Efficiency is good when you are ordering a pack of batteries on Amazon (which I did, just a few hours ago), but not when you are seeking better social outcomes like greater inclusion, democracy or economic justice/protection.

Efficiency has an angle of lean. A direction, a purpose and a vision. When we say we want something to be “efficient,” it means we want to do something with an intended purpose, with a certain set result. This also means that the end result will have some compromises, cut-backs and likely reduction in quality, in some cases (not always).

Here’s the operating mantra for what I have learnt, in my years of studying nonprofits, some government agencies and public admin in general: Efficiency is good, but not always; inefficiency is generally bad, but not always.

Further, government inefficiencies can actually be good, especially when protecting and promoting inclusion, people’s rights and other elements of our social contract.

This question of efficiency has become a bit of an obsession in the business world (and the American government), and quite understandably. With a focus on profits, businesses are concerned about making things faster, cheaper and more efficient. So, why has this seeped into the world of government?

One can argue that this idea of running a government like a business is part of a trend that started in the 1980s, in the US, and more generally, with the rise of Reaganomics. This has continued in some ways, with subsequent Presidents such as Bill Clinton, who was all about cutting “waste” and government welfare programs. There is an enormous body of work that points to how that hasn’t worked out exactly as planned and how the broken social contract has given us a demagogue like Trump. With talk of doing away with Social Security and other benefits in the name of “efficiency,” we are actually tearing away at the fabric of the little social/public welfare support network that our country provides.

 The trend of outsourcing (use of private contractors), decreased spending on domestic programs and deregulating businesses was all wrapped up in the logic of making government and public life more “efficient.” This single-minded focus on efficiency has a lot of downsides – lack of stability, lack of accountability and lack of transparency. And of course optimizing for profits/ cost reduction means massive cuts to benefits and basic necessities for millions. Austerity may be good for the state, but not for millions of masses.

******

How is inefficiency good? You may be asking. Am I just being contrarian for the sake of being one? Not really.

Can we think of a case where inefficiency in public life is to be tolerated and perhaps not as bad as it seems? Democratic decision making is one such area. When people are to be included in decision making, it takes time, effort and patience to include as many (if not all stakeholders) involved. This is by nature inefficient. Autocracy and dictatorships are efficient. Democracy is inherently not. So, anyone calling for democracies to move at breakneck speeds is asking for implementing a small group’s agenda – usually the elites that have access to levers of power.  

Some services or agencies in government are actually inefficient and lose money – they don’t work like businesses. But they serve a crucial social function – like being available and offering a service, when a private company would not do it – because it is not profitable.

Such cases justify an inefficient agency/ service, even if it is not the best or top of the line. USPS, for instance delivers mail across the country, in remote parts and under conditions that any private player would choose not to operate. The USPS also has been mobilized in terms of natural disasters. As this Urban Institute report points out “The Postal Service moved quickly to reestablish communications, to reopen lines of commerce, and to deliver government information, relief checks, and medicine to hurricane victims living in makeshift shelters. Its extensive address database enabled it to locate hundreds of thousands of displaced persons so that they could be reunited with their families.” Such an infrastructure is worth its weight in gold and exactly what we need, during emergencies.

There is a long history to how we have become obsessed with this one idea, to the detriment of all others – including more democratic decision making, inclusivity, equity, justice and stability.

Going back in time, more than a century, the thinking about efficiency in public life, in management started with the “scientific management revolution,” – think of the early industrial era. “Taylorism,” or the way manufacturing plants were supposed to be run were ideas that shaped how factories in the US (and later, around the world) were supposed to run – reduce waste, increase productivity and save time and labor costs. These principles, which we take for granted – and without any questioning – are the bedrock of modern manufacturing. These ideas of business have seeped into the world of governance and we are witnessing the culmination of these in the ideas and policies being proposed, in 2024. While it is too early to speak of what they will yield, we can certainly look at the world since the 1980s and look at how certain departments and government agencies have been hollowed out, and the negative consequences for our society.