If people allocated taxes to undervalued public goods, then wouldn’t the incentive of every agency…
The Suburbanist

The government should not help to save Chrysler, of course not. This is a private enterprise system. It’s often described as a profit system but that’s a misleading label. It’s a profit and loss system. And the loss part is even more important than the profit because it’s what gets rid of badly managed, poorly operated companies. When Chrysler loses money…it’s got to do something. When Amtrak loses money it goes to congress and gets a bigger appropriation. — Milton Friedman, What is Greed?

The current system of government rewards failure. Would this be an even bigger problem with pragmatarianism?

One part of the problem with the current system is that congress is spending money that it didn’t earn. Friedman had a good bit about other people’s money. With pragmatarianism, taxpayers are going to be spending their own money. As such, they are going to be a gazillion times more sensitive to how well their money is being used. Taxpayers really don’t want their hard-earned money to be flushed down the toilet. So I’m pretty confident that failure will be a lot less rewarded with pragmatarianism.

Another part of the problem with the current system is that, when there’s only a few people deciding how to spend money, there’s going to be an extremely narrow range of perspectives in terms of solutions. With pragmatarianism you’re going to get the broadest possible range of perspectives on possible solutions. Some people are going to think that the problem of crime can be solved by more police. Others are going to think that the problem can be solved by improving education. Others are going to think that the solution is more employment opportunities (reducing barriers to entry). Obviously I can’t list all the different perspectives on possible solutions to crime.

Decentralized approaches result in more ground being covered and more progress being made.