In his odd little press conference yesterday, Mayor Mike Huether repeated his assertion that government at all levels should be run like a business. As South Dacola points out, Mayor Huether couldn’t give specific examples of what running Sioux Falls like a business rather than as government looks like.
Some consensus has developed among scholars about the fundamental ways that running a government is different from running a business. Here are a few:
- Government is about this thing called the “public interest.” There is no such animal in the private sector. Private firms care about their stakeholders and customers; they do not generally care about people who do not invest in their businesses or buy things from them. Thus, accountability is by necessity much broader in government; it is much more difficult to ignore particular groups or people.
- Private-sector performance is measured by profitability, while performance measurement in government needs to focus on the achievement of outcomes.
- Compromise is fundamental to success in the public sector. No one owns a controlling share of the government. When Gov. Rauner and the state legislature refused to negotiate, it resulted in Illinois operating without a budget for a full year. The notion of a separation of powers can be anathema to effective private management. It is central to the design of government, at least in the United States.
- Government must constantly confront competing values. The most efficient solution may disadvantage certain groups or trample on individual or constitutional rights. In the private sector, efficiency is value number one; in government, it is just one of many values.
- Government has a shorter time horizon. In government, the long term may describe the period between now and the next election. Thus there is a strong incentive to show relatively immediate impact.
- Government actions take place in public, with much scrutiny from the press and the public. There is no equivalent of C-SPAN showing how decisions are made in the corporate boardroom. Corporate leaders do not find it necessary to explain their every decision to reporters [Philip Joyce, “The Enduring Myth That Government Should Be Run Like a Business,” Governing, 2016.12.14].
Mayor Huether refused to say whether he is running for Governor in 2018, but come on—the only reason the mayor’s party switch from Democrat to independent is press-conference-worthy only if it is part of a larger gambit to run for higher, partisan office. So saddle up, Democrats: our gubernatorial nominee will have to tackle two pro-business Republicans for Governor on the November 2018 ballot… and it will be up to us to explain to the voters that we love business, too, but we recognize the difference between running a business and serving the people.