
I love this example of why competition works, from last week's
Economist.
It asks why government has been less successful than business and industry in using the internet "to lower costs, please customers and raise profits", suggesting that public bodies do just fine at putting information online, but less well at delivering services through new technology. One of the reasons it offers is a "lack of competitive pressure".
"Governments have few direct rivals. Amazon.com must outdo other online booksellers to win readers' money. Google must beat Yahoo!. Unless every inch of such companies' websites offers stellar clarity and convenience, customers go elsewhere. But if your country's tax-collection online offering is slow, clunky or just plain dull, then tough. When Britain's Inland Revenue website crashed on January 31st - the busiest day of its year - the authorities grudgingly gave taxpayers one day's grace before imposing penalties. They did not offer the chance to pay tax in Sweden instead."