Three Interesting Economic Development Findings in the GAO’s “Government Duplication” Report

It’s time for everyone’s favorite game show, “Pretend that the federal budget problems can be solved by eliminating waste!” And by “everyone’s favorite,” I’m referring to the “60 percent saying the federal budget’s problems can be ameliorated by eliminating waste, fraud and abuse.” Which is right up there for me with “government should be run more like a business” on the list of things that people who don’t understand government like to say.

IMHO.

Which is not to say that there aren’t opportunities for streamlining and improving government, like the ones pointed out in this new GAO report, poignantly named “Opportunities to Reduce Potential Duplication in Government Programs, Save Tax Dollars, and Enhance Revenue.” Among the many parts of the federal government examined, there’s a section about how “Efficiency and Effectiveness of Fragmented Economic Development Programs Are Unclear” (starting on page 42). Here are three interesting things about that section:

1) “GAO has previously developed a list of nine activities most often associated with economic development. These activities include: planning and developing strategies for job creation and retention, developing new markets for existing products, building infrastructure by constructing roads and sewer systems to attract industry to undeveloped areas, and establishing business incubators to provide facilities for new businesses’ operations.” Which is sort of cool…I’ve never actually thought about the formal definition; I’ve always assumed that economic development is like pornography, in that it’s everything that has to do with making money you know it when you see it. By the way, the full list is below on the left column.

2) “Preliminary results of GAO’s ongoing work involv[e] 80 economic development programs…many of the programs were differentiated by legislative or regulatory restrictions that targeted funding on the basis of characteristics such as geography, income levels, and population density (rural or urban)…Additional work to assess progress in collaboration and evaluation could identify areas for improvement, consolidation, or elimination.” You can see the exact lists of programs in the above chart, and there’s actually two interesting things here. First off, I didn’t know that, for example, HUD was involved in entrepreneurial efforts and business parks. Maybe they want to fund BETI? Second, though, I find this interesting because it’s the same thing I wrote about in my post on the potential for increased collaboration or consolidation in economic development in our region. The concern is not that the programs that exist are bad, per se, or even that they’re duplicatively serving the same exact stakeholders. Rather, the question is, “is there a different collaborative or administrative structure that could deliver these same services for less overall cost and/or greater impact.”

3) “Agencies need to collect accurate and complete data on program outcomes and use the information to assess each program’s effectiveness.” I’m always of two minds of performance measurement. I know, I know, it’s blasphemy to say so, and certainly I’m all about accountability. But I have two concerns. A) Some of the impacts of programs aren’t that easy to measure; maybe they’re long-term or maybe they’re more qualitative. That doesn’t make them less valuable, necessarily, and frankly I’m not convinced that the state of performance measurement as an objective endeavor has progressed to the point that it’s all that good at measuring real world outcomes for policy. B) The old “you get what you measure” – are we going to be so focused on the specific criteria that we set for these economic development programs that we’re going to miss out on innovative ways to grow jobs and increase prosperity? And what’s a “good enough” return on investment, and what period of time should that ROI be within?

By the way, the focus of the GAO report is on four agencies: Commerce, HUD, SBA, and USDA. In my proposal to restructure the federal government, I put five agencies into the “Department of the Economy”: Agriculture, Commerce, Energy, Labor and Treasury. So, we agree on two of them (Commerce & Ag) and I didn’t go to the agency level (if so, I would have also included SBA). So our real disagreement is on Energy, Labor & HUD. I put HUD in my Department of Infrastructure, but I appreciate their proposal that infrastructure is an economic development issue (which it is); although by that logic, all the freight and supply chain stuff from DOT should be on this list as well. They’re definitely missing the boat on Labor and Energy though.

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