incentives. It is almost NEVER the case that an organization has no incentives or performance metrics. Yes, it is frequently the case that they may not have clear written formal metrics and evaluations and incentives. But every organization has informal, unwritten incentives. Sometimes, even when there are written evaluation procedures, these informal incentives dominate.

Within government agencies, I think these informal incentives are what matter. Here are a few of them:

  1. Don’t ever get caught having not completed some important form or process step or having done some bureaucratic function incorrectly.
  2. Don’t ever get caught not knowing something you are supposed to know in your job.
  3. Don’t ever say yes to something (a project, a permit, a program, whatever) that later generates controversy, especially if this controversy gets the attention of your boss’s boss.
  4. Don’t ever admit a mistake or weakness of any sort to someone outside the organization.
  5. Don’t ever do or support anything that would cause the agency’s or department’s budget to be cut or headcount to be reduced.

You ever wonder why government agencies say no to everything and make it impossible to do new things? Its not necessarily ideology, it’s their incentives. They get little or no credit for approving something that works out well, but the walls come crashing down on them if they approve something that generates controversy.

So consider the situation of the young twenty-something woman across the desk from me at, say, the US Forest Service. She is probably reasonably bright, but has had absolutely no relevant training from the agency, because a bureaucracy will always prefer to allocate funds so that it has 50 untrained people rather than 40 well-trained people (maintaining headcount size will generally be prioritized over how well the organization performs on its mission). So here is a young person with no training, who is probably completely out of her element because she studied forestry or environment science and desperately wanted to count wolves but now finds herself dumped into a job dealing with contracts for recreation and having to work with — for God sakes — for-profit companies like mine.

One program she has to manage is a moderately technical process for my paying my concession fees in-kind with maintenance services. She has no idea how to do this. So she takes her best guess from materials she has, but that guess is wrong. But she then sticks to that answer and proceeds to defend it like its the Alamo. I know the process backwards and forwards, have run national training sessions on it, have literally hundreds of contract-years of experience on it, but she refuses to acknowledge any suggestion I make that she may be wrong. I coined the term years ago “arrogant ignorance” for this behavior, and I see it all the time.

But on deeper reflection, while it appears to be arrogance, what else could she do given her incentives? She can’t admit she doesn’t know or wasn’t trained (see #2 and #4 above). She can’t acknowledge that I might be able to help her (#4). Having given an answer, she can’t change it (#1).

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