Skip to main content
opinion

Why can't we desire excellence in government spending as passionately as we desire excellence in athletic performance? Why can't we embrace international competitions to determine who provides the world's best public services? Why can't we award gold medals to countries that, dollar for dollar, produce the healthiest, people, the best educated people, the most prosperous people?

Aren't the techniques for judging public-sector performance much the same as for Olympic performance? You calculate input (funding); you measure output (the fastest trains, the highest literacy, the strongest families). How would Canada fare?

In Olympic competition, output is easy to calculate. Count the medals. With 26 Olympic medals, Canada took 10 per cent of the 258 medals awarded, an astonishing performance compared with past Winter Games - and producing one medal for every 1.3 million Canadians. With 23 medals, Norway produced one for every 210,000 Norwegians, a six-fold superiority. For Canada to have matched that performance it would have needed to win 160 medals. With 37 medals, the United States produced one for every 8.3 million population and felt good. With 15, Russia produced one for every 9.5 million population and felt badly - although, in relative terms, it did almost as well as the U.S.

Whether processed as government subsidies, corporate sponsorships or neighbourhood bake sales, certain resources - inputs - are an essential factor for most medal winners. (You can't quantify the self-sacrifice.) People used to think that more state funding for more athletes would produce more medals. They were wrong. Now they think that more state funding for fewer athletes will produce more medals. And they're probably right. Though distinctly Darwinian, this results-driven strategy hurts no one, cuts down on waste and appears to improve performance.

When it comes to Olympic funding, the Canadian public appears to want efficient use of the government's modest inputs - and a certain medal count to justify them. When it comes to stimulus spending (to cite one example of everyday government inputs), Canadians appear indifferent to efficiency and only marginally concerned with performance. Since the inputs provided for the Olympics are insignificant in comparison with the inputs provided for all other public-sector spending, this represents a curious double standard. People know, of course, that governments are notoriously inefficient - although they don't appear to want to know exactly how inefficient. This is a dangerous ignorance.

Perhaps we need a public-sector Olympics. Here's a prototype. In an international comparison of 23 countries, published a few years back by the European Central Bank, three European economists (Antonio Afonso, Ludger Schuknecht and Vito Tanzi) endeavoured to measure the efficiency of public-sector spending. They analyzed inputs (administration, government transfers, core program spending - all the costs of the modern welfare state). Using scores of indicators, they analyzed output (educational achievement, high-school enrolment, infant mortality, life expectancy, average unemployment rates, long-term prosperity). They calculated which countries gained the most output from the least input.

In this analysis of public-sector performance in affluent, democratic countries, across a 10-year period, Canada finished 12th in input efficiency and 13th in output performance.

Expressing a gold-medal performance in public-sector efficiency by the number 1, the economists scored all other competitor countries as percentages of the first-place finish. With an input rating of 0.75, Canada's 12th-place finish meant it spent 25 per cent more money than it needed to spend - that it could have attained the same results by spending only 75 per cent of the money it spent. You could put it another way. The Canadian government wasted one dollar for every four dollars it spent.

In a three-way tie, the United States, Japan and Luxembourg took gold in this input-efficiency competition. Other top-ranked countries included Australia (0.99 for fourth place) and Switzerland (0.95 for fifth). (Its reputation for fiscal discipline notwithstanding, Norway finished behind Canada, (0.73 for 13th place.)

In the competition for public-sector performance, Canada finished with a rating of 0.84, a better score in absolute terms but a worse ranking (13th place). This score implied that Canada could have increased its public-sector performance by 16 per cent without spending another dime. (Norway distanced itself from Canada in this round, scoring 0.93 and finishing fifth.)

Without an aggressive stinginess to limit its spending, the federal government will continue relentlessly to subsidize everyone with borrowed funds. O Canada: Slower, lower, feebler.