Emergencies and the Project Manager’s Dilemma

Government agencies’ initial responses to the COVID-19 crisis were notable for one particular characteristic: incompetence. From basic errors in data collection (mixing up viral tests with antibody tests), through failed lab safety precautions, through to contradictory messaging about the effectiveness of masks, the record of agencies like the Centers for Disease Control and Prevention and the Food and Drug Administration has been distinctly subpar. Americans are entitled to ask why.

Unfortunately, the most likely answer is unlikely to satisfy anyone. The agencies have probably been the victim of the project manager’s dilemma. Simply put, the dilemma is this:

• You can have it fast and cheap, but not good.
• You can have it fast and good, but not cheap.
• You can have it good and cheap, but not fast.

This dilemma is so basic that it is taught to everyone in business schools. It is a well-accepted and observable phenomenon.

When it comes to government, the logic of government budgeting almost always ensures that “cheap” is predetermined. Yes, there are some agencies that sit on large piles of cash, but for the most part, public choice considerations ensure that budget managers spend their budgets on day-to-day operations. As Michelle Minton has demonstrated, public health agencies are particularly prone to mission creep and wasteful spending, as opposed to keeping their powder dry for an emergency.

So, in an emergency, when government wants results fast, the dilemma produces only one result: Quality control is lost. That certainly appears to have been the case in initial agency responses to the pandemic.

In debates over state capacity, the project manager’s dilemma and public choice theory should always be at the forefront of people’s minds.