Refocusing government

Take away the expectation that we or our children will enjoy a higher standard of living, and all bets are off. From riots in Greece, strikes in France, protests in China and demonstrations in the UK (against EU workers), I am quite pessimistic about the future of liberal democracy. Yet we read about government, which is supposedly there for our benefit, spending ever larger proportions of the incomes of the wealthiest societies that have ever existed in history. With all that public sector spending, and all the high technology and human ingenuity available to the public sector, why are our prospects so dim? There are many answers, and quite a few point to the failure of government. From, corporate welfare schemes and scams, subsidies to the rich or to environmental destruction (pdf), or to the creation of a legislative and regulatory environment that is heavily biased in favour of the large and global at the expense of the small and local, government's failings have implications for us all. My sense is that government as a whole has become too specialised, too big, and hence too remote from the people it is supposed to serve. Writing in the UK, Minette Marrin says

...public servants are distinguished by three facts, unique (when united) to them: first, the taxpayer pays for them, second, their jobs and their pensions are protected (by the rest of us) and third, it’s extremely difficult, if not impossible, to sack them. Some of them do crucially important things, and some of them do those important things well; but many of them do important things badly, and a lot of them do things that do not need to be done at all, least of all at public expense, and with impunity. Watch out quangocrats, [London] 'Sunday Times', 1 February

A Social Policy Bond regime, I think, would be one way by which we could refocus government spending on what is important. Democratic governments could potentially be extremely effective at articulating society's social and environmental goals, and pretty efficient at raising revenue for their achievement. But they are not so good at achieving those goals themselves. Indeed, they appear to have lost sight of any explicit broad long-term goals, being distracted as they are by the day-to-day running of the government machine. But if instead they concentrated on what they are good at - defining desirable outcomes and funding them- while contracting out their achievement to a motivated private sector via Social Policy Bonds, then our societies would have the best of both worlds: optimal social and environmental outcomes achieved at minimum cost.