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An Entrepreneurial Model for Government

U.S.CapitolLarge organizations do some things better than small ones. Small organizations do some things better than large ones.

The franchise model delivers the best of both worlds.



There’s the franchisor which may grow into a large company and take advantage of economies of scale.

Then there are the franchisees who often live in or near the local markets they serve.

In some franchise systems, you have Master Franchisees which serve as the liaison between the Franchisor and the Franchisees.

The franchise model for government

So here we go with our entrepreneurial model for government:

Local governments are the franchisees. The States are the Master Franchisees. The Federal Government is the Franchisor.

As with a franchise system, all monies (i.e. taxes) would flow into the local entity. They would be responsible for serving their constituents. They would work closely with local agencies, churches, schools, etc. to improve the quality of life of the people in their area.

In some cases, a State may be able to deliver the same quality service more affordably. The municipality could elect to purchase that service through the State for its constituents rather than doing it internally.

In still other cases, the Federal Government may be able to provide the same quality service at a rate cheaper than the State. The State could purchase it in bulk from the Feds and distribute it to the municipalities.

Of course, the Federal Government would have to receive some money for things like national defense (probably funneled through the States).

There you have it … an entrepreneurial model for government.

We admit that it’s a bit of a utopian dream. We realize that we can’t reverse course overnight. But what if we could gradually move to a system like this?

Competition between governments

This model introduces more competition into government. We believe competition is a good thing.

If you don’t like what your city is doing, it’s not that hard to move to another city. It’s harder to do the same thing with your country.

The system we have now is very top heavy. The Federal Government takes in the lion’s share of our tax dollars.

Yet the Federal Government effectively has no competition. So there is no natural check on its operations. They can be incredibly inefficient and nothing happens. 

Competition between levels of government

The States would have an economic incentive to deliver higher quality services at the same price as the municipalities (or the same quality service at a lower price). The Federal Government would have the same incentive when it comes to the States.

Want to grow your government agency? Deliver your services more cost-effectively and you’ll get more “customers”! There’s an incentive that leads to BIGG success!

What do you think?  

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(Image in today's post by rmcwilson)