Public vs. Private Sector

The argument that government is not as efficient or as effective as private enterprise continues to rage on. I finally thought it would be worthwhile to offer my two-cents worth to the argument. Seeing how I work for the government, you probably think that I am biased towards it. I will admit that this is true. But please be aware that my arguments are based on experience, not on academics (although I reserve the right to use academics for reference). I’m not going to argue which is better to work for… that’s for the reader to decide. Rather, I will offer my arguments as to why I think that government organizations are generally actually more efficient than private businesses.

I’ll start with customer service. It would seem that since companies are trying to lure and keep customers, they are doing what they can to increase their customer service. You could even argue that governments don’t need to worry about customer service because many of their citizens usually don’t choose where to live once they’ve moved in. This is false. In fact, governments are very concerned about citizen-relations because they realize that citizens do have the means and option to move. Many of our larger cities have seen a decline in population in the last twenty years, while the suburban communities have seen an increase. Development in rural areas is an important issue. This is evident that governments are concerned about the people they govern. Yet private companies were the driving force behind the customer service charge, but that seems to have waned among some companies. I think I am especially upset about many of the large department stores. Many of these stores have had to deal with low employment, so they seem to have hired just about anyone. Yet they seem to miss the fact that they need to train employees on how to deal with customers. I’m sorry, but if I get some cocky 17-year-old guy that’s too busy speaking on the phone with his buddies to answer a couple of questions, I can easily find another store to patronize. I think many governments have realized this, so they have made efforts to become more in-tune to what their citizens want… but you still can’t please everyone.

The second complaint I hear about is the rigidity of government bureaucracies. Yet there is also the argument for equity and fairness. Max Weber argued that bureaucracies are the most efficient and fairest organizations around (during the 1920s). Yet I have recently seen more problems in the private sector in relation to this. The biggest gripe I have is that when I take an item to the store to exchange, they make me sit through this entire process of scanning in the old item, applying the credit to my account, then ringing in the new item. During this entire process, I have gone from one receipt to three… there are times I’ve ended up with seven (must be that new math). Yet government bureaucracies are doing many things to make life easier for their customers. I recently visited a Division of Motor Vehicles office to change my address. While there, I observed the operation. When you walk in, you read a sign that explains the process. First, you take a number from the machine, and you push the button for the category of your visit (licensing, vehicle registration, etc.). Second, you don’t stand in line… you sit. Who would’ve thought that people actually hate to stand on their feet for 20 minutes? Anyway, you sit and wait for your number to be displayed on a large electronic board. If you have a form to fill out, you can do so while waiting for your number to appear on the board. Finally, you are called to a counter where a customer service representative helps you deal with your paperwork. I even hear that they will be working on better id photos.

Third, when was the last time a government filed bankruptcy? Only two major cities (that I know of) have in the last century. Meanwhile, many companies are merging or closing down. Sure, you can argue that it’s the result of fierce market competition, but how many cities have to compete against the same conditions? How many people move out of the cities and into the suburbs? Many governments continue to struggle with budget deficits and other shortfalls, yet they seem to develop balanced budgets and continue to operate rather well. Companies that run into problems close branches (like some retailers), shut down factories, or even completely disappear by the wayside.

I haven’t mentioned accountability yet, have I? This is very important. When a company makes a mistake, the company begins to point fingers. This was pretty apparent in a recent automobile mistake. Eventually, the company accepted fault and paid the consequences. Government officials are much more accountable in this case. If an elected official makes a mistake, he or she usually gets elected out (well, we won’t discuss the conduct of a high elected official and his intern). My point is that there is a higher level of checks and balances between the public and its government than there is between companies and their customers. Warranties are useful in some cases, but they are usually limited and not heeded until after those limits have passed. Elected officials are out meeting their constituents time and time again just to continue to serve. That, I believe, is a high level of accountability.

Finally, there’s the cost of government. Governments are constantly increasing their services while simultaneously cutting their primary revenue sources, i.e. taxes. Businesses increase prices when the cost of production increases. Yet governments have been under this sad façade of cutting taxes while increasing services. The truth is that governments are really at their wits’ ends. They’ve fallen under the guises of strategic planning and benchmarking (and a list of other names), and they’ve really been able to pull off this amazing feat. Only lately have governments really felt the pinch of this. Companies, on the other hand, have been raising prices… some beyond belief. And prices can increase more than once a year… governments cannot raise taxes more than once a year due to the constraints of the budget. Where is the budget for companies? They do make them, but they are usually not as constrained to them the way governments are.

Thus I believe that the public sector does not receive its fair shake in the argument of which is more efficient and effective. No system is perfect, public or private. Yet it is difficult for me to argue one is better by comparing apples to oranges. The bottom line is that governments are not any worse than private companies… I dare to argue that governments have as many pitfalls as private enterprises, but with greater restrictions. On the bright side, I do like the fringe benefits that governments offer.