Think Tanks are Inefficient, but by No Fault of Their Own

Think tanks are often a clear example of when poor government structure makes a market extremely inefficient. While some think tanks have a huge impact, many do almost nothing to create value for those who donate, yet they are still extremely well funded. While they are primarily rooted in ideology, patrons give money expecting some sort of real-world effect on the political landscape. While creating political progress in any direction is difficult, many think tanks do not even put forward the appearance of action. Government related nonprofits are some of the most wasteful organizations in existence. The government’s classification of them as nonprofits, and the deeply convoluted nature of the federal government exacerbate the inefficiency of nonprofits. The U.S. Federal government’s size and confusing structure convolute the signals of output that would ideally drive think tanks to effective action. 

Think tanks are inefficient organizationally and in output. Ineffective employees and executives are given far more grace than is helpful for them or the organization. Donors cannot easily judge the effectiveness of an executive and thus the executive feels like their job is to maintain the status quo rather than change course to seek more effective strategies. Often, the ideological alignment of people and think tanks allows a dangerous camaraderie to exist, where people are allowed to be poor performers because they agree with a certain set of beliefs. It is not always good to fire an employee strictly for being inefficient, but the organizational incentives of think tanks mean that employees are not called to their highest level of work. Even beyond the internal organizational incentives, the intangibility of a think tank’s output means that it is hard for employees and external observers to determine whether they are being productive. Some think tanks that produce very little research are extremely well-connected and are able to push forward the ideas that they espouse. Many think tanks also produce a large amount of papers and research yet don’t actually change anyone’s minds. The difficulty of judging a think tank’s output means that people typically select think tanks on ideological alignment rather than the likelihood of getting anything done. Many think tanks that are not effective have found a unique ideological niche, and are able to secure their existence through espousing those beliefs rather than benefitting their donors by aggressively seeking to change the country.  

The high cost of political action means that the path of least resistance for most think tanks is obsessing over ideological alignment rather than attempting to affect change. It is easy to look down on pragmatists who try to get into the messy realities of politics when it is much easier to cater to those who already agree with you. Particularly when there is no real way to compare the output of efficient versus inefficient think tanks, it is much easier to simply put forward the perception of political striving without the difficulty of actually doing so. The government is extremely complicated, and political change often comes about from grassroots movements or public outrage, neither of which think tanks can control. This leaves many ideological think tank executives to despair in their situation as they benefit from the good fortune of a well-paying intellectual job.

Think tanks will be free from positive market incentives until the Federal government gains institutional transparency and simplicity. The extreme organizational and legal complexity of the state provides a huge barrier to effective think tank action. The connection of ideals to specific policies or suggested changes is extremely difficult in an environment where it is difficult to know which rules can be changed, which cannot, and who is in charge of what. Think tanks have difficulty knowing where to start when every part of life is subject to jurisdictional overlap. For example, any business is simultaneously subject to financial, environmental, and criminal regulations along with existing in a world with hundreds of thousands of other businesses governed by an even wider range of regulations, all while being in an environment that is heavily historically influenced. Think tanks would be better able to pinpoint specific areas for action if unchangeable rules were firmly supported and the variable nature of other laws was well-known. Constant attacks at the constitution and slavish devotion to recent pieces of legislation confuse the signals of where energy should be devoted. Founding documents and easily removable legislation should be more clearly described as such. Not all law is the same, and think tanks would be more effective if the government made that clear. It is a governmental problem rather than a think tank problem that the organizations have to spend most of their energy figuring out a fluid and complex government structure before they can even choose which governmental actors to influence. A less complex Federal government would free non-profits to experience much clearer outcomes which could drive them to more organizational efficiency and allow donors to observe differences between effective and poor performers.