Friday, April 02, 2010

Bureaucrats & Politicians

Many people love to hate politicians, blaming them for everything from wars to poverty and budget deficits. I think politicians are actually great leaders and for the most part the discipline that most of them require to be popular enough to win elections repeatedly is rare and envied. In fact, I would hypothesize that statements about "politics being the last resort of scoundrels" is primarily due to the following empirical observations:
1. Some politicians seek to maximize wealth when they attach a low probability to winning the next election, aided by the means to maximize wealth in a way most ordinary people do not; and
2. Many politicians seek to maximize the welfare of their constituents with an eye to winning the next election, without considering the flawed execution of public programs by bureaucrats.
This brings us to the real villains in the public space: bureaucrats, particularly in countries where these people have lifetime job security with minimal scrutiny. Bureaucrats have done much damage in the name of public welfare programs; in many countries they manage very large budgets without the oversight prevalent in the private sector. They generally seek to maximize (relatively successfully) their own private material interests at the expense of the taxpayer without many of the controls that shareholders can exert in private sector settings. The design of rules for the punishment/reward of bureaucrats is an important but minimally studied aspect of social welfare; the implementation of such rules is even more rare.

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