The Government’s Incentive Problem


May 26, 2014 12:00PM

Having just recently moved from Virginia to Tennessee for my new job at the Beacon Center, I had to acquire a Tennessee driver’s license. As I sat in the DMV, frustrated like so many Americans by the incompetence and complete lack of customer service by the employees who worked there, something dawned on me. Everyone hates the DMV, there are always long lines, it’s completely inefficient, and the employees are rarely helpful. Yet, despite all of these characterizations, which most people on both sides of the political spectrum would agree with, we all continue to go back to the DMV because we don’t have a choice. I could go home and write a nasty review on Yelp or post a Facebook status about how horrible my DMV experience was and absolutely nothing would change. If a restaurant got the kind of reviews the DMV does, it would go out of business. Unfortunately, this isn’t the way it works with government. Next time I need to get my licensed renewed or changed, I am required by law to go back to the DMV. I have no other alternative like I do in the private market. If I had a bad experience at Pizza Hut because the line was too long or the service was bad, the next time I wanted pizza I would go to Papa John’s instead. If there was competition and the government allowed for a private business to compete against the DMV, the DMV would have no choice but to improve or go out of business (my preference). Currently, the DMV and pretty much every other government organization have absolutely no incentive to improve and we will not see improvement until private enterprise is allowed to compete with the government. The innovation we benefit from every day is due to competition in the free market. Until we break down the government monopoly, those services it provides will remain the way they always have been.   -Mark Cunningham

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