Entrepreneurialization of Government
Something that has consistently bothered me since I began exploring the ?business for social good? continuum is the notion (implied, but not often stated), that the government has been usurped as the primary provider of public goods. Government has failed and private enterprise must take over. Conventional wisdom dictates that government bureaucracies aren?t facile enough to meet the dynamic needs of the populace. In the words of David Bornstein, author of How to Change the World: Social Entrepreneurs and the Power of New Ideas:
Today, many people do not believe that we can alleviate poverty, or fix the education system, or improve the government, or find better ways to deal with many social problems. Amidst this disenchantment with government, the field of social entrepreneurship has emerged?..But in order to [solve these problems] society needs to think differently about the approach.
(Source: article introducing How to Change the World: Social Entrepreneurs and the Power of New Ideas by David Bornstein)
It’s to the point at which topics like ?Governments as Agents of Change,? broached at the Business for Social Responsibility (BSR) conference ?Innovative Strategies–Measurable Impacts,? held last year in New York City, seem almost laughable. But are they?Now clearly, my professional choices have demonstrated a certain degree of sympathy for this point of view. After all, I am pursuing a business degree, not a degree in public policy–not to imply that two are mutually-exclusive. But I cannot say that I have stopped to analyze this core assumption about the role of government. Not surprisingly, my examination of this question has fallen victim to a seemingly endless flurry of pre-MBA activity.
However, it came bouncing back to the surface (as these things often do) quite unexpectedly after a trip to visit a friend in New Orleans. She courageously decided to move home to NOLA from Nigeria eighteen months ago after witnessing the devastation of Hurricane Katrina via CNN. I remember anxiously tracking the progress of the storm with her and subsequently acting as a sounding board to her internal debate about how, when, and whether to return home.
More than a year later, as she took me on an impromptu tour of the city, she deftly explained some of the issues encountered by the citizens of the New Orleans after the storm. The issues: rebuilding homes and neighborhoods via the ?Road Home? fund with all of its delays, the lack of support for renters, the negligence of the levee system, the inefficient and expensive use of mobile homes for temporary housing, control of federal aid disbursement, local political reform, and the practical implications of what a ?market driven recovery? should look like, seemed ridiculously daunting. Nonetheless, despite all of this, the people of New Orleans are taking the initiative to set priorities, rebuild, and bring their city back.
As encouraged as I was by the determination of NOLA’s citizens, I was equally shocked and disappointed by the (arguably) apparent lack of a comprehensive recovery plan sponsored by; you guessed it, the city government. (It was still in the approval process at the time of my visit). To make matter worse, even if there had been a finalized plan, given the federal government’s ineffective response to the disaster, including the under-funding of the relief effort relative to the extent of the damage sustained in Louisiana, and the conflation of disaster relief and rebuilding funds, it might not have been financed even if it had been finished sooner.
So my question is, ?Is it really okay to abdicate, implicitly or explicitly, the distribution and management of public goods to private enterprise??
My gut says no, simply because I?m not convinced that innovation, creativity, agility, and accountability are values that are exclusive to business or entrepreneurship. Fortunately, I?m not alone. Jim Collins, author of one of my favorite business books, Good to Great: Why Some Companies Make the Leap and Others Don?t also wrote Good to Great and the Social Sector: A Monograph to Accompany Good to Great. His central argument is that the principles and practices that support strong organizations are not necessarily specific to business. After all, there are many inefficient, poorly-run companies out there.
According to Collins, ?the critical distinction is not between business and social, but between great and good. We need to reject the na’ve imposition of the ?language of business? on the social sectors, and instead jointly embrace a language of greatness.? (2)
Additionally, Aneel Karnani confronts this issue in an article he wrote for the Stanford Social Innovation Review, ?Microfinance Misses the Mark,? also recently referenced here at nextbillion. Pay particular attention to the sections entitled ?The State’s Responsibilities? and ?Markets Aren?t Enough.? As Karnani argues:
Even those who advocate a market-based approach to providing basic services don?t argue that the state can totally abdicate its responsibilities. …The state must also be responsible for providing services when there is a market failure. Free markets do not work well when economies of scale are very large and there is a natural monopoly, as in the case of piped water, and when the commodity is a ?common good,? as in the case of public health. In such cases, the market might be a partial complement to the state, but it cannot be a total substitute.
What’s more, I would like to believe that occasionally there is a good reason for government to be slow to change. Surely, it can entrench the power of those who’d like to retain it. Fair enough. But on the flip side, I?m not sure that I want a government that can quickly respond to the needs of the people by rewriting the constitution in ?24 hour hours or less.? Okay, the abuse of hyperbole is obvious here, but my point is that there are a few duties and processes that are legitimately ponderous, and for better or worse, bureaucracy supports that.
Just to clarify, I?m not asserting that government isn?t often bureaucratic, slow, inefficient and frustrating. Nor am I implying that unchecked inertia is a good way to protect our rights as citizens. However, I would like to think that we can call for the ?entrepreneurialization of government? with the same spirit that we martial the supposedly rapacious, profit-driven, shareholder-coddling forces of enterprise and corporate business to improve the world.
Why? Because just about everything I’ve read about the aforementioned ?business for social good? continuum suggests that partnering with government, nonprofits, development agencies, communities, etc. is critical to problem-solving. I imagine that the process of partnering; success, failures, and debacles inclusive, would encourage all parties involved to leverage strengths and manage weaknesses. In the long-run best case scenario, we might end up with more efficient government bureaucracies and less “ruthless” businesses. However, I emphasize the phrase ?long run best case scenario.?
To be fair, there is certainly recognition of the problems regarding the role and efficacy of government; from discussions of bureaucratic size to civil service efficiency, this ground is generally well-tread. It just seems to be a less compelling topic of discussion among proponents of ?business for social benefit.?
So let’s go out there and make government more innovative and efficient! Right. As if it were that simple. Nonetheless, we can continue to hope for, and work toward, the best.