This article appeared at RealClearDefense on February 24, 2015.

During his confirmation hearing, Secretary of Defense Ashton Carter offered a small window into his plans to fix the Pentagon’s much maligned acquisition system. Responding to a question, he declared his intention to “reintroduce the role of the customer” by giving the chiefs of the military services greater oversight in the acquisition process. Fine, but if Carter really wishes to use the services to fix what currently ails the Department of Defense, he should reintroduce their roles as competitors.

There has been an ongoing effort to eliminate service competition in defense management since the end of World War II. The tendency toward centralization reached its apogee with the Department of Defense Reorganization Act of 1986, better known as Goldwater-Nichols. The law was a response to coordination problems that plagued military operations in Iran, Lebanon and Grenada in the late 1970s and early 1980s. But its emphasis on increasing service “jointness” in the field furthered the centralization of management at the Pentagon, effectively ending service competition.

Nearly two decades ago, with the joint force Goldwater-Nichols produced still struggling to define its post-Cold War identity, Harvey Sapolsky of the Massachusetts Institute of Technology (MIT) saw three advantages inter-service competition provide for defense management. They are even more applicable today.

First, inter-service competition provides information for civilian oversight. At his confirmation hearing, Carter acknowledged that the “taxpayer cannot comprehend” the amount of waste at the Pentagon, and lent his rhetorical support to legislative efforts to audit the Department of Defense. It remains unclear, however, whether the Pentagon will meet its 2017 deadline for audit-readiness or what exactly a one-time audit will accomplish, other than confirm what is already known: the military wastes tremendous amounts of money. Inter-service competition on the other hand provides a mechanism for an immediate and ongoing audit. Put the Army, Navy and Air Force in competition with one another for money and missions, and they will happily inform civilian overseers about the wasteful practices of their brethren.

Second, service competition provides civilians leverage in their oversight role. While Robert McNamara did a great deal to centralize defense management during his tenure at the Pentagon, he wisely left himself leeway to play the services off one another. He cultivated allies in the Navy and Army while cancelling two Air Force bombers and capping the number of intercontinental ballistic missiles the service could possess. At the post-Goldwater-Nichols Pentagon, such cancellations are uncommon as the services present a “joint” front to protect favored programs. A problematic program like the F-35 continues with no fear for its existence seeing as the Air Force, Navy and Marine Corps all have skin in the game.

Third, competition spurs innovation. Sapolsky’s MIT colleague Owen Cote has found that military organizations seek new technologies—or new ways of using existing technologies—in competition over missions. Military services are famously conservative institutions, but they will discard preferred weapons and doctrines rather than become irrelevant. The Department of Defense is currently investing in an innovation initiative, with $12 billion dedicated to the effort in its current budget request. But money alone is no incentive to innovate. It takes considerable risk to change the status quo. In psychology, prospect theory says that people risk more to prevent losses than they do to achieve gains. Thus, profligate spending and bureaucratic comity only perpetuate current service preferences. Service competition instead works in concert with Budget Control Act spending limits to provide powerful incentives to innovate.

In addition to these advantages, competition facilitates better strategic planning. Today’s centralized planning system relies on prediction and consensus. It assumes that threats emerge on a schedule that conforms to formal planning exercises, such as the Quadrennial Defense Review. It also demands agreement from various constituencies within the Department of Defense on what is the most pressing threat. But it is foolish to mistake service collusion for strategic coherence. Competition among the services can provide alternative perspectives on the multiplicity of challenges the U.S. military now faces.

At Carter’s confirmation hearing, Senator John McCain acknowledged that absent reform, no amount of money could fix the problems that plague America’s defense establishment. Carter himself, with years working inside the Department of Defense, knows this better than anyone. Decentralizing Pentagon planning and reintroducing the role of service competitors, rather than service customers, is where the new secretary of defense should begin his reform efforts.

Matthew Fay is a foreign and defense policy analyst at the Niskanen Center. He has previously published research on nuclear weapons, co-authoring an article for the American Historical Review on nuclear forecasting during the Cold War and a proposal for changes in U.S. nuclear force posture for the Cato Institute. His research interests include U.S. foreign policy, grand strategy, and defense politics.