Bureaucracy

Preparing for the upcoming elections, I've been trying to get a very rudimentary and basic knowledge of the bureaucratic world which previously has been entirely unknown to me. And to be honest, I'm getting somewhat worried about what the money we pay in taxes is actually spent on and whether or not some serious austerity and axing of budgets and scopes should be in line.

From 2002 to now, the budget of the Finnish government has soared from 35 billion to over 50 billion euros, and the trend is monotonous and rising. This quite a bit higher than what the overall inflation is while at the same time the amount of people employed by the government has remained at roughly at a constant level of about 120 000 individuals. I guess the last part is somewhat comforting, as it implies that at least the headcount isn't out of control. For comparison the municipalities employed about 430 000 individuals in 2004, so if we guestimate the level to have remained somewhat similar, we have over half a million individuals working in the public sectors. Some figures suggest the figure to be even higher at around 700 000 individuals. So for a country of about 5.3 million people, we have roughly 10% of the inhabitants working in the public sector. If we arbitrarily estimate the overall workforce to be e.g. 2.5 million, this is about 20-30% of the workforce. To be fare, I haven't had the time to dig up similar numbers for other countries, so I'm not entirely certain how Finland would fare against them. But just by applying common sense, I have a feeling that that number should be lower.

So the question is two-folded, then: 1) is everything that the public sector is doing absolutely necessary and/or even in the scope of the public sector and 2) could it be done any more efficiently with the proper application of e.g. technology? I have a hunch that if we compare the public sector to a barebones, minimum required set of functions to keep a country running, the current form has organically grown many times over the scope of a minarchist government. And point number two seems like a self-evident thing: public sector differs from the private sector in the sense that whereas private companies operate under the logic of maximizing revenue while minimizing costs to strive for maximum efficiency, the bureaucracies under the government intrinsically do not really have these types of requirements in place. So one thing to think about could be how these bureaucracies could be better incentivized to increase efficiency, since it can't be an impossible thing to do.

Relating to the previous, I also recently ran across the topic of Eurocrat salaries, which gave me quite a fright. I'd never before looked at the salary levels of this bunch, but the levels are quite amazing with the lowest of the low assistants already making around 2 600 euros a month, not including all types of allowances and other perks, which in the case of Finland already boosts it way over 3 000 euros a month and closing in on 4 000 euros at a rapid pace. Factor in the aspect that this group isn't under the normal taxation, the typical Finnish Eurocrat will in fact drag in quite a hefty amount of salary, with the higher echelons of them having a base salary of over 18 000 euros a month, not including allowances and other perks. Of course one could use the counterpoint of how the bureaucratic machine needs to be able to attract the sharpest minds in order to function brilliantly, but my apologies if I'm slightly cynical about the efficiency of even this machine (as an interesting exercise, a quick googling of e.g. "Lady Ashton" shows just some of the redundancy and waste that is going on in the EU).

Granted, this was just a very shallow scratch at the surface and I will need to spend some more time playing around with the numbers, but even this, I think, shows some of the issues associated with public sector spending.