URBS 615—Professional Seminar

Tools of Government Ch. 2:  Direct Government

Defining the Tool

  1. Can be more flexible and responsive than indirect government, since it can internalize transaction costs.
  2. Costs are on-budget
  3. Best used when
    1. Exercise of legitimate force is involved
    2. Performance cannot easily be left to chance
    3. Equity is particularly important
    4. No effective market exists to supply a good or service (nor is likely to in the foreseeable future)
    5. Maintenance of some government capability is essential.
  4. Barriers to direct government are strongest when opposition is well-organized and support is not.  As a result, often part of program is turned to indirect methods to turn potential opponents into constituents.
  5. Managers are most successful in direct government when
    1. Mission is well-focused
    2. Discretion available in rules and budgets
    3. Customer approach
    4. Accountability to superiors is based on regularly measured results (financial accounting, unfortunately, often displaces managerial accounting)
  6. Direct government more effective than indirect when procedural rights impose excess costs



© 2004 A.J.Filipovitch
Revised 9 February 04