When an organization grows in size, it becomes more inefficient and bureaucratic. This happens to both the private and public sectors. Private companies must pay for their inefficiency in the form of lost sales, turned-off customers, and dwindling profits. They are punished or rewarded by the quality of their performance.
On the contrary, government is not for profit but to serve the people. Government inefficiency means the public do not get their money’s worth after paying their taxes. How do you punish a government for bad performance? A dictatorial or communist government is normally immune. A democratic government may get voted out. A revolution may also happen when the people are pushed to the limits.
In America, two political groups (conservatives and libertarians) routinely advocate the simplest answer, which is to give government less money by reducing its budget, hence its size. They assume that size reduction will lead to efficiency. That only works to a small extent. If we look back in history when the size of government was much smaller, was it really more efficient?
Just focusing on size misses the point because many successful big companies and governments indeed exist. Furthermore, as the economy grows and gains sophistication, we need a government with the appropriate size that is competent enough to regulate it and safeguard the interests of the people. The size of government must grow with the advancing economy. Otherwise, we have a situation of under-government where businessmen run wild to fatten their pockets with no restraints.
Businessmen only want two things – minimum regulations and minimum taxation so that they have a free hand to maximize profits. If not the government, who will protect the wage earners, the consumers, the weak and the innocent? Can we rely on the businessmen to police themselves?
We should question the true motives of those advocating for a small government. Do they have a business motive hidden behind? Do they try to divert tax money away from education and other long-term investments to the businesses that they serve? The reason employed is always to create jobs. We must also question the logic of this reason, too.
Deciding on the right size of government is difficult. It’s a trial-and-error process, which is only a mechanical aspect of management. The solution lies in the character of people. Since government does not run on profits, it requires moral and responsible leadership at the top to steer it. It also requires competent civil servants to manage and provide services to the people. In other words, the incentives for good government does not come from profits but from a higher purpose – morality, responsibility, compassion, and a willingness to serve.
If the people in government are corrupt, you will need to clean house rather than a budget cut before you can achieve efficiency. When the government achieves efficiency, it will keep its size in check and trim its fat.