The Problem and Auditable Quality Standards as a Solution

Government is unique in that the economic reality that confronts almost every other kind of economic entity does not confront government. Government will never go out of business as a consequence of a lack of delivered quality or competition. The problem is that there is no "invisible hand" that guides government services naturally to meet the demands of its customers. Only elected representatives can shutter those that do not work, and the record of such shut-downs is almost non-existent

Government must provide essential public services and it must ensure that public obligations are met. Municipal bankruptcy notwithstanding, there is not one poorly operated city (or more specifically a municipal corporation) that will be closed and cease to exist. When cities are so badly managed that they cannot pay all their bills, a court may appoint a receiver to remove the discretionary powers of the city council, or to restructure its operations, but the city structure will remain in some form, as if it has eternal life. The taxpayers will be required to continue to pay for its operations through taxes.

Even poorly operated government services will continue to operate, because its revenue stream, through taxes, is automatically collected each year on a formula basis. It does not depend on individual taxpayers approving its service level and agreeing to "buy" a set of government services for the year. Those taxpayers do not have a choice of providers. It is structured as a monopoly to a captive consumer base. It is the pre-eminent bundled package of services.

Government is missing the most important input for the practice of "quality science"—it is missing the Voice of the Customer. There is no one direct "customer" of government services that determines the value of what is received—nor could there be. Voice of the customer is often based on a presumption that in the production of goods and services there is a series of individual transactions that shape and deliver each product, and that at each step there is a producer and a customer. In such an environment it is easy to demonstrate that the services were or were-not effectively and efficiently provided according to the single set of requirements important to the person receiving them. This is often not true in government, and the least appropriate "fit" for this model is in regulatory services, where the person being regulated does not want the service—a speeding ticket for example.

A singular "voice of the customer" concept in government is confounded by the principle of equity. Equity in government means that fairness and other attributes of public purpose often enter into each transaction. So for example, in matters of justice, the decision reached is based on principles of fairness and consistency with law, and not on any "user" needs. In issues of providing monetary support, government must consider whether eligibility requirements are met, and must review whether funds are used for authorized purposes. Principles of equity require that corollary issues serving other purposes are as important as the transaction initially desired by a distinct individual. In addition, even individual agencies perform multiple services, so a description of what each agency does, for whom, and to what effect or outcome, is arguable. This does not mean that voice of the customer cannot be achieved, but it must be based on a carefully constructed model that starts out with a clear definition of what outcome is desired, and that in turn will define the product or service "users" and stakeholders with whom we must communicate to negotiate requirements, and performance standards.

Unlike with private enterprise, individual citizens and taxpayers cannot input a marketplace decision about the government services they now receive, with the collective result of those decisions resulting in changes to the next years' operating budget of those specific government offices. Instead, taxes are "automatically" levied on behalf of the group of departments and offices that are included within the jurisdiction. In addition, the division of taxes between the various agencies that spend the money is also by formula—through legislative and budgeting action—and none of the individual agencies depend on a positive marketplace decision—they each get a legislatively determined "piece of the pie". There is no self-correcting economic motivation as there would be for the divisions of a single company that would show the products and services of one Division were very widely accepted by consumers while those of another were rejected. Government is a package deal, with funding provided through an annual budget, and there is no "invisible hand" that encourages agencies to grow and improve in the areas of customer satisfaction, or efficiency. It sounds like a hopeless mess, that will never sort itself out, but it does not have to be.

Some may argue that those who hold political office must serve in the place of customers, as primary stakeholders, and that through their collective political actions they must provide the correct economic motivation and leadership direction in order for quality to result. However, while having legislators as surrogate customers might work in theory, the actual experience has been different. Our elected leaders are not at all like corporate directors in that they do not have a vested interest in the overall positive performance of the governments for whom they are supposedly "accountable". Their most direct line of responsibility is to the small group of special interests on which they depend for the preponderance of their campaign re-election funding, and secondarily to the members of the majority political party within the geographic area in which they are elected—which could be as little as one-third to one-fourth of the total adult population in that district. Within some reasonable bounds of behavior, a long tenure in office can often be achieved by any politician who can deliver only those votes that are viewed favorably by his or her special interest supporters, through obtaining "key" partisan votes and through obtaining a generous amount of funding for local projects.

A further problem is that elected officials do not get good information to know where to cut even if they have the highest and most noble public interests. For example, how can your Congressman determine whether the Federal Department of Education is doing as good a job as the Department of Housing and Urban Development, or if either or both are unnecessary or in need of improvement? How can Congress get early warning that three of the major programs within the Departments are very poorly run, while the remainder are doing...