As a general matter, governments are poorly managed compared to businesses in competitive markets. They tend to spend money on low‐value activities, put up with sloth and waste, and follow failed policies for years without a course correction. I have examined the structural causes of federal waste and mismanagement in studies on Congress and the executive branch.
Many of the federal government’s structural problems also bedevil state governments. Yesterday, a Washington Post editor, Gene Park, described some of the dysfunction in Hawaii’s government that led to the false missile alert last month.
I could not figure out whether Park was mainly blaming institutional problems—such as union job protections—for government failures, or whether he was blaming the general culture of Hawaii and its government.
Certainly, the two factors are related. Flawed institutions such as labor unions create bad incentives and spawn a culture of waste. I would guess that people are similar everywhere, but different institutions across societies have shaped differing cultures or general behaviors. Of course, within societies people have many different personality traits, and governments likely attract workers seeking an environment of high job security and low performance expectations.
Is Hawaii’s government more mismanaged than other state governments? If so, is it because high unionization and other features of its government have created bad incentives, or is it because people in the state hold attitudes that undermine government efficiency?