Toward a Political Economy of Government Waste: First Step, Definitions

According to Vice President Al Gore's National Performance Review, the latest blue-ribbon commission report on economy and efficiency in the federal government, "the average American believes we waste 48 cents of every tax dollar" (Gore, 1993; 1). Not surprisingly, Rush Limbaugh's favorite source, Martin Gross, alleges that "waste of enormous proportions is built into the federal system, though most of it is expertly hidden; [it] is more prevalent than efficiency, more common than good works" (Gross, 1992; 2). Even Osborne and Gaebler, authors of the recent best-selling book on public administration, Reinventing Government, say that "waste in government is staggering. Our governments are like fat people who must lose weight" (Osborne and Gaebler, 1992; 23). Federal employees estimate that 25 to 50 percent of the personnel in their offices are useless (p. 127). Washington Post editor Brian Kelly (1992) goes even further in his recent book, Adventures in Porkland: Why Washington Can't Stop Spending Your Money. He claims that the 1992 budget contained $97 billion in pork-barrel projects that were entirely without merit and could be "lopped out" without harming in any way "the welfare of the nation." Government waste - and attacks on waste - are hardy perennials. Like the weather, everyone complains about it, but no one ever seems to do anything about it. There are good reasons why this is the case. Government waste is persistent because there is a demand for it. Or, as Gramlich (1990; 226) puts it, "one guy's pork is another guy's red meat." We have two objectives in this article: to explore the concept and nature of government waste and to draw some tentative conclusions that will move us toward an understanding of its causes.(1) What Is Waste? In our survey of the literature on government waste, we were surprised to find that few authors bother to define the term. They offer plenty of examples, of course, but seem to assume that the concept is well understood. That is almost certainly not the case. Otherwise, foolish analysts would not insist that the very idea of waste repudiates the law of conservation of matter, which states that nothing in nature is ever wasted. (In fact, all organizational most natural processes produce waste in the form of unwanted by-products, and some of these wastes are toxic.) Nor would usually wise analysts, such as Ellwood and Patashnik (1993; 22), blithely assert that waste, like beauty, is in the eye of the beholder. We found three notable efforts to define government waste. In a book devoted to the now mantra-like trilogy of waste, fraud, and abuse, McKinney (1986; 5) defined waste as "the unnecessary costs that result from inefficient or ineffective practices, systems, or controls." Recktenwald (1983; 52-53) identified six distinct kinds of government waste involving two kinds of welfare losses: costs unrequited by benefits (a situation he called Q-inefficiency) and excessive costs (X-inefficiency). In a similar vein, Baran (1959; 55) defined waste as the difference between the level of output of useful goods and services that would obtain if all productive factors were allocated to their best and highest uses "under a rational social order" and the level that actually obtains.(2) Each of these definitions is helpful but also somewhat problematic. McKinney reminds us that waste is unnecessary - which is to say, avoidable - but fails to explain what he means by inefficient, ineffective, or even cost. Recktenwald emphasizes waste's protean nature and reminds us that its costs should be denominated in terms of opportunities forgone, but his categories of waste are neither mutually exclusive nor severally exhaustive. Baran adds that waste is gauged by the gap between what we get of the things we want and what we could get. However, Baran's counterfactual proposition is somewhat farfetched. It assumes an ideal state that can neither be achieved nor even approximated. …