Monday, 19 January 2009

Getting rid of public money: An international perspective

Something I have heard today from a colleague working for an international organisation:
Damn, I still have 20,000 Euros on this travel costs budget line of programme XYZ - and since I cannot transfer them to another budget line, I have to find ways how to make people travel around in order to be able to spend that money before the programme finishes!
This kind of attitude makes me really angry: People working for an public organisations and are using public money are looking for ways how to get rid of this money just in order not to have anything left.

It shows an absolute lack of understanding about what kind of money they are using and spending. It shows that the incentive system build into some public (national or international) organisations is totally wrong and contributes to excessive spending and especially miss-spending of resources that could well be used for better purposes.

Not to talk about the doubling of work of certain organisations without producing better results.


Antal Dániel said...

I think this is a typical deadweight loss of strict rules that want to prevent misuse of public funds. Usually budget lines cannot be re-arranged to prevent unauthorized, corrupt use, but this rigidity leads to inefficient use and encourages waste. I am generally against procedural burdens on how to spend public money. Those kind of people who would use public money for their own gains are exactly the ones who waste it this way if they cannot use it freely. The waste for the taxpayer is probably equal.