In the private sector, firms must attract voluntary customers or they fail; and if they fail, investors lose their money, and managers and employees lose their jobs. The possibility of failure, therefore, is a powerful incentive to find out what customers want and to deliver it efficiently. But in the government sector, failures are not punished, they are rewarded. If a government agency is set up to deal with a problem and the problem gets worse, the agency is rewarded with more money and more staff — because, after all, its task is now bigger. An agency that fails year after year, that does not simply fail to solve the problem but actually makes it worse, will be rewarded with an ever increasing budget.
– David Boaz, Liberating Schools: Education in the Inner City (1991, Cato Institute).
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