Why Institutions Fail
We live at a time where institutions are increasingly distrusted. The feeling is that they are corrupt and out of touch with their constitutuents. I often here complaints against particular institutions, but never any explanation of why this is a general problem.
The explanation is simple. When institutions are new, they are staffed with people who believe in their mission. If they succeed, they become wealthy and powerful. Wealthy and powerful institutions attract people who care about wealth and power and not the original purpose of the institution. So the original goals of the instituion change to the pursuit of more wealth and power, een if this contradicts the original goals.
I remember watching many years ago the president of General Motors on Wall Street Week. He was asked about the cars General Motors amde and the decisions behind them. But the only thing he seemed to care about was maintaing the size of the stock dividend. So inevitably because General Motors lost its market to the Japanese car companies.
You see this pattern in many organizations. Scientists more interested in getting grants than doin science. Regulators more interested in finnding a job after they leave the business they regulate. Politicians with an eye on their career after they leave government. The focus is off the job they are supposed to do and on advancing their self-interest.