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How New Zealand brought transparency and accountability to government spending

The challenge of phasing out programs that have become obsolete and irrelevant


June 26, 2006


It shouldn't be too much to ask that the government spend your money wisely.  Then why does the concept of accountability continually elude policy makers and bureaucrats?  "Autopilot budgeting" seems to be the mindset in Washington where lawmakers are reluctant to perform true oversight of government programs and continue to fund programs that have not demonstrated their worth or relevance.  In many cases programs have been on the books so long that lawmakers don't even question the program's purpose or effectiveness.

Consider what happened in New Zealand in the 1980s and 90s.  The Honorable Maurice McTigue recently gave a talk about the succesful reforms in New Zealand he witnessed and implemented as a member of the parliament.  He headed up several Kiwi ministries (Employment, Labour, Immigration, State Owned Enterprises, Railways, Works and Development) and, also was the chairman of the New Zealand cabinet's Expenditure Control Committee.  TCS reports that McTigue relayed the following story:

During one of his ministerial posts, an underling from the Department of Motor Vehicles came into his office and asked for a larger outlay for his agency. McTigue, in his telling, asked the supplicant why his office required additional funding. The bureaucrat responded that costs had gone up. McTigue, unruffled, asked why that was and the underling said he'd get back to him.

A few weeks later, when the bureaucrat returned, he told McTigue that it had become more expensive to process driver license renewals. The MP then asked a fundamental question: why does the government of New Zealand need to renew licenses every several years? After all, renewals required neither a new photograph nor an updated driving test. Again, the official promised to come back with an answer.

But this time, when he entered McTigue's office, the underling told him that no one in the office could think of any good reason for license renewals. He had discovered that the practice was a historical one: when licenses were first issued for driving horses and buggies in the early 20th century, they were printed on paper that wore out after several years. Thus, the need to issue renewed licenses. Not necessary, of course, in the age of durable plastic laminates.

Presto! An entire office vanished -- and for good reason (to be fair, the government does require, for security reasons, updated photos every ten years and, for safety reasons, a new driving test once licensees turn 70).

McTigue's conclusion is that forces of historical inertia are generally the culprits behind ongoing, wasteful government programs. The original justifications for creating projects, offices, and entire agencies often dissipate over time -- but their outgrowths remain. Only through careful investigation can such waste be disposed. 

In his capacity as the director of the Government Accountability Project at George Mason University's Mercatus Center, McTigue is sharing the lessons of his practical experience with U.S. government officials, including the Administration, members of Congress, and officials from over 23 federal agencies and state governments on applying the principles of transparency and accountability in the public sector.  McTigue's approach is practical and not ideological.  Read the entire thing here.





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