Saturday, October 26, 2013

Diseconomies of scale in federal programs

Click on the link below and look at the graph (quick and easy to do) that shows how many federal agencies have programs in particular areas.  For instance, 5 agencies do 15 unmanned aircraft programs.  Do you suppose this is efficient?  I am not saying that large corporations are much more efficient but it would seem that the profit motive would lead to some restructuring and streamlining that might make things more efficient.

West Michigan Economy and Politics: How to Manage the Federal Budget

5 comments:

  1. Everything is so complex and intertwined... it's hard to make a call on any of these.

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  2. i think it makes sense for large corporations to step in on these sectors going along with the profit motive idea. who decides how much each category gets in terms of programs, agencies and funding?

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  3. But if you have been following the Obamacare IT nightmare.....big corporations don't always succeed in providing goods that have significant market failures attached to them.

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  4. I agree with Sameen, although corporations may not succeed all the times but if they are in the best position to handle the situation then it should be them.

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  5. I don't think the 'free market' need take over in all of these situations, especially given not all the programs have a profit motive (or would have the profit motive play out in a socially positive way). It is clear that the problem here is inefficiency. I think in some ways we have come to associate this with government, that their programs are necessarily inefficient. Why does that have to be the case? Shouldn't we demand the government be more efficient? We certainly ask plenty else of it.

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