There’s the large (huge?) category of market failure in politics, both local and national.
Let’s take the simplest example: long term projects. When the private market wants to invest in a very long term project, there are plenty of financial instruments that allow them. For example you can plant a slow growth forest, which takes 20+ years to mature. Then in several years you can sell bonds, or just sell the forest itself at a value proportional to the time left to maturation—to somebody that either wants to wait, or more likely is just looking for a medium term investment and also intends to sell it in a few years for a moderate profit.
When a local administration wants to invest in a long term project—and by “long term” I mean a project where the benefits will be seen and collected in a few years—there is just no incentive structure to do that, because the elected officials are there for something like 4 years, maybe 8. After that most of them intend to use the quick results shown locally to move to a bigger scene. There is just no way they can start something now and collect (political) benefits partway. Except by the expenditure itself, instead of the results, which creates even more perverse incentives.
That’s compensated for, perhaps over compensated for, by career civil servants who regard elected official as as an inconvenience to their long term goals
There’s the large (huge?) category of market failure in politics, both local and national.
Let’s take the simplest example: long term projects. When the private market wants to invest in a very long term project, there are plenty of financial instruments that allow them. For example you can plant a slow growth forest, which takes 20+ years to mature. Then in several years you can sell bonds, or just sell the forest itself at a value proportional to the time left to maturation—to somebody that either wants to wait, or more likely is just looking for a medium term investment and also intends to sell it in a few years for a moderate profit.
When a local administration wants to invest in a long term project—and by “long term” I mean a project where the benefits will be seen and collected in a few years—there is just no incentive structure to do that, because the elected officials are there for something like 4 years, maybe 8. After that most of them intend to use the quick results shown locally to move to a bigger scene. There is just no way they can start something now and collect (political) benefits partway. Except by the expenditure itself, instead of the results, which creates even more perverse incentives.
That’s compensated for, perhaps over compensated for, by career civil servants who regard elected official as as an inconvenience to their long term goals
The problem also exists for career civil servants when they are moved around before the project completes.