Book Review: The Political Economy of Federal Government Growth: 1959-1978 by James T. Bennett and Manuel H. Johnson

Center for Education and Research in Free Enterprise, Texas A&M University, College Station, Texas 77843)
145 pages • $12.95 cloth; $4.95 paperback

Bennett and Johnson, economists at George Mason University, reveal that official statistics often understate the true burden of government. Agency budgets, for example, do not take account of the enormous sums that businesses must spend in order to comply with regulations. Nor are future pensions, loan guarantees, and other long-term or contingent obligations reflected in current expenditures, despite the fact that they are mounting rapidly.

Employment figures are equally misleading. Thousands of full-time personnel are reclassified part-time every year to circumvent limits on hiring. As many as eight million more individuals—contractors, consultants, and state and local employees—depend on federal grants and programs for their paychecks.

There have been important qualitative changes as well. During the twenty-year period examined by Bennett and Johnson, policymakers at GS-13 to GS-15 levels more than tripled in strength. This is “the bureaucracy,” and it has a vested interest in its own expansion.

The rational self-interest of any other actor in the political process is liable to change; that of the bureaucrat is immutable. Civil service protections have made it virtually impossible to fire him, and he gets no rewards for being efficient, economical, or productive. On the contrary, his promotions, salary increases, and status depend almost entirely on his multiplying the number of people working under him.

The authors build a persuasive case for regarding the bureaucrat as the real villain in the piece. They examine his skill in cultivating other political actors and playing them off against each other, his shrewd manipulation of “crises,” his use of the media, and (this is increasingly important) his clout at the polls. At a time when low voter turnouts are common, government workers are one bloc that can always be counted on to show up in force.

The authors’ analysis is also appealing because it suggests a possible solution. If the bureaucrat is the prime mover for growth because the existing incentive system has programmed him for that role, restructuring the system might well improve his behavior. Bennett and Johnson suggest a number of changes that could be made in this respect, utilizing both the carrot and the stick. Promotions and salary increases should be tied to job performance, not to the number of under lings. Discipline and removal procedures should be simplified. In addition, the authors propose that a “tax” be levied on the budgets of agencies that create paperwork for the private sector. If an agency’s appropriations were liable to be reduced every time it introduced another form, there would be less unnecessary paperwork.

In short, an admirable primer on government growth. Short, pithy, and illuminating, it ought to be required reading for every one of Mr. Reagan’s budget cutters.