And an individual's costs of obtaining these benefits-acquiring information, monitoring public employees, and organizing an effective political force to modify the behavior of public managers and employees' would be high. The consequences of public ownership are thus predictable. Since the nominal owners of public enterprises, the taxpayers, do not have strong incentives to monitor the performance of public employees, the costs of shirking are relatively low. Public employees, therefore, commonly seek job-related prerequisites, which increase production costs and divert attention from serving consumer demands. Public and private enterprises are similar in that they both must plan.
Public planning is, however, fundamentally different from private planning.
Public plans are developed by public managers and employees who neither bear the costs of their mistakes nor legally capture benefits generated by foresight. Moreover, public plans are developed by people who do not have to answer to any owners. As long as the planning rules and procedures are followed, a public plan is considered a good plan. Private planning is quite a different story. Private plans attempt to anticipate consumer demands and production costs correctly, because the present value of the private enterprise depends on correct anticipation of demands and costs.