The search for government efficiency; from hubris to helplessness. - book reviews

Washington Monthly, Nov, 1986 by Leonard Reed

The Search for Government Efficiency; From Hubris to Helplessness.

George W. Downs, Patrick D. Larkey. Temple University Press, $27.95. Writers whose lot it is to review books on government bureaucracy get awfully damned tired of political science professors and their jargonized, quantified, and rarified cures for what ails government. It is a joy, therefore, to report on a book written by that breed with wit, clarity, and insight; one that quotes with equal reverence the words of Yogi Berra, George Burns, Mary Poppins, and Calvin Coolidge.

The most discomforting thing about being a critic of the bureacracy is the company in which one finds oneself, notably the businessman who, convinced that the government machinery is operated by people whose IQ is just above dribbling, comes to Washington armed with some hackneyed maxims to set things straight. Every once in a while it's a good idea to put into perspective the notion that the private sector operates on a rational basis and ask, for example, how come the chief executive of International Harvester was reaping $600,000 a year while streeing the corporation down the road to bankruptcy? Downs and Larkey note that the decisions of some of our industrial leaders make the Defense Department's $600 toilet seats look like the buy of the century. "For every one of the seemingly countless number of executives profiled in the pages of Business Week, Fortune, and Forbes who save a corporation by "hard-driving,' "far-sighted,' "fat-trimming,' management,' they observe, "there was a corporation that needed saving.'

But their particular bete noir is the report of the Grace Commission--"the archetype of the ineffectual, uninformed reform initiative that would bring business methods to government.' The commission's report, which stands 10 feet high (47 unindexed volumes), contains 2,478 "cost-cutting' or "revenue-enhancing' recommendations to save $424 billion in three years. Two thousand people reportedly worked on the survey, their work overseen by a 161-person executive committee, mostly chief executive officers. J. Peter Grace, chairman of W.R. Grace Company, has since made a second career of promoting the report by making speeches and television appearances, and providing boilerplate copy for newspaper editorials.

Many fewer people will read the devastating--and well-justified-- critique of the Grace Commission's report in this book. If the Commission hadn't worked from the assumption that the bureaucracy is managed by fools, some of Downs's and Larkey's thrusts might seem a bit harsh. They note that more than 60 of the corporations contributing to the report were themselves below the median in performance (measured by a five-year return on equity) in their own industries, and ask by what logic managers of the Continental Illinois Corporation-- recipient of a $4.5 billion federal bailout to avert bankruptcy caused by disastrous management practices--think they are in a position to advise the U.S. Treasury Department.

The point is not that government is efficient--it is not--but that the cure for its inefficiency does not lie in hyped-up nostrums from the business world. Anyone familiar with the workings of the federal government has seen these highly publicized imports from the private sector--the Planning-Programming-Budgeting System (PPBS) in the Kennedy and Johnson years, Management By Objective (MBO) under Nixon, Zero-Based Budgeting (ZBB) in the Carter administration--come in with great fanfare and quietly wither away.

There are myriad reforms that can help reduce inefficiency in the bureaucracy, but before they can be seriously undertaken, we must rid ourselves of the notion that business has the solution that, like some wonderful antibiotic, can cure the ills of government.