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How to stop corruption and gain efficiency in Government: Introducing Self-Regulating Feedback Loops

Written by Neil Mammen, Executive VP, Every Black Life Matters. www.EveryBLM.com

By Neil Mammen

Because when we build systems that monitor themselves, we create a government that is efficient, transparent, and truly accountable to the people it serves. This is how we honor the legacy of those who built this nation on the principle of government of the people, by the people, and for the people.

How to stop corruption and gain efficiency in Government: Introducing Self-Regulating Feedback Loops

Let me start with a question: What keeps a simple gas heater from becoming a deadly hazard?

The answer is a thermocouple. There are 2 metals in the thermocouple that bend at different temperatures. Solder them to each other and you get a thermocouple. If the thermocouple cools, it bends one way, if it heats it bends the other way. You set it so it has to be warm to bend enough to turn on the gas, when it cools it bends the other way and shuts off the flow of gas. This small device without any built in intelligence, automatically detects when the flame goes out and immediately shuts off the gas so you don’t have gas leaking with the chance of an explosion. It doesn’t require oversight, audits, or an emergency response. It just works. Why? Because the system is designed by us to correct itself. It’s a self-regulating feedback loop—a mechanism that responds automatically to ensure safety.

We do that in almost all your electronics. As an engineer, I’ve designed this into most of my own designs. As the heat in your device goes up, there’s a fuse made of similar metals to that in the HVAC that bends and disconnects when it gets too hot, and your phone turns itself off and you can’t turn it on till it cools down and fuse pops back in place. Same as your laptop.

In fact, your old HVAC has these feedback loops all over the place. If something called an Induced Blower does not turn on to remove flammable gases, a pressure regulator won’t have the air pushing against it to allow it make a connection and your furnace won’t start. As a user you don’t need to know about how it works or even think about it. It’s predesigned into the fabric of the HVAC system. It’s self-regulating.

Now, let me ask you another question: How do you get two kids to fairly share a single candy bar without adult intervention and more importantly without whining and complaining?  Well it’s easy, you set the law – one child gets to cut the bar, while other gets the first choice. The feedback loop here is simple: The cutter knows they’ll get the smaller piece if they’re unfair. It’s a system built on both positive and negative feedback, incentivizing fairness without anyone stepping in. It’s self-regulating. Both have something to lose that offsets them having something to gain.

Applying Self-Regulating Feedback Loops to Government

 

So here’s what I want you to think about: Why don’t we write our laws the same way? Every time we pass a law that allocates money, or funds a project, or governs a department, why don’t we embed self-regulating feedback loops into the system? We could write it right into the law. Why should we rely solely on external oversight, audits, or government investigators who have nothing to lose if they mess up, when we could design laws and systems that correct themselves, just like the thermocouple or the candy bar split?

If we write laws so every party has something to gain and all involved parties have something to lose if they violate the contract or underperform we’ve just built a self-regulating feedback loop into the law. And we don’t need to hire thousands of inspectors who could be bribed themselves.

Now to be clear, I’m not here to give you the final solution but to ask you to start thinking in this new paradigm. Legislators, every time you write a law, what if you ask yourself: How could we design an automatic self-regulating feedback loop an SRFL into the law, to ensure accountability, transparency, and efficiency?

Let me throw out a few rough ideas just to get you thinking.

  1. First to Report Corruption get to keep the money.

Corruption thrives when everyone involved benefits from keeping quiet. But what if we flipped that dynamic? What if we created a system where the first to report fraud, waste, or corruption received a significant reward? Let’s start with bribes.

Imagine a politician accepts a $50,000 bribe from a contractor. If the politician reports the bribe first, they keep the $50,000, and the contractor loses the contract, is fined an additional $50,000 and goes to jail. The politician doesn’t lose their job, and the public thinks they did this to root out the evildoers. But the politician is forced to correct their behavior and future contractors will be loath to bribe them.

But if the contractor reports the bribe first, they keep their contract and earn 200% of the bribe amount back—$100,000. Meanwhile, the politician goes to jail for five years.

This self-regulating feedback loop forces both parties to weigh the cost of silence against the benefits of coming forward. The result? Corruption is exposed quickly, and the public wins. Everyone is motivated to reveal the corruption. Just like the two kids with the candy bar, it’s in balance. But it doesn’t have to be just the briber and bribee, if anyone else like a janitor or a junior partner can prove the corruption happened then they get 200% of the bribe amount and both the contractor and the politician go to jail for 5 years. It’s a built in feedback loop. Everyone is incentivized to report and the punishments are so severe that there’s no gaming the system.

This same idea works for even bribing inspectors, police officers, permit grantors or any government official.[1] You’ve incentivized everyone on both sides to report any bribe. Remember, “it’s first to report,” so you better be on your toes and report it right away. Everyone now suspects everyone else. It’s just ensuring there is no honor amongst thieves. Of course, the report needs to be accompanied with hard evidence, and in todays’ age of video cameras and electronic communications that’s easy.

  1. Government vs. Private Competition

How could feedback loops work here? Well, every government department should know this: If you fail, a private company will take over your job.

Here’s how it may work. When a government agency works on a project, they have to issue an online budget and a schedule of the milestones. Now every private company and individual can gain by monitoring their performance. If the private company identifies inefficiencies or failures, a portion of the agency’s budget is redirected to the private person or company.

For instance, when the floods happened in New Orleans, it took years for any reconstruction to start because nobody could get permits to build. The city had 100’s of excuses. In this case, the manager of the department would have to give a schedule right away. E.g.: We will issue 100% of the permits requested in 2 weeks with up to 900 permits in 90 days. If the department head tried to waffle and say it would take 2 years, immediately a private party who could do the same permitting process (yes it’s done all the time) could object and negotiate for better efficiency and get the project away from the city.

But if the city does issue a schedule but if the city did not meet that goal, the Department head gets demoted, and his salary is lowered. He or she would naturally incentivize those working for him by letting them know that various division managers would be fired if they did not perform to meet this public goal.[2] Ah you say, they could then rubber stamp all the permits and pass all even if they were bad. Not so fast, the standard for a permit does not change, and any citizen who sees a permit that should not have been granted, gets a reward for pointing it out and the city department permitter gets demoted. So despite what his boss says, he’s not going to do it.  Get the idea?

If any of this happens three times, the department is shut down, and all future work is opened to private bids. The department head is demoted again or fired, ensuring accountability vs. just shuffling him over to another senior position. This feedback loop forces government agencies to compete on performance, just like in the private sector.

  1. SRFL in Government to Private Contracting

Ah but perhaps you saw a weakness, for private companies could underbid in the last scenario. Well, when private companies bid on government contracts, the losing bidders don’t walk away empty-handed. Instead, they become unpaid monitors of the deliverables of the winning contractor. Why? Because they get to gain if the winning contactor messes up.

If the primary contractor fails to deliver—whether by missing milestones or delivering substandard work—the monitoring companies take over the project. The original contractor forfeits payment for that phase. And oh by the way, payment is only made after completion.[3]

This system ensures that someone is always incentivized to watch, creating a built-in safeguard against poor performance.

Added to the above, if a private company exceeds the budget by even $1 or delays delivery by even 1 day, they and all their senior management and officers are banned from getting government contracts for 3 years. And they can’t just start a new company because we know who those individuals are. Any fraud will be punished by 1 year in prison.

Furthermore, all milestones and deliverables must be displayed publicly and anyone (and we do mean anyone) who shows that they were missed (to avoid their cronies in the government from given them a pass) will get 5% of the bid as a reward and the company will lose the contract. We’ve basically incentivized everyone on the internet to be an inspector and whistleblower. If you are an employee of the company you have a lot to win by showing that your company messed up.

  1. Tying Budgets to Performance

Why should any department receive the same budget every year regardless of results?

Instead, tie a portion of every department’s budget to measurable outcomes. Departments that meet or exceed their goals receive additional discretionary funds. Those that fail face budget cuts and the department head is demoted. This should be written into the law that created that department.

Conclusion

Other Suggestions follow at the end.

Every law our legislators make, may be an opportunity to create a self-regulating feedback system. These are just rough ideas, a legislator worth their salt, can refine it and ex-government employees will know what is actually needed. The question isn’t whether we can fix corruption, waste, or inefficiency—it’s whether we’re willing to design systems that fix themselves.

So, I urge you: Start thinking in feedback loops. Every time you write a law, ask yourself: How can we make this law like the thermocouple in a gas heater or the candy bar split between two kids?

Because when we build systems that monitor themselves, we create a government that is efficient, transparent, and truly accountable to the people it serves. This is how we honor the legacy of those who built this nation on the principle of government of the people, by the people, and for the people.

Other Ideas:

  1. Penalties for Duplication

Here’s a question: How many duplicate programs are running in government right now, wasting millions of taxpayer dollars?

Imagine a system where citizens who identify redundancies receive 5% of the savings from shutting them down. For example, if two departments are running similar programs, and a citizen exposes it, one program is eliminated, and the citizen earns a reward.

In addition, the responsible department head is demoted, and the department’s budget is reduced. This feedback loop incentivizes streamlining and eliminates waste.

I realize that one department may be slightly different from the other, but the issue is what of that work is overlapping. That’s the duplication we are going to eliminate. If the staff of one department is now jobless, they are terminated.

This can also be done by incentivizing department heads to evaluate other departments and if they find a duplication, the other department is shut down and they get a promotion. Again, first to report wins. Now you’ve incentivized government workers to look for inefficiencies quickly before some one else reports it.

  1. Real-Time Transparency

Every government department should publish real-time dashboards showing their goals, progress, and expenditures. If a citizen uncovers false data, they earn a reward, and the department head is demoted. The department’s budget is also reduced by 10%. For instance remember the recent false reporting of incomes and the economy under the previous administration.

This feedback loop encourages every average citizens to hold their government accountable, ensuring a culture of transparency. We suddenly create a nation of checkers and verifiers.

  • Eliminating Chronic Underperformance

What happens to the bottom 10% of performers in the private sector? They’re let go.

At the end of each year, the bottom 10% of government job performers should face the same fate. This feedback loop prevents mediocrity and rewards excellence. Every employee now wants to make sure they are not in the bottom 10%.

Objections

Objection 1: Could people game the “first to report” rule?

  • Harsh penalties for false reporting ensure only real corruption is exposed. Nobody is going to offer to go to prison for 5 years to make that money. If you want to be safe make the penalty to be 7 years for every $1M stolen. Video and digital evidence is required to qualify for the reward.

Objection 2: Could watchdog incentives be misused?

  • Penalties for false reports and transparent documentation prevent frivolous claims.

Objection 3: Could budget cuts harm essential services?

  • No because these essential services will be performed by other redundant departments or farmed out to the free markets.

Objection 4: Will firing the bottom 10% of government employees lead to high turnover?

  • This method is standard in the private sector and drives performance. If you work for the government, just make sure you are not one of the lowest 10%.

 

[1] What about if someone takes a bribe and then claims they only did so because they had an intent to report. The following prevents that.

  1. Explicit Legal Provision:
    • Write the law to specify that the “first to report” protection applies only to individuals who report immediately after the first bribe.
    • Taking a second bribe would automatically void their eligibility for protection or incentives, regardless of intent to report later. Note any instance of payment is one bribe. Even if the bribe is split into two installments, each installment is considered a bribe.
    • Note however a person who has paid multiple bribes can recover all the money they paid as bribes if they report all the bribes. This does not apply to the receiver of the bribes.
  1. Clear Definition of Bribe Incidents:
    • Define what constitutes separate bribes to avoid ambiguity (e.g., two distinct payments or favors on different occasions).
  2. Immediate Reporting Mechanism:
    • Require that any bribe be reported promptly after it occurs (e.g., within 24 hours) to qualify as “first to report.” Failure to report before a second bribe disqualifies the individual.
  1. Sting Operations:
    • In sting scenarios, investigators could ensure the individual is offered a second bribe to test their adherence to the law. If they accept the second bribe, their claim to first-reporter status is invalidated.
  2. Documentation of Law:
    • Clearly communicate this rule to all government employees as part of anti-corruption training to eliminate misunderstandings about how the system works.

[2] Note this is not talking about inspections. Inspections need to be done to ensure buildings are safe. But in my opinion it should be done only by private companies who put up a bond, who would then be sued if they rubber stamped an inspection and something bad happened within say 10 years. Oh we should not this already exists.

 

[3] Ah but you say, private contractors don’t have the money to pay for a contract up front. Yes, so they need to secure a private loan to do that where they are liable for the loan. And they can feed the cost of that loan into the proposal.

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