How often have we heard this refrain … why can’t government be run more like a business? Or, how often do we hear the pithy comment … good enough for government! Even I have employed this second aphorism on numerous occasions, the implication being that the standards of the private sector exceed those found in its public counterpart. This premis is widely accepted both outside and (all too often) inside government, but is it true?

To address such a question fully would demand a response well beyond one of my occasional blogs. Still, as with most of the questions that attract my ever wandering attention, I have a couple of half-baked opinions which I’m sure you are dying to hear.

I’ll pretty much skip over the obvious points that separate the public and private sectors. For example, the private sector is driven by profit margins while the public sector typically is burdened by expectations to deliver various services and/or address needs for which the profit motive would be irrelevant, if not counterproductive. The U.S. postal service mimics private sector alternatives reasonably well, at least the for-profit competition that has emerged in recent decades. Oddly enough, Fred Smith, the genius behind a major competitor, Fed- Ex, passed away recently. When he proposed the central idea for what became the overnight delivery behemoth in a paper for a Yale business class, he received a grade of C. ‘A ridiculous concept that could never work,’ his course professor responded. I know for a fact that the persons teaching most subjects in a university setting are neither omniscient nor always correct. After all, I once was one of them.

Digressions aside, there are significant differences between for-profit delivery systems (e.g., UPS and Fed Ex) and our federal postal system approach. For example, our postal system must reach all segments of our population and all geographical locations irrespective of impacts on the fiscal bottom line. When our public system suggests economies like eliminating remote post offices or cutting back on Saturday deliveries, the political backlash is unforgiving. This is a special burden borne by what we consider a public good. Unlike their private good counterparts, they cannot operate free from exogenous (e g., political) pressures.

In this blog I touch on the issue public sector competence mostly from a personal perspective and with respect to the arena I know most about … our public safety net. After all, I spent most of my life in the public sector … as a practitioner, as a policy wonk, and as one of those omniscient scholars at the head of a university classroom. One exception was my first paying job, delivering newspapers around age 11 or 12. This experience suggested that any career in the private sector might not be a wise choice for me. At times, I actually lost money on my route, quite a feat now that I think on it. I had to pay for the papers I delivered. Then, it was up to me to collect what was due from my working class (often struggling) customers. That proved surprisingly difficult at times. While my devotion to the delivery task never flagged, I could never be sufficiently aggressive in the collection aspect of the job. Perhaps I was overly appreciative to how some of my customers struggled to make ends meet, a struggle I witnessed in my own home. I just couldn’t summon up the assertiveness required of an entrepreneur. As a result, I came out on the short end of the fiscal stick all too often.

I started what I considered my first real job at age 14, in the position of page at the Worcester Public Library. A page is the guy or gal who returns books to shelves and performs other minor duties. I never stopped working after that, even while pursuing my education, until I retired some five decades later from my university position as an academic and policy wonk of some national repute at the University of Wisconsin. Even as a senior scientist at an R-1 (top level) research university, I consulted with federal, state, and local public sector officials on the design, management, and evaluation of human service systems. I organized networks of officials to facilitate collaboration and cooperation regarding the pusuit of innovative solutions to social challenges. And I taught public policy courses to undergraduate and graduate students while helping to manage a nationally recognized research entity (the Institute for Research on Poverty). I’m fatigued just thinking about all the things I tried to do.

And yet, my professional positions were never guaranteed. For the most part, I had to raise my own funds to support my research and consulting work. If I failed to do so, I faced the distasteful prospect of having to get a real job. Even my institutional administrative duties were for an academic organization that had to compete with other top universities for federal and private support. I enjoyed no guarantees, at least not many, and never had the comforting protections of academic tenure. Thus, I enjoyed no stable sinecure and remained quite sensitive to the dynamics of the market place. Fortunately,  I was good at raising money and normally had ‘banked’ resources beyond what I could take in salary.

My background aside, my interest in this topic was stimulated by an article I recently stumbled across which noted how efficient the IRS has been in collecting taxes. In recent years, the employees of this much maligned public agency reduced the administrative costs for collecting what was due from 53 cents on each additional $100 dollars collected to 35 cents. That’s an amazing benefit-cost ratio. In fact, it was reported that some 83,000 IRS employees collected $4.7 trillion dollars in 2023. Irrespective of the validity of periodic complaints about some draconian measures employed by the IRS to browbeat citizens in paying up what is owed, this remains a remarkable performance.

Now, enter Elon Musk and DOGE (the Department of Governmental Efficiency). With great fanfare, Elon essentially promised to employ the demanding standards of the private sector to root out some $2 trillion dollars of fraud and abuse in our federal government. Let us ignore the obvious coincidence that this figure would almost compensate for the lost revenues if the 2017 Trump tax cuts were extended through the remainder of the decade, a favored policy initiative of his titular boss.

As we know, these Trump 2017 tax cuts essentially redistribute resources from the less affluent to the uber-wealthy. Non partisan estimates suggest that low income families would lose an additional $1,600 (per year) if the cuts are extended while their affluent counterparts would gain about $12,000 on average. The really rich, like Elon, would gain much, much more. But let us give Elon the benefit of the doubt. Perhaps his intentions are noble.

So, what did Elon do with his remarkable power? He marched right in and began whacking away at public programs in a wholesale and seemingly indiscriminate manner. One of the first to go was USAID, a program that provided health and food assistance (among other things) to the most vulnerable target populations across the planet, but particularly in distressed areas. True, such aid could never be delivered in a way to turn a profit. And true, not all that which is expended can fully be justified … there likely is even some fraud. Still, this is a humanitarian gesture that so many appreciate.

In the main, Elons cuts had nothing to do with fraud and abuse. He, and his nominal boss (Trump) simply didn’t like the program (among others justified on humanitarian grounds). Besides, they were desperate to develop a fiscal rationale to justify further tax breaks for the economic class that already has seen their share of the economic pie soar over the past several decades. The draconian program excisions by DOGE, however, will result in untold deaths and great suffering, especially among vulnerable children who will be defenseless against such scourges as AIDS and malnutrition. 

Another program to fall under Elon’s sword involved IRS staff.  Thousands were cut and the resulting savings added to the amount of waste eliminated. It was soon pointed out that these staff resulted in a net resource gain for the government (see above). This fact was obvious to  anyone with any understanding of how government operated.

In an earlier blog, I noted that my first professional position involved, in part at least, detecting and eliminating fraud and abuse in the major cash welfare system of that era … the Aid to Families wuth Dependent Children program or AFDC. This program had come to symbolize what many thought was wrong with our federal safety net. Therefore, ensuring program integrity by reducing eligibility and payment errors was a top priority.

From my experiences, I can attest that detecting real fraud and abuse is not easily done. You have to know what you are doing. Unlike the Musk approach of merely assuming massive amounts of fraud and waste, we scientifically sampled random cases and did extensive audits. This accountability intervention was known as the Quality Control system (QC). When error rates exceeded permitted tolerance levels, states were required to develop corrective action plans to reduce errors or face federal sanctions or penalties. In Wisconsin, we met our administrative responsibilities with remarkable  success.

The lessons in all this are simple. Doing public programs is not like doing things in the private sector. In many ways, the public domain is more complex, more subject to shifting priorities, more susceptible to multiple and even competing purposes. I do not intend to denigrate private firms. Making a profit in a competitive environment can be daunting. I’m merely asserting that the two systems, one private and one public, are substantially distinct phenomena. What works in one won’t necessarily work in the other.

Of course, some slight of hand was involved in lowering so-called welfare error rates. For example, we realized that the best way to eliminate error was to reduce the opportunity for error. The public never could distinguish unintentional mistakes from intentional fraud. From an inside perspective, we knew that actual fraud was infrequent whereas decionmaking mistakes often emanated from program rules that were overly complex, especially for staffs facing rising caseloads. Besides, not all errors penalized taxpayers. A sizable number were underpayments that disadvantaged poor families.

Nothing personified the difficulties associated with addressing real (as opposed to imagined) abuse than initial efforts to control problems in the newly nationalized federal Food Stamp program (now SNAP). Federal officials decided to take the QC protocols developed for AFDC snd apply them to the growing Food Stamp program. What worked for one should work for another, no? The answer, by the way, is NO!

I recall bring sent to Washington to represent Wisconsin as the new program was being unveiled. While other states sent top officials, Wisconsin sent me, a lowly analyst. But I knew how these programs worked in more detail than the higher ups. Without doubt, I knew that the Food Stamp error rates measured during the start-up of this evaluation effort would be astronomical unless the methodology was substantially tweaked.

These dramatic error rates would not be due to fraud or abuse but rather to flaws in the evaluation system being imposed by the feds. I did my best to warn them. While acknowledging that a number of federal officials listened respectfully, it was soon apparent that this listing ship was destined to sail and sink. I could only watch in dismay.

My prescient predictions were spot on. The initial error rates were through the roof. The press reported the results in ways that suggested fraud and abuse. The public’s negative perceptions of the program were reinforced. Eventually, my warnings were headed. Eventually, the kinks were worked out but additional damage was done to yet another federal system already under the public’s suspicious purview.

Back to AFDC. In the 1970s, we used the QC system to fundamentally alter the AFDC program in Wisconsin. How? We radically eliminated program complexity and, equally as important, we embarked on a journey to bring welfare administration into the computer age. This was an innovation in which I was very involved at the start though I left state government service (for the University) before the transition was complete.

By the time the AFDC program had been fully reworked, it had been radically streamlined and simplified. The old complex, paper driven system had been restructured to eliminate most error-prone decision points. Moreover, front-line worker discretion had been replaced by binary decisions, the kind that could be made by computer and did not require costly professional decisions by agency staff.

Such reforms had apparent downsides. AFDC became a one size fits all program that focused on its income transfer responsibilities. Personal care for troubled families was lost, staff discretion minimized, and individualization eliminated. We were aware of such tradeoffs. But that is the challenge of doing public policy … making tough choices when competing purposes clashed. 

We also knew that we were  dramatically reducing error rates and lowering administrative overhead. During my tenure, I witnessed overhead costs fall well below 5 cents for each dollar in benefits expended. This overhead rate was  among the lowest, if not the lowest, in the country. And yet, lower error rates and overhead costs did little to improve the program’s reputation. Administrative efficiency meant little when program purposes remained controversial in the eyes of the public. Still, we knew we had created an extremely well run program in Wisconsin even if some desired program features had to be sacrificed.

Fast forward some two decades. Now, I’ve long been at the University and have carved out a role that had me consulting with many local, states, and federal officials. One theme that had captured my attention by this time involved developing human service systems that were sufficiently integrated to respond to the multiple needs of dysfunctional families, especially those we designated as FUBARS (fouled up beyond all recognition). In short, now I was returning to a challenge that we had sacrificed when we turned AFDC into an efficient and accurate income transfer system.

The need for more flexible and rehabilitation-oriented public assistance systems continued to increase as taxpayers expressed a stronger desire to move welfare dependent families into mainstream society. Efficient income transfer systems were now passe, no matter how well they were being designed and run. Public sector programs, it would seem, do not function in a vacuum. They must respond to inevitable cultural and political changes. As I often told my students, one generation’s solution is the next generation’s scandal. I had many such memorable quips.

I got heavily involved in these issues while working with officials in Kenosha County Wisconsin. Over several years in the late 1980s, a team from the University I put together collaborated with local officials to develop the first one-stop public assistance agency. We were able to integrate several distinct programs in ways that enabled their underlying purposes and competing cultures to operate in a coherent and complementary fashion. In some ways, it was a complete opposite to my work more than a decade earlier. The Kenosha County model became an inspiration for change across the nation and in several other  countries

By the late 1990s, my colleagues and I were working with a number of state and local sites, including Toronto Canada, on human services integration innovations. One such state was Indiana, one of several that were part of my Welfare Peer Assistance Network or WELPAN. I had organized this network of senior welfare officials from seven Midwestern states who would meet periodically to share both challenges and possible solutions to the demands imposed by welfare reform.

As we pursued service integration possibilities with welfare officials in that state, we learned that the Republican Governor decided to go in a different direction. Assuming that public sector programs were (by definition) poorly managed, he decided to privatize the administration of the program … something highly favored in conservative orthodoxy. Based on my own experiences, I remained very skeptical of this radical move even if it were a staple of Republican orthodoxy. However, I had been around the track enough times not to stand in front of a moving train.

The State of Indiana moved ahead with their ambitious, if questionable, plan. They signed a multi-year, several billion dollar contract to have the IBM corporation manage the State’s several welfare programs. The governor was publicly optimistic. Obviously, a profit-driven private firm had to do a better job than public bureaucrats. Everyone knew that, didn’t they?

The experiment, as I foresaw, turned out to be a total disaster. Within a couple of years, the state had fallen out of compliance with federal standards and faced substantial penalties. The corporation, it turned out, had no concept regarding how to run a public welfare program. They possessed little understanding of the special challenges associated with populations facing severe personal limitations and societal impediments. They had little experience working with multiple programs purposes, not the more singular ends faced by most private firms. The technologies and tactics that might work well with their typical customers now backfired. In short, they were clueless about the challenges they had taken on. The governor had no choice but to cancel the experiment at considerable political costs. Experienced public employees knew what they were doing after all.

Doing public policy just isn’t as easy as it looks.