A two-fer! This is from Yglesias's very good article on passenger rail also quoted in the previous post. In discussing why Amtrak is generally uninterested in making incremental improvements on the Northeast Corridor, he writes:
The way Amtrak is currently set up, there's no real incentive to undertake incremental improvements. The Northeast Corridor already generates an operating profit, which simply defrays losses elsewhere in the system. Making it run better doesn't generate any wins for the people who would have to do the work, and would plausibly just lead Congress to reduce subsidies. If the NEC were spun off as an independent entity — perhaps even a private company — then it could internalize the gains from improved service and seek private financing to make cost-effective investments.
Long-time readers will know that my company privatizes the operation (but not the ownership) of public parks. I will make two-hour presentations to parks agencies about how we can improve operations quality while cutting costs by 30-50% or more, and the near-universal response is, "well, if you reduce costs, then the legislature will just reduce our appropriations." More efficient park operations, and at the margin better visitor service, don't create any wins for agency employees given their incentives. In fact, if the parks are improved and more people show up, their job is just harder. I had the manager of Arizona's premier state park tell me, absolutely in all seriousness, that he had the best job in the world if it wasn't for all the visitors. Can you imagine a McDonald's franchise manager saying that? As I have always said, government is not populated with bad people, it is populated with perfectly normal people who have terrible incentives.
When agencies choose how to spend incremental funds, they will almost always try to route these to the agency staff, in the form of more headcount and/or more pay. When money is actually spent to make investments in the parks themselves, projects are chosen not by return on investment or customer priorities, but based on which ones will create the most prestige for the agency and its leaders. This latter is one reason the Washington Metro is the mess it is, as the agency and the politicians who make appropriations will always prioritize system expansions over capital maintenance and sensible incremental improvements.