Efficient Government, Indiana edition

David Leonhardt has a profile of Indiana Governor Mitch Daniels, in which he extols him for keeping Indiana’s budget impressively steady over the past few years, even running a surplus in 2009. But what I find even more impressive is his aggressive approach to improving government efficiency by relying on statistical measures of success and demanding compliance with incentives. For example, he commissioned a study to determine how to reduce prison budgets and confirmed what crime expert Mark Kleiman has been saying for years: prison sentences are far too harsh and come far too late in the process to work as incentives, especially in drug crime. Contrary to the conservative impulse, Daniels pushed for these “soft crime” reforms. (I discuss Kleiman’s book here)

Similarly, under Daniels tenure the average wait at the DMV has dropped from 40 minutes to 8; he enforced this by having each customer’s receipt stamped with entry and exit times. All in all he looks like a pragmatist:

In some cases, the goal [of increasing government efficiency] requires enlarging government rather than cutting it. The administration hired 800 more child caseworkers and vastly expanded efforts to help single mothers collect child support, a particular Daniels obsession…. He began a program to underwrite discounted prescription drugs. To supplement Medicaid, and in time perhaps replace it, he introduced state-sponsored medical insurance built around health savings accounts. Participants were required to pay in to the accounts, which were heavily subsidized by the state, and they had the responsibility of making their own health care decisions. To pay for the program, and to enable the property tax cut, Daniels agreed to increase the state sales tax by one percentage point.

Of course, there are plenty of caveats to apply. When acting as budget director for George Bush, Daniels wasn’t exactly a model fiscal disciplinarian, not fighting much against either the tax breaks for the War in Iraq. And of course, the incentives facing the Governor in Indiana are pretty different from those facing the president of the United States. Still, this type of shrewd improvement at the margin is what we should be demanding from our politicians.

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