Government don't do IT good. Not just here in the United States, but in Britain, as this Telegraph blogpost argues. “Most nations -- but especially the USA -- have a woeful record when it comes to IT procurement,” writes blogger Willard Foxton, with a link to a subject that is familiar to American readers, the debacle of the Obama administration's healthcare.gov.
Foxton goes on to say that it's not only governments that have problems procuring information technology. So do private sector firms, he writes, citing a McKinsey & Co. report that half of large IT projects “go wildly over budget.”
There’s a difference here, though, between the private and public sectors. The private sector is held accountable in the marketplace. If IT doesn’t work, or if cost overruns raise prices to uncompetitive levels, consumers have alternatives. When government IT fails, however, the citizen doesn’t have any alternative. You stare at your computer, wondering if it might work if you hit it with a hammer.
All of which suggests that centralized command-and-control government is an unsuitable means of delivering services in the information age. When Social Security was enacted in 1935, in the industrial age, the government could hire armies of file clerks who could arrange pieces of standard-sized page in manila folders in steel filing cabinets. That wasn't too hard to organize. It took time to extract the appropriate piece of paper to address any individual request for information, but it could be done. The basic system didn't have to be overhauled every two years -- the time in which computer capacity doubles in line with Moore's Law. You just set up a schedule to procure more pieces of paper, manila folders and filing cabinets.
IT doesn’t work that like. Government procedures are inevitably slow, for reasons that include the good (to prevent fraud on taxpayers) as well as the bad (employees can’t be fired or otherwise held accountable). They can’t match the pace of technological change.
More than half a century ago, Friedrich Hayek argued persuasively that centralized government could never process information as well as decentralized markets. Government’s incompetence at IT procurement suggests that markets’ superiority over centralized government is even greater than when Hayek was writing.
I've written several columns this year on the poor performance of government, focusing on recent books by John Micklethwait and Adrian Wooldridge, Peter Schuck and Philip Howard, all highly worth reading.