Better Government

The Real Threat to Democracy: Money Problems

Critics of democracy -- and they are many -- believe that democratic governments eventually fail because the people will tax themselves less and less while voting themselves ever-increasing benefits. The fact is that failure to exercise prudent fiscal stewardship is one of the surest ways to undermine democracy. (Just ask the residents of Detroit how much democracy they enjoy.) The failure to make wise choices will steadily erode the ability of any entity to control its own fate.

America’s founders conceived of democracy as a form of government controlled by people like themselves: white male property owners. It’s hard not to think that they would see the reforms we have accomplished since -- extending the vote and the opportunity to serve in elected office to the broad swath of ordinary people -- as placing power in the hands of the rabble. But if you believe in the intrinsic value of human beings, then of course the franchise should be shared broadly. In these times we call it crowdsourcing. READ MORE

A Better Way to Save Jobs: Employee Stock Ownership Plans

Do you recall the single word of advice for achieving prosperity that Dustin Hoffman was given in The Graduate? “Plastics.” Well, Chris Mackin has a one-word prescription for public officials looking to reduce economic inequality and increase prosperity: “Assets.” Mackin, who for eight years ran a program for the state of Massachusetts focused on employee ownership, calls assets “a seemingly magical set of resources that work for anyone who owns them.” A powerful way to get assets into the hands of workers is through employee ownership.

A look at the data confirms the power of employee ownership, the dominant form of which is through employee stock ownership plans (ESOP). During the Great Recession, the average job loss for U.S. companies was 12 percent. For ESOP companies, it was only 2.5 percent. ESOP companies grow about 2.5 percent a year faster than the average company, and employees get two and a half times as much in retirement assets as other employees. In 2013, while 7.3 million private-sector workers belonged to unions, more than 12 million were employee-owners. READ MORE

South Korea’s Street-Level Transparency

This story is part of Governing's annual International issue.

I was in Seoul, South Korea, last fall, and I was so surprised by a sidewalk sign I saw on one of the streets that I stopped and took a picture of it. It was a large, temporary sign with a description of the sidewalk construction project that was under way, with beginning and end dates noted in both English and Korean. The unusual feature that caught my attention, however, was that the sign prominently displayed the photographs and phone numbers of the people directly responsible for the project. READ MORE

Will Financial Reporting Finally Make Sense?

Back when I taught a graduate course in public finance, I would ask the budding young government managers on the first night of class why they were there. They would look at me a bit quizzically and tell me they were there because the class was required. Then I would tell them that the reason they were there was because they could not manage any organization, public or private, without understanding its finances. 

But I would also tell them that for a host of reasons—including the lack of a single financial bottom line and government’s (incorrectly) perceived imperviousness to market discipline—public-sector finances are much more difficult to understand, which leads to bad management decisions. Sometimes the people making those decisions simply do not understand their consequences, and sometimes the opaqueness of a jurisdiction’s finances allow those consequences to be deliberately obscured. READ MORE

A Better Way to Link Policy Analysis and Performance Management

Operation Breakthrough, a Kansas City social service agency founded in 1971 by two nuns, sits in one of the poorest parts of the city. It serves about 400 kids every day, 98 percent of whom come from families who live below the poverty line. About a quarter of the kids are homeless and another quarter are living in foster care.

Operation Breakthrough is one of dozens of nonprofits and government agencies trying to improve the lives of children and families in the city’s urban core. It’s clear that some of these agencies are doing vital work well. Yet Sister Berta Sailer says that conditions in the neighborhoods served have steadily worsened over the decades. READ MORE