“Bureaucrats Stifle Innovation” Maybe that sounds like something I might say.  And you would be right.  But I didn’t say that.  It was the title of an article in Reason on June 1, 2016 by John Stossel.  Yes, Stossel is polemical.  But I think he is also on to something.  The subtitle is “Taught Not to Try,” which I would say captures at least an important part of bureaucratic dysfunction in all kinds of organizations.

Those who read the Bereans know I write (actually I also vent) on bureaucracy as it exists in all sorts of organizations, but particularly government.  From many studies on bureaucratic behavior and bureaucracy, it clear that one of the pathologies of bureaucratically (hierarchically) structured organizations is to stifle innovation.  The reasons are fairly straightforward and two-fold. First many employees in such organizations don’t want to innovate once they know their jobs are basically secure. In many Federal agencies, one has to commit murder or die to be fired—and both are negotiable.  Just sit back, don’t make waves and enjoy that pretty good salary.  But second, if one did want to be active in promoting innovative methods and in being truly responsive to consumer needs, he/she might well be ostracized at worst, ignored, or in some cases, be driven from the position by harassment from above or from lateral colleagues.  Who wants that kind of hassle?

The result is often that bureaucrats simply do the minimal work necessary to avoid being negatively noticed, and otherwise little else.  Everyone in the bureaucracy is happy.  Consumers/taxpayers/citizens may not be happy, but too bad.  The bureaucracy itself is largely unaccountable.  Very little therefore changes over time, at least not in terms of service improvement—though salaries, offices, and budgets do increase.

Again, I have said this before, but I feel compelled to repeat it once in awhile.  We need to begin to understand this phenomenon if there is any hope of changing it.  I also  repeat that the biggest problem is with public bureaucracies.  But non-profits have similar problems as they get bigger, as do large private, for-profit companies.  The problem becomes worse as these organizations grow larger.

There are only two ways to address the problem: (1) major structural changes to the bureaucracy or (2) some major improvement in human virtue, or both.  The latter is impossible apart from God’s grace, but the former, while possible, has limited ability to address the pathologies completely.  Still, it is better than no solution.  Let’s begin with the Federal bureaucracies—break them up into smaller structures, eliminate their functions altogether and place them in the market, with price and cost incentives, or some hybrid.  In the meantime, each of us can also think about reforms closer to our own homes.

If you want innovation, don’t entrust a service to a bureaucracy with no accountability.