Cash for Clunkers and Performance Measurement: A Lemon, or a Porsche?

Our good friends Katherine Barrett and Richard Greene have recently begun a blog focused on the American Recovery and Reinvestment Act (ARRA) in conjunction with the IBM Center for The Business of Government. They sent us a note about a piece they wrote around the “Cash for Clunkers” automobile incentive purchase program and performance measurement – or, more precisely, the lack of performance measurement. You can check out their posting by clicking here.

We’ve talked before about the Levels of Transparency in government, beginning with transparency around how money is planned to be spent (the budget, in other words) and increasing to transparency around the results for customers generated by those dollars. As Barrett & Greene point out in their piece, a primary focus of ARRA was accountability and transparency around how the dollars were spent and the jobs created, but there has been little effort to collect performance information beyond that.

The missed opportunity is extraordinary. With this lack of performance information, the primary narrative around ARRA has become about the dollars spent, with only a limited ability to speak to the results provided by those dollars. The question of whether or not ARRA programs like Cash for Clunkers “worked” is hard to answer, as the definitions for success were not established out of the gate.

Let’s be clear – the administrative challenge presented by getting ARRA dollars out quickly has been huge, and the effective financial management of those funds is essential. With not much additional effort, however, there could have been a rich, meaningful flow of performance information about the difference ARRA is making for Americans in ways that would have demonstrated remarkable accountability and transparency. We hope that the lessons learned from ARRA will help drive a great focus on performance information in the future.

But this also raises a question for leaders at all levels of government – are we being as accountable and transparent as we can, and should, be? We put together a self-assessment tool last year to help government organizations quickly assess how transparent and accountable they are – if you haven’t seen it, take a look at it and see how your entity/jurisdiction stacks up. You can download our free tool by clicking here.