Efficient government is not the same thing as less government.
As the Trump administration, Congress and the Department of Government Efficiency take steps toward reform, they should not simply be trying to create a federal government that does less with less. Ideally, the goal should be to achieve good outcomes using no more tax dollars than necessary.
While it may not grab headlines, and while it hasn’t yet been fully put to the test, a bipartisan government-reform law passed several years ago could help.
Waste and fraud are obvious enemies of efficiency, and given the surge in such things that we’ve experienced since the pandemic, it’s a good place to focus on first.
According to the nonpartisan Government Accountability Office, often referred to as the “congressional watchdog,” waste occurs when “individuals or organizations expend government resources carelessly, extravagantly or without adequate purpose.” Its officials have identified a huge amount of waste over the years, but nothing like they’ve found over the last few years.
Just this past year alone, they estimate that there were $162 billion in improper payments — those that a government agency made but should not have or which were made in incorrect amounts. GAO also estimates that the federal government loses between $233 billion and $521 billion annually to fraud, which is willful misrepresentation to obtain something of value.
As always, the GAO makes recommendations aimed at reducing these payment errors. These may or may not be followed by federal agencies. There is more, however, to government efficiency than improper payments and fraud. What about the broader question of whether government programs achieve their intended outcomes, and whether they do so using more tax dollars than necessary?
For example, programs like Temporary Assistance for Needy Families and Supplemental Nutrition Assistance Program are designed to reduce poverty and provide economic support to lower-income families. In upcoming research, I have found that SNAP alone likely has a huge amount of fraud and may overpay benefits by over $10 billion a year.
Even if these or other programs were administered without waste and fraud, there is the question of how successfully they achieve their goals.
If this were the private sector, we’d measure efficiency by productivity. Economic data can tell us how inputs like labor, capital or materials are used to produce goods or services. Estimating government productivity, however, can be much more difficult.
Public goods and services can’t easily be valued in the same way because they lack market transactions. Reducing poverty is an intrinsically good and important goal, but to determine what works and what doesn’t, we still need to measure the specific economic value of doing so.
And because Americans are taxed to accomplish reductions in poverty — making some a little bit poorer — and because the government could spend those dollars in other beneficial ways, we also need to determine how many tax dollars should go toward reducing poverty.
The Foundations for Evidence-Based Policymaking Act of 2018 (Evidence Act) was designed to help overcome this. Its overarching goal is to ensure that federal programs and policies are based on sound evidence and undergo rigorous evaluation of their performance.
Signed into law with an impressive amount of bipartisan support during President Trump’s first term, the implementation has now been going on through two presidential administrations.
A main tool is referred to as a “program evaluation,” a systematic process of collecting, analyzing, and using information to assess a program’s performance. That is, how well the program is working, whether it’s achieving its intended outcomes, and whether it’s operating efficiently. This evidence can be used to improve the program’s design, its implementation, and make decisions about how many future taxpayer resources it should receive.
It’s too early to judge precisely how successful this effort will be. Much of the effort so far has smartly focused on pushing agencies to collect useful evidence on how their programs are performing and establishing data and evaluation officers to do the work.
In 2020, the Trump administration took the next step by publishing program evaluation standards to guide agency evaluations. The following year, the Biden administration doubled down on this guidance by requiring agencies to create evidence-building and evaluation plans with an emphasis on the use of rigorous methodologies.
Americans are sharply divided on DOGE, but not long ago, Democrats and Republicans lined up behind an effort that could help deliver a more efficient government. Whatever else happens, let’s give the Evidence Act a chance.
Keith Hall is a distinguished visiting fellow with the Mercatus Center at George Mason University, former director of the Congressional Budget Office and former commissioner of the Bureau of Labor Statistics.