The efficiency trap
Efficiency is a good thing, isn’t it?
The Merriam Webster dictionary defines “efficient” as being “capable of producing desired results with little or no waste.” Waste — a damaged, defective, or superfluous material — is bad, and “desired results” are… desirable. So, what’s not to like?
The rise of the dystopian Department of Government Efficiency (DOGE) in the United States of America suggests that efficiency might be a more controversial concept than is often assumed. The post below is littered with scare quotes of spending that is considered by DOGE to be wasteful.
As this post suggests, DOGE can’t even get budget numbers correct, with numerous examples of missing decimal points.
Whatever one’s view on the Diversity, Equity, and Inclusion (DEI) purge (I am against it), primary literacy in Kenya seems about as uncontentious a spending line item as one can imagine. But, one of the programme partners is called Inclusive Development Partners. So, was the programme red flagged because of the term “inclusive”? Maybe, but more broadly this seems merely to be a tendentious excuse to close an agency that the richest man in the world and his acolytes do not like. As United States Agency for International Development (USAID) ex-Chief Economist, Dean Karlan put it:
“This is DOGE figuring out how to dismantle an agency, and they’re using USAID as the guinea pig to figure that out.”
Vassal state, the United Kingdom, dutifully followed suit reducing aid from 0.5% of Gross National Income (GNI) to 0.3% to fund a rise in military spending. This comes alongside a wider trend of declines of aid spending. So, is aid now wasteful and military spending an efficient investment? Not by any serious assessment, no. In 2024 alone, 291 Ministry of Defense (MoD) employees were fired for inefficiency, a freedom of information request revealed. This is not to mention the billions of pounds in procurement failures such as the armoured car, Ajax. Military spending is among the most inefficient spending areas of them all, even if you believe it’s a good idea (I do not). Last year, the Commons Public Accounts Committee reported that it was:
“Extremely disappointed and frustrated by the continued poor track record of the MoD and its suppliers…and by wastage of taxpayers’ money running into the billions.”
Former (Conservative) International Development Secretary, Andrew Mitchell, argued that “cutting the aid budget to fund defence spending is a false economy that will only make the world less safe.” It has nothing to do with either spending efficiency or a genuine effort to economise. Instead, this is evidence the UK’s new foreign policy stance of Progressive Realism and, mostly, because Prime Minister Keir Starmer was looking for something appealing to share in his White House meeting with Donald Trump.
Artificial Intelligence (AI) in a post-truth world
We now live in what has widely been described as a “post truth” world, and Artificial Intelligence (AI) has a key role to play in producing this (dystopian) world. Eryk Salvaggio recently wrote a really interesting blog on the Anatomy of an AI Coup which recounts the rise of DOGE (thanks to Marina Apgar for the tip). As Salvaggio explains, the AI coup that DOGE is attempting relies on both a productivity myth and a particular framing of government efficiency. The Trump administration frames generative AI as a remedy to “government waste,” and it achieves this efficiency by eradicating services. The way they’ve done this seems mostly to have been achieved through crude keyword searches. CBS News’ review found that contract cancellations have been largely based on language in the agreements referencing diversity, equity, or inclusion.
The doublespeak in our post-truth world is truly breathtaking sometimes. I’ve always been of the view that you should listen carefully to views you disagree with. So, I spend not inconsiderable time watching YouTube videos I find offensive and misguided. It’s genuinely like watching an upside-down reality. The way the words “truth,” “corruption,” “fraud,” “waste,” and “efficiency” are used is entirely back-to-front in large parts of YouTube, particularly the notorious Manosphere. Some have even argued this is a key reason Trump was elected. Either way, the beliefs and preferences of this otherworld of alternative facts has now spilled over into the government decision-making processes. DOGE Chairwoman Marjorie Taylor Greene announced a hearing titled “America Last: How Foreign Aid Undermined U.S. Interests Around the World.” She claimed that:
“The DOGE team has uncovered with USAID is shocking, but it’s just the tip of the iceberg. For decades now, the federal government has been sending billions after billions of dollars to push left-wing ideology, fund radical extremist groups, and usurp the will of the people abroad and here at home.”
Taylor Greene is, of course, pursuing her own ideological war, and (referring to herself in the third person) she has struggled to shake the moniker of being a “fringe extremist” herself.
As Charles Kenny notes, there are spending lines at USAID we might reasonably question:
“If they’d asked aid experts, or even staff at USAID, the White House could have come up with a more impressive list of avoidable ways USAID spends money worse.”
It would not be hard to find better examples than DOGE has shared. Indeed, Dean Karlan joined USAID, in his view, “to help choose effective programs to get more bang for our buck.” So, he probably already had a list of what his office considered were ineffective and inefficient programmes and which might therefore reasonably be cut. This speaks to the sheer incompetence of DOGE and how deeply unserious they are about what they pretend they are trying to achieve.
Most of the spending critiqued are not of ridiculous, malicious, or harmful investments at all. Kenny points out that USAID spending has always been under the microscope, as indeed has the spending of most aid agencies. A recent Independent Commission for Aid Impact (ICAI) report on how UK aid is spent reveals that 1/3 of it is spent domestically, and this was previously covered by the Home Office. So, a substantial proportion is not even really aid.
Scarcity mindset and its discontents
All the same, I think it’s worth reflecting briefly on how some in the aid industry have unwittingly aided and abetted this destruction. International Rescue Committee (IRC) Chief Executive Officer (CEO), David Miliband, argued recently at an impact evaluation conference that:
“There is not enough money to go around… [so] we need to make sure every dollar is not just well spent but spent as well as possible.”
This sounds benign, but this is the wrong starting point. Getting more bang for your buck, is about the overall effectiveness of aid programmes. Efficiency and economy are, at best, subsidiary parts of how cost effective programmes are. And this goes far beyond what can be neatly assessed by certain forms of impact evaluation.
Effective Altruists like Benjamin Todd claim that most social programmes don’t work. Yet, this is based on an extremely narrow and highly selective evidence base — not to mention the dubious messianism of Effective Altruists. Karlan’s efforts to promote cost-effectiveness at USAID seemed likely to fall into a similar trap — promoting what it is easiest to measure with Randomised Control Trials (RCTs) and cost data rather than what might actually be most effective in different sectoral systems but more difficult to measure. I’ve written about this trap regularly. Karlan never got the call to share what investments were cost effective or not, so we may never know what was on his list. However, I think it’s worth considering how the aid industry largely accepted a particular narrative regarding costs and benefits of investments, and overly narrow parameters for what delivers “value for money.” The scarcity mindset regularly embraced by chief economists is at the heart of this. It’s clearly time to look for a new narrative.
