Monday, August 24, 2020

OCPA column: Private sector forces create a government success

Private sector forces create a government success
By Jonathan Small

After having been at the bottom of the barrel, Oklahoma now ranks in the top 10 for bridge conditions, according to the latest data from the Federal Highway Administration. That success is the result not of government, but primarily of private-sector forces. And similar improvement can be generated elsewhere by taking advantage of market forces and the benefits of competition.

In 2004, nearly 1,200 of Oklahoma’s 6,800 highway bridges were considered structurally deficient. Today, only 86 highway bridges are considered structurally deficient, and each is already scheduled for improvements through the Oklahoma Department of Transportation’s Eight-Year Construction Plan.

Increased funding was a component of that successful turnaround—but only one component. The more important factor was reliance on private-sector competition to generate improvement.

How? The state’s eight-year road plan has an equal emphasis on performance and outcomes, along with funding. Notably, ODOT uses state funds to pay private entities to perform the work. That’s not a minor detail.

ODOT’s contracts include bonus pay for high-performance and, on the flip side, the agency can and does fire contractors who don’t live up to expectations. Imagine that.

Thus, this is a “government success” built almost entirely on free-market competition and the superior service produced by the private sector. It’s a success that can be duplicated elsewhere.

Each year it is common for education advocates to call for creation of an eight-year plan for schools. Yet those advocates typically want a plan focused only on increased funding, not increased funding tethered to increased reliance on competition and private-sector providers. But the road-and-bridge plan shows such competition is crucial.

If school funding were increased each year, with parents allowed to use their taxpayer dollars to choose a child’s school (public or private), we would quickly see improvement in education that matches the improvement in state bridges. When pay is tied to educational outcomes for children, providers quickly show they can provide better outcomes—knowing that if they don’t, bad providers will be let go.

Such choice is especially important now as many districts are ignoring the needs of children by telling parents they can go online-only or do without. Notably, in the urban areas where such take-it-or-leave-it edicts are coming from public schools, most private schools are finding a way to safely offer in-person instruction. Those private schools do so because their pay is tied to consumer needs, not bureaucrats’ wants.

There’s a reason Oklahoma’s eight-year plan for roads succeeded when the old Soviet Union’s five-year plans generated only misery. One relies on private-sector forces, while the other trusted government bureaucrats over market forces.

As Oklahomans rightly celebrate our top 10 ranking in roads, they have reason to note our continued low ranking elsewhere, including education, and then ask this question: Why not copy success?

Jonathan Small serves as president of the Oklahoma Council of Public Affairs.


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