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.  …