James Wilson

Bureaucracy

What distingishes public from private organizations is neither their size nor their desire to 'plan' (that is, control) their environments but rather the rules under which they acquire and use capital and labor. General Motors acquires capital by selling shares, issuing bonds, or retaining earnings; the Department of Defense acquires it from an annual appropriation by Congress. GM opens and closes plants, subject to certain government regulations, at its own discretion; DOD opens and closes military bases under the watchful guidance of Congress. GM pays its managers with salaries it sets and bonuses tied to its earnings; DOD pays its managers with salaries set by Congress and bonuses (if any) that have no connection with organizational performance. The number of workers in GM is determined by its level of production; the number in DOD by legislation and civil-service rules.

What all this means can be seen by returning to the Registry of Motor Vehicles and McDonald's. Suppose you were just appointed head of the Watertown office of the Registry and you wanted to improve service there so that it more nearly approximated the service at McDonald's. Better service might well require spending more money (on clerks, equipment, and buildings). Why should your political superiors give you that money? It is a cost to them if it requires either higher taxes or taking funds from another agency; offsetting these real and immediate costs are dubious and postponed benefits. If lines become shorter and clients become happier, no legislator will benefit. There may be fewer complaints, but complaints are episodic and have little effect on the career of any given legislator. By contrast, shorter lines and faster service at McDonald's means more customers can be served per hour and thus more money can be earned per hour. A McDonald's manager can estimate the marginal product of the last dollar he or she spends on improving service; the Registry manager can generate no tangible return on any expenditure he or she makes and thus cannot easily justify the expenditure.

Improving service at the Registry may require replacing slow or surly workers with quick and pleasant ones. But you, the manager, can neither hire nor fire them at will. You look enviously at the McDonald's manager who regularly and with little notice replaces poor workers with better ones. Alternatively, you may wish to mount an extensive training program (perhaps creating a Registration University to match McDonald's Hamburger University) that would imbue a culture of service in your employees. But unless the Registry were so large an agency that the legislature would neither notice nor care about funds spent for this purpose—and it is not that large—you would have a tough time convincing anybody that this was not a wasteful expenditure on a frill project.

If somehow your efforts succeed in making Registry clients happier, you can take vicarious pleasure in it; in the unlikely event a client seeks you out to thank you for those efforts, you can bask in a moment's worth of glory. Your colleague at McDonald's who manages to make customers happier may also derive some vicarious satisfaction from the improvement but in addition he or she will earn more money owing to an increase in sales.

In time it will dawn on you that if you improve service too much, clients will start coming to the Watertown office instead of going to the Boston office. As a result, the lines you succeeded in shortening will become longer again. If you wish to keep complaints down, you will have to spend even more on the Watertown office. But if it was hard to persuade the legislature to do that in the past, it is impossible now. Why should the taxpayer be asked to spend more on Watertown when the Boston office, fully staffed (naturally, no one was laid off when the clients disappeared), has no lines at all? From the legislature's point of view the correct level of expenditure is not that which makes one office better than another but that which produces an equal amount of discontent in all offices.

Finally, you remember that your clients have no choice: The Registry offers a monopoly service. It and only it supplies drivers' licenses. In the long run all that matters is that there are not 'too many' complaints to the legislature about service. Unlike McDonald's, the Registry need not fear that its clients will take their business to Burger King or to Wendy's. Perhaps you should just relax.

If this were all there is to public management it would be an activity that quickly and inevitably produces cynicism among its practitioners. But this is not the whole story. For one thing, public agencies differ in the kinds of problems they face. For another, many public managers try hard to do a good job even though they face these difficult constraints.