Matt Yglesias Summarizes the Public Parks Opportunity in One Paragraph

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.

  • Joe -

    "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. "

    blatantly obvious with money spend in the school system "for our children" - basically all the money goes to higher teachers salaries

  • Ombibulous

    A U.S. Postal Service driver crossed paths with a United Parcel Service (UPS) driver during the busy holiday season.

    UPS driver: "Hey! How's it going!"

    Government employed, unionized USPS driver: "Horrible! So many packages! How's it going with you?"

    UPS driver: "Terrific! So many packages!"

  • irandom419

    So basically the public parks people are more greedy than wall street and don't have an iota of public servant left in them.

  • joe

    A few years ago, the local school district was doing major expansions at all 4 high schools with only minor increase in students. I ran into the school board president at at social function ( our daughters are the same age)
    I asked the school board president why so much taxpayer money was being spend with no increase in student enrollment. Her response was " this was bond money, not taxpayer money" oblivious to the fact that taxpayer money is needed to redeem the bonds

  • Matthew Slyfield

    "As I have always said, government is not populated with bad people, it
    is populated with perfectly normal people who have terrible incentives."

    Have you ever stopped to think that those incentives are rather attractive to bad people. Sure, there are some normal people dealing with terrible incentives, but government has a disproportionately high percentage of bad people precisely because bad people find the terrible incentives particularly attractive.

  • bigmaq1980

    Right. Also...

    Having implemented systems that measurably saved a federal department several $M, they couldn't reinvest that for future desired projects that would also save money - Why? Because, as they say, the "different color of money". Money saved in one part cannot be used in another part that is appropriated separately (different line item). Money is not fungible within organizational boundaries.

    So, they were left begging for more money, while the budget line item that the savings appeared, disappeared (i.e. reduced) the next year.

  • NL7

    In addition to prestige, with projects that have large capital outlays, it's often difficult to stop operating needless investments. If you can get the capital outlays, then it's politically difficult to pull out of them later.

    It's comparatively easy to tell Tyson's Corner that there's no money or appetite for a Silver Line to the DC Metro. Sorry, lack of funds, too much effort to build a new line, etc. But once the Silver Line stops open, it's hard to shut it down unless it's unsafe, grossly expensive, or unpopular. Once people buy homes and build apartments and retail centers on the promise of a metro line, you've created thousands or hundreds of thousands of financially interested parties. Closing the line makes their homes and investments less valuable.

    It's easier to wrangle capital maintenance with the threat of dangerous derailments. Nobody dies from lack of a new metro line being built. But once you get it built, you have a better argument for some modest appropriations for safety and maintenance.

    In addition to the prestige of opening a grand new line, the prestige of running a larger WMATA with more employees and more passengers, etc.

  • markm

    No, most of it goes to ADMINISTRATOR'S salaries and fancy offices. The public schools I attended 50 years ago had about 10 teachers per administrator - including the grossly underpaid secretaries. Now there's nearly one administrator per teacher, and most of them are paid more than any teacher.

    ...But they have to have all those office drones to fill out the paperwork now required by the federal and stage governments. There is truth to that statement, but I also suspect that it takes 3 college graduates with education administration majors to replace 1 good secretary of the old days. Those secretaries weren't college educated, but they were hardworking and well above average intelligence; now, education administration is one of the two college majors with the lowest SAT scores going into college and GRE scores coming out. Those people are _stupid_.

  • markm

    They are just following the incentives - like all monopolists.

  • Joe

    Mark - True most of the money goes to increased administration, nicer offices, etc, with very little of the money going for actual improvements in education. The selling point is better teacher pay will attract and retain better teachers. The reality is what you stated.

  • joshv

    Yeah, we had a local park district head make that same argument "No, these aren't financed with taxes, these are paid for by bonds" - as if going into debt to enhance recreational space is a good investment, and bonds don't have to be paid back with tax payer dollars.