Monday, December 12, 2011

Public Scrutiny When Privatizing the Public Sector


The Problem:
After we abolished the parliament and the government, the civil administration feels rather lonely and unsupervised. So why don't we abolish the administration too?
No Civil Service is considered a bastion of effectiveness and innovation. If efficiency could reach private sector level, it is said that income tax could be reduce to half. Google government inefficiency and you will find an endless series of cartoons. I could not resist to copy a few.




Inefficiency is inherent to the current system of public administration. Explanations abound: Politicians don't like cuts in the public sector as it is complicated, long term and against a strong constituency. Using the coercive power to raise taxes is always easier. Though these options are in no way mutually exclusive. The waves of privatization of public sector functions have reduced cost but too often at the expense of quality. In short, it is complicated.  


The Solution:
In the new democracy advocated by this blog, every law has its own budget. The logical next step is that every law has its own administration. How does it work:


  1. The public proposes a law using their like-button 
  2. The cost of implementation of the bill is an integral part of this public discussion (even the type of taxes to raise the funds are discussed.)
  3. A random sample of the electorate approves or rejects the bill.
  4. Using the cost proposal as a ceiling, private companies can bid to implement the law. 
  5. A good performance system ensures efficiency does not come at the cost of quality.
  6. Other private companies bid for supervision and audit of the implementation including complaint handling.
  7. At all times implementation should be fully transparent (with the usual exceptions) and any citizen can ask for clarifications. 
Sure, not every civil servant will disappear (think national defense), but this is the vision. This is what should lead us towards our goal. And yes, privatization is preferably local in line with the principles of agile reform.


The Transition:
Privatization has been the flavor of the week for several decades now. But administrations have been growing simultaneously certainly if contracting-in is taken into account. And it has gone at the expense of quality as far as the time I spent talking to a machine to get public services is a reliable indicator. 
Civil service reform is as complicated as it is unpopular. The current crisis might be a good opportunity to implement unpopular measures and to start a process of real privatization. 
Still, a better approach might be to cut the public administration into very small autonomous pieces that have distinct function with a performance target linked to a fixed budget. This has been tried in various sectors around the world with mixed results. 
No doubt, abolishing the the administration is fraud with difficulties. Funny enough, when I try to explain this to friends, they find it so much more plausible than abolishing elections.