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Wasting taxpayers money
Copyright Oddmund Grøtte 2004, updated 3rd of January 2005

(This is older notes from my blog which you can find on the frontpage)

27th of August, 2004
Managing taxpayers money
I am currently in Trondheim. In my local newspaper today I read a really disappointing story. As usual, it was about wasting money by our politicians:

The local council ordered a sculpture for 160 000 NOK just to scrap it weeks later due to security risks. The deputy mayor is still positive about it: - I still think it was a good idea. Besides, this is just pocket money. (This is Knut Fagerbakke from SV, a left winger)

What a contempt for the taxpayers money! He has no regret and obviously doesnt care. This is a small amount but one could imagine what other things they have wasted our money on. 

Milton Friedman in Free to Choose has a great illustration of the lack of incentives for doing a great job when spending public money. Lets look at this table:

In number 1 you have incentives to get value for money and get it as cheap as possible. You spend your money on yourself. Obviously you are not gonna waste money. But lets look at number 4: there you are spending other peoples money on other people. You have no incentive to get value for money and the price does not matter. In this category we find most public spending. No wonder there is bureaucratic waste en masse.