Inefficient Government Rules and Regulations

Rules are part of the public-sector terrain, but they can be the most frustrating aspect of government.
by | October 6, 2010 AT 2:00 PM
Confusing maze

I serve on the school committee in my town, and we wanted to put a modular classroom, a prefabricated building that is also called a temporary or portable classroom, on the back of a crowded elementary school. We expected it to cost about $600,000. But a new state regulation dictated that if we put on a modular, we'd have to install a new sprinkler system in the 50-year-old building at a cost of an additional $900,000.

Needless to say, we didn't put on the modular classroom.

This fire safety rule may have been well-intentioned, but in application it produced a foolish result. Students now have to endure overcrowding, and the building still doesn't have a sprinkler system.

Rules are part of the public-sector terrain, but they can be the most frustrating aspect of government.

Colleague Stephen Goldsmith has written how civil service rules and union contracts can frustrate efforts at finding better, faster and cheaper ways of doing things. But that is only part of the picture. A whole host of well-intentioned rules work against common sense.

A recent Wall Street Journal article looked at how Detroit was stymied in trying to spend $30 million in federal stimulus money on home weatherization. After they sent out requests for bidders, they were told by the state's Department of Human Services that they couldn't award the work unless they paid a "prevailing wage" as defined by the federal Davis-Bacon Act. But a "prevailing wage" didn't exist for weatherization work, so they had to conduct a survey first. This created a delay of months.

It didn't end there. According the Wall Street Journal, the "White House Office of Management and Budget had notified all recipients of stimulus funds that they had to comply with the National Historic Preservation Act...Michigan's historic preservation office said it would have to review all work being considered for any house that was more than 50 years old."

This created more delays, more paperwork and more reviews.

The unemployment rate in Detroit is about 15 percent. These rules tied up much-needed funds that could have employed hundreds of people. As the WSJ noted: "For a year after the stimulus bill passed, most of the extra funds for Michigan community agencies went unspent." The most infuriating aspect is that these rules aren't producing real public value.

In the 1990s, the best-selling business book Reengineering the Corporation preached that firms needed to look at their processes to eliminate all steps that weren't producing customer value. Business process reengineering helped many businesses cut costs and boost profitability. There were some failed reengineering efforts, too, but the basic idea of examining workflows and weeding out those steps that weren't producing value was a good one.

In government, such thinking isn't just rare, it's often illegal. Detroit officials don't have the authority to ignore the rules put into place by Congress just because they're foolish.

Author Philip Howard argues that such laws are destroying the ability of government to function. The law, says Howard, "has taken a life of its own, like a dead tyrant ruling from the grave. While it's hard to pass new laws, it's basically impossible to get rid of old laws. Why? The reason is simple -- because they're surrounded by armies of special interests." Indeed, union lobbyists fought hard to get the prevailing wage rule attached to stimulus funds.

Long ago, a visitor to America warned what happens when government overregulates: "It covers the surface of society with a network of small, complicated rules, minute and uniform, through which the most original minds and the most energetic characters cannot penetrate." Ask someone who works in government today if Alexis de Tocqueville's description doesn't ring true. Public employees expend a great deal of effort trying to get around the rules in order to get stuff done.

In the 1990s, back when the era of big government was over, the reinventing government movement made a serious attempt to cut back on needless red tape. Vice President Al Gore went on the David Letterman show to illustrate the absurdity of federal procurement rules. One specification for buying an ashtray had a requirement regarding how many pieces the ashtray would break into when struck by a hammer. Donning a pair of safety glasses, Gore took a hammer to the ashtray, and argued that we needed to smash all such foolish rules.

I'd like to hear more public officials express anger about the rules today. We can no longer afford the wasteful consequences of rules that produce no public value and sap the initiative of those in government.