What is exceptional about the plans by the incoming Trump Administration to set up a Department of Government Efficiency (DOGE) is that this has never been done before, at least, in the US.
Setting up a DOGE is a symbol of a big commitment to budget cuts and deregulation. Other bodies and individual departments have often taken up the sort of role envisaged for DOGE, but never has there been a dedicated government institution with the sole task of coming up with budget cuts and regulations to scrap.
Despite the enormous expansion of the public sector across the world, the rise in deficits, and the ballooning of public debt, governments rarely fundamentally question what they are doing. There are few governments that have a mandate to cut spending. It is mostly ‘government as usual’ without disruption.
Agile private businesses continuously review, monitor and question what they are doing and how they can become more efficient, and often they can quickly change strategy and turn themselves around. An immense amount of good can come out of questioning whether activities are really worthwhile, and how savings and greater efficiency can be achieved.
President Donald Trump’s idea for DOGE might have come from the new Ministry of Deregulation and State Transformation that Javier Milei, the radical libertarian President of Argentina set up. Its job is to scrap regulations that restrict the economy. In Argentina the number of government departments has halved through a combination of mergers and abolitions, and many regulations have been scrapped.
Now that two countries will soon have similar departments, such entities might become a global standard. Key will be giving such departments real authority within a government.
Unlike the Ministry of Deregulation in Argentina, DOGE in the US has no authority to implement cuts or scrap regulations. DOGE won’t really be a government department but rather more of an advisory body, headed by two part-timers: the entrepreneurs Elon Musk and Vivek Ramaswamy. Its role, according to a statement issued by President Donald Trump, will be to “provide advice and guidance” and work with the Office of the Management of the Budget, which draws up the US federal government budget.
So, it could become a place where ideas that might upset key constituencies and beneficiaries of big spending and regulation go to die. The US system of checks and balances between the President, Congress and the Supreme Court makes it difficult to get things done.
But having set it up, the Trump Administration will have a strong incentive to show that it is not a toothless body. Because President Trump will not be able to run for a third term, he might be prepared to upset important constituencies.
Since the plan for DOGE was launched, the naysayers have lined up to say it just won’t work. Their common thread is that working in the federal bureaucracy is very different from working in the private sector, as rules on the whole don’t allow for quick actions. Laws mean the new Administration will not be able to fire thousands of civil servants or revamp the government. Besides, some argue, more civil servants are needed to make the government more efficient.
Except for the last point, much of this argument does hold true. But that does not mean that with strong political will, DOGE proposals could eventually be acted upon.
There are numerous constraints on DOGE, which may mean its suggestions could either be watered down or not get anywhere. The current plan is for DOGE to come up with $2 trillion in cuts, amounting to short of a third of US government spending. That could be difficult, as only $1.7 trillion of the $6.3 trillion spent by the US Federal Government last year is discretionary spend. The rest is made up of spending required by law, such as that on social security, debt and interest payments, which cannot be cut without a change in legislation.
Another problem is that while Trump promised tax and spending cuts, people generally like handouts and US federal government spending that benefits their state. And it is often the case that Congressmen exchange their support for a bill for a clause that brings a special project to their state.
So Musk and Ramaswamy might find themselves frustrated, but at least the idea for such a Department as internal questioner, critic, and source of ideas has been launched.
South Africa would have some problems with a DOGE, but there would be large benefits. In South Africa total budgeted spending for this financial year is R1,913 billion, of which 40 percent – R382 billion – is spent on debt service and R378 billion on grants. And of the remaining 60 percent, 40 percent of the budget is spent on health and education, which would be almost impossible to cut.
Due to the low number of clean audits of public sector bodies, we do not really have a reliable picture of public spending and where deep cuts could come from. The Auditor-General’s Report on National and Provincial Audit Outcomes released last week shows an appallingly low level of clean audits. Only 17 percent of the bodies responsible for critical areas to the poor (such as energy, water, health, and education, which make up 77 percent of spending) have clean audits.
Under such circumstances, the best solution might be to allow the private sector to take on the sort of roles provided by the state. That would be anathema to the ANC.
DOGE-type departments are desperately needed around the world. Despite a digital revolution and the transformation of economies, many governments have hardly changed in what they do and how they do it. Few have fully embraced digital government with its savings. Very rarely is there deep internal questioning about whether governments should in fact be performing a particular activity, even in the face of years of failure. Regulations that were implemented years ago just seem to stay forever, due to bureaucratic inertia and the protection of vested interests, often involving the civil servants themselves.
In South Africa, exchange controls survived, in a less stringent form, the end of the country’s apartheid-era isolation. The assumption that the SA Reserve Bank’s foreign exchange control department is the best arbiter on what sums can be taken offshore is plain wrong and inefficient for the economy.
Our host of regulations on labour and black empowerment have deterred investment, yet the government wishes to entrench them further. Unemployment has risen, and because of the hit to confidence from excessive regulation, investment has been far lower than it should have been. Yet the ANC sticks to these regulations in the face of failure.
A government agency with a mandate to report objectively on such failures would be a step in the right direction. But would an ANC-dominated government take the advice?
It certainly would not allow the power that such a department has in Argentina.
[Photo: Screenshot/NBC News]
The views of the writer are not necessarily the views of the Daily Friend or the IRR.
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