The Practice of American Public Policymaking 9781317455219, 9780765617750

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The PRACTICE of AMERICAN PUBLIC POLICYMAKING

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The PRACTICE of AMERICAN PUBLIC POLICYMAKING

SELDEN BIGGS • LELIA B. HELMS

ROUTLEDGE

Routledge Taylor & Francis Group

LONDON AND NEW YORK

___________________________

To Warren and Grace Biggs

___________________________ First published 2007 by M.E. Sharpe Published 2015 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN 711 Third Avenue, New York, NY 10017, USA Routledge is an imprint of the Taylor & Francis Group, an informa business Copyright © 2007 Taylor & Francis. All rights reserved.

No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Notices No responsibility is assumed by the publisher for any injury and/or damage to persons or property as a matter of products liability, negligence or otherwise, or from any use of operation of any methods, products, instructions or ideas contained in the material herein. Practitioners and researchers must always rely on their own experience and knowledge in evaluating and using any information, methods, compounds, or experiments described herein. In using such information or methods they should be mindful of their own safety and the safety of others, including parties for whom they have a professional responsibility. Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. Library of Congress Cataloging-in-Publication Data Biggs, Selden, 1948– The practice of American public policymaking / by Selden Biggs and Lelia B. Helms. p. cm. Includes bibliographical references and index. ISBN 10 0-7656-1775-7 (cloth : alk. paper) ISBN 13 978-0-7656-1775-0 (cloth: alk. paper) 1. Policy sciences. 2. Political planning--United States. I. Helms, Lelia B. (Lelia Biggs), 1943– II. Title. H97.B54 2006 320.60973—dc22

2006000170 ISBN 13: 9780765617750 (hbk)

Brief Contents Detailed Contents .......................................................................................................... vii List of Tables and Figures .......................................................................................... xxi List of Mini-Cases ....................................................................................................... xxv Acknowledgments ..................................................................................................... xxvii

Part I. Foundations ............................................................................................. 1 1. Introduction ................................................................................................................ 3 2. Foundations ................................................................................................................ 5 3. Preview .......................................................................................................................15

Part II. Inputs 4. 5. 6. 7.

.......................................................................................................37

Problems ....................................................................................................................39 Politics and Policy Entrepreneurs .....................................................................63 Access, Lobbying, and Public Opinion ........................................................ 100 Agenda Setting ..................................................................................................... 128

Part III. Production ...................................................................................... 161 8. 9. 10. 11. 12. 13. 14.

Policy Technologies and Maps ....................................................................... 163 Authority ................................................................................................................ 168 Agency .................................................................................................................... 196 Program .................................................................................................................. 227 Rules ........................................................................................................................ 273 Contract .................................................................................................................. 295 Budget ..................................................................................................................... 329

Part IV. Results

................................................................................................. 363

15. Outputs .................................................................................................................... 365 16. Outcomes ............................................................................................................... 398 v

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BRIEF CONTENTS

Part V. Context and Content ................................................................ 433 17. 18. 19. 20.

Context: An Overview of Policy Sectors .................................................... 437 Context: The Government Sector .................................................................. 446 Context: Market, Civil, and Private Sectors ............................................... 470 Content: Policies and Policymaking ............................................................. 497

Part VI. Conclusions .................................................................................... 537 Index ................................................................................................................................. 545

Detailed Contents

List of Tables and Figures .......................................................................................................... xxi List of Mini-Cases .................................................................................................................... xxv Acknowledgments ..................................................................................................................xxvii Part I. Foundations ..................................................................................................................... 1 Chapter 1 Introduction............................................................................................................... 3 Chapter 2 Foundations ............................................................................................................... 5 Preview .................................................................................................................................. 5 2.1 Definitions .................................................................................................................. 5 2.1.1 Policy ................................................................................................................. 5 2.1.2 Public ................................................................................................................. 7 2.1.3 Politics and Policy ............................................................................................. 8 2.2 Public Policy as a Field of Study ................................................................................ 9 2.2.1 Founders: 1950s–60s ....................................................................................... 10 2.2.2 Reaction and Retrenchment: 1970s–80s ......................................................... 10 2.2.3 Renewal: 1990s to the Present ......................................................................... 11 2.3 Conclusion: The Practice of American Public Policymaking .................................. 12 Key Terms ............................................................................................................................ 13 Questions for Discussion ..................................................................................................... 13 Suggested Readings ............................................................................................................. 13 Chapter 3 Preview ..................................................................................................................... 15 Preview ................................................................................................................................ 15 3.1 Framework ................................................................................................................ 15 3.1.1 Process and Activities ...................................................................................... 15 3.1.2 Actors and Roles .............................................................................................. 18 3.1.3 Technologies and Practices .............................................................................. 18 3.1.4 Context or Environment .................................................................................. 19 3.1.5 Content or Domain .......................................................................................... 19 vii

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3.2 The Policymaking Process ....................................................................................... 20 3.2.1 Overview ...................................................................................................... 20 3.2.2 Actors and Roles........................................................................................... 22 3.2.2.1 Policy Entrepreneurs ........................................................................ 22 3.2.2.2 Policymakers ..................................................................................... 23 3.2.2.3 Target Populations ............................................................................ 24 3.2.2.4 Winners and Losers........................................................................... 24 3.2.2.5 Conclusion ........................................................................................ 24 3.2.3 The Policymaking Process: Detailed View ................................................... 25 3.2.3.1 Inputs (Part II, Chapters 4–7) .......................................................... 25 3.2.3.2 Policy Production (Part III, Chapters 9–14) .................................... 25 3.2.3.3 Outputs (Part IV, Chapter 15)........................................................... 26 3.2.3.4 Outcomes (Part II, Chapter 4, and Part IV, Chapter 16) .................. 27 3.2.3.5 Summary ........................................................................................... 29 3.2.4 Context (Part V) ............................................................................................ 29 3.2.4.1 Level ................................................................................................. 30 3.2.4.2 Sector ................................................................................................ 30 3.2.5 Content (Part V) ............................................................................................ 31 3.2.5.1 Domains and Networks..................................................................... 32 3.2.5.2 Jurisdictions and Venues................................................................... 32 3.3 Policy Maps .............................................................................................................. 33 3.4 Conclusions .............................................................................................................. 34 Key Terms ............................................................................................................................ 35 Suggested Readings ............................................................................................................. 35 Part II. Inputs ............................................................................................................................ 37 Chapter 4 Problems .................................................................................................................. 39 Preview ................................................................................................................................ 39 4.1 Introduction .............................................................................................................. 39 4.2 What Problems Are and Are Not .............................................................................. 40 4.2.1 Situations and Problems .................................................................................. 40 4.2.2 Conditions and Problems ................................................................................. 40 4.2.3 Problems and Policy Problems ........................................................................ 41 4.2.4 Events and Problems ....................................................................................... 42 4.2.5 Solutions and Problems ................................................................................... 42 4.2.6 Policy Outcomes and Problems ....................................................................... 44 4.3 The Nature of Policy Problems ................................................................................ 45 4.4 Defining Problems .................................................................................................... 46 4.4.1 Images.............................................................................................................. 47 4.4.2 Metaphors ........................................................................................................ 47 4.4.3 Stories .............................................................................................................. 47 4.4.4 Causes .............................................................................................................. 48 4.4.5 Numbers .......................................................................................................... 48 4.5 Issues ...................................................................................................................... 50 4.6 Conclusions .............................................................................................................. 53 Case Study: Chasing Chads ................................................................................................. 53

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Key Terms ............................................................................................................................ 59 Questions for Discussion ..................................................................................................... 60 Suggested Readings ............................................................................................................. 60 Chapter 5 Politics and Policy Entrepreneurs ......................................................................... 63 Preview ................................................................................................................................ 63 5.1 Introduction .............................................................................................................. 63 5.2 Politics and Policymaking ........................................................................................ 65 5.2.1 Electing Policymakers .................................................................................. 65 5.2.2 Elections and American Policymaking ......................................................... 66 5.2.3 Personality and Policymaking ...................................................................... 68 5.2.4 Appointments and Policymaking ................................................................. 69 5.2.5 Political Parties and Policymaking ............................................................... 70 5.3 Policy Entrepreneurs................................................................................................. 72 5.4 Business Organizations............................................................................................. 73 5.5 Interest Groups ......................................................................................................... 74 5.6 Think Tanks .............................................................................................................. 77 5.6.1 What Are Think Tanks? ................................................................................ 78 5.6.2 The Evolution of Policy Think Tanks ........................................................... 78 5.6.3 The Constellation of Policy Think Tanks ..................................................... 80 5.6.4 Think Tanks and American Public Policymaking ........................................ 80 5.7 Media ...................................................................................................................... 81 5.7.1 From Colonies to Republic ........................................................................... 81 5.7.2 The Emergence of the Mass Media .............................................................. 83 5.7.3 The “New Journalism” ................................................................................. 83 5.7.4 Twentieth-Century Media and Policymaking ............................................... 84 5.7.4.1 Radio................................................................................................. 85 5.7.4.2 Television .......................................................................................... 86 5.7.4.3 The Internet and Beyond ................................................................... 89 5.8 Conclusions .............................................................................................................. 90 Case Study: Reviving Religion ............................................................................................ 90 Key Terms ............................................................................................................................ 96 Questions for Discussion ..................................................................................................... 96 Suggested Readings ............................................................................................................. 97 Chapter 6 Access, Lobbying, and Public Opinion ............................................................... 100 Preview .............................................................................................................................. 100 6.1 Introduction ............................................................................................................ 100 6.2 Lobbying................................................................................................................. 102 6.3 Lobbying Strategies ................................................................................................ 102 6.3.1 Target Policymakers ................................................................................... 102 6.3.2 Play Offense and Defense........................................................................... 103 6.3.3 Build Relationships .................................................................................... 103 6.3.4 Supply Information ..................................................................................... 104 6.3.5 Hire Contract Lobbyists ............................................................................. 105 6.4 Lobbying Tactics .................................................................................................... 105 6.4.1 Direct Lobbying.......................................................................................... 106

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6.4.2

Indirect Lobbying ....................................................................................... 108 6.4.2.1 Politics as a Means ......................................................................... 109 6.4.2.2 The Media as Intermediary............................................................. 110 6.4.2.3 Interest Groups as Intermediaries .................................................. 111 6.4.2.4 The Public as Intermediary ............................................................ 111 6.4.3 Conclusions ................................................................................................ 113 6.5 Public Opinion ........................................................................................................ 113 6.5.1 What Is Public Opinion? ............................................................................ 113 6.5.2 How Is Public Opinion Determined?.......................................................... 113 6.5.3 Public Opinion and Public Policy............................................................... 115 6.5.4 Public Opinion: Summary .......................................................................... 116 6.6 Conclusions ............................................................................................................ 117 Case Study: Covering all Bases—Lobbying for Enron ..................................................... 117 Key Terms .......................................................................................................................... 125 Questions for Discussion ................................................................................................... 125 Suggested Readings ........................................................................................................... 126 Chapter 7 Agenda Setting ...................................................................................................... 128 Preview .............................................................................................................................. 128 7.1 Introduction ............................................................................................................ 128 7.2 What Is an Agenda? ................................................................................................ 129 7.3 Institutions and Agenda Setting .............................................................................. 130 7.3.1 Legislatures................................................................................................. 131 7.3.1.1 Schedules ........................................................................................ 131 7.3.1.2 Lawmaking ..................................................................................... 132 7.3.1.3 Legislative Oversight ...................................................................... 136 7.3.1.4 Legislatures: Conclusions............................................................... 137 7.3.2 Executives ................................................................................................... 137 7.3.2.1 Schedules ........................................................................................ 137 7.3.2.2 Presidential Agenda........................................................................ 138 7.3.2.3 Tools ................................................................................................ 138 7.3.3 Bureaucracy ................................................................................................ 139 7.3.4 Courts ......................................................................................................... 141 7.3.4.1 Framing a Lawsuit .......................................................................... 142 7.3.4.2 Litigation Strategies........................................................................ 142 7.3.4.3 Appellate Review ............................................................................ 143 7.3.4.4 Courts: Conclusions ....................................................................... 144 7.3.5 Constitutional Amendments ....................................................................... 145 7.3.6 Initiatives and Referenda ............................................................................ 146 7.4 Process .................................................................................................................... 147 7.5 Mapping Policy Inputs ........................................................................................... 148 7.6 Part II Recap ........................................................................................................... 149 Case Study: The Stars Must Be Lined Up Just Right ........................................................ 150 Key Terms .......................................................................................................................... 157 Questions for Discussion ................................................................................................... 158 Suggested Readings ........................................................................................................... 158

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Part III. Production ................................................................................................................ 161 Chapter 8 Policy Technologies and Maps ............................................................................. 163 8.1 Introduction ............................................................................................................ 163 8.2 Technology and Policy Production ......................................................................... 164 8.3 Mapping Policy Production .................................................................................... 166 Key Term ........................................................................................................................... 167 Chapter 9 Authority ................................................................................................................ 168 Preview .............................................................................................................................. 168 9.1 What Is Authority? .................................................................................................... 168 9.2 Authority, Law, and Public Policymaking ................................................................ 169 9.3 Sources of Public Authority ...................................................................................... 171 9.4 Constitutional Authority ........................................................................................... 172 9.4.1 Constitutional Amendment ........................................................................... 173 9.4.2 Judicial Review ............................................................................................ 173 9.5 Legislative Authority ................................................................................................ 174 9.5.1 Scope of Legislative Authority ..................................................................... 174 9.5.2 Types of Legislative Authority ..................................................................... 175 9.5.3 The Structure of Statutory Authority ............................................................ 176 9.6 Executive Authority .................................................................................................. 177 9.7 Judicial Authority...................................................................................................... 179 9.7.1 Interpretive Authority ................................................................................... 179 9.7.2 Remedial Authority ...................................................................................... 180 9.8 Administrative Authority .......................................................................................... 182 9.9 Popular Authority: Initiatives and Referenda ........................................................... 183 9.10 Strategies for Authority Production .......................................................................... 184 Case Study: The Strange Career of Affirmative Action..................................................... 185 Key Terms .......................................................................................................................... 192 Questions for Discussion ................................................................................................... 192 Suggested Readings ........................................................................................................... 193 Chapter 10 Agency .................................................................................................................. 196 Preview .............................................................................................................................. 196 10.1 Introduction................................................................................................................ 196 10.2 What Is Agency? ........................................................................................................ 196 10.2.1 Agency as Relationship ............................................................................... 197 10.2.2 Agency as Organization ............................................................................... 197 10.3 Governments .............................................................................................................. 198 10.3.1 What Is a Government? ............................................................................... 198 10.3.2 General-Purpose and Special-Purpose Governments .................................. 199 10.4 Agencies: Private and Public ..................................................................................... 199 10.4.1 Private Agencies .......................................................................................... 200 10.4.2 Public Agencies ........................................................................................... 201 10.4.3 State Action Doctrine .................................................................................. 202 10.4.4 Agencies—An Overview ............................................................................. 203 10.5 Public or Government Agencies ................................................................................ 204

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10.5.1 Departments or Administrative Agencies .................................................... 204 10.5.2 Independent (Regulatory) Agencies ............................................................ 206 10.5.3 Government Corporations ........................................................................... 207 10.5.4 Government-Sponsored Enterprises ............................................................ 208 10.5.5 Advisory Committees and Commissions..................................................... 210 10.6 Private or Nongovernmental Agencies ................................................................... 210 10.6.1 For-Profit Corporations................................................................................ 210 10.6.2 Not-for-Profit Corporations ......................................................................... 211 10.7 Types of Agencies—Outputs and Outcomes .......................................................... 212 10.8 Strategies for Agency Design ................................................................................. 213 Case Study: Birth Pangs of an Agency—Homeland Security ........................................... 215 Key Terms .......................................................................................................................... 222 Questions for Discussion ................................................................................................... 223 Suggested Readings ........................................................................................................... 224 Chapter 11 Program ............................................................................................................... 227 Preview .............................................................................................................................. 227 11.1 Introduction ............................................................................................................ 227 11.2 What Is a Program? ................................................................................................ 229 11.3 Program Versus Agency.......................................................................................... 231 11.4 Classifying Programs.............................................................................................. 232 11.5 Program Creation.................................................................................................... 234 11.6 Program Design ...................................................................................................... 235 11.6.1 Background .................................................................................................. 235 11.6.2 The Art of Program Design.......................................................................... 236 11.6.2.1 Define a Vision ............................................................................. 236 11.6.2.2 Define Needs ............................................................................... 237 11.6.2.3 Define Goals and Objectives ........................................................ 238 11.6.2.4 Identify Best Practices.................................................................. 238 11.6.2.5 Determine “Fit” ........................................................................... 238 11.6.2.6 Determine Program Resources .................................................... 238 11.6.2.7 Plan Activities .............................................................................. 239 11.6.2.8 Execute the Program ................................................................... 239 11.6.2.9 Evaluate ...................................................................................... 239 11.6.2.10 Sustain and Renew ..................................................................... 239 11.6.3 Program Logic Model .................................................................................. 239 11.6.4 Conclusions ................................................................................................. 241 11.7 Service Delivery Strategies .................................................................................... 242 11.7.1 Vertical Versus Horizontal Strategies .......................................................... 242 11.7.2 Types of Vertical Governance ...................................................................... 243 11.7.2.1 Regulation ..................................................................................... 243 11.7.2.2 Direct Delivery ............................................................................. 243 11.7.2.3 Outsourcing .................................................................................. 243 11.7.3 Types of Horizontal Governance ................................................................. 244 11.7.3.1 Networking ................................................................................... 244 11.7.3.2 Coordination ................................................................................. 244 11.7.3.3 Cooperation .................................................................................. 245

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11.7.3.4 Collaboration ............................................................................... 245 11.7.4 Conclusions ................................................................................................. 245 11.8 Program Management ............................................................................................ 246 11.9 Project Management ............................................................................................... 248 11.10 Program Evaluation ................................................................................................ 249 11.11 Performance Measurement ..................................................................................... 251 11.11.1 Background................................................................................................ 252 11.11.2 The Government Performance and Results Act Framework ..................... 253 11.11.3 Performance Measures .............................................................................. 254 11.11.3.1 The Aggregation Challenge ...................................................... 254 11.11.3.2 The Causal Challenge .............................................................. 255 11.11.4 Performance Measurement and Politics .................................................... 256 11.12 Program Evolution .................................................................................................. 257 11.13 Conclusions ............................................................................................................ 260 Case Study: Redesigning Welfare ...................................................................................... 260 Key Terms .......................................................................................................................... 268 Questions for Discussion ................................................................................................... 269 Suggested Readings ........................................................................................................... 270 Chapter 12 Rules .................................................................................................................... 273 Preview .............................................................................................................................. 273 12.1 Introduction ............................................................................................................ 273 12.2 What Is a Rule? ...................................................................................................... 273 12.2.1 Informal Rules ............................................................................................. 274 12.2.2 Formal Rules ............................................................................................... 274 12.3 Rules and Policy Production .................................................................................. 276 12.4 Administrative Rules .............................................................................................. 276 12.4.1 Agencies and Rules...................................................................................... 277 12.4.2 Laws and Rules............................................................................................ 277 12.4.3 Applicability and Effect ............................................................................... 278 12.4.4 Classification of Rules ................................................................................. 278 12.5 Administrative Rulemaking .................................................................................... 279 12.5.1 The Evolution of Administrative Rulemaking ............................................. 280 12.5.2 The Process of Administrative Rulemaking ................................................ 281 12.6 Other Administrative “Rules” ................................................................................. 283 12.6.1 Orders .......................................................................................................... 283 12.6.2 Guidelines .................................................................................................... 284 12.6.3 Standards ..................................................................................................... 284 12.7 Rules and the Future of Policy Production ............................................................. 286 Case Study: Dueling Rules at the EPA .............................................................................. 286 Key Terms .......................................................................................................................... 291 Questions for Discussion ................................................................................................... 292 Suggested Readings ........................................................................................................... 293 Chapter 13 Contract ............................................................................................................... 295 Preview .............................................................................................................................. 295 13.1 Introduction ............................................................................................................ 295

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13.2 Public Contracts...................................................................................................... 296 13.2.1 Contracts ...................................................................................................... 297 13.2.2 Public Contracts........................................................................................... 296 13.2.3 Contracts Versus Regulation ........................................................................ 298 13.3 Procurement Contracts ........................................................................................... 299 13.3.1 The Evolution of Government Contracting ................................................. 299 13.3.2 The Decision to Contract ............................................................................. 302 13.3.3 Contract Formation ...................................................................................... 303 13.3.4 Types of Contracts ....................................................................................... 304 13.3.4.1 Fixed-Price Contracts .................................................................. 304 13.3.4.2 Cost-Reimbursement Contracts .................................................... 304 13.3.4.3 Incentive Delivery Contracts ........................................................ 304 13.3.4.4 Time-Materials and Labor-Hour Contracts ................................. 304 13.3.4.5 Letter Contracts ............................................................................ 305 13.3.5 Contract Management ................................................................................. 305 13.3.6 Franchises .................................................................................................... 305 13.4 Service Delivery Contracts ..................................................................................... 306 13.5 Grants and Cooperative Agreements ...................................................................... 308 13.5.1 Grants .......................................................................................................... 308 13.5.2 Cooperative Agreements.............................................................................. 309 13.6 Interagency Agreements ......................................................................................... 310 13.7 Interstate Compacts ................................................................................................ 311 13.8 Regulatory Contracts .............................................................................................. 312 13.9 Contracts: Competition and Collaboration ............................................................. 313 13.9.1 Competition ................................................................................................. 313 13.9.2 Collaboration ............................................................................................... 314 13.10 Conclusions ............................................................................................................ 314 13.10.1 Contracts and Privatization ........................................................................ 314 13.10.2 Legal Issues ............................................................................................... 315 13.10.3 Practical Issues .......................................................................................... 316 13.10.3.1 Management Capacity .............................................................. 316 13.10.3.2 Loss of Capacity to Perform ..................................................... 316 13.10.3.3 Impact on Private Providers ..................................................... 316 13.10.3.4 Loss of Accountability .............................................................. 317 Case Study: Procuring Trouble—Boeing and the Air Force ............................................. 318 Key Terms .......................................................................................................................... 324 Questions for Discussion ................................................................................................... 325 Suggested Readings ........................................................................................................... 326 Chapter 14 Budget .................................................................................................................. 329 Preview .............................................................................................................................. 329 14.1 What Is a Budget? .................................................................................................. 329 14.2 Budgets and the Technologies of Policy Production .............................................. 331 14.3 The Two Faces of Budgeting .................................................................................. 333 14.3.1. Raising Money............................................................................................ 333 14.3.2 Spending Money ......................................................................................... 333 14.4 The Evolution of Budgeting ................................................................................... 334

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14.4.1 The Beginnings: From 1865 to the Progressive Era .................................... 334 14.4.2 Between the World Wars ............................................................................. 335 14.4.3 From World War II Through Vietnam: Guns and Butter ............................. 336 14.4.4 Living with Deficits ..................................................................................... 336 14.4.5 The Twenty-First Century: Back to the Future? .......................................... 339 14.4.6 State and Local Budgeting........................................................................... 340 14.5 Managing the Federal Budget—OMB ................................................................... 341 14.6 The Budget Process: Overview .............................................................................. 342 14.7 Phase One: Executive Budget Formulation ............................................................ 343 14.7.1 OMB Guidance ............................................................................................ 344 14.7.2 Agency Budgets ........................................................................................... 344 14.7 3 Enter OMB .................................................................................................. 344 14.8 Phase Two: Legislative Enactment ......................................................................... 345 14.8.1 Concurrent Budget Resolution .................................................................... 346 14.8.2 Reconciliation .............................................................................................. 346 14.8.3 Authorization ............................................................................................... 346 14.8.4 Appropriations ............................................................................................. 347 14.8.5 Continuing Resolutions ............................................................................... 347 14.8.6 Omnibus Appropriations.............................................................................. 347 14.8.7 Legislative Enactment and Policy Production ............................................. 348 14.9 Phase Three: Budget Execution and Control .......................................................... 348 14.9.1 Budget Execution ........................................................................................ 348 14.9.2 Budget Control and Oversight ..................................................................... 350 14.10 Performance Budgeting and the Future .................................................................. 352 14.11 The Politics of Budgeting ....................................................................................... 353 Case Study: Feeding at the Budget Trough—Earmarks for Educators ............................. 354 Key Terms .......................................................................................................................... 358 Questions for Discussion ................................................................................................... 359 Suggested Readings ........................................................................................................... 360 Part IV. Results ........................................................................................................................ 363 Chapter 15 Outputs ................................................................................................................ 365 Preview .............................................................................................................................. 365 15.1 Introduction ............................................................................................................ 365 15.2 History of Policy Outputs in the United States ...................................................... 366 15.2.1 The Standard Story ...................................................................................... 366 15.2.2 The “Well-Regulated Society” .................................................................... 367 15.2.3 Risk and Policy Outputs .............................................................................. 368 15.3 What Is an Output? ................................................................................................. 370 15.3.1 Outputs Versus Production .......................................................................... 370 15.3.2 Outputs Versus Outcomes ............................................................................ 370 15.3.3 Intermediate and Final Outputs ................................................................... 371 15.4 The Analysis of Policy Outputs .............................................................................. 371 15.5 For Whom? Target Populations .............................................................................. 372 15.5.1 Targeted Beneficiaries and Losers ............................................................... 374 15.5.2 Direct Versus Indirect .................................................................................. 374

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15.5.3 Intermediate Versus End .............................................................................. 374 15.5.4 Groups Versus Individuals ........................................................................... 375 15.5.5 Classification in Theory ............................................................................... 375 15.5.6 Classification in Practice ............................................................................. 376 15.6 What? Benefits and Burdens .................................................................................. 376 15.6.1 Operational Classification: The U.S Government ....................................... 377 15.6.2 Normative Classification: Economics and Policy Goods ............................ 379 15.6.2.1 Individual Goods .......................................................................... 380 15.6.2.2 Toll Goods ..................................................................................... 380 15.6.2.3 Common-Pool Goods .................................................................... 380 15.6.2.4 Collective Goods .......................................................................... 381 15.6.2.5 Economic Goods and Policy Outputs ........................................... 381 15.6.3 Empirical Classification: Carrots, Sticks, and Sermons .............................. 381 15.6.4 Empirical Classification: Policy Outputs as Tools....................................... 382 15.7 How? Methods of Allocation .................................................................................. 386 15.7.1 Principles of Allocation ............................................................................... 386 15.7.2 Procedures for Allocation ............................................................................ 387 15.8 Summary................................................................................................................. 388 Case Study: Queuing for Kidneys ..................................................................................... 388 Key Terms .......................................................................................................................... 394 Questions for Discussion ................................................................................................... 395 Suggested Readings ........................................................................................................... 395 Chapter 16 Outcomes ............................................................................................................. 398 Preview .............................................................................................................................. 398 16.1 Introduction ............................................................................................................ 398 16.2 What Are Outcomes? .............................................................................................. 400 16.2.1 Outcomes and Policy Objectives ................................................................. 400 16.2.2 Short-Term, Mid-Term, and Long-Term Outcomes .................................... 401 16.2.3 Policy, Program, and Project Outcomes ...................................................... 404 16.2.4 Outcomes and Policy Outputs ..................................................................... 405 16.2.5 Outcomes and Policy Inputs ........................................................................ 406 16.2.6 Designing Policy Outcomes ........................................................................ 407 16.2.7 Outcomes and Impacts ................................................................................ 409 16.2.8 Impacts and Time ........................................................................................ 409 16.3 Outcomes for Whom? Winners and Losers ............................................................ 411 16.3.1 Targets Versus Recipients ............................................................................ 411 16.3.2 Policy Stakeholders ..................................................................................... 413 16.4 Evaluating Outcomes .............................................................................................. 415 16.4.1 Intended Versus Unintended ........................................................................ 415 16.4.2 Anticipated Versus Unanticipated ................................................................ 415 16.4.3 Primary Versus Side Effects ........................................................................ 415 16.4.4 Beneficial, Perverse, or Null Effects ........................................................... 416 16.4.5 Policy Failures ............................................................................................. 417 16.5 Policy Outcomes and Policy Performance ............................................................. 418 Case Study: Tracking the Fallout—No Child Left Behind ................................................ 419 Key Terms ......................................................................................................................... 428

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Questions for Discussion ................................................................................................... 428 Suggested Readings ........................................................................................................... 429 Part V. Context and Content .................................................................................................. 433 Chapter 17. Context: Overview of Policy Sectors ................................................................ 437 Preview .............................................................................................................................. 437 17.1 Introduction ............................................................................................................ 437 17.2 The Government Sector .......................................................................................... 438 17.3 The Market Sector .................................................................................................. 439 17.4 The Civil Sector ...................................................................................................... 440 17.5 The Private Sector................................................................................................... 441 17.6 Policy Sectors: Relationships ................................................................................. 441 17.7 Policy Sectors: Evolution ....................................................................................... 443 Key Terms .......................................................................................................................... 444 Questions for Discussion ................................................................................................... 445 Suggested Readings ........................................................................................................... 445 Chapter 18 Context: The Government Sector...................................................................... 446 Preview .............................................................................................................................. 446 18.1 Introduction ............................................................................................................ 446 18.2 Overview ................................................................................................................ 447 18.3 Federal Government ............................................................................................... 447 18.4 State Government ................................................................................................... 449 18.5 Local Government .................................................................................................. 450 18.5.1 Municipalities .............................................................................................. 450 18.5.2 Counties ....................................................................................................... 450 18.5.3 Townships .................................................................................................... 450 18.5.4 School Districts ........................................................................................... 451 18.5.5 Special Districts ........................................................................................... 451 18.6 Neighborhood Government .................................................................................... 451 18.7 The Network of Governmental Federalism ............................................................ 452 18.8 The Evolution of Governmental Federalism .......................................................... 453 18.8.1 Early Period: To 1877 .................................................................................. 454 18.8.2 The Liberal State: 1877 to 1980 .................................................................. 456 18.8.3 The “Rebirth” of Federalism: 1980 to the Present ...................................... 457 18.9 Conclusions ............................................................................................................ 459 Case Study: Dead on Arrival: Bioterrorism and Small Pox Vaccination ........................... 460 Key Terms .......................................................................................................................... 466 Questions for Discussion ................................................................................................... 467 Suggested Readings ........................................................................................................... 467 Chapter 19 Context: Market, Civil, and Private Sectors .................................................... 470 Preview .............................................................................................................................. 470 19.1 Introduction ............................................................................................................ 470 19.2 The Market Sector .................................................................................................. 470 19.2.1. Evolution of the Market Sector .................................................................. 471

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19.2.1.1 Evolution of Legal Instruments..................................................... 472 19.2.1.2 Greenhouse Effects of Federalism ................................................ 473 19.2.1.3 Continuing Changes in the Twentieth Century ............................. 474 19.2.2. Joint Production: Market and Government Sectors .................................... 475 19.2.2.1 Contracting ................................................................................... 476 19.2.2.2 Government-Commercial Hybrids................................................ 476 19.2.3. Contemporary Relations and Privatization ................................................. 477 19.3 The Civil Sector ...................................................................................................... 479 19.3.1 Historical Background ................................................................................. 479 19.3.2 Joint Production: Civil and Government Sectors ........................................ 481 19.4 The Private Sector................................................................................................... 482 19.4.1 Historical Background ................................................................................. 483 19.4.2 The Private Sector and Policy Production ................................................... 484 19.5 American Federalism: Conclusions ........................................................................ 485 Case Study: “A Hand Up, Not a Hand Out”—Delivering Goodwill ................................. 486 Key Terms .......................................................................................................................... 493 Questions for Discussion ................................................................................................... 493 Suggested Readings ........................................................................................................... 493 Chapter 20 Content: Policies and Policymaking .................................................................. 497 Preview .............................................................................................................................. 497 20.1 Introduction ............................................................................................................ 497 20.2 Domains .................................................................................................................. 498 20.3 Issues .................................................................................................................... 501 20.3.1. Multiple Domains ....................................................................................... 501 20.3.2. Policy Niches .............................................................................................. 503 20.4 Jurisdictions ............................................................................................................ 505 20.4.1. Venues......................................................................................................... 505 20.4.2. Public Agencies .......................................................................................... 507 20.4.3. Legislatures................................................................................................. 508 20.5 Policy Maps ............................................................................................................ 509 20.6 Networks................................................................................................................. 513 20.6.1 What Is a Policy Network? .......................................................................... 513 20.6.2 Networks and Horizontal Governance......................................................... 515 20.6.3 Why Policy Networks? ................................................................................ 516 20.6.4 Types of Networks ....................................................................................... 517 20.6.4.1 Intergovernmental (Interagency) Networks .................................. 517 20.6.4.2 Multilevel Government Networks ................................................. 517 20.6.4.3 Multisector Networks.................................................................... 518 20.6.5 Managing Policy Networks ......................................................................... 519 20.7 Policy Change ......................................................................................................... 522 Case Study: Smoke ’n Mirrors—The Life Cycle of an Issue ............................................ 523 Key Terms .......................................................................................................................... 533 Questions for Discussion ................................................................................................... 534 Suggested Readings ........................................................................................................... 534

DETAILED CONTENTS

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Part VI. Conclusions ............................................................................................................... 537 VI.1 Policymaking ............................................................................................................. 537 VI.2 Technologies and Practices ........................................................................................ 538 VI.3 Results .................................................................................................................... 538 VI.4 History and Law ........................................................................................................ 540 VI.5 Imitation and Diversity .............................................................................................. 540 VI.6 Case Studies............................................................................................................... 542 Index ......................................................................................................................................... 545

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List of Tables and Figures Chapter 2. Foundations Figure 2.1 Figure 2.2

Making Policy: The Basics Making Public Policy: A Preview

6 7

Chapter 3. Preview Figure 3.1 Figure 3.2 Figure 3.3 Figure 3.4 Figure 3.5 Figure 3.6 Figure 3.7 Figure 3.8 Figure 3.9 Figure 3.10 Figure 3.11 Figure 3.12 Figure 3.13 Figure 3.14 Figure 3.15 Figure 3.16 Figure 3.17 Figure 3.18 Figure 3.19

Process: A Simplified View Process: Concurrent Activities Process: Interdependent Activities Iterative or Cyclical Process Iterative Process: A Three-Dimensional View Process, Time, and Context Policymaking Process: Overview Public Policymaking: An Iterative Process Policy Change as Punctuated Equilibrium Roles in the Policymaking Process Technologies for Policy Inputs Technologies of Policy Production Components of Policy Outputs Components of Policy Outcomes Public Policymaking: Detailed Model Policymaking Levels and Sectors Policy Domains, Networks, and the Policymaking Process Format of Policy Maps: Process and Practices Policy Maps: Process and Context

16 16 17 17 17 19 21 21 22 23 25 27 27 28 29 31 32 33 34

Part II. Policy Inputs Figure II.1 Figure II.2

Inputs and the Policymaking Process Preview of Part II

37 38

Chapter 4. Problems Figure 4.1 Figure 4.2

Policy Problems and Societal Problems The Politics of Policy Issues

41 52 xxi

xxii

LIST OF TABLES AND FIGURES

Chapter 6. Access, Lobbying, and Public Opinion Figure 6.1 In-House Versus Contract Lobbying Figure 6.2 Direct Lobbying Figure 6.3 Indirect Lobbying

105 106 108

Chapter 7. Figure 7.1 Figure 7.2 Figure 7.3 Figure 7.4 Figure 7.5

132 141 147 148 149

Agenda Setting Simplified View of the Lawmaking Process Bureaucratic Agencies and their Environment American Policy Production, an Overview Mapping Policy Inputs Mapping Policy Inputs: Example

Part III. Production Figure III.1 Production in the Policymaking Process Figure III.2 Technologies of Policy Production

161 162

Chapter 8. Policy Technologies and Maps Figure 8.1 Technologies of Policy Production and the Policymaking Process

166

Chapter 9. Authority Figure 9.1 Sources of Public Authority Table 9.1 Sources of Authority: Advantages and Disadvantages

171 185

Chapter 10. Figure 10.1 Figure 10.2 Figure 10.3 Figure 10.4 Figure 10.5 Figure 10.6

Agency Authority and Agency in Policymaking Basic Agency Housekeeping Functions Types of Policy Production Agencies A Typology of Policy Production Agencies Executive Influence and Agency Design Organizational Chart for Department of Homeland Security

197 201 203 212 214 220

Chapter 11. Figure 11.1 Figure 11.2 Figure 11.3 Figure 11.4 Table 11.1 Table 11.2 Figure 11.5 Figure 11.6 Figure 11.7 Figure 11.8 Figure 11.9 Table 11.3 Figure 11.10

Program Programs in the Policy Production Process Program Goals and Activities Programs, Agencies, and Policies Agencies and Programs Agencies and Programs: A Comparison Classification of Government Programs Program Design Methodology Program Logic Model Program Delivery Strategies The Environment of Program Management Programs and Projects: Where They Fit Program Versus Project Management Cascading Objectives and Performance Measurement

228 229 229 231 232 233 237 240 242 246 249 250 254

LIST OF TABLES AND FIGURES

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Figure 11.11 Performance Indicators and Data Cost and Quality Figure 11.12 Evolution of Policy Programs

255 258

Chapter 12 Rule Table 12.1 Classification of Policy Production in the Code of Federal Regulations Table 12.2 Code of Federal Regulations: Page Count by Selected Presidencies Figure 12.1 The Rulemaking Process

279 281 282

Chapter 13 Contract Table 13.1

Contract and Regulation: A Comparison

298

Chapter 14 Budget Figure 14.1 Figure 14.2 Figure 14.3 Figure 14.4 Figure 14.5 Figure 14.6 Figure 14.7

The Cyclical Nature of Public Policymaking Budget Process Overview Executive Budget Formulation Legislative Budget Enactment Overview of Budget Execution Performance Budgeting: Linking Dollars to Results Cascading Levels of Performance Measurement

Part IV

Results

Figure IV.1 The Policymaking Process

331 343 343 345 349 352 353

363

Chapter 15 Outputs Figure 15.1 Table 15.1 Table 15.2 Table 15.3 Figure 15.2

Policy Outputs The Three Phases of Risk-Management Policy in the United States U.S. Government Classification of Target Groups Types of Domestic Assistance Four Kinds of Policy Goods

366 369 377 378 379

Chapter 16 Outcomes Figure 16.1 Figure 16.2 Figure 16.3 Figure 16.4 Figure 16.5 Figure 16.6 Figure 16.7 Figure 16.8 Figure 16.9 Figure 16.10 Figure 16.11

Policy Outcomes in the Policymaking Process Policy Outcomes: Detailed View Policy Outcomes for Social Programs Time and Scope of Policy Outcomes Policy Outcomes and “Spillover” Effects Policy and Program Outcomes Program and Project Outcomes Program Outcomes Time and Policy Impacts Relationships Between Eligible and Recipient Beneficiaries Standards for Evaluating Policy Outcomes

Part V.

Context and Content

Figure V.1

Sectors and Levels in American Society

399 399 402 402 403 404 405 408 410 412 416

434

xxiv

LIST OF TABLES AND FIGURES

Chapter 17. Figure 17.1 Figure 17.2 Figure 17.3 Figure 17.4 Figure 17.5

Context: An Overview of Policy Sectors Anatomy of Nonprofit Organizations Policy Sectors Hybrid Policy Institutions The Evolution of Policy Sectors: Differentiation The Future of Policy Sectors: Integration

440 442 442 443 444

Chapter 18. Figure 18.1 Figure 18.2 Figure 18.3

Context: The Government Sector The Structure of American Governmental Institutions Intergovernmental Relationships in American Federalism American Governmental Regimes

447 453 454

Chapter 20. Figure 20.1 Figure 20.2 Figure 20.3 Figure 20.4 Figure 20.5 Figure 20.6 Figure 20.7 Figure 20.8 Figure 20.9 Figure 20.10 Figure 20.11 Figure 20.12 Figure 20.13 Figure 20.14 Figure 20.15 Figure 20.16

Content: Policies and Policymaking Policymaking and Policy Domains Growing Interdependence of Policy Domains Evolution of Policy Domains Homeland Security: A New Policy Domain Issues and Policy Domains Proliferation of Issue Niches in a Policy Domain Venues for Public Policymaking Policy Domains and Policy Programs Policy Map: Process and Context A Path Analysis of Policymaking in Response to Wall Street Corruption A Path Analysis of the Smallpox Vaccination Program Policy Networks in a Policy Domain Networks and the Policymaking Process Networks and Horizontal Governance Levels, Sectors, and Policy Networks The Cyclical Nature of Policy Change

499 499 500 500 502 504 506 508 510 511 512 514 514 515 519 522

List of Mini-Cases 4.1 4.2 5.1 6.1 6.2 7.1 9.1 9.2 10.1 11.1 11.2 11.3 12.1 12.2 13.1 13.2 13.3 13.4 14.1 14.2 15.1 15.2 16.1 18.1 18.2 19.1 19.2 20.1 20.2 20.3 20.4

Solutions Finding Problems—The Patriot Act Your DNA Could Help Get You into Grad School The Clerys and Campus Security Health Care—“Play It Again, Sam” Selling to the Feds Restacking the Chairs on the Deck Who Gets to Say Who Pulls the Plug? Same-Sex Marriages Whether to Reorganize the National Institutes of Health Whistle-Blowers—The Conundrum for Program Management Measuring Customer Satisfaction Reconciling Benefits—Prescription Drugs and Food Stamps Plan B and the FDA Rulemaking by Proxy What One State Actually Buys—A Snapshot Competitive Bidding and the Potential for Price Gouging The Colorado River Compact Tracking Contracts to Interrogate Prisoners in Iraq Social Security—Budgeting by Ostriches Accounting for Unspent Money Winners and Losers at the Department of Agriculture Beach Sand as a Policy Output The GI Bill Sixty Years Later Getting Our Fair Share—The Perennial Problem Air Pollution—Nudging Policymakers Bringing Baseball Back to D.C. Comparing Performance Between the Private and Public Sectors Protecting One’s Image in a Crowded Domain Reconfiguring the Intelligence Community Target a Niche to Get Things Done Binge Drinking on (and off) Campus

45 50 64 101 107 134 177 181 205 247 251 259 275 285 301 305 312 317 340 351 373 385 403 449 459 475 478 501 502 504 520

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Acknowledgments This text represents the convergence of two streams of experience—teaching and practice. In the first instance, it is the product of teaching public policymaking to graduate students in the School of Education of the University of Iowa. The initial spark was a doctoral dissertation written by Rosalyn Eaton-Neeb, which provoked the coauthors to commit their ideas on the policymaking process to paper. In the early stages of this work we were fortunate to gain the support of Eric Stano, who guided the text through multiple rounds of revisions and anonymous reviewers. We also benefited from the feedback of graduate students in educational policymaking at the University of Iowa, who brought a broad range of academic and professional backgrounds to the materials in the text. The second stream of experience came from the practical world of government contracting and consulting. From this vantage point, the practice of public policymaking looks far different from models of policy analysis learned in graduate school. Nearly two decades of experience in the trenches taught us that making public policy is a complex sequence of tasks that demands skill, effort, resources, coordination, patience, and more than a little humility. So the challenge in writing this text was to merge the two worlds of teaching and practice, that is, to give future policy analysts and public managers a comprehensive overview of policymaking as actually practiced. Our goal, in short, is to help prepare future practitioners for their first day on the job. Along the way we have been assisted by many others. The first author owes an intellectual debt to John D. Montgomery and Karl Deutsch. From the former he learned how to approach policy inquiry and from the latter the value of systems analysis. The first author is also indebted to Annie Millar Biggs, who helped create the art and science of performance measurement and practices what she preaches. The second author relied on the support given to faculty by the Department of Educational Policy and Leadership at the University of Iowa. She is indebted to her husband, Charles Helms, for his support, as well as for materials used in this text. She is also grateful to her children, Wesley, Bethany, and Timothy, who encouraged her in her endeavors. Finally, we are both grateful to the scholars and others who have given generously of their time—in particular, Arthur Bonfield and Alan Henkin of the University of Iowa and Carole Singleton Henkin, Joe Wholey, Scott Fosler, John Watson, John Hantla, and Beryl Radin. Then there are the many people who have helped with the preparation of this text—Erin Luong, Barbara Long, Stephanie Levine, Karen Bixby, Jan Latta, and Ben Lewis. In particular, we wish to express our gratitude to Patricia Kolb, Angela Piliouras and Maki Parsons at M.E. Sharpe for their belief in our text and help with bringing it to completion. They have made our work easy and deserve special thanks. As always, any errors and omissions remain our responsibility. Finally we wish to express our gratitude to two generations of canine coauthors—Sherri, Tillie, Holly, Missy, and Reilly. They patiently endured endless hours at the computer with only occasional comment or criticism. xxvii

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PART I Foundations

Part I introduces the reader to the study of American public policymaking. Chapter 1 establishes the scope and guiding assumptions of the text. Chapter 2 defines the basic terms, surveys the evolution of policy studies as an academic discipline, and sketches the themes that will guide the reader through the following pages. Chapter 3 describes our approach to the study of public policymaking and offers a detailed preview of the remainder of the text.

1

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CHAPTER 1 Introduction The Practice of American Public Policymaking is an introductory survey of public policymaking in the United States. By policymaking we mean the activities, actors, institutions, practices, and technologies that combine to “deliver the goods” to the American people. Six strategies guide our approach. First, this is a text about American public policymaking. We focus on public policymaking as it is conceived and practiced in the United States. To be sure, other nations and international organizations make public policy. The production of policies outside of the borders of the United States bears a strong family resemblance to that performed within. Much of what we talk about will be familiar to students of policymaking in Europe, Asia, Latin America, and Africa. However, there are differences; these differences matter, and they demand serious attention. Given the breadth of our subject matter and the length of our text, we will not expand the scope of our attention beyond the shores of the United States. Second, we take a holistic view of the meaning and scope of public policymaking. Public policy is the art and science of producing results. Policymaking is about public action in the broadest sense. Most textbooks on public policymaking devote a large majority of their pages to the formation and formulation of policy commitments—that is, legislation, executive orders, and the like—and leave policy implementation and evaluation to brief concluding chapters. Their focus is on how policy commitments are made and not on how those commitments are transformed into deeds. For the latter, students must consult texts on public management. We believe that the de facto segregation of public policy and public management is a mistake, especially for students preparing to enter the worlds of public advocacy or public management. There is no policy without implementation. The sins of legislators, executives, and judges are soon visited on program managers, and vice versa. All policy advocates and public officials are engaged in a continuous and never-ending process of policy design and delivery. The walls separating lobbyists, legislators, executives, judges, program managers, and contractors are crumbling inexorably. They must all work together to survive and thrive. All participants must understand the process as a whole and the contribution of each to the success of the entire enterprise. Therefore, we dedicate a major portion of this text to the art and science of public management. Public management is not an afterthought; it is the point of the entire process. As a result, our text is designed to introduce future practitioners to the entire spectrum of policymaking activities, from problem creation through outcome evaluation. Third, we focus on the work that policymakers do rather than on the calculus of public decision making. This is not a text on policy analysis. Policy analysis is the art and science of choosing among alternative solutions to a problem. Policy analysis asks what should or can be done. What is the solution to the problem? In contrast, public policymaking focuses on how—How do things get done? Policy analysis looks to the quality of decisions while policymaking is concerned with the quality of results. The difference between the two perspectives is profound. Good decisions may 3

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lead to bad results and good things may happen despite flawed decisions. We argue that both the practice and perception of public policymaking experienced a “paradigm shift” at the end of the twentieth century. Policymakers are increasingly held accountable for the quality of results rather than the quality of their decisions. The public, as citizens and voters, cares about what happens. This public focuses on decision methods, only to assign blame when things turn out badly. Hence, we concentrate on the Who, Where, and How of public policymaking and not on the values and beliefs that inform the analysis of policy problems and the evaluation of policy solutions. Fourth, we highlight the technologies and practices that participants use to make public policy. Here we mean both “hard” technologies such as television, computers, and information networks as well as “soft” technologies like rules, projects, and budgets. Though much has been written about the effects of inventions like the telegraph, typewriter, and the Internet on public life, we tend to overlook the critical role of such twentieth-century innovations as budgeting, contracting, and project management. Technologies—both hard and soft—not only help us solve old problems, they generate new ones at a rapid rate. Indeed, many of the most contentious issues of the twenty-first century—for example, discrimination, privacy, and abortion—are the by-products of technological innovation. Technology is both the cause and instrument of public policymaking and we shall pay close attention to the technologies and practices that policy actors use to do their jobs. Fifth, our approach is institutional and historical. We treat the actors, activities, technologies, and practices of American public policymaking as works-in-progress. The game of American public policymaking is constantly changing. Today’s players and plays are far different from those of a century ago and they will inevitably seem archaic a century into the future. New plays and players emerge, evolve, and sometimes even disappear. Change is the only constant and we should never assume that the institutions of American public policymaking will long endure in their current form. Moreover, an institutional and historical approach inevitably leads to an appreciation of the role of path dependence in the narrative of American public policies. Policy technologies like budgeting and project management and entire sectors of society like commercial enterprises and civic associations are forever stamped by their places of origin and accidents of history. Institutional arrangements are “sticky.” They resist change and encourage imitation and reproduction. Future choices are constrained by past decisions. Therefore, we begin the examination of each institution of American public policymaking with a brief history of its origins and evolution. This helps remind us that both the statistical and behavioral “laws” of public policymaking are mutable and circumstantial. The best guide to the future of American public policymaking is the past. Finally, our approach is specifically designed for the case study method of teaching public policymaking. We provide a technique called “policy mapping” that facilitates the comparative analysis of individual policy initiatives in a classroom setting. This is a textbook on the practice of public policymaking, not the theory. Our target audience consists of those interested in how American public policymaking works and those considering a career in policy advocacy or public management across the many fields of practice. Case studies help put students into the shoes of individual policy practitioners, both past and future. Case studies help students understand the choices policy actors make and the consequences of those choices. They help span the gulf between analysis and practice.

CHAPTER 2 Foundations PREVIEW Chapter 2 introduces the field of American public policymaking in the twenty-first century. As you read this chapter, keep in mind these key questions. • • • •

What is public policy? What is the difference between politics and policymaking? How has the practice of American public policymaking changed over the past century? What factors are transforming public policymaking in the present?

In this chapter we build the foundations for the rest of the text. First, we define some of the basic terms that will be used throughout. Second, we survey the brief history of public policy as a field of academic study. Like every introductory text, the pages that follow offer an overview of a field of research in continuous motion. To understand the state of public policymaking in the first decade of the twenty-first century we need to know something about the past. Third, we outline some of the characteristic traits of American public policymaking that the remainder of the text will explore in depth. 2.1 DEFINITIONS In this section we begin at the beginning. In other words, we define the subject matter of our text. 2.1.1 Policy What is policy? The term policy has a long and checkered career. In the sixteenth and seventeenth centuries, writers like Niccolò Machiavelli, William Shakespeare, and Francis Bacon used the term to refer to the “cunning of reason”—that is, to the artful application of knowledge to further the ends of the prince or the state. “Machiavelli was fascinated by power and outcome, with the use of policy to obtain whatever were the objectives of power-holders. . . . The effective politician (prince) is one who can make best use of the times and circumstances. Machiavelli believed that there was a kind of knowledge which could facilitate knowledgeable governance.”1 For Machiavelli, policy was informed statecraft. This idea lies at the root of our contemporary notions of policy as effective action. “Policy analysis and the analysis of policy in the twentieth century emerged for similar kinds of Machiavellian reasons: the desire to understand what actually happens in government and how governmental performance measures up to its promises. Success, performance, and getting results are ultimately the criteria by which we have come to judge those 5

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in government. Policy is the strategy by which goals are reached.”2 In the sixteenth century, as now, the word policy refers to actions guided by objectives and measured by performance. Policy is all about getting things done. However, it is important to understand the relationship between strategy and action, word and deed. Policymaking is strategic action, or action according to a plan; therefore, promises must precede performance. In the public realm, promises are codified and published in the form of laws, orders, directives, rulings, and the like. These public documents contain the commitments against which government performance will be measured. Moreover, promises are mere words and rarely, if ever, produce the intended effect without subsequent action. Yes, symbolic acts do have consequences, but symbols do not protect us from criminals, pave our streets, or rescue us from rising floodwaters. Laws must be enforced, services must be provided, and benefits must be delivered. Something must be done before performance can be measured. Thus, making policy typically involves generating the three objects or products shown in Figure 2.1. First, an authoritative promise is issued; second, public benefits are delivered or burdens are Figure 2.1 Making Policy: The Basics

Promise

Benefit or Burden

Outcome

imposed; and third, the consequences or outcomes of policy are assessed. To make policy is to produce promises, benefits or burdens, and, ultimately, outcomes. Nevertheless, in everyday language we often talk about promises as if they were policies. We separate the words from the deeds that follow. Politicians perpetuate this impression by talking about the laws they have passed or the orders they have issued, as if the words alone are all it takes to make policy. They take credit for the words or promises as if they were deeds. Moreover, the notion that promises without deeds are policies is reinforced by discussions of the policymaking process that distinguish policy formulation, or promise making, from policy implementation, or policy action. If policy has been formed before it is implemented, then formulating policy is logically separate from implementing it. Policy—in this view—precedes action. This logical conundrum was noted more than two decades ago. “Implementation, to us, means just what Webster and Roget say it does: to carry out, accomplish, fulfill, produce, compete. But what is it that is being implemented? A policy, naturally. . . . But policies normally contain both goals and the means for achieving them. How, then, do we distinguish between a policy and its implementation?”3 We propose a holistic approach to the study of public policymaking that eliminates the need to make logical distinctions between policy and implementation. Making public policy is making promises and implementing them. What is being formulated is not policy, but merely a promise or policy commitment. Thus, we avoid the logical confusion that arises with the use of the term policy formulation.4 We view words or promises as merely the stepping stones to the actions and consequences

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that follow. What some call implementation is not simply an afterthought; it is the heart and soul of the policymaking process. Making policy is making plans and promises happen. Most Americans view public policymaking through the prism of results and not through the lens of promises made or broken. They care about deeds done and changes made. If good things happen, they care little about the reasons and promises that preceded them. If democracy blossoms in Iraq and U.S. troops suffer limited casualties, then few worry about missing weapons of mass destruction or terrorist links. Success is success, regardless of failed plans and broken promises. Americans hold their public officials accountable for results, not consistency. They care less about principle and celebrate leaders who mold principles to the dictates of circumstance. Indeed, if the results don’t match the promises then public officials often change the promises to fit the results. They tailor promises to performance, not vice versa. Therefore, the distinction between policy as promise and implementation as deed bears little relationship to the reality of public policymaking. Making policy is making good things happen, and public commitments are but markers on the road to getting results. In Figure 2.2 we offer a highly simplified preview of how policy is made. Figure 2.2

Making Public Policy: A Preview

situation

Problem

Solution

Promise

Benefit or Burden

Outcome

Policy begins with a situation that people see as a problem. Rivers flood, terrorists strike, people fall ill, and steelworkers lose jobs. Next, policy advocates or entrepreneurs propose solutions to the problem and persuade government officials to commit to their solutions in the form of laws, orders, regulations, and the like. Then, other government officials or their agents translate these promises into benefits or burdens for the public. Dams are built, airport security is strengthened, prescription drugs are subsidized for seniors, and tariffs are raised on imported steel. Finally, the situation is changed, people are pleased or displeased with policy outcomes, and the cycle starts all over again. Making policy, therefore, includes everything that happens, from the original situation to the eventual outcome of public action. What some texts discuss as implementation is an integral part of our policymaking process. Words without deeds and deeds without words do not constitute policies. Policy is both the plan and the ensuing course of action. This approach, we believe, honors the mindset that most citizens unconsciously bring to their views of—and participation in—public policymaking. 2.1.2 Public Why public policymaking? What makes public policymaking different from policymaking in general or nonpublic policymaking in particular? After all, corporations and even software application programs today have policies. What makes public policy special? The concepts of public, and its polar opposite, private, are of relatively recent vintage. Although the roots of these two terms can be traced back to ancient Greece, the modern meanings emerged

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only in the nineteenth century. At that time, philosophers, governments, and even ordinary people began to distinguish two separate spheres or modes of behavior—public and private. Although much ink and no little blood have been spilled over the meanings of these two antipodal terms, the early twentieth-century philosopher John Dewey offered a characteristically American gloss on the meaning of public and private. We take then our point of departure from the objective fact that human acts have consequences upon others. . . . [These] consequences are of two kinds, those which affect the persons directly engaged in a transaction, and those which affect others beyond those immediately concerned. In this distinction we find the germ of the distinction between the private and the public. When indirect consequences are recognized and there is effort to regulate them, something having the traits of a state comes into existence. When the consequences of an action are confined, or are thought to be confined, mainly to the persons directly engaged in it, the transaction is a private one. The public consists of all those who are affected by the indirect consequences of transactions to such an extent that it is deemed necessary to have those consequences systematically cared for. Officials are those who look out for and take care of the interests thus affected.5 The distinction between public and private is based on the perceptions of the participants and not upon any abstract definition or theory. When the consequences of a situation get out of hand and affect outsiders, the problem becomes public. Government, in all its forms, is the means by which the public is organized and its interests are cared for. We adopt Dewey’s concept of public as our own for two reasons. First, it mirrors the pragmatic, typically American view of what belongs—and does not belong—in the public realm as the subject of government action. It is the scale and scope of the consequences that matter, not the nature of the problem. It’s the situation, not the theory, which governs. Second, Dewey’s concept of public includes, but is not limited to, government action. Government is the instrument of the public, but the public can and does act through other means. The study of public policymaking is broader than the study of “what governments do, why they do it, and what difference it makes.”6 Businesses, nonprofit organizations, churches, associations and even individual families like the Kennedys or Rockefellers can and do play active roles in the policymaking process. Later in the text we will turn our attention to nongovernmental policymakers. 2.1.3 Politics and Policy The word politics does not appear in the title of this text and that omission is not accidental. This is a textbook about policy, not politics. While we do not deny that American politics and policy are joined at the hip like Siamese twins, we argue that the relationship between these two is fractious at best and fratricidal on occasion.7 Indeed, politics and policy have come to be seen as opposites, at least in public discourse. How did this situation come about? Though Machiavelli examined statecraft or policymaking at length, his real focus of concern was on politics. That is, on the art and science of seeking, gaining, and maintaining power. By power we mean the ability to prevail on the battlefield, to win office, or even to win while in office. Politics focuses on Who shall exercise power—be it in government, the workplace, or the home. Policy, on the other hand, deals with the What—with the consequences of the exercise of power. The struggle for power does not necessarily involve disagreement over policy. Conversely, policy

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disputes may not change the allocation of power. In practice, however, politics and policy are inseparable. Who gets to decide and what gets decided are inextricably linked. For Machiavelli, power was the dominant “twin.” Given the limitations of fifteenth-century technology, the ability to control the actions of superiors, subordinates, and peers was about all one could expect from life. In a world ruled by fate, the possibilities for changing and improving the world were limited. Man could control other men, but control over nature was beyond his or her grasp. Therefore, the fate of a medieval prince depended more on political skills than on the ability to deliver a better life to his people. Policy or “governance” took a back seat to politics. Half a millennium after Machiavelli the tension between politics and policy remains, but public perceptions have changed. Twenty-first-century Americans have a different view of the relationship between politics and policy. In the first place, Machiavellian politics has never enjoyed much currency in the United States. Americans have always loved political spectacles—the parades, banners, demonstrations, and, more recently, the political debates on television. Political conflict can be entertaining. However, distrust of political power lies deep at the heart of the American psyche. Americans fought a revolutionary war against the arbitrary exercise of power by the British and have been wary of the trappings of power ever since. Indeed, as we shall soon see, George Washington believed that politicking should be limited to elections and had no role to play in governing the young United States of America. “Playing politics” has never been a favored sport in America, and few public officials lay claim to the title of politician with pride. As General George S. Patton discovered in World War II, Americans may love a winner, but they recoil at the naked exercise of power by the strong over the weak. In contrast, Americans put their faith in technology. They are optimistic about our ability to control the environment. Without such a faith the early American settlers would have never ventured across the Atlantic to tame the wilderness and build cities, skyscrapers, dams, bridges, and other monuments to human ingenuity. Whether the issue is global warming, genetic engineering, or racial profiling, the assumption in every case is that human—and most particularly, collective—intervention is possible. Problems can, should, and someday will be solved. This confidence both shapes and drives the policymaking process. Thus, faith in technology and reliance on public policy are but two sides of the same coin. As the technologies of social and environmental control expand and develop, so too do the possibilities, opportunities, and demands for public policymaking. In the public realm, this faith in technology leads to the ceaseless invention and reinvention of public policy. Americans expect their elected representatives and government officials to get things done—to tackle issues, solve problems, and deliver results. They demand action. Political candidates, elected representatives, and public officials are all expected to act like latter-day Thomas Alva Edisons, ceaselessly tinkering with old and inventing new policy initiatives. Voters endure politicians to elect policymakers. They hold saints and sinners, ideologues and party bosses to the same standard—the bottom line. Americans may disagree vehemently over the content of public policies, but they are united in the belief that the primary purpose of government is to get things done. Thus, many Americans view politics and policy as polar opposites and generally prefer the latter to the former. As long as America’s confidence in its ability to control its economic, social, and security environment continues, the scope of policymaking and the prestige of policy studies will continue to grow. 2.2 PUBLIC POLICY AS A FIELD OF STUDY Although the concept of policy as informed statecraft has been around since the time of Machiavelli, public policy as an academic discipline is relatively young. The study of public policy is a recent

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invention based on the idea that government could solve problems through the systematic application of a common set of methods. It was not until the post-World War II era that the study of what is effective—policy science—branched off from the study of how to get and wield power—political science. In the five plus decades since its beginnings, the field of policy studies has experienced radical changes in mission and content. This evolution may be roughly divided into three periods: the first characterized by the enthusiasm of its founders (1950s to 1960s); the second, by skepticism and even disillusionment (1970s to 1980s); and finally the current era marked by the renewal of efforts to improve the performance of policy institutions beginning in the 1990s. 2.2.1 Founders: 1950s–60s Like all new ventures, the policy sciences were born of optimism. The achievements of Roosevelt’s New Deal and the success of World War II forged a generation confident in the capacity of government to solve problems of peace and war. The Manhattan Project, the government’s wartime endeavor to produce the first atomic bomb, became the model for policymakers and policy analysts across the spectrum. For the first time, scholars and engineers collaborated on a daily basis to turn theory into action. The federal government could successfully marshal the vast resources of many disciplines across the nation in the name of solving important problems. By the early 1960s, policy analysis and policy analysts were in great demand. Science and empirical data could be combined to solve the ills of society. Optimism was rampant. A nation that could put a man on the moon could solve the mounting urban and environmental crises of the 1960s. Policy science and applied technology promised the dawn of a new “golden age” in American society.8 The federal government needed policy scientists, so American universities stepped forward to establish new degree programs in public policy. The policy sciences became a new cottage industry—an integrated, multidisciplinary approach for bridging problems across the social sciences. By the late 1960s the outlines of a field called policy studies were discernible. Regardless of applied area of specialization, policy analysts saw their mission as helping the government solve problems through systematic decision making. Those working in the field of public policy came from many academic and applied backgrounds. Academic programs in fields from education and public health to urban planning and social work began to devote resources to training specialists as policy activists. Graduates of these programs headed for jobs in government or prestigious policy research organizations like the RAND Corporation, the Urban Institute, and the Brookings Institution. The graduates of early policy studies programs followed their teachers to Washington to help build a better world at home and abroad through better decision making. The founders were policy engineers as well as policy analysts. Their work was grounded in practice as well as theory. 2.2.2 Reaction and Retrenchment: 1970s–80s The golden age of technocratic public problem solving never materialized. The Great Society was overtaken by riots in the streets and burning ghettos. Both the press and the public declared defeat in the War on Poverty. Technology was fouling the air and water. And the Vietnam War vividly demonstrated the failings of social engineering in war and peace. Though faith in policy science as an instrument of governing lived on in the bowels of the Pentagon, the role of policy science in government waned. The decades that followed saw a sharp reaction to the optimism of the founders about the capac-

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ity of government to solve problems. A second generation of students rejected both the optimism and—in some cases—the personal involvement of their teachers. Many proponents of the power of policy analysis retreated to academe or to roles as professional researchers. The field of public policy divided into three separate streams of research. In the first instance, policy analysis focused on the all-too-common failures rather than the less obvious successes of public policy.9 The focus turned toward implementation and results, and the picture wasn’t pretty. The gap between the promise of scientific decision making and the realities of performance was enormous. Unanticipated consequences foiled the best-laid plans of decision-makers, while organizational and individual opportunism made policy implementation an exercise in futility. If the founders were therapists on a quest for new ways of curing society’s ills, the policy analysts of the 1970s and 1980s were pathologists in search of shattered dreams and intractable realities. Second, theoretical studies focused on the limits of government and the superiority of free-market allocations of value in society. Skeptics who viewed public policy through the lens of economic rationality found government in general, and legislatures and bureaucracies in particular, wanting. Following Ronald Reagan, many policy analysts concluded that government was the problem and not the solution. The answer was to shift the delivery of public service to the private sector whenever possible. From this perspective, the pathologies of public policymaking were systematic, not technical, global, not local. This approach continues to influence policy analysis and policy design even in the wake of 9/11 and the resurgence of government-based solutions. The third and final trend saw a rapid growth in the use of policy analysis in the political process. Applied policy analysis migrated to an ever-growing array of policy institutes and think tanks that played supporting roles in the political process. Many second-generation analysts became policy advocates or political actors, not policy engineers like their mentors. As the role of policy analysts increased in policy formation, it declined in policy implementation. Graduates of public policy programs flocked to think tanks and advocacy groups where the focus was on influencing decisions, not on delivering results. 2.2.3 Renewal: 1990s to the Present The third generation of policy analysts is a work in progress. However, the overall trend has seen a rebirth of interest in improving the performance of government institutions from within. Although most policy analysts still dwell in think tanks or academic centers and engage in policy advocacy, improving governance has become the lodestar of twenty-first-century policy studies. In the first place, the popular bias against “government as the problem” motivated public officials to borrow methodologies and techniques from the private sector to improve the delivery of public services. Most of the corporate executives brought to Washington to shake up the government may have had little personal impact, but the ideas they carried with them lasted long after they returned to the boardrooms of New York and Dallas. By breaking down the barriers between private gain and public service, antigovernment ideologists reopened the channels of communication between government and industry. Second, the growing use of commercial and nonprofit organizations to deliver public services has transformed the nature of government work. Government officials have become managers, not producers, and policymakers everywhere had to learn to work together with private industry to get the job done. As the boundaries between public and private enterprise have become fuzzier, the flow of people and innovations across this frontier has increased. While public–private partnerships are not without their liabilities and risks, the practice of public policymaking has emerged from

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the cocoon of public administration and now borrows heavily from the classrooms of business administration. Third, and more recently, the events of 9/11, the global war against terrorism, and the hurricanes that flooded New Orleans and the Gulf Coast have dulled the rhetoric of “government as the problem” and re-energized the movement to make government work better. Since 9/11 the role of the federal government has expanded enormously, just as it did during the Cold War of the 1950s, when the field of policy science was born. As a result, the demand for policy analysis and policy analysts within—as well as without—government is bound to increase accordingly. 2.3 CONCLUSION: THE PR ACTICE OF AMERICAN PUBLIC POLICYMAKING From the foregoing, what can we say about American public policymaking as practiced today? In the first instance, American public policymaking is experimental. Americans focus on solving the problem at hand and leave general principles and long-term consequences for others to worry about. Policymaking is not a science. It is not the application of abstract theories or principles to specific problems. Policymaking is invention. It is finding or making solutions to fit immediate needs. Thomas Edison summarized this attitude best when he wrote, “Anything that won’t sell, I don’t want to invent. Its sale is proof of utility, and utility is success.”10 What people forget is that only a few inventions—and policy programs—succeed. New policy programs are experiments and most experiments—outside the classroom—fail to live up to expectations. When we celebrate inventors like Thomas Edison or the Wright brothers we tend to forget that much of their effort was consumed by ideas that never panned out or failed in the marketplace. Invention is a trial-and-error process with countless trials and nearly as many errors. The same holds true for public policies. Some policies never work. Others work sometimes and in some places. Still others cause more problems than they solve. Most undergo endless tinkering and periodic recycling. A select few endure and become integral parts of our daily lives. Nevertheless, all policies start out as experiments. Second, invention is the process of engineering new solutions based on old ones. Invention is the creative use and reuse of old knowledge. Invention in most instances is really reinvention. Thus, the key to policymaking is the ability to find and manipulate past solutions. Policymaking is the reengineering of old solutions to fit the specific demands of new problems. In policymaking, as in most professions, there is no substitute for experience. Therefore, creative policymaking almost always depends on individuals with the background and experience to reshape past lessons into future solutions. Innovations in public policymaking often follow the paths of policy innovators as they move from one generation and job to another. Moreover, innovations in public policymaking tend to originate far away from the marble and granite buildings of Washington, D.C. They often arise in state and local governments, private enterprise, or even in social and religious institutions, and follow their creators to Washington. Policies and policy instruments have histories that weave across the length and breadth of American society. Third, the technologies and practices used by policy entrepreneurs and policymakers are limited in number and slow to change, while the objects and objectives of policymaking are infinitely diverse. The scope of public policymaking is always expanding. A decade ago the Internet was largely a playground for “techies.” Today, Congress annually passes new laws regarding spam, viruses, privacy, and related Internet-based issues. The way Congress works, however, changes much more slowly. Policy issues may be infinite in number, but the practices

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of public policymaking are scarce and valuable resources to be used over and over again. Thus, when a new technique is invented—as, for example, for making reparations to groups victimized by some trauma—it gets reused again and again in evermore remote contexts. That all policy entrepreneurs and policymakers share a common toolkit is—after all—what makes studying public policy worthwhile. Whatever the issue—be it bioterrorism, spam, or affirmative action—the methods of public action and skills needed to use them remain pretty much the same. Finally, American public policymaking relies heavily on policy advocates and policymakers with one particular set of skills—lawyers. The importance of law and legal training in American public policymaking can be traced back to Colonial times, and has been noted and frequently lamented by commentators ever since. To the extent that the results of policymaking are written into law and legal documents, lawyers become a key resource in the invention and reinvention of public policy. Lawyers, however, are more than mere participants. They have helped reshape the contours of the policymaking process as a whole. American lawyers work from precedent, not principle. To resolve current issues they search for past solutions that can be tailored to present circumstances. Thus, the culture of American law has reinforced the innovator’s imperative to recycle both policy solutions and policy tools. KEY TERMS policy—both the plan for, and the ensuing course of, action. politics—the processes of seeking, gaining, and maintaining power. public—all those sufficiently affected by the consequences of transactions to such an extent that they seek to have those consequences systematically cared for. QUESTIONS FOR DISCUSSION 1. Evaluate this statement: Americans are both optimists and pragmatists in the sense that the majority believes that most problems can be solved, whether in the form of controlling the environment or modifying behaviors. 2. Evaluate this statement: The scope of public policymaking expands in tandem with our technological capacity to manage the physical and social environments in which we live. 3. Develop examples of problems that are private, as distinguished from public, in nature, and therefore not suited to public policymaking. SUGGESTED READINGS Allison, Graham, and Philip Zelikow. Essence of Decision: Explaining the Cuban Missile Crisis. 2nd ed. New York: Addison-Wesley Longman, 1999. Birkland, Thomas. An Introduction to the Policy Process: Theories, Concepts, and Models of Public Policy Making. 2nd ed. Armonk, NY: M.E. Sharpe, 2005. Heineman, Robert A.; William T. Bluhm; Steven A. Peterson; and Edward N. Kearny. The World of the Policy Analyst, Rationality, Values and Politics. New York: Chatham House, 2000. Hill, Michael, and Peter Hupe. Implementing Public Policy. Thousand Oaks, CA: Sage Publications, 2002. Kingdon, John W. America the Unusual. New York: Wadsworth, 1998. Lasswell, H.D. “The Policy Orientation.” In The Policy Sciences, eds. Daniel Lerner and Harold D. Lasswell, pp. 3–15. Palo Alto, CA: Stanford University Press, 1951. Lipset, Seymour Martin. American Exceptionalism: A Double-Edged Sword. New York: Norton, 1998.

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Pierre, Jon, and B. Guy Peters. Governance, Politics and the State. New York: St. Martin’s Press, 2000. Pressman, Jeffrey L., and Aaron Wildavsky. Implementation. Berkeley, CA: University of California Press, 1973. Radin, Beryl A. Beyond Machiavelli: Policy Analysis Comes of Age. Washington, DC: Georgetown University Press, 2000.

NOTES 1. Wayne Parsons, Public Policy. An Introduction to the Theory and Practices of Policy Analysis (Cheltenham, UK: Edward Elgar, 1995), p. 42. 2. Ibid. 3. Jeffrey L. Pressman and Aaron Wildavsky, Implementation, 3rd ed. (Berkeley, CA: University of California Press, 1984), p. xxi. 4. For a review of the logical issues in distinguishing “policy” from “implementation,” see Michael Hill and Peter Hupe, Implementing Public Policy: Governance in Theory and Practice (Thousand Oaks, CA: Sage Publications, 2002). 5. John Dewey, The Public and Its Problems (Athens, OH: Swallow Press, 1927), pp. 12–13, 15–16. 6. Thomas R. Dye, Understanding Public Policy, 7th ed. (New York: Prentice Hall, 1992), pp. 2–4. 7. We focus here on the American understanding of these terms. As several authors have noted, the English term policy does not travel well and is translated with some difficulty into such Western languages as French, Italian, and German. 8. Thomas P. Hughes, Rescuing Prometheus (New York: Vintage Books, 2000), p. 168. 9. Most notably, Pressman and Wildavsky, Implementation. 10. From http://brainyquotes.com/quotes/authors/t/thomas_a_edison.html.

CHAPTER 3 Preview PREVIEW Chapter 3 introduces our model of the policymaking process and a technique for graphically mapping those processes. As you read this chapter, you should keep in mind the following questions. • • • • • •

What are the components of the policymaking process? What is an input? What are the basic technologies of policy production? What distinguishes an output from an outcome? What are the contexts or environment in which policymaking unfolds? What are the distinctions between the four sectors of policy production?

In chapter 3 we introduce our conceptual framework, preview the remaining chapters, and then introduce the technique of policy mapping that we employ at key junctures in the text. Thus, the following pages will quickly survey a broad array of materials that will be examined in detail and at a more leisurely pace in parts II through V of the text. 3.1 FRAMEWORK In this section we present a high-level overview of this conceptual framework. Our framework consists of five components: 1. The public policymaking process and its constituent activities 2. The roles of policy actors 3. The alternative technologies and practices used at each step in the process 4. The environment or context in which this process unfolds 5. The substantive content of policy issues 3.1.1 Process and Activities First, we start with process. This is, after all, a text on the American public policymaking process, so it is time to define what we mean by the term. Much has been written about the policymaking process, but rarely is the concept of process taken seriously. Here we will merely outline some of the basic features of a process.1 A process is a set of activities performed in sequence to reach a goal or objective. For 15

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example, there is an “admissions process” within colleges and universities that begins when high school students become aware of a college or university and ends with the arrival of a freshman class on campus. Similarly, there is a “legislative process” that begins with the drafting of a bill and ends with either the bill’s failure or the creation of a new law. The term process is used to describe such sequences of activities that are repeated over and over again in a more or less standard fashion. Whether you realize it or not, much of your life is consumed by activities that are parts of processes managed by your school, employer, social organizations, or governments. Figure 3.1 shows the simplest possible representation of a process as a sequence of activities or steps over time. The important point is that a process consumes resources (materials and effort), applies technologies to those resources, performs a variety of standardized practices, and produces outputs over time. For example, the legislative process usually takes months or years to come to a conclusion; demands enormous effort on the part of legislators, lobbyists, executives, and bureaucrats; consumes countless pages of documentation and hours of televised debate; and, in the end, generates a product or output called a law. Figure 3.1

Process: A Simplified View

Time

Step 1

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However, most processes are far more complicated than that shown in Figure 3.1. In the first instance, a process generally consists of multiple overlapping or concurrent activities, as shown in Figure 3.2. Figure 3.2

Process: Concurrent Activities

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To get something done takes the combined activities of a number of participants over time. So, using Figure 3.2 as our prototype, passing legislation to create a policy requires separate action by both houses of Congress, with each following their own specialized procedures first to generate a separate version of a proposed law and then to negotiate a common version of that law. Added to this are a president’s roles, often in initiating the process by submitting a draft of that legislation to Congress and deciding after Congress completes its work whether to sign or veto the law. More importantly, not only must these activities must be performed in the appropriate order, they must also be coordinated or linked if the process is to be completed successfully. Activities are interdependent, as shown in Figure 3.3 (facing page). Activities must not only be performed sequentially and concurrently, they are also interdepen-

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Figure 3.3

Process: Interdependent Activities

Time Activity 1 Activity 1 Activity 1 dent. The president must submit a budget before Congress can consider it. Both houses of Congress must approve appropriations bills before the president can sign or veto them. And agencies cannot spend money until an appropriation or continuing resolution has been approved and signed. The participants must coordinate their activities or the process fails. Finally, some processes are cyclical or iterative in form, as shown in Figure 3.4. Figure 3.4

Iterative or Cyclical Process

Step 1

Step 1

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In an iterative or cyclical process the same sequence of activities is performed over and over again during some time period. An employee goes to work day after day, a teacher teaches the same course year after year, the United States Census Bureau conducts a census every ten years. Congress operates on a two-year cycle, in contrast with the presidency, which is organized around a four-year cycle. Each repetition differs slightly from the previous one, but, by-and-large, the same activities are performed each time around. Unfortunately, Figure 3.4 is a two-dimensional view of a three-dimensional process that unfolds in time. Figure 3.4 does not show the dimension of time. So, we offer the three-dimensional perspective shown in Figure 3.5. As we can see much more easily, the process repeats the activities as it “wraps” around the time axis. Figure 3.5

Iterative Process: A Three-Dimensional View

T1

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Public policymaking is a classic example of an iterative or cyclical process. In many cases, public policies enacted into law must be renewed or reauthorized by Congress or state legislatures on a prescribed schedule. More broadly, Congress and state legislatures must decide on funding for policy programs, which forces the policymaking process to rewind and repeat on an annual or biennial basis. In American public policymaking, almost nothing is forever. Over the centuries the American people have instituted a system of government that requires both policy entrepreneurs and policymakers to revisit the same policies over and over again. While Figure 3.5 represents a more realistic representation of the policymaking process, we will mostly use the two-dimensional representation of a process to make mapping the evolution of policy activities over time easier to visualize. 3.1.2 Actors and Roles The second component of our model consists of the actors that participate in the process in specialized roles. By actors we mean the actual individuals and organizations that participate in the process. By roles we mean those types or groups of actors responsible for performing an activity. The distinction between actors and roles is important and often misunderstood. Roles are determined by activities—legislators legislate, judges judge, public officials administer, and executives execute. A role is a responsibility or assignment. Actors are “real” people or organizations that may play multiple roles. The same individual who administers an agency is also a lobbyist for agency interests before Congress and a political campaigner for the president. Lobbyists advocate policy solutions, but they also help write their solutions into law and profit—directly or indirectly—from the outcomes of public policymaking. As we shall see, policy actors play multiple roles and these multiple roles often lead them into legal and ethical thickets. When we talk about policy actors and the roles they play we should never forget that the same actors often wear multiple hats and that this incestuous relationship between actors and roles contributes greatly to the complexity, ambiguity, and politicization of the policymaking process. 3.1.3 Technologies and Practices The third component of our model consists of the technologies and techniques that actors use to do their work. At each step of the policymaking process actors make use of a limited variety of technologies and practices needed to get the job done. We use the term technology to refer to the fundamental institutions of public action. We use the term practice to describe the various methods or procedures associated with the technologies of policymaking. We will explore our usage of both these terms in much greater detail in chapter 8. For example, we define authority as a technology of policy production. Almost every policy initiative must be justified under the rubric of some existing or modified authority. In the public arena you must have authority to act. If you want to make public policy, you will have to learn how to find, use, create, and sometimes circumvent authority. However, as we shall see in chapter 9, there are several different kinds of public authority and many different practices associated with the use of authority in public policymaking. We examine the fundamental practices of authority with which every policymaker and policy advocate should be familiar. When actors perform their respective roles they employ a relatively limited set of technologies and practices to get the job done. Lobbyists meet with policymakers, feed press releases to the mass media, and give political contributions to elected officials. Legislators draft laws, hold hearings, and conduct investigations. Lobbyists and legislators do the same things day after day

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and draw upon a relatively standardized repertoire of technologies, practices, and skills. Moreover, these practices vary relatively little from one issue area to another. Lobbyists lobby, legislators legislate, judges judge, and bureaucrats manage, regardless of whether the issue is health care, housing, or national security. Actors generally use the same technologies and practices for all kinds of policies. 3.1.4 Context or Environment The fourth component of our policy model is the policy context or environment. The policymaking process unfolds in both time and space. There are more than 80,000 policymaking bodies or entities in the United States across the many levels of governance. And this does not include the several million more commercial or social organizations involved in influencing and delivering public policies. Although the core features of the policymaking process are the same everywhere, context does matter. What works in Washington often does not play well in a state capital or neighborhood association. Thus, we introduce the notion of the policy environment, or the time and place of the action. As we shall see in part V of this text, the Where of public policymaking makes a big difference. The rules of the game are different in Washington, D.C., Austin, Texas, or even in a neighborhood homeowners’ association. However, we will introduce the dimensions of context only after describing the generic processes and practices that have universal applicability. Figure 3.6 illustrates the first four components of our process model. Figure 3.6

Process, Time, and Context

Time Activites

Roles (Actors) Technologies

POLICYMAKIN PROCESS

& Practies

CONTEXT (ENVIRONMENT) 3.1.5 Content or Domain Finally, public policy is always about something. It has a subject matter; it has content. Policy analysts rarely talk about policymaking in general. More typically, they focus on health care policy or education policy or homeland security policy or national defense. As we shall see, the term commonly used for subject matter or content is policy domain. While we argue that the fundamental practices of American public policymaking are similar regardless of content, the subject matter does make an important difference. Most policy analysts and policy advocates tend to specialize in one or at most several policy domains. If you are an expert on public health care, you are unlikely to be consulted on issues of national defense. Nevertheless, the traditional boundaries of policy domains are constantly morphing, and new policy domains—like homeland security—can indeed emerge quite suddenly and fully grown. Consider, for example, the domain of educational policymaking. Schooling is delivered locally to students and families in neighborhoods and towns by units of government called school districts,

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historically creatures of state governments but locally organized, financed, and controlled. Today, approximately 14,000 school districts produce wildly varying results in terms of the education offered to students. As a consequence, over the past decades state governments have increasingly intervened both by supplying more funding and imposing minimum standards on local districts, all in the name of remedying perceived problems, most of which are related to glaring inequities. Finally, the federal government has joined the fray, adding its voice in recent decades, also in the name of remedying the great discrepancies in education delivered to students based on race, class, and location. This nationalization of policymaking in the education domain was the handiwork of a Republican Party that had advocated abolition of the federal Department of Education less than a decade before. Now compare the education domain to national defense policymaking, where the president can act on his own initiative with little meddling from Congress and virtually no reliance on local or state governments for delivery. No wonder the president is tempted to use the practices of national defense policymaking in the domains of public health and disaster relief, where local authorities also do most of the delivery. While each policy domain employs the same technologies of policy formation, production, and delivery, each domain has its peculiar set of practices or rules of the game. Understanding these domain-specific rules of the game is the key to success for policy actors. 3.2 THE POLICYMAKING PROCESS We will now proceed to preview how this framework is deployed in the remainder of the text. 3.2.1 Overview We divide the policymaking process into four components: •

• • •

Inputs—the raw materials of the public policymaking process—for example, problems, solutions, politics, agendas, and the like—and how they are created, crafted, and introduced into the policy production process Policy production—how societal inputs are assembled, manipulated, and transformed into benefits and burdens for the American public Outputs—the products of public policymaking—that is, public benefits and burdens and how they are allocated to different groups in society Outcomes—the intended and unintended consequences of the policymaking process as well as the conditions and events that lead to the creation of new policy inputs

These four components represent the most basic elements of a system or process model of public policymaking. They also correspond to the key elements of the performance measurement model included in the Government Performance and Results Act of 1993—the fundamental framework for performance management in the federal government. We have simply taken the framework for evaluating the performance of public agencies and expanded it to include the entire policymaking process, from problem to promise to delivery to outcome.2 We argue that the results-based performance model represents a fundamental shift in the way both practitioners and the public look at the policymaking process. Today, we all speak the language of results. We “talk the talk” even if policymakers don’t always “walk the walk.” Thus, we have extrapolated the model for performance management to the policymaking process as a whole. This new paradigm of public

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management is not without its critics, but it is the language that policymakers and policy advocates speak today and will speak for the foreseeable future. In the remainder of the text we will employ the graphic shown in Figure 3.7 to represent the four components of the policymaking process. Figure 3.7

Policymaking Process: Overview

Inputs

Outcomes

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Procuction

Figure 3.7 simply applies the generic model for all iterative processes to the case of public policymaking. It is the view of the policymaking process that we will return to throughout the text. In fact, Figure 3.6 represents the same iterative process model shown in Figure 3.3 in a different manner. Thus, we introduce Figure 3.8 to show a three-dimensional representation of Figure 3.7. In Figure 3.8 we see that public policymaking is a “spiral” or iterative process that cycles repeatedly through inputs, production, outputs, and outcomes. As we shall see later, these iterations occur typically on an annual basis and correspond to the budget process, which allocates funds to policy programs. Figure 3.8

Public Policymaking: An Iterative Process

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Finally, Figure 3.8 shows an iterative process with each cycle of approximately the same size or incrementally increasing order of magnitude. This shows public policymaking as more or less a steadystate process, where each cycle is roughly the same as the last. In reality, however, few public policies evolve in the orderly fashion shown in Figure 3.8. While most policy cycles involve only incremental change, some cycles involve large-scale or qualitative changes to policy inputs, production, outputs, and outcomes. Policy change is irregular, with periods of relative quiescence interspersed with brief periods of major transformations. Frank Baumgartner and Bryan Jones have called this model of policy change “punctuated equilibrium,” after the model of change first advanced by evolutionary biologists.3 Figure 3.9 illustrates the punctuated equilibrium model of policy change. Figure 3.9 Policy Change as Punctuated Equilibrium

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Production Outputs

For example, the Medicare program grew slowly but steadily for decades until 2003, when Congress and the Bush administration added Part D, or prescription drug benefits, to the mix. Similarly, federal aid to K–12 education expanded slowly over the years until an unlikely coalition of liberal Democrats, conservative Republicans, and a Republican president passed the No Child Left Behind Act of 2001, legislation that radically expanded the federal role in public education. While some policies seem immune to the kind of perturbations shown in Figure 3.9, many or most would appear to follow the irregular path predicted by the theory of punctuated equilibrium. 3.2.2 Actors and Roles For each of the four process components we define specific roles in the policymaking process, as shown in Figure 3.10 (see facing page). While we examine each of these four policy roles, we should remember that the same actors can—and often do—play multiple roles in the policymaking process. 3.2.2.1 Policy Entrepreneurs By policy entrepreneurs we mean the individuals, groups, or organizations that define policy problems and advocate policy solutions. “Policy entrepreneurs are people willing to invest their resources in return for future policies they favor. They are motivated by combinations of several things: their

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Figure 3.10 Roles in the Policymaking Process

Outcomes

Inputs Policy

Winners & Losers

Entrepreneurs

Outputs

Policy Production

Target Populations

Policymakers

straightforward concern about certain problems, their pursuit of such self-serving benefits as protecting or expanding their bureaucracy’s budget or claiming credit for accomplishment, their promotion of their policy values, and their simple pleasure in participating.”4 While we typically view policy entrepreneurs as being outsiders—that is, outside government or the policy production process—we should not forget that policy promises are co-produced by entrepreneurs and policymakers. Lobbyists are just as much a part of American public policymaking as the congressmen they wine and dine. “Government by the people” has always meant governance by policymakers and policy entrepreneurs. Moreover, we tend to forget that policymakers are also policy entrepreneurs. Policymakers are just as much lobbyists as the K Street lawyers in Washington. Finally, we must include as policy stakeholders all those policy entrepreneurs who actively oppose a policy initiative. For every policy issue, there are networks of policy entrepreneurs, both inside and outside government, that mobilize to advance, stall, kill, or divert policy initiatives. Just because a policy promise—in the form of legislation, executive order, or constitutional amendment—is promulgated, does not mean that these networks disappear or cease to help shape policy production, outputs, and outcomes. Policy entrepreneurs are there for the full cycle of the policymaking process, influencing production, hawking or belittling outputs, or interpreting outcomes. The array of actors supporting the transformation of policy inputs is formidable. Policy entrepreneurship is big business in America and growing bigger. Research organizations, universities, law firms, public relations and polling companies, publishers, restaurants, resorts, and hotels all participate in and profit from policy advocacy. While some of these organizations are dedicated to specific policy arenas or issues, most are agnostic and simply doing business. We shall explore the role of policy entrepreneurs in much greater detail in chapter 5. 3.2.2.2 Policymakers By policymakers we mean the individuals, groups, or organizations responsible for policy production and accountable for policy results. Responsible, in the sense that they work (more or less) within the legal framework of public authority. Accountable, because they can be, and often are, evaluated based on the consequences of their actions. Policymakers come in many shapes and sizes. There are authorities, agency executives, program directors, project managers, contract managers, rule makers, budget officers, and many more. While many policymakers are government officials, many are not. They are business enterprises, nonprofit associations, religious organizations, or private individuals who work on behalf of public authorities.

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FOUNDATIONS

The universe of policymakers is much larger than the universe of public officials, be they elected or appointed. Most commercial businesses and many social organizations participate to some extent in the production of public policy. They compete for contracts to perform work for the 80,000 or so units of American government. Producing or delivering policy outputs is a source of revenue for most and profit for many. American government is big not because of the number of government employees, but rather because of the number of people who earn their livelihood off of policy production. 3.2.2.3 Target Populations Target populations consist of the intended recipients of the benefits or burdens of a public policy. Put another way, target populations are the groups who are supposed to receive or pay for the outputs of policy production. We use the terms benefits and burdens broadly, to include any kind of gain or loss that governments can impose on a target population. Moreover, we emphasize the adjective intended because the people who are supposed to receive the benefits or pay the price often do not. There’s a critical difference between belonging to a target population and actually winning or losing, as we shall see in chapter 16. However, target groups and their members can gain from public policymaking even when they don’t receive their benefits or burdens. When policymakers designate a target population for benefits they are mirroring or changing the values of the society as a whole. If one group is rewarded, why not others? If we declare wars on poverty or drugs or terrorists, then we acknowledge that each of these groups is deserving of special treatment by the government. So, regardless of outcomes, target populations do indeed gain or lose standing in the society as a whole when they are singled out as deserving of government largesse or sanctions. 3.2.2.4 Winners and Losers The final role is that of winner or loser. Who actually receives the benefits or suffers public sanctions? Who are the real winners and losers? Sometimes it takes significant time and effort to analyze who really does receive the benefits or burdens of a public policy. How many seniors will actually receive greater benefits under the new Medicare Part D prescription drug program than they would have otherwise? And do new roads actually make travel easier, or simply foster new development, more traffic and congestion, and more delays for residents? Moreover, time matters. Who wins or loses next week, next year, or in the next decade? The real winners and losers of public policies may not become apparent for several policy cycles. That is what makes public policy so contentious—it can be difficult to tell who wins and who loses. However, in a broader sense, policy entrepreneurs, policymakers, and target populations all benefit from the process itself. They are stakeholders either actively or passively invested in the policymaking process. Making policy is what policymakers do for a living, and getting something—indeed, anything—done is usually career enhancing. Similarly, policy entrepreneurs benefit from policy decision making even when they find themselves on the losing side. They win by simply being there. 3.2.2.5 Conclusion Policy actors participate in the policymaking process in one or more of four roles. Besides the specific calculus of benefits and losses as a result of specific policy initiatives, they are all stakeholders in the policymaking process. Since everybody pays the taxes that fund the process and

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almost everybody obeys the laws that result from the process, everyone is both a winner and loser in the grand scheme of things. This, after all, is what makes public policymaking public. 3.2.3 The Policymaking Process: Detailed View We introduce here the complete model as a preview of parts II, III, and IV of this text. 3.2.3.1 Inputs (Part II, Chapters 4–7) In our approach, inputs describe what happens before public officials get to make policy promises. Policy inputs are all about how problems are defined, how solutions are crafted and sold, how access is gained to policymakers, how politics shapes the policymaking process, and how the agendas of public institutions are set. In part II of this text we focus on the technologies and practices that policy entrepreneurs use to set the agenda of policy production. These technologies and practices include: • • • • • •

Problems—representations of situations that can be remedied through concerted action Solutions—theories of problem solving that guide the policymaking process Issues—controversial problems that have public consequences and are deemed appropriate for resolution by public policymakers Politics—how the process of gaining, maintaining, or expanding power and position affects the policymaking process Access—how policy entrepreneurs communicate with policy producers Agendas—the schedules or institutional calendars that determine when and how policy entrepreneurs communicate with policy producers

Figure 3.11 shows these resources for shaping policy inputs in an expanded version of the inputs ball shown in Figure 3.7. Figure 3.11 Technologies for Policy Inputs

VOTE

Issues

Politics

Problems

INPUTS Solutions

Access Agendas

3.2.3.2 Policy Production (Part III, Chapters 9–14) The situation is quite different, however, once policymakers begin to act. By policymakers we mean primarily, though not exclusively, the millions of public officials charged with making the

26

FOUNDATIONS

public promises and delivering the public goods and services we call public policy. In practice, policymakers are problem solvers with a limited repertoire of solutions to offer. Just as doctors have their diagnostic protocols, stethoscopes, and medications, policy producers have their own technologies and tools to solve, resolve, or absolve public problems. While it may be difficult to predict what issues policymakers may choose to do something about, what they do about it is another matter entirely. There may be an infinite variety of public problems and hundreds of thousands of organizations seeking solutions, but the means of policy production are relatively few in number. We focus on six critical technologies of policy production. Most or all of these are involved in the production of every public policy, and the application of each tool involves a relatively limited range of choices. The six key technologies we focus on are: •

•

•

•

•

•

Authority—the ability to act or make decisions with the expectation that those affected will accept the action or decision as legitimate. In the context of policy production, authority is the institutionalized power to get things done. (chapter 9) Agency—the delegation of authority to act to another entity or agent. In the policy production process, agencies are the organizations that house policy production and to whom oversight authority for that production is given. (chapter 10) Program—a service or line of work performed by an agency a group of agencies. A program is an operational unit dedicated to accomplishing a specific mission or result. (chapter 11) Rule—an instruction or prescription for action. Rules are documented recipes for action that carry the weight of authority, whether formally or informally. Making policy almost always involves making and enforcing some form of rule. (chapter 12) Contract—a binding agreement between two or more parties that is enforceable by law. Much of the work of policy programs is accomplished through the many forms of agreements with the many parties involved in producing and delivering the benefits of public policy. (chapter 13) Budget—a plan for managing funds by setting levels of spending based on estimates of revenue available to finance that spending over a specified time period. (chapter 14)

Figure 3.12 (see facing page) displays these six technologies of governance in the standard format we will use throughout the text. While there are other technologies and practices of governance that may also be included as elements of policy production, the six we examine are critical and universal components in the design of nearly every public policy. 3.2.3.3 Outputs (Part IV, Chapter 15) Policy outputs are the products—the goods, services, benefits, and burdens—that policymakers deliver to the public. Outputs are the immediate results of policy production—what policymakers do for or to members of the public. As shown in Figure 3.13 (see facing page), policy outputs consist of three components: •

The target population for whom the benefits or burdens are designed. To whom will the checks be written? Who will pay the taxes? Who will be liable if the tire tread comes apart and people are injured?

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Figure 3.12 Technologies of Policy Production

Law

Authority Budget

Agency

PRODUCTION Contract

Program Rule

• •

The benefits or burdens provided to the public. A method of allocation. How are benefits or burdens distributed to members of the target population? How do victims of the World Trade Center attack qualify for government loans? How are waiters taxed for the tips they receive? How are life-saving transplant organs allocated to patients with kidney disease?

Figure 3.13 Components of Policy Outputs

Method of Allocation

OUTPUTS

Benefits & Burdens

Target Pouplations

Though the products of public policymaking are often indistinguishable from those delivered by commercial enterprises, the context is markedly different. Public policymakers have the power to compel and coerce that private producers do not—at least in modern times—enjoy. This makes the nature of public policy products and the responsibilities of public policymakers quite different, as generations of corporate executives have found upon entry into public service. 3.2.3.4 Outcomes (Part II, Chapter 4, and Part IV, Chapter 16) Outcomes are both the end and the beginning of the policymaking process. Like Janus, the twofaced Roman god, every outcome looks both forward and backward.

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FOUNDATIONS

Looking forward, from the policymaker’s perspective, “outcomes are the events, occurrences, or changes in conditions, behavior, or attitudes” that result from the policymaking process.5 Outcomes are the consequences and not the products of the policymaking process. The difference between outputs and outcomes is the difference between what gets done and what happens as a result. Outcomes are the ultimate measure of the effectiveness of the policymaking process. Looking backward, from the policy entrepreneur’s perspective, outcomes are the situations and events that constitute the raw material for public policymaking. When policy entrepreneurs look at the world around them they see problems or aspects of the world outside that can and should be changed by human intervention. Outcomes, therefore, can be described in different ways. • • •

• •

Policy objectives are the changes in the physical and social world that policymakers seek to produce. Policy impacts are what actually happens as a consequence of what policymakers do and deliver. Impacts rarely match objectives in the real world. Events are discrete “happenings” of a magnitude large enough to affect the policymaking process. Events may be natural—like a hurricane—or human—as with the attack on the World Trade Center—in origin, but they are typically unanticipated or unpredictable. Situations are our sensory experience of the world outside our heads. When people decide that a situation can and should be changed for the better, a policy problem is born. Conditions are situations that cannot be changed by human intervention. Thus, policymakers can treat the consequences of conditions, but they cannot change the conditions themselves. Figure 3.14 shows these aspects or dimensions of outcomes.

Figure 3.14 Components of Policy Outcomes

Situations Conditions

Events

OUTCOMES RIP

Imapcts

Objectives

The discussion of outcomes will be split, as befitting their dual nature. The role of events, conditions, and situations will be examined in part II, chapter 4, as part of the discussion of how problems are born. They are, as we shall see, the precursors to the policymaking process. The results or outcomes of policymaking will be discussed in chapter 16.

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3.2.3.5 Summary It’s time to put the four stages of the policymaking process back together again. Figure 3.15 shows our combined model of the policymaking process. However intimidating this may seem, parts II, III, and IV of the text will walk the reader step by step through the stages and tools of the policymaking process. Figure 3.15 Public Policymaking: Detailed Model

Conditions

Events

Problems

Politics

Solutions

Access

INPUTS

OUTCOMES

Impacts

VOTE

Issues

Situations

Objectives Agendas

Method of Allocation

Authority Budget

Agency

PRODUCTION Benefits & Target Burdens Populations

Program

Contract Rule

3.2.4 Context (Part V) In the previous section we outlined the policymaking process. People see problems and seek solutions; policymakers make promises, produce policies, and deliver results. Finally, something happens and the cycle repeats. Policymaking is a continuous cycle of problems, promises, production, products, and consequences. However, American public policymaking does not take place in a vacuum. The cycles of inputs, production, outputs, and outcomes involve individuals, organizations, and institutions from every nook and cranny of American society. Policymaking is an integral part of American society. Everyone has a stake in the policymaking process and everybody is touched by the institutions and technologies described in the preceding chapters. What is missing so far is the context or environment of American public policymaking. We need to view public policymaking within the broader picture of American society and its evolution over time. So far we have focused on the policymaking process. Now it is time to turn our attention to the public part of American public policymaking. In chapters 17 through 19 of part V we examine the context of American public policymaking in terms of two dimensions: level and sector.

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FOUNDATIONS

3.2.4.1 Level The first dimension is level, or the geopolitical organization of political, economic, and social institutions. We distinguish at least four levels of policymaking in the United States. They are: • • • •

National (federal) State Local—city, county, municipal, and township governments Neighborhood—homeowners’ associations and other residence-based forms of governance

In the American system of government there is one federal government, fifty (or more) state bodies, thousands of local institutions, and many more neighborhood bodies—all performing policymaking activities. However, this simplistic picture of four levels of governance is complicated by a broad range of interlevel and intralevel government activities, as we shall see in subsequent chapters. There are innumerable regional governmental and quasi-governmental entities consisting of both state and local governments. In addition, there are many international bodies that play an ever-expanding role in the realm of global governance. We will briefly survey some of these organizations within the framework of horizontal or networked governance. That is because the authority and powers of regional and international governments are derived from the authority and powers of their member governments. Thus, we will treat such bodies as a technology or means of policy production rather than as a locus of production. Nevertheless, most of the practices we examine in the following pages can be observed in equal measure in both regional and international governments. 3.2.4.2 Sector The second and less familiar dimension is sector. A sector is a relatively coherent set of social institutions sharing common norms, values, and legal status. Following Thomas Janoski,6 we identify four distinct institutional sectors: • •

•

•

Government—the institutions of society based on the monopoly of the legitimate use of physical force within a given territory7 Market—commercial institutions and organizations “engaged in the instrumental creation of income and wealth through the production of goods and services.”8 As we shall see, the market sector is primarily populated by for-profit corporations, but there are increasing numbers of nonprofits that are competing with for profits in the market economy Civil—encompassing a broad range of social organizations and voluntary associations dedicated to some commonly accepted public purpose or good and generally classified by the American legal system as not-for-profit Private—consisting of individuals, family life, networks of friends and acquaintances, and the disposition of private property9

The role of policy sectors has only recently come to the forefront of public and academic attention. The traditional approach to public policy is to limit the scope of interest to the activities of government officials at federal, state, and local levels. In this narrow view, public policymaking is what elected representatives, judges, and bureaucrats do—or ought to do—for a living. However, as students of

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American politics from de Tocqueville onward have repeatedly emphasized, the United States is unique in the extent to which nongovernmental bodies such as commercial enterprises, voluntary associations, and even churches participate in the formation and delivery of public policy. To limit the study of public policymaking narrowly to governmental activities at the federal, state, and local levels is to omit the bulk of the action. Private corporations and nonprofit organizations not only participate in the generation of policy demands, they also serve as instruments of policy production. That government benefits are delivered via commercial and nonprofit institutions is the norm and not the exception in American society. Governance involves all sectors of American society. Figure 3.16 shows a highly simplified picture of the relationship between policymaking levels and sectors. Figure 3.16 Policymaking Levels and Sectors

tS en

r t Secto

Marke

r

cto

Se

rnm

Local

te

ve

iva

Pr

r

Secto

Go

State

Civil

ec

tor

National

Neighborhood

The two dimensions shown in Figure 3.16 enable us to characterize the Where of public policymaking. • • • •

At what levels and in which sectors do inputs emerge? At what levels and in which sectors does policy production take place? How are policy benefits and burdens distributed? How are policy impacts felt? These questions are addressed in chapters 17–19 of part V of the text.

3.2.5 Content (Part V) At the end of part V we change perspective from context to content in chapter 20. For most of this text we assume that the policymaking process is more or less similar for all issues. Everybody uses the same set of tools. In the next-to-last chapter we look through the opposite end of the telescope. We ask how does the nature of the problem—for example, health care, education, welfare, or national defense—shape the policymaking process? How does content affect process and context? While the institutions of public policymaking remain largely the same, the process can differ from one problem area to another. In chapter 20 we examine the complex relationships between content, process, and context in terms of policy domains, networks, and jurisdictions.

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FOUNDATIONS

3.2.5.1 Domains and Networks A policy domain is the specialized arena or subsystem in which policymaking takes place. Policy domains are broad issue areas, such as public health, national defense, agriculture, transportation, and the environment. A policy domain is the environment in which public policymaking takes place. Operating within domains are policy networks. Policy networks are composed of the policy actors that work together in various ways to make public policy. When we talk about policy networks we are generally referring to the patterns of relationships that link participants or stakeholders in all four phases of the policymaking process, as illustrated in Figure 3.17. The concept of domain helps us characterize where the policymaking process unfolds, while the idea of policy network provides insight into how the participants work together. Figure 3.17 Policy Domains, Networks, and the Policymaking Process

Policy Outcomes

Inputs

Winners & Losers

Entreprencurs

Outputs

Production

Target Population

Policymakers

Domain

3.2.5.2 Jurisdictions and Venues However, we can further qualify the Where of public policymaking by focusing on jurisdictions and venues. What government officials can do is determined by their jurisdictions. While policy entrepreneurs can choose their arenas of action—say, for example, clean air, or bioterrorism—the scope of government action is grounded in law. Every government and government agency has a jurisdiction that determines: • • •

Where authority can be exercised Over whom authority can be exercised Over what kinds of issues authority can be exercised

A critical step in the policymaking process is deciding which jurisdiction or venue shall be used. Thus, the concept of policy venue ties all three components of policy—process, context, and content—together.

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3.3 POLICY MAPS Finally, we preview our method for visualizing or “mapping” the historical trajectory of a public policy. The purpose of a policy map is to provide a framework for depicting the evolution of an individual policy initiative over time. It is a method for conducting case studies of public policies. Policy maps use the categories and concepts introduced above and in the remainder of the text as a template for both the historical analysis and prospective design of policy initiatives. The basic idea is that at every step of the policymaking process actors have choices to make among alternative strategies, technologies, or practices. For example: • • • • • •

How should we define the problem? With numbers, images, or human interest stories? Where should we look for a remedy? In a legislature, court, or government agency at local, state, or national levels? How should we sell the problem and solution? Through person-to-person contacts, media campaigns, or party fundraisers? What agencies should be responsible for solving the problem? How should we pay for solving the problem? Who will benefit from the solution and how?

A policy map displays each step as a heading or column along a horizontal axis. The horizontal dimension represents the temporal sequencing of activities. Of course, public policies do not evolve in neat, sequenced steps, but inputs do generally precede policy production, production results in outputs, and outputs eventually lead to policy outcomes. This overall causal sequencing applies. If it did not, we could not talk about a policymaking process because the causal sequencing of events over time is what a process is all about. The alternative strategies or methods are then displayed as rows along the vertical axis. This is the second dimension of the policy map. Figure 3.18 shows the basic format of a policy map. Figure 3.18 Format of Policy Maps: Process and Practices

POLICYMAKING

Alternatives

Inputs

Production

PROCESS Outputs

Outcomes

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FOUNDATIONS

The classification of alternatives can vary considerably from one map to another. For example, the rows could consist of alternative strategies—such as legislative, executive, judicial, administrative, constitutional, or popular (initiative) authorities or venues for policy production. They map the What of public policymaking. In chapters 7 and 8 we will use the rows to show alternative strategies or practices for the technologies used for policy inputs and policy production. Later we shall use the vertical dimension to show the alternative contexts of public policymaking, as shown in Figure 3.19. Figure 3.19 Policy Maps: Process and Context CONTEXT

POLICYMAKING

PROCESS

PRODUCTION LEVEL SECTOR

INPUTS

OUTPUTS OUTCOMES Authority Agency Program Rule Contract Budget

Government

National

Market Civil Private Government

State

Market

Civil Private Government

Local

Market Civil Private

This second type of map focuses attention on the Where of public policymaking and enables students to visualize the path of a policy initiative from point(s) of origin through locations of production, to locus of impact. We will discuss context maps in more detail in chapter 20. 3.4 CONCLUSIONS In this chapter we have previewed our approach to the study of public policymaking and a new technique for graphically mapping the evolution of individual public policies. While policy maps cannot capture all the complexity of the underlying model, they do provide an easy-to-understand visual representation of the paths that public policies take. Both our approach and the maps have been designed with two distinct audiences in mind. For practitioners, our approach documents the kinds of technologies and practices to get things done. The maps offer a template for policy design. The public and their supervisors hold policymakers accountable for results. They are judged both by what they deliver (outputs) and what happens to the public (outcomes). The model mirrors their world and the maps provide a technique for working backward from policy objectives to policy outputs and policy production. Deployed in reverse sequence, policy maps offer a comprehensive design methodology for public policymaking.

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For teachers and students of public policymaking, the model provides a comprehensive framework for understanding public policymaking as practiced. In addition, the policy maps offer a methodology for case studies. By focusing on the activities, actors, tools, and contexts of public policymaking, both the model and the maps enable students to document the history of individual policies from problem to performance. The case study approach to teaching American public policy helps students understand the choices and resources available to policymakers at each step of the process. Both the model and the maps help students to “walk in the shoes” of policymakers and comprehend their world. KEY TERMS domain—a general issue area or grouping of related policies. For example, education, defense, health, housing, and energy are all domains that encompass many more specialized policies and programs. inputs—the raw materials of the policymaking process and how they are created, crafted and introduced into the policy production process. level—the geopolitical organization of political, economic, and social institutions from federal to state, local, and neighborhood. model—a lens through which we view and interpret the world around us. outcomes—the intended and unintended consequences of the policymaking as well as the conditions and events that lead to the creation of new policy inputs. outputs—the products of public policymaking—that is, public benefits and burdens and how they are allocated to different groups in society. policy actors—those policymakers and policy entrepreneurs who regularly participate in the policy process. policy entrepreneurs—the individuals, groups, or organizations that define policy problems and advocate policy solutions. Policymakers—individuals, groups or organizations responsible for policy production and accountable for policy results. Policy production—how societal inputs are assembled, manipulated and transformed into benefits and burdens for the American public. process—a set of activities performed in sequence to reach a goal or objective. The policy process includes inputs, production, outputs, and outcomes. sector—a relatively coherent set of social institutions sharing common norms, values, and legal status. Four sectors are identified in this text: public, market, civil, and private. target populations—those for whom the outputs of public policy are intended. winners and losers—the individuals, groups, or organizations that actually benefit from or are burdened by public policy.

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SUGGESTED READINGS Allison, Graham, and Philip Zelikow. Essence of Decision. New York: Addison-Wesley Longman, 1999. Bardach, Eugene. Getting Agencies to Work Together: The Practice and Theory of Managerial Craftsmanship. Washington, DC: Brookings Institution Press, 1998. Janoski, Thomas. Citizenship and Civil Society: A Framework of Rights and Obligations in Liberal, Traditional, and Social Democratic Regimes. New York: Cambridge University Press, 1998. Kelman, Steven. Making Public Policy. New York: Basic Books, 1987. Klein, Gary. Sources of Power: How People Make Decisions. Cambridge, MA: MIT Press, 1998. March, James G., and Johan P. Olsen. Rediscovering Institutions: The Organizational Basis of Politics. New York: Free Press, 1989. March, James G., and Herbert A. Simon. Organizations, 2nd ed. Cambridge, MA: Blackwell, 1993. Schacter, Mark. What Will Be Will Be: The Challenge of Applying Results-Based Thinking to Policy. Ottawa, Canada: Institute on Governance, 2002. Wilson, James Q. Bureaucracy: What Government Agencies Do and Why They Do It. New York: Basic Books, 1989.

NOTES 1. The following discussion is based on two broad streams of literature: systems theory and process engineering. Perhaps the best exemplar of the former is James Grier Miller’s Living Systems (New York: McGraw-Hill, 1978). Process engineering has a daunting number of varieties and applications, most notably in the software engineering industry. 2. For an excellent analysis of this approach, see Mark Schacter, What Will Be Will Be: The Challenge of Applying Results-Based Thinking to Policy (Ottawa, Canada: Institute on Governance, 2002). 3. Most notably in Frank R. Baumgartner and Bryan D. Jones, Agendas and Instability in American Politics (Chicago, IL: University of Chicago Press, 1993). 4. John W. Kingdon, Agendas, Alternatives and Public Policies, 2nd ed. (New York: Addison-Wesley Longman, 1995), p. 204. 5. Adapted from Harry P. Hatry, Performance Measurement. Getting Results (Washington, DC: The Urban Institute Press, 1999). In the original, outcomes “indicate progress toward achievement of the mission and objectives of the program” (p. 15). This makes two assumptions—(1) that policies equal programs, and (2) that programs are always guided by missions and objectives—that severely restrict the scope of application. 6. Thomas Janoski, Citizenship and Civil Society: A Framework of Rights and Obligations in Liberal, Traditional, and Social Democratic Regimes (New York: Cambridge University Press, 1998). 7. Max Weber, “Politics as a Vocation,” in Max Weber: Essays in Sociology, ed., with an introduction by H.H. Gerth and C. Wright Mills (London: Routledge, 1991), p. 78. 8. Janoski, Citizenship and Civil Society, p. 14. 9. Ibid., pp. 12–13. The importance of family and kinship in American public policymaking has been largely overlooked in the academic literature despite journalistic preoccupation with political dynasties like those of the Adamses, Kennedys, Rockefellers, and Bushes. The recent work of Adam Bellow, In Praise of Nepotism: A Natural History (New York: Doubleday, 2003), has begun to fill in this gap in the literature.

PART II Inputs

Part II focuses on how problems get into the pipeline for consideration and action by public policymakers and describes what happens before public officials get to make policy promises. It looks at how problems are shaped and molded into policy commitments. Problems are everywhere. Bad things happen all the time. Everybody has problems. However, only a few of these problems make it onto the public agenda. What people want done is always more than what public officials can do. Needs and desires are unlimited and public resources are limited. Few people get just what they want; most people can get only some of what they want; and many people get something they don’t want. Part II examines the institutions and technologies that Americans use to get public policymakers to pay attention to what they want. Inputs to policy production just don’t happen. Policy inputs are designed, crafted, and delivered just like policy outputs. Though we tend to focus on the public officials and the decisions they make, much of the action happens elsewhere. Politicians, the media, interest groups, and citizen activists are just as much a part of the policymaking process as are public officials. They provide the raw—and often the refined—material of public policy production. Public activists and the like may not be able to transform policy promises into policy performance, but they can and do convert problems into issues on the public agenda. These “preproduction” institutions, technologies, and activities are the subject of part II. Figure II.1 shows the relationship of part II to the other parts of the book, which cover other components of the policymaking process. Figure II.1

Inputs and the Policymaking Process

Part II

Outcomes

Inputs

Part IV '

Ootputs

Production

Part III

37

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INPUTS

As can be seen from Figure II.1, we include some of the aspects of outcomes in our discussion of policy inputs. By outcomes we mean the causes and consequences of public policymaking that lie outside of the control of either policy entrepreneurs or policymakers. Some of these causes, as we shall see, are directly linked to the shaping of policy inputs, and we include them in part II as antecedents to the human creations that are policy inputs. Part II is divided into four chapters. Chapter 4 describes the What of public policymaking —problems—and the ways in which problems are defined by society at large and policy entrepreneurs in particular. We will see how problems, solutions, and issues are crafted out of the raw materials of situations and events. Chapter 5 then surveys the Who of policymaking—that is, the political and social institutions that frame, filter, and advocate policy problems and solutions. Finally, chapters 6 and 7 examine how problems and their solutions get the attention of public policymakers. Chapter 6 focuses on access, or how policy entrepreneurs gain the attention of policymakers. Chapter 7 looks through the other end of the telescope and asks how the institutional procedures and agendas of public policymakers shape the flow of policy inputs. Figure II.2 shows the order of presentation of the principal components contributing to the formation of policy inputs. Figure II.2

Preview of Part II Chapter 4

Chapter 5

Issues

Situations Eventst

Condition

VOTE

Politics

Problems

INPUTS

OUTCOMES Solutions

Access Agendas

Chapter 7

Chapter 6

CHAPTER 4 Problems PREVIEW Chapter 4 examines how events, situations, and conditions are transformed into problems and then issues addressed through the policymaking process. Problems are the raw materials of policymaking. As you read the chapter, you should keep in mind the following questions. • • • • • • •

What distinguishes an issue and a problem from a situation and a condition? How are solutions and problems related in policymaking? What are the differences between solution, resolution, dissolution, and absolution in dealing with a problem? Why is policy its own cause? What is a “wicked” problem? What is the role of focusing events? What are the various tools for representing demands as problems?

4.1 INTRODUCTION Policymaking usually begins with a problem. Somebody needs some help. Something needs to be fixed. And something needs to be done. Everything that happens during the policymaking process is somehow connected to a problem. Broadly conceived, public policymaking is just a special variety of problem solving. This formulation, however, disguises a shadowy world of ambiguity and confusion. Both the problem and the solving sides of the equation prove to be difficult concepts to pin down. Not only do people see problems and solutions differently, these differences often lead to radically different understandings about what the policymaking process is or should be about. Before examining the policymaking process in detail, we must establish a common framework for understanding what policymaking is all about—problems and their solutions. Chapter 4, therefore, clears the terrain for the discussion to follow. First, we explore the Jekyll and Hyde concepts of problem and solution. Then we detail some of the standard strategies for defining and representing policy problems. Finally, we examine how events change our definitions of problems and trigger the policymaking process into action.

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4.2 WHAT PROBLEMS ARE AND ARE NOT When we say that public policymaking is a form of problem solving we are stating one of those convenient half-truths that conceal more than they reveal. If problems are the raw material of public policymaking, we must take time to analyze and refine this material before tracking its progress through the policy production process. In particular, we must distinguish between problems and a number of related concepts that complicate the process of problem definition. 4.2.1 Situations and Problems In the first instance, problems—as Sam Spade says in The Maltese Falcon—are “the stuff that dreams are made of.” Problems are not realities. They are representations of realities created in the minds of men and women. Earthquakes and floods are not problems, though they surely do create problems for American citizens. It is critically important to distinguish between the problem situation—our sensory experience of the world outside of our heads—and the problem, or how we impose meaning or order on this experience. Although philosophers argue endlessly about reality, it is generally agreed that problems are “mental artifacts that come about by transforming experience through human judgment.” According to William Dunn, “Problems have no existence apart from the individuals and groups who define them, which means that there are no ‘natural’ states of society which in and of themselves constitute policy problems . . . problems are therefore socially constructed, maintained, and changed.”1 Problems “are products of thought acting on environments” and not brute force realities acting on human beings. This view of the creative nature of problem definition is by no means novel. American philosopher John Dewey saw social inquiry in the same light. “For Dewey, inquiry arises in response to an obstruction in the flow of action, when the inquirer encounters a problematic situation that is inherently doubtful or indeterminate. Thought serves mainly to convert a problematic situation into a solvable problem.”2 Problems are not “out there.” They’re inside of us. Problems are man made. 4.2.2 Conditions and Problems When we see a problem in a situation, we are viewing the world in a special way. When we say there is a problem, we have already assumed that something can be made better. A problem, by definition, is an opportunity for improvement.3 A problem is something we believe we can do something about. However, there is another way of looking at the world. We can see a bad situation and assume that nothing can be changed for the better. We can be fatalistic and decide that the situation is a condition about which nothing can be done. Indeed, until the modern era, most of the misfortunes visited upon ancient civilizations were assumed to be the doings of vengeful gods or the products of blind fate. War, pestilence, famine, poverty, and other ills were part of the human condition. They were effectively beyond human intervention.4 They were conditions, not problems. Modern history begins when societies start to see their trials and tribulations as opportunities for change rather than as inescapable conditions. To be “modern” is to see problems rather than misfortunes. To be modern is to assume that change for the better can be made through human intervention in the form of technology, or the skilled application of both human and natural energies to the satisfaction of human needs.5 It is technology that enables modern societies to see an ever-expanding array of situations as problems rather than conditions.

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Problems are representations of situations that can be remedied through concerted action. Centuries ago, earthquakes, floods, famine, and pestilence were all curses visited upon a helpless mankind by a wrathful deity. Today, famine and pestilence are solvable social issues, and both earthquakes and floods may be contained through human ingenuity. In the next decade or so, many birth defects and related genetic disorders may be preventable and correctable through genetic engineering techniques that will surely be the subject of extensive public policymaking. As new technologies arise, so too will new problems. Problems are artifacts of people’s abilities to control both nature and themselves. As a species, we are less and less willing to bow to fate or misfortune. This is particularly true of American problem solving in general and policymaking in particular. Americans are a “can-do” people. They have always had confidence—at times perhaps, overconfidence—in the possibilities of change through technology. If cars can be made safer, if diseases can be cured, if the disadvantaged can be helped, then it should be done. Thus, Americans often see opportunities or problems where other societies have seen the workings of fate. Problem talk is both a prerequisite and a pretext for action. 4.2.3 Problems and Policy Problems What is the difference between social problems in general and public policy problems in particular? A problem is an opportunity for improvement. A public policy problem, therefore, is something that can be made better by means of public policymaking. Policy problems are a subset of all the problems of American society. Most problems live and die in the larger world outside of the public policymaking process. Families discipline children, businesses serve customers, and churches save sinners, all without the participation of public policymakers. Although the scope of public policymaking is large and ever expanding, relatively few problems are candidates for public policymakers. Of course, what problems public institutions can and should address is a subject of ongoing controversy, so the boundary between public and non-public problems is always disputed and constantly changing. Figure 4.1 shows the relationship between a core set of generally accepted public policy problems surrounded by a large public policy penumbra of problems whose status is contested.6 When families abuse children, businesses cheat customers, and priests or ministers exploit parishioners, public authorities and policymakers can and do become involved in solving problems. Just how policymakers become involved—or, as the arrows show in Figure 4.1, sometimes dis-involved—will be discussed in chapters 6 and 7. Figure 4.1

Policy Problems and Societal Problems SOCIETAL POLICY PUBLIC POLICY PROBLEMS PENUMBRA PROBLEMS

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4.2.4 Events and Problems Problem situations are conglomerations of events and circumstances that human observers see as problems. In most cases, the individual events that compose the problem mosaic are small and inconspicuous. The problems of poverty and racial discrimination, for example, are abstractions or representations of innumerable circumstances and events that, taken individually, have little or no impact on the public consciousness. However, every once and a while, an event occurs that galvanizes public attention and crystallizes public perception of a problem. A hurricane strikes, airplanes crash into the World Trade Center, an act of police brutality is videotaped—these are the kinds of focusing events that help transform problematic situations into public problems. Focusing events have four features that distinguish them from run-of-the-mill happenings. • • • •

Focusing events “happen suddenly, with little or no warning.” They are generally rare and thus unpredictable and unplanned. They usually affect a large number of people, either directly or indirectly. Knowledge of these events is widespread and this knowledge is spread virtually simultaneously across the community.7

When we talk about focusing events, we often refer to natural disasters in which humans play little or no part. However, policy entrepreneurs and even policymakers occasionally seek to manufacture focusing events by publicizing or even staging incidents to edify the public. Terrorist attacks like those on the World Trade Center and the Pentagon may be viewed as man-made, carefully engineered focusing events. The problem is that events alone are seldom an effective means of problem definition. “Crises, disasters, symbols, and other focusing events only rarely carry a subject to policy agenda prominence by themselves. They need to . . . reinforce some preexisting perception of a problem, focus attention on a problem that was already in the back of people’s minds.”8 Focusing events often have their greatest impact after—not before—a problem has been perceived and defined. 4.2.5 Solutions and Problems If a problem is an opportunity for improvement and a policy problem is an opportunity for improvement by means of public policymaking, then solutions are an integral part of the problems we see. We see problems through their potential solutions. A solution is a theory of problem solving that guides the policymaking process. As Aaron Wildavsky observed, “policy problems are man-made in that we choose among infinite possibilities to attack one sort of difficulty rather than another. Problems are defined by hypothetical solutions; the problem’s formulation and the proposed solution are part of the same hypothesis in which thought and action are fused. Problems, then, are difficulties or dilemmas about which we think we might do something.”9 Solutions are mini-action theories that lead us to see and define new problems. The more solutions or theories we have available, the more ways in which we can see the problem. Professionals are problem solvers, and each profession brings its own catalogue of solutions in the quest for new problems. Different professions see more or less the same problem situation through different theories or lenses. For example, economists see poverty through the lens of income distribution, whereas sociologists see social stratification; psychologists, cognitive deficits; and political scientists, powerlessness. Everyone brings an explicit or implicit catalogue of solutions to the hunt for problems. More fundamentally, solutions give us confidence that situations can be improved, that what

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vexes us is a problem and not a condition. The more theories we have, the more problems we solve, the more problems we believe we can solve. Solutions breed problems. Where do solutions come from? Just like economists, sociologists, psychiatrists, and lawyers, policymakers bring their own theories or solutions to the quest for new problems. Like all professionals, policymakers have both institutional and personal reasons to discover and define problems. Thus, the policy community—the amorphous collection of policy advocates, makers, and beneficiaries—is the primary source of solutions. John Kingdon has written eloquently about the “policy primeval soup” in which policy proposals or solutions float around competing and combining in a struggle for survival, waiting for the right opportunity or situation to come along.10 Finally, solutions may be theories of action, but not all theories are created equal. Russell Ackoff identifies four different varieties of solutions that play a part in both the problem definition and policy production processes.11 • Solution. To solve a problem is “to achieve a result that comes as close as possible to the best possible outcome.” A solution is an optimal result. For example, some might see cameras in intersections to record the license numbers of all cars running red lights as an optimal means for both deterring and catching violators. Narrowly speaking, it would appear to be both an efficient and effective solution, allowing for little inconsistency, few human errors, and low operating costs. • Resolution. To resolve a problem is to pursue a course of action good enough to satisfy those affected. Resolution is an exercise in finding an acceptable answer. The ad hoc and piecemeal policy approaches to America’s insatiable appetite for energy and periodic energy crises over the past three decades are good illustrations of resolutions. They have “gotten us through” until supplies increased, prices fell, and public attention faded. There have been few incentives to do more. • Dissolution. To dissolve a problem is “to redesign either the entity that has the problem or mess, or its environment, in such a way as to eliminate the problem or mess.” When health maintenance organizations tried to keep the costs of health care down and profits up by refusing to refer patients to specialists, Congress sought to eliminate this problem in its proposal to give patients a right to sue their HMOs for damages caused by any lack of referral. • Absolution. Absolution is the theory that a problem is best ignored. Sometimes problems that are too contentious, too broad, or too complex are better avoided. Alternatively, the appearance, as opposed to substance of action, may be substituted. Ignoring or avoiding problems is a common policy response. The possibility that the Earth might be struck by a meteor of such magnitude as to disrupt or destroy life as we know it, as most likely happened to the dinosaurs, is ignored as a subject for policymaking, at least for the time being. Policy solutions can generally be placed into one or more of these four categories—depending upon the perspective and interests of various participants. All but one of these four categories describes a partial answer. Problems are not often solved, in the narrow technical sense of the word. Instead, they are worked around, redefined, or simply ignored until they fade into the background of public consciousness due to the advent of new, more pressing problems. So what in the end is the relationship between the various forms of solutions and problems? The seeming paradox is that we start with a solution in order to end up with a problem. “Problem solving for the policy analyst is as much a matter of creating a problem (1) worth solving from a social perspective and (2) capable of being solved with the resources at hand as it is of converging to a solution when given a problem.”12 Problem definition is both the beginning and end of the policymaking process.

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of all our problems

Governm

ent C Toesnoter All Oulve Prob r lems

Source: Non Sequitur © 2001 Wiley Miller. Dist. by Universal Press Syndicate. Reprinted with permission. All rights reserved.

4.2.6 Policy Outcomes and Problems Though as we have just seen, not all policy solutions produce real consequences, the success of policies is usually measured by changes in outcomes. The point of policymaking is not that something is done—though that criterion may satisfy the policymakers themselves—but that something happens to people in the society at large. However, policy outcomes are also the start of something new. The changes introduced by policy outcomes are always problematic. Every policy is an experiment in “social engineering.” Every policy disturbs the ebb and flow of social life in diverse and unpredictable ways. Whether intended or unintended, anticipated or unanticipated, beneficial or perverse, each policy outcome generates new realities, expectations, and opportunities for policymaking. Policy outcomes transform the action theories embedded in solutions into new problems. Every analysis of policy outcomes is the genesis of a new policymaking process. Policy outcomes create new problem situations. Indeed, as the old saying goes, “the cure may be worse than the disease.” Aaron Wildavsky has made this point most persuasively. “Problems are not so much solved as superseded.”13 Policymaking is not really about solving problems, but rather about creating new problems that are “more worthy of trying to solve.” This normative view of public policymaking is in turn motivated by the fact that the scope of public policymaking in American life is ever expanding. This creates the phenomenon of “policy becom(ing) its own cause.” Where policy outcomes become the primary determinants of policy inputs, “solutions often carry their own tensions with them, and acting as their own cause, give rise to different problems. More and more, policies respond to past policies . . . rather than to events rooted in social life . . . As policy becomes more and more its own cause, public agencies are ever more involved in making adjustments to past programs.”14 As the scope of government policymaking broadens to include more and more problems, policy outcomes become the driving force in driving policy inputs. Policymaking becomes increasingly autonomous because policymakers spend most of their time dealing with the consequences of their previous actions.

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MINI-CASE 4.1 Solutions Finding Problems—The Patriot Act The Patriot Act was sold to the American public as a key weapon in the war against terrorists. Passed by Congress in the weeks following the attacks of September 11, 2001, it is designed to break down the wall that had prevented information sharing between intelligence and criminal investigations, between the CIA and the FBI or Department of Justice. It also permits shortcuts around traditional requirements for grand jury proceedings and wiretap procedures by invoking intelligence needs. To date, it has allowed the Justice Department to bring terrorism-related charges against several Americans and to move to cut off funding from American sources to organizations promoting terrorism. The Patriot Act has been more effective, however, in solving crimes unrelated to terrorism. It has been most useful in ordinary criminal investigations involving drug trafficking, white-collar crime, corporate fraud, money laundering, identity theft, and child pornography. There has been a sharp spike in numbers of investigations as the Justice Department uses its expanded power to pursue hundreds of cases and to produce impressive results from the seizure of millions of dollars in tainted assets through shutting down money laundering operations by Latin American officials in the United States. The Patriot Act is an effective, if unanticipated, solution to combating a broad range of criminal behaviors. Yet, the loosening of restrictions on criminal procedures in cases of terrorism was not intended to combat garden-variety crime. Civil libertarians argue that short-circuiting traditional protections and civil liberties is never appropriate. The unanticipated benefits of the Patriot Act offer a solution that promises results in the battle against other forms of crime, but pose another set of policy problems.

4.3 THE NATURE OF POLICY PROBLEMS What is it that makes policy problems so difficult to solve? Why must we often merely dissolve or absolve policy problems instead of truly solving or even resolving them? In a landmark essay from 1973, Horst Rittel and Melvin Webber paint a devastating portrait of the challenges facing policymakers. They argue that the kinds of problems policymakers deal with are inherently different from those addressed by scientists and engineers. Policymakers must confront wicked problems. The problems that scientists and engineers have usually focused upon are mostly “tame” or “benign” ones. As an example, consider a problem of mathematics, such as solving an equation; or the task of an organic chemist in analyzing the structure of some unknown compound; or that of the chess player attempting to accomplish checkmate in five moves. For each the mission is clear. It is clear, in turn, whether or not the problems have been solved. Wicked problems, in contrast, have neither of these clarifying traits; and they include nearly all public policy issues—whether the question concerns the location of a freeway, the adjustment of a tax rate, the modification of school curricula, or the confrontation of crime.15

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Wicked problems are ill-defined and are rarely, if ever, solved. Some of the features of wicked problems include: •

•

• • •

“There is no definitive formulation of a wicked problem. . . . The formulation of a wicked problem is the problem! . . . To find the problems is thus the same thing as finding the solution; the problems can’t be defined until the solution has been found.” “Wicked problems have no stopping rule.” There is no way of knowing when one has finished; when the problem is solved. The policymaker stops working on the problem “for considerations that are external to the problem: he runs out of time, or money, or patience.” “There is no immediate and no ultimate test of a solution to a wicked problem.” Any solutions “generate waves of consequences over an extended—virtually an unbounded—period of time.” “Wicked problems do not have an enumerable (or exhaustively describable) set of potential solutions.” “Every wicked problem can be considered to be a symptom of another problem.”16

Health and health care illustrate prototypical wicked problems. First are questions of definition: What is health? Is health the absence of disease, or of an acute medical condition? Or does health imply some positive state of well-being? Which leads to the question of When can we say we are healthy—both as individuals and as a population? For each of us, health means our personal, physical well-being—a highly variable and subjective understanding. Nationally, health involves far different criteria: lower infant mortality, numbers of days of work or school lost to illness, how long we live. How much healthiness is enough, personally, and as a nation? Is it when we eliminate disease(s), or simply devise treatments? Further, new forms of disease continue to be identified; germs and bacteria mutate. So too, as we are learning, do the behaviors and genetics that contribute to health problems. Such discoveries create the potential for more mini-solutions, but not “the” solution. Then there are questions of access: Who should receive treatment, for what, by whom, and at what costs? Demands for health care are infinitely elastic; the resources available for providing it are not. How will care be allocated? By wealth, by rationing, by seriousness of disease state? Successes, in the form of mini-solutions, such as the diagnostic powers of MRI technology or expensive regimens of drug cocktails that delay full-blown AIDS, fuel both demand and costs. The dynamics of health policy are those of wicked problems where there is no end and no stopping rules, only an endless redefining of problems and solutions. The best that policymakers can do under these circumstances is to replace wicked problems or issues with less wicked ones. 4.4 DEFINING PROBLEMS How society makes sense of what people demand and what government does is at the core of defining problems as inputs in the cycle of policy production. Assigning meaning is an inherently political process. Deborah Stone in The Policy Paradox has described problem definition as “the strategic representation of situations” or outcomes. “Problem definition is a matter of representation because every description of a situation is a portrayal from only one of many points of view. Problem definition is strategic because groups, individuals, and government agencies deliberately promote their favored course of action. . . . Representations of a problem are therefore constructed to win the most people to one’s side and the most leverage over one’s opponents.”17 The tools for representing demands as problems include images, symbols, stories, and numbers.

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4.4.1 Images Whether moving or still, images serve as visual embodiments of problems or situations. Images condense complex problems into simple, understandable parts. Photos and videos are visual forms of synecdoches—figures of speech in which the whole is represented by a part. We cannot see abstractions like poverty and disease. But we can photograph a poor person or film the daily lives of an impoverished family. Problems are abstractions, but images as synecdoches help us see individual instances of the problem in personal terms. Images “make a problem concrete, allow people to identify with someone else, and mobilize anger. Also, [an image] reduces the scope of the problem and thereby makes it more manageable. The extreme version of this strategy is reducing a large-scale problem to a single instance.”18 Thus, the problem of racial segregation is captured by the moving images of snarling dogs and fire hoses deployed against peaceful demonstrators in Selma, Alabama. The dilemmas of Cuban immigration and Cuban-American relations are personified in the pictures of Elian Gonzalez being torn out of the arms of his American relatives to be returned to Cuba. The problem of global terrorism is captured by images of the smoking ruins of the World Trade Center. In the media-dominated world of twenty-first-century America, images are more and more the primary currency for problem definition. 4.4.2 Metaphors Metaphors are ways of comparing one situation or problem with another. When we liken policy problems to diseases or wars we are using metaphors. Whereas images as synecdoches gain their power by making the abstract concrete, metaphors lead their readers (or viewers, in rare instances) to make a “normative leap” from one policy context to another. “Metaphors are important devices for strategic representation in policy analysis. On the surface they simply draw a comparison between one thing and another, but in a more subtle way they usually imply a whole narrative story and a prescription for action.”19 For example, war is one of the most pervasive metaphors in the lexicon of American public policymaking. In the 1960s Lyndon Johnson declared a “war on poverty,” in the 1980s and 1990s American presidents waged a “war against drugs,” and the twenty-first century is host to a “war on terrorism.” Indeed, President George W. Bush sought to mobilize support for his faith-based policy initiatives by talking about “the armies of compassion.” The war metaphor helps mobilize popular support and enables policymakers to enlarge the boundaries of permissible action. By leading us to believe that a new problem A is like a known problem B, we can recycle and reuse old solutions for B in the policy production process for A. While the use of metaphors in problem definition undoubtedly peaked during the era when the mass media was dominated by newspapers and radio, metaphors still remain a vital force in the policymaking process, despite the supremacy of television, images, and synecdoches in the contemporary world. 4.4.3 Stories Stories are narrative sequences conveyed both through images and words and used to describe and represent problems. “Definitions of policy problems usually have narrative structure; that is, they are stories with a beginning, a middle and an end, involving some change or transformation. They have heroes and villains and innocent victims, and they pit the forces of evil against the forces of good.”20

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Stone identifies two major story lines, with multiple variants, that are used to define policy problems. • The story of decline begins with the assumption that things were better once upon a time but things have recently changed—or will change—for the worse. The story of decline plays upon nostalgia for the past, dissatisfaction with the present, and hope for the future. Life used to be good, families used to be happy and everything could be wonderful again if only so-and-so hadn’t done such-and-such. • “The other broad type of narrative in policy analysis is the story of helplessness and control . . . Stories about control are always gripping because they speak to the fundamental problems of liberty—to what extent do we control our own life conditions and destinies.”21 For example, stories that tell us we really are in control, that what we thought were conditions are really problems, give us hope that things can get better. Most policy issues have competing story lines and successful policy advocacy depends largely on the storytelling skills of policy entrepreneurs. 4.4.4 Causes Policy issues often revolve around differing definitions of why a problem came about. Causal explanations are fundamental to the analysis of policy problems. “We often think we have defined a problem when we have described its causes. Policy debate is dominated by the notion that to solve a problem, one must find its root cause or causes; treating the symptoms is not enough.”22 Unfortunately, causation in the social world is much more complicated than the kinds of causation we understand in the physical or natural world. When we say that poverty causes crime or that someone or something causes a war, we speak a different language than when we talk about the moon causing tides. Human beings act with purpose or intent. Inanimate objects do not. People may cause outcomes without intending them or intend outcomes without causing them. Causing harm is not the same as intending harm. Blame is not responsibility. Causal descriptions of policy problems raise multiple issues that no text or library of books could ever resolve. Pragmatically speaking, however, Stone details a number of different strategies of causal description in problem definition. • • • •

“Show that the problem is caused by an accident of nature.” “Show that a problem formerly interpreted as accident is really the result of human agency.” “Show that the effects of an action were secretly intended by the actor.” “Show that the cause of a problem is so complex that only large-scale policy changes at the social level can alter the cause.”23

Stone warns us that such strategies are typically used to assign or dodge blame and to empower individuals to change the sources of causation. 4.4.5 Numbers Sooner or later problem definition involves measurement and counting. How much and how many are fundamental questions that almost every policy entrepreneur and policymaker must address. From the very beginnings of the Republic, Americans have placed great emphasis and faith on numbers. The founders mandated a census of the American population every ten years, and several key provisions of the Constitution were anchored on numerical ratios.24 Americans have always been a “calculating

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people.”25 Few problems attain the status of public issue without pages of numbers in tow. “Counting always involves deliberate decisions about counting as . . . Counting must begin with categorization, which in turn means deciding whether to include or exclude. We categorize by selecting important characteristics and asking whether the object to be classified is substantially like other objects in the category.”26 To measure or count is to commit classification. If you count something, you’re not counting something else. If we want to characterize the racial and ethnic composition of the American population, we must first categorize people into abstract groups according to race and ethnicity. But which races, what ethnic groups, and how do racial and ethnic classifications correspond? Are the Japanese a racial or ethnic group? Or is it appropriate and useful to count Japanese together with Indians and Burmese and Nepalese as “Asians?” Every classification system and every set of numbers involves a whole host of similar, equally arbitrary decisions. These decisions are guided by the goals—whether explicit or implicit—of the person who does the classifying and counting. Stone offers some important observations about the role of measurement and counting in problem definition. • “To call for a measurement or survey of something is to take the first step in promoting change.”27 Recent debates about the problem of racial profiling have led many states to require additional types of data reporting on the part of police and other officials. • Counting always requires decisions about whom or what to include or exclude—decisions that almost inevitably reflect the policymaker’s values and objectives. • “To count something at all is to assert that the phenomenon is at least frequent enough to bother counting. . . . Counting moves an event from the singular to the plural.”28 • “Measuring any phenomenon implicitly creates norms about how much is too little, too much, or just right.”29 How much unemployment is too much or too little? Should the percentage of minorities in jobs or universities match their share of the total population? Evidence of discrimination is established by numbers that show disproportionate outcomes by race. Numbers create implicit norms. • Numbers can create communities of interest out of people who share the same trait that is being counted. The American government created a category called “Hispanic” in the 1970s to lump together primarily Spanish-speaking individuals with diverse ethnic and racial backgrounds. Though immigrants from Puerto Rico, Mexico, Spain, Central America, and South America share little in common other than language, the various programs and benefits directed at the “Hispanic” community have created a common interest and organizational framework where none existed before. • “Counting can aid negotiation and compromise by making intangible qualities seem divisible.” • “Numbers can create the illusion that a very complex and ambiguous phenomenon is simple, countable, and precisely defined.” • “Numbers, by seeming to be so precise, help bolster the authority of those who count.”30 Numbers are the lingua franca of problem definition. Like all languages, however, measurement and counting are value-laden tools that benefit both the people or phenomena being counted and the people doing the counting. One cannot help but measure. But one must also weigh carefully the means and motives of the measurers.

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MINI-CASE 4.2 Your DNA Could Help Get You into Grad School DNA is much in the news these days. DNA testing of suspects in criminal cases is commonplace, as are stories of convicted felons released from prison based on DNA evidence. Your DNA can help identify you as being innocent or guilty. Similarly, DNA analysis is increasingly used to identify your risks of suffering from certain diseases like breast cancer or multiple sclerosis. Based on a DNA analysis, your doctor may treat you differently and insurance companies may—if permitted by government policymakers—even deny you health or life insurance. In the not-too-distant future your DNA will increasingly determine both who you are and how you are treated. Your DNA will become part of your public identity. Indeed, your DNA may even help get you into college or graduate school. Based on a 2004 Supreme Court ruling, colleges and universities can consider race and ethnicity in admissions decisions as long as race or ethnicity is not the primary or exclusive factor. Being a member of a racial, ethnic, or tribal group can be counted in your favor. In the competitive world of college and graduate school admissions, every additional advantage helps. But what is racial or ethnic identity? In other words, how do colleges and other organizations categorize race and ethnicity and how do they determine who belongs to which categories. In most cases applicants are asked to self identify by checking one (or more) boxes from a standard list issued by the Office of Management and Budget in Washington. You pick your identity from a list. Supporting evidence is rarely required. Your choice, of course, helps influence your odds of being accepted. The point is what you look like, or who your ancestors were does not determine your identity. DNA testing adds a new twist to this process. Today, companies with names like DNA Tribes, DNA Print Genomics, and Ethnoancestry will analyze your DNA to determine your geo-ethnic ancestry. For a small fee they may determine that you are, for example, 11 percent Sub-Saharan African or 15 percent Native American. This information, according to these companies, could give you a competitive edge when applying to school or even for a job. And this is just the beginning. In the future, DNA analysis will be able to specify your racial, ethnic, or even tribal origins with ever greater precision. This information could help all sorts of organizations to decide how to treat you. Unfortunately, the same DNA results that might help you get into grad school today could raise your health insurance rates tomorrow. Using technology to replace self identification in assigning you to a category cuts both ways. So, you might think twice before submitting to a DNA test.

4.5 ISSUES So far we have talked exclusively about problems. But there is more—much more—to public policymaking than problems. While public policymaking is about problems, public policymakers typically deal with issues. Problems are just the starting point. What is an issue? Simply put, an issue is a controversial problem. When people disagree over the definition of a problem and its related solution, a problem becomes an issue. A public issue,

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therefore, is a controversial problem that has public consequences and is deemed appropriate for resolution by public policymakers. Though admittedly fuzzy, the difference between problem and issue is important because the vast majority of public problems never really grow up to become issues. Every day thousands, if not millions, of Americans make individual demands on public authorities. They call their local police, register their cars, visit their county commissioners, or apply for government grants, subsidies, or loans. These individual contacts are grist for the mill of the policymaking process, but they remain personal in scope and limited in impact. They may be problems for individual citizens, but they are private in scope and cannot be called issues. They fuel the process, but seldom—save through sheer unanticipated volume—change it. Their solution, resolution, dissolution, or absolution is a matter of routine. While these everyday demands are an important and often neglected part of public policymaking, we focus on a small subset of demands that require the making of new policies or the altering of old ones. Policy issues are inputs that demand creative—as well as routine—action on the part of policymakers. Creative, that is, with respect to policy products or processes. Thus, a policy issue/problem may require policymakers to produce new policies, remake old ones, or even change their way of doing business. The policymaking process, therefore, really revolves around issues, not problems. You can define and analyze a problem to the nth degree, but it does not become a policy input until people know and care enough about it to demand public action. There are millions or even billions of problems out there but only a very few are crystallized into issues and find themselves on the public agenda. Tom, Harry, Sue, and many others may consider the waiting lines at their local Department of Motor Vehicles Office a problem, but it doesn’t become a matter for public policymakers until somebody takes up their cause. If the first step in the policymaking process is seeing problems in the world at large, the next step is turning a problem into an issue. Or alternatively, searching for new problems to fortify existing issues. For, as we have seen, people with solutions are always hunting for new problems to solve. While, logically, we would like to believe that policy problems precede and cause policy issues, the latter can and do predate the former. Just as we can have problems without issues we can have policy issues without underlying problems. The main point, however, is that issues are the primary unit of analysis when we study the policymaking process. While policymakers are problem solvers, problems arrive on the public agenda packaged as issues. Issues are never the product of immaculate conception. They come with fathers and mothers, winners and losers, beneficiaries and stakeholders. When we talk about issues we necessarily include the people wrapped around the problem. While policy analysts can extract the problem from its context, policymakers cannot. Issues add the political dimension that separates policymaking from policy analysis. How do we describe the political dimensions of a policy issue? Issues can be classified according to the distribution of perceived benefits and costs. Issues typically arise over who should benefit from or pay for a policy solution. Should financial aid be given to only the best students, or only the poorest ones, or should all students be the intended beneficiaries? As we shall explore further in chapter 15, the issues include: Who is the target population for policy benefits? Who will pay for the benefits? Shall aid be provided as loans so the students themselves pay, or should taxpayers foot the bill? Both benefits and costs may be either widely distributed among the many or restricted to a few. Social security payments are a widely distributed benefit, while income taxes are a widely distributed cost. Sooner or later, everybody will gain and lose. Conversely, subsidies to peanut farmers benefit a very few, while regulations limiting air pollution by power plants impose costs on a small group of companies. James Q. Wilson offers a simple but powerful typology of the politics that envelop policy issues.31 By classifying both

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benefits and costs according to their distribution he arrives at the four kinds of politics shown in Figure 4.2. Figure 4.2 The Politics of Policy Issues

Perceived Benefits

Perceived Costs Distributed

Concentrated

Distributed

Majoritarian Politics

Entrepreneurial Politics

Concentrated

Client Politics

Interest Group Politics

Source: James Q. Wilson and John J. DiIulio, Jr., American Government Institutions and Policies, 6th edition (Lexington MA: D.C. Heath, 1995), p. 457. Copyright © 1995 by D.C. Heath and Company. Reprinted with permission.

Majoritarian politics arise when both the benefits and costs of a policy issue would be widely distributed. Just about everyone will receive Social Security benefits and almost everyone pays Social Security taxes. Similarly, everyone pays for police protection, and the entire community benefits, even if the police themselves benefit more than the public. While arguments may rage about the extent of benefits and costs, majoritarian politics is generally characterized by consensus building and driven by the interaction of focusing events and public opinion. People will gain and pay more or less, but there will be no big winners or losers, so the incentives to organize are few. The opposite of majoritarian politics is interest group politics. Here the issue involves relatively small groups of beneficiaries and payees. Both benefits and costs are concentrated. Occupational safety standards or labor laws governing industrial plants benefit a relatively limited group of workers, while an even smaller group of companies must pay the bill. Since the stakes are high for both winners and losers, interests on both sides will be highly mobilized and conflicts will be intense. In client politics only a few will benefit, but the public foots the bill. “Because the benefits are concentrated, the group that is to receive those benefits has an incentive to organize and work to get them. But because the costs are widely distributed, affecting many people only slightly, those who pay the costs may be either unaware of any costs or indifferent to them because, per capita, they are so small.”32 Dairy farmers are subsidized, dams are built, post offices are renovated, corporate investments are depreciated, and the public pays the bill. Each group vigorously pursues its interests, protects its piece of the public pie, and cooperates with other groups claiming their own share of the public largesse. Finally, in entrepreneurial politics the benefits are widely shared, but the pain is concentrated. Everyone gains from clean air and water, but relatively few industries have to pay the price for pollution controls. “It is remarkable that policies of this sort are ever adopted, and in fact many are not. After all, the American political system creates many opportunities for checking and blocking the action of others . . . a determined minority therefore has an excellent chance of blocking a new policy. And any organized group that fears the loss of some privilege or the imposition of some burden will become a very determined minority indeed.”33

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Nevertheless, public opinion can be mobilized to overcome the resistance of entrenched interests. Policies with concentrated costs and widely distributed benefits can and do succeed. Wilson’s typology of issue politics is but one of several methods for classifying policy issues. These methods characterize the people wrapped around the problem and not the subject matter of the problem itself. In chapter 20 we will turn to approaches describing the content of public policies—for example, agriculture, energy, homeland security, and the like—but in the intervening chapters we will focus on the process that transforms problems and issues into policy outcomes. 4.6 CONCLUSIONS Problem structuring and definition are the first steps in the formation of policy inputs. By the time a problem becomes consequential and controversial enough to become a public policy issue, most, if not all, of these methods of problem definition will have to be used and reused innumerable times. But problem definition is only the beginning. Somebody must bring the issue to the attention of public policymakers. This job belongs to policy entrepreneurs—the topic of chapter 5.

CASE STUDY Chasing Chads Before the night of November 7, 2000, most Americans did not know about, or could have cared less about, hanging chads. A vote was a vote, was a vote! What could be more straightforward than entering the voting booth to pull a lever, connect a line, or punch a card to register your choices? In the early morning hours of November 8, all that changed, as a closely divided nation awaited the results from a few remaining states. Al Gore had won the popular vote. Yet the outcome in the Electoral College remained in doubt. The source of that doubt was Florida. If Florida, with its large chunk of twenty-five electoral votes, went to George Bush, Bush would become president. Over the next five weeks the election and the presidency hung in the balance as Republicans and Democrats chased elusive chads in a furious debate about how to count votes. Americans faced a problem they never knew existed. The nation traversed the path from condition to problem to policy issue in a very short time period, propelled by the focusing event of an election that ended in a virtual dead heat. The question then became how to find a solution. Or rather, which among the many possibilities proposed by Democrats and Republicans would prevail? Five weeks later, still with no winner in sight, the Supreme Court imposed its own solution. George W. Bush became president. Although the Supreme Court resolved the immediate crisis, it did little to solve, dissolve, or absolve the underlying problem. How to count votes is a condition associated with all elections. Since the 2000 election, that condition has entered the category of public problems that periodically attract some attention from public policymakers. Indeed, there have been reform initiatives, most of which have suffered from lack of funding. Three years later, the issue of how to count votes reappeared and almost postponed the recall election for the governorship of California in 2003. From Condition to Problem to Issue—In Twenty-Four Hours How we vote to select those who will govern us, and how we count those votes, are conditions encountered by every political unit every time an election is used as a mechanism of public choice. The issues of who gets to vote and the obstacles to voting have occupied the attention of policy-

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makers since the founding of the Republic. Remarkably, in the United States questions about the mechanisms of voting, that is, how we vote and how we count those votes, have far less frequently become issues for policymaking. The federal Constitution and laws, such as the Voting Rights Act of 1965, establish minimum requirements for voting in the United States. Yet localism prevails in terms of determining the conduct of elections. The Constitution gives Congress authority to regulate congressional elections. Yet Congress has never required uniform national voting procedures, even after the 2000 election. The potential complexity and confusion associated with conducting simultaneous congressional, state, and local elections has deterred efforts to establish uniform national standards. Instead, a federal agency, the Office of Election Administration, part of the Federal Election Commission, assists state and local jurisdictions. State and local laws govern the administration of elections in approximately 10,000 electoral districts at the county, township, or municipal level. Given this, some reformers have suggested that, as a starting point, states be encouraged to adopt their own statewide uniform standards. Currently, almost all states use multiple voting technologies and, with some restrictions, allow local jurisdictions broad discretion to determine not only how people vote but also how votes are counted. State standards are discretionary. Why? The problem is usually not an issue. Most elections produce few challenges to counting procedures because few are close enough to merit a recount. Consequently, most errors in counting are irrelevant or simply never identified before an outcome is certified as final. Recounts arise only in instances where an outcome hangs in the balance. Many are triggered by state or local laws either requiring or permitting challenges when a margin of victory falls within a certain percentage of votes cast or a specified number of votes. This is what happened in Florida. Out of a total of 5,816,486 votes cast, the initial count showed Bush receiving 1,784 more votes than Gore. At the time, Bush’s brother, Jeb, was governor, and the secretary of state, the official responsible for overseeing elections, was also a Republican. Florida law required a machine recount when there is a margin of less than one-half of one percent of the total.34 That recount still showed Bush to be the winner, but by fewer votes. It was at this point that how to count moved from condition to issue. The focusing event was a presidential election that hung in the balance. Unlike most such events, however, this one was not the product of some natural disaster but, instead, a consequence of our normal political cycles. The questions then became whether and how to count votes again. This contest unfolded predictably, with each side advocating a solution wrapped in those procedures most likely to produce an advantage. Bush argued to sustain existing procedures, whereas Gore asked for a manual recount of votes cast in the four most urban counties: Volusia, Palm Beach, Broward, and Miami-Dade. Most importantly, Florida had no law standardizing how votes were to be counted in such recounts. Instead, each jurisdiction followed its own local procedures. The usual deadline for counties to report their final canvass of votes to the state’s Elections Canvassing Commission in Tallahassee was November 14, 2000. Gore requested a postponement, but the secretary of state denied the request. Subsequently, the Florida Supreme Court moved the deadline to November 26. On November 26, the state’s Canvassing Commission certified the election results for Bush. The next day Gore filed an action in state court contesting the certification. State law allowed such challenges upon a showing that the tally contained “a number of illegal votes or rejection of a number of legal votes sufficient to change or place in doubt the result of the election.”35 Gore prevailed in the Florida Supreme Court. Efforts to ensure fairness and equity in elections are as old as the nation. Most of these have focused on issues of who can vote. Tales of those voting multiple times or dead people voting are the stuff of political folklore. So too are the efforts to deter people from registering. Questions of

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counting also arise, from the stuffing of ballot boxes, to missing voting machines or precinct tallies —but less and less frequently—as the nation has adopted more modern voting technologies. Two basic problems and one lesser problem of counting, however, remain: • •

•

Overcounting—ballots disqualified because they are read as registering more than one vote for a single office. Undercounting—ballots not counted because they are read as not registering a vote at all. This group also includes those voters who may deliberately decide not to make a choice from those candidates for a particular office. No voting procedure can prevent undercounts. Unintended choices—ballots in which a voter makes a mistake and inadvertently selects a candidate other than his or her selection.

Both overcounting and undercounting became the focal point of dispute in Florida, a state that traditionally allowed local jurisdictions substantial discretion over how to conduct a hand count of ballots that machines had read as overcounts or undercounts and discarded. The argument about confusing ballot formats or butterfly ballots—that may have misled voters and resulted in unintended choices in the 2000 election—goes beyond this case study. Defining the Problem Technological Drivers Technology has always played a key role in the evolution of voting and of the problems associated with elections. Different voting procedures implicate different sets of problems in counting, with different effects on accuracy. Counting may be performed electronically or by hand, at the precinct level or at some central collection point. “Nationwide statistics reveal that an estimated 2 percent of ballots cast do not register a vote for President for whatever reason, including deliberately choosing no candidate at all or some voter error, such as voting for two candidates or insufficiently marking a ballot.”36 For most of the nineteenth century, voting was done with preprinted paper ballots. The voter simply selected a preprinted ballot from the party of his or her choice and placed it in a ballot box for later counting. Vote buying and ballot box stuffing were easy and common. To reduce such abuses, privacy in voting was introduced into American elections in the late 1880s in the form of the secret or Australian ballot. Voters marked their individual choices in private from among a complete list of alternatives printed on the paper ballot itself. To ensure that a voter voted only once, only election officials could hand out, collect, and count ballots. Paper ballots require manual tabulation but produce a document that can be verified in case of recount. The accuracy of the vote count depends on the people doing the counts. As of 1998, paper ballots remained in use in only about 3 percent of all precincts. However, the growing popularity of absentee voting reliant on mail-in paper ballots would appear to offset this trend. In 1892 the first voting machines were introduced. Called lever machines, this technology required the voter to pull a lever for each candidate choice. The machine then automatically recorded vote totals. Lever machines eliminate paper ballots and the need to count ballots manually. They also preclude over-votes. There is no residual paper document for verification with this technology and to demonstrate its accuracy in any given election depends on both the design and the maintenance of the voting and counting equipment. On the other hand, there are fewer opportunities for tampering. About one-fifth of all precincts still employ lever machines, although this proportion is decreasing.

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Punch-cards are ballots where the voter chooses by punching holes in the appropriate, prescored locations on some type of paper computer card. A chad is the piece of that card that is punched out either by a stylus or some other mechanism. Punch-cards are then read by machine, although the punch-card itself is a document that can be preserved and manually recounted. Punch-cards were introduced in the 1960s and were the most prevalent technology of voting, used by approximately 37 percent of precincts in 1998. In punching the ballot there is a possibility that voters may not completely remove the chad. When not machine-readable, these hanging or swinging chads pose a problem when manual counts are required. Estimates of error rates for over- and undercounts using punch-card ballots range from less than 1 percent37 to 2.23 percent.38 Punch-card systems may be the least accurate of the available technologies for voting. They were the voting technology used in those jurisdictions in Florida where Gore sought a manual recount. Optical scanning forms were introduced in the 1980s. They involve paper forms where the voter chooses by connecting a line or filling in a box. Ballots are then recorded by the voter in a machine that counts the marks. Again, this technology creates a paper document available for manual recount. Optical scanning is increasingly popular, with approximately one-fourth of all precincts using it in 1998. Finally, electronic voting is gaining acceptance as a technology for voting. Like lever voting, electronic voting directly records and counts choices and leaves no paper trail. The voter simply pushes a button or the screen itself and that information is stored in the machine’s memory. About 7 percent of precincts now employ electronic voting—a number that is continuing to increase. A promising variant of electronic voting involves the Internet and online voting. However, problems of ensuring authentication, secrecy, and security are not completely resolved. Also there is no paper documentation. Numbers: Searching for Votes In a close election the margin of error is critical. In Florida, twenty-five Electoral College votes were finally awarded based on a difference of 537 out of almost 6 million votes, a difference equivalent to about 1 out of every 11,000 votes cast. Furthermore, over the five-week period in which recounts were conducted, the margin between Bush and Gore had narrowed from 1,784, the initial difference on November 8, 2000. Such numbers dictated a search for every vote. There were many possible sources. First, approximately 180,000 ballots, or 3 percent of the total vote for president in Florida, were not counted, again primarily because of over-votes and undervotes. These error rates varied by technology used, ranging between 3.8 percent for precincts using punch-card voting and 1.3 percent for those using optical scanning. The problems with punch-card voting were well known, but only to a few experts.39 Very quickly, however, this knowledge was transformed into strategy. Those counties in Florida using punch-card technologies were exactly those areas richest in potential Democratic votes and targeted for recount. Yet knowing where to look for votes was only the first step. The second step, how to count punch-cards with various type of hanging chads, proved much more contentious. When is a chad sufficiently loosened (hanging) so as not to block a punch hole, therefore signaling the voter’s intent to vote? Do one or two paper corners left attaching a chad to its card mean no intent to vote, whereas three corners signal the intent to vote? What does an indented or dimpled chad with no detached corners imply? How many times could the actual paper votes with chads in various states of hanging be manually handled before compromising the physical state of the evidence itself? Florida had no statewide standards for counting votes or for resolving these

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questions. Instead, local officials were on their own in determining when intent to vote could be derived from hanging or dimpled chads. Political partisans and officials in each jurisdiction were free to develop their own procedures and standards for counting—differences that would later prove fatal. Spinning the Story The problems with voting technologies, especially those associated with punch-card voting, provided a tailor-made story for Democrats. And so, the tale was spun! Democrats, the party with the most to gain from recounts, crafted a story about disenfranchisement. The poor, minorities, and the elderly, all predominantly Democratic voters in urban areas, were once again being made to suffer, denied their fundamental right to have their votes mean something. Practically speaking, this story justified a position that any dimple in a chad should count as a vote and discredited technical standards as quibbling. The cause had broad symbolic appeal. By opposing recounts, Republicans were stealing the election. Unfortunately, however, Democrats never broadened their call for local recounts into a demand for a statewide canvass. The Republicans, on the other hand, were stuck with a less appealing story. Opposing recounts had to be garbed in a different logic. For Republicans, that logic was procedural fairness —sticking to narrow interpretations of existing law and seeking enforcement through the courts. The contentious nature of a closely contested election required an emphasis on the importance of resolving the dispute within constitutional and statutory deadlines and on pressuring state and federal lawmakers to step into the breach. Republicans chose to emphasize the need for orderliness of existing procedures as opposed to the potential chaos of unresolvable issues and uncharted territory. Despite their respective stories, both Democrats and Republicans pursued votes whenever and wherever available. For example, Republicans sought to count absentee ballots from military personnel—a move opposed by Democrats. Democrats, on the other hand, successfully petitioned the Florida Supreme Court, which on December 8 required precincts where under-votes had not yet been manually tabulated to begin recounts, but allowed these precincts leeway to create their own standards for which chads could be counted.40 As each side jockeyed for advantage, the quixotic recount narrowed the gap between Bush and Gore, while the drama became ever more compelling as not only state deadlines passed, but constitutional deadlines loomed. Solutions A month after the November elections, the United States was not much closer to a final determination of the outcome in Florida. No one seemed able to solve the dilemma over how to count chads. Breaking the Stalemate To the surprise of many, the Supreme Court agreed to hear Bush’s petition on December 9. Specifically, he asked the Court to decide whether the Florida Supreme Court, in requiring manual recounts without specifying standards for counting, had violated the Equal Protection clause of the Fourteenth Amendment. By a five to four vote, the Supreme Court found the Florida Supreme Court’s failure to specify any uniform standards for ascertaining intent in ordering a recount to violate the Equal Protection Clause. Although not denying the power of local authorities to develop

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different systems for conducting elections, the Court found that the state’s supreme court had “not shown that its procedures include the necessary safeguards . . . When a court orders a statewide remedy, there must be at least some assurance that the rudimentary requirements of equal treatment and fundamental fairness are satisfied.”41 With its decision, the Supreme Court solved the immediate controversy raised by the Florida recount. However, it avoided broader questions about what levels of inequity in vote counting will trigger equal protection requirements. The immediate crisis receded, the public turned to other issues, but the problem remains. There was enough residual political energy from this crisis to generate legislative initiatives in the 106th and 107th Congresses. In 2002 President Bush signed the Help America Vote Act into law. That legislation did not seek to alter the traditional responsibilities of states for conducting elections but it did create incentives for modernization and reform. It authorized $3.8 billion to be spent over four years and provided an immediate (cash) infusion of $650 million to help states replace punch-card voting equipment. That momentum quickly began to dissipate, however, as appropriations to fund reforms dwindled in subsequent years and a newly constituted Election Assistance Commission, designed to help states reform their voting technologies and to approve state plans for using federal funds, was slow to begin operations. Of the twenty-six states that used punch-card systems in 2000, only twelve had decided to replace them, usually with touch-screen voting machines four years later. Florida was among the first to consider upgrading its voting system. However, concerns about tampering with the software used in this technology continue to slow momentum. Clearly, lack of money and public attention, as well as a full plate of competing policy problems, are diluting interest in reforms to our voting practices. How to count votes is, after all, a pretty boring and technical topic—not an issue on which to make or break political careers. That is, until the next crisis! Revisiting the Problem Yet, it took only three short years for America to be reminded again about its problem with voting technologies. The occasion was the gubernatorial recall election scheduled for October 7, 2003, in California. The state had moved to eliminate punch-card voting with a self-imposed deadline of the presidential primary in March 2004. This progress did not resolve concerns about the gubernatorial recall election and the potential for mistakes generated by a ballot listing 135 candidates in more or less random order. In this brief replay of 2000, the courts got involved, this time before the counting could even start. Groups representing those allegedly to be disenfranchised in the upcoming vote sought to postpone the election until all remaining punch-card machines could be replaced. Again, these machines were located in six predominantly urban, poor, and minority counties. Again the story was wrapped in partisanship, with key Democratic groups proclaiming that Republicans were trying to steal another election. Although the Ninth Circuit Court initially granted a postponement, it reconsidered its decision a week later and let the recall vote proceed as scheduled. It reasoned that the potential for harm in stopping an election already under way outweighed the costs of over-counts and under-counts from punch-card ballots. With these questions resolved, both citizens and activists could turn again to the much more entertaining dynamics of an election pitting a movie star against a beleaguered governor. The large margin of victory both for recalling Governor Davis and for replacing him with Arnold Schwarzenegger made challenges to vote counting irrelevant.

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Summary How to count votes involves complex procedural questions that only rarely move front and center onto the policymaking stage. Predictably these will arise when an election is (predicted to be very) close. We can identify some lessons about the dynamics of policy problems from this case study about how to count votes. • First is the nature of the problem. How to count votes is part and parcel of every election—a condition of voting. • Second is the role of technological innovation in generating policy changes. How to count votes involves complex procedural questions that are closely linked to the voting technologies being used. • Third is the importance of events. How to count votes only becomes a problem when elections are close and few votes separate the candidates. Further, most closely contested outcomes are local and are solved locally. The presidential election of 2000, especially the contested outcome in Florida, transformed a problem into an issue. It was a focusing event sufficient to move questions about voting technologies front and center onto the policymaking stage, at least for a time. • Fourth is the role of solutions in addressing problems. Two types of solutions resulted from the events of 2000. One, the Supreme Court’s decision in Bush v. Gore, resolved the immediate crisis associated with selecting a president but did little to resolve the second, broader question about how to count votes. There was sufficient momentum, however, over the next two years to produce a second solution, as Congress passed legislation to update voting technologies, thereby decreasing the risks of counting errors. • Fifth is the relationship between outcomes and problems. One outcome, the Supreme Court’s assumption of some responsibility for problems associated with counting votes, altered the roles of policy entrepreneurs in subsequent elections—as evidenced in the quick recourse to the courts before the California recall election. Policy action in one forum stimulates consequences in another. • Sixth is the utility of stories attached to issues. The technical nature of problems associated with counting votes puts most people to sleep. Dramatization, however, focuses public attention. What could be more compelling in the midst of an election than stories about stealing votes? The specific issue of how to count chads is receding from public attention, a problem of outmoded technology, soon to be relegated to the dustbins of history. Yet problems associated with how votes are counted retain the potential to re-emerge at any time.

KEY TERMS absolution—to deal with a problem by ignoring it. condition—a situation about which nothing can be done. dissolution—to deal with a problem by redesigning or redefining it in such a way as to eliminate it. focusing event—an occurrence or occurrences that help to transform problematic situations into public problems.

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issue—a controversial problem. A public issue is a controversial problem that has public consequences. metaphor—ways of representing a problem by comparing one situation or problem with another. problem—a representation of situations that can be remedied through concerted action. resolution—to deal with a problem by pursuing a course of action good enough to satisfy those affected. solution—a theory of problem-solving that guides the policymaking process by pursuing the best possible outcome. synecdoche—an image or a figure of speech in which the whole is represented by a part. wicked problems—problems that are ill-defined and difficult, if not impossible, to solve. QUESTIONS FOR DISCUSSION 1. Evaluate this statement: The more solutions or theories we have available about a problem the more ways in which we can see a problem and design ways to deal with that problem. 2. Most Americans would agree that the attacks on the World Trade Center and the Pentagon on 9/11 and the hurricane/flood that devastated New Orleans in 2005 were focusing events. How have these events been used to define new policies? And for what problems? Compare the life span of these focusing events in terms of their ability to generate new policy initiatives. 3. Identify examples of policy approaches that are intended to resolve, dissolve, or absolve, rather than solve, the problems that they were designed to address. 4. Evaluate this statement: The role of the policy analyst is to identify a problem worth solving and capable of being solved within the limits of available resources and solutions. 5. Identify a wicked problem and develop an analysis of why it meets the criteria for being wicked. 6. Select a policy problem and develop an analysis of the different policy stories that people with different perspectives on the problem attach to it. 7. Select a policy and problem area in which there is some history of federal government involvement and evaluate the statement that policy is its own cause. 8. Develop a list of problems that have become issues for policymaking over the past five years. What propelled their transformation from problem into issue? SUGGESTED READINGS Birkland, Thomas A. After Disaster: Agenda Setting, Public Policy and Focusing Events. Washington, DC: Georgetown University Press, 1997. Dery, David. Problem Definition in Policy Analysis. Lawrence, KS: University Press of Kansas, 1984. Kingdon, John W. Agendas, Alternatives and Public Policies. 2nd ed. New York: Addison-Wesley Longman, 1995. Rittel, Horst W.J., and Melvin M. Webber. “Dilemmas in a General Theory of Planning,” Policy Sciences 4 (1973):155–69. Stone, Deborah. Policy Paradox: The Art of Political Decision Making. New York: Norton, 1997. Schon, Donald A., and Martin Rein. Frame Reflection: Toward the Resolution of Intractable Policy Controversies. New York: Basic Books, 1995. Wildavsky, Aaron. Speaking Truth to Power. Boston: Little, Brown, 1979.

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NOTES 1. Quoted materials in this paragraph are from William N. Dunn, Public Policy Analysis: An Introduction, 2nd ed. (Englewood Cliffs, NJ: Prentice Hall, 1994), p. 141. 2. Donald A. Schon and Martin Rein, Frame Reflection: Toward the Resolution of Intractable Policy Controversies (New York: Basic Books, 1995), p. 52. 3. David Dery, Problem Definition in Policy Analysis (Lawrence, KS: University Press of Kansas, 1984), p. 27. 4. One could attempt to intervene with the gods through prayer or sacrifice, but one does not seek to change the course of human events directly. 5. “Technology signifies all the intelligent techniques by which the energies of nature and man are directed and used in satisfaction of human needs; it cannot be limited to a few outer and comparatively mechanical forms. In the face of its possibilities, the traditional conception of experience is obsolete.” John Dewey, “What I Believe,” in The Later Works, 1925–1953, ed. Jo Ann Boydston (Carbondale, IL: Southern Illinois University Press, 1969–1991), vol. 5, p. 270, as quoted in Larry A. Hickman, Philosophical Tools for Technological Culture (Bloomington, IN: Indiana University Press, 2001), p. 8. 6. Our concepts here are more basic than the standard distinction between systemic and institutional agendas in the public policy literature. We are talking here about problems, not issues. 7. Thomas A. Birkland, After Disaster: Agenda Setting, Public Policy, and Focusing Events (Washington, DC: Georgetown University Press, 1997), pp. 22–27. 8. John W. Kingdon, Agendas, Alternatives and Public Policies, 2nd ed. (New York: Addison-Wesley, 1995), p. 98. 9. Aaron Wildavsky, Speaking Truth to Power (Boston: Little, Brown, 1979), p. 83. 10. See chapter 6 in Kingdon, Agendas, Alternatives and Public Policies. 11. Russell L. Ackoff, Re-Creating the Corporation: A Design of Organizations for the 21st Century (New York: Oxford University Press, 1999), pp. 13–15. “We are almost never confronted with separable problems but with situations that consist of complex systems of strongly interacting problems. I call such systems of problems messes.” 12. Wildavsky, Speaking Truth to Power, p. 388. 13. All quotes in this paragraph are from Wildavsky, Speaking Truth to Power, chapter 3. 14. Ibid., pp. 81, 390. 15. Horst W.J. Rittel and Melvin M. Webber, “Dilemmas in a General Theory of Planning,” Policy Sciences 4 (1973):155–69. 16. Ibid., pp. 161–65. 17. Deborah Stone. The Policy Paradox: The Art of Political Decision Making ( New York: W.W. Norton, 1997), p. 133. Many of the ideas in this chapter rely on work by Deborah Stone. Copyright © 1997, 1988 by Deborah Stone. Used by permission of W.W. Norton and Company, Inc. 18. Stone, Policy Paradox, p. 147. 19. Ibid., p. 148. 20. Ibid., p. 138. 21. Ibid., p. 142. 22. Ibid., p. 188. 23. Ibid., p. 203. 24. See Michael Meyerson, Political Numeracy: Mathematical Perspectives on Our Chaotic Constitution (New York: W.W. Norton, 2002). 25. Patricia Cline Cohen, A Calculating People: The Spread of Numeracy in Early America (New York: Routledge, 1999). 26. Stone, Policy Paradox, p. 164. 27. Ibid., p. 168. 28. Ibid., p. 172. 29. Ibid., p. 176. 30. Ibid. 31. See James Q. Wilson and John J. DiIulio, Jr., American Government: Institutions and Policies, 6th ed. (Lexington, MA: D.C. Heath and Company, 1995). 32. Ibid., p. 459. 33. Ibid., p. 460.

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34. Florida Election Code § 102.141(4) (2000). 35. Florida Election Code § 102.168 (3) as cited in Bush v. Gore, 531 U.S. 98 (2000). 36. Bush v. Gore, 531 U.S. 98 (2000). 37. Except when otherwise specified, the data on voting technologies rely on the report compiled for the Congressional Research Service by Eric A. Fischer, RL30773: “Voting Technologies in the United States: Overview and Issues for Congress,” CRS Report for Congress, updated March 21, 2001. www.ncseonline. org/NLE/CRSreports/Risk/rsk-55.cfm?&CFID=7036962&CFTOK (accessed 10/1/2003). 38. Southwest Voter Registration Education Project v. Shelley No. 03–56498, D.C. No. CV-03–05715–SVW (9th Circuit, en banc, filed September 23, 2003), p. 4. 39. Roy G. Saltman, Accuracy, Integrity, and Security in Computerized Vote-Tallying. National Bureau of Standards, Special Publication, 500–158 (August 1988). 40. Gore v. Harris, 779 So. 2d 270 (Fla. 2000). 41. Bush v. Gore, 531 U.S. 98 (2000), p. 109.

CHAPTER 5 Politics and Policy Entrepreneurs PREVIEW Chapter 5 examines the Who of policy inputs. As you read this chapter, you should keep in mind the following questions. • • • • • • • • •

How do elections influence policymaking? How do appointments influence policymaking? What are the respective roles of personality and issues in elections? What is the role of political parties in policymaking? How have the roles of business organizations and interest groups in policymaking evolved? What are the similarities and differences between business organizations and interest groups in their approaches to influencing public policymaking? What roles do think tanks play in policymaking? How have the roles of the various forms of communications media evolved to influence policymaking? How may the Internet influence public policymaking in the future?

5.1 INTRODUCTION Things happen. People become dissatisfied with their situations. They see the possibility of change for the better. They begin to define problems and their potential solutions. They talk to other people who see different problems and alternative solutions. Soon they begin to argue with each other about issues. Thus are the raw materials of public policymaking created. However, we have come a long way from this simple picture of policy inputs. Problems do indeed arise spontaneously from the experiences and perceptions of the public, but, in most cases, organizations and other social institutions drive the genesis of policy issues. Lone individuals can make a difference. In the beginning, there was Ralph Nader, all alone in the wilderness, crying out against the evils of corporate America. But, Ralph Nader eventually became “Ralph Nader Incorporated,” with interlocking organizations lobbying the public and public officials on a wide range of social, economic, and environmental issues. If you want to change things in America, you’ve got to organize. Policy issues are made, not born. They are deliberately crafted and carefully propagated by organized policy entrepreneurs. Policy issues are institutional products. In this chapter we survey the role of politics and policy entrepreneurs in the crafting of policy inputs. As John Kingdon has argued, both politicians and policy entrepreneurs are independent actors in the policymaking process. They need a steady stream of problems to survive and thrive in their chosen professions. While politicians and policy entrepreneurs can indeed create new issues 63

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MINI-CASE 5.1 The Clerys and Campus Security Once in a great while, a “Lone Ranger” succeeds. Individual policy entrepreneurs can, on rare occasions, make a difference. The Clery family of Pennsylvania is one such example. In 1986, Jeanne Clery, a student at Lehigh University, was raped and murdered in her dormitory room by another student whom she had never met. The murderer had gained access to her room in the middle of the night through three doors, all of which had been propped open. When Jeanne’s parents sought answers from campus administrators, university officials brushed them off and claimed the campus was safe. This, despite officials’ knowledge of prior violent crimes on campus and at least 181 reports of dorm doors either propped open or unlocked in the four months prior to Jeanne’s murder. The Clerys sued the college. With money from their out-of-court settlement, the Clerys founded an interest group, Security Across Campus, to push both state and federal legislators to adopt laws requiring colleges and universities to compile and publicize statistics on campus crime. The Clerys soon met with success. Pennsylvania was the first state to enact a mandatory reporting law. Higher education officials in Pennsylvania, motivated in part by the fact that colleges and universities in the state were the only institutions then required to disclose statistics on campus crime, felt they were at a competitive disadvantage in recruiting students to their campuses. They persuaded the Pennsylvania congressional delegation to place the Clerys’ cause before Congress. Congress responded quickly, and President George H.W. Bush signed the Student Right-to-Know and Campus Security Act in 1990. That act employs a “buyer beware” strategy. It requires all colleges and universities across the nation to compile data on crime on campus and then to publicize that information to students, parents, and anyone else requesting it. The story of the Campus Security Act starts with a personal tragedy, a focusing event for one family, motivating them to organize and eventually to take the lead in creating a new policy initiative. Examples of successful individuals as policy entrepreneurs are infrequent, but nonetheless illustrate that, on occasion, individuals do shape the course of public policymaking.

or become issues themselves, they still depend upon the public and public events to supply the raw materials for policy advocacy. While in chapter 4 we examined Kingdon’s “problem stream” in the policymaking process, in chapter 5 we now turn our attention to the institutions that shape both political and policy streams in his seminal model.1 In particular, we focus on the institutions of politics that select policymakers, and on the organized activities of four kinds of policy entrepreneurs—business organizations, interest groups, think tanks, and the media. While politics, various types of groups, and the mass media all play critical roles in the formation of public policy, the tools and resources available to each differ significantly. Our focus here is institutional and historical—in other words, on how political institutions like elections, parties, various groups, and the media have influenced public policymaking over the years. We will leave the topic of how issues become policy agenda items to chapters 6 and 7.

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The institutions of policy advocacy are continuously evolving. Some, like political parties, elections, and political appointments, have always been with us. Others, like business lobbies, public interest groups, think tanks and mass media outlets, have emerged and changed over the centuries. Thus, to understand how these institutions work today and may work tomorrow, we need to trace their origins and history. 5.2 POLITICS AND POLICYMAKING We have defined politics as the pursuit and exercise of power and policymaking as the production of results. Obviously, politics and policymaking are intimately related. Politicians seek public office not only to exercise power over others but also to change the world. Public officials—especially those elected to office—inevitably wear two hats. As office seekers they are by definition politicians. As officeholders responsible for getting things done, they are also policymakers. The tensions between these two roles are inescapable. When elected officials advocate policy issues. are they pursuing “real” results, more votes, or indeed both objectives at once? The answer is rarely obvious. For elected officials, politics and policymaking go hand-in-hand. Policymaking and politics coexist—albeit to a lesser extent—in the jobs of public officials appointed to office. Appointees are selected to exercise authority and make policy. Once in office they must exercise political skills if they wish to have their policy proposals prevail over those of other officials, both elected and appointed. And appointees typically seek higher office with greater authority to act. Thus, most appointed public officials conceal at least some remnants of a political Mr. Hyde beneath the Dr. Jekyll of a dedicated public servant. What is important, however, is that different expectations, norms, and institutions govern politics and policymaking. Politics involves the pursuit of power and the exercise of power over others. Policymaking, in contrast, is more focused on the mechanisms of governance. The rules and rituals for getting power differ significantly from those for exercising power. The transition from campaigning to governing is often a painful one.2 Although advocates and analysts of the “permanent campaign” see a blurring of the distinctions between campaigning and governing, the differences between winning and doing are visible to participants and the public alike. Electoral or political participation relies on different social technologies than non-electoral or policy-based participation. These distinctions were central to the authors of the U.S. Constitution and have become codified into an elaborate and ever-changing web of laws and regulations governing both political campaigning and public lobbying. In this section we focus first on elections and the institutions for getting power that have grown up around them. 5.2.1 Electing Policymakers Politics in the United States is centered on the institution of elections. Election of representatives to governing bodies has been a hallmark of American society from colonial days. Although the meaning of representation and conduct of elections has changed markedly over the centuries, the proliferation of representative governments and the frequency of elections are defining features of American democracy. Today, the average citizen has the opportunity to elect representatives at multiple levels in the pyramid of American federalism. Elections are held at the: • •

Neighborhood level, for private homeowners’ associations Local level, for town and county officials, as well as for key officials in school and other types of special districts

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State level, for state representatives, executives, and even judges in some cases National level, for congressional representatives and presidents

In each case, citizens have the opportunity to select individuals to represent their interests and concerns in the policymaking process. Nowhere else are policymakers subject to election more often than in the United States. The question is, how do elections influence the policymaking process? In the first instance, elections are episodic. They happen at regularly scheduled, periodic intervals. Thus, elections and election campaigns impose a certain kind of rhythm on the policymaking process. As the date of an election approaches, the impact of political campaigns on official policymaking peaks, with the logic of winning prevailing over the logic of governing. On the eve of elections, politics tends to supplant policy. If challengers win at the polls or incumbents take re-election as a “mandate for change,” then campaign promises tend to guide policy formation, at least until events and the constraints of governance take hold. In the wake of elections, therefore, politics tends to drive policy. However, the impact of election cycles on policymaking has waned over the past decades as policymaking has gradually replaced politics as a spectator sport for the American public. Occasionally, the horse race aspect of election campaigns may grab public attention, but most Americans have long since ceased to believe that elections make a significant change in their lives. Though often condemned as the product of cynicism or lassitude, this attitude simply reflects the realistic view that the weight of past policies constrains future action. Comparatively speaking, if the number of elected officials and the frequency of elections are accurate measures of the politicization of public life, then Americans are the most political people on Earth. Despite endemic complaints about the growing number and power of unrepresentative bureaucrats, the ratio of elected to unelected officials is still exceptionally high. Despite the disdain that Americans have for politicians as a class, the institutions of federalism force policymakers to don the hat of office seeker and compete for office at regular intervals. Americans may praise effective policymakers, but they give them little leeway and time to get things done. 5.2.2 Elections and American Policymaking Historically speaking, the relationship between elections and policymaking has been complex and changing. In the beginning—in the colonial era—the relationship between elections and policymaking was quite different. According to Michael Schudson, “from the early colonial days until the 1760s, American politics was politics by assent, elections largely a communal ritual of reaffirming rule by gentlemen. In the seventeenth century there were no campaigns for office by rival candidates and in the eighteenth century they remained the exception.”3 Voting was limited to white male property owners, though qualifications were comparatively lenient for the times and many or most white male citizens could vote. Elections to local, county, and even colonial assemblies were frequent, often annual affairs, but the work of these assemblies was minimal by modern standards. “Legislation was, in any event, a secondary activity of the colonial assemblies. Their primary tasks, as in England, were to express the grievances of the people and to keep watch on the executive. Their activities often concerned adjudicating private and local disputes; government was only thinly divided from private affairs.”4 There were no true politicians or policymakers in the modern sense of the terms. Both the pursuit and exercise of public power were viewed primarily as responsibilities attached to men of high social standing. The American Revolution did little to change this pattern. Suspicion of both executive and legislative authority led to further restrictions on the freedom of action of elected

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Frank and Ernest

Constitutional Convention

A DEMOCRACY

DO WE REALLY WANT TO RUN THIS COUNTRY W/TH W/TH

THAVES POLITICS AND POLICY ENTREPRENEURS

Source: Frank and Ernest © 1999 Bob Thaves. Reprinted with permission. All rights reserved.

officials by means of annual elections and the issuance of binding instructions to assembly delegates.5 The Revolution aimed at limiting the scope of action of government, not enhancing it. When the authors of the Constitution sat down to work in Philadelphia in 1787, they faced the daunting task of building a new rationale for government action in a nation fracturing into regions and interests. Their solution involved an elaborately designed set of institutions with off-setting powers to serve as checks and balances against undue influence from special interests or factions. Staffing these institutions required elections, though not the annual elections that had become the norm in Revolutionary America. But, the founders rejected nearly all of the private institutions that today surround the machinery of government. According to Schudson, The framers believed that the science of politics they worked on was a science of governmental systems and structures that would be, once constituted, a perfect mechanism for the deliberation of public issues. . . . The founders, in short, conceived and established a republican government, but outside the central requirement of frequent elections, they did not readily tolerate the private institutions that twentieth-century thinkers have found necessary requirements in the formation of a public sphere of opinion and public communication. Some of the founders straightforwardly condemned private political associations. . . . They discouraged candidates from presenting themselves to the voting public.6 With the new Constitution, Americans forged a fragile agreement on the institutions of governance. How those institutions would perform was another matter. In 1790, the United States was divided by what many perceived to be irreconcilable differences. For many, opposition represented disloyalty to the new Republic and Constitution. “What they were trying to resolve—and they did so, after all, with a substantial measure of success—is a fundamental problem of modern democracy . . . How . . . to develop a responsible effective constitutional opposition . . . [in which] . . . both government and opposition are bound by the rules of some kind of constitutional consensus . . . [and where] . . . it is understood . . . that opposition is directed against a certain policy or complex of policies, not against the legitimacy of the constitutional regime itself.”7 There was little in the way of useful precedent to aid Americans in understanding the concept of a legitimate national opposition. “Americans of the 1790s could not make that crucial distinction between a party, which might temporarily hold the power of office, and the government itself.”8 As most of the founders and early Federalists saw it, politics (electioneering) and policymaking were to be strictly segregated. Public influence over the policymaking process was to be limited to

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the selection of representatives to wield power. Those elected should “be able to resolve disagreements in a gentlemanly and trusting way . . . in line with civic humanist ideas . . . for the general good” and not for partisan advantage.9 As our first president, George Washington embraced these civic ideas and never abandoned his opposition to the emergence of factions or parties. His Farewell Address included a diatribe against factions as traitorous, destructive of the basic principles of republican government and the will of the people, and as “impeding the regular deliberation and action of the constituted authorities.”10 Even Thomas Jefferson, the first president to organize and be elected by a political party, shared Washington’s views about the importance of segregating politics and policymaking. For Jefferson, parties were a means to gain office that, “once attained, became the embodiment of a public consensus upon the general good.”11 With Jefferson’s election, political parties assumed a central role in American elections, but it took another three decades to resolve questions about the legitimacy of opposition and competitive policymaking. “The ideas that political parties might alternate in power and that there might be such a thing as a loyal opposition were slow to gain acceptance. For it was not until the election of 1844 that a political party was able to regain the presidency once it had been lost. Before this political parties that had lost power had also lost their legitimacy, so to speak, to represent the public’s articulation of the national will.”12 In the beginning, elections were not just an institution for influencing the policymaking process; they were to be the only source of policy inputs. While Washington’s views did not prevail, they have colored American attitudes toward political parties and public lobbying ever since. 5.2.3 Personality and Policymaking Another aspect of elections and policymaking may be found in the interplay between personality and policy in American politics. From the beginning, elections have been more about who wins rather than what happens. Elections are about power, not policy. Though policy issues can and do play a significant role in the electoral process, just how much of a role is a matter for politicians to calculate and academics to debate. By most accounts, our first president was anointed rather than elected. Respect and gratitude for his leadership during the Revolution carried Washington into the executive office despite lingering fears of monarchy. Americans made no distinction between person and policy. “Affection for him [Washington] and complete trust in him were at times during this period probably the only sentiments which were shared without important reservations by the mass of the people throughout the country. These sentiments were called into service to support government policy at every important crisis from 1793 on.”13 The dominance of the Who over the What in American national elections continued with the elections of John Adams and Thomas Jefferson, and reappeared again two decades later in the political career of Andrew Jackson, another popular war hero. By then, the role of parties in producing popular majorities in the Electoral College was established. The elections of 1824, 1828, and 1832, in which Andrew Jackson participated, raised questions of personality to new prominence with “‘personal rivalries, elaborate intrigues, and calculated plots to ‘destroy’ opponents’ occupying center stage in the political drama.”14 In 1828, Jackson presented himself as a national hero and was elected by popular majority as president. As president, he was the first who “regard[ed] himself as the primary representative of the people and assert[ed] in many ways the authority of his position over that of the Congress and the judiciary.”15 He used his status as the “hero president”16 to expand the powers of the executive by resurrecting traditional claims to the civic loyalty and deference of legislators.

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Not quite two centuries later, elections have been surrounded by numerous public and private institutions that would astonish the first president and his cohorts. Nonetheless, elections continue to be dominated by the personalities of candidates. Elections do impact the policymaking process, though they must compete with other sources and technologies of influence. And, many of the same issues endure—for example, should policymakers be bound by their promises and the instructions (read “platforms”) of their supporters? However, the impact of elections on public policymaking does seem to have declined at the end of the twentieth and beginning of the twenty-first centuries. Despite all the talk about policy issues, voters continue to focus more on personality and style than on the specifics of issues in an era of media-saturated coverage of elections. 5.2.4 Appointments and Policymaking Elections are not the only way that policymakers are selected. In the federal government, the president has the power to appoint high-level government officials and federal judges, subject to “the advice and consent” of the Senate. The appointment power is critical to the president’s—or any executive’s—ability to manage the policymaking process. “[T]he president’s nomination power plainly allows him to insinuate his priorities or views into the lawmaking process. For every non-judicial position that Congress creates and whose occupant qualifies as an ‘officer of the United States’ with policymaking influence, the president potentially has a unique opportunity to set the direction or tone for how the powers wielded by such nominees will be exercised. . . . Moreover, presidents are potentially able to dominate the policymaking functions performed within a wide range of administrative agencies by virtue of their powers to nominate the heads of those agencies.”17 However, the Constitutional requirement for “advice and consent” of the Senate means that thousands of federal administrators and judges must be confirmed by the Senate before they can take office. Similar processes take place in all fifty state governments. While the vast majority of government officials are not subject to the advice and consent of legislators, key policymakers of every administration are subject to public scrutiny and the possibility of rejection. This allows opponents of a president’s (or governor’s) policies to mobilize popular and legislative support to defeat the nominee and influence the subsequent direction of public policy. As a result, the appointment process has been a focal point of policy contention since the earliest days of the U.S. government. For example, appointments to the federal courts have always been used as venues for policy debates. In 1801 the efforts of outgoing President John Adams to “pack” the federal judiciary with sympathetic judges on the eve of Thomas Jefferson’s taking office provoked a Constitutional crisis resolved by the Supreme Court in the case of Marbury v. Madison.18 Of the more than 145 nominees to the Supreme Court, at least 28 have been defeated—that is, rejected or withdrawn—due to opposition in the Senate and by the public. Though issues of character and personal integrity have often been involved in these failed nominations, policy issues have played a significant role in many or most. Indeed, in the contentious political climate of the beginning of the twenty-first century, nominations to the Supreme Court are viewed by many as having even greater impact on the policymaking process than election to the presidency. In a federal government nearly evenly split between Republicans and Democrats, the power of Supreme Court judges to shape policy and even decide presidential elections is seen as institutionally, if not politically, unfettered. Similarly, executive branch and lower-level federal judicial appointments are being increasingly used as levers to implement or block policy changes. As political and institutional gridlock makes it ever more difficult for legislators to make new policy or law, symbolic battles over

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political and judicial appointees provide welcome opportunities to rally supporters and gain visibility. Nevertheless, the actual impact of nomination hearings and confirmation battles on the policymaking process is less clear. On the one hand, the opposition in confirmation struggles only has negative power. Blocking appointed policymakers from taking office is not the same as blocking the policies they advocate. On the other hand, the ability to stop presidential appointments does influence the kinds of individuals nominated and the behavior of officials once in office. Presidential appointees are likely to hold, and have held, multiple positions requiring Senate confirmation, so the ability to withstand legislative scrutiny is a critical qualification for senior executive branch officials. Individuals with a track record of advocating highly controversial policy positions are unlikely to be nominated for high-visibility positions. 5.2.5 Political Parties and Policymaking Not long after Washington’s death, the private political organizations he detested and feared began to take shape; these were political parties. Political parties are permanent organizations whose principal objective is to capture and maintain control of the institutions of government. “Parties want to occupy government physically, whereas interest groups merely want to influence some of the decisions made by government. In addition, parties focus their attention on elections and the selection of candidates to fill public offices.”19 Even though political parties can and do have strong ideological or policy orientations, their primary reason for being is to get people elected to office. Politics, not policy, is their raison d’être. James Q. Wilson has identified three political arenas in which parties play a significant role. “A party exists as a label in the minds of the voters, as an organization that recruits and campaigns for candidates, and as a set of leaders who try to organize and control the legislative and executive branches of government.”20 Political parties provide the resources—symbols of political identity, material and financial support, and leaders to mobilize followers—that enable candidates to win office. They bring stability and continuity to the periodic contests for public office created in the Constitution. How do political parties influence the policymaking process? As might be expected, the impact of political parties on the policymaking process has varied widely over time. In the beginning, political parties had labels and leaders, but little organization. In the election of 1800, Thomas Jefferson mobilized his supporters around the “Republican” label and began to use such hitherto frowned-upon practices as mass campaign rallies and distribution of printed tickets listing party nominees to prospective voters. For the next quarter century, both the Jeffersonian Republicans and the Federalists experimented with the new campaign technologies that would characterize party politics in nineteenth-century America. However, party activities were mostly limited to electoral campaigns. American political parties came into their own during the second quarter of the nineteenth century. Parties became permanent organizations run by leaders who—for the first time in American history—considered politics a full-time profession. By the 1830s, political parties were holding nominating conventions, using newspapers as vehicles for public mobilization, and rewarding supporters with the spoils of public office. Nineteenth-century elections were public spectacles. Political parties managed the elections, distributed preprinted ballots to potential voters, and offered all sorts of inducements to voters turning out at the polls. However, except for the traumatic interlude of the Civil War and Reconstruction, American political parties did not organize or mobilize around policy issues. Indeed, the most divisive issue of the antebellum era—the rising abolitionist movement in the North—was the subject of a gag rule in the House of Representatives. The two major

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parties of the time—Democrats and Whigs—straddled the issue of slavery in order to maximize their electoral chances. Policy issues were secondary to strategies for winning elections. The zenith of political party influence in American politics came at the end of the nineteenth century, following the end of the Reconstruction and the bitter divisions over slavery and its aftermath. Though the Republican and Democratic parties of the time did divide over some issues, they were united in their single-minded provision of jobs for supporters. Political parties became the principal institutions for public welfare of the time. They were the engines of nineteenth-century distributive politics. “A large part of governing was the distribution of offices to party loyalists. Jobs were closer to the heart of the party than issues. . . . Key issues were often ethnocultural—natives separated from immigrants, Protestants from Catholics, temperance advocates from their opponents. The parties typically avoided issues that might evoke these vast cultural divides; platforms and speeches stressed party loyalty, personal attacks on the opposition, and empty patriotic platitudes. It was all but impossible to consistently identify Democrats and Republicans with particular issues.”21 Indeed, in cities like New York, as many as one-third of party voters were on the public payroll. In addition, the parties themselves employed large armies of workers. “The Pennsylvania Republican organization, with some 20,000 regular workers earning wages from the party, represented more ‘employees’ than most of the large railroads in the state.”22 To a remarkable extent, policy issues were swallowed up by the distributive politics of public/private welfare. The public/private payroll solved all—or at least most—problems. Politics captured policymaking. To be sure, social problems can only be bought off for so long. The combination of Civil Service reform and the deep Depression of 1893 eroded the ability of the two parties to use the spoils system to smother economic, social, and political conflicts. The Progressive Era, with the introduction of the secret ballot and related reforms, dealt a fatal blow to the power of the two political parties to control—or, more precisely, to suppress—the public agenda. With the rise of public interest groups as alternative channels of influence, the role of political parties declined—with the brief exception of the 1930s and 1940s. Today, the influence of the two major political parties on the public agenda is significant, but truly a mere shadow of what it was over a century ago. Changes in administration and in the balance of power in legislatures still open windows of opportunity for policy advocates, but the windows are getting smaller and smaller and closing with increasing rapidity. Moreover, the proliferation of distributive welfare programs has made it ever more difficult for parties to use private grievances to mobilize voters to the polls. When everyone is on the public payroll to some extent, political debates are transformed from struggles between the haves and the have-nots to negotiations between the “have-mores” and the “have-lesses.” In such an economic and social environment, the spoils that parties can still dispense in office are strictly limited. For people with problems and advocates with solutions, political parties can be a tedious and often frustrating path to the policymaking process. Nevertheless, in 1995 the leadership of the new Republican majority in the House of Representatives decided to fight back against both the perception and the reality of party weakness. Although the preconditions for reassertion of party control had long been in the making,23 the Republican leadership moved swiftly to expand its control over the public agenda. First, the leadership announced the “K Street Project”—a systematic campaign to increase party influence over the major lobbying organizations that inhabit the glass and concrete office buildings along K Street in Washington, DC. The objective was to make the lobbyists serve the party, not vice versa. With the election of George W. Bush and the consolidation of Republican control over both House and Senate, the K Street Project gained momentum. The Republican

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leadership set up a Web site to monitor and publicize the activities and politics of Washington lobbyists. More importantly, Republican leaders pressured lobbying firms to hire Republicans and purge Democrats. The leadership made sure that former Republican congressmen and senior staff members were placed in key jobs on K Street. Once ensconced on K Street, former congressional insiders continued to work closely with both former colleagues and paying clients, helping to draft legislation and fill Republican Party coffers. And when lobbying groups refused to cooperate, the leadership punished them by sidetracking their legislative proposals. In one instance, House leaders eliminated a provision for $1.5 billion in tax relief for the motion picture industry in retribution for its hiring of a Democrat to head its lobbying organization in Washington.24 The lesson was obvious to all—if you want to see your item on the agenda, you had to play ball with the leadership of the majority (Republican) party. Second, congressional leaders have sought to regain control over party members. The seniority system—whereby powerful committee chairmen were selected on the basis of length of service—has been partially dismantled, and errant lawmakers have been disciplined. Members who opposed the leadership found themselves out in the cold. Moreover, party members were expected to contribute not only votes, but also campaign funds to the party leadership. Indeed, committee chairmen have been pressured to raise large sums for the party as a whole or face loss of the chairmanships.25 Finally, both Republican and Democratic Party leaders have endeavored to insulate as many House incumbents as possible from the rigors of competitive elections. Nearly all of the congressional districts are now “safe seats” with significant majorities of either Republican or Democratic voters. Thus, incumbents have more to fear from opponents in party primaries than in general elections. Party members have a strong incentive to toe the party line or face the prospect of wellfunded primary opponents. All of these stratagems have helped to restore party influence over the fate of policy issues in Washington. While we have come a long way from the spoils system of the late nineteenth century, party control over the public agenda is expanding both inside and outside the halls of the Capitol. 5.3 POLICY ENTREPRENEURS In the previous section we surveyed the role of politics and political institutions in the crafting of policy inputs. Now, we turn to the part played by policy entrepreneurs—the individuals and institutions dedicated to the advocacy of policy solutions. Politics and political institutions are costly and relatively unreliable means for influencing the public agenda. Taking power is rarely the fastest or most effective way of making public policymakers pay heed to your wishes. And contesting presidential or gubernatorial appointments may make great headlines, but seldom produces immediate or measurable policy results. Today, ordinary citizens have many ways of influencing the policymaking process that bypass the institutions of public elections, appointments, and political parties. How do individuals bring issues to the attention of public officials? As we have seen, individuals seek the assistance of public policymakers in solving personal needs on a regular basis. That is the ordinary business of public policymaking. But how do individuals get public officials to address public issues? When an employee goes to court to seek redress for discrimination or other employer practices, he is solving his personal problem. But when the same employee petitions his congresswoman for higher wages or files a class action lawsuit, he is trying to get policymakers to make policy.

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While stories of how enterprising citizens have fought city hall and won are legion, they are the exceptions that prove the rule. In the vast majority of cases, issues are brought to the attention of public policymakers by means of organizations and organized action. Despite the mythologies of individual heroics, it takes organizations—corporations, voluntary associations, interest groups, labor unions, and the like—to get things done in American public life. Organizations aggregate the shared interests of dispersed citizens; they articulate problems, propose solutions, and bring the weight of thousands or millions of members to bear in influencing the agendas of public officials. Organizations are the means, the technology that individuals use to pressure public policymakers to serve their needs. As described earlier, attempts to influence government decision makers between elections were viewed as illegitimate by the founders. Though political parties flourished during the nineteenth century as mechanisms for distributing the spoils of public office, their primary purpose was still to get people elected to office. They were—and are—political institutions. Policy-oriented institutions are different. They focus on policy decisions, not policymakers. Today, groups and organizations seeking to influence the public policymaking process number in the tens if not hundreds of thousands. So, the question arises—How did policy-oriented groups make the difficult journey from treason to ubiquity? In the following three sections we examine four institutional actors and their roles in the formation of policy inputs: • • • •

Business organizations Interest groups Think tanks The media

5.4 BUSINES S ORGANIZATIONS Lobbyists for commercial business interests took the first steps down this path. The term lobbyist first appears in the early nineteenth century as a term for those individuals who hung around the lobby of the Capitol, seeking to edify or educate bored congressmen condemned to spend their days far away from home in the fetid swamp that was Washington, D.C. Then, and now, entertainment was a valued commodity for legislators. The first lobbyists were social net-workers adept at putting legislators in contact with the rising class of private entrepreneurs that were transforming the American economy. William P. Browne describes the activities of one of the pioneering lobbyists of the nineteenth century, Thurlow Weed. “Weed’s career was finally made by cultivating industrial leaders, such as Cornelius Vanderbilt, and local political bosses, such as New York’s William Marcy Tweed, and through their friendship, putting public officials into their company and companionship. Weed also became a party operative, the role for which he’s best known, managing the Whig Party’s 1848 electoral campaign. Indeed, he was an ultimate insider.”26 Browne goes on to make several key points about the original lobbyists. • • • •

They worked on behalf of the railroads, banks, and other commercial interests to ensure that Congress looked favorably on the industrial transformation of the 1800s. They represented individual companies, not associations or mass membership organizations. They operated in the dark, in back rooms out of the light of public scrutiny. Their influence was fueled “as much by corruption and bribery as it was by social networking and providing legitimate information and ideas to policymakers.”27

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The relationship between the wealthy, their representatives, legislators, and political parties was incestuous. The wealthy could buy their way into Congress, especially the Senate, and their lobbyists bankrolled and ran the political parties.

More than a century of regulation has curbed most of the excesses of nineteenth-century business lobbying. The close relationship between corporate lobbies and political parties has been loosened due to both electoral and campaign finance reform. Professional lobbyists must register with the federal government and file quarterly financial reports. Gifts and other perks provided to legislators are limited and must be publicly reported. However, the influence of corporate lobbyists on the policymaking process continues to be significant. Political action committees (PACs) and other institutional devices are used by corporations—and many other institutions—to circumvent restrictions on campaign contributions. Money, in the many forms by which it flows into the coffers of parties and politicians, buys access. Corporations maintain permanent lobbying staffs in Washington and hire public relations and law firms to press their interests. Despite periodic scandals and legislative initiatives, the “contact game” continues under new guises and constantly changing rules. That these efforts are frequently successful in influencing the shape of public policy is undeniable. How successful, however, is another matter.28 We will limit ourselves to four, relatively uncontroversial, conclusions. First, corporate interests were the pioneers in the lobbying business. They set the mold that subsequent groups have sought to emulate or avoid. Second, the public has always viewed lobbying by corporate interests with suspicion. The title of corporate lobbyist has never been considered a badge of honor outside of Capitol Hill. Third, corporate lobbyists have played an important—though perhaps overweening—role in providing government policymakers—both elected and un-elected—with the information needed to manage and regulate an ever-changing economic environment. For better or for worse, they are needed. Finally, both the technologies and measures of influence evolve in endless cycles, with new technologies resulting in greater success, thus provoking reaction, regulation, and ultimately new modes of influence. Regulation follows innovation as night follows day. The game of corporate lobbying will always be with us. 5.5 INTEREST GROUPS Today, business enterprises must compete with many other kinds of organizations advocating policy positions. The era when nineteenth-century “robber barons” could directly control both electoral and policymaking processes is long since past. Although these dinosaurs of policy advocacy still survive in different guises, the latter half of the nineteenth century saw the appearance and spread of newer species of policy-oriented organizations called interest groups. These more recent forms of social organization gradually came to dominate the landscape of policy advocacy in the twentieth century. It is important to distinguish interest groups dedicated to influencing the public policymaking process from other organizations with different goals and interests. Historically, Americans have been joiners. They have joined churches, clubs, professional and neighborhood associations, political parties, and—most recently—a virtually infinite variety of chat rooms and discussion groups. Rare is the individual who does not belong to multiple groups in both the social and cyber worlds. The landscape of American society is populated with millions of organizations, both physical and virtual. Nearly all of these organizations are involved in the ordinary, everyday processes of public policymaking. They file articles of incorporation with state governments. They pay corporation fees. They file tax returns with the Internal Revenue Service. Many of these organizations may

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become occasionally or tangentially involved in raising policy issues with public policymakers. But relatively few dedicate a major share of their resources to lobbying public policymakers on behalf of their members. The organizations that do pressure public officials as a primary function are called interest groups. According to William P. Browne, “interest groups are known by three necessary characteristics. One, they voluntarily bring together members and supporters, or joiners. Two, these joiners share a common characteristic that differentiates them from others. Three, the group’s purpose is to represent issues of public policy that fit the joiners’ common concerns. That’s their interest. Without all of the three, whatever an organization is, it isn’t an interest group.”29 Thus, the National Rifle Association, which spends a large share of members’ dues on lobbying Congress and supporting political candidates, is clearly an interest group, even though it provides many other services to members. In contrast, the Rotary Club or the Knights of Columbus surely do not qualify as interest groups. While they do provide opportunities for local problem solving, they do so largely outside of the public policymaking process. Even though such groups may serve important political functions as gathering places and career boosters for local decision makers, their avowed purpose is social in nature. To be sure, the distinction between interest groups and other vehicles for advancing policy issues is not always as clear as Browne implies. Many organizations begin as self-help groups or community associations and only later become involved in lobbying policymakers on behalf of their members. And many organizations consider pressuring public officials as but one of several primary missions or objectives. These distinctions are not merely academic—they have become embedded in the United States tax code. Thus, under Section 501(c)(3), organizations operating exclusively to promote the social welfare of the country qualify for both tax-exempt status and deductibility of contributions if they do not engage in substantial lobbying. “The 501(c)(3) groups (charitable) may not legally lobby Congress but may advocate positions before administrative agencies and may give Congress information on pending legislation.”30 In contrast, groups that do engage in substantial lobbying may qualify for tax-exempt status, but individual contributions to these groups are not tax deductible. This is a serious problem for organizations in search of support. Indeed, provisions of tax law governing charitable groups engaged in political lobbying are themselves a lively policy issue and the object of considerable interest group lobbying. Interest groups are an inextricable part of the policymaking process. They are both the subjects of policymaking and the objects of policy execution. But it was not always so. Interest groups as we know them today are a relatively recent invention dating back to the Progressive Era. As Elisabeth Clemens has argued, the rise of organized group interests outside of the party system represented a fundamental change in American public life. “Under the political system of the late nineteenth century, individuals or groups were motivated by partisan identities, action was organized around the election of officials, and the pursuit of legitimate action was understood to be partisan victory or some ‘common good.’ Consequently, the pursuit of special interests was understood to be illegitimate and involved methods or models of organization that were culturally corrupt.”31 By the last quarter of the nineteenth century, the excesses of the spoils system had thoroughly discredited the technologies of policy advocacy. How, then, were the outsiders or losers able to mobilize to redress the inequalities and injustices of the Gilded Age? What happened was that outsiders grafted new techniques of social organization onto the older forms of lobbying to produce a new technology of policy advocacy—the modern interest group. In the United States, the shift from the electoral regime of highly competitive parties to the legislative and administrative focus of interest group bargaining can be understood by

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examining the organizational experiments of groups that were comparatively disadvantaged under the first of these regimes. . . . [While the] making of specific claims on legislatures was not in itself new, it had previously taken the form of petitions, private bills directed at individuals, and bribery in the Gilded Age. What was new was the exertion of issue-specific pressure through political education, public opinion, expert testimony, and the increasingly sophisticated legislative tactics of issue—or constituency-based organizations.32 The new interest groups drew upon the resources of social movements and civic associations that burst onto the American scene in the years preceding and immediately following the Civil War. The temperance movement, the moral crusades of newly founded Protestant denominations, and the spread of fraternal orders like the Masons provided nineteenth-century Americans with experience in mobilizing large numbers of people across the length and breadth of the American republic. “Surely it is no accident that both federated mass mobilizing political parties and federated popularly rooted voluntary membership associations emerged and became well institutionalized in the same era of American history, between the 1820s and the 1850s. Although parties and associations operated partly at cross-purposes—because most associations tried to be nonpartisan in order to attract people from competing electoral parties—they grappled with many of the same organizational dilemmas: how to inspire large numbers of people to participate while at the same time forging links across a growing and diverse new nation.”33 From the beginning, civil associations imitated the federal structure and constitution-based rules of the U.S. government. These nonpolitical voluntary associations were a training ground for Americans in the arts of government. “Federated membership associations influenced the larger U.S. polity in a number of ways. Inside the clubs or lodges or posts, millions of people learned about group operations and collective debate and decision-making. They learned the ‘constitutional rules’ that governed membership, dues paying, and representation; they learned the rules of legislation and adjudication in their associations . . . People acquired and practiced organizational skills too.”34 When depression and war led some of these groups to add public campaigns and legislative lobbying to their roster of activities, they could rely on the skills of members and the resources of organizational routines. As sociologist Theda Skocpol emphasizes, “voluntary membership federations, in short, have often rivaled political parties in affording organized leverage in civic and legislative affairs to large numbers of Americans.”35 When these groups and their offspring entered the political arena at the end of the nineteenth century, they were able to break the stranglehold of American political parties on the policymaking process. The history of American public policy inputs from the beginning of the twentieth century to the present is a story of the rise of public interest groups and the decline of political parties in the policymaking process. How have interest groups changed since the Progressive Era? Some argue that contemporary interest groups have moved away from the model of membership-based voluntary associations. “No longer do civic entrepreneurs think of constructing vast federations and recruiting interactive citizen-members. When a new cause (or tactic) arises, activists envisage opening a national office and managing association-building as well as national projects from the center. Members, if any, are likely to be seen not as fellow citizens but as consumers with policy preferences.”36 Interest groups no longer depend solely on the contributions of members; they can rely on wealthy patrons, nonprofit foundations, and mass mailings to finance their activities. Moreover, the mass media and other communications technologies allow broad-based lobbying campaigns with little or no participation by grassroots members. Everything can be done from a central office

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in Washington, D.C. Technology has made “virtual membership,” via phone, mail, or Internet a more cost-effective model of organization. The proliferation of advocacy groups has also been driven by the rapid expansion of government services in the second half of the twentieth century. According to Jeffery Berry, [T]he single most important structural change in government that helped to spur both the growth of citizen groups and their incorporation into the policymaking process was simply the growth of the federal government itself. . . . As new laws and programs were created, and new bureaucracies formed to carry out the tasks prescribed in those laws and programs, the opportunities for citizen groups swelled. . . . More programs meant more constituencies. More constituencies meant more opportunities for entrepreneurs to organize advocacy groups. . . . Thus, there is a “supply side” to interest group formation: not only do groups demand new programs but new programs demand new groups.37 Finally, the new model of advocacy politics also matches the lifestyles of middle-class Americans. “In more fundamental ways, privileged Americans and staff-led civic groups need one another. Cause-oriented advocacy groups offer busy privileged Americans a rich menu of opportunities to, in effect, hire other professionals and managers to represent their values and interests in public life. Why should highly trained and economically well off elites spend years working their way up federations when they can simply send checks to advocacy groups or contribute to service providers?”38 From a policymaking perspective, the newer model of advocacy groups may be a “highly efficient use of civic energy. The citizen who joins them may get the same civic payoff for less personal hassle. This is especially so if we conceive of politics as a set of public policies.”39 Hence, we appear to have arrived at a policymaking world that seems to be a photographic negative of that envisioned by our founders. The idea of a perfectly operating political machine in which policy issues would only be injected via the mechanism of regularly scheduled elections has been replaced by a “fly-by-wire” policymaking system where individual policy preferences are continuously polled, calibrated, and balanced with computer-like speed and precision. Every citizen can express his or her policy preferences at any time with the mere click of a mouse. Every citizen with a phone line is directly wired into the policymaking process. A high-tech policy network appliance has replaced the primitive political machinery of the late eighteenth century. 5 . 6 T H I N K TA N K S The universe of policy entrepreneurs is always evolving. In the early nineteenth century businesses began to lobby policymakers and became the most prominent source of policy inputs through the first decades of the twentieth century. In the early twentieth century, interest groups formed—often in opposition to business lobbies—to advance the concerns of an ever-expanding and diverse array of economic, social, and cultural institutions. Finally, the end of the twentieth century saw the rapid proliferation of yet another vehicle for policy inputs—the think tank. Today, more than 1,600 think tanks compete with business lobbies, interest groups, and each other for the hearts and minds of American policymakers. Indeed, think tanks have become the domicile for thousands of policy analysts and the “home away from home” for many policymakers. We will conclude this brief survey of policy entrepreneurs with an examination of the nature, origins, and influence of policy think tanks.

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5.6.1 What Are Think Tanks? Everybody understands why businesses and interest groups are involved in crafting policy inputs. They participate in order to benefit their organizations and their members. They are there for what they can get. They are there—as a cynic would point out—to make a buck. The third type of policy entrepreneur is different—at least in theory. Think tanks are policy research organizations that operate outside the formal institutions of government yet remain independent of the special interests that seek benefits for their members. Think tanks are typically nonprofit, tax-exempt organizations engaged in the study—and often the advocacy—of policy issues. “They qualify for nonprofit status by applying as educational organizations undertaking a commitment to increase public awareness about a host of policy issues. To obtain tax-exempt status, they must also remain nonpartisan. [W]hile think tanks . . . are not prohibited from taking positions on various policy issues, as many frequently do, they cannot publicly endorse or oppose any political party or devote more than a legally prescribed percentage of their budget to lobbying government.”40 The term think tank originally referred to the RAND Corporation and similar national security research institutes born during the height of the Cold War during the 1950s. The term is now applied to the much broader universe of policy research institutes that provide expert advice to policymakers in all phases of the policymaking process. Though we tend to think of such prominent, big-budget organizations as RAND, the Brookings Institution, and the Heritage Foundation, the vast majority of American think tanks are small organizations located outside the Washington area, where “a handful of researchers monitor the latest political developments, pursue short-term research projects, organize seminars and conferences, publish occasional books or reports, field telephone calls from reporters, and work hard to obtain foundation grants or corporate support to keep their enterprises afloat.”41 Think tanks thus occupy the nonprofit middle ground between lobbyists for business and special interests and policy research units working within government agencies. 5.6.2 The Evolution of Policy Think Tanks The origins of American think tanks can be traced back to the same early twentieth century that spawned today’s interest groups. The social sciences were experiencing their birth pangs, and departments of economics, government, and sociology were being formed in universities all across the nation. At the same time, Progressive Era policymakers began to pursue objective, scientific research on the problems of American society. State and federal officials tapped academic scholars for some of these original social science surveys, but by the 1920s a new species of research organization emerged to bridge the growing gap between the world of the university and the needs of government policymakers. These were nonprofit research institutions funded by the philanthropic foundations established by John D. Rockefeller, Andrew Carnegie, and other nineteenth-century plutocrats. The earliest of these institutions was the Russell Sage Foundation, founded in 1907, which then, as now, supported scientific research on social problems and social policies. What made the Russell Sage Foundation unique for its era and prototypical for all think tanks since was its dedication to solving the ills of society. Unlike the world of the university, it was interested in applied, not basic, research. Though the Russell Sage Foundation sometimes worked with and for government policymakers, its independence was guaranteed by its original endowment and by the contributions of individual and corporate donors. This source of independent funding has characterized many, but not all, policy think tanks down to the present day. As James E. Smith has noted, “for the most part, the large funders of policy research have fostered intermediary groups, using grants to create new research centers and the hundreds of private commissions and task forces

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that have carried out various assignments in policy research.”42 By keeping these policy research institutions at arm’s length, their wealthy benefactors have tried to stay above the fray. In the first half of the twentieth century several of these new policy research institutes played important roles in fostering government accounting practices and accountability. They helped draft the legislation that established the federal budget and crafted tools for managing the national economy. What primarily motivated this first generation of think tanks was contempt for partisan politics and an abiding faith in the ability of science to solve the problems of society. They were scientists in the service of the public welfare, not the servants of partisan interests. The upheavals of the 1930s and 1940s transformed the mission and role of independent policy research organizations. Franklin Roosevelt mobilized thousands of policy experts from the academic world to staff the alphabet soup of new government agencies. The canons of objective science seemed quaint when the Great Depression threatened the well-being of millions of Americans. Then World War II completed this transformation. Government, industry, and the university community all worked together for victory. In the aftermath, a new model of cooperation between government and independent research organizations arose. The federal government sponsored and funded a whole new class of independent research organizations to enlist the best minds in science and technology to the task of winning the Cold War. “The creation of postwar contract research organizations fundamentally altered the relationship between experts and public policy making. Almost any governmental agency was now able to have semi-permanent reservoirs of outside experts at their command. . . . The prototype was the RAND Corporation, founded at the end of World War II, its name an acronym for ‘research and development.’ The success of the RAND model inspired a flock of other new research firms whose work throughout the 1950s and 1960s was performed largely at the behest of and by contracts with governmental agencies.”43 Although the first generation of think tanks sought to educate policymakers on the problems of society, the new generation of government contractors helped policymakers deliver results. Their primary mission was to help deliver policy outputs—military hardware and the strategies that surrounded them—rather than formulating policy inputs. They were problem-solvers, not problem creators. They did not seek out the government; the government sought them out. They were, in short, technocrats, not policy innovators. By the late 1960s, the technocratic model of policy research was beginning to fray at the edges. The technocrats that had built America’s nuclear arsenal could not win the war in Vietnam and their tools proved fruitless in the domestic struggles against poverty, violence, and racism. While government contracting by policy think tanks did not disappear, faith in government ebbed. The problem appeared to be not how government solved problems but what problems government chose to solve in the first place. As a result, a new generation of policy institutes began to appear in the 1970s dedicated to advocating new approaches to governing and governance. Rather than serving government, these institutions sought to challenge both the government and the older research institutions that supported it. To do this they needed to get the attention of the public and politicians in particular. Thus, the 1970s saw the onset of the third wave in policy think tanks. These advocacy organizations coalesced around specific policy agendas or ideological viewpoints and dedicated themselves to marketing their ideas to policymakers and politicians. Financed by a diverse array of philanthropic foundations, corporate sponsors, and ambitious politicians, the new think tanks provided policy papers for political candidates, volunteers for political campaigns, and staffing for victorious candidates. Indeed, the new advocacy think tanks have largely replaced the political party organizations in these roles. Candidates are now free to shop around for the constellation of policy institutes that match their personal preferences and campaign requirements. Since Jimmy

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Carter, every presidential candidate has made extensive use of the resources of advocacy think tanks in drafting the mountain of policy papers and speeches that have become the lifeblood of both primary and presidential elections. 5.6.3 The Constellation of Policy Think Tanks The universe of contemporary think tanks reflects the legacy of these three waves of independent policy institutes. Each wave has left us an enduring model for subsequent generations. • Universities without students are quasi-academic institutions whose primary mission is to educate policymakers, not students. Their focus is on the analysis of problems and the evaluation of solutions and not—for the most part—on advocating specific policy proposals. Universities without students are staffed by academics who conduct research and give seminars or workshops on important policy issues. “Unlike universities, however, the seminars and workshops they offer and the studies they produce are generally intended for policymakers, not students.”44 The Brookings Institution in Washington, D.C., and the Hoover Institute in Palo Alto, California, are two of the oldest and bestknown examples of this type, but there are many other, more recent examples of this genre. • Government contractors bear the imprint of the second generation of think tanks. As we have seen, government contractors do not seek to influence the agenda of public policymakers, they try to live off of it. Though numerous think tanks fit the profile of government contractors, there is a select, inner circle of private, nonprofit research centers directly funded by the federal government. These Federally Funded Research and Development Centers (FFRDCs) have their own line items in the federal budget and do not have to compete for contracts from government agencies. In 2002, approximately three dozen FFRDCs received more than $7 billion to conduct research and development for the Department of Defense, the Department of Energy, NASA, and other agencies. Nevertheless, FFRDCs make up only a tiny fraction of the many policy research institutes whose work is sustained by contracts from federal, state, and even local agencies. • Advocacy think tanks—as we have seen—are the most recent additions to the constellation of policy think tanks. These organizations are typically specialized in subject area or approach and focused on public relations and media campaigns. They also tend to be less stable, since their success depends in large part upon the success of the candidates and policymakers they support. Some of the most prominent advocacy think tanks include the libertarian Cato Institute, the conservative Heritage Foundation, and the Progressive Policy Institute, which has helped Democratic politicians like Bill Clinton. Although education, contracting, and advocacy are by no means exclusive categories, the three categories of think tanks roughly correspond to the evolution of policy think tanks over the course of the twentieth century. We should not be surprised, however, to see new forms emerge as the twenty-first century unfolds. 5.6.4 Think Tanks and American Public Policymaking Why have think tanks proliferated so rapidly in recent decades and why have they come to play such an important role in American public policymaking? The primary reason appears to be the decentralized structure of American politics and policymaking. “As several scholars have observed, few other countries provide an environment more conducive to the development of

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think tanks. With a government based on separate branches sharing power, a party system in which members of Congress are free to vote as they wish, and a growing number of presidential candidates trying to develop new ideas, think tanks have multiple opportunities to shape public opinion and public policy.”45 Moreover, think tanks as nominally independent policy voices can lend credence to the policy positions of politicians, policymakers, and even other policy entrepreneurs. They cloak partisan briefs in the mantle of scientific expertise. Nevertheless, we may be skeptical of the overall impact of so many so-called independent voices competing for the public agenda. “The cacophony of experts and ideologues—and a predictable perplexity about the often-obscure institutions that have magnified their voices—make it difficult for most citizens to gauge their competing claims to expertise, to identify the interests or intellectual affiliations that shape their perspectives, and to weigh their contributions to public discourse.”46 As a result, think tanks may well become indistinguishable from all the other policy entrepreneurs who make no such claim to independence, expertise, or objectivity. Third, think tanks have become the employer of choice for many graduates of public policy programs in American universities. Think tanks are the places were policy analysis is actually practiced and where solutions to policy problems are crafted, nurtured, and promulgated to policymakers in particular and to the public. Think tanks have become the institutional embodiment of Kingdon’s policy stream in the policymaking process. Finally, think tanks are invaluable resources for political candidates and elected officials alike. The former need position papers to build campaign platforms, while the latter need policy experts to staff the bureaucracy. Think tanks are both incubators for policy solutions and training grounds for future policymakers. 5.7 MEDIA The fourth major group of policy entrepreneurs consists of the organs of the communications media. By this we mean newspapers, magazines, journals, radio and television stations, Internet sites, and corporate entities such as AOL-Time Warner and Disney that dominate the combined information and entertainment industry. While the mass media do indeed play the role of messenger in carrying messages back and forth between policy entrepreneurs and policymakers, they also represent a distinctive set of public interests and values. In this case the messenger is the message. To say that the mass media bias or distort communications between policymakers and the public is to state the obvious, but overlooks the more important fact that the communications media in the United States have always played a vital yet independent role in the policymaking process. From the earliest days of the American Revolution the media have been an integral part of policy formation, whether as paid mouthpieces of policy advocates and policymakers or as independent voices. Here we focus on the mass media as an institutional player in the formation of policy inputs and on how this role has changed over the centuries of American public life. We conclude with an overview of the growing influence of the Internet on policymaking. 5.7.1 From Colonies to Republic Though never as completely “free” as self-advertised, the press in America has always enjoyed a remarkable degree of independence from government ownership and control. Although the earliest eighteenth-century colonial newspapers were mostly printed “with Authority” (that is, licensed by colonial governments), and many benefited from subsidies to printers, the American press has

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been commercially owned and motivated from the beginning. Thus, advertising and news have always coexisted in the American media as publishers needed profits to continue publishing. Indeed, as Timothy Cook has observed, even in colonial times newspapers were but a small part of a nascent communications industry. The norm by the middle of the eighteenth century was for newspaper publishers to be printers, but the production of newspapers, as well as the income obtained in that capacity, was only one part of their enterprises, which comprised printing books, religious tracts, political broadsides, blank forms, official announcements, and laws, in addition to many side jobs, such as serving as auctioneers (sometimes for slaves), and selling books, lottery tickets, and other goods. This diversity provided some independence from governmental and political patrons in the largest cities. Elsewhere, printers relied on obtaining the public business. All benefited economically from printing on commission; newspapers were simply part of this overall business logic.47 Publishers as printers were the Rupert Murdochs of colonial America. The relative independence of the press, plus the circumstances of the American Revolution stimulated the precursors of an adversarial—or least superficially adversarial—relationship between press and government. Indeed, the first journalistic crusade in America dates back to 1721 with James (older brother of Ben) Franklin’s attack on the medical practice of smallpox vaccinations in the New England Courant. Soon thereafter Franklin was thrown into jail for criticizing the authorities for lack of protection against pirates.48 Though the colonial press was free from official licensing, “printers were forever being called before the bars of the legislative bodies to answer for ‘affronts,’ ‘breach of privilege,’ ‘impudence,’ ‘indignities’ upon authority, and ‘libels.’”49 In 1735 the acquittal of Peter Zenger for criticizing the colonial governor of New York set a psychological, though not a legal, precedent for the growth of a free press in America. Zenger’s defense that the truth could not be held as libelous inspired generations of journalists to follow. Although the relationship between the press and policymakers is more symbiotic than antagonistic, journalists still cast themselves in the role of modern-day Zengers, challenging authority with the truth. In any case, the key role of the colonial media in mobilizing the colonists against Great Britain during the Revolutionary War rooted the adversarial tradition firmly in the psyche of American journalism. By taxing legal documents and paper, the Stamp Act of 1765 alienated two professional groups—lawyers and publishers/journalists—that would eventually lead the American colonies to independence. Sam Adams, contributor to the Boston Gazette and master propagandist, formed a network of local reporters—the Committees of Correspondence—to gather intelligence, disseminate anti-British propaganda, and organize the movement for American independence.50 Colonial newspapers became the nerve centers of the American Revolution. As a result, they became intimately involved with the factional politics that plague any revolutionary movement. According to Cook, “the end of the Revolution left a contradictory legacy—on the one hand, stressing impartiality and the empirical collection of facts in newspapers deferential to officialdom, on the other, independent crusades against corrupt authority on behalf of political faction.”51 When George Washington took office in 1788 and the new administration split into two bitterly opposed factions, both factions organized around the press, just as they had done during the Revolution. “A new kind of newspaper developed, an extension and crucial tool of the party. After the Hamiltonians and Jeffersonians split into two rival parties (the Federalists and the Republicans), party organizing included founding newspapers both to reach sympathetic electors and to mobilize them to support the

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party slate. Colonial printers first and foremost had started a journal as the best way to economic success; now politicians became editors to further their political ambition, sometimes holding simultaneous party, newspaper, and government positions.”52 In the early years of the United States, the institutions of the press, politics, and government were conjoined in ways that would take decades to uncouple. 5.7.2 The Emergence of the Mass Media The middle of the nineteenth century saw the emergence of an independent mass media in a form recognizable to citizens of the twenty-first century. Technology, economy, society, and politics all conspired to produce a commercial press aimed at the broadest possible audience. In the first instance, innovations in printing and the advent of railroads made the publication and dissemination of cheap newspapers possible. The telegraph—what one scholar has aptly labeled the “Victorian Internet”53—revolutionized not only the business of journalism but society as a whole by making instantaneous communications across long distances possible. Long before radio, television, and the Internet, the telegraph began to undermine the logics of time and place. Information could be removed from its context and valued—like perishable goods—for its immediacy or freshness.54 The telegraph made it possible for small town newspapers to survive and thrive alongside their big city cousins and provided the backbone for the Associated Press and other news services that collected and disseminated news stories for a fee. At the same time, the reading public expanded, as literacy increased and public participation broadened during the first half of the nineteenth century. No longer targeted to a small elite, new mass circulation journals catered to the common people enfranchised and cultivated during the era of Jacksonian democracy. Local news, human-interest stories, and news of violence all appealed to readers of the 1850s and 1860s, much as they do to the viewers and readers of the twenty-first century. “Infotainment” has long been a standard feature of the American media. Moreover, with expanded circulations, prices were cut, and advertising provided the basis for commercial revenues. The American media not only became commercial, it became commercialized. Finally, in the same era, political parties emerged as independent institutions organized around patronage, not newspapers. The political parties of the late nineteenth and early twentieth centuries used rallies, parades, conventions, and—above all—jobs to mobilize the faithful, not newspapers. While still partisan, newspapers were no longer the instruments of the politicians. The era of the mass media was born. The Civil War was the first war in which correspondents and photographers played an important role. War correspondents followed the armies in battle and telegraphed news back to their papers for publication, sometimes the next day. Matthew Brady was the first war photographer and his 3,500 battlefield pictures showed the horrors of war in a way no printed word could match. Fortunately for Abraham Lincoln and the Northern cause, Brady’s photos could not be reproduced in the newspapers of the time and so were rendered more abstractly by artists’ line drawings. The Civil War also—not surprisingly—was the first to witness both military and political censorship on a significant scale. After many fits and starts, the Lincoln administration finally worked out a system whereby journalists were accredited as war correspondents by the government and worked at the sufferance and with the acceptance of field commanders.55 Piece by piece, the puzzle of modern government–media relations was assembled. 5.7.3 The “New Journalism” The last quarter of the nineteenth century saw the emergence of the press as an independent force in American public policymaking. The excesses and dislocations of the Gilded Era and its

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aftermath turned the mass media into social activists and policy advocates. In the first instance, Joseph Pulitzer’s New York World coupled sensationalist reporting with social crusading. Pulitzer pushed a very specific social, economic, and political agenda that included taxation of the wealthy and punishment of the corrupt. Pulitzer added a Sunday edition with pages for women, children, comics, and other entertainment-oriented features. William Randolph Hearst then upped the ante with lurid tales of sex, sin, and scandal that could compete with today’s supermarket tabloids. And, for the first time, policy advocacy by newspapers moved to the international arena. Hearst worked hard to promote a war with Spain over Cuba, captured in the immortal if apocryphal telegram to his pictorial correspondent Frederick Remington, “Remington, Havana. Please remain. You furnish the pictures. I’ll furnish the war. W.R. Hearst.”56 Hearst and his cohorts in the “yellow press” played an equally prominent role in pushing President McKinley, the Senate, and the American public to acquire the Philippines and other territories as the fulfillment of Manifest Destiny in the wake of the Spanish-American War of 1898. Although publishers like Henry Luce, journalists like Woodward and Bernstein, and even television news anchors like Walter Cronkite have since played important roles in shaping public opinion and public policy, none can hold a candle to Hearst for chutzpah and cynicism. Motivation aside, the legacy of Pulitzer and Hearst is one of active media intervention in the policymaking process. The media’s role was not just to report the news, it was to make news. The beginning of the twentieth century also saw the emergence of what we call today investigative journalism. The later reforms of the Progressive Era were informed and sustained by journalistic muckrakers and magazines dedicated to exposing the social, economic, and political ills of American society. The muckrakers of the first quarter of the twentieth century set the standards that have governed investigative reporting ever since. Finally, the early years of the twentieth century saw the emergence of a new institutional relationship between government and the mass media. At the same time that some of America’s largest corporations were discovering the value of public relations, American presidents were beginning to take an active approach to managing the press. Although a cadre of professional newspaper reporters had been a feature of Washington politics for decades, President McKinley was the first to invite them inside the White House and have his secretary brief reporters on the events of the day. Teddy Roosevelt went further and set up an office for the press in the White House. Roosevelt made extensive use of the press, photographers, and even the first newsreel cameramen as instruments of his “bully pulpit.” According to Roosevelt, “almost, if not quite, the most important profession is that of the newspaperman. . . . The newspapermen—publishers, editors, reporters—are just as much public servants as are the men in the government service themselves.”57 The press had become an integral and indispensable part of the policymaking process. The new role of the press was strengthened when President Wilson established the Committee for Public Information during World War I as a means of disseminating news—or propaganda—about the war to the American public. Policymakers not only had to manage the news makers, or messengers, they had to manage the news itself. News making and policymaking were now inseparable. 5.7.4 Twentieth-Century Media and Policymaking The twentieth century has rightly been called the age of the mass media. For the first time in human history, most of the information we get about the world comes not from personal contacts but from mediated or indirect sources. In many cases we know far more about distant events and people than about our neighborhood and next-door neighbors. The remote is more familiar than the local. As successive waves of new media technologies have washed over the American public,

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the American psyche has been surfeited and surrounded with what one observer has called “data smog.”58 How have these technologies influenced the policymaking process? 5.7.4.1 Radio Radio took the American public by storm in the 1920s. Beginning with a handful of stations in 1920, by 1927 there were at least 733 stations, and by the end of the 1930s more than 90 percent of urban and 70 percent of rural homes had radios.59 Radio transformed the relationship of both policymakers and the public to the mass media. First, the notion of broadcasting emerged. Newspapers have always been targeted at local or regional audiences and even those few newspapers published at the national level—for example, the Wall Street Journal or USA Today—reach only a small portion of the American public. Radio stations, however, were quickly linked together by telephone lines in networks that could broadcast to millions of people simultaneously. By the 1930s several radio networks delivered live programming to the American public. Broadcast networks literally created the American public as we understand the term today. Radio began to erode the boundaries of geography and culture that had divided Americans from colonial times. Second, radio revolutionized the relationship between policymakers and their publics. For the first time, leaders could talk directly to millions of Americans at home sitting in their living rooms or kitchens. Leaders became real live persons, not abstractions on a page. They could convey emotions such as reassurance or hate that would mobilize people into action. Radio enabled national leaders to speak “over the heads” of other officials, journalists, and other intermediaries. It is no accident that many of the great leaders and demagogues of the twentieth century—Franklin Delano Roosevelt, Winston Churchill, Adolf Hitler, and Benito Mussolini, among others—were masters of radio as a medium of communication. Third, radio brought government regulation into the picture. The rapid proliferation of competing radio stations in the 1920s brought chaos to the emerging broadcast industry. Radio broadcasters and manufacturers alike clamored for federal regulation of the radio spectrum. The Radio Act of 1927 established the principle that the public “owned” the broadcast channels and gave the Federal Radio Commission (FRC) the power to regulate all forms of radio communications. “[T]he Commission granted licenses for the use of specific channels for 3-year periods. Licenses were to be granted ‘in the public interest, convenience, or necessity’ to provide ‘fair, efficient, and equitable service’ throughout the country.”60 The Communications Act of 1934 extended this authority to all telecommunications and clearly established the responsibility of government license holders to operate “in the public interest.” Both the FRC and its successor, the Federal Communications Commission (FCC), issued rules that “implicitly favored large commercial broadcasters” and discouraged “‘propaganda stations’ run by labor unions, educational institutions, churches, and local governments.”61 Government regulation has been a part of the broadcast media from its infancy. Fourth, the advent of television and the new technology of FM programming led to the fragmentation and segmentation of radio as a mass medium. FM broadcasting in stereo, with its limited range and improved quality, gave birth to thousands of new stations, each targeting specific listening audiences in local markets. As the number of radio networks multiplied, the influence of networks waned and stations developed hundreds of program formats. Whereas early radio united the American public around Jack Benny, The Green Hornet, and Edward R. Murrow, satellite radio now caters to the whims of American consumers with soft rock, Howard Stern, and sports talk. Moreover, radio listeners increasingly can and do “talk back.” Radio has pioneered the transition

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from broadcasting to “narrow-casting,” as well as the movement toward interactivity in media communications. Finally, despite the FCC bias against stations with political, social, or religious axes to grind, radio did provide a forum for policy entrepreneurship. Newscasters and commentators like Lowell Thomas, Edward R. Murrow, and Walter Winchell influenced millions of Americans with their vivid reporting and commentaries. For more than a decade The March of Time brought listeners dramatized reenactments of real events using radio actors to impersonate famous personalities. Radio has also nurtured political activists and organizers of all persuasions. In the 1930s the “Radio Priest” Father Coughlin railed against socialism, communism, capitalism, international bankers, and Jewish interests to an audience of more than thirty million listeners. In the 1980s and 1990s radio talk show hosts like Rush Limbaugh and Ollie North used radio to mobilize listeners for or against specific policy initiatives. Indeed, radio talk shows have largely replaced the local meetinghouse and town square as a forum for policy debate and discussion. 5.7.4.2 Television Television took the nation by storm in the early 1950s and transformed both the nation and public policymaking. Though we are entering the age of the Internet and global interactive networking, television remains the driving force in contemporary politics and a major factor in public policymaking. We will limit ourselves here to only the briefest overview of some of the ways television has changed how we define policy problems and construct policy inputs. First, the primary language of public life has become visual, not verbal. Policies and policymakers are driven by images, not words. Printed words offer an abstract representation of distant people and events. Though good writing can paint images in the minds of readers, concepts like poverty, famine, and destruction remain disembodied abstractions for readers. Images, especially moving images with sound, radically alter the media equation. The use of images in politics and policy formation is not new. As far back as 1747, Benjamin Franklin was printing editorial cartoons in political pamphlets.62 The technological advances that enabled publishers to combine photographs with text in late-nineteenth-century magazines contributed in no small part to the emergence of muckraking and the movement for social reform. Newsreels like The March of Time served the same role for movie audiences of the 1940s and 1950s as do the television news broadcasts of today. In a society where images and moving images are always with us, the inputs, production, outputs, and outcomes of the policy process are increasingly driven by visuals. If it looks bad on television, then it must be a problem; if it doesn’t look good, then it’s probably not a good solution. Policy issues are framed in terms of competing visualizations rather than by alternative verbal descriptions. One of the earliest and most famous examples of this principle was the undoing of Senator Joseph McCarthy by television news reporter Edward R. Murrow and lawyer Joseph Welch during the early 1950s. Television revealed McCarthy as a bully and a hypocrite and effectively ended the career of man who had terrorized hundreds, if not thousands, of American citizens. Televised coverage of the civil rights movement and the Vietnam War in the 1960s played a major role in swaying both the American public and public policymakers. In these and innumerable other cases, the language of images overwhelmed the language of words. Seeing trumped both reading and listening. Today, policy entrepreneurs may still write position papers, but the more successful among them have gone into the business of producing video news releases (VNRs) for rebroadcast by the news media. “VNRs have been termed the ‘Hamburger Helper’ for news organizations. They

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I DON'T HACE ANY POLITICAL OPINIONS MY TV 15 BROKEN OPINIONS POLL

THAVES

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Source: Frank and Ernest © 2000 Bob Thaves. Reprinted with permission. All rights reserved.

generally arrive at newsrooms via satellite feeds similar to the raw feeds that bring the news gathered by actual reporters and wholesale news suppliers. The difference is that VNRs deliver strategic political or economic messages wrapped in news packages produced in public relations, advertising, political consulting, or corporate communications offices.”63 While policy decisions or commitments must still be codified in terms of written words, it is the visual representation of policy inputs, outputs, and outcomes that drives the both the beliefs and actions of public and policymakers alike. The words become servants to the images. Second, the preoccupation with images leads to the personalization of the news. Instead of analyzing the causes and effects of social, economic, and political problems, television focuses on individuals. We see problem situations “up close and personal.” “[W]hether the focus is on sympathetic heroes and victims or hateful scoundrels and culprits, the media preference for personalized human-interest news creates a ‘can’t-see-the-forest-for the trees’ information bias that makes it difficult to see the big (institutional) picture that lies beyond the many actors crowding center stage who are caught in the eye of the news camera.”64 Television turns public policymakers into celebrities and policy debates into personal contests. Although personalized news coverage tends to blur the simplistic good-versus-evil, us-versus-them distinctions that characterized the print media at its worst, it replaces debates over the merits of issues with arguments over the merits of individuals. Policy struggles between the Democratic president and the Republican Congress during the last years of the twentieth century became a personal contest between two flawed leaders, President Bill Clinton and Speaker of the House Newt Gingrich. Character has replaced ideology; the messenger has become the message. Third, television dramatizes news stories and policy issues. Since public policy is about people, not issues, what happens to these people, how the story turns out, tends to drive the coverage. According to W. Lance Bennett, “Dramatized news fits neatly with the personalization bias. Drama, after all, is the quintessential medium for representing human conflict. Promising psychological release and resolution, drama satisfies emotional concerns aroused in the development of characters and plots. Although there are occasional walk-on roles for ordinary people, the majority of news plots revolve around a cast of familiar officials who play standard roles in news dramas. There are also the rich, the famous, the powerful, and the glamorous, along with plenty of bad guys threatening the lives of decent people.”65 Drama feeds on conflict and its resolution. Thus, television news searches for conflict where it can find it and promotes conflict where it cannot. More importantly, the logic of dramatization impels both media and policymakers to produce or co-produce resolutions to conflict situations.

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Stories, after all, have to have an ending. Issues without resolution make bad stories. Congress and the president can’t argue about the budget forever—they must come to some legislative conclusion, no matter how arbitrary or illusory. Arabs and Israelis cannot fight forever in the Middle East—they must negotiate some agreement or make some progress toward peace. Without a light at the end of the tunnel, policy issues tend to turn off viewers. Though as we saw in chapter 4, many policy problems can simply be absolved or ignored, this runs counter to the bias of the media. Thus, more or less permanent problems like poverty, hunger, economic inequality, and ethnic and religious strife tend to fly beneath the radar of media attention unless resolvable, short-term crises emerge. Both policymakers and the media collaborate in the production of crises and resolutions. Fourth, television fragments policy issues into a collage of short clips of videotape that whiz by surfing viewers like rock videos on MTV. According to Bennett, “News fragments exist in self-contained dramatic capsules, isolated from each other in time and space. The impression given by the news is of a jigsaw puzzle that is out of focus and missing many pieces. When focus is provided, it is on the individual pieces, not on how they fit into the overall picture. When information is delivered in such fragments, people are invited all the more to project their own interpretations onto the world.”66 Sixty- or ninety-second news stories are composed of quick cuts of burning buildings, distraught victims, sound bites, talking heads, and snappy video graphics. The goal is to pack as much variety as possible into every story. Video clips longer than twenty seconds are likely to send viewers searching for their remotes. Hence, the shrinking size of the “sound bites” accorded to politicians and policymakers that populate the evening news. Policymakers, in turn, have learned to play by the rules of television news. Former Speaker of the House of Representatives Newt Gingrich in speaking to reporters from USA Today stated, “part of the reason I use strong language is because you all will pick it up . . . You convince your colleagues to cover me being calm, and I’ll be calm. You guys want to cover nine seconds. I’ll give you nine seconds because that is the competitive requirement . . . I’ve simply tried to learn my half of your business.”67 The most valuable commodity in the media marketplace is the viewers’ attention. Capturing and holding that attention for sixty or ninety seconds is what news programming and policy advocacy is all about. Fifth, the proliferation of cable channels in general and cable news channels in particular has “Balkanized” both the mass media and the mass public. Viewers can pick their windows onto the world like breakfast cereals on a grocery store shelf. Instead of broadcasting to large and diverse audiences, cable channels ‘narrow-cast’ to targeted groups with specific interests and lifestyles. In its early years, television had a homogenizing effect upon the viewing public. Coverage of public events was filtered through three national networks, all dedicated to the canons of objective journalism. And all Americans tuned into the Tonight Show and Johnny Carson to get their daily dose of political humor and commentary. Today, cable news channels cater to audience niches with sensational coverage and manufactured controversy. Indeed, comedy programs spoofing cable newscasts have become as popular as—and virtually indistinguishable from—the programs they mock. News has become entertainment and entertainment now caters to an ever-proliferating array of micro-audiences. As we shall see, this proliferation of channels and venues has also transformed the policymaking process itself. Finally, television has invaded and exposed the policymaking process. Cable viewers can turn on C-span to watch the Senate and House in action, or their local public affairs access station to follow the goings on at the county commissioners’ meetings. Though television’s penetration into the arcane world of public policymaking remains limited, still it behooves successful policy advocates and policymakers to be telegenic or at least “telecompatible.” Television has turned

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policymakers into celebrities and celebrities into politicians and policymakers. The Joe McCarthys of this world, that is, politicians who feel uncomfortable or act strangely under the influence of klieg lights, need not apply. Conversely, astute policy entrepreneurs enlist Hollywood celebrities as spokespersons for their causes. Television has blurred the boundaries between policymaking and publicity seeking. Celebrity has become a key resource for policymakers. 5.7.4.3 The Internet and Beyond The Internet is the focus of the ongoing revolution in media technology. The Internet or its descendents will inevitably bring about the “death of distance,” though this death is most likely to result from a thousand gradual improvements rather than any sudden transformation. People will still prefer to visit the Taj Majal in person rather than see it on the Web, but the Internet has already transformed how and where work is done in the global economy. While the impact of the Internet on the lives of American citizens is destined to become a policy issue of enduring importance, its impact on the policymaking process is less clear. The most important and perhaps least appreciated Internet technology is e-mail. E-mail has changed the way people communicate and work more than any technology since the telephone. E-mail and instant messaging have accelerated the pace and expanded the horizons of communication in ways unimaginable less than two decades ago. Citizens can quickly reach out to policymakers as never before, and policymakers armed with a BlackBerry or the like are never “out of touch.” The problem with instant messaging and universal access, however, is that all these messages leave precious little time for measured consideration of issues. Instant messaging leads to communications overload and the inability to separate information from background noise. In a wireless world inundated by e-mail, voicemail, and numeric paging, everything turns into spam sooner or later. Moreover, instant messaging often produces instant responses, which can land policymakers on the front page or—in the worst case—even in jail. E-mail and its companion technologies have proved to be a mixed blessing for both policymakers and policy entrepreneurs alike. More recently, Internet forums in the form of Weblogs or blogs have begun to play a more prominent role within the media of mass communications. Blogs are Web-based publications consisting of an online diary in the form of journal entries, assembled periodical articles, and links to other Web sites. Blogs have largely—though not entirely—replaced usenet and chat rooms as the vehicle for online discussions.68 Many blogs are interactive and allow visitors to leave their own comments or contributions. Blogs are typically managed by individuals or groups of authors who control the content. Originally conceived as alternatives to the “establishment media,” blogs have gone mainstream as journalists, politicians, lobbyists, and ordinary citizens now leave their daily musings on Web sites for all to see and comment on. Blogs have become the focal points for an ever-proliferating array of Internet communities where people go to share their points of view with like-minded individuals around the world. Indeed, some blogs have begun to rival cable television channels in the number of viewers. This expanding “blogosphere” played an important role in the 2004 presidential campaign as a means of communicating with supporters and eliciting contributions. In the policy realm, blogs are increasingly used to mobilize supporters for or against the hot issue of the day. In particular, blogs have been successfully used to push issues that the establishment media has been reluctant to touch. Blogs have increasingly served as the nuclei around which policy advocates mobilize and communicate. Rather than marching on Washington, today’s protestors increasingly communicate and organize via the Internet. That said, the impact of the Internet on the policymaking process is, as of now, relatively limited. Internet-based communications are perfect for short bursts of energy but less suitable for long-term

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organizing. Prophesies of global understanding, citizen empowerment, and weakening political institutions have yet to come true. While the Internet offers new tools for policy entrepreneurs and poses new problems for policymakers, it has not fundamentally changed the policymaking process, at least at this point in time. If anything, the Internet has simply hastened the trend toward fragmentation of policy issues and balkanization of policy communities fostered by radio in the 1980s and cable television in the 1990s. It helps sustain the innumerable policy enclaves69 that have formed around the various institutional nodes of the policymaking process. We can track the outputs of policy production virtually instantaneously and communicate directly with decision makers in all phases and domains of the policymaking process, but the ultimate consequences of all this interactivity are unforeseeable. 5.8 CONCLUSIONS In this chapter we surveyed the main institutions that populate Kingdon’s political and policy streams in the policymaking process. In the first instance, we briefly surveyed the ongoing dance between politics and policy. Then, we focused on the origins and evolution of the four types of policy entrepreneurs—business organizations, interest groups, think tanks, and the mass media —that play prominent roles in the crafting of policy inputs. As we have seen, each of these four institutions has its own distinctive evolution and its own characteristic imprint on the form and content of policy inputs. In the following chapter we will shift our attention from the Who to the How of crafting policy inputs.

CASE STUDY Reviving Religion November 5, 2003, was a banner day for the religious Right. President Bush signed into law legislation banning a medical procedure termed “partial birth abortion.” The president proclaimed: “America stands for . . . the unalienable right of life . . . [that] cannot be granted or denied by government because it does not come from government, it comes from the creator of life.”70 Eight years and two presidential vetoes after first introducing legislation banning partial birth abortion, the religious Right appeared to have won this one. Yet, whether this ban is carefully enough crafted to survive challenges in the courts remains to be seen in the next round. No matter. The religious Right will continue to use all available political channels for pursuing and protecting its policy preferences. Most in the movement understand that the ban on partial birth abortion is but a skirmish in its war to put God back at the center of American civic life. American society has deep roots in religion as well as a long tradition of religious tolerance. In the earliest days of the Republic, de Tocqueville commented about “how the American clergy stand aloof from secular affairs.”71 He also went on to foresee the dilemma of religion in a democracy and anticipate the dynamics galvanizing the religious Right into action almost two centuries later. [O]f all the passions which originate in or are fostered by equality, there is one which it renders particularly intense, and which it also infuses into the heart of every man,—I mean the love of well-being. The taste for well-being is the prominent and indelible feature of democratic times. The chief concern of religion is to purify, to regulate, and to restrain the excessive and exclusive taste for well-being which men feel at periods of equality.

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For as public opinion grows to be more and more the first and most irresistible of existing powers, the religious principle has no external support strong enough to enable it long to resist its attacks.72 This state of affairs may be changing. In 1973, a Supreme Court decision challenged policy entrepreneurs to reverse the course of history predicted by de Tocqueville. In establishing constitutional protections for abortion, the landmark decision in Roe v. Wade73 generated a new political movement with a clear policy agenda—to make religious values and morals central to American public policymaking. The resulting movement has reshaped the landscape of American politics by expanding the traditional politics of who gets what to include the politics of who believes what. If successful, as one observer has commented, “the politics of fundamental, first principle-based conflict is likely to be very different from the politics of the distribution of material benefits.”74 How have the Who and the What of this movement been combined? The story of the rise of the religious Right in the United States over the past three decades illustrates the complex interactions between issues, politics, and policy entrepreneurs. It points to the slow and torturous path to becoming a powerful force in American politics. Moreover, it demonstrates that political influence is not always easily transformed into policy leverage—as evidenced by the growing but still limited impact of the religious Right on public policies. Getting Organized The rise of the religious Right to political prominence has been long and uneven. Much of the leadership in this movement developed at the grassroots level in very different communities dispersed across many states, often with different agendas. The Who and What vary widely by region. Generally, the religious Right draws its strength from more traditional and moralistically oriented regions. Southern states have been the most fertile source of proponents, especially among whites. In the far less ethnically diverse but populist Midwest, more conservative mainline Protestants, and traditionalist Catholics, have supplied many advocates, often attracted to specific issues. The more secular and ethnically diverse regions of the West and New England have been less welcoming, but nonetheless occasionally generated groups associated with specific causes. The emergence of the religious Right is primarily a story about social conservatives in many different religious communities. For example, the National Conference of Catholic Bishops has long issued statements on issues of morality and values aimed at Catholics, the largest single religious group in the United States. Roe v. Wade moved the bishops fully and overtly into direct political action designed to stimulate pro-life activities at the parish, diocesan, and congressional district levels. Today the U.S. Conference of Bishops behaves as a “classic interest group” organized both to pressure Catholics into action and to lobby politicians and policymakers.75 Catholic voters, on the other hand, do not march predictably to the same tune. Evangelicals, including fundamentalists, Pentecostals, charismatics, and Southern Baptists have played an even more critical organizing role.76 Initially, these groups were mostly local, organized to influence issues within their states. At the national level, fundamentalists were the first to organize with the founding of the Moral Majority in the late 1970s. Other evangelical subgroups followed suit with groups ranging from the Christian Voice and the Religious Roundtable to Focus on the Family, the Family Research Council, Concerned Women for America, and the Traditional Values Coalition. A second wave of national organizing associated with the growing political influence of the religious Right and an emerging emphasis on political office occurred again in the late 1980s with Pat Robertson’s Christian Coalition and his run for the presidency. A

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third wave may be in the offing as opposition reacts to the ruling by the Massachusetts Supreme Court requiring that state to give legal status to gay marriages and with many-pronged efforts to insert intelligent design into the science curriculum of local school districts. Clear differences by state and policy agenda distinguish these groups. Mobilizing resources for policy change in the United States usually begins at the state level and depends on the political climate within each state. The following examples help to make this point. In Virginia, often considered the birthplace of the religious Right, organizing began in the 1970s when Jerry Falwell and his Bible Baptist Fellowship started the Moral Majority, initially to oppose parimutuel betting. Other groups, such as the Family Foundation, Concerned Women for America, the Virginia Society for Human Life, and the Madison Project, soon followed suit. Proximity to Washington, D.C., made Virginia an attractive location for headquartering groups as they turned their attention to national policy issues. As a consequence, many prominent figures in the movement call Virginia home. On the other hand, in Colorado, the religious Right blossomed when established groups organized chapters within the state. Falwell’s Moral Majority was first, establishing a chapter in the 1980s. Others, such as the Christian Coalition Organization, the Rocky Mountain Family Council (Focus on the Family), Colorado Right to Life, Colorado Pro-Life Alliance, Colorado for Family Values, Christian Home Educators, Promise Keepers, and Citizens for Responsible Government, followed in the 1990s. Yet, the religious Right in Colorado remains factionalized, a reflection, in part, of a state comprised of “frontier individualists.”77 In several states, successful organizing by the religious Right followed rather than preceded state-level controversies over specific social issues. Debates over the equal rights amendment (Iowa and Maine), abortion (Iowa and Kansas), and gay rights (Florida and California) all served to motivate individuals to organize. In many of these states, right-to-life advocates and anti-feminists then moved into leadership roles of the new groups. Most groups in the religious Right originated with efforts to influence state policymaking and then expanded their focus to the ballot box. This broadening of strategy required carving out a role for themselves within their state political parties. Political Parties and Becoming Republican The rise of the religious Right is also a story about the revival of the Republican Party over the past three decades. For most in the movement, a key goal in organizing was to gain influence over the political parties, initially both Democratic and Republican. After all, Jimmy Carter, the president from 1976 to 1980, was a “born-again” Christian (Baptist). Despite this, the real impact of the religious Right has been on the Republican Party, especially in the South. In the South, Democrats had monopolized state parties and politics since Reconstruction. This left a skeletal Republican Party open to influence, if not capture, by new groups—in this case the religious Right. In more progressive regions of the country and in states with stronger Republican Party structures, the religious Right was somewhat less successful. Indeed, in several states, the growing influence of the religious Right occasionally harmed Republican interests. “American political parties are notoriously ‘permeable’ to outside interests.”78 That is, the open rules generally used by parties to select candidates and to produce platforms, including open caucuses, conventions, and primaries, are designed to broaden participation and make the party attractive to voters. The Christian Right systematically availed itself of such openness. For example, Republicans became a force to reckon with in Virginia after the demise of Harry Byrd, a “grand old man” in Virginia politics, and the weakening of his Democratic political machine. The

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religious Right moved to fill that vacuum. Similarly, in Texas, Republican ranks began to swell with in-migration from other states, the defection of conservative Democrats, and the willingness of activists on the religious Right to do the hard political work of organizing and training workers to canvass and mobilize voters at the precinct level. In California, the religious Right worked to establish a voice in a Republican Party that has vacillated between moderates and conservatives for fifty years. Republicans responded by adopting many of the religious Right’s positions on abortion, gay rights, school vouchers, and gun control, but alienated many voters in the process. The impact has been to undermine the electoral competitiveness of the Republicans in California. Similarly, in Minnesota, the religious Right, comprised primarily of right-to-life advocates, affiliated with a state Republican Party that is traditionally socially moderate and fiscally conservative. The resulting split created two distinct factions and a political dynamic forcing Republican candidates to continually engage in straddling the gap. Of course, the reason that entrepreneurs from the religious Right seek a role in political parties is to influence elections. Electioneering—All Politics Is Local All politics is local and so, too, are the issues and participants that dominate local elections! Elections are pervasive in American society. We regularly elect officials to a wide range of offices—from president to dog catcher. Elections occur in cycles, some on a yearly basis, each with different rules and an endlessly changing cast of characters. Ironically, the very frequency of elections in America may be counterproductive, at least in terms of voter interest and turnout. Participation decreases dramatically from presidential to off-year (non-presidential) to local elections. Lower voter turnout increases the likelihood that activists with specific agendas can more directly affect the outcome. These basics explain both the successes and the problems of the religious Right at the polls. While Christian groups often succeed locally, their prospects in state- and national-level elections diminish as the scale and scope of an election increase. In part this is due to the levels of participation by policy entrepreneurs and voters. Moreover, elections, especially those for more important and visible state and national offices, are often won in the middle, by “soccer moms” and “NASCAR dads” who might be energized to vote. To win, party activists, often those most committed to specific issues, must attract those in the middle—those more moderate, less ideologically motivated voters. Occupying the center is often key to winning in national elections. Ironically, the logic of winning elections often contrasts with the logic of nomination within political parties, where party activists and groups with clear policy agendas dominate. The religious Right may periodically prevail in party nominating processes, but often has greater difficulty in winning general elections. This explains the fate of many candidates of the religious Right to date. Members of the religious Right may contest and win seats in a local school board contest, a state legislative district, or, as in Kansas, in electing state school board members dedicated at first to making creationism, and later, intelligent design, part of statewide curricular requirements. It also explains how Senator John McCain, an anathema to the religious Right in Virginia, was targeted and lost in the state’s presidential primary, thus ending his bid for the presidential nomination in 2000. Yet, in the same state, Oliver North, the darling of the Christian Right, received the Republican nomination to run for governor in Virginia in 1994 but lost to an incumbent Democrat tainted by scandal. To date, no religious activist has fared well when seeking the presidency, whether as a third-party candidate (Pat Robertson) in 1988, or as the Republican nominee (Gary Bauer) in the primaries of 2000.

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The religious Right enjoys greater success in electing candidates who are sympathetic, as opposed to committed, to their cause. Such candidates are not necessarily devoted to the policy agenda of the religious Right but may supply a friendly vote occasionally or make a sympathetic appointment (especially to the courts) should the opportunity present itself. Ronald Reagan, a favorite of the religious Right, signed the nation’s most liberal abortion law while governor of California. Senators Grassley (Iowa) and Brownback (Kansas) and Governors Allen (Virginia) and Bush (Florida) are other examples. George W. Bush billed himself as a “compassionate conservative,” but distanced himself from the religious Right during his first presidential campaign. However, when opportunities presented themselves, President Bush stepped up to the plate. He willingly signed the partial-birth abortion legislation and legislation making it a separate criminal offense to harm an unborn child; has nominated friendly judges to the federal bench, including the Supreme Court; promoted a faith-based initiative to expand funding for churches to participate in delivering welfare-related services in local communities; and has advocated a constitutional amendment prohibiting gay marriage. Finally, the religious Right has tried the route of policymaking via state ballot initiatives. Ballot initiatives, or referenda, are used in many states to place legislative or constitutional measures before voters. If passed, they become law. The religious Right has gathered signatures to place initiatives on issues near and dear to them on the ballot in many states. Several, such as Colorado’s ban on state funding of abortions (1984), California’s prohibition on same-sex marriage (2000), and Maine’s repeal (1998) of a state law establishing protections for gays and lesbians, passed. Some backfired. A Colorado initiative, later overturned by the Supreme Court (1996), outlawed local ordinances providing civil rights to homosexuals. California banned the use of state funds for services to illegal immigrants (1994), a measure that resulted in Hispanics abandoning the Republican Party in droves. In other instances the religious Right works to oppose measures it disagrees with. Again, the record is a mixed one. The Christian Right helped to defeat passage of the Equal Rights Amendment in Iowa and efforts to introduce gaming in Maine (2003), but failed to stop creation of a state lottery in South Carolina or the right to assisted suicide in Oregon. The religious Right is pursuing such state-level policymaking initiatives in numerous battles over gay marriage and homosexuality. The Media and the Message—Televangelism Televangelism as a medium for religious communication is inextricably involved with the rapid growth of the religious Right in American politics. In the 1970s broadcasters and the FCC sought deregulation as a strategy for expanding the numbers of broadcasters, developing alternative programming and networks, and introducing cable systems. It worked. Religious channels and broadcasting were among the first and largest television networks to take advantage of these changes. Within a decade, a cast of television evangelists, modern-day revivalist preachers, established themselves as media personalities attracting large audiences and funding. Jerry Falwell replaced Billy Graham as a religious guru for the nation. Robert Schuller built a crystal cathedral for his weekly broadcasts. Oral Roberts, Pat Robertson, and Jimmy Swaggart financed new universities with funds donated by faithful viewers. Jim and Tammy Bakker founded a religious empire, later toppled by revelations about financial mismanagement and sexual improprieties. Pat Robertson hosted the 700 Club, the most frequently watched religious broadcast in the United States.79 All were skilled and successful fundraisers competing in a newly created marketplace for media-based, free-enterprise religion. Within two decades there were more than five religious broadcasting networks and over sixty syndicated television broadcasts.

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Televangelists became important national personalities. They were charismatic leaders with entertainment value for television audiences.80 Their roles marketed popular religion through a medium never previously associated with religion. In content, their message was one of personal redemption and social change through individual religious conversion.81 In effect, television preachers reinforced private rather than public faith—a faith practiced at home rather than shared by communities of worship. None, except Falwell (Baptist), were from mainline religious denominations. Conventional religious denominations worried about the potential erosion of their congregations, at least initially. Televangelists have been policy entrepreneurs for the religious Right. They preach the gospel of cultural fundamentalism and of God’s covenant with America.82 Their message has been inherently political as they rail against secular humanism and “man’s attempt to solve his problems independently of God.”83 This message, with its biblical and moral roots, has sought to reinstate God in American life and to strip away the barriers between church and state erected over the past half century. Televangelists have urged their followers to grassroots activism and civic involvement in support of their secular activities as political entrepreneurs. In terms of public policy, these efforts have had mixed results. Summary As we have seen, the religious Right is now a major player in American politics and policymaking. It has been successful in organizing and carving out an important niche within the Republican Party and in gaining access to large numbers of Americans through its media presence. Despite this, the religious Right has been less successful in the national electoral arena and can count far fewer clear-cut policy victories. Why? • It is easier to prevail in state and local venues. The diversity of state and local politics provides greater opportunities for highly motivated groups and individuals. • The openness of the American political system generates a continuing stream of new entrepreneurs and groups. These groups form and reform, subdivide and merge. They are drawn to the openness of political parties as a channel for influence. Yet the currency of political parties is winning elections and winning requires parties to broaden their appeal by adding groups to their coalition. • The larger the electorate, the broader the appeal needed for parties to assemble a winning coalition and the greater the pressures for compromise between coalition partners. Winning trumps ideological purity and dictates moderation at election time. • A win is never a win in American policymaking. Layers of government and never-ending cycles of elections and issues present endless opportunities for political entrepreneurship. These dynamics mean that politicians seeking office and the groups supporting them must constantly defend their gains and sustain their commitment of resources. • Except in the case of ballot initiatives, elections change personnel, not policies. Even then, the turnover of elected officials is slow, with newly elected officials often relegated to the bottom of the seniority barrel to learn the ropes and pay their dues. This slows progress and often means that their issues take a back seat. It also dictates a focus on the judiciary, where appointments are lifelong. • Many channels of access make for never-ending debates. Policymaking occurs in multiple institutional forums with many different entrepreneurs seeking access and influence. Policies are subjected to ongoing challenges and revision. Public policymaking is always a work in progress.

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From one perspective, November 5, 2003, was a milestone for the religious Right as a group organized to influence public policy in America. Yet the religious Right knows from past experience that courts, agencies, events, and future election cycles can undermine the legislation signed on that day. Furthermore, new issues, such as the debate over legalizing gay marriage or making intelligent design part of the high school science curriculum, may siphon off entrepreneurs or draw supporters in different directions. Yet there will be opportunities too. The political dynamics of policymaking are unforgiving and fast moving. The complexity of the interactions between these institutional entrepreneurs and their impact on policymaking is the subject of the remaining chapters of this text.

KEY TERMS interest groups—advocacy groups whose primary organizational purpose is to influence the public policymaking process. political parties—permanent organizations, whose principal objective is to capture and maintain control of the institutions of government through the election process. think tanks—policy research organizations that operate outside the formal institutions of government, usually remaining independent of the special interests that seek benefits for their members.

QUESTIONS FOR DISCUSSION 1. Do you agree with the statement that the impact of elections on public policymaking is decreasing? Why? 2. Evaluate this statement: Lobbying by business and other interest groups serves important functions in policymaking and will always be with us in some form. 3. Evaluate this statement: The expansion in numbers and types of interest groups seeking input into policymaking reflects the growth in scope of benefits and burdens produced by governments and the fact that everyone is directly affected by public policies in some way. 4. In the twentieth and twenty-first centuries, the history of expanding access to American policymakers and the policymaking process has been one of the rise of public interest groups and the decline of political parties. To what degree should this trend be reversed and the role of parties be strengthened? 5. Evaluate this statement: The proliferation of think tanks has contributed to the politicization of policymaking. 6. Evaluate this statement: The development of various communications technologies has reshaped (and will continue to reshape) the methods by which policy advocates and interest groups seek to influence policymaking. Describe how this idea applies to the Internet. 7. Evaluate this statement: The primary language of public life has become visual, not verbal. Assess it in terms of a policy issue of your choice.

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SUGGESTED READINGS Abelson, Donald E. Do Think Tanks Matter? Assessing the Impact of Public Policy Institutes. Montreal, Canada: McGill-Queen’s University Press, 2002. Bennett, W. Lance. News: The Politics of Illusion. 4th ed. New York: Addison-Wesley Longman, 2001. Berry, Jeffrey M. The New Liberalism. The Rising Power of Citizen Groups. Washington, DC: Brookings Institution Press, 1999. Browne, William P. Groups, Interests, and U.S. Public Policy. Washington, DC: Georgetown University Press, 1999. Cook, Timothy W. Governing with the News: The News Media as a Political Institution. Chicago: University of Chicago Press, 1998. Dionne, E. J.; Jean Bethke Elshtain; and Kayla M. Drogosz, eds. One Electorate Under God: A Dialogue on Religion and American Politics. Washington, DC: Brookings Institution Press, 2004. Gerhardt, Michael J. The Federal Appointments Process: A Constitutional and Historical Analysis. Durham, NC: Duke University Press, 2000. Graber, Doris A. Processing Politics: Learning from Television in the Internet Age. Chicago: University of Chicago Press, 2001. Heinz, John P.; Edward O. Laumann; Robert L. Nelson; and Robert H. Salisbury. The Hollow Core: Private Interests in National Policy Making. Cambridge, MA: Harvard University Press, 1993. Hrebenar, Ronald J. Interest Group Politics in America. 3rd ed.. Armonk, NY: M.E. Sharpe, 1997. Kingdon, John W. Agendas, Alternatives, and Public Policies. 2nd ed. New York: Addison-Wesley Longman, 1995. Postman, Neil. Amusing Ourselves to Death. New York: Penguin, 1985. Schudson, Michael W. The Good Citizen: A History of American Civic Life. New York: Free Press, 1998. Skocpol, Theda, and Morris P. Fiorina. Civic Engagement in American Democracy. Washington, DC: Brookings Institution Press, 1999. Smith, James A. The Idea Brokers: Think Tanks and the Rise of the New Policy Elite. New York: Free Press, 1991.

NOTES 1. See John W. Kingdon, Agendas, Alternatives, and Public Policies, 2nd ed. (New York: Addison-Wesley Longman, 1995), chaps. 5–7. 2. Charles O. Jones, Passages to the Presidency: From Campaigning to Governing (Washington, DC: Brookings Institution Press, 1998). 3. Michael W. Schudson, The Good Citizen: A History of American Civic Life (New York: Free Press, 1998), p. 27. 4. Ibid., pp. 30–31. 5. Marc W. Kruman, Between Authority and Liberty: State Constitution Making in Revolutionary America (Chapel Hill, NC: University of North Carolina Press, 1997), pp. 76–81. 6. Schudson, Good Citizen, pp. 54–55. 7. Richard Hofstadter, The Idea of a Party System: The Rise of Legitimate Opposition in the United States, 1780–1840 (Berkeley, CA: University of California Press, 1970), pp. 3–4. 8. James Roger Sharp, American Politics in the Early Republic: The New Nation in Crisis (New Haven, CT: Yale University Press, 1993), p. 5. 9. Ibid., p. 10. 10. Ibid., pp. 140–41. 11. Ibid., p. 286. 12. Ibid., p. 287. 13. Joseph Charles, The Origins of the American Party System: Three Essays (Williamsburg, VA: The Institute of Early American History and Culture, 1956), pp. 37–38. 14. Schudson, Good Citizen, p. 114. 15. Alfred De Grazia, Public and Republic: Political Representation in America (New York: Alfred A. Knopf, 1951), p. 179.

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16. Sharp, American Politics in the Early Republic, p. 287. 17. Michael J. Gerhardt, The Federal Appointments Process: A Constitutional and Historical Analysis (Durham, NC: Duke University Press, 2000), p. 43. 18. Marbury v. Madison, 1 Cranch 137, 2 L. Ed. 60 (1803). 19. Ronald J. Hrebenar, Interest Group Politics in America, 3rd ed. (Armonk, NY: M.E. Sharpe, 1997), p. 9. 20. James Q. Wilson and John J. DiIulio Jr., American Government: Institutions and Policies, 6th ed. (Lexington, MA: D.C. Heath & Co., 1995), p. 152. 21. Schudson, Good Citizen, p. 148. 22. Ibid., p. 152. 23. For a detailed analysis of the role of political parties in controlling the public agenda, see Gary W. Cox and Mathew D. McCubbins, Legislative Leviathan (Berkeley, CA: University of California Press, 1993) and Setting the Agenda: Responsible Party Government in the U.S. House of Representatives (New York: Cambridge University Press, 2005). 24. Elizabeth Drew, “Selling Washington,” New York Review of Books 52 (11), June 23, 2005. 25. Jeffrey H. Birnbaum and Jim VandeHei, “Delay’s Influence Transcends His Title,” Washington Post, October 3, 2005. 26. William P. Browne, Groups, Interests, and U.S. Public Policy (Washington, DC: Georgetown University Press, 1998), p. 112. Copyright © 1998, Georgetown University Press. Materials reprinted with permission. 27. Ibid., p. 118. 28. For one attempt at measuring success, see John P. Heinz et al., The Hollow Core: Private Interests in National Policy Making (Cambridge, MA: Harvard University Press, 1993). 29. Browne, Groups, Interests, and U.S. Public Policy, p. 13. 30. Hrebenar, Interest Group Politics in America, p. 73. 31. Elisabeth Clemens, The People’s Lobby: Organizational Innovation and the Rise of Interest Group Politics in the United States, 1890–1925 (Chicago, IL: University of Chicago Press, 1997), p. 29. 32. Elisabeth Clemens, “Organizational Repertoires and Institutional Change: Women’s Groups and the Transformation of American Politics, 1890–1920,” in Civic Engagement in American Democracy, ed. Theda Skocpol and Morris P. Fiorina (Washington, DC: Brookings Institution Press, 1999), pp. 84–85. 33. Theda Skocpol, “How Americans Became Civic,” in Civic Engagement in American Democracy , ed. Theda Skocpol and Morris P. Fiorina (Washington, DC: Brookings Institution Press, 1999), p. 43. 34. Ibid., p. 68. 35. Ibid., p. 69. 36. Theda Skocpol, “Advocates without Members: The Recent Transformation of American Civic Life,” in Civic Engagement in American Democracy, ed. Theda Skocpol and Morris P. Fiorina (Washington, DC: Brookings Institution Press, 1999), p. 492. 37. Jeffrey M. Berry, The New Liberalism: The Rising Power of Citizen Groups (Washington, DC: Brookings Institution Press, 1999), p. 29. 38. Skocpol, “Advocates without Members,” p. 496. 39. Ibid., p. 498, quoting Michael Schudson. 40. Donald E. Abelson, Do Think Tanks Matter? Assessing the Impact of Public Policy Institutes (Montreal, Canada: McGill-Queen’s University Press, 2002), p. 9. 41. James A. Smith, The Idea Brokers: Think Tanks and the Rise of the New Policy Elite (New York: Free Press, 1991), p. xv. 42. Ibid., p. 54. 43. Ibid., pp. 113–14. 44. Abelson, Do Think Tanks Matter? p. 19. 45. Ibid., p. 60. 46. Smith, Idea Brokers, p. 223. 47. Timothy W. Cook, Governing with the News: The News Media as a Political Institution (Chicago, IL: University of Chicago Press, 1998), p. 22. 48. Michael Emery and Edwin Emery, The Press and America: An Interpretive History of the Mass Media, 6th ed. (New York: Prentice-Hall, 1988), p. 29. 49. Cook, Governing With the News, p. 22, quoting from Harold L. Nelson, “Seditious Libel in Colonial America,” American Journal of Legal History 3 (1959): 163. 50. Emery and Emery, Press and America, pp. 54–58.

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51. Cook, Governing with the News, p. 25. 52. Ibid., p. 26. 53. Tom Standage, The Victorian Internet (New York: Berkley, 2001). 54. Neil Postman, Amusing Ourselves to Death (New York: Penguin, 1985), pp. 64–70. 55. Emery and Emery, Press and America, p. 162. 56. Ibid., p. 236. A line paraphrased most famously in the movie Citizen Kane. Hearst later served in Congress and vainly pursued the presidency. Due undoubtedly to the examples of Hearst and his cinematic alter ego Charles Foster Kane, American media moguls have generally limited themselves to policy advocacy rather than the naked pursuit of political power. 57. Cook, Governing with the News, p. 48. 58. David Shenk, Data Smog: Surviving the Information Glut (New York: HarperCollins, 1998). 59. Emery and Emery, Press and America, p. 382. 60. Ibid., p. 317. 61. Cook, Governing with the News, p. 56. 62. Doris A. Graber, Processing Politics: Learning from Television in the Internet Age (Chicago: University of Chicago Press, 2001), p. 70. 63. W. Lance Bennett, News: The Politics of Illusion, 4th ed. (New York: Addison-Wesley Longman, 2001), p. 9. 64. Ibid., p. 35 65. Ibid., p. 52. 66. Ibid., p. 58. 67. Cook, Governing with the News, p. 114. 68. For an overview of these online discussion groups, see Richard Davis, Politics Online: Blogs, Chatrooms, and Discussion Groups in American Democracy (New York: Routledge, 2005). 69. On the potential problems of such enclaves, see Cass Sunstein, Republic.com (Princeton, NJ: Princeton University Press, 2001), pp. 77–79. 70. Dana Milbank, “Bush Signs Ban on Late-Term Abortions into Effect,” Washington Post, November 6, 2003, A4. 71. Alexis de Tocqueville, Democracy in America, ed. Richard D. Heffner (New York: Mentor Books, 1956) p. 154. 72. Ibid., pp. 153–54. 73. Roe v. Wade, 410 U.S. 113 (1973). 74. Christopher Z. Mooney, “The Public Clash of Private Values,” in The Public Clash of Private Values, ed. Christopher Z. Mooney (New York: Chatham House, 2001), p. 5. 75. Paul J. Fabrizio, “Evolving into Morality Politics: U.S. Catholic Bishops’ Statements on U.S. Politics from 1792 to the Present,” in The Public Clash of Private Values, p. 87. 76. John C. Green, Mark J. Rozell, and Clyde Wilcox. “The Christian Right’s Long Political March,” in The Christian Right in American Politics, ed. John C. Green, Mark J. Rozell, and Clyde Wilcox (Washington, DC: Georgetown University Press, 2003), p. 9. 77. Robert Zwier, “The Christian Right and the Cultural Divide in Colorado,” in The Christian Right in American Politics, p. 192. 78. Green, Rozell, and Wilcox, “The Christian Right’s Long Political March,” p. 11. 79. Jeffrey K. Hadden and Anson Shupe, “Elmer Gantry: Exemplar of American Televangelism,” in Religious Television, ed. Robert Abelman and Stewart M. Hoover (Norwood, NJ: Ablex Publishing, 1990), p. 11. 80. Ibid., p. 4. 81. Razell Frankl, Televangelism: The Marketing of Popular Religion (Carbondale, IL: Southern Illinois University Press, 1987), p. 114. 82. Ibid. 83. Ibid., p. 5.

CHAPTER 6 Access, Lobbying, and Public Opinion PREVIEW Chapter 6 examines how policy entrepreneurs bring problems and their solutions to the attention of public policymakers. It examines the constant dialogue between policy entrepreneurs, the public, and policymakers from the perspective of the policy entrepreneurs. That is, how do policy entrepreneurs get the attention of public policymakers? As you read this chapter, you should keep in mind the following questions. • • • • • • •

What are the basic strategies and techniques of lobbying? How do lobbyists inform policymakers? What is the distinction between playing offense and playing defense for lobbyists? What are the differences between direct and indirect approaches to lobbying? What are the problems of polling as a method for assessing public opinion? What is the impact of public opinion on policymakers? To what degree do policymakers shape public opinion?

6.1 INTRODUCTION In chapter 4 we focused on the What of policy inputs—what policy problems are and how they are crafted into issues. In chapter 5 we surveyed the Who of issue advocacy. We reviewed several types of policy entrepreneurs and their changing impacts on the policymaking process. In chapter 6 we shift attention to the How. That is, on the strategies policy entrepreneurs use to gain access to policymakers. Policy entrepreneurs have problems or issues that require the attention and action of policymakers. Policy entrepreneurs need policymakers to make things happen. They need to “sell” their problems and solutions to people who can actually bring about the changes they seek. Policy entrepreneurs and policymakers are locked in an elaborate, endless mating dance. At every step, from the definition of policy problems to the evaluation of policy outcomes, policymakers and policy entrepreneurs must work together to produce results. In this chapter, however, we describe the mating dance from the point of view of the policy entrepreneur. What steps can be taken to connect with policymakers? In chapter 7 we will reverse the perspective and look at the dance from the policymaker’s viewpoint. The remainder of this chapter surveys the techniques that policy advocates of all types use to advance their particular issues or causes. Lobbying is the generic term we use to describe how policy entrepreneurs insert inputs into the policy production process. Public opinion then describes the ways in which the policy views of citizens, those not actively seeking to influence policy, impact policy production. 100

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Frank and Ernest

ERNIE, SELLING YOUR VOTE IS BAD ENOUGH BUT ON

E-BAY

amiss THAVES Source: Frank and Ernest © 2001 Bob Thaves. Reprinted with permission. All rights reserved.

MINI-CASE 6.1 Health Care—“Play It Again, Sam” Health care is a perennial electoral issue, a favorite among politicians and voters alike. No one is ever satisfied with the cost, access, or quality of care they are getting. The problems are so complex and costly, with so many stakeholders involved, that few administrations make much headway in untying the Gordian knot of health care. As a consequence, health policy remains a continuing source of issues and votes and of activity for the numerous proponents and opponents involved in this policy area. The 2004 election cycle was no exception. Opinion polls ranked cost and accessibility of the U.S. health care system generally, and expanding health insurance specifically, as substantial concerns of three-quarters of the public. Lobbyists and politicians alike jockeyed for position to capitalize on these worries, although most changes to their basic policy arguments were only cosmetic. All sides repackaged old plans to sell them as new. Not unexpectedly, Kerry, the Democratic candidate, promoted expanded access for the twenty-seven plus million uninsured Americans, an attractive if costly proposition. Bush, the Republican, relied on tax breaks to encourage more people and small businesses to purchase insurance at lower rates, a less costly proposition extending coverage to far fewer people. Various health care groups also cranked up their public relations operations to generate visibility for their own proposals and get them in front of candidates and potential supporters. Not to be left out, Congress even showed brief signs of activity, as legislators tried to demonstrate their credentials as health care policy advocates to their constituents back home. However, no major legislative initiative succeeded in the months before the November elections. The important thing is that, given the saliency of health care as a policy issue, all sides have a plan and be ready to demonstrate their credentials as activists and advocates as needed. The next election cycle will soon be here.

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6.2 LOBBYING Lobbying is the communication of information by policy entrepreneurs to policymakers in an effort to influence the production of public policies. As we saw in chapter 5, by policy entrepreneurs we generally mean organized interests or institutions such as political parties or the mass media. Of course, individual citizens can also lobby policymakers. They can write their congresswoman, picket the White House, and even take out full-page ads in major newspapers, if they can afford it. Individuals do not need organized groups as mediators to influence public policymakers. Indeed, visionaries see the Internet as the ultimate enabler of direct citizen influence—one that will surely diminish the power of policy entrepreneurs in the policymaking process. In this vision, every citizen armed with a PC and an Internet connection becomes a mini Ralph Nader, directly communicating his or her policy preferences to the appropriate officials on a daily basis. Nevertheless, the more likely scenario is that the Internet will simply enhance the ability of policy entrepreneurs to mobilize supporters and access policymakers in the systematic pursuit of policy objectives. Moreover, lobbying focuses on what people do and not what they say. It is possible to add up the views and opinions of hundreds or thousands of individual citizens and call the result “public opinion.” Public opinion, however, is the result of what public polling organizations do to the American public and not what the American public does to policymakers. Public opinion is not just “out there”— someone, usually a public polling organization, must actively pursue it and capture it. Policy entrepreneurs may use the results of public opinion polling as a weapon in lobbying policymakers, but answering the canned questions of a pollster over the phone is a far cry from writing a letter or talking to a government official. Responding is not the same as acting. Here we focus first on the kinds of actions policy entrepreneurs and even individual citizens can take to influence the production of public policies. Then we survey the role of public opinion in American policymaking. 6.3 LOBBYING STR ATEGIES What, then, do lobbyists do? 6.3.1 Target Policymakers The first and most important decision to make is where to do battle for one’s cause. As we shall see later in this text, there are multiple arenas and institutions for producing policy in the United States. There are literally tens of thousands of government bodies and countless non-governmental organizations in the business of producing public policy. Entrepreneurs seeking policy solutions must first decide who can and will solve their problem. They must shop for the best—or at a minimum, the most appropriate—policymaker. Though many students of public policymaking assume that policy production begins with Congress, policy entrepreneurs are increasingly using alternative institutions to solve their problems. For example, opponents of tobacco tried and failed in Congress, then struck out in the federal Food and Drug Administration, and finally succeeded through lawsuits by the State Attorneys’ General. Similarly, civil rights advocates bypassed Congress and used the federal courts to achieve their ends in the period from the 1940s through the 1960s. Despite the traditional focus on policymaking in the halls of Congress, most of the action has been, and always will be, elsewhere. In chapters 7 and 9 and in part V we will explore the Where of public policymaking in greater detail.

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6.3.2 Play Offense and Defense When we talk about policy entrepreneurs we tend to assume that most of their activities are focused on advocating a particular solution or cause. Policy advocacy, after all, is about making changes for the better. The Association for the Advancement of Retired People wants prescription benefits for the elderly and the National Rifle Association wants fewer restrictions on the rights of gun owners. By definition, policy entrepreneurs “play offense”—they seek to advance the policy objectives of their membership and the groups they claim to represent. They play to win. Winning, however, is difficult. The arena of American public policy is crowded with countless policy entrepreneurs seeking change. Of the thousands of bills submitted to Congress every year only a hundred or so ever become law. The overwhelming majority of policy initiatives fail and the ones that do succeed often take so long that the final solution bears little resemblance to the original proposal. Large-scale policy initiatives may take decades from initiation to implementation. Playing offense typically requires considerable time, skill, patience, money, and other resources. On the other hand, losing is easy. The arena of American public policymaking is a multi-ring circus. In this circus there are thousands of policy advocates competing for influence and hundreds of rings or institutional settings where inputs may be received. This means that thousands of policymakers can be producing policies that work at cross-purposes with one another. Policy entrepreneurs inevitably crowd each other out and policymakers cannot help but step on each other’s toes. For every policy initiative favorable to one’s cause, there are dozens that are potentially unfavorable. In this environment, policy advocates must constantly be on the alert to changes that could harm their group’s position or interests. They must play relentless defense. Fortunately, defense is easier to play than offense. Obstructing, subverting, or delaying change is almost always easier than accomplishing it. Therefore, defensive lobbying strategies tend to predominate over offensive lobbying is strategies. While advocacy is the heart and soul of most policy entrepreneurs, day-to-day activities are often dedicated to loss prevention. Policy entrepreneurs typically spend more time protecting past gains than pursuing future victories. 6.3.3 Build Relationships Before one can play offense or defense, however, one must first become a player. In order to influence the production of public policies, one must be able to communicate with policymakers, and in order to communicate effectively, one must have an ongoing relationship with the people one seeks to influence. “Relationships are the foundation on which everything else rests. Like personal capital, you must invest time and resources to build up relationship capital so you can draw on it when you need it . . . If you wait until the last minute to try to influence key decision makers, you will have no base of relationships and hence no credibility.”1 The point is to build a personal relationship that transcends the specific issues that the lobbyist is advancing. Familiar faces are generally preferred to unfamiliar ones and personal contacts establish a framework for business contacts. “While bars, dinners, and other formal social events have long been the conventional way to establish these first-name relationships, tennis has become the ‘in way’ to meet politicians in the 1980s.”2 In the 1990s, bringing Hollywood celebrities to social functions in Washington became yet another way of building relationships between policy entrepreneurs and policymakers. Perhaps the most important aspect of these relationships is that they allow lobbyists to do favors for policymakers. “As one former regulatory official points out, ‘government officials are always dealing with people who need something. All the time. If you are calling to offer them something, you

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are building up credit in the bank so you can use that later on.’ The need to reciprocate is a very strong social norm. So doing favors is a potent way to gain influence.”3 While the kinds of bribes once used by nineteenth- and early twentieth-century lobbyists and policymakers are now illegal, no law can effectively prohibit the kinds of favors, information, and social contacts that constitute personal relationships between lobbyist and policymaker. 6.3.4 Supply Information Information is the lifeblood of policy production. Policymaking is a data-driven process. In the first instance, policymakers need issues to decide and act on just as much as policy entrepreneurs need policymakers to get things done. Moreover, policymakers must know what the problems are; what solutions are possible; who suffers from the problems and may benefit from the solutions; and what the consequences of action or inaction may be for policymakers, policy entrepreneurs, and the public. Since much of this information is future-oriented and speculative at best, both the costs and risks of crystal ball gazing are high. Finally, as the scope of public policymaking expands and the number of issues multiplies, policy decisions require ever more technical information from policy experts. The demand for policymaking information is literally insatiable. Therefore, the lobbyist’s primary value to the policymaker is as bearer of information for policy production. Though policymakers do have their own dedicated resources to investigate problems and analyze solutions, many policymaking organizations could not function effectively without the kinds of policy information provided by lobbyists. Policy entrepreneurs spend hundreds of millions of dollars annually producing policy research for consumption by policymakers. While public attention focuses mostly on multipurpose policy think tanks like the Brookings Institution, Heritage Foundation, and Cato Institute, most policy entrepreneurs generate policy analyses and recommendations for individual policymakers. In addition, they conduct opinion polls to support policy decision making and often provide political intelligence to policymakers on the consequences of policy issues for themselves and their constituents. “Organized interests also trade political intelligence with policymakers in Congress. A member of Congress intent on winning passage of a favored piece of legislation will exchange information with an allied interest about the alignment of political support and opposition to the measure, the likely tactics of opponents, and so on. Perhaps the most valuable political intelligence an organization can provide to a legislator is information about how his or her home district would be affected by the enactment of a bill.”4 In the executive branch, the participation of policy advocates has been formalized in the form of advisory committees, commissions, boards, and study groups. There are thousands of such advisory committees helping federal agencies produce public policies in nearly every policy arena. Although such advisory committees are supposed to include a broad spectrum of interests, business lobbies often play a dominant role in such bodies. “Advisory committee membership is an important tactic for interest groups to pursue because such membership enhances contacts between the interest groups and government decision makers and allows the interest frequently to ‘set the debate’ by approving an official information base and making recommendations directly to the appropriate executive branch agencies and departments. These recommendations carry some legitimacy because they come from ‘blue ribbon,’ quasigovernmental committees.”5 Policy entrepreneurs influence policy production from inside as well as outside the process.

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6.3.5 Hire Contract Lobbyists How do policy entrepreneurs establish the kinds of personal relationships with policymakers that help provide access to the decision-making process? The quickest—though usually not the best—way is to buy a relationship. That is, to hire a professional lobbyist who brings personal relationships with him or her as part of his résumé. In Washington, D.C., and the fifty state capitols, there are thousands of individuals who make their living as contract lobbyists for interest groups and all kinds of policy entrepreneurs. These for-fee lobbyists usually work on a project-by-project basis and should be distinguished from lobbyists who are full-time employees of an organization or association—that is, a policy entrepreneur—representing their members’ interests.6 Figure 6.1 shows the alternatives of in-house versus contract lobbying. Figure 6.1

In-House Versus Contract Lobbying

Contract Lobbyists Policy Entrepreneurs

Policymakers

Contract lobbyists are typically hired on the basis of previous experience working in government. There is a constant “revolving door” of former public officials who move out of office into lobbying firms and often back into government on a recurring basis. Through this revolving door pass: • • •

Ex-congressmen or ex-congresswomen, who bring personal contacts with former colleagues and detailed knowledge of the legislative process Former executive branch officials, who bring subject-matter expertise and familiarity with bureaucratic decision making Former legislative staff members, who combine legislative and political skills with subject-matter expertise7

Many of these former public officials go to work for the large law firms and public relations agencies that constitute the corporate giants of the lobbying industry. These “full-service” behemoths help well-heeled clients with legal advice, coalition strategies, media campaigns, public polling, issue monitoring, event planning, and other services. Many clients, however, prefer smaller, more specialized lobbying agencies offering more personalized service and specialized expertise. Finally, as the number of lobbyists and laws has multiplied in recent years, lobbying has become more professionalized, with its own professional association and even a graduate program in lobbying at the George Washington University in Washington, D.C. Lobbying is an industry in itself, one larger than many of the old-style industries it represents. 6 . 4 L O B BY I N G TAC T I C S How should one conduct a lobbying campaign? So far we have focused on what is called direct strategies—that is, on individual contacts with policymakers. “Direct lobbying is defined as those

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tactics that bring the official representatives of an organization or organizations into direct contact with government officials.”8 Direct strategies, however, are labor intensive, costly, and strictly limited by the busy schedules of policymakers. There are other, more circuitous ways to influence policymakers. Following Ronald Hrebenar, we call these strategies indirect. By indirect lobbying we mean any technique that uses other institutions or the public as an intermediary. Thus, indirect strategies include a wide range of techniques, from giving contributions to officials’ election campaigns to public advertising. In the follow paragraphs we will briefly survey some of the principal techniques of both direct and indirect lobbying. 6.4.1 Direct Lobbying Figure 6.2 diagrams direct strategies as conducted by the three types of policy entrepreneurs discussed in chapter 5. Figure 6.2 Direct Lobbying

Media Organizations Public Organizations (Interest Groups)

Policymakers Political Organizations & Institutions

We call it direct lobbying when representatives of business organizations, interest groups, media organizations, and political groups personally contact policymakers on behalf of group interests. Among the techniques of direct lobbying are: • Meetings with policymakers. Here we focus on person-to-person visits in the policymaker’s office. According to Schlozman and Tierney, “In a private meeting in a legislator’s office, organized interests can present their arguments away from the scrutiny of the media and beyond the manipulative reach of political competitors. Furthermore, this kind of direct contact affords lobbyists the opportunity to cultivate personal relationships with policymakers . . . For the policymakers, these direct interactions mean access to various kinds of information, assistance, and services that lobbying organizations can furnish.”9 The same benefits hold true for meetings with legislative staff and executive agency officials. From the lobbyists’ perspective, a private meeting with a policymaker is the equivalent of hitting the jackpot. Since policymakers’ time is always limited and the legal and ethical restrictions on such contacts are not insignificant, such meetings are often carefully planned and scripted. • Phone, e-mail, and snail mail contacts. While person-to-person meetings are the ideal, they are relatively infrequent. In the interim, lobbyists must maintain the relationship via phone, e-mail, and regular mail. Phone calls are typically reserved for relationship-building exercises or urgent requests, while e-mail and regular mail are the channels through which technical reports, videos, and other detailed materials are sent.

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• Informal contacts. Contacts between lobbyists and policymakers occur every day in venues as diverse as hall corridors, restaurants, gyms, tennis courts, and social events. While such informal meetings, whether by design or by chance, are not well suited for intensive policy discussions, they can prove to be an effective means of circumventing the legal and ethical restrictions on formal contacts. • Testifying at hearings. Perhaps the most common means of formally communicating the interests of a group is to testify at a public hearing. Though we tend to equate public hearings with the legislative process, executive agencies and even administrative judges use hearings to gather information for policy production. In legislatures there are generally two kinds of public hearings: legislative hearings on new legislation under consideration and oversight hearings on the effectiveness of existing legislation.10 Either type of hearing can be an effective forum for gaining visibility and presenting technical information. There are two parts to testifying at a public hearing: the oral testimony and the written statement accompanied by supporting documentation. Depending upon the public visibility of the issue at hand, public testimony may also attract media and public attention to one’s cause. • Drafting legislation and legislative strategy. Tens of thousands of bills are submitted to Congress and state legislatures each year. Though a significant proportion of these deal with private matters, the volume of policy-related bills is simply too great for legislators and their staffs to handle. Thus, policy entrepreneurs often play key roles in drafting legislation and guiding bills through the legislative labyrinth. “Representatives of organized interests typically have a thorough understanding of existing laws and programs and can provide useful aid in fashioning a bill that has an appropriate fit with existing statutes and governmental activities . . . lobbyists . . . are in a position to advise their congressional allies on the best legislative strategy for coalescing needed majorities and neutralizing opponents.”11 Policy entrepreneurs not only provide much of the information for policymaking, they also work on the assembly line of policy production. Producing legislation or policy promises is a variety of wordsmithing, and wordsmithing is what policy advocacy is all about. • Providing services for policymakers. As we have seen, policymakers need lobbyists just as much as lobbyists need policymakers. Engaging in favors is what the lobbying process is all about. Although public attention focuses on the free airplane rides, vacations, and tickets to sporting events, policy entrepreneurs also “write a lot of the speeches that members of Congress give and a lot of the articles that appear under legislators’ by-lines.”12 They also provide opportunities for policymakers to be seen and heard by constituents. Policymaking is the collaborative product of policymakers and policy entrepreneurs. Direct lobbying is the arena where this collaboration takes place on a day-to-day, person-to-person basis.

MINI-CASE 6.2 Selling to the Feds Lobbying the feds is big business and getting bigger by all estimates, regardless of source. By one estimate (Influence.biz), revenue generated by more than 100 lobby shops and law firms rose from $570 million in 2002 to more than $700 million in 2003. Another estimate came in at $3 billion, up from $1.6 billion in 1998 (Center for Public Integrity). While expenditures keep rising, much of this increase comes in recent “hot areas” of policy production—Medicare reform, homeland security, security services, and business opportunities in foreign markets. Such help takes many forms. Most familiar are efforts to gain or forestall legislation. But

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each piece of legislation generates new opportunities. So, for example, the National Association of Realtors has managed to prevent the Treasury Department from issuing a rule allowing banks to expand into the real estate business by securing a rider to the annual appropriations bill for several years. This strategy is easier than having to reopen debate over the initial legislation that allowed banks to enter an arena previously limited to realtors. Other opportunities occur regularly in the budget cycle. Appropriations bills are routinely packed with thousands of specific projects, termed earmarks, targeted to the demands of specific clients. This practice has spawned a new subset of the lobbying industry specializing in appropriations. Other lobbying firms have developed marketing departments to help companies selling goods and services to the government or competing for federal grants. For example, one go-between brokered a contract between Health Net Federal Services Inc. and the Department of Veterans Affairs to scrutinize its expenditures for hospitalized veterans in exchange for a percentage of the savings it realized. So, who are the lobbyists that staff these firms? Those with pedigrees in both the legislative and executive branches are most highly prized. The National Board of Realtors hired James Lischer, former legislative counsel at the Office of Thrift Supervision and an assistant general counsel for legislation at the Department of Housing and Urban Development, to help with its yearly efforts to stave off the banking industry. Robert Borski, a long-term member of the Transportation and Infrastructure Committee, retired in 2002 after ten terms in the House of Representatives. Although ethics rules limited his role to advising clients for a two-year period, he is now free to contact legislators and their staffs directly. His client list includes business interests in the areas of transportation and infrastructure. The Ford Corporation recently hired a high-powered duo for its governmental affairs office: Stephen Biegun, national security adviser to the senate majority leader and a former deputy to former national security adviser Condoleezza Rice, and Dan Brouillette, majority staff director of the House Energy and Commerce Committee. These are examples of the types of folks who will at least get past the receptionist’s desk.

6.4.2 Indirect Lobbying Indirect lobbying is the use of other organizations and institutions to communicate with policymakers. Rather than speaking to the policymaker in person, the policy entrepreneur communicates through the media, the public, the political arena, or other policy entrepreneurs. Figure 6.3 shows the potential paths that such communications may follow. Figure 6.3 Indirect Lobbying Media

Organizations

PUBLIC

Public Organizations (Interest Groups) Political Organizations & Institutions

Policymakers

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As may be seen in Figure 6.3, indirect lobbying primarily relies on four different kinds of institutions—politics, the media, other interest groups, and the public—as the means of influencing the policy production process. 6.4.2.1 Politics as a Means The most visible and notorious of these techniques are those that exploit the links between politics and the policymaking process. In particular, these techniques focus on electoral politics and its connection to the policymaking process. Participation in election campaigns not only helps elect candidates favorable to one’s cause, it also creates a sense of indebtedness on the part of the candidate, regardless of his or her policy positions. Buying off potential enemies is as important, if not more important, than buying potential friends. Techniques of indirect lobbying focusing on electoral politics include: • Campaign contributions. This is money given to the political campaigns of policymakers who also happen to be elected officials. Although many scholars consider campaign contributions part of the “inside game” of policymaking, giving money to policymakers for policy decisions is by definition an indirect strategy of lobbying. While one may contribute to a political campaign, it is illegal to “buy” a policymaker. Even though the vast majority of policymakers are not elected to office, for those in elected office the connection between politics and policymaking is inextricable. Trading policy commitments for dollars is illegal. However, “[a] new and more subtle form of bribery, indirect bribery, has replaced the crass, blatant direct cash bribes. Indirect bribery has as its most respectable forms the campaign contribution and the (now banned on the federal level) honorarium. Both of these are designed, not to ‘pay off’ a legislator for a correct vote, but to indicate to him or her the organization’s support for past and future efforts and to keep open the access channels established over the years.”13 The techniques that policy entrepreneurs use to funnel money to politicians and political campaigns are complicated and ever changing. An important cog in this machinery is the Political Action Committee, or PAC, that enables policy entrepreneurs to collect money from members and funnel it to the campaigns of key policymakers. Despite the recent passage of the Campaign Finance Reform Act of 2002, financial contributions to the political campaigns of elected policymakers are likely to remain a major weapon in the arsenal of indirect lobbying. • Assisting candidates. There are a variety of techniques of supporting candidates besides simple monetary contributions. Policy entrepreneurs can fund their own independent advertising campaigns for or usually against individual candidates. As long as these campaigns are not coordinated with those run by the candidates, they can escape the limitations placed on direct contributions to candidates. In addition, interest groups also contribute to candidates by helping with voter registration, get-out-the-vote drives, polling, and fund raising. • Influencing party platforms. Major interest groups, such as labor unions and the Christian Coalition, often play a major role in drafting party platforms prior to elections. While party platforms generally have limited influence on policy production, the ideas formulated during political campaigns can and do influence the actions of elected officials in office.

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Frank and Ernest

METTlNG TONIGHT

HOW TO GET MONEY OUT OF POLITICS

IT'S EITHER A CAMPAIGN REFORM RALLY OR

A LOBBYIST'S WORKSHOP

THANKS

Source: Frank and Ernest ©2000 Bob Thaves. Reprinted with permission. All rights reserved.

The other major political channel for influencing policy production is the appointments process. Policy entrepreneurs can change the course of policy production by changing the identity of policymakers. Thus, major executive branch appointments are often vetted, or cleared, with major interest groups and lobbying for or against such appointments has become increasingly intense over the past decade. Similarly, the appointment of federal judges has become the focus of attention, money, and effort on the part of a wide range of policy entrepreneurs since the 1980s. “The indirect tactic that has received the most attention in recent years has been group efforts to influence the selection of judges, especially on the federal level. Because federal judges are appointed for life, the impact of judicial appointments can last for decades after a president has left the White House.”14 Finally, policy entrepreneurs can influence public policymaking through the “revolving door” that sends former public officials back to office after stints as lobbyists for interest groups. “The expertise and experiences of professionals representing organized interests make them logical candidates for agency appointments, and organizations are often successful in gaining executive branch positions for their staff and activists.”15 Since politics, both elective and appointive, is the primary means for choosing senior-level policymakers in the American system, political entrepreneurs cannot afford to ignore the opportunities for influence that politics provides. 6.4.2.2 The Media as Intermediary In the age of the mass media, media campaigns have become an increasingly popular means of influencing the policy production process. The target of such campaigns is both the public as well as individual policymakers, and the technique is advertising. Ronald Hrebenar has identified three different types of advertising campaigns aimed at influencing the products of the policymaking process. • Goodwill campaigns. These long-term advertising campaigns seek to create a favorable image of the interest group and its causes in the minds of both policymakers and the public. Thus, corporate groups sponsor public television programs, the chemical industry touts its efforts to clean up the environment, and the tobacco industry boasts of industry-funded campaigns to stop teen smoking. Goodwill campaigns are the equivalent of positioning in direct lobbying—the objective is not to influence specific policies but to establish a positive image or relationship with the public.

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• Offensive campaigns. Offensive media campaigns are tactics aimed at building support for specific policy initiatives. Offensive campaigns are usually tied to specific legislation, shorter in duration, and narrowly targeted at key policymakers and their active supporters. • Defensive campaigns. Defensive campaigns are mounted to oppose legislation or proposed policy changes. Perhaps the most famous or infamous of the defensive campaigns were the “Harry and Louise” commercials used by the hospital industry to attack the health care proposals offered by President Clinton in the 1990s. Just as we have seen in the realm of direct lobbying, playing defense is generally easier than playing offense, so negative campaigns need only sow the seeds of doubt while offensive campaigns must cross the higher threshold of convincing the public and policymakers of the merits of change. 6.4.2.3 Interest Groups as Intermediaries Policy entrepreneurs must typically rely on other policy advocates to get their message across. Therefore, building coalitions in support of—or in opposition to—policy initiatives is a major strategy for influencing policy production. Few interest groups are sufficiently influential or wealthy enough to go it alone. Most groups seek to build coalitions broad enough to attract sufficient support, yet small enough so as not to forfeit their specific causes. Coalitions range from relatively permanent organizations with dues-paying memberships and scheduled meetings to ad hoc groups assembled to fight for a particular issue or piece of legislation. Prominent among the former are industry associations consisting of rival corporations banded together to lobby the government and governmental associations such as the National Governors Association. These long-term coalitions have become a permanent feature of the policy production process. Most coalitions, however, are short-lived ad hoc alliances formed to advance or defeat a particular bill in Congress. The advantages of such short-term arrangements are obvious. They enable coalition partners to pool resources and information and allow for a more efficient division of labor. Also, broad-based coalitions consisting of business rivals tend to impress policymakers with the seriousness and public-mindedness of the issues they advance. If all automobile manufacturers or health maintenance organizations are allied in support of a policy position, then claims of representing the public interest can seem more plausible. The problems with coalitions are equally apparent—partners must limit their aspirations to lowest common denominator issues and positions. Nevertheless, coalition building is an integral part of almost every successful lobbying strategy. 6.4.2.4 The Public as Intermediary There are means of influencing the public and policymakers other than via the mass media. Policy entrepreneurs can rally the public to lobby policymakers. They can transform the spectators into participants in the policymaking process. • Grassroots lobbying. This is the mobilization of public support on behalf of a policy initiative. The objective of grassroots lobbying is to orchestrate a groundswell of individual public contacts with policymakers that give the appearance of being spontaneous and unorganized. Successful grassroots campaigns lead policymakers to believe that they are hearing the voice of the people. In the past, grassroots campaigns used the mail, telephones, and telegrams as the means of communicating with individual policymakers. Members were urged to call or write

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their congressmen and were often given standard forms or templates to expedite the process. In recent years, new technologies, especially talk radio, e-mail, the Internet, cell phones, faxes, and BlackBerrys have made grassroots lobbying easier. These devices make access and information exchange instantaneous. Now, patch-through telephone and computer capabilities allow a group to sort through its database, select those to receive a prerecorded telephone call about pending legislation, and finally to transfer that call directly to the office of the listener’s congressional representative. The problem with grassroots lobbying is that the greater the degree of organization, the less spontaneous it appears to public officials. Public representatives and officials are less likely to pay attention to hundreds of copies of the same form letter than to ten or fifteen unique messages from individual citizens. • Initiatives and referendums. As we shall explore in a later chapter, many states permit citizens to bypass the ordinary institutions of policy production by means of initiative petitions signed by the voters and passed by the electorates. Initiatives and referendums are direct democracy in action and transform the voting public into policymakers themselves. • Demonstrations and protests. Instead of using words, policy entrepreneurs can also use deeds as a means of communication, by taking to the streets. Though less frequently used than other tactics, and less commonly used since the protest generation of the 1960s and 1970s, demonstrations and protests remain a standard weapon in the arsenal of indirect lobbying. “Washington is the demonstration capital of the United States, and the popular site for demonstrations is the public park directly across the street from the White House. Well over 1,000 demonstration or parade permits are issued by city authorities each year.”16 Generally speaking, demonstrations and protests are tactics of interest groups lacking the resources to pursue direct lobbying strategies. They are also a favored tactic of social reform movements of all kinds, ranging from the labor union protests in the 1930s to the civil rights movement of the 1960s, the Vietnam War protests of the 1960s and 1970s, and the anti-abortion and AIDS demonstrations of the 1980s and 1990s. Groups using demonstrations and protests typically seek to occupy the moral high ground in the eyes of the television-watching public and their members at home. Nonviolent protest tactics leading to arrest under the watchful eyes of television cameras is another means of demonstrating a willingness to sacrifice for the cause. In many cases, however, such demonstrations are simply another part of a multilevel strategy that has lobbyists patrolling the halls of Congress while protesters parade in the streets. Using the public as intermediary means mobilizing spectators to become activists themselves. It means bringing new blood into the policymaking process. This is not easy. Getting people to write letters to their legislators or march in demonstrations is hard work. There are the “usual suspects”—the broader network of supporters who can be relied on for an occasional contribution, but getting members of the “silent majority” to participate in grassroots campaigns or demonstrations takes work, money, and an attention-grabbing issue. The problem is that using the public as intermediary is a double-edged sword. When policymakers perceive the voices of the silent majority to be genuine and motivated, they listen. Nothing gets the attention of public policymakers faster than an influx of new participants into the policymaking process. However, if the grassroots campaigns and demonstrations appear staged or passionless, then the tactic may backfire. Given the ease with which modern technology allows citizens to deluge policymakers with missives, skepticism is often the first response to a flood of e-mail, phone calls, or telegrams. Using the public as intermediary is generally a high-risk approach to lobbying policymakers.

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6.4.3 Conclusions Despite the unsavory past and tarnished reputation of lobbying in American public policymaking, lobbying is an inextricable part of the policy production process. Lobbying is how outsiders—in our terms, policy entrepreneurs—bring problems and solutions to the attention of public policymakers. Though public policy analysts traditionally focus on legislative lobbying by policy entrepreneurs, policy advocates play an integral role at every step in the policy production process. They not only advance the interests of the members or groups they represent, they also help produce policy commitments and policy outputs. The work of lobbyists does not end when issues are placed on the agendas of policymakers, it continues throughout the formation of policy commitments, the assembly of policy outputs, and the evaluation of policy outcomes. Indeed, the extent to which policy production depends upon the active participation of policy entrepreneurs is one of the defining features of American democracy. 6.5 PUBLIC OPINION In the previous section we examined how policy entrepreneurs gain access to policymakers. By policy entrepreneurs we mean those who work to influence the direction of public policy. By definition, policy entrepreneurs are activists—people who participate in the policymaking process. But what about the much larger group of people who do not participate? People who resist the blandishments of policy entrepreneurs and do not participate in grassroots campaigns, demonstrations, or any other form of lobbying? What about the silent majority that may watch and listen but choose not to act? What about those who remain passive, be it out of lack of interest or lack of ability to participate? Do these policy passivists, or nonparticipants, play any role in the policymaking process? The answers to these questions take us into the art and science of public opinion. 6.5.1 What Is Public Opinion? For our purposes, public opinion consists of the policy attitudes of the American citizenry. It’s what the American people feel or think about public policies. When we talk about policy entrepreneurs and lobbying we are looking at what people do. We see the letters or e-mails they write or the statements they make. We know policy activists through their public words and deeds. Public opinion, however, is quite different. The attitudes and beliefs that form public opinion cannot be observed. They are latent, not manifest. They are private, not public. They lie silently within the hearts and minds of the citizenry unless and until someone asks. Public opinion plays a part in the policymaking process only to the extent that the participants in that process actively seek it out. Thus, we arrive at the classic definition of public opinion as those beliefs and attitudes “held by private citizens that governments find it prudent to heed.”17 Public opinion is what policy analysts, entrepreneurs, and policymakers want to know about the private beliefs and attitudes of the public.18 6.5.2 How Is Public Opinion Determined? Public opinion is discovered by asking people questions. The public is polled. Indeed, public opinion and public opinion polling have almost become synonymous. What is sought and how

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it is sought have become indistinguishable. Public opinion almost always means the product of polling. Public opinion polling is ubiquitous. Policy entrepreneurs do it, policymakers do it, and even the mass media do it. But what are polls all about? The fundamental idea behind public opinion polling is that you cannot ask everyone, so you must select a representative sample of people. If the sample is chosen carefully—and the science of statistics helps greatly here—we can be confident that the answers are valid for the population as a whole.19 However, there are many issues associated with asking people for their opinions. The first is What is the target population? Should it include children, nonvoters, or people who haven’t a clue about the policy issue of interest? And once it has been decided whose attitudes count, a technique for accurately sampling the target population must be designed. The second is How do you communicate with the sampled population? Do you ring doorbells, stand outside a voting booth, or call on the telephone? Most public polls today are conducted via telephone because it’s much cheaper than paying survey takers to ask the questions face-to-face. In recent years the Internet has provided an entirely new means of asking questions of the public. Each method has advantages and disadvantages. Telephone surveys must rely on simple questions and even simpler answers and compete with unsolicited sales calls for the respondent’s time and attention. Face-to-face interviewers can gather more sophisticated data on peoples’ views but they must gain access to, and the trust of, their respondents. The third is How do you ask the questions? Do you give your respondents multiple choices, ranking scales, or the opportunity to formulate their own answers? Simple questions evoke simple answers, no matter how complicated the underlying policy issue. How accurately do polling questions reflect the views of private citizens on policy issues? Moreover, the order of questions matters a great deal, as survey researchers have discovered. Earlier questions tend to influence or contaminate the answers to later ones. Finally, What do you do about people who refuse to answer? Do nonresponses tell us something important about people’s attitudes and beliefs? To some extent, every question is a loaded question. The kinds of questions that are asked determine the kinds of answers given. Public opinion is always seen through the eyes, ears, and preconceptions of the pollster. The fourth question is Why? Why are you asking people about their attitudes toward public policy? As a policy entrepreneur you may be seeking to understand which issues resonate with the public and why. Do people want tax cuts? Compared to what, and at what cost in public services? Policy entrepreneurs often use public opinion polls to discover “hot-button issues,” to fine-tune their messages, or sway policymakers. Policymakers have their own reasons for polling public opinion. Presidents—and sometimes governors—use polls to prioritize among competing issues and to pretest policy solutions. Political candidates—that is, aspiring policymakers—poll potential voters to craft campaign platforms. Indeed, politicians have even used “push polls” not to understand what voters want, but to prejudice voters against their opponents. Finally, both commercial and nonprofit organizations conduct public opinion polls for the mass media or simply as a public service. Pollsters have reasons for polling and these reasons influence both what the results are and how the results are used. The final issue is What is it, exactly, that public opinion polls measure? What is in the minds of the public before the questions are asked? Some scholars have argued that—by and large—“there’s no there there.” Nothing strikes the student of public opinion and democracy more forcefully than the paucity of information most people possess about politics. Decades of behavioral research have shown that most people know little about their elected officeholders and virtually nothing about the public issues that occupy officials from Washington to city hall.

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Those attitudes they express to interviewers are usually ephemeral and transient. In what sense, then, can the policies of any government be said to reflect the will of the governed when that will cannot even be said to exist?20 In short, polls assume that public opinion is the sum of individual responses to a survey instrument or questionnaire. Each response is individual or private, each respondent counts the same as every other respondent, and the aggregation of responses constitutes public opinion on a given policy issue. Although alternative modes of evaluating public attitudes, such as focus groups, are being increasingly deployed,21 polling as a technique has become virtually identical with public opinion in American public policymaking. What public opinion polling often discovers is ignorance, rather than knowledge, and nonattitudes, rather than beliefs. What pollsters see at the end of the day may simply be the reflection of their own attitudes and beliefs in the mirror of public responses. 6.5.3 Public Opinion and Public Policy Given all these caveats, what is the relationship between public opinion—or more precisely, public opinion polls—and American public policymaking? In a democracy we would expect that public opinion affects public policy. Public officials should—by and large—be responsive to the wishes of the people. When it comes to the wishes of the active participants discussed above, we universally recognize the impact of lobbying on public policy. Lobbyists do make a difference. The question is not if lobbyists influence public policy, but rather whose lobbyists are successful. If they’re not lobbying for your interests, then they must be working for the “special interests.” The impact of public opinion on public policy is much more controversial. Does public opinion —as captured by countless opinion polls—really affect public policy and public policymakers? The scholars who study public opinion and public policymaking have different views. When we look at the big picture, it seems self-evident that public opinion polls influence public policymaking. Both policy entrepreneurs and policymakers spend enormous amounts of time and money sponsoring, conducting, and analyzing public opinion polls. They act differently because of polls. At the aggregate level scholars have discovered a strong correlation between public attitudes and public policies. Broadly speaking, liberal states tend to have more liberal policies, while conservative states have more conservative policies.22 And at the national level, the public mood tends to lead and not lag public policy. When the mood of the public turns liberal, liberal policies ensue, and when the mood shifts in a conservative direction, conservative policies are enacted. When viewed from afar, public opinion shapes public policy. Similarly, at the micro level, public opinion polling has come to play a major role in presidential policymaking. Polling has long played a key role in the electoral process. Political candidates rely on polls to find who is going to vote for them or not vote for them and why. Polls are the meat and potatoes of political campaigns. Though politicians routinely claim not be governed by polls, every president since Nixon has used polling as an integral part of the policymaking process and has brought the campaign polling operation into the White House. Indeed, presidential polling became so pervasive in the Clinton White House that analysts and critics alike spoke of the “permanent campaign”—the application (or misapplication) of the tools of political campaigning to public policymaking. “Presidents and their staffs employed polls to define and connect with the presidential constituency, to prioritize and choose among agenda items and their alternatives, and to produce public relations strategies . . . The poll apparatus influenced message design via phrasing and speeches, and also aided event

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evaluation . . . The poll apparatus did not affect program design or implementation, leaving the bureaucratic phases of the policy cycle alone.”23 If public opinion polls are but reflections of the pollster’s mind, then American presidents have been narcissists for decades. Public opinion polling has certainly changed the behavior of presidents and their staffs. However, does public opinion actually affect individual public policies? Here, the evidence is decidedly mixed. Despite the increased use of public opinion polls, some scholars have concluded that the impact of public opinion on public policymaking is actually declining. “In short, the evidence suggests that government responsiveness to public opinion varies over time and has declined over the past several decades. The findings indicate that politicians’ policy decisions do respond to public opinion but that responsiveness has fallen off since the 1970s.”24 Policymakers are polling more and responding less. Why? In the first instance, the sheer number and diversity of polls makes reading public opinion a daunting exercise. Too many polls lead to confusion rather than certainty about what the public is thinking on any particular issue. More importantly, policymakers don’t poll to discover what the public wants; instead they poll to discover better ways to sell the policies they desire. “Politicians, then, use polls and focus groups not to move their positions closer to the public’s (as commonly assumed) but just the opposite—to find the most effective means to move public opinion closer to their own desired policies.”25 Policymakers aren’t panderers, they’re salesmen. They poll to figure out who to target their message to and how to sell their policy proposals better. They are polling for customers, not approval. If presidents use polls to lead public opinion, not follow it, we may ask how successful are they? If public opinion has an uncertain impact on public policy, how does public policymaking impact public opinion? The answer appears to be that a president’s ability to move public opinion is limited at best. On issue after issue, even presidents as skilled as Ronald Reagan and Bill Clinton failed to move public opinion. Presidents have a poor track record when they resort to the bully pulpit. “[P]residents typically do not succeed in their efforts to change public opinion. Even ‘great communicators’ usually fail to obtain the public’s support for their high-priority initiatives.”26 The impact of public policymaking on public opinion is as tenuous as the effect of public opinion on public policymaking. Despite all the resources dedicated to public opinion polling by modern presidents, it is difficult to demonstrate that either the public moves presidents or that presidents move the public on many or even most policy issues. 6.5.4 Public Opinion: Summary What, then, can be concluded about the relationship between public opinion and public policymaking? First, we should be skeptical that public opinion is “out there” in the hearts and minds of the people, independent of the questions they are asked. When the silent majority speaks, policymakers listen, but when pollsters speak for the silent majority, we should be careful to consider whose voices are being heard. We would also expect that public opinion matters in a democracy, and it does—if we take a global view of the policymaking process. However, when we focus on individual policy issues the picture becomes muddled. Public opinion—in the form of opinion polls—doesn’t so much motivate policymakers as constrain them. Policymakers put ears to the ground not to discern the direction of public sentiment but rather to avoid being run over by a stampede of public emotions. Public opinion tells them what they cannot do, not what they can. “There is substantial evidence of government responsiveness to public opinion, especially on high salience issues. But the evidence

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also indicates that there is considerable room for interest groups, party activists, policymakers, and others to prevail against the public on many issues.”27 By and large, policy entrepreneurs and policymakers do not seek the approval of the silent majority—they seek to preserve its silence. 6.6 CONCLUSIONS In this chapter we have focused on access and influence. First, we reviewed how policy entrepreneurs gain access to, and the attention of, public policymakers. To be sure, policymakers are rarely passive partners in the dance of influence. They need policy advocates just as much as policy advocates need them. They need the policy solutions, the campaign contributions (for elected officials), and indeed the understanding that the public cannot provide. So policymakers also seek out policy entrepreneurs, and sometimes—as we saw in chapter 5 in the discussion of the K Street Project—seek to keep them on a tight leash. Nevertheless, the roles do differ and policy entrepreneurs generally do take the lead—at least from a public policy perspective. Then we explored the muddled if omnipresent role of public opinion in the policymaking process. Public opinion shadows both policy entrepreneurs and policymakers and both try to capture it, change it, and use it to their advantage. However, we have only looked at one half of the picture. We have examined the actors and shadows that influence policymakers, but we have not viewed the process through the eyes of the policymakers themselves. We will do that in chapter 7.

CASE STUDY Covering All Bases—Lobbying for Enron In the sixteen years between 1985 and 2001, a sleepy little Texas company transformed itself into the seventh-largest company (in terms of revenue) in the United States, and then swiftly imploded into bankruptcy, leaving behind thousands of employees without jobs or pensions and a trail of criminal charges and civil litigation. Enron, the company in question, traversed the road from American success story to debacle in less than two months during the fall of 2001. Although Enron may end up as a footnote in the long history of corporations undone by greed and overreaching, its spectacular demise offers us an opportunity to examine the impact of lobbyists and lobbying on policymaking. In many respects, “Enron’s story is notable not because it gave millions of dollars to elected officials and party leaders, but because its financial implosion pulled back the curtain and exposed the corporate world’s sharp-elbowed lobbying that usually remains behind the scenes.”28 Enron’s political operations typified the efforts of those seeking to influence state and federal policymakers. This was a classic case of lobbying by corporations to defend and promote their interests. The following is a tale about the players and money that assembled to promote Enron’s interests over its relatively short but spectacular career. When all was said and done, all the access and influence at Enron’s command could not rescue the company and its top executives from their own folly. Enron, a Brief History To provide context, we start with a brief overview of Enron: its beginnings, businesses, and dramatic demise.

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Rise to Power Enron rode the waves of technological innovation and the economic boom of the 1990s. It began during the 1980s, an era of company takeovers, with Kenneth Lay and his local pipeline company, Houston Natural Gas. Understanding that for his company to survive he needed to be big, Lay negotiated a merger with the largest pipeline company in the nation, Inter North. The new company was named Enron, an interstate natural gas pipeline company headquartered in Houston, Texas. However, the merger left Enron with huge debts in an era of deregulation and volatile markets. To meet the challenges, Enron transformed itself from a business built around hard assets for moving natural gas into a company engaged in trading electricity and gas. Essentially, Enron became an investment banker or middleman for energy commodities.29 Enron was at the forefront of efforts to deregulate energy markets in the United States in the 1980s and 1990s. It was an innovator. It challenged established state-regulated energy utilities that operated as monopolies with negotiated rates and pre-set profits. Such arrangements offered advantages of stable energy sources but disadvantages of inefficiency and higher costs. When oil became cheap again in the late 1980s and consumers switched away from reliance on natural gas, Lay used his leverage to convince federal regulators that pipeline companies would fail without the authority to negotiate long-term contracts at stable prices between suppliers and producers. He also sought to deregulate the wholesale electricity market. In both arenas, Enron aggressively sought to make itself the middleman in negotiating sales between producer and customer and making money by packaging and arranging complex deals. Business boomed. By 1995 Enron controlled one-fifth of the North American market for natural gas, and, at its peak, about one-quarter of the energy traded across the nation. Enron sought to extend its approach to other commodities and began to shift its trading forum to the Internet. At various times, it sought to create markets for electricity, wood pulp, steel, fiber-optic cable, and high speed data transmission on the Internet within its trading empire. It entered the global markets for water and power plants. In its best years Enron had yearly revenues of more than $100 million and more than 20,000 employees. But in its expansion, Enron rid itself of many of the hard assets that produced tangible returns. With revenues based almost entirely on the value of contracts traded, it became vulnerable to fluctuations in the energy markets. Fall from Grace Enron collapsed for two reasons: sagging revenues from its energy trading business and its practice of “cooking the books” to conceal debt and overstate profits. First, Enron’s revenue depended on a percent of the value of the contracts it negotiated. As the price of energy fell, so too did profits. Second, in the 1990s Enron formed a series of allegedly independent partnerships that allowed it to transfer corporate debt to those partnerships, thereby ensuring paper profits, business confidence, and rising stock prices for Enron itself. It was a technique for inflating the value of the corporation by siphoning off losses and was used by Enron many times in creating its house of cards. For example, beginning in 1993, Enron, together with the California Public Employees’ Retirement System (CALPERS), formed a joint venture named Joint Energy Development Investments (Jedi), with each party contributing $250 million, CALPERS in cash and Enron in stock. Four years later, Enron formed a second partnership, Chewco (named after the hairy Star Wars character Chewbacca), to buy out CALPERS, but maintained the partnership and the liabilities carried on Jedi’s books. In order for Chewco to qualify as an independent partnership, at least 3 percent of its capital had to come from outside investors. To form the second partnership, Enron

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both guaranteed the bank loan and funded the needed 3 percent from outside investors through personal loans based on its own stock. The outside investors were usually hand-picked Enron executives. Chewco enabled Enron to keep about $600 million in debts off its books and to see profits continue to rise. Enron’s downfall began when its stock prices fell. The value of its stock guarantees, which sustained the independence of both partnerships evaporated, and the liabilities they carried on behalf of Enron had to be transferred back to Enron. Throughout, Enron’s accounting firm appeared to close its eyes to these always-shady transactions between Enron and its numerous partnerships. By 2001 the scheme was unraveling. After trading as high as $90 per share in August 2000, Enron’s stock, like that of many others, fell in the bear market of 2000–2001. This set off its rapid descent into bankruptcy. The once highly profitable company was forced to report devastating losses of $618 million for the third quarter of 2001 when its stock fell precipitously. Enron was forced to reduce shareholder equity further by another $1.2 billion in transfers of liabilities from its partnerships. It then prohibited employees from selling Enron stock from their 401(k) retirement accounts. Finally, it announced that it had overstated profits for the previous five years by $586 million. In late November 2001 Enron formally imploded. It laid off its remaining employees, but not before paying $55 million in retention bonuses to a favored 500, including eleven executives who received between $500,000 and $5 million each. Of course, most top Enron officials unloaded their Enron stock in the summer of 2001, well before December 2, 2002, when Enron filed for bankruptcy. By early January Enron stock traded at 67 cents a share. In January 2003, Enron’s accounting firm, Arthur Andersen, disclosed that it had destroyed a large portion of its Enron documents. With this began the next phase of investigation, revelation, and criminal prosecutions of Enron’s corporate executives by the Department of Justice. Evidence of how Enron sought to promote and defend its interests in government policies was but one element in this debacle. It is, however, the focus of the remainder of this case study. The Web of Policy Influence—Covering All Bases In its decade and a half of existence Enron created an extensive network of contacts to communicate its interests to governments. What it did differs little from the present-day governmental affairs and public relations operations of many large corporations in the United States. Lobbying is big business, with tentacles that cross parties, groups, institutions, and governments. It is pragmatic, designed to ensure access to policymakers regardless of party or ideology. In pursuing its policy agenda, Enron employed most of the techniques described in this chapter, relying both on direct and indirect techniques of lobbying. The Players First and foremost Enron sought to build relationships—at all levels—from federal, including the president, administrative officials, and legislators, down to its local community of Houston, Texas. Clearly access depended on such relationships. Enron, as many large corporations, operated both a public relations program to enhance its public image and reputation and a governmental affairs program targeted directly to government policymakers. In terms of the former, Enron made itself a major player in Houston and in Texas as a whole. There, the lines dividing politics, business, and society were especially blurred.30 Enron Field, completed in 2000, became the home for Houston’s professional baseball team. Kenneth Lay made himself one of Houston’s leading citizens. Lay raised more than $100 million for the University of Houston, supported the arts, led the greater

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Houston business partnership, and opposed efforts to roll back local affirmative action programs. Other senior Enron executives were also expected to work to better their community. Enron was a “symbol to the city of the best of what Houston wanted to be.”31 Such visibility and money made Enron and Ken Lay crucial players in Texas politics in the early 1990s, a time when George H.W. Bush was president, George W. Bush was contemplating the transition from owner of a baseball club to governor of Texas, and Dick Cheney, the future vice president, headed Halliburton, another powerful Texas company skilled in obtaining government contracts. Enron’s law firm employed Senator Kay Bailey Hutchinson’s husband. Arthur Andersen, one of the premier national accounting firms under contract to Enron, was housed within Enron’s building. Enron and its leaders contributed generously to candidates for office in Texas, from judges and local prosecutors seeking election to state legislators and governors. Even the U.S. attorney for southern Texas, a career prosecutor, had to disqualify himself and his staff in January 2002 from any role in investigating Enron because of the fact that too many lawyers in his office had personal ties to former employees of the company. And so forth. It was a world of cozy relationships permitting easy access to the inner circles of state and federal government. Enron made the most of its contacts. Although it operated through a relatively lean Washington staff, it bought broad access to policymakers. Enron covered all of the familiar bases. In 2000 it made campaign contributions to 188 representatives and 71 senators, Democrats and Republicans alike, almost half of all members of Congress. Among the biggest beneficiaries were members of the Texas delegation, such as Phil Gramm and Kay Bailey Hutchinson, as well as those holding key committee leadership positions on both sides of the aisle. Enron contributed lavishly to the presidential campaign of George W. Bush in 2000, but also cultivated ties with Democrats in the Gore campaign. Lay had access to both Democratic and Republican presidents. Lay, a longtime friend of Clinton’s chief of staff, played golf with President Clinton. Texas connections made Lay a regular visitor to both Bush presidents. He also served as a chairman of the Republican National Convention in Houston in 2000, and was a member of George W. Bush’s presidential transition team. This network of relationships extended to the several agencies involved with energy regulation. Close advisors to presidents were hired as lobbyists for Enron after leaving office. Most prominent was Wendy Gramm, who chaired the Commodity Futures Trading Commission from 1988 to 1993, a key period for Enron. She oversaw the drafting of rules exempting energy products from regulations on over-the-counter derivatives and futures contracts. Five weeks after leaving office, Gramm, the wife of Texas senator Phil Gramm, joined Enron’s board of directors and received a generous compensation package paid in Enron stock. In 2000 Enron hired Linda Robertson, a former Clinton administration official, to head its Washington office. By that time it had more than 150 staffers working at the federal and state levels. The network operated in two directions. Not only was Enron home to former public officials, it also was a source of future government officials. Thomas White, Jr., a former army general and an eleven-year executive with Enron, became secretary of the army in 2001. In 2001, Robert B. Zoellick, the U.S. trade representative, and Lawrence Lindsey, Bush’s top economic advisor, went straight from Enron’s payroll to top positions in the Bush administration. In Texas, Max Yzaguirre, the former president of Enron de Mexico, was appointed head of the state’s Public Utility Commission. Enron also cultivated political pundits and media commentators on its behalf. It offered $50,000 in annual retainers to a series of notables in return for two visits each year to its Houston headquarters. This group became an “advisory council” for the company. Among those participating were William Kristol, editor of the Weekly Standard; Larry Kudlow of CNBC and the National Review; Ralph Reed, former head of the Christian Coalition and head of the Georgia Republican

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Party; and Paul Portney, president of Resources for the Future, a not-for-profit group and recipient of annual gifts from Lay’s family foundation. James Carville, a key Democratic strategist, refused an invitation to participate in 1997, but did work with Enron in lobbying for electricity deregulation in Pennsylvania. The Money Money greases the skids of access in politics and Enron applied this lesson well during its glory years. Enron and its subsidiaries spent large sums yearly. These totaled, by one account: $1.9 million in 1999, $2.1 million in 2000, and $2 million for the first half of 2001.32 These sums reflect money paid in-house and to lobbying firms for work related to congressional business. The federal Lobbying Disclosure Act requires disclosure of such spending. How did Enron spend its money on electing politicians? Ken Lay clearly preferred Republicans, but Enron itself was somewhat more evenhanded. Between 1989 and 2001, Enron contributed $5.78 million, including $3.39 million in soft money, to political parties (about 60 percent to Republicans and 40 percent to Democrats); $1.15 million to political action committees (65 percent to Republicans and 35 percent to Democrats); and $1.24 million to individuals. Six of the ten top recipients of funds from Enron in the House of Representatives and two of the top ten recipients in the Senate were Democrats. Enron donated to the campaigns of 71 senators and 188 representatives, almost half of the Congress elected in 2000. The 118 members of Congress on the seven committees involved in investigating some aspect of Enron’s downfall received more than $700,000 in campaign donations from the company or its executives.33 On the other hand, during the same period, Lay and other top Enron executives gave $1.63 million to the political parties, with only 7 percent going to Democrats.34 While the corporation hedged its bets, Enron executives targeted Republicans. Politicians in Texas also benefited from Enron’s largesse. Rick Perry, Bush’s successor as governor, received more than $200,000 between 1997 and 2001, including $25,000 from Ken Lay a day after Perry appointed a former Enron executive to chair the state’s Public Utility Commission. The Texas attorney general, John Cornyn, subsequently elected to the Senate, recused himself from the investigation of Enron’s collapse because he received over $193,000 in contributions. So, too, did Representative Ken Bensten, a potential opponent for Cornyn who received $44,250. Seven of the nine justices elected to the Texas Supreme Court received Enron donations, ranging from $4,600 to $33,908, since 1984. One was subsequently nominated by President George W. Bush to the United States Court of Appeals. Another way to channel benefits to Enron’s friends was through its stock. Large numbers of federal and state officials owned or were paid in stock. Wendy Gramm was paid for her work on Enron’s board of directors with 10,256 shares of stock, which she cashed in for $276,912 in 1999 so as to avoid conflict of interest charges when the Senate, under her husband’s leadership, addressed legislation dealing with electric power generation. Subsequently she received a salary for her work. Many Bush officials had large holdings: senior advisor Karl Rove owned stock worth more than $100,000 at a time when he was dealing with energy policy. So too did Defense Secretary Donald Rumsfeld, Environmental Protection Agency Administrator Linda Fisher, Treasury Undersecretary Peter Fisher, and Army Secretary Thomas White.35 Most sold their shares before assuming their positions and, as it turned out, in time to avoid the company’s collapse. A few may not have been so lucky. How did Enron raise these funds for its political contributions? It relied on political action committees and on individuals. Some of this money came from employees, as the company aggressively

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canvassed top officials on multiple occasions. “At Enron, it was understood that executives receiving astronomical salaries would turn part of the money back to the company’s smooth political operation.”36 For example, in April 1999 Lay solicited contributions from upper-level managers for Bush’s primary campaign. A year later “on June 15, 2000, Enron’s political action committee sent a representative to employees suggesting ‘voluntary’ contributions for Enron employees ranging from $500 for a low-level manager to $5,000 for a top executive.”37 Several viewed this as a form of extortion. “It was more or less required that you participate in the political action committee if you were an officer,” said one Enron executive.38 “We didn’t even know if we liked this guy [Bush] . . . I didn’t know if I was going to vote Republican” said another.39 Enron spent big bucks to ensure access to policymakers. All of this should be placed in context, however. Enron didn’t come anywhere near the top in terms of corporations pouring money into political campaigns. Of the top ten contributors in 2000, AT&T was in first place, with $3.626 million, followed by Bank of America at $2.676 million, and Freddie Mac at $2.398 million. Federal Express was tenth at $1.327 million. Of the $206 million given by corporations in the 2000 elections, 36 percent went to Democrats and 63 percent to Republicans. Nor is Ken Lay listed among the top ten individual contributors. For 2000, those honors went to Daniel and Ewa Abraham at $1.5 million and Bernard and Irene Schwartz at $1.3 million. What It Got Them What does access buy? That Enron was an important player is evident. We must now consider what Enron actually bought in terms of promoting and preserving its policy interests. Influence Enron enjoyed many successes along the way. It created markets for energy in many areas and revolutionized a policy domain. Its wide-reaching political operations opened many doors over the last decade and a half of the twentieth century, an era that generally looked favorably on less government, deregulation, and technological innovation. That period included Republican presidents Reagan (1980–88) and George H.W. Bush (1988–92) and Democratic president Clinton (1992–2000). Enron capitalized on the policy agendas of both. Enron began by seeking to undermine the traditional monopolies of utility companies over power plants and transmission lines. It wanted deregulation of the wholesale electricity market. This dictated a focus on key federal agencies, specifically the Federal Energy Regulatory Commission (FERC) and the Commodity Futures Trading Commission (CFTC); on congressional legislation; and on key state agencies charged with overseeing utilities. But, it also had powerful opponents on many fronts. These included big state and regional utility companies, such as Southern Company, and their lobbying arms, Citizens for State Power and the Electric Utility Shareholders Alliance; regional telephone companies, such as Southern Bell and Verizon; and national cable companies, such as AT&T and AOL-Time Warner, both of which opposed Enron’s efforts to create a competitive market in telephone and broadband services; the New York Mercantile Exchange, which fought energy-trading legislation favored by Enron; and Archer-Daniels-Midland, which fought to defend ethanol in battles with Enron over gasoline additives. Enron had multiple successes. In 1992, Congress passed the Federal Energy Policy Act, which opened up transmission lines owned by established companies to electricity merchants such as Enron. In 1993, it persuaded the CFTC, headed by Wendy Gramm, to exempt energy from

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regulations governing futures trading in derivatives. Subsequently, this was to become Enron’s most profitable business, although other corporations, including British Petroleum and Phillips Petroleum, both lobbied for and profited greatly from these exemptions. Congress ratified this approach again in 2000 with legislation precluding the CFTC from regulating trading in energy derivatives. Key regulations by the FERC in 1996 sought by Enron also helped it become the major player in the emerging markets for gas and electricity as well as in telecommunications services. Enron sought to lead the way in creating a market to sell credits to emit carbon dioxide and reduce greenhouse gases. In 1997, it worked with President Clinton and other White House officials to develop proposals for the Kyoto Treaty on a worldwide emissions-trading system and lobbied the Department of Energy and other vested interests to move more quickly on the deregulation of energy. Enron also received at least $2.4 billion for its overseas energy projects between 1992 and 2000 from the Overseas Private Investment Corporation (OPIC) and the Export-Import Bank, in the form of insurance, loans, and guarantees underwritten in part by taxpayers. Some of this went toward a project in India to build a power plant. When the Indian government reneged on repayment, several high-level officials in the Clinton administration, and later the Bush administration, intervened, but to little avail. Enron’s bankruptcy left OPIC exposed to more than $1 billion in Enron-related liabilities. Finally, in the first months of the Bush administration, Ken Lay was involved in private meetings with Vice President Cheney to develop proposals on energy and to determine nominations to the FERC. Lay played the role of kingmaker in appointing a chair for the FERC. Lay called the then head, Curtis Hebert, to say that he would recommend re-appointment if Hebert would agree to support faster deregulation of electricity markets. Hebert refused, and Lay’s choice, Pat Woods III, a Texan, replaced him. The Endgame Yet, Enron did not always prevail, especially as it sought to prevent its own disintegration. When President George W. Bush withdrew U.S. support for the Kyoto Treaty on greenhouse gases and worldwide warming, it pulled the rug out from under Enron and its work with the Clinton administration. Enron was viewed by many as a brash upstart and was resented by those it bullied. One Washington insider commented, “They were sophisticated enough to hire good people but then not disciplined enough to hide their disdain for policymakers who did not agree with them from the beginning. . . . all they cared about . . . [was] . . . what impacted them personally.”40 In the end, everyone abandoned Enron. Enron tried to call in its chips in the fall of 2001, but its friends turned a cold shoulder. As its stock plummeted and its losses mounted, Enron chief Ken Lay called both Treasury Secretary Paul O’Neil and Commerce Secretary Donald Evans, seeking help in stopping a private credit rating agency from downgrading Enron debt and potentially forcing the company into bankruptcy. Lay also asked about the possibility of a government-coordinated bailout. Neither lifted a finger. Nor did they bother to tell President Bush about Lay’s request until two months later. Instead, after public disclosure of Enron’s deliberate overstating of its profits, Enron became radioactive, a political hot potato for those who had so eagerly taken money from the company only a few months earlier. During its hour of greatest need Enron also turned to its Democratic friends. It called upon Robert Rubin, treasury secretary in the Clinton administration, to persuade officials in the Bush administration to intervene with the bond-rating agencies. Rubin made the phone call but was rebuffed. Republicans defended their failure to act. Lawrence Lindsey, President Bush’s economic advisor and beneficiary of Enron’s past largesse, claimed that “in no other country in the world would you have the seventh largest company fail, one with these political connections, and the government would

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simply let it happen.”41 Most Democrats also kept their distance, as the media eagerly posted lists of recipients of Enron’s money. Ironically, a few Democrats, including Henry Waxman, a leading member of the House, criticized President Bush for not helping—although for an entirely different set of reasons. “It is now clear the White House had knowledge that Enron was likely to collapse but did nothing to protect innocent employees and shareholders who ultimately lost their life savings . . . I am deeply troubled that the White House stood by and let this happen to thousands of families.”42 Summary—What Does It All Mean Enron’s efforts to promote and defend its policy interests provide a glimpse into the world of lobbyists and lobbying. Unfortunately, we often get the inside story only when things unravel, as they did so spectacularly in Enron’s case. When things go right, lobbyists and lobbying operate behind the scenes. Visibility is usually the enemy of access. What can we learn from Enron and the complex network of lobbyists and lobbying it assembled to influence policymakers? • First is the importance of relationships and personal contacts. Traveling in the same circles, living in the same community, and knowing the right people were starting points for Enron. It built an extensive Houston–Washington, D.C. connection, reinforced by the fact that both presidents Bush called Texas home. • Second is the ongoing need to play both offense and defense. Enron sought to revolutionize energy policy in the United States and made substantial progress on its agenda during its brief existence. But its success created opposition and occasional setbacks. In the end it could not call in enough chips to defend itself, although its collapse would appear to be due to its fraudulent accounting practices and the house of cards on which it was built rather than to any failure of lobbying or lobbyists. • Third is the technical nature of lobbying that operates at a level of detail beyond public attention and the media. Enron pursued objectives that were esoteric and little understood by most Americans. As subject matter, energy deregulation flies beneath the radar of public opinion despite the vast sums of money at stake. Policy plays out directly in technical discussions before regulatory agencies and congressional committees, arenas not widely reported by the media or tracked by citizens. • Fourth is the professional nature of lobbying. Although Enron relied on many personal and direct contacts for access and key leverage, much of the actual work was gradually transferred to a large and growing staff, many of whom were eventually located in Washington, D.C. Enron’s top executives made cameo appearances at key points in the policy process and attended numerous political events. Nevertheless, the critical details were worked out in other forums, out of the public eye. • Fifth is how direct and indirect strategies of lobbying are combined. Enron cultivated a reputation as a good corporate citizen in Houston and across the nation—an indirect but important strategy for a new corporation seeking to introduce major reforms into how energy is managed in the twenty-first century. In tandem. it developed a full array of direct lobbying services aimed both at elections and at policymakers. Both operations were lavishly funded. • Sixth is the complexity of Enron’s operations. States regulate energy. This necessitated Enron’s targeting policymakers at the state as well as federal levels. Although they enjoyed some success with federal policies, progress in the states was much more uneven, and the results, quite variable.

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• Last is the importance of playing both sides of the street. Enron, although leaning Republican, established and maintained access to both Republicans and Democrats at the highest levels. It was careful to create and preserve access and influence with all sides.

KEY TERMS contract lobbyists—professional lobbyists who are hired on a for-fee basis over a period of time, or on a project-by-project basis. defensive lobbying—lobbying designed to obstruct, subvert, or delay proposed changes to existing policies supported by a sponsoring group. direct lobbying—tactics that bring the official representatives of an organization into direct contact with government officials. grassroots lobbying—the mobilization of public support from citizens on behalf of a policy initiative. indirect lobbying—techniques of lobbying that use other institutions or the public as intermediaries between the lobbyist and government officials. lobbying—activities designed to influence policymakers. offensive lobbying—the communication of information by policy entrepreneurs to policymakers in order to influence the policymaking process. polling—methods, from telephoning and surveys to interviewing and focus groups, used to identify the opinions of private citizens. public opinion—what the American people feel or think about public policies. QUESTIONS FOR DISCUSSION 1. Evaluate this statement: Lobbying is a necessary component of the policymaking process. 2. How does the fact that there are so many different points of access to institutions and so many different lobbyists seeking to influence policy affect policymaking and efforts to develop coherent and consistent solutions to policy problems? 3. Develop examples to evaluate this statement: Lobbyists are occupied more by playing defense than offense. 4. Evaluate these statements: The lobbyist’s primary value to the policymaker is as bearer of information for policy production. Many policymaking organizations could not function effectively without the kinds of policy information provided by lobbyists. 5. Do you agree with the assertion that public opinion is what policy analysts, entrepreneurs, and policymakers want to know about the private beliefs and attitudes of the public? Why? 6. Evaluate this statement: A president’s ability to move public opinion is limited at best. 7. Evaluate this statement: By and large, policy entrepreneurs and policymakers do not seek the approval of the silent majority; they seek to preserve its silence.

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SUGGESTED READINGS Asher, Herbert. Polling and the Public: What Every Citizen Should Know. 5th ed. Washington, DC: Congressional Quarterly Press, 2001. DeKieffer, Donald E. The Citizen’s Guide to Lobbying Congress. Chicago: Chicago Review Press, 1997. Heith, Diane J. Polling to Govern: Public Opinion and Presidential Leadership. Palo Alto, CA: Stanford University Press, 2004. Herbst, Susan. Reading Public Opinion: How Political Actors View the Democratic Process. Chicago: University of Chicago Press, 1998. Hrebenar, Ronald J. Interest Group Politics in America. 3rd ed. Armonk, NY: M.E. Sharpe, 1997. Kingdon, John W. Agendas, Alternatives, and Public Policies. 2nd ed. New York: Addison-Wesley Longman, 1995. Manza, Jeff; Fay Lomax Cook; and Benjamin I. Page, eds. Navigating Public Opinion: Polls, Policy, and the Future of American Democracy. New York: Oxford University Press, 2002. Schlozman, Kay Lehman, and John T. Tierney. Organized Interests and American Democracy. New York: HarperCollins, 1986. Watkins, Michael; Mickey Edwards; and Usha Thakrar. Winning the Influence Game: What Every Business Leader Should Know About Government. New York: John Wiley & Sons, 2001.

NOTES 1. Michael Watkins, Mickey Edwards, and Usha Thakrar, Winning the Influence Game: What Every Business Leader Should Know About Government (New York: John Wiley & Sons, 2001), p. 89. 2. Ronald J. Hrebenar, Interest Group Politics in America, 3rd ed. (Armonk, NY: M.E. Sharpe, 1997), p. 107. 3. Watkins, Edwards, and Thakrar, Winning the Influence Game, p. 92. 4. Kay Lehman Schlozman and John T. Tierney, Organized Interests and American Democracy (New York: HarperCollins, 1986), p. 299. 5. Hrebenar, Interest Group Politics, p. 117. 6. Robert L. Guyer, Guide to State Legislative Lobbying (Gainesville, FL: Engineering the Law, 2000), pp. 46–67. 7. Hrebenar, Interest Group Politics, pp. 82–92. 8. Ibid., p. 105. 9. Schlozman and Tierney, Organized Interests, p. 292. 10. Donald E. deKieffer, The Citizen’s Guide to Lobbying Congress (Chicago, IL: Chicago Review Press, 1997), p. 74. 11. Schlozman and Tierney, Organized Interests, p. 300. 12. Ibid., p. 301. 13. Hrebenar, Interest Group Politics, p. 107. 14. Ibid., p. 221. 15. Schlozman and Tierney, Organized Interests, p. 336. 16. Hrebenar, Interest Group Politics, p. 153. 17. V. O. Key, Public Opinion and American Democracy (New York: Alfred A. Knopf, 1961), p. 14. 18. Susan Herbst interviewed participants in the policymaking process and discovered that many of them identify public opinion with the activities of lobbies and the output of the media. People inside the policymaking process pay attention to other insiders. Obviously, public opinion is in the eye of the beholder. In this text we adopt the standard, or academic view, of public opinion as the unexpressed—at least until asked—attitudes and beliefs of “outsiders.” See Susan Herbst, Reading Public Opinion: How Political Actors View the Democratic Process (Chicago, IL: University of Chicago Press, 1998). 19. For a comprehensive survey of the art and science of public opinion polling, see Herbert Asher, Polling and the Public: What Every Citizen Should Know, 5th ed. (Washington, DC: Congressional Quarterly Press, 2001). For a cogent critique of polling, see Taeku Lee, “The Sovereign Status of Survey Data,” in Navigating Public Opinion: Polls, Policy, and the Future of American Democracy, ed. Jeff Manza, Fay Lomax Cook, and Benjamin I. Page (New York: Oxford University Press, 2002), pp. 290–312. 20. John Ferejohn and James H. Kuklinski, eds., Information and Democratic Processes (Urbana, IL: University of Illinois Press, 1990), p. 3, quoting from Jeff Manza and Fay Lomax Cook, “The Impact of

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Public Opinion on Public Policy: The State of the Debate,” in Navigating Public Opinion: Polls, Policy, and the Future of American Democracy, ed. Jeff Manza, Fay Lomax Cook, and Benjamin Page (New York: Oxford University Press, 2002), p. 24. 21. The most popular alternative to survey research is the focus group. Focus groups are organized discussion sessions with a selected group of individuals led by a moderator. The moderator introduces the topic for conversation, draws out the opinions of participants, and fosters dialogue and debate among the participants. While focus groups address many of the shortcomings of standard survey research, they do not claim to be representative of public opinion as a whole. See Richard A. Krueger and Mary Anne Casey, Focus Groups: A Practical Guide for Applied Research, 3rd ed. (New York: Sage Publications, 2000). 22. See Robert S. Erikson, Gerald C. Wright, and John P. McIver, Statehouse Democracy: Public Opinion and Policy in the American States (New York: Cambridge University Press, 1993). 23. Diane J. Heith, Polling to Govern: Public Opinion and Presidential Leadership (Palo Alto, CA: Stanford University Press, 2004), pp. 103, 135. 24. Lawrence R. Jacobs and Robert Y. Shapiro, “Politics and Policymaking in the Real World: Crafted Talk and the Loss of Democratic Responsiveness,” in Navigating Public Opinion, p. 58. 25. Ibid., p. 55. 26. George C. Edwards III, On Deaf Ears: The Limits of the Bully Pulpit (New Haven, CT: Yale University Press, 2003), p. 241. 27. Benjamin I. Page, “The Semi-Sovereign Public,” in Navigating Public Opinion, p. 325. 28. Dan Morgan, “Rivals Battled Enron in Energy Lobbying,” Washington Post, February 19, 2002, A 4. 29. For more details, see Kurt Eichenwald, “Enron’s Short, Dizzying Plunge from Success Story to Debacle,” New York Times, January 13, 2002, A1. 30. Don Van Natta, Jr., John Schwartz, and Jim Yardley, “In Houston the Lines Dividing Politics, Business and Society are Especially Blurry,” New York Times, January 20, 2002, A25. 31. Ibid. 32. Steven Weiss, “Enron Understated Its Lobbying Expenditures CRP Analysis Finds” Money in Politics Alert, January 29, 2002, vol. 6, no. 39. www.opensecrets.org/include/formattoprint.asp?Page=/alerts/v6/ alertv6_39.asp. 33. Data from the Center for Responsive Politics, Jesse Holland, Associated Press, “Congress Members Took Enron Donations,” Washington Post, January 18, 2002, www.washingtonpost.com/ac2/wp-dyn/A6662002Jan18. 34. Iowa City Press Citizen, “FBI Undertakes Enron Probe,” as reprinted from the Washington Post/Los Angeles Times and citing data assembled by Marcy E. Mullins, USA Today, January 23, 2002, p. 7. 35. Christopher Newton, “Enron Contributed to Both Parties,” Washington Post, January 12, 2002. 36. Joe Stephens, “Hard Money, Strong Arms, and the Matrix,” Washington Post National Weekly Edition, February 18–24, 2002, p. 11. 37. Natta, Schwartz, and Yardley, “In Houston,” A25. 38. Stephens, “Hard Money,” p. 11. 39. Ibid. 40. Ibid. 41. Glenn Kessler and Mike Allen, “Economic Collapse. Political Fallout,” Washington Post, January 13, 2002, A1. 42. Ibid.

CHAPTER 7 Agenda Setting PREVIEW Chapter 7 examines the impact of policy institutions and processes on the flow of policy inputs. As you read this chapter, you should keep in mind the following questions. • • • • • • • •

What is an agenda? What are the major institutional arenas for agenda setting? Why do rules and procedures dominate access and inputs to Congress? How do these impact policymaking by that body? What is legislative oversight? What are the chief executive’s three basic functions in policymaking? What are the principal features of bureaucratic or administrative policy production? How do courts create inputs into policymaking? What are the respective roles of constitutional amendments and initiative petitions as inputs into policy production?

7.1 INTRODUCTION In the previous chapter we surveyed the many techniques that policy entrepreneurs use to gain access to—and the attention of—policymakers. Policymakers are very busy people and their attention is a scarce and highly valued resource. So policy advocates compete fiercely for a few minutes of time in a policymaker’s daily schedule—be it on the daily news, in a public meeting, in a private office, or—best of all—on a golf course. Getting access to those with the ability to get things done is the first step in turning policy solutions into public realities. Attention, or “eyeball time,” however, is not enough. The antics of movie stars and shark attacks also grab the public spotlight, but they rarely contribute to public action. If getting things done were as easy as getting public attention, then PR (public relations) experts would rule the world. Fortunately, or unfortunately, they do not, and the art of transforming public words into public deeds is what policymaking is all about. In chapter 7 we reverse perspectives and examine the formulation of policy inputs from the point of view of policymakers. Our point of departure is the fact that public policymakers do not live in a vacuum. They work in public institutions with highly evolved procedures. Because public policymaking is public and because policymakers have the ability to distribute benefits to and impose burdens on the public, their activities are tightly constrained by procedural, legal, and ethical rules. These rules determine Who can make What kind of public policy Where, When, and How. Moreover, these rules determine how policymakers respond to policy advocates and—in turn—how 128

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and when policy advocates make their pitch. The institutional settings of public policymaking really do matter. The system is important, and both policymakers and policy entrepreneurs must “work the system” to succeed. In the following pages we examine the institutional settings of public policymaking to see how they affect what does and does not get on the agenda for public action. 7.2 WHAT IS AN AGENDA? As we saw in chapter 6, access is the means of getting the attention of a policymaker. Getting someone’s attention, however, is merely the first step to getting something done. And getting things done is what public policymaking is all about. Unfortunately, the path from attention to action is complex and highly unpredictable. Just ask the Madison Avenue advertising executives who spend billions of their clients’ dollars attempting to craft commercials that not only grab viewers’ attention, but motivate them to buy. Thus, who could have predicted that an ad campaign in the form of the AFLAC duck could motivate hundreds of thousands of customers to buy supplemental insurance? Similarly, who could have foretold that by simply calling the inheritance tax the “death tax,” policy advocates could change the minds of the public and the votes of policymakers across the nation? Grabbing the attention of policymakers is easy. Motivating them to act is the difficult and mysterious part. Students of the policymaking process have generally focused on one step or milestone on the road from attention to action. They have concentrated on the concept of policy agenda. Simply put, an agenda is a list or schedule of things to be done.1 An agenda is a to-do list, a list of action items. Everybody has an agenda—or rather, multiple agendas—to organize his or her future actions. People post shopping lists on the refrigerator, keep day planners, make financial plans, and—sooner or later—draft wills. All of these are agendas, of one sort or another. They allocate time and resources to future actions. Now, to be sure, plans fall through. Much that we plan to do never materializes. Our actions rarely match our agendas. Nevertheless, agendas are much more than simple wish lists. They involve promises or commitments to act—however tenuous or impermanent. And committing to act is a much more consequential state of being than passively attending to one’s environment. Making commitments costs time and energy. Public policymakers also have their agendas. They have their daily agendas of people to meet, events to attend, speeches to give, and decisions to make. If a policy entrepreneur has met a policymaker, then he or she has already become part of the policymaker’s daily agenda. Policymakers also have policy agendas—commitments to solving policy problems—that organize and prioritize what they want to get done in the public sphere. Of course, many policymakers also have political agendas—careers to advance, elections to win, campaign contributions to solicit—that commingle and compete with their policy agendas. Thus, a policymaker’s daily or weekly calendar is always the result of a complex negotiation among an individual’s policy, political, and personal agendas. Finally, government bodies and other policymaking institutions have organizational agendas. They have public, private, and sometimes secret calendars of events to organize their activities. These institutional agendas determine what will and will not be considered for action. Institutional agendas are the decision gates through which policy actions must pass. In a policy environment with hundreds of policy solutions competing for the limited time and resources of policymaking bodies, deciding what gets on the institutional agenda is often more controversial than deciding what to do. Managing the policy agenda is more difficult than crafting policy solutions. Individual policymakers often have a greater stake in getting a problem on—and ultimately, off—the institutional agenda than on the actual solution. Doing something may be more important than doing something specific. In 2003 Congress passed legislation providing prescription drug benefits for

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seniors that virtually nobody liked but everyone wanted off their plate. The real problem Congress addressed was removing prescription drug benefits from its agenda. The merits or demerits of the actual legislation were secondary. Whether the issue is terrorism or disaster relief or prescription drug benefits, doing anything may be preferable to doing nothing. Therefore, setting the institutional agenda is often the pivotal point in the policymaking process. In the following pages we focus on how institutional agendas are set. Because they are so critical to the process, institutional agendas have become surrounded with elaborate rules and procedures. These rules of the game determine not only how policy inputs are crafted, but also how policy outputs are shaped. This focus on institutional agenda setting contrasts with a much broader conception of agenda often employed in the public policy literature. Some authors have extended the meaning of the term agenda to include “the list of subjects or problems to which government officials and people outside of government closely associated with those officials are paying some serious attention at any given time.”2 This latter definition considerably expands the frame of reference from institutions to individuals and from schedules or to-do lists in particular to attention in general. While the transformation of attention into commitment and the aggregation of individual policy and political agendas into institutional ones are important research topics, they belong more in the realm of theory than practice. How and when policy windows open, as John Kingdon has emphasized, is largely the product of chance. Things happen. Unexpected or unanticipated events suddenly turn topics of interest into action items and meld individual policy and political agendas in novel ways. From a policy analyst’s perspective, understanding the patterns hidden in large numbers of policy events is a valuable exercise. However, statistical patterns mean relatively little to the participants in the process. Exploiting the rules of the game and beating the odds is what success is all about, for both policy entrepreneurs and policymakers. Practitioners practice despite—or rather because of—the odds. Since our focus is on practice rather than theory, we will limit our attention to the institutional practices that determine where, how, and when policy issues are scheduled for decision and action. 7.3 INSTITUTIONS AND AGENDA SETTING There are literally thousands of arenas or venues for the production of public policy. Each of these venues has its own peculiar mechanisms for managing policy inputs and delivering results to the American public. And each of these access points has its own agenda and rules of the game. To simplify our discussion we divide the many thousands of public policymaking institutions into six distinctive types: 1. Legislatures—institutions such as Congress and the fifty state legislatures that make laws 2. Executives—elected public officials like the president, state governors, and city mayors who are responsible for the implementation of public policy 3. Courts—bodies composed of judges responsible for the interpretation and the application of laws 4. The bureaucracy—appointed officials responsible for assembling and delivering policy outputs 5. Constitutional amendments—the process for altering the form or scope of government at both national and state levels 6. Initiatives and referenda—an alternative process for public policymaking available to voters of many states.

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Each of these six arenas offers different opportunities for policy advocacy and rules for policy production. While we will examine the What of policy production in each of these arenas in greater detail in part III, here we focus on the When and Where of institutional access for policy advocates. 7.3.1 Legislatures Legislatures, with the power to make laws and oversee their implementation, are the primary focus of public policymaking. Fearful of the abuses of executive power, the architects of the Constitution established a system of national government with Congress at the center. While the twentieth century saw the emergence of competing centers of policy production in the executive branch, the judiciary, the bureaucracy, and—in some states—via “direct” democracy—the gaze of public, media, and even academic attention remains squarely on Congress and its cousins in the fifty states. For policy advocates, Congress is often the first stop in the quest for policy changes. The work of legislatures is governed by rules and procedures as complex as seen in any institution in contemporary society. In the first place, procedures influence policy outcomes. According to Walter Oleszek, “Congressional procedures are employed to define, restrict, or expand the policy options available to members during floor debate. They may prevent consideration of certain issues or presage policy outcomes. Such structured procedures . . . determine, in general, the overall character of policy decisions.”3 Second, “policy decisions often are expressed as procedural moves . . . Procedure hasn’t simply become more important than substance—it has, through a strange alchemy, become the substance of our deliberations.”4 The focus changes to the “inside game”—the moves and individual tactics —rather than the overall score. In an institution where conflicts over life and death issues are not uncommon, procedural actions may be the outcomes that members can agree upon. Indeed, as we have repeatedly emphasized throughout this text, the How and What of public policymaking are virtually indistinguishable at times. Third, the nature of a policy issue can determine the procedures used to decide them. For example, emergency measures or national security issues are typically handled in more expeditious fashion than ordinary legislation. As a result, all sorts of policy proposals are classified as emergency actions or national security matters in order to circumvent standard operating procedures. Finally, in order to succeed as either a legislator or a legislative lobbyist, one must master the rules of the game. “Just as carpenters and lawyers must learn their trade, members of Congress need to understand the rules if they expect to perform effectively.”5 Policy production is a craft learned largely through on-the-job training. Despite the American romance with “citizen legislators” and term limits for elected officials, policymaking is both a profession and a vocation. We will divide our survey of policy production in legislatures into three interconnected topics: work schedules, law making, and oversight. 7.3.1.1 Schedules In the first instance, the business of legislatures is dictated by the electoral cycle. Every two years the membership of Congress and state legislative bodies is changed through elections. Thus, policy production must be reorganized and start over again on a biennial basis. Every two years new leaders are elected, new assignments are made, and the legislative agenda must be built anew. Legislatures are self-renewing organizations. For individual legislators this means that they have a limited window of opportunity to get things done before running for reelection by the voters. More importantly, legislators are beholden

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to their constituents for their jobs, and not to their coworkers. Yet, legislative performance is only loosely linked to the legislator’s performance at the polls. The logics of getting things done and getting votes often diverge. Thus, as elections approach, the political agenda tends to overwhelm the policy agenda for both individual legislators and the institution as a whole. The window of opportunity for policy production is much shorter than the two-year intervals between elections. More fundamentally, policy production is really just a part-time job for most legislators. Most state legislatures meet for relatively brief sessions whose length is strictly limited by law. In these states, the notion of citizen legislator prevails—that is, public policymaking is a part-time job for individuals who make their living and their primary income in the “real world.” Citizen legislators thus wear three hats: private wage earner, part-time policymaker, and part-time politician. Surprisingly enough, even in the halls of Congress, policy production is really only a part-time vocation for senators and representatives. Much of their time is dedicated to politics, not policymaking—to fund-raising, party politics, and politicking among constituents back home. Members of Congress must rely on members of their permanent staffs as well as committee staffs to do much of the heavy lifting of policy production while they focus on assembling the resources needed for reelection. 7.3.1.2 Lawmaking Over the past decade, only about 5 percent of the bills and joint resolutions introduced in Congress became public law. Similar rates apply to state legislatures as well. Making law is an obstacle course, with many opportunities for influencing legislative outcomes and many more opportunities for blocking or derailing legislation. Here we will limit our discussion to the summary overview of the formal legislative process, as shown in Figure 7.1. Figure 7.1 Simplified View of the Lawmaking Process COMMITTEE ACTION INTRODUCTION Bill introduced in House

Referred to House committee & subcommittee, which hold hearings and recommend passage

FLOORACTION House debates and passes

House approves compromise

CONFERENCE COMMITTEE House and Senate members confer, reach compromise on all differences between the two versions

Bill introduced in Senate

Referred to Senate committee & subcommittee, which hold hearings and recommend passage

Senate debates and passes

Senate approves compromise

President signs into law

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Even in this highly simplified view, it is apparent that the process of legislative lawmaking offers many leverage or access points for influencing the fate and content of a bill. At each step, different legislators dominate the production process, offering different opportunities for shaping the final outcome. Introduction. The first, and often the most important, leverage point is the drafting and sponsoring of proposals for legislation. Just about anyone can draft a bill or legislative proposal: legislators themselves, the president or governor, federal or state agencies, political entrepreneurs, or even individual constituents. As we have seen, policy advocates often play a key role in drafting legislative proposals. However, the staffs of both legislators and legislative committees are usually involved at some point in researching and drafting legislation. Each bill must have one or more sponsors in the House or the Senate. The choice of sponsor can have a significant impact on the bill’s fate. Legislators differ in power and expertise, so it is important to find a sponsor who has the motivation and ability to see the bill through the complex and lengthy legislative process. Committee action. Once a bill has been drafted, introduced, and assigned a number, it is referred to the appropriate committee for consideration. There are eighteen permanent committees in the House of Representatives and seventeen in the Senate and scores of subcommittees that specialize in such policy domains as agriculture, armed services, and small business. Each legislator serves on several committees and subcommittees and thus must deal with dozens of bills at any given time. “Committee work is arguably the most important leverage point in the legislative process. Of the several thousand bills referred to committees during each session of Congress, only a small number are chosen by committee chairs for consideration. The committee chair refers those that are selected to the appropriate subcommittee; each committee has several subcommittees, with anywhere from 4 to over 30 members apiece.”6 Committee and subcommittee chairs have broad discretionary control over committee agendas, timetables, hearing schedules, and witness lists. Often subcommittees hold public hearings on pending legislation and invite expert witnesses as well as executive branch officials to testify. Once public hearings have been concluded, the bill may simply die or the subcommittee may proceed to mark up or make changes to the text. If a majority of the subcommittee approves of the marked-up bill, it is returned to the full committee for additional hearings, revisions, and debate. This is the critical time in the life of a bill—the time when a well-placed amendment or change in wording suggested by one or two members can determine the fate of the legislation. Much of the work of policy production takes place within the formerly smoke-filled confines of committee chambers. Since the number of players in these rooms are few and their influence great, opportunities for direct or inside lobbying are significant. Once committee action has been completed, the bill is voted on and reported to the full House or Senate or killed. Floor action. In the House of Representatives bills reported out of committee go to the Rules Committee. The Rules Committee establishes the schedule and ground rules for floor debate, including the time limits for debate and the opportunities for amendment. Quite literally, the Rules Committee—working at the behest of the Speaker—controls the legislative agenda of the House. In the Senate, bills reported out of committee go directly to the floor, where the agenda is controlled by the Senate majority leader. Though it may take months or even years for legislative proposals to reach the floor, bills before the full House or Senate are again subject to amendment and debate. Floor action provides new opportunities for opponents of bills that have been carefully shepherded through partisan committees. In the House, amendments are usually limited by the Rules Committee, but in the Senate bills can be amended virtually at will. During floor actions, media and grassroots campaigns as well as public demonstrations can be effective in mobilizing public support for or against a piece of legislation.

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Conference action. Once the House and Senate have passed similar legislation, the two bills go to a conference committee composed of members from both chambers. “The job of the committee is to work out a compromise version of the bill, which is then sent to each chamber for a final ‘up or down’ vote. The conferees . . . are appointed by the Speaker and the Senate presiding officer . . . [and] are usually members of the committees that originally reported on the bill.”7 Conference committees are the ideal setting for insider lobbying. The objective of the conference committee is to forge a compromise version of the bill acceptable to both chambers. Since this is the last best chance to see their issues written into legislation, lobbying of conference committees is particularly intense. Though floor action on the conference committee report can be the target of intense media and grassroots campaigns, the calculus of support negotiated in conference committee usually prevails in the final votes. Presidential action. If both the House and the Senate pass the conference report, the bill goes to the president to be signed or vetoed. If the president vetoes the legislation, it takes a two-thirds majority of both houses to override his veto. The maze of legislative operating procedures shapes policymaking in several ways. First it slows action by creating numerous procedural hoops. This makes blocking far easier than passing legislation. Second, the multiplicity of procedures emphasizes the power and importance of interest groups and of strategically positioned congressmen. Compromise and coalition-building as well as gridlock are the hallmarks of American lawmaking. Legislators must “go along to get along” if anything is to be done. As a consequence, electoral accountability based on clear policy choices is diminished. Third, because of pressures for compromise, legislation usually reflects the least common denominator of agreement. That is, decisions often paper over differences, leaving such details for agency and program officials to wrestle with at a later date. Fourth, it reinforces biases toward political “pork” and protecting constituency needs. Elected representatives, subject to periodic reelections, must protect their districts from legislation with perceived harmful consequences and procure benefits in the form of resources. Finally, because of the complexity of congressional procedures, legislation once in place, is rarely undone. It becomes a permanent addition to the pantheon of laws, subject only to periodic tinkering and revision.

MINI-CASE 7.1 Restacking the Chairs on the Deck One way that legislators seek policy reform is by reorganizing responsibilities. In the legislative session beginning in January 2001, the Republican majority in the House of Representatives sought to consolidate their control over programs dealing with higher education by tinkering with the assignment of subcommittee responsibilities. At issue was a reshuffling of jurisdiction over the various components of the Higher Education Act of 1965, the basic legislation governing federal programs in postsecondary education. The House Committee on Education and the Workforce is the umbrella committee that oversees programs under the Higher Education Act and supervises the work of numerous subcommittees. Specifically, responsibility for issues related to student aid and training beyond the high school level remained with the Subcommittee on 21st Century Competitiveness, the group with primary oversight of the Higher Education Act. Programs that provided funds to historically

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black colleges and Hispanic-serving institutions, however, were separated out and assigned to the Subcommittee on Select Education Programs, a subcommittee with primary jurisdiction over programs dealing with juvenile delinquency, child care, and older Americans. Committee Democrats immediately criticized the reorganization as racially motivated and threatened to boycott subcommittee meetings. Republicans vehemently denied the charge and pledged to protect minority-serving colleges. Such tiffs over lower-level congressional reorganization attract little attention beyond the few stakeholders directly affected. In 2001 only those paying the closest attention noted the new sets of players, and realignment of interests and dynamics now influencing the pace and tenor of policy production shaping higher education. The next time they gain a majority in Congress the Democrats will undoubtedly reshuffle committee jurisdictions once again.

As complicated as it may seem, this textbook description of the legislative process is grossly oversimplified. Each step in the process has dozens of variants and wrinkles that ultimately stamp each piece of legislation with a unique trajectory. The process is complex not only because of the diversity of issues and players involved, but also to insulate the participants from the full force of public scrutiny and pressure. If every piece of legislation in Congress had one and only one up-or-down vote, then forces would be mobilized, lines would be drawn, and every vote would resemble a presidential election. The “complexification” of procedure protects the participants; it gives them room to maneuver and shelters them from the lobbyists swarming outside their doors. Of course, procedural obfuscation can also hide unethical and even illegal conduct. Nevertheless, both complexity and its counterpart—variability—are endemic features of public decision making. While novelists have long celebrated the subterranean stratagems of corporate boardrooms and mafia families, these worlds are transparent when compared to the politics of the legislative process. Moreover, as many have noted, the classic description of the process has changed significantly over the past decade. After nearly four decades in the wilderness, in 1995 the new Republican majority in the House of Representatives entered office determined to change the way the process worked and preserve their slim majority. Procedures were harnessed to both policymaking and political processes. As former House Republican leader Tom DeLay emphasized, “Procedure is always a party vote.”8 While party members could differ on the substance of policy proposals, unanimity was demanded with respect to the rules of procedure. Control over the agenda became the first priority. As we saw in chapter 5, congressional Republicans have used partisan tactics to seize control over the legislative agenda and advance the party’s agenda. The powers of committee chairmen have been weakened and party leaders have sometimes taken a direct role in crafting legislative packages. Rules governing amendments to bills have been finely tuned to weaken the control of committee chairmen and strengthen party leaders both on the floor and in conference committees. Finally, omnibus legislation combining numerous initiatives into gigantic packages has become the norm and not the exception. By combining the popular with the unpopular, then sweetening it with pork-barrel projects, congressional leaders can force a take-it-or-leave-it vote on the whole package. Often such approaches produce widely divergent versions of pending legislation in each house. When conference committees refuse to compromise, leadership is increasingly called to take over, often adding administration officials from the executive branch to the deliberations.

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What emerges from such conferences are megabills, consisting of thousands of pages, that few, if any, legislators have time to read before voting on. And such behemoths typically include enough items critical to the executive branch to forestall presidential vetoes. While omnibus legislation is considered an abomination by many, it has become a necessary abomination in an era of slim party majorities, virulent partisanship, and tight budgetary constraints. 7.3.1.3 Legislative Oversight As we have emphasized throughout, laws are not public policies. They are merely the public commitments to act that guide policy production. Thus, legislatures cannot make or produce public policies by themselves. They must collaborate with executives, judges, and administrators to see that the promises are kept and policy results are delivered. “Congressional oversight is the continuing review by the House and Senate . . . of how effectively the executive branch is carrying out congressional mandates. . . . As one senator put it ‘I believe that oversight is one of the Congress’s most important constitutional responsibilities. We must do more than write laws and decide policies. It is also our responsibility to perform the oversight necessary to insure that the administration enforces those laws as Congress intended.’”9 The tools of legislative oversight include: • Investigations. Investigations have long been a feature of American policymaking. The first congressional investigation in 1792 looked into government conduct in the wars against the Indians. Special investigations of events such as the Watergate break-in and the Iran-Contra Affair have transformed the political landscape. Although legislative investigations traditionally focus on failures of policy implementation, they are also used to focus attention on the need for policy intervention in such problem areas as hunger, poverty, and automotive safety. Though subject to excesses and abuses, ad hoc congressional investigations have grown in importance as a source of policy inputs. • Audits. In 1921 Congress created the General Accounting Office (GAO) to serve as a watchdog over the federal government. The GAO conducts audits and investigations of executive programs and agencies at the request of members of Congress, conducts field investigations of administrative agencies, prescribes accounting standards for the executive branch, and provides legal opinions regarding government activities. In recent years the GAO has played a leading role in proposing best practices for programs, information technology, and human resource management in the government. • Inspectors general. Congress has created the Office of Inspector General (IG) in more than fifty federal agencies and departments. IGs have broad authority to conduct independent investigations and audits of their agencies to expose waste and fraud and improve agency management. The “IGs keep Congress fully and currently informed about federal activities, problems, and program performance through the issuance of periodic reports.”10 • Senate confirmation. As we have seen, presidential appointments of federal judges and toplevel executive branch officials require the advice and consent of the Senate. While the appointment process is political in nature, Senate confirmation gives legislators leverage over policy production in both executive and judicial branches. The confirmation process gives senators the ability to deny office to individuals whose policy views they oppose and to use delay as a bargaining weapon in contests with the president over public policies. Finally, the torture test of Senate confirmation hearings is designed to impress on new appointees the need for at least token deference to the policy preferences of individual senators.11

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7.3.1.4 Legislatures: Conclusions The work of legislators is rigidly structured. Although the political dramas and backroom intrigues of legislative decisions sell newspapers and books, legislatures rely on numerous, complex institutional controls to regulate policy production. Legislatures deal with policy inputs mechanistically through a series of cycles and procedures to manage its action agendas. Such procedures channel political conflict and the demands of 535 independent legislators by allocating policy inputs and controlling the agenda for congressional action. Only as procedures and calendars permit can policy entrepreneurs push policy initiatives through the labyrinth of congressional policymaking. 7.3.2 Executives “Chief executives dominate the agenda-setting process in the United States.”12 This is as true for city mayors and state governors as it is for presidents of the United States. The preeminent role of executives in the policymaking process is of comparatively recent vintage and by no means unchallenged. The constitutional architects established a system of government that detailed the policymaking powers of Congress but left the role of the president open and vaguely defined. For most of the nineteenth century, policy production was centered in Congress in times of peace. It was Theodore Roosevelt at the beginning of the twentieth century who first systematically employed the “bully pulpit” of the presidency to seize initiative away from Congress. Roosevelt understood that direct access to the mass media and the president’s dominant role in national defense and foreign policy gave him leverage over Congress in the struggle over policymaking. In addition, Roosevelt recognized and exemplified the power of personality or persona in American culture. “Americans have always preferred politics with a personal touch, making heroes and villains out of public figures and evaluating politicians on the basis of human qualities such as integrity, leadership ability, and physical attractiveness . . . Political interest typically focuses on individuals, and in most cases this means chief executives—presidents, governors, and mayors.”13A century later, the fundamentals have changed little, but presidents—and to a lesser extent governors—have far more resources at their disposal in the policy production process. 7.3.2.1 Schedules Presidents, governors, and mayors (for the most part) are elected officials with limited terms of office. They know that in four, or two, or however many years, they must either run for reelection or leave office, if term limits apply. Thus, executives, like legislators, have limited time to get things done. Moreover, the actual time available is much shorter than the stipulated term of office. “Barring unforeseen tragedy or political scandal, the length of the President’s term of office is constant, covering 1,460 days. In qualitative terms it is much shorter. According to one White House aide, ‘You should subtract one year for the reelection campaign, another six months for the midterms, six months for the start-up, six months for the closing, and another month or two for an occasional vacation. That leaves you with a two-year presidential term.’”14 Executives, especially term-limited executives, are policymakers in a hurry. Within their foreshortened window of opportunity, presidents are constrained by two annual cycles of policy production: the State of the Union address and the submission of a proposed budget. The State of the Union outlines the president’s agenda or wish list of policy proposals. The budget, as we shall see in chapter 14, proposes funding for policy programs. While the State of the Union address is

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less a policy process than a public occasion, the annual budget process does consume significant time and effort on the part of the president and his staff. As a result, presidential policymaking initiatives follow a relatively predictable rhythm. “Whatever the President’s party or term, the first year is the most important, and the first year of the first term is critical. Although information and expertise are at a general low in the first year, nevertheless Presidents select the dominant themes and directions in the early moments. Those choices tend to follow the administration throughout the remaining years of both terms . . . Presidents set their domestic agendas early and repeat them often.”15 Policy initiatives often take a long time to come to fruition and the President’s effectiveness typically wanes in the latter part of his term. 7.3.2.2 Presidential Agenda What distinguishes presidents in particular and executives in general is the freedom they possess to make it up as they go along. Congressional procedures and legislators’ prerogatives make it difficult, if not impossible, to impose a policy agenda on the workings of either the House or the Senate. The president, in contrast, operates under no such constraints. He sets his own course. This freedom is reflected in the range of policy issues that presidents choose to tackle. “Compared with other American policymakers, chief executives raise an exceptionally wide variety of issues. As tribunes of the people they are free to discuss just about any policy question they wish.”16 Of course, the president does not come into office with a clean slate. Every new president enters the Oval Office carrying a heavy load of campaign promises. Although most of these promises vaporize in the atmosphere of the White House, every president feels the obligation to carry out some of the commitments made to the American people. More importantly, the presidential agenda is constrained by the resources at hand and the attention spans of Congress, the bureaucracy, and the American public. There are only so many policy initiatives that the president can start and finish. 7.3.2.3 Tools Presidents have always played a leading role in the arenas of national defense and foreign affairs. However, the president’s leading role in domestic policymaking is of more recent vintage. Perhaps the best indicator of the expanding scope of presidential policymaking is the size and composition of the White House staff. In the early 1930s President Herbert Hoover encountered controversy when he decided to expand his staff from one to three. Today, there are approximately 5,000 people working “at the pleasure of the president” as White House staff and many more in the Executive Office of the President and related agencies.17 This cast of thousands does the day-to-day work of public policymaking for the president. The history and organization of these employees mirror the changing and expanding role of the president in the policymaking process. The White House staff, the Executive Office of the President, and the Office of Management and Budget (OMB) are the primary organizational tools the president uses to make public policy in the United States. For ease of understanding it is possible to group the president’s staff into three broad functional categories: outreach, policy processing, and coordination and supervision:18 • Outreach. The president is merely one of many participants in the policymaking process. Outreach serves a dual purpose—it handles the thousands of interest groups and policymakers seeking to influence the president and seeks out like-minded groups and individuals in support of the president’s policy initiatives. For example, the task of the Office of Public Liaison is to pursue a mutually beneficial

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dialogue with public interest groups. The president’s press secretary—the granddaddy of presidential staffers—and Office of Communications handle the mass media and public relations. The Office of Legislative Affairs supports the president’s efforts to work with Congress, while the Legislative Reference Division of OMB reviews and coordinates the administration’s legislative proposals and administrative statements on bills passing through Congress. The Office of Intergovernmental Relations coordinates policy initiatives with the 88,000 state, local, and tribal entities that constitute the policymaking units within the federal system. Finally, the Office of Political Affairs coordinates the activities of the president as policymaker and party leader. • Policy processing. Policy processing involves specialized advice and expertise on policy issues. Of the president’s policy advisors, the National Security Council and the Council of Economic Advisors are the oldest and most prominent organizations. Since the administration of Richard Nixon, the president has coordinated domestic policy within the White House in the Domestic Policy Council. Over the years, other policy processing offices have sprung up, such as the Office of National Drug Control Policy, focused on drugs, and the Office of Science, Technology, and Space Policy, focused on science. The mission of these offices is to provide advice to the president and ensure coordination of policy initiatives across the federal bureaucracy. • Coordination and supervision. Less visible but no less important are the offices that keep the White House running. The most notable of these is the Office of Presidential Scheduling. Virtually every president has had someone to manage his schedule. Scheduling is absolutely critical because—as we have seen—the president’s time is precious. “Sixty percent of the president’s time tends to be committed to engagements about which he has little choice . . . Intelligence briefings, meetings with cabinet members, national security, legislative and staff meetings are preordained. . . . It is the remaining 40 percent of his time which can creatively be used to accomplish the important initiatives and goals of his administration.”19 Another venerable management function is speechwriting. Presidents have always given speeches, and contemporary presidents seem to be giving speeches all the time. “The contemporary White House is, in fact, a high-speed prose factory.”20 Though most presidential speeches are routine expositions of settled policy, scheduled policy addresses can and do drive the formation of public policy. While speechwriters rarely make public policy, speechwriting often does force the president’s team to make policy for the occasion. The president has become policymaker-in-chief not by dint of experience, expertise, or charisma, but rather as the manager of a staff of thousands. While we would like to imagine the president as the ultimate policy wonk, the real work of policy production is done in the trenches. 7.3.3 Bureaucracy What is the bureaucracy? We use the term to apply to twenty million or so civilian employees of the federal, state, and local governments. Of these, we focus particularly, though not exclusively, on the career civil servants who work for government agencies established by law. We specifically exclude the thousands of staff members working directly for the president or for Congress. Of course, the boundaries of the bureaucracy are fuzzy. There are many career civil servants working in the Executive Office of the President and a large number of military officers staffing jobs in the Pentagon and civilian agencies. What is important from our perspective is that bureaucrats are public policymakers that produce policy in a manner quite different from that of legislatures, executives, and judges.

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DEPA

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OF IONA L AND IZATION HYP ERB OLE

THE REAL CENTER OF GOVERNMET

Source: Non Sequitur © 2000 Wiley Miller. Dist. By Universal Press Syndicate. Reprinted with permission. All rights reserved.

In part III of this text we will examine in some detail how bureaucracies make public policy. Here we shall simply summarize some of the principal features of bureaucratic, or administrative, policy production. In the first place, bureaucratic policymaking is located right at the intersection of legislative, executive, and judicial policymaking. Generally speaking, bureaucracies are organizations created and funded by Congress, led by presidential appointees, and bound by judicial oversight. Congress creates (or abolishes) bureaucratic agencies at will, decides if they’re permanent or provisional, dictates agency mission and structure, and funds—or withholds funding for—agency operations on a yearly or biennial basis. The president and his staff appoint agency leaders, set agency strategy, and monitor agency compliance with presidential policies. And the judiciary ensures that agency products and activities do not stray too far from legal principles and findings. It should not be surprising, therefore, that bureaucratic policy production combines features of executive, legislative, and judicial policymaking. Moreover, bureaucratic policymaking is limited to a specific problem area or target population. The president, Congress, and the judiciary deal with all sectors of society. Bureaucratic policy production is specialized. Bureaucrats tend to focus on agriculture, health, transportation, or some other policy domain. Thus, bureaucratic policymaking is closely linked, and bureaucrats are closely associated with specific groups—particularly interest groups—in American society. The pattern of relationships shown in Figure 7.2 (facing page) emerges. Bureaucrats, legislators, executive staff, and lobbyists—when involved in the same policy domain—share a natural community of interest. All are locked in the embrace of self-interest.

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Figure 7.2

Bureaucratic Agencies and their Environment

Courts

Legislature

Bureaucracy

Executive

Policy Entrepreneur Policy Domain

Since bureaucrats specialize in a particular policy domain, the bonds between lobbyists and bureaucrats grow particularly strong. “Government officials with whom interest representatives are most often in contact mirror, in many respects, the characteristics and patterns of behavior of the interest group lobbyists.”21 How do bureaucracies manage these relationships? Like the president’s staff they establish permanent offices to coordinate relations with Congress and the public. “[E]very Cabinet-level department has a congressional relations office, headed by an assistant secretary with a staff of at least twelve employees. Most non-Cabinet agencies also have a staff designated as liaison with Congress . . . By the late 1980s the various Federal agencies annually spent more than $100 million to employ 2,000 ‘congressional affairs personnel.’”22 Likewise, bureaucratic agencies typically have public outreach offices for managing the public. Another feature that shapes policy production in bureaucracies is the fact that the vast majority of bureaucrats are civil service employees, with permanent appointments, subject-matter expertise, and an interest in stability and incremental improvement. Unlike executives and legislators, bureaucrats are not in hurry-up mode. Patience is on their side. Career bureaucrats typically see several generations of political appointees and congressional overseers come and go. Thus, their focus is on protecting their agency and the public interests they serve or regulate. Continuity, stability, and incremental change are the hallmarks of policy production in bureaucracies. 7.3.4 Courts Courts offer another avenue to influence policymaking. However, the techniques of influence and the channels of access differ greatly from those used to lobby Congress, the president, or the government bureaucracies. This is because courts are institutions of governance designed to be above the fray of daily politics. With lifetime or long-term tenures, fixed incomes, substantial discretion to run their courtrooms as they see fit, and codes of professional ethics, judges are more or less insulated from direct lobbying.23 Such limitations are essential to preserving the legitimacy of the courts and the respect accorded to judicial decisions. Nonetheless, groups and individuals alike

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regularly use courts to pursue their interests. They seek favorable outcomes, whether in resolving a specific dispute or in obtaining a friendlier interpretation of some statute or policy. Strategies for influencing policy through litigation are shaped by the three basic phases of litigation. First are choices about how to frame litigation, that is, what disputes to pursue and laws to challenge and before which court. Second are numerous process-based opportunities associated with actually filing and maintaining a lawsuit through to the point of obtaining a judgment by a trial court. Third are the more familiar political strategies designed to influence appellate review where interpretations of law by trial courts are challenged and where policy differences are more directly argued and resolved. As outlined below, the strategies available to those seeking to influence policy via the courts are intertwined with the complex processes for judicial decision making. 7.3.4.1 Framing a Lawsuit Deciding what to litigate is the crucial first question. Those seeking to influence judicial policymaking must first find a good test case. This involves answers to three basic questions. • • •

What provision of a law or policy is to be challenged, and on what legal basis? What actual dispute or controversy should provide the factual basis for the case to be litigated? What court has jurisdiction and venue and is most sympathetic?

Every lawsuit requires a dispute or actual controversy in which someone is injured and for which there is a remedy within the law. Groups with specific policy agendas initially target those laws or policies they wish to change. Identifying such provisions is often straightforward, reflecting a group’s common policy agenda and the principles that unite them. Next, they must search for disputes with fact patterns that could lead to their desired outcome and that fall under the law or policy being challenged. This search requires both sophistication and resources. Last is the question of jurisdiction. That is, in which court system and venue will the prospective case be most sympathetically received? Fifty-one different court systems (fifty state and one federal) operate simultaneously within our federal system of governance. Federal courts only try cases involving federal laws, conflicts between state and federal laws, and those involving certain parties,24 but, even then, the specific court (venue) hearing the case depends on the location of the parties to the case and where the dispute occurred. This determination is important because “an accumulating body of literature suggests . . . that judges are influenced by the traditions and mores of the region in which their courts are located.”25 Those seeking to influence policymaking through litigation must be aware of the old legal adage that “bad cases make bad law.” Decisions preceding the filing of a lawsuit provide the framework for shaping the desired outcome. 7.3.4.2 Litigation Strategies Getting a lawsuit into court and through the litigation process involves jumping through the multiple hoops that comprise that process. This requires most litigants to obtain lawyers. The legal skills and mastery of procedures that experienced, highly paid attorneys bring to litigation are important building blocks. The judicial process offers many strategic openings. Among the most familiar of these are:

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• • • •

143

Formulating the lawsuit as a class action Requesting broad or immediate remedies Gathering and presenting compelling evidence Drafting well-argued legal briefs for the presiding judge

As a general rule, parties to a lawsuit cannot litigate on behalf of others. In terms of judicial policymaking, the primary exception to this is the class action lawsuit. Class action lawsuits allow courts to resolve complaints that involve a common set of facts and affect a group of people suffering a common injury and requesting a common remedy. Efficiency and effectiveness provide the rationale for such suits, but legislatures craft the specific rules permitting such approaches to litigation. Class actions allow courts to address common problems under limited circumstances and are often employed when interest groups seek to broaden the impact of their lawsuits. Other strategic opportunities include the remedies requested by the plaintiff in filing the lawsuit and the development and presentation of evidence. The choice of remedy affects litigation strategy by signaling the stakes ahead of time to both parties. For example, requesting a preliminary injunction (or temporary restraining order) requires quick judicial action. Such injunctions stop a challenged policy activity, immediately, before, rather than after, litigation. Although difficult to obtain, success at this stage often presages a winning hand. Evidence gathering and presentation offer opportunities to develop a compelling case or find “the smoking gun.” However, it also may require large expenditures, during both the discovery and trial phases of litigation. Many a case is won or lost on insufficient evidence or on the quality of expert opinions during trial. Indeed, results, especially in policy-related lawsuits, often turn on a battle between experts in testimony during litigation. Finally, how groups formulate their legal arguments in briefs submitted to judges often shapes rulings from the bench. In cases tried without a jury (most policy-based cases), judges often issue opinions. Where precedent exists, judges have guidance in determining their decision. In cases of first impression, or with limited precedent, however, lower-court judges are freer to reason through the legal questions based on evidence and arguments raised at trial. As trial court judges, their opinions do not create precedent for other courts to follow, but, nonetheless, are sometimes published and available to other judges and courts. Even in cases where there is clear precedent, lower-court judges retain some latitude to find ambiguities in established appellate court holdings or to avoid ruling on the merits of a case and opt, instead, for a decision on procedural or technical grounds. Other options for judges who may disagree with existing judicial precedent are to rule as narrowly as possible or to hold that the facts in the present case differ sufficiently so as to require a different outcome. Such dynamics speak again to the importance of who presides as judge and the forum for litigation.26 7.3.4.3 Appellate Review The appellate stage of litigation opens up additional opportunities for litigants to influence judicial decisions. To become policy, that is, to serve as precedent binding in future litigation, cases must undergo appellate review. Decisions by trial courts may be appealed by the losing party to appellate courts on three grounds: that errors in procedure were committed, that errors in law were made, or that the wrong law was applied to the facts of the case. There are two levels of appellate review in the federal court system: the thirteen circuit courts, which provide a first level of review, and the Supreme Court, which is the final arbiter for cases involving federal law. Circuit courts hear two general categories of cases. First are civil and criminal

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appeals from federal trial courts. Of these, about 29 percent involve petitions by prisoners, 42 percent involve disputes between private parties, and 13 percent involve the U.S. government acting in its private capacity, in some way.27 A second group, making up about 10 percent of all civil cases, includes appeals from federal administrative agencies, departments, and regulatory commissions. These are primarily heard by the U.S. Court of Appeals for the Federal Circuit in Washington, D.C.—a court with particular expertise in administrative law and government policymaking. Circuit courts often reach different conclusions in interpreting the same law, as, for example, in cases involving affirmative action on campus, where widely varying circuit court decisions accumulated for a quarter of a century before the Supreme Court agreed to visit the issue again. The Supreme Court alone has the authority to resolve differences in judicial interpretations between courts below it. It also has almost complete discretion in selecting what cases it will hear, and issues between 100 and 150 written opinions yearly. For a case to be placed on its docket, the Supreme Court must review the written brief of the case under appeal and issue a writ of certiorari if four justices agree. Certiorari is granted in less than 10 percent of cases appealed. Again, predictions about which cases the Court will agree to hear are notoriously unreliable, although most agree that the saliency of the legal issue and the existence of a split among the circuit courts are important factors. Policy advocates often emphasize these factors in generating momentum for the Supreme Court to review their cases. Pursuing a case through appellate review requires resources, persistence, and some luck. To take a case to the level of the Supreme Court involves marshalling substantial legal and political support: first, to convince the Court of the pressing need to resolve the legal question at issue; and, second, to persuade the Court of the correctness of the interpretation sought by each side. While many groups with specific policy interests may participate in sponsoring litigation from the beginning stages, several groups are specifically organized to focus on litigation in the federal appellate courts, especially the Supreme Court. These include private groups, such as the American Civil Liberties Union, and staff employed by several public agencies, such as the Solicitor General in the Department of Justice. Such groups seek amicus curiae (friend of the court) status and rights to participate in the review process by submitting briefs and other documents supporting their interpretations of the legal question. In addition, legal scholars and policy experts often seek influence through articles in legal journals and other media that might command the attention of judges. In the most important cases, political activists add their voices. Supreme Court decisions make policy. Examples of this are familiar to all, from the impact of the Brown v. Board of Education28 decision on the civil rights movement and Gideon v. Wainwright29 on criminals’ rights to due process, to Roe v. Wade30 on a woman’s right to have an abortion. Such decisions, once announced, are usually beginnings, not endings. In addition to impacts on policies and politics in other branches of government, court decisions often provoke new rounds of litigation, new lawsuits, and continued attention from the same, as well as newly activated groups and interests. 7.3.4.4 Courts: Conclusions Courts generate policy inputs and move policymaking forward in very different ways and employ very different tools for making policy than legislatures, executives, or bureaucracies. Courts rely on an important fiction to preserve the legitimacy of their role in governance: that is, courts do not make law, but rather, interpret and apply it. This distinction is critical to understanding judicial inputs in policymaking. Courts deal with established law in the form of constitutions, statutes, and rules. They are constrained to apply precedent, or prior decisions interpreting that law, to

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the specific dispute at hand if the specific facts of the case before the court are similar to those in a case previously decided. However, when the facts differ, judges may select from competing precedents or craft a new application reflecting this variation in facts. These principles of judicial decision making provide some wiggle room for judges to identify similarities and differences between cases and to adapt their decisions accordingly. Often small differences in facts can refine and distinguish lines of precedent and set new policy directions. Those seeking to move problems or solutions onto the more formal agendas of the political institutions of government frequently resort to the courts for decisions supporting their positions. Courts are important sources of policy that generate inputs resolving day-to-day operational questions for policy administrators and, on occasion, issue important substantive interpretations of statutes, rules, and constitutions that determine the future course of policymaking. Occasionally, courts venture into policy issues where politicians dare not go. From abortion and affirmative action to the death penalty and school vouchers, litigation offers alternative policymaking channels where many of the “third-rail” issues of American politics can be addressed. For this reason, policy entrepreneurs and policymakers alike use the courts to seek rulings consistent with their particular agendas in the hope that favorable outcomes will generate support and momentum for broader action. Predicting the outcomes of judicial decisions is risky at best, however. 7.3.5 Constitutional Amendments Legislatures, executives, bureaucracies, and courts are not the only institutions for policy production. There are two other kinds of institutions—or institutional processes—for making policy. The first of these is the constitutional amendment. Amending the Constitution poses nearly insurmountable obstacles for policy advocates. These hurdles take the form of procedures designed to slow change and protect the Constitution against the vagaries of transient political passions. In the more than two centuries since its adoption, the Constitution has been amended only twenty-seven times. Of those amendments, the first ten, the Bill of Rights, were enacted in 1791 as part of the political compromise between states allowing ratification. Of the remaining seventeen, seven31 modify procedures for governing, from reforms of the Electoral College and provisions concerning presidential succession and limiting the number of terms a president may serve to the most recent amendment (1992), limiting the power of legislators to raise their own salaries. Ten amendments, including the two dealing with prohibition, which cancel each other out,32 make substantive changes. These remaining eight amendments reflect the most profound policy changes in American history, from those eliminating slavery33 and extending suffrage to all groups within the nation,34 to those requiring states to comply with the protections offered citizens under the Bill of Rights35 and allowing governments to levy taxes on income.36 There are two methods for amending the Constitution,37 although only one has ever been used. In one, Congress initiates the process by proposing an amendment by a two-thirds vote of both houses. Three-quarters of the states, either through their legislatures or by conventions, as specified by Congress, must then ratify the proposed amendment. The second method, never used, imitates in large part the processes used in 1787 for ratifying the Constitution itself. It allows for the calling of a convention for proposing amendments upon the recommendation of two-thirds of all state legislatures, and then, as in the first method, requires ratification of the proposed amendments by three-quarters of state legislatures or of state conventions. The difficulties of the amending process, beyond periodic procedural issues, are substantial.

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Historical experience further deters efforts to amend the Constitution for all but the most substantive policy changes. At the state level, however, the situation is entirely different. The American states have repeatedly revised their constitutions. “Only nineteen states still retain their original constitutions, and a majority of states have established three or more.”38 Amendments to state constitutions are commonplace. “As of 1996, over 9,500 amendments had been proposed to the states’ current constitutions and over 5,900 adopted—an average of almost 120 amendments per state.”39 Moreover, popular participation in amending state constitutions is extensive. In all but one state the voters ratify all constitutional changes. At the state level, therefore, amending the constitution is a viable and oft-used alternative to legislative action. 7.3.6 Initiatives and Referenda In twenty-four states and the District of Columbia an alternative method of policy production is available—the initiative petition. “With the initiative, citizens, by the collection of voter signatures, may propose legislation and bring about a vote upon their proposals by the electorate. This allows the electorate to act independently, or at least somewhat independently, of the legislature.”40 On the other hand, twenty-six states allow referenda, or laws initiated by a state legislature subject to ratification or rejection by voters.41 Of the two approaches to policymaking by the electorate, initiatives are more controversial. Although the roots of direct democracy go back hundreds of years, the initiative as a technique of policy production is little more than a century old. The corruption of late nineteenth-century state governments led reformers in mostly Western states to establish the initiative petition as a means of policy production. First in South Dakota in 1898, and later in Oregon and California, states began to allow citizens to initiate petitions that became either statutory or constitutional law if signed by a sufficient number of citizens and approved by the voting public. “The initiative process has two basic forms: the direct initiative and the indirect initiative. In the direct initiative, a measure that qualifies for the ballot by citizen petition is submitted directly to a vote of the people. In an indirect initiative, a ballot measure must be submitted to the legislature before being voted on by the people. If the legislature decides to adopt the measure, then it is not submitted to a vote of the people.”42 Initiatives provide an alternative means of producing policy authority. Citizens who fail to make their case before state legislatures can produce policy authority on their own by drafting a new law or constitutional amendment, collecting signatures from voters, and winning approval at the polls. Originating with the Progressive Era reform movement, initiatives have become a growth industry for policy production since the 1980s. Fueled by distrust of politicians, wealthy sponsors, and professional campaign lobbyists, initiatives have become the production process of choice for some policy advocates. “In a single year, 1998, voters across America used the initiative process to pass laws or amend state constitutions, achieving a wide variety of goals. They ended affirmative action, raised the minimum wage, banned billboards, decriminalized a wide range of hard drugs and permitted thousands of patients to obtain prescriptions for marijuana, restricted campaign spending and contributions, expanded casino gambling, banned many forms of hunting, prohibited some abortions, and allowed adopted children to obtain the names of their biological parents.”43 While debate rages over the impact of direct democracy on American public policy,44 the advantages of initiative campaigns for policy production are clear. Initiatives provide a means of policy production for groups promoting politically and socially divisive policy initiatives. When

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legislators prove reluctant to tackle polarizing social issues like assisted suicide, abortion, illegal immigration, and affirmative action, activists can change public policy by mobilizing small minorities of signatories and bare majorities at the polls. Often, initiative campaigners boldly go where legislators fear to tread. 7.4 PROCESS We have identified six arenas where policy inputs are processed and placed on policymakers’ agendas: legislatures, executives, courts, bureaucracies, constitutional amendments, and initiatives and referenda. The first four arenas are those identified with everyday policy production. The latter two are institutions where the normal cast of policymakers is expanded. In the case of constitutional amendments, the final decision is made by state legislatures at the federal level and by voters at the state level (in 49 of the 50 cases). In state initiatives and referenda the voters have the last say. Up to now we have discussed these six arenas in isolation. It is time to put all the pieces together. Figure 7.3 shows a highly simplified view of the processes that link these six arenas together. What is apparent from even this elementary overview of the workings of American government Figure 7.3

American Policy Production, an Overview Amendments

Legislatures Judgments Laws & Oversight

Bureaucracy

Laws Enforcement Actions

Courts

Judgments Rules S Regulations Review

Lobbying

Judgments POLICY ENTREPRENEURS

Legal Challenges & Appeals

Advice & Consent

Executives

Lobbying POLICY ENTREPRENEURS Lobbying

Initiatives

Lobbying Appointments & Direction

Constitutional Amendments

Appointments' Bills

VOTERS

POLICYMAKERS

Source: Adapted from Michael Watkins, Mickey Edwards, and Usha Thakrar, Winning the Influence Game (New York: Johy Wiley and Sons, 2001), p. 114.

is that there are not only multiple arenas for public policymaking, there are complex relationships or dependencies that provide countless opportunities for placing inputs onto the public agenda. If a policy entrepreneur fails in a legislature, he or she can try again in the courts, the executive branch, or the bureaucracy, or even appeal to the voters through constitutional amendments or initiatives. There is always another time or another place to challenge the status quo. In addition, the complexity of the policymaking process illustrated in Figure 7.3 means that playing offense (initiating policy

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change) is more difficult than playing defense (maintaining a policy status quo). Most policy problems can only be solved with the active participation and cooperation of many policymakers in multiple branches and at multiple levels of government. American policy production is, by definition and design, collaborative social action. Getting things done is never simple and seldom easy. Executives must work with legislators, judges, and numerous entrepreneurs to make public policy a reality. And federal, state, and local officials must deal with each other if they truly want to see results. 7.5 MAPPING POLICY INPUTS Despite the daunting complexity of Figure 7.3, it is possible to track the trajectory of policy inputs as they cycle around and around the institutions of public policymaking. Although policy inputs cycle repeatedly throughout the numerous arenas of policy production, we can map the path a policy takes through each individual cycle. Figure 7.4 introduces the basic matrix or grid we will use to track the evolution of a single policy input. The columns in Figure 7.4 display the components of a policy input as it evolves over time. Figure 7.4 Mapping Policy Inputs

POLICY Problems Solutions Issues

INPUTS Politics

Access

Agendas

ARENAS Legislature Executive Court Bureaucracy Amendment Initiative

• • • • •

A policy entrepreneur defines a problem or situation to be remedied by public action. The same, or another entrepreneur, links the problem to a pre-existing or new solution. Though solutions often predate problems, it is the linking of the two that matters. The problem–solution package competes with other related problem–solution packages for public attention, and a policy issue is born. Issues are then linked to politics, where politicians and public officials exploit them to further their pursuits of power and position. Policy entrepreneurs seek access to public policymakers to get on the agendas in one or several of the six institutional arenas listed in the final column.

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The rows in Figure 7.4 enable the policy analyst to track multiple problems, solutions, issues, political venues, modes of access, and institutional agendas and their relationships. At each step a policy input may involve a complex bundle of problems, solutions, issues, political interests, access points, and agendas. The matrix displays in Figure 7.4 offers a graphical overview of these pieces of the puzzle. Figure 7.5 offers an example of a policy map for two different policy inputs. Figure 7.5

Mapping Policy Inputs: Example

POLICY

INPUTS

Problems Solutions Issues Politics

Access

Agendas

ARENAS Legislature Executive Court Bureaucracy Amendment Initiative

The first path (top) shows a couple of problems bundled with two separate solutions in a single issue that involves two different political players and pursues access to the legislative agenda. For example, the flooding and devastation of New Orleans, while attributable to a failed levy system, also exposed the endemic poverty of many of the city’s residents and moved that issue higher on the policy agenda, at least briefly. The second path (bottom) follows a policy input that is directed toward both judicial and bureaucratic institutions. Affirmative action is an example of an issue that has remained rather consistently within the purview of the courts and the various bureaucracies that interpret and apply this policy. Obviously, the real world is far more complex than the paths shown in Figure 7.5. Problems, solutions, issues, politics, access, and agendas interact in complicated and often unpredictable ways in different arenas. The sequence of events implied in Figure 7.5 is as much illusion as reality. Nevertheless, policy inputs do consist of bundles of components and the relationships between these components and their histories matters. Policy maps offer a framework or starting point for analyzing the seemingly random trajectories of individual public policy inputs. 7 . 6 PA RT I I R E C A P In part II we have surveyed how policy problems are created, nurtured by policy entrepreneurs, and inserted into the policy production process. Problems and their solutions are made, not born.

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They are handcrafted—and on occasion, mass-produced—by policy advocates, who shop around for the policymaking arena most likely or able to bring about the results they seek. Policymakers, in turn, need problems—the “raw materials” of policy production—in order to do their job and demonstrate policy results. Both policy entrepreneurs and policymakers are ultimately driven by the imperative of getting things done. Finally, policy production itself is governed by complex sets of procedures that vary significantly from one institution to another and constitute the rules of the game for both policymakers and policy entrepreneurs. These rules determine What can be done, Where, When, How, and by Whom. The genius of American public policymaking is that there are many policy arenas, many different rules of the game, and thus, infinitely many potential paths from policy input to policy output and outcome. Part II has also emphasized the following themes. First, modern technology and problem definition are inseparable. A problem is something we believe we can do something about, and technology —broadly construed—is the means to solving problems. The greater our faith in technology, the more problems we believe we can solve, the greater our reliance on public policy production. Americans are problem solvers. We like to believe we’re a “can-do” people. If it can be done—that is, if it is a problem and not a condition—then it should be done. Our trust in public policymaking is simply a mirror of our faith in progress and technology. Second, in order to solve the problems we see around us, Americans have invented a vast and ever-growing assortment of institutional arrangements for problem definition, issue advocacy, and policy production. We have honored the wisdom of our Founding Fathers not by slavish adherence to original principles, but rather by constant innovation in institutional designs for managing policy inputs. When the mechanisms of the Constitution proved inadequate, we invented political parties, business associations, public interest groups, initiative petitions, think tanks, political action committees, and a never-ending array of institutional adaptations to policy advocacy and production. Institutional creativity and change is the hallmark of American public policymaking. Third, the pattern of continuous innovation in policy institutions means that history matters. New institutions are layered on top of old ones, and the only way to anticipate the future of public policymaking is to look to the past. The American public and American policymakers have been seeking to regulate and reform the relationships between policy entrepreneurs and policymakers for nearly a century and a quarter. The record of this effort is the best and only guide to what the future may hold for the nettlesome relationship between politics and policymaking in America. Finally, part II dealt with the first stage of the policymaking process—inputs. It examined the what, who, and how of bringing policy problems to governments. However, getting policymakers to make commitments to act is just the first step in the policy production process. As we shall see in part III, there is much more to policy production than meets the eye. What occurs between the making of a promise to act and the actual delivery of some intended policy benefit is neither automatic nor preordained.

CASE STUDY The Stars Must Be Lined Up Just Right In a radio interview in fall 2003, Senator Grassley, then chairman of the Senate Finance Committee, characterized policymaking by Congress.45 For legislation to pass, “the stars must be lined up just right.” Grassley was describing his efforts to pass his own, seemingly simple, proposal for targeted reforms to Medicare. Specifically, he sought to narrow the discrepancies between urban and rural regions in payments made by Medicare to reimburse physicians and hospitals in caring

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for patients—an issue near and dear to the hearts of Iowa physicians. From our perspective as students of public policymaking, the convoluted path to success for Grassley’s pet project illustrates the importance of being in the right place at the right time. The Issue Since its passage in 1965, Medicare has funded health care services for America’s senior citizens. Medicare is a federal program, paid for by a tax levied equally on the incomes of all Americans, and administered by the Center for Medicare and Medicaid Services (CMS) within the Department of Health and Human Services. Medicare operates on a modified fee-for-service basis. More than a million service providers, including doctors, hospitals, nursing homes, home health care agencies, and others, submit claims for reimbursement to Medicare. Payment levels to these providers are not equal, however. Instead, payments are first calculated on the type of service provided and then adjusted to reflect local and geographic differences in wages and costs. These differences result in large discrepancies in payments between regions, especially between urban and rural areas, and motivated Senator Grassley and others from rural states to pursue reform during the first session of the 108th Congress. The nature of a policy issue conditions the strategies used to advance or block its political fate. The problem, geographic variations in reimbursement formulas, has existed for decades. Despite periodic attempts at reform, the formulas for reimbursing health care providers have generated ever-widening discrepancies in payments and limited the ability of low reimbursement areas to attract and retain physicians and to maintain the viability of hospitals and other service providers. These discrepancies are most pronounced between urban and rural regions. For example, in 2000, the national average for Medicare spending per beneficiary was $5,360. By state, average payments ranged from highs of $7,200 in the District of Columbia and $6,700 in Louisiana to a low of $3,800 in Hawaii. In urban areas average payments ranged from a high of $9,200 per person in Miami and $8,000 in New York City to a low of $3,700 in Albuquerque, New Mexico, and Green Bay, Wisconsin.46 Although everyone pays the same premiums across the nation, regional differences in spending per beneficiary translate into wide variations in payments for and access to services reimbursed by Medicare. A related question is whether reimbursement rates affect the quality of care provided to Medicare beneficiaries. Differences in reimbursement and availability of services would appear to have little effect on quality of care. According to Medicare data, better performance is found in northern and less-populated states, while those states providing higher service intensity to patients were usually associated with lower quality rankings.47 In other words, greater utilization of health care services (intensity) is not consistent with better results for patients. Ironically, patterns of medical practice in the lower-spending regions of the United States produce higher quality care, while greater numbers of hospital beds, physicians, and specialist-oriented patterns of practice do little to improve health outcomes. This holds true, despite large differences between geographic regions in the availability of inpatient-based and specialist-oriented health care services. These somewhat contradictory findings cut two ways in terms of policy implications. One response, relying on the logic of fairness, points to reforms to equalize spending by “leveling up.” That is, a solution would be to narrow the gap by revising reimbursement formulas and increasing funding for low-cost, primarily rural states and regions. A second response, relying on the logic of performance, is to equalize by “leveling down.” That is, the solution would be to cut funding to high-cost states and force improvements in program efficiency and effectiveness. By one estimate, “up to 30 percent of Medicare spending could be saved if all regions were to adopt the practice patterns of the lower-spending regions.”48 Politically, the first solution, finding a pot of money

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somewhere for the “have-nots,” estimated to cost about $100 million yearly (a relatively small amount in terms of the annual Medicare budget), was a more politically attractive strategy than the latter solution, taking away a large chunk of resources from the “haves.” The Advocates Geography and the specific policy issue at stake condition the political dynamics of who and how. These effects may be seen in the interactions between players involved in efforts to redress the inequities produced by Medicare payment formulas. The problem was narrow and esoteric, not one to raise the hackles of the American public. Not unexpectedly, rural reimbursement flew beneath the radar of most American media over the period in question. However, because this was a pocketbook issue directly affecting relatively few, the politics of reform involved a small circle of stakeholders in a campaign that gained political legs in 2003 with the elevation of Senator Grassley to a key leadership position. Two groups of health care providers, physicians and hospitals, and their respective interest groups, the American Medical Association (AMA) and the American Hospital Association (AHA), might have been expected to lead the charge for reform. This was not the case. The regional nature of funding inequities crippled the ability of these national lobby groups to perform their traditional role and to speak for reform with one voice. Instead, the issue pitted regional interests within each association one against the other, doctor against doctor. The stumbling block remained the problem of finding resources for the have-nots that did not take away funds from the existing group of haves. The AMA found few issues to be as contentious to their members as geographic disparity, and argued that the question simply distracted public officials from the more serious problem of progressively deeper annual cuts in Medicare payments affecting all physicians. These dynamics had strategic implications in terms of access and agenda. First, political leadership had to emanate from state, rather than national associations of physicians and health care providers. Second, the campaign needed to remain below the national political radar but generate sufficient political momentum within states that were adversely affected. Third, there was a need to avoid another potential source of divisiveness within the medical community, competition between general practitioners and hospitals and those medical subspecialties and tertiary hospitals with interests in expanding the availability of more highly reimbursed, intensive care services. Assembling a coalition of interests takes time. Professional staff and activists within various state medical societies and hospital associations took the lead, with efforts to educate their memberships and their congressional delegations about the problem. Materials were generated by state-level associations and opportunities sought for local professionals to testify before Congress on related topics. Righting inequities became the rallying cry for state-level political action committees, with efforts to persuade representatives from local congressional districts. Members were asked to make calls at strategic times. A loose coalition of interested states, primarily Midwestern, organized to exchange information and coordinate approaches. Several state medical societies formed their own coalition, the Geographic Equity in Medicare Coalition (GEM) to coordinate their efforts both within the AMA and in Congress. Finally, GEM managed to push the issue of geographic fairness through the House of Delegates at the AMA’s Annual Meeting in July 2002—a symbolic but acrimonious victory. The AMA remained more or less on the sidelines. This left much of the heavy lifting to those in states whose legislators occupied key legislative positions in Congress and could be characterized as friendly. Chief among these was Senator Grassley, the senior senator from Iowa, who, after the elections of 2002, was elevated to a key position as chairman of the Senate Finance Committee.

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Institutions, Access, and Agendas Because Medicare is an important program delivering health care to over 40 million Americans each year, policymakers in Congress, the White House, and the bureaucracy are regularly asked to resolve policy problems associated with its administration. Role of the Legislature In terms of legislative efforts to redress inequities in Medicare reimbursement, the electoral and budgetary cycles, as well as the actual positions occupied by key advocates, determined whether and how this issue would be addressed. The yearly cycles of congressional authorization and appropriations create access for legislators seeking to revise and amend various provisions in Medicare, even when no major reforms are on the political agenda. Not unexpectedly, measures had been previously introduced to adjust upward reimbursement for rural health care providers. These were often timed to coincide with election-year cycles by those seeking reelection from legislative districts where the reimbursement issue played well. So, for example, in the run-up to the congressional elections of fall 2002, Representative Bereuter of Nebraska introduced the Rural Equity Payment Index Reform Act, and Senator Harkin of Iowa filed legislation to eliminate inequities by gradually phasing in increased reimbursements to low-payment areas, and pay for these by lowering funding to high-cost areas. Neither bill emerged from their respective committees. The structure of representation in the Senate and House also conditions legislative strategy. Representation in the House is based on population. More populous, urban states have larger delegations and are more heavily represented in the House than in the Senate. The twenty-nine states penalized by the urban bias in Medicare reimbursement account for only 40 percent of the votes in the House, but 68 percent in the Senate.49 This structural bias serves as a subtle deterrent to any proposal directly aimed at redressing urban–rural inequities that originate in the House of Representatives. Senators are the more likely progenitors for legislation with a rural bias. The outcomes of legislative elections also make a difference. Somewhat unexpectedly, the offyear congressional elections of fall 2002 produced slim Republican majorities in both houses of Congress. Republican replaced Democratic leadership in the Senate. Senator Grassley, an Iowan and a long-time supporter of eliminating the Medicare reimbursement discrepancy, as we mentioned earlier, became chair of the Senate Finance Committee, one of the most powerful positions in the Senate. A window of opportunity to compete for scarce health care dollars now opened for proponents of redressing rural inequities. Such opportunities are often brief, bounded by the two-year legislative cycle, in which the first year or session in a two-year cycle usually permits work on substantive reforms or policy needs, while the second year is dominated by competition for partisan advantage in the upcoming fall elections. A session typically lasts from January through October or November. For Grassley this meant a hard push for reform in 2003 before the political dynamics of 2004, a presidential election year, overwhelmed concerns about substantive reforms to policy. Finally, Senator Grassley himself was up for reelection in 2004. Grassley hit the ground running in the first session of the 108th Congress. He first attempted to attach his proposed reform to other, higher-priority legislation. In spring 2003, President Bush’s mind was on cutting taxes and stimulating the economy. Grassley, by virtue of his chairmanship of the Finance Committee, was a central player on this issue as well, but determined to pursue geographic equity for rural providers. Grassley folded his proposed reform into the president’s tax

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cut and spending bill. The package passed the Senate by 86 to 12 and went to conference committee in May. In conference committee opposition came mainly from two powerful members of the House, William Thomas from California, chairman of the Ways and Means Committee, and Billy Tauzin from Louisiana, chairman of the Energy and Commerce Committee, both of whom objected to the increasing rural reimbursements. The conference committee stripped out Grassley’s provision, but only after Grassley extracted a promise of presidential support later on, as part of pending legislation to create a Medicare prescription drug benefit. Throughout these negotiations, the media paid little attention to the issue of fixing geographic inequities. In the politics of 2003, the only reform to Medicare that mattered to most people was adding a prescription drug benefit. Prescription drug benefits had played a role in the presidential election of 2000 and the congressional elections of 2000 and 2002. Republicans and Democrats both agreed benefits were needed, but differed sharply about program design. Many Republicans viewed adding drug benefits as leverage in exchange for reducing costs and expanding private health care plans for seniors within Medicare. Democrats, on the other hand, envisioned more comprehensive coverage, providing drug benefits to all seniors regardless of income. Both sides faced a deteriorating fiscal reality shaped by the war in Iraq, tax cuts, shrinking revenues, and burgeoning federal deficits. There were few resources for new spending on Medicare and, consequently, severe constraints on attempts to design a new prescription drug benefit. Agreement on some form of prescription drug benefit was the necessary prerequisite to progress on other, less salient reforms to Medicare—including Grassley’s measure for reducing geographic disparities. Threatened with political gridlock, Senators Grassley and Baucus (D-MT) privately negotiated a compromise prescription drug benefit plan and then promoted it heavily as the Senate’s bipartisan plan. Termed the Medicare Prescription Drug and Modernization Act, the plan met minimal Democratic requirements for a meaningful and reliable drug benefit and minimal Republican interests in offering seniors some options to select private health care plans. Each side got some of what they wanted. Senator Kennedy (D-MA) climbed aboard, seeing the proposal as an historic first step or down payment that could later be improved. Senate Democrats rallied and the measure passed 76 to 21, with strong bipartisan support. At the same time, the House of Representatives narrowly passed (216 to 215) a very different and highly partisan version of a prescription drug benefit that emphasized privatizing the delivery of Medicare services. All eyes focused on the promise of a prescription drug benefit, not on provisions buried deep within the proposed legislation addressing discrepancies in Medicare reimbursement. In August 2003, the conference committee began efforts reconcile these two very different measures. Both versions addressed the issue of reimbursement discrepancies, but in very different ways. Conferees from the House were predominantly from heavily urban states, whereas those from the Senate were predominantly rural. The co-chairs were Bill Thomas (R-CA), the chairman of the House Ways and Means Committee, and Grassley, by virtue of his role as chairman of the Senate Finance Committee. Throughout their legislative careers Grassley and Thomas had often been at loggerheads, with Thomas traditionally reluctant to increase reimbursement for rural providers. In the negotiations Thomas sought cuts in Medicare reimbursements to all providers. Grassley’s strategy was to resolve the reimbursement issue first. Negotiations got off to a bad start. Grassley ordered his staff to boycott talks when Thomas refused to finalize details of the rural reimbursement provisions early on. However, pressures for progress on the politically important prescription drug benefit soon rolled over Grassley’s pet project. Strategically, Thomas was seeking

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leverage for the measure passed by House Republicans and argued that the razor-thin margin of passage by the House required greater concessions by Senators, who could afford to compromise, since their version passed by more than fifty votes. In return, Grassley, as the advocate for the Senate’s position, threatened not to sign any conference report that did not retain the outlines of his bipartisan agreement with Democrats. The fate of eliminating regional disparities in reimbursements was now inextricably bound to that of the proposed prescription drug benefits. Deadlock persisted for weeks, as each side maneuvered to mobilize congressional and presidential leadership resources to intervene. Senator Daschle, former Democratic majority leader, publicly criticized Thomas as “intransigent,” and threatened a filibuster if the House version prevailed. A lobbyist described the conflict as a “clash of the titans,” and the posturing led media pundits to predict possible failure. Others began to push for a backup plan to fix existing problems in Medicare, minus prescription drug benefits, in case negotiations failed. The Role of the President Both presidential candidates Al Gore and George Bush had promised a prescription drug benefit in their election campaigns of 2000. Although the events of September 11, 2001, diverted everyone’s attention from this issue, it surfaced again in the off-year congressional elections in the fall of 2002. The issue of inequities in Medicare reimbursement never became a matter for presidential concern. Yet, presidential intervention played a role. President Bush had other political priorities in the spring of 2003, specifically, tax cuts. Grassley initially attached his reimbursement reforms to the president’s priority legislation lowering taxes. Then, in exchange for deleting his pet proposal while continuing to shepherd the bill through committee, Grassley extracted a public promise from Bush, who wrote, “I will support the increased Medicare funding for rural providers contained in your amendment as part of a bill that implements our shared goal for Medicare reform.”50 By fall 2003 it was time for Grassley to collect on Bush’s IOU. But, this relatively minor reimbursement issue depended on a policy behemoth, the proposed prescription drug benefit legislation. In the deadlock between House and Senate conferees, only the president had sufficient leverage with conservative House Republicans to break the impasse. Even Senator Kennedy called for President Bush’s active involvement. Although little help was forthcoming—at least initially—as the fall wore on, pressures built on Bush to get involved. The Role of the Bureaucracy Several public agencies and their staffs also contributed to the effort to reform discrepancies in Medicare reimbursement—although mostly beforehand and behind the scenes. First, many of the discrepancies could be traced to formulas developed by the then Department of Health, Education, and Welfare decades earlier, when the program mechanisms were designed, tested, and eventually codified by statute. As illustrated in this case study, once a schema is established and resources distributed to winners and losers, corrections are difficult to make. Second, the agencies responsible for implementation were then involved in overseeing policy production, especially in gathering data to evaluate the effects of programs they administer and to suggest ways to improve performance. The Center for Medicare and Medicaid Services (CMS), formerly known as the Health Care Financing Administration (HCFA), is the group within the

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Department of Health and Human Services (DHHS) responsible for generating such program information. So, for example, CMS long had evidence documenting the effects of discrepancies in Medicare reimbursement. Much of this evidence has served as a basis for previous efforts by many different stakeholders to improve and reform the delivery of Medicare services to the elderly. Third, agency pressure for change had been brought to bear. This often occurs during appearances before various committees of the House and Senate. In terms of rural equity, the Secretary of Health and Human Services, Tommy Thompson, a former governor of Wisconsin, a state belonging to the reform coalition, announced his support for greater equity in hearings before the Senate in early 2002. Grassley acquired a key bureaucratic ally. Finally, bureaucracies are often the source of policy solutions. In the case of reimbursement inequities, CMS had offered such a solution years earlier. It permitted any state to shift from differing urban and rural reimbursement rates within that state to a single statewide equal payment rate for all physicians and hospitals. CMS only required that the state provide the agency with an assurance that the physician community agreed to the proposal. By 2003, very few states had switched to a state-based reimbursement rate. Ohio, one state that did switch, saw large numbers of urban doctors quit the state medical society.51 CMS’s proposed solution stirred too much contentiousness between health care providers within a state to be viable. As a consequence, the bureaucratic solution fell by the wayside and the issue was bumped up to the national level, where blame could be diffused if no alternative solution could be found. Hitching a Ride on the Prescription Drug Benefit Legislation Our story ended just before Thanksgiving 2003, when Congress completed work on a $400 billion measure creating a prescription drug benefit for Medicare beneficiaries. The conference committee continued its last-minute negotiations well into November. Representative Thomas remained the obstacle throughout, as he held out for the conservative position allowing for private health care plans to compete in delivering care to elderly patients. President Bush became publicly involved only in the last few weeks, as the prospects for deadlock between the committee conferees grew. Rural reimbursement was but a footnote in these later-stage negotiations. By the second week of November, conferees abandoned their closed-door discussions and bumped resolution of the differences to an informal group consisting of White House officials (Rove, Thompson, and Scully) and the leaders of the House (Hastert and DeLay) and Senate (Frist). Except for two moderates (Baucus and Breaux), Democrats were excluded from the final rounds of negotiations. On November 16, the Republican leadership announced an agreement, and the bill emerged from conference committee. Compared to the machinations of deliberations within the conference committee, final passage was straightforward. On November 23, a sharply divided House of Representatives passed the prescription drug benefit legislation by five votes (220 to 215). Senate passage followed a few days later by a much more comfortable margin. Although everyone focused on the merits and weaknesses of the prescription drug benefit piece of this legislation, there were lots of other goodies attached. Among the hundreds of “fixes” to Medicare unrelated to prescription drugs was $27 billion in funding to remedy discrepancies in reimbursements to physicians and hospitals in rural regions. The “stars were lined up just right.” Rural reimbursement had hitched a ride.”52 And yet, less than a week after passage of this Medicare reform, the New York Times ran a long article53 complaining loudly about a newly identified unfairness—discrimination in funding for urban hospitals created by the revised reimbursement formulas. The policy saga continues.

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Summary There are several lessons in this one case study. •

• • • • •

•

First is that of complexity. Even a simple reform has a long and convoluted history. Success often depends on timing, politics, and the fate of other proposals to which it is attached. Solutions have often been long available, frequently developed within the bureaucracy delivering the program, but ignored when politically unpalatable. Second is how the nature and structure of a specific problem condition the political dynamics of how it is addressed, that is, the alignment of groups and which institutions play what roles, and how. Third is the importance of individual policymakers, often a few well-positioned and dedicated players, in shaping legislative outcomes. Fourth is the impact of institutional and electoral cycles. How an issue is addressed has to be accommodated to institutional and electoral schedules that determine timing, political dynamics, and coalition formation and dissolution. Fifth is that each policy, whether successfully enacted into legislation or not, has its own story. Each differs from other policy issues in the important details of the Who, How, Why, and When. Sixth is the strategic role of leadership, in this case the president as lobbyist. The bully pulpit is useful primarily at the end of the legislative process, for those measures that actually reach the stage of final floor votes and conference committee negotiations. Presidential leverage is exercised primarily through the media and through twisting the arms of key partisan leaders in the legislature. Seventh is the observation that it is much easier to prevent something from getting done than to create new policy in the American system. Further, once it gets done, the game is not over, but almost immediately becomes one of playing defense rather than offense.

In many respects successful policymaking depends on position, resources, skill, timing, and luck—on the alignment of the stars.

KEY TERMS agenda—a list or schedule of things to be done. appellate review—review of decisions by trial courts because of errors of procedure, errors of law, or on the grounds that the wrong law was applied to the facts of the case. bureaucracy—appointed officials responsible for assembling and delivering policy outputs. constitutional amendment—the process for altering the form or scope of government, as set forth in its basic organizing documents. courts—state and federal entities composed of judges responsible for the interpretation and the application of laws. executives—elected public officials, like the president, state governors, and city mayors responsible for the implementation of public policy.

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General Accounting Office (GAO)—an agency established in 1921 to conduct audits and investigations of executive agencies and programs at the request of Congress. In 2004 the GAO was renamed the Government Accountability Office. initiative petition—a mechanism in which citizens originate legislation and submit it for popular vote. Inspector general (IG)—an office in major federal agencies for conducting independent audits and investigations of agency programs. legislatures—institutions such as Congress and the fifty state legislatures composed of elected officials charged with the responsibility for making laws. legislative oversight—continuing review by the House and Senate (or state legislators) of how effectively the executive branch is carrying out statutory mandates. referendum—a mechanism in which citizens’ approval s required for a statute adopted by the legislature. QUESTIONS FOR DISCUSSION 1. How does the fact that there are so many different points of access to institutions and so many different policymakers affect policymaking and efforts to develop coherent and consistent solutions to policy problems? 2. In terms of policymaking, what are the relative advantages and disadvantages, if any, of the complex and multiple procedures used by Congress, including the effects: a) of slowing down passage of legislation, b) of creating pressures for compromise and coalition building, and c) of minimizing the accountability to voters of legislators for their policy positions? 3. What are the primary means of congressional oversight? Identify and analyze an example of each form. 4. Why do executives tend to dominate the policy agenda? 5. How does the perspective of civil servants in the bureaucratic agencies influence their roles in public policymaking? 6. Why do policy entrepreneurs seek to influence policymakers through the courts? What are some examples of successful policy change attributable to courts? What are the limitations of this approach as a strategy for policymaking? 7. Why have policy changes made through constitutional amendment been so difficult to make? Should the process of amending the Constitution be made easier? 8. What are the advantages and disadvantages of legislating policy change by popular vote (initiatives and referenda) during elections? 9. Some have proposed that the Internet be used as a forum for expanding direct democracy, that is, as a mechanism by which proposed legislation could be put to a vote by all citizens. Evaluate the advantages and disadvantages of this proposal. SUGGESTED READINGS Birkland, Thomas A. An Introduction to the Policy Process. 2nd ed. Armonk, NY: M.E. Sharpe, 2005. Broder, David S. Democracy Derailed: Initiative Campaigns and the Power of Money. New York: Harcourt, 2000.

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Carp, Robert A., and Ronald Stidham. The Federal Courts. 2nd ed. Washington, DC: Congressional Quarterly Press, 1991. Davidson, Roger H., and Walter J. Oleszak. Congress and Its Members. 10th ed. (Washington, DC: Congressional Quarterly Press, 2006). DeKieffer, Donald E. The Citizen’s Guide to Lobbying Congress. Chicago, IL: Chicago Review Press, 1997. Dubois, Philip L., and Floyd Feeney. Lawmaking by Initiative. New York: Agathon Press, 1998. Hrebenar, Ronald J. Interest Group Politics in America. 3rd ed. Armonk, NY: M.E. Sharpe, 1997. Kingdon, John W. Agendas, Alternatives and Public Policies. 2nd ed. New York: Addison-Wesley Longman, 1995. Light, Paul C. The President’s Agenda. 3rd ed. Baltimore, MD: Johns Hopkins University Press, 1999. Oleszek, Walter J. Congressional Procedures and the Policy Process. 5th ed. Washington, DC: Congressional Quarterly Press, 2001. Schlozman, Kay Lehman, and John T. Tierney. Organized Interests and American Democracy. New York: HarperCollins, 1986. Sinclair, Barbara. Unorthodox Lawmaking: New Legislative Processes in the U.S. Congress. Washington, DC: Congressional Quarterly Press, 2000. Tarr, G. Alan. Understanding State Constitutions. Princeton, NJ: Princeton University Press, 1998. Van Horn, Carl E.; Donald C. Baumer; and William T. Gormley, Jr. Politics and Public Policy. 3rd ed. Washington, DC: Congressional Quarterly Press, 2001. Walcott, Charles E., and Karen M. Hult. Governing the White House: From Hoover Through LBJ. Lawrence, KS: University Press of Kansas, 1995. Watkins, Michael; Mickey Edwards; and Usha Thakrar. Winning the Influence Game: What Every Business Leader Should Know About Government. New York: John Wiley & Sons, 2001.

NOTES 1. American Heritage Dictionary of the English Language (New York: Houghton Mifflin Co., 1969). 2. John W. Kingdon, Agendas, Alternatives, and Public Policies, 2nd ed. (New York: Addison-Wesley Longman, 1995), p. 3. 3. Walter J. Oleszek, Congressional Procedures and the Policy Process, 5th ed. (Washington, DC: Congressional Quarterly Press, 2001), p. 11. 4. Ibid., p. 11, citing former House Minority Leader Robert Michel. 5. Ibid., p. 12. 6. Michael Watkins, Mickey Edwards, and Usha Thakrar, Winning the Influence Game: What Every Business Leader Should Know About Government (New York: John Wiley & Sons, 2001), p. 121. 7. Ibid., pp. 127–29. 8. Quoted in Roger H. Davidson and Walter J. Oleszek, Congress and Its Members, 10th ed. (Washington, DC: Congressional Quarterly Press, 2006), p. 186. 9. Oleszek, Congressional Procedures, p. 274. 10. Ibid., p. 283. 11. On the federal appointments process, see Michael J. Gerhardt, The Federal Appointments Process (Durham, NC: Duke University Press, 2000); and G. Calvin Mackenzie, ed. Innocent Until Nominated: The Breakdown of the Presidential Appointments Process (Washington, DC: Brookings Institution Press, 2001). 12. Carl E. Van Horn, Donald C. Baumer, and William T. Gormley, Jr., Politics and Public Policy, 3rd ed. (Washington, DC: Congressional Quarterly Press, 2001), p. 158. 13. Ibid., p. 157. 14. Paul C. Light, The President’s Agenda, 3rd ed. (Baltimore, MD: Johns Hopkins University Press, 1999), p. 17. 15. Ibid., p. 41. 16. Van Horn, Baumer, and Gormley, Politics and Public Policy, p. 165. 17. Bradley H. Patterson, Jr., The White House Staff: Inside the West Wing and Beyond (Washington, DC: Brookings Institution Press, 2001), pp. 4–5. Patterson’s survey excludes the career civil servants that work for agencies within the Executive Office of the President and the Office of Management and Budget.

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18. See Charles E. Walcott and Karen M. Hult, Governing the White House: From Hoover Through LBJ (Lawrence, KS: University Press of Kansas, 1995). 19. Patterson, White House Staff, p. 185. 20. Ibid., p. 162. 21. John P. Heinz et al., The Hollow Core: Private Interests in National Policy Making (Cambridge, MA: Harvard University Press, 1993), p. 243. 22. Ronald J. Hrebenar, Interest Group Politics in America, 3rd ed. (Armonk, NY: M.E. Sharpe, 1997), pp. 256–57. 23. Robert A. Carp and Ronald Stidham, The Federal Courts, 2nd ed. (Washington, DC: Congressional Quarterly Press, 1991), p. 198. 24. Federal courts are courts of limited jurisdiction. For a more specific list of what cases may be heard by federal courts, see Article III of the Constitution. 25. Carp and Stidham, Federal Courts, p. 147. 26. Ibid., pp. 202–5 for further discussion of these dynamics. 27. Ibid., p. 41. 28. 347 U.S. 483 (1954). 29. 372 U.S. 335 (1963). 30. 410 U.S. 113 (1973). 31. Amendments 12 (1804), 17 (1913), 20 (1933), 22 (1951), 23 (1961), 25 (1967), and 27 (1992). 32. Amendments 18 (1919) and 21 (1933). 33. Amendment 13 (1865). 34. Amendments 15 (1870), 19 (1920), 24 (1964), and 26 (1971). 35. Amendment 14 (1868). 36. Amendment 16 (1913). 37. See Article V of the U.S. Constitution. 38. G. Alan Tarr, Understanding State Constitutions (Princeton, NJ: Princeton University Press, 1998), p. 23. 39. Ibid., p. 24. 40. Philip L. Dubois and Floyd Feeney, Lawmaking by Initiative (New York: Agathon Press, 1998), p. 7. 41. Elisabeth R. Gerber. The Populist Paradox: Interest Group Influence and the Promise of Direct Legislation (Princeton, NJ: Princeton University Press, 1999), pp. 3–4. 42. Dubois and Feeney, Lawmaking by Initiative, p. 27. 43. David S. Broder, Democracy Derailed: Initiative Campaigns and the Power of Money (New York: Harcourt, 2000), pp. 3–4. 44. For a fuller development of this argument see Broder, Democracy Derailed, and Gerber, The Populist Paradox. 45. Radio interview with Senator Charles Grassley, “Iowa Talks,” WSUI, Iowa City, IA, September 25, 2003. 46. Data drawn from Nora Super, principal research associate, “The Geography of Medicare: Explaining Differences in Payment and Costs,” No. 792 National Health Policy Forum (Washington, DC: George Washington University, July 3, 2003), www.nhpf.org. 47. Ibid., p. 11. 48. Ibid. 49. These figures draw on work by Elliott S. Fisher, David E. Wennberg, Therese A. Stukel, Daniel J. Gottlieb, F.I. Lucas, and Etoile L. Pinder, “The Implications of Regional Variations in Medicare Spending. Part 1: The Content, Quality, and Accessibility of Care,” Annals of Internal Medicine 138 (4) (February 18, 2003). 50. Jack Sullivan, “Bush Pledges to Support Rural Medicare,” Associated Press, May 22, 2003, as quoted in the Washington Post, www.washingtonpost.com/ac2/wp-dyn/A27288-2003May22. 51. Markian Hawryluk, “Rural Doctors Seek Equal Medicare Pay,” AMA News, July 22, 2002, www. ama-assn.org/sci-pubs/smnews/pick_02/gvsa0722.htm. 52. Glen S. Krutz, Hitching a Ride: Omnibus Legislating in the U.S. Congress (Columbus, OH: Ohio State University Press, 2001). 53. Richard Perez-Pena, “City Hospitals Reap Little in Medicare Bill,” New York Times, November 30, 2003, A28.

PART III Production

In part III we turn from policy inputs to policy production. Figure III.1 shows a high-level overview of where we find ourselves in the text. Figure III.1

Production in the Policymaking Process

Parttl Outcomes

Inputs

Part IV

Outputs

Production

Part III

In part III we move from sources of public policymaking to the actual process of crafting and assembling policy outputs. Simplistically speaking, we move from policy entrepreneurs—those who seek to shape the direction and content of public policies—to policymakers—those with the responsibility for producing policy results. Of course, policymakers are also policy entrepreneurs. They are advocates and lobbyists just as much as policy craftsmen. The difference, however, is that policymakers are held accountable to the public in ways that ordinary policy lobbyists are not. While policy entrepreneurs work as advocates for the causes or interests they represent, policymakers are expected to work as representatives of the public as a whole. They are—in most cases—public officials or officers of the public. From the president of the United States to the treasurer of your 161

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local homeowners association, public policymakers are bound by legal constraints and ethical expectations that transcend those governing ordinary citizens. Thus, the transition from policy advocate to policymaker is palpable though often invisible. Making policy is a responsibility shared by millions of public officials working in more than 80,000 governmental bodies in the United States. In part III we examine the technologies and techniques they use to do their jobs. OVERVIEW In part III we focus on six key technologies of policy production. While it is possible to add to this list, we believe that the six technologies examined in the following chapters form the essential means for policy production in nearly every instance. Many or most policy initiatives involve the application of all six technologies. While the list may not be exhaustive, it does cover the basic means for policy production, be it in a local city council or the Congress of the United States. Figure III.2 shows the six different technologies of policy production that we will examine in Part III. Figure III.2

Technologies of Policy Production

Chapter 9

Chapter 14

Chapter 10

Authority Agency

Budget

PRODUCTION Chapter 11

Chapter 13 Program

Contract Rule

Chapter 12 However, before detailing individual means or techniques of policy production we will pause in chapter 8 to discuss the idea of policy technologies in general and revisit the technique of policy mapping in particular.

CHAPTER 8 Policy Technologies and Maps 8.1 INTRODUCTION In part II we examined how problems are transformed into policy inputs and chapter 7 concluded with a brief survey of how the processes of policy production determine when, where, and how policy inputs are handled by policymakers. To those who understand the mechanics of legislation, executive decision making, judicial proceedings, bureaucratic practice, constitutional amendments, and initiative petitions, there are multiple windows of opportunity to get one’s issue on the agenda and one’s point of view heard. Since there are more than 80,000 federal, state, and local policymaking bodies and thus at least an equal number of windows into policy production, the actual flow of issues into policy production is a chaotic process that defies ordinary explanation or prediction. Forecasting the fate of any particular policy issue is often an exercise in frustration—chance and circumstance play a greater role than the logics of human analysis. There are hundreds, if not thousands, of policy issues awaiting an incident—a plane crash, a spectator with a video camera, a telegenic victim, a corporate bankruptcy, a hurricane or flood—to propel the public and public policymakers into action. Although the influx of policy issues displays characteristic patterns and trends, the fate of any particular issue often makes sense only in retrospect. The situation is quite different, however, once policymakers begin to act. As we have said, public policymakers are problem solvers with a limited repertoire of solutions to offer. Just as doctors have their diagnostic protocols, stethoscopes, and medications, policymakers have their own technologies, tools, and techniques to solve, resolve, or absolve public problems. While it may be difficult to predict what lands on the public agenda at any given time or place, what policymakers do about it is another matter entirely. There may be an infinite variety of public problems and 80,000 places to find a solution, but the means of policy production are relatively few in number. We use the term technologies here to emphasize the difference between the institutional means of policy production and the types of outputs that are delivered to the public. Policy production is the process of transforming public demands into outputs such as schools, roads, taxes, welfare checks, police patrols, subsidies, and regulations. The distinction between the means of production—that is, how policymakers organize their work—and the products that policymakers deliver to the public is critical. Just as there are different ways of assembling automobiles, televisions, or computers, so too are there alternative arrangements for producing food stamps, dams, and public transportation. How government delivers benefits and services is just as important as what government delivers. While the outputs of governance are many and varied, the means of delivery are much more restricted and formally codified in laws, rules, processes, and procedures. The public in public policy means that we all have a stake in both the What and the How of the policymaking process. As citizens of a democracy we all make a tacit bargain to accept the means of policy production even as we disagree with 163

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the results. Though we often rail against the process, we generally recognize that the same process can be used to our advantage or our disadvantage. Consequently, both policymakers and the public are more cautious about changing the How versus the What. 8.2 TECHNOLOGY AND POLICY PRODUCTION Technology is a much used and abused word. When people talk about technology they generally think about the hardware of life—the televisions, DVD players, computers, and lasers that people use both at work and at play. Technology is about physical objects—their invention, design, and application. However, in the twenty-first century it is increasingly clear that most important technologies are all about software—that is, the instruction set or code that runs the hardware of both machinery and life itself. Sooner or later, for better or for worse, social organizations will regulate human behavior by manipulating the genetic code, just as they have manipulated the institutional codes of custom, law, and social norms over the millennia. Technology today primarily revolves around three different types of code: • • •

The genetic code of DNA and its role in shaping and regulating life itself The so-called “West Coast code”—the instructions written in artificial languages that make the software and hardware of the modern world run “East Coast code”—the legal codes, rules, and instructions written in natural languages that Congress, bureaucrats, and other policymakers write to regulate social behavior1

In this text we focus on technology as “East Coast code” and leave the impact of the other two forms of code to futurologists. Despite the trendy moniker, this broad perspective on technology was advanced decades ago by John Dewey. According to Dewey, “‘Technology’ signifies all the intelligent techniques by which the energies of nature and man are directed and used in satisfaction of human needs; it cannot be limited to a few outer and comparatively mechanical forms. In the face of its possibilities, the traditional conception of experience is obsolete.”2 More specifically, by technology we refer to the complex bundles of organizational routines that policymakers bring to bear in producing policy deliverables or outputs. These routines or “standard operating procedures” serve as the means of production for public policymaking.3 We specifically use the term technology for four interrelated reasons. First, we focus on policymaking or governance as the creation, selection, application, and modification of organizational forms or practices. As captured in laws, rules, charters, policies, procedures, and techniques, these forms constitute the fundamental technologies of action available to policymakers and their stakeholders. We argue that, “at bottom, governance is not primarily a matter of philosophy, plutocracy, or bureaucracy. It is constitutive public practice—a technology of public action with its own history, structures, and rationalities that produce as much as they are produced by economics, ideology, and culture.”4 Just as homebuilders employ architects, blueprints, plumbers, carpenters, and construction tools to produce a house, policymaking involves legislators, legislation, administrators, agencies, programs, rules, contractors, and budgets to transform citizen demands into policy outputs and outcomes. When confronted with a problem or demand, a policymaker selects from a limited array or repertoire of tools and techniques at his or her disposal for crafting an appropriate solution or output. This repertoire of public action consists of “templates, scripts, recipes, or models for social interaction. Once routine patterns of organization are articulated in these ways, they become ‘modular,’ or transposable from one setting to another. Any individual will be familiar with some

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set of forms; this constitutes his or her organizational repertoire.”5 Legislators, executives, administrators, and judges all have their respective repertoires for assembling solutions to policy problems. In the following pages we examine only some of the most widely used and fundamental templates for policy production. Second, we use the term technology to emphasize the impermanent or contingent nature of the means used to deliver policy outputs. Nearly everyone understands that hardware technology is constantly changing and that yesterday’s quill and inkwell have given way to today’s BlackBerry. What people tend to overlook, however, is just how transitory are the routines and institutions we use to get things done in contemporary American society. Concepts like privacy, civil rights, and bureaucracy are relatively recent inventions, historically speaking. Indeed, the whole idea of public policy is a twentieth-century creation. The institutional and organizational tools we use to get things done are nearly as changeable as the physical utensils we manipulate inside these organizations and institutions. Many of the paraphernalia of public policymaking—the agencies, corporations, programs, rules, budgets, and so forth—are either nineteenth- or twentieth-century innovations and may well change radically or disappear altogether in the twenty-first century. Social technologies—the laws, rules, and routines of everyday life—are no less contingent than the electronic gadgets that clutter our homes and workplaces. When we use the term technology to refer to social and institutional processes such as authority, agency, rule, program, contract, and budget, we are reminding the reader that both innovation and decay are inevitable. In the nineteenth century the party machines and the spoils system reigned supreme. Political parties employed or subsidized large segments of the population and citizens used their feet to participate in public life. Today, private contractors do most of the business of government and citizens can now participate by simply pointing and clicking in the comfort of their homes. Social technologies evolve more slowly but just as surely as the computers that sit on readers’ desks. Third, the term technology also makes explicit the tight linkage between the hardware and software of public life. The technologies and techniques of governance are closely tied to the physical technologies of communication and transportation. Without the telegraph, telephone, and typewriter, the growth of large administrative bureaucracies would have been impossible. Similarly, the advent of television, personal computers, cellular phones, and electronic networks has begun to transform the techniques of governance in fundamental ways. The “big government” that so many railed against in the latter half of the twentieth century is still big, but its workings have been altered by the introduction of information and communication technologies. The techniques of policymaking have changed because technology has forced such changes. We are reminded of this tight linkage in cases such as the presidential election of 2000 in Florida, where the physical technologies of voting clashed with the social and political technology for resolving electoral disputes. Policy issues and the policy production process are increasingly driven by the opportunities and problems generated by information technology. Hence, we use the term technologies of policy production to remind the readers that the How of policymaking is inseparable from the What of policy outputs and the consequences of policy outcomes. Fourth, and finally, we use the term technology to distinguish our approach from the growing literature on policy tools. Initially focused on the economic analysis of different kinds of collective goods, students of policy tools have expanded their scope of research to include the entire range of mechanisms for delivering outputs to the public. Indeed, within the framework we introduced in chapter 3, the policy tools literature fits relatively neatly within our definition of policy outputs —that is, the actual benefits or burdens and their method of delivery to a target population. As we shall see in chapter 15, there is a large and ever-expanding array of outputs—goods, services, burdens, disincentives, and the like—that policymakers deliver to the public. These are the tools

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of governance in all their diversity and changeability. However, by technologies of production we refer to the methods that policymakers use to design and craft these outputs. Whatever the tool or output delivered, policymakers must employ authority, agency, programs, rules, contracts, and budgets to build and produce those outputs in every instance. How policymakers work is largely independent of what gets delivered as a result. In this section we focus on how policy is produced or the technologies of production and leave the products of policy production for part IV. 8.3 MAPPING POLICY PRODUCTION In chapter 7 we demonstrated how policy inputs can be mapped according to the types of problems, solutions, issues, politics, access, and agendas that are involved. Policy entrepreneurs assemble policy inputs and push them onto the agendas of public policymakers. We can perform the same type of analysis for the technologies of policy production in part III. Indeed, mapping policy production is much simpler than tracing the evolution of policy inputs because policymakers have a more limited set of technologies at their disposal than do policy entrepreneurs. Lobbyists have much more room for creativity than policymakers. There are many ways to lobby for a bill, but there are only a few ways to get a bill passed into law. Compared to policy entrepreneurs, policymakers must cope with a straightjacket of laws, rules, and public expectations. At each step of the production process, choices of technologies are defined and limited. Figure 8.1 shows a map of the policymaking process, with the six technologies of policy production displayed as columns, along with policy inputs, outputs, and outcomes. Figure 8.1 Technologies of Policy Production and the Policymaking Process

POLICYMAKING INPUTS (Part II)

PRODUCTION Authority (Arenas)

Agency Program

PROCESS

(PART III) Rule

Contract Budget

OUTPUTS OUTCOMES (PartV)

(PartV)

Legislative Executive Judicial (Courts) Administrative (Bureaucracy) Constitutional (Amendment) Direct (Initiative)

Figure 8.1 is actually a continuation of the map of policy inputs illustrated in Figure 7.4. The six arenas for agenda setting are identical to the six types of authority that we shall examine in chapter 9. While policy production rarely unfolds in the simple, linear fashion displayed in Fig-

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ure 8.1, most policy initiatives are indeed crafted in one or more of the six types of venues, and most involve the selection or creation of the appropriate agencies, programs, rules, contracts, and budgets to deliver policy outcomes. Choosing the arena or venue of authority, in most cases, is the most important decision for both policy entrepreneur and policymaker. Authority is the fulcrum of the policymaking process. We will return to policy maps later in the text after we introduce the contextual dimension to the policymaking process. Here, however, we focus on policy mapping as a technique of illustrating the kinds of technologies and choices that make up the process of policy production. In chapters 9 through 14 we examine each of the six technologies of production and the choices available to policymakers at each step of the way, which are summarized in the following list. • •

• • • •

Authority—Where to seek the solution to the problem—in the legislature, executive, courts, bureaucracy, Constitution, or direct petition? (chapter 9) Agency—What kinds of organizations should be responsible for the solution—government departments, independent agencies, government corporations, or private entities? (chapter 10) Program—How shall the work of policy production and delivery be organized—programs, projects, or the like? (chapter 11) Rule—Shall regulations, standards, guidelines, or other forms of rules be promulgated and enforced? (chapter 12) Contract—Shall contracts with service providers or agreements with government agencies be employed? (chapter 13) Budget—How will policy solutions be financed? (chapter 14)

Once we have detailed the technologies and techniques of policy production we will then turn to the products and outcomes of policy production in part IV. KEY TERM policy technologies—the complex bundles of organizational routines that policymakers bring to bear in producing policy deliverables or outputs. For the purposes of this text, these include authority, agency, program, rule, contract, and budget. NOTES 1. For the complex relationships between East Coast and West Coast code, see Lawrence Lessig, Code and Other Laws of Cyberspace (New York: Basic Books, 1999), pp. 43–62. Lessig compares law, market, norms, and architecture (code) as alternative modes of regulating the behavior of things, both animate and inanimate. 2. Cited in Larry A. Hickman, Philosophical Tools for Technological Culture: Putting Pragmatism to Work (Bloomington, IN: Indiana University Press, 2001), p. 26. 3. After decades of neglect, the literature on the institutional technologies of social action is diverse and rapidly expanding. For a general survey of the literature on social institutions, see B. Guy Peters, Institutional Theory in Political Science: The ‘New Institutionalism’ (London: Continuum, 1999). 4. From The People’s Welfare: Law and Regulation in Nineteenth Century America by William J. Novak. Copyright © 1996 by the University of North Carolina Press. Materials reprinted with permission, p. 8. 5. Elizabeth S. Clemens, The People’s Lobby (Chicago, IL: University of Chicago Press, 1997), p. 49.

CHAPTER 9 Authority PREVIEW Chapter 9 examines the technology of authority or the legal permission or obligation to act. Authority is the lodestar of American public policymaking. The tools of authority in policy production, however, come in many forms, with a resulting lack of coherence and orderliness. This allows for multiple, sometimes conflicting, interpretations of policymaking authority and adds to its richness and complexity. As you read this chapter, you should be able to answer the following questions. • • • • • • • •

What are the differences between express, implied, and apparent authority? What is constitutional authority, and how is it used in policy production? What is legislative authority, its sources, basic forms, and uses in policy production? What is executive authority, its sources, basic forms, and uses in policy production? What is judicial authority, its sources and basic forms? How is it used in policy production? What is administrative authority, its sources, basic forms, and limitations? What is popular authority, and how is it used in policy production? What are the advantages and disadvantages of using each of the various forms of authority in policy production?

9.1 WHAT IS AUTHORITY? Authority is the oxygen that makes policy production possible. It is the most basic resource available to policymakers. To make policy, to get things done, one must either acquire authority or exploit an available source of authority. To be sure, people can do things without benefit of authority—criminals rob banks, citizens cheat on their taxes, and tyrants murder on a whim—but policymaking requires the mantle or at least the semblance of authority. Authority comes in many shapes and sizes, but all authority shares a common feature: the expectation that decisions made or acts performed under the veil of authority will be accepted as legitimate by others. When the president issues an Executive Order, most may obey the act, others may choose to ignore it, and still others may protest, but all or nearly all recognize the act as justifiable or “authorized.” Of course, authority is circumscribed by boundaries of time, place, law, and domain of human behavior. The president’s authority ends when he leaves office and does not extend to the private lives of constituents. Billy Graham is an authority in the domain of religion, Steven Hawking is an authority in the realm of science, and Michael Jordan is an authority in the world of basketball. In each case, their words and deeds are accepted as rightful or even binding by participants within their specific domains. Authority is 168

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what leaders have and followers respect. Authority is the glue that makes organized human action possible. 9 . 2 A U T H O R I T Y, L A W, A N D P U B L I C P O L I C Y M A K I N G There are many different domains and sources of authority: moral authority based on rectitude, religious authority based on piety, traditional authority based on wisdom or age, and professional authority based on expertise. In the realm of public policymaking the predominant source of authority in the contemporary era resides in law. Authority in this domain is the legal permission or obligation to act. Though public policymakers can and do act outside the law, and the authority of public officials rests on foundations other than legality, disputes over the scope and use of public authority usually involve lawyers and often end up in courts. Whether wittingly or unwittingly, policymakers make, interpret, and apply the law. Legal authority is the lodestar of American public policymaking. However, the relationship between legal authority and public policymaking is complex and evolving. From the colonial era through the mid-nineteenth century, the exercise of authority by the federal government was far from the primary basis for public policymaking. The founders commanded the respect and obedience of others based on their prestige, upbringing, and personal accomplishments, rather than on the authority of law. They were members of the social, economic, and political elite that sought public office out of a sense of social obligation. In governing they relied more on the authority of social prestige than on the legal permissions of office.1 They did not acquire authority in office; they brought authority to office. The men who hammered out a Constitution for the United States relied on personal and cultural authority, not legal mandates, to accomplish their arduous task and sell their creation to a skeptical American citizenry. Until the mid-nineteenth century, the practice of law focused more on the resolution of private disputes than on the solution of public problems. It was not until the waning years of the nineteenth century that legislatures and courts began to build a legal scaffolding to buttress the decisions and actions of public officials. In a truly democratic society, where individuals of humble birth and questionable reputation can and do rise to public office, leaders require the legal powers of office to secure the obedience, if not the respect, of ordinary citizens. Today, successful policymakers rely heavily on legal authority. While other forms of authority still carry weight and legalistic pettifogging engenders popular distrust, policy production derives its impetus and form from the authority of law. It is important to be more specific about the relationships between authority, law, and public policy. In the first instance, we tend to think of law and legal authority as being based on immutable principles, or directives cast in stone, like the Ten Commandments. Quite the contrary. Law is the codification of norms that arise and evolve through social practice. Law is a record of past solutions distilled into guidelines for future action. The authority of law derives from its successful application and not from its source or intrinsic value. When law is no longer appropriate to changed circumstances, its legitimacy withers away. When law proves flexible enough to assimilate and manage new situations and technologies—like automobiles, wireless communications, and genetic engineering—it gains the power to command respect and compliance. Since policy production involves the generation of solutions—both old and new—to new public problems, policymaking inevitably involves both the reaffirmation and renovation of law. The policymaking process sustains and transforms the authority of law. While old law constrains the actions of policymakers, policymaking inevitably creates new law, thereby expanding or reducing the legal authority of future policymakers. The technology of authority is transformed through

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use. This is especially true in American society, where the traditions of common law (law based on precedent, or practice-based law) still govern legal practice, from the humblest small claims court to the Supreme Court.. Law is as law does. Legal authority is in large part a by-product of the policy production process. Second, there are different kinds of law, and consequently different varieties of legal authority. Law is not a coherent body of rules or norms. Rather, there are multiple bodies of law governing different kinds of objects or situations. Law expands and diversifies to handle new kinds of institutions and situations. In the nineteenth century, the modern form of the private corporation appeared on the scene, and a whole new body of corporate law emerged. In the early twentieth century, courts began to discover that individuals had rights, and civil rights law was born. As American society evolves and new technologies create new situations that demand innovative applications of past law, the potential sources of legal authority become ever more diverse and disparate. Adapted to special circumstances, the principles embedded in these different bodies of law typically offer alternative solutions and authorities to rely on. As legal authorities proliferate, opportunities for the creative application of dissonant legal principles expand. As a result, the relationships between legal authority and policy production become increasingly complex and unpredictable. The more law pervades the policy production process, the less certain are the consequences. When attorneys for George W. Bush first asked the Supreme Court to overturn the decisions of the Florida Supreme Court in the November 2000 election, neither they nor their peers in the punditry racket considered equal protection law as a significant weapon in their quiver of legal arrows. The ultimate success of their legal argument bears stark witness to the creative, indeed liberating, possibilities of contemporary legal argument. Both policy advocates and policymakers have such a diverse array of legal instruments at their disposal, that the selection and manipulation of legal authority can be one of the most important factors determining the success or failure of the policy production process. Finally, since legal authority is based on written documents, and words are always subject to varying degrees of ambiguity, legal scholars have distinguished three categories of authority: express, implied, or apparent. • Express authority is “that found within the plain meaning of a written source”2 like a constitution or a statute. For example, the power of Congress to make laws providing for the common defense is clearly set forth in the Constitution. • Implied authority is “that which is necessary or appropriate for exercising express authority and can therefore be inferred from express authority.” The Supreme Court, in claiming for itself authority to decide whether acts of the legislature or executive conform to the Constitution, and, if not, to void those that are inconsistent, found that authority implied in both Article III of the Constitution, vesting the judicial power of the United States in the Supreme Court, and Article VI, which states that “this Constitution, . . . shall be the supreme Law of the Land.”3 So, for example, a college or university’s claim of authority to revoke an academic degree previously awarded to a student when information later comes to light that the degree had been obtained through fraud or plagiarism is arguably implied from its power to grant degrees granted by statute or charter. • Apparent authority is more tenuous. It is “not actual authority at all” but rather describes “the situation where someone acting for the institution induces a belief in other persons that authority exists when in fact it does not.” Authority may be derived from the appearance, rather than the substance, of authority and is thus more subject to challenge. President Truman’s claim of apparent authority to nationalize the steel mills during the Korean War to ensure continuous production was not sufficient justification to sustain his action.4

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The need for legitimacy in a democracy requires the linkage between a public act and some source of authority, and gives rise to these three distinctions. When challenged in court, lawyers for both sides frame their argument in terms of whether authority can be traced to one of these three categories. 9.3 S OURCES OF PUBLIC AUTHORITY As we have seen, legal authority is not unitary. Nor is law a completely coherent system of principles and rules. Indeed, there are several varieties of legal authority that coexist in constant tension. Public policymaking relies upon and exploits different foundations and sources of law to justify action and secure compliance. There are multiple sources of legal authority for policy production. These include: • • • • • •

Constitutional law (federal and state) Statutory law or legislative authority (federal and state) Executive authority (federal, state, and local) Judicial authority (federal and state) Administrative authority (federal, state, and local) Direct or popular authority (state)

Most policy literature identifies legislation as the dominant, if not sole, source of authority for public policy. This is a truly parochial point of view that misses much, if not most, of the action in the arena of public policy. The action is often elsewhere. By focusing on gridlock in Washington, these analysts mistake the dance macabre of congressional legislation for the vast and ever-expanding repertoire of policy authorities and policy production processes. Figure 9.1 shows the six major institutional sources of authority for policy production. Figure 9.1

Sources of Public Authority

CONSTITUTIONAL

LEGISLATIVE

EXECUTIVE

POPULAR

JUDICIAL

ADMINISTRATIVE Figure 9.1 offers a very simplified view of the relationships between the six institutional sources. As can be seen, the (U.S.) Constitution is the “supreme law of the land” and all other federal sources derive their authority, directly or indirectly, from the Constitution. Both federal and state constitutions specifically allocate authority to legislative, executive, and judicial branches. In the early twentieth century, states began to experiment with direct forms of democracy —referenda, initiative petitions, and the like—and these relatively recent additions to the arsenal of public authorities are playing increasingly important roles in policymaking in the fifty states.

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Finally, the Administrative Procedures Act of 1946 codified the principal procedures to be used by federal administrative authorities, which are subordinate to the executive and overseen by both judicial and legislative branches. State administrative procedures acts perform the same function for state governments. 9.4 CONSTITUTIONAL AUTHORITY A constitution is a fundamental contract between people to govern themselves. “Constitutions embody the agreements communities reached through one means or another as to the general form of their governments, the apportionment of power therein, and the acceptable boundaries of governmental practice.”5 The idea of a constitution as the ultimate source of public authority has been around for almost a millennium. In 1215, English barons forced King John to sign the Magna Carta, which established the notion that the powers of the ruler were limited and that the source of public authority ultimately derived from the ruled, not the rulers. However, British parliamentary government did not distinguish between constitutional authority embodied in a written document or charter and the authority of Parliament to make laws. In contrast, the British colonies in America were governed from the very beginning by the assumption that public authority derived from the authority of the written word. The early colonies were joint stock companies with formal charters detailing the powers and obligations of the proprietors. In modern terminology, the American colonies were founded as corporations. By the time of the American Revolution, the colonists were thoroughly imbued with the principles of constitutionalism, that is: • • •

Sovereignty derives from people or the “consent of the governed” Written constitutions were the means of defining and limiting the powers of government Constitutions can be changed when conditions permit6

Even before the Declaration of Independence in July 1776, individual colonies began to adopt written constitutions by means of popularly elected assemblies. Indeed, America between the Declaration of Independence and the adoption of the Constitution in 1788 can be seen as an experimental laboratory where the technologies of constitutional government were created, tested, revised, and codified. While theories of constitutionalism had flourished for centuries, it was the generation of Jefferson, Madison, Hamilton, et al. that invented the practice of constitutional government. The idea of constitutional authority as a technology of policy production with a distinctive set of techniques and procedures is a fundamentally American idea that has spread around the world in the past two centuries. From a policy production perspective, however, there are significant differences between the U.S. Constitution and the constitutions of the fifty states. The U.S. Constitution is a very short document with little to say on specific policy issues. The authority of the U.S. Constitution is what people read into its sparse words. “State constitutions, in contrast, deal directly with matters of public policy, sometimes in considerable detail.”7 Provisions in state constitutions take many forms, including specific policy directives, prohibitions on legislative action, and much more specific guarantees of civil rights than are embedded in the vague, open-ended language of the federal Bill of Rights. In some cases, sections of state constitutions are so detailed that they are virtually indistinguishable from ordinary legislative acts. Hence, the role of constitutional authority in federal and state policy production differs significantly. As a document, the U.S. Constitution has changed little over the years. Its authority lies in the generality of its terms and in the multiplicity

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of meanings they take on. The provisions of state constitutions are far more numerous and prosaic and often require revision to accommodate changing circumstances. 9.4.1 Constitutional Amendment One of the key inventions in the Constitution was the process for changing or amending it. The original Articles of Confederation from 1777 made the amendment process very difficult. The Constitutional Convention of 1787 was originally convened as a body to draft amendments to the Articles. After due discussion, the delegates decided to do away with the Articles of Confederation and draft a new constitution, more or less from scratch. Thus was born the Constitution of the United States. As detailed in chapter 7, Article V of the Constitution sets forth two mechanisms for amendment that have only been successfully used twenty-seven times in over 200 years. In the arsenal of policy production, the constitutional amendment may be seen as the nuclear weapon of public authority. Creating legal authority for policy production by amending the Constitution is not only the most difficult, but also the most potent, basis for justifying action. While more than 10,000 resolutions for amendments have been submitted to Congress, only thirty-three have obtained the necessary two-thirds vote in both the Senate and the House. Most of the twentyseven amendments actually passed by the states deal with important, if not transformative, issues, with impact on either the structure or content of American public policymaking. To propose a constitutional amendment as a means of authorizing a policy objective is to threaten potential adversaries with the “nuclear option,” and signals, at least symbolically, that the issue at hand is of fundamental import. Proposed amendments in recent decades tend to be used as instruments of “compellance” or deterrence rather than as technologies of action. The threat of a proposed amendment can—as in the case of the 1990s balanced budget amendment and, more recently, efforts to ensure that the words “under God” remain in the pledge of allegiance, or to limit marriage to the “union of a man and a woman”—push public policymakers to adopt different means to the same end. 9.4.2 Judicial Review There is, however, a much easier way to change the U.S. Constitution. This is simply to read the words differently. Since the words are few and reflect the often-ambiguous compromises of the founders, questions of interpretation arose soon after ratification. Who could decide what the Constitution really meant when applied to policy problems unknown and unimaginable to its authors? This issue was resolved by the Supreme Court in the case of Marbury v. Madison in 1803. Writing for a unanimous court, Chief Justice John Marshall asserted that “It is emphatically the province and duty of the judicial department to say what the law is. . . . A law repugnant to the Constitution is void.”8 Marshall proclaimed the power of the Court to declare both congressional legislation and executive acts null and void if they violated the Court’s understanding of the Constitution. Soon thereafter, the Court also declared its authority to find state laws and acts unconstitutional in Martin v. Hunter’s Lessee.9 The authority of judicial review opened a whole new avenue to those seeking to influence the meaning and application of the law. Marbury v. Madison created a second, more flexible mechanism of constitutional change. Most revisions in constitutional authority result from decisions by the Supreme Court reviewing the exercise of authority by Congress or the president. Historically, the Court has been reluctant to exercise this authority. In the first sixty years of the nation, the Court found Congress to have

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exceeded constitutional boundaries just twice. In the past century, however, judicial reticence has declined markedly. Indeed, in the five-year period from 1995 to 2000, the Supreme Court overruled Congress twenty-four times.10 The activist stance of the Court over the past half-century has meant that many policy advocates—and even some policymakers—now look to the Court and not the legislature as the primary arena for enacting political and social change. Prominent legal analysts characterize courts as increasingly willing to invalidate congressional authority, even if on minimalist grounds.11 Judges across all political persuasions would appear to be less encumbered by the weight of the argument that, by so doing, they are displacing decisions made by presumptively democratic legislatures.12 In fact, the prospect of Supreme Court review has become a major issue in legislative policymaking, with opponents occasionally seeking to insert “poison pill” provisions aimed at provoking high court review and rejection. The threat of judicial review has made the federal court system a major player in the policy production process and a primary venue for many groups of social activists. 9.5 LEGISLATIVE AUTHORITY Most texts on public policy focus on the production of legislative authority or statutory law as the main act in the policymaking process. Many view making policy and making statutory law as being synonymous. While we recognize the critical importance of legislation and legislative law making, we wish to reemphasize two key points in our broader view of the policymaking process. First, legislation is only one of several institutional technologies of policy production. Public policy is produced every day without the participation of legislators or the benefit of statutory law. Despite the claims of senators and representatives that Congress is the policymaking body of the United States, you don’t have to work in the Capitol building to make public policy. Second, statutory law—just like constitutional law, executive orders, and the like—is only a framework or foundation for policy production and not the entire process. Laws are nothing more than public commitments or promises—mere words on paper. Laws do not become policy until the promises are kept and public action is taken. The passage of legislation is merely one step in the process of converting public demands into public outputs. Though philosophers may argue that words are actually another medium of behavior, most ordinary citizens understand the vital differences between rhetoric and action. The production of legislative authority in particular, or any form of authority in general, is only one of the many acts in the policymaking process. Hence, we will limit our discussion to the basics. • • •

First, we survey the sources and scope of legislative authority. Second, we review the types of legislative acts that can be used to create new authority for policy production. Third, we review the structure of existing legislative authority and how policymakers use existing statutory authority to justify policy production.

9.5.1 Scope of Legislative Authority The authors of the Constitution assumed that “in republican government the legislative authority, necessarily, predominates.”13 This is emphasized in Article I, Section 8 of the Constitution, which—after detailing a garden-variety list of congressional powers—adds most tellingly, the authority “to make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United

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States, or in any Department thereof.”14 The supremacy of legislative authority, within the scope of Article I, is reinforced in Article VI of the Constitution, which states: “This Constitution, and the Laws of the United States which shall be made in Pursuance, thereof . . . shall be the Supreme Law of the Land.” However, the authors made sure that legislative authority would not be exercised arbitrarily. Congress was divided into two separate bodies—the House of Representatives and the Senate—and legislative overrides of presidential vetoes had to pass by large majorities. In addition, Federalist #78 made it clear that “No legislative act therefore contrary to the constitution can be valid,”15 and the Supreme Court soon took upon itself the implied authority of judicial review. While legislative authority may be supreme in theory, in practice the powers of Congress are more limited than the founders may have imagined. Similar dynamics characterize the legislative authority of the states. 9.5.2 Types of Legislative Authority There are three general types of legislative authority: • • •

Organic or enabling Authorization Appropriation

The most basic form of legislative authority is organic. “Enabling or organic legislation is legislation that creates an agency, establishes a program, or prescribes a function, such as the Department of Education Organization Act or the Federal Water Pollution Control Act. While organic legislation may provide the necessary authority to conduct the program or activity, it, with relatively rare exceptions, does not provide any money.”16 The exercise of legislative authority begins with organic or enabling legislation. Organic legislation is produced by specialized committees in Congress that have jurisdiction over particular policy domains—for example, agriculture, labor, education, and armed services. Typically, a grant of authority included in organic legislation is fairly broad, with details and implementation issues left for subsequent legislative acts. Enabling legislation usually expands the scope of existing authority and demarcates the boundaries of future action. Hence, most enabling acts are permanent in nature—at least as permanent as legislative authority gets. However, enabling legislation is only the first and most symbolic step in the construction of legislative authority. Nothing compels Congress to make any effort to transform enabling legislation into action. The next step in the exercise of legislative authority is authorization. Authorization—or technically speaking, an appropriation authorization—is “legislation which authorizes the appropriation of funds to implement the organic legislation. . . . As a general proposition, it, too, does not give the agency any actual money to spend.”17 An authorization act is the promise that Congress makes to itself to authorize funding for a function or agency created by an enabling act. Although the authorization act may be included in the organic legislation it is often separate. Like enabling legislation, authorization acts are produced by the subject-matter committees of Congress. Many governmental programs are reauthorized annually. In some cases, however, a comprehensive reauthorization is scheduled on a periodic, multiyear basis. Authorizing legislation regularly reviews and revises basic organic authority. It fills perceived gaps, newly defined needs, and updates policy solutions identified through the political process. Again, authorizing legislation varies from narrowly technical or corrective changes to broad infusions of new responsibilities for marginally related policy problems. The third and final component of the exercise of legislative authority is an appropriation act.

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According to the Government Accountability Office (GAO) an appropriation is an authorization by an act of Congress that “permits Federal agencies to incur obligations and to make payments out of the Treasury for specified purposes.”18 Appropriation acts are specifically mandated by the Constitution in Article 1, Section 9, which states “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.” This clause means that Congress—and not the executive or judicial branches—has ultimate control over the “power of the purse.” It is Congress that has final say over whether a policy program is funded and at what level. Moreover, the power of the purse can also be used to make de facto changes in both enabling and authorizing authority. Thus, Congress can decree, either in the appropriation itself or by separate statutory provisions, what will be required to make the appropriation “legally available” for any expenditure. . . . In this manner, Congress may, and often does, use its appropriation power to accomplish policy objectives and to establish priorities among federal programs. Congress can also use its appropriation power for other measures. It can, for example, include a provision in an appropriation act prohibiting the use of funds for a particular program. By doing this without amending the program legislation, Congress can effectively suspend operation of the program for budgetary or policy reasons.19 We will discuss appropriations and their role in the budget process in more detail in chapter 14. 9.5.3 The Structure of Statutory Authority A statute is the product of the legislative process. Statutes are vehicles for the exercise of federal and state legislative authority. Statutory authority has several components that are usually—but not always—included in different sections of a law. • A title, short title, and an enacting clause. All statutes, except appropriations bills, have titles. Enacting clauses provide formal notice that the bill is a statute with the force of law. • A statement of the legislative findings and purposes of the legislation. Here Congress sets forth its reasons and its goals for the law. This language is important to courts when they are called upon to resolve questions about the meaning and application of a statute. • A section setting forth key definitions and terminology. Again, definitions are set forth to be sure that key terms are given precise and particular meanings as the law is implemented and subjected to judicial and administrative interpretation. • General provisions outlining the changes in the law, the scope, and any exceptions to these changes, the assignment of responsibilities, and any provisions for coordinating this law with previous or overlapping statutes. These sections set forth the substance of the policy and the procedures for implementation. • Remedies and sanctions outlining how the act will be enforced. These give “teeth” to the law by outlining: who can sue (the administering agency, the Department of Justice, a private person), when (defining a violation), how (arbitration, in court, within the administrative agency), and for what (damages, penalties, imprisonment, attorneys’ fees, court costs). • A severability clause. Such clauses instruct courts as to what effect a finding that one section of the law is invalid will have on the remaining sections. Here Congress may wish either to isolate the impact of subsequent court action or to ensure that the balancing of interests in important legislative compromises be preserved by invalidating the entire statute. • A date when the law goes into effect.20

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Statutes are compiled and published in the United States Code (USC) in sequentially numbered provisions organized by subject matter into titles. The USC contains the currently effective public laws of the United States. Similarly, states regularly compile and publish their statutes. Depending on the complexity of the subject matter and legislative politics, statutes vary widely in detail. Generally, however, the longer a law has been in force, the more amendments and revisions to the original enabling authority. Sometimes the trail of legislative authority contains significant omissions or contradictions. Legislatures regularly repackage policy authority to fill gaps or meet newly perceived needs and problems.

MINI-CASE 9.1 Who Gets to Say Who Pulls the Plug In 1991, Theresa Schiavo, aged 26, slipped into a constant vegetative state. She left no written instructions as to her wishes in such an eventuality, although, according to her husband, Michael, she had told him she would never want to be kept alive by artificial means. Seven years later, in 1998, Michael began legal efforts to remove her life support systems. Florida courts agreed with his request and issued an order allowing doctors to remove her feeding tube. As Terri’s husband, Michael had the final say-so. Terri’s parents objected—strongly—fighting Michael every step of the way. They appealed to the governor, who asked the legislature for a statute to counter the court order. The Florida state legislature complied and Terri’s Law required that her feeding tube be reinserted six days after it was removed. Michael filed suit again. In a decision by the Florida Supreme Court, the state’s legislature and governor were found to have violated a fundamental principle of American democracy—the separation of powers between the executive, legislative, and judicial branches. Why? Both the governor and the legislature had violated the authority of a court to issue a final determination in an individual case. Legislatures make public laws with prospective application, not private laws to remedy individual grievances after the fact. Courts, on the other hand, make decisions retrospectively, interpreting and applying law to the facts in a specific instance. The Florida court viewed Terri’s Law as retroactively overriding a court order. It compromised the integrity of the state’s constitutional system of three independent and coequal branches of government, none of which can encroach on the power of the other. In March 2005, the state court again ordered the feeding tube removed. This time, Congress entered the fray by passing legislation granting jurisdiction to the federal courts over the Schiavo case. However, the federal courts, including the Supreme Court, refused to overturn a state court order. Terri Schiavo died a few days later.

9.6 EXECUTIVE AUTHORITY The executive authority of the president is set forth in Article II of the Constitution. Presidential authority flows from the Constitution: to appoint judges and public ministers, to negotiate treaties, to receive diplomats and other ministers, to provide information periodically, to convene and adjourn Congress, to issue pardons, to be commander in chief, and to ensure that the laws be

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faithfully executed. This short list belies the steady expansion of the presidency to meet needs for national leadership at various points in history. Today, texts on the presidency describe multiple roles for presidents, who occupy the center stage of American politics. Most commonly added to the express powers of the president in the Constitution are roles as legislative leader and policymaker, public opinion and party leader, and manager of the economy. Presidential leadership, however, depends on how well an incumbent exercises his influence within the framework of this executive authority.21 Authority granted to state governors varies more broadly, with many state constitutions making far more specific provisions controlling what the chief executive may or may not do. Many texts examine presidents and policy from the perspective of their ability to get Congress to craft legislation. In this text we are primarily interested in presidential authority to execute policy—that is, authority over policy produced by the various administrative units of the executive branch. Domestic executive authority is primarily derived from four sources: the powers to appoint, to take care that the laws are faithfully executed, to veto legislation, and to require reports. “The president’s formal authority provides him with some degree of deferential treatment from his subordinates in the vast federal bureaucracy.”22 This is affected by relationships between a president and his or her appointees. In terms of executive authority, however, executive orders are a primary technology. Executive orders are unilateral “presidential directives issued to federal government officials or agencies.”23 They are managerial tools with the force and effect of law if exercised within the scope of presidential authority. Many are issued pursuant to some grant of statutory authority. Executive orders cannot be overturned except by congressional legislation or judicial decision, nor are they subject to any forum for public debate. Federal agencies may develop regulations to carry out the provisions of an executive order. Executive orders have a long history of usage for ceremonial and routine administrative matters as well as in military and foreign policy. Although used sparingly in the early years of the republic, many have had major impact. President Washington proclaimed neutrality in 1793; Franklin Roosevelt ordered the exclusion and internment of Japanese Americans in World War II; Lyndon Johnson required all federal contractors to adopt affirmative action practices; Nixon established price controls by executive order; Clinton instituted the “don’t ask, don’t tell” policy for gays in the military; and President George W. Bush ordered the establishment of military tribunals for prisoners held at Guantanamo Bay, Cuba. Presidential reliance on executive orders as authority for administering policy continues to expand.24 Executive orders have been characterized as “presidential legislation.”25 Many are issued under a grant of authority in a statute but some are issued simply to implement the personal policy preferences of a president.26 Here, a president’s authority to legislate has no direct expression in the Constitution and so rests on shakier ground than congressional legislation. Another problem arising from reliance on executive orders involves whether courts have authority to hear claims arising under executive orders. Unlike statutes, executive orders do not always make provision for lawsuits in disputes arising under terms of the order. Some explicitly preclude review. Only if an executive order clearly supplements requirements set forth by statute, or if it is constitutionally suspect, have courts generally allowed individuals access to courts. The advantages of executive orders as a means of policy production are clear. Instead of having to persuade hundreds of legislators or endure years of litigation through the federal courts, lobbyists need only persuade one individual—the president of the United States. The disadvantages are equally obvious: once a new president enters the White House, previous executive orders can be easily overturned. Nevertheless, since the 1960s, such major policy initiatives as affirmative action, racial and ethnic classifications for federal data collection, and restrictions on federal fund-

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ing for abortions have relied heavily on the authority of executive orders. While presidents can and do undo the work of their predecessors, most executive orders build up enough bureaucratic momentum to survive through subsequent administrations. 9.7 JUDICIAL AUTHORITY As previously described, Article III of the Constitution establishes the framework for judicial authority and a federal court system. Similarly, state constitutions outline the authority granted to and limits on state courts. Whereas statutory and executive authorities are prospective and general in nature, judicial authority is retrospective and deals only with actual disputes. Judicial authority is exercised when courts interpret and apply the relevant law. With some exceptions, judicial authority is exercised after the fact, when an injury has already occurred, and, narrowly, on a case-by-case basis. Litigation, whether by aggrieved individuals or interest groups, regularly reshapes policy authority. It introduces some degree of uncertainty into the interpretation of policy authority and into controls over production. Two aspects of judicial authority are important in our discussion of policy production. First, courts engage in interpretation by explaining ambiguities in authority sources. Second, courts also make decisions about remedies once a violation is found. The latter, although a less clearly delineated aspect of judicial authority, is important in determining the impact of courts on policy. The following two sections review the contributions of both aspects. 9.7.1 Interpretive Authority Judges interpret the law. They decide what the authors of a constitution or of a piece of legislation really meant. That is, how do unanticipated situations and new technologies fit the framework of existing law? In the United States, courts are bound to follow the command of the legislature. Yet statutes, the products of broad political compromises, are often unclear and offer little concrete guidance as applied to factual disputes before the courts. These characteristics open the door for judges to interpret authority. “Statutory interpretation is a search for legislative meaning in the context of the particular question before a court.”27 Remember, questions about what statutes mean arise only from real disputes where a statute or its progeny is applied to real people causing real damage. When courts are asked to resolve ambiguities in law, judges generally begin by consulting several sources: • • •

The plain meaning of the statutory language The purpose of the law, as set forth in the statute The intent of the legislature as derived from the debates and history surrounding its passage

These guidelines offer judges discretion. Judges create meaning by filling in the spaces within the outlines supplied by legislatures. Each decision then adds precedent to the interpretation of a statute and gives direction to policymakers. The more judges depart from the words in a statute and its legislative history the more political hackles will be raised—either from the Right or the Left—depending on whose interests are at stake. Judicial interpretation drives policy production in its post-legislative phases. As a technology, it offers both advantages and disadvantages. Resorting to the courts for more favorable interpretations of authority is a frequent strategy for the policy advocate, especially given the difficulty of persuading Congress to act. Of course, opponents engage in similar tactics. Much policy change,

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from school desegregation to the erosion of affirmative action practices, has been instigated by courts. Alternatively, when courts sustain existing interpretations, they add certainty to production methods and approaches. Courts democratize policy production by allowing “Jane Citizen,” when she sues, to have direct input into how laws are applied. However, the disadvantages of judicial interpretation are also significant. The very ability of citizens to act as private attorneys general adds to the complexity of policy. Further, our dual system of federal and state courts, the lengthy process of litigation, and the fact that only the Supreme Court or state supreme courts can reconcile differences of interpretation between courts below make standardization difficult. Policy across the nation often resembles a patchwork quilt, with the exercise of judicial authority balkanizing production. Finally, courts act retrospectively rather than prospectively. Generally courts can only act after the fact, on a case-by-case basis, rather than anticipate potential for harm. 9.7.2 Remedial Authority A second aspect of judicial authority is the power of courts to issue remedies. Without remedies, rights have very limited value. “The value of a right . . .” whether under a statute or other source of authority “. . . depends on the ability to obtain a legally enforceable remedy.”28 Courts do more than decide who is right; they also decide a policy output—what is needed to resolve the dispute. A remedy is the tangible result, or product, of a lawsuit.29 While judicial interpretation offers opportunities for policy advocates to achieve policy results by changing the meaning or scope of the law, courts also change the calculus of behavior under an existing law by imposing remedies on violators. There are three basic categories of remedies that courts may award in civil (as opposed to criminal) cases: •

Compensatory relief—a judgment that the defendant pays the plaintiff a sum of money as damages for his or her harmful conduct. Damages are the most common form of remedy.

•

Declarative relief—a judgment defining the rights and duties of the parties in a particular legal context. For example, a court may outline requirements that a policy be applied in a new way or to a new group of beneficiaries.

•

Specific relief—an order commanding or forbidding a specific action. For example, a seller who signed a contract to sell her house but later changes her mind may be required to follow through with the sale.

Statutes generally outline the remedies courts apply when a law has been violated. Most common are awards of monetary damages to an injured party, including attorneys’ fees and court costs. The rationale is restoration through compensation. For example, tobacco companies have been required to pay the costs borne by individual victims of smoking as well as the costs to states of treating those suffering from lung diseases associated with smoking. But courts regularly employ many other combinations of remedies. These include: • • • •

Injunctions prohibiting some practice or action Reinstatement of a person, practice, or policy Specific performance of some task or action Orders or decrees imposing affirmative obligations to restructure existing programs and institutions

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The last remedy in this list is the most recent addition to the technology of judicial authority—and the most controversial. Remedies imposed by many federal courts now extend well beyond the first three approaches above involving compensation, stopping a violation, or ceasing a practice or policy.30 With affirmative remedial powers, courts assume direct policy authority over key private or public functions by crafting remedies and then supervising the progress of the parties in meeting judicial requirements. Affirmative remedies are most controversial when courts exert direct control over some aspect of policy production by a government. Since the 1960s, federal and state courts have imposed affirmative obligations on hundreds of school districts, prison systems, and local welfare agencies and appointed “special masters” to oversee reforms to these systems. Courts regularly employ their remedial authority to reshape policy production. For example, rather than take its chances on punitive legislation coming out of a hostile Congress, the tobacco industry in 1999 agreed to pay out billions of dollars to settle a lawsuit brought by the states. In finding a right to marry for gays and lesbians under the state’s constitution, the Massachusetts Supreme Court set a new cycle of policymaking in motion. Businesses also look to the courts for relief when regulators and politicians are on the warpath. As the default of several of California’s utility companies in 2001 demonstrated, bankruptcy courts appeared to offer the utilities a more favorable result than the normal regulatory and political processes.

MINI-CASE 9.2 Same-Sex Marriages Who has the final say over who can marry whom? In 2003, same-sex marriage made headlines when the Massachusetts Supreme Court ruled that same-sex couples had the right to marry under the state’s constitution. With this ruling, judicial authority trumped a state statute limiting marriage to heterosexual couples. Opponents of same-sex marriage in Massachusetts then contemplated moving to the next level—that is, amending the state constitution, a difficult, two-year procedure involving passage of an amendment by the state legislature in two consecutive sessions, followed by ratification by voters in a state referendum. In the interim, the governor searched in vain for some sort of executive authority to stay the effect of the court’s decision while the state legislature responded with an amendment to the state’s constitution that ultimately failed. Events in Massachusetts encouraged policy entrepreneurs in other regions of the United States to challenge authority in different ways. In California, an initiative passed declaring marriage to be a union between a man and a woman. Subsequently, in San Francisco, the mayor announced that the city would issue marriage licenses to same-sex couples, and several thousand couples were married before a court issued an injunction forcing the city to comply with state law and stop. Proponents subsequently challenged state law prohibitions as contrary to the constitution. Finally, the California legislature passed a law allowing same-sex marriage, later vetoed by the governor. Similar scenes are playing out in other states as advocates on both sides challenge various forms of authority over marriage at all levels of government. These events clearly illustrate the variety of authorities within a state. They also challenge the various forms of federal authority across the fifty states. The federal Constitution is silent on the subject of marriage. It does require comity between states, that is, that each recognizes the acts of the others. Under this principle, other states should recognize samesex marriages performed in Massachusetts and accord the partners the same rights when outside Massachusetts. However, recent federal legislation has stepped into this vacuum.

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Congress passed the Defense of Marriage Act, which gives states the right to refuse to recognize same-sex marriages performed in other states. This hands the issue back to individual states. For many this is not enough. They advocate a national standard in the form of a Constitutional amendment. The real argument is over who has the final authority over the institution of marriage.

9.8 ADMINISTR ATIVE AUTHORITY Policy, once formulated as legislation, court decision, or executive order, is not self-executing. Responsibility for producing outputs belongs to the “fourth branch” of government—the many types of federal and state administrative entities participating in policy delivery. Such entities are organized around expertise. Administrative authority arises at the intersection between the general framework for addressing a problem contained in a statute and the practical, applied judgments needed to deliver benefits or outputs. Administration requires interpreting authority in its many forms and applying it to practice. Indeed, although differing over degree, many commentators argue that political and policymaking discretion is appropriately assigned to administrative bureaucracies with greater expertise and with additional layers of procedure to protect political debate while refining policy options.31 “Agencies make a great deal of policy within the boundaries of their enabling acts.”32 Historically, this view has not always been well received. Support for administrative authority is not always easily reconciled with the ideas of democracy, popular sovereignty, and the will of the people as expressed through legislation. Acceptance of the need for some degree of latitude for administrative authority is relatively recent. In the nineteenth century, administrative authority was localized, controlled by political parties and the spoils system. Supervision of public projects was “generally inept.” Courts frequently served as the arbiter of behavior and the guardian of the public interest.33 The few specialized federal bureaus that did exist performed limited service functions, such as delivering mail, helping farmers, and paying benefits to war veterans. Only in 1887, with the pressures of industrialization, did Congress depart from this narrow definition of service and create the Interstate Commerce Commission—a tentative step toward the establishment of an administrative entity with broader regulatory authority. Slowly over the next half century, administrative authority, in the form of regulation, emerged as a new technology for national policy production based on the rationale that authority could be delegated to administrative bureaus. Administrative authority strengthened the state’s capacity to deal with the growing industrial economy. It slowly gained acceptance with the establishment of the civil service, reforms of the Progressive Era, and Woodrow Wilson’s advocacy in his academic writings. Events, including the Depression of the 1930s, the New Deal, and the Second World War, radically altered both popular and constitutional expectations for the role of government. Administrative authority gained legitimacy. In 1946, Congress passed the Administrative Procedures Act (APA), the fundamental charter of the administrative state. States followed suit with their own versions over the next several decades. The APA creates a framework for the exercise of administrative authority. Administrative authority combines all elements of legislative, judicial, and executive authority within each agency. Agencies make law in regulations or rules issued under their rule making authority. The elaborate procedures

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for rule making create a quasi-legislative forum for participation by interested stakeholders. Like courts, agencies also adjudicate disputes over the application of agency policies under the rationale that those administering a policy should have the first opportunity to remedy mistakes. There are two types of limitations on the exercise of administrative authority. First is legislative oversight. Congress is responsible for monitoring agency activities through its standing committees and the expectation that committee members and staff be versed in agency operations. Investigations, hearings, and periodic amendments to the enabling legislation are fundamental mechanisms of congressional control. Second is judicial review, when courts are asked to review an agency’s interpretation of a statute it administers. Courts deal with three key questions in reviewing whether an administrative entity has acted within its authority: • • •

Whether Congress in the authorizing statute has clearly spoken to the question at issue. If it has, then the court must give effect to the expressed intent of the legislature without regard to the agency’s interpretation of the statute. Whether Congress in the authorizing statute remained silent on the question before the court. If it did, then the court must decide whether the agency’s interpretation of the statute is reasonable in the absence of legislative guidance. If Congress delegated authority in the statute to the agency to fill in the gaps by issuing rules, then such rules are presumptively valid unless they can be shown to be arbitrary, capricious, or directly contrary to the statute or constitution.

It is important to note, however, that “the vast majority of agency decisions are never reviewed by either the courts or the legislature.”34 There are advantages and disadvantages to administrative authority as a technology for policymaking. Administrative authority is easier to create and better tailored to the problems dealt with by an agency. Experts and specialists on the front line of policy production are directly involved. Regulations, the most familiar form of administrative authority, however, are detailed, difficult to access, and voluminous. Further, they are developed through processes that operate below the political radar of public opinion and are often dominated by special interests and stakeholders. Finally, administrative authority frequently lacks finality. What one administration does, the next frequently seeks to undo. 9 . 9 P O P U L A R A U T H O R I T Y: I N I T I A T I V E S AND REFERENDA In theory, at least, citizens are the ultimate source of public authority in a democracy. In the words of the Declaration of Independence, “governments are instituted among men, deriving their just powers from the consent of the governed.” But, how was the “consent of the governed” to be expressed? Fearful of the excesses of mob rule, the architects of the Constitution established a “republic” in which both elected and appointed representatives of the people made decisions. The nation was too big and too diverse to support direct democracy by the people. Authority was vested in legislators, judges, executives, and administrators who worked as the agents of the people. Once chosen, the agents of the American public were free to carry out their mandates within the framework of the law. Indeed, the authors of the Constitution specifically rejected the colonial practice of allowing voters to bind their elected representatives with written instructions. Thus, all five sources of authority detailed above are produced by delegates or agents of the citizenry, and not by the citizens themselves.

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Despite the fears of the founders, direct democracy never completely disappeared. In some New England town meetings, residents still gather on an annual basis to vote on town officers and decide on public issues. And, in the century following the adoption of the Constitution, states increasingly mandated approval of constitutional amendments by popular vote and required popular approval—by means of referenda and initiatives—of specific policy measures.35 By the beginning of the twenty-first century at least twenty-four states and the District of Columbia had authorized some form of initiative (a mechanism in which citizens originate legislation and submit it for popular vote) and twenty-six, not necessarily overlapping, states now permit the use of the referendum (a mechanism in which citizens require a public vote on a statute adopted by the legislature).36 Today referenda and initiatives are policymaking technologies available to states but not to the federal government. The question is then What may be accomplished through these technologies? The answer moves us into mostly uncharted territory. Beyond the general caveat that policy initiatives authorized by referenda and initiatives must, at a minimum, be consistent with the federal Constitution, there is little guidance for those pursuing their policy goals via referenda and initiatives. While the Supreme Court did overturn an Arkansas initiative that limited the terms of office of officials elected to federal office,37 limitations on the scope of referenda and initiatives are few and largely untested. In making referenda and initiatives available to voters as methods of direct citizen policymaking, states do place various restrictions on what can be done and how. Most require that such proposals be limited to a single area of constitutional or statutory change. Many attempt to reconcile potential conflicts between state constitutional and legislative authorities with such measures. Some restrict the tax implications of such measures. More and more states are beginning to address the issue of regulating practices associated with the growing number of interest groups and individuals with deep pockets who regularly use referenda and initiatives to bring their personal policy agendas before the voters. Reforms, however, are primarily procedural, rather than substantive, and include proposals for registering groups, and for campaign finance and disclosure laws. In states such as California and Oregon, referenda and initiatives are an integral, if controversial, part of the policy production process.38 Initiatives have been used to make public policy on such controversial social issues as the legalization of medical marijuana, affirmative action, and legalizing assisted suicide—issues that state legislators are often loathe to touch. Moreover, in states that allow such forms of direct democracy, new policy production “industries” have emerged, dedicated to drafting petitions, obtaining signatures, and campaigning for voter support. It is apparent that the use of initiatives and referenda will continue to grow and policy advocates will increasingly use these forms of direct democracy to push the limits of policy discourse and policy production in the United States. 9.10 STR ATEGIES FOR AUTHORITY PRODUCTION One step in policy production is defining the authority or justification for action. In the easiest case, authority for policy production is clearly defined by legislators, executives, courts, or administrators. These forms of authority can be found in a citation in one of the various compilations of laws. In more difficult cases, authority must be produced anew by means of constitutional amendment, organic legislation, or innovative acts of judicial review or judicial interpretation. In between, policy production involves recycling or rehabilitating existing authority texts to fit new circumstances through administrative interpretation and congressional amendment. Most policy texts concentrate on one form of authority—legislation. This reflects scholarly and popular interest in Congress, the presidency, and the daily drama of national politics. Yet policy

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authority takes many forms and is more commonly generated through other channels. These characteristics present stakeholders with multiple sources of authorities and strategies of production. Each comes with advantages and disadvantages, as summarized in Table 9.1 below. As outlined in the text and Table 9.1, each form of authority has strategic advantages and disadvantages for policy entrepreneurs and policymakers alike. Such considerations must be incorporated into the complex mix of strategic decisions necessary for policy entrepreneurs and policymakers to advance their goals and shape policy results. Policy production requires authority in some form—but the options are more numerous than traditionally conceived. The “dance of legislation” is but one arrow in the quiver of authority necessary to produce policy in America. Table 9.1

Sources of Authority: Advantages and Disadvantages Authorities Advantages 1. Constitutional Amendment • Permanent and legitimate 2. Judicial Review • Ease of access 3. Organic Legislation

• Legitmacy and relative permanence

4. Authorizing Legislation

• Periodic review and revision • Legitimacy • Yearly funding cycles and review

5. Appropriation Legislation 6. Executive Order

• Independent source for President • Readily accomplished 7. Judicial Interpretation • Ease of access 8. Judicial Remedy • Direct relief for injured parties • Method for reforming institutions 9. Administrative Regulation • Policy expertise input • Second forum for public input 10. Popular Authority

• Direct participation by the public

Disadvantages • Difficult to produce • Inconsistent outcomes, often negative or blocking policy production • Difficult to produce • Often ambiguous. Requires appropriations to be effective • Complexity and incrementalism in accumulation of provisions • Bias toward spending increases and expanded scope with little regard for results • Relatively little oversight by Congress or the courts • Readily undone • Inconsistent outcomes • Controversy—courts assume legislative and executive functions • Procedural complexity and volume of rules • Role of special interests • Influence of special interests

CASE STUDY The Strange Career of Affirmative Action The year 2003 was a good one for advocates of affirmative action. In June, the Supreme Court gave a yellow light to the continued use of racial and ethnic preferences in college admissions. Later that fall, Ward Connerly, a longtime activist and opponent, lost a round, as California voters defeated Proposition 54 in the recall election of 2003. Proposition 54 would have restricted the state’s power to collect information about race and ethnicity, data critical to all affirmative action practices. Only a few years earlier, policy momentum had appeared to be running against affirmative action. Federal courts had restricted affirmative action in collegiate admissions in several regions,

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as well as in set-asides for minority contractors. States such as Texas, Florida, and California had moved from allowing racial preferences to admitting a set percent of every high school graduating class in efforts to maintain minority enrollments in their public colleges. In 1996, with the passage of Proposition 209, another Connerly initiative, Californians amended the state constitution to ban the use of preferences based on race, ethnicity, or sex. And so the story of affirmative action continues its strange career, a career shaped by periodic struggles to reform the numerous policy authorities that control how we deal with the effects of centuries of discrimination. Over seven decades, affirmative action, originally a form of administrative authority, morphed into a set of policies and practices used by many organizations across the nation. During that transformation, it also acquired currency as a political symbol dividing American politics and policymakers. Yet, throughout its career, affirmative action has only rarely been a subject for legislative action. Instead, battles over affirmative action have unfolded in the many alternative forums of policy authority. For these reasons, affirmative action offers insight into the complex interactions between multiple forms of policy authority. We will here briefly recount the story of affirmative action, with its many fits and starts. Early Prototypes: Administrative Authority Where did it all start? What are the origins of authority for affirmative action? The answer is: in the 1930s, with efforts by President Roosevelt to counter the devastating consequences of the Depression and enact his policy agenda. The first efforts were part of the administration of New Deal programs to put people to work. In the South, entrenched segregation meant that black workers were excluded from these federal benefits. Determined to overcome these barriers, Harold Ickes, Secretary of the Interior and Administrator of the Public Works Administration (PWA), issued an order prohibiting discrimination in all PWA projects. When this proved ineffective, he imposed hiring quotas in 1934 to ensure black participation in such projects. A quota of 50 percent black labor in an employer’s workforce was first proposed but later rejected in favor of proportional representation, defined as the same proportion of blacks in an employer’s workforce as the number of local black workers in the pertinent job category identified in the 1930 census. Requirements for the proportional representation of blacks spread to several other New Deal programs, including the Civilian Conservation Corps, the Tennessee Valley Authority, the National Youth Administration, and the U.S. Housing Authority. These administrative requirements were later abandoned when wartime needs overwhelmed domestic policies.39 Affirmative action also had origins in the administrative machinery developed to foster the labor union movement. Buried in the text of the National Labor Relations Act of 1935 (NLRA), a statute establishing the rights of workers to form unions and to engage in collective bargaining, is the earliest source of statutory authority for what would eventually become the practice of affirmative action. The statute read, in part, “if upon the preponderance of the testimony taken, the Board [National Labor Relations Board] shall be of the opinion that any person named in the complaint has engaged in or is engaging in any such unfair labor practice, then the Board shall state its findings of fact and shall issue and cause to be served on such person an order requiring such person to cease and desist from such unfair labor practice, and to take such affirmative action including reinstatement of employees with or without back pay, as will effectuate the policies of this Act” [emphasis added].40 This provision enabled the National Labor Relations Board (NLRB), a government agency, to impose remedies that include prospective rather than retrospective remedies upon a finding

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of wrongdoing. Although there were strict limitations on the use of affirmative action under the NLRA, these provisions represented an important turning point in the evolution of administrative authority by providing for future-directed or risk mitigation strategies of action. Traditionally, the remedial authority of courts had been limited to compensation for damages already done rather than to preventing future problems. Prophylactic social action is a hallmark of public policymaking in the contemporary era. The meaning of the term affirmative action remained amorphous for a long time.41 It applied originally only to the field of labor relations and did not formally cross over into concerns about fair employment until 1945. As with much policy innovation, this occurred not at the federal, but at the state level. New York passed a law forbidding discrimination in employment and created a state agency modeled after the NLRB, with authority to order affirmative action remedies by employers found to have engaged in discrimination. Although the New York agency aggressively pursued complaints of employment discrimination, it never went so far as to order remedies requiring racial quotas or to use racial proportionalism (under-representation) as a measure for remedying discrimination. Form Over Substance: Executive Orders in the 1960s At the federal level the terminology of affirmative action was first linked with the issue of race discrimination in March 1961 with Executive Order 10925. Like many of his predecessors, President Kennedy created an agency, the President’s Committee on Equal Employment Opportunity (PCEEO), assigned to the Office of the President, to deal with issues of fair employment. EO 10925 required nondiscrimination by federal contractors and asked them to take affirmative action as a remedy when discrimination was identified. In practice, EO 10925 was a toothless wonder. Since it contained no standards for proving discrimination, its remedial provisions for affirmative action were meaningless. Indeed, agreeing on a standard for measuring discrimination remained contentious in the early 1960s, when most civil rights advocates argued for strictly color-blind practices based on individual, rather than group rights or measures. In 1965, President Johnson issued his own Executive Order 11246, substantially similar to Kennedy’s version. It covered employment practices by the federal government and federal contractors, included the same affirmative action language, and had the same limitations as its predecessor. However, President Johnson’s agency, the Office of Federal Contract Compliance (OFCC), was reassigned from the Office of the President to the Department of Labor. There, embedded in the entrenched bureaucracy of the Department of Labor, it was protected from direct access by civil rights groups who staunchly opposed any practice requiring reporting by race or ethnicity. It was from this, more sheltered, position that affirmative action was defined in practice from 1967 to 1969. Putting the Brakes On: Legislative Authority in 1964 Energized by the Supreme Court’s landmark decision in Brown v. Board of Education in 1954,42 the civil rights movement garnered support over the next decade sufficient to pass landmark legislation. With the Civil Rights Acts of 1964, Congress created the basic framework of statutory authority for nondiscrimination in the United States. Among its provisions, Title VII, dealing with discrimination in employment, and Title VI, requiring nondiscrimination by recipients of federal funds, are the two implicated in this case study. The legislative debates leading to passage of these laws provide evidence that memories of the

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racial quotas used by New Deal programs remained alive and still provoked sharp disagreement in 1964. Title VII reflects the contradictory experiences, or lessons learned, from three decades of efforts to untie the Gordian knot of discrimination. Like many political compromises, Title VII contains conflicting provisions. It bans discrimination in employment and prohibits racial balancing or preferences with the following language: “Nothing in this title shall be interpreted to require any employer to grant preferential treatment to any individual or group on account of an imbalance which may exist with respect to the total number or percentage of persons of any race employed by any employer . . . in comparison with the total number or percentage of persons of such race . . . in any community . . . or in the available workforce in any community.”43 At the same time, Title VII also provides authority for courts to order affirmative action as a remedy in cases brought by the Equal Employment Opportunity Commission (EEOC), the agency responsible for administering the law: “If the court finds that the respondent has intentionally engaged in or is intentionally engaging in an unlawful employment practice charged in the complaint, the court may enjoin the respondent from engaging in such lawful employment practice, and order such affirmative action as may be appropriate, which may include, but is not limited to, re-instatement or hiring of employees, with or without back pay . . . or any other equitable relief as the court deems appropriate.”44 Within a few short years, these contradictions in the sources of legislative authority would be dissolved. This happened because administrators in two key federal agencies, the EEOC and the OFCC, reconfigured old practices and created new forms of administrative authority for affirmative action. Herein lie the modern roots of affirmative action. Getting Serious: Administrative Authority Revisited Authority for affirmative action in its contemporary form owes its existence to two agencies, the EEOC and the OFCC. Between 1965 and 1969 the EEOC evolved a standard for measuring the presence of discrimination: disparate impact. On a parallel but separate track, the OFCC required those with racial discrepancies in their workforces to remedy such differences by setting categorical targets or racial benchmarks of progress: affirmative action plans. As new agencies, both faced the task of carving out roles for themselves in the early years of their existence and of demonstrating progress in dismantling segregation. Both operated in a highly contentious political climate shaped by frustration with the slow progress in dismantling the pervasive effects of discrimination across the nation, complicated by race riots in many urban centers and a growing antiwar movement. The EEOC When the EEOC began operation in 1965, it inherited a reporting system that its predecessors had used to collect information from employers about their employees’ race. By 1966, the EEOC had expanded this national information system and was collecting “massive data as to where patterns of discrimination lie and where progress is being made to correct them . . . information . . . crucial in assessing the effectiveness of Title VII of the Civil Rights Acts of 1964.”45 In 1967, EEOC staff and a majority of its commissioners launched a “wholesale attack” on the patterns of institutionalized racism made evident by this data.46 Originally Title VII required showing that an employer had intentionally engaged in a discriminatory employment practice before ordering a remedy. Yet, proving intentional discrimination was difficult and required a laborious, case-by-case examination of complex facts and motives. On the other hand, EEOC data made patterns of bias easy to identify when an individual employer’s

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workforce was compared with data on the industrywide availability of racial and ethnic minorities. Under pressure to demonstrate results, EEOC officials revived a 1930s solution, racial proportionalism, but repackaged it in new terminology, disparate impact. Disparate impact resolved a previously intractable problem—how to measure the presence or absence of discrimination. It did so by demonstrating a discrepancy in the distribution of policy benefits or burdens based on race. It measured discrimination by effects or results rather than by intent or motive. In so doing it rewrote the law of employment discrimination set forth in Title VII. The OFCC The more familiar story, and the one that propelled affirmative action into national political controversy, unfolded at the OFCC between 1967 and 1969. It arose over the Philadelphia Plan, a program requiring government contractors to set categorical targets for minority hiring. The OFCC was an agency with teeth. “It had the power to cancel, terminate or suspend . . . any contract, or portion thereof that violated EO 11246. With federal funds reaching 225,000 contractors involved in $30 billion in annual contracts, the agency wielded considerable leverage.”47 After some experimentation, the OFCC decided to direct its attention to a target group of federal contractors—those with construction contracts in federal housing programs—and to require agreements for hiring minorities before awarding those contracts. In the fall of 1967 it set forth new requirements for bidding on this group of contracts. To be eligible to bid, all employers had to submit detailed tables specifying the number of minority workers to be hired in each job category, plus agree to submit annual reports containing data on progress toward meeting their self-imposed quotas. Opposition to the OFCC’s new requirements first arose internally within the Johnson administration. In November 1968, the GAO, the agency with final legal jurisdiction over federal contracting procedures, ruled the Philadelphia Plan illegal, and the Department of Labor quietly rescinded it. Affirmative action plans required of federal contractors appeared to be dead on arrival. But such plans weren’t squelched completely. President Nixon, who based much of his 1968 campaign on appealing to the racially conservative South, found the prospect of setting the organized labor and civil rights movements at each other’s Democratic throats to be good politics.48 In June 1969 Nixon’s secretary of labor revived the Philadelphia Plan, and his attorney general declared the plan legal. In December 1969, when Congress failed in efforts to pass antiaffirmative action legislation, the OFCC then issued Order 4, the federal regulations requiring affirmative action programs, including underutilization analysis, goals, and timetables for all those with federal contracts.49 Those regulations have since been modified and replicated across almost every program distributing federal funds in any way, including those under Title VI. Using their authority, the EEOC and the OFCC assembled the two basic building blocks of modern affirmative action policy—disparate impact and categorical targets. Other agencies and groups were quick to replicate an approach that appeared to promise better results. Enter the Courts: Judicial Authority The story of efforts to shape affirmative action now migrated into other policymaking forums. Stymied at the agency level, opponents of these new forms of administrative authority for dealing with discrimination turned to the courts for help. The courts responded in a series of authority “bits” that continue to generate twists and turns. The first prong of affirmation action policy, disparate impact, was challenged almost imme-

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diately. Specifically, in 1971, the Supreme Court was asked to decide whether disparate impact could be used as a measure of discrimination under the provisions of Title VII.50 By holding that it could, the Court sustained the EEOC in making the consequences, rather than the intent or motive, the measure of nondiscrimination. With relatively few modifications,51 Griggs v. Duke Power Co. remains good law. Yet, Griggs did not address questions about what form an affirmative action plan should take. Numerous cases have subsequently attempted to define the scope of authority for affirmative action. Courts only become players when someone challenges what is perceived to be a policy wrong. In terms of affirmative action, those wrongs found their way into the courts as reverse discrimination claims. When Allen Bakke was denied admission to the medical school at the University of California at Davis, the Supreme Court agreed with Bakke in a ruling that set no clear legal precedent beyond rejecting the use of quotas, or a fixed number of slots set aside for minorities by the university.52 Justice Powell’s famous “diversity opinion,” a separate analysis representing only his own views, argued that racial classifications to enhance diversity may be appropriate in some instances. A year later, in United Steelworkers v. Weber, the same Court allowed the voluntary use of race-conscious hiring goals when they were contained in a contract negotiated between private employers and a union.53 Policy practitioners were more or less free to draw whatever lessons they wished from these decisions. And they did. By the mid 1980s the Supreme Court was regularly called on to bless or trim affirmative action programs in many different forms. It did both with some regularity. In fractured opinions, it barely rejected a challenge to a congressional program requiring that 10 percent of federal funds granted to local public works projects be set aside for minority contractors.54 It prohibited the use of racial criteria in teacher layoffs in a school district seeking to increase numbers of minority teachers, but having no past history of legally mandated racial segregation.55 It did, however, allow the use of race in hiring state troopers in Alabama, a state that had previously excluded all blacks from such positions.56 But, it prohibited the City of Richmond from “setting aside” 30 percent of all municipal contracts for minority businesses.57 Such a plan was only allowable if the city could show that it was needed to remedy past discrimination by the city itself. In 1996 the Court disavowed its earlier decision and curbed the federal government’s program for setting aside a percent of contracts for minority businesses. The Court required some evidence that the set-aside contracts remedied the effects of past discrimination caused by state or federal action. 58 Finally, after limiting the use of race in drawing voting district boundaries in a long line of cases,59 the Court let stand the use of a surrogate characteristic (political affiliation) to be used in gerrymandering voting districts in its most recent decision.60 In 2003, the Supreme Court revisited its 1978 decision in the Bakke case. Issues of affirmative action have proved especially contentious in admissions practices by selective colleges and professional schools and produced numerous contradictory rulings by lower courts. In Grutter v. Bollinger61 the Court ruled that diversity could be a reason for the use of racial and ethnic preferences in admissions. That is, race could be used as one of several criteria but could not be decisive alone. 62 In allowing the procedures used to admit students to the University of Michigan’s law school, but finding the procedures used by the undergraduate college to be race determinative, the Court set the stage for future rounds of challenges over how to do it. State and Local Adaptations: Popular Authority Plus Many other entities have had lesser roles in the promotion of affirmative action. In a federal system, advocates who lose the battle in one forum seek other forums for creating authority better

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suited to their viewpoints. Thus, state and local governments entered the fray. Many states enacted laws and regulations and set up agencies to oversee a variety of affirmative action programs. What was done depended on the political climate in that state and the particular programs that attracted the attention of policymakers. For example, Iowa enacted a law providing all minority students with generous scholarships to colleges within the state if they attend precollegiate workshops designed to encourage postsecondary education. California and Washington both passed referenda to limit or prohibit affirmative action practices generally, whereas Florida and Texas focused on limiting its use in college admissions. In the final analysis, however, affirmative action policies are determined and delivered by individual organizations and institutions, both public or private. Summary: Authority as a Patchwork Quilt When there is little political consensus, battles over authority in policymaking often unfold in forums that command less media attention. Affirmative action illustrates this pattern. In the seventy years in which affirmative action has existed as policy practice, it has rarely occupied center stage as a matter of debate between those considered to be the major players in American public policymaking—the Congress and the president. Yet affirmative action has had a major impact on American society and practices. While this case study describes only the major sources in the evolution of policy authority for affirmative action, we can draw several conclusions from this evidence, listed below. • Statutes are not necessarily the initial or sole source of authority for policy. With two limited exceptions,63 Congress has played a minimal role in creating legislative authority for affirmative action, preferring instead to keep a low public profile and avoid contentious debate. • Administrative authority is often a source of policymaking. Affirmative action originated primarily as an exercise of administrative authority by program officials seeking strategies that produced results, first in the 1930s, and later in the 1960s. • Judicial authority is a primary means for modifying policy authority. Multiple, often inconsistent, rulings have driven the evolution of affirmative action practices, making them ever more complex and procedurally oriented. • Executive authority allows presidents to pressure the agendas of bureaucrats and specific groups. Executive orders may be used to create entities that sustain interest in issues—in the case of affirmative action, fair employment and nondiscrimination. • Popular authority is available when issues are salient and traditional avenues of influence blocked. The use of affirmative action was blocked in two states, adding to the regional variation in policymaking. Affirmative action is not one coherent policy based on an original policy source but rather a multitude of authorities shaped over time by the political environment in particular jurisdictions. The dynamics of authority and the fact that policy emerges from many authority sources often create piecemeal policy approaches. Affirmative action is a prime example of the patchwork quilt that is often American public policy. We can reasonably expect that pieces will continue to be added to that quilt. Like most public policies, affirmative action is a work in progress.

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KEY TERMS administrative authority—the authority of federal and state administrative entities responsible for policy production to interpret and apply legislative, executive, and judicial authorities in delivering policy outputs. apparent authority—authority arising from situations where someone acting for an institution induces a belief in other persons that authority exists, when in fact it does not. The most tenuous form of authority. authority—legal permission to act. Authority for policymaking comes from six sources: constitutional, legislative, executive, judicial, administrative, and popular. constitutional authority—authority found in the Constitution or in state constitutions as the fundamental contract between people in the United States, or people within a state, for governing themselves. executive authority—the authority of the president and governors, as set forth in constitutional documents. Most important in terms of policy production are an executive’s powers of appointment, responsibilities to take care that the laws are faithfully executed, to require reports, and to exercise a veto over legislation. executive orders—unilateral presidential or gubernatorial directives issued to federal or state government officials or agencies with binding effect. express authority—authority found within the plain meaning of a written source. implied authority—authority that is inferred from express authority, as necessary or appropriate to the exercise of an express grant of authority. judicial authority—the authority of courts under federal and state constitutions to resolve disputes appropriately brought before them. judicial review—the authority of courts to declare a legislative or executive act as contrary to a constitution (either federal or state). legislative authority—the authority found in statutes (laws) passed by Congress and by state legislatures. There are three basic types of legislative authority: organic or enabling, authorization, and appropriation. popular authority—authority derived from state constitutions to pass laws or amend the constitution by direct vote of citizens in state elections. The procedures for exercising popular authority vary from state to state. QUESTIONS FOR DISCUSSION 1. For policymakers, what are the relative advantages and disadvantages of constitutions that are very detailed and specific versus constitutions that are broadly worded and somewhat vague? 2. What are some examples of how the power of courts to “read the words differently” has affected the course of policy production in the United States? 3. What are the advantages and disadvantages of using executive orders as the basis of authority for dealing with captured terrorists from other nations and with those suspected of planning terrorism in this country?

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4. Evaluate this statement: The courts are becoming a more important forum for policy production than the Congress. 5. Affirmative action, tobacco, and abortion are examples of policies where multiple sources of authority have been used. Can you identify examples of other policies whose origins may be primarily attributed to institutions other than Congress? 6. Do you see the increasing reliance on initiatives and referenda as a method for more democratic policymaking, or as a symptom of policymaking being captured by well-financed, specialinterest groups with narrow agendas? Identify examples. 7. Identify examples of policies that have been primarily shaped by administrative authority. Explain your examples. SUGGESTED READINGS Broder, David. Democracy Derailed: Initiative Campaigns and the Power of Money. New York: Harcourt, 2000. Cook, Brian J. Bureaucracy and Self-Government: Reconsidering the Role of Public Administration in American Politics. Baltimore, MD: Johns Hopkins University Press, 1996. Daynes, Byron W.; Raymond Tatlovich; and Dennis L. Soden. To Govern a Nation: Presidential Power and Politics. New York: St. Martin’s Press, 1998. Dubois, Phillip L., and Floyd Feeney. Lawmaking by Initiative. New York: Agathon Press, 1998. Fox, William F., Jr. Understanding Administrative Law. 3rd ed. New York: Matthew Bender, 1997. Kyvig, David E. Explicit and Authentic Acts: Amending the U.S. Constitution, 1776–1995. Lawrence, KS: University Press of Kansas, 1996. Liang, Bryan A. A Zone of Twilight: Executive Orders in the Modern Policy State. Washington, DC: National Legal Center for the Public Interest, 1999. Schudson, Michael. The Good Citizen: A History of American Civic Life. Cambridge, MA: Harvard University Press, 1998. Sunstein, Cass R. One Case at a Time: Judicial Minimalism on the Supreme Court. Cambridge, MA: Harvard University Press, 1999. Tarr, G. Alan. Understanding State Constitutions. Princeton, NJ: Princeton University Press, 1998.

NOTES 1. Michael Schudson, The Good Citizen: A History of American Civic Life (Cambridge, MA: Harvard University Press, 1998), p. 30. 2. This discussion is based on materials from William A. Kaplin and Barbara A. Lee, The Law of Higher Education, 3rd ed. (San Francisco, CA: Jossey Bass, 1995). The quotations that follow are found on page 77. See also Charles R.T. O’ Kelley and Robert B. Thompson, Corporations and Other Business Associations: Cases and Materials, 3rd ed. (New York: Aspen Law and Business, 1999), pp. 31–33. 3. See Marbury v. Madison, 1 Cranch 137, 2 L. Ed. 60 (1803). 4. Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579 (1952). 5. David E. Kyvig, Explicit and Authentic Acts: Amending the U.S. Constitution, 1776–1995 (Lawrence, KS: University Press of Kansas, 1996), p. 2. 6. Ibid., p. 17. 7. G. Alan Tarr, Understanding State Constitutions (Princeton, NJ: Princeton University Press, 1998), p. 20. 8. 1 Cranch 137, 2 L. Ed. 60 (1803). 9. 1 Wheat 304, 4 L. Ed. 97 (1816). 10. Nina Tottenberg, “Morning Edition,” National Public Radio, July 10, 2000. 11. Cass R. Sunstein, One Case at a Time: Judicial Minimalism on the Supreme Court (Cambridge, MA: Harvard University Press, 1999). 12. Mark Tushnet, “Foreword: The New Constitutional Order and the Chastening of Constitutional Aspiration,” Harvard Law Review 113 (1999): 26–109.

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13. James Madison, “Federalist #51,” in The Federalist Papers: Hamilton, Madison, Jay, ed Clinton Rossiter. (New York: Mentor Books, 1961), p. 322. 14. Quoted materials are found in the U.S. Constitution. 15. Alexander Hamilton, “Federalist #78,” in The Federalist Papers, p. 467. 16. United States Government Accountability Office, Office of the General Counsel, Principles of Federal Appropriations Law, 3rd ed., vol. I (January 2004), pp. 2–40. 17. Ibid., p. 2–40. 18. United States General Accounting Office, Office of the General Counsel, A Glossary of Terms Related to the Budget: Exposure Draft (Revised January 1993), p. 16. 19. Government Accountability Office, Principles of Federal Appropriations Law, pp. 1–4. 20. Abner J. Mikva and Eric Lane, An Introduction to Statutory Interpretation and the Legislative Process (New York: Aspen Law and Business, 1997). 21. For a further exposition see Byron W. Daynes, Raymond Tatlovich, and Dennis L. Soden, To Govern a Nation: Presidential Power and Politics (New York: St. Martin’s Press, 1998). 22. Ibid., p. 216. 23. Steven Ostrow, “Enforcing Executive Orders: Judicial Review of Agency Action Under the Administrative Procedure Act,” George Washington Law Review 55, no. 3 (March 1987): 659, fn 2. 24. Bryan A. Liang, A Zone of Twilight: Executive Orders in the Modern Policy State (Washington, DC: National Legal Center for the Public Interest, 1999). 25. Ostrow, “Enforcing Executive Orders,” p. 660. 26. Ibid., see fn 6, commenting that, between 1945 and 1965, 83 percent of executive orders referenced specific statutory authority, but that some refer more generally to the Constitution as authority. 27. Mikva and Lane, Introduction to Statutory Interpretation, p. 6. 28. Edward D. Re and Joseph Re, Remedies: Cases and Materials, 5th ed. (New York: Foundation Press, 2000), p. vi. 29. Ibid., p. 2. 30. See discussion in John Choon Yoo, “Who Measures the Chancellor’s Foot? The Inherent Remedial Authority of the Federal Courts,” California Law Review 84, no. 4 (July 1996): 1121–77. 31. For a discussion of the justifications for administrative interpretive authority, see Mark Seidenfeld, “A Civic Republican Justification for the Bureaucratic State,” Harvard Law Review 105 (1992): 1512–76. See also Brian J. Cook, Bureaucracy and Self-Government: Reconsidering the Role of Public Administration in American Politics (Baltimore, MD: Johns Hopkins University Press, 1996). 32. William F. Fox, Jr., Understanding Administrative Law, 3rd ed. (New York: Matthew Bender, 1997), p. 6. 33. Stephen Skowronek, Building a New American State: The Expansion of National Administrative Capacities, 1877–1920 (New York: Cambridge University Press, 1982). 34. Fox, Understanding Administrative Law, p. 7. 35. Phillip L. Dubois and Floyd Feeney, Lawmaking by Initiative (New York: Agathon Press, 1998), p. 9. 36. Ibid., p. 18. 37. U.S. Term Limits Inc. v. Thornton, 514 U.S. 779 (1995). 38. For example, see David Broder, Democracy Derailed: Initiative Campaigns and the Power of Money (New York: Harcourt, 2000); and Larry J. Sabato, Howard R. Ernst, and Bruce A. Larson, eds., Dangerous Democracy? The Battle Over Ballot Initiatives in America (Lanham, MD: Rowman & Littlefield, 2001). 39. For a detailed description, see Paul D. Moreno, From Direct Action to Affirmative Action: Fair Employment Law and Policy in America, 1933–1972 (Baton Rouge, LA: Louisiana State University Press, 1997). 40. National Labor Relations Act 49 Stat. L. 449, 10 (c). 29 U.S.C. §§ 151–169 (1974). 41. Moreno, From Direct Action to Affirmative Action, p. 189. 42. Brown v. Board of Education, 349 U.S. 294 (1954). 43. 42 U.S.C. 2000 e, § 703 (j). 44. 42 U.S.C. 2000 e, § 706 (g). 45. Henry G. Pearson, “Title VII: Reporting and Record Keeping,” Boston College Industrial and Commercial Law Review 7 (1965–66): 560. 46. Hugh Davis Graham, The Civil Rights Era (New York: Oxford University Press, 1990), p. 250. 47. Robert D. Manning and Stephen R. Domesick, “Title VII: Relationship and Effect on Executive Order No. 11246,” Boston College Industrial and Commercial Law Review 7 (1965–66): 567.

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48. John David Skrentny, The Ironies of Affirmative Action: Politics, Culture, and Justice in America (Chicago, IL: University of Chicago Press, 1996), p. 177. 49. 41 C.F.R. Parts 60–62. 50. Griggs v. Duke Power Co., 401 U.S. 424 (1971). 51. Ward’s Cove Packing Co. v. Antonio, 490 U.S. 642 (1989), as modified by the Civil Rights Restoration Act of 1991. 52. Regents of the University of California v. Bakke, 438 U.S. 265 (1978). 53. United Steelworkers v. Weber, 443 U.S. 193 (1979). 54. Fullilove v. Klutznick, 448 U.S. 448 (1980). 55. Wygant v. Jackson Board of Education, 476 U.S. 267 (1986). 56. United States v. Paradise, 480 U.S. 149 (1987). 57. City of Richmond v. J.A. Croson, 488 U.S. 469 (1989). 58. Adarand Constructors v. Pena, 115 S. Ct. 2097 (1996). 59. Shaw v. Reno, 509 U.S. 630 (1993); Miller v. Johnson, 115 S. Ct. 2475 (1995); Shaw v. Hunt, 116 S. Ct. 1894 (1996). 60. Georgia v. Ashcroft, 123 S. Ct. 964 (2003). 61. Grutter v. Bollinger, 539 U.S. 306 (2003). 62. Gratz v. Bollinger, 539 U.S. 244 (2003). 63. The minority business enterprise set aside for federal contractors and the Civil Rights Restoration Act of 1991.

CHAPTER 10 Agency PREVIEW Chapter 10 examines agency as a technology of policy production. Agency is the organizational framework for policy production. Agencies are the institutions assigned the legal and financial responsibility for turning policy authority into policy action. Decisions about the various forms of agency are the first step in the journey from word (a grant of authority) to deed (performance) in policy production. As you read this chapter, you should be able to answer the following questions. • • • • • •

What is agency? What are the differences between general- and special-purpose governments and agencies? What are the differences between public and private agencies? What are the differences between a department and a regulatory agency, a government corporation, a government-sponsored enterprise, and a commission? What are the distinctions between production, procedural, craft, and coping organizations? What strategic considerations are involved in designing agencies?

10.1 INTRODUCTION As we have seen, policy production usually begins with a grant of authority. That authority may be newly minted or merely recycled, but someone, somehow, somewhere has cited a legal permission or obligation to act. Since Americans tend to take written commitments seriously, we usually assume that promises will be kept and actions will be taken. Hence, the nearly exclusive focus on authority production in most textbooks on American public policymaking. However, the journey from word to deed is seldom obvious or automatic. The policymakers who produce legal authority—which amounts to mere ink stains on paper or pixels on a computer screen— depend on someone or something else to actually do the work of policy production. They require agents—or agencies—to transform promises into performance. Authority is exercised through institutions and people. 10.2 WHAT IS AGENCY? In the broadest legal sense, agency is the consensual “relationship between one person—the agent—who agrees to act for, and under the direction or control of, another—the principal.”1 An agent acts under the control of and on behalf of a principal. In public policy production the “person” is typically, though not always, a “legal person” in the form of a corporate entity or organization.2 196

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In the spheres of state and federal governments, these organizations are typically called administrative agencies, though—as we shall see—private, nongovernmental organizations can also act as agents of public policy production. The two meanings of the word agency—that is, (1) agency as the relationship between principal and agent and (2) agency as an organizational agent—can be confusing, and we shall endeavor to keep them separate in the following discussion. 10.2.1 Agency as Relationship Authority and agency are the yin and yang of policy production. Authority can be seen as both the instructions and directions a principal gives to an agent as well as the power of the agent to deal with third parties in accordance with those same instructions. As applied to the policy production process, this pattern of relationships may be depicted as in Figure 10.1. Figure 10.1 Authority and Agency in Policymaking

PRINCIPAL (Legislature, Executive, Judge)

THIRD PARTY (Citizen)

AGENT (Administrative Agency) AUTHORITY,

AUTHORITY2

Of course, there may be multiple agents or subagents between the principal or authority giver and citizen, so the chain of authority may be long, complicated, and sometimes controversial. Does an agent or subagent really have the express, implied, or apparent authority to act on behalf of the original principal or authority producer? This question lies at the heart of many, if not most, judicial disputes over the policy production process. Such disputes are framed in the legal terminology of delegation. Section 8 of Article I of the Constitution allows Congress to delegate its authority to governmental agencies to act on its behalf. Similarly, most state constitutions contain such provisions. However, this language does not answer questions about boundaries: that is, in what form and under what conditions can legislative authority be delegated to an agency? The nondelegation doctrine is the name for judicial challenges to agency action seen as going beyond the authority granted to that agency by statute. From the earliest era, the Supreme Court insisted that Congress must establish the general outlines of program responsibilities assigned to an agency, but may leave to that agency the authority “to fill up the details.”3 Subsequently, with the exception of the early years of President Roosevelt’s New Deal, courts have been little interested in applying the nondelegation doctrine to the daily operations of government agencies. Despite relatively few legal challenges to delegations of authority, enabling legislation is expected to contain language specifying who has authority to act and what standards an agency is to apply. 10.2.2 Agency as Organization As the previous paragraph suggests, the term agency also applies to an organization that acts as an agent of a government. In this second and related sense, an agency is a collective agent. For the purposes of this text, we focus on agency as a thing or entity and not on agency as a relationship. Nevertheless, the two meanings are inextricably linked. An agency is—by definition—an agent of

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government. It is created by an act of delegation. However, agencies are also organizational actors that possess lives of their own. In the following pages we will focus primarily on the internal lives of the agencies as organizations—both public and private—that are delegated the responsibility to turn policy commitments into policy action. 10.3 GOVERNMENTS When agencies participate in the policymaking process they are acting primarily—though not exclusively—on behalf of governments. The types of public authority we examined in the previous chapter are characteristically vested in institutions we call governments. Before we can understand what agencies do and how they operate, we must first define the principals on whose behalf they act. We must take a stab at defining what a government is and is not. 10.3.1 What Is a Government? How do we recognize a government when we see one? “A government is an organized entity which, in addition to having governmental character, has sufficient discretion in the management of its own affairs to distinguish it from the administrative structure of any other governmental unit. To be counted as a government, an entity must possess all three of the attributes reflected in the foregoing definition: existence as an organized entity, governmental character, and substantial autonomy.”4 To be more specific, a government entity is: 1. Organized—when it exercises such corporate powers as a legal name, the right to sue and be sued, make contracts, and acquire and dispose of property. A government has all the attributes of an agency—and more. 2. Governmental—if its officers are publicly elected or appointed by public officials, if it is accountable to the public and its records are open to public scrutiny, if it has the power to levy taxes or issue debt exempt from federal taxation, or, more broadly, if it performs functions commonly recognized as “governmental.” Of course, not everybody agrees about what functions are intrinsically governmental. What people do generally agree upon is that governments can and do behave differently than nongovernmental entities. 3. Substantially autonomous—when it has considerable fiscal and administrative independence. Fiscal independence involves the ability to raise revenues, spend monies, and issue debt without approval by another government. Administrative independence is indicated by an elected governing board or by an appointed board exercising independent functions. Autonomy is what separates government entities from government agencies. When a government entity exercises considerable control over its own affairs, it qualifies as a government. When control is largely exercised by another government unit, it is treated as an agency. The differences, however, are a matter of degree and legal interpretation. There is no simple litmus test for distinguishing governments from the agencies that serve them. There is a fourth feature characteristic of the vast majority of government units. Most governments operate within a specific geographical area with a determinate population. There is a Where to most governments. They operate within a jurisdiction or defined boundaries.

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10.3.2 General-Purpose and Special-Purpose Governments To make a complicated situation worse, governments come in two varieties. • General-purpose governments provide a wide range of functions to the public and operate under broad grants of authority. Towns, municipalities, counties, states, and the federal government are all instances of general-purpose government. As we shall see in part V, there are multiple levels or layers of general-purpose governments, from neighborhood associations at the bottom to the federal government at the top. While general-purpose governments may be subordinate to other general-purpose governments, they operate with significant autonomy and exercise authority within specific jurisdictions. With general-purpose governments you always know “where you’re at.” When we speak about government in this text we are usually—though not always—referring to general-purpose governments. As of 2002, the U.S. Census Bureau counted nearly 39,000 general-purpose governments in the United States. We will examine the American system of general-purpose governments in more detail in part V of this text. • Special-purpose governments are independent governmental units that provide “specific services that are not being supplied by existing general-purpose governments. Most perform a single function such as fire protection, electric power, water supply, mass transit, community development, education, and or management.”5 While special-purpose governments operate within defined boundaries, their jurisdictions can and do overlap with both one another and multiple general-purpose governments. Indeed, special-purpose governments are often set up to deliver services like water supply and mass transit that exceed the capacities and boundaries of generalpurpose governments. Instead of collaborating to deliver policy benefits, state and local governments create a new government entity dedicated to the provision of a specific service. Rather than exercise existing authorities, a new authority and implementing agency is established. In recent decades, the number of special-purpose governments has grown as doubts about the capacities of general-purpose governments have increased. Today there are approximately 49,000 specialpurpose governments in operation, of which many thousands are public school districts. Thus, a significant majority of the governments in the United States are actually special-purpose governments—entities that might be likened to administrative agencies “on steroids.” All told, there are more than 87,000 governments operating in the United States. That is, there are more than 87,000 entities in which public authority is vested. Hence, the typical American citizen is subject to the authority of several general-purpose and special-purpose governments. While we tend to talk about government as if it were a monolith, actually American governments are far more diverse in nature and operations than nongovernmental entities. 1 0 . 4 A G E N C I E S : P R I VA T E A N D P U B L I C In order to get things done, the 87,000 plus governments in the United States delegate authority to millions of agencies. These agencies or organizational entities come in two distinct types: private and public. This distinction is embedded in the American legal system, which treats private agencies or corporations quite differently from administrative agencies. Nevertheless, as we shall see in part V, both evolved from a common source. Both private and public organizations are creatures and instruments of American government.

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10.4.1 Private Agencies Despite their vast number and diversity of activities, legally speaking all private agencies share common origins and features. Private agencies are organized under state laws that provide for general forms of ownership and governance and endow an agency, as opposed to individuals, with the legal capacity to perform key functions. These powers include the right to: • Sue and be sued. That is, the organization can bring as well as be forced to defend against litigation in court. For example, the accounting firm of Arthur Anderson, not its employees, was successfully sued by the federal government for its failure to report violations by the Enron Corporation, its client, of standard accounting practices. • Allocate liability. That is, depending on whether an agency is public or private, there are different schema for assessing the personal liability of those involved with the organization, and its employees, officials, and owners, to those outside the agency. • Impose obligations on internal agency stakeholders. That is, to curb self-interested behavior, employees, officials, and owners within an organization are required to act in the best interests of that organization, whether in the form of fiduciary duties or a duty of loyalty (these terms are applied to private and public agencies, respectively). • Make and enforce contracts. That is, agencies, through their basic rights of contract, can hold or lease property, borrow money, hire and fire employees, and perform other such activities necessary to accomplish their business. States set minimum statutory criteria that all agencies organized in that form within the state must comply with. Each agency files documents with the secretary of state at the time it organizes. These articles form an agency constitution, or charter, and confer broad powers to act in the interests of the agency for any legal purpose, as well as establish some limitations on directors and self-dealing. In addition, they contain various procedures to be followed by the agency to ensure that members are periodically informed about agency activities and meet periodically to review agency actions. Once an entity complies with state standards for organizing, it receives authority to act. An important distinction in the evolution of private agencies came with the passage of the federal income tax law exempting agencies organized for public benefit from taxation. The result was the not-for-profit corporation. Today, the forms of agency developed under state laws continue to evolve, again often in response to changes in federal tax laws. A partial list of common forms of agency includes: joint ventures, partnerships, limited partnerships, limited liability corporations, closely held corporations, and S corporations. Private agencies may be organized for almost any purpose not specifically forbidden by law. Such agencies vary widely, but state law requirements usually outline the duties of directors, managers, owners, or partners; regulate access to capital and debt; and provide for record keeping and reporting. In addition, federal regulation of business practices affects the organization of agencies. These regulations were introduced early in the twentieth century and have expanded periodically, often when corporate abuses negatively affect the economy and the public good. The bottom line, however, for all private agencies is that they live or die by their capacity to support themselves, whether from the sale of goods and services, or from their ability to find funding through grants, contracts, or contributions.

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10.4.2 Public Agencies Public or administrative agencies are the creations of government. They are the instruments through which governments work. There are literally millions of government agencies serving the 87,000 governments in the United States. Despite their number and diversity, government agencies do share a few core features in common. One is that all are derived from statutes or executive orders. In most instances, statutes delegate authority to government agencies as an architectural structure for programs and activities serving government interests.6 Access to the technologies of administrative authority is a second characteristic common to agencies. “The distinguishing feature of ‘administrative’ agencies lies in their . . . power to determine, either by rule or by decision, private rights, and obligations.”7 Typically government agencies have both legislative and judicial authority: the former to issue rules and regulations consistent with their enabling statute and the latter to adjudicate disputes challenging agency practices. These technologies will be discussed in detail in chapter 12. A third characteristic involves authority to contract and to receive and spend money. Agencies have authority to control the use of agency resources. They are termed reporting entities for accounting purposes and are responsible for communicating financial and related information about the agency and its operating programs.8 This authority has two parts: the authority to contract, and the responsibility for receiving and expending resources. Agencies are responsible, both procedurally and substantively, for contracts issued by units within their jurisdiction. They also enforce standards of financial accountability in administering the receipt and disbursement of resources allocated to the agency and its operating units. A fourth characteristic involves “housekeeping” functions. Figure 10.2 shows some of the typical housekeeping functions embedded in the organizational DNA of government agencies. Figure 10.2 Basic Agency Housekeeping Functions

Secretary Undersecretary

Administration

Public Affairs

Budget

Personnel

Congressional Relations

Inspector General

Planning & Evaluation

Legal Affairs

Field Offices

Agencies usually provide the architecture for operations commonly needed to maintain policy programs housed within the agency. Most housekeeping activities involve maintaining the organization, its structures and personnel; ensuring its accountability; and preserving it results-producing capacity. Housekeeping involves two important functions. One is to ensure that agency practices and operations conform to a lengthening list of minimum operations performed by all

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government agencies. For example, an office of personnel manages employment and human relations practices in conformity with civil service personnel regulations, civil rights laws, and many other federal or state laws. Legal affairs supplies the expertise for dealing with problems such as contracts, the drafting of regulations and proposed statutes, whistleblowers, and so forth. It also manages litigation against the agency. Planning and evaluation offices link program operations to agency functions and to requirements to demonstrate performance and results. Inspectors general and financial offices perform many of the auditing functions ensuring agency compliance with standards for fiscal accountability enforced by other government agencies. Another set of housekeeping functions involves an agency’s needs for coordination in its relationships with its external stakeholders—other agencies, the Executive Office, the Congress, and the public. Offices of public relations and congressional relations are long-established agency functions. In recent decades Congress has imposed additional reporting requirements on government agencies to reduce paperwork, lessen the impact of agency activities on small business, prevent conflicts of interest, and monitor agency performance. Such housekeeping requirements have the effect of adding more functions and boxes to those shown in Figure 10.2. A fifth characteristic is funding. Most public agencies are funded by government revenue and subject to periodic budget cycles and legislative oversight. Increasingly, however, public agencies are allowed to generate revenues from other sources, including fees, services, and sales to profitmaking activities. The growing array of methods for raising revenues is blurring traditional distinctions based on sources of funding between private and public agencies. Yet, in the final analysis, public agencies have recourse to the public treasury. This makes them ultimately accountable to the American public, which pays taxes to the government as a matter of necessity, not choice. In summary, public agencies are created by legislatures in enabling statutes that in varying degrees define and limit that agency’s task or mission through a set of functions and powers; designate its place within a government’s administrative entities; provide for its internal organization, personnel, and forms of accountability; and assign its sources of funding. The choices made by legislatures about how to organize a public agency “determine the extent of decision-making at the administrative level; the ability of officials, private interests, and elected representatives to influence these decisions to their own advantage; and the incentives that these different actors face.”9 10.4.3 State Action Doctrine The state action doctrine is the legal doctrine that distinguishes an agency as public or private. In determining whether an agency is public or private, a court examines how an agency exercises authority. Three rationales are used: 1. Delegated powers—whether the state itself has delegated its authority to the agency 2. Public function—whether the agency performs a public function (increasingly a less-favored approach, as the boundaries between policy domains addressed through public policy grow less and less clear) 3. Government contacts—whether the agency is so entangled or involved with government as to create a “symbiotic” relationship, inseparable from the state The Supreme Court has generally relied on a narrow interpretation of the state action doctrine in deciding whether or not an agency is public or private.10 Public agencies are obligated to protect the constitutional rights of persons affected by agency

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actions, whether as employees or as recipients of public benefits. Public agencies must provide for the important public rights of free speech, association, due process, and equal protection, whereas private agencies are not bound by such constitutional requirements. For example, a public school may not expel a student without according that student constitutionally mandated due process, usually in the form of a formal hearing in which the student has extensive legal rights. On the other hand, a private school may opt to expel students however it wishes and is not required to provide for any constitutional rights of due process or fairness. The state action doctrine derives from the Bill of Rights, which was designed to limit the exercise of authority by the federal government. Later, the Fourteenth Amendment extended the protections of the Bill of Rights to actions by state and local governments. Today, the state action doctrine covers employment practices in public agencies and extends to recipients of public benefits. Furthermore, the growing prevalence of quasi-governmental organizations and public–private partnerships is increasing pressures to further modify the judicial distinctions between public and private and to impose obligations to provide greater constitutional protections on private agencies.11 10.4.4 Agencies—An Overview There are many types of agencies available for policy production. Policymakers seeking an appropriate organizational vehicle for delivering policy results have numerous choices to make. Figure 10.3 shows only the most common types of government and nongovernmental or private agencies involved in policy production.

Figure 10.3 Types of Policy Production Agencies

GOVERNMENTS

General Purpose

Special Purpose

Special District

Public School System

Department or A dministra five Agency

NONGOVERNMENTAL ENTITIES

Dependent Agencies

Independent (Regulatory) Agency

Commission

Government Sponsored Enterprise

Government Corporation

For-Proftt Corporation

Non-Profit Corporation

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The blurring of boundaries between public and private agencies in recent years is a product of the increasing reliance by federal, state, and local governments on private agencies to deliver policy benefits and on increasingly creative funding schemes for raising public revenues. Although the differences between public and private agencies are not always straightforward, they remain fundamental, especially in terms of determining legal rights and the obligations that flow from those rights. 10.5 PUBLIC OR GOVERNMENT AGENCIES The variety of government agencies is bewildering. Here we limit our attention to the five most prevalent forms of government agencies. 10.5.1 Departments or Administrative Agencies Departments and administrative agencies are distinguished by their dependence on tax revenue to fund policy production.12 Their primary role is to provide services and distribute benefits. They form the most familiar group of state and federal entities. The cabinet-level departments, such as Defense, Agriculture, and Health and Human Services, employ the largest proportion of the executive branch’s civilian personnel, and consume the lion’s share of discretionary federal spending. Smaller agencies, such as the National Aeronautics and Space Administration, Environmental Protection Agency, and Railroad Retirement Board, are almost four times more numerous, but comprise only about 5 percent of federal employment. The Constitution does not provide for an administrative system of federal departments and agencies. It does, however, create procedures for the appointment of “public ministers and consuls . . . and all other officers of the United States whose appointments are not herein otherwise provided for, and which shall be established by law.”13 The departments and agencies of the federal government were founded over time as Congress identified needs for institutions to carry out its policy decisions. The resulting agencies have been renamed, reshuffled, expanded, divided, reassigned, but rarely eliminated. Several have long historical roots. The earliest departments to be established were War, State, and Treasury, in what is now termed the cabinet. Periodic disputes slowly delineated the boundaries between congressional and presidential authority to oversee these departments. For example, in 1789, with the founding of the State Department, the precedent was established that, despite the fact of shared powers of appointment requiring presidential nomination and Senate approval, the president alone could remove such officials. Several smaller agencies, too, have equally long histories, reflecting the changing needs of a developing nation rather than any underlying logic. Agencies often have had many different placements—sometimes within departments and sometimes freestanding. For example, the Public Health Service, now lodged in the Department of Health and Human Services, was founded by Congress in 1798 as an independent organization to operate marine hospitals to care for merchant seamen. The Land Office, established in 1812 to maintain records of land transactions in the expanding young republic, has morphed into the present-day Bureau of Land Management. On the other hand, the census, a constitutional mandate for counting the population every ten years, only acquired agency status as the Bureau of the Census with legislation in 1902. Originally, U.S. marshals in the State Department were assigned responsibilities for the census. The Department of the Interior took over in 1850. In 1903, after becoming a permanent federal agency, the Bureau of the Census was moved to the Department of Commerce, where it continues to reside.

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Departments and agencies have distinctive characteristics that condition their utility in policy production. These may be weighed as advantages or disadvantages when evaluating the various technologies of agency. First are characteristics derived from the fact that the taxpayers who fund these types of organizations are very numerous, while the benefits produced by the agency for each individual taxpayer tend to be relatively small. This dynamic decreases incentives for individuals and legislators alike to participate in or monitor policy production by such agencies and increases the discretion and latitude accorded agency personnel. The opposite is true when an agency works with relatively few stakeholders who are greatly affected by agency actions. Second are characteristics arising from the effects of civil service personnel systems. Civil service rules further enhance the monopoly of influence and control by agency staff and undermine responsiveness to policy change. On the other hand, there are fewer opportunities for partisan domination of agency production. Both sets of characteristics make agency accountability problematic, especially when the outputs of policy production by such agencies are difficult to measure. While departments may produce justice, conduct foreign relations, and promote agriculture, there are difficulties in defining and quantifying these outputs. Viewed from another perspective, the policies produced by these agencies, from Medicare to defense preparedness, are public goods for which there is widespread citizen support, but few nonpolitical measures of effectiveness.14

MINI-CASE 10.1 Whether to Reorganize the National Institutes of Health What are the National Institutes of Health (NIH)? Technically, NIH is an umbrella organization that houses agencies, institutes, and centers. NIH provides the institutional architecture for twenty-seven (at last count) different organizations, ranging from the National Heart Institute and National Cancer Institute to the National Institute for Nursing Research, National Institutes on Aging, and the National Institutes on Alternative Medicine. Generally, new institutes and centers have proliferated, as lobbyists for different diseases or medical issues have commanded public attention and generated support for research devoted to a specific health-related condition. NIH has prospered as Americans have spent generously to eliminate disease and reduce suffering as a policy priority. Today, these organizational arrangements are so complex that many complain about duplication, bureaucracy, and inefficiency at NIH. NIH fares well, even during periods of large federal deficits, with funding for all institutes increasing in virtual lockstep, with little regard to differential progress across the various research areas. However, the administrative burden of servicing so many different organizations has created a bloated NIH. In response to mounting criticisms from the scientific community, Harold Varmus, the head of NIH from 1993 to 1999, proposed reorganizing and streamlining NIH. Specifically, he argued for reducing it from twenty-six to six broader institutes. In part, he envisioned broad institutes responsible for research on the brain, internal medicine, human development, and environmental medicine, with one dedicated to oversight and coordination. Many years later, proposals to reform NIH have gone nowhere, as lobbyists for those afflicted by specific diseases fear the consequences of merger.

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10.5.2 Independent (Regulatory) Agencies This group of state and federal agencies is distinguished by their function (regulation), rather than their organizational form. Although all legislation is likely to be incomplete and to involve delegation, statutes setting up regulatory agencies delegate broad legislative authority to make rules and policies to relatively independent agents and agencies. The Constitution does not define regulatory authority, but in Article I, section 8, it does give to Congress the power to regulate commerce among the states. Such language framed the creation in 1887 of the first regulatory agency, the Interstate Commerce Commission (ICC), charged with regulating business between the states. Until the 1930s, however, the Supreme Court was reluctant to allow regulatory agencies to make rules not directly tied to clear standards found in congressional legislation.15 The Depression, New Deal, Second World War, and emergence of the United States as a major economic and industrial power transformed the policy environment and increased the utility of the emerging organizational technology of independent regulatory agencies. Agencies were established to regulate banking, communication, labor management relations, transportation, power production and distribution, banking, corporate securities, commodities and securities exchanges, unfair business practices, and consumer product safety. Success led to further replication. Regulation migrated into the traditional federal departments as Congress authorized the establishment of regulatory agencies within departments such as the Food and Drug Administration in the Department of Health and Human Services and the Occupational Safety and Health Administration in the Department of Labor. Today, regulatory agencies are among the most powerful technologies of policy production. The chairman of the Federal Reserve Board, an independent regulatory agency, usually can command the attention of the nation. Although the period of rapidly expanding regulatory authority lodged in agencies, either independent of or within existing departments, may have peaked in the 1980s, this technology remains an important option in designing policy production strategies. With independent (regulatory) agencies state and federal policymakers employ an organizational technology for policy production with two important characteristics. First is independence of agency leadership. Congress structured many of these agencies to be substantially independent from the political process. Generally these agencies are led by multimember, bipartisan boards or commissioners with staggered terms. Commissioners have final decision-making and supervisory authority. They are usually nominated by a president or governor and confirmed by the Senate or state legislature. A president cannot remove a commissioner, once in office, except in limited circumstances. To some degree, the independence of commissioners has been eroded in recent years. The Office of Management and Budget in the executive branch now controls the budgets of these federal agencies and the Justice Department decides which appeals of agency litigation go before the Supreme Court. Second is the independence given to an agency through broad delegations of legislative authority. The discretion accorded a regulatory agency varies, and legislatures can modify agency action with superseding legislation. But, they rarely do so. Nonetheless, broad delegations of authority have advantages for legislatures of reducing the costs of conflict and of shifting responsibility. Regulatory agencies formulate standards and impose transaction costs on large private-sector businesses and interests within their jurisdiction. They set rates and standards, apply these standards by issuing licenses and monitoring compliance, and impose sanctions, such as fines or penalties, for violations. Agency policymaking generally is carefully structured to be responsive and to invite participation by stakeholders. Within the limits of their enabling legislation, regulatory agencies generally enjoy greater discretion over the development and enforcement of policy than departments and agencies. As a technology for organizing policy production, independent regulatory agencies have both advantages and disadvantages. They deflect conflict from legislatures and divert public attention. The

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domains they regulate usually consist of very powerful economic stakeholders. Regulatory agencies are structured to be sensitive to and accommodate these interests. They have to rely for information and expertise on the private interests they regulate. Both characteristics entangle these agencies closely with their stakeholders. This increases the capacity of stakeholders to influence agency performance but narrows the focus of the agency to its own limited domain. So, for example, the Federal Communications Commission concentrates on telecommunications to the exclusion of other emerging information-based technologies. Finally, agency actions are regularly subject to review by courts. Litigation is considered an integral part of the policy production process by regulatory agencies.16 10.5.3 Government Corporations Until recently, government corporations were one of the fastest-growing technologies for structuring agencies for public policy initiatives. Government corporations are legally separate, government-owned, but quasi-independent, agencies organized in corporate form. They may or may not be self-sustaining, combining revenue generated by sales-financed production with tax subsidies.17 That is, they share both commercial (profit-seeking) and noncommercial policy objectives.18 They have no standard organizational form, but share some common characteristics, including full or partial funding by a government, flexibility in the degree to which they are subject to administrative statutes and regulations, independent or freestanding status, and performance of public functions of a predominantly business nature.19 Government corporations are organizations: • • • • • •

Authorized by statute for specific purposes to provide services or to build public and private projects. Unlike the charters of private corporations, the authorizing statute for a government corporation may be amended. Financed by appropriations and/or self-financed. Government corporations are free to set fees, charges, and so forth, but not to impose taxes. Permitted to issue bonds where the interest paid to investors is free from tax, plus permitted to exercise the power of eminent domain. Governed by a board composed, in part, of members appointed by the president or a governor. Managed by a full-time professional and with most staff exempted from government personnel and civil service regulations. Government corporations are publicly owned but managed as private corporations. Having independent legal authority to sue and be sued.20

Government corporations are an old form of agency, which became increasingly popular in the twentieth century. Examples range from the U.S. Grain Corporation and Sugar Equalization Board and Housing Corporation, set up during the period of the First World War, to familiar, longlived agencies such as the Tennessee Valley Authority, the St. Lawrence Seaway Development Corporation, the Federal Deposit Insurance Corporation, and the Government National Mortgage Association (Ginnie Mae). Congress attempted to exert its authority over this group of organizations with the Government Corporation Control Act of 1945, but with little effect. With the number and reach of these agencies growing steadily, the Chief Financial Officers Act of 1990 again sought to strengthen audit and management reporting requirements. Yet there remain few standard criteria for government corporations. Estimates of the number operating through the federal government range from twenty-two to fifty-eight. One government study reported that, in fiscal year 1994, twenty-two federal government corporations had gross outlays of almost $66 billion and net

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federal outlays of over $8.2 billion—exceeding those of the Departments of Commerce, Education, and Energy combined.21 Government corporations in the federal sector include important policy initiatives from Amtrak and Federal Crop Insurance for farmers to the Pension Benefit Guaranty Corporation, which insures the long-term viability of employee pensions. States also utilize the technology of government corporations to organize policy production. By one estimate in 1990, there were 6,352 government corporations operating in the fifty states. Twenty-nine percent of these were organized in Pennsylvania, alone. The same study found that 24 percent of all government corporations in the states were involved with housing, 18 percent with environmental protection, 14 percent with economic development, 7 percent with building and managing public-use facilities, and the remaining 16 percent with various other functions.22 At the state level, government corporations have built much of the nation’s infrastructure. Government corporations provoke controversy by scholars who either praise the flexibility and proficiency of such agencies in producing tangible results or condemn their lack of accountability and their wastefulness and abuse of power. “The experiment with government corporations has clearly been a hallmark of American public administration” and “an enigma . . . that not even the most astute scholar can figure them out.”23 At the very least, government corporations are subjected to minimal scrutiny. Although students of public policy have paid more attention to the use of government agencies in recent years, there remains little systematic knowledge about government corporations. The advantages mirror the disadvantages of government corporations as a technology for organizing policy production. Their advantages include: flexibility of funding sources and management; the capacity to raise revenue through the capital markets; a distancing from politics in daily operations; the capacity to attract competent professionals and experts subject neither to civil service rules nor to the bottom line of business; freedom from burdensome administrative regulations; insulation from politics; and the capacity to work between the jurisdictional lines that divide governments. The disadvantages of this organizational form come from a lack of transparency, with its accompanying potential for corruption, mismanagement, conflicts of interest, waste, and weak taxpayer interest. Recourse to the public treasury both to bail out and to subsidize troubled agencies further undermines any incentives for prudent management. Finally, government corporations may create disincentives to the development of private-sector competition and the participation and direct assumption by individuals or taxpayers of the full costs of a service or project. 10.5.4 Government-Sponsored Enterprises Government-sponsored enterprises (GSEs) are distinguished from other organizational technologies by their sole reliance on sales-financed production.24 They are corporations that share the following characteristics: • • • • • •

Chartered by a government, but limited in their business activities to the purposes specified in their charter Typically financed by private investors Privately owned, staffed, and controlled Profit seeking Regulated by government to protect the government’s interest Perceived by the credit markets as having the implicit backing of government

Federal GSEs were first defined in the Omnibus Budget Reconciliation Act of 1990. They are private corporations that operate under a charter granted by Congress. GSEs work through

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boards of directors, the majority of whom must be elected by private shareholders. Some may be appointed by the president or Congress. GSEs primarily function as financial intermediaries by guaranteeing loans to borrowers identified in some legislative program. They may raise funds in several ways, but in no case are the liabilities of a GSE backed by the full faith and credit of the federal government—at least in the language of their enabling legislation. GSEs are not required to submit yearly budgets to Congress. Nor are they authorized to tax, regulate, or make financial commitments in the name of the federal government. Employees are not federal employees. Yet, GSEs have “a far older lineage than as a wholly owned government corporation.”25 GSEs first appeared early in the nineteenth century with the First and Second Banks of the United States chartered by Congress as joint-stock companies. They reappeared in the twentieth century with the Farm Credit System in 1916, and later with agencies such as the Federal Home Loan Bank System, to lend to financial institutions to fund mortgages; the Federal National Mortgage Association (Fannie Mae), to create a secondary market for home mortgages; and the Student Loan Marketing Association (Sallie Mae), to create a secondary market for student loans. Although more common in other industrialized nations, GSEs occupy a relatively narrow policy niche in the United States. They are found primarily in the financial sector to facilitate the flow of investment funds to specific areas of the economy by guaranteeing debt against potential default.26 Such guarantees create incentives for private lenders to provide money. GSEs have created broad access to debt financing for many socially desirable purposes, such as stabilizing farm income, home ownership, and college loans. They have also exposed the federal government and, ultimately, taxpayers to the risks associated with fluctuations in the values of farm income, real estate, and personal income. In the 1980s, GSEs grew at a rate far exceeding that of the Gross National Product or real federal spending. However, the 1980s also exposed major weaknesses with the failure of two major GSEs, the Farm Credit System (1985) and the Federal Savings and Loan Insurance Corporation (1988). Despite disclaimers to the contrary, the federal government stepped in at a cost of almost $200 billion to cover defaults. In both cases, losses resulted from inadequate management by the GSEs, lax supervision by the federal government, and the failure to enforce existing regulatory standards.27 GSEs have advantages and disadvantages as technologies for organizing policy production. To date they have served relatively limited purposes and imposed real costs as well as benefits when they have been used as policy instruments in the United States. In other developed nations, GSEs are more widespread. Generally, GSEs have been used in the United States only to subsidize markets needed to expand social programs with broad public support. In these instances, GSEs have come to dominate markets and to displace private initiatives. Despite disclaimers, GSEs have implicit guarantees of support from the federal government—a promise that allows them to raise funds at rates substantially below those paid by private firms under similar circumstances. By their very size and function, GSEs are too important to be allowed to fail. Further, GSEs are an off-budget, economical technology for accomplishing major policy goals, especially when deficits are high and budget resources scarce. The disadvantages of GSEs are similar to those of government corporations. Basically, GSEs operate below the radar of the usual mechanisms by which government institutions monitor policy production. From a public perspective, the problem is one of prevention: controlling the exposure of taxpayers to mismanagement and default before it occurs. Suggested improvements rely on strategies for risk minimization written into the structure of GSEs at the stage of enabling legislation. Most, however, simply propose improvements to reporting, monitoring, and evaluation to appropriate congressional and executive branch agencies.

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10.5.5 Advisory Committees and Commissions A fifth organizational technology is found in the numerous advisory committees and commissions that participate in policymaking by federal and state agencies. These are entities with no authority to make rules or operate programs and that are not subject to suit. They are funded entirely through legislative appropriations. Many of them do perform important research and advisory functions. Often they are structured to create policy knowledge and input from broader perspectives than those of agency personnel. They are also more readily abolished, again through legislation. National advisory commissions have a long history. In the New Deal they were useful in drafting codes of fair competition to regulate production and prices in many industries as the federal government extended its authority over the economy. More recently they have become important arbiters of policies affecting scientific and medical research. With the expanding scope of federal policy, many federal programs have sought input and promoted grassroots participation by those receiving benefits. One well-known example, the Advisory Council on Intergovernmental Affairs, operated, until 1994, as a resource providing information and research on federal–state–local relations. It disappeared as a result of budget cuts and efforts to streamline government. Despite efforts to decrease their numbers, in 1996 there were approximately 900 such federal advisory commissions, established either by statute, a president, or an agency itself.28 Federal advisory commissions are regulated by the Federal Advisory Committee Act of 1972 as amended in 1997.29 That act covers all committees not composed wholly of full-time, or permanent part-time, federal officers or employees plus committees created by the National Academy of Sciences and the National Academy of Public Administration. The General Services Administration is responsible for oversight and administration of committees and commissions, while specific agencies using this technology are required to establish guidelines for the operations of the committees within their jurisdiction. Three groups of participants are usually represented on such commissions and committees: employees of the organization making the decision; persons and groups with expertise and specific interests; and, members of the public affected by the decision. Again, the problem is one of balancing competing interests rather than allowing domination by a few.30 States make their own provisions for advisory committees. Advisory committees are a limited technology. They exist for specific purposes: to improve the quality of decisionmaking, rather than to implement decisions after the fact. They have the advantages of broadening participation and perspectives on policy needs and options. 1 0 . 6 P R I VA T E O R N O N G O V E R N M E N TA L A G E N C I E S “Institutions are the fundamental arrangements through which societies seek to deal with social and economic problems.”31 Private organizations are the most numerous form of agency in the United States. As described in section 10.4.1 above, private agencies share some characteristics in common. The following sections examine in greater detail the two basic types of private agencies most commonly involved in policy production: for-profit and not-for-profit corporations. Differences between for-profit and not-for-profit agencies have important implications for their utility in policy production. These issues will be more fully developed in part V of this text. 10.6.1 For-Profit Corporations American economic development was propelled in large part by the emergence of the corporation as an organizational technology in the late nineteenth and early twentieth centuries through changes

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to state laws. Three aspects of for-profit corporations distinguish their structure and behavior: their ownership arrangements, their direct dependence on income generated from the sales and services they produce, and their authority to retain or distribute earnings to management and shareholders. Stockholders, as owners, bear the economic costs and risks of the agency’s performance in the market and face a fundamental problem of agency—ensuring that the interests of the corporation as a whole are aligned with any self-interested behaviors of top-level managers and directors. Several attributes condition for-profit corporate behavior in important ways. First, for-profit corporations must make a profit or perish. This narrows the focus and discretion of corporate managers and provides a direct measure of performance. The bottom line of profit and loss drives accountability. Second, for-profit corporations depend upon the satisfaction of the consumers of their goods and services. They cannot depend—in most cases—on direct government subsidies. Third, both state and federal governments regulate the activities of for-profit corporations. Historically, federal regulation has focused on ensuring a competitive marketplace. In recent decades, federal regulation has expanded to include such concerns as product safety, fair employment, worker safety, and disclosure of information to stockholders and the broader public. For-profit corporations regularly participate in public policy production. They often are the companies that manufacture goods and services for governments. So, for example, the Boeing and Lockheed Martin companies regularly manufacture planes under contract to the Air Force, while Halliburton provides services, from erecting housing for and feeding soldiers in Iraq to providing security for transporting military supplies. Other corporations staff prisons for state governments, build highways, and produce vaccines. Governments could not function without private-sector industries operating on a for-profit basis. 10.6.2 Not-for-Profit Corporations Not-for-profit corporations comprise a growing proportion of private agencies, about 40 percent of agencies, by one estimate.32 Not-for-profit corporations have no owners and are legally prohibited from distributing any profits to their management. Although not legally prohibited from making profits, not-for-profits may lawfully spend profits only on the agency itself and its needs. The linkages between agency profitability, ownership, and employee income are severed by law. Further, nonprofits face limits on competition and on some types of financial transactions with for-profit enterprises. In return, not-for-profits have several advantages conferred by law. They receive tax subsidies in that they are exempt from federal and state corporate taxes and state and local taxes on property and sales. Some are eligible for postal subsidies as well as being allowed to receive tax-deductible donations from contributors.33 Not-for-profits receive such benefits because they are deemed to serve publicly defined needs—an alternative organizational technology for accomplishing socially desirable goals. There are, however, important behavioral differences between for-profits and not-for-profits, with consequences for policy production. First, consumers of services produced by not-for-profits are less likely to be able to be informed consumers or to have choices between providers of services. Second are labor force characteristics. Not-for-profits typically have fewer resources to compensate employees and may rely on a greater variety and intensity of services. The latter is important in the retention and satisfaction of volunteers and professional-level employees. Third are mechanisms for controlling the availability of services. With limited ability to increase fees or raise costs to the clients, not-forprofits use waiting lists and eligibility criteria to keep from being overwhelmed by demand. Not-for-profit agencies also are integrally involved in the development and delivery of public policy. Not-for-profit think tanks are regularly asked to help with the development and evaluation

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of policy solutions. The United Network for Organ Sharing, a not-for-profit agency, was created in 1987 by the National Organ Transplant Act and charged with developing regulations to govern the distribution of scarce kidneys among those needing transplants. Countless not-for-profits, from United Ways, Goodwills, Red Crosses, Salvation Armies, and YMCAs, to homeless shelters and numerous local entities are heavily involved in delivering programs and services to needy citizens. 10.7 TYPES OF AGENCIES—OUTPUTS AND OUTCOMES In the preceding sections we have examined the diverse kinds of agencies involved in policy production from a legal perspective. Though public and private agencies can do the same work, the laws, procedures, and expectations governing these institutions are quite dissimilar. The choice of organizational tools does make an enormous difference. However, we can view the work of agencies through a different lens. According to James Q. Wilson, “from a managerial point of view, agencies differ in two main respects: Can the activities of their operators be observed? Can the results of those activities be observed? The first factor involves outputs—what the teachers, doctors, lawyers, engineers, police officers, and grant-givers do on a day-to-day basis. Outputs consist of the work that the agency does. The second factor involves outcomes. Outcomes can be thought of as the results of agency work.”34 Now, both the work that agencies do and the impact of that work on the public may be easy or difficult to observe. When a government builds a bridge or highway, both the work itself and its impacts are readily observable. Conversely, when a social worker counsels a client or a police officer handles a family argument, neither the work itself nor its impact may be visible to the agency director or the public. The abilities to track what organizations do and with what effect depend upon the kind of work done. Hence, we can classify agencies according to the transparency of both agency outputs and outcomes. Wilson’s classification yields four alternative ideal types of policy production organizations, as displayed in Figure 10.4. Figure 10.4 A Typology of Policy Production Agencies

OUTCOMES

Observable

Observable

Not Observable

Production Organizations

Procedural Organizations

1 1 1 1

OUTPUTS Not Observable

Craft Organizations

Coping Organizations

1. Production organizations are those agencies where both outputs and outcomes are easily observed and measured. Construction crews build public facilities, road crews fix potholes, and garbage collectors pick up the trash. Work processes can be observed and standardized, and

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outcomes—such as improved traffic flow, reduced auto vehicle damage, and public satisfaction —can be measured. As we shall see in later chapters, policy production activities fitting this category are increasingly performed by private, rather than public, agencies. 2. Procedural organizations are those agencies where managers can observe and measure the work of staff members, but the outcomes of that work are difficult to track. They can see what workers do, but it is difficult to evaluate the impact of that work on the public. Drug treatment facilities treat drug addicts, juvenile detention centers feed and discipline delinquents, U.S. Air Force officers maintain and man nuclear missile silos. Outputs are measurable—clients are logged in and their cases handled, weapons systems are operational—but the net impact of all this effort is hard to track. Does drug treatment or rehabilitation actually work? Do all those missiles actually make the United States safer? Definitive answers to such questions about the impact of policy delivery are difficult to get. Hence, procedural organizations typically rely on standard operating procedures and a sense of professionalism to manage employees and work flow. Though neither public nor private agencies hold a monopoly on professionalism, the use of private agencies in procedurally based policy delivery has increased significantly in recent years. 3. Craft organizations have the opposite situation from procedural organizations. Outcomes are measurable, but the work of agency staff is hard to observe. Both murder rates and terrorist attacks are highly visible to the public, but the work of homicide detectives and counterintelligence agents is difficult to track. The same is true for military units in combat situations. Outcomes are obvious, or countable, but the activities leading to these results are shrouded in the “fog of war.” As a consequence, the use of private agencies to perform the work of craft organizations is fraught with risks for public policymakers. Since we hold public agencies to much higher standards of public visibility, due process, and fairness, using private organizations to perform such public policy functions as policing, incarceration, and intelligence is still the exception and not the rule. 4. Coping organizations operate in a world where both outputs and outcomes are difficult to track. Diplomats, intelligence agents, criminal investigators, interrogators, and even teachers perform work that is largely invisible to their supervisors and whose effects are nearly impossible to measure. The failures of coping organizations may be spectacular—for example, wars, terrorist attacks, computer system hackings, corporate fraud—or ordinary—as, for example, graduating students who can’t read or write—but the day-to-day operations and effectiveness of such organizations typically defy simple measurement. This is particularly true for a wide variety of organizations whose primary mission is to deter bad things from happening. In any case, policymakers or principals typically rely on public agencies to perform the work of coping organizations. Few real-world agencies fit neatly into these four categories. However, the difficulty of measuring policy outputs and outcomes does play an important role in agency design and operation. Both the public and state and federal legislators are demanding that agencies demonstrate results. Making agencies account for outputs and outcomes may be good politics, but it is easier said than done for craft and coping organizations. 10.8 STR ATEGIES FOR AGENCY DESIGN Agency design is all about the Who and Where of policy production. Who is responsible for doing the work and where will the work be done? Regardless of their view of the agency’s mission, all legislators have a common interest in who gets hired to do the work and where the work gets done. Even legislative

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opponents can benefit when both public and private agencies create jobs in their home districts. Indeed, doling out infrastructure rewards is a time-honored tactic for building coalitions for policy initiatives. Agency design is often as much about politics as it is about organizational effectiveness. In addition, agency design is constrained by the institutional framework of American government. In the first instance, while legislators create agencies, executives run them. Congress may have created the Department of Homeland Security, but the president appoints the secretary and all the top officials that lead the agency. This poses no problem when legislative majorities and executives share common policy goals, but what happens when legislators lack confidence in executives to do what they want? When legislators distrust executive control over their creations, they typically seek to insulate an agency from executive interference. Thus, the several types of public agencies discussed earlier in this chapter can be characterized by the degree of executive influence over agency decision making, as illustrated in Figure 10.5. Figure 10.5 Executive Influence and Agency Design

Least Government Corporation & Other

EXECUTIVE Government Sponsored Enterprise

Most

INFLUENCE

Independent Commission

Independent (Regulatory) Agency

Cabinet Department

Source: Adapted from David E. Lewis, Presidents and the Politics of Agency Design (Palo Alto, CA: Stanford University Press, 2003), p. 45.

Legislators also seek to insure their creations against the uncertainties of both political and administrative processes. They can bind the actions of public bureaucrats by: • • • • • • •

Writing “detailed legislation that imposes rigid constraints on the agency’s mandate and decision procedures”35 Imposing specific deadlines for agency actions Writing sunset provisions that require periodic agency reauthorization Putting the agency in a “safe” location where allies can protect the agency from its enemies Detailing constraints on hiring agency executives, such as professional qualifications, lengthy terms of office, and political balance for governing boards Specifying reporting procedures for detailed legislative oversight Detailing sources of agency funding, including tax revenues and user fees

Of course, other legislators can use opposing tactics to increase agency autonomy. Agency design almost always involves compromise among many groups with diverse interests in agency success and failure. As a result, “bureaucratic structure emerges as a jerry-built fusion of [legislative] and [executive] forms, their relative roles and particular features determined by the powers, priorities, and strategies of the various designers. The result is that each agency, whatever the technical requirements of effective organization might seem to be, cannot help but begin life as a unique structural reflection of its own politics.”36 To be sure, agency design is an ongoing process. “The game of structural politics never ends. An agency is created and given a mandate, but, in principle, all of the choices that have been made in the formative round of decision making can be reversed or modified later. Battles lost today can be won tomorrow, and vice versa . . . In the final analysis, however, the choices about structure

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that are made in the first period, when the agency is designed and empowered with a mandate, are normally far more enduring and consequential than those made later . . . Most of the pushing and hauling in subsequent years is likely to produce only incremental change.”37 Thus, agency design tends to explain much—though surely not all—of agency effectiveness in the years to come. Though agencies can and do strike out on their own and initiate policy programs without statutory authorization, they do so by changing the agendas of the legislators and executives that control them. Agencies gain autonomy of action by becoming their own policy entrepreneurs.38

CASE STUDY Birth Pangs of an Agency—Homeland Security The United States has not fought a war on its own soil since 1865. As a nation we have had little practical experience in providing for homeland security. On September 11, 2001, the attacks on the World Trade Center and the Pentagon changed this overnight. How to protect its citizens from commercial airliners used as flying bombs, to prevent its mails from being used as delivery mechanisms for anthrax or other biological weapons, and to defend against numerous other unthinkable scenarios now occupies center stage in American policymaking. The first obligation of any government is to provide for the defense of its citizens. For most Americans, the issue is less what to do than how to do it. The answer raises basic questions of policy production—how do we organize to meet our needs? In the case of homeland security, as hearings on the causes of 9/11 have illustrated, most of the basic resources were in place well before September 11, 2001. These included agencies and departments with responsibilities for homeland defense, including state and federal law enforcement, military forces, border security and immigration, intelligence gathering, and public health and emergency responders. Yet, as Americans sadly learned after the fact, agencies that might have detected the terrorists’ plot beforehand had few incentives to share information or take preventive action. Coordinating and redirecting resources to prevent future attacks on American citizens on American soil may not be easy to accomplish. Americans are revisiting issues of agency in policy production. This time the lens is turned inward, on a new domain of policy production—homeland security. The issues surrounding formation of a new Department of Homeland Security (DHS) provide insight into the difficulties of how to organize an agency—what authority, responsibilities, personnel, and resources will produce the results we seek. If it is not carefully designed, any new agency risks being both responsible and powerless. For policy practitioners, resolving questions about agency creates the fundamental framework for all subsequent action. For most Americans, however, these issues are terminally boring. The Urge to (Re)Organize Reshuffling responsibilities among various agencies occurs with some frequency in policy production, usually when existing institutional arrangements fail to accommodate changes in their policy environments. Reorganizing policy production after a major policy disaster is almost a given. In terms of national security, the last major round of reorganizing occurred immediately after World War II and was designed to correct the failures that led to the attack on Pearl Harbor. That reorganization placed the military services under a new agency, the Department of Defense, and created the National Security Council, charged with coordinating national security policy; a new intelligence-gathering agency, the Central Intelligence Agency (CIA); and the Joint Chiefs of Staff, to coordinate military planning and operations. These reforms took three and a half years

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of bitter in-fighting and pitted the Department of State, the Army, and the Navy against advocates of reform. Within a few weeks of September 11, 2001, the cycle of reorganization began once again. Both Congress and the president called for a new entity to deal with homeland security. Although President Bush won the race to be the first to create some sort of an organization for homeland security, the Democrats quickly countered with a competing proposal for a new, comprehensive, cabinet-level department. Both envisioned this new entity as responsible for overseeing the development of a comprehensive national strategy to safeguard Americans and to coordinate efforts to ensure security against terrorism. All sides agreed on the critical importance of resolving fundamental questions about the technology of agency, that is, what should be the architecture of this new policy domain. A year later, congressional legislation in November 2002 established the basic architecture for a new agency. Three years after that, the details of that new agency’s operations became controversial once again, as the problems with the Federal Emergency Management Agency’s (FEMA’s) response to Hurricane Katrina and the flooding of New Orleans occupied the attention of the nation, at least briefly. Forms of Agency: The Initial Debate What type of agency would be utilized? Two familiar prototypes were suggested: a cabinet-level department and a czar model office. Congress argued from the start for the former, a new department with a new federal bureaucracy, statutory authority and responsibilities, civil service personnel, and a yearly budget. Eventually this approach would prevail, but not until the limitations of the czar model were explored. As a technology of agency applied to homeland security, the czar model is a variant of an advisory committee/commission approach. In a czar model an administrator and a relatively small staff coordinate an entire policy domain across multiple agencies that retain authority over daily operations. This organizational form depends on “jawboning” to gain cooperation, because it lacks enforcement authority over the agencies it coordinates. In October 2001, President Bush issued an executive order creating an Office of Homeland Security, and appointed Tom Ridge, the former Governor of Pennsylvania, as director. The first Office of Homeland Security followed the czar model. It was supposed to operate as the domestic counterpart of the National Security Council, an important and visible agency charged with advisory and coordination functions but with no operational responsibilities. This Office of Homeland Security had neither department status within the president’s cabinet, nor any direct legal operating authority, a basic characteristic of agency. Instead, Bush’s executive order authorized the director to prepare a comprehensive national plan to secure the nation’s borders and to improve the gathering and sharing of intelligence information by federal and state law enforcement agencies to detect and apprehend terrorists. The new director was to be a senior advisor with access to “the president’s ear”—evidenced symbolically by his office located in the White House itself. Ridge was neither subject to confirmation by the Senate nor responsible for providing information to legislative investigators. His staff, scattered in locations across the city, were few in number, with most being “on loan” from other agencies. Although a few temporary “special employees” were to be hired from the private sector, there were questions about screening and civil service status usually required of permanent employees. The office had no formal budgetary authority over other agencies—that is, clout to ensure that homeland security initiatives were carried out by agencies with daily operating responsibility. Further, the director had no veto authority over any of the appeals panels that are traditionally used to settle disputes by agency heads over funding levels set by the president’s staff. For its first year of operation, the office was allocated only $25 million in appropriations from general emergency funding.

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The Obstacles to Reorganizing The Obstacles to Reorganizing The Obstacles to Reorganizing The Obstacles to Reorganizing The Obstacles to Reorganizing

All rights reserved.

The Obstacles to Reorganizing The Obstacles to Reorganizing

CIA

CIA

CIA

CIA

CIA

CIA

The Obstacles to Reorganizing

Source: AUTH © 2001 The Philadelphia Inquirer. Reprinted with permission of Universal Press Syndicate. All rights reserved.

The Obstacles to Reorganizing The basic obstacle in designing a new agency for homeland security is the complexity of the task itself. Homeland security cuts across many different policies spread across existing agencies and established programs. The issue was, and is, how to realign separate fiefdoms in ways that create incentives for greater cooperation and coordination—a monumental task considering the entities involved. How to counter the logic of all organizations to preserve and protect their traditional prerogatives and resources is always a major stumbling block in all policy production requiring interagency cooperation. Tom Ridge, the new homeland security “czar,” had to tackle the problems of creating linkages between various federal agencies with responsibilities affecting homeland security. By June 2002 President Bush did an about-face. Accumulating evidence about intelligence failures and lack of coordination between the FBI and the CIA that contributed to the September 11 attacks led the president to abandon the czar model. Instead, he proposed a major reorganization of existing government agencies into a new cabinet-level department, more sweeping than that previously offered by legislators. Overnight, the planned architecture for homeland security moved from minimalist to behemoth status, provoking a new set of organizational concerns. Even then, the critical details of agency remained to be negotiated. Assembling the Components As proposed, the new DHS was to have five distinct missions and operating authority over twenty-two agencies, to be transferred from several established government departments.39 These included:

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1. Border and transportation security—to unite the major border security and transportation operations within one agency. Agencies to be transferred: Immigration and Naturalization Service (Justice), Customs Service (Treasury), Animal and Plant Health Inspection Service (Agriculture), Coast Guard (Transportation), Federal Protective Service (General Services Administration), and the Transportation Security Administration (Transportation). This affected 156,169 employees and $23.8 billion in yearly budgetary resources. 2. Emergency preparedness and response—to oversee domestic disaster preparedness training and coordinate government disaster response. Agencies to be transferred: Federal Emergency Management Agency (independent); Chemical, Biological, Radiological, and Nuclear Response Assets (HHS); Domestic Emergency Support Team (interagency); Nuclear Incident Response (Energy); Office of Domestic Preparedness (Justice); and the National Domestic Preparedness Office (FBI). This affected 5,300 employees and $8.4 billion in yearly budgetary resources. 3. Chemical, biological, radiological, and nuclear countermeasures—to lead the federal government’s efforts to prepare for and respond to terrorist threats involving weapons of mass destruction, including agro-terrorism. Agencies to be transferred: Civilian Bio-defense Research Programs (HHS), Lawrence Livermore National Laboratory (Energy), National BW Defense Analysis Center (new), and Plum Island Animal Disease Center (Agriculture). This affected 598 employees and $3.6 billion in yearly budgetary resources. 4. Information analysis and infrastructure protection—to analyze homeland intelligence from other agencies involving threats to homeland security and to evaluate vulnerabilities of the nation’s infrastructure. Agencies to be transferred: Critical Infrastructure Assurance Office (Commerce), Federal Computer Incident Response Center (General Services Administration), National Communications System (Defense), National Infrastructure Protection Center (FBI), and the National Infrastructure Simulation and Analysis Center (Energy). This affected 976 employees and $364 million in yearly budgetary resources. 5. Secret Service—to report directly to the secretary of Homeland Security, with the same mission, the protection of the president and other government leaders. This affected 6,111 employees and $1.25 billion in yearly budgetary resources. When agency becomes an issue, the devil is always in the details of architecture and of who gets what authority over whom. The proposed department involved a sweeping reorganization of authority structures across multiple existing agencies. Among the most prominent criticisms was the claim that this new approach would not remedy the documented lapses in gathering and sharing intelligence between the FBI and CIA. Specifically, critics wanted the new cabinet department to have its own intelligence-gathering capacity and suggested dividing up units within the FBI and CIA and transferring them to the new agency. These proposals were not included in the final legislation. Others feared the downgrading of routine but important government operations and sought to split up functions previously performed by agencies such as the Customs Service and the Coast Guard and transfer to the new department only those operations directly related to homeland security. Again, this did not succeed. Another set of criticisms addressed problems associated with large bureaucracies. First was the assumption of improved cooperation and coordination simply because agencies are housed within one department. The Department of Energy, created in the same manner, primarily through reorganization, to this day remains a “collection of separate fiefdoms” never capable of developing a coherent national energy policy.40 A second involved the claim that reorganization would impose no additional costs. Any government agency with 170,000 employees requires substantial new housekeeping operations and staff to manage personnel, audit, public relations, and other support functions. More, not fewer, employees and resources are always needed.

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Legislative Birth Pangs: Producing a Rough Outline Legislators faced the task of meshing the president’s proposal with those already on the table. They encountered substantial political opposition from three sources: unions representing federal workers, established departments slated to lose operations, and legislators themselves, whose personal influence might be diminished by shifting committee jurisdictions and roles. In designing the new Department of Homeland Security, Congress also engaged in a tug of war over basic questions of agency: will the department be subject to various requirements usually imposed on government agencies, such as the Freedom of Information Act and whistleblower statutes, performance measurement requirements, and other such functions performed at the agency level? Would the director be able to hire and fire some staff outside the civil service personnel system? Would the director be able to authorize salaries for some employees rather than be bound by the lock-step pay scales of the federal civil service? Would the director be able to move new agency personnel around and create new job titles and positions, again without having to process these changes through the bureaucracy of the civil service? Much of the president’s basic proposal eventually became law and the basis for the new Department of Homeland Security (DHS). So too did many of the proposals to expand the director’s authority over agency personnel at the expense of traditional civil service protections for federal personnel—the sharpest fight in the legislative debate. Again, Tom Ridge was nominated and confirmed by Congress to be the first director. Administrative Birth Pangs: Housekeeping Arrangements Building an organizational architecture of policy production for homeland security was the critical first step. Such tasks are not glamorous and usually play out well beneath the political radar of public opinion. While Americans were preoccupied with the substantive effects of DHS programs—from lines through security checkpoints in airports and the shutdown of charities with ties to terrorist organizations to the deportation of those illegally in the country, especially if they were “of Arab origin”—the work of organizing an agency began in earnest. The decisions made in these earliest stages will endure in bureaucratic concrete, often long beyond their useful life. Designing institutional capacity for DHS was the essential first step to figuring out how to defend the nation against the threat of terrorism on our soil. The outcome of debates over the technology of agency will continue to condition the capacity of DHS to coordinate and deliver policy across the domain of homeland security for the foreseeable future. The basic organizational infrastructure for DHS was put into effect in March 2003. At that time, more than $50 billion in assets and 180,000 employees were formally transferred to the newly formed DHS. Figure 10.6 (see next page, top) shows the initial distribution of authority over basic housekeeping operations required to maintain DHS as an agency. The components with typical housekeeping functions are shaded. The major operational units are unshaded. The organizational chart for DHS has undergone numerous changes in recent years, but the role of housekeeping activities in DHS—or any other major public agency—has remained relatively constant. Since this chapter focuses on the basics of agency architecture, we now examine what issues of housekeeping occupied the attention of policymakers charged with setting up this new agency. Time and space permit only a brief sampling. Several issues encountered in creating this new organizational superstructure generated controversy. A few were symbolic, such as the flap over whether agencies being merged into DHS

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Figure 10.6 Organizational Chart for Department of Homeland Security Commandant of the Coast Guard

Secretary

Executive Secretary

Deputy Secretary

Legislative Affairs

Privacy Officer

Public Affairs State & Local Coordination Special Assistant to the Secretary (Private Sector) National Capital Region Coordination

Citizenship & Immigration Service Ombudsman

Director, Bureau of Citizenship & Immigration Services

Chief of Staff

Small & Disadvantaged Business

Shared Services

Under Secretary Management

Inspector General General Counsel Civil Rights & Civil Liberties Director of the Secret Service International Affairs Counter Narcotics

Under Secretary Science & Technology

Under Secretary Information Analysis & Infrastructure Protection

Under Secretary Border & Transportation Security

Undersecretary Emergency Preparedness & Response

could retain their established logos and seals. Transportation Security Administration staff had to remove their newly developed logo from their uniforms and replace it with the seal created for DHS. Only the Coast Guard and the Secret Service got to keep their own symbols. Other conflicts signaled more serious problems, especially ones related to coordination and jurisdiction. The FBI and DHS engaged in a turf war over responsibilities for tracking the financing of suspected terrorist groups within the United States. The FBI was given general jurisdiction over the initiative, but DHS agents actually conducted investigations, early on.41 Working out new financial structures and support systems for DHS and reconciling them with previous practices in the member agencies was a tedious and long, drawn-out process. For example, in terms of basic operational services for DHS, a five-year budget and planning program was created. So too was an agency budget process (modeled after that used by the Department of Defense). A consolidated business and financial management system program was adopted, including an investment review board to evaluate acquisitions above $5 million and a consolidated bank card program, reducing the number of individual programs authorized to make credit card purchases from twenty-seven to three. Plans were announced to physically integrate and standardize the eighty-three separate financial management systems that DHS inherited from its many previously independent agencies. Yet, problems dogged this aspect of the transition. The flawed financial accounting system inherited from the old Immigration and Naturalization Service produced loud complaints from those seeking to add agents and modernize practices to patrol the nation’s borders, and warnings from Congress about the reliability of

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agency accounting practices. An audit of the Transportation Security Agency by the Defense Contract Audit Agency spotlighted questionable spending practices, with examples including a $526.95 phone call, $1,180 for twenty gallons of Starbucks Coffee, $8,100 for elevator operators at a hotel in Manhattan, and $5.4 million to pay the salary for nine months of the chief executive of an “event logistics” firm.42 Federal auditors raised questions about DHS policies governing the use of credit cards in purchasing supplies and in contracting help for victims of Hurricane Katrina. Sharing information is among the most important measures to improve homeland security. Efforts to improve departmentwide communication and to reduce operational redundancies have been a DHS priority, but progress is slow. An initial problem involved integrating communications between units within the agency itself. Administrators at the level of departmental undersecretary, lodged within the same headquarters building, complained for several years about their inability to send classified e-mails from one to another. A continuing problem remains that of integrating data and communication with first responders at state and local levels. Efforts to adopt information technologies have had mixed results. For example, a 10-billion dollar, ten-year contract to Accenture for a program called US-VISIT to build a “virtual border” that will electronically screen millions of foreign travelers seeking to enter the United States has been criticized as “being built on aging computer databases and software that government scientists concluded two years ago are out of date, poorly coordinated, and ineffective.”43 In terms of visibility, at least within the Beltway, negotiations to delineate workers’ rights within DHS have proved most contentious. Initially, a new personnel system was negotiated to establish new agency prerogatives to tie employees’ pay to performance rather than to seniority and the federal pay grade schedule, to provide new procedures for resolving employee grievances more rapidly, and to limit collective bargaining rights. The Bush administration welcomed these changes, while the president of the American Federation of Government employees at DHS claimed that “morale is not good in Homeland Security. People are very concerned and maybe a little demoralized about what’s going on.”44 Three years later, a federal judge issued an injunction preventing DHS from implementing its new labor-management system, because it infringed on employees’ collective bargaining rights. This proposed performance- and occupation-based pay system may take another two to three years, and multiple rounds of negotiations, before it can be fully implemented. Hurricane Katrina and the New Orleans flood added further questions about DHS management and responsibilities. FEMA became the focal point for criticism about the federal role in disaster preparedness in New Orleans. Yet, issues of administrative jurisdiction and authority, as reflected in staff turnover, have dogged DHS since its inception. FEMA is but one example—its qualified emergency personnel deserted the agency in droves to be replaced by political cronies, as preparedness for natural disasters took a backseat to protecting against terrorist attacks. Even at the highest levels frustration was evident, as Attorney General Ashcroft on several occasions preempted Secretary Ridge with announcements about terrorist threat alerts—duties assigned to DHS by presidential directive. Ridge, who lasted two years as secretary of DHS, was replaced by Michael Chertoff, who immediately announced a comprehensive review of the organization, and a realignment of responsibilities, primarily in the reporting relationships between the operational agencies. Chertoff also announced the agency’s short-term priorities: “preparing for the most devastating kinds of terrorist attacks, securing transportation modes other than aviation, improving screening technology, and rolling out a ‘new game plan’ for border protection and immigration.”45 In the summer before Hurricane Katrina, emergency preparedness for naturally occurring disasters was not on the DHS list of priorities. In the post-Katrina era, this situation has changed.

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Summary: The End Is the Beginning So where are we now? The United States has formulated and then reformulated an organizational apparatus for producing homeland security. Multiple rounds of tinkering with agency architecture will follow, as DHS absorbs fallout from events over time. In the early rounds of designing agency architecture the focus was on preventing and preparing for a terrorist attack on our homeland. Next to be reconciled are DHS responsibilities for emergency preparedness in cases of natural catastrophes. DHS will continue to roll out procedures and to revise organizational responsibilities in these early trial-and-error stages of development. Most of these efforts will involve strengthening and improving coordination between already existing programs. But, to do this requires creating a superagency and imposing multiple layers of organizational architecture and housekeeping on top of twenty-two long-established agencies in order to reconcile major differences in their past operating routines. Communications, accounting, personnel, and contracting systems all need to be redefined and standardized. Improved coordination and cooperation between previously distinct agencies and well-established programs will take years. Most of this time-consuming work of policy production remains invisible to many Americans, concerned primarily with preventing future attacks and responding to disasters when they occur. Are we better prepared because of the Department of Homeland Security? Unfortunately, only the failures of the new DHS will command much public attention.

KEY TERMS advisory committees/commissions—entities with no authority to make rules or operate programs and that are not subject to suit, but serve rather to generate inputs and policy knowledge for various policymakers and agency personnel. agency—an entity or organization that acts under the control of and on behalf of a principal, whether a government (public) or a board (private). corporations—private entities meeting various state statutory requirements for organizing internal and external relationships through charters that confer authority to sue and be sued, to make and enforce contracts, to hold property, and to conduct their affairs. There are two basic types: forprofit and not-for-profit corporations. departments (administrative agencies)—entities distinguished primarily by their dependence on tax revenue to fund policy production. Examples include the most familiar group of federal entities, from the cabinet-level departments, such as Defense and Agriculture, to many smaller entities, such as the Immigration and Nationalization Service and the Census Bureau, that may be either free-standing or organized separately within a department. for-profit corporations—entities that are distinguished by their ownership arrangements, their direct dependence on income generated from the sales and services they produce, and their authority to retain or distribute earnings to management and shareholders. general-purpose government—provides a wide range of functions to the public and operates under broad grants of authority. While general-purpose governments may be subordinate to other

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general-purpose governments, they operate with significant autonomy and exercise authority within specific jurisdictions. government—a geographically organized, substantially autonomous entity with governmental characteristics (fiscal and administrative independence, etc.). government corporations—legally independent entities authorized by statute for specific purposes; independently staffed; often partially financed by public funds, but allowed to charge fees and issue bonds; and governed by a board composed, in part, by members appointed by government. government-sponsored enterprises (GSEs)—entities chartered by a government but limited in their business activities, financed by private investors, privately owned and staffed, profit seeking, but perceived by the credit markets as having the implicit backing of the government. GSEs are distinguished by their sole reliance on sales-financed production. independent (regulatory) agencies—a group of entities distinguished by their primary function as regulators that make and enforce rules, often affecting some sector of the economy. Examples include the Interstate Commerce Commission, the Securities and Exchange Commission, and the Federal Aviation Administration. not-for-profit corporations—entities with no owners that are legally prohibited from distributing any profits to their management, but are instead required to spend only on the agency and its needs. This status was first set forth in the tax code for organizations dedicated to interests serving the public. private agency—an entity organized under state laws, which set requirements for general forms of ownerships and governance, and endow that agency, as opposed to individuals, with legal capacity to perform key functions. public agencies—governmental entities created by enabling statutes, which define its tasks, powers, organization staffing, accountability, and sources of funding. There are several different categories of government agencies. special-purpose government—an independent unit of government organized to provide specific, often single-function, services within a defined territory that often includes multiple generalpurpose governments. state action doctrine—the legal doctrine used by courts to characterize an agency as either public or private. QUESTIONS FOR DISCUSSION 1. What are the differences between a public agency, such as a Department of Health and Human Services or a Department of Labor, and not-for-profit agencies, such as the Red Cross or the Salvation Army? How are they similar? How do their differences affect their capacity to act? Under what circumstances? 2. What are the differences between public and private not-for-profit colleges and universities? What are the advantages and disadvantages of each? What role do you see for the growing number of for-profit corporations that are entering the market for students in higher education? 3. Most K–12 schools are organized as special-purpose governments rather than public or private agencies. What are the advantages and disadvantages of this organizational form for

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5.

6.

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education? How might efforts to improve K-12 education benefit by expanding the market of types of agencies (public, private not-for-profit, and private for-profit) organized to produce education? What are the differences between a government corporation such as Amtrak and for-profit corporations that also operate railroads? To what degree should government subsidize and/or compete with private enterprises? In what areas? To what degree should government exert greater ongoing supervision over the activities and performance of government-sponsored enterprises, such as the Savings and Loan Insurance Corporation (banks) or the Student Loan Marketing Association (student loans), that have opened up access to the credit markets to many ordinary Americans but also have the potential for costly defaults on their obligations, whether through mismanagement or a misreading of markets? The 9/11 Commission suggested reorganizing our approaches to organizing intelligence operations in the federal government to meet the challenges posed by terrorism. Can you suggest ways to reshuffle and regroup existing agencies (the CIA, the FBI, the National Security Agency, and the various intelligence-gathering operations of the Armed Services) into an entity or entities responsible for improving American intelligence capabilities? How, and to what extent, should private, for-profit or not-for-profit, corporations be involved in providing services during armed conflicts? What kinds of services?

SUGGESTED READINGS Horn, Murray J. The Political Economy of Public Administration: Institutional Choice in the Public Sector. New York: Cambridge University Press, 1995. Hynes, Michael; Sheila Nataraj Kirby; and Jennifer Sloan. A Casebook of Alternative Governance Structures and Organizational Forms. Santa Monica, CA: RAND, 2000. Lewis, David E. Presidents and the Politics of Agency Design. Palo Alto, CA: Stanford University Press, 2003. Mitchell, Jerry. The American Experiment with Government Corporations. Armonk, NY: M.E. Sharpe, 1999. Moe, Terry M. “The Politics of Structural Choice: Toward a Theory of Public Bureaucracy.” In Organization Theory: From Chester Barnard to the Present and Beyond, ed. Oliver E. Williamson, pp. 116–53. New York: Oxford University Press, 1995. Powell, Walter W., and Elizabeth S. Clemens. Private Action and the Public Good. New Haven, CT: Yale University Press, 1999. Radin, Beryl. The Politics of Federal Reorganization: Creating the U.S. Department of Education. New York: Pergamon Press, 1988. Stanton, Thomas H., and Ronald C. Moe. “Government Corporations and Government-Sponsored Enterprises.” In The Tools of Government: A Guide to the New Governance, ed. Lester M. Salamon, pp. 80–116. New York: Oxford University Press, 2002. Wilson, James Q. Bureaucracy: What Government Agencies Do and Why They Do It. New York: Basic Books, 1989.

NOTES 1. Roscoe T. Steffen, Agency—Partnership in a Nutshell (St. Paul, MN: West Publishing, 1977), Section 2. 2. For example, judges often appoint judicial “masters”—individuals who act as agents of the court in carrying out the judge’s decision. 3. Wayman v. Southard, 23 U.S. (10 Wheat) 1 (1825) at 16. 4. Bureau of the Census, 2002 Census of Governments, Volume 1, Number 1, Government Organization (Washington, DC, December 2002), p. ix.

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5. Ibid., p. vii. 6. John Cibinic, Jr., and Ralph C. Nash, Jr., Formation of Government Contracts, 3rd ed. (Washington, DC: George Washington University Press, 1998), p. 36. 7. Bernard Schwartz, Administrative Law: A Casebook, 2nd ed. (Boston, MA: Little Brown, 1982), p. 11, citing from the “Report of the U.S. Attorney General’s Committee on Administrative Procedure” (1941), p. 7. 8. Federal Accounting Standards Advisory Board, Statements of Federal Financial Accounting Concepts and Standards, vol. I (Washington, DC: General Accounting Office, February 28, 1997), p. 72. 9. Murray J. Horn, The Political Economy of Public Administration: Institutional Choice in the Public Sector (New York: Cambridge University Press, 1995), p. 3. 10. Rendall-Baker v. Kohn, 457 U.S. 830 (1982). 11. See Brentwood Academy v. Tennessee Secondary School Athletic Association, 531 U.S. 288 (2001), which decided (5 to 4) that a not-for-profit high school athletic association regulating interscholastic sports among Tennessee’s public and private high schools was sufficiently entangled to be a state actor. 12. Horn, Political Economy, p. 31. The following discussion relies heavily on basic distinctions drawn by Horn. 13. Article II, section 2, U.S. Constitution. 14. For a more extensive discussion, see Horn, Political Economy . 15. Panama Refining Co. v. Ryan, 293 U.S. 388 (1935). 16. Horn, Political Economy, p. 43. 17. For a comprehensive discussion of the legal aspects of government corporations, see A. Michael Froomkin, “Reinventing the Government Corporation,” University of Illinois Law Review, no. 3 (1995): 544–634. Froomkin divides government corporations into three types: wholly owned, mixed ownership, and privately owned. For purposes of this text, we prefer the distinction set forth by the GAO in its 1995 report (see Froomkin, footnote 20), dividing these entities into two categories: those with mixed government funding (government corporations) and those that are profit-seeking and financed by private investors (government-sponsored enterprises). 18. Thomas H. Stanton and Ronald C. Moe, “Government Corporations and Government-Sponsored Enterprises,” in The Tools of Government: A Guide to the New Governance, ed. Lester M. Salamon (New York: Oxford University Press, 2002), p. 81. 19. United States General Accounting Office, Government Corporations: Profiles of Existing Government Corporations Report to the Ranking Minority Member, Subcommittee on Post Office and Civil Service, Committee on Governmental Affairs, U.S. Senate, GAO/GGD-96-14, (Washington, DC: 1995), p. 8. 20. Jerry Mitchell, The American Experiment with Government Corporations (Armonk, NY: M.E. Sharpe, 1999), p. 12. 21. United States General Accounting Office, Government Corporations, p. 6. 22. Mitchell, American Experiment, pp. 15–16. 23. Ibid., pp. 85, 127. 24. Horn, Political Economy, p. 31. 25. Stanton and Moe, “Government Corporations,” p. 96. 26. Federal Accounting Standards Advisory Board, Statements of Federal Financial Accounting, vol. I, p. 77. 27. James F. Gatti and Ronald W. Spahr, The Burden of Government-Sponsored Enterprises: The Case of the Federal Home Loan Mortgage Corporation, Cato Policy Analysis No. 176 (Washington, DC: Cato Institute, August 19, 1992). 28. Data from FY1996 reflect a decrease during the first term of the Clinton presidency. His Executive Order 12838 directed the elimination of one-third of all discretionary advisory committees. William F. Funk, Jeffrey S. Lubbers, and Charles Pou, Jr., Federal Administrative Procedure Sourcebook, 3rd ed. (Chicago, IL: American Bar Association, Section of Administrative Law and Regulatory Practice, 2000), p. 402. 29. Federal Advisory Committee Act, 5 U.S.C. App. 2, (Pub. L. No. 92–463, as amended Pub. L. 105–153). 30. In 2001, Vice President Cheney chaired an advisory committee on energy policy. When Cheney refused to release information on the committee activities as required under law, an agency of Congress—the Government Accountability Office—filed suit against the vice president. Cheney v. United States District Court, 334 F. 3d 1096 (D.C. Cir. 2003); No. 03–475 (June 24, 2004 decided); 2004 U.S. Lexis 4576. 31. Burton A. Weisbrod, “Institutional Form and Organizational Behavior,” in Private Action and the Public Good, ed. Walter W. Powell and Elisabeth S. Clemens (New Haven, CT: Yale University Press, 1999), p. 69.

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32. Ibid. 33. Termed section § 503 (c) (3) eligibility under the Internal Revenue Code. 34. James Q. Wilson, Bureaucracy: What Government Agencies Do and Why They Do It (New York: Basic Books, 1989), p. 158. Several of the ideas that follow draw on the Wilson text. 35. Terry M. Moe, “Toward a Theory of Public Bureaucracy,” in Organization Theory: From Chester Barnard to the Present and Beyond, ed. Oliver E. Williamson (New York: Oxford University Press, 1995), p. 136. 36. Ibid., p. 143. 37. Ibid., p. 146. 38. Daniel P. Carpenter, The Forging of Bureaucratic Autonomy: Reputations, Networks, and Policy Innovation in Executive Agencies, 1862–1928 (Princeton, NJ: Princeton University Press, 2001), p. 15. 39. Adapted from Washingtonpost.com, June 10, 2002. Source: Department of Homeland Security Book, courtesy of The White House, www.whitehouse.gov. 40. David S. Broder, “The Good and the Silly,” Washington Post, June 12, 2002, A31. 41. See Susan Schmidt and Douglas Farah, “Turf Wars Over Terrorism,” Washington Post National Weekly Edition October 20–26, 2003, p. 29. 42. Scott Higham and Robert O’Harrow, Jr., “The High Cost of a Rush to Security,” Washington Post, June 20, 2005, A01, www.washingtonpost.com. 43. Robert O’Harrow, Jr. and Scott Higham, “U.S. Border Security at a Crossroads,” Washington Post, May 23, 2005, www.washingtonpost.com. 44. Christopher Lee, “Personnel System in Final Stage,” Washington Post, October 20, 2003, A21, www. washingtonpost.com. 45. Spencer S. Hsu and Sara Kehaulani Goo, “Homeland Security to Be Restructured,” Washington Post, July 13, 2005, www.washingtonpost.com.

CHAPTER 11 Program PREVIEW Chapter 11 examines programs as a technology of policy production. Programs are lines of business, the ongoing operations and activities designed to deliver the outputs identified as the objectives of policy. Despite almost universal usage and an extensive literature on managing programs, a common definition of the term program has eluded policymakers in the public sector. As you read this chapter, you should be able to answer the following questions. • • • • • • • • • • •

What is a program? What are the differences between programs and agencies? How may programs be classified? What are the basic components of a program? What are the elements of program design? What are the differences between vertical and horizontal strategies in program design? What is direct delivery of policy outputs? What roles does a program manager perform? How are projects distinguished from programs and project management from program management? What is the Government Performance and Results Act and how is it impacting policy programs? How do programs evolve?

11.1 INTRODUCTION The terms policy and policy program have become virtually indistinguishable in everyday language. When we talk about policy as a course of action we almost always refer to the program responsible for policy delivery. Nevertheless, the relationship between policy production and program delivery is far more complex than ordinary language would admit. Just because a policy commitment or authority is in place does not necessarily mean that a corresponding program has been put into operation. The list of phantom policies or policy commitments are legion. Likewise, there may be multiple, sometimes competitive, programs aimed at implementing the same policy authority. Finally, programs may spring up like weeds without any explicit authority or authorization. The landscape of federal and state government is littered with programs.1 In the end, most policy commitments are implemented by means of programs. Indeed, there are many thousands of programs flourishing at the federal level and countless more to be found at state and local levels. Policy programs are ubiquitous. 227

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As shown in Figure 11.1, programs are typically the third link in a chain of responsibility that begins with an authority and is mediated by an agency. Figure 11.1 Programs in the Policy Production Process

Authority

Agency

Program The only problem is that nobody is quite sure what a policy program actually is. Despite a mountain of literature on program development, management, and evaluation, there appears to be little agreement on precisely what a policy program is or ought to be. In the following pages we explore some of the features that will help us recognize a program when we see one. We attempt to build a cage—albeit conceptual—around the elusive yet commonplace idea of a policy program. Indeed, as we shall see, a policy program is a microcosm of the larger policymaking process. In the following pages we will review: • • • • • •

What a program is and how programs differ from agencies How programs are classified How programs are created, designed, and managed What is project management? What is program evaluation and performance measurement How programs evolve over time

Programs are the pivotal technology for getting things done. Authority defines what you should or should not do, and agency defines the Who and Where, but program focuses on What you want to get done. Programs focus on results. Therefore, the process of designing and implementing a program is a condensed version of the larger policymaking process. Programs are what transform the words of authority and the resources of agency into deeds.

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11.2 WHAT IS A PROGR AM? A recent text has defined a program as a “set of activities that has clearly stated goals from which all activities—as well as specific, observable, and measurable outcomes—are derived.”2 A program is simply the association of a public statement of goals with a defined set of activities. In other words, we use the term program to connect the Why to the What of public policymaking, as shown in Figure 11.2. Figure 11.2 Program Goals and Activities

Program

Goals (Why)

Activities (What) As can be seen from Figure 11.2, a program typically has multiple goals and activities. And, as shown in Figure 11.3, a policy often involves multiple programs that may—or may not—be housed in different agencies. Figure 11.3 Programs, Agencies, and Policies

Policy Goal

Programs Agencyi

Agency:

Agency3

To be sure, many students of public policymaking would view the situation depicted in Figure 11.3 as suboptimal or aberrant—that is, policies, agencies, and programs should be

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neatly aligned. Such was the idea behind the creation of the Department of Homeland Security. Unfortunately, policy problems change much faster than the agencies and programs that support them, so every alignment is out-of-date almost from birth, and no alignment can satisfy everyone. Everybody slices and dices the universe of policy problems in different ways, so every solution set is suboptimal. The Government Accountability Office (GAO) puts some additional flesh on these very bare bones. “Generally, a program is an organized set of activities directed toward a common purpose or goal that an agency undertakes or proposes to carry out its responsibilities. Because the term has many uses in practice, it does not have a well-defined, standard meaning in the legislative process.”3 Though hardly definitive, the GAO definition highlights three key features of a program. The first feature is that a program operates within the framework of an agency. Agencies house or host programs. Second, programs consist of organized or planned activities. There is no such a thing as an ad hoc or spontaneous program. There is no program without a plan. Third, and most important, programs are directed toward a defined purpose or goal. Programs are future oriented; programs are the institutional vehicles for producing outcomes. This aspect of a program is central to the Federal Accounting Standards Advisory Board (FASAB), which treats programs from the distinctive view of government, a perspective that contrasts with an organizational or financial view. “From a third perspective, the government is composed of programs and activities, i.e., the services the organizations provide and specific lines of work they perform. Each program and activity is responsible for producing certain outputs in order to achieve desired outcomes.”4 In this view, a program is a “line of business” responsible for producing an output or product, in government lingo. Just as Microsoft is in the operating system and application software business, the government is in the business of providing a whole variety of goods and services to the American public. Programs are to the government as products and product lines are to a commercial enterprise. Managing programs for government agencies is roughly similar to managing products in the business world. Finally, programs are typically continuing or open-ended activities. Most programs are conceived and operated on the assumption that they will last forever. Programs, to be more precise, are a continuing or iterative set of organized activities aimed at fulfilling a policy objective and producing a desired outcome. As long as the need persists, so too will the program. Although legislators have tried to impose time limits or “sunset provisions” on programs from time to time, most government programs address continuing problems that are resistant to “final solutions.” Programs are built around the delivery of benefits and the achievement of outcomes. To paraphrase a long-forgotten philosopher, programs are “the means of production” for public policies. Since most programs are designed to reach or maintain specific social goals—for example, better health, better housing, less discrimination—they typically involve the performance of repetitive activities on a continuing basis. Since programs deliver benefits to a target population, they often create a constituency that endures long after the original objective or social need has been met. Successful programs—like successful products—may be periodically repackaged, but live forever.5 While programs lack the kind of operational infrastructure that makes agencies so difficult to kill, such linkages make programs resistant, though not immune, to calendar-driven schedules, zero-based budgets, or other tools of management.

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11.3 PROGR AM VERSUS AGENCY Both inside and outside government, there is little clarity and, often, great confusion over the relationships between agencies and programs. Agencies are organizational entities, while programs are the lines of business performed by these organizations. At this most basic level, the relationship between government agencies and programs is not unlike that between corporate entities and product lines in the world of commerce. However, even this statement proves to be complicated in practice. Generally speaking, Congress creates programs through legislation organizing and specifying work to be performed. Congress typically assigns—or sometimes, reassigns—a program to an agency that provides operational and managerial support. In addition, Congress usually provides spending authority directly to programs, although programs may only expend funds and sign contracts under the umbrella of agency authority. Finally, programs have traditionally exercised independent managerial authority over operations and program staff. Thus, program authority and agency authority frequently overlap. Figure 11.4 offers a high-level overview of the possible relationships between agencies and programs involved in the policy production process. Figure 11.4 Agencies and Programs

A

B

C

In Figure 11.4, part A depicts an organization or agency dedicated to a single program. Agency and program are effectively one. Familiar examples include the Social Security Administration and the National Labor Relations Board. In the more common case shown in Figure 11.4, part B, a single agency houses multiple programs. Here, the agency provides many of the landlord or housekeeping functions—for instance, legal, personnel, contracting, and facilities services—while results-oriented responsibilities are allocated to numerous programs within its jurisdiction. The Department of Education houses many programs, such as those for K–12 schools, vocational education, colleges and universities, student financial aid, students with disabilities, and so on. Finally, Figure 11.4, part C, illustrates the increasingly common practice of an interagency program that marshals the expertise and resources of multiple agencies. Moreover, the multiple agencies shown in part C may include both private and public enterprises. Interdepartmental and intergovernmental programs, as well as programs in which responsibilities are shared with business and nonprofit entities, are increasingly popular. For example, the Office of National Drug Control Policy in the Executive Office of the President is tasked with

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coordinating the activities of a whole host of federal and state agencies involved in reducing the supply and demand for illegal drugs. As legislatures, executives, and the public focus increasingly on the production and measurement of results, examples of Figure 11.4 part C are bound to proliferate. By one estimate, more than four-fifths of all programs created or revised now operate within more than one agency.6 However, this new breed of interdepartmental program threatens to expose the divergent goals and practices of agencies seeking growth and stability and programs geared toward producing outcomes. Table 11.1 summarizes some of the principal differences between agencies and programs. Table 11.1

Agencies and Programs: A Comparison FEATURES 1. Authorized by statute 2. Authority to sue and be sued 3. Authority to hire and fire 4. Authority to sign contracts 5. Perform housekeeping activities–e.g., construction, building rental, facilities support, etc. 6. Funded by legislative appropriation 7. Perform housekeeping functions for field offices

AGENCIES Yes Yes Yes Yes

PROGRAMS Usually No No No

Yes Yes Yes

No Usually No

There are exceptions, of course, to the distinctions drawn in Table 11.1. For example, housekeeping activities at each of the Department of Energy’s major field offices are managed by a “landlord” program, which assumes responsibilities for facilities management and other housekeeping functions. And hybrids surely do exist. However, it is important to understand the different kinds of responsibility, standards of accountability, and measures of performance that are appropriate to agencies versus programs. For example, programs often lack direct control over the kinds of resources—personnel, buildings, and infrastructure—critical to accomplishing their legislatively mandated goals and objectives. Until policymakers and policy analysts gain a better understanding of both agencies and programs as different technologies for policy production, the proliferation of flawed, jerry-built programs will continue. Programs are the primary technology of policy production. Without funded programs, authority is little more than an empty promise. And, without successful programs, an agency is simply workfare for bureaucrats. That is why the terms policy and policy program have become virtually synonymous in everyday parlance. 11.4 CLASSIFYING PROGRAMS How does one classify the many different types of programs? The primary approach to classifying policy programs is by content or domain. If a program is a line of business, then what business is the government in? Following the New Deal of the 1930s and World War II, the number and diversity of policy programs had grown so rapidly that Congress sought a better means of getting a handle on what was happening. In 1948, Congress developed a broad-gauge classification scheme for government programs and activities. Table 11.2 (facing page) reproduces the major functions and subfunctions that Congress uses to classify government programs in its annual budget resolution. The categories listed in Table 11.2 have remained relatively stable since 1974 and represent a catalogue of national needs and activities from Congress’s perspective. “By grouping together

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Table 11.2

Classification of Government Programs National Defense • Department of Defense—Military • Atomic energy defense activities • Defense-related activities International Affairs • Development and humanitarian assistance • International security assistance • Conduct of foreign affairs • Foreign information and exchange activities • International financial programs

Education, Training, Employment, and Social Services • • • • •

Elementary, secondary, and vocational education Higher education Research and general education aids Other labor services Social services

Health • Health care services • Health research and training • Consumer and occupational health and safety

General Science, Space, and Technology • General science and basic research Medicare • Space flight, research, and supporting activities • Medicare Energy • Energy supply • Energy conservation • Emergency energy preparedness • Energy information, policy, and regulation Natural Resources and Environment • Water resources • Conservation and land management • Recreational resources • Pollution control and abatement • Other natural resources Agriculture • Farm income stabilization • Agricultural research and services

Income Security • General retirement and disability insurance (excluding social security) • Federal employee retirement and disability • Housing assistance • Food and nutrition assistance • Other income security Veterans Benefits and Services • Income security for veterans • Veterans education, training and rehabilitation • Hospital and medical care for veterans • Veterans housing • Other veterans benefits and services Social Security • Social security

Commerce and Housing Credit • Mortgage credit • Postal Service • Deposit insurance • Other advancement of commerce

Administration of Justice • Federal law enforcement activities • Federal litigation and judicial activities • Federal correctional activities • Criminal justice assistance

Transportation • Ground transportation • Air transportation • Water transportation • Other transportation

General Government • Legislative functions • Executive direction and management • Central fiscal operations • General property and records management • Central personnel management • General purpose fiscal assistance • Other general government • Deductions for offsetting receipts

Community and Regional Development • Community development • Area an regional development • Disaster relief and insurance

Source: United States General Accounting Office, Budget Function Classifications. Origins, Trends, and Implications for Current Uses (Washington, DC: February 1998).

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items which are functionally related, regardless of the agency that is responsible, this type of classification provides for the Congress and the public a useful summary of what the Government is doing, or expects to do, and, in general, focuses upon the ultimate purpose which the Government programs are designed to serve.”7 This classification of programs by content or domain is important, because it serves as the basis for allocating jurisdiction over program design, funding, and oversight to congressional committees. And who gets to decide about individual programs can have a critical role in shaping the fate of these programs. Indeed, the organization of congressional committees mirrors and complements the administrative organization of policy programs. “[L]egislative organization in the United States must be understood within its broader governmental context, one in which policy production does not begin and end within Congress itself. . . . . Congress needs committees to offset executive branch agencies, both so that legislators can have their own source of expertise on complex issues and to direct resources to favored constituents.”8 The classification and organization of policy programs drive the organization and operations of government institutions. New problem areas and new policy programs—as in the case of Homeland Security—can lead to the reorganization and restructuring of policy institutions of all kinds. How we classify policy problems and programs ultimately shapes the organization of policy production. 11.5 PROGR AM CREATION As we have seen, policies must be legitimated—either directly or indirectly—by some act of authority. A legislature passes a law; the president issues an executive order; state voters approve a constitutional amendment or initiative petition. The fundamental issue with every authority act is the extent to which the details of policy production are included in the original act. Or conversely, to what extent does the enabling authority delegate the details of policy production to other policymakers in general and to agencies in particular. Authorities can decide the details themselves or delegate the decision to others. This is the first, and often the most important, step in establishing the infrastructure for policy production. Although the legislative architects of policy programs can and do specify the details of policy production and policy outputs down to the most minute details, program creation requires the kind of time and expertise that is in short supply in legislative bodies. “Making explicit laws requires legislative time and energy that might be profitably spent on more electorally productive activities. One of the reasons that bureaucracies are created in the first place is to implement policies in areas where Congress has neither the time nor the expertise to micromanage policy decisions.”9 “[W]hen deciding where policy will be made, Congress trades off the internal policy production costs of the committee system against the external costs of delegation.”10 Legislators are politicians as well as policymakers. In a democracy they have only limited resources to dedicate to policymaking. Moreover, authorities can’t produce policies; they can only make policy commitments that others must keep. Authorities deliver promises, not action; words, not deeds. Technically speaking, legislators can’t do anything. They can, however, leave room for little discretion or creativity by prescribing both the means and outputs of production down to the smallest details. They can limit the freedom of action of the program managers who actually deliver the goods. So the authors of programs can—and often do—prescribe program design in minute detail. Nevertheless, at a minimum, program architects must establish the basic foundations for policy production. These foundations typically include:

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235

• An enabling authority. As we saw in chapter 9, this authority may be newly minted or simply cited or inferred from existing authorities. Programs do not enjoy the kind of inherent powers granted to agencies. They can only do what they are specifically authorized to do. Authority is the straightjacket within which program activities must be conducted. • An organizational context or agency home for the program. Programs must reside somewhere. Some agency or agencies must provide the facilities, pay the bills, sign the contracts, and provide all the other necessary housekeeping functions. • Program goals and objectives. What does the program seek to accomplish, and for whom? • A time frame for program operation and delivery. While programs are ongoing lines of business, many programs are authorized for a limited period of time—sometimes from year to year, but most often for periods of three to five years. At the end of this period the program must be reauthorized by the legislature or executive that created it. In addition, some authorizing acts include deadlines for delivery of program outputs and achievement of program outcomes. An example of the former was the deadline for staffing the airport security functions by federal employees of the newly created Transportation Security Agency. An example of the latter would be targets for reduction in atmospheric pollutants. • A management structure. What officers shall be responsible for the program, who shall appoint them to office, and to whom shall they report? • Financial and human resources. How shall program activities be funded and who will do the work? • Provisions for program oversight or accountability. How shall the program be accountable to the authorizing body, the courts, program beneficiaries, and to the public? Legislative authorities are increasingly detailing specific mechanisms—public reports, oversight boards, public consultation provisions, and so forth—to ensure that program management is responsive to external stakeholders. However, there is no rulebook for creating a program. Programs can be announced today and forgotten tomorrow. New programs can be cobbled together from old activities. And policymakers often disagree about what counts as a program and what does not. Programs are in the eyes of their beholders. Nevertheless, when you talk about why public organizations do things, you are speaking the language of programs. 11.6 PROGRAM DESIGN How does one design and build a program? Before describing some of the techniques of policy design we need to survey the evolution of program design as art and practice. 11.6.1 Background Until recently, legislators, executives, bureaucrats, and even judges have acted as program designers, with little guidance other than the record of past successes and failures. It was only during the 1950s that policymakers began to understand the difference between the Where—agencies—and the Why—programs—of policy production, and tried to develop new tools for managing the latter. As we shall see in chapter 14, tools for managing program finances emerged in the 1960s, but relatively little attention was paid to the art of program design outside of the Department of Defense. In response to the failures of the 1960s and 1970s, the art of program evaluation flourished, but few analysts focused on the principles of program design. With few exceptions, program evaluation looked backward rather than forward.

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There were two reasons for this lack of interest in program design. First, legislative majorities in the U.S. Congress often drafted detailed proposals that left little room for creativity in program design by agency directors and program managers. Second, Congress then micromanaged policy programs, both new and old, at the behest of political constituencies. As a result, politics drove program design and legislators burdened new programs with arbitrary deadlines, detailed mandates, and special treatment for favored constituents. With limited discretion, there was little opportunity for program design. As a consequence, policy analysts focused on the scope, or What, of policy problems rather than on the How of policy design. Policy analysts could influence the debate about what government should do, but there was little or no audience for examination of the methods to accomplish whatever governments set out to do. The analysis of ends overshadowed the design of means. This situation began to change during the 1990s. Partisan gridlock in Washington limited the scope of new policy initiatives and the power of legislative majorities to dictate program design to agency heads and program managers. Unable to change the What of public policymaking, both legislators and executives began to focus on the How. In other words, if you can’t invent new programs, then at least you can reinvent the old ones. Moreover, the unanticipated consequences and costs of undisciplined legislative creativity were apparent for all to see. Legislators proved to be far more adept at building electoral mandates than engineering social programs. Many of the ambitious program initiatives of the 1960s, 1970s, and 1980s were not only depleting the federal treasury, they simply didn’t work as advertised. Finally, disarray in Washington opened the way to innovation in states and localities. State and local governments had to find ways to do more for less. They were forced to innovate. Hence, creative approaches to program design were born in the hinterlands in the early 1990s and have flourished there ever since. In order to understand programs as a technology of governing, we must often escape the Washington Beltway and visit local communities, where the art of program design flourishes daily. 11.6.2 The Art of Program Design There is no simple recipe for designing a policy program. Every problem is different, and every solution is constrained by multiple factors. In addition, the art of policy production almost never begins at the beginning. No problem can be solved in isolation. Every solution builds on past solutions and wrestles with newly emerging problems. Designing a program is not like drawing up the blueprint for a new building. Policy programs—like policy problems—are never completed or finished. Therefore, policy design is an adaptive process that requires continual effort. The job is never done. Nevertheless, the process of program design can be broken down into the following steps, as depicted in Figure 11.5 (see facing page). Figure 11.5 offers a prescriptive model of how programs ought to be designed. In most cases, the reality of program design is much more chaotic. There are many players involved in the design process—Congressional committees, lobbyists, agency executives, inspectors general, Office of Management and Budget (OMB), GAO, the federal courts, and so forth. As a result, programs often reflect the divergent and often conflicting ideas of their multiple authors. Nevertheless, there is growing recognition among both policy analysts and policymakers of the need for more systematic approaches to the design of policy programs. 11.6.2.1 Define a Vision According to Chinman et. al., a vision statement is a “dream about what the future should look like.”11 It describes the ideal situation that the program seeks to bring about. It captures the image

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Figure 11.5 Program Design Methodology

Vision

Needs & Resources Sustain

Goals & Objectives Best Practices

Improve

Outcome Evaluation Quality Evaluation

Fit

Plan Capacities

Source: Adapted from Matthew Chinman, Pamela Imm and Abraham Wandersman, Getting to Outcomes 2004 (Santa Monica, CA: RAND Corporation, 2004).

of success. The purpose of a vision is to inspire and motivate people to work together toward a common end. 11.6.2.2 Define Needs Once a program has a sense of purpose, the next step is to define the problem to be solved. What is the situation that the program is seeking to improve? What is the scope of the problem and what is the target population? Does the program focus only on drug use in schools, or abuse of certain drugs, or drug abuse in the community at large? Was the mission in Iraq to prevent the use of weapons of mass destruction, eliminate a hotbed of terrorism, remove a brutal dictator, or bring democracy to the Middle East? How you define the problem or need determines what the program should do and how you measure success. Conversely, you must also define the conditions and resources that are related to the need—which laws can be used, what funding is available, and what human energies can be mobilized to solve the problem. The technique for scoping the problem a program is to solve is called a needs assessment.

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11.6.2.3 Define Goals and Objectives Next you define the goals and objectives of the program. Goals are “broad statements that describe the desired longer-term impacts of what you want to accomplish.” Objectives, in contrast, document the desired outcomes or “specific changes expected in your target population(s) as a result of your program.”12 Goals translate the dream articulated in the vision into achievable results. Goals tell you what you want to achieve. Objectives are the measurable outcomes that you seek to produce in a target population. Goals and objectives are the criteria by which program success is ultimately measured. 11.6.2.4 Identify Best Practices A best practice is a procedure or tool that has produced good results in the past. Once you have decided on your goals and objectives, you must then decide on what to do to achieve them. The key is to evaluate the lessons learned from previous programs with similar problems. Thus, you should research what works and select tools appropriate to your needs, resources, and goals and objectives. Policymakers do not solve problems in a vacuum. They look to models, or documented best practices, to appropriate and imitate. They look to the past for guidance about the future. 11.6.2.5 Determine “Fit” “Program fit is the degree to which a selected best practice fits within the program and community context.”13 Identifying the tools to be used is the easy part. These tools must then be adapted to the specific context of the program. Solutions cannot be taken off a shelf and applied in cookie-cutter fashion. They must be tailored to fit the: • • • •

Specific goals and objectives of the program Characteristics of the target population, key program stakeholders, and the community at large Relevant legal authorities, agency missions, and stakeholder politics Other programs and services that already serve the targeted population

The final point is particularly troublesome, because the policy space for nearly every target population is densely populated with multiple programs, often driven by overlapping and sometimes contradictory goals and objectives. Programs not only must compete for attention and resources, they must also be carefully designed not to work at cross-purposes with existing programs. Fitting the technologies and tools of policy production to program requirements is central to the art of program design. 11.6.2.6 Determine Program Resources No matter how carefully designed to fit the problem context, program solutions will fail without adequate resources to succeed. The next step is determine whether or not the program can access the human, technical, fiscal, organizational, and community resources needed to accomplish its goals and objectives. Are there sufficient resources to get the job done? Can we afford to build and sustain a democratic Iraq or rebuild New Orleans or mitigate global warming? Resources are limited and programs must compete for their share of the pie. What is desirable and feasible is often not affordable. Program goals and objectives must be tailored to the limited resources available.

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11.6.2.7 Plan Activities Once you have decided on program tools, techniques, and practices, and identified the resources needed to deploy them, you must build a program plan. A program plan documents program components and activities; their interdependencies and sequence of performance over time; and the specific human, financial, and technical resources that must be in place to accomplish program tasks. 11.6.2.8 Execute the Program The next step is to implement the program plan. Of course, program execution rarely goes smoothly. Things happen. No plan can anticipate every contingency and the best-laid plans almost inevitably go awry. Program execution always involves improvisation. 11.6.2.9 Evaluate Once you have commenced program activities, you should also evaluate how well your plan has been put into action. There are two fundamental dimensions to evaluation: • •

Process—Did you do what you planned to do? What did you actually do, how well did you do it, and what was the quality of program implementation? Outcomes—Did you achieve your program objectives or desired outcomes? Were you successful in changing the world?

Process quality and outcomes are independent dimensions. You may do everything the right way yet still not achieve program objectives. Conversely, your program may be badly implemented and yet you achieve your desired outcomes. A thorough program evaluation must consider both dimensions. 11.6.2.10 Sustain and Renew Apply the lessons learned from program evaluation to the next cycle of program planning. Change program design if needed to improve the quality of program implementation and revisit program objectives. The world is constantly changing and programs must continually reinvent themselves to ensure both quality performance and successful outcomes. Since program budgets are typically reformulated on an annual or biennial basis, program redefinition is a necessity, not a choice. Moreover, many programs are time limited and require legislative reauthorization. So programs must periodically lobby their sponsors or find new sponsors to ensure their survival. Thus, the cycle of activities shown in Figure 11.5 is repeated over and over again. Program design is a recurring activity. 11.6.3 Program Logic Model The basic tool of program design is the program logic model. “The program logic model is defined as a picture of how your organization does its work—the theory and assumptions underlying the program. . . . It uses words and/or pictures to describe the sequence of activities thought to bring about change and how these activities are linked to the results the program is expected to achieve. . . . The term logic model is frequently used interchangeably with the term program theory in the evaluation field.”14 A program logic model is a theory of change describing how a program is designed to work. Although there are many versions of a program logic model, Figure 11.6 (see next page) shows the components of a typical one. As you may see, the logic model simply illustrates the components of a program design and their relationships.

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Figure 11.6 Program Logic Model Assumptions

External Factors

INPUTS

ACTIVITIES

OUTPUTS

What program invests

What program does

What program delivers

TARGET POPULATION Who program reaches

OUTCOMES What happens NEEDS

Short Medium Long Term Term Term

CAUSAL LOGIC (FLOW OF EVENTS) DESIGN LOGIC (PROGRAM PLAN) Source: Adapted from the University of Wisconsin Cooperative Extension, Program Development and Evaluation, Program Action Logic Model, at www.uwex.edu/ces/pdande/evaluation/evallogicmodel.html.

• Inputs are the human, financial, technological, and organizational resources a program has available to do the work. • Activities are what the program does with its resources. Activities include all the actions necessary to produce program outputs. Activities are the program’s production functions. • Outputs are the direct products of program activities. Outputs are the benefits and burdens that the program delivers to a target population. While we normally think of outputs as goods and services delivered to beneficiaries, public policy programs also deliver a wide variety of burdens, such as taxes, rules and regulations, and sanctions or punishments for violations of government rules and regulations. We will delve more deeply into the types of outputs produced by public policy in chapter 15. • The target population is the group of beneficiaries that the program seeks to serve. “Target populations are crucial to policy effectiveness because targets must co-produce; that is, behave in ways needed to achieve policy goals or solve problems. . . . Policy designers usually have a choice among different target populations, any one of which can be logically linked to the solution of a particular problem.”15 • Short-term outcomes are those immediate effects or changes caused by program outputs. “Short-term outcomes are specific changes in things like attitudes, behavior, knowledge, skills, status, or level of functioning”16 expected to result from the delivery of program outputs. These are usually expressed at the individual level on the part of program beneficiaries. For example, in response to various public service ads, does a child think twice about accepting a drink or smoking marijuana, or does a family decide to recycle its newspapers? • Medium-term outcomes are those longer-term changes in behavior, practices, or private decision making caused by an accumulation of short-term outcomes. Generally speaking, medium-term outcomes are measured over intervals of six months to two years. Is the child still not smoking marijuana, and is the family still recycling, a year or so later? • Long-term outcomes are the larger social, economic, political, and environmental impacts of

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program outputs. Long-term outcomes generally refer to the results expected three to ten years after the program has been in operation. Years later, have the rates of drug use decreased and the volume of trash diminished? Is society better off as a result of program outputs? We will examine policy outcomes in more detail in chapter 16. • Assumptions include the legal, political, and administrative context of program design, as well as the theory of change upon which program design is based. Constraints on program design include program architecture as mandated by Congress or the legislature, executive branch politics and policies, and agency missions or rules that limit program manager discretion. The theory of change incorporates fundamental beliefs about human nature and social causation that guide program design. • External factors are those institutions and events over which program managers have little or no control. • Needs are the problems the program seeks to solve. The logic of the program logic model flows in two directions, forward and backward. First, the causal logic is the logic of events as they unfold in time—that is, from left to right, as depicted in Figure 11.6: • • •

If the program has the requisite resources, then the program can perform the activities, If the activities are performed, then the outputs can be delivered to the target population, If the outputs are delivered, then the outcomes will occur in the target population.

Second, the design logic is how program designers build or rebuild a program—that is, from right to left in Figure 11.6: • • • •

Given the needs or problems the program seeks to solve, what are the long-term outcomes the program seeks to achieve Given those long-term outcomes, what medium-term and short-term outcomes must be produced Given those outcomes, what goods or services must be delivered to what target group Given the outputs, what resources and inputs are required to deliver those results.

The logic of events moves forward, step-by-step, from inputs to outcomes, while the logic of design begins with needs and desired outcomes, and moves backward to required inputs, activities, outputs, and groups. By graphically depicting the logics of events and design, a program logic model can help build a shared understanding of how the program is intended to work prospectively, and—retrospectively— how the program did or did not work in reality. Since programs may have multiple objectives, and policies may be served by multiple programs, it is possible to represent both programs and policies as a hierarchy of nested logic models. Of course, a program logic model is just a model—it offers a highly simplified guess at how the program ought to work—but it provides a theory of action that can be progressively tested and modified over time. Without a program theory, there is no basis to understand why a program succeeds or fails. 11.6.4 Conclusions The art of program design is still in its infancy. Although program design has come to play an increasing role in local and community policymaking, both state and federal programs are typically

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created and funded with little regard for sound program design or systematic program evaluation. Program managers in the end must make do with what they get. Nevertheless, the movement to hold programs accountable for results is gaining ground at all levels of government, and program design techniques—together with logic models—are increasingly deployed, often long after programs are up and running, in response to legislative oversight and public demand. 11.7 SERVICE DELIVERY STR ATEGIES One of the key decisions facing the program designer is determining who is actually going to produce and deliver policy outputs to the target population. In other words, what is the strategy for program delivery? It is possible to isolate two basic strategies and four approaches to policy production, as illustrated in Figure 11.7. The first strategic choices involve the vertical and horizontal dimensions in policy production. Figure 11.7 Program Delivery Strategies

Alternative Production Strategies

"Vertical" (Hierarchical)

Regulation

Direct Delivery

"Horizontal" (Co-Production)

Networking

Coordination

Cooperation

Collaboration

Outsourcing

11.7.1 Vertical Versus Horizontal Strategies By vertical governance strategies we mean hierarchical control based on the delegation of legal authority. The program manager relies on the delegation of authority as passed through an agency in order to get things done. The primary mechanism of accountability is to the law and to the specific delegation of authority contained in that law. Vertical or hierarchical governance is traditionally identified with bureaucratic government, but it also includes the ability to devolve or contract out performance to a third party. The key point is that regardless of who actually does the work, authority over production resides within the program. Horizontal governance, in contrast, is the sharing of responsibility for policy production among multiple organizations, both governmental and nongovernmental. Government agencies and other organizations work together to solve a problem. Many problems, like drug abuse or teen pregnancy, are too broad in scope to be solved by any single program. Individual programs—by their very nature—are specialized to focus on specific problem sets and produce measurable results. Often, an individual

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program can only address a piece of the puzzle. When results are the overriding issue, programs must work together to produce lasting change in the world at large. Collaboration brings the diverse skills and resources of multiple programs to bear to help solve problems that no single program could address alone. As the world gets ever more complex and more problems become wicked, as defined in chapter 4, horizontal strategies are becoming an increasingly popular way of producing public policies. The distinction between vertical and horizontal is an arbitrary but critical one. Every program relies on some specific grant of authority, however vague it may be. And few programs operate in splendid isolation. Every program must coordinate its activities with other programs and agencies. Nevertheless, the choice of a dominant strategy has important consequences for program design and policy delivery. 11.7.2 Types of Vertical Governance Although the varieties of vertical governance are innumerable, they can be grouped into three independent, though overlapping, types or choices in terms of strategies for designing programs. 11.7.2.1 Regulation Perhaps the most characteristic products of public policymaking are regulations or rules that mandate or prohibit certain kinds of behavior by the public. Regulations coerce members of the public to deliver benefits to others by enforcing limitations on individual behavior. When governments prohibit cigarette smoking in public places or compel banks to report on large cash transactions they impose burdens on some for the benefit of the many. Regulations force individual citizens and corporate entities to become both the means and ends of policy production. We will examine regulation in general and rules as a technology of policy production in chapter 12. 11.7.2.2 Direct Delivery Direct delivery is the production or withholding of a tangible good or service by government employees.17 In direct delivery, public employees do the work and serve as the interface with the public. To be sure, every agency or program uses third parties or contractors in the production process. Contractors may manage the facilities, administer the computer systems, and serve as consultants to program managers. But with direct delivery, program personnel themselves produce the goods or deliver services to the public. The variety of goods and services delivered directly by government is impressive and everexpanding. More than half of the federal budget is spent as direct payments to individuals and corporations in the form of Social Security benefits, tax credits and tax incentives, loans and loan guarantees, subsidies, grants, vouchers, insurance, and similar benefits. Less tangible, but no less important, are the benefits of public safety and national defense provided by federal, state, and local agencies. While critiques of government bureaucracy abound, the bulk of public goods and services are still delivered by government employees. We will examine the various types of government outputs in chapter 15. 11.7.2.3 Outsourcing In outsourcing, the program—or more precisely, the agency—signs a contract with a third party who delivers the goods or services according to the program or client’s specifications. “The cli-

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ent [program] specifies the tasks it wants performed and pays the provider for performing them. Negotiating these arrangements revolves around defining the terms of the contract. Managing them is about ensuring that the provider complies with the terms. In contrast to partnership agreements, client-provider contracts do not involve sharing power or decision-making.”18 Outsourcing is a hierarchical relationship because the client program retains both the authority to perform the work and the responsibility for results. The relationship is asymmetrical. While many texts talk about outsourcing as a partnership, it is not a relationship among equals. The provider is just a paid contractor and not—in almost all cases—an agent of the public. In recent years outsourcing has become not only a common alternative for service delivery, it has become the preferred alternative. We will examine the contractual basis of outsourcing in depth in chapter 13. 11.7.3 Types of Horizontal Governance Horizontal governance is characterized by a relationship among equals. Each party or partner brings its own specific grant of authority to the table. While some partners are always more equal than others, in horizontal governance one party cannot compel or coerce another. Horizontal or collaborative governance is a more recent and less well-defined strategy for policy production. While the principles and practices of vertical governance have been codified into the body of administrative law over the past seven decades, collaborative governance has no such coherent body of law behind it. While state and local governments and their agencies have always worked with one another on an informal basis, state laws authorizing such practices are of relatively recent origin and follow no common model. Thus, horizontal governance—like program design—is an emerging art form without a standardized vocabulary of action. However, a number of policy practitioners have adopted a set of categories that describe the levels of horizontal collaboration from the simplest to the most complex. 11.7.3.1 Networking Networking is the simplest approach to horizontal governance. Networking is the exchange of information for mutual benefit.19 Programs share information through meetings, newsletters, e-mails, databases, or Web sites. Networks are usually informal and do not involve significant levels of effort on the part of the members. Participants in a network pursue their own independent objectives and manage their own resources. Though networks represent the minimal form of interagency and interprogram collaboration, they are critical to craft or coping activities, where timely access to information is vital to success. For example, the General Services Administration of the United States has set up a Web site and supporting database dedicated to documenting interagency contracts. Information and communications networks in the era of the Internet are so numerous and pervasive that we tend to take their influence in the policymaking process for granted. 11.7.3.2 Coordination The next level is coordination. Programs have a coordinating relationship “when they modify their activities so that together, they provide better services to their constituents.”20 They change plans or alter schedules so that their operations fit together. Coordination is the first step in actually working together toward a common goal. Coordination does demand more trust than networking and involves a greater commitment of time, but each program or agency makes its own management decisions.

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11.7.3.3 Cooperation When programs cooperate, “they not only share information and make adjustments in their services, they share resources to help each other do a better job. In a cooperative relationship, organizations may share staff, volunteers, expertise, space, funds, and other resources.”21 Cooperation may involve legal instruments such as a memorandum of understanding or agreement. While these formal commitments are not quite contracts—as we shall see in chapter 13—they require substantial investments of time and energy and require a significant measure of trust on the part of participants. In a cooperative relationship, programs must be willing to share the responsibilities and risks of joint program management. 11.7.3.4 Collaboration In a collaborative relationship, the partners help each other expand or enhance their capacities to perform their activities. “[C]ollaborating is a relationship in which each organization wants to help its partners become the best that they can be at what they do. This definition also assumes that when organizations collaborate they share risks, responsibilities, and rewards, each of which contributes to enhancing each other’s capacity to achieve a common purpose.”22 Since collaborations involve shared authority, decision making, and financial management, they require a much higher level of trust and risk taking by the participants. As a result, collaborative partnerships demand significant “up-front” work and different management skills than those required for hierarchical governance. Everything must be negotiated from scratch; trust is essential; and legal, financial, and political accountability can be difficult to trace. However, once the management hurdles have been surmounted, partnerships can take advantage of the specialized and complementary skills of the participants. We shall further explore horizontal governance in chapter 20. 11.7.4 Conclusions The 1992 publication of Osborne and Gaebler’s Reinventing Government23 triggered a rebirth of interest in alternative approaches to program delivery among both policy analysts and policy practitioners. While the proliferation of self-help manuals has fostered the illusion that program managers have the freedom to choose program delivery approaches as if from a cookbook, the fundamental truth still holds: The choice—or nonchoice—of program delivery tools has significant consequences for program success and survival. The importance of program design in general and program delivery in particular has recently been recognized in the Program Assessment Rating Tool (PART) questionnaire. This questionnaire was developed by the OMB for the second Bush administration and has been used as a diagnostic tool to evaluate program performance. The PART questionnaire includes five questions under the rubric of Program Purpose and Design. They are: 1. Is the program purpose clear? 2. Does the program address a specific and existing problem, interest, or need? 3. Is the program designed so that it is not redundant or duplicative of any other federal, state, local, or private effort? 4. Is the program design free of major flaws that would limit the program’s effectiveness or efficiency?

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5. Is the program design effectively targeted, so that resources will reach intended beneficiaries and/or otherwise address the program’s purpose directly?24 While one may debate the content of these five questions or the politics of PART evaluations, program managers must now justify their program’s design to OMB examiners. Program managers are now being held accountable for the quality of program design. 11.8 PROGR AM MANAGEMENT Program management is what a program manager does. Of course, the boundaries between program design and program management are fuzzy at best. As we shall see in chapter 14, every budget cycle is an opportunity for executives and legislators to redesign or reinvent a program. Nevertheless, program managers do face a characteristic set of everyday challenges in running programs that deliver results. Figure 11.8 illustrates the context or environment that the typical program manager must navigate. Figure 11.8 The Environment of Program Management Programs/Budgets Authorizations/Appropriations ($)

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Legislature

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Lobbying

Contractors & Partners Lobbying

Lobbyists

Lobbying

Courts

Beneficiaries

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Program managers must deal with key stakeholders in managing policy production. These include: • A legislature that determines program design and funding. As we have seen, a legislature establishes the framework within which program managers must operate. • An executive who oversees program compliance with policy objectives and seeks legislative funding for program operations. Though programs are typically authorized and funded by the legislature, program managers need executive branch support to thrive, and in some cases, to survive. • Contractors or partners. Program managers need contractor or partner participation and cooperation to succeed. Few program managers can go it alone. They must rely on commercial, nonprofit, or other government partners to produce and deliver goods and services. Moreover, program outputs and outcomes seen as damaging to contractor interests can indirectly limit program design through contractor lobbying of both Congress and the executive. • Beneficiaries of program outputs. Figure 11.8 shows the benefits being delivered by a contractor or partner. This situation can make it difficult for the program manager to evaluate the quality of service delivered to program customers. • Courts, lobbying groups, the media, and the public.These entities also intrude upon the program manager’s world. While program operations are generally invisible to these external stakeholders, accidents or crises can expose program activities to outside scrutiny. The program manager is the primary interface with all of these external parties. A program manager spends much or most of his or her time advancing and defending the program in a complex and ever-changing political environment. “[P]ublic managers become strategists rather than technicians. They look out to the value of what they are producing as well as down to the efficacy and propriety of their means. They engage the politics surrounding their organization to help define public value as well as engineer how their organizations operate.”25 The program is a microcosm of the entire policymaking process, and the program manager is the master of this world. While the conventional image is that of a cog in a vast bureaucratic wheel, the opposite is most often the case. Entrepreneurial program managers are more like orchestra conductors—while they may not write the music, they can and do work with the composers, board of directors, subscribers, players, and even the support staff to get the job done.

MINICASE 11.1 Whistle-Blowers—The Conundrum for Program Management That most program managers want employees to report problems with program operations or with program staff would seem obvious. Yet, how to design such systems is a much more difficult matter. As most employees will tell you, loyalty pays much greater rewards than honesty. Those who ask troublesome questions or report misconduct by fellow employees are often ostracized and frequently fired. There are federal laws protecting government whistle-blowers to counter this. Yet, a 1992 survey of 1,500 federal employees who reported misconduct illustrates the consequences of whistle-blowing. Of the 1,500, 25 percent experienced verbal harassment and intimidation; 20 percent were shunned by coworkers and managers; 18 percent were reassigned, usually to less desirable jobs; and 11 percent were denied further promotions. Those

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who go to court to protect their rights under the statutes often find little relief. Without the protections of the civil service personnel system and government employees unions, many would have been fired. So the problem remains—how can a manager detect mismanagement or misconduct? To date, the focus of federal efforts has been on what are considered to be major problems. That is, primarily fraud, waste, and abuse in program operations. To deal with these situations, the government has used financial incentives for leverage. Since the 1980s the False Claims Act has entitled whistle-blowers to 15 to 30 percent of whatever sums the government has recovered in cases of fraud. Although the False Claims Act has helped the government to recover more than $3.5 billion since 1986, it has offered little to encourage employees to report garden-variety misconduct or mismanagement. For these problems, common sense and leadership appear to be the only way to counter the actions of employees who prefer loyalty to honesty.

11.9 PROJECT MANAGEMENT Most of a program manager’s time is dedicated to managing the program environment—that is, the universe of program stakeholders. This is the external dimension of program management, as shown in Figure 11.8. In contrast, the internal dimension of program management is defining the work that must be done and supervising the performance of program activities. In many cases program activities are ongoing and open-ended, like the program itself. Policemen patrol neighborhoods, social workers see clients, and bureaucrats do paperwork day after day, week after week, and year after year. Program activities are continuous and continuing. However, program activities are increasingly organized into discrete units, or projects. “A project is a temporary endeavor undertaken to create a unique product or service. Temporary means that every project has a definite beginning and a definite end. Unique means that the product or service is different in some distinguishing way from all similar products and services.”26 In the language of production, projects are batch assembly jobs, where each batch of activities is performed on a defined schedule and where each batch is specifically designed or customized. Projects are prevalent where work can be divided into separate, time-limited activities. Temporary, in this context, really means a defined duration of time. When the project is complete, the team or organization assembled to perform the work is disbanded. Like the taped instructions in an episode of Mission Impossible, projects are designed to self-destruct. Unique means that significant effort must be expended in defining the scope of work involved in a project. With a project, defining and refining the scope of work is a major part of the job. How do programs and projects relate? A government program resembles a product line or line of business in the world of commercial enterprise. Programs are about producing benefits or outcomes. Projects typically involve the production of outputs that contribute to the delivery of benefits. Producing outputs—widgets, benefit checks, bridges, and so forth—is one thing; producing outcomes or benefits to consumers or the public at large is an entirely different matter. Program benefits cannot be managed or evaluated on a project-by-project basis. Projects, however, are more readily managed and evaluated. Good program management uses projects, but always focuses on the larger goals of ensuring the continuous flow of benefits to customer and

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organization alike. Figure 11.9 illustrates how programs and projects fit into the overall pattern of policy production. Figure 11.9 Programs and Projects: Where They Fit

Agency

Program

Project

Contractor (Outsource)

Program activities are often divided into projects, which, in turn, may be performed by contractors or partners. While projects are often outsourced, public agencies can also perform ‘in-house’ projects. Finally, and less commonly, agencies can outsource entire programs to contractors. Table 11.3 (see next page) lists some of the different functions of program versus project managers. Programs deliver ongoing streams of benefits to the public. Projects turn the delivery of program benefits into measurable, manageable packages. Project managers focus on getting the work done. Program–project relationships are becoming the standard form of the provider–deliverer relationship in the policy production process. Both private industry and government have adopted project management techniques for the same reason: the capacity to control the cost, schedule, and outputs of production. “Projectization” facilitates accountability. The skilled project manager should be able to plan, track, and evaluate every project input, throughput, and output in both time and space. 1 1 . 1 0 P R O G R A M E VA L UA T I O N How do you know if a program is successful? You conduct a program evaluation, as shown in Figure 11.5. “Program evaluations are individual systematic studies conducted periodically or on an ad hoc basis to assess how well a program is working. They are often conducted by experts external to the program, either inside or outside the agency, as well as by program managers.”27 Program evaluations are planned research projects conducted for the purpose of answering specific questions about program performance. Program evaluations are: • • •

Systematic—they apply standardized research methods Retrospective—they involve the empirical assessment of past events Useful—designed to provide information for future action28

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Table 11.3

Program Versus Project Management Program Manager

Project Manager

Provides policy and broad program direction.

Gives the program manager recommendations on technical performance, cost, and schedule requirements for the project.

Establishes and justifies the need for projects within the program.

Develops the project execution plan.

Defines and communicates program requirements Communicates status and planning information to and project objectives to the project manager. program managers and other participants and stakeholders. Serves as the principal interface with Congressional staff, other agencies, and Department Headquarters on project issues, and communicates status of issues to project managers.

Ensures technical objectives are accomplished.

Notifies Congress when changes to project baselines are expected to exceed Congressional thresholds.

Establishes and controls work scope.

Aligns program and projects with agency mission, goals, and objectives.

Develops annual budget requests for projects and coordinates development with program managers.

Ensures compliance with applicable statutory requirements affecting program operations.

Plans, implements, and reports on compliance with statutory requirements.

Source: United States Department of Energy. Good Practice Guide GPG-FM-014, Program/Project Relationships (Washington, DC, March 1996).

Although the literature on program evaluation is voluminous, the GAO identifies four different kinds of program evaluations. • A process evaluation “assesses the extent to which a program is operating as it was intended. It typically assesses program activities’ conformance to statutory and regulatory requirements, program design, and professional standards or customer expectations.” • An outcome evaluation “assesses the extent to which a program achieves its outcome-oriented objectives. It focuses on outputs and outcomes (including unintended effects) to judge program effectiveness but may also assess program process to understand how outcomes are produced.” • An impact evaluation “assesses the net effect of a program by comparing program outcomes with an estimate of what would have happened in the absence of the program. This form of evaluation is employed when external factors are known to influence the program’s outcomes, in order to isolate the program’s contribution to achievement of its objectives.”

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• A cost-benefit or cost-effectiveness evaluation compares “a program’s outputs or outcomes with the costs (resources expended) to produce them. . . . Cost-effectiveness analysis assesses the cost of meeting a single goal or objective, and can be used to identify the least costly alternative to meet that goal. Cost-benefit analysis aims to identify all relevant costs and benefits, usually expressed in dollar terms.”29 Unfortunately, program evaluations are costly research projects conducted on special occasions or in response to external demands. Though they constitute the final step in the program design process, program evaluations are rarely done on a regular basis. They provide little help to the program manager in everyday program operations. 11.11 PERFORMANCE MEASUREMENT How then, do you measure and manage program performance on a continuing basis?

MINI-CASE 11.2 Measuring Customer Satisfaction The federal government now measures public satisfaction with policy programs and government websites. In annual surveys, the federal government seeks information from the public about program performance. It uses an instrument, the American Customer Satisfaction Index (ACSI), to determine which programs best serve the public. The ACSI is a survey administered by the National Quality Research Center at the University of Michigan Business School to approximately 16,000 respondents who are asked to assign a grade to programs provided by approximately thirty federal agencies and sixty-four departments. The results create a type of report card for federal programs. In 2005, the top scorers were the Railroad Retirement Board at 90 percent followed by the U.S. Mint at 88 percent. Not surprisingly, the IRS was near the bottom with an aggregate score of 64 percent, though individuals filing electronic returns rated the IRS more highly at 77 percent. Typically, those federal programs imposing burdens, as opposed to distributing benefits, tend to rank at the bottom of the surveys. Interestingly enough, the federal government programs surveyed tend to score higher than local government agencies, though this may be an artifact of the programs selected for analysis. Such data can provide important feedback to administrators charged with improving program design and delivery. ACSI also surveys private industries, and the comparison with government results is interesting. Although public expectations for federal government services remain low, customer satisfaction with the quality of government service is comparable to that with private sector services. And satisfaction with government services has risen faster than with private industry since 1999. The focus on results in government appears to be paying off. Source: www.theacsi.org/government.htm

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11.11.1 Background The idea of performance management has plagued policymakers and policy analysts alike since the rapid proliferation of programs as a technology of policy production in the 1950s and 1960s. The first and most obvious choice was to manage programs by managing the money they spent—that is, to use the technology of budgets (see chapter 14) as the primary, if not exclusive, means of controlling programs. Before the era of modern information technology, just about the only thing policymakers could measure and monitor with any sense of confidence was the flow of dollars. Since you can only manage what you can count, and in the 1960s and beyond you could only count dollars in any systematic fashion, program management became the province of accountants and economists. From the 1960s through the 1980s the OMB in the executive branch experimented with an alphabet soup of different techniques for managing programs by managing program budgets or spending plans.30 Besides being focused on finances, these techniques all shared two major features: • •

They focused on program inputs and activities to the neglect of program outputs and outcomes They were largely ephemeral creations of the executive branch with little or no legislative support on the part of Congress

These two features were intimately related. Legislators get reelected based on their ability to deliver goods and services to constituents, not on the technicalities of program accounting. For legislators—and the public—the bottom line is what gets done, not whether or not it costs more than expected. As we shall see in chapter 14, budgeting is a central technology of program management, but it cannot replace program management per se. By the late 1980s three important factors had changed. In the first place, the hard technologies of computing and communications have made systematic data collection and analysis both possible and cost-effective. Until the 1980s, the work of frontline bureaucrats was tracked on pieces of paper stuffed in file cabinets in local offices. Turning these widely scattered piles of paper into usable program information was difficult at best. Program evaluators could do it, but at great expense. Desktop and—more recently—handheld computing have changed everything. Work done on a computer is manageable by computer. Just as Wal-Mart tracks store inventories on a daily basis, program managers can monitor policy outputs on a weekly basis. Moreover, communications technologies combined with computers have made it easier to track program and policy outcomes. Video cameras, cell phones, e-mail, and the like make collection of data on social attitudes and behavior much less expensive. Social outcomes have become far more transparent. Therefore, program managers have access to volumes of data unimaginable to their predecessors a mere two decades ago. Second, over the course of the 1970s and 1980s program evaluators devised ever more sophisticated techniques for monitoring and measuring program outputs and outcomes. They refined both qualitative and quantitative indicators for studying the individual, social, and environmental outcomes of program activities. When combined with the analytical power of computers, these social science research methodologies turned mountains of raw data into useful program information. Finally, the accounting profession had broadened its horizons to include the measurement and tracking of outputs and outcomes. In the early 1990s, the Government Accounting Standards Board (GASB), a private organization created to “establish and improve standards of accounting and financial reporting for state and local government” began issuing reports and guidelines

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on Service Efforts and Accomplishments (SEA) reporting for government agencies.31 At the same time, the Department of the Treasury, the OMB, and the GAO established the FASAB to recommend adoptions of similar standards for federal agencies.32 By the beginning of the 1990s, the accounting profession had embraced the measurement and management of program inputs, activities, outputs, and outcomes. Both the tools and methods were in place to manage program performance as well as program budgets. 11.11.2 The Government Performance and Results Act Framework As might be expected, innovation in the use of performance measurement bubbled up from local and state governments. During the 1980s, the city of Sunnyvale, California, implemented a comprehensive results-based planning and management system. In 1989, the former mayor of Sunnyvale, John Mercer, went to work for the Senate Governmental Affairs Committee, where he pushed relentlessly for legislation creating a national system of performance measurement. In 1993, with bipartisan support, he succeeded. The Government Performance and Results Act of 1993 (GPRA) created a three-part system for performance planning and management. In particular, the act requires all executive departments, independent agencies, and governmentsponsored enterprises (GSEs) with annual outlays exceeding $20 million to regularly provide the following information: • • •

A strategic plan covering five or more years, with updates every three years beginning in September 1997 An annual performance plan, setting forth measurable goals and requesting resources for the fiscal year in their budget submission to OMB, beginning in FY1999 An annual program performance report due within six months of the close of the previous fiscal year, beginning in March 2000. An annual report is to review program successes and failures in meeting performance goals and to explain why goals were not met, the appropriateness of scheduled tasks, and the feasibility of program goals.33

While GPRA reporting is an agency requirement, the information gathered to populate these reports is based on agency programs. As set forth in current OMB guidelines, these reports must include information describing program activities in terms of: •

• • •

•

General objectives—a description of a more specific level of achievement than a general goal. Included in the strategic plan, objectives are paired with a general goal and used to help assess whether a general goal was or is being achieved Outcome goals—a description of the intended result, effect, or consequence that will occur from carrying out a program or activity Output goals—a description of the level of activity or effort that will be produced or provided over a period of time or by a specific date Performance goals—a target level of performance expressed as a tangible, measurable objective, against which actual achievement can be compared. This goal is included in the annual performance plan. Performance goals can be outcome or output goals Performance indicators—a particular value or characteristic used to measure output or outcome and associated with performance goals in the annual performance plan34

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As is apparent, the GPRA framework corresponds to the program logic model shown earlier in Figure 11.6. Indeed, logic modeling is an essential, if not indispensable, tool for building a performance measurement system. Although details may differ, all performance measurement systems rest on the same foundations. 11.11.3 Performance Measures Applying a performance management framework like the GPRA is a complex and complicated business. Two fundamental challenges confront every performance management system builder. 11.11.3.1 The Aggregation Challenge In the first instance, every performance measurement system involves a hierarchy of goals or objectives. At the top or agency level—in the case of GPRA—are the general goals of an agency. For example, the general goals of the president’s Office of National Drug Control Policy are reductions in both the supply of and demand for illegal drugs. However, these general goals must be broken down into more specific goals and objectives of the programs that contribute to the fulfillment of agency goals. And, in turn, program goals must be further subdivided into activity or project goals. Goals and indicators must cascade down or aggregate up from the bottom as shown in Figure 11.10.

Figure 11.10 Cascading Objectives and Performance Measurement

Policy Agency B

Agency A

Agency Program

Project

Program-,

Program2

Program;,

Unfortunately, nesting objectives (or indicators) is no easy task. In reality, lower-level objectives can serve multiple higher-level objectives, and objectives at any level may work at cross purposes. Every pyramid of objectives and indicators is a house of cards.

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11.11.3.2 The Causal Challenge The second challenge is to establish the relationships between objectives and indicators and between the different kinds of performance indicators. The relationship between objectives and indicators is only as good as the logic model that links the two halves of performance measurement. Figure 11.11 offers a simple logic model for an antismoking campaign, and the relative cost and quality of the various types of performance indicators. Figure 11.11 Performance Indicators and Data Cost and Quality

INPUTS

Budget Resources Work

ACTIVITIES Design & test ads Produce ads Purchase commercial

OUTPUTS

Ads run on TV

SHORTTERM

Viewers see ads

time Weak Low

RELATIONSHIP TO ULTIMATE OUTCOMES

O U T C O M E S MEDIUMTERM Viewers attitudes changed Viewers smoke less

• Lower incidence of smokiing related disease

Strong

COST TO OBTAIN DATA

Low

LONGTERM

UNCERTAIN CAUSE & EFFECT

High High

Adapted from Mark Schacter, Not a “Tool Kit.” Practitioner’s Guide to Measuring the Performance of Public Programs (Ottowa, Canada: Institute on Governance, 2002).

While it is relatively easy to obtain performance data about program inputs, activities, and outputs, it is difficult to establish a causal relationship between these indicators and program outcomes. In contrast, getting valid data about program outcomes is relatively costly, and the causal relationships between outcome indicators remain uncertain. The longer the time horizon, the greater the impact of external factors on program outcomes. The causal challenge produces four dilemmas for the designers and managers of performance measurement systems.35 1. Perverse incentives. Poorly designed performance indicators can reward behavior—on the part of both program staff and beneficiaries—that results in undesired outcomes. Program staff will “game” performance indicators for their personal benefit. Thus, school administrators and teachers in Houston, New York, and other cities have been caught encouraging students to drop out of school so that their scores on standardized exams do not lower the averages for their school and expose the school to sanctions for poor performance. More generally, the relationship between indicators and outcomes is always tenuous, and there is always the risk that performance indicators will produce unintended results. 2. The attribution problem. As you move from short-term to long-term outcomes, it becomes increasingly difficult to claim responsibility for program success or failure. Antismoking ads are but one of many factors that influence people’s propensity to smoke. You cannot hold a program manager accountable for outcomes that are largely beyond his or her control. “This is the most difficult challenge you will have to deal with as you develop your performance measurement framework. What level of outcomes is it reasonable to attribute to your program? At what point on

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the logic model does your accountability end? How do we explain and justify to stakeholders our decisions about where to ‘draw the line.’ Dealing with the attribution problem requires thoughtful answers to these questions.”36 3. Significant results vs. significant change. You may be able to demonstrate significant short-term program outcomes, but these results may mean little over the long term. You may be able to influence smoker attitudes for days or weeks, but significant changes in smoker behavior take months or years to unfold. While you can establish a significant causal relationship between outputs and short-term outcomes, this relationship says little about program success or failure. 4. Data cost vs. data quality. Tracking and measuring program inputs, activities, and outputs is relatively inexpensive. Unfortunately, the data tell you little about program outcomes. Outcome data, in contrast, are costly. Getting valid measurements of program-related changes in the attitudes and behavior of the target population typically requires surveys, focus groups, or other methods of program evaluation. Performance measurement, therefore, involves a series of trade-offs. No system is perfect and every system involves compromise among competing values. Mark Schacter identifies five qualities of performance indicators and the ideal value for each quality: • • • • •

Significance of the indicator in relation to long-term outcomes (“high” is preferred) Cost of data collection (“low” is preferred) Level of program control over measured phenomenon (“high” is preferred) Risk of creating a perverse incentive (“low” is preferred) Significant change on an annual basis (“high” is preferred)37

The goal of performance measurement is to enable program managers to tell a credible and persuasive story about what a program accomplishes. The program logic model serves as the plot, while performance measures are the characters and events that populate the story of what difference a program can make. 11.11.4 Performance Measurement and Politics Performance measurement is a recent and rapidly evolving addition to the tool kit of program management. Like many tools, performance measurement serves different masters with different aims and interests. Some of the oft-stated goals of performance management include: • • • • • • • • •

To help clarify program goals and objectives To help programs learn how to accomplish goals more effectively To support strategic planning by linking broad statements of goals to specific operational outputs and outcomes To monitor program operations and make continuous improvements To support budgetary planning and resource-allocation processes To help motivate public servants To enable both policymakers and citizens to make better-informed decisions about public programs To restore public confidence in the effectiveness of government programs To strengthen internal administrative and external political accountability38

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Given the multiplicity of aims and stakeholders, performance and its measurement are as much political as technical enterprises. This is particularly true for performance measurement in the public sector. Performance will always remain a contested and evolving concept. Securing agreement on what constitutes performance, especially successful performance, is made more difficult by the nature of public sector activity. Most public programs have more than one goal and the goal statements tend to be vague, changeable, controversial, and, at times, conflicting. Under these conditions, performance is a multi-faceted and subjective phenomenon. There are usually numerous stakeholders—that is, individuals and organizations who can affect or are affected by public programs—and therefore there can be widely divergent perspectives on what constitutes performance. Unlike private firms for which profits and returns on investment provide widely accepted measures of success, for public organizations the criteria of success are many and controversial.39 As a result, performance measurement systems have come to play a symbolic role in the political process. “Appearances matter almost as much as reality. The adoption of a performance measurement system, often accompanied by considerable fanfare, is itself meant to send the reassuring message that in the future government decision-making will be based more on objective evidence about longer-term impacts than on short-term political calculations. The implication is that we can get ‘the politics’ out of program management, allowing design and delivery of programs to be based upon well-informed professional judgments.”40 Nevertheless, GPRA and similar performance measurement systems have indeed changed the language of public policymaking in the first decade of the twenty-first century. Although the congressional authors of GPRA have failed to make use of the system they created, performance measures and the logic models that support them have become a part of the organizational life of federal, state, and even local bureaucrats. While implementation of this new paradigm is inevitably slow, painful, and uneven, the potential implications for both policymaking and policy analysis are incalculable. The practice of policy production will never be the same. 11.12 PROGR AM EVOLUTION Programs evolve. With every budget or authorization cycle, legislators and executives have the opportunity to review program execution and revisit program design. Occasionally program sponsors kill them outright, but more often programs are merged or folded into other programs. More important, programs beget other programs. The first solution to a problem is almost always incomplete and gives rise to additional solutions to fix unmet needs, or new problems generated by new solutions Generally speaking, citizens want more benefits, not less, and successful programs produce spin-off programs, like so many television series. Figure 11.12 (see next page) shows the generation of similar, yet increasingly miniaturized, programs over time. Policy domains gradually expand as programs give rise to new programs and these new programs create even more programs. As Aaron Wildavsky has eloquently argued, policy programs are self-replicating systems.41 Major programs generate smaller, contiguous, self-similar programs that follow a pattern of growth much like that of a Mandelbrot set.42 This nonlinear growth pattern produces a seemingly counterintuitive effect—policy programs proliferate at a much faster rate than the policy domain that they populate and define. But, new

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Figure 11.12 Evolution of Policy Programs

.4

Program 1

Program 1

Program 1 2

2 '3

to

ti

t2

programs are preshrunk to work around the production interests of existing programs and to fit into the more slowly growing popular perceptions of the boundaries of a given policy domain such as health care, public housing, transportation, and the like.

FEDERAL. FEDERAL

FEDERAL DEPT. of

FEDERAL FEDERAL MAKING

FEDERAL FEDERAL FEDERAL FEDERAL FEDERAL FEDERAL

DEPT. OF FEDERAL FEDERAL FEDERAL FEDERAL FEDERAL FEDERAL FEDERAL FEDERAL FEDERAL FEDERAL FEDERAL

FEDERAL

MAKING GOVERNMENT

Source: NON SEQUITUR © Wiley Miller 2004. Dist. by Universal Press Syndicate. Reprinted with permission. All rights reserved.

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The interplay between policy domains and policy production is subtle and important. • • •

Policy programs and policy problems grow synergistically. The successful use of specific solutions accelerates the proliferation of the former and the expansion of the latter. Policy programs actually foster the proliferation of policy problems. The rapid growth in the number of policy programs places severe population pressures on successful policy designs. Successful solutions are scarce, though cloneable. Expert policy designers are even scarcer and they cannot—as yet—be cloned. The primary vectors of innovation in policy production are individual experts. Experts carry their expertise with them as they move, like modern-day journeymen, from one program, sector, and domain to another.

The self-replication of ever-smaller policy programs produces demands for simpler solutions. Miniaturized programs require miniaturized designs. Unfortunately, not all policy solutions are scaleable. When affirmative action program managers substitute quotas or separate admissions for complex, multiattribute rating systems, they simplify their decision algorithms at the risk of public controversy. Bite-sized policy programs tend to produce condensed and often ineffective policy solutions.

MINI-CASE 11.3 Reconciling Benefits—Prescription Drugs and Food Stamps Congress added a prescription drug benefit to Medicare in the fall of 2003. Although the full program did not become effective until 2006, the legislation authorized a $600 interim benefit in the form of a discount card to help reimburse out-of-pocket drug costs for the neediest citizens when they purchase prescription drugs. In the spring of 2004, as seniors began to sign up, a major glitch threatened these transitional benefits. Those low-income elderly who used their drug benefit cards saw their food stamps reduced by the value of the card. Two important programs, food stamps and Medicare prescription drug benefits, were at loggerheads. Eligibility for food stamps depends on need. It is calculated according to a formula that weighs monthly income against expenses, including the costs of shelter, health care, and outof-pocket drugs. The U.S. Department of Agriculture (USDA), the agency responsible for the food stamp program, issued a statement on March 10, 2004, that anyone using the drug card would find their food stamp allotment reduced by the amount received in drug benefits, up to the $600 covered by the interim Medicare program. A few weeks later, food stamp officials in various states dutifully followed suit and announced changes to their formulas to comply with USDA policy. Once seniors began using their new discount cards in June 2004, they began to be notified about reductions to their food stamp benefits. Predictably, a furor ensued. A few days later, the USDA backed off its position and reluctantly issued a press release saying it would issue policy guidance clarifying its new position that food stamp applicants should experience no impact on their eligibility or allotment because of the new drug benefit. How exactly the formulas for calculating eligibility will be reconciled may take longer to figure out, as the Departments of Health and Human Services and Agriculture attempt to retrofit two overlapping and contradictory sets of eligibility requirements.

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11.13 CONCLUSIONS Policy programs and program management are twentieth-century inventions. The idea that government agencies could house multiple programs or lines of business or that policy programs could cut across multiple agencies would have seemed bizarre to public policy professionals just a few generations ago. Even during the New Deal era, the welter of new policy initiatives meant the creation of an alphabet soup of new government agencies. While new government agencies, like the Department of Homeland Security, are still being created, their birth is complicated, laborious, and usually painful. Programs, however, can be created virtually at will and have proliferated almost beyond anyone’s ability to count. Nevertheless, in the first decade of the twenty-first century, technologies of program design and management are gradually being put into place. Just as the Administrative Procedures Act of 1946 brought order and predictability to the chaos of New Deal agency building, the Government Performance and Results Act of 1993 and related legislation are beginning to bring programs and program management under control. In this chapter we have presented the outlines of an emerging approach to program design and evaluation that will eventually make program managers more accountable to legislators, executives, and the American public.

CASE STUDY Redesigning Welfare Now to enter the world of policy programs and the alphabet soup of federal bureaucratese! In 1996, Congress ushered in a new era in welfare policy with passage of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA). This legislation, decades in the making, replaced another federal program, Aid for Dependent Children (AFDC), passed in 1935, that had supported poor families with children through direct cash assistance. In its place, PRWORA created Temporary Assistance for Needy Families (TANF), a new block-grant program giving states greatly increased responsibilities for developing their own approaches to helping poor families and guaranteeing states a steady source of federal funding. PRWORA also sought to create incentives for TANF to collaborate with other welfare-related programs, including Supplemental Security Income (SSI) for children, food stamps, child support enforcement, child care, and child nutrition. The legislation sets clear goals for the TANF program: • • • •

Five-year lifetime limit on eligibility for cash assistance Work requirements for welfare recipients to maintain eligibility for assistance Financial penalties for states that fail to reduce the proportion of families on cash assistance Requirements for states to maintain their levels of funding commitment

TANF exchanges the carrot of a steady flow of federal money to the states, via block grants, plus limitations on the federal role in administering welfare, for the stick of greater state accountability in producing results. It is vertically organized, despite granting states greater freedom to develop their own program approaches, and employs its regulatory authority to set standards and requirements for state eligibility and reporting as well as for auditing the flow of funding. So why reform after six decades? In part, because of ever-growing welfare rolls. In 1936, during its first year of operation in the depths of the Depression, the new AFDC program served 147,000

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families, or less than 1 percent of all American families with children. By 1994, AFDC was serving about 5 million, or 15 percent of all families with children. Much of this growth occurred between 1963 and 1973, as the War on Poverty and the civil rights movement slowly extended benefits to previously excluded populations. Relentless growth in caseloads then continued, propelled by changing social norms, immigration, and periodic recessions. In the five-year period (1989–94) preceding PRWORA, welfare caseloads rose by 34 percent. Welfare reform exemplifies recent trends in federal programs, where various types of social services form the subject matter of policy production. It illustrates fundamental problems with program design, that is, how to improve the delivery of federal program benefits to local populations living in very different communities and circumstances across America. The solution requires sharing the burden of program production with state and local partners. Such issues conditioned the design and administration of the new TANF program. From the perspective of the federal government, cost sharing requires constant vigilance to ensure that state partners step up to the fiscal plate. This meant a preoccupation with questions of architecture, regulation, monitoring, and accountability for federal program designers. It also meant reliance on outsourcing for the actual delivery of benefits to families in need, with responsibilities delegated to state and local agencies, both public and private. The federal government outsourced direct control over program administration and production activities to states but retained authority if the states failed to demonstrate results. This bifurcation of responsibilities between federal- and state-level programs creates its own set of dynamics. States push for greater leeway to tailor programs to widely differing populations and demands, whereas federal program managers are motivated to promulgate rules, ensure compliance, and standardize and document results. This constant struggle for authority results in underlying tensions. These dynamics are further exacerbated by the ups and downs of unpredictable economic cycles that, in terms of welfare, wreak havoc on the lives of our most vulnerable populations. Such tensions are apparent in the history of the TANF program to date. As advertised by the politicians, welfare, as we knew it, may have ended. But, whether TANF meets its objectives remains a work in progress. Certainly, programs to help poor families in need will not end in the near future. The real question is whether we have improved the design of such programs. Program Architecture: Organizing TANF at the Federal Level TANF, the program most associated with the 1996 welfare reform initiative, is a block-grant program initially providing a $16.5 billion per year fixed stream of federal funding to the states. States are then required to add funding of their own amounting to at least 75 to 80 percent of the total each spent for welfare as of 1994. In terms of architecture, TANF is a program housed in the Office of Family Assistance (OFA), a third-level bureaucracy in the Department of Health and Human Services (HHS). TANF is the major program within OFA, which also includes four housekeeping subunits responsible for state policy, state and territorial management, tribal management, and data collection and information. OFA is one among several units within the Administration for Children and Families (ACF). ACF is a major second-level organizational unit within HHS, a cabinet-level department of the federal government. ACF houses several federal programs for children and families, most of which are involved in some way with various activities for low-income families. Many of these programs are being reorganized along the lines of TANF, that is, having centralized federal program management functions, organized vertically, that are separate from the delivery of policy outputs, which are

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often outsourced to states and then to public and private contractors. In its own words, ACF is responsible for implementing parts of twenty-two separate statutes authorizing more than sixty different programs funded through thirty-five different budget activities. For purposes of determining accountability under the GPRA, these are consolidated into fourteen major program areas that must report yearly on progress toward meeting program objectives. ACF is headquartered in Washington, D.C., but also operates ten regional offices. In 2004 it oversaw more than $45 billion in grants made to other governmental and nongovernmental organizations and delivered technical assistance through its staff of 1,500. ACF administers several well-known programs, also grouped by offices, plus the usual housekeeping functions. In addition to TANF, these include programs for persons with developmental disabilities, refugee resettlement, child support, child care, Head Start, child welfare, youth programs, social services and community services block grants, family violence prevention, low-income energy assistance, assets for independence demonstration projects, and several specific efforts to assist Native Americans. By design, TANF’s primary responsibilities involve distributing and monitoring block-grant funding to states. That means that much of the program work at the federal level involves figuring out how to get money to the states and then how to assess the impact of such funding. Such work is primarily regulatory and involves developing detailed rules and guidelines and then monitoring compliance. Before states may receive federal funds, they must be eligible. Practically, states have to submit plans to TANF staff outlining how funds will be spent to meet the standards set in the legislation and by OFA personnel. To be eligible, states are required to prove that local governments and organizations have been involved in program planning. Once submitted and approved, state plans remain effective for a twenty-seven-month period, after which they go through the renewal process again. The TANF program began operation in July 1997, although final program rules governing the basic framework for providing benefits did not take effect until October 2000. States are encouraged to adapt their TANF plans to local and regional needs. Indeed, OFA is required to review state plans for completeness, but not for content. Yet, this is somewhat misleading. State plans must conform to numerous requirements set forth in the legislation and in subsequent program regulations. These specify program objectives, time frames, standards, and outputs and include: • Work requirements that recipients be employed as soon as ready but no later than two years after beginning to receive cash assistance. TANF sets state targets for the employment of those receiving benefits—25 percent for one-parent and 75 percent for two-parent families in 1997, rising to 50 and 90 percent, respectively, over a five-year period. Penalties, starting at 5 percent of grant funding, are imposed on states not meeting work requirement targets. • Five-year time limits on eligibility for families receiving federally funded cash assistance. States may optionally extend assistance beyond the time period, but only with state funds, and then not beyond 20 percent of their total state caseload. Again, any failure to comply triggers a 5 percent penalty. • Rules about participation in work activities that count toward meeting work requirements. Such activities are limited to unsubsidized or subsidized employment, on-the-job training, job searches (six weeks total), vocational training (twelve months), job training or education directly related to work, or satisfactory secondary school attendance. No more than 30 percent of those meeting the participation rates may be involved in training activities. State grants are penalized according to the degree of noncompliance for those refusing to participate in work or work activities without good cause.

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• Maintenance of effort (MOE) requirements that states not reduce their proportion of shared costs in funding programs for needy families. States must contribute an “applicable percentage” (75 to 80 percent) of the state’s (nonfederal) AFDC expenditures as of 1994. Contingency and “rainy-day” funds are available for states with economic problems. Penalties for not meeting MOE requirements are based on the proportion of underspending and entail the loss of Welfare to Work funds. Bonus funds are available to reward high-performing states. • Reporting and compliance requirements to ensure states submit data to OFA as scheduled, participate in a federal income and eligibility verification system, and monitor programs for fraud and abuse. Again, penalties in the form of a percent reduction in block-grant funds are imposed for failures to report.43 In terms of daily routines, senior program managers work with multiple stakeholders affected by the TANF program, especially state-level managers, legislators skeptical about this reform, and federal managers in other federal programs serving similar populations. Internally, most OFA staff is involved in two types of work—compliance reviews and other reporting functions, as well as negotiations with other program personnel in federal or state offices. Their assignments primarily involve monitoring the paperwork created by regulatory requirements, working with state officials, certifying eligibility, refining guidelines and other publications to explain these provisions, and reviewing and analyzing the information reported by states to ensure compliance and preserve eligibility of the states for continued funding. At the outer limits of program administration are negotiations about questionable practices or the imposition of penalties for noncompliance. Federal TANF staff has little, if any, contact with those actually receiving the benefits or caseworkers in local offices. Instead, their work primarily involves making the arrangements necessary to transfer funds to states and overseeing compliance. Program Delivery: In the Trenches with Wisconsin Works The benefits of the TANF program reach families in need only through chains of state-level intermediary agencies and programs, eventually leading to local offices and personnel who actually do the work of welfare in the field, that is, the caseworkers dealing with poor families. By design, these chains vary widely both between states and within states so as to accommodate local and regional differences. Funded in part with TANF monies, most state agencies usually perform the role of second-level intermediary program management, designing and overseeing state-organized programs that oversee local third-level operations that make the actual decisions about client eligibility and distribute various forms of assistance. Again, state program management also performs functions that are primarily hierarchical, reliant primarily on regulation and outsourcing, but not engaged in the direct delivery of benefits. Most state programs simply transform block-grant funds into service contracts to be negotiated with many different local entities to carry out the work of delivering benefits and programs in places where needy families live. The design of the TANF program means that we must use a specific state as an example to illustrate this second stage of how welfare reform is delivered locally. Wisconsin has been a leader in welfare reform. Beginning in 1987, it experimented with a series of efforts to limit growth in its welfare rolls. It adopted generous, but rigidly controlling approaches to helping needy families. Over the next decade, the state drove its caseload down by moving adult recipients into employment—an approach termed workfare. Wisconsin succeeded at the same time as welfare rolls in most other states soared by a third. In 1997, when TANF became

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law, Wisconsin created Wisconsin Works (W-2), an approach requiring only minimal changes from its earlier program. It reassigned its welfare division from the Department of Health and Human Services to the Department of Industry, Labor and Human Relations. W-2 sets very specific objectives and requirements. To establish eligibility for benefits, W-2 requires all applicants to work in some way. Those most employable must find jobs in the private sector. In return they receive child care and other support services. These benefits are also extended to all families employed but earning less than 115 percent of the federal poverty level. Those least employable must participate in remediation as well as work in government jobs up to forty hours weekly. Work requirements are imposed immediately, concurrent with receiving benefits, rather than at some point after beginning assistance. In exchange, Wisconsin’s benefits are generous. Its cash assistance payments are among the highest (2003) in the nation. Also included is subsidized child and health care for all families under 185 percent of the poverty line, whether or not they receive cash assistance. W-2 funds numerous services for families in need, from case management, job training, and transportation assistance to grants for vocational training. In addition, TANF funds are used to improve collaboration across many programs by supporting an earned-income tax credit; child welfare, juvenile justice, and mental health programs; services for the developmentally disabled; substance abuse treatment activities; and performance incentives for local contracting agencies actually delivering services to these clients. Unlike TANF, which prohibits the use of federal welfare funds for legal immigrants, Wisconsin sets aside state funds to pay cash assistance to recent legal immigrants. On the other hand, Wisconsin strictly enforces compliance with its eligibility requirements. Wisconsin “pioneered an intensive style of paternalistic social administration”44 with close oversight of recipients by case managers. Cash benefits are reduced for each hour that a family member fails to attend an assigned activity. Substantial numbers of families have lost income for rule infractions, 4,200 in 1997 alone. As specified under TANF, families who receive W-2 monthly cash assistance payments for a total of five years are ineligible for further receipt of cash assistance. The Wisconsin program is the product of a long learning curve involving continuous tinkering with the details of program design and “of masterful government administrators.”45 With a decade of prior experience, state-level officials assembled a program that borrowed from numerous local initiatives and reforms. For example, work first, rather than the more common training first approaches, were initially tried by program managers in Kenosha County, whereas diversion, the practice of requiring those eligible for aid to gain financial support through any means other than welfare, was pioneered by caseworkers in Sheboygan County. There, applicants were provided only with job searching services before being required to work. Finally, the state added funding to strengthen local programs by investing in their staff and facilities and by reducing welfare caseloads. Despite this, inadequately coordinated reporting systems and improperly applied penalties for rule infractions remained problematic.46 Organizationally, both federal and state funds for the W-2 program are obligated to a single state agency. That agency is itself an intermediary, arranging and monitoring contracts with over seventy local public and private agencies to perform the actual work of determining eligibility, distributing cash assistance, and delivering services to local program participants. Such contracts are performance-based and renegotiated every two years. Wisconsin insists that all types of entities, both public and private agencies, compete for contracts to provide services. Such competition led to the ouster of several public welfare departments, including Milwaukee and several other counties. For example, in Milwaukee, five proprietary and nonprofit agencies were awarded W-2 contracts to deliver W-2 services to local families. Such privatization may actually have strengthened state control over reform.

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W-2 is sometimes touted as the “poster child” for welfare reform. Since 1996, the number of Wisconsin families on cash assistance has declined by 80 percent, from 74,000 to less than 16,000 families—the largest drop for any urban state. It is also one of the states with the highest level of workforce participation among families receiving welfare. Further, Wisconsin’s savings in cash assistance more than offset added expenditures to expand its other programs, such as child care and medical assistance. Wisconsin received performance bonus funds under the TANF program for its successful program outcomes. Finally, the budget crisis brought on by the recession of 2001–2003 stabilized, but did not dramatically reverse, the numbers of families receiving welfare in Wisconsin. So, how have TANF program funds been used in Wisconsin? Basically, Wisconsin has used about half of its yearly TANF grants to replace state funds used for welfare. With decreasing caseloads and state funds freed up by TANF monies, the state has complied with TANF’s maintenance of effort requirements in several ways. First, it has used its surplus TANF funds (about 15 percent of grant funding) to finance the state’s earned-income tax credit for the poor, replacing state funds. Second, the legislature has provided for expanded state subsidies in programs for child care, health care, job training and other efforts to help the working poor. Total state spending on the costs of programs for the working poor declined only marginally (4 percent) over the first four years of the TANF program in Wisconsin. This reflects dramatic declines in the state’s cash assistance programs but large increases in expenditures across the range of other programs for the poor. Combined state and federal spending on support for the working poor plus health care grew by about 2 percent, while state spending declined about 3 percent in real terms between 1996 and 2000. At the same time, the state’s share of total expenditures for welfare fell from 45 to 43 percent.47 Depending on their political perspective, commentators both praise and criticize Wisconsin’s reforms. Most, however, agree on the elements necessary to carry out such major changes in program direction. “It is institutional capacity—both political and administrative—that largely determines whether these programs succeed. That is especially true when programs seek to link benefits to requirements, and above all if they adopt an intense paternalistic style with close oversight of clients. For then, policy is literally embodied in political will and administration.”48 Program (re)design and administrative capacity are the keys to understanding the reorganization of welfare reform in Wisconsin. Program Performance: Policy Results The bottom line of policy production is results. So how has the TANF program performed over its brief career? Welfare reform appears to have produced some highly favorable short- and medium-term outcomes. Not quite seven years after enactment, 2,032,157 fewer families were receiving TANF cash benefits, a decrease of 54 percent. Counted another way, a total of 4,955,479 individuals received some form of TANF benefits in June 2003, 60 percent fewer than in August 1996. Moreover, reform benefited all groups broadly, as poverty rates between 1996 and 2001 fell from 27.7 to 23.1 percent for blacks, from 29.6 to 24.9 percent for Hispanics, and from 9.8 to 7.9 percent for whites.49 Because the culture of program administration for welfare has changed in many places, many see TANF as a long-term success. Most states now require welfare recipients to move toward selfsufficiency within a defined time period and penalize those not making progress toward this goal. For welfare recipients, benefits now come with real costs. Program services have been expanded, and staff pressure clients to work and then closely monitor compliance. Immediate job placement and work experience has replaced training as the overriding concern for most programs. Moreover,

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large decreases in spending on cash assistance have freed up additional budget resources for states to strengthen support to other programs helping the poor. Indeed, this is what has happened, as spending on all programs for the poor increased—a goal of the TANF program. More than 40 million people in families with children now receive such non-TANF benefits, three times more than in 1994, and the highest proportion since the Depression.50 The new welfare system is bigger and serves more people—a fact made politically more palatable because recipients may now be viewed as worthier, as the working poor, rather than as freeloaders. Upon closer analysis, the good news masks more subtle realities. TANF was launched during economic boom times, when jobs were plentiful, and average real earnings, especially for low-wage workers, were rising. Studies suggest multiple reasons for declining welfare rolls: “the robust economy explains 15 to 25 percent of the decline; aid to the working poor 30 to 40 percent; increases in the minimum wage 0 to 5 percent; and welfare reform 30 to 45 percent.”51 Surveys of former welfare recipients indicate that 60 to 70 percent were employed at the time they left the rolls, with 60 to 80 percent of that group working full time, and the remainder, only part time. Some 20 to 30 percent of those leaving welfare eventually return to the rolls. By one estimate, about 50 to 60 percent of mothers leaving welfare are working regularly. Many leave welfare without taking jobs—a group about whom little is known. For some, the hassle factor may not be worth it, especially with other valuable benefits still available. State program administrators face new questions as welfare reform programs evolve. The fiveyear deadlines for eligibility took effect at the same time that the crippling effects of the economic downturn of 2001–2003 reduced state budgets and spending. In July 2001, welfare caseloads stopped declining and began to grow again, although the increases were relatively modest (10 to 20 percent). Whether states impose mandatory work requirements on single mothers who cannot find a job remains to be seen. The recession of 2001–2003 was relatively short-lived. Federal administrators also face changing circumstances. Predictably, TANF officials are preoccupied with two sets of questions. First are issues about the maintenance of effort provisions and whether states are contributing their share of the costs of welfare reform. Here, federal staff is deeply involved with detailed monitoring of state compliance with federal program requirements. Second are questions about states’ failures to contribute to a required rainy-day fund set aside as insurance to maintain their funding levels during periods of economic recession. Rainy-day funds are necessitated because of the design of the TANF program as a fixed-amount block grant, where states assume the burden of added funding for the unexpected costs of economic downturns.52 Both questions have preoccupied federal TANF officials—reflecting the bifurcated interests of a federal program dependent on the states to deliver benefits. Program Performance: Political Results A last set of results involves political judgments about the effects of welfare reform. Here partisan politics shape the future of the TANF program. Programs are periodically subject to reauthorization by Congress. For TANF, that review was first scheduled for 2002. Congress deadlocked over proposed changes and simply resorted to extending existing TANF provisions each year for four years until a compromise could be reached. The Republican administration sought to expand the TANF model to other federal programs that fund families in need so as to encourage states to unify and align these services in ways better adapted to local needs. Critics worried that further delegations of authority would increase gubernatorial and executive prerogatives at the expense of congress and federal administrators and permit states to reduce total benefits. Critics see the TANF program as having two fundamental

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design flaws: one, the potential for reducing federal funds for block grants in times of budgetary retrenchment; and the other, the transfer of direct responsibility for service delivery from federal to state governments. The eventual compromise did not the alter basic design of the TANF program and maintained its funding levels. It gradually increases work participation requirements and strengthens programs that assist those who have left welfare in sustaining their status in the workforce. It added $150 million for a Healthy Marriage Initiative component to ACF responsibilities, provided entitlement funding for child care, but reduced funding for child support and tightened requirements for collection from non-custodial parents. The most controversial change to TANF empowered the federal, rather than each state, government to make rules standardizing the definition of work. From the perspective of the states, this compromises much of their flexibility and discretion over program design and management. From the perspective of the second Bush administration, worried about states that define qualifying work loosely, as for example, participation in substance abuse treatment, the change serves to limit the potential for program abuse. The four year deadlock over reauthorization of welfare reform reflected ongoing divisions across American society. TANF has partially reframed the policy debate over welfare. Yet, symbolic issues, from marriage and abstinence to whether the poor are really better off just because they are working, continue to dominate policy debate in Congress and in the larger arena of public opinion. Ironically, the initial success of TANF did not calm the politics of welfare policy. Reauthorization was delayed by issues of policy design, especially those related to recalibrating the balance between federal and state authorities with each side perceiving losses or gains related to their interests. As for the American public, the problem of ever-growing welfare rolls, although in remission during recent periods of economic prosperity, ebbs and flows with events or crises that move the problems of the poor in and out of the public spotlight. Indeed, the publicity over the plight of the poor during the flood in New Orleans, rather than any breakthrough related to program management and design, probably moved legislators finally to reauthorize the TANF program after four long years of stalemate. Summary Program design is the core component of policy production. In the case of TANF, the statute itself dictated much of the design by mandating block grants and substantial freedom to states to adapt programs to state settings. Program architecture constrained design at both the federal and state levels, because federal and state program officials were primarily responsible for regulatory functions, while local entities engaged in the daily work of delivering benefits to families in need. What lessons about program design can be drawn from this case study of welfare reform? • First is that the federal, state, and local agencies involved in different areas of policy production play different roles. The policy benefit being provided influences how programs are organized. For example, national defense is almost exclusively addressed within the national government, whereas programs dealing with health, education, and social needs must be produced in conjunction with state and local officials. This introduces issues of decentralization and coordination necessitated by the multiple levels of government in our federal system. • Second is that clear objectives and measurable standards, as well as incentives for performance, are important. The program architecture for TANF provided a clear time frame and provisions for

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accountability. However, the program also had the good fortune to be initiated during a period of relative prosperity. • Third is that functions must be bifurcated when designing programs where governments (federal or state) seek to distribute benefits locally. Bifurcation often results in a centralized administrative staff that is reliant primarily on a vertical and regulatory approach to production. In such approaches, relatively few federal or even state-level officials are ever involved in the delivery of services to families in need. • Fourth is that there are many intermediary agencies and programs that are also involved in long chains of production. Only those at the end of these chains, often the staff of local agencies, whether public, nonprofit, or for-profit entities who have contracted with the state, are involved in delivery. • Fifth is that there is a strong bias in federal programs toward regulatory functions and outsourcing. A key component of the TANF program for federal program personnel involves ensuring standardization and monitoring compliance. Over time, these functions generate more and more rules and requirements. • Sixth is understanding the potential effects of program reassignment and resources where major reform is contemplated. The assignment of the new W-2 program to a new state agency in Wisconsin may have disrupted old patterns and practices and facilitated introduction of a new culture for program administration. • Seventh is that most elements and problems of program design apply to state programs. State programs vary widely. They also are much more heavily involved in the tasks of negotiating and managing contracts with local entities actually delivering benefits and services. • Eighth is that solutions and potential reforms often emerge at the point of delivery. Local entities and groups working with clients are resources for policy innovation and experimentation. • Ninth is understanding the urge to replicate and expand apparently successful solutions. Part of the debate over reauthorization involved proposals to extend the TANF model to other federal programs serving the poor. • Last is that program results will vary. Complex combinations of reasons, from economic cycles and plant closings to natural disasters, make performance difficult to measure and interpret. Significant results in the short term may be hastened or overshadowed by circumstances and events. Welfare reform, like most policy programs, is a work always in progress. Although dependent on its enabling legislation, program design matters. However, design in a federal system where the delivery of services occurs locally is very complicated, often requiring coordination across several levels of government. Design and feedback, in terms of measures of results, are crucial to improving policy programs during subsequent rounds of reauthorization, especially when federal, state, and local policymakers are tied together in complex chains leading to the delivery of services and benefits locally. Often, however, results serve to fuel additional political debate. KEY TERMS Government Performance and Results Act (GPRA)—a broadly based management initiative, passed by Congress in 1993, that requires all executive departments, regulatory agencies, and government-sponsored enterprises with annual outlays exceeding $20 million to regularly report information, including a strategic plan, an annual performance plan, and an annual performance report due within six months of the close of each fiscal year.

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horizontal governance—shared or horizontal responsibility for policy production among multiple organizations, based on networking, coordination, cooperation, or collaboration. program—a set of organized and ongoing activities directed at fulfilling a policy objective and producing a desired outcome. Programs are the means or lines of work in policy production. program design—the organization of the daily work in producing and delivering results as determined by program managers. program logic model—a representation of the sequence of work performed by a program linking needs and resources to activities to outputs and results. program managers—person responsible for the success of a program in both its internal and external dimensions. project—a temporary endeavor or activity, performed on a defined schedule, and undertaken to produce a specific product, output, or service. vertical governance—hierarchical control over policy production based on the delegation of legal authority and characterized by regulation, direct delivery, or outsourcing. QUESTIONS FOR DISCUSSION 1. In each of the following cases, what information would you need to know and how would you design a program? For each, assess the relative advantages and disadvantages in the designs you suggest. • • • •

A city seeking to create a program to improve very low rates of recycling by residents A K–12 school district interested in developing a program to decrease the instances of bullying in schools A state seeking to broaden health care coverage for those who do not have access to insurance through their employers or cannot afford it The federal government seeking to decrease the costs of housing and feeding soldiers in the field during an armed conflict

2. For each of the four examples in the preceding question: when would you issue regulations; use program personnel to deliver the service or outsource; or work through some form of networking, coordination, cooperation, or collaboration? 3. Identify a program of your choice and develop an analysis of its architecture, program design, and delivery mechanisms using the materials in this chapter. 4. What are the strengths and weaknesses of program logic models in practice? Why are such approaches increasingly being employed? 5. Why are horizontal approaches to policy programming becoming more prevalent? What implications does this trend have on measuring performance and achieving results? 6. Identify someone in the position of program manager in a public program and interview him or her about what his or her job entails. 7. The GPRA has been in place since the mid 1990s. What has been its impact? Is such an initiative worth the time and resources expended on it by programs? 8. What are the problems of applying performance measures? Select a program with which you are familiar and describe the difficulties in measuring the results of that program.

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SUGGESTED READINGS Behn, Robert D. “Why Measure Performance? Different Purposes Require Different Measures.” Public Administration Review 63, no. 5 (Sept./Oct. 2003): 586–606. Chinman, Matthew; Pamela Imm; and Abraham Wandersman. Getting to Outcomes 2004. Santa Monica, CA: RAND Corporation, 2004. Epstein, David, and Sharyn O’Halloran. Delegating Powers: A Transaction Cost Politics Approach to Policy Making under Separate Power. Cambridge, UK: Cambridge University Press, 1999. Ferlie, Ewan; Laurence E. Lynn, Jr.; and Christopher Pollitt, eds. The Oxford Handbook of Public Management. New York: Oxford University Press, 2005. Himmelman, Arthur T. “Collaboration for a Change. Definitions, Decision-Making Models, Roles and Collaboration Process Guide.” (January 2002). Available at www.futurehealth.ucsf.edu/pdf_files/ 4achange.pdf. Moore, Mark H. Creating Public Value: Strategic Management in Government. Cambridge, MA: Harvard University Press, 1995. Osborne, David E., and Ted Gaebler. Reinventing Government: How the Entrepreneurial Spirit Is Transforming the Public Sector. Reading, MA: Addison-Wesley Longman, 1992. Osborne, David E., and Peter Plastrik. Banishing Bureaucracy: The Five Strategies for Reinventing Government. New York: Plume Press, 1998. Schacter, Mark. Not a “Tool Kit”: Practitioner’s Guide to Measuring the Performance of Public Programs. Ottawa, Canada: Institute on Governance, 2002. ———. What Will Be, Will Be: The Challenge of Applying Results-Based Thinking to Policy. Ottawa, Canada: Institute on Governance, 2002. Schneider, Anne Larson, and Helen Ingram. Policy Design for Democracy. Lawrence, KS: University Press of Kansas, 1997. W.K. Kellogg Foundation. Logic Model Development Guide. Battle Creek, MI, December 2001. U.S. General Accounting Office. Glossary. Performance Measurement and Evaluation. Definition and Relationships, GAO/GGD-98-26, Washington, DC: GAO, April 1998. University of Wisconsin Cooperative Extension, Program Development and Evaluation, Program Action Logic Model. Available at www.uwex.edu/ces/pdande/evaluation/evallogicmodel.html. Vedung, Evert. Public Policy and Program Evaluation. New Brunswick, NJ: Transaction Publishers, 1997. Wildavsky, Aaron. Speaking Truth to Power. Boston: Little, Brown, 1979.

NOTES 1. Senator William Roth describes the difficulty of identifying federal programs: “Thirty years ago, as a freshman Congressman, I undertook a project to examine the size and scope of the Federal government . . . I found that the Federal government itself did not possess enough information on all its programs to allow our study . . . to assemble a comprehensive list. . . . (A decade later) in the 1980s . . . the ‘Grace Commission’ after trying to find out how many government programs exist . . . discovered that ‘no one had the answer. There is just no central source for that kind of information . . . the Federal government doesn’t know how many offices it has or where they’re located.’ . . . [T]he commission’s best guess was that there were over 963 federal social programs alone. . . . Once created a government organization is ‘virtually immortal.’ . . . [W]hile the government continues to grow . . . old policies, roles, functions, and organizations are not terminated, despite the fact that they, as most often is the case, are no longer necessary.” In Mark R. Daniels, Terminating Public Programs: An American Political Paradox (Armonk, NY: M.E. Sharpe, 1997), pp. xiii–xiv. 2. Matthew Chinman, Pamela Imm, and Abraham Wandersman, Getting to Outcomes 2004 (Santa Monica, CA: RAND Corporation, 2004), p. xix. 3. U.S. General Accounting Office, A Glossary of Terms Used in the Federal Budget Process (Washington, DC: GAO, revised January 1993). 4. Federal Accounting Standards Advisory Board, Statements of Federal Financial Accounting Concepts and Standards: Original Statements, vol. I, part 2 (Washington, DC: General Accounting Office, February 28, 1997), pp. 70–71. Emphasis added. 5. For an in-depth discussion of program termination see Daniels, Terminating Public Programs.

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6. Thad E. Hall and Laurence J. O’Toole, Jr., “Structures for Policy Implementation: An Analysis of National Legislation, 1965–66 and 1993–94,” Administration and Society 13, no. 6 (January 2000): 667–86. 7. Ibid., from the 1948 Budget. 8. David Epstein and Sharyn O’Halloran, Delegating Powers: A Transaction Cost Politics Approach to Policy Making under Separate Powers (Cambridge, UK: Cambridge University Press, 1999), pp. 166–67. 9. Ibid., p. 27. 10. Ibid., p. 7. 11. Chinman, Imm, and Wandersman, Getting to Outcomes 2004, p. 10. 12. Ibid., p. 33. 13. Ibid., p. 57. 14. W.K. Kellogg Foundation, Logic Model Development Guide (Battle Creek, MI: December 2001), pp. iii and 1. 15. Anne Larson Schneider and Helen Ingram, Policy Design for Democracy (Lawrence, KS: University Press of Kansas, 1997), pp. 84–85. 16. Kellogg Foundation, Logic Model Development Guide, p. 18. 17. Adapted from Christopher K. Leman, “Direct Government,” in The Tools of Governance: A Guide to the New Government, ed. Lester Salamon (New York: Oxford University Press, 2002), p. 49. 18. Organization for Economic Co-operation and Development, “Managing Accountability in Intergovernmental Partnerships” (Paris, France: OECD, 1999), p. 12. 19. Arthur T. Himmelman, “Collaboration for a Change: Definitions, Decision-making models, Roles and Collaboration Process Guide” (January 2002), available at www.futurehealth.ucsf.edu/pdf_files/4achange. pdf. Many social and political analysts use the term network to apply to a more robust set of social practices and institutions. See, for example, Walter W. Powell, “Neither Market Nor Hierarchy: Network Forms of Organization,” Research in Organizational Behavior 12 (1990): 295–336. 20. The Community Toolbox, Part G, Chapter 24, Section 3, “Promoting Coordination, Cooperative Agreements, and Collaborative Agreements Among Agencies,” available at ctb.ku.edu/tools/en/sub_section_main_1229.htm. 21. Ibid. 22. Himmelman, “Collaboration for a Change,” p. 4. 23. David E. Osborne and Ted Gaebler, Reinventing Government: How the Entrepreneurial Spirit Is Transforming the Public Sector (Reading, MA: Addison-Wesley Longman, 1992). 24. Office of Management and Budget, Instructions for the Program Assessment Rating Tool (PART Guidance for the 2006 Budget), (Washington, DC: 2004). 25. Mark H. Moore, Creating Public Value: Strategic Management in Government (Cambridge, MA: Harvard University Press, 1995), p. 20. 26. Project Management Institute, Project Management Body of Knowledge (Upper Darby, PA: Project Management Institute, 1996), p. 4. 27. U.S. General Accounting Office, Glossary: Performance Measurement and Evaluation. Definition and Relationships, GAO/GGD-98-26 (Washington, DC: GAO, April 1998), p. 3. 28. Evert Vedung, Public Policy and Program Evaluation (New Brunswick, NJ: Transaction Publishers, 1997), p. 3. 29. All quoted materials are from U.S. General Accounting Office, Glossary. Performance Measurement and Evaluation, p. 5. 30. Some of the more notable—or notorious—of these techniques include Planning-Programming-Budgeting (PPB), Management by Objectives (MBO), and Zero-Based Budgeting (ZBB). 31. For information on the Government Accounting Standards Board, see www.seagov.org/. 32. Federal Accounting Standards Advisory Board, Statements of Federal Financial Accounting Concepts and Standards. 33. Executive Office of the President, Office of Management and Budget, Circular No. A-11, Part 2, Preparation and Submission of Strategic Plans, Annual Performance Plans, and Annual Program Performance Reports (July 1999). 34. Ibid., Section 200.2 35. Mark Schacter, Not a “Tool Kit”: Practitioner’s Guide to Measuring the Performance of Public Programs (Ottawa, Canada: Institute on Governance, 2002), pp. 17–21. 36. Ibid., p. 24. 37. Mark Schacter, What Will Be, Will Be. The Challenge of Applying Results-Based Thinking to Policy (Ottawa, Canada: Institute on Governance, 2002).

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38. Adapted from Paul Thomas, Performance Measurement, Reporting, and Accountability: Recent Trends and Future Directions, Public Policy Paper 23 (Canada: Saskatchewan Institute of Public Policy, February 2004), p. 6. See also Robert D. Behn, “Why Measure Performance? Different Purposes Require Different Measures.” Public Administration Review 63, no. 5 (Sept./Oct. 2003): 586–606. 39. Thomas, Performance Measurement, p. 10. 40. Ibid., pp. 100–111. 41. Aaron Wildavsky, Speaking Truth to Power (Boston: Little, Brown, 1979). 42. Mandelbrot sets are a type of fractals, or exotic geometric shapes, discovered and popularized by the mathematician Benoit Mandelbrot in the 1970s and 1980s. Though based on the simplest of equations iterated ad infinitum, Mandelbrot sets are some of the most complex and beautiful objects in mathematics. The closer you look at these objects, the more jagged and complex the boundaries become. Like Mandelbrot sets, policy programs iteratively replicate themselves in ways that produce astonishingly complex organizational patterns based on the simplest of social mechanisms or technologies. For a readable introduction to Mandelbrot sets and related phenomena, see James Gleick, Chaos: Making a New Science (New York: Viking Press, 1987). 43. Final regulations published at 64 F.R. 17719-17931 (April 12, 1999), 45 C.F.R. §§ 260–265. See also www.acf.dhhs.gov/program/ofa/. 44. Lawrence M. Mead, “The Culture of Welfare Reform,” The Public Interest 154 (Winter 2004): 100. 45. Ibid., p. 103. 46. J. Deparle, “Flaws Emerge in Wisconsin’s Welfare-to-Work Plan,” New York Times, October 17, 1998. 47. U.S. General Accounting Office, Welfare Reform: Challenges in Maintaining a Federal-State Fiscal Partnership, Appendix XI, Wisconsin, GAO-01-828 (Washington, DC: GAO, August 2001), pp. 125-43. 48. Mead, “Culture of Welfare Reform,” p. 110. 49. Urban Institute, Poverty Gap Between Whites, Blacks, Hispanics Narrows Between 1996 and 2001 (April 28, 2004), available at www.urban.org/urlprint.cfm?ID=8841. 50. Douglas J. Besharov, “The Past and Future of Welfare Reform,” The Public Interest 150 (Winter 2003): 18. 51. Douglas J. Besharov and Peter Germanis, “Welfare Reform—Four Years Later,” The Public Interest 140 (Summer 2000): 26. 52. U.S. General Accounting Office, Welfare Reform, p. 7.

CHAPTER 12 Rules PREVIEW Chapter 12 describes the function of rules as a technology for policy production. With varying degrees of formality, rules prescribe the structures, standards, and behaviors of practice—that is, what ought or ought not to happen. There is evidence that rules are simultaneously becoming both a more pervasive and a more flexible technology of policy production. As you read this chapter, you should be able to answer the following questions. • • • • • • •

What is a rule? What is the Administrative Procedures Act of 1946 and what has been its impact on rules in federal policy production? What is an order? What is the Code of Federal Regulations? What is the process of administrative rulemaking? What are guidelines and standards? What are the advantages and disadvantages of rules in policy production?

12.1 INTRODUCTION In the previous three chapters we have followed a relatively straightforward story of policy production: authority begets agency, which begets programs. Now we shift our attention to rules. Rules are a common—if not ubiquitous—means of packaging and distributing policy outputs. Writing, interpreting, and enforcing rules is how many, if not most, agencies and programs implement the policy commitments contained in the laws, executive orders, amendments, judicial decisions, and initiative petitions of policy authority. Indeed, many policy analysts consider rulemaking to be the defining feature of government in general, despite the roads, bridges, dams, missiles, tanks, and even the financial largesse that are all products of modern-day government. Rulemaking and rules are an indispensable technology of policy production. Policy programs are responsible for the substance, or content, of rules, while the agency housing the program is responsible for issuing and enforcing rules. In the following pages we will explore the What and How of rules and rulemaking as a primary means of making policy. 12.2 WHAT IS A RULE? According to Shimanoff, “a rule is a follow-able prescription that indicates what behavior is obligated, preferred, or prohibited in certain contexts.”1 Followable means that the behavior is physically possible and the result of intentional human action. We cannot defy—nor can we obey—the 273

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law of gravity. Prescription means that the rule has normative force—it operates to limit or direct future behavior. Rules do not describe what has happened, they stipulate what ought to or ought not to happen. Context means that the rule applies only within some defined set of circumstances. Rules are bounded by human institutions—families, organizations, countries, cultures, religions, and so forth. While rules are always generalized—that is, they apply to specific types or classes of situations—they cannot be universal like the law of gravity. Rules are the recipes that social institutions use to guide the behavior of individuals and other institutions. Rules constitute the grammars of social action. In the following pages we will take an expansive view of rules to include the regulations, procedures, codes, conventions, directives, guidelines, standards, algorithms, and norms used and produced by federal and state policymakers. Generally speaking, rules come in two distinct varieties: informal, or unwritten, and formal, or written. 12.2.1 Informal Rules Informal or unwritten rules are the social norms that govern all aspects of human behavior, from the chance encounter of two individuals to the international relations of states and nations. We cannot stroll down a sidewalk or greet a stranger without invoking the unwritten rules of social interaction. Despite the untiring efforts of Miss Manners and other writers on social etiquette, most social behavior is guided by intricate patterns of shared understandings and expectations that defy written documentation. Even in the most formal and bureaucratic of institutions, invisible rules still guide most social interchanges. Indeed, the pervasive role of informal rules in formal work settings is starkly revealed when workers protest management policies by “working to the [written] rules,” thereby causing disruptions in service delivery. Informal rules also play a critical, if poorly understood, role in the policy production process. Despite vast tomes of written procedures, the work of legislators, executives, judges, and bureaucrats is oiled by tacit rules that make effective policy production possible. When these unwritten rules are violated or changed, the machinery of government can grind to a halt. 12.2.2 Formal Rules However, our attention here focuses primarily on written or formal rules. Written rules are a common, perhaps defining, feature of modern organizations. “They are the frames for action within an organization, and they are artifacts of the history of an organization. They specify procedures to be followed and penalties associated with failing to do so. They are found in policies, operating manuals, handbooks, regulations, job and product descriptions, and contracts.”2 As organizations encounter new problems, new rules are created and old rules are changed to capture and preserve the lessons of experience. “Rules accumulate. The proliferation of rules, however, appears to be connected to the solution of political and technical problems imposed on, or at least recognized by, the organization. Rules encode a history of reacting to such problems.”3 Written rules document solutions to policy problems. Most organizations have inventories of written rules that can be used “off-the-shelf” to solve—or at least, begin to solve—new problems that arise. Moreover, the use of written rules makes life easier and more predictable for those who work with or in policy organizations. “Written rules convey the images of orderliness, authority structure, appropriate policies and practice.”4 They reassure an organization’s stakeholders that policies will be produced and enforced in a predictable manner despite changes in personnel and circumstances. Written rules bring consistency—or at the very least, the appearance of consistency—to policy production. In the world of policy production, rules are ubiquitous. Indeed, from the 1890s through the 1970s

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both policymakers and policy analysts generally agreed that reliance on rulemaking in policymaking should be expanded. Policy production was seen as the art and science of defining, applying, and enforcing general rules to regulate the behavior of individuals, institutions, and technologies. As government took on ever-widening responsibilities to solve the problems of the nation, the volume of rules produced would inevitably increase. Since the 1970s, this view of governing as rulemaking has been challenged from two directions: • •

At the theoretical level, by the notion of policymaking as rational decision making At the operational level, by the increased reliance on private contractors and privatization of government services

Nevertheless, neither trend has changed the realities of policy production at the authority, agency, and program levels. Observe the daily activities of legislators, executives, judges, and bureaucrats and you will find that they spend much of their time writing, interpreting, discussing, applying, or enforcing rules of one kind or another. Indeed, increased reliance on privatization and private contracting may result in different kinds of rules and rule writers, but it has not led to any decrease in the total number of rules generated by policy production and implementation. Just the opposite. The How and What of government rulemaking may have changed, but the use of rules as a technology of policy production has not.5

MINI-CASE 12.1 Plan B and the FDA Early in May 2004, the Food and Drug Administration (FDA) decided not to approve an application by Barr Laboratories to grant over-the-counter status to its emergency contraceptive, Plan B,® a “day-after” drug. The acting director of the FDA claimed that there was insufficient information that the drug could be safely used by girls sixteen-years-old and under. In so doing, he overrode the recommendations of the FDA’s own advisory panel, a group of scientific experts who had reviewed the manufacturer’s application, confirmed evidence that the drug is safe, and recommended approval by a 23 to 4 vote in December 2003. The issue resurfaced again in August 2005. After promising senators at his confirmation that the FDA would resolve the Plan B controversy, FDA commissioner Lester Crawford announced that the agency would neither approve nor reject Barr Laboratories’ application. A few weeks later, the FDA’s secretary for Women’s Health and later Crawford himself resigned their positions. A subsequent inspector general’s report revealed that the decision to reject Plan B had been made before input from scientific experts was sought. So what has happened to the role of expertise in formulating the rules that govern how and in what ways drugs will be made available to the American public? The short answer is politics, and in this case the bitter controversies associated in any way with issues of abortion. In such instances the expertise of agency personnel, those supposed to exercise considered and balanced judgment and to base policy decisions on scientific grounds, may be trumped by the larger political environment. What is next? The ball is back in the politicians’ court, where each side will regroup for another round—a battle that will once again play out within the confines of the FDA over another version of a proposed rule or regulation. Until then, Plan B remains a prescription-only drug.

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12.3 RULES AND POLICY PRODUCTION One cannot understand policy production without understanding the logic of rule-based decision making. Though critics lampoon the rigidities and occasional absurdities of hidebound, bureaucratic behavior, rules, and the routines they embody, are the critical technologies that make policy production possible. Rules, routines, and standard operating procedures are organizational databases of past problems and their solutions. When new problems arise, individuals and organizations do not build new solutions from the ground up. Rather, they search their repositories of past rules to find prefabricated solutions and solution components that best fit the problem at hand. Solutions are assembled, not created. They are crafted, retrofitted, and reverse-engineered from old solutions to similar problems. As James G. March has emphasized, policy production is driven as much by the “logic of appropriateness” as by the so-called rational calculation of consequences. Rule following is grounded in the logic of appropriateness. Decision makers are imagined to ask (explicitly or implicitly) three questions: 1. The question of recognition: What kind of situation is this? 2. The question of identity: What kind of person am I? Or what kind of organization is this? 3. The question of rules: What does a person such as I, or an organization such as this, do in a situation such as this?6 The question of recognition frames the situation in terms of previous problems. Is the use of illegal drugs the result of individual and societal demand or the product of available supply? Are injuries to children from toys caused by defective design or parental neglect? The first step in rule-based policy production is to decide what kind of problem is at hand. The question of identity then focuses on the role the decision maker chooses to assume. Identities in rule-based decision making are generally called roles, and the question is: Which responsibilities should be associated with the various roles in the decision process? Should standards for education be a matter for the states or the federal government? Should they be determined by legislators, executives, judges, or administrators? The second step is to decide what responsibilities for problem solution the decision maker must assume. The third step is to find the appropriate rule and then tailor it to fit the new situation. The rule is matched—or as some would inevitably opine, mismatched—to the situation. For every problem, there are multiple types of solution rules that may be applied and an infinite variety of adaptations and combinations. If inner city schools are failing, should better facilities be built, better teachers be sought out and trained, more discipline be applied, or should parents be given the incentives to opt out with vouchers? Whatever the solution, old solution rules must be modified and crafted to fit present circumstances. Throughout the decision-making process, previous problems and solutions are recycled and redefined to meet new demands. 12.4 ADMINISTR ATIVE RULES So far we have discussed rules in the broadest sense of the word. However, most policymakers and policy analysts focus on one particular type of rule: rules written and administered by governmental agencies. Administrative rules occupy a central position in policy production. As defined in the Administrative Procedures Act of 1946 (APA), an administrative rule is “the whole or a part of an agency statement of general or particular applicability and future ef-

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fect designed to implement, interpret, or prescribe law or policy or describing the organization, procedure, or practice requirements of an agency.”7 A rule is “the skin of a living policy,” a policy solution in the “frozen form of words. . . . The framing of a rule is the climactic act of the policy making process.”8 12.4.1 Agencies and Rules Legislatures produce legislation. Government agencies produce rules in cooperation with programs. Despite differences of origin, rules have the same legal authority as statutes, executive orders, and judicial opinions. Rules are crafted by and for programs, but only agencies have legal authority to issue rules. State and federal administrative procedures acts authorize government agencies to make rules when legislatures delegate authority in enabling legislation for programs to do so. Rules are a byproduct of legislation where Congress or state legislatures are either unwilling or unable to spell out the details of policy production. This difference of origin makes rules a separate and distinct technology of policymaking. Rulemaking is the term used to describe the procedures used by agencies to develop and issue rules. Rules are the operating directions for policy activities. Rules deal with two types of questions: substantive, or what to do, and procedural, or how to do it. Rules resolve internal program issues of who does what and how, as well as external questions for stakeholders and beneficiaries about who gets what and why. Bureaucrats with expertise in that policy domain develop rules. Rules are also historical, containing the record of program experience, learning, and modifications to policies. Finally, rules are impersonal, explicit, public, and of general applicability. For agencies responsible for overseeing rulemaking, written rules offer advantages of efficiency in saving managerial effort, stability in limiting and channeling internal conflict, hierarchy in signaling positional authority and formal roles, and accountability in creating templates for action and assessing performance. 12.4.2 Laws and Rules As defined in the APA and later through practice, “rules can be developed in any area in which Congress adopts a valid statute.”9 Rules depend on the choices of the legislators who delegate rulemaking authority to bureaucrats and those who actually exercise those policy choices through rulemaking. Legislators have the option in every statute of specifying what is to be done and how. The more detailed the statutory scheme, the fewer rules needed. Yet the trend is toward greater reliance on rulemaking. Through leeway left in the legislation, rulemaking is delegated to those officials responsible for production. There are three general types of rules: procedural, interpretive, and substantive. Procedural rules are relatively straightforward. These are rules setting forth procedures to be followed in carrying out policy activities. Interpretive rules are issued to clarify the statute the agency and program must apply or work with. Interpretative rules are those filling in the gaps, ambiguities, or, occasionally, contradictions in enabling legislation. Theoretically, wholly interpretive rules do not have the force of law and, when challenged, courts are not required to defer to an agency’s interpretive rule.10 Practically, however, an interpretive rule has important effects as a statement about program practices. So, for example, clean air standards may be revised and applied as new sources of pollutants are identified, but may be overruled by litigation. For both procedural and interpretative rules, agencies are not required to engage in rulemaking under

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the APA, although the rules must be published in the Federal Register so that those affected by such rules will have notice. Substantive rules are different. Substantive rules affect individual rights and obligations, may be traced to a congressional delegation of authority, and are subject to rulemaking procedures set forth in the APA. Substantive rules fill in a statutory vacuum. Here programs and agencies are empowered by legislation to define what to do and how to do it. Further, agencies get to decide which rules are substantive as distinguished from procedural and interpretive. Because substantive rules are subject to rulemaking, courts are required, with some exceptions, to defer to agency rules. Substantive rules often become lightning rods for public controversy because Congress often avoids the hard policy questions by delegating authority. Only later, with accumulated policy experience and a changed political climate, may Congress then step in and second-guess the bureaucrats. For example, the Occupational Safety and Health Administration (OSHA), guided only by a very general legislative mandate to assure safe and healthy working conditions for Americans,11 is an example of an agency working extensively through substantive rules. Rules create the technical and operational details of policy production and guide program staff in their daily activities while accommodating changing circumstances. Statutes and rules are locked in a “symbiotic relationship.”12 12.4.3 Applicability and Effect All rules share characteristics in common with legislation. Rules are normally prospective, not retrospective. A rule specifies future patterns of conduct. “It is a determination of general applicability involving unnamed persons and classes of situations in the future.”13 Rules are important instruments of policy precisely because they have future effects. They influence behavior before the fact and affect large segments of the population and generic problems or activities. Because rules are legislative in nature and make policy directly, the APA imposes elaborate procedures on substantive rulemaking by agencies so as to democratize decisions to issue rules and to ensure stakeholder access and participation. Agencies retain some discretion over whether to use rules as a technology. There is an alternative in some instances. That is, to use orders and make decisions on a case-by-case basis rather than employing some previously developed rule. Orders are agency decisions resolving disputes involving an individual case and specific circumstances, as, for example, a denial or approval of someone’s license or application. The National Labor Relations Board (NLRB) is an example of an agency that has traditionally preferred to operate predominantly through orders rather than rulemaking.14 Most programs, however, operate by issuing rules first and then applying them through orders when disputes over individual cases arise in the course of daily operations. Both rules and orders are used in policy production. Rules, however, are a critical technology of policy production precisely because of their number, scope, and future effect. Rules establish the operating boundaries of policymaking. The sheer volume of federal rules proposed and finalized each year, a figure estimated to be between 2,800 and 3,400,15 attests to the amount of time occupied by and the importance of this technology. 12.4.4 Classification of Rules Once issued, rules are organized by category and published in the Code of Federal Regulations (CFR). There are fifty different generic categories of regulations, or titles, in the CFR as set forth

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in Table 12.1. These categories have remained relatively constant over time. Within each title are chapters corresponding more or less to distinct policies, programs, or agencies. For example, the rules for OSHA are found in chapter 17 of Title 29, the general grouping of programs within the Department of Labor. The address, or citation, for the more than 1,600 pages of rules for OSHA is 29 C.F.R. §17. Table 12.1

Classification of Policy Production in the Code of Federal Regulations Title Title Title Title Title Title Title Title Title Title Title Title Title Title Title Title Title Title

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

Title 19 Title 20 Title 21 Title 22 Title 23 Title 24 Title 25

— General Provisions — [Reserved] — The President (Executive Orders) — Accounts — Administrative Personnel — [Reserved] — Agriculture — Aliens and Nationality — Animals and Animal Products — Energy — Federal Elections — Banks and Banking — Business Credit and Assistance — Aeronautics and Space — Commerce and Foreign Trade — Commercial Practices — Commodity and Securities Exchanges — Conservation of Power and Water Resources — Customs Duties — Employees’ Benefits — Food and Drugs — Foreign Relations — Highways — Housing and Urban Development — Indians

Title 26 — Internal Revenue Title 27 — Alcohol, Tobacco Products and Firearms Title 28 — Judicial Administration Title 29 — Labor Title 30 — Mineral Resources Title 31 — Money and Finance: Treasury Title 32 — National Defense Title 33 — Navigation and Navigable Waters Title 34 — Education Title 35 — Panama Canal Title 36 — Parks, Forests, and Public Property Title 37 — Patents, Trademarks, and Copyrights Title 38 — Pensions, Bonuses, and Veterans’ Relief Title 39 — Postal Service Title 40 — Protection of Environment Title 41 — Public Contracts and Property Management Title 42 — Public Health Title 43 — Public Lands: Interior Title 44 — Emergency Management and Assistance Title 45 — Public Welfare Title 46 — Shipping Title 47 — Telecommunications Title 48 — Federal Acquisition Regulations System Title 49 — Transportation Title 50 — Wildlife and Fisheries

The various classification schemes for identifying government programs are not consistent. Statutes are organized and numbered differently than rules. Further, the categories for rules used in the CFR differ substantially from those used by Congress for purposes of classifying government programs in its annual budget (see Table 11.2 in chapter 11). These multiple methods for categorizing policy domains and programs are confusing to all but the most experienced practitioners. 12.5 ADMINISTR ATIVE RULEMAKING The next question is how rules are made? Procedures for rulemaking are as complex and even more varied than those for passing legislation. The materials to follow merely scratch the surface in terms of details. Again, the bias toward ever-greater complexity is best placed in historical context and the expanding scope of public expectations for government.

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during the Revolutio durin during the Revolutio durin during the Revolutiodurin during the Revolutiodurin during durin the Revolutio

Why bureaucrats were the first to go during the Revolution Source: Rubes © October 11, 2001. By permission of Leigh Rubin and Creators Syndicate Inc.

12.5.1 The Evolution of Administrative Rulemaking Rules have been a key technology of policy production since the earliest congressional delegations of authority to presidents to make rules governing trade with Indian tribes and to set duties on foreign goods.16 The limited scope of federal policymaking meant that rules and processes for rulemaking received little attention until late in the nineteenth century. But the growing federal role in domestic policy, beginning with the Interstate Commerce Commission and with various programs to deal with agricultural production and food purity, was accompanied by increasing numbers of supplemental rules. Rulemaking accelerated with the New Deal and programs to counter the effects of the Depression. More programs, authorized by more legislation, meant more rules. Yet, there was no uniformity either in the processes used by agencies to make rules or in their scope and function. As a first step, the Code of Federal Regulations was created in 1934 in an effort to at least collect and organize existing rules. At the same time, the threat to democratic government of delegated legislation, that is, unsupervised rulemaking by bureaucrats, began to attract the attention of legal scholars and politicians. Criticism of bureaucracy and “administrative absolutism” from many key groups pressured President Roosevelt to think about curbing agency powers. He instructed his attorney general in 1939 to examine the need for procedural reforms. Although World War II interrupted momentum for change, the report of the Attorney General’s Committee on Administrative Procedure formed the basis for sweeping legislative changes to administrative practices passed by Congress in 1946. This legislation, the APA, created the framework for rulemaking in policy production. After a century and a half, the APA legitimized and systematized rules and rulemaking as a technology for policy production. Since its passage, rules and rulemaking have expanded in tandem

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with the scope of policymaking. The 1970s were a period of unprecedented rulemaking activity, as agencies with newly defined program authority and loosely defined mandates began to define standards and procedures for meeting their responsibilities. In the 1980s, President Reagan added more procedural hoops to rulemaking in an unsuccessful bid to stem the tidal wave of federal regulation. If, as Table 12.2 suggests, volume is any indicator, rulemaking continues to grow in importance as a technology of policymaking. Table 12.2

Code of Federal Regulations: Page Count by Selected Presidencies President George W. Bush (2001–2003) Bill Clinton (1993–2000) George Bush (1989–1993) Ronald Reagan (1981–1989) Jimmy Carter (1977–1980)

Average annual number of pages in the Code of Federal Regulations 70,438 66,482 53,818 50,683 64,483

Source: Clyde Wayne Crews Jr., Ten Thousand Commandments. An Annual Snapshot of the Federal Regulatory State. Executive Summary, available at www.cato.org/tech/pubs/10kc_2004.pdf.

Despite data on the increasing volume of rules, several scholars suggest that formal rules and rulemaking are being replaced by other, less cumbersome types of rules not subject to the process of administrative rulemaking discussed below. 12.5.2 The Process of Administrative Rulemaking Rulemaking procedures can be complicated. Again, Congress and state legislatures retain discretion in authorizing statutes to specify when rulemaking is required and how. But beyond that, programs and agencies have discretion over whether and how to issue rules. Figure 12.1 below maps out the basic steps involved in the process of federal rulemaking. Every decision to issue rules involves both internal and external considerations. Internal considerations include some agreement that there is a need and then agency permission to its staff to proceed with preparing a draft. Here the complexity of what happens depends greatly on the scope and impact of the proposed rule. Rules serve purposes based on projected needs and justified by research and information gathered from the field. Information in support of a rule must be carefully collected, described, and condensed into a negotiated proposal affecting some aspect of a policy. Once prepared and cleared by those agencies within the government responsible for monitoring rulemaking, a draft rule is ready for the second stage: review and input from external, nongovernment, sources. Here the common goal of all forms of rulemaking is to provide notice and an opportunity for input to those potentially affected by the proposed rules. It is at the stages for external input (see phases 7 through 9, Figure 12.1), that the differences between forms of rulemaking are most apparent. There are three types of rulemaking: formal, or on the record; informal, or notice and comment; and negotiated, or reg-neg (regulatory negotiations), now available to agencies. • Formal rulemaking requires trial-type hearings patterned after proceedings in a court of law17 as a method for protecting the rights of interested groups to present evidence and arguments in

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Figure 12.1 The Rulemaking Process

Phase 1: Analysts of Legislation What the law says • Purpose of rule making • Schedule • Which agency has jurisdiction • Level of agency control & responsibility

Phase 2: Where the Ideas Come From What the rules should say Legislated content • Deadlines » Default provisions Internal agency input • Senior agency staff • Advisory committees • Program office • General counsel • Field & enforcement staff External input > White House • Congress • Other agencies • Interest groups • Businesses • Interested individuals

Phase 3: Authorization Preparing to write the rules • Set agency priorities • Allocate staff resources

Phase 4: Planning How the rules will be written/who will write them Identify goals • Establish legal requirements • Establish information requirements • Develop plan for participation Written comments or public hearing? Whom to invite?

Phase 5: Drafting Rules Writing/editing the rules • Data collection & analysis • Impact studies - How will small business be affected? - How much paperwork is required? - What are the environmental impacts? • Internal discussions • External discussions (unofficial) • Draft rules & implementation plan

Phase 6: Internal Review Getting informal feedback within the agency Solicit peer feedback • Program offices • Policy analysts • Research & development » Field/enforcement staff • Advisory groups Solicit supervisory feedback • General counsel • Senior agency management • Political leaders

Phase 7: External Review Getting informal feedback from outside the agency • Office of Management & Budget • Congress • Interest groups • Affected businesses • Other agencies

Phase 8: Public Input Official • • • • •

processes for soliciting feedback Publish notice of process in Federal Register Review written comments Hold hearings Review & analyze input Respond to public input

Phase 9: Approvals - Possible Actions(Next Steps) Internal agency decision making on final rules 1. Approve rule with no changes (Publish in Federal Register) 2. Approve rule with minor changes (Repeat Phases 6 & 7) 3. Need another round of public input (Repeat phase 8) 4. Make major change to rule (Return to Phase 5) 5. Abandon current rule & start over (Return to Phase 3) 6. Decide there is no need for rule (Publish in Federal Register)

Phase 10: Epilogue It is never over Rules can be challenged by • Staff interpretations • Technical variations • Petitions for reconsideration Litigation

Source: Michael Watkins, Mickey Edwards and Usha Thakrar, Winning the Influence Game (New York: John Wiley and Sons, 2001), p. 135. Copyright © 2001 by John Wiley and Sons. Reprinted with permission.

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these hearings and to cross-examine other stakeholders and agency personnel about a draft rule. Based on hearings, an agency is then required to derive findings of fact that serve as the basis of its final rule when published. Such findings later provide interpretive guidance to courts. • Notice and comment rulemaking is simpler.18 The first step involves notice in the form of publishing the text of the proposed rule in the Federal Register, accompanied by an invitation to any interested person or group to submit written comments on the rule within a certain time period. This notice must contain an extensive statement of the agency’s reasons for the proposed rule. Once the deadline for comments passes, the agency is required to consider all comments received and to prepare and publish the final rule. Courts have not articulated a common standard for agencies to demonstrate their consideration of public input.19 • Negotiated rulemaking, also known as reg-neg, was set forth in federal legislation in the Negotiated Rulemaking Act of 199020 amending the APA and consolidates approaches developed in the 1980s by several agencies for drafting rules. The essence of reg-neg procedures involves bringing together representatives of the agency and affected groups to negotiate the text of a proposed rule beforehand. The logic of this approach is that the resulting rule will be easier to implement and will decrease the likelihood of subsequent litigation. Reg-neg reflects one of the most important of the newer approaches to rulemaking. In all of these approaches, technologies for formal rules require those involved in policy production to pay close attention to the myriad hoops and procedures of rulemaking. 12.6 OTHER ADMINISTR ATIVE “RULES” The categories of administrative rules subject to the APA constitute a small and shrinking fraction of public policy rules. In particular, federal agencies increasingly rely on orders, guidelines, standards, and similar mechanisms not only as a means of circumventing APA requirements, but also in response to the increasingly fluid and case-driven nature of policy delivery. The impact of internal program norms and standard operating procedures is now well documented. Both written and unwritten rules make policy production predictable and stable. Most discussions of rules occur within the framework of administrative law. Administrative law requirements are based on the dichotomy in administrative authority between rules and adjudication. This narrow focus on rules is losing its utility as a spectrum of approaches to rules is developing. These are intermediate forms of authority employed in producing policy benefits and these include orders, guidelines, standards, and unwritten rules. Many of these do not have formal legal status or categorization. Nonetheless, as the array of approaches available to producers broadens, the following description of the range of rules conditioning policy production is useful. 12.6.1 Orders As discussed earlier, orders are agency directives or decisions affecting only one individual case and set of facts. Orders are the results of the procedures used by agencies and programs for dispute resolution. An order is a determination adjudicating the facts in one dispute or case arising under the jurisdiction of a program. Programs need procedures to deal with disputes by those who might be adversely affected by some action or decision by a program and wish to challenge that act. This ensures that program actions comply with program rules and treat individuals and beneficiaries appropriately. Usually programs are responsible for administering some form of adjudication for

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beneficiaries to challenge their acts, while agencies perform the appellate-level review function for programs. In this way, a citizen contesting the nonrenewal of her driver’s license has a right to an administrative hearing to review the appropriateness of that denial. The order resulting from that hearing may be appealed by the losing party to the agency (department of transportation) housing the licensing bureau. Similarly, a college may challenge a decision by the Department of Education denying its eligibility for funding under the terms of some program it administers. Again, the genealogy of authority for orders comes from various state and federal administrative procedures acts and enabling statutes. Orders apply only to disputes arising from a specific program action directed at and binding on an individual but, when used as a substitute for more formalized types of rules, pose problems of consistency and generalizability. A question remains about the degree to which orders serve as precedent. That is, must an order resolving the facts in one dispute be consistent with orders issued in previous disputes involving similar facts? 12.6.2 Guidelines Agencies have options other than promulgating rules. Between 80 and 90 percent of agency work is not directed by rules or orders.21 More and more agencies are substituting rule-like mechanisms for rules when dealing with recurring problems, especially those not central to the attainment of policy goals. Such substitutes are often used as benchmarks for lower-echelon personnel to use in reaching decisions and in managing activities. Again, the reason for adopting guidelines is to ensure some minimal degree of consistency of performance across daily program operations. We use the term guidelines to cover a group of quasi-rules that go by many names, from advisories, program circulars, and advanced notices to technical corrections and directives. Guidelines are agency statements providing advance notice about how staff is to deal with classes of recurrent problems and activities. The exact legal status of guidelines is not clear. There would appear to be some authority for guidelines in a provision of the APA describing something called “other orders” that function to make agency advice reliable and reduce uncertainty about how agencies will act.22 Guidelines, like rules, allow agencies to issue binding advance decisions, but with no procedural prerequisites. Agencies have complete discretion over whether and when to issue guidelines. Guidelines bridge the chasm between cumbersome rulemaking processes and reliance on orders produced through agency adjudication. They offer a means for clarifying policy standards to be enforced and for minimizing the costs of administrative overhead. For example, the Department of Education increasingly issues guidelines rather than rules covering a variety of problems, from racial harassment and race-specific scholarships to its numerous, evolving policies for administering its programs of student financial aid. Criticisms of the growing preference for working through informal guidelines and avoiding formal rules are heard with some frequency, especially from legal scholars. Placing too much discretionary authority in agencies risks arbitrariness and isolation on the part of bureaucrats. In contrast, students of management often criticize trends toward micromanagement, especially when managers become too deeply involved in the day-to-day decisions by professional staff. In this view, policy outcomes are improved when those actually delivering services employ flexibility and discretion to allow a case-by-case matching of needs and benefits. 12.6.3 Standards Standards are practices, things, or qualities by which something may be tested or measured.23 They are “something established by authority, custom, or general consent as a model or example.”24 Standards are evidence of minimum acceptable performance, usually set by some group of experts

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or professionals. The use of standards in policy production is increasingly common, driven by many of the reforms of the past decade designed to ensure levels of acceptable quality and to document government performance. Standards provide baselines for measuring minimal or acceptable levels of inputs, outputs, and results. Standards regularly allow those involved in policy production to rely on evidence and practices in the private sector. Participation in some program or eligibility for some benefit is commonly conditioned on certification by some external group. Lawyers, to be eligible to represent clients in court, must have passed an exam created and administered by a state bar association. In order to enable their students to receive federal financial aid, colleges and universities must be accredited, that is, they must meet the standards set by one of several private regional accrediting associations. Similarly, to be eligible for Medicare funding, hospitals must be accredited by the Joint Commission on Accreditation of Health Care Organizations (JCAHO) every three years. The government has adopted standards for federal accounting that are developed by a Federal Accounting Standards Advisory Board and used by all government agencies.25 In recent years, more and more standards have been incorporated into policy production. This may be traced to the long experience of government contracting practices in the commercial and private sectors. So, for example, before the Federal Acquisition Streamlining Act of 1994 (FASA),26 federal agencies were more or less free to specify their own quality criteria for the goods and services procured. Today, FASA requires that government purchases meet quality criteria for standard or customary commercial items and it limits the ability of agencies to craft their own standards.27 This change has had two impacts: first, it has tied government to industry practices and reduced the time demands for justifying agency purchases; and, second, it has reduced coziness between agencies that write specifications and their favored contractors. Although problems of defining standards or customary practice remain, standards are playing ever-greater roles in policy production as baseline measures in technologies for policy production.

MINI-CASE 12.2 Rulemaking by Proxy In the summer of 2004, a major tiff broke out about the long-standing practice in the drug industry of not reporting results from clinical trials that might be unfavorable to a company’s financial interests. Specifically, data were never reported to the effect that, in more than two-thirds of the clinical trials of antidepressants that included depressed children as subjects, the medications worked no better than placebos. Furthermore, although Congress required companies in 1997 to register all clinical trials with the Food and Drug Administration (FDA), FDA officials reported that they had not enforced this provision because the law contains no remedy for violations. Legislators professed to be in a tizzy and threatened to hold committee hearings. Enter the academic medicine types. On September 8, 2004, a dozen editors of the most prestigious medical journals provided a solution to this problem—a remedy in the form of a stick. They announced that they would refuse to publish, or even consider reviewing, articles reporting any results from any clinical trials conducted by pharmaceutical companies unless those studies were registered in a public database before they began. Trials already in progress had to register before the journal would publish their results. Thus, the medical publishing community stepped in where the FDA feared to tread. They set their own standard. While Congress may still opt to require the FDA to enforce the 1997 law, the academic medical community has already done the heavy lifting.

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12.7 RULES AND THE FUTURE OF POLICY PRODUCTION Governments have traditionally been viewed as rulemaking and rule-bound entities par excellence. Policy activity in the second half of the twentieth century confirms this view, as formal rulemaking exploded onto the policy arena. Formal rulemaking under the APA and its state-level “sons of APA” counterparts became the ostensible mechanism for controlling and democratizing policy production once in the hands of program managers. The result overwhelmed capacity. Efforts to limit the now dizzying, if not incomprehensible, array of rules for policy production have gained momentum over the past decade in the movement to reengineer government. Ironically, reinventing government is shifting the locus and form of rules, but not limiting their reach or numbers. Differences between public- and private-sector and formal and informal rulemaking are growing fuzzier every day. The past decade has witnessed a proliferation of standards-setting bodies in industry and a virtual explosion of industry standards or benchmarks in all aspects of commercial life. Rules and rulemaking are necessary features of information-based economies. In the long view, it may make little difference whether the Department of Commerce, the International Standards Organization, or Microsoft makes the rules. Rules are technologies to be “crafted,” as the title of a recent book suggests.28 Improvements in technologies for documenting and understanding the dynamics of policy problems have expanded our abilities to characterize particular risks and specific areas of noncompliance and to design better interventions. These interventions require a broader range of innovations, including new forms of rules as standards for structuring interactions between policy producer and beneficiary. Results, rather than inputs, may be assuming greater importance and attention in program policy production, but rules are increasingly prevalent as a technology for monitoring this shift in emphasis in federal policymaking. The technology of rules is an important component of policy production. Ironically, rules have simultaneously become more pervasive and more flexible. Reengineering reforms have dual purposes: to empower and free programs and their control over policy production at the front end, and to ensure accountability by standardizing managerial and reporting practices imported from the private sector at the back end. Newer techniques employing various forms of rules are logical, indeed inevitable, adaptations to the dilemmas faced by programs of delivering snack-sized policy benefits to an increasingly sophisticated and fickle public clientele.

CASE STUDY Dueling Rules at the EPA Few Americans like air pollution. And the government has done something about it. To improve air quality across the nation, Congress passed the Clean Air Act of 1970 and shifted important responsibilities for reducing pollution from state and local governments to the federal government. Since then, the Clean Air Act has provided important benefits. “Air quality has improved significantly in virtually every metropolitan area around the country since 1970.”29 Yet, more can be accomplished. But questions remain: how much cleaner, at what cost, and who should pay?

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To reduce air pollution, the Clean Air Act adopted a policy production strategy reliant primarily on rulemaking and enforcement by the Environmental Protection Agency (EPA). Despite amendments to its basic framework in 1977 and 1990, the basic approach to policy production set forth in the Clean Air Act has remained more or less intact since its inception. In large part, this strategy reflects the willingness of legislators to delegate decision making about contentious issues, such as the standards for air pollution, to experts in the responsible agency. As a consequence, agency rulemaking has become the forum in which political gladiators battle over how to improve air quality. It is the arena where the never-ending struggle between groups to protect their interests and pocketbooks plays out. Moreover, most of the combat over rulemaking rarely attracts public scrutiny. This is because such proceedings are complex and highly technical, often garbed in the language of science and the methodology of social science. The real subtext, however, usually pits costs that fall heavily on a few against small but tangible benefits accruing to many. Such are the dynamics surrounding decades-long efforts by the EPA to formulate two new sets of rules: more stringent standards for clean air, and requirements that power plants install pollution control technologies adequate to meet those standards. The following case study briefly traces the tortuous course of Clinton-era rulemaking to upgrade standards and technology followed by the efforts of the second Bush administration to undermine implementation—a war waged almost entirely on the battlefield of rules, well beneath the political radar of most Americans. It illustrates both the importance of rulemaking and the relative ease with which the efforts of one administration may be countermanded by the next. It is a story about rules and policy gladiators in the constant, behind-the-scenes battles over rulemaking. Round One: Stricter Rules on Pollutants in the Air The Clean Air Act initially set standards for the concentrations of various pollutants in the ambient air. It created a regular schedule of rulemaking for the EPA by requiring review and updating every five years if the latest evidence indicates an existing standard is not sufficient to protect public health. Congress requires the EPA to set standards at levels that “provide an adequate margin of safety” to protect the public “from any known or anticipated adverse effects associated with such air pollutant(s) in the ambient air.”30 If the EPA fails to meet its deadlines for review, any citizen or interest may sue to compel the agency to engage in rulemaking. In 1994, the American Lung Association successfully sued the EPA for failing to meet the deadlines for updating its rules on clean air. A court ordered the EPA to complete its required review and propose drafts of new rules by 1996—an accelerated timeline considering the complexity of the process and numbers of stakeholders with interests in the topic. Two weeks before the deadline, the EPA proposed stringent new standards for soot and smog in the ambient air. The stage was then set for opponents. Policy entrepreneurs from many sectors clamored to be heard. Officials within the Clinton administration from the departments of Commerce, Defense, Energy, Transportation, and the Treasury and from the Small Business Administration, the Office of Science and Technology Policy, and the President’s Council of Advisors all voiced criticisms. The rules were so contentious that Congress itself became involved through a series of hearings to highlight problems with the proposed rules. Testimony focused on a lack of scientific evidence for the proposed rules, on costs, and on the hurried process used by the EPA in their formulation. Legislators were so upset they sought to block implementation of the new rules.31 Lacking a two-

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thirds majority to override a threatened presidential veto, however, the measures were withdrawn. Undeterred, the EPA rejected modifications to its proposed rules and issued final rules on soot and smog six months later in July 1997 with only minor changes. Once the new standards were formally issued as rules, policy gladiators could then appeal to a second forum for policy production—the courts—to pursue their cause. Over forty parties quickly joined forces to challenge the EPA’s new rules. The plaintiffs seeking to overturn the new standards included representatives of large and small businesses as well as several state governments. They made three arguments: • • •

Congress had unconstitutionally delegated its legislative power in authorizing rulemaking by the EPA The EPA must include consideration of the costs of implementation in formulating its rules on soot and smog The EPA had unreasonably interpreted the criteria set by the Clean Air Act with respect to its standards for ozone

The case was heard first by the U.S. Court of Appeals.32 In May 1999, that court invalidated the new standards on grounds unrelated to the scientific challenges to the rules, but rather on grounds that Congress had unconstitutionally delegated authority to the EPA. The decision would have required the EPA to start over and reformulate new rules. But the EPA opted to continue the battle and appealed to the Supreme Court. That body rendered its opinion early in 2001.33 The Supreme Court’s decision was more or less a victory for the EPA and its proposed rules. First, the Court found the agency had acted within its scope of authority. Congress had not unconstitutionally delegated its legislative power to the EPA but, rather, had created an intelligible principle to guide agency actions. “Statutes need not provide a determinate criterion for saying how much of a regulated harm is too much to avoid delegating legislative power.”34 Second, the Court dealt a major setback to stakeholders whose pocketbooks were adversely affected by the proposed rules and backed the EPA. It held that the applicable provisions of the Clean Air Act did not allow the agency to consider the costs of implementation in setting standards for soot and smog. Finally, the Court found that the agency’s interpretation of two somewhat ambiguous and contradictory provisions of the Clean Air Act as applied to ozone was not reasonable and sent the standards back to the EPA for clarification, especially as to timetables for compliance and implementation in various parts of the nation. The Supreme Court handed opponents of the new standards on soot and smog a body blow and the EPA a victory. The EPA’s rules were sustained. Americans could look forward to breathing cleaner air. The EPA then began the long process of implementing its new rules via case-by-case application to reluctant industries. But, in the years it had taken to affirm the new clean air standards, the political ground had shifted. Republicans replaced Democrats, and the new Bush administration searched for ways to stall implementation of the new stricter standards for clean air. They found the key in an old set of rules, termed new source review, which, after revision, could be used to create an escape hatch for several industries under the gun to comply with the stricter standards. Rules can be used to subvert rules. Skinning the Cat Another Way: Rules on New Source Review Other provisions of the Clean Air Act of 1970 required industrial polluters to minimize their emissions of harmful pollutants into the air. However, questions quickly arose over how much and

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how fast: specifically, whether polluters had to retrofit every existing plant immediately, whether the standards were to be applied only to newly built facilities, or whether antipollution devices could be added during periodic maintenance to existing equipment. When this issue proved too contentious for the EPA, Congress addressed the dilemma in 1977 and allowed companies to continue to operate and to perform routine maintenance without having to install pollution-control technologies, but required the installation of antipollution technologies when companies replaced or substantially modified equipment. Termed new source review (NSR), the EPA was empowered to set criteria or rules for determining what may be classified as routine maintenance. The 1977 legislation was designed to allow companies to phase in new antipollution technologies over a number of years. Early NSR rules contained somewhat convoluted distinctions between routine maintenance and substantial modifications, which set in motion a decade of negotiation between the EPA and industries facing substantial investments in antipollution technologies. The power companies were especially active in challenging the rules on the level of repairs triggering new source requirements. Until the end of the first term in the Clinton administration, EPA officials opted for negotiating NSR requirements with individual companies and enjoyed some success in several industrial sectors. However, the utility sector, especially power plants reliant on coal-fired electricity generation, refused to compromise. In frustration, the EPA, claiming more than two decades of violations of the Clean Air Act, asked the Justice Department to sue seven utility companies in 1999, with penalties amounting to $27,500 per plant for each operating day in violation of the standards. The cost estimates for installing antipollution technologies in existing facilities, or retrofitting them to burn natural gas, ran into the hundreds of millions of dollars. In the fall of 2000, the power companies turned to the Republican-dominated Congress for help. They were unceremoniously denied. Public opinion polling found that 81 percent of Americans were in favor of stronger environmental standards.35 Seeing the handwriting on the wall, several of the utilities then entered into serious negotiations with the Justice Department to settle the claims and limit their exposure to penalties in exchange for installing new pollution-control equipment. By the end of 2000, three companies had reached settlements: Tampa Electric agreed to spend more than $1 billion; Virginia Power, $1.2 billion; and Cinergy, $1.4 billion, on new antipollution controls.36 Enter the Bush Administration Within a few days of assuming office in January 2001, President Bush formed a task force, the National Energy Policy Development Group, charged with formulating policy for the next four years. Their report was issued in May 2001 and criticized burdensome environmental regulations hobbling the development of energy resources and energy independence for the nation. At the head of the reform agenda was an overhaul of NSR rules and a suggestion that the Justice Department consider dropping the cases still pending against the utilities. Sensing the changing political dynamics, Cinergy, one of the energy producers, backed out of its earlier settlement agreement, and negotiations at the Justice Department with the remaining power companies broke down by early 2002. In the summer of 2001, with little fanfare or public reaction, EPA officials embarked on a full review of NSR rules. Their goal was to broaden criteria allowing repairs to existing equipment without triggering requirements for installing costly antipollution technologies. The sticking point was where to draw the line between routine maintenance and significant upgrades to equipment. A year later, EPA officials settled on a solution: establishing a cost indicator or benchmark to

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make this determination. That is, if the value of the generating equipment were $1 billion, the company could make repairs costing up to some percentage of that figure yearly without having to install new pollution controls. The benchmark initially proposed was 0.75 percent per year, or $7.5 million for repairs to equipment valued at $1 billion before activating the requirement to install antipollution technologies. In the interim, however, the self-interests of the utilities prevailed and the benchmark finally agreed to was 20 percent per year, or $200 million in repairs to equipment valued at $1 billion. In November 2002, the EPA announced the publication of its proposed revisions to the NSR rules at a news conference that the EPA’s administrator, Christie Whitman, refused to attend, and where cameras were not permitted. The revised NSR rules were to take effect in December 2003. Needless to say, most of the American public knew little about any of these events. Yet stakeholders do pay attention to rulemaking. The environmental watchdog groups were on alert and quickly complained that the revised rules set thresholds so high as to gut NSR requirements to install antipollution control technologies. Litigation was next, as attorneys general from nine states, mostly from those northeastern states with the greatest damage from acid rain, filed suit early in 2003 to stop the rules from taking effect. In November 2003, officials in the enforcement arm of the EPA countered with the announcement that they were halting seventy pending investigations of companies suspected of NSR violations, and would continue work only on those cases already turned over to the Justice Department for litigation.37 On Christmas Eve 2003, a federal appeals court issued an injunction prohibiting the revised rules from taking effect until the case brought by the attorneys general was decided. The next rounds of activity proceeded on two tracks. One track was the proposal of new legislation, named Clear Skies, which sought to reframe the debate by establishing a cap-andtrade program to create a market for emissions by utilities. However, the Clear Skies measure failed to make it through congressional committee. The second track was to pursue revisions to the proposed NSR rules that would leave the trigger for requiring installation of new pollution control equipment at 20 percent of a plant’s replacement costs, but would add limits on the release of pollutants and set deadlines for their imposition. For plants unable to meet their deadlines, a limited cap-and-trade system would allow them to buy credits from those who are ahead of schedule. The rulemaking process on NSR was rejuvenated after a federal appeals court issued another opinion in June 2005. This time the court sided with industry in a suit dating from the Clinton administration crackdown that levied fines on a utility that had expanded its facilities without adding modern antipollution devices. The appeals court ruled that no pollution upgrades were needed if overall emission levels at the plant would not increase as a result of the replacements or repairs. A year later, however, the Supreme Court surprised the Bush administration by agreeing to review the 2005 decision. And on it goes. We do not know the outcome, but one thing is certain. The battles will continue. One side or the other will periodically gain temporary advantage only to be countered, eventually, by the other. There are almost as many ways to “skin the cat” of rulemaking as there are rules. Furthermore, much of the action will not attract the attention of the public. Only those whose pocketbooks are directly affected or who are committed to a cause will do battle. Moreover, the battle will remain mostly within the confines of the EPA—evident to the public only in public stages of rulemaking or in adjudications filed by the EPA to enforce its standards. So what happens to those plants and utilities that have already complied voluntarily with the revised EPA standards for soot and smog and spent millions of dollars to modernize equipment? Or, to those who have settled in litigation with the EPA? Or to those who have avoided compliance? To be continued . . .

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Summary Rules are deliberately technical, and arguments about them are usually the prerogative of major policy entrepreneurs with much to win or lose. Rulemaking creates endless opportunities for policymakers to enact substantial policy changes out of the direct glare of the media and public attention. The very complexity of rulemaking makes it easier to participate and compete for influence. However, this means outcomes are never final and always open to revision. The Clinton administration could create tough new standards on soot and ozone in 1996 and proceed to begin to enforce them using another set of rules, those dealing with new source review. On the other hand, the second Bush administration could then delay implementation by revising new source review rules to let existing producers of such pollution off the hook—somewhat. No one should believe that we have heard the last of this saga. What can we learn about rules from this case study about dueling rules? • Lessons about complexity—The procedures used, from drafting and finalizing rules through enforcement, are deliberately repetitive and open. They allow each new administration a great deal of leeway in determining how aggressively to pursue their particular policy agenda. • Lessons about policy entrepreneurs—Rulemaking provides a process and complex procedures, a minilegislative forum for interests to be pursued or protected. • Lessons about the role of adjudication—both within an agency and subsequently by courts. Agency enforcement relies on adjudication when the subjects of rulemaking do not voluntarily comply with standards. This, then, places the courts front and center in the pipeline of policy production—another feedback loop. • Lessons about the nature of rules—Rules breed more rules and rules can be made to counter rules. As agencies apply rules, specific interests are adversely affected and demand exceptions or refinements to rules. So, the EPA creates new rules or standards and then rewrites old rules to create loopholes. • Lessons about the politics of rules—Rules often impose large costs on relatively few stakeholders, whereas their benefits may be more broadly distributed across large populations. Rules are also relatively easier to create and undo precisely because they often fly beneath the radar of public attention. These dynamics bias the daily routines of rulemaking in favor of the big players, but such dynamics may also be undone by election cycles that regularly change the cast of presidential and congressional players.

KEY TERMS Administrative Procedures Act (APA)—the basic federal statute, first passed by Congress in 1946, governing rulemaking by agencies. States each have their own statutes governing rulemaking by state agencies. Code of Federal Regulations (CFR)—the publication that contains a compilation of all federal rules organized by area (termed titles). States also compile and publish their rules in similar form. Federal Register—a daily publication issued by the federal government containing notices of and information about all proposed and final rules for all agencies.

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formal rulemaking—rulemaking by trial-type hearings, patterned after proceedings in a court of law as a method for protecting the rights of all interested parties to participate and be heard. Formal rulemaking is often specified in enabling legislation. guidelines—quasi-rules. Agency statements issued without rulemaking to provide advance notice about how personnel are to deal with classes of recurring problems and activities. notice and comment rulemaking—a simpler form of rulemaking, involving publication of a proposed rule in the Federal Register, an invitation to interested parties to submit written responses, some consideration of these comments by program staff, and final publication including any modifications, again, in the Federal Register. negotiated rulemaking (reg-neg)—a form of rulemaking in which interested stakeholders work out a consensus on a proposed rule before it is formally promulgated. order—a directive or decision affecting only one person or group retrospectively. Orders are issued by agencies in adjudications to resolve disputes that arise when an individual or group challenges a specific program action. rule—a followable prescription that indicates what behavior is obligated, preferred, or prohibited in certain contexts. In the context of policy production, rules document solutions to policy problems. rulemaking—a term describing the procedures used by public agencies to develop and issue formal rules. standards—practices, benchmarks, or qualities by which something may be tested or measured; evidence of minimum acceptable performance, usually set by some group of experts or professionals external to the government. QUESTIONS FOR DISCUSSION 1. Identify and describe the operation of an unwritten rule in some context with which you are familiar. 2. Why are rules and policymaking so closely associated? 3. What is meant by the logic of appropriateness, as applied to why we make and follow rules? 4. Why do we complicate rulemaking with complex procedures that allow for participation by policy entrepreneurs and interest groups? 5. To what degree should we allow the stakeholders governed by rules to negotiate the content of the rules they will be governed by? 6. When should we develop formal rules and rulemaking as opposed to less formal guidelines and standards? Identify examples of subject matter appropriate to each. 7. Evaluate this argument: Rulemaking is an appropriate forum for administrations with different policy agendas to seek to change policy directions. 8. The case study describes an example in which the Supreme Court deferred to the expertise of the EPA in determining air quality standards. How would the Supreme Court rule on the EPA’s revised new source review rules? To what degree should the Supreme Court defer to an agency’s formulation of its rules?

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SUGGESTED READINGS Administrative Conference of the United States, Office of the Chairman. A Guide to Federal Agency Rulemaking, 2nd ed. Washington, DC: U.S. Government Printing Office, 1992. Hawkins, Keith, and John M. Thomas, eds. Making Regulatory Policy. Pittsburgh, PA: University of Pittsburgh Press, 1989. Kerwin, Cornelius M. Rulemaking: How Government Agencies Write Law and Make Policy, 2nd ed. Washington, DC: Congressional Quarterly, 1998. March, James G. A Primer on Decision Making. New York: Free Press, 1994. March, James G.; Martin Schulz; and Xueguang Zhou. The Dynamics of Rules. Palo Alto, CA: Stanford University Press, 2000. Rosenbloom, David H. Administrative Law for Public Managers. Boulder, CO: Westview Press, 2003. Skrzycki, Cindy. The Regulators: Anonymous Power Brokers in American Politics. Lanham, MD: Rowman and Littlefield, 2003. Sparrow, Malcolm K. The Regulatory Craft: Controlling Risks, Solving Problems, and Managing Compliance. Washington, DC: Brookings Institution, 2000. Vogel, Steven K. Freer Markets, More Rules. Ithaca, NY: Cornell University Press, 1996. Watkins, Michael; Mickey Edwards; and Usha Thakrar. Winning the Influence Game. New York: John Wiley & Sons, 2001.

NOTES 1. Susan B. Shimanoff, Communication Rules: Theory and Research (Newbury Park, CA: Sage Publications, 1980), p. 57. 2. James G. March, Martin Schulz, and Xueguang Zhou, The Dynamics of Rules (Palo Alto, CA: Stanford University Press, 2000), pp. 20–21. 3. Ibid., p. 193. 4. Ibid., p. 21. 5. See Steven K. Vogel, Freer Markets, More Rules (Ithaca, NY: Cornell University Press, 1996). 6. James G. March, A Primer on Decision Making ( New York: Free Press, 1994), p. 58. 7. 5 U.S.C. § 551 (2)(b). 8. Colin Diver, “Regulatory Precision,” in Making Regulatory Policy, ed. Keith Hawkins and John Thomas (Pittsburgh, PA: University of Pittsburgh Press, 1989), p. 199. 9. Cornelius M. Kerwin, Rulemaking: How Government Agencies Write Law and Make Policy, 2nd ed. (Washington, DC: Congressional Quarterly, 1998), p. 4. 10. Chevron v. Speedmore, 529 U.S. 576 (2000). 11. 29 U.S.C. §§553, 651–678. 12. Kerwin, Rulemaking, p. 7. 13. Bernard Schwartz, Administrative Law: A Casebook, 2nd ed. (Boston: Little, Brown, 1982), p. 255. 14. Ibid., pp. 127, 317. 15. For a more extensive discussion of the volume of rulemaking, see Kerwin, Rulemaking. 16. Kerwin, Rulemaking, p. 7. 17. The requirements for formal, or on-the-record, rulemaking are governed by different sections of the Administrative Procedures Act. See 5 U.S.C. §§ 554, 556, and 557. 18. Set forth in 5 U.S.C.§ 553, the section of the Administrative Procedures Act that covers notice and comment rulemaking. 19. William P. Fox, Understanding Administrative Law, 3rd ed. (New York: Matthew Bender, 1997), p. 201. 20. Pub. L. No. 101–648, 104 Stat. 4969, 5 U.S.C. §§581–90. 21. The lower estimate is by James O. Freedman, Crisis and Legitimacy: The Administrative Process and American Government (Cambridge, UK: Cambridge University Press, 1978), p. 207. The upper estimate is by Fox, Understanding Administrative Law, p. 313. 22. Administrative Procedures Act, 5 U.S.C. § 554. See also Schwartz, Administrative Law, p. 285. 23. Adapted from the Oxford American Dictionary. 24. Webster’s Ninth New Collegiate Dictionary (Springfield, MA: Merriam Co., 1985), p. 1148.

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25. Federal Accounting Standards Advisory Board, Statements of Federal Financial Accounting Concepts and Standards: Original Statements, vol. I (Washington, DC: General Accounting Office, February 28, 1997). 26. Federal Acquisition Streamlining Act of 1994, Pub. L. No. 103–355, 108 Stat. 3243, 41 U.S.C. §261. 27. For a discussion of this legislation, see Carl L. Vacketta and Susan H. Pope, “Commercial Item Contracts: When Is a Government Contract Term of Condition Consistent with ‘Standard’ or ‘Customary’ Commercial Practice?” Public Contract Law Journal 27, no. 2 (Winter 1998): 395–427. 28. Malcolm K. Sparrow, The Regulatory Craft: Controlling Risks, Solving Problems, and Managing Compliance (Washington, DC: Brookings Institution Press, 2000). 29. Paul R. Portney, “Air Pollution Policy,” in Public Policies for Environmental Protection, ed. Paul R. Portney and Robert N. Stavins (Washington, DC: Resources for the Future, 2000), p. 77. 30. 42 U.S.C. § 7409 (b) (1). 31. H.R. 1984 and S. 1084, 105th Congress (1997). 32. American Trucking Associations v. Environmental Protection Agency, 175 F.3d 1027 (D.C. Cir. 1999). 33. Whitman v. American Trucking Associations, 531 U.S. 457 (2001). 34. Ibid. 35. Bruce Barcott, “Changing the Rules,” New York Times Magazine (April 4, 2004): 39, 44. 36. Congressional Research Service, Larry B. Parker and John E. Blodgett, “Air Quality and Electricity: Initiatives to Increase Pollution Controls,” CRS Report for Congress, RS20553, October 25, 2002. 37. Barcott, “Changing the Rules,” pp. 39, 77.

CHAPTER 13 Contract PREVIEW Chapter 13 examines the tools of contracting as a technology for policy production. Contracts enable governments to acquire the goods and services needed to produce as well as deliver benefits to people. Contracting has deep historical roots as well as being an increasingly common means of policy production. Contracts take numerous and continually evolving forms. As you read this chapter, you should be able to answer the following questions. • • • • • • • • •

What is a contract? What are the special characteristics of public contracts? How do contracts differ from rules and regulations? What factors determine the decision to contract? What are the differences between procurement and service delivery contracts? How do grants and contracts differ? What are interagency agreements, interstate compacts, and regulatory contracts? What are the relative roles of competition and collaboration in contracting? What legal and practical issues are raised by the use of contracts in policy production?

13.1 INTRODUCTION In chapter 12 we examined rules as a technology of policy production. For many, making and enforcing rules are the quintessential activities of government. There are few aspects of everyday life not subject to government rules and regulations. However, there are other means of getting things done. Rather than issuing and enforcing rules, public policymakers can make a deal. They can buy goods you produce, pay somebody else to deliver the goods or services you need, or even bargain with you about what you can or cannot do. Instead of telling you what to do, public policymakers can employ contracts or agreements to produce results. They can draw on the same tools that businesses and consumers use every day. In this chapter we examine contracts in particular and agreements in general as a technology of public policymaking. While agencies and rules are truly ancient technologies of public policymaking, contracts are a newer and rapidly proliferating means of governance. If this text had been written four decades ago, the discussion of contracts and contracting would have merited at most a few paragraphs. At that time, the business of government was managing agencies and programs and making rules, while contracts were primarily a means of acquiring pencils, computers, or missile systems. Today, however, contracts are seen by many as the preferred technology of public policymaking. We expect our government to act like a business and purchase both goods and 295

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services from competing contractors. Government contractors deliver welfare benefits, manage correctional institutions, fly spy missions, and even fight alongside American troops in remote regions of the world. In the twenty-first century there are few functions of government that have not been ”outsourced,” to both commercial and not-for-profit contractors. How are contracts important to policy production? First, through their economic impact. Quite simply, “the U.S. government is the world’s single largest purchaser of goods and services.”1 The federal government spends more than $200 billion dollars a year on contracts.2 And state and local governments spend even more. Second, through their ubiquity. “Contracting for goods and services could be considered the major activity of the United States government, given the volume of dollars and work generated by federal contracts.”3 Third, through history and tradition. Contracts have been around since the American Revolution as the technology by which the government acquires the goods and services it needs. Fourth, through the trend toward using contracts to acquire services once performed by government agencies. When the Defense Department hires contractors to feed its troops and service its vehicles, and when states pay commercial companies to manage food stamps and welfare benefits, governments become dependent on external parties to get the job done. Government contracting is transforming the relationship between public policymakers and their beneficiaries. In the following pages we will examine a variety of contracts and contract-like tools of public policymaking. What all these tools share is an agreement or deal between government policymakers and other parties to deliver policy benefits directly—or indirectly—to the American public. The authority of government is used to negotiate for results, not command them. The following sections will review the general types of contracts, as well as many of the issues associated with contracting. • • • • • • • •

Public contracts—what public contracts are and how they differ from private contracts and rules Procurement contracts—how governments acquire the goods and services they need to operate Services contracts—how governments contract with private enterprises to deliver public services such as health care Grants and cooperative agreements—how governments distribute money to both public and private entities to further policy objectives Intergovernmental agreements—how government agencies work with each other through interagency agreements and intergovernmental compacts Regulatory contracts—how governments use contracts in combination with rules and regulations Competition and collaboration—the strategies of policy production that contracts serve Conclusions—legal and practical issues concerning contracts as a technology of policy production

13.2 PUBLIC CONTR ACTS 13.2.1 Contracts A contract is a binding agreement between two or more parties that is enforceable by law. The parties to a contract exchange benefits and obligations to fulfill the terms of the agreement. You offer to pay a dealer $25,000 for a new car; you sign a nondisclosure agreement with your employer; you promise to “love, honor, and obey” your spouse. And if the terms of a contract are not met,

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the parties have a right to seek a remedy in court. Contracts are the lingua franca of modern economic life, and contract law is the bedrock of American society. The free market of the American economy operates effectively because the billions of transactions between economic actors are informed and sustained by law and enforced by courts. 13.2.2 Public Contracts Governments—and by delegation, government agencies—have the inherent right to make contracts. The Supreme Court affirmed this right in 1831 in finding the right to contract to be incidental to the “general right of sovereignty.”4 However, from the beginning, the courts drew a distinction between the private contracts formed by private parties and the public contracts entered into by sovereign governments. A government is not like an ordinary citizen or private enterprise. A government has the sovereign authority to make laws and enforce compliance with its decisions. It can act unilaterally and with coercion. Thus, when a government enters into a contract with a private citizen it is not really an agreement between equals. When a government agency fails to fulfill its obligations under a contract, the aggrieved party can only seek redress from another agent of government—the courts. When a sovereign and its subject make an agreement, the former always has the upper hand. Thus, “[t]he distinction between the respective roles of ‘government as sovereign regulator’ and ‘government as contracting party’ raises a difficult practical question. When may the government avoid its own contractual promises by virtue of its sovereign authority to establish the rules under which contractual promises are enforced—and to change them?”5 For example, from the beginning the Supreme Court has “held that public contracts are to be strictly construed in favor of the government.”6 In addition, agencies may terminate contracts “for the convenience of the government” as long as the contractor receives reasonable compensation. Thus, at the end of World War II the federal government cancelled contracts worth more than $20 billion with minimal litigation. Moreover, the rights of contractors are also limited with respect to national security. In a case dating back to the Civil War, the Supreme Court found that contractors conducting secret or covert operations could not sue the government in court for breach of contract.7 In a contest between national security and contractual obligations it is the former that will prevail. Though government agencies cannot act capriciously, they hold the advantage in dealings with private enterprises and individuals. Finally, public contracts are instruments of public policy. As such they embody the procedural standards and substantive goals that we expect of public agents. Therefore, government contracts almost always include multiple clauses mandating compliance with a wide range of government policies, including (among many others): • • • • • •

Anti-kickback procedures Limitations on payments to influence certain federal transactions Utilization of small business concerns Equal opportunity Affirmative action for workers with disabilities Workers’ compensation insurance

These and many other “boilerplate” clauses are inserted into public contracts, adding to their bulk as well as to the costs of contract administration for both parties. While burdensome, contract boilerplate is unavoidable. When government agencies write contracts they are accountable to the public as well as to their contract partners. Government agencies must abide by numerous policy

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provisions and constraints that don’t apply to private parties. We give private institutions much more leeway or discretion than public ones. As a result, public contracts are longer, more complicated, and less flexible than private contracts.8 While private parties can seal agreements with a handshake, government agencies must rely on lawyers and lengthy legal documents. Paradoxically, governments may have the authority to break promises, but they must work much harder to make them. Public contracts must conform to standards of openness, fairness, and accountability that are much more onerous than those governing private contracts. Dealing with governments is fundamentally different than dealing with private parties. 13.2.3 Contracts Versus Regulations How do contracts differ from rules and regulations? Table 13.1 summarizes some of the important differences between contracts and regulations as tools of public policymaking. Table 13.1

Contract and Regulation: A Comparison Contract Fixed duration Specified parties Enforceable according to its terms Enforceable by outside authority (courts or arbitration) Party agreement Resolution by negotiation Adaptation of terms to specific situations Quid pro quo

Regulation Indefinite duration General population (within jurisdiction) Enforceable and revocable by government Unilateral enforcement by government Party submission Resolution by direction Generalized terms applied “across the board” Benefits from, and obligations of, citizenship

Contracts are limited agreements based on negotiations by a limited set of parties. When contracts “go bad,” the parties must turn to the legal system or third-party arbiters for enforcement. Regulations, on the other hand, are generalized rules with broad application that are unilaterally issued and enforced by government agencies and can be changed by those agencies at any time. At first view, contracts and regulations appear to be radically different technologies of public policymaking. This view is reinforced by the fact that the laws governing government rulemaking and government contracting have independent sources and separate histories. As we saw in chapter 12, the Administrative Procedures Act of 1946 (APA) established the foundations for modern rulemaking. However, the APA specifically exempts contracting from its purview. Instead, the basic laws governing government contracts were separately enacted in 1947 and 1949. These laws serve as the basis for the General Services Administration, the agency responsible for oversight of contracting by the federal government. Since then, the laws of public administration and public contracting have followed different evolutionary paths. Experts in administrative law seldom talk to experts in government contracting. Rules and contracts seem to be starkly different choices for technologies of public policymaking. Nevertheless, differences in theory and law mask integration and interaction in practice. The subjects of regulation do indeed participate in the rulemaking process and the application of general rules to specific circumstances almost always involves negotiation with the affected parties. Regulators constantly bargain with regulated parties, and public contracts are always constrained by public laws and administrative procedures. In reality, regulation involves negotiation, and negotiation requires regulation. Rules and contracts are complementary tools of public policymaking.

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13.3 PROCUREMENT CONTR ACTS The most common type of public contract is the procurement contract. Procurement contracts are the means by which government agencies acquire the goods and services they need to operate. Strictly speaking, all government contracts are procurement contracts. According to federal regulations, a contract is defined as “a mutually binding legal relationship obligating the seller to furnish the supplies or services (including construction) and the buyer to pay for them. It includes all types of commitments that obligate the Government to an expenditure of appropriated funds and that, except as otherwise authorized, are in writing.”9 This definition reflects the historical use of public contracts as a vehicle for acquiring supplies and services for consumption by government agencies and the public. The practice and law of public contracting evolved as a tool to enable public policymakers to purchase weapons systems, subsidize transportation or communications services, or build roads, canals, dams, or other public works. However, in recent years, the same definition and legal apparatus have been used to deliver government benefits such as medical care, welfare, and even incarceration. Today, governments pay private contractors to decide what kind of medical care you will receive, whether or not you qualify for public welfare, or even how you will be treated as a prisoner of the state. Private contractors decide what your individual benefits—or liabilities—will be. We will leave the discussion of these newer types of public contracts for a later section. 13.3.1 The Evolution of Government Contracting Defense needs have driven much of the evolution of government contracting. From the earliest days of the Revolution, the Second Continental Congress organized a procurement system in 1775 for the new nation under a Commissary General and issued contracts, “letters of marque and reprisal” to privateers (the first American Navy) to confiscate British shipping. Problems became evident at that early date, too. General Washington complained bitterly about war profiteering at the expense of an impoverished army. Many of the solutions to the problems in the technology of contracting also emerged first in the domain of defense. This pattern has continued into the present era. The Pentagon today spends over 70 percent of all contracting dollars—more than any other federal department. Among the civilian agencies and departments, Energy leads the way in contracting out work.10 Another focus for public contracting in the early days of the American government was the postal system. Contracts for carrying mail on stagecoaches were authorized by the Continental Congress in 1785, and familiar problems soon emerged. Stagecoach operators “were quite willing to gouge the taxpayer and did not always live up to their promises about the level and quality of service.”11 By 1792 the first federal law requiring publicly advertised bids was included in postal legislation. The American pattern of reliance on private enterprise to supply the goods and services needed by government rather than on production by government itself was also defined relatively early in the history of the new republic—again in the domain of defense. Arms to fight the Revolution were primarily produced locally, and the war further stimulated local production. The French Revolution and foreign violations of American neutrality raised the question of whether there was sufficient armament to protect American interests. In response, the government—unable to buy enough weapons from local gunsmiths—set out to create its own production capacity. Beginning in 1794, the government created its own manufacturing facilities in Navy yards and armories at Springfield, Massachusetts, and Harper’s Ferry, West Virginia, to produce muskets. Further, the government also acquired several iron mines and foundries to support production at these facili-

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ties. These steps reflected the beginnings of an approach to organizing policy production based on a government monopoly in manufacturing weapons.12 President Jefferson, upon taking office in 1801, reversed direction. He advised “purchasing at market where competition brings everything to its proper level of price and quality” and persuaded Congress to revise the approach the United States would take to arming itself in the future. “From that time on, the Legislature’s decision has, in general, been overwhelmingly in favor of the private entrepreneur.”13 Similarly, a glimpse of the federal government’s future role in stimulating American industry and in standardizing the quality of production can be detected in the same series of events leading to Jefferson’s decision to rely on private manufacturing in 1801. Changing technologies, in the form of assembly-line mass production that expanded capacity and standardized quality, had allowed private-sector manufacturers to better respond to government needs for muskets. Eli Whitney, the father of assembly-line, mass production in the United States, led the way with his idea to replace skilled handcraftsmen with power tools to produce interchangeable parts for the government. The government contracted with Whitney to manufacture 10,000 weapons meeting government specifications within a two-year period. His success enabled Jefferson to have confidence in his recommendation to Congress. “Without Whitney’s demonstration of the ability of private enterprise to meet large-scale demands, and of ‘the market’s’ capacity to produce cheaply at adequate standards of quality, the result might have been different.”14 At a critical junction, technological innovations and government needs were merged to determine the future direction of policy production. At the same time, government contracts drove the movement toward standardized production in the industrial revolution. From the beginning, the federal government used contracts to foster emerging industries and help individual businesses survive. Corporate subsidies and bailouts are part of the American way of government. Moreover, the federal government also used postal and military contracts to build an infrastructure for the national economy. As the nation expanded westward, it extended the postal system and sent troops to “pacify” the Native American tribes. “These postal and military activities provided government with an excuse for contracts that built roads, expanded water transport, and developed postal, and later telegraph, communications throughout the nation. If this kind of strategy sounds familiar, it should. The same approach was used in the 1950s to justify federal financing of the interstate highway system, ostensibly constructed to enable the military to rapidly reposition troops and equipment.”15 Economy and efficiency have never been the sole drivers of government procurement. Until the mid-1930s, government contracting was reasonably straightforward, with periodic efforts to improve procedures and protect against fraud and abuse. Generally, the federal government sought two basic types of goods and services: products normally available in civilian markets and products with unique, noncommercial characteristics often destined for military use. In the first instance, the major concern was that there be multiple suppliers and competitive bidding to keep costs down. With military products, as long as technologies changed only slowly, the government encountered few problems in developing standards detailing specifications for the work to be performed, despite limited numbers of suppliers. The scope and forms of government contracting were expanded and profoundly changed by events surrounding the Second World War. Rapidly changing military technologies and their associated costs of development and production changed the nature of government contracting. Government policy supported research and development (R&D) through contractual agreements with private institutions as the government itself assumed responsibility for sponsoring technological development and promoting change. Private businesses were encouraged to work closely with the government and, in so doing, “to meet standards of performance unknown in normal markets. . . . The standards set by

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government have had significant impact upon business organization and managerial procedures. . . . It has also stimulated the growth of a variety of nonprofit organizations which seem to be claiming an ever larger role in a highly competitive milieu.”16 World War II and the subsequent Cold War led to a period of aggressive federal military expenditures in support of a U.S. arms race with the Soviet Union. Such government spending eventually led to many other R&D initiatives designed to apply knowledge to a growing number of human problems now considered the responsibility of government. Government contracts were a primary technology for channeling public resources into R&D. Many new players responded to the growing pool of funds as the private sector adjusted to dealing with the government. President Eisenhower warned of the implications of the growth of the “military-industrial complex.” The federal government scrambled to reform its procedures for contracting to reflect very different needs and a very different environment. Until the past two decades, reforms were slow and stepwise. Beginning in the 1980s, a comprehensive federal acquisition system began to be assembled. The most important step involved the promulgation in 1983 of the Federal Acquisition Regulations (FAR), the first time uniform policies and procedures for contracting by all executive agencies were enacted.17 The FAR system was a joint effort of the Department of Defense and the Office of Federal Procurement Policy. After a decade of experience, these regulations were revised and improved, first in the Federal Acquisition Streamlining Act of 1994 (FASA),18 legislation dealing primarily with the acquisition of commercial items, and again with legislation passed in 1996.19

MINI-CASE 13.1 What One State Actually Buys—A Snapshot What one state actually buys—a snapshot In fiscal year 2003, Iowa, a medium-sized state with a total yearly budget of approximately $5 billion, contracted for the following major purchases (in millions of dollars). $millions Vendors Paid $millions Goods Purchased $millions Services Purchased Client Services for Dept. Consultec (Medicaid & Liquor* 78.8 of Human Services 227 Medicare) 20.7 University of Iowa Food 37.4 Administrative Services 61.6 (professional services) 18.6 Data Processing 35.3 Professional Services 42.2 Merit Resources 12.9 Neumann Brothers Inc. 38.6 (construction) 12.0 Construction 35.1 Legal Utilities 22.1 Engineering 34.4 Barton Brands 11.0 Iowa State University 18.7 (professional consulting) 11.0 Postage 18.8 Information Technology Scientific Games (lottery Vehicles 15.7 Other 17.2 services) 10.0 * The state exercises a monopoly over the wholesale distribution of hard liquor by purchasing and then reselling it to local retailers for sale to the public.

Source: Iowa City Press Citizen, May 18, 2004, 2A.

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13.3.2 The Decision to Contract The first step in the procurement process is to decide whether to do the work in-house or contract out. Should the work be performed by the government, or by private contractors? In many cases, the decision has already been made in the authorizing legislation and embedded in the program design. But what about the myriad government activities that fall under the radar of legislative intent? Should printers, secretaries, computer technicians, cooks, auto mechanics, and maintenance crews be hired as government employees, or contractor staff? What functions should government perform? As outlined above, the bias in American government has long been in favor of purchasing commercial goods and services rather than using government or in-house supply. This bias was hardened into policy by President Eisenhower in 1955. The policy stated that: “the federal government will not start or carry on any commercial activity to provide service or product for its own use if such product or service could be procured from private enterprise through ordinary business channels.”20 This policy—issued as Office of Management and Budget (OMB) Circular A-76—has been the policy of the federal government ever since. Implementing this policy principle, however, has not been easy. In 1983, the Reagan administration issued a detailed methodology for making cost comparisons between in-house production and contractor proposals and tilted the system further in favor of contracting out government activities. The revised A-76 mandated that only activities that are “inherently governmental service in nature” could be performed by the government without competitive bidding. It also included an elaborate classification of both “inherently governmental” and inherently commercial activities. However, the Reagan administration’s push to privatize government activities had limited success due to bureaucratic resistance, recurring scandals with government contractors, and the inherent difficulties of comparing public- and private-sector costs. Since then, both the Clinton and the second Bush administrations have wrestled with the mandates of Circular A-76. In 1996, the Clinton administration sought to clarify the factors used in making the decision to “in-source” or outsource the performance of government activities. In 1998, Congress passed the Federal Activities Inventory Reform Act (FAIR), which requires an annual inventory of all activities performed by federal employees. These activities were to be classified as either commercial or inherently governmental. “As set forth in the A-76, an inherently governmental activity is one that is so intimately related to the public interest as to mandate performance by government personnel. These activities require the exercise of substantial discretion in applying government authority and/or in making decisions for the government. Inherently governmental activities normally fall into two categories: the exercise of sovereign government authority or the establishment of procedures and processes related to the oversight of monetary transactions or entitlements.”21 The FAIR inventory would then be used as the basis for deciding which government activities could and should be opened to competitive outsourcing by private contractors. That is, private companies could compete against existing government agencies for contracts to perform these activities. In practice, however, implementation of Circular A-76 was largely limited to the Department of Defense. The second Bush administration has taken the A-76 process several steps further. In 2001 it announced a “competitive outsourcing initiative” to institutionalize public-private competitions as a management tool. Based on the FAIR inventories, approximately one-quarter of the federal civilian workforce was

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identified as performing commercial activities that should be available for competition. Of those available for competition, the Bush administration specifically targeted 425,000 federal workers for privatesector competition. Agencies were then required to set up permanent staffs dedicated to managing these public-private competitions. Although the details of the competitive outsourcing initiative have been hotly debated, the premise—that federal government activities and jobs must be justified or subject to private competition—is deeply rooted in the American approach to government. 13.3.3 Contract Formation Once the decision to contract has been made, the procurement process is governed by the 2,200-page FAR. The FAR evolved from a hodgepodge of laws and regulations that for the most part focused on preventing corruption and ensuring fairness in the awarding of contracts. The FAR helped reduce the kinds of fraud that had been endemic in the first two centuries of government procurement, but it introduced rigidity, mountains of paperwork, lengthy delays, and increased costs into the system. When combined with the government penchant for developing unique product standards and specifications, the outcome was long procurement cycles that resulted in $500 toilet seats, cost overruns, and failed projects. The procurement process became a bureaucratic nightmare. The Federal Acquisition Streamlining Act of 1994 helped ameliorate the worst aspects of the process. Rules were simplified, agencies were encouraged to purchase commercial off-the-shelf products, performance-based specifications were emphasized, and procurement officers were given greater discretion to innovate and get things done. Nevertheless, the process itself remained largely intact, with the major steps including: • • • • • • •

Acquisition planning Market research into alternative solutions Preparation of a statement of work and product specifications Issuance of a solicitation, or request for proposal Evaluation of offers or proposals Contract negotiations Contract awards

Agencies have discretion to decide what contracting method to use in each acquisition. There are three basic approaches to forming a contract: • • •

Sealed bidding—used when price is to be the only basis for making an award decision and there are no negotiations between the bidders and the government Simplified acquisition procedures—used for purchases where the aggregate value of the contract is less than $100,000 Negotiations—used when contracts are awarded after negotiations and revisions between those bidders presenting competitive proposals. Contracts awarded without sealed bidding are considered negotiated.

A contract defines the expectations of both parties. That is, it defines the scope of work to be performed. Federal contracts are classified according to the nature of the work to be performed by a contractor. A single contract may provide for several different tasks. The Office of Federal Procurement Policy (OFPP), part of the Executive Office of the President and answering to the director of the OMB, oversees procurement by government agencies. It was established in 1974 and charged with developing uniform policies and procedures for acquiring the

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goods and services needed by all executive branch departments and agencies. The OFPP administers the regulations and other statutes governing the federal contracting process. These include basic procedures for solicitation of proposals, contractor qualifications, design or performance specifications, bonding or insurance requirements, contract modification, termination, auditing, and procedures for resolving disputes. In addition to the basic provisions in the statutes and rules, each agency may issue its own implementing or supplementing regulations, called deviations, tailored to their contracting needs. 13.3.4 Types of Contracts There are several broad categories of procurement contracts. Each has advantages and disadvantages for both parties that should be calculated before signing. 13.3.4.1 Fixed-Price Contracts Fixed-price contracts pay the contractor a set price, including all costs and profits, established at the time the contract is awarded. These are the most frequently used form of government contract.22 Such contracts are used where the work or goods can be held to some specified measure of performance and a fair price established at the outset. Often they involve sealed bidding and goods and services that are commercially available. Fixed-price contracts offer the potential for maximizing profits and also the potential risks of cost overruns to the contractor. 13.3.4.2 Cost-Reimbursement Contracts Cost-reimbursement contracts pay the contractors for the actual costs they incur plus a previously agreed-upon profit or fee. Such contracts are used when uncertainties of production do not permit an accurate estimate of costs ahead of time. So, for example, cost-reimbursement contracts are used to develop high-technology weapons systems where development costs cannot be accurately projected. In their simplest form, such contracts have few disincentives for contractors to keep costs down and transfer risk to the government. For these reasons, various incentives are often added to such contracts to minimize contractors’ ability to access the deep pockets of government. 13.3.4.3 Incentive Delivery Contracts Incentive delivery contracts are used when the exact quantities and/or times of delivery are not known at the time of contract but are to be defined at a later time. In this arrangement, flexibility benefits for the government come with several risks for the contractor. When the quantities a government will purchase are not specified, but a date is certain, a contractor must be careful to weigh costs based on the amounts likely to be needed against the risk that less will be actually purchased. Similarly, when time is not specified, the risks involve changing costs and disruption in production schedules. Contractors may try to offset these risks by requiring the government to obtain all or at least a guaranteed minimum quantity of its actual purchase requirements from one source. 13.3.4.4 Time-Materials and Labor-Hour Contracts Time-materials and labor-hour contracts provide for purchasing supplies or services on the basis of hours and costs of labor (with profit added in). A time-and-materials contract includes the cost of materials plus labor, whereas a labor-hour contract includes only time. Both are used when it is not

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possible to estimate with any precision how much or how long work on the project will take. The advantages and disadvantages of both types are similar to those of cost-reimbursement contracts. 13.3.4.5 Letter Contracts Letter contracts are written preliminary contracts authorizing a manufacturer or supplier to begin work immediately pending negotiation of a final contract. Letter contracts may not have a firm price, but they bind both parties for 180 days, or until completion of 40 percent of the work to be performed. They are used when time is of the essence and are binding if no final agreement can be reached. 13.3.5 Contract Management Once a contract is awarded, the contracting officer (CO) is responsible for ensuring that the job gets done and gets done right. Historically, COs have taken an auditing approach to contract management. “[T]hree different kinds of audits have been done over the years: (i) to ensure that the contractor was actually performing the contract; (ii) that its financial practices met the contract and federal laws; and (iii) that it was in fact complying with the certifications that it had submitted concerning government labor standards, civil rights requirements, and other policies. These are generally known as performance, financial, and compliance audits.”23 Audits, however, have proved inadequate to the task of monitoring contracts where technical specifications are complex, standards of delivery are poorly defined, or actual delivery is far removed from the desk of the CO. Indeed, contract management is the Achilles heel of public procurement. “Contract administration can be a labor-, information-, and technology-intensive activity.”24 Given the systemic bias for outsourcing work to private enterprises, policymakers everywhere tend to underestimate the costs and resource requirements for ongoing contract management. And governments of all kinds lack the human and material resources needed to manage complex, long-term contracts. Though both legislators and the FAR focus on the process of contract formation, it is lack of skilled management and oversight that produces most of the horror stories of government contracting. 13.3.6 Franchises One particular form of procurement contract used more frequently in recent years is a franchise. “Under the franchising of external services, the government grants a concession or privilege to a private-sector entity to conduct business in a particular market or geographical area—for example, operating concession stands, hotels, and other services provided in certain national parks. The government may regulate the service level or prices, but users of the service pay the provider directly.”25 In addition to the traditional types of franchises, the federal government has begun to use franchise contracts to provide travel services and other support to government agencies.

MINI-CASE 13.2 Competitive Bidding and the Potential for Price Gouging More than half of the goods and services purchased by the federal government are now procured without bidding. Of the $230 billion worth of goods and services purchased in 2001, $123 billion bypassed federal bidding procedures. This proportion has been on the rise since the 1990s, when the Clinton administration and the GOP-controlled

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Congress streamlined government purchasing in the name of reinventing government. In 34 percent of all government purchases, no bids were solicited. An additional 19 percent was spent on contracts awarded where only one bid was received, on credit card purchases that required no bids, or on multiple-award contracts to the same provider. This situation has evolved, despite language in the Federal Acquisition Regulations requiring full and open competition for all government purchases except when only one supplier (sole source) was available. Government agencies are obligated, in principle, to seek the best deal. In contrast, there are more and more examples of contract monopolies. The Defense Department paid American Auto Logistics, Inc., $204 million to transport 75,000 cars belonging to U.S. military personnel to their new duty stations around the world in 1998. The company, the only bidder on the contract, was not required to justify its cost or pricing data. Similarly, in the same year the Federal Office of Personnel Management paid Investigations Services, the only bidder on the contract, $115 million to perform background checks on government employees seeking security clearances. It, too, was not required to submit cost and pricing data. The Department of Energy paid Westinghouse Corporation $1.5 billion to operate the Savannah River nuclear weapons production facility in South Carolina. That contract, last offered for bid in 1996 when Westinghouse was the only bidder, has not been reopened since. Instead, it was simply renewed in 2001. What do these examples tell us about government contracting? The GAO and watchdog groups document growing numbers of abuses in recent years but, so far, the federal government reliance on sole source contracting continues unabated. Source: “Half of Federal Contracts Uncompetitive,” Iowa City Press Citizen, April 2, 2002, p. 9A, citing the Associated Press.

13.4 SERVICE DELIVERY CONTR ACTS Technically speaking, public contracts are procurement contracts. The same rules and laws that apply to government purchases of computers also apply to contracts with Health Maintenance Organizations, nursing facilities, faith-based social services providers, or private prisons. However, the situation in the latter cases can be quite different. When the Army purchases a new tank or when a state builds a new road, the benefits and costs are shared among thousands or millions of fellow citizens. When a doctor working for a private HMO decides that you qualify for Medicare reimbursement, the benefits and burdens you receive are “up close and personal.” They are tangible, immediate, and specifically tailored to your circumstances. You are a consumer of public benefits. Moreover, when governments sign contracts with private vendors to deliver social services, the actual beneficiary or consumer of the services becomes a third party to the transaction. Even though the benefits you consume are tangible and individualized, your relationship to the government that provides them is distant or indirect. The private vendor stands between the government and its citizens. Hence, citizen beneficiaries have the least to say about the government benefits that have the greatest impact on their lives. The scope and impact of services delivery contracts are ever-increasing. Governments are constantly adding to the menu of social benefits they provide to their citizens and they increasingly rely on contractors as the means of delivery. The focus of government procurement has shifted

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from the acquisition of goods or construction to services. “[B]etween fiscal year 1990 and fiscal year 2000, purchases of supplies and equipment fell by about $25 billion, while purchases of services increased by $17 billion, or about 24 percent. Consequently, purchases for services now account for about 43 percent of federal contract expenses—the largest single spending category.”26 Hence, social welfare benefits in the United States are typically delivered by means of chains of public-private contracts. For most social services, a state legislature or local government body . . . delegates responsibility to an agency, and the agency undertakes its delegated task through a combination of contract and regulation. In a typical contractual regime, the agency and private provider may negotiate the terms of the contract, but the ultimate consumer of the service is a member of the public. . . . Thus, the delivery of social welfare and services is accomplished through a series of contracts: those between governments and those subsequently negotiated between a government agency and a private provider . . . such arrangements allow private actors to share significant discretionary authority with government, including considerable coercive authority.27 State implementation of Medicaid—the federal program that provides health care benefits to low-income citizens—is a case in point. States can now compel Medicaid beneficiaries to participate in programs operated by private managed care organizations (MCOs). “[S]tates increasingly require Medicaid beneficiaries to choose among the MCOs offered by the state, much like employees in firms might choose from a menu of managed care providers offered by their employers.”28 While beneficiaries can choose among multiple providers, they have little say in the policymaking process. “At this stage in their development, Medicaid contracts vary widely across states; some are highly specific, leaving little discretion to managed care plans, while others delegate substantial discretion to contractors in making coverage, operational, and administrative decisions. Under most contracts, private companies rather than states select and design their provider networks and oversee provider performance.”29 Moreover, as third parties to state-MCO contracts, beneficiaries have limited rights to press claims against MCOs. Whom can beneficiaries sue and for what when things go wrong? MCOs are not state actors or agents of government authority and so are not bound by the constitutional rights of due process. When governments contract with private companies to deliver social services, the rights of beneficiaries often dwell in legal limbo. Finally, in a far different context, half-way around the world, civilian contractors hired as interrogators by U.S. military intelligence have played active, perhaps leading, roles in the humiliation and torture of Iraqi prisoners. Who was in charge of these contractors and how should they be held responsible for their actions? In the case of U.S. military forces, the answers are clear: soldiers operate under a chain of command and their behavior is subject to the Uniform Code of Military Justice. The situation for military contractors is quite different. In the first instance, it is often difficult to determine whom they work for and why. “Smooth operations require that commanders in the field be able to oversee contractors, but in fact the officer who is expected to ensure that a company meets the terms of its contract may be back in the United States. Field commanders have no easy way to find out what exactly a contractor has been sent to do. All of this makes oversight difficult even among the executive agencies that hire private security.”30 The mission and authority of civilian contractors hired to interrogate Iraqi prisoners were murky at best. More important, how should these contractors be held accountable for torturing Iraqi prisoners? Granted immunity under the terms of U.S. occupation of Iraq,

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contractors are subject to prosecution by the U.S. Department of Justice under laws that have rarely, if ever, been tested in court. Though the abuse of prisoners by civilian contractors in Iraq may seem remote from the everyday concerns of American public policymaking, there are examples closer to home. One is the growing number of domestic U.S. prisons owned and operated by private companies under contract to federal and state governments. The problems of oversight and accountability are endemic to government contracting of social services. 13.5 GR ANTS AND COOPER ATIVE AGREEMENTS Grants and cooperative agreements are familiar techniques of policy production. Although technically not contracts, both are similar enough to warrant inclusion in the discussion of public-private agreements. Grants and cooperative agreements are often used by governments to work through other public and private entities to achieve policy objectives where the purpose is to benefit the public rather than furnishing services to the agency. 13.5.1 Grants Grants are conditional awards of funding. Government agencies award recipients funds to further the goals of a public program. A federal grant is defined as “[t]he legal instrument reflecting a relationship between [the Agency] and a recipient whenever: (a) the principal purpose of the relationship is to transfer money, property, services, or anything of value in order to accomplish a public purpose of support or stimulation authorized by Federal statute and (b) no substantial involvement is anticipated between [the Agency] and the recipient during the performance of the contemplated activity.”31 The principal differences between a grant and a contract are two: first, grants are not regulated by a uniform statutory framework, and second, “federal agencies do not possess the inherent power to enter grant agreements as they do procurement contracts. . . . Instead, Congress must explicitly provide for grants in legislation and authorize appropriations for the grant. As a result, there is no uniform statutory framework for grants as there is for procurement and they are subject to a variety of government-wide and agency-specific conditions.”32 Grants are divided into two principal types: • •

Mandatory grants are awards given to grantees—usually other public agencies—who file an application that meets the statutory and regulatory requirements of the grant program. Mandatory grants are automatically given to those who qualify. Discretionary grants are those where applicants compete for an award and the agency selects awardees. Agencies have considerable leeway in the choice of recipients and in monitoring compliance with the conditions of the grant. Discretionary grants are typically used to provide assistance to both public and private recipients.

Moreover, federal grants to states and localities may be further subclassified as either categorical or block grants. • Categorical grants allow funds to be used only for specific, narrowly defined purposes and include reporting requirements that help ensure both financial and programmatic accountability. Categorical grants have the advantage of allowing Congress to monitor program activities and results. From the perspective of state administrators and third-party beneficiaries, however, cat-

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egorical grants can prove problematic. “[A] grant system comprising numerous and overlapping specific programs, each with its own target populations and requirements, can create difficulties at the service delivery level. The combined coverage of related specific programs may be poorly matched to local need, and differing eligibility and reporting requirements complicate program administration for service providers who receive funds from multiple grants.”33 • Block grants award funds to state or local governments to be used at their discretion to support a range of activities. Thus, block grants have traditionally imposed few administrative or reporting requirements and avoid many of the burdens of categorical grants. However, as reflected in the case study in chapter 11 on welfare reform, this is changing. Federal awards increasingly impose reporting requirements on recipients, again reflecting greater emphasis on public accountability and documenting results. Grants are big business, especially for the federal government. Grants have a long history, dating back to the early nineteenth century, when the federal government awarded land grants to states, which, in turn, sold the land to finance public transportation projects and state universities. Today, federal grants to state and local governments total approximately $300 billion dollars a year. That amount is nearly one-third the total of all federal discretionary spending. Grants are an irreplaceable weapon in the arsenal of policy production and the primary means of federal control over state and local governments. The grant system not only allows the federal government to advance its substantive policy goals, but it also enables the federal government to indirectly regulate state and local governments and ultimately to impose conditions on the private provides of social services. . . . Because a conditional grant is a “carrot” that a state can refuse, rather than a “stick” that it cannot, even heavily conditional grants that require states to pass legislation are not considered to be unconstitutionally “coercive” intrusions into state sovereignty. . . . The grant device effectively enables the federal government to purchase services for the benefit of third parties and regulate the delivery of the services simultaneously.34 In order to get federal grants for highways, homeland security, health, welfare, and a host of other benefits, states must comply with a wide variety of federal rules and regulations. More important, federal grants are the source of funding for social services delivery by states and localities. Thus, federal health care and welfare benefits—among many others—are provided by a lengthy chain of intermediaries that include federal grants to states, state agency contracts with private contractors, and provider delivery to individual citizens. Without grants as a tool of policy production, the federal government would be unable to provide many of today’s benefits and services to the American public. 13.5.2 Cooperative Agreements Cooperative agreements are another tool for policy coordination and delivery. As distinguished from contracts, cooperative agreements are used when “the fruits of these agreements benefit the public at large” versus “the furnishing to a federal agency of supplies or services.”35 Cooperative agreements differ from grants in two important respects. Grants are created by special legislative authority tied to a specific funding line and the government is not substantially involved after funds are transferred to the recipient. Cooperative agreements, on the other hand, are legal instruments establishing a relationship between two or more governments or between governments and other

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recipients (nonprofit or for profit corporations, groups or individuals) to fund and share policy functions. They are used when a government expects substantial and ongoing involvement with a recipient in carrying out the activities contemplated in an agreement. Cooperative agreements take many forms, from joint planning and development activities to the actual financing and delivery of services that benefit those participating in the agreement. For example, two cities or a county and several townships may have a cooperative agreement to share the expenses of road repair equipment and snow removal. Or, the National Park Service may develop agreements with numerous educational institutions, state and local governments, and other groups to develop training programs for its employees across the nation. The Federal Grant and Cooperative Agreement Act of 197736 established government-wide criteria governing the use of cooperative agreements. • • • •

First, an agency or program must have legal authority to use such an agreement. Second, the principal purpose of the agreement must be to transfer a thing of value to the recipient to support or stimulate a legitimate public purpose. It must not be a subterfuge for acquiring property or services for the direct benefit of the government noncompetitively. Third, there must be substantial involvement between the parties to the agreement. Fourth, a cooperative agreement must be formally documented with evidence of funding sources and amounts, a statement of work or task agreements, and confirmation that all parties are committed to the terms of the agreement.

Cooperative agreements give governments substantial leeway to share in policy production across levels of government and sectors of the economy. They have advantages of lowering costs and improving the efficiency of policy production through coordination and cooperation. Their disadvantages may include problems of reaching and maintaining agreements about levels and quality of services and of variable bargaining power, especially if one party to the agreement is more powerful than the others. Despite drawbacks, cooperative agreements are an increasingly common and practical tool. 13.6 INTER AGENCY AGREEMENTS An interagency agreement is a tool used when one public agency is providing payments, goods, or services to another public agency. An interagency agreement is a special kind of contract vehicle between governments. In the federal government, interagency agreements are governed by the Economy Act, as well as by an assortment of related statutes specifically governing how agencies and programs formulate such agreements. “The Economy Act (31 U.S.C. 1535) provides general authority for agencies to obtain goods and services from other government agencies. To place orders under this authority, the requesting agency must have funding available for the procurement; the order should be in the best interest of the government; the agency from which the goods and services are requested must be able to provide the goods or services, either directly or by contract; and the requesting agency must determine that a commercial enterprise cannot provide the goods and services as conveniently or cheaply.”37 Federal statutes governing interagency agreements are fragmentary at best. Furthermore, policies and procedures for interagency agreements differ significantly from agency to agency. Interagency agreements are also subject to the FAR (FAR 17.5) that require that the agency seeking the contract file a procurement request, independent cost estimates, a statement and schedule of work, and evidence of the servicing agency’s capability to perform the work. So, for

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example, the Department of Education may contract for services from the Bureau of the Census to perform a more sophisticated analysis of data sets it has gathered or, alternatively, purchase the services of Census Bureau personnel for a set period of time to perform the same task. An interagency agreement requires less formality and may be documented in any form acceptable to both agencies. Such agreements raise perennial questions for federal overseers about circumventing federal contracting requirements, especially those mandating competitive bidding. Such agreements may be subjected to audit, although not in any systematic manner. They have most of the features of contracts, but it is unclear both in law and practice what happens when agencies violate the terms of their agreements. Strictly speaking, interagency agreements are unenforceable. Interagency agreements are even more commonly used by state and local governments. Here terminology is inconsistent and adds to the confusion with such agreements, often called intergovernmental contracts. Nonetheless, such arrangements resemble interagency agreements. For example, a small town may simply purchase jail space from its larger neighbor rather than build its own. Or, a group of towns may negotiate with a county to provide fire protection and other emergency services on a regional basis. Again, the logic involves economies of scale and reducing unnecessary duplication. Most states have statutes that provide in some way for the joint exercise of authority to contract for agencies and governmental entities. Such agreements must conform to state specifications as to the purposes, powers, rights, objectives, and responsibilities of the contracting parties, as well as be within the powers specifically assigned an agency or governmental entity. Whatever their ambiguities as legal instruments, interagency agreements are building blocks for collaboration between government agencies at the same or different levels. Interagency agreements are one of the primary instruments of horizontal governance. Uncounted thousands of such agreements are the glue that binds governments together to get work done. 1 3 . 7 I N T E R S TAT E C O M PAC T S Interstate compacts are a far less common but powerful tool of contracting. A compact is an agreement that binds two or more states. Compacts are subject to the provisions of contract law and of the U.S. Constitution that protect against laws impairing the obligations of contract. Interstate compacts may be compared to treaties between nations and signatory states where all are bound to observe the terms of their agreement even if those terms are inconsistent with the laws of individual signatories. Unlike treaties, compacts may not be unilaterally abrogated, except as provided for by the terms of the agreement itself. Finally, Congress and the courts may enforce compliance with the terms of an interstate compact. Many consider compacts the most effective method for ensuring cooperation between states in an era where greater regional coordination is an important goal. Compacts are contracts and, as such, must satisfy the customary elements for valid contracts. Practically, this often means that, in order for the compact to become effective, all states that are parties to it must approve its terms by means of identical statutes. It is less clear when exactly Congress is required to give its consent to a compact between states. Although Article I, Section 10, of the U.S. Constitution implies that consent is always needed, historically the Supreme Court has required legislative consent only when an interstate compact affects a power delegated to the federal government or when it might alter the political balance within the federal system. For example, boundary settlements and river basin agreements affecting the water rights of nonparties have required such consent, whereas agreements promoting interstate communication or cooperation in building and maintaining bridges over a shared river boundary have not. Historically, compacts were rarely used before the twentieth century and their uses were primar-

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MINI-CASE 13.3 The Colorado River Compact Watersheds are geographic entities and do not fit neatly within political boundaries. The Colorado River rises in the Rocky Mountains and wends its way through many states, plus numerous Native American tribal areas, to empty into the Pacific Ocean at the Baja Peninsula. En route it provides water to numerous cities, including several, such as Denver, Las Vegas, Los Angeles, San Diego, and Salt Lake City, not within its actual watershed. So, how are decisions made about who gets how much water from the Colorado River in a southwestern desert with booming population growth? The Colorado River Compact of 1922 created mechanisms for controlling the watershed and managing conflicts over rights to its water between the participating states. Initially, it divided the region into two, the Upper and Lower Basins, and apportioned river water equally between the two. Over the decades, the scope of the Compact expanded, as numerous dams and reclamation projects were constructed and Mexico was added as an international party with rights to water from the river. In numerous challenges, the authority of the states to apportion the distribution of water under the Compact, while confirmed by the Supreme Court, was gradually weakened as Congress assumed authority over the problem and made the Secretary of the Interior water master for the Lower Basin region. Despite these efforts, the allocation of rights to individual states continues to be politically charged. The southwestern states are perennially thirsty. Since the 1970s, new sets of policy concerns for the region have been injected into the mix in several forms: water quality standards under the Clean Water Act, protections under the Endangered Species Act, the National Environmental Policy Act, and numerous irrigation projects under the Reclamation Act. Each introduced multiple sets of competing interests and eroded efforts at coherence in policy production. Practically speaking, however, these issues remain subservient to the overriding questions about who has what rights to how much water. A Compact that was created to deal with one set of problems across highly fragmented jurisdictional interests now faces multiple and conflicting policy objectives—a reason why the federal government retains its contentious leadership role in this Compact arrangement.

ily limited to settling boundary disputes between states. Over the past century, however, they have become more a common and useful tool, with the best-known being the New York-New Jersey Port Authority (1921) and the Colorado River Compact (1922). Today, compacts are more and more common as policy problems require interjurisdictional solutions, whether between states or between a group of states and the federal government. 13.8 REGULATORY CONTR ACTS At the beginning of this chapter we briefly discussed rules and contracts as alternative technologies of policy production. Rules embody the vertical or hierarchical dimension of governance. Governments can employ their sovereign authority to compel compliance by the subjects of rules and regulations. Contracts, on the other hand, typify the horizontal dimension of governance.

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Governments can negotiate an agreement with private parties to get things done. Rather than issuing commands, they can cut deals. It is possible, however, to combine the two technologies. Regulatory contracts, the newest wrinkle in approaches to contracting, do just that. In 1990 Congress passed the Negotiated Rulemaking Act authorizing federal agencies to employ a new approach to rulemaking called negotiated rulemaking, or reg-neg. Instead of the standard rulemaking process described in chapter 12, the agency convenes a committee consisting of parties that will be significantly affected by the proposed rule. The parties bargain and produce agreements, and then undertake commitments that form the basis of the draft rules. These negotiated rules must then go through the notice-and-comment process described in chapter 12. The objective of negotiated rulemaking is “to bring principles of alternative dispute resolution to rulemaking—in the form of direct negotiations among the affected parties—in order to ameliorate the adversarialism that had come to characterize the conventional approach.”38 Though its use has been primarily confined to environmental, health, and safety regulations, negotiated rulemaking brings private interests directly into the policy formation process with the purpose of developing agreements that bind both agency and the parties it regulates. Reg-neg involves a formal, consensus-based stakeholder process that combines the two technologies, rules and contracts. It produces what are termed regulatory contracts. Regulatory contracts are rules that are, in essence, agreements negotiated between the parties that bind all sides in their future acts. They are a pragmatic response to the complexity and politics of rulemaking, which can be followed by endless rounds of litigation. As a tool of policy production, however, regulatory contracts have critics. Opponents argue that regulatory contracts blur the lines between public and private and their constitutional status is unclear. In question are the rights of private parties to sue, and access to the public treasury via damage awards when the government is alleged to have violated a regulatory contract. However, in one instance the Supreme Court did find that a regulatory contract could be enforced and that the government had voluntarily surrendered its sovereign immunity by entering such an agreement with savings and loan institutions.39 The government could be sued for damages in that case. Proponents, on the other hand, argue that increased flexibility, directly negotiated consent, and mutual enforceability promise better results, especially in highly contentious policy arenas, such as protecting the environment. 13.9 CONTR ACTS: COMPETITION AND COLLABOR ATION In the previous sections we have examined some of the important tools of contracting as a technology of policy production. As we have seen, the techniques of contracting have expanded significantly over the past decades as policymakers have explored new methods of producing public policy. Nevertheless, contracting is a technology, and like any technology it can be put to multiple, often contradictory uses. Though we typically associate public contracts with privatization or the outsourcing of public functions, contracts and their kin can be used to expand as well as shrink the scope of government. We should never confuse a technology with the purposes to which it is applied. In particular, contracts are routinely deployed to further two complementary strategies of governance: competition and collaboration (or partnership). 13.9.1 Competition The first strategy is based on the concept that competition is the best approach to promote efficiency and accountability in policy production. Advocates of competition argue that the

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problem is monopoly, and not government per se. The ideal is competitive government. “A competitive government is one that fosters competition among service providers—including public sector agencies—for the right to deliver services. The rationale for competitive government is that when providers must compete with others in an open marketplace they will keep their costs down, respond quickly to changing demands, and strive hard to satisfy their customers.”40 Thus, there are three different kinds of competition in policy production: 1. Private vs. private competition—contracting out the provision of services to private parties. 2. Public vs. private competition—having public agencies compete against private companies for the provision of government services. As we have seen earlier in this chapter, the federal government under George W. Bush institutionalized public vs. private competition under the authority of A-76 and the Competitive Sourcing program. 3. Public vs. public competition—State and local government agencies may organize competitions among different government units in neighboring jurisdictions for the right to deliver public services. For example, street cleaning crews in one city or district may compete to provide the same service in adjoining localities. Although the benefits of competitive government may depend on the existence of bona fide markets and market participants, all forms of competition for the provision of government services rely on contracts as the primary vehicle for implementation. 13.9.2 Collaboration Contracts can also be used as an integral part of a collaborative approach to governance, described in chapter 11. In order to achieve policy objectives, both public and private organizations can work together to achieve results that no one organization alone can accomplish. Contracts are typically embedded in strategic partnerships, but collaborative relationships rely on integrative mechanisms that go beyond adherence to formal contracts. We will examine the mechanisms of collaborative governance in more detail in chapter 20. 13.10 CONCLUSIONS The technology of contracting has become an integral part of contemporary policy production. Despite the association of contracts with the political agenda of privatization, contracting can serve the expansion of government power and authority just as much as its reduction. Indeed, contracts in general and grants in particular have played critical roles in the growth of “big government” in the last three decades. Though the size of government in terms of personnel has grown little during this period, the scope of government has increased enormously. The tools of contracting have been essential to this trend. However, contracts—especially public-private contracts—raise some serious issues for students of American public policymaking. 13.10.1 Contracts and Privatization Privatization is a term over which much ink has been spilt. Basically, privatization refers to outsourcing the delivery of both existing government functions and new government activities

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to private contractors. Clearly, contracting is the primary means or technology for accomplishing privatization. Unfortunately, the term privatization is often applied to tools like grants and vouchers that are not—technically speaking—contracts, and contracts are used for many purposes other than privatization. Confusing ends with means not only makes for flawed policymaking, it also obscures the variety of contract-like tools that policymakers use every day to get things done. In this chapter we have described some, but surely not all, of these tools. 13.10.2 Legal Issues The use of private contractors to deliver public benefits raises a number of complex legal issues. When a private contractor decides you are not eligible for medical or welfare benefits or mistreats you in a private correctional institution, he or she is acting as an agent of the government. When is this delegation of public authority to private entities appropriate? And what guarantees are there that private agents won’t misuse or abuse their delegated authority? Generally speaking, the delegation of authority by government agencies to private parties has been viewed with skepticism by the courts and the public. As much as the American public distrusts government, it is even more suspicious of the private exercise of public power. The Texas Supreme Court captured this idea best in a 1997 decision: [P]rivate delegations clearly raise even more troubling constitutional issues than their public counterparts. On a practical basis, the private delegate may have a personal or pecuniary interest which is inconsistent with, or repugnant to, the public interest to be served. More fundamentally, the basic concept of democratic rule under a republican form of government is compromised when public powers are abandoned to those who are neither elected by the people, appointed by a public official or entity, nor employed by the government. Thus, we believe it axiomatic that courts should subject private delegations to a more searching scrutiny than their public counterparts.41 The Texas Supreme Court then offered an eight-part test for evaluating the constitutionality of delegations to private parties: 1. Are the private delegate’s actions subject to meaningful review by a state agency or other branch of state government? 2. Are the persons affected by the private delegate’s actions adequately represented in the decision making process? 3. Is the private delegate’s power limited to making rules, or does the delegate also apply the law to particular individuals? 4. Does the private delegate have a pecuniary or other personal interest that may conflict with his or her public function? 5. Is the private delegate empowered to define criminal acts or impose criminal sanctions? 6. Is the delegation narrow in duration, extent, and subject matter? 7. Does the private delegate possess special qualifications or training for the task delegated to it? 8. Has the legislature provided sufficient standards to guide the private delegate in its work?42 While other state and federal courts have yet to apply such systematic tests to the issue of private delegations, the Texas court’s criteria can be applied to a wide range of public-private contracts.

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13.10.3 Practical Issues Finally, as the preceding pages have demonstrated, public contracts introduce numerous practical issues for public policymakers. Some of the most significant are discussed below. 13.10.3.1 Management Capacity Contract acquisition and management are resource intensive activities. They require time, money, and—above all—skilled personnel to execute successfully. Hiring, training, and retaining expert contract managers is one of the greatest challenges facing governments today. It is a truism that few government agencies have the resources they need to manage an ever-growing portfolio of contracts. While contract managers can be hired and trained, retaining them is virtually impossible, as the best and the brightest frequently leave for more lucrative jobs in private industry. As long as public managers can earn significantly more in private industry, it will be difficult to retain the kind of management capacity required for managing complex procurements and multitiered social services. 13.10.3.2 Loss of Capacity to Perform Over time, dependence on outsourcing robs governments of the ability to do it themselves. Little more than a decade ago, U.S. military units fed themselves, repaired their own equipment, and administered their own information systems. Today, wherever the U.S. military goes, so too go hundreds or thousands of contractors to perform support operations. The U.S. armed forces are gradually becoming dependent upon a relatively small number of private contractors for operational, logistical, and intelligence support. While these contractors can indeed provide services faster, better, and cheaper, the military loses the capacity to “go it alone.” And once lost, government capacity is both difficult and slow to rebuild. 13.10.3.3 Impact on Private Providers Government outsourcing not only affects government, it changes the companies and industries that do the work. Companies seeking government contracts must change their way of doing business in order to compete. As we have seen, public contracting demands more overhead for both parties to the relationship. As more and more companies derive larger percentages of their revenues from government contracts, they way they do business will change. Some of the procedures and norms of public contracting will necessarily infiltrate private contracts. While many scholars worry about the introduction of private business practices into the public sphere, the reverse is equally likely. Companies that work for the government will increasingly come to work like the government. Public norms will tend to overwhelm private ones.43 Finally, the outsourcing of both new and existing government functions often changes the structure of local, state, and even national markets. By seeking contractors to do its work, a government can create markets for goods or services where one never existed or—on the contrary—turn competitive markets into oligopolies or even monopolies. And by relying on nonprofit and faith-based organizations to deliver social services, governments may change the way these institutions are run. Government contracting changes the contractors as well as the government.

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MINI-CASE 13.4 Tracking Contracts to Interrogate Prisoners in Iraq In the spring of 2004, the scandal over abuse of Iraqi prisoners held in the Abu Ghraib prison dominated the headlines. Some of the interrogators worked for CACI International, a private contractor working under a blanket purchase agreement with the Army. Such arrangements allow flexibility in government purchasing and are specifically intended for the routine purchasing of products and services from the same company. Blanket purchase agreements are large, open-ended contracts permitting rapid turnaround times between the request and receipt of services from a contractor. They short-circuit requirements for separate bidding and evaluation procedures for each separate project. In this instance, CACI had a blanket purchase agreement with a $500 million cap. CACI is a technology and network services company based in Arlington, Virginia. The CACI contract was brokered through the National Business Center, a fee-for-service procurement operation within the Interior Department. The National Business Center is one of several procurement services run by federal agencies that perform procurement and administrative tasks for other federal agencies for a fee. In addition to the Interior Department, the General Services Administration (GSA) also has oversight responsibility for blanket purchase agreements involving federal supplies and services. The CACI agreement was outsourced to the Army through an interagency agreement. The deal for intelligence services to be delivered to the military was originally negotiated in 1998 with another company, Premier Technology. CACI purchased Premier Technology in May 2003 and assumed its contracts for interrogation and intelligence support work. The 1998 deal was initially to run screening programs for clearing host country nationals for work on American military bases within their countries. In addition, the contract provides for a wide range of military planning services, from intelligence and terrain analysis, to counterintelligence and antiterrorism services. As of June 2004, CACI had received eighty delivery orders from the Army, with eleven for projects in Iraq, three of which were for interrogation and intelligence. Tracking the chain of complex contractual relationships that led to the abuses at Abu Ghraib is an arduous task. Assigning responsibility may be even more so. In this particular instance, contractors, rather than upper-level military brass, may bear the brunt of retribution.

13.10.3.4 Loss of Accountability Finally, government outsourcing makes it difficult for governments to account for—and be accountable for—the benefits they provide. It is difficult to measure the outcomes of government programs when those outcomes result from the activities of local service providers funded by state contracts using block grants provided by federal programs. For example, the chain of responsibility linking congressional intent to the activities of local nursing homes and health care workers is long and difficult to trace. Contracting as a technology of policy production has become a growth industry. Whatever the issues with existing tools of contracting, we can be assured that new and more complex tools will be deployed in the future. Understanding and managing these tools will be one of the principal tasks of public policy analysis and public managers in the early decades of the twenty-first century.

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CASE STUDY Procuring Trouble—Boeing and the Air Force Scandals involving government contracting occur with some frequency. Many involve the Department of Defense (DOD)—that unit of the federal government most dependent on large-scale procurement contracts. As a consequence, DOD contracts are regularly subject to allegations of mishandling, or worse. Major claims of fraud and abuse in procuring a needed weapons system surfaced in 2003—this time involving modernization of a fleet of midair refueling tankers that keep Air Force planes in flight. Billions of dollars, thousands of jobs, the viability of a respected American corporation, the integrity of the Air Force, and the personal integrity of the Air Force’s most respected acquisitions officer were at stake. The Setting In May 2003 the U.S. Air Force proposed adding a new twist to procurement contracting. It decided to lease rather than buy a major new weapons system.44 It announced an agreement with the Boeing Corporation to lease, rather than to purchase outright, 100 new 767 jetliners that would be converted to Air Force specifications for $16 billion over a six-year lease period. The deal would allow the Air Force to replace part of its aging fleet of 544 KC-135 tanker planes then being used by the military for midair refueling operations. At the end of six years, the Air Force would then have the option of purchasing the planes for approximately $4 billion.45 On the surface, leasing rather than buying heavy military equipment seemed like a good idea. On closer examination, however, the deal looked more and more suspicious, as evidence of fraud in the contract negotiations between the Air Force and Boeing accumulated. Regardless, the Air Force had a problem—how to modernize its aging fleet of refueling planes. The question was (and still is) how to accomplish that goal while protecting the public’s interest in ensuring value for funds spent. Parties to the Deal The U.S. government has never been in the business of building military aircraft. Consequently, the usual questions about in-house production and compliance with A-76 requirements do not apply when the Air Force seeks to buy planes. Yet, increasingly complex technological specifications for military aircraft continually drive up the costs of manufacturing. On the private-sector side of this equation, the same conditions have led to declining numbers of manufacturers capable of building large, technologically sophisticated aircraft and to decreased competition for government contracts. The consequences of not winning a large government contract can disrupt, if not sink, an aircraft manufacturer. The consequences of limited numbers of suppliers and one very large purchaser distort the usual presumptions about a market economy reliant on “arm’s-length” transactions and competitive bidding. Numerous stakeholders are involved in the DOD’s purchase of any large weapons system. In this case, the major parties to the deal included personnel from the Air Force and the Boeing Company as well as workers and politicians from communities with jobs at stake. Other watch-

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dog and advocacy groups also monitor large-scale procurement initiatives to protect the public’s interest. Finally, the proposed multibillion-dollar lease of a fleet of refueling tankers had multiple institutional clearance points, including four congressional committees and the Executive Office of the President. Each institutional hoop enables stakeholders of all stripes the opportunity to influence the outcome. The Air Force The Air Force claimed to have a problem. Its 544 KC-135 tankers, used to refuel its planes in midair, were on average over four decades old. KC-135s are the planes that refuel Air Force planes engaged in long bombing runs from distant airfields or carriers. Replacing that fleet is expensive. At a time of ballooning military budgets, two wars (Afghanistan and Iraq), and spending on homeland security needs, there was little room for new or replacement weapons systems. Furthermore, before 2003, the Air Force never made replacing the KC-135 a high priority in its yearly budget requests. In early 2001, before the events of September 11, the Air Force began to think about the possibility of replacing its aging fleet. Over the next two years, it identified three possible options—to repair and upgrade its existing tankers, to purchase a new fleet of tankers, or to lease a new fleet. 1. Upgrading the old fleet. The KC-135 tankers were put into service in the 1950s and 1960s. Despite their age, many are lightly used, with some flown less than 300 hours yearly. Before beginning negotiations with Boeing, the Air Force ordered a major study, completed in early 2001, that concluded that repairs and upgrades to the fleet “should permit the aircraft to remain viable through the year 2040.”46 The General Accounting Office (GAO) estimated that refurbishing the tankers would cost approximately $3.2 billion. Upgrading, however, would still leave the Air Force with increasingly outdated planes. 2. Purchasing a new fleet. By September 2002, the Air Force had changed its tune. It claimed to Congress that “corrosion is significant, pervasive, and presents an unacceptable risk”47 and that replacing the tanker fleet was an “urgent military need.”48 The traditional method for buying new weapons systems is to negotiate a contract with a manufacturer specifying technological requirements, quantities, and delivery dates—an approach requiring large expenditures of funds up front. But, according to the Congressional Budget Office, purchasing 100 new refueling tankers outright would be less expensive than leasing, with the cost differential estimated to be $21.5 billion for the lease-buy option and $15.9 billion to buy.49 Despite these cost savings, the Air Force claimed “purchasing is not a viable option for us.”50 Much of this argument turned on differences in budgeting between leasing and purchasing contracts. 3. Leasing a new fleet. Leasing, as opposed to purchasing, has never been used to procure major weapons systems.51 Yet, despite greater costs, leasing was the “most effective way to upgrade its fleet,”52 according to the Air Force. First, it had the advantage of speedier delivery, with savings in operational and maintenance benefits. Sixty of the 100 planes would be in service by 2009, instead of delivery in 2014 under traditional procurement methods. Second, it had budgetary advantages. Leasing would allow costs to be spread more evenly over multiple budget years rather than incurred as a onetime initial expenditure of $19 billion, the estimated amount required if the deal followed traditional purchasing arrangements. From an Air Force perspective, lowering initial budgetary costs would diminish potential impacts on the acquisition of other desirable weapons systems. The Air Force opted for leasing. Within the DOD, Air Force personnel, especially those in procurement management, took

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the lead in negotiating the lease with Boeing. Chief among them were James Roche, secretary of the Air Force; Marvin Sambur, an assistant secretary for acquisitions; and Darleen Druyun, the deputy assistant secretary for acquisition and management, with thirty-three years of experience in weapons procurement. Druyun, the official responsible for negotiating the lease, was a civilian employee of the Air Force and had built her career around reforming acquisitions for the military. In becoming a superstar of modern military contracting, Druyun had outlasted many in the career military but made enemies in the process. In January 2003, she retired from the Air Force and began a new job as a vice president and general manager of missile defense systems for Boeing. As revelations about potential abuses in the contracting process accumulated, various other Pentagon personnel, including the secretary of Defense and the inspector general for the Pentagon entered the picture. Boeing Fewer and fewer companies are big enough to supply the sophisticated technologies demanded by the U.S. military. This leaves the government with fewer partners and with fewer options for disciplining contractors when government procurement rules are violated and also makes the appearance of arm’s length transactions more difficult. The Boeing Corporation is the world’s largest aircraft manufacturer. Its business has traditionally been building planes for the commercial sector, a market characterized by boom-and-bust economic cycles. To protect itself against such fluctuations and stabilize its revenues, Boeing moved aggressively into the aerospace industry in the 1990s by purchasing the McDonnell Douglas Corporation, a large-scale defense contractor. By 2000, Boeing was the largest contractor for NASA and the second biggest supplier to the Pentagon, after Lockheed Martin. Boeing supports an extensive staff of lobbyists estimated to cost $8 million yearly.53 Approximately 55 percent of the company’s expected revenue in 2003 came from the federal government.54 It also has a reputation for cutthroat dealings at the expense of competitors, the most recent of which included allegations of stealing proprietary documents from its competitor, Lockheed Martin, to win large aerospace contracts.55 Such charges have had few ramifications beyond adverse publicity, in part because there are so few manufacturers capable of building military aircraft. The events of September 11 adversely affected airlines and commercial aircraft manufacturers. With cancellations and delayed orders for new planes, Boeing sought to bail out its commercial aviation business with contracts for military aircraft. It has had only limited success. Company profits declined in 2002 and 2003. Defense contracts were profitable but could only offset some of its losses. Boeing was scheduled to shut down production of its venerable 757 planes in 2004 and its 767s soon afterward if the refueling tanker lease deal fell through. The result would be a projected loss of thousands of jobs. In 2003, Airbus, Europe’s aircraft manufacturer, surpassed Boeing in worldwide production of commercial aircraft. The lease agreement with the Air Force was vital to the continued viability of Boeing as a manufacturer of commercial airplanes. On Boeing’s side, Michael Sears, the chief financial officer of the corporation, played a key role in what eventually became a major procurement scandal. He was involved both in negotiating the lease deal with Druyun and in recruiting her as a future Boeing employee. Boeing’s unions, especially the 22,000-member International Federation of Professional and Technical Engineers, also actively urged approval of the leasing deal. Phillip Condit was the chief executive of Boeing throughout the period of lease negotiations.

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Congress and the Executive Congress becomes involved in procurement when approval of contracts for major weapons systems is required. In the case of the Boeing–Air Force lease, four committees shared jurisdiction, but two were key, the House and the Senate Armed Services Committees. Selected members of these committees were consulted about the proposed lease as early as September 2002, well before negotiations were completed. Key participants in the House of Representatives were the Speaker, Dennis Hastert, from Illinois, the state where Boeing’s corporate headquarters are located, and Norman Dicks, from the district in Washington where the 767s would be manufactured. On the Senate side, Senators Ted Stevens (Alaska), John McCain (Arizona), and John Warner (Virginia) played key roles. Stevens, a longtime proponent of leasing as a method of military procurement and chair of the Senate Appropriations Committee, was also a longtime friend of the Boeing Corporation and regularly received substantial campaign contributions from them. McCain, a member of the Senate Armed Services Committee and chair of the Senate Commerce Committee, has been a consistent critic, complaining loudly that the deal was a “Boeing bailout.”56 Warner chaired the Senate Armed Services Committee, a key committee with jurisdiction over the proposed deal. Among other critics were the Congressional Budget Office (CBO) and the GAO in their roles as budget watchdogs. Others within the executive branch but outside the DOD also played roles both in helping to put together the deal and then later in criticizing it. President Bush and his chief of staff, Andrew Card, helped create momentum early in the negotiations. OMB issued an early report criticizing the Air Force’s choice of the leasing option and arguing that it would cost an additional $8 billion while decreasing the Air Force’s refueling capacity. Eventually, with arm-twisting, the OMB gave half-hearted support to the deal. Assembling a Deal The idea of converting 767s into refueling tankers for the Air Force first surfaced in February 2001, when Boeing, in an unsolicited proposal, suggested selling thirty-six planes to the Air Force at a cost of $124.5 million each. This was despite an Air Force study published at the same time, which concluded that no new planes were required before 2010, since its existing fleet of KC-135s would last through the year 2040. Furthermore, in 2001, the Air Force had not placed replacement tankers on its list of unfunded priorities or its wish list of weapons systems for future purchase. September 11 created opportunities for policy entrepreneurs to change these dynamics. Anticipating the consequences of that disaster on its commercial business, Boeing officials first met with Druyun, then the Air Force’s lead procurement officer, on September 25, 2001, to work out a new approach to procurement—leasing. According to notes from the meeting, Druyun agreed to promote the leasing idea to legislators, and to help find funding for the deal by reducing existing allocations for repair to the KC-135s and by placing procurement contracts in the districts of key members of Congress. In November, Air Force officials then drafted formal specifications for the replacement fleet, including a concession requested by Boeing that the fuel-carrying capacity of the new tankers not be required to equal or exceed that of the KC-135s. The next step was authorization by Congress. In December 2001, during the rush to pass the end-of the-year appropriations for defense, Senator Ted Stevens inserted an item in the appropriations measure authorizing a new refueling fleet and specifying that 767s be used. This occurred during closed negotiations over the defense budget by the House-Senate conference committee.

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It was a so-called “virgin birth”—a congressional term for items that somehow find their way into appropriations bills with no evidence of prior consideration by any congressional committee.57 This created statutory language authorizing, but not funding, the Air Force to negotiate a deal to replace its fleet of refueling tankers. Congressional specification of 767s as the refueling tanker also allowed the Air Force to circumvent its usual contracting procedures for developing an “analysis of alternatives,” a formal document analyzing the costs and benefits of all different options for procurement of a major weapons system. From this point on, attention turned to the details of a deal. Despite persistent opposition from within the administration by OMB and Pentagon budget analysts, Boeing’s campaign gathered momentum. In September 2002, congressional supporters added their voices, as Representatives Hastert and Dicks lobbied President Bush directly about moving quickly to close the tanker lease deal. The president agreed and ordered his chief of staff, Andrew Card, to resolve any outstanding differences between OMB and the Air Force over how to do the deal. Card silenced internal critics within the administration. Negotiations then proceeded on how to structure a deal with costs low enough to make replacements affordable in a period of rapidly escalating military expenditures. Airbus, the European aircraft manufacturer, submitted its own cost estimates for building refueling tankers to the Air Force. Yet, bidding was never formally opened to competition before signing the lease agreement because the authorization clause inserted by Stevens in 2001 specified 767s. Also, evidence later surfaced that Druyun gave detailed information about Airbus’s prospective offer to Boeing and that Boeing modified its cost estimates accordingly. Nor was any formal testing of the new tankers required before the contract was formally signed, unlike procedures used in the procurement of most new major weapons systems. Officials from the GAO and Pentagon tried to argue that the deal did not comply with federal accounting standards, was in reality a purchase, rather than a lease agreement, and was too expensive. Finally, a newly constituted Pentagon leasing review panel that operates with far fewer oversight controls than required for traditional government purchase agreements okayed the deal. OMB officials commented that the leasing arrangement was “right on the margin” of compliance with federal procurement regulations.58 The contract negotiated between Boeing and the Air Force was formally announced on May 23, 2003. It established “one of the most expensive military programs this decade.”59 Boeing was initially committed to building only 100 refueling tankers at a cost of $21 to $25 billion, but eventually expects to supply planes to replace the entire fleet at an estimated cost of $100 billion. The deal would have enabled Boeing to keep its 767 production line open despite the falloff in commercial orders. Boeing’s supporters in Congress then pushed for funding for the tankers in the president’s $87 billion request in the late summer for supplemental funding for the wars in Iraq and Afghanistan. Clearance by all but one of the four congressional committees, the Senate Armed Services Committee, followed quickly. Unraveling Led by Senator McCain, critics of the deal gathered during the summer of 2003. McCain used his chairmanship of the Senate Commerce Committee to launch an investigation. In the 8,000 pages of documents submitted by Boeing and the Air Force to McCain’s committee, there was ample fodder for suspicions about conflicts of interest, potential fraud, and waste. These details began to surface in the press and the proposed deal began to unravel. In August, the CBO released a report stating that the “Air Force has broken numerous federal budgetary and leasing rules to make this lease a reality . . . [and] violate[d] four out of six principles

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of federal leasing.”60 By early September, Senator Warner, chairman of the Senate Armed Services Committee, announced a delay in any vote to approve the lease agreement. In Warner’s words, “I am concerned that if this matter is approved as submitted . . . it will establish a precedent and we can see a reoccurrence of this type of end run—I call it a ‘Hail Mary’ pass—around the budget process.”61 Warner proposed to substitute a less ambitious alternative: to lease up to twenty-five of the refueling tankers and purchase the remainder following traditional procurement practices. Boeing and the Air Force both balked, arguing that the revised approach was “potentially un-executable,”62 would delay delivery, and would cost more per plane. But, support for the 100-tanker lease deal eroded quickly as other stakeholders added their voices. The Congressional Research Service suggested an alternative for funding the planes, termed incremental funding, which would lower costs from $11 to $8.5 billion in upfront funding over the first five years to purchase rather than lease the planes. A public interest watchdog group, Citizens for Responsibility and Ethics in Washington, asked the Select Committee on Ethics of the Senate to investigate Senator Stevens’ long and well-documented role in procuring favors for Boeing in exchange for campaign contributions. Several groups launched investigations into the actions of Druyun and Sears. The inspector general of the Pentagon sought to determine whether Druyun, while an Air Force employee, had given Boeing proprietary information about Airbus during the negotiations. Boeing pursued an internal company inquiry into whether Sears, its representative, had improperly dangled an offer of employment to Druyun during the course of negotiations. In October, Boeing announced the shutdown of its production lines for its 757 passenger jet and a 31 percent decline in company profits for the third quarter due to its losses from its commercial aviation business. In early November, the Air Force, under pressure, reluctantly agreed to Warner’s proposed compromise, and the Senate approved the modified plan. The Air Force was allowed to lease twenty Boeing 767s and then to purchase eighty more. A year later Congress revisited this deal and rescinded the initial lease-buy arrangement. It then authorized the purchase of 100 new tankers over several years and allocated $100 million in funding to begin acquisition. The original deal had unraveled—sort of! Fallout The contracting debacle compromised several of the players implicated in the scandal. Boeing, seeking to rehabilitate its reputation, fired Druyun and Sears, its former chief financial officer, as well as Philip Condit, its chairman and chief executive. Federal prosecutors and the Justice Department launched a criminal prosecution. Druyun pleaded guilty and was sentenced to nine months in federal prison. Sears pleaded guilty to violating conflict-of-interest laws and also served time in prison. Secretary of the Air Force Roche resigned in response to continuing criticisms and before being cited for violations of Pentagon rules on lobbying defense contractors to hire friends. The top Air Force acquisitions official also resigned. Administration officials, from four senior Air Force officials to a top aide to Secretary of Defense Donald Rumsfeld, were harshly criticized in the inspector general’s report on the Pentagon purchasing bureaucracy submitted to the Senate Armed Services Committee. The Air Force’s claim that the Boeing scandal was attributable to the actions of Druyun alone crumbled as investigators dug deeper. A review of the 407 contracts Druyan had negotiated during her tenure as a top procurement official prompted a full-scale review of procurement practices by the Pentagon’s inspector general. The Senate Armed Services Committee launched its own inquiry. Both confirmed that there was little need to replace the KC-135 tanker fleet, that Air Force officials knew this, and that the “numbers were contorted [in] a lot of different ways” to benefit

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a company under stress.63 What impact this scandal will have on reforming procurement by the Pentagon remains to be seen. Nor is there evidence of a willingness to tackle the larger issue of how to oversee the movement of government procurement officials into much more lucrative positions with former contracting partners in the private sector. An Autopsy—Not at Arm’s Length The Boeing–Air Force lease deal reeked of scandal from the beginning. It is a classic illustration of a procurement contract run amok, an “iron triangle” of incestuous relationships between corporations, legislators, and government officials. In this instance, the seller, Boeing, worked hand in glove with the buyer, the Air Force, to create a demand, a new fleet of refueling tankers. The irony in this particular instance was that the Air Force official, Druyun, had made her reputation in the military by streamlining and modernizing military acquisitions. A few legislators beholden to Boeing then aggressively supported plans to benefit their patron and constituents. At best, the deal was not at arm’s length. At worst, it violated laws against fraud and abuse in government contracting. In between, it ruined the careers of several Boeing and federal officials and ultimately cost $615 million in settlement costs. The deal bears witness to the intractable problems of government contracting, specifically those associated with the procurement of very large-scale contracts where relatively few bidders are available to compete. It raises enduring questions of: • • • • • •

How to avoid conflicts of interest when there is no underlying market with multiple contractors capable of competing on equal footing. How to preserve the public interest in arm’s length transactions where the contracts being negotiated are for goods and services available only in a few congressional districts. How to make procurement procedures less cumbersome and more transparent, especially where large-scale, technologically complex systems must be purchased. How to regulate the revolving door of government procurement officials moving into highly compensated positions in their counterpart industries. If even the largest federal agencies have the capacity to manage contracts. If public agencies have the capacity to train and retain procurement officers, given the relatively low wage scales of civil service employees and the scarcity of trained personnel.

Today, few American manufacturers can produce technologically sophisticated planes. They find it increasingly difficult to thrive in the roller-coaster world of commercial aircraft production, especially since Airbus, their chief competitor, is openly subsidized by European governments. To a large extent, defense contracts for military aircraft now subsidize American commercial manufacturing capability—although few admit to this openly. How can we untangle this Gordian knot? Certainly not by playing fast and loose with the rules of contracting!

KEY TERMS Circular A-76—the criteria used by the Office of Management and Budget to determine whether activities are inherently governmental in nature and, therefore, can be performed in-house by the government, or inherently commercial, and subject to outsourcing.

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contract—a binding agreement between two or more parties that is enforceable by law. cooperative agreements—legal instruments establishing a relationship between two or more governments or between governments and other recipients (nonprofit or for-profit corporations, groups, or individuals) to fund and share policy functions. cost-reimbursement contract—a contract where reimbursement is based on actual costs plus a previously agreed-upon profit or fee. fixed-price contract—a contract where the price is set at the time of award. grants—conditional awards of funds to recipients to accomplish a public purpose where the agency has no substantial involvement with the recipient in performance of the grant activity. incentive delivery contract—a contract where the time of delivery and quantities needed by the government are not fixed but contain incentives for the contractor. interagency and intergovernmental agreements—contracts used when one public agency is providing payments, goods, or services to another public agency. interstate compacts—agreements that bind two or more states. letter contract—a written preliminary contract allowing work to begin immediately pending negotiation of a final contract. privatization—the conversion of existing government functions and activities into activities and functions performed by means of private contractors. procurement contract—the means by which government agencies acquire the goods and services they need to operate. regulatory contracts—rules derived from agreements negotiated between the parties that bind all sides in their future acts. service delivery contract—a contract with a private vendor as the intermediary for delivering benefits funded by government to third parties as the intended beneficiaries of that contract. time-materials and labor-hour contract—a contract where reimbursement is based on negotiated rates for various combinations of time, materials, or hours, plus profit, where one of those three elements cannot be realistically estimated. QUESTIONS FOR DISCUSSION 1. How did early efforts to supply American defense needs influence later patterns of policy production and American industry? 2. What is A-76? Why did it become important in American policy production and what are the problems with fully implementing it? 3. What problems are associated with sole-source contracts and a lack of competitive bidding for government contracts? 4. Identify an interstate compact (other than the Colorado River Compact) and describe its purposes, benefits, and drawbacks as a mechanism for policy production.

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5. Private contractors played an important role in the war in Iraq. What advantages and disadvantages can you identify in using contractors alongside our troops? Identify an example and describe how it worked in practice. 6. Contracts are the primary technology for privatization. To what degree should there be limits on contracting out? What should those limits be? 7. Contracting is a technology of policy production that evolved primarily at the state and local level before its widespread migration into federal policy production. Why? 8. Evaluate regulatory contracting as a newly emerging, mixed technology of policy production. For example, as opposed to decisions about rules made through consultation with experts and scientists, to what degree should the Environmental Protection Agency be allowed to negotiate agreements (which then become rules) with industries in the sector it is responsible for regulating? .

SUGGESTED READINGS Cooper, Phillip J. Governing by Contract: Challenges and Opportunities for Public Managers. Washington, D.C.: Congressional Quarterly Press, 2003. Danhof, Clarence H. Government Contracting and Technological Change. Washington, DC: Brookings Institution, 1968. Freeman, Jody. “The Contracting State,” Florida State University Law Review 28, no. 1 (2000): 155–214. ———. “The Private Role in Public Governance,” New York University Law Review 75, no. 3 (2000): 543–675. Hanrahan, John D. Government by Contract. New York: W.W. Norton & Co., 1983. Hughes, Thomas P. Rescuing Prometheus. New York: Random House, 1998. Keyes, W. Noel. Government Contracts in a Nutshell. 3rd ed. St. Paul, MN: West Group, 2000. Millis, Walter. Arms and Men: A Study in American Military History. New York: Capricorn Books, 1956.

NOTES 1. Eugene W. Massengale, Fundamentals of Federal Contract Law (New York: Quorum Books, 1991), p. 1. 2. Phillip J. Cooper, Governing by Contract: Challenges and Opportunities for Public Managers (Washington, DC: Congressional Quarterly Press, 2003), p. 11. 3. John D. Hanrahan, Government by Contract (New York: W.W. Norton & Co., 1983), p. 21. 4. Cooper, Governing by Contract, p. 28, note 38. 5. Geoffrey C. Hazard, Jr., and Eric W. Orts, “Environmental Contracts in the United States,” in Environmental Contracts: Comparative Approaches to Regulatory Innovation in the United States and Europe, ed. Eric W. Orts and Kurt Deketelaere (London: Kluwer Law International, 2001), p. 78. 6. Ibid. 7. Cooper, Governing by Contract, pp. 29–30. 8. See Mary K. Marvel and Howard P. Marvel, “The Ratio of Beef Cubes to Onion (6:1) in Hungarian Goulash and Public Sector Contracting: Market-Like or Market-Lite?” Policy Currents 12, no. 2 (Summer 2003). 9. Federal Acquisition Regulations, 48 C.F.R. Title I, at §2.101. 10. Hanrahan, Government by Contract, p. 27. 11. Cooper, Governing by Contract, pp. 23–24. 12. See chapter 1 in Walter Millis, Arms and Men: A Study in American Military History (New York: Capricorn Books, 1956) for further materials. 13. Ibid., p. 156, quoting from American State Papers, vol. I. 14. Ibid., pp. 60–61. 15. Cooper, Governing by Contract, p. 27. 16. Clarence H. Danhof, Government Contracting and Technological Change (Washington, DC: Brookings Institution, 1968), p. 21.

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17. Federal Acquisition Regulations, 48 C.F.R. Title I. 18. Federal Acquisition Streamlining Act (FASA) of 1994. Pub. L. No. 103–355, 41 U.S.C. §261. 19. Federal Acquisition Reform Act (FARA), the Clinger-Cohen Act of 1996, Pub. L. No. 104–106, 31 U.S.C. §3512. 20. Jerome B. McKinney and Lawrence C. Howard, Public Administration, 2nd ed. (New York: Praeger, 1998), p. 73, quoting a Bureau of the Budget memorandum. 21. Office of Management and Budget, Circular No. A-76 (Revised), May 29, 2003, p. A-2. 22. W. Noel Keyes, Government Contracts in a Nutshell, 3rd ed. (St. Paul, MN: West Group, 2000), p. 285. 23. Cooper, Governing by Contract, p. 105. 24. Ibid., p. 102. 25. U.S. General Accounting Office, “Public-Private Partnerships: Terms Related to Building and Facility Partnerships,” GAO/GGD-99-71 (Washington, DC: GAO, April 1999), p. 12. 26. U.S. General Accounting Office, “Contract Management. Trends and Challenges in Acquiring Services,” GAO-01-753T (Washington, DC: GAO, 2001), p. 2. 27. Jody Freeman, “The Private Role in Public Governance,” New York University Law Review 75, no. 3: 596–97. 28. Jody Freeman, “The Contracting State,” Florida State University Law Review 28, no. 1: 180. 29. Ibid., p. 184. 30. Deborah Avant, “What Are Those Contractors Doing in Iraq?” Washington Post, May 9, 2004, B5. 31. Department of Commerce, Grants and Cooperative Agreements Interim Manual, chap. 3, p. 2, available at http://oamweb.osec.doc.gov/GMD_interimManual.html. 32. Freeman, “The Contracting State,” p. 167. 33. U.S. General Accounting Office, “Grant Programs. Design Features Shape Flexibility, Accountability, and Performance Information,” GAO/GGD-98-137 (Washington, DC: GAO, June 1998 ), p. 3. 34. Ibid., pp. 167–68. 35. Hammond v. Donovan, 538 F. Supp. 1106, at 1109–1110 (W.D. Mo. 1982). 36. 31 U.S.C. §§ 6301 et seq. 37. Securities and Exchange Commission, Office of the Inspector General Audit Report, Interagency Agreements, Report No. 228, February 1, 1996, p. 1, available at http://www.sec.gov/about/oig/ oigauditlist.htm. 38. Freeman, “The Contracting State,” p. 193. 39. United States v. Winstar, 518 U.S. 839 (1996). 40. U.S. Department of Health and Human Services, Administration for Children and Families, A Guide to Developing Public-Private Partnerships in Child Support Enforcement, chap. 2, available at www.acf. dhhs.gov/programs/cse/rpt/pvt/ch2.htm. 41. Texas Boll Weevil Eradication Foundation, Inc. v. Lewellen, 952 S. W. 2d 454 at 469 (Tex. 1997) as cited in Dru Stevenson, “Privatization of Welfare Services: Delegation by Commercial Contract,” Arizona Law Review 45, no. 1: 83–131 (2003), p. 96. 42. Ibid., p. 96–97 citing Texas Boll Weevil Eradication Foundation, Inc. v. Lewellen, p. 472. 43. Jody Freeman, “Extending Public Norms Through Privatization,” Harvard Law Review 116 (March 2003): 1285–1352. 44. Greg Schneider and Renae Merle, “Pentagon to Lease Boeing Tanker Planes,” Washington Post, May 24, 2003, E1. 45. Ibid. Note: Cost estimates vary by account. 46. R. Jeffrey Smith, “Air Force Gives New Assessment of Tanker Corrosion,” Washington Post, October 29, 2003, A4. 47. Ibid. 48. Renae Merle, “Alternative to Boeing Tanker Deal Proposed,” Washington Post, September 5, 2003, A4. 49. Renae Merle, “Air Force Said to Understate Lease Costs,” Washington Post, August 27, 2003, E1. 50. Merle, “Alternative to Boeing Tanker Deal Proposed,” A4. 51. Schneider and Merle, “Pentagon to Lease Boeing Tanker Planes,” E1. 52. Renae Merle, “U.S. Probes Actions of Boeing Executive,” Washington Post, September 4, 2003, E3. 53. Leslie Wayne, “Creative Deal or Highflying Pork,” New York Times, April 20, 2003, Section 3, p. 1.

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54. R. Jeffrey Smith and Renae Merle, “Rules Circumvented on Huge Boeing Defense Contract,” Washington Post, October 27, 2003, A1. 55. “Boeing Timeline,” Washington Post, December 1, 2003, available at www.washingtonpost.com. 56. Wayne, “Creative Deal or Highflying Pork,” Section 3, p. 1. 57. Smith and Merle, “Rules Circumvented on Huge Boeing Defense Contract,” A1. 58. Merle, “Alternative to Boeing Tanker Deal Proposed,” A4. 59. Smith and Merle, “Rules Circumvented on Huge Boeing Defense Contract,” A1. 60. Merle, “Air Force Said to Understate Lease Costs,” E1. 61. Merle, “Alternative to Boeing Tanker Deal Proposed,” A4. 62. Renae Merle, “Air Force Faulted in Report on Plane Deal,” Washington Post, October 2, 2003, E7. 63. R. Jeffrey Smith, “E-Mails Detail Air Force Push for Boeing Deal,” Washington Post, June 7, 2005, A1, available at www.washingtonpost.com.

CHAPTER 14 Budget PREVIEW Chapter 14 examines budgets as a technology of policy production. A budget is a plan for raising and spending the money needed to produce policy outputs for a defined period of time. Arguments about how much to spend often overshadow arguments over what to do in policymaking. Budgets operate on annual or biennial cycles that drive the timing and pacing of the policy production process. As you read this chapter, you should be able to answer the following questions. • • • • • • • • • •

What is a budget? What is the difference between discretionary and nondiscretionary spending? What are the origins of modern budgeting? What are the roles and responsibilities of the Office of Management and Budget and the Congressional Budget Office in the yearly budget process? What effects have decades of prolonged budget deficits and efforts to control spending had on budgeting and on policy? What occurs during the three basic phases in budgeting? How does the president exert control over requests for budget resources from programs and agencies each year? What is omnibus budgeting? What is performance budgeting? How are policy and budgets related?

14.1 WHAT IS A BUDGET? The sixth and final technology of policy production is the budget. A budget is a “detailed statement of actual or anticipated revenues and [planned] expenditures”1 over a defined time period. In short, it is a periodic financial plan for managing income and spending over time. By law, almost every public or private organization in the United States must document anticipated revenues and expenditures and then track actual results against the plan on an annual or biennial basis. Every budget is both a plan for the future and a record of past performance. Budgeting principles are similar, regardless of what kind of organization—public or private, commercial or nonprofit—is doing the budgeting. Government budgets, however, are several orders of magnitude more complicated than those of other kinds of organizations in American society. Most organizations collect revenues from members or clients who give voluntarily—they sell goods or services and collect contributions from members. Governments, in contrast, have the ability to coerce, that is, tax, revenues from 329

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citizens and compel these same citizens to do other things against their will. A government can not only compel you to pay property taxes on your house, it can force you to sell your house so a highway or sports stadium or shopping center can be built in your neighborhood. Because governments possess these kinds of powers, government practices in general and government budgeting in particular are governed by elaborate rules and procedures to protect the interests of citizens. Government budgeting is complicated because the stakes are so high for everyone involved. Moreover, government budgeting operates under an additional constraint. The authors of the Constitution stipulated in Article 1 that “No money shall be drawn from the Treasury, but in consequence of appropriations made by law.” The U.S. government can only spend money from the Treasury based upon laws passed by Congress and signed by the president. Unlike commercial enterprises or nonprofit organizations, the U.S. government cannot spend funds it doesn’t have. The government doesn’t have a credit card. Every penny spent must be legally authorized and appropriated. The government cannot “buy now and pay later,” like the typical American family. While this does not mean that the U.S. government cannot go into debt, it does mean that every dollar of debt must be approved by Congress in advance. Hence, Congress engages in the frequent ritual of voting to raise the debt ceiling, which must be done to keep the national government in business. The government cannot spend money it does not have nor does not plan to get. Somewhere, somehow, every dollar spent must first be accounted for. The federal budget also serves a broader set of policymaking functions. First, the federal budget lists or sets the priorities for national action. In reality, almost everything the government does costs money. Although spending money is not the same as getting results, it is difficult to get results without spending money. When governments publish budgets, they are also informing the public as to their priorities for public action. Despite all the rhetoric about not “throwing dollars after problems,” commitments to act without the budget dollars behind them are usually empty promises. Budgets are good, if imperfect, indicators of what governments are serious about. Second, the federal budget is a legal document that gives agencies permission to begin, cease, or continue operating governmental programs or activities. Although the budget does not—as a general rule—give agencies the authority to act, it does provide or deny them the resources to act. It is true that agencies can and do perform activities not specifically funded in budgets, but the life of programs in budget limbo is perilous. Third, the federal budget gives agencies the legal authority to collect revenues and incur and pay financial obligations. It enables them to collect fees from citizens or organizations and buy and pay for the goods and services needed to operate. Without a budget approved by both Congress and the president, government agencies would have to shut down. Government agencies have indeed been shut down due to the absence of an approved budget, but this “nuclear option” of the budget world is rarely invoked. Fourth, the federal budget serves as a financial baseline against which agency performance is measured. The budget is a spending plan and agencies are funded by the Treasury Department based on their individual spending plans. Once the period of the plan is over, agencies are required to report on how their actual spending corresponded to the plan. Finally, budgets are the forcing mechanism that drives the rhythm of public policymaking. Budgets are financial plans for a defined period of time. More often than not, a budget is a plan for a one- or two-year period. That means that the budget process is repeated annually or biennially. This gives policymakers and policy entrepreneurs repeated opportunities to reshape policy commitments by

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reallocating funding for agencies, programs, and projects. Budgeting, therefore, drives the cyclical rhythms of public policymaking. Each budget cycle is a mini-policymaking cycle of its own. So the life history of a public policy is an iterative cycle of policymaking cycles, as shown in Figure 14.1. Figure 14.1 The Cyclical Nature of Public Policymaking

Yi

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The budgetary process is a series of repetitive annual cycles replete with multiple opportunities for policy entrepreneurs and policymakers at all levels to advance their policy agendas. Since the budget process cannot—technically speaking—create new policy authorities, agencies, or programs, budget debates would appear to be arguments over resources for policy production. Budgeting is supposed to be about money for policy and not about policy itself. However, arguments about money turn out to be a convenient, and conveniently obscure, surrogate for arguments about policy. Policymakers and policy entrepreneurs may not be able to defeat or terminate policies they oppose, but they can starve them to death. The politics of the budget are fierce, but buried deep within arcane and exceedingly complex procedures that often shield policies and policymakers from direct public scrutiny. Yet, behind the scenes, the struggle between practitioners for resources is ongoing, as agencies, programs, and their staffs jockey for advantage. “Budget decisions invite the most bitter bureaucratic and political rivalries.”2 They lie at the “heart of public policy-making at all levels of government.”3 Though the concept of a budget—be it for a government, an agency, a program, or a family—seems intuitively obvious to twenty-first century Americans, the practice of public budgeting is less than a century old. Today, the politics of budgets—that is, arguments about how much to spend—often take precedence over arguments over what to do in the policy arena. The technology of finding sources of revenues and managing spending has become so complicated that many, both inside and outside the government, view policy programs in terms of dollars rather than outcomes. They view policy production through the lens of accounting, rather than performance. Indeed, for decades, both policymakers and policy analysts sought—with scant success in most cases—to manage policy programs primarily, if not exclusively, by means of budgets. The technology of budgeting or fiscal control dominates much of the daily lives of those involved in policy production. 14.2 BUDGETS AND THE TECHNOLOGIES OF POLICY PRODUCTION How do budgets interact with the other technologies of policy production? A budget is an accountant’s perspective on policy production. An accountant understands policy production in

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terms of budget accounts or categories of revenue and expenditure. Where does the money come from and where does it go? As such, the budget perspective on policy production contrasts with the: • • •

Authority perspective—What is the legal basis or justification for policy production? Agency perspective—Which organizations are delegated the authority to get things done? Program perspective—What are the intended outputs and outcomes of policy production?

Sometimes the authority, agency, program, and budget perspectives mesh neatly together. A program has a unique and exclusive budget account, operates in a single agency, and draws its authority from a single source. Most of the time, however, programs, budgets, agencies, and authorities do not match up one-to-one. Programs may be funded by multiple budget accounts, administered by multiple agencies, and/or authorized by multiple authorities. The technologies of policy production work together in disharmony. That is what makes policy production so complex and complicated. However, the primary point is that budgets and budgeting constitute an independent technology for managing policy production. What distinguishes budgets from other technologies of policy production is the relative ease with which we can measure dollars. Lawyers can distinguish different kinds of authority and estimate the scope of authority in specific cases, but we cannot measure amounts of authority like we measure amounts of dollars. Similarly, we can measure the results—the outputs and outcomes—of government action, but consensus on the relative costs and benefits of government action has proved elusive. Is the American public safer or happier or wealthier because of policy A or program Y? It all depends on whom you ask, and where, when, and how. The authority, agency, and program perspectives are usually far more difficult to quantify than the accountant’s perspective. Accountants can track the flow of funds down to the penny, if they wish. Since all dollars are the same, they don’t have to worry about the fine points of the law or different measures of public satisfaction or discontent. Everything can be reduced to the bottom line. As a result, many students have viewed the policymaking process primarily—if not exclusively —through the accountant’s perspective. For many, budgeting is the central process of governance and balanced budgets became the primary measure of government success. If governments could only balance revenues and outlays, then governance could be judged a success. Mastery over the budget numbers has meant mastery of the arts of governance. Since the early 1990s this single-minded focus on budgets and budgeting has gradually eroded. Just as corporate executives recognized by the 1980s that financial discipline could not rescue enterprises selling shoddy products to alienated customers, policymakers in the 1990s began to realize that balancing budgets was no substitute for policy performance. While policymakers wrestled endlessly about budgeting methods and balanced budgets, the public increasingly demanded accountability for results. When the policymakers finally balanced the federal budget in 1998 after three decades of congressional reforms, constitutional amendments, and even government shutdowns, the public yawned. Indeed, it only took a couple of years before both Congress and the president abandoned fiscal restraint and plunged the U.S. government even deeper into debt in the early years of the twenty-first century. With the real catastrophes of 9/11 and Gulf Coast hurricanes, the potential threats of terrorism and pandemic influenza, and the costs of wars in Afghanistan and Iraq, public attention turned to accountability for results, not fiscal responsibility. Protecting the health and welfare of the American public took priority over balancing the budget. Effectiveness took precedence over efficiency. As a technology of policy production, budgeting increasingly shares center stage with the capacity to design authorities, programs, rules, and contracts that get results.

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1 4 . 3 T H E T W O FA C E S O F B U D G E T I N G There are two sides to budgeting—raising and spending money. 14.3.1 Raising Money Where does the money for policy production come from? Who pays? The short answer is, the American public. Governments raise revenues through taxation. Taxes come in many sizes and shapes—both obvious and subtle. In some instances, policy programs raise a part or all of the revenues needed to support their own production. Whether through user fees, licenses, and other charges, some programs and agencies, such as local garbage collection, state driver licensing programs, or the U.S. Postal Service generate revenues to finance some or all of their operations. Many government programs, however, are not self-financed. Instead, they are funded through transfer payments in which revenues collected from taxes and other sources are applied to finance policy production. The most visible tax is the income tax, collected from individuals and businesses alike. Proportionately, the federal government is more reliant than states on this source of revenue. Payroll taxes are collected directly from wages. Payroll taxes may also be tied to specific programs, such as Social Security and Medicare, and so, may not be available as general revenue. Most states collect revenue from income taxes, too, but the sales tax is often a larger source of revenue. Both state and the federal government collect numerous excise and other forms of special taxes. Local governments rely heavily on the property tax for much of their revenue. Trust funds are revenues collected by state or federal governments dedicated to specific purposes and programs. The government manages the funds and disburses them to beneficiaries according to the terms of the law. The social security trust fund is a familiar example. The search for revenue comprises the supply side of budgeting. What is available determines what can be spent. For most of the history of federal budgeting, the processes for determining supply (revenue) and demand (spending) were separated. Procedures to tighten the linkage between the two were only added in the second half of the twentieth century with efforts to impose discipline on budgeting processes. Yet, passing legislation to generate enough revenue, especially when it means new taxes, is always dicey. 14.3.2 Spending Money The second half of budgeting involves expenditures. There are always more ways to spend money than there is money available. For most governments, revenues must equal expenditures. The federal government is the exception to this rule. The federal government can incur operating debt, or deficits, although over most of its history it has balanced its budget. Recent decades of large federal deficits are now changing the dynamics of financing policy and the technologies of budgeting. This usually means devising ways to finance policy production “off budget,” that is, outside the formal budget process. Budgets have always been works in progress. They reflect the evolution of government and government’s role in policy production. Many federal budgeting practices of today first evolved at state and local levels. Cycles of prosperity and recession in the economy periodically leave their imprints on public budgeting when governments are forced to search for new solutions to the never-ending problem of reconciling public spending with revenues collected. With each adjustment, a layer of complexity is added to the budgeting process. For these reasons, the mysteries of budgeting may be best unraveled historically.

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14.4 THE EVOLUTION OF BUDGETING Budgeting requires participation by many of the major stakeholders in policy production. The Constitution makes Congress responsible for authorizing, appropriating (funding), and raising revenues (taxing) to pay for government programs. It gives the president responsibility to see that laws are carried out by the agencies within the Executive Branch. These provisions lock the president, the bureaucracy, and Congress in a yearly budgetary mating game that funds federal policy initiatives. The same dynamics characterize budgeting by state governments, with two important differences: the balance of power may be tipped more toward governors than legislatures and there is greater leeway for state policymakers to use budgets as a vehicle for substantive policy changes.4 Tensions between legislatures and executives over raising and spending money to fund policy are a continuing theme in American political history. The provisions in the Constitution for shared responsibility were reactions to the rallying cry of the Revolution rejecting “taxation without representation” and to the colonial experience of the struggles between English parliaments and kings over the power to tax. In the early years of the federal government, budgeting was conducted as a continuing dialogue between Congress and the Treasury Department. In Congress, the Ways and Means Committee exercised unified control over both revenues and appropriations, while the Treasury Department simply compiled, but did not reconcile, requests for funding from the executive departments. In 1865, congressional procedures were decentralized, with authority over appropriations divided among eight separate committees.5 Except for periods of war and depression, this lack of procedural coordination had limited effect, since federal government programs were minimal in scope, and revenues, which were derived primarily from customs duties and fees, were usually sufficient. Problems with budget first arose at the local, municipal level where nineteenth-century policy production took place. Municipalities were the first to experiment with practices that became the foundation for modern budgeting.6 14.4.1 The Beginnings: From 1865 to the Progressive Era The earliest efforts to control expenditures arose in America’s cities in the era of rapid expansion, immigration, industrialization, and urbanization following the Civil War. Faced with the need to provide clean water, sanitation, roads, bridges, and schools to a burgeoning population, local governments needed reliable sources of revenues and a better means to control expenditures. The old party machines and the spoils system were inadequate to the task of managing America’s urban centers through the boom-and-bust cycles of the late nineteenth century. By the turn of the century the basic techniques of budgeting had emerged. First to appear were techniques for better estimating revenues and needs. Second were better strategies for imposing fiscal discipline; for example, requiring departments to spend only that money allotted them and preventing officials from circumventing funding limits by lobbying deterring council members. Third, municipalities adopted mechanisms to differentiate between operating and capital budgets—that is, between funding to keep the government running and investments in infrastructure. These technologies eventually led city executives to the understanding that formulating budgets had to begin first in the executive branch. In that way, estimates of expenditures and revenues could be reconciled and priorities established before review and final decisions by elected officials. Multiple boom-and-bust cycles over this period gave local officials practice in dealing with the relationship between the economy and the budget. Budgeting was, and continues to be, “cyclical, shifting back and forth between supporting collective problem-solving and emphasizing balance and cutbacks.”7 Modern budgeting by the federal government began with the Progressive Era and the “good

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government” movement. Reformers looked at efforts of municipalities seeking to combat corruption and at methods of accounting being developed by the corporate sector. Such initiatives reflected the advent of “scientific” approaches to managing budgets and their spread to the emerging field of public administration. Advocating new accounting methods used in the corporate sector, the New York Bureau of Municipal Research, the forerunner of the present-day Brookings Institution, produced a prototype budget using object (line-item) classifications for the New York City Department of Health in 1907. Innovation quickly found imitators. In 1912, the Taft Commission recommended that the federal government adopt line-item or object classification budgeting methodology. By the 1920s, most major American cities had adopted this approach. 14.4.2 Between the World Wars These reforms migrated into the federal government. In the nineteenth century, presidents exercised little control over executive departments, which developed their funding requests independently and negotiated their budgets directly with Congress, bypassing the president. Growing expenditures and budget deficits from World War I changed the dynamics of government budgeting, however. The need for greater fiscal responsibility plus improved economy and efficiency propelled these reforms. “The 1920s, normally viewed as a time of quiescent, laissez-faire government, actually was a period of intense state building. The national budget system created a new executive branch with potentially great powers . . . not actively projected outward into society until the 1930s.”8 The modern technology of federal budgeting was introduced in 1921 with passage of the Budget and Accounting Act. This act made the president central to the yearly budget process. It created a Bureau of the Budget (BOB), later to become the present day Office of Management and Budget (OMB), to assist the president with newly assigned responsibilities for preparing a yearly budget to submit to Congress that was to include estimates of expenditures, appropriations, and revenues. These reforms greatly strengthened the president’s fiscal and policy roles both internally, in exercising control over agencies within the executive branch, and externally, with Congress. All funding requests and supporting information, as well as proposed legislation from agencies, were routed through the BOB. Agencies were no longer supposed to initiate contacts with Congress and were required to support the president’s budgetary allocations. At the same time, the act also created the General Accounting Office (GAO) (renamed the Government Accountability Office in 2004) as an arm of Congress responsible for conducting independent audits of government expenditures. These measures realigned federal policy production. They created the modern framework for presidential policymaking and greatly curbed the power of agency heads. These reforms positioned Franklin Roosevelt, a decade later, to launch the vast expansion in federal programs that became the New Deal, and “relegat[ed] Congress to the status of a reactive spectator whose primary duty was to oversee the exercise of the authority it had delegated to the president.”9 The Depression and Second World War vastly increased demands on the federal government, which steadily expanded the responsibilities of the BOB for managing the budgets that sustained policy production. Ever-greater revenues were needed to keep federal programs afloat. The BOB became the managerial eyes and ears of the president across the range of federal agencies and programs. It had authority over the yearly executive budget, proposed legislation, and, later, in 1981, over clearance of all proposed agency rules. In terms of the federal budget, layer after procedural layer was added to the reporting, accounting, and management practices needed to plan for and control government activities.

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14.4.3 From World War II Through Vietnam: Guns and Butter The Truman administration managed to restore a balanced budget within a few years of the end of the war. The 1950s were a period of budget stability. Economic growth supported federal expenditures at levels sufficient to meet burgeoning infrastructure needs in the form of capital projects after years of pent-up demand, plus the need to respond to the Cold War. Defense spending, which had absorbed 90 percent of the federal budget at the end of World War II, fell to 40 percent by the beginning of the Vietnam era. Presidents also demonstrated a commitment to balance spending against revenues both by cutting expenditures and raising taxes as necessary. This balancing act fell apart in the 1960s. First, President Kennedy learned that deficit spending often provided the policy solution to reversing economic recessions. Then, the Johnson administration adopted policies incorporating both “guns and butter,” and refused to raise taxes. Domestic spending for multiple new social entitlement programs combined with defense spending for the war in Vietnam led to endemic deficits. The bipartisan consensus on spending and balancing budgets slowly disintegrated. So too did congressional willingness to bow to presidential priorities. The end of the Vietnam War brought no budgetary retrenchment as Democrats and Republicans both insisted on high levels of funding for their very different priorities. The result was an increasing politicization of budgeting. Over the same period, new program and performance formats were added to traditional lineitem budgeting approaches. These efforts sought to introduce and utilize data and analysis more systematically in the formulation and justification of programmatic budget requests and to impose greater rationality and control over budgets that responded primarily to the logic of incremental yearly growth. Planning-programming-budgeting systems (PPBS) emerged in the 1950s and 1960s, again borrowed from the corporate and municipal sectors. PPBS systems reflected strategic efforts to use budgets to plan and control the future direction of policies and programs and were often associated with good economic times. Subsequently, other systems, such as managementby-objectives (MBO) and zero-based-budgeting (ZBB), emerged as reforms when techniques for reining in spending and for forcing tough decisions about policy priorities were called for. Although these formal approaches to exerting greater control over program budgeting fell by the wayside, many of their elements persist. 14.4.4 Living with Deficits In the 1970s, the budgetary chickens came home to roost. Congress struck back. In the name of preserving its policy priorities, Congress reasserted many of its traditional budgeting prerogatives. First, it turned many of its favorite programs, such as Social Security, Medicare, and Aid to Families with Dependent Children into entitlements. In budget-speak, entitlements are programs over which Congress has no discretion in terms of determining yearly funding amounts and where the rate of funding increase is on autopilot, pegged to some arbitrary number, often a cost-of-living index. By 1980, the discretionary portion of the yearly budget had fallen from two-thirds to onethird of the total federal budget. Second, Congress passed the Congressional Budget and Impoundment Control Act of 1974. This act strengthened its role in several ways. First, the act unified congressional budgeting by centralizing and unifying authority in newly created Senate and House Budget Committees. These committees draft overall budget targets each year, and then, after passage of an annual budget resolution, work with the appropriations committees to negotiate final amounts. The act also created the Congressional Budget Office (CBO) as an independent source of budgetary and economic

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Frank and Ernest

IT WOULD SAVE A LOT OF TROUBLE LATER ON If YOU ADDED

S O M E T H I N G ABOUT

A BALANCED A

BALANCED

Frank and Ernest © 1995 Bob Thaves. Reprinted with permission. All rights reserved.

Source: Frank and Ernest © 1995 Bob Thaves. Reprinted with permission. All rights reserved.

expertise. Further, it limited the president’s powers to obstruct policy production by impounding, or not spending, duly appropriated funds. Finally, it set deadlines for the sequences of executive and legislative actions necessary to produce a budget for each fiscal year. The 1974 act strengthened Congress’s capabilities without diminishing the president’s role in budgeting. Yet, it could not resolve the crisis caused by recurring federal deficits, years of economic stagnation, relentless inflation, especially in entitlement expenditures, multiplying federal program initiatives, and continued military buildup. Decades of continuing deficits produced annual rituals of budgetary hand-wringing combined with political posturing by all sides about reducing red ink. Yet, no one was willing to pay the political price of reforming the way in which policy is funded or to see funds for their pet programs cut. By the 1980s, “conflicts over federal budget policy . . . monopolized the nation’s political agenda.”10 Balancing the budget became a mantra to which politicians gave lip service but little more. What did emerge were new strategies and tactics for accomplishing policy goals through the budgeting process. Some had greater staying power than others. • Omnibus Budget Reconciliation Act (OBRA). “Omnibus legislating is the practice of combining numerous measures from disparate policy areas in one massive bill.”11 In terms of budgeting, the OBRA of 1981 is viewed as a watershed event. It merged all appropriations into one bill rather than the usual thirteen separate bills and relied on the complexity of the budget process to shield it from legislative politics. OBRA broke new ground in using budget legislation to terminate policy programs. Omnibus budgeting now dominates federal budgeting. It is used when the pressures of time and irreconcilable political divisions between legislators make agreements on budgets difficult. • Earmarks. Omnibus, catch-all budget bills have proved to be the ideal vehicle for congressional earmarks. Earmarks “set aside specific funds for projects or programs in members’ districts or states.”12 When an earmark is inserted in circumvention of normal budgeting procedures it is generally called “pork.” So-called “pork-barrel projects” have become the technique of choice for delivering targeted benefits to constituents. By any standard, the number of congressional earmarks has exploded over the past two decades. According to the Congressional Research Service, there were a total of 12,852 earmarks with a value of $67 billion in the fiscal year 2006 appropriations bills.13 In some cases, agencies have difficulty in performing their basic missions due to the earmarking of agency funds. Earmarks also expand the opportunities for corruption since they are often added without the knowledge of other legislators or tucked away in report language and not actually contained in the bill itself.

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• Tax-cut packages. Reducing revenue as a strategy to curb spending and limit the scope of federal policymaking has been a favorite budget strategy since Reagan assumed the presidency in 1981. In the 1980s, Congress passed two such measures, the Economic Recovery Act of 1981 and the Tax Reform Act of 1986. In 2001 and 2003 the second President Bush pushed through two more tax cuts. Such strategies deal with the supply side of budgeting. While the original rationale for tax cuts was to reduce revenues and thereby inhibit the growth of federal spending, recent analysis appears to show that tax cuts have actually spurred federal spending. By making government cheaper than it actually is, tax cuts have actually increased public demand for more government programs.14 • Tax increases. Increasing the revenues available for spending is another strategy of budgeting—again on the supply side of the equation. Measures designed to raise taxes and reduce the federal deficit have been adopted twice over the past few decades: the first in 1990 by the first President Bush, who, in his election campaign had promised “no new taxes”; and the second, early in President Clinton’s administration, with the 1993 OBRA legislation. Raising taxes is politically more difficult than cutting them. • Balanced budget amendments. Amending the Constitution to require a balanced budget has long been a strategy for managing budgets by fiscal conservatives. In 1995, this strategy almost succeeded. The 104th Congress, controlled by a Republican majority, pressed for approval of an amendment requiring a balanced budget by 2002. It passed the House by 300 to 132, but failed to gain approval in the Senate by a single vote. Most state and local governments are required to balance their budgets. • Line-item veto. Presidents have long argued for authority, like that given to many state governors, to strike out individual items in appropriations legislation as a way to curb wasteful spending. Such vetoes are useful in countering earmarks and other forms of pork often used to gain support from legislators. In 1996, Congress passed, and the president signed, legislation granting the president such authority. The Supreme Court found the line-item veto to be unconstitutional a year later. Most state constitutions, however, provide for some form of line-item veto and the idea periodically reappears in Congress. Over the same period Congress also exercised its legislative authority to control budgeting practices in more traditional ways. In 1985 Congress passed the Gramm-Rudman-Hollings Act (GRH), legislation designed to impose discipline on itself. GRH set yearly fixed targets for progressive deficit reduction aimed at a magic date (1991) for achieving a balanced budget. When deficit targets were not met, it then required that funds be withheld (sequestration) from existing programs. In practice GRH failed. Congress simply found new ways to circumvent its own budget estimates. In 1990 Congress tried again with the Budget Enforcement Act. Abandoning GRH’s fixed deficit limits, it instituted a new deficit control process that distinguishes between discretionary spending subject to annual appropriations, and nondiscretionary spending, such as entitlements, not controlled by the appropriations process. Three sets of rules were created: one introducing flexibility in adjusting yearly deficit targets; a second for setting caps on discretionary spending (approximately one-third of the federal budget); and the third, termed pay-as-you-go (PAYGO) rules for entitlements, requiring appropriations sufficient to finance these government obligations. An appropriation to one program exceeding the caps placed on discretionary spending must be offset or sequestered from another program. Similarly, spending authorized by new legislation is required to be offset by legislation raising revenues or by funds sequestered from

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existing programs. These provisions began to take effect between 1991 and 1994 as Congress became more serious about deficit reduction. Only two small sequesters of discretionary funding were required. In 1995 the federal government reached budgetary meltdown and was shut down briefly twice. The Republican takeover of both houses of Congress in 1994 made deficit reduction an overriding priority. After rejecting President Clinton’s proposals for deficit reduction by increasing taxes, Republicans issued their own budget proposal for FY1996 containing major revisions to programs and spending. After months of confrontation and stalemate, the president vetoed a continuing resolution used to fund the government on a temporary basis while Congress completed work on the next year’s budget. That triggered the shutdown of the federal government, affecting 800,000 workers for six days. Although opinion polls indicated that the Republicans were blamed for much of the debacle, neither side benefited from this extraordinary sequence of events. In the contentious negotiations that followed, a final budget resolution with limited tax increases was passed seven months after the deadline and fourteen different continuing resolutions later. President Clinton, however, had managed to blunt Republicans’ most concerted effort to reshape spending for federal policies. At the very height of the budget wars, the climate for budgeting turned around. Enter the infusion of revenues generated by the economic growth of the booming 1990s! 14.4.5 The Twenty-First Century: Back to the Future? Fiscal 1998 was the first year since 1969 in which the federal budget registered a surplus. Ironically, the presence of “a surplus actually makes the annual budget debate in Washington far more complicated than . . . when there was a deficit to be eliminated.”15 Surpluses reinvigorated the perennial debate between those wanting more revenue available to spend on policy needs and those wanting more income to remain in the hands of taxpayers. The 2000 election between Gore and Bush was “in part, a contest over the future size of government.”16 Indeed, one of the first measures passed by the new Bush administration in 2001 was a tax cut lowering the rates on individual income and capping the availability of revenues to support new domestic programs. Yet the period of debate over surpluses was short-lived. In a remarkable reversal, the economy drifted into recession by mid-2001. The stock market tanked when the technology bubble burst and the excesses of speculators seeking easy money were revealed. The events of September 11, 2001, however, transformed the political and budgetary landscape and opened the floodgates for new spending for wars in Afghanistan and Iraq and homeland security. By 2002, deficits reappeared, soon followed by rounds of tax cuts to pump up the economy. Defense and homeland security consumed increasing portions of the federal budget. Republicans, the majority party in control of both houses of Congress and the presidency, were willing to spend more generously on programs for education, for prescription drugs, pandemic bird flu, and funds for rebuilding the hurricane-ravaged Gulf Coast—all electoral agenda items. Meanwhile, creeping fiscal pressures on Medicare and Social Security entitlements loomed in the background as the baby boom generation inexorably approached retirement. As the first decade of the twenty-first century comes to a close, efforts to curb government spending and promote fiscal responsibility are running head-on into twin crises: the visible crisis of public safety—that is, protection against terror, disaster, and disease—and the invisible crisis of growing entitlements. While the outcome of this contest over public values cannot be predicted, it is certain that budgets and budgeting will play a central role in whatever solutions emerge.

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MINICASE 14.1 Social Security—Budgeting by Ostriches The crisis of Social Security is looming. We have known for years that Social Security cannot pay for the benefits of the baby boomer generation and that, as presently structured, too few workers will be asked to support too many retirees. Yet, like ostriches, we bury our heads in the sand of budgetary denial and hope the problem will disappear. Social Security costs a lot. In 2002 it paid out $454 billion in benefits to retirees, to the spouses and dependents of workers who died prematurely, and to the disabled. For the same year Social Security collected $627 billion in payroll taxes to fund these benefits. Employees pay 6.2 percent of their incomes, with employers chipping in another 6.2 percent, up to an $87,000 salary ceiling. The self-employed pay 12.4 percent of their income. Currently, Social Security collects more in taxes than it spends on benefits. The difference is “loaned” to the U.S. government in trust funds in the form of interest-bearing Treasury securities. Yet, by 2018, spending on benefits will outpace revenues as the baby boomer generation retires and draws benefits. By 2038 or 2042, depending on whose estimate you believe, Social Security trust fund reserves will be depleted and benefits will be on a pay-as-you-go basis. So what are the options? Raising taxes, cutting spending, increasing government borrowing, or privatization? One way or another, the promises we have made to future retirees must be financed. If we raise payroll taxes to cover costs, the burden may be expected to rise from 6.2 percent of taxable wages at present to 17.8 percent in 2038. Another option would be to raise or remove the yearly wage ceiling on which the Social Security tax is paid by workers. Alternatively, cutting spending can be done in several ways: eliminating other programs, or cutting back on existing Social Security benefits, whether by increasing the age of eligibility (from 67 to 70) or pegging benefits to retirees’ income in some way. Increasing federal borrowing seems less and less likely as ballooning budget deficits once again threaten the financial stability of the government and its capacity to borrow. The option of privatization, or creating incentives for some to opt out of Social Security so as to reduce the benefits owed retirees, has been suggested, but has not gotten out of the starting blocks, at least for the time being. No matter what your preferred policy solution, doing nothing now only postpones tough budgetary choices in the future.

14.4.6 State and Local Budgeting Last, we turn to budgeting by state and local governments. States and municipalities do not have the luxury of running budget deficits. Because they are required to balance their annual budgets, state programs are both more susceptible to the vagaries of economic cycles and more disciplined in their approaches to budgeting. They too are subject to the conflicting pressures of expanding versus contracting the scope of services offered the public, and of limiting taxes, especially those on property. Added to this is the fact that states are required to pay for a growing list of unfunded federal mandates These are federal programs for which states must provide funding out of their own coffers. In many respects these constraints have encouraged more experimentation with, and reforms to, budgeting. For example, cities and states have worked extensively with the targeted

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and performance-based budgeting strategies that are now migrating to the federal government. Occasionally, the failures of state and municipal budgeting have been spectacular, as with New York City in 1975, when the lending markets refused to loan money to the city and the state had to come to the rescue; or with California in 2003, when revenue shortfalls caused a political crisis and the recall of a sitting governor. Budgeting at the state and local levels offers a laboratory for practices that may both guide and warn practitioners in the federal government. Finally, state and local governments will inevitably take on increasing budgetary responsibilities for coping with growing threats to the safety of the American public. 14.5 MANAGING THE FEDER AL BUDGET—OMB No discussion of the relationship between policy and the resources available to fund federal policy production is complete without understanding the role of the Office of Management and Budget (OMB). “If you are responsible for advising the President about numbers, you are—de facto—in the stream of every policy decision made by the federal government.”17 OMB provides the president with the institutional capability to exert fiscal, policy, and management control over federal departments and agencies within the executive branch. It occupies a pivotal niche in policy production by representing agency and program needs to the president and by ensuring that presidential interests are communicated to the programs and agencies of the executive branch. Although used in different ways by various presidents, OMB is organized within the Executive Office of the President and staffed by a group of 400 to 600 political appointees and professional civil servants. The director holds the “second most powerful job in . . . government.”18 OMB is organized both by function and program. Its three functional divisions include budget review, responsible for coordinating the budget process for the entire executive branch; legislative reference, responsible for clearing and coordinating all legislation submitted to or passed by Congress; and several smaller offices assigned responsibility for various management functions across the executive branch. An Office of Information and Regulatory Affairs was added by President Reagan to serve as a clearinghouse for executive review of proposed agency rules. In 1996 further responsibilities for upgrading and coordinating information technologies across the government were also assigned to OMB. The Resource Management Offices (RMOs) lie at the heart of OMB’s role in budgeting and policy production. There are five RMOs responsible for collecting, analyzing, and overseeing information from each program within the agencies assigned to their general domain. Each office serves as a “depositor[y] of agency-specific programmatic information” and as the “collective intelligence centers” for the budgetary, legislative, and management units in the OMB.19 Each is staffed by program examiners who form the personal connection between OMB and agencies and programs. Individual examiners develop expertise in the subject matter, operations, and budget of their assigned programs and of groups of functionally related programs across agencies. They monitor all budgetary, operational, legislative, and program issues within their review areas. They also serve as the information conduit for communicating presidential concerns and priorities to agencies and programs; for clearing legislative proposals and testimony to Congress; and for reviewing, formulating, and representing proposed budgets from their respective agencies and programs in yearly negotiations. Examiners perform intelligence gathering and assessment functions based on their personal contacts and relationships with agency and program personnel.20 In August 2001, the second Bush administration issued the President’s Management Agenda (PMA). Led by OMB, that agenda consisted of five interlocking initiatives:

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Strategic management of human capital Competitive sourcing Improving financial performance Expanded electronic government Budget and performance integration

In pursuit of the fifth objective, OMB greatly expanded the use of performance information in the budget process. Government Performance and Results Act (GPRA) Performance Plans were physically integrated into the budget documentation required by OMB and submitted to Congress. In addition, deadlines for submission of GPRA Performance Plans were moved forward so that OMB could make use of them in its review of agency budget submissions. OMB also developed the Program Assessment Rating Tool (PART), which it used to evaluate 20 percent of government programs each year. Individual programs were evaluated as effective, moderately effective adequate, ineffective, or results not demonstrated. PART scores were to be used by agencies in formulating program budgets. Finally, OMB instituted a scorecard that rated agency success in integrating budget and performance information. OMB scored agency progress in integrating budget and performance information based on criteria such as • • • •

Use of integrated financial and performance reports by senior managers Limited number of goals and objectives in strategic plans Full cost of achieving performance reported in agency financial and performance reports Use of efficiency measures in performance plans

Indeed, as the OMB enters the twenty-first century, the “M” for Management is beginning to emerge from the shadows of the “B” for Budget. 14.6 THE BUDGET PROCESS: OVERVIEW Now we turn to the budgeting process itself—a series of procedures and steps that usually seem arcane and needlessly complex to outsiders. To policy practitioners sitting at a program desk or staffing a congressional committee, budgeting consumes much of their daily activity. Mastery of budgeting details is essential to successful policymaking. Budgeting produces the resources needed to fund program operations, from supplies and personnel to grants and contracts for services to be delivered. Even small changes may adversely affect the capacity of policy programs to deliver benefits to targeted populations. We use the federal budget as our example. State budgeting processes are generally similar, with important differences in detail. The yearly federal budget may be divided into three phases: • • •

Executive budget formulation Legislative budget enactment Budget execution and control

Not surprisingly, the first two phases—formulation and enactment—take longer and require far more effort than the third—the actual period of time when the budget is in effect. The federal budget or fiscal year begins on October 1 of the previous year and ends on September 30. Thus, fiscal year 2007 begins on October 1, 2006, and ends on September 30, 2007.

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Moreover, it is important to understand that, at any given moment, policymakers must deal with two or three budgets at various stages in their life cycle, as shown in Figure 14.2. In the following pages we will briefly outline the steps in the budget process. Figure 14.2 Budget Process Overview

FY2007 Execution FY2008 Formulation

Execution

Enactment

FY2009 Formulation

Enactment

Execution

Formulation

Enactment Formulation

|O|N|D|J|F|M|A|M|J|J|A|S|O|N|D|J|F|M|A|M|J|J|A|S|O|N|D|J|F|M|A|M|J|J|A|S|

-2006

2009

2008

2007-

14.7 PHASE ONE: EXECUTIVE BUDGET FORMULATION The end of the executive budget formulation process is set by law. Before the first Monday in February each year the president must submit to Congress a proposed budget for the (next) fiscal year beginning on October 1. Historically speaking, this deadline has always been met. Practically speaking, it drives the entire executive budget formulation process. Figure 14.3 shows an overview of executive budget formulation. The numbers in Figure 14.3 show the number of months before budget execution or the beginning of the next fiscal year. Figure 14.3 Executive Budget Formulation Previous Budget Submitted to Congress

Feb. -20

Mar.

-19

OMB Prepares Guidance

Apr.

-18

Mid-Session Review of Previous Budget &A-11 Issued

May June -17 -16

Agency Offices, Programs & Projects Prepare Budgets

Jul. -15

OMB Review

Aug. Sept. Oct.

-14

-13

Agency Prepares Budget & Performance

Plans

-12

President Submits OMB OMB Prepares Budget to Passback Budget Congress

Nov. Dec. Jan. -11 -10 -9

Agency Agency Submits Appeals Performance Report

Feb. -8

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14.7.1 OMB Guidance Every annual budget is constrained by what has happened before. That is, the proposed budget for fiscal year 2008 (FY2008) is strongly influenced by its predecessors. When the president submits a detailed budget to Congress for the next fiscal year he also submits estimates for the five “outyears” following the budget year. These estimates serve as the starting point for executive budget formulation. Every budget begins with this legacy of numerical estimates or commitments. Detailed work on executive budget formulation actually begins approximately ten months before the president submits the executive budget proposal to Congress and nineteen months before the budget takes effect. Soon after the submission of the previous year’s budget proposal in February, OMB begins work on guidelines for the following year’s budget. These guidelines consist of two parts:21 • •

Substantive guidance on overall budget priorities and agency target estimates Procedural guidance on information to be submitted by agencies to OMB to support the president’s budget proposal. This guidance is contained in OMB Circular A-11, which is revised every year to reflect the president’s policy agenda.

These guidelines are usually published in July of the year preceding the president’s February submission to Congress. OMB Circular A-11 is formally issued in July and federal agencies are given two months to fill in the required data to submit to OMB. OMB substantive guidance is contained in the Mid-Session Review of the previous budget proposal, which the president is required by law to submit in July. While the Mid-Session Review specifically deals with the budget currently under consideration by Congress, the out-year numbers set targets for agency decision makers. 14.7.2 Agency Budgets At the same time that OMB is telling agencies what to do and setting targets for what they can get, agencies are beginning to draft their own budget requests. Agencies typically issue their own “budget call” to operating units, programs, and major projects to provide justifications for resources. These internal budget requests are then reviewed by agency budget offices during the summer prior to the September deadline for submission to OMB. For agency heads and budget offices, August is generally the month when the competing demands of agency units, programs, and projects are reconciled with OMB guidance and internal priorities are established for the budget that is to go in effect more than one year later. At the same time, agencies are required to draft and submit the Annual Performance Plan required under the Government Performance and Results Act (GPRA) as discussed in chapter 11. Originally, GPRA planning documents were not integrated into the budget process. Under the second Bush administration, however, OMB required that agency budget requests and annual performance plans be submitted to OMB as integrated documents. While agency budgets and performance plans are typically produced by different offices, gradual, if uneven, progress is being made in linking performance targets to budget requests in the federal government. 14.7.3 Enter OMB Agencies are required to submit their budget requests and performance plans to OMB as an integrated package in mid-September. From September to November, OMB staff work together with

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presidential advisors to set general policy priorities for the overall budget in the next year and then to reconcile these with competing requests from the agencies. To assist in the process, the OMB under the second Bush administration required agencies to submit their Performance Reports on the previous year’s Performance Plan in November, rather than February, so OMB can use the results in evaluating agency requests. The OMB review process involves intensive negotiations with administration officials and agency heads. In late November, OMB sends its decisions on funding back to the agencies in the form of a passback. Passbacks come in many forms, from denial of funds to a specific activity within a specific program to general cutbacks at the agency level. A passback may increase or decrease funds or it may dictate that specific activities or operations be targeted for increases, cutbacks, or, in some cases, elimination. Generally, OMB lets agencies and programs favored by an administration retain discretion over how any cutbacks will be apportioned. For those less favored, passbacks often come with detailed instructions about what may be included in the final budget. Sometimes passbacks are informal, communicated in face-to-face meetings between agency and OMB personnel. At this point agencies again move front and center to reconcile their initial requests with passbacks from OMB. Again, this requires intensive negotiations between the various operating units. All documents generated during negotiations around passbacks are confidential. An appeals procedure to OMB is available, with final decisions made around Christmas. After that, the president’s budget is printed and made ready for submission to Congress in February. After submitting the budget in February, the president is required to update the information and estimates for Congress by July 15 each year as the Mid-Session Review. 14.8 PHASE TWO: LEGISLATIVE ENACTMENT The Congress, although not required to adopt the president’s budget, often uses it as a starting point. Congressional budgeting operates on a schedule, although it rarely meets its scheduled deadlines. Congress has eight months from the president’s budget submission in February to the start of the fiscal year on October 1 to enact a budget. Some of the steps in the budget enactment process are mandated by law, others are simply legislative procedures, but congressional schedules are seldom observed in practice. Figure 14.4 illustrates the major components of the congressional budget process during the months preceding the start of the next fiscal year.22 Figure 14.4 Legislative Budget Enactment President Submits Mid-Session Review

President Submits Budget to Congress

Feb. -8

March -7

April -6

May -5

June -4

July -3

August Sept. -1 -2

President Signs or Vetoes Bills

Oct. 0

Nov-A + 1/2/3/

CRS

Omnibus Bill

Budget Resolution Reconciliation Authorization Appropriation

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14.8.1 Concurrent Budget Resolution Both houses of Congress review the work of the budget committees and are required by law to adopt a concurrent budget resolution (CBR) by April 15. In practice this deadline is rarely met. The budget resolution sets the levels of budget authority and outlays for the upcoming fiscal year and makes recommendations to congressional authorizing committees about changes in statutes needed to achieve the levels for spending and revenue in the resolution. The CBR is the legislative response to the president’s budget and does not require the president’s signature. 14.8.2 Reconciliation Based on directives in the CBR, both houses must agree on “changes in permanent law to achieve the revenue and mandatory spending targets in the CBR.”23 Reconciliation action can take any of the following forms: • • • •

Increase or reduce tax levels Change the benefits or eligibility requirements for entitlement programs Require government agencies to charge fees Change budget laws

The reconciliation process addresses both discretionary and entitlement (nondiscretionary) programs. As discussed earlier, since taxes and entitlements are politically controversial issues, Congress sometimes enacts a single Omnibus Budget Reconciliation Act (OBRA) that wraps up all changes into one big package. Congress is required to complete the reconciliation process by June 15, but this deadline is rarely met. Indeed, in some years, reconciliation is never completed. 14.8.3 Authorization “Authorization laws establish, continue, and modify federal programs.”24 Authorization bills are under the jurisdiction of specific authorization committees in both the House and Senate. All spending must be authorized by enabling or permanent legislation. But authorizing legislation has two components. One, enabling legislation, establishes the purpose and guidelines for programs conducting policy activities. The other kind establishes the basis for congressional funding or appropriation authorization provisions. It is this latter component that is important in our discussion of budgeting. Authorization for funding takes two forms. •

•

Some bills authorize programs and set limits on the amount of funding that can be appropriated for a program. Authorizations may be for one or more years. After that period a program must be reauthorized. In theory, Congress cannot appropriate money for “unauthorized” programs. In practice, “the total amount of unauthorized appropriations has ranged between approximately $90 and $120 billion annually.”25 Other authorization bills set policy and make funds available without further appropriations action. Most of these programs are permanently authorized. These include entitlement programs like Social Security that provide benefits based on criteria that are not affected by the budget situation.

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14.8.4 Appropriations Discretionary spending is managed by the Appropriations Committees in the House and Senate. The Appropriations Committees each divide the discretionary portion of the budget into thirteen separate appropriations measures, each grouped into related activities or accounts. There are more than 1,300 separate accounts in the federal budget. Subcommittees then hold hearings and make decisions on funding for each of the thirteen appropriations measures. While the thirteen appropriation subcommittees are supposed to be guided by the targets contained in the CBR and limits set in authorizations, they seldom do so in practice. Indeed, subcommittee members often add earmarks, or set-asides, for pet projects not authorized by law. All thirteen appropriations bills are supposed to be passed by Congress and signed by the president before the start of the fiscal year on October 1, but this almost never happens in practice. 14.8.5 Continuing Resolutions Without new appropriations for the next fiscal year, the federal government has no funds to operate. When Congress fails to complete its budgeting process by the October 1 deadline, it uses a continuing resolution (CR) requiring a presidential signature to ensure the continued functioning of federal programs. CRs are commonly used and allow the government to function at the same funding levels as in the previous budget year. Congress establishes rules for continuing agency funding and expenditures in each CR, and OMB apportions funds accordingly. While CRs limit the ability of agencies to initiate new contracts, most agency budget analysts build in CRs as a “cost of doing business.” Since FY1978, Congress has completed appropriations legislation on time in only three years. Following the politically disastrous government shutdown of 1995 and 1996, neither Congress nor the president has seriously considered using a shutdown of government services as a tactic in the budget wars. Hence, CRs have become a normal part of the budget enactment process. 14.8.6 Omnibus Appropriations As we saw in chapter 7, Congress has increasingly relied on “the practice of combining numerous measures from disparate policy areas in one massive bill.”26 This same technique has come to dominate the budgeting process. Instead of completing thirteen separate appropriations bills, Congress and the president come to terms on two or three omnibus measures that bundle together a grab bag of appropriations that individually would fail, but together form veto-proof packages. Omnibus appropriations change the dynamics of budgeting.27 Bundling appropriations measures obscures many of the trade-offs between factions and circumvents many of the complicated prerogatives of committee fiefdoms in Congress. It shifts power to congressional leadership by aggregating the importance of a measure. It also encourages the attachment of specialized projects and unrelated legislative riders. Packaging encourages compromise between unlikely bedfellows, forcing legislators to accept measures they dislike in order to obtain what they want. Presidents, too, face similar choices when contemplating a veto. Critics complain that omnibus budgeting lessens accountability and transparency. Proponents, on the other hand, argue that bundling works as a viable alternative to political gridlock.

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14.8.7 Legislative Enactment and Policy Production As the scope and complexity of government responsibilities have expanded, so too have needs for resources to finance policy production and the complexity of budgeting. This ties lawmaking and budgeting ever more closely together.28 Furthermore, because policy production is funded on a yearly cycle, budgets can and do regularly make changes to policy. The question is, how? What are the impacts of budgets and the budgeting process on policy? The first and most obvious impact is funding. Budgets provide the resources to support programs and the delivery of benefits to target populations. Levels of funding determine how and what resources can be distributed by each program. At the very least, stakeholders, including interest groups, legislators, and program staff, seek to preserve the status quo for their pet policies and to increase their funding if possible. Budgeting is basically incremental, usually consuming marginally greater or fewer dollars each year, with only occasional episodes of major expansions or contractions in funding.29 Budgetary incrementalism stabilizes policy production and maintains the political equilibrium between stakeholders.30 To some degree, decades of deficits have challenged, but not altered, the relationships between budgeting and policy production. A second impact of budgeting on policy, however, is actually a disconnect between the budgeting process and the nature and scope of public policymaking. “The national government ha[s] become too complex to justify a piecemeal budget process that prevent[s] a broad view of inputs and outputs.”31 As a consequence, policy coherence is often the loser. Omnibus budgeting has emerged as one tool for managing the gridlock that characterizes budgeting practices as well as the legislative process. Many new policy initiatives now become law as riders attached to omnibus budget measures. This strategy permits the “fast-tracking” of new policies by avoiding much of the jurisdictional quagmire of review by multiple congressional committees. Yet the consequences on policymaking of using omnibus budgeting to fast-track legislative initiatives are little explored. Health care is an example of a policy domain where this practice is common. In the words of one researcher, “the normal legislative process does not work”32 for most health care legislation. In ten of the sixteen years between 1979 and 1994, any significant changes made to health policies were associated with the budget process.33 In other policy domains, many controversial initiatives, such as school vouchers for the District of Columbia and overtime regulations for the Department of Labor, end up as attachments to appropriations measures. The appropriations process “is doing what the authorizing folks can’t get done.”34 The result is piecemeal policymaking via the budgetary process. Omnibus budgeting would appear to be used primarily “for mid-level policy changes. Legislative proposals for large-scale changes are more likely to have to go it alone.”35 The last impact is the opportunity to add myriad earmarks to appropriations measures made possible by the complexity of the budgeting process. Individual members of Congress seek opportunities to fund their pet programs and projects. These programs are usually tailored to reelection politics and bringing home the bacon to the districts they represent. Earmarking may subvert program operations designed to organize policy delivery in an orderly and coherent manner. 14.9 PHASE THREE: BUDGET EXECUTION AND CONTROL 14.9.1 Budget Execution Executive budget formulation and legislative enactment are so complicated and contentious because public monies and public interests are at stake. If the process runs on schedule it takes approximately twenty months from the time an agency component submits its initial budget request to the time that the request receives budget authority or the legal capacity to expend government funds. Of course,

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the process often runs late, what with continuing resolutions extending months into the new fiscal year. Nevertheless, even after the formulation and enactment processes have run their course, the complexities continue. Despite the endless chorus of critics of government profligacy, spending government money is not easy. The art of spending government money is almost—but not quite—as difficult as appropriating the money in the first place. Budget execution is a complicated process because of the numerous controls put in place over time to ensure that money is actually spent for the purposes intended. While these controls help government auditors and the public trace the flow of funds through the public coffers, they also add complications, delays, and additional overhead costs to the business of government. While the rules governing budget execution are rarely examined outside of government offices, they play an important role in protecting the public from the misuse of public funds. Figure 14.5 offers a highly simplified view of the budget execution process.36 Figure 14.5 Overview of Budget Execution Budget Authority Congress gives agency authority to expend funds through (1) appropriations, (2) collections, or (3) transfers Apportionment

Warrant

Agency submits request to OMB, OMB apportions appropriations to agency

Treasury Department sets up fund balances in accounting system

Allotment/Allowance

Expiration & Cancellation

Agency divides Apportionment into Allotments to responsible Allottee; Funds may be subdivided into Allowances

Agency & Treasury cancel accounts for Expired appropriations

Obligation

Outlay

Agency creates Oblgations against appropriations through contract, grant, or other legal means

Agency disburses funds to eliminate Obligations

The first step is budget authority, which is the product of legislative enactment. Budget authority is the legal permission for an agency to enter into obligations that bind the government and that will require the outlay or expenditure of federal funds. The primary source of budget authority is appropriations passed by Congress, whether in one of the thirteen appropriations bills or in a continuing resolution. Three features of an appropriation are critical: 1. The purpose for which the money is to be disbursed 2. The period of availability 3. The amount

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The purpose is important because, by law, funds can be spent only for their stated purpose. This protects the public against misuse of government funds, but it imposes a heavy burden on the financial management process. In theory, accountants should be able to track every dollar spent by the government back to its original appropriation to ensure that it was actually spent for the purpose authorized. No matter how many hands they pass through, federal dollars can—or rather, should—never be separated from the budget accounts they were born into. Spending government money is not a simple process. Moreover, agencies may have limited time to actually spend the money that is appropriated for them. There are three types of appropriations, according to period of availability. • • •

Annual appropriations, which expire after one year Multiyear appropriations, which expire after a designated time period greater than one year No-year appropriations, which do not expire

With the exception of no-year appropriations, government agencies have limited time to obligate or commit funds. The clock is ticking. Agency officials must obligate funds or lose them. And even in the case of no-year funds, program managers who carry over unobligated funds from one fiscal year to the next risk having their budgets reduced by OMB or Congress. Thus, there is a compelling incentive to spend every penny appropriated. As a result, there is a peculiar, herky-jerky rhythm to federal spending that has no counterpart in the commercial world, what with continuing resolutions delaying the ability to commit and expiration deadlines accelerating the need to commit. As the budget formulation and enactment processes become ever more complicated and contentious, the challenge of managing the federal spending process grows apace. 14.9.2 Budget Control and Oversight Once Congress has passed a budget, the president, through OMB, is responsible for overseeing implementation. OMB apportions budget authority to each agency and operating unit either by time periods, usually quarterly, or by activities, so as to preclude shortfalls. Supplemental requests, reflecting unforeseen changes, may occasionally be made to Congress. The president also has some authority to defer (delay) spending for a limited period of time or, with congressional approval, to propose rescissions (defunding an activity). Spending, however, is managed by agencies independently. Funds are allocated to budgetary units within agencies or departments. Allotted funds must be obligated (legally committed) within a specified time period although, once obligated, the actual outlay or expenditure of funds may occur at a later time. Agencies and programs retain varied but limited authority to transfer or reprogram funds. Congress has set up internal mechanisms to control budget execution. In 1978 Congress established inspectors general for agencies and made them responsible for conducting and coordinating audits and investigations of internal agency programs and operations. In the 1990s, the Chief Financial Officers Act, Federal Accounting Standards Advisory Board, and other government-wide mandates modernized and standardized government accounting and budgeting procedures. The Federal Managers’ Financial Integrity Act requires each agency to submit yearly self-assessments of their internal control and accounting systems. Chief financial officers are now appointed in all major federal departments and agencies and are responsible for a range of reporting functions dealing with internal controls, financial management, and agency oversight. They also link agencies to OMB. Congress also employs several mechanisms to oversee budget and policy execution. The first mecha-

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nism is oversight by various committees, from authorizing committees, those originally establishing a program or agency, to appropriations committees and subcommittees. However, oversight, often in the form of required reporting or occasional investigation, is frequently limited, compromised by the close relationships formed between committee members and program or agency personnel. The Senate Committee on Governmental Affairs and the House Committee on Governmental Reform are specifically charged with responsibility for governmental operations and performance, but their role is seriously constrained by jurisdictional disputes. Second, Congress employs three agencies to oversee budget execution: the GAO, which both evaluates program performance and conducts audits; the Congressional Research Service; and the Congressional Budget Office. Finally, the staffs of individual legislators and congressional committees generate information related to budget execution and policy performance. These sources produce extensive information. Yet, “the availability of information and analysis alone is not sufficient for effective congressional oversight. The desire to follow through . . . is another necessary ingredient—and it is this ingredient which is often lacking.”37

MINI-CASE 14.2 Accounting for Unspent Money Budgeting for government programs involves the art of matching revenues and expenditures. This is often more guesswork than science, especially for programs where it is difficult to anticipate the expected demand on government-supported services eighteen months ahead of time. So what happens when there’s a mismatch? When funds are left over? That is a dilemma regularly faced by the SCHIP program. The State Children’s Health Insurance Program (SCHIP) is a federal program that sends matching funds (about $4 billion yearly) to the states to enroll and deliver health care to children whose parents meet certain income guidelines but have no health care insurance. The problem has always been to seek out and enroll the 8.4 million children who, according to the Census Bureau, are not covered by insurance. Currently, estimates are that about 5.8 million of the total are now served. The gap between those eligible and those actually using care funded through SCHIP has plagued budgeters for years. In the past, federal officials have often solved the problem of leftover funds in the yearly budget account by extending the spending deadlines for the program. Before 2004, the Bush administration followed suit. But, with ballooning deficits in 2004, President Bush opposed giving states more time to spend the $1.1 billion in remaining federal SCHIP dollars. The monies were due back to the U.S. Treasury on September 30. This was only a month after Bush’s speech accepting his party’s presidential nomination. Bush’s speech announced a new $1 billion appropriation to enroll millions more children in SCHIP. Skeptics saw the funds returned by the states as the source of money for Bush’s new initiative, leaving the budget for the SCHIP program at previous spending levels. Eventually the deadlines were enforced, but the Department of Health and Human Services also revised the formula in the rules that govern how excess funds are managed. The changes limit the ability of states to carry over unspent funds but allow for greater flexibility in redistributing unspent funds among states to help those with shortfalls. Sources: Ceci Connolly, “Words, Actions at Odds on Children’s Health Care,” Washington Post, September 25, 2004, p. A1 and Chris L. Peterson, SCHIP Financing: Funding Projections and State Redistribution Issues, CRS Report for Congress, RL 32807, Congressional Research Service, updated March 21, 2006.

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14.10 PERFORMANCE BUDGETING AND THE FUTURE As we have seen, in 2001 the second Bush administration established budget and performance integration as one of the five goals of the President’s Management Agenda. The ultimate objective of this initiative is to move federal agencies step-by-step toward a system of performance-based budgeting. But what is performance budgeting? “A performance budget is an integrated annual performance plan and annual budget that shows the relationship between program funding levels and expected results. It indicates that a goal or a set of goals should be achieved at a given level of spending.”38 A performance budget directly links dollars as a measure of inputs to outcomes, as shown in Figure 14.6. Figure 14.6 Performance Budgeting: Linking Dollars to Results

$$$$$ INPUTS

ACTIVITIES

OUTPUTS

OUTCOMES

Figure 14.6 should look very familiar to you by this point in the text. It is simply a dollarcentric view of the policy model introduced in chapter 3 and the program logic model discussed in chapter 11. Performance budgeting is a method for tracking the flow of dollars from program inputs to program outcomes, and vice versa. How does performance-based budgeting differ from traditional budget practices? Generally speaking, traditional budgets are based on object classes—that is, on the kind of things that money will be spent on. Thus, a standard budget will tell you how much money is spent on salaries, benefits, office supplies, travel, facilities, and the like. A true Performance Budget is not simply an object class budget with some program goals attached. It tells you much more than just that for a given level of funding a certain level of result is expected. A real Performance Budget gives a meaningful indication of how the dollars are expected to turn into results. Certainly not with scientific precision, but at least in an approximate sense, by outlining a general chain of cause and effect. The most effective governmental performance budget does this by showing, for each program area, how dollars fund day-to-day tasks and activities, how these activities are expected to generate certain outputs, and what outcomes should then be the result.39 In theory, performance budgets would provide an annual (or biennial) snapshot of what program dollars should and did accomplish. Thus, program budgeting, combined with performance measurement, gives you a systematic tool for comprehensive performance management. Performance budgets of one variety or another have been implemented by local and state governments with varying degrees of success. However, as we saw in chapter 11, performance budgeting—just like performance measurement—can be difficult to implement. First, mapping the causal linkages shown in Figure 14.6 is a challenging task in the best of circumstances. Local governments can plausibly associate budget dollars for cleaner streets or

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fewer crimes, but consensus about the value obtained by dollars invested in homeland security or national defense is likely to be elusive. Second, performance budgets require a complex, multilevel hierarchy of cascading goals, objectives, measures, and indicators, as shown in Figure 14.7. Figure 14.7 Cascading Levels of Performance Measurement Agency Mission Statement Strategic Goals Strategic Objectives Strategic Performance Goals Annual Performance Goals Performance Indicators Program Measures Project Measures Tasks

Measure Such cascading performance systems generate thousands of categories and the difficult task of clearly defining categories—goals, objectives, indicators, and measures—at each level of the hierarchy. Performance budgeting is an ambitious and labor-intensive exercise. While governments of all kinds are moving step by step to incorporate performance measures into the budget process, the promise of performance budgeting remains an ideal rather than a daily reality for most public policymakers. 14.11 THE POLITICS OF BUDGETING Three decades of budget deficits from the 1960s through the 1990s generated much innovation in budgeting. Most of these changes were designed to sidestep traditional budgeting procedures,

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as evidenced by the expanding list of techniques for off-budget spending and the increasing proportion of nondiscretionary funding. This trend was encouraged by politicians frustrated by the policy straightjacket of decades of budget deficits and protective of their pet programs. We experienced an era of creative—some would say irresponsible—funding mechanisms that have permitted some favored policy initiatives to become entrenched. Whether in the form of entitlements, trust funds, or guarantees, nondiscretionary spending now comprises most of the federal budget and the stranglehold of yearly budget battles over the policy production process has been weakened. Nonetheless, disputes over the budget still preoccupy Congress and the president in the waning months of each fiscal year. In some respects this spectacle may be more symbolic than real. The scope of conflict has been minimized because so much of spending is now off-budget. In contrast, that may also be why the intensity of political conflict has increased. The consequence is that new policy initiatives may be hobbled because of lack of resources. Our review of budgeting history described numerous efforts, both by Congress and the executive, to exert better controls over the budget process and, in this way, to micromanage policy. Such efforts may be expected to continue. Despite this, “budget processes and outcomes are not obviously getting better.”40 There are few obvious solutions to the complexities and dynamics of preparing and executing government budgets. All, however, depend on political will and the capacity to reconcile the differing policy perspectives of participants. Budgeting is simply a microcosm of a larger world characterized by competing interests and scarce resources. As we have seen, during the last quarter of the twentieth century, many policy analysts and policymakers saw budgeting as the technology for controlling the policymaking process. Decades of policy analysis and political struggle finally produced end-of-century budget surpluses that vanished virtually overnight. Victory proved fatal to the weary veterans of the budget wars. Budget surpluses combined with domestic crises to trigger an orgy of deficit spending that may take another three decades to undo. The gods of fiscal responsibility were briefly dethroned and shall take their revenge. At the same time, a new faith has emerged—the hope that performance budgeting and resultsbased management can be harnessed to improve the effectiveness of public action. The heroes of twenty-first-century policymaking are program managers, not budget analysts. Today’s mantra is producing results, not saving money; measuring outcomes, not tracking costs. This new faith is slowly and painfully transforming the technology of budgeting from below, rather than from above. While performance-based budgeting cannot unclog the politics of the budget process, it may transform the language of debate and the criteria for public solutions.

CASE STUDY Feeding at the Budget Trough—Earmarks for Educators How does your campus fare in the yearly competition for congressional earmarks? How well do your campus administrators play the game of budgetary pork?41 In 2002, Alaska Pacific University received $1.5 million to restore Atwood House, a historic property in Anchorage, while Florida Gulf Coast University got $1 million to engage in curricular planning, and Grand View College in Iowa, $1 million to build a wellness center on its campus. Congress set aside $240,000 for Brevard Community College to renovate and improve the Cocoa Village Playhouse and $150,000 for the University of Maryland Eastern Shore to promote tourism and economic growth in the Delmarva Peninsula region. And the list continues. All told,

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668 institutions shared in congressional earmarks for 2002 and 716 in 2003, with the number of earmarked projects rising from 1,645 to 1,964 over the same two-year period. Earmarks add up. In 2002, the University of South Florida won the pork-barrel sweepstakes for postsecondary institutions by taking home $41.4 million. A year later, the New Mexico Institute of Mining and Technology won that honor, with $56.1 million in earmarks. The grand champion, however, is Loma Linda University, which, although finishing only ninth in 2003, has enriched its coffers by $157.4 million in congressional earmarks over the previous six years.42 In 2003, lawmakers provided over $2.012 billion for projects for colleges lucky enough to feed at the trough. This was a 10 percent increase over 2002 and six times higher than the $296 million provided by Congress for postsecondary institutions in 1996. This growth is occurring at the same time that federal revenues are shrinking, deficits are ballooning, and many domestic programs are being pinched. Why are earmarks to colleges irresistible to congressional budgeters? The answer illustrates the contradictions in the budget process. The politics of the budgetary process pits the hopes for a disciplined federal budgeting process against the interests of individual legislators who serve at the will of local constituencies and promote local interests. Both co-exist in the annual budgetary cycles. Pork—the Basics Earmark is a colloquial term describing set-asides to fund individual projects or institutions, often inserted into a budget at the behest of legislators and lobbyists. Earmarks are also called pork. Earmarking occurs at specific points in the budget process. Some earmarks are formally incorporated into the text of appropriations measures, or into floor amendments and conference reports on such measures. When formally enacted in such measures, earmarks are legally binding. Most earmarks, however, are nonbinding and inserted in various supporting reports issued by the Senate and House Appropriations Committees that describe measures in an appropriation bill. Alternatively, they may be inserted into statements by floor managers explaining congressional intent in materials that accompany a Senate and House conference report. Such reports do not have statutory force and are not legally binding on agencies. Despite this, agencies that have to justify funding requests annually before members of the appropriations committees in each house usually accede to earmarks inserted into budgets in this way. Not to cooperate would be to risk retaliation during the next budgeting cycle—a foolhardy act. The practice of earmarking is deeply rooted in the annual struggle between Congress and the executive branch to control the purse strings of government. In the Constitution, Congress controls the basic power of the purse. With the advent of federal budgeting processes in the early part of the twentieth century, authority to impose discipline and to set priorities on federal spending in the form of an annual budget by the executive branch gradually began to impinge on congressional prerogatives. But not completely. Congressional critics regularly challenge the idea that “all wisdom on the allocation of federal . . . funding . . . resides in the Executive Branch” and argue that “members know the needs of their districts better than civil servants working in Washington, D.C.”43 There is a built-in tension between these two branches of the federal government and efforts to control and coordinate policy delivery versus needs to be locally responsive. On one side, the interests of good government dictate that federal grants and contracts should go to those with the most meritorious proposals, the greatest need, or the lowest bid. On the other, legislators are judged by their ability to serve and enhance the interests of the local constituents who elect them.

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Presidents have long complained about congressional extravagance in the form of legislative pork. Ironically, federal deficits and a shrinking discretionary budget have accelerated reliance on earmarking. Pork-barrel projects are one of the few remaining ways to reward loyalists and maintain visibility among constituents when new program initiatives seem too expensive. In 1996, at the height of the deficit crisis, Congress passed the Line Item Veto Act,44 giving the president long-sought authority to cancel any earmark for discretionary spending in an appropriations act or in a committee report or floor managers’ statements. Two years later, however, the Supreme Court ruled the line-item veto unconstitutional.45 The floodgates, temporarily closed, were again opened wide, and a new onslaught of pork-barrel spending ensued. Congress approved 7,803 home-district projects in its FY2002 budget, an increase of 1,350 over the previous year.46 Politics in the Pork Barrel Congressional pork thrives on omnibus legislation that requires reciprocity—“you scratch my back, I’ll scratch yours.” It operates on a logic made fragile by the competition for limited resources and creates a delicate balancing act. Not every legislator can be successful in funding all of his or her pet projects. So, who goes first? How is the pecking order determined for access to the trough? The ability to procure pork depends largely on influence over the process. In terms of budgeting, seniority and committee assignments are key, especially positions on the House and Senate Appropriations Committees. Most of the action on earmarks occurs at phase two of the congressional budget process. Specifically, many set-asides are inserted into the proposed Congressional Budget Resolution by the various subcommittees of the House and Senate Appropriations Committees late each spring. That resolution sets levels of budget authority and outlays for that fiscal year. After that, the appropriations committees in each house, working through subcommittees, begin final action on the thirteen separate bills that will comprise the budget for the year. Additional earmarks can be added at any time, although final appropriations must fall within the limits established by the budget resolution. Traditionally, “pork barrel projects have been fairly evenly divided between Republicans and Democrats”47 and require comity in working relationships. Historically, at the committee and subcommittee levels there has been substantial bipartisanship between legislators. However, the climate for cooperation may be changing, as pressures to control ballooning federal deficits again dominate the budget process. Several signs of impending breakdown can be detected. First are efforts by the executive branch, specifically the Office of Management and Budget, to curb deficit spending. To save $14.5 billion, Bush’s proposed budget for 2003 sought to bar renewal of all previously approved home-district earmarks. This caused legislators to join ranks in protest, however. They countered with the claim that the president’s effort to trim pork amounted to minor change, less than 1 percent of the $2.1 trillion federal budget. More interesting are the effects on earmarking of the increasingly partisan atmosphere in both houses of Congress. For example, Ralph Regula (R-OH), chair of the subcommittee of the House Appropriations Committee that controls spending on earmarks for education as well as health and jobs programs, threw a grenade into the appropriations process for the FY2004 budget. Regula was outraged when all the Democratic members of his subcommittee voted against the budget resolution, claiming that it shortchanged education. This, despite the fact that the very same Democrats had agreed to that budget figure during committee negotiations and had shared equally in the distribution of home-district pork controlled by the subcommittee, including more than 1,800 projects worth almost $900 million. His logic was that the Democrats

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had betrayal the principle of reciprocity. Regula then retaliated and threatened to jettison every earmarked project within the subcommittee’s jurisdiction during final budget negotiations, including pork designated for Republicans on the subcommittee. Fiscal conservatives applauded this announcement, but most decried this break with traditional bipartisanship and norms of reciprocity that had previously characterized that particular subcommittee. This approach to curbing earmarks may have little staying power in the deficit wars to come, but other strategies for enforcing discipline may emerge. Pork on Campus—The Policy Impacts So why be concerned about earmarks, especially those for colleges and universities? What could possibly be wrong with a few extra dollars in the budget each year to fund a few projects on campuses and to relieve some of the financial pressures on institutions that are always searching for resources? Earmarks raise many issues, pro and con. • First are concerns over whether earmarks improve the ability of colleges to compete for federal resources through the usual mechanisms of grants and contracts or whether they simply sustain struggling institutions. Closer examination reveals that, in the 1990s, those colleges receiving substantial amounts of earmarked funding did not subsequently improve their rankings or position when applying for federal grants and contracts awarded in peer-reviewed competition. Instead, earmarks politicize spending on postsecondary institutions with little long-term effects on common measures of institutional quality. • Second are concerns about whether earmarks spread the wealth to those institutions that receive relatively few federal research dollars. Again, data from the 1990s undercut this argument. The top 100 institutions in terms of federal research funding awarded through traditional mechanisms also captured 82 percent of congressionally earmarked projects in 1990, and 40 percent in 2003. Despite greater dispersion of the goodies, the rich still get richer. • Third is the argument that the funds spent on earmarks comprise only a tiny proportion of all federal spending, generally, and of federal dollars for research, specifically. But pork-barrel spending does add up, equaling 8 percent of the $19.191 billion spent by the federal government for academic research and administered by the National Institutes of Health (NIH) and the National Science Foundation (NSF) in 2001, the most recent year for which data are available. Furthermore, forty-six such earmarks in 2003 averaged more than $5 million each, awards far larger than those available through the peer-reviewed grants and contracts programs administered through NIH and NSF. • Fourth is the argument about gap filling. Earmarks permit greater flexibility in addressing needs to support institutions not related to grants for peer-reviewed research or national policy priorities. So, for example, in 2001, the University of Idaho received $700,000 for a project to study jazz and the University of Alaska, $645,000 to develop a machine to debone wild salmon. Despite this claim, in 2003, 60 percent of all earmarks still went to research projects in the natural or social sciences, with another 13 percent spent on research buildings and equipment. • Fifth is the criticism that earmarks circumvent traditional, if burdensome, federal mechanisms for competitive bidding and for monitoring and auditing project accomplishments. Cutting program staff out of the chain of policy production uncouples the few methods available for ensuring some correlation between inputs and outputs and for requiring recipients to perform as promised.

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There is scant evidence comparing the quality of earmarked research projects with that generated through peer-reviewed, federally administered and funded programs. • Next is an argument about politics. Earmarks replace deliberative, coherent policymaking with horse-trading between special interests and legislators, whose interests often coincide at the local level. College officials seeking earmarks look more and more like ordinary lobbyists with self-serving agendas. Indeed, many institutions now spend substantial amounts to be represented by lobbying firms with access to legislators. Their return on investment is reported to be highly unpredictable.48 • Last is the observation that the growth in earmarking, despite its long-established roots, would appear to be associated with the rise of omnibus budgeting. Pork greases the skids of politics but distorts budget and policy processes. Earmarked projects for campuses located within their state or district may benefit the reelection chances of local legislators and so are almost irresistible at budget time. However, they also erode much of the rationale for systematic and equitable approaches to policy programming and the delivery of benefits to target populations. But maybe budgeting cannot be rationalized. College administrators are well aware of these distortions. In the fall of 2001, officials from OMB engaged in a discussion with leaders from the key organizations that represent the interests of higher education. The director of OMB asked for help in reining in their appetite for pork. The ensuing discussion reflected an understanding of the problems of earmarking, but little willingness to modify their behavior.49 The rapid increases in funding for earmarks to colleges in the years since that discussion are testimony that the feeding frenzy continues.

KEY TERMS appropriation—the authority source for yearly spending, usually an amount not to exceed the authorization amount set for a program. appropriation authorization—legislation authorizing a program that often sets limits on the amount of funding that can be appropriated. budget—a plan for managing money by setting levels of spending based on estimates of revenue available to finance that spending over a specified time period. budget authority—authority provided by law to enter into obligations that will result in immediate or future outlays involving federal government funds. budget execution—the process of spending, managing, controlling, and reporting government funds. concurrent budget resolution (CBR)—a resolution agreed to by both houses of Congress, setting the levels of budget authority and outlays for the upcoming fiscal year. Congressional Budget Office (CBO)—the congressional office responsible for supplying information on the budget and economy for legislators. continuing resolution (CR)—interim funding to keep government operating while the budget for the next fiscal year is being completed.

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discretionary spending—that portion of the budget subject to congressional control in yearly budgeting by the appropriations committees. earmarks—funds set aside in appropriations or authorization bills for specific projects in congressional districts. Earmarks are often called “pork.” entitlements—a special form of direct spending authority where payments are obligated in advance to a person or entity meeting eligibility requirements even though budget authority is not provided in advance. indexing—spending increases for a benefit or output that are automatically tied to some indicator, normally the rate of inflation, therefore avoiding political debate. line-item veto—the power of a governor to strike out individual items in appropriations legislation. The Supreme Court found congressional legislation giving a line item veto to the president to be unconstitutional in 1996. nondiscretionary spending—expenditures that are obligations of the federal government but are exempted from control by Congress in the appropriations process. Office of Management and Budget (OMB)—the office within the executive branch that prepares the budget for each fiscal year and oversees its implementation after Congress appropriates funds. In addition, OMB performs many critical functions for the president in overseeing policy production by federal agencies within the executive branch. omnibus budgeting—the practice of combining numerous measures from disparate policy areas into one massive appropriations bill. passback—the decision by OMB on the amount of funding to be allowed an agency in response to the agency’s initial request. performance budget—an integrated annual performance plan and annual budget that shows the relationship between program funding levels and expected results. reconciliation—agreements by both houses on changes in permanent law to achieve the revenue and mandatory spending targets set in the concurrent budget resolution. QUESTIONS FOR DISCUSSION 1. Describe the role of the Office of Management and Budget in shaping program budgets and negotiating with programs over their proposed budget needs. 2. Evaluate the following statement: Much like their counterparts in the corporate sector who devised over the past decade many ways to misrepresent their profits by manipulating accounts and the bottom line of corporate profitability, legislators have misrepresented federal budgeting practices through an expanding list of techniques for off-budget spending. This has been accomplished by simultaneously increasing the proportion of nondiscretionary funding, usually for programs deemed to be “sacred cows,” and by refusing to raise taxes. Unlike those in the business sector, who are subject to jail time for false accounting, policymakers are not likely to be held to the same standard. 3. Evaluate the argument that dollars, rather than performance, continue to drive policy production and that the chief tools for managing production are fiscal, rather than some measure of

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5. 6. 7. 8.

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results. To what degree should performance be incorporated into decision making about allocating budgetary resources? Evaluate the argument that the complexity of budgeting procedures in both the executive and legislative branches deters all but the most motivated from mastering the procedural labyrinths and, so, protects those few directly involved in budgeting from close scrutiny and the political limelight. What programs should be off-budget, that is, exempt from the yearly competition between programs for funding? What are the pros and cons of “omnibus budgeting”? Do you have any suggestions for limiting budgetary earmarking? Or, are earmarks appropriately used as carrots to gain political agreement and compromise? Evaluate the following statement: “The indexing of Social Security benefits to the rate of inflation removed it from the contentious politics that surround yearly budget debates. Yet, by insulating Social Security from yearly debates over which among many worthy programs should prevail in the competition for limited resources, legislators both postponed and accelerated the crisis over funding Social Security for the baby boomers.”

SUGGESTED READINGS Frederickson, H. George, and Jocelyn M. Johnston, eds. Public Management Reform and Innovation. Tuscaloosa, AL: University of Alabama Press, 1999. Gessaman, Don, et al. Understanding the Budget of the United States Government. 8th ed. Washington, DC: EOP Foundation, 2004. Gosling, James J. Budgetary Politics in American Government. 2nd ed. New York: Garland Publishing, 1997. Ippolito, Dennis S. Why Budgets Matter: Budget Policy, and American Politics. University Park, PA: Pennsylvania State University Press, 2003. Kahn, Jonathan. Budgeting Democracy, State Building, and Citizenship in America, 1890–1928. Ithaca, NY: Cornell University Press, 1997. Krutz, Glen S. Hitching a Ride, Omnibus Legislating in the U.S. Congress. Columbus, OH: Ohio State University Press, 2001. LeLoup, Lance T. Parties, Rules, and the Evolution of Congressional Budgeting. Columbus, OH: Ohio State University Press, 2005. Lynch, Thomas D. Public Budgeting in America. 2nd ed. Englewood Cliffs, NJ: Prentice Hall, 1985. Mercer, John. Performance Budgeting for Federal Agencies: A Framework. American Management Systems, 2002, http://www.john-mercer.com/library/Performance_Budgeting_FA.pdf. Rubin, Irene S. Class, Tax, & Power: Municipal Budgeting in the United States. Chatham, NJ: Chatham House Publishers, 1998. Schick, Allen. The Capacity to Budget. Washington, DC: Urban Institute, 1990. ———. The Federal Budget: Politics, Policy, Process. Washington, DC: Brookings Institution, 1995. Tomkin, Shelley Lynne. Inside OMB: Politics and Process in the President’s Budget Office. Armonk, NY: M.E. Sharpe, 1998. U.S. Department of Health and Human Services. Knownet, Federal Budget Execution Desk Reference. Available at www.knownet.hhs.gov/finance/budexecDR/default.htm. Wildavsky, Aaron. The New Politics of the Budgetary Process. Glenview, IL: Scott, Foresman, 1998.

NOTES 1. U.S. House of Representatives, Committee on Rules, Majority Office, Glossary of Terms in the Budget Process, available at www.house.gov/rules/glossary_fbp.htm. 2. Patrick D. Larkey and Erik A. Devereux, “Good Budgetary Decision Processes,” in Public Management Reform and Innovation, ed. H. George Frederickson and Jocelyn M. Johnston (Tuscaloosa, AL: University of Alabama Press, 1999), p. 179.

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3. James J. Gosling, Budgetary Politics in American Governments, 2nd ed. (New York: Garland Publishing, 1997), p. 1. 4. Ibid., chap. 5. 5. Thomas D. Lynch, Public Budgeting in America, 2nd ed. (Englewood Cliffs, NJ: Prentice Hall, 1985). 6. See Irene S. Rubin, Class, Tax, & Power: Municipal Budgeting in the United States (Chatham, NJ: Chatham House Publishers, 1998). 7. Ibid., p. 31. 8. Jonathan Kahn, Budgeting Democracy, State Building, and Citizenship in America, 1890–1928 (Ithaca, NY: Cornell University Press, 1997), p. 190. 9. Ibid., p. 203. 10. Dennis S. Ippolito, Why Budgets Matter: Budget Policy, and American Politics (University Park, PA: Pennsylvania State University Press, 2003), p. 1. 11. Glen S. Krutz, Hitching a Ride, Omnibus Legislating in the U.S. Congress (Columbus, OH: Ohio State University Press, 2001), p. 1. 12. Walter J. Oleszek, Congressional Procedures and the Policy Process, 6th ed. (Washington DC: Congressional Quarterly Press, 2004), p. 47. 13. Congressional Research Service, Memorandum: Earmarks in FY2006 Appropriations Acts, March 6, 2006. 14. Jonathan Rauch, “Stoking the Beast,” The Atlantic Monthly, vol. 297, no. 5 (June 2006), pp. 27–28. 15. Stanley E. Collender, The Guide to the Federal Budget: Fiscal 2000 (New York: The Century Foundation Press, 1999), p. vii. 16. Ippolito, Why Budgets Matter, p. 291. 17. Shelley Lynne Tomkin, Inside OMB: Politics and Process in the President’s Budget Office (Armonk, NY: M.E. Sharpe, 1998), p. 4, quoting from Paul H. O’Neill, former deputy director of OMB, “Presentation to Office of Management and Budget Staff” (Mimeographed Copy), September 6, 1988, p. 2. 18. U. S. Senate, Hearings before the Committee on Governmental Affairs on the Nomination of Leon Panetta for Director of the Office of Management and Budget, 103rd Congress. First Session (January 11, 1993), p. l. 19. Tomkin, Inside OMB, p. 12. 20. Tomkin, Inside OMB, see chap. 8. 21. Chief Information Officers Council, FY2006 Training Materials, available at www.cio.gov/documents/fy2006.html. 22. The following sections draw upon materials in Don Gessaman et al., Understanding the Budget of the United States Government, 8th ed. (Washington, DC: EOP Foundation, 2004), pp. 173–96. 23. Ibid., p. 178. 24. Ibid., p. 189. 25. Ibid. 26. Krutz, Hitching a Ride, p. 1. 27. Ibid. The following discussion draws largely on materials by Krutz. 28. Krutz, Hitching a Ride, p. 140. 29. See Aaron Wildavsky, The New Politics of the Budgetary Process. Glenview, IL: Scott, Foresman, 1998. 30. See Frank B. Baumgartner and Bryan D. Jones, Agendas and Instability in American Politics (Chicago, IL: University of Chicago Press, 1993). 31. Krutz, Hitching a Ride, p. 99, as modified. 32. Ibid., p. 111. 33. Ibid., p. 108. 34. Quoting G. William Hoagland, the chief budget and appropriations aide to Senate Majority Leader Bill Frist (R-TN), and the former staff director of the Senate Budget Committee, in David Baumann, “Delays in Spending Bills Hamper Agency Planning,” Govexec.com Daily Briefing, November 6, 2003, available at www.GovExec.com. 35. Krutz, Hitching a Ride, p. 142. 36. This graphic and the following discussion is based on Knownet, the Federal Budget Execution Desk Reference, sponsored by the U.S. Department of Health and Human Services, available at www.knownet. hhs.gov/finance/budexecDR/default.htm. Also see Ed Martin, “Budget Execution—The Art of Spending Money,” Office of Budget Execution, Department of Health and Human Services, 2002, available at www. knownet.hhs.gov/finance/budexecDR/pdf_ppt_docs/backups/BUDEXECClass2002.ppt.

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37. Mark A. Triebwasser, “Congressional Oversight,” American Politics (July 13, 2004), available at www.polisci.ccsu.edu/trieb/Cong-8.html. 38. John Mercer, Performance Budgeting for Federal Agencies: A Framework. American Management Systems, 2002, www.john-mercer.com/library/Performance_Budgeting_FA.pdf, p. 2. 39. John Mercer, Performance-Based Budgeting, available at www.john-mercer.com/pbb.htm. 40. Larkey and Devereux, “Good Budgetary Decision Processes,” p. 179. 41. For the answers, visit the database maintained by the Chronicle of Higher Education at chronicle.com/stats/ pork. However, after 2003, the Chronicle no longer continued its yearly comprehensive report on this topic. 42. Data are taken from the Chronicle of Higher Education’s series on academic pork. See materials from its reports on August 10, 2001; September, 27, 2002; and September 26, 2003, available at http://chronicle. com/stats/pork. 43. John Lancaster, “Earmark Attack Raises Hackles,” Washington Post, February 11, 2002, A23. 44. P.L 104–130, 2 U.S.C.S. § 691 et seq. 45. Clinton v. City of New York, 524 U.S. 417 (1998). 46. Jonathan Weisman, “Bush Budget says ‘Pork,’ County says ‘Priority,’” USA Today, February 26, 2002, 5A. 47. Dan Morgan and Juliet Eilperin, “Rejection of ‘Earmarks’ Angers Democrats,” Washington Post, November 7, 2003, A6. 48. Jeffrey Brainard, “Hired Guns Help Colleges Feed at the Pork Barrel,” Chronicle of Higher Education (October 13, 2000), available at http://chronicle.com/stats/pork. 49. Jeffrey Brainard, “At Session on Curbing Earmarks, Lots of Talk but Little Prospect for Change,” Chronicle of Higher Education (October 12, 2001), A28; and “Research-University Group Considers Stance on Earmarks,” Chronicle of Higher Education, November 2, 2001, A30.

PART IV Results

Part III examined six fundamental technologies, or the How of policy production. In Part IV, we shift attention to the What and What Happens of the policymaking process. Policymaking is all about producing results—about what policymakers do for and to the American public. By results we mean both outputs—what policymakers produce—and outcomes, or the consequences of policy production. Figure IV.1 shows how both outputs and outcomes fit into our model of the policymaking process. Figure IV.1 The Policymaking Process

Part II Outcomes

Inputs

Part IV Outputs

Production! Part III

As we shall see in chapter 15, outputs must be distinguished from outcomes. Policy outputs are the products—the goods, services, benefits, and burdens—that policymakers deliver to the public. Roughly speaking, policymakers determine or control the production of policy outputs. Outcomes, 363

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on the other hand, involve “how, if at all, the world changes because of outputs.”1 Outcomes are events or consequences external to policy production. Though some authors use the term results to refer exclusively to policy outcomes, we will adopt the broader usage of the term to include both what policymakers do and what happens as a result. The output–outcome distinction is central to understanding the late twentieth-century revolution in both private and public management. For more than a century, economic theory and its political and sociological offshoots focused on the quantities of product delivered. Efficiency—the ratio of outputs to inputs—was the mantra of both business and—to a considerable extent—government. In the past two decades the focus has shifted from outputs to outcomes, from the volume of goods produced to the volume of goods consumed, from production to consumption. Though outputs are still important—government, just like industry, has to produce something—the measures of success have shifted to consequences, or results. Though few citizens will return their tax rebate checks mandated by Congress, citizens, politicians, and policy scientists understand that Uncle Sam’s gifts may not have the desired impact on the economy and society as a whole. As both consumers and citizens, we are becoming increasingly sophisticated in distinguishing outputs from outcomes. We understand that problems cannot be solved simply by throwing money at them, that what government does doesn’t necessarily make a difference, or at least the right difference. Policy outputs do not always lead to the desired outcomes. Part IV consists of two chapters. Chapter 15 will focus on outputs. Chapter 16 will examine outcomes. By the end of chapter 16 we will have completed our introductory tour of all four phases of the policymaking process. NOTE 1. James Q. Wilson, Bureaucracy: What Government Agencies Do and Why They Do It (New York: Basic Books, 1989), p. 158.

CHAPTER 15 Outputs PREVIEW Chapter 15 examines the outputs, or the What of public policymaking. Outputs are the products of policy production. As you read this chapter, you should be able to answer the following questions. • • • • • • • • •

What is an output? What is a target population? What are the differences between direct and indirect and intermediate and end beneficiaries of policy production? What is the role of classification in designating policy beneficiaries? What are the major approaches to classification used to identify beneficiaries? What are the major groups of benefits and burdens that comprise policy outputs? What are the three basic components in any decision about how benefits/burdens are allocated to target populations? What are the differences between equality, time-related, status-based, merit, need, and efficiency principles in designing allocation systems? What are the differences between selection, admission, and placement procedures in designing allocation systems?

15.1 INTRODUCTION Chapter 15 examines the outputs, or the What of public policymaking. Policy outputs consist of three components: • The target population for whom the benefits or burdens are designed. To whom will the checks be written? Who will pay the taxes? Who will be liable if the tire tread comes apart and people are injured? • The benefits or burdens targeted for the public. As we shall see, the range of benefits and burdens delivered by policymakers is staggering. There have been many efforts to sort and classify these and we shall present a number of techniques of cataloging policy benefits and burdens. • A method of allocation. How are benefits or burdens delivered to members of the target population? How do victims of the World Trade Center attack qualify for government loans? How are waiters taxed for the tips they receive? How are life-saving transplant organs allocated to patients with kidney disease? 365

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Figure 15.1 illustrates the three components of policy outputs. Figure 15.1 Policy Outputs

Method of Allocation

OUTPUTS

Benefits & Burdens

Target

Populations

Producing outputs is not unlike building automobiles. First you must decide for whom the output is intended, then you build the output, and finally you decide how to deliver the output to the individual beneficiary. There are two principal differences, however. The “customers” of policy outputs often consider themselves to be victims not beneficiaries and the methods of allocation are governed by expectations of fairness, equity and due process that no automobile dealer could tolerate. Though the products of public policymaking are often indistinguishable from those delivered by commercial enterprises, the context is markedly different. Public policymakers have the power to compel and coerce that private producers do not—at least in modern times—enjoy. This makes the nature of public policy products and the responsibilities of public policymakers quite different, as generations of corporate executives have found upon entry into public service. 15.2 HISTORY OF POLICY OUTPUTS IN THE U N I T E D S TAT E S The scope and diversity of public policy outputs today is mind-boggling. There are few commercial goods and services that government does not provide in one form or another and many of these are unique to the public sector. Though much academic study has been devoted to what governments can or ought to do and politicians wage periodic campaigns to reduce the size of government, the array of goods, services, and burdens provided by public policymakers grows inexorably. 15.2.1 The Standard Story The standard story is that “big government” is a twentieth-century invention. According to the received wisdom, nineteenth-century Americans relied on their friends and neighbors for assistance and were unfettered by government rules and regulations. Only in the twentieth century,

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and then largely as a result of economic depression and mobilization for war, did Americans turn to government as a provider of social welfare and economic security. Government intrusion into the daily lives of American citizens is a twentieth-century phenomenon—or aberration—from this perspective. While historians have debated the context and cause of this basic storyline, until recently they have generally accepted the premise that government played a relatively minor role in the production of public goods before the dawn of the twentieth century. Thoreau’s famous epigram “that government is best which governs least” has been taken to mirror both the dreams and the realities of eighteenth- and nineteenth-century America. 15.2.2 The “Well-Regulated Society” In recent years, however, social historians have begun to expose the realities behind the mythology. Indeed, from colonial days to the present, government has played an important role in regulating the lives of the American people. Government has always been an active provider of policy outputs. The problem is that we view the policy outputs of eighteenth- and nineteenth-century America through twenty-first-century eyes. We allow differences in the technologies of policy production and the location of government authority to blind us to government provision of benefits and burdens in earlier times. Just because policy outputs were delivered by local and state governments without benefit of bureaucratic agencies, programs, and budgets does not mean that a wide range of policy outputs were not delivered. As far back as the seventeenth century, colonial assemblies mandated public assistance for the less fortunate, funded by compulsory taxation. “The most common seventeenth century practice, however, was to place the poor in private homes at public expense. While this usually involved the payment of a fixed sum agreed upon for each person, with the town often supplying clothing and medical care besides, it was not unusual to auction off the needy . . . who went to the lowest bidder.”1 Because colonial communities were obligated by law to provide care for the sick and poor, visitors were closely monitored, and strangers were forced to post bond before settling in a new community and expelled if lacking in resources. Communities exercised controls over their members that few modern-day Americans would tolerate. By the nineteenth century, the notion of a “well-regulated society” justified government intervention into all aspects of people’s lives. As William J. Novak has argued, “armed with a far-reaching conception of law and state serving the people’s welfare, [nineteenth-century] public officials defined the safety, health, morals, and commercial concerns of citizens as objects of state policy and governmental regulation. All private interests and rights were subordinated to these primary public objectives.”2 Modern concepts of privacy, property, and civil rights were foreign to early nineteenth-century lawgivers and public officials. Thus, “morality in this tradition was not a private, individual, or discretionary matter. Rather, it was a responsibility of government and a quid-pro-quo of community membership.”3 Not only were offenses against public morals subject to fines and imprisonment, nineteenth-century policymakers also used “licensing, inspection, prohibition, search and seizure, summary abatement of moral nuisances, private prosecution . . . [and] even extralegal crowd actions and riots” to enforce the moral codes of the day.4 Nor did private commerce escape nineteenth-century regulators. According to Novak, “legislatures empowered a small army of inspectors, measurers, surveyors, viewers, cullers, weighers, provers, and gaugers, as well as mayors, aldermen, justices of the peace, and private citizens, to protect the public against the evils of unregulated commerce and trade. The fear was fraud and deceit. . . . But there was also a ubiquitous concern for quality, merchantability, and fair dealing.” 5

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While these benefits and burdens were managed and delivered at the community level, they are not dissimilar in kind to the regulatory outputs of big government in the twenty-first century. Early American government may not have been big by contemporary standards, but it was no less intrusive in the lives of citizens. Differences in the means of policy production should not mask the similarities in policy outputs. 15.2.3 Risk and Policy Outputs Economic historians have also been revising the prevailing wisdom about the role of government in the American economy. Rather than viewing the expansion of government policy outputs as simply a response to economic growth and development, some historians have viewed government as an active participant in shaping the economic institutions of society. Policy outputs have been a cause—as well as a consequence—of the modernization of American society. Recently, an economic historian, David Moss, has offered a different view of the evolution of American public policy outputs. Moss focuses on a subtler aspect of public policymaking—risk management. In addition to sending checks, building roads, and catching criminals, government also helps to control the risks that threaten individuals, groups, or organizations in American society. Risk management is the art and science of reducing or managing the effects of bad things that happen to people. First of all, “policymakers can reduce risk directly by prohibiting or otherwise constraining activities that are themselves hazardous, such as driving an automobile over sixty-five miles per hour or handling a deadly toxin on the job.”6 Alternatively, policymakers can simply reallocate risk rather than go to the trouble of trying to reduce it. Government can shift the risks of activities from one party to another. For example, legislation holding chief executive officers (CEOs) liable for misstatements on financial reports shifts the consequences of these acts from company stockholders to CEOs. Risk shifting changes the calculus of who pays the price when something goes wrong. Finally, public policymakers can spread risks across a large number of people, as they do when they provide insurance for crop failures or flood damage. Risk spreading means that all taxpayers, and not individual victims, pay the price for natural and man-made disasters. Moss argues that the management of risk has played a central role in the evolution of American public policymaking. Given a political culture that celebrates the individual and stigmatizes government, risk management policies offer a less intrusive way of solving economic and social problems. [T]he historical record suggests that risk-reallocation policies (though not risk-reduction policies) may have proved particularly appealing in the United States because they tended to require little in the way of invasive bureaucracy and could easily be cast in the rhetoric of contract. Risk-shifting policies such as limited liability and bankruptcy law, for example, required no bureaucracy whatsoever other than the courts themselves. The same can be said of product liability law. Even social insurance programs, which currently absorb about 10 percent of U.S. GDP [Gross Domestic Product] were originally sold to the public as close analogues to private insurance.7 Public policy in the United States has focused largely, though by no means exclusively, on managing the burdens people suffer rather than distributing or redistributing benefits. Moss identifies three phases in the evolution of American risk-management policy. During Phase I, nineteenth-century legislatures sought to promote business development and economic

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growth by passing laws that stabilized the currency and banking systems, provided bankruptcy protection for businesses, and limited individual liability for corporate failures and misdeeds. From 1900 to 1960, Phase II saw a shift in values as “new policymakers increasingly targeted risks facing the nation’s workers through the enactment of workers’ compensation laws and other forms of social insurance.”8 Finally, beginning around 1960, legislatures and courts broadened the focus of concern to ensuring the safety and welfare of consumers in particular and citizens in general. Table 15.1 summarizes the evolution of American risk-management policy from the nineteenth century to the present. Table 15.1

The Three Phases of Risk Management Policy in the United States

Period Prior to 1900

1900–1960

Since 1960

Phase I: Creating a secure environment for business • Property rights • Common currency • Deposit insurance (1) • Limited liability • Bankruptcy law • Enterprise liability law • Fixed exchange rate • Deposit insurance (2) • Crop insurance • Foreign investment insurance

• Company bailouts

Phase II: Creating a secure environment for workers

• Workplace safety regulations • Workers’ compensation • Old age insurance • Unemployment insurance • Macroeconomic stabilization policy • Disability insurance • Occupational safety and health regulation • Pension regulation and insurance

Phase III: Creating a secure environment for all citizens • National defense • Local poor relief

• Product safety laws (food and drugs) • Federally insured mortgages

Dramatic expansion of: • Federal disaster relief • Health, safety, and environmental regulation • Federal insurance • Federal financial guarantees • Means-tested welfare programs • State insurance guaranty funds • Product liability law • Environmental liability law

Source: David A. Moss, When All Else Fails: Government as the Ultimate Risk Manager (Cambridge, MA: Harvard University Press, 2002), pp. 298–99. Reprinted with permission.

Both Novak and Moss emphasize that the evolution of public policy outputs in America has been a much more complicated story than the one told by critics of the modern welfare state from both the Right and the Left of the political spectrum. Americans have relied upon the outputs of public policy production since the first colonists stepped ashore in Virginia and Massachusetts.

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15.3 WHAT IS AN OUTPUT? Policy outputs are the benefits or burdens produced for, and delivered to, a target population. Outputs are the immediate results of policy production—what policymakers do for or to members of the public. Paved roads, cash payments, loans, loan guarantees, taxes, and prosecutions of criminals are all types of policy outputs. 15.3.1 Outputs Versus Production How do you distinguish policy outputs from policy production? Obviously, the means of production and the objects of production are closely related. There are only so many ways to build a house, construct a bridge, subsidize farmers, or tax citizens. Nevertheless, the technologies of policy production are far fewer than the array of products delivered. That’s the generative power of a technology—a single technology can be used and reused to create a vast assortment of products. In contrast, the potential list of policy outputs is unlimited. Policy outputs come in all forms, reflecting the complexity of human and societal needs and interaction. From taxation to fire protection, standards of professional competence to old-age security, clean air to preventing crime, outputs are the products of public policymaking. In practice, however, distinguishing policy outputs from production activities is no simple matter. The key concept is whether something is a public or external deliverable. When a policymaker writes a report for internal program or agency consumption, he or she is performing a production task or activity. When that same report is delivered to the public, it becomes an external deliverable or policy output. What policymakers do for other policymakers is a production activity. What policymakers deliver to a target population is an output. Though simple in theory, many of the problems of results-based public policymaking revolve around the difficulties in distinguishing internal work products from external deliverables.9 15.3.2 Outputs Versus Outcomes If the boundaries between what policymakers do and what they produce can be a little fuzzy at times, how do we distinguish between what policymakers deliver and the outcomes of that delivery? After all, we included both outputs and outcomes under the heading of results. Outputs are what policymakers produce. Outcomes are what happens as a result of what policymakers produce. “Outputs are things that the program’s personnel have done, not changes to outside persons or changes that outside organizations have made. . . . Outcomes are not what the program itself did but the consequences of what the program did.”10 Though easy to state, the difference between outputs and outcomes can be devilishly difficult to apply in practice. “For most agencies and products, whether something is an output or an . . . outcome is clear, but there are exceptions. One example is the number of arrests for a law enforcement program. Many persons believe that arrests are an output because they are actions taken by agency employees. On the other hand, arrests involve citizens outside the agency, the persons arrested, and their families. In that sense, they might be counted as . . . outcomes.”11 The difference depends on how much control policymakers have over their products. University admissions officers can control how many students are accepted into the freshman class (output) in April, but they can only influence how many students actually enroll in September (outcome). However, as rising graduation rates do demonstrate, once students arrive on campus, universities can, and do, exercise significant control over how many of those students leave the campus with

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diplomas. Similarly, if there are no speeders or drug dealers to be found, police cannot legally make output quotas for speeding tickets and drug busts. As we shall see in the next chapter, defining and managing policy outputs and policy outcomes is an evolving art form. 15.3.3 Intermediate and Final Outputs In some contexts it is useful to distinguish intermediate from final outputs.12 Policymakers delivering services over time often make a distinction between interim and final deliverables. The most obvious instance is the production of a draft or preliminary report as an intermediate output. Less clear-cut, but no less important, is the difference between the delivery of a service—for example, training, counseling, or outpatient care—and the completion of the service. In some cases it is helpful to treat service delivery as an intermediate output and service completion as a final output. The question that must be answered is, When is a client finished with a service? For some services, the output is easily and clearly defined; for others, it is problematic. In most training programs, for example (or even in a university setting for that matter), a number of training sessions or class sessions are required for successful completion of the course. . . . For other services, final outputs are more difficult to define. In ongoing services such as day care or long-term residential care for the elderly, it is not useful to define final outputs in terms of exit or “graduation” from a program because these programs are not designed to move clients in and out at a steady and predictable pace.13 Finally, it is possible to apply the distinction between intermediate and final outputs to the arena of regulatory policymaking. The rules and regulations produced by an agency could be considered intermediate outputs while the number of investigations or prosecutions brought under the rule or regulation could be seen as a final output. As we shall shortly see, the mandates and prohibitions contained in government regulations are a peculiar kind of policy output—one that challenges the ingenuity of policymakers to measure and manage. 1 5 . 4 T H E A N A LY S I S O F P O L I C Y O U T P U T S Policy outputs are things that governments and their agents deliver to the public. Since outputs are things or objects, the study of policy outputs is much less complicated than the analysis of policy production or policy outcomes. Policy production is a process; it takes time, energy, people, and effort. Outcomes unfold over time, they change constantly, and they depend upon where you look and how. Outputs just exist—you care more about how they got there and what people do with them. Therefore, the analysis of policy outputs generally focuses on three questions: 1. How do you classify different kinds of outputs? Or more precisely, how do you classify the types of target populations, benefits or burdens, and methods of allocation that constitute policy outputs? The reasons for classifying policy outputs vary widely, but usually boil down to three motivations: (a) Operational—You are a policy producer and need to define the kinds of products you will and will not deliver. In other words, you need to know what your job is and when it should be done. (b) Normative—You are a policy analyst and you want to persuade other analysts and policymakers what products government should or should not produce. For ethical or practical reasons, policymakers ought or ought not to produce certain kinds of outputs.

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(c) Empirical—You are a policy historian or analyst and you want to understand what products have and have not been produced. 2. How should you organize policy production in order to produce specific kinds of outputs? Given a specific output—say, for example, financial aid for college students or passenger searches at airports—what is the best way to deliver the goods? Different kinds of policy outputs lend themselves to different kinds of technologies of policy production. That is what part III of this text is all about. 3. What outputs can or should you use to produce specific policy outcomes? If you want to reduce traffic congestion, should you build more roads or improve mass transit? If you want to reduce the use of illegal drugs, should you try to reduce the supply of or demand for these substances? If you are interested in outcomes, then outputs are the tools to generate the consequences you want. Whether you are focused on outputs as the ends of production or as the means of producing outcomes, the analysis of policy outputs begins with classification. In recent years, policy analysts have devoted considerable attention to typologies of policy outputs. These typologies come in addition to the various operational classification schemes used by various agencies of the federal government. Therefore, the remaining sections of this chapter will focus on the various methods for categorizing the target populations, benefits or burdens, and methods of allocation that make up policy outputs. 1 5 . 5 F O R W H O M ? TA R G E T P O PU L AT I O N S The first question in designing policy outputs is: Who is the benefit or burden for? Outputs benefit or burden somebody. Indeed, public policy outputs often benefit one group of people at the expense of another group. We call the Who of policy outputs beneficiaries, consumers, users, or even customers, but all of these terms imply that the output is a benefit, not a burden. In reality, many policy outputs are about shifting burdens from one group to another or spreading burdens from one group to the society as a whole. Public policies shift the risks of industrial pollution, workplace accidents, and financial manipulations from residents, workers, and stockholders to business executives. Taxpayers cushion the risks of floods, droughts, and poor health for homeowners, farmers, and senior citizens. For many public policy outputs there are both winners and losers. Thus, we must be very careful to remember that many of the beneficiaries of policy outputs consider themselves victims. We prefer to use the neutral term target population, but cannot entirely avoid the terminology of customers and users that pervades the language of public policymaking. Why is it important to identify the target groups for policy outputs? As we saw in the preceding paragraphs, external customers are what distinguish policy outputs from production activities. More important, there are many alternative paths to a single policy objective or outcome. Policymakers can use different target populations to produce the same result. “Strategies for reducing drunk driving, for example, can focus on prohibition of drinking by persons under the age of twenty-one. They can make bartenders responsible for damages of accidents if they have served too many drinks. They can focus on repeat offenders and impose increasingly severe sanctions, or on first offenders with treatment programs. . . . Public relations campaigns can attempt to change public tolerance for drunk driving, thereby making the public at large the target population. They can target the liquor industry and increase the taxes. . . . Or, they can also target recreational businesses such as bars and restaurants. . . .”14 The choice of target population is a political decision that involves fundamental assumptions about justice and efficacy and has major implications for the public’s relationship with policymakers. “Targets may be chosen on the basis of need, merit, equality, fairness, political power, wealth,

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image, or other principles that send messages about the values of society and its leaders. Policy educates about the conditions of agreement and the ‘rules of the game.’ People’s experiences as targets of policy shape their attitudes and orientations toward government, as much, or more than, campaigns and elections.”15 Just as important, the choice of targets for policy outputs embodies a tacit or explicit model of social causation that links outputs and their targets to desired policy outcomes. How will ad campaigns influence potential drunk drivers? Is it more effective to target the friends of drunk drivers than potential drivers themselves? Do youth antidrug campaigns affect different age groups differently? As we saw in chapter 11, every policy program has an implicit or explicit logic model that links outputs to outcomes by means of one or more target populations. Without a clear definition of Who, the What of policy outputs cannot be dependably linked to their outcomes or consequences. Policymakers can be successful without logic models, but they cannot know why they succeed or how to repeat their success.

MINI-CASE 15.1 Winners and Losers at the Department of Agriculture The Department of Agriculture had long refused to release a list of those receiving subsidy payments under its many programs. In 1996, however, it lost a challenge by the Environmental Working Group, a Washington-based nonprofit group interested in conservation issues, when a federal judge ruled that such data were matters of public interest and, therefore, could be disclosed under the Freedom of Information Act. As a consequence, in November 2001, a new database was launched on the Internet tracking recipients. It listed farmers by name and rank-ordered them according to the amount of federal dollars each received under the various federal agricultural subsidy programs. Thirty days later there had been more than 10.1 million hits on the Internet site. Farmers eagerly logged on to find out how they and their neighbors fared under federal support programs for corn, soybeans, and the many other crops which people are paid to grow, or not to grow. For the first time, the sun could shine on who gets what from the Department of Agriculture. Farmers could actually compare their benefits and see how federal subsidies are allocated. The list of recipients ranges from Fortune 500 companies, colleges and universities, more than a dozen members of Congress, lobbyists for major farm organizations, large farm corporations, wealthy growers, and many prominent citizens to ordinary family farmers. Not unexpectedly, the largest subsidies go to the biggest farmers—those who produce more, get more. For example, in 2004, 70 percent of federal farm subsidies went to 10 percent of the farmers. Some receive hundreds of thousands of dollars yearly, while others barely scrape by. Yet, these disclosures are controversial. They raise the stakes for winners and losers alike in the agricultural subsidy game and spur competition between stakeholders. For example, landowners are seeking to raise the rents of tenant farmers receiving subsidies. Other groups suggest placing ceilings on annual subsidies and redirecting resources to family and smaller farms. Most groups, however, are careful to emphasize that they want to preserve the very generous benefits of the numerous programs that subsidize agriculture. They simply want to readjust the formulas for allocating these price supports among various beneficiaries. Source: Environmental Working Group report at www.ewg.org/farm/.

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15.5.1 Targeted Beneficiaries and Losers Targets can be characterized across several dimensions. The first, as we have seen above, is winners versus losers. Who are the intended beneficiaries and who is supposed to pay for a policy output? All public outputs come at a cost to somebody. Somebody or everybody pays—at a minimum—for the costs of policy production and delivery. More to the point, benefits destined for one group often come as burdens for another. Product-safety regulations benefit consumers but cost producers. Regulation of corporate accounting practices benefits stockholders but burdens corporations. Crop subsidies benefit farmers at the cost of higher prices to consumers. Many policy outputs involve a complex calculus of benefits and costs. 15.5.2 Direct Versus Indirect Policy outputs may benefit or burden groups other than those specifically targeted by policymakers. State or local recycling rules may burden homeowners but serve as a boon to waste recycling companies. Transportation projects, defense weapons systems, and tariffs on imports also provide jobs for workers. Who really are the intended beneficiaries of policy outputs? Indeed, legislators, bureaucrats, judges, and the public may have differing views on just who are the direct and indirect beneficiaries of public laws and regulations. What is the target population for a new highway, dam, or weapons system? When gray wolves are reintroduced into the national parks, who are the intended winners and losers? Although policymakers can and do view indirect beneficiaries (or losers) as part of the calculus of outcomes, including or excluding groups from the target population is as much a political as a policy issue.16 15.5.3 Intermediate Versus End Closely related to direct versus indirect targets is the distinction between intermediate and end beneficiaries. While the direct–indirect distinction involves nominal—or official—target groups as opposed to actual target groups, intermediate beneficiaries are there by design. It is difficult for policymakers to assist infants and children directly, but they can provide subsidies and services to families. Parents are given tax credits for day care or college education expenses. Low-income mothers and mothers-to-be are provided food, dietary counseling, and immunizations. Families are given educational vouchers to be used to send children to private or parochial schools. Children are the target population; their parents are the intermediaries. Burdens can also be delivered via intermediaries, as when bartenders are held responsible for the drunk driving of their customers. That’s the way the program works. Some scholars extend the concept of intermediate beneficiaries to intergovernmental programs. For example, Harry Hatry states that “State and local government agencies, for example, are the intermediate customers of many federal agency programs. The federal programs work through these lower levels of government to produce favorable outcomes to end customers.”17 While federal grants to state and local agencies certainly qualify as program outputs, the treatment of other policymakers as the targets of public policy has serious implications for program management and public accountability. If the customers of federal education programs are the state and private institutions that administer them, then federal officials can—and often do—wash their hands of responsibility for outcomes. Should other policymakers be viewed as intermediaries? More broadly, should other policymakers be treated as a target population just like John Q. Public? There are no easy answers to these questions, but we prefer to honor the

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distinction between policy providers and deliverers described in chapter 10. How benefits get delivered is an issue for policy design and a subject for policy production. Outputs are not really outputs until they touch someone outside the policymaking community. Deliverers are not customers; they are intermediate steps in the value chain of policy production. 15.5.4 Groups Versus Individuals The targets of public policy are groups or classes of individuals and not specific individuals. Though Congress can indeed pass private bills “designed to provide special relief to specified persons or entities adversely affected by laws of general applicability,”18 these bills are handled differently and generally considered to be outside the realm of the policymaking process. Indeed, the use of private bills has declined significantly due to the whiff of corruption with which they have become associated in recent decades. However, “laws of general applicability” often have remarkably narrow and artfully constructed categories of beneficiaries. While individuals and individual companies may be the real targets of public policymaking, the nominal targets are almost always defined as groups or categories of targets. 15.5.5 Classification in Theory If public policymaking is all about groups and not individuals, how do we define the groups or classes of individuals that constitute the target population? Designating beneficiaries has two components. Both are problems of classification. First is the question of identifying a pool of individuals or entities eligible to receive the output. Usually this requires designating some common characteristic or property to sort on. Second is the question of how carefully drawn must the class of beneficiaries be. What are the potential risks and costs of making mistakes in distributing benefits or burdens to the target population? This question will be addressed at length in Chapter 16. In most instances, a person, group, or entity receives a policy benefit or burden based on some distinguishing property or characteristic. Distribution depends on some qualification established through criteria of eligibility. Beneficiaries and criteria of eligibility are often identified in basic legislation and subsequently refined and narrowed by the various technologies of production. Beneficiaries are selected for numerous reasons, usually related to policy goals and the political environment. Some may be selected for their political clout or lack thereof. Others may be identified because of their potential impact on some causal chain of effects. For both types of beneficiaries, instrumental assumptions about behavior and motivation provide the rationale for constructing technologies of production, whether through inducements and coercion or incentives and disincentives. Often such policies are designed so that target populations exercise some control over their selection and inclusion as beneficiaries. That is, policymakers leave it up to the public to decide whether or not to participate. Beneficiaries may also be created because of their status or other characteristics. In this approach to defining beneficiaries, some common property, usually defined in terms of its relationship to a policy benefit or burden to be conferred, is used as the sorting criterion. Everyone sharing that property is presumptively a member of the beneficiary group. Status principles are commonly used to create categories of beneficiaries. Among the most familiar are: age, gender, race, ethnic origin, physical and mental characteristics, religion, sexual orientation, residence, occupation, literacy, education, skills, family status, health status, economic status, need, and so forth. Status has several properties. Status may be dichotomous, the individual either has or does not

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have the defining attribute, or relative, dependent on how much of or the degree to which the individual has the attribute. For example, sex is traditionally a dichotomous characteristic, that is, either male or female, although some now seek to make gender a relative property by adding categories (bisexual, transsexual, homosexual, lesbian, etc). Age, wealth, and IQ are traditionally treated as relative categories. These various properties of status may also be combined to create beneficiaries. Thus, the National Merit Scholarship Program employs both dichotomous and relative characteristics in distributing scholarships. Eligibility depends first on performance, achieving a minimum score on the PSAT, and second, on a student’s actual financial need, in order to receive funding. The main point is that all policymaking hinges on the classification of target populations. How policymakers define or construct these populations affects not only the distribution of policy outputs, but also both public and policymaker perceptions of policy success. 15.5.6 Classification in Practice How does the U.S. government classify target populations or beneficiaries? Classification theories are interesting and they can tell us a lot about the assumptions and biases built into public policies, but practice is another matter indeed. In practice, government classification of beneficiaries turns out to be a messy affair, with new systems of categories added awkwardly to old ones as public needs and perceptions change over time. Table 15.2 (facing page) shows the categories of beneficiaries that the General Services Administration established to aid citizens searching for programs offering federal assistance. These categories are taken from the U.S. government’s Catalog of Federal Domestic Assistance. The Catalog of Federal Domestic Assistance is a government-wide compendium of Federal programs, projects, services, and activities which provide assistance or benefits to the American public. It contains financial and nonfinancial assistance programs administered by departments and establishments of the Federal government. . . . [T]he primary purpose of the Catalog is to assist users in identifying programs which meet specific objectives of the potential applicant, and to obtain general information on Federal assistance programs. In addition, the intent of the Catalog is to improve coordination and communication between the Federal government and State and local governments.19 This list includes only those classes of beneficiaries that are eligible to apply directly for federal assistance. Thus, it does not include target populations for such intangible goods as national defense, economic security, and civil rights. Nor does it include such “beneficiaries” of federal laws and regulations as taxpayers, polluters, swindlers, and criminals. What Table 15.2 shows us are the diverse and often overlapping categories of Americans that have become the objects or targets of policy outputs. It tells us the categories of eligibility used by the federal government. Anyone interested in the archaeology and anthropology of target populations in American public policymaking would do well to start with this federal catalog, incomplete as it is. This list tells the categories of people that policymakers in the federal government have deemed deserving of policy benefits. 15.6 WHAT? BENEFITS AND BURDENS The second component of a policy output is the actual benefit or burden delivered to the target population. As we have seen, the range of policy benefits and burdens is virtually limitless,

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Table 15.2

U.S. Government Classification of Target Groups 10 11 12 14 15 18 20 21 22

Federal Interstate Intrastate State Local Sponsored organization Public nonprofit institution/organization Other public institution/organization Federally Recognized Indian Tribal Governments

57 58 59 60 61 62 63 64 65

23 U.S. Territories 31 Individual/Family 32 Minority group

66 69 70

33 Specialized group (e.g. health professionals, students, veterans) 34 Small business 35 Profit organization 36 Private nonprofit institution/organization 37 Quasi-public nonprofit organization 38 Other private institution/organization 39 Anyone/general public 40 Native American Organizations 41 Health Professional 42 Education Professional 43 Student/Trainee 44 Graduate Student 45 Scientist/Researchers 46 Artist/Humanist 47 Engineer/Architect 48 Builder/Contractor/Developer 49 Farmer/Rancher/Agricultural Producer 50 Industrialist/Business Person 51 Small Business Person 52 Consumer 53 Homeowner 54 Land/Property Owner

71

Black American Indian Spanish Origin Oriental Other Non-White Migrant U.S. Citizen Refugee/Alien Veteran/Service Person/Reservist (including dependants) Women Handicapped (e.g., Deaf, Blind, Crippled) Physically Afflicted (e.g., TB, Arthritis, Heart Disease) Mentally Disabled

72 73 74 76 77 78 79 80 81 84 85 86 87 88 91 92 93 94 96 97 98

Drug Addict Alcoholic Juvenile Delinquent Infant Preschool School Child (6–15) Youth (16–21) Senior Citizen (60+) Unemployed Welfare Recipient Pension Recipient Moderate Income Low Income Major Metropolis (over 250,000) Other Urban Suburban Rural Education (0–8) Education (9–12) Education (13+)

thus giving rise to a variety of methods for grouping them into manageable categories. We will explore but a few of the approaches to classifying benefits and burdens. 15.6.1 Operational Classification: The U.S. Government Let us return to the Catalog of Domestic Federal Assistance as a convenient starting point. The Catalog includes 1,738 programs for which individuals, organizations, and government agencies can apply. Table 15.3 lists the fifteen different kinds of policy programs by benefit type and their respective definitions. The categories of policy programs listed in Table 15.3 (next page) have remained stable over the years. The fifteen categories—including government employment—reflect an operational, ground-level view of the kinds of benefits that government offers to enterprising individuals, groups, and organizations. These are benefits to apply for, not to lobby for.

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Table 15.3

Types of Domestic Assistance Program Type and Number A. Formula Grants (173)

Description Allocations of money to States or their subdivisions in accordance with distribution formulas prescribed by law or administrative regulation, for activities of a continuing nature not confined to a specific project. B. Project Grants (889) The funding, for fixed or known periods, of specific projects. Project grants can include fellowships, scholarships, research grants, training grants, traineeships, experimental and demonstration grants, evaluation grants, planning grants, technical assistance grants, survey grants, and construction grants. C. Direct Payments for Financial assistance from the Federal government provided directly to individSpecified Use (138) uals, private firms, and other private institutions to encourage or subsidize a particular activity by conditioning the receipt of the assistance on a particular performance by the recipient. This does not include solicited contracts for the procurement of goods and services for the Federal government. D. Direct Payments with Financial assistance from the Federal government provided directly to Unrestricted Use (38) beneficiaries who satisfy Federal eligibility requirements with no restrictions being imposed on the recipient as to how the money is spent. Included are payments under retirement, pension, and compensatory programs. E. Direct Loans (44) Financial assistance provided through the lending of Federal monies for a specific period of time, with a reasonable expectation of repayment. Such loans may or may not require the payment of interest. F. Guaranteed / Insured Programs in which the Federal government makes an arrangement to Loans (61) identify a lender against part or all of any defaults by those responsible for repayment of loans. G. Insurance (12) Financial assistance provided to assure reimbursement for losses sustained under specified conditions. Coverage may be provided directly by the Federal government or through private carriers and may or may not involve the payment of premiums. H. Sale, Exchange, or Programs which provide for the sale, exchange, or donation of Federal real Donation of Property and property, personal property, commodities, and other goods including land, Goods (23) buildings, equipment, food and drugs. This does not include the loan of, use of, or access to Federal facilities or property. I. Use of Property, Facilities, Programs which provide for the loan of, use of, or access to Federal faciliand Equipment (15) ties or property wherein the federally owned facilities or property do not remain in the possession of the recipient of the assistance. J. Provision of Specialized Programs which provide Federal personnel directly to perform certain tasks Services (92) for the benefit of communities or individuals. These services may be performed in conjunction with nonfederal personnel, but they involve more than consultation, advice, or counseling. K. Advisory Services Programs which provide Federal specialists to consult, advise, or counsel and Counseling (74) communities or individuals to include conferences, workshops, or personal contacts. This may involve the use of published information, but only in a secondary capacity. L. Dissemination of Programs which provide for the publication and distribution of information or Technical Information (88) data of a specialized or technical nature frequently through clearinghouses or libraries. This does not include conventional public information services designed for general public consumption. M. Training (46) Programs which provide instructional activities conducted directly by a Federal agency for individuals not employed by the Federal government. N. Investigation of Federal administrative agency activities that are initiated in response to reComplaints (38) quests, either formal or informal, to examine or investigate claims of violations of Federal statutes, policies, or procedure. The origination of such claims must come from outside the Federal government. O. Federal Employment (7) Programs which reflect the government-wide responsibilities of the Office of Personnel Management in the recruitment and hiring of Federal civilian agency personnel.

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15.6.2 Normative Classification: Economics and Policy Goods Generations of economists have sought to classify the outputs of public policy from an entirely different perspective. For the most part, economists have asked: What goods should government provide? not What does government provide? Based on the assumption that governments step in when markets or other forms of collective action fail, economists have attempted to identify those instances when government intervention is justified from a theoretical perspective.20 Perhaps the clearest exposition of an economic classification of policy goods has been articulated by E. S. Savas. Drawing on a vast literature in political economy, Savas begins with the premise that “the nature of the benefit/burden determines the conditions needed to supply it.”21 Or, in the terminology of our policy model, outputs condition the technologies for production. The type of output does matter, because it determines how the output can best be supplied. Savas argues that all goods can be sorted and classified according to two characteristics: • Exclusion—whether a potential user can be denied the good if he or she does not meet the conditions of use. “In other words, the goods can change hands only if both the buyer and seller agree on the terms of sale. This is a perfectly ordinary condition. All the commonplace goods that we buy in the marketplace clearly have this exclusion property. I may walk off with my bag of groceries or my haircut only after my grocer or barber agrees. . . . But there are vast numbers of other goods that do not possess this simple property. A consumer can simply help himself to such goods as long as Mother Nature or another supplier makes them available.”22 The critical factor is the ease or difficulty of excluding users from the enjoyment of a good. It is easy for a cabbie to exclude potential passengers, but it is difficult to exclude individuals from enjoying clean air or water. • Consumption—whether the goods and services can be used simultaneously by many without being diminished in quality or quantity. “A fish and a haircut are examples of a good and a service subject to individual consumption; the fish is no longer available to another diner, and neither are the services of the barber while he is cutting someone’s hair. . . . Contrast these cases with a television broadcast. My family’s ‘consumption’ of a program, by enjoying it on our television set, in no way limits its ‘consumption’ by anyone else. . . . Another illustration of a joint-consumption good is national defense.”23 Combining these two dimensions creates four categories of goods and services, namely: individual goods, tool goods, common pool resources, and collective goods, as shown in Figure 15.2. Figure 15.2 Four Kinds of Policy Goods EXCLUSION

CONSUMPTION

Easy to exclude Individual

Joint

Difficult to exclude

Individual goods

Common-pool goods

(e.g., food, clothing, shelter)

(e.g., air, fish in the sea)

Toll goods

Collective goods

(e.g., cable TV, telephone, electric power)

(e.g., national defense, broadcast TV)

Source: E S Savas, Privatization and Public-Private Partnerships (New York: Chatham House, 2000), p. 62. Copyright © 2000 by CQ Press. Reprinted with permission.

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The two variables—exclusion and consumption—are continuous, not dichotomous, variables: Each can coexist with the other to some degree, one does not exclude the other. Thus, the four types of goods in Figure 15.2 represent the four corners of a two-dimensional matrix. Many, if not most, goods fit in between these four extremes. According to Savas, “The resulting classification determines the roles of government and of the nongovernmental (private) institutions of society in supplying the goods and services.”24 For our purposes, Savas’s classification of outputs results in a framework for understanding what types of production relationships (private and public) are best adapted to delivery of each type of output. 15.6.2.1 Individual Goods Individual goods are the kinds of goods we typically buy in the marketplace. Consumers demand them and producers supply them at a negotiated price on the open market. Toothpaste, automobiles, and personal computers are all standard individual goods. While governments may regulate the conditions under which they are sold, the commercial sector has few problems supplying individual goods in the marketplace. Governments can and do supply individual goods, but there is no intrinsic reason why markets could not produce them in adequate supplies and at lower cost. 15.6.2.2 Toll Goods Like individual goods, toll goods can be readily supplied by the marketplace. Commercial producers can make a profit selling them to individual customers. The problem with toll goods is that they tend to lead to monopolies in the marketplace. “These are the toll goods said to be natural monopolies, where the cost per user decreases as the number of users increases. The result is that it is most economical to have a single supplier, as in cable television, communication networks, electric power, gas distribution, water supply, and sewer service.”25 Such “natural monopolies” often lead to distortions in the market that result in government regulation or—in some cases—government ownership. By the end of the nineteenth century, American municipal governments began to take ownership of, or heavily regulated, such public utilities as electric power, water and sewer service, gas, and public transportation. While changing technologies may foster privatization and deregulation of toll goods such as energy supply, public utilities remain a special focus of public policymaking, as the scandals surrounding Enron and MCI WorldCom have recently demonstrated. 15.6.2.3 Common-Pool Goods Common-pool goods are those that are individually consumed but more or less free for the taking. Endangered species like elephants, tigers, and whales are common-pool goods because it is difficult to stop people from hunting and killing them. “With no need to pay for such goods, and with no means to prevent their consumption, such goods will be consumed—even squandered—to the point of exhaustion.”26 This phenomenon has been termed the “tragedy of the commons.”27 People exploit common resources until there is nothing left for anyone. Individuals and industries pollute rivers, lakes, and the atmosphere until clean water and air disappear for everyone. The free market cannot supply common-pool goods; governments must intervene to ensure their preservation and allocation through regulation. Thus, governments almost inevitably manage the provision and supply of common-pool goods.

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15.6.2.4 Collective Goods Collective goods are the antithesis of individual goods. Collective goods “are used simultaneously by many people and no one can be excluded from enjoying them.”28 National security, protection against crime, and prevention of communicable diseases are all collective goods. Everybody enjoys the benefit of them, but no single individual has an incentive to provide them for others. This has been called the free rider problem—people have an incentive to consume collective goods without paying for them. Thus, the marketplace cannot supply collective goods. Societies must turn to either voluntary action or government coercion. In small, or particularly cohesive groups, “collective goods can be supplied by voluntary action. . . . Volunteers provide fire protection and emergency ambulance service. . . . Philanthropists provide parks, and local merchant groups provide street lighting, street cleaning, and protective patrols.”29 However, voluntary action often fails to provide adequate levels of collective goods, so governments step in. Taxation, regulation, and compulsory military service are just some of the coercive measures employed by governments to ensure that collective goods are provided to the public. Governments are the natural—if not inevitable—provider of public goods. 15.6.2.5 Economic Goods and Policy Outputs Savas provides an economic framework for evaluating what kind of goods government policymakers should—and should not—provide. Or, more precisely, he provides a framework for what governments can more efficiently provide. While governments can and do provide all four types of goods, they are better suited to providing collective goods and regulating toll and common-pool goods than producing individual goods. Savas constructs a theory about what kinds of outputs governments provide best, better, and worse. Moreover, Savas goes on to argue that the intrinsic nature of each kind of good shapes the appropriate—that is, cost-effective—means of policy production. This—at heart—is an economic perspective on the merits of policy outputs. Nevertheless, values other than efficiency guide the production of policy outputs by American governments. Governments have regulated the morals and marital relations of the American people since the colonists first landed on Plymouth Rock. While this may not be an efficient use of public or government resources, it has been part of the landscape of American public policymaking from the beginning. Economic models may help public policymakers do things better and do better things, but they have difficulties in explaining how the institutions of public policymaking got to be what they are today and how they’re going to be tomorrow. 15.6.3 Empirical Classification: Carrots, Sticks, and Sermons From the ground level we now move to a high-level, bird’s-eye view of policy outputs. In other words, we are shifting from an operator’s to an analyst’s perspective—from the messy world of trying to order the chaotic realities of existing program design to the neat and precise world of academic analysis. Perhaps the most intuitive of these academic classifications is that of Evert Vedung. Vedung classifies policy instruments into carrots, sticks, and sermons. • Carrots, or economic policy instruments, involve the provision of incentives or disincentives for action by the target population. “Economic instruments make it cheaper or more expensive

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in terms of money, time, effort, and other valuables to pursue certain actions. . . . Economic tools always leave the subjects of governance a certain leeway within which to choose by themselves whether to take an action or not.”30 Thus, carrots include such monetary incentives as cash transfers, subsidies, and tax credits and disincentives like taxes, fees, and tariffs. • Sticks, or regulations, are “measures undertaken by governmental units to influence people by means of formulated rules and directives which mandate receivers to act in accordance with what is ordered in these rules and directives.” Sticks are limitations on the actions of the target population backed—in the standard case—by threats of sanctions or punishment. “[R]egulations are often associated with threats of negative sanctions such as fines, imprisonment, and other types of punishment. However, this is not always the case. There are regulations intentionally not coupled with threats of negative sanctions. . . . Regulations, to start with, encompass numerous varieties. First, they can be phrased in the negative, expressly proscribing certain phenomena or actions. Also, they may be formulated in affirmative terms, prescribing what has to be done.”31 • Sermons, or information, include “attempts at influencing people through the transfer of knowledge, the communication of reasoned argument, and persuasion.” Sermons include a wide variety of communication campaigns, from the publication of technical reports to the use of the bully pulpit by the president. “As with the economic tools of statecraft, no government obligation or coercion is involved. Under no circumstances are addressees mandated to act in the way suggested in the information. . . . This absence of obligation makes information different from regulation, which by definition contains mandatory rules of conduct. Yet, information is also different from economic policy instruments in that no handing out or taking away of material resources is involved.”32 As the reader can see, Vedung’s tripartite classification of carrots, sticks, and sermons offers a more sophisticated view of policy products than our simple dichotomy of benefits and burdens. In particular, it focuses on the means—utilitarian (carrots), coercive (sticks), or normative (sermons)—of control exercised by policymaker over the target population. Vedung’s classification thereby offers a political window onto the relationship between government and the governed. 15.6.4 Empirical Classification: Policy Outputs as Tools The fourth and final typology views outputs as the instruments, or tools, that policymakers use to generate outcomes. Policy tools are the means that policy programs use to make an impact on society.33 “Programs thus embody tools, applying them to the circumstances of a particular field or problem. A single tool therefore can be used in many different programs in many different fields. Typically, a program embodies a single tool, although increasingly . . . programs are coming to embody entire suites of tools.”34 Thus, policy tools are the kinds of outputs policymakers use to achieve their objectives. As we would expect, the What, or tools, of policymaking are much more diverse than the means or technologies of production. Classifying policy outputs as tools is a messy business. The numbers of purposes to which policy outputs can be put are virtually infinite. So too are the potential number of different kinds of policy tools. However, scholars have identified a number of categories of policy outputs—categories that cover much more territory than those listed in the Catalog of Federal Domestic Assistance. Some of the more important types of policy tools include

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• Goods and services—provisions that benefit or burden target populations. Examples include the printing of money or stamps, the delivery of mail, the provision of national security or police and fire protection, the operation of national and state parks or prisons, and the purchase and distribution of vaccines to immunize soldiers or the general population during emergencies. • Tax expenditures—provisions placed in the tax code to encourage certain behaviors by deferring, reducing, or eliminating some part of the obligation to pay taxes.35 For example, tax expenditures subsidize deductions for mortgage interest on homes, health care costs, charitable contributions, and child care costs for working parents from the income tax owed by ordinary citizens. Lower-income families may claim an earned-income credit. Businesses receive large subsidies through various depreciation allowances, deductions for expenses, and lower tax rates on capital gains. Tax expenditures are politically attractive, relatively hidden, and long-lived. However, they reduce the amount of revenue available to fund other policy activities. • Cash transfers—unilateral or one-way payments by a government to a person or agency that do not form part of any exchange of goods or services.36 They often arise as entitlements. Direct payments to individuals comprise a substantial portion of federal expenditures: 58 percent in 1995, by one estimate.37 The classic example of a cash transfer is a monthly Social Security check. The payment is not conditioned on any behavior or act by the recipient, but simply on some status. • Loans—involve government in borrowing money from the Treasury and lending it, in turn, directly to borrowers. The government then oversees repayment of the loan and collection procedures should there be a default. A growing share of the loan obligations incurred by students to pay for college is directly held by the federal government through its Direct Loan Program. The Small Business Administration has traditionally encouraged new business start-ups with loans made directly to local entrepreneurs. • Loan guarantees—involve the government indirectly by simply guaranteeing repayment to a private lender, such as a commercial bank, should there be a default on repayment. The private lender issues and services the loan. For example, the market for home mortgages is sustained by a secondary market made possible by a government-sponsored enterprise (Fannie Mae, the Federal National Mortgage Association) operating a loan-guarantee agency. Loan guarantees are a rapidly growing policy product and help to broaden access to debt financing for many socially desirable purposes. • Government insurance—a product that allows the government to share some of the risk for potential losses in activities deemed to serve important public purposes. Typically it is used when private insurers cannot or will not assume the entire risk of losses from an activity and a government seeks to create or stabilize a market for insurance. By so doing, governments assume responsibility for covering costs that exceed the capacity of private insurers in specified occurrences. Natural disasters, such as floods, earthquakes, and crop failures are situations involving government as an insurer. Government insurance in the form of the Federal Deposit Insurance Corporation protects depositors with $100,000 or less in banks. After September 11 and overwhelming losses by insurers, public policymakers face the question of whether government should shore up the insurance market against future acts of terrorism. • Grants—as we learned in chapter 11, are “payments from a donor government to a recipient organization (typically public or nonprofit) or an individual.”38 The purpose of the grant is to foster or support some activity by the recipient deemed valuable to the government and the public. Prospective grantees must apply for the grant and typically provide reports to the donor government to demonstrate that the funds received were spent for the designated purpose. Grants differ with respect to the method of allocation, with formula grants allocated

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on the basis of a distribution formula established by law and project grants provided for the delivery of goods or services.39 Grants are a common policy output, as demonstrated by the fact that over half of the 1,783 programs listed in the 2002 Catalog of Federal Domestic Assistance are grants. • Vouchers—subsidies that give “limited purchasing power to an individual to choose among a restricted set of goods and services.” Vouchers have been used extensively to subsidize food, housing, and—most recently and controversially—education. “Vouchers . . . differ from grants . . . in that they vest more control in the hands of the ultimate beneficiaries of public programs rather than the suppliers of goods and services. They are therefore often referred to as ‘consumer-side subsidies’ rather than ‘producer-side subsidies.’”40 Vouchers have become increasingly popular in recent years as they offer beneficiaries a measure of choice in selecting suppliers. Beneficiaries’ freedom of choice, however, is usually quite limited, as donor agencies must often certify and regulate eligible suppliers. In addition, the effectiveness of vouchers depends upon beneficiaries’ awareness of, and access to, qualified suppliers. Many large-scale public programs, from housing to Medicare and food stamps to Pell grants for students to attend college produce vouchers as outputs. • Corrective taxes, charges, and tradable permits—products that “us[e] prices and other market mechanisms to create financial incentives for individuals to change their behavior in ways that reduce social harms or secure benefits for society at large.”41 They are coercive in that they impose behaviors, require payments, and prosecute those not complying. They may also be seen as creating incentives. For example, corrective taxes are levied on cigarettes and alcohol to discourage use, on gasoline to accumulate funds to help maintain roads, and on waste collection to discourage consumption and encourage recycling. In other forms, customs duties or tariffs are corrective taxes that help to sustain less competitive domestic producers. Charges take somewhat different forms. They are fees in exchange for some benefit or service and usually become a source of fiscal support for the benefit or services. Charges are very common but may be directly or indirectly levied. Entrance fees to a museum or a public camping ground are directly paid by the user. Airport take-off and landing fees charged for each commercial flight are directly charged to airlines and only indirectly to passengers. Finally, tradable permits are a relatively new product that relies on market forces of demand and supply to allocate the costs of complying with clean air regulations. Such schemes create standards for emissions and then establish a market for trading emissions, allowing heavy polluters to purchase pollution units from those with fewer emissions—thereby reinforcing incentives for all to minimize air pollution. • Regulations—products that impose duties and “deliver obligations, rather than services.”42 Although designed to have beneficial outcomes, regulations are products that use legal authority to command compliance. Regulations are the product of rulemaking by programs and agencies. As such, once formulated, they set standards for performance and define permissible activities as well as authorize enforcement by program personnel in their roles as regulators. Regulators “impose economic penalties, place liens upon or seize property, limit business practices, suspend professional licenses, destroy livelihoods . . . restrict personal liberty and use force.”43 There are two basic types of regulations: economic and social, although this distinction is often blurred. (a) Economic regulations focus on the healthy functioning of markets.44 Much of the work of the independent regulatory agencies centers on this goal, with regulations as the basic product of their efforts. A large portion of their production involves regulation of the entry

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MINI-CASE 15.2 Beach Sand as a Policy Output Hurricanes regularly strike the barrier islands off the coast of North Carolina. The Outer Banks, low-lying spits of sand, are gradually eroding, as the ocean reclaims the beaches and marshes during major storms. These same islands are crowded with growing numbers of beachfront homes and with towns grown rich with property tax revenue that are dependent for their livelihoods on vacationers. Hurricane Isabel, a moderate, category 2 storm, hit Cape Hatteras in the fall of 2003, with its predictable effects of flooding and further erosion of beachfront property. Dozens of towns on the islands were declared disaster areas. Enter the Federal Emergency Management Agency (FEMA), the agency charged with disaster relief and cleanup. Emerald Isle, one of the towns eligible for FEMA assistance, filed claims for funds to replace an estimated 128,187 cubic yards of sand, or about 7 percent of the beach lost during Isabel along a six-mile stretch of waterfront. Because the town regularly spends its own tax dollars to replenish the continuously eroding sand, estimated at about two to three feet of shoreline yearly, Emerald Isle qualified for FEMA funds to help rebuild its shoreline infrastructure. FEMA paid for 75 percent of the estimated $1.9 million cost of sand that was pumped onto the beach in front of a long line of expensive vacation homes and condominiums in March 2004. Residents of Emerald Isle and other Hatteras towns dependent on their beaches to attract vacationers hope eventually to persuade the Army Corps of Engineers to widen their beaches with a comprehensive effort to stem erosion of these barrier islands once and for all. Until then, FEMA will continue to fund sand to replenish the beachfront property of wealthy vacationers on a storm-by-storm basis.

and exit of firms as well as licenses, permits, price controls, standards, and other forms of production control that determine access to and behaviors in various markets. They also monitor and enforce compliance through various dispute-resolution procedures and accompanying penalties. (b) Social regulations concentrate on issues of health, safety, welfare, working conditions, and the environment.45 They have three key elements: rules that govern expected behaviors, benchmarks for compliance, and sanctions for noncompliance. Such regulations take varied forms, from controls to ensure the safety of food and drugs and occupational safety to those ensuring the quality of water we drink and access to fair housing markets. Many social regulations are cross-cutting, that is, they impose obligations on a range of public and private activities. So, for example, protections against various forms of racial and ethnic discrimination extend broadly and are enforced across the board. Though long, this catalog of different kinds of policy benefits and burdens could easily be expanded and refined. Policymakers have many different kinds of policy tools at their disposal and new variants appear every time policymakers encounter new problems or revisit old ones. No catalog of policy tools can ever be complete.

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15.7 HOW? METHODS OF ALLOCATION The third and final component of designing policy outputs is the method of allocating burdens and benefits to target populations. Benefits and beneficiaries—and burdens and “victims”—must be linked through some system of allocation. There is no more enduring and controversial subject in the realm of political and social philosophy than the question of how policy benefits and burdens should be allocated to the public. Philosophers, economists, political scientists, sociologists, and even social psychologists have been grappling with the issues of justice, fairness, and efficiency for generations and will continue to do so for generations to come.46 However, our focus here is on policymaking, not philosophy, so we will limit our discussion to the pragmatics of policy design. Jonathan Elster has developed a framework for analyzing problems of allocation in the design of policy outputs. Elster is primarily interested in designing strategies for matching the two, but acknowledges the critical role that the characteristics of both benefit and target play. “The primary effect of an allocation scheme is to channel the good to the group of recipients defined by the criteria and mechanisms embodied in the system.”47 Allocation involves decisions about how distribution will occur in terms of the properties of both the benefit or burden and the target populations. Three types of decisions are involved in the distribution of outputs: 1. Decisions determining the amount of a good to be made available for distribution. These are decisions about how much, a category usually decided through the political system in yearly appropriations and occasionally in revisions to authorizing statutes. 2. Decisions determining allocation once availability is determined. While a framework for allocation may be set out in statutes and rules, these are institutional decisions routinely made by managers and personnel in the daily routines of implementing organizations. 3. Decisions determining who is eligible to receive the benefit or burden. Decisions here are primarily focused on the characteristics of beneficiaries.48 These three components of decisions about distribution are interrelated. A change in one affects the other two, even though such interaction may not be addressed or anticipated. For example, a reduction to the budget for the Immigration and Naturalization Service may force revisions to staffing patterns and personnel reassignments, with consequences for those intending illegal entry in the affected regions. At this point in our discussion, we are primarily interested in decisions determining allocation after issues about amounts of resources are resolved. There are two properties of mechanisms for allocating benefits or burdens to a target population. First are the principles or systematic rationales for distinguishing recipients from nonrecipients. Second are the actual procedures. 15.7.1. Principles of Allocation There are four principles commonly used to justify systems of allocation. While presented separately below, these principles are usually combined in practice to form mixed systems.49 • First is equality as principle for dividing outputs among beneficiaries. Systems employing egalitarian approaches to allocating benefits often involve considerations dependent both on the nature of the output and its scarcity. Often allocation based on egalitarian criteria employs the approach of equal deviation from some baseline: that is, reducing or increasing the availability of an output proportionally. Equal distribution of an output often dilutes its utility or value. Ensur-

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ing equal access to an output poses difficult problems when a good is scarce or cannot be divided up without being destroyed. Allocation by lottery (equal chance to obtain a benefit) and rotation (taking turns) are useful strategies when outputs are scarce or not readily divisible. One example of the dilemmas of equality is found in the various systems used for allocating scarce, healthy kidneys for transplantation. • Second are time-related principles of allocation. These are systems employing criteria of time in some form as a method for linking outputs and beneficiaries. Time is often viewed as an impersonal and appropriate method for differentiating between beneficiaries when other criteria are too contentious. Two types of time-related allocation mechanisms are familiar: queuing and seniority. Queuing involves the idea of first-come, first-served as a method for determining access and distribution. Queuing may be seen as “fair,” because the sacrifice involved in waiting is impersonal, based on the common sorting device of wasting time. Queuing is often a proxy for motivation. Seniority involves queuing that is dependent on time as a by-product of another activity. Again, eligibility is established through length of time rather than other qualifications. For examples, seniority is frequently used to determine the order of lay-offs and recall procedures for jobs in businesses facing financial crisis. • Third are status-based principles. Status properties are biological, behavioral, or institutional characteristics of individuals or organizations that are used as a basis to establish eligibility for a benefit or burden. Here measurable or observable biophysical, social, economic, and legal properties are employed to differentiate between potential recipients. The list of status characteristics is extensive and includes characteristics such as gender, race, ethnicity, age, height, weight, health status, literacy, ability, citizenship, skills, occupation, kinship, wealth, and so forth. Status may be used positively to differentiate between groups, negatively to ensure no differentiation based on a characteristic (nondiscrimination), or as compensation to offset less-favored status. Historically, policies dealing with race in the United States have employed all three approaches to sorting by status to allocate benefits and burdens. • Fourth are merit, need, and efficiency, three different principles for matching outputs to beneficiaries. In these, characteristics of the recipient enter into the calculus of distribution. Allocation based on merit rewards past performance or deservingness as the basis for awarding outputs, whereas allocation based on need is configured on present or existing conditions. Efficiency employs comparison to project how well beneficiaries will use the scarce good in the future in terms of policy objectives and resources.50 Efficiency criteria often use outputs as incentives or motivational mechanisms in linking outputs and beneficiaries. 15.7.2 Procedures for Allocation In terms of the procedural characteristics of allocation mechanisms, the properties of the benefit to be produced are also very important to the procedures employed. Whether the benefit is scarce or plentiful, divisible (many can receive the output) or indivisible (impossible for more than one person to receive it), or heterogeneous (all units of output are different) or homogeneous (all units of output are indistinguishable) are important attributes of design. Three types of procedures may be identified: selection, admission, and placement. 1. Selection procedures involve comparing individual beneficiaries against each other in terms of previously identified criteria, rank ordering, and awarding outputs until the supply is exhausted. Thus, admissions committees at highly selective colleges generally compare

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candidates against some profile and offer places to a predetermined number of applicants matched to the capacity of the institution. Selection procedures are characteristically used with scarce goods. 2. Admission procedures involve comparing potential recipients to some threshold criteria that, if met, make the beneficiary eligible for the output. Such mechanisms are best fitted to distributing nonscarce, indivisible goods, but can be readily adapted when resources are limited. For example, many colleges fill their classes by admitting all students meeting established, minimum criteria. 3. Placement procedures regulate the allocation of outputs where distribution, rather than scarcity, is the primary obstacle. Placement designs are found where outputs are heterogeneous, but not scarce. In such approaches, each beneficiary ends up with some output, although not necessarily of the same form and type as other outputs.51 Problems with placement systems arise when there are substantial variations between outputs. For example, almost all students can access some type of postsecondary education, although the forms and rewards attached to attendance at the various types of institutions may vary widely. 15.8 SUMMARY In this chapter we have surveyed some of the multidimensional schemes for classifying outputs. The literature on policy outputs is vast and growing because outputs are where the rubber meets the road in the world of public policymaking. Outputs are the most immediate and visible results of policy production. Checks and vouchers are distributed, grants are awarded, roads are paved, submarines are launched, and arrests are made. We see government first and foremost through its outputs. For Americans this is particularly important because we are an impatient people and like to see things happen, the sooner the better. Thus, we tend to overrate outputs at the expense of the longer-term consequences of outcomes. We mistake government action for societal change. Moreover, policymakers prefer to be responsible for outputs rather than outcomes, because they can control the former and only influence the latter. During reelection campaigns, public officials always point to the factories built and roads paved, and only occasionally to the air pollution and traffic congestion that result. Nevertheless, policy outputs are the instruments or tools of government. Policy outputs are what policymakers do to make life better for the American public. Thus, the art of crafting policy benefits and burdens, choosing a target population, and designing a method of linking the two is an essential part of the policymaking process.

CASE STUDY Queuing for Kidneys In November 2003, Alonzo Mourning, center for the New Jersey Nets and one of the most dominant defensive players of his era, announced his early retirement from basketball. The reason? Segmental glomerulosclerosis, a life-threatening disease of the kidneys requiring dialysis multiple times each week to cleanse his blood of harmful wastes. Like many others, Mourning’s name was added to the long list of thousands of Americans awaiting a kidney for transplantation.

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Since the first successful organ transplant was performed in 1954, the United States has developed and expanded programs for transplanting kidneys so that many now enjoy longer life because of this procedure. Steady advances in scientific and medical research have propelled the growth of such lifesaving technologies, with about 25,000 people receiving organ transplants each year. Yet, half a century later, the limits on programs making transplantation more broadly available are also obvious. Many of these arise from the procedures we have devised for allocating kidneys as well as from the basic characteristics of the target population and the nature of the benefit being provided. Background Kidneys are the most commonly transplanted human organ. Kidney disease, called end-stage renal disease in its most severe form, was uniformly fatal before the development over the last forty years of two basic medical procedures: hemodialysis and transplantation. Hemodialysis functions as a substitute for kidneys. It operates by filtering waste by-products from the blood and requires patients to spend three to four hours, three times a week, hooked up to a machine in a hospital or dialysis center. An estimated quarter of a million patients yearly now rely on dialysis, a procedure that extends life but cannot heal the damaged kidneys. Dialysis usually precedes transplantation as a therapy for kidney disease while potential recipients await donors. Approximately 10 percent of those on dialysis receive a kidney each year.52 Transplantation involves surgery to remove a kidney from a living donor or a cadaver and to graft it into a recipient. Transplantation offers the possibility of restoring kidney functions and of extending life without dependency on machines. Without dialysis or transplantation, death is assured. Both transplantation and long-term dialysis became increasingly common in the 1970s. As a consequence, those with end-stage renal disease lived longer and demand for kidney transplantation expanded. Those undergoing transplantation face additional problems of compatibility and tissue rejection that limit the number of good candidates for surgery. Early on, only genetically related, or histocompatible (blood group and antigen matching) kidneys transplanted from living donors had any reasonable expectation for long-term survival. In the early 1980s, the introduction of cyclosporine, an immunosuppressant drug, dramatically reduced the rates of rejection of newly transplanted kidneys and made kidneys donated from cadavers much more practical. So-called ”wonder” drugs opened up access to transplantation for many more potential recipients and benefited many patients. Since then, the numbers of transplants from living donors have grown only slowly, while those from cadavers have risen dramatically. Nonetheless, demand for kidneys has always outpaced supply. Today, one-year survival rates for adults undergoing kidney transplantation are close to 95 percent.53 Despite ever more sophisticated drugs, graft rejection, especially with kidneys from cadavers, remains a problem. Almost 20 percent of those receiving transplants from cadavers encounter problems with immunosuppressant therapies and are forced back onto dialysis within a year of surgery. Since the 1980s, those needing retransplantation have been added back into the list of those seeking kidneys for transplantation. In the 1990s, another group, those with successful first transplants, also rejoined the list of those awaiting retransplantation. More than half of those recipients with successful initial grafts experience rejection within ten years of their transplant.54 Advances in the medical technologies of transplantation had other immediate effects. One was the need to address the problem of cost and who pays. In 1972, the federal government first subsidized patients who sought to benefit from new medical technologies for end-stage renal

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disease through legislation extending Medicare coverage to patients seeking hemodialysis and/or transplantation. This eliminated most financial barriers to treatment and transferred costs to the public and the Medicare program budget. Then, it created incentives for medical centers to offer dialysis and transplantation services. These policy initiatives expanded hospitals’ capacity to perform transplants, but did little to address the scarcity of available kidneys. Many hospitals set up their own programs to procure kidneys, often performing transplants from the kidneys of brain-dead cadavers.55 Yet, growing demand always outpaced supply and exacerbated the need to prioritize an ever-lengthening list of potential recipients. Shortages of kidneys eventually led to scandals. One of the more perverse effects involved those seeking access to transplants by buying kidneys from willing live donors. The press loudly criticized an approach that seemed to offer kidneys to the highest bidder. Political pressures built to regulate access and curb excesses. In 1984, Congress passed the National Organ Transplant Act, prohibiting the sale of kidneys and setting up a framework for allocating kidneys in this new federal initiative. That legislation provided financial assistance to organ procurement organizations, prohibited the purchase of all human organs, and required that only medical criteria be used in matching organs with potential recipients. Accordingly, in an unusual delivery arrangement, a private, not-for-profit organization, the United Network for Organ Sharing (UNOS), was given public regulatory authority in 1987 to design a nationwide system to ensure some sort of fairness in governing the allocation of kidneys from cadavers. Regulations establishing a nationwide system for allocating available kidneys from cadavers (the benefit) to a target population (those seeking transplants) are the output of policy production in this case. Policymakers hoped that the new system would displace the old patchwork quilt of local and regional registries of potential recipients. Kidneys donated by living donors have always remained a private transaction between the two individuals involved and beyond the purview of federal regulation. Those willing to donate a kidney to a friend or family member may do so if their consent is informed and freely given. The National Registry UNOS regulations created a system for allocating kidneys from cadavers to recipients who have not found a live, willing donor. It is a national registry and waiting list assigning a priority to all eligible recipients. There are no procedures required for those able to find a live, compatible donor. Benefits Kidneys are indivisible goods that are consumed individually. That is, a kidney may not be shared. Once grafted into a recipient, it is no longer available to another. Although potentially a marketable good, the government has intervened to prohibit the sale of kidneys for reasons of fairness and ethics and to expand access to those not able to pay the exorbitant prices in a market that would be biased toward the wealthy. Scarcity is the overriding characteristic of the supply of kidneys available for transplantation. Organ transplantation can be a life-saving medical procedure for terminally ill patients when compatible organs are available. Most problems with policies for dealing with kidney transplantation have two sources: First, there are many more people in need than suitable organs available. Second, the success of kidney transplants depends in large part upon antigen sensitivity and the compatibility between the tissue and blood types of the kidney taken from a donor and that of the recipient. Despite our ever more sophisticated abilities to transplant organs from one human being into another and to manage complications medically via an expanding pharmacy of expensive drugs, problems in

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matching donors to recipients stubbornly persist despite the efforts of policymakers to design better distribution practices. Recipients Ostensibly, eligibility for a kidney transplant is easily established: either a patient has end-stage renal disease or not. At the first level, the system for allocating kidneys to recipients is designed as an admission system. But, the scarcity of kidneys requires that other criteria be used to further sort between recipients. Approximately one in ten of those eligible for transplantation receive a kidney each year. Such odds raises the stakes for those charged with designing an allocation system. Interestingly, at the next level, traditional status-based principles play only a limited role. Age, race, gender, other medical complications, psychological stability, and social support available for postoperative care are not permitted as criteria, or even to be entered as information in the database. This is the case, despite important differences in the rate of kidney disease by race and in the rate of rejection by gender. Moreover, other complicating diseases and whether or not the person is seeking a retransplant cannot be used as criteria. Instead, the only criteria allowed are: • Length of time the recipient has waited on the transplant registry, a queuing criterion. Length of wait time is perceived by many as a neutral and fair way of sorting because it combines compassion for suffering endured with a surrogate measure of medical urgency. It overlooks the fact that those longest on the list may be the sickest and least likely to do well post transplantation. • Measures of recipient-donor matching, that is, blood group and antigen compatibility established through tissue typing. These are criteria reflecting principles of efficiency designed to optimize graft survival in a recipient. Compatibility is an important predictor of success, despite the availability of more effective immunosuppressant drugs. Allocation: Matching Benefits with Recipients How should kidneys be allocated? The system designed by UNOS establishes a national registry for candidates for transplantation based on principles of queuing, efficiency, and fairness. These criteria provide the framework for assigning priorities to those seeking kidneys for transplantation. Distribution is coordinated by a national registry that administers a priority list using two criteria: eligibility based on matching of histocompatibility and waiting time. The system requires tissue typing for each donated kidney and each potential recipient. Sharing of any newly harvested kidney where there is a six-antigen match with someone on the national registry is mandatory. These mandatory sharing rules require coordination between hospitals across the nation and “represent the most complex inter-hospital collaboration in all of American medicine.”56 Added to tissue typing is a point system combining length of time on the waiting list and absence of sensitivity factors, including tissue mismatches and blood type incompatibilities that might compromise the viability of grafts. Patients with the highest number of points receive the highest priority. Allocation in Practice To date, the development of a truly national system for allocating kidneys, the intent of the 1984 legislation, has been only partially successful. Approximately 15,000 of the 2.1 million hospital

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deaths each year are potential organ donors.57 A 1997 change to Medicare rules required all hospitals receiving Medicare funding to notify UNOS about all hospital deaths involving a potential donor and resulted in increased donation rates of cadavers in some states. About 20 percent of kidney transplants are allocated via the national registry. The remaining 80 percent continue to be allocated through registries operated by various transplant centers and regional agencies, many of which predate UNOS. Limited success in centralizing policy outputs into a single national registry reflects problems of distributive fairness and incentives that have plagued policy designers working with the issue of allocating kidneys for transplantation over the past three decades. Multiple, parallel registries persist primarily because of differences in the characteristics of various target populations of donors and recipients as well as the method of allocation. These include: • Differences in characteristics between supply and demand. Different populations, such as urban, suburban, or rural groups, different socioeconomic groups, and different racial groups experience substantial differences in the incidence of end-stage renal disease and in willingness to donate kidneys. • Geographic inequalities. Currently, most transplants occur in the same communities where the kidney was donated. The luckiest recipients live in communities with a low incidence of end-stage renal disease and high rates of donation. The unluckiest live in places, usually large urban areas, with a high incidence of kidney disease and low rates of donation. Ironically, the latter communities often have large potential donor populations (cerebral and gunshot injuries, and violent accidents) with little prior knowledge about donation. Finally, this group of potential donors is often treated in overworked and crowded hospital emergency rooms where there are few resources and little time to harvest available organs. • Gender disparities. Women who have been pregnant are antigen sensitized at rates higher than those of men. This reduces their chances of finding compatible kidneys under the present system of priorities, which does not factor in considerations of gender. Also, kidneys transplanted from female donors are more likely to be rejected than those from male donors. Despite this, sex may not be considered in determining eligibility or match. • Racial disparities. African Americans receive fewer kidneys (24 percent of the total) than their numbers (31 percent) on the national registry, but more than their numbers (12.1 percent) in the general population, and far more than donated by African American donors (8 percent). African Americans are overrepresented as recipients and underrepresented as donors. Genetic differences among races as far as blood-group and tissue types also appear to exacerbate the difficulties of matching donors with recipients under the current priorities. • Multiple transplantations. About 20 percent of grafts fail during the first year. Among this group, those receiving a second transplant fail at even higher rates. However, patients who lose a graft due to chronic rejection after three years are at less risk of rejection a second time. Many of those seeking retransplantation are highly sensitized and thus, for this subgroup, assigned a somewhat lower priority on the registry. Yet, many with failed grafts are assigned the same priority as those seeking a first transplant. Approximately 17 percent of cadaver transplants are retransplants. Such differences in the characteristics of the target population introduce fundamental distortions into the design of the UNOS allocation system. The most obvious problem is the overwhelming need to increase the supply of kidneys available for transplantation. Federal rules support incentives for transplantation centers that successfully expand the supply of kidneys harvested from

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cadavers. Centers are allowed to work on a “keep-one, share-one” system of allocating recovered kidneys between those on the national and local/regional waiting lists. The result is that most kidneys continue to be donated and transplanted locally. Local and regional registries sustain this incentive system. Those hospitals that most aggressively seek to expand the supply of kidneys from cadavers are rewarded by being allowed to retain a certain proportion (usually half) of those harvested from the local patient population and then to transplant them into recipients from their regional registry. The capacity to serve populations in their local market creates incentives for hospitals to grow their own supply of donors. Separate local and regional waiting lists retain their utility. Furthermore, they expand options for potential recipients. Those seeking transplants are often placed on multiple waiting lists simultaneously. Today, we are no closer to a single, centralized system, despite periodic efforts to reform UNOS. Much of the problem can be attributed to intractable problems of allocation in designing outputs. Jumping the Queue—The Alternative Those lucky enough to find a live donor can escape the vagaries of waiting lists and registries. Unlike most with end-stage renal disease who cannot find a live, willing donor, Alonzo Mourning was one of the lucky ones. Less than a month after his retirement, Mourning received a kidney from a family member and was eventually able to return to playing professional basketball. Everyone breathed a sigh of relief! Mourning’s long-term future, however, may be less certain. Kidneys from live donors sometimes fail over time. Should there be a rejection of his graft or a recurrence of his underlying disease, Mourning may still encounter the list. Let’s hope he picks the right registries. Summary What lessons can be learned from this case study about policy outputs and the federal government’s efforts to increase organ donation? • A first lesson is about the conceptual difficulties of identifying outputs. From the perspective of the federal government, UNOS may be termed an intermediate output, a policy tool in the form of an external deliverable, a private, not-for-profit entity administering a regulatory system for distributing kidneys on a nationwide basis. UNOS was designed to supplement local hospital practices for matching donors and recipients by adding an element of distributive fairness. From the perspective of the target population, potential recipients of kidneys, however, the output is a list and a system that determines access to kidneys available for transplant. • A second lesson is about the dependence of outputs on both the properties of target populations and the goods involved. Two independent and very different systems, one for selecting recipients, and the second for searching for donors, are linked, if awkwardly, at local and national levels. This adds layers of complexity and without reducing limitations. Privately negotiated agreements between donors and recipients remain the most effective arrangement for transplantation and circumvent the procedural morass of a list and of long waiting periods, plus the real possibility of death in the interim. • The third lesson is the importance of values in shaping and limiting systems to allocate benefits. The legitimacy of privately negotiated agreements between willing donors and needy recipients has never been challenged. Issues of selling organs have been thoroughly discredited as violating

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norms of fairness. Furthermore, kidneys do not always go to those who might benefit most in terms of length or quality of life, but instead recipients are prioritized on a first-come, first-serve basis, with kidneys often going to the sickest. Efficiency and effectiveness take a backseat to underlying values of equity and the logic of queuing. • The fourth lesson is about the context of allocation in determining outputs. That is, the impact of regional and demographic variations on who becomes a donor and who receives a kidney. A national system was imposed on top of, but did not displace, existing practices by local hospitals. Local hospitals need incentives, in the form of benefits to their own transplantation programs, to encourage donors. Variables of race, sex, lifestyle, and age all bias the potential for success in encouraging kidney donation. • The last lesson is the irony of success in policy production. As more outputs are made available, in the forms of an increased supply of kidneys, the numbers of transplants have increased. So too have the numbers of individuals seeking transplants. Supply may never be able to meet the demand for kidneys, and the methods of allocation may appear overly complex, but the output of policy production, our present-day organ-sharing mechanism, provides greater access for more people to a scarce resource: kidneys available for transplant.

KEY TERMS admission procedures—a method of allocation that compares each potential recipient to some minimum or threshold criteria which, if met, confer eligibility for that benefit. When the benefit is scarce, threshold criteria are raised. cash transfers—unilateral, or one-way, payments by a government to a person or agency that does not form part of any exchange of goods or services. collective goods—outputs that benefit and are used by everyone, but where no one individual has an incentive to provide them for others. National security and protection against crime are examples. common-pool goods—outputs that are individually consumed, but are more or less free for the taking and therefore subject to overuse and depletion. Fishing stocks and panda bears are examples. government insurance—an output that allows government to share some of the risk for potential losses in activities deemed to serve important public purposes, and where private insurers are unable to assume the entire risk. individual goods—outputs that are usually supplied adequately through the marketplace. Food and clothing are examples. loans—products that involve government borrowing money from the Treasury and lending it, in turn, directly to borrowers. loan guarantees—an output that involves the government indirectly by simply guaranteeing repayment to a private lender should there be a default on repayment by a borrower. placement procedures—a method of allocation where distribution (of different types of benefits),

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rather than scarcity, is the issue. Here allocation is based on some assessment of fit between the potential recipient and the benefit. regulations—duties and obligations, usually accompanied by sanctions, imposed to limit undesirable behaviors or practices. selection procedures—a method of allocation used when a benefit is scarce and where individual beneficiaries are compared and ranked against each other in terms of identified criteria in order to establish their priority. tax expenditures—provisions placed in the tax code to encourage certain behaviors by deferring, reducing, or eliminating some part of the obligation to pay taxes. toll goods—outputs that can be supplied through the marketplace but, by their nature, tend to be produced by monopolies. Electric power and public transportation are examples. vouchers—subsidies or payments that give limited purchasing power to an individual to obtain a restricted set of goods and services from eligible providers. QUESTIONS FOR DISCUSSION 1. 2. 3. 4. 5. 6. 7. 8.

How do the outputs of public policy differ from those in the market economy? How have the outputs of government policy production changed over time? Evaluate the statement that all public outputs come at a cost to somebody. Affirmative action was originally a benefit designated only for African Americans. To what other classes of beneficiaries, if any, should eligibility for this benefit be extended? What are the differences between carrots, sticks, and sermons, and how useful are these distinctions as a classification schema for policy outputs? Develop examples to illustrate the differences and ambiguities between these three classes of outputs. Evaluate the argument by economists that government is better suited to providing collective goods and regulating toll and common-pool goods than to producing individual goods. Why is the proposed introduction of vouchers as a method of allowing parents greater choice over their children’s schools so much more controversial than vouchers in the form of Medicare as a method of allowing the elderly to select their health care providers? Should your college award honors to graduating seniors? If so, how would you design a method for designating such honors?

SUGGESTED READINGS Eliadis, Pearl; Margaret M. Hill; and Michael Howlett, eds. Designing Government: From Instruments to Governance. Montreal, Canada: McGill-Queen’s University Press, 2005. Elster, Jon, Local Justice. New York: Russell Sage Foundation, 1992. ———. ed. Local Justice in America. New York: Russell Sage Foundation, 1995. Hatry, Harry P. Performance Measurement: Getting Results. Washington, DC: Urban Institute Press, 1999. Moss, David A. When All Else Fails: Government as the Ultimate Risk Manager. Cambridge, MA: Harvard University Press, 2002. Novak, William J. The People’s Welfare: Law and Regulation in Nineteenth-Century America. Chapel Hill, NC: University of North Carolina Press, 1996. Salamon, Lester M., ed. The Tools of Government: A Guide to the New Governance. New York: Oxford University Press, 2002. Savas, E.S. Privatization and Public-Private Partnerships. New York: Chatham House, 2000.

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Schneider, Anne Larson, and Helen Ingram. Policy Design for Democracy. Lawrence, KS: University Press of Kansas, 1997. Vedung, Evert. “Policy Instruments: Typologies and Theories,” in Carrots, Sticks, and Sermons: Policy Instruments and Their Evaluation, ed. Marie-Louise Bemelmans-Videc, Ray C. Rist, and Evert Vedung. New Brunswick, NJ: Transaction Publishers, 1998.

NOTES 1. Walter I. Trattner, From Poor Law to Welfare State: A History of Social Welfare in America, 5th ed. (New York: Free Press, 1999), p. 14. 2. William J. Novak, The People’s Welfare: Law and Regulation in Nineteenth-Century America (Chapel Hill, NC: University of North Carolina Press, 1996), pp. 235–36. Copyright © 1996, University of North Carolina Press. Materials reprinted by permission. 3. Ibid., p. 154. 4. Ibid., pp. 155–56. 5. Ibid., pp. 89–90. 6. David A. Moss, When All Else Fails: Government as the Ultimate Risk Manager (Cambridge, MA: Harvard University Press, 2002), p. 293. Emphasis added by author. 7. Ibid., p. 320. 8. Ibid., p. 294. 9. Confusion about the differences between production activities and policy outputs is rampant in the theoretical literature as well. In Harry Hatry’s standard text on performance measurement he defines outputs as “the completed products of internal activity: the amount of work done within the organization or by its contractors.” This definition glosses over the critical difference between internal and external deliverables or products. See Harry P. Hatry, Performance Measurement: Getting Results (Washington, DC: Urban Institute Press, 1999), p. 13. 10. Hatry, Performance Measurement, pp. 14–15. 11. Ibid., pp. 16–17. 12. For a discussion of intermediate versus final outputs, see Peter M. Kettner, Robert M. Moroney, and Lawrence L. Martin, Designing and Managing Programs: An Effectiveness-Based Approach, 2nd ed. (Thousand Oaks, CA: Sage Publications, 1999), pp. 119–24. 13. Ibid., pp. 124–25. 14. Anne Larson Schneider and Helen Ingram, Policy Design for Democracy (Lawrence, KS: University Press of Kansas, 1997), p. 85. 15. Ibid. 16. Schneider and Ingram categorize beneficiaries according to the criteria of political influence and reputation. Four groups result: (1) Advantaged, those with considerable resources to influence policy and with “deserving” political reputations; (2) Contenders, those with political power but “undeserving” political status; (3) Dependents, those without political power but with deserving status; and (4) Deviants, those with neither power nor deserving status. Schneider and Ingram argue that the behavior of participants in the production process is conditioned by how beneficiaries are perceived (socially constructed) independent of the substantive domain or problem (pp. 102–28). 17. Hatry, Performance Measurement, p. 39. 18. Walter J. Oleszek, Congressional Procedures and the Policy Process. 5th ed. (Washington, DC: Congressional Quarterly Press, 2001), p. 116. 19. General Services Administration, Catalog of Federal Domestic Assistance, June 2002. The June 2002 version of the Catalog is no longer available online. 20. For a brief summary of the literature on public choice, see chapter 4 in this volume. As we stated in chapter 4 and will expand upon in part V of this text, we reject the assumption that governance is a by-product of the failure of markets or any other form of social action. Just the opposite. Markets have evolved largely as a result of, not despite, government intervention. The real question is: What can governments do better? not What should governments do? 21. E. S. Savas, Privatization and Public-Private Partnerships (New York: Chatham House, 2000), p. 45. The following discussion draws on materials and concepts in the Savas book. 22. Ibid., pp. 41–42. 23. Ibid., p. 43.

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24. Ibid., p. 41. 25. Ibid., p. 50. 26. Ibid., p. 52. 27. Garrett Hardin, “The Tragedy of the Commons,” Science 162 (December 13, 1968): 1243–48. 28. Savas, Privatization and Public-Private Partnerships, p. 53. 29. Ibid. 30. Evert Vedung, “Policy Instruments: Typologies and Theories,” in Carrots, Sticks and Sermons: Policy Instruments and Their Evaluation, ed. Marie-Louise Bemelmans-Videc, Ray C. Rist, and Evert Vedung (New Brunswick, NJ: Transaction Publishers,1998), p. 32. The following discussion draws on material from pp. 30–35. 31. Ibid., pp. 31, 41. 32. Ibid., pp. 33–34. 33. Lester M. Salamon and Michael S. Lund, “The Tools Approach: Basic Analytics,” in Beyond Privatization: The Tools of Government Action, ed. Lester M. Salamon (Washington, DC: Urban Institute Press, 1989), p. 29. 34. Lester M. Salamon, “The New Governance and the Tools of Public Action: An Introduction,” in The Tools of Government, ed. Salamon, p. 20. 35. Christopher Howard, “Tax Expenditures,” in The Tools of Government, ed. Salamon, p. 411. 36. Vedung, “Policy Instruments,” p. 44. 37. Christopher K. Leman, “Direct Government,” in The Tools of Government, ed. Salamon, p. 55. 38. David R. Beam and Timothy J. Conlan, “Grants,” in The Tools of Government, ed. Salamon, p. 341. 39. Ibid., p. 344. See also chapter 13, section 13.5.1, and Table 15.3 in this text. 40. C. Eugene Steuerle and Eric C. Twombly, “Vouchers,” in The Tools of Government, ed. Salamon, pp. 445–46. 41. Joseph J. Cordes, “Corrective Taxes, Charges, and Tradable Permits,” in The Tools of Government, ed. Salamon, p. 256. 42. Malcolm K. Sparrow, The Regulatory Craft (Washington, DC: Brookings Institution, 2000), p. 2. 43. Ibid., p. 2. 44. Ibid., p. 7. 45. Ibid. 46. For philosophical perspectives on the allocation of social benefits, see John Rawls, A Theory of Justice, rev. ed. (Cambridge, MA: Belknap Press, 1999); and Robert Nozick, Anarchy, State, and Utopia (New York: Basic Books, 1977). For an empirical analysis of the standards of fairness and efficiency in public policy, see Edward E. Zajac, The Political Economy of Fairness (Boston, MA: MIT Press, 1996). 47. Much of the following discussion draws on two works of Jon Elster, Local Justice (New York: Russell Sage Foundation, 1992), which presents a theoretical basis for systems of allocation, and Local Justice in America, ed. Jon Elster (New York: Russell Sage Foundation, 1995), which offers a more applied approach to the same subject matter. The quoted materials that follow are from Elster, ed. Local Justice in America, p. 17. 48. Ibid., pp. 8–9. 49. Ibid., p. 16. 50. Ibid., p. 14. 51. Ibid., pp. 24–25. 52. The following discussion relies on materials from J. Michael Dennis, “Scarce Medical Resources: Hemodialysis and Kidney Transplantation,” in Local Justice in America, ed. Elster, p. 86. 53. U.S. Transplant, Scientific Registry of Transplant Recipients, About Transplants: Fast Facts (accessed September 24, 2002), available at www.ustransplant.org. 54. National Institute of Allergy and Infectious Diseases, NIH, Immune Tolerance: Improving Transplantation Success (accessed September 24, 2002), available at www.niaid.nih.gov/publications. 55. As of August 19, 2002, UNOS counted 248 programs for kidney transplantation in 257 medical centers across the United States. The same Web site listed only 59 operating organ procurement programs and 158 histocompatibility laboratories. Critical Data: U.S. Facts About Transplantation (accessed September 24, 2002), available at www.unos.org. 56. Dennis, “Scarce Medical Resources: Hemodialysis and Kidney Transplantation,” ed. Elster, p. 118. 57. Julie Tanner Sanford and Judith Townsend Rocciccioli, “Cash for Kidneys: The Use of Financial Incentives for Organ Donation,” Policy, Politics, and Nursing Practice 4, no. 4 (November 2003): 277.

CHAPTER 16 Outcomes PREVIEW Chapter 16 examines the outcomes of policy production. Outcomes are the real world impacts of policy production, the nodes that connect past to future policymaking. As you read this chapter, you should acquire a vocabulary and framework for understanding the role of outcomes in policy production. You should be able to answer the following questions. • • • • • • • • • •

What are outcomes? What are the differences between outputs and outcomes? What are the differences between distributive, redistributive, and regulatory outcomes? What are the differences between short-term, mid-term, and long-term outcomes? What are spillover effects? How are outcomes related to policy design? What are the differences between letdown, latent, and sleeper effects? Who are the basic stakeholders in policymaking? How do we evaluate outcomes? How may policy failures and fiascoes be understood?

16.1 INTRODUCTION Outcomes are both the end and the beginning of the policymaking process. The whole point of policymaking is to produce outcomes or changes in a target population. Policymaking is a systematic course of action intended to produce change and outcomes measure the differences made at the end of the day. However, every course of action is but a single thread in the fabric of public life. Every policy has outcomes or consequences that contribute to the demand for new or revised policies. Every policy outcome carries the germ of future policy problems. Thus, every policy is the parent of one or many future policies. Outcomes generate new demands and new policies out of the raw materials of past policy actions. Like Janus, the two-faced Roman god, every outcome looks both backward and forward. That is why we show outcomes as having two sides, as in Figure 16.1. (see next page). As shown in Figure 16.1, outcomes link outputs to inputs. Policy consequences activate policy inputs. Figure 16.2 shows a more detailed view of the backward- and forward-looking components of policy outcomes.

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Figure 16.1

Policy Outcomes in the Policymaking Process

Outcomes I

Inputs

Outputs

Production

In chapter 4 we examined how real-world events, conditions, and situations influenced policy entrepreneurs and helped shape policy inputs. That is, we focused on the top part of Figure 16.2, where outcomes are the triggers for the policymaking process. Here we examine the consequences of policy action, or the bottom half of the graphic. In other words, we view outcomes as the result, and not the cause, of the policymaking process. Figure 16.2

Policy Outcomes: Detailed View

Situations Conditions

Events

OUTCOMES Impacts

Objectives

In the following pages we explore what policy outcomes are and are not. We explore the concepts of policy and program outcomes from the perspective of the policymaker. As a generation of American public policymakers is now learning, the use of outcomes in policy design and program management challenges the very foundations of policy studies and analysis. Then we briefly review the Who in policy outcomes. Who actually benefits or loses from the delivery of policy benefits and burdens in particular and from the policymaking process in general. Finally, we change perspectives and look backward, not forward, at policy outcomes. In other words, how do policymakers and the public evaluate policy outcomes in retrospect?

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16.2 WHAT ARE OUTCOMES? “Outcomes are the events, occurrences, or changes in conditions, behavior, or attitudes” that result from the policymaking process.1 Outcomes are the consequences, and not the products, of the policymaking process. In contrast to outputs, outcomes are beyond the direct control of policymakers. Policymakers have substantial, though not complete, control over the outputs—the grants, subsidies, food stamps, regulations, criminal prosecutions, and so forth—but they can only influence the attitudes and behavior of the target population. The difference between outputs and outcomes is the difference between what gets done and what happens as a result. While policymakers—just like the producers of automobiles or toothpaste—are surely not powerless to influence outcomes, the daily news is replete with examples of products that don’t sell and policies that fail. Outcomes are the ultimate measure of the effectiveness of the policymaking process. 16.2.1 Outcomes and Policy Objectives The objectives of a policy are the major results that a policy seeks to achieve.2 Or, in the terminology of this text, objectives are statements of the kinds of outputs and outcomes that a policy is designed to effect. Objectives are qualitative—as opposed to quantitative—criteria for evaluating policy results.3 Policy objectives are the most general measures of policy success. Although policy objectives can and often are expressed solely in terms of outputs—for example, in terms of miles of road paved and numbers of speeding tickets written—the entire thrust of twenty-first-century public policymaking is to target and measure progress in terms of outcomes, not outputs. If paved roads do not lead to reduced congestion and speeding tickets do not lower accident rates, then the results may do little or nothing to improve the lives of the public. While many policy architects and program managers may find it difficult to express policy objectives in terms of outcomes, few would argue with the normative principle. Objectives are the intended outcomes of public policies. One of the oldest, broadest, and most widely cited typologies of policy objectives was first suggested by Theodore Lowi in the 1960s.4 Lowi argued that policies could be classified in terms of their intended outcomes. • Distributive policies use funds to provide benefits to groups, organizations, or communities. When everybody foots the bill and only some benefit, there are no specific losers. For example, eliminating the inheritance, or so-called “death,” tax would benefit a very small number of individuals, but disadvantage no one in particular. The same holds true for highway construction, flood control projects, and many programs often labeled government “pork” by opponents. • Regulatory policies “impose restrictions or limitations on the behavior of individuals or groups. That is, they reduce the freedom or discretion to act of the regulated.”5 The diversity and reach of government regulatory programs is astonishing. Though we often think of business, consumer protection, and environmental regulations, social regulation has been an integral part of American public life from the very beginning. For example, American state governments have regulated marriage, divorce, and the intimacies of family life or “domestic relations” from the early 1800s on down to the present.6 • Redistributive policies explicitly “shift the allocation of wealth, income, property, or rights among broad classes or groups of the population.”7 Redistributive policies have both winners and losers. The graduated income tax, for example, taxes the wealthy at higher rates than the middle class and the poor. Affirmative action is designed to enlarge access for minorities to jobs,

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housing, and education. While many distributive programs like Social Security have had redistributive impacts, relatively few policies are justified on the basis of benefiting one group to the disadvantage of another. While Lowi’s typology is difficult to apply in practice—for example, regulatory policies may be either distributive or redistributive, and many nominally distributive policies are actually redistributive—it endures because it reflects the intended outcomes of policymakers. 16.2.2 Short-Term, Mid-Term, and Long-Term Outcomes Outcomes don’t happen all at once. They unfold over time and space. Several authors distinguish between intermediate and long-term outcomes, but we shall revisit the three-fold classification introduced in chapter 11. • Short-term outcomes are those immediate effects or changes caused by program outputs. Short-term outcomes “are the first benefits or changes participants’ experience, and are the ones most closely related to and influenced by the program’s output.”8 Short-term outcomes generally involve changes in the knowledge, attitude, or skills of the target population. These are usually expressed at the individual level on the part of program beneficiaries. Thus, does the audience for public service announcements show a greater awareness of the problem or change their attitudes in any way? Do antidiscrimination or equal opportunity programs change the beliefs of the target population? Public policies are seldom directed solely at changing public perceptions and attitudes, but short-term outcomes can serve as indicators of progress toward policy objectives. • Mid-term outcomes “link a program’s initial outcomes to the longer-term outcomes it desires for participants. They are often changes in behavior that result from participants’ new knowledge attitudes or skills.”9 Behavioral change takes longer to happen and is often the result of repeated exposure to or use of policy outputs. Children may become more aware of the evils of cigarettes and alcohol, but do they actually refrain in practice? Moreover, do the effects of policy outputs spread out beyond the immediate target population? Does antidiscrimination training for real estate agents actually change the attitudes and behavior of buyers and sellers? Depending on the type of change sought, mid-term outcomes may unfold over periods from six months to several years. • Long-term outcomes are “the ultimate outcomes a program desires to achieve for its participants. They represent meaningful changes for participants, often in their condition or status.”10 Moreover, long-term outcomes often characterize the larger community of interest. Does teen drug use decline? Do fair housing programs lead to less discrimination in housing and less segregation in the community at large? Long-term outcomes generally refer to the results expected five to ten years after the program has been in operation. Is society better off as a result of program outputs? Figure 16.3 (see next page) summarizes the different kinds of change targeted by social programs for short-, mid-, and long-term outcomes. Figure 16.3 shows the relationships as a function of time. An antismoking commercial grabs the attention of a teenager or his or her parents, the teenager stops smoking after discussing the ad with his or her parents, and ultimately the teenager—along with many of his or her cohorts—lives a longer and healthier life and reduces the cost of health care in America. Changes in attitudes lead to changes in behavior, which produce—in the aggregate and over the course of time—changes in society. However, the relationship between short-, mid-, and long-term objectives can also be understood as

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Figure 16.3 Policy Outcomes for Social Programs

Short-term

Mid-term

Long-term

Learning

Action

Conditions

Learning Awareness Knowledge Attitudes Skills Opinions Aspirations Motivations

Behavior Practice Decisions Social action

Social Economic Civic Environmental

Source: E Taylor-Powell, University of Wisconsin-Extension, Cooperative Extension, Logic Model Workshop, Board of Regents University of Wisconsin System, December 5, 2001, p 4 at http://www.uwex. edu/ces/pdande/Evaluation/logicwkshp.htm.

a function of level or scope—that is, from immediate changes in the attitudes and skills of individuals to more lasting changes to social groups or organizations, and finally to broader impacts on the institutions of American society. Figure 16.4 illustrates the relationship between time and scope for policy outcomes. Figure 16.4 Time and Scope of Policy Outcomes SCOPE

Society Groups Organizations

Individuals

Short-Term Outcomes

Mid-Term Outcomes

TIME Long-Term Outcomes

Policies—especially social and economic ones—tend to change individual attitudes and behavior. Individuals then turn to collective action by participating in new or existing groups or organizations. Finally, society is changed by the concerted action of social organizations. The effects of public policy flow outward like the ripples in a pond. The implicit model behind Figure 16.4 is that it is easier to change the attitudes and behavior of individuals than that of groups, and it takes a good deal of time to change the institutions of society. Of course, not all policies are designed to change society as a whole. Many policies are targeted at specific groups—for example, peanut farmers, or millionaires subject to the inheritance tax—with little impact on the society as a whole. Targeted outputs, such as tax credits or crop subsidies, are limited to narrowly defined classes of

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beneficiaries and delivered—almost invisibly—on a regular basis. In such cases, the transmission model shown in Figure 16.4 does not really apply. Instead, such policies have outcomes distributed over time and space in a pattern similar to that shown in Figure 16.5. Figure 16.5 Policy Outcomes and “Spillover” Effects SCOPE "Spillover

Short-Term Outcomes

Mid-Term Outcomes

Long-Term Outcomes

TIME

Subsidies to peanut farmers help the farmers who receive them, but also impact the economy of rural communities. No matter how narrowly targeted, benefits (or burdens) almost always spill over to others. Every policy has some spillover effects, be they intended or unintended. Every public policy affects society as a whole, if only to the extent that virtually everyone pays in the form of taxes.

MINI-CASE 16.1 The GI Bill Sixty Years Later President Franklin Roosevelt signed the Servicemen’s Readjustment Act, known as the GI bill, in June 1944, while World War II continued to rage. At that time everybody feared a repeat of the post-World War I recession and saw free education and training as an alternative to joblessness for returning veterans. The GI bill provided tuition, fees, books, and living expenses for up to forty-eight months. The outcomes of the GI bill not only exceeded the expectations of its authors, they also transformed American higher education in ways unimagined by anyone in 1944. Of the 15,440,000 veterans of World War II, some 7.8 million received training through the GI bill between 1945 and 1956, at a total cost to taxpayers of $14.5 billion. More than 2,230,000 attended college. In 1947 almost half of the college students in the United States were veterans. A second Veterans Readjustment Assistance Act, similar to the first, was passed in 1952 for those returning from the Korean War. Of the 5,509,000 eligible, almost 2.4 million took advantage of its benefits between 1952 and 1965, at a cost of $4.5 billion. The GI bill and its successors not only put the federal government bigtime into the business of funding higher education, it also changed the nature of post-secondary education forever. The most obvious change was the rapid enrollment of older students from diverse socioeconomic backgrounds. American higher education would never again be the preserve of the elite. Second, the curriculum was transformed. Returning veterans studied business, engineering, and other professional disciplines. The role of liberal arts declined. Third, the influx of

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veterans required a major expansion in infrastructure and triggered the growth of graduate education to train a new cohort of college educators. Fourth, the GI bill instituted a voucher system whereby veterans could spend their entitlement at the college of their choice. This approach to student financial aid has become a model for many programs since. Finally, the success of the GI bill helped cement the connection between higher education and national defense in the public mind. Most historians view the GI bill as a cornerstone of American’s emergence to preeminence as a world leader in the last half of the twentieth century.

16.2.3 Policy, Program, and Project Outcomes Analysts also draw a distinction between policy and program outcomes. As we saw in chapter 11, programs are an instrument or technology of policy production. Programs are more or less the assembly lines of policy production. Policies can be, and usually are, delivered by means of multiple, often overlapping programs. Thus, it is important to distinguish between policy outcomes—which result from broadly based, long-term policy objectives—and program outcomes—which result from component programs with narrower outputs, outcomes, and objectives that combine to generate policy results. The first component is called policy outcomes. These indicate the effectiveness of government policies in achieving the basic goals of a nation; a state, province, region, or county; or a community. For example, economic policy outcomes include unemployment rates, inflation rates, poverty levels, and trade balances. Environmental policy outcomes include public health, air and water pollution levels, soil erosion, and the like . . . Program . . . outcomes indicate the effectiveness of government programs, strategies, regulations, or other activities at achieving the desired policy outcomes . . . One program outcome goal, for example, might be to place 80 percent of all participants in a government-training program in jobs. If that goal is achieved, it will contribute to the policy outcome goal of lowering unemployment.11 The relationship between policy and program outcomes is illustrated in Figure 16.6. Figure 16.6

Policy and Program Outcomes SCOPE SCOPE

Program 1 Outcomes _ Policy Outcomes

Program^ Outcomes Program3 Outcomes

Short-Term Outcomes

Mid-Term Outcomes

Long-Term Outcomes

TIME

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The Office of National Drug Control Policy (ONDCP) has been tasked by Congress with leading the president’s “war on drugs.” To accomplish the policy objective of reducing both the demand for, and supply of, illicit drugs, ONDCP seeks to coordinate the activities of dozens of programs in nine federal departments and independent agencies. It is the job of ONDCP to ensure that all these program outcomes contribute—in one way or another—to producing a single overriding policy objective. While few policymakers have as broad a portfolio as that of the president’s “drug czar,” many must synchronize the outcomes of multiple programs in order to achieve their policy objectives. Many, or perhaps even most, public policies involve complex networks of coordinated policy programs, outputs, and outcomes. The relationship between program and project outcomes is different, however. As we saw in chapter 11, programs often use projects as the technology for delivering outputs. Projects divide the continuous delivery of program outputs into discrete packages of tasks. Each of these tasks has a start, finish, and duration, with defined outputs or deliverables. For each program, therefore, there are typically several projects. Moreover, projects deliver results in batches, as shown in Figure 16.7. Figure 16.7 Program and Project Outcomes

SCOPE

Project Outputs & Outcomes

Program S

S S S S S S S

S

S

S S

S

S S

S S

Outcomes S S

Start Finish

Short-Term Outcomes

Mid-Term Outcomes

Long-Term ' Outcomes

TIME

Even though projects deliver outputs in batches or discrete bursts, project outcomes can be as enduring as those of any program. Once completed, large-scale construction projects can lead to outcomes that last for centuries. The Hoover Dam, the Manhattan Project, and the Yucca Mountain Project for nuclear waste disposal are all projects that will keep producing outcomes for centuries. While few projects are as large or enduring as the Hoover Dam or the “Big Dig” in Boston, policymakers must—or at least must try to—coordinate project, program, and policy outcomes. 16.2.4 Outcomes and Policy Outputs As we saw in chapter 15, drawing a distinction between outputs and outcomes—especially shortterm outcomes—is not always easy. A General Accounting Office (GAO) study identified some of the problems that administrators have in separating outcomes from outputs. “Respondents found

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that, at the most basic level, defining the specific outcomes desired for their program was difficult to accomplish . . . Some said that defining outcome measures required administrators to change from thinking on a day-to-day basis to taking a long-term perspective on what they wanted to accomplish . . . More generally, some respondents observed that ‘outcome’ seemed to be a fuzzier concept than ‘output,’ difficult to think through and specify precisely.”12 For example, for service programs, customer participation may be treated either as an output or short-term outcome, depending on the program design. For example, “if attendance is mandatory, the number participating would, at best, be output information. For programs in which participation is voluntary, and which include activities aimed at attracting customers. . . participation can be categorized as [a short-term] outcome because it depends on the program’s ability to attract participants. Similarly, the program’s ability to retain participants until the activities are completed is [a mid-term] outcome. Completion is more important than participation because it indicates that the activity has been sufficiently attractive for customers to have stuck with it until the training program’s end.”13 Outputs shade into outcomes to the extent that target populations, not service providers, control rates of participation. Thus, prison populations are output measures—the “customers” are literally captives. Colleges and universities present a more complicated situation. While rates of application are outcomes of college recruiting efforts, graduation rates are generally considered output measures, because colleges and universities can indeed loosen standards and “dumb down” curricula to make it easy for students to get a degree. At the other extreme, community outreach and drug rehabilitation programs often treat attendance and completion rates as outcome measures because they depend on decisions made by the target population. The customer is in the driver’s seat. In addition, some concepts, like the quality of service delivery, are inherently ambiguous. Is quality an aspect of what a program does (output) or a measure of program accomplishments (outcome)? The short answer is that it depends on the program. “[Q]uality, unlike quantity (units of service) tends to be more elusive and is defined differently depending on one’s perspective. In business and industry, customers have tended to be the final arbiters of what constitutes quality. . . . In human services, customer (client) perspectives are important but are not the sole criteria for determination of quality.”14 If quality measures are based on external standards, whether voluntary or government mandated, then they are usually considered to characterize outputs. This is true for many government service programs where formal standards developed by professional groups or government authorities are often used to measure program outputs. However, if quality characteristics are measured based on actual customer feedback, then they are usually treated as (short-term) outcome measures. Thus, responsiveness and accessibility could be measured based on established criteria (output measures) or customer surveys (outcome measures). Since public policy often delivers burdens rather than benefits, customer satisfaction is often a questionable measure of policy outcomes. Criminals are hardly the best judges of the performance of police departments, and the Internal Revenue Service would cease operating if it relied on customer satisfaction as a final measure of service quality. Quality management in government is a different animal altogether from that espoused and practiced in private industry. The main point is that quality can be either an output or an outcome of public policy programs. The distinction lies in the details of program design. 16.2.5 Outcomes and Policy Inputs In chapter 4 we explored the relationship between policy outcomes and policy inputs. There we introduced Aaron Wildavsky’s insight that “policy is evermore its own cause.”15 Policies generate

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outcomes that lead to new conditions and problems. The more policymakers change the world, the more changes must be made to the world. “I have been arguing that policies feed on each other; the more there are, the more there have to be in order to cope with new circumstances, effects on other policies, and unexpected consequences.”16 Every policy solution results in outcomes that affect other policies, with impacts far beyond the scope of the original policy. The bigger the problem, the more likely it is that policy solutions and their outcomes will compete or conflict with neighboring policies. “[B]ig problems usually generate solutions so large that they become the dominant cause of consequences with which public policy must contend.”17 New Deal programs to aid the elderly and children became social entitlements that have transformed the culture of American society. The interstate highway system begun in the 1950s sped up the decay of the inner cities and contributed to suburban sprawl, air pollution, and health problems such as asthma. The policy outcomes of today become the policy problems of tomorrow. Policymaking, as we show in our model, is an endless cycle of problems, production, outputs, and new problems. Policymaking is a circular, not a linear, process, as we show in Figure 16.1 and elsewhere. This view of the policymaking process also leads policy analysts to look backward in order to see forward. “To understand where future policies are likely to lead us, we need to know about past policies. For, as policy becomes its own cause, the future problems in which we are increasingly interested are a response to our past solutions.”18 If policymaking is cyclical, then policy analysts must retrace the cycles of the past in order to understand the present and manage the future. Policymakers, as we have argued, do not generally calculate the best solution, they take past solutions and recycle them. This strategy is the best cure for the myopic view that “policy as its own cause” is a recent phenomenon—a product of the twentieth-century administrative state. Just because there are more policies and many more policymakers does not necessarily mean that individual policies have a greater impact on the lives of the American people. Indeed, just the opposite is true. Public policy has always played a formative role in American society. As contemporary economic and social historians have demonstrated, the economic institutions and social problems of nineteenth- and twentiethcentury America were artifacts of public policymaking, not the products of impersonal forces or “natural law.” American society was and is a product of manmade laws and public policies. The industrial behemoths of twentieth-century America did not emerge on their own. Their very organization and rapid growth were the intended—and unintended—results of both state and federal legislation.19 The fewer the number of public policies and policymakers, the greater the potential impact of any individual policy solution on American society. The more complex the web of policy programs and attendant outcomes, the less the potential impact of any policy outcome. Policy may evermore be its own cause, but the net effects of policy outcomes are evermore diminished. The proliferation and interdependency of policy outcomes dampens or attenuates change.20 For those worried about the intrusion of government policymakers into the lives of American citizens, Wildavsky’s axiom should serve as a source of comfort, not alarm. Today’s outcomes do indeed become tomorrow’s inputs, but the end result is continuity, not disruption, evolution, not revolution. 16.2.6 Designing Policy Outcomes The outcomes that policymakers want to happen are a policy’s objectives. However, the potential outcomes resulting from any policy output are infinite and mostly irrelevant. Taxpayers on their way to mail their tax returns do get run over by cars or run into other taxpayers in cars, but few

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would consider such random events relevant policy outcomes. Policymakers cannot foresee all possible outcomes that flow from the delivery of policy outputs. So, they must decide what potential outcomes are relevant and monitor and track them. Figure 16.8 shows how policymakers identify a limited number of outcomes to track program results. Figure 16.8 Program Outcomes

SCOPE Program

Outcomes

TIME

Short-Term Outcomes

Mid-Term Outcomes

Long-Term Outcomes

The darts represent desired outcomes, or program objectives. Short-term, mid-term, and long-term policy objectives should be connected or linked. As we saw in the discussion on program logic models in chapter 11, there should be a logical “if-then” relationship between the different outcomes that a program is designed to generate. Outcomes need to be linked in sequences.21 If antidrug ad campaigns are designed to change the attitudes of viewers, then these short-term changes should influence the mid-term behaviors of viewers and their peers and eventually lead to reduced drug use and trafficking in the community at large. The important point is that policy and program objectives should be translated into the kinds of outcome sequences shown in Figure 16.8. However, policymakers and program architects should also consider potential outcomes other than those associated with policy objectives. “Are there any potentially bad consequences or effects associated with the program that should also be monitored? If these can be tracked on a regular basis, they should be included as outcomes.”22 In Figure 16.8 we represent these outcomes as plain targets located on the periphery of policy outcomes. Bad things—or more precisely, undesirable things—happen as a result of nearly every policy. Every policy involves trade-offs between benefits or burdens and costs or risks. Every policy has undesirable consequences. Thus, good policy design mandates consideration, monitoring, and management of undesirable outcomes. Reducing air pollution or international trade barriers may cost money and jobs. Unless policymakers track unwanted as well as wanted outcomes, it is difficult to evaluate the net effects of any policy solution. Obviously, policymakers must choose which outcomes to track. The question is, how? Since policymakers can and are being held accountable for delivering results, two criteria tend to dominate the selection of policy or program outcomes:

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Are the outcomes and their indicators likely to demonstrate success in reaching policy objectives? Do the outcomes matter to the people that matter to the policymakers?

In the first instance, policymakers need to show that they can make a difference. As we indicated at the beginning of this text, Americans expect policymakers to get things done. They prefer that policymakers do the “right” thing, but at a minimum they expect something. Action of just about any kind is better than inaction. Thus, American policymakers must demonstrate results. Of course, the easiest and safest way to show results is to focus on outputs. That is, to trumpet miles of roads paved, jobs created, or business loans provided. Since policymakers control outputs, they would prefer to be held accountable for what they can deliver directly. Outcomes, in contrast, are always riskier, because they depend on the attitudes and actions of the public. If the roads exacerbate congestion, if the jobs are dead end, or if the loans are not repaid, then performance will fail to meet promise. If policymakers are held accountable for what happens and not just what they do, then they prefer short-term outcomes that they can reliably affect versus long-term outcomes that are largely influenced by factors beyond the control of the policymaker. Drug rehabilitation or crime prevention programs can easily demonstrate local and immediate successes, but longer-term measures of participant recidivism or reduction in local crime rates are only marginally affected by such programs. The longer the time frame and the broader the target population, the more outcomes are shaped by external factors or events beyond the policymakers’ control. The longer the chains of cause and effect, the weaker the links. While policymakers often invoke such long-term outcomes as improved security or reduced health risks, claiming success in such endeavors is as much a product of luck as of effective policymaking. The second criterion asks, for whom is the difference made? In other words, to whom are policymakers accountable? Policy outcomes not only happen to people, they happen for people. We will examine the second criteria in greater detail in Section 16.3. 16.2.7 Outcomes and Impacts Policy and program outcomes are (some of) the measures of performance for public policymakers. Outcomes are forward-looking—they measure what should and could happen as a result of policy outputs. Policy impacts, on the other hand, are “the extent to which the program actually caused particular outcomes.”23 Impact analysis looks backward, that is, to determine how much of what actually happened was caused by the policy output. Impacts are successful policy outcomes seen through a rearview mirror. “[A]n indicator of impact would be labeled something like the following: Number of expectant teenage mothers who, because of the program, had healthy babies. (Without the program, they would have lost their babies or had babies with substantial health problems).”24 Outcome measures tell what changes you sought to make and whether or not—in retrospect—you actually succeeded. Impact measures tell you in retrospect how much of what happened was caused by the program. Outcomes assume cause and effect; impacts evaluate how much cause and effect. 16.2.8 Impacts and Time How do the impacts of public policies unfold over time? Or more simply, how does change work? In the preceding discussion we saw how the scope of policy outcomes typically expands over time. Policy outcomes tend to diffuse from individuals to broader social groups and spill over into areas

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only marginally related to policy objectives. Efforts to stem the flow of drugs from one source lead to increased flows from other nations. Programs to assist the children of women in poverty lead to declining rates of marriage and increased rates of children born out of wedlock. Policy and program outcomes spread out over time. However, the scope of policy impacts is not the same as the intensity of a given impact. The breadth or scope of change is often inversely related to the amount of change. While government price supports may have a significant impact on milk producers or peanut farmers, the impact on local communities or the consuming public may be relatively minor. Moreover, change does not happen all at once or evenly over time. Some impacts take longer to emerge. Thus, the study of policy outcomes involves an implicit or explicit theory of change—that is, a model of when and how change happens. Lester Salamon has explored the relationships between change and time in policy outcomes.25 Salamon identifies three different types of policy impacts. • The letdown effect occurs when the initial impact of a policy output wears out over time. The changes in behavior caused by the policy output are temporary and diminish over time without additional reinforcement. Drug addicts respond to treatment programs but eventually make their way back to the street and old habits. Drivers slow down for a few minutes after passing a speed trap. Corporate CEOs lay low until the wave of public indignation and prosecutorial zeal wanes. Public policies make an initial splash but succumb to the forces of time and inertia. • In contrast, latent effects are “apparent during a program’s operation but . . increase with the passage of time as the program’s impact sinks in.”26 Compliance with recycling or seat belt laws is spotty at first but gradually improves over time. • Sleeper effects only appear long after a program begins. “Here program effects are unlikely even to make their appearance for many months or years.”27 Early-childhood education programs or affirmative action programs advantage the children or grandchildren of the target population, but the effects of these initiatives take a long time to identify. Sleeper effects emerge only in the long term. Figure 16.9 shows the changes in impact of these three types of policy effects over time. Figure 16.9 Time and Policy Impacts IMPACT

"Letdown" Effect "Latent" Effect "Sleeper" Effect

Short-Term Outcomes

Mid-Term Outcomes

Long-Term Outcomes

TIME

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Salamon argues that different program designs produce different patterns of policy impacts over time. He contrasts two theories of program design with respect to policy outputs and outcomes. “The first identifies changes in the skills, attitudes, or outlook of identifiable program participants as the key to desired program effects. The assumption here is that something about the individual himself is wrong or in need of improvement . . . [T]he second type stresses the need for changes in the social conditions in which these individuals find themselves. Under this theory, societal conditions and structures are identified as the obstacles to desired results and programs are designed to alter these conditions in the expectation that individual behavior will respond in due course.”28 Programs that attempt to provide the target population with particular skills or information are likely to produce letdown effects, since skills or information tend to disappear without constant reinforcement. The effects of education or training fade over time. Programs seeking to change the values or behavior of the target population tend to produce latent effects, because it takes time to make such fundamental changes in individual members of a group. Thus, antidiscrimination programs take years, perhaps decades, to take hold. Finally, programs “that focus primarily on changing the external social and political conditions confronting program participants are more likely to have significant sleeper effects.”29 Rural electrification, urban renewal, and information superhighway programs all have generated long-term consequences only dimly imagined by their advocates and architects. Program design and policy impacts are intimately related. 16.3 OUTCOMES FOR WHOM? WINNERS AND LOSERS In the previous section we examined the What of policy impacts. Here we focus on the Who. In chapter 15 we defined the target population as that class or group of individuals for whom the benefits or burdens of public policy are intended. In the language of commerce, the target population consists of the “market segment” or potential consumers of policy outputs. However, public policies and public policymaking affect a much broader group of individuals than just the target population. We must consider the Who of policy outcomes from at least two perspectives: • •

Who are the actual—as opposed to intended—beneficiaries of policy outputs? (See Section 16.3.1) What groups are affected by the policymaking process in its entirety? (See Section 16.3.2)

16.3.1 Targets Versus Recipients The first question is the narrower one. Does the policy work as designed? Do the target populations actually receive the benefits or burdens? Are the targets truly the recipients? These questions are not academic. Indeed, they form the basis for judicial evaluation of policy programs. In American policymaking, courts are frequently asked to render judgments on the fairness of policy programs. In particular, they must decide whether or not the classification of a target population is fair and equitable as a matter of public policy. Thus, judges must evaluate the degree to which a classification of beneficiaries succeeds in treating similarly those similarly situated. “A reasonable classification is one which includes all persons who are similarly situated with respect to the purpose of the [law].”30 This perspective requires consideration of the purpose of the law as well as the properties of the class of eligible beneficiaries. Beneficiaries actually consist of two

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populations, those eligible for, and those actually receiving, the benefit. “We are really dealing with the relation of two classes to each other. The first class consists of all individuals possessing the defining Trait; the second class consists of all individuals possessing, or rather, tainted by, the Mischief at which the law aims. The former is the legislative classification; the latter is the class of those similarly situated with respect to the purpose of the law.”31 The key issue is the fit in distributing benefits between those who are eligible and those who are recipients. As illustrated in Figure 16.10, there are five possible combinations to be considered in constructing the relationship between eligible and recipient beneficiaries. Figure 16.10 Relationships Between Eligible and Recipient Beneficiaries

#1

Perfect Fit

#2 Perfect Mismatch

#3 Underinclusion

#4 Overi inclusion

Eligibles

Eligibles

Recipients

Recipients

Eligibles

( Eligibles Recipients

#5 Partial Mismatch Eligibles Recipients

Recipients

Adapted from Joseph Tussman and Jacobus tenBroek, “The Equal Protection of the Laws,” California Law Review, 37 (1949): 341-381.

Questions about the fit in delivering policy outputs to beneficiaries arise frequently, often in the form of lawsuits by disgruntled potential, but excluded, beneficiaries. The best-developed analyses of this aspect of classification are found in the legal literature on equal protection. In only a very few policy domains do courts demand that policymakers approach the ideal of a perfect fit (#1 in Figure 16.10) between the class of eligible beneficiaries and those actually receiving benefits. This standard is termed narrow tailoring in legal jargon. An example would be when only those criminals actually committing murder receive the death penalty. Similarly, as illustrated in diagram #2, policies where no eligible beneficiaries actually receive benefits or no actual recipients are eligible are perfectly mismatched. Here, using the same example, only the innocent are executed. Diagrams #3, #4, and #5 in Figure 16.10 offer much more realistic and common, if complex, cases for policymakers and courts. Diagram #3 illustrates the problem of underinclusiveness, arising when some, but not all, of those eligible receive benefits. Expanding on the example above, many may commit murder, but only some are caught and executed. Underinclusiveness may be less problematic than overinclusiveness (diagram #4). Policies that are overinclusive provide benefits or impose burdens on some who do not meet criteria of eligibility. In our example, this would mean applying the death penalty to some who did not commit murder. Finally, diagram #5 illustrates problems of a partial mismatch, including both underinclusiveness and overinclusiveness. Here, some murderers escape detection and punishment, while some innocents are convicted of murder and executed.

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Perfect congruence in ensuring that all those eligible receive benefits is rarely attainable, whether by legislators in designing legislation or by program managers in refining delivery systems. The issue for policy designers is always one of what is a permissible margin for error. The greater the expected congruence between eligibles and recipients, the more procedures are imposed during production and delivery. In many policy domains, courts usually defer to the discretion of legislators and to the statutory authority delegated to administrators to determine the fit between those eligible for and those receiving the benefits or burdens of policy. In legalese, courts simply require that the purposes of legislation be “reasonably” or “rationally” related to its output and impact on beneficiaries—a very broad standard. This inevitably leads to the question of linkages between beneficiaries and benefits. Only in relatively few policy domains, such as affirmative action and voting, do the courts scrutinize closely the margin of error between eligibles and recipients. Thus, the first question compares the design of policy outputs to policy outcomes. Do the eligible members of the target population actually receive the intended benefits or burdens? Do the elderly poor actually receive prescription drug benefits? Do family farmers really receive relief from the estate tax? Do disaster victims really get aid? Do policies actually deliver the goods or “bads” to their intended targets? Does the policy work as designed? 16.3.2 Policy Stakeholders The second question—Who is affected by the policymaking process as it unfolds—is far broader in scope. So far we have defined winners and losers in the narrow, technical sense—that is, who actually receives the benefits and pays the cost of policy outputs. When policy analysts examine the benefits and costs of public policies they almost always focus exclusively on target populations and actual recipients. They focus on results. However, recipients are not the only winners and losers in the policymaking process. There are many people who benefit from the process regardless of the specific outputs or actual outcomes. There are many people who have a stake in public policymaking. Stakeholders are individuals, groups, or organizations that have an interest in or are affected by a policy or policy program.32 As such, stakeholders are involved not only in policy outcomes but also in the policy process that results in those outcomes. Policy entrepreneurs, policymakers, and target populations often benefit as much from the process as from the results of the process. Just as policy has become its own cause, the process generates its own reasons and causes, winners and losers. The process feeds on itself. Whether successful or unsuccessful, paid or unpaid, stakeholders benefit from the making of public policy. As we emphasized in chapter 4, the calculus of stakeholder interests is one of the features that distinguishes the study of public policymaking from policy analysis. Politics matters. In chapter 3 we identified four sets of actors corresponding to the four phases of the policymaking process: • • • •

Policy entrepreneurs—inputs Policymakers—production Target populations—outputs Winners and losers—outcomes

Let’s briefly survey how each set of actors benefits from the process itself. Policy entrepreneurs are the individuals, groups, or organizations that define policy problems

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and advocate policy solutions. Crafting problems and solutions is what policy entrepreneurs do for a living. It’s their vocation. So policy entrepreneurs benefit both professionally and personally when they succeed in getting problems and their solutions on the public agenda. Whether their specific policy objectives are achieved is often less important than being part of the process. In the hypercrowded and hypercompetitive arenas of public policymaking, nobody wins every battle, everybody loses sometimes. And losing a few rounds often helps transform localized or transient problems into enduring issue networks. Therefore, policy entrepreneurs must keep their problems or solutions in play until a window of opportunity opens and the stars line up just right. “Being there”33 is what really counts. Policymakers, of course, are the individuals, groups, or organizations responsible for policy production and accountable for policy results. For the most part, policymakers are paid to make policy. It’s their job. It is in the policymakers’ interest to make policy, regardless of whether or not society as a whole or the target population in particular benefits. Indeed, some scholars have based entire theories of bureaucracy on the premise that bureaucrats are maximizing their welfare at the expense of the public’s.34 And policymakers may view outcomes in quite a different light from intended or actual beneficiaries and policy entrepreneurs. From a policymaker’s perspective, getting contentious problems off the legislative agenda may be a more important outcome than the actual outcomes of policy initiatives. Welfare reform in 1996 and prescription drug benefits in 2003 were motivated as much by the desire to remove these issues from the campaign trails as by substantive policy objectives. In the short term, policymakers are judged on outputs rather than outcomes. The public can see the outputs of public policymaking, but the outcomes often take longer to emerge. Thus, making policy is often more important than the policies made. Policymakers focus on producing policy outputs and worry about policy outcomes later. Target populations are also stakeholders in the process. They can be winners even if they never receive their promised benefits. Public policy is public, which means that the distribution of benefits to one group rather than another is a matter of public concern and public values. Within the realm of public policy we are citizens, not merely consumers. Policymakers are—in theory at least—our agents or representatives. We are all participants in decisions to reward some groups and punish others. Hence, the designation of some groups as more or less deserving carries much more weight than decisions by businesses to provide products to one market segment versus another. Public benefits are judged by uniquely public standards of fairness, equity, and justice. As a result, the designation of target populations both reflects and recasts the normative order of American society. If one group is rewarded, why not others? If Holocaust survivors deserve compensation, why not victims of Japanese internment camps, or descendents of slaves? If policy benefits are distributed to African Americans as a group, why not to Hispanics or Asians or other minority groups? In the arena of public policy, everybody is implicated when some are singled out. Public recognition of a target group is its own reward. Target groups often win simply by being part of the policymaking process. Finally, both winners and losers have a stake in the process. Those benefiting from public policy gain resources to lobby for additional public benefits. Entitlements beget more entitlements, rights beget more rights, and tax breaks help pay for more tax breaks. Winning can be contagious. Similarly, losers have a greater incentive to invest in the process or risk losing again the next time around. Groups on the losing side of issues are often far better mobilized than those on the winning side. Losers usually have a greater investment in the process than winners. Therefore, all four types of actors—policy entrepreneurs, policymakers, target populations, and recipients—benefit from the process per se. Even when they lose a battle, they can gain by being a player in the game.

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1 6 . 4 E VA L UA T I N G O U T C O M E S Now we move from the Who of policy outcomes to the What. Previously we examined the What of policy outcomes from a design perspective. How do policymakers envision outcomes looking forward? Now we approach outcomes from a historical or evaluation perspective. Looking backward, what happened? If real-world outcomes are how we judge the success or failure of the policymaking process and its products, by what standards do we evaluate outcomes? There are many ways to judge outcomes.35 16.4.1 Intended Versus Unintended First of all, we can ask if the outcomes match the goals or objectives of the policymakers. Were the consequences intended36 or unintended? Did we get what we wanted? The answer is, frequently, not quite. The gap between intended and unintended outcomes often becomes more apparent with the passage of time. Two examples shed light on this question. From a policy perspective, Columbus’s voyage was intended by King Ferdinand and Queen Isabella to find a sea route to the riches of India. His discovery of America was unintended. The hydroelectric dams harnessing the waters of rivers in the Pacific Northwest were intended to and did bring cheap electricity to the region. Their effects on salmon runs and the regional fishing industry were not intended. 16.4.2 Anticipated Versus Unanticipated Second, did the policymakers anticipate the impacts of the policy process? Were the results anticipated or unanticipated? While intent goes to the purpose of action, anticipation involves the ability of a policymaker to see the possibilities inherent in the future. While one would question the sanity of a policymaker who intended an outcome that was not anticipated, foreseeing the unintended consequences of policies is a highly valued trait. Despite safety regulations, accidents happen, and wise regulators take measures to anticipate the inevitable failures. True policy fiascoes, like the explosion of the Challenger space shuttle, occur when bad things happen that are both unintended and unforeseen.37 16.4.3 Primary Versus Side Effects Third, were the effects within the targeted scope of the policy—that is, primary effects38—or were they by-products, or side effects? Everyone understands the concept of side effects when applied to prescription or over-the-counter drugs. Policies, too, can have side effects, as when construction of a nuclear power plant threatens the health of nearby residents or the survival of endangered species. Indeed, nearly the whole domain of environmental regulation is involved in calculating and managing the side effects of human activities. While side effects may be either anticipated or unanticipated, the question of intended side effects has troubled students of human behavior for centuries. For example, concerns over public safety at Department of Energy nuclear facilities led to the shutdown and cleanup of some of these facilities—a policy effort that resulted in increased levels of employment. Were additional jobs for local communities merely an unintended side effect of the new shutdown and cleanup policy, or actually an intended result central to at least some of those involved in the policymaking process? The short answer is that it depends upon who was doing the intending. The distinction between main effects and side effects is clearly in the eye of the beholder.

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16.4.4 Beneficial, Perverse, or Null Effects Fourth, what are the consequences—positive, negative, or neutral—with respect to the policy’s objectives? If the policy is to reduce the use of illegal drugs, did the policy actually have the perverse impact of increasing drug use, or perhaps no impact at all? Setting aside the difficult issue of linking cause and effect in any sphere of human endeavor, intended effects may be: • Beneficial—the results advance the goals and objectives of the policymakers. Of course, every policy has many parents, and the goals and objectives may be ambiguous, vague, conflicting, or absent. Or, we may disregard the intentions of the policymakers and evaluate the results based on the needs or views of the policy’s immediate clients or, indeed, of the society as a whole. Nonetheless, policies that make improvements in some way, be it creating cleaner water, safer food, or longer life spans, may be said to be beneficial. • Perverse—the results contradict the goals and objectives of the policymakers or harm the policy’s clientele. History is replete with examples of policies that backfire—urban renewal programs that increase urban decay and military interventions that bring chaos, not order. • Null—the results demonstrate no impact whatsoever from the policy in its targeted area. In such cases the policy solution has no effect on the problem. Although most solutions have some, often less sweeping, effects on the problems they are designed to remedy, examples of null effects can be found. The Maginot Line, a line of impregnable defenses on the French-German border, did nothing to prevent Germany from invading France via Belgium in the Second World War. Pressman and Wildavsky’s classic study of a federal program to expand employment opportunities for the chronically disadvantaged in Oakland, California, describes a program with almost no impact on the target population.39 The complex relationships between these multiple types of outcomes are summarized in Figure 16.11, modified from an original by Evert Vedung. Figure 16.11 Standards for Evaluating Policy Outcomes POLICY OUTCOMES Intended

Unintended

Anticipated

Unanticipated

"Primary Effects" (In the Target Area) Beneficial

Intermediate

Null

Perverse

"Side Effects" (Outside the Target Area) Beneficial

Perverse

End

Adapted from Evert Vedung, Public Policy and Program Evaluation (New Brunswick, NJ: Transaction Publishers, 2000).

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All these criteria for evaluating policy outcomes look backward to some antecedent condition. In most cases, this precursor involves the goals, objectives, and intentions of the people who assembled, produced, and delivered the policy. This view is based upon what Evert Vedung has called the “goal attainment” approach to policy evaluation. But policy outcomes need not be judged based on antecedent goals, if indeed these goals can be discovered. Policy outcomes can also be measured against the prior condition of the policy clientele, or indeed of the society as a whole. This second view seeks to determine not if goals were met, but rather if people are better off as a result of the policy. Nevertheless, both models assume that there is some form of causal relationship between precursor and outcome. A policy outcome must happen afterward and as a consequence of some prior policy product or event. Obviously, external factors outside of the control of policymakers also enter the fray. Things happen. Acts of God, in combination with the artifices of man, combine to thwart the best-laid plans and actions of policymakers everywhere. Thus, in the best of cases, evaluating policy outcomes is as much an art as a science. 16.4.5 Policy Failures Sometimes the evaluation of a policy or program is relatively unambiguous—it was a fiasco. When and how does the public come to the conclusion that the policymaking process failed? The answer depends, in part, on events or triggers and, in part, on how stakeholders interpret and define them. The past two decades have seen an “apparent increase in policy fiascoes in most Western democracies.”40 Such growth may be expected, given the ubiquity of public policy. As governments try to do more, “there is simply more and more policy to go wrong.”41 The irony is that the many successes of public policy breed expectations for more and better government action. Demand is fueled both by achievements and by failures and fiascoes. However, failures attract more attention than successes. Policy failures differ from fiascoes by orders of magnitude. Failures are ordinary, a common policy outcome, at least from the narrower perspective of program goals, performance standards, program evaluation, and social expectations for policy. The absence of an effective antiballistic missile shield after two decade and tens of billions of dollars is a classic example of a policy failure. So too are the persistent gaps in educational achievement by low-income and minority children. Policy fiascoes, on the other hand, are more spectacular. They are negative events viewed by influential sectors of public opinion as “at least partially caused by avoidable and blameworthy failures of public policymakers.”42 The response to Hurricane Katrina is viewed by nearly all as a fiasco. The distinction between the two terms is made in the forum of public opinion. From the Vietnam War and the explosions of the Challenger and Columbia space shuttles to chronic budget deficits and enduring homelessness, the litany of policy fiascoes and failures is long and growing. Failures and fiascoes especially may be understood through several lenses: • • •

The effects, or resulting damages from a policy The causes, or what led to these consequences The blame, or who is responsible

First, both the impacts and our understanding of policy consequences change with the passage of time and events. Policies viewed as failures in the present may produce substantial benefits in the longer term, or vice versa. How do we assess the damages from higher energy

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costs in the present against the expansion of production capacity and reduction in the price of energy in the future? Judgments about damages also change as public opinion reinterprets events and policy meanings. The internment of Japanese American citizens in the name of national security interests during World War II is now viewed as a policy fiasco, regardless of military justification. The second lens involves untangling the Gordian knot of causation in policy production. The frustration of sorting out authorities, activities, procedures, personalities, and timing often makes the reconstruction of events leading to fiascoes and failures next to impossible. Why, for example, did New Orleans flood? Was the storm surge too great or were the levees poorly designed and constructed? There are many causes for fiascoes or large-scale failures and just as many competing explanations. The last, and most political, lens involves attributing responsibility. That is, was the error one of misfortune, and therefore excusable, or one of mismanagement, and therefore subject to blame? Such determinations are the stuff of political drama and national catharsis. It is policymaking as good versus evil. Assigning blame may be functional, however. It can be a form of collective judgment that may be used to delegitimize the old and create new opportunities to get it right. Crises make problems graphic. They are mechanisms that grease the skids of policy change.43 Linking crises to failures and fiascos creates platforms for action. Policy fiascoes challenge modern sensibilities about our capacity to control our physical, economic, and social environments and our tolerance for risk and misfortune. They also drive a growing disenchantment with government and its capacity for problem solving. Yet, policy failures and fiascoes offer a continuing source of policy demands, grist for the mills of stakeholders seeking to define problems to their advantage in the continual cycle of production. The more interesting problem may be how we construct our understanding of policy failures and fiascoes. 16.5 POLICY OUTCOMES AND POLICY PERFORMANCE As we have emphasized throughout this text, American public policymaking has always been about getting results, about getting things done. While Americans do care about how things get done, they value success above all. They want problems solved and worry about means and methods usually when solutions fail. As long as the corporate executives and policymakers of the 1990s produced soaring stock prices and a roaring economy, the public cast a blind eye to the shady dealings and creative methods. It is when the boom goes bust that the public holds public figures responsible for process as well as results. It is this pragmatic view of the policymaking process that enables generation after generation of American public policymakers to experiment with new technologies and techniques of turning promises into results. However, pragmatism as a culture is a far cry from performance-based policymaking as a methodology. Building outcomes, especially measurable outcomes, into the policymaking process is no mean feat. While modern technology has made it possible as never before to capture, collect, analyze, and disseminate information on outcomes as diverse as racial profiling and global warming, harnessing this flood of data to the policymaking process is another matter entirely. Now that we can measure individual, social, economic, and environmental outcomes, the real question is, what outcomes do we want to be held accountable for? Do we want to measure the success of our schools based on the outcomes of standardized tests of student achievement? If so, then what kind of achievement, which tests, and whose standards? To what kinds of outcomes should the Internal Revenue Service be held accountable? If the Securities and Exchange Commission

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does not convict anybody for crimes, is it a sign of successful prevention or failed investigation? Outcomes are in the eye of the beholder. Turning American pragmatism into performance-based policy design and management opens up a Pandora’s box of competing and often contradictory social values and perspectives. Finally, performance measurement and management make life difficult for public policymakers. Since outcomes by definition involve factors beyond the immediate control of public policymakers, linking policy goals to measurable outcomes is a double-edged sword. When policymakers tie their futures to outcome goals and objectives, they are putting their careers at risk. Hence, the discomfort and reluctance experienced by most policymakers when asked to measure success in terms of outcomes rather than outputs. Outcomes are always uncertain, subject to unanticipated circumstances and unforeseeable events. Outcomes turn policymakers into the playthings of fate.

CASE STUDY Tracking the Fallout—No Child Left Behind On January 8, 2002, President Bush signed the No Child Left Behind Act of 2001 (NCLB) into law.44 NCLB was passed by a bipartisan majority of both houses of Congress. It is the most sweeping reform to the role of the federal government in education since 1965. It is designed to end the achievement gap between disadvantaged and minority students and their peers with four strategies: stronger accountability for results, greater flexibility and local control, increased options for parents, and strengthening teachers and teaching methods that work. At least that’s what Americans were promised. A few years later we can begin to track short- and some intermediate-term outcomes from this massive injection of federal policy into the classroom. Some effects are already apparent. Others are surfacing. If experience offers any lessons, another group of outcomes can be anticipated, as opposition by educators gathers momentum. How this battle plays out and how the NCLB withstands pressure from stakeholders who are organizing to dilute, if not repeal it, are questions that will dominate the next decade of educational policymaking as the NCLB stimulates subsequent rounds of policymaking. In the next few pages we try to cut through some of the initial rhetoric surrounding the NCLB, to discern outcomes, both real and projected, of this legislation. Please remember—outcomes are often moving targets, dependent in part on the observer’s biases. Clearly, legislation of the magnitude of NCLB will have impacts that play out over several decades. First we begin with a brief description of the problem. The Problem—Money Down the Drain The NCLB is a reaction to years of no apparent progress toward improving American schools. Since 1965, when the first federal programs to improve education, especially in school districts enrolling poor and minority students, were launched, progress has been painfully slow. As a nation, we have more than tripled expenditures (in constant dollars) on education from an average of $2,275 to $8,259 per pupil per year over four decades. At the same time, average pupil to teacher ratios declined from 22.3 in 1970 to 15.9 in 2001, although much of this reflects staffing added for students with disabilities. Despite all these new resources, average

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reading scores for seventeen-year-olds have not improved much since the 1970s. Two-thirds of high school graduates now enroll in postsecondary education after graduation, but 60 percent of American twelfth-graders could not read at grade level in 1998. High school dropout rates, although declining in the 1970s and 1980s, stabilized in the 1990s. Those in the lowest income brackets are six times as likely not to complete high school as those in the highest brackets. More than 91.8 percent of whites and 94.6 percent of Asian Americans, but only 83.7 percent of blacks and 64.1 percent of Hispanics finish high school. We are spending more, but more is not necessarily better.45 Reforming schools is a tough nut to crack for federal policymakers. This is due, in large part, to how schools in America are organized. Education is a state responsibility. States delegate authority to school districts, as quasi-independent forms of local government, to provide (fund, organize, and manage) and to deliver (run schools) education on a daily basis. School districts are organized territorially, with local schools serving nearby neighborhoods. Local districts generate a substantial portion of their own revenues, usually from taxes on property located within their districts. Layered on top of this basic organization are federal programs for education, many of which seek to improve education for minority and disadvantaged students. Funding from the federal government, however, comprises only a small portion (6 to 9 percent) of all revenues for education and is accompanied by extensive regulations and paperwork. This institutional architecture means that the capacity of a school district to fund and deliver good education to its students is closely tied to the socioeconomic status of the community and populations it serves. It results in wide discrepancies in funding and in quality between local school districts and between states. In recent decades, states have assumed greater responsibilities for closing the gap in funding between rich and poor school districts, but with little impact on narrowing the gaps in achievement. State fiscal involvement has also been accompanied by growing state regulation and oversight. Most states have set standards for learning and many have already mandated some form of testing to measure students’ progress in districts across the state. Despite these efforts, there are wide variations within and between states in per pupil expenditures and in achievement. With respect to expenditures, the District of Columbia ($14,557) and New York ($12,343) spent the most per pupil in constant dollars while Utah ($5,294), Mississippi ($5,719) and Alabama ($6,327) spent the least in 2001-2002. The range of variation is greater than 2:1. However, money does not necessarily buy achievement. The District of Columbia, in 2003 ranked lowest in achievement (both in reading and math) followed by Mississippi, Alabama, and California. On the other hand, Massachusetts (seventh highest in expenditures) ranked highest in achievement whereas Utah (lowest in expenditures) ranked in the middle ranges for achievement in both math and reading.46 Student achievement depends on many factors other than money. The Solution—Standards, Tests, and Consequences NCLB enshrines a new solution. Borrowing heavily from beliefs about accountability for performance found primarily in the business world, it seeks to improve education by holding schools accountable for what students learn. It requires states to set standards and to measure how schools perform. It also imposes consequences for failure. As a condition for receiving federal funds, NCLB requires every state to establish a system for statewide accountability. Each state • •

Sets its own academic standards as to what its students should know in each content area Gathers specific, objective data through tests aligned with its standards

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Tests every child in reading and math in grades three through eight, as well as in one grade in high school Analyzes data on the achievement of all students as well as on the achievement of historically at-risk groups, specifically racial and ethnic minorities, English-as-a-second-language (ESL) students, economically disadvantaged students, and special education students Provides information on graduation rates and on students not tested Provides data about the professional qualifications of teachers Uses this information to identify strengths and weaknesses in each school district and to make improvements Provides information about these results to parents and communities annually

Yet, the NCLB goes well beyond mandating standards, testing, and the reporting of results. It imposes consequences with teeth. Schools47 not meeting state standards by not demonstrating adequate yearly progress (AYP) in meeting an overall standard of proficiency, encounter a set of escalating sanctions. • • • •

After two consecutive years, a school is labeled “in need of improvement.” These schools must allow students to transfer to other public schools and must support the transportation costs of those students After the third year, a school must subsidize the costs of tutoring and after-school help plus offer summer programming After a fourth year of failure, the school district can take any necessary action against individual schools not meeting standards After the fifth year, a school is to be closed and restructured

Similarly, school districts and states that don’t make AYP are also sanctioned. States may defer program funds from a district, reduce administrative staff, remove schools from a district’s jurisdiction, or permit students to transfer to other districts. States are required to produce annual public reports summarizing test results for each school and school district in the state. These must be available to parents and communities. States do not face penalties, however, from the federal government until 2013–14, when the Department of Education may withhold funds from states failing to meet the standards they set for themselves. The NCLB is built around a simple solution—accountability. It pursues one outcome, improved achievement, via two outputs—standards and tests. However, it also imposes consequences. NCLB is simply designed: test all students and, based on the results, sanction those schools whose pupils do not meet state standards. Finally, NCLB provides little or no guidance about how to improve school performance and student achievement. That is a matter for professional educators. Outcomes over Time Short-Term Outcomes In terms of short-term outcomes, what do we know? Immediately after NCLB was signed into law, states scrambled to develop content standards and accountability systems. Most states already had set standards. Some states that had previously implemented assessment systems sought waivers from NCLB requirements, while others quickly marshaled resources to meet new requirements. Strong reaction to the legislation focused

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on its costs, with the National Association of State Boards of Education estimating the costs of implementing testing programs at $7 billion over seven years. The NCLB allocated $400 million for states to develop accountability plans. State departments of education had to hire assessment experts to train employees in the areas of content standards, assessment, and data analysis. Teachers and school administrators, knowing little about the specific requirements of NCLB, also needed training. Most training concentrated on developing and interpreting content standards, on how to administer assessments, and on understanding and interpreting standardized test results. Some districts also trained teachers to teach test-taking skills. These measures expanded the capacity of states and local school districts to assess students’ learning. Mid-Term Outcomes In terms of mid-term outcomes, two years after the NCLB some results were apparent. In 2003–2004, 26,896 schools failed to meet their AYP goals, according to the National Education Association (NEA). This number dropped to 20,948 schools the following year—evidence that NCLB appeared to have led to higher test scores for students and fewer numbers of schools failing to meet AYP standards.48 The NEA identified three possible reasons for the declining number of schools failing to make AYP: • Federal rules changes. The Department of Education changed the rules on the testing of disabled students and English language learners so that fewer of these students were included among students tested. • Changes to state accountability plans. Several states modified their implementation requirements and raised the minimum number of students in each subgroup to be tested. This served to mask the performance of low-achieving students. • AYP threshold goals. Under the NCLB, states were required to raise standards “periodically.” States could therefore test against the same standard for several years. This led to better results in the second year of testing. However, the primary factor appears to be the wide variation in state testing standards. Ironically, many of the states with lower testing standards are those with the least number of schools facing sanctions. For example, under NCLB, Arkansas had no schools facing sanctions while the District of Columbia reported that only twelve of its schools faced sanctions. However, the results of the National Assessment of Education Progress (NAEP) tests tell a different story. NAEP is a broad-based, standardized national achievement test that offers a baseline for comparing student achievement across all fifty states. Students in the District of Columbia consistently ranked last on NAEP while students in Arkansas performed only at the national average. The District of Columbia and Arkansas performed well according to NCLB because of lower testing standards.49 In contrast many of the states with higher standards performed poorly under NCLB. Of the three states with the greatest number of failing schools under NCLB—Michigan (1,513), California (1,009), and Ohio (760—only California fell below national averages on the 2005 NAEP assessment, whereas Michigan and Ohio scored above national NAEP averages. Massachusetts, the state which scored highest on NAEP, was ranked eighth-lowest by NCLB standards. 50 These data point to important variations in state standards. While differences in numbers of failing schools might not be “real” by a common standard (NAEP), the sanctions faced by schools

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that fail to make adequate yearly progress are. As the sanctions required by NCLB begin to bite, states with higher standards face the temptation to dumb them down. Last, the Nation’s Report Card covering the first two-year period of NCLB (2003–2005) pointed to some progress across the nation as a whole. The same NAEP data found that, for fourth-graders, the national average score for reading rose by one point and for math by three points. For eighthgraders, the national average NAEP score for reading fell by one point, but rose by one point for math.51 The evidence for national progress in the first two years of NCLB is ambiguous. There is another possible reason for the appearance of improvement under NCLB. Teachers and students rather consistently appear to respond to measures of accountability. “Every state that has implemented test-based accountability has seen its scores rise. In some cases the rises have been dramatic.”52 The reasons for improved performance are not clear, however. Experts do not know whether gains are due to students working harder, improvements to classroom instruction, or teachers being more focused on subject matter covered by the tests. In several states substantial rewards are attached to success on state-administered achievement tests. Nonetheless, many expect average test scores to continue to rise, at least in the short term. Other evidence also points to problems, some of which may have potentially corrosive longer-term effects. For example, Houston, Texas, and New York City have already encountered major scandals. Students who could not meet the performance standards for entering high school have been pushed out of school early, thereby allowing high schools to maintain their ranking on proficiency standards and to avoid penalties for dropouts, also a required reporting measure. Other states, such as Massachusetts and Virginia, have had to wrestle with whether to let high school students who can’t meet minimum standards on assessment tests but have completed all required high school courses graduate. California has experienced inconsistent, even volatile, rates of improvement in achievement. Large gains in one year are often offset by little or no progress in the next. Then, there are issues associated with letting states set their own standards and develop their own tests. Several states, such as Kentucky and Texas, report far greater gains on state achievement tests than confirmed by performance on NAEP examinations. There is also initial evidence of unanticipated effects from the sanctions imposed on failing schools. Sanctioned schools report that the students who transfer out to higher performing schools are their top performers rather than their lowest achievers.53 Other school districts report problems from fraud and abuse to absenteeism in the growing markets for contracts with private tutoring companies that provide services to students eligible for supplementary educational services. In Chicago alone, 230,000 students from 400 schools qualified in 2005 for such services.54 Other states are seeking concessions from the federal government on standards and funding. At least two (Utah and Vermont) have considered the possibility of terminating state programs that rely on federal funding. Two others (Connecticut and Michigan) have sued the Department of Education, claiming NCLB to be an unfunded mandate, contrary to the provisions in the law itself. Finally, after three years of implementation, President Bush proposed extending the NCLB framework to the nation’s high schools. His proposal relied on NAEP data that only 36 percent of the nation’s high school seniors are proficient in reading and only 17 percent are proficient in math as evidence of the need for reform. Whether enough time has passed to assess the value of NCLB in improving student achievement remains a matter of debate. However, policy replication often precedes careful evaluation. In the Longer-Term: What Can We Anticipate The critics of NCLB are the loudest in predicting policy failure. Many of these criticisms come from stakeholders in the educational community. Among the outcomes of both the latent and sleeper varieties anticipated from NCLB are:

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• Lowered standards. Although NCLB requires states to meet minimal performance standards, what this means is not clear. States have every incentive to demonstrate progress, which can be more readily accomplished if standards are set low and, therefore, some may be tempted to lower their standards. • Score inflation and fluctuation. Scores may continue to rise because teachers will teach to the test. However, volatility in scores will also be apparent, especially in schools with the highest proportion of transitory populations. • Curriculum narrowing. High-stakes testing forces teachers to concentrate on the subject matter in the test and to change their instructional approaches to emphasize memorization and to mimic testing formats, often multiple choice, rather than to concentrate on reflective teaching methods and testing formats that better measure such learning. • Neglected content. NCLB concentrates on reading and math and only requires testing in science to begin by 2006–2007. At this time, it does not include social studies, writing, health, the arts, and other content areas students are typically exposed to. • Cheating. Although not necessarily widespread, policies employing rewards and punishments often create incentives to coach, cheat, or circumvent the testing process. • Doing more with less. Testing makes new demands on already scarce educational resources and little added federal funding is available to supplement state and local budgets. • Diversion of resources. With little new funding available for schools, existing funds are being diverted to testing. Furthermore, scarce resources will be taken away from schools making adequate progress and concentrated on those deemed in need of improvement, lowering achievement for all students, especially those identified as gifted and talented, in the long run. Some anticipate more beneficial results. These include: • More policy-relevant information. Data gathered from each school, school district, and state can be used to generate better, more systematic information and analysis about what works and what does not work in the classroom. Such information may help in offsetting the effects of student background characteristics on learning. • Better feedback. Data on progress and problems are now available yearly to individual school personnel, allowing teachers and principals to make improvements quickly. • Better tracking of individual student progress. Assessment systems can help monitor the progress of students, both within and between districts. • Better tracking of teachers. Assessment systems can help to identify teachers who are effective and improve professional evaluation. • Changes in teacher assignment practices. NCLB may alter existing incentive structures for teacher placement. The best teachers will be assigned to classrooms with students at greatest educational risk rather than to classrooms with students well prepared to learn. • Improved reading and math achievement. A focus on basics may actually improve performance in the core areas of learning. • More resources for at-risk students. Specific reporting by ethnic and racial group may channel more attention and resources by school districts to efforts to improve achievement for groups that, despite lip service, have never benefited before from reform.

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At this point, insight into the long-term outcomes for nationwide testing and the future of NCLB is speculative at best. Further, the history and architecture of American education make drawing comparisons with other nations difficult. Assessment goals in other nations differ radically from those of NCLB and offer little help in projecting policy outcomes. Most nations rely on achievement tests to a far greater extent than has been the case in the United States. Also, most nations employ such tests to sort between and track students, not to improve and pour resources into failing schools and students. The NCLB seeks to counter much of the logic of tracking and to ensure that students with the weakest backgrounds are not ignored, but rather supplemented until they meet some minimal level of achievement expected of all students. Outcomes for Whom NLCB has numerous stakeholders. First and foremost are the beneficiaries targeted by the law—students. Students do not start school on a level playing field. NCLB aims to narrow these initial gaps by improving student achievement and ensuring that all children, not just those who come to school from advantaged backgrounds, learn. All school-age children in public schools are subject to its provisions. All will be burdened in the form of regular testing. To what degree any or all will benefit and how can only be determined over a long period of time. High-stakes testing may have both positive and negative effects on students themselves. On the plus side, students may gain better information and feedback about their knowledge and skills. They may be motivated to work harder, to be more focused in their studies, and to associate hard work with success. On the minus side, they may encounter greater frustration and discouragement, become alienated from school, or simply blow off the tests. Testing may also increase student competitiveness or exacerbate distinctions between students. NCLB is specifically designed to focus on and benefit at-risk students: racial and ethnic minorities, special-education students, ESL students, and disadvantaged students in Title I schools. The results of yearly testing for all groups must be separately analyzed and reported for each school and school district. If any of these subgroups does not make AYP, even if school achievement in the aggregate meets the standard, that school will be labeled “in need of improvement.” In this way, at-risk groups can no longer be neglected but must be prioritized and resources diverted to their needs. NCLB revises the incentive structures in education and makes evidence of learning for these at-risk groups pivotal to the continued functioning of a school. It targets resources to the students with the greatest educational deficits. Without added funding, NCLB will divert resources from those students who have traditionally most benefited from schools as presently organized. Redistribution is always a contentious political strategy, especially when the haves control the resources that fund education. The federal tail is wagging state and local dogs. A second group of stakeholders are the educators. Both teachers and administrators are directly affected by the outcomes of testing. Clearly NCLB might help both in several ways. For teachers, yearly assessments allow better feedback in several forms: diagnosis of individual students’ needs, information about strengths and weaknesses in curricular content, and help in understanding their own needs for professional development. On the other hand, teachers face not-so-subtle pressures to teach to the test, to help students with testing, and loss of control over curriculum and teaching innovations. Many feel that NCLB creates an educational straightjacket that does not accommodate the individual differences students bring to learning. For school officials, NCLB may strengthen efforts to improve policies and procedures as well as target resource allocation, but at the same time narrow curricular and administrative focus. The law provides few financial incentives to

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offset the costs of extensive testing and the reporting and dissemination requirements that add to the workload of educators at all levels. NCLB may help administrators to identify more effective teachers but add to frustrations if heavily unionized teachers circle the wagons and defend existing practices based on secure employment and life-time tenure in exchange for relatively low pay. A third group of stakeholders directly implicated by the NCLB are parents. Parents are supposed to be empowered through yearly reports on the performance of their schools and the qualifications of teachers in their schools and, in cases of inadequate progress, through options to supplement the education available to their child or to transfer to better schools. Reporting allows parents to become better consumers of education and, when problems are documented, to make their own determination as to whether or not their school is meeting their child’s needs. To what degree parents will demand supplemental services or ask for transfers to other schools is not yet clear. However, choice, especially in smaller school districts, may be an illusion. Only in larger school districts with many schools may there be realistic alternatives. Once again, however, these are exactly the school districts with larger numbers of at-risk students. A last group of stakeholders includes many diverse interests. From testing companies and textbook publishers to colleges of education and teacher unions, many groups have vested interests in schools. For testing companies, NCLB should be a gold mine. Much remains to be learned about how and what to test. The fact that fifty states set fifty different standards potentially requiring fifty different tests can only help to grow an already thriving industry. The initial problems for textbook publishers may be greater, but over time the problems of accommodating texts to tests should be resolved. Colleges of education prepare teachers and administrators and have a large stake in the status quo. Not unexpectedly, this group is among the most vociferous of NCLB opponents. Yet, it is difficult to see how these stakeholders will be adversely affected in the longer run, as evidence generated through assessment is digested to become the research sustaining new advocates and new rounds of modifications to practice. On the other hand, teachers’ unions may be pressured by district administrators to remove ineffective but tenured teachers. Here the effects may be local—evident only in yearly contract negotiations. More likely, however, reaction will be increasingly visible at state and national levels. Teachers’ unions in many states are among the most effective political players in state politics, well able to protect their membership. Evaluating Outcomes So far we have looked forward, to envision possible outcomes for NCLB. Now we will try to look backward. What has happened? Many would say it is too soon to engage in such an exercise, that enough time has not passed to identify impacts clearly. Yet some effects are already visible, as described in this case study. As with most public policies, NCLB will be a work-inprogress for the foreseeable future. Which outcomes were intended and which were not? What could be anticipated and what could not be anticipated? Can we see any primary or side effects, beneficial, perverse, or null effects? Again, as before, this is a judgment call, depending on the observer’s bias. Clearly, NCLB has had consequences, although we cannot determine with any finality whether they are beneficial, perverse, or null. That testing improves achievement in the short term would seem relatively clear. However, what this means in the longer term, and how it impacts schools and learning is not. The early indications are that, as with many policy initiatives, the outcomes will be mixed. Some students will be helped and some burdened, in both instances, not necessarily those targeted by policy. Certainly we are accumulating a much larger body of evidence about what may work—an unintended but beneficial consequence, at least for educational researchers. However,

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NCLB is not about generating evidence but, rather, about changing schools and learning, especially for students at risk. Here it is probably too soon to assess outcomes. Clearly there are difficult decisions ahead, decisions that most educators and politicians would prefer to avoid. There is accumulating evidence of dissatisfaction, especially at state and local levels, where education is funded and policy delivery occurs. The intended and the primary effects of NCLB will surely be influenced by the side effects of politics. Much depends on the political environment. For many, especially those expecting NCLB to be a vehicle to expand resources for education from the federal government, the outcomes are clearly perverse—at least in the short run. Federal funding has increased, but not at the levels hoped for by the educational community. This may change, although burgeoning deficits make this unlikely. NCLB provides a policy vehicle for channeling money to schools if the political will is present. The difficulty of producing new policy in the United States often works against direct repeal, but rather portends delay and incremental modification. Summary—Back to the Future For as long as most of us can remember, there has been a crisis in education. Johnny can’t read. Susie can’t add. Our schools are run down. They are segregated by race and class. There is never enough money, books, or teachers. Our teachers aren’t qualified. Nor are they paid enough. Students drop out before graduating. Many who do graduate are not prepared for college. The litany of complaints is familiar and we continue to create more programs and pour more money into schools. Why, then, so many problems? What does the NCLB initiative teach us about policy outcomes and efforts to improve education, especially for at-risk students. • First, education is a classic wicked problem. What can we expect of schools as opposed to what can schools deliver? Learning and achievement cannot be readily engineered or guaranteed by NCLB or any other federal program. There are too many intervening variables. Schools are not factories and children are not widgets. • Second is the dependence of federal policy outcomes on fifty different state systems for educational policymaking and delivery. Despite federal capacity to command resources and mandate solutions, federal leverage over educational practices in the classroom is limited. • Third, education has never been a domain where the stakeholders, rather than the target populations, have borne the consequences. Under NCLB educators, not students and parents, bear the initial brunt of the consequences of accountability. Educators are well organized and represented by politically sophisticated interest groups, that may eventually succeed in diminishing the impact of NCLB. • Fourth, NCLB adds another layer of data requirements and data reporting to already overburdened local, state, and federal educational bureaucracies. NCLB adds substantially to the transaction costs of doing business in K–12 education. Will the benefits exceed the costs? • Finally, it is doubtful that federal sanctions against failing schools can ever really work. K–12 education has always been the responsibility of state and local governments. The role of the federal government as “enforcer” has yet to be demonstrated in this policy arena. In 2002 we tried a new solution, designed around the concept of accountability. The solution, NCLB, seeks to improve education by measuring student performance and then imposing

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consequences on schools that do not meet state set standards. Whether there is enough willpower to tie the evidence generated through NCLB assessments to the consequences envisioned by the law remains to be seen. At a minimum, we may be left with better evidence for future rounds of policy refinement. With persistence we may make slow progress.

KEY TERMS beneficial effects—results that advance the goals and objectives of a program or policy. latent effects—changes that become apparent during program operation but increase with the passage of time as policy impacts sink in. letdown effects—the changes that result when an initial impact of a policy wears off. long-term outcomes—the ultimate effects or results from program outputs, often evaluated in terms of the larger community of interest (domain) and over a longer period (five to ten years) of time. mid-term outcomes—the intermediate effects or results from program outputs, often evaluated in terms of other policy stakeholders, usually unfolding over a period of months to several years. null effects—results that demonstrate no identifiable impact from a policy or program. objectives—the intended outcomes of public policies. perverse effects—results that contradict or undermine the goals and objectives of a policy or harm the target population in some way. policy fiascoes—catastrophic outcomes at least partially caused by avoidable and blameworthy failures of public policymakers. policy impact—the extent to which a program actually caused a particular outcome, that is, in retrospect, how much of what happened was caused by the program. primary effects—effects within the targeted scope of a policy or program. short-term outcomes—the immediate effects of changes caused by program outputs. side effects—effects that are by-products of a program or policy. sleeper effects—changes that appear long after a program begins. stakeholders—individuals, groups, or organizations that have an interest in or are affected by a policy or policy program. Stakeholders may be divided into policy entrepreneurs, policymakers, target populations, and winners and losers. QUESTIONS FOR DISCUSSION 1. What are the differences between program, and policy outcomes? 2. What is the role of policy outcomes in program design?

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3. What are the short-, mid-, and long-term outcomes of policies regulating kidney transplantation (the case study for chapter 15)? 4. What types of programs are more likely to produce letdown effects? Latent effects? Sleeper effects? 5. Education is a policy domain in which the effects (letdown, latent, and sleeper) of programs are often difficult to identify. Why? 6. In terms of the death penalty, evaluate this statement: “The issue for policy designers is always one of what is a permissible margin for error. The greater the expected congruence between eligibles and recipients, the more procedures imposed during production and delivery.” 7. Select a policy with which you are familiar and develop an analysis of the permissible margin for error, or “congruence between eligibles and recipients,” for those designated as the target population for benefits. How does the tolerance level for error differ in your example from that posed by the death penalty? 8. Identify and evaluate the anticipated and unanticipated effects; primary and side effects; and the beneficial, perverse, or null effects, if any, of policies regulating kidney transplantation (the case study for chapter 15). 9. What are the different lenses for understanding policy failures and fiascoes? Identify examples that distinguish between the two. SUGGESTED READINGS Baumgartner, Frank R., and Brian D. Jones. Agendas and Instability in American Politics. Chicago, IL: University of Chicago Press, 1993. Bovens, Mark, and Paul ‘t Hart. Understanding Policy Fiascoes. New Brunswick, NJ: Transaction Publishers, 1998. Hatry, Harry P. Performance Measurement: Getting Results. Washington, DC: Urban Institute Press, 1999. Osborne, David, and Peter Plastrik. The Re-inventor’s Fieldbook: Tools for Transforming Your Government. San Francisco, CA: Jossey-Bass, 2000. Pressman, Jeffrey L., and Aaron Wildavsky. Implementation. 3rd ed. Berkeley, CA: University of California Press, 1984. Salamon, Lester M. “Follow-ups, Letdowns, and Sleepers: The Time Dimension in Policy Evaluation,” in Public Policy Making in a Federal System, ed. Charles O. Jones and Robert D. Thomas. Beverly Hills, CA: Sage Publications, 1976. United Way of America. Measuring Program Outcomes: A Practical Approach. Alexandria, VA: United Way of America, 1996. Vedung, Evert. Public Policy and Program Evaluation. New Brunswick, NJ: Transaction Publishers, 1997. Wildavsky, Aaron. Speaking Truth to Power. Boston: Little, Brown, 1979.

NOTES 1. Adapted from Harry P. Hatry, Performance Measurement: Getting Results (Washington, DC: Urban Institute Press, 1999). In the original, outcomes “indicate progress toward achievement of the mission and objectives of the program,” p. 15. This makes two assumptions that severely restrict the scope of application: (1) that policies equal programs and (2) that programs are always guided by missions and objectives. 2. Many texts use the term goals instead of objectives. We prefer to reserve the term goals for broader statements of purpose or vision and use the narrower term objectives for qualified goals. 3. Hatry, Performance Measurement, p. 36. Quantitative measures of policy results are typically called performance indicators. 4. Theodore J. Lowi, “American Business, Public Policy, Case Studies, and Political Theory,” World Politics 16 (1964): 677–93. 5. James E. Anderson, Public Policymaking, 4th ed. (New York: Houghton Mifflin, 2000), p. 10.

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6. See Nancy F. Cott, Public Vows: A History of Marriage and the Nation (Cambridge, MA: Harvard University Press, 2000). 7. Anderson, Public Policymaking, p. 12. 8. United Way of America, Measuring Program Outcomes: A Practical Approach (Alexandria, VA: United Way of America, 1996), p. 32 9. Ibid. 10. Ibid. 11. David Osborne and Peter Plastrik, The Re-inventor’s Fieldbook: Tools for Transforming Your Government (San Francisco, CA: Jossey-Bass, 2000), pp. 249–50. 12. U.S. General Accounting Office, Managing for Results: Analytic Challenges in Measuring Performance, GAO/HEHS/GGD-97-138 (Washington, DC: GAO, May 1997), pp. 14–15. 13. Hatry, Performance Measurement, p. 22. 14. Paul M. Kettner, Robert M. Moroney, and Lawrence L. Martin, Designing and Managing Programs: An Effectiveness-Based Approach (Thousand Oaks, CA: Sage, 1999), p. 126. 15. Aaron Wildavsky, Speaking Truth to Power (Boston: Little, Brown, 1979), p. 62. 16. Ibid., p. 82. 17. Ibid., p. 63. 18. Ibid., p. 83. 19. For one of many interesting studies in this vein, see Charles Perrow, Organizing America: Wealth, Power, and the Origins of Corporate Capitalism (Princeton, NJ: Princeton University Press, 2002). 20. Wildavsky is saying that public policymaking has become a “richly-joined system,” in the language of systems theory. Every policy and policy outcome is somehow linked to every other policy and outcome. However, the end result of such a situation may be paralysis or “demosclerosis,” as described by Jonathan Rauch in Government’s End: Why Washington Stopped Working (New York: Public Affairs, 1999). For the original description of fully or richly joined systems, see H. Ross Ashby, Design for a Brain, 2nd ed. (London: Chapman and Hall, 1960), chapter 11. 21. Though these outcome sequences move forward in time, from short- to mid- to long-term outcomes, program designers should—in the ideal case—build these sequences backward. See chapter 11 in this volume for a discussion of approaches to program design. 22. Hatry, Performance Measurement, p. 53. 23. Ibid., p. 21. 24. Ibid., pp. 21–22. 25. Lester M. Salamon, “Follow-ups, Letdowns, and Sleepers: The Time Dimension in Policy Evaluation,” in Public Policy Making in a Federal System, eds. Charles O. Jones and Robert D. Thomas (Beverly Hills, CA: Sage Publications, 1976), pp. 257–84. 26. Ibid., p. 261. 27. Ibid. 28. Ibid., pp. 262–63. 29. Ibid., p. 263. 30. Gerald Gunther and Kathleen M. Sullivan, Constitutional Law, 13th ed. (Westbury, NY: Foundation Press, 1997), p. 637, citing from the classic discussion in an article by Tussman and tenBroek, “The Equal Protection of the Laws,” California Law Review 37 (1949): 341–81. 31. Ibid. 32. For a discussion of program stakeholders, see Evert Vedung, Public Policy and Program Evaluation (New Brunswick, NJ: Transaction Publishers, 1997), pp. 69–75. 33. Like Peter Sellers’s character Chance the gardener in the film version of Jerzy Kosinski’s novel Being There. 34. William A. Niskanen, Jr., Bureaucracy and Representative Government (Chicago, IL: Aldine-Atherton, 1971). For a summary discussion, see Joe B. Stevens, The Economics of Collective Choice (Boulder, CO: Westview Press, 1993), pp. 269–308. 35. The following discussion is based on the excellent review of evaluation models in Vedung, Public Policy and Program Evaluation, chapter 4. 36. In this discussion we set aside, for the moment, the vexing issue of policy paternity—that is, of policies that are either unintended or have disputed parentage. 37. For a detailed examination of the nature of policy disasters, see Mark Bovens and Paul ‘t Hart, Understanding Policy Fiascoes (New Brunswick, NJ: Transaction Publishers, 1996).

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38. See Vedung, Public Policy and Program Evaluation. 39. Jeffrey L. Pressman and Aaron Wildavsky, Implementation, 3rd ed. (Berkeley, CA: University of California Press, 1984). 40. Bovens and ‘tHart, Understanding Policy Fiascoes, p. 142. 41. Ibid. 42. Ibid., p. 15. 43. See Frank R. Baumgartner and Brian D. Jones, Agendas and Instability in American Politics (Chicago, IL: University of Chicago Press, 1993). 44. P.L. 107–110, H.R. 1 (2001). 45. The data in this section are compiled from information developed by the National Center for Education Statistics, Digest of Education Statistics, 2004. U.S. Department of Education. http:// nces.edu.gov/programs/digest. 46. Ibid. See tables 115, “Average scale score in reading for 8th graders in public schools, by race/ethnicity and state or jurisdiction,” 124, “Mathematics proficiency of 8th graders in public schools by race/ethnicity and state or jurisdiction,” and 168, “Current expenditure per pupil in average daily attendance in public elementary and secondary schools, by state or jurisdiction: Selected years.” 47. These sanctions apply only to Title I schools, that is, schools identified for improvement in the provisions added to the 1994 reauthorization of the Elementary and Secondary Education Act. This group of schools carries their status with them under NCLB. 48. National Education Association, NCLB Testing Results Offer Complex, Muddled Picture: Emerging Trends Under the Law’s Annual Rating System, 2005, available at www.nea.org/esea/ayptrends1104.html. 49. The data used in this discussion draws on two sources: National Education Association, NCLB Testing Results Offer Complex, Muddled Picture, and the Department of Education’s Web site, containing findings from the National Assessment of Educational Progress (NEAP), The Nation’s Report Card, October 2005, State Comparisons, Table 5, available at www.nationsreportcard.gov. 50. Ibid. 51. NEAP, The Nation’s Report Card, National Trends, Tables 2 and 3. 52. Brian M. Stecher and Laura S. Hamilton, “Putting Theory to the Test,” RAND Review 29, no. 1 (Spring 2002): 21. 53. Maria Glod, “High Achievers Leaving Schools Behind,” Washington Post, November 10, 2004, A01. 54. Valerie Strauss, “As ‘No Child’ Answer, Tutoring Generates Complex Questions,” Washington Post, October 25, 2005, available at www.washingtonpost.com.

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PART V Context and Content

In parts II, III, and IV we described the policymaking process. People see problems and seek solutions; policymakers make promises, produce policies, and deliver results. Finally, something happens and the cycle repeats. Policymaking is a continuous cycle of problems, promises, production, and consequences. Problems are solved, resolved, or dissolved and new ones arise. In parts II through IV we examined the institutions, organizations, and technologies that sustain the policymaking process. However, American public policymaking does not take place in a vacuum. The cycles of inputs, production, outputs, and outcomes involve individuals, organizations, and institutions from every nook and cranny of American society. Policymaking is an integral part of that society. Every American has a stake in the policymaking process and every American is touched by the institutions and technologies described in the preceding chapters. What has been missing so far is the context, or the Where, and the content, or the What, of American public policymaking. Now it is time to turn our attention to the public part of American public policymaking. We will first focus on context, which we will classify according to two interrelated dimensions. The first dimension is geographical or geopolitical. What is the extent or scope of public policymaking? Is policymaking conducted at the national level and applied to all American citizens, or is the scope limited to individual states, counties, cities, or just local neighborhoods? What are the geopolitical boundaries of the policymaking process? In the following pages we will focus on four levels or nested units of public policymaking.1 • • • •

National—conducted by the federal government State—conducted by the fifty state governments of the United States Local—conducted by the thousands of counties, cities, towns, and other units of government operating within the fifty states Neighborhood—conducted by the hundreds of thousands of community associations organized around the places where we live

As we move from national to state to local and finally to neighborhood entities, the character of public policymaking changes significantly. While the president of the United States and the 433

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president of your local homeowners’ association share the same title and basic functions, the details of the policymaking process differ enormously. The second dimension of the context focuses on the Who within these geopolitical boundaries. The traditional approach to policy analysis is to limit the scope of interest to the activities of government officials at federal, state, and local levels. In this narrow view, public policymaking is what elected representatives, judges, and bureaucrats do—or ought to do—for a living. However, as students of American politics from de Tocqueville onward have repeatedly emphasized, the United States is unique in the extent to which nongovernmental bodies such as commercial enterprises, voluntary associations, and even churches participate in the formation and delivery of public policy. To limit the study of public policymaking narrowly to governmental activities at the federal, state, and local levels is to omit the bulk of the action. Private corporations and nonprofit organizations not only participate in the generation of policy demands, they also serve as instruments of policy production. That government benefits are delivered via commercial and nonprofit institutions is the norm and not the exception in American society. Governance involves all sectors of American society. Based on the work of Thomas Janoski, we divide American society into four distinct, though interdependent, sectors:2 • • • •

Government—the institutions of governance at national, state, local, and neighborhood levels Market—the commercial institutions of the American economy Civil—the voluntary cultural, social, and economic institutions of what is often called “civil society” Private—institutions based on individuals and families

Since market, civil, and private institutions also operate within the four geopolitical levels of American governance, we illustrate the relationship between the Where and Who of public policymaking in Figure V.1. Figure V.1 Sectors and Levels in American Society

ctor

et Se Mark

tS en rnm

r cto Se

ve

te

iva

Pr

ctor

l Se

Go

State

Civi

ec tor

National

Local

Neighborhood

Figure V.1 offers a highly simplified but useful picture of the context or environment of public policymaking. Lastly, we will turn to content, that is, to the relationship between policies and policymaking.

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What is the substance or content of public policy? For the first nineteen chapters of this text we ask how American institutions, organizations, and organizational technologies shape the delivery of public policy. Then we reverse the question and ask how the nature of the problem shapes the policymaking process. In other words, does form follow function? Does content influence the policy production process? Does policymaking for national defense differ significantly from that for education or health? While the institutions of public policymaking remain largely the same, the process can differ from one problem area to another. Content does make a difference and content does influence the nature of the policymaking process. In this text we will examine how issues or policy domains—that is, components of the political organized around substantive issues3—affect the policymaking process. Therefore, part V is divided into four chapters. Chapter 17 briefly describes the nature and evolution of the four sectors of American society and the parts they play in the policymaking process. We argue that American public policymaking has always been carried out by a diverse array of governmental, quasi-governmental, and nongovernmental institutions. As we shall see, distinctions between public and private spheres, commercial and noncommercial enterprises, and state and society are inventions of the modern era. When contemporary policy analysts talk about privatization and civil society they are simply opening their eyes to aspects of American governance that have been around from the very beginning. The current public focus on the role of nongovernmental actors is not a “brave new world” but rather a return “back to the future” of American federalism. Chapter 18 then outlines the organization of the governmental sector. We describe the four levels of American government—federal, state, local, and neighborhood—and discuss the evolving roles of each level in American public policymaking. Chapter 19 broadens the focus to include the continuing and evolving roles of market, civil, and private sectors in the policymaking process. Finally, chapter 20 looks at policies and policymaking as they evolve in the context of different policy issues or domains. The What of policymaking does make a difference. Policy issues like health care, education, national defense, and—most recently—homeland security inhabit their own singular domains or subsystems, with networks of specialized entrepreneurs, policymakers, beneficiaries, and stakeholders. Chapter 20 not only examines how these policy subsystems influence the policymaking process, but also how policies themselves evolve within these hothouse environments. NOTES 1. These four levels follow the standard, legal classification of U.S. government entities. They do not include international bodies like the United Nations or intergovernmental bodies such as regional commissions. While international and intergovernmental organizations do play prominent roles in American public policymaking, their authority is derivative and based on agreements reached by participating governments or government bodies. 2. Thomas Janoski, Citizenship and Civil Society: A Framework of Rights and Obligations in Liberal, Traditional, and Social Democratic Regimes (New York: Cambridge University Press, 1998), pp. 12–13. 3. Paul Burstein, “Policy Domains: Organization, Culture, and Policy Outcomes,” Annual Review of Sociology 17, no. 1 (1991): 328.

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CHAPTER 17 Context: An Overview of Policy Sectors PREVIEW As you read this chapter, you should keep in mind these key questions. • • • • • •

What are the four levels of government operating within the United States? What is the government sector? What is the market sector? What is the civil sector? What is the private sector? How have these four sectors emerged and changed over time?

17.1 INTRODUCTION In this chapter we offer a brief, but comprehensive overview of the four types of social institutions that play an active role in the public policymaking process. That making public policy involves complex networks of governmental and nongovernmental institutions is perhaps the single most noted—and notable—feature of public policymaking in twenty-first century America. As we saw in chapter 11, horizontal governance—the collaboration of organizations across multiple sectors of society—has become the norm, not the exception. Today, the American government cannot fight wars or build peace abroad without the participation of private contractors and voluntary associations of all kinds. Policymaking is no longer—if it ever was—the exclusive reserve of government officials. We also examined—in chapter 10—what makes governments government. There are more than 87,000 national, state, and local governmental units recognized by the United States Census Bureau and more than a quarter of a million neighborhood associations or “private governments.” Students of government spend a lot of time and energy drawing boundaries around governments because governments have special authority and obligations that nongovernmental institutions do not. Although the boundaries are getting more and more blurred every day, most people know—or should know—when they cross the line. Just look at the different legal liabilities and judicial venues for American soldiers and American private contractors charged with abusing prisoners in Iraq. They may look the same on videotape, they may have committed the same acts, but they are subject to widely different systems of justice. The real question is, how do we deal with the world outside of government? How are we to clas437

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sify and deal with nongovernmental institutions? We commonly talk about public (governmental) and private (nongovernmental) spheres as if they were two, distinct universes. However, the private or nongovernmental sphere is itself divided into starkly different kinds of institutions. To lump all nongovernmental institutions into a single category is to ignore the radically different cultures of profit-making businesses, civic associations, churches, and families in American society. If these differences were not so great, then why should President George W. Bush’s initiative to promote the inclusion of faith-based institutions in policy production cause so much controversy? After all, commercial enterprises have been producing policy outputs since the founding of the United States. Obviously, differences among nongovernmental institutions do make an enormous difference in the policymaking process. Following the lead of Thomas Janoski, we divide the nongovernmental sphere into three separate sectors: • • •

The market sector—encompasses the millions of for-profit and nonprofit enterprises that participate in the commercial economy of the United States The civil sector—includes a diverse array of nonprofit organizations, associations, churches, and other institutions, all of which fall under the rubric of “civil society” The private sector—“consists of family life, networks of friends and acquaintances, and the disposition of personal property.”1

Each of these sectors is governed by a relatively coherent set of social institutions sharing common norms, values, and legal status. While nearly everybody participates in all three sectors—businessmen go to church, do volunteer work, and go home every night to their families and friends—people generally understand when they cross the boundaries between these three sectors. And if they do not, the legal system will intervene to remind them. When we add these three nongovernmental sectors to the governmental sector, we get four sectors of society. While social theorists may debate the boundaries of these four sets of institutions, they do make a difference in who makes public policy and how it is made. Each sector has its own distinctive values, norms, expectations, and patterns of behavior. And each sector demands different skills and attitudes on the part of its participants. While individuals participate in multiple sectors—for example, work, family, church, and government—on a daily basis, tensions between the various institutional spheres are ever present. While the role of each sector in the policymaking process varies widely, no sphere of action is beyond the reach of the contemporary policymaking process. 17.2 THE GOVERNMENT SECTOR The government sector—as we have already seen—is central to the policymaking process. The state—as embodied in the institutions of government—is the primary sphere of action for public policymaking. What differentiates government from the other three major institutional sectors of society? As Max Weber emphasized more than a century ago, the basis of state authority rests on two pillars: territory and force. “[A] state is a human community that (successfully) claims the monopoly of the legitimate use of physical force within a given territory.”2 Lurking behind the actions of all government institutions is the threat of force. Thus, the core institutions of statehood or government are the military, which protects the territory from external threats, and the police, who maintain order within the geographical boundaries of the state. Even though state authority and responsibilities extend far beyond these core functions, what distin-

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guishes the institutions of government from those in other sectors is the ability to enforce their decisions by means of legitimate coercion. Besides maintaining order, what other activities are characteristic of the government sector? Since the Reagan administration, the federal government has taken great effort to differentiate “inherently governmental functions” from those activities best performed by commercial—or noncommercial —contractors. According to recent federal guidelines: An inherently governmental function involves, among other things, the interpretation and execution of the laws of the United States so as to: a. bind the United States to take or not to take some action by contract, policy, regulation, authorization, order, or otherwise; b. determine, protect, and advance its economic, political, territorial, property, or other interests by military or diplomatic action, civil or criminal judicial proceedings, contract management or otherwise; c. significantly affect the life, liberty, or property of private persons; d. commission, appoint, direct, or control officers or employees of the United States; or e. exert ultimate control over the acquisition, use, or disposition of the property, real or personal, tangible or intangible, of the United States, including the collection, control, or disbursement of appropriated and other Federal funds.3 While these guidelines are subject to a wide range of interpretations, they constitute as much of an official statement of the intrinsic nature of government activities as one is likely to find. When we talk about public policymaking, we usually—but not always—refer to the authority and activities of government institutions and agents. Nevertheless, public policymaking is by no means limited to the agents—be they governmental or nongovernmental—of the state. Other sectors are involved in virtually every step of the policymaking process. Nor are government institutions a necessary player in public policymaking as we conceive it in this text. Indeed, little more than two centuries ago the role of the government in the lives of its inhabitants was marginal and episodic at best. The domains of public life and public policymaking have always exceeded the reach of government institutions. 17.3 THE MARKET SECTOR The market sector is composed of institutions and organizations “engaged in the instrumental creation of income and wealth through the production of goods and services.”4 The market sector is all about economics—the production, exchange, and consumption of commodities and services. “[T]he market sphere consists of private firms and corporations engaged in business activities and necessarily this also includes institutions that are directly involved in this process.”5 In American society the market sector has come to be identified with the for-profit corporation or commercial enterprise. And to a large extent, this identification holds true. However, while private corporations produce most of the economic wealth of the country, so-called nonprofit corporations produce a significant and growing share of the nation’s goods and services. For example, in the health care sector, 50 percent of the country’s hospitals are organized as nonprofits, and 46 percent of the nation’s institutions of higher education are nonprofits.6 All told, nonprofits account for approximately 10 percent of the gross domestic product and 15 percent of total employment in the United States. Indeed, the term nonprofit is misleading, as nonprofit organizations may accumulate profits in a given year, they just cannot distribute these profits to the organizations’ members. As

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we shall see, the commercialization of nonprofit organizations is one of the side effects or—to many—perverse outcomes of their involvement in policy production. When nonprofits compete with for-profit corporations for government contracts, they inevitably begin to look like and behave like commercial enterprises.7 Therefore, the market sector includes a generous supply of nonprofit, as well as traditional, for-profit, corporations. 17.4 THE CIVIL SECTOR Much has been written about the concept of civil society and its place in American democracy.8 Few dispute the assertion that America has always been a land of voluntary groups and associations. However, there are many disagreements about the nature and evolution of civil society and its role in American government. Here we simply argue that there is a distinctive civil sector in American society and that it does play—and always has played—a critical role in American public policymaking. What are the boundaries of the civil sector? We will begin with Lester Salomon’s definition of nonprofit organizations. While some nonprofits are active participants in the market economy, all civil-sector organizations are nonprofits—at least from the perspective of the Internal Revenue Service in particular and American government in general. Thus, with the caveats noted above, we can characterize the civil sector as a collection of entities that are: 1. Organizations 2. Private, as opposed to governmental 3. Not profit-distributing 4. Self-governing 5. Voluntary, that is, with some meaningful degree of voluntary participation 6. Of public benefit9 Obviously, the boundary between the civil and market sectors is fuzzy at best. As indicated above, some nonprofits are active participants in the market sector despite their formal organizational and tax status. However, most nonprofit organizations meet the prima facie test for inclusion in the civil sector. Figure 17.1 reproduces Lester Salamon’s classification of nonprofit organizations with rough estimates of numbers for each category. Figure 17.1 Anatomy of Nonprofit Organizations Nonprofit Organizations (-1,600,000) Member-Serving (-400,000)

Public-Serving (-1,200,000)

Business & Profesional Associations

Mutual Benefit & Cooperative Organizations

Funding Intermediaries (50,000)

Service Providers

Social & Fraternal Organizations

Political Organizations

Churches

Action Agencies

(76,000)

(96,300)

Labor Unions (66,600)

(160,000)

(6,100)

(352.000)

(655,000)

(149,000)

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Civil-sector organizations can be roughly divided into those organizations dedicated to promoting the benefit of their members and those founded to serve the public at large. While many or most of the mutual benefit and cooperative organizations and service providers may be considered participants in the market sector, most of the remainder fit into our notion of the civil sector. Despite the obvious overlap between civil and market sectors, the norms and expectations of the business world are significantly different from those of voluntary associations, social organizations, or nonprofit service providers. Thus, the chief executive officer (CEO) of a business can enjoy million dollar salaries and all the perks of office while the CEO of a larger nonprofit corporation risks the wrath of its members and legal sanctions for aspiring to the same lifestyle. While we expect CEOs and the staff of nonprofit organizations to earn fair salaries, we expect them to be dedicated to public good—be it of their members or of society at large. 1 7 . 5 T H E P R I VA T E S E C T O R The private sector, as we define it, consists of individual rights, families, and the disposition of private property. While many social scientists envision the private sector as the yin to the public sector’s yang, here we take a much narrower view of the term. “The existence of the private sphere relies on a right to privacy, but in modern times, the state, market, and public [civil] spheres have invaded the private sphere. . . . The state now implements child abuse laws and takes children away from mothers and fathers. It also regulates divorce proceedings in the courts, often bringing private affairs into painful public scrutiny. . . . Nonetheless, a private sphere, in which friends and family figure prominently, does exist with most citizens living large portions of their lives quietly within it.”10 In some societies the private sector as embodied in the institution of the family or of blood relationships plays a significant role in the life of the nation. While the United States has its Kennedys, Rockefellers, Bushes, and fictional Corleone clan, the family as a social institution has played a much-diminished role in comparison with other cultures.11 While many businesses begin as family affairs, the norms of the marketplace typically prevail over the ethos of the family in the management of enterprise. The same holds for political dynasties, with the Adamses, Kennedys, Roosevelts, and Bushes standing out as exceptions to the rule. Indeed, in the United States the private sector has focused primarily on the individual and has coalesced around the twentiethcentury concept of privacy. Here, the private sector has been defined primarily as the exclusion of the government sector—and to a lesser extent, the civil and market sectors—from interference with the rights of the individual. 17.6 POLICY SECTORS: RELATIONSHIPS Figure 17.2 (see next page) is a simplified view of the relationships between the four institutional sectors. The government sector here is shaded to show its interactions with civil, market, and private sectors. Moreover, it is obvious that there is significant overlap among the four sectors. A policy organization can be a hybrid or mixture of two institutional forms or—from a different perspective—play divergent roles in different institutional contexts. Figure 17.3 (see next page) depicts the six kinds of hybrid institutions and offers examples of each type. In an increasingly complex, interdependent society, public policymaking becomes increasingly focused on managing the interfaces between state, market, civil, and private institutions. Similarly, hybrid institutions and organizations, whose activities span these institutional boundaries, play an ever more important role in the policymaking process.

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Figure 17.2 Policy Sectors

Government

Market

Civil

Private

Figure 17.3 Hybrid Policy Institutions

Govt.

1 Market • defense contracting • economic regulation

Govt. 2 Civil • political parties • public/private welfare

Civil Civil 4 Market

5 Private

• union associations • trade associations

• private charities • family associations

Govt. 3 Private • child abuse laws • political dynasties

Market 6

Private • family firms • organized crime families

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17.7 POLICY SECTORS: EVOLUTION Figures 17.2 and 17.3 depict the institutional framework of American public policymaking from a contemporary perspective. Figure 17.2, however, is merely a snapshot of an institutional framework in continuous flux. Two centuries ago the public sector encompassed all others. There were no separate spheres of commercial, civil, or private action distinct from the state. As William J. Novak has emphasized: America was a public society in ways hard to imagine after the invention of twentieth century privacy. Its governance was predicated on the elemental assumption that public interest was superior to private interest. Government and society were not created to protect preexisting private rights, but to further the welfare of the whole people and community.12 . . . [T]he fundamental social and economic relations of the nineteenth century—the market, the city, and the countryside, the family, the laborer, the proprietor, the good neighbor, the good citizen—were formed and transformed in this period as the constant objects of governance and regulation.13 From the early 1800s through the middle of the twentieth century, the four sectors of society gradually diverged into separate forums for social action. What was a relatively unified public sector was carved up into government, civil, and market sectors, each characterized by distinctive institutions and laws. First, a separate market sector emerged as the basis of economic life during the course of the nineteenth century. The mid-nineteenth century saw the explosive growth of American businesses and the parallel codification of corporate law to regulate these entities. Second, a civil sector matured, as religious, educational, fraternal, and welfare organizations evolved into a robust sphere of public action distinct from both governmental and commercial institutions. The end of the nineteenth century and the early twentieth century saw the proliferation of large-scale voluntary associations and the emergence of nonprofits as an alternative institutional framework in American law. Finally, the early twentieth century saw the rapid expansion of a private sphere anchored in the concept of individual rights and dedicated to limiting the ever-expanding reach of both government and market institutions. Figure 17.4 summarizes the evolution of the four policy sectors from the beginning of the nineteenth century to the mid-twentieth century. Figure 17.4 The Evolution of Policy Sectors: Differentiation Public

Civil

Market I

Civil

Civil Market

Life

-1776

Govt.

Govt.

Govt.

-1900

Market Private

-1950

The story of American society in its first two centuries was one of progressive differentiation of autonomous sectors. The government, market, civil, and even the private sectors all grew out of a broad, undifferentiated sphere of public life in the late eighteenth century. To assert the

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primacy or precedence of any single sector is to engage in social ideology, not social history. The four spheres of modern American society grew out of the same milieu of eighteenth-century American public life. Though the differences between government bureaucracy, commercial enterprises, voluntary associations, and individual rights seem self-evident today, they are the products of American history, and not the laws of either nature or society. But, what happened in the later twentieth century? And how will the future look? Figure 17.5 offers a schematic view of the present and future. Figure 17.5 The Future of Policy Sectors: Integration Govt.

Govt. Govt. Civil

Market

Civil

Market

Market

Civil

Private Private

-1975

-2000

.Private^ -2025?

Since the1970s the trend toward differentiation has been reversed, as government, market, civil, and private sectors are increasingly interrelated and interconnected. The boundaries between sectors have become increasingly fuzzy as market and civil institutions assume ever more important roles in the policymaking process and the concepts of private rights are increasingly challenged by information and bioengineering technologies. If history offers us any lessons, it is that the relationships between the four sectors that now seem so obvious to us will evolve over time in response to changes in society and in the institutions created to meet citizens’ needs. KEY TERMS civil sector—those institutions and voluntary associations dedicated to some commonly accepted public purpose or good. These entities cannot be privately (individually) owned and are classified as not-for-profit for purposes of taxation. government sector—a human community that (successfully) claims the monopoly of the legitimate use of physical force within a given territory. market sector—those institutions and organizations engaged in the instrumental creation of income and wealth through the production of goods and services. Ownership of these entities is subject to state law. private sector—the sphere of individual rights, families, and the disposition of private property.

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QUESTIONS FOR DISCUSSION 1. Evaluate this statement: “Since 1975 the trend toward differentiation between the government, market, civil, and private sectors has been reversed, as market and civil institutions assume ever more important roles in policymaking.” 2. Evaluate this statement: “The concept of private rights is increasingly challenged by information and bioengineering technologies, as well as by the effects of globalization.” 3. How might policies to ensure homeland security and to protect the United States against terrorist acts alter relationships between the four policy sectors? SUGGESTED READINGS Bellow, Adam. In Praise of Nepotism: A Natural History. New York: Doubleday, 2003. Janoski, Thomas. Citizenship and Civil Society: A Framework of Rights and Obligations in Liberal, Traditional, and Social Democratic Regimes. New York: Cambridge University Press, 1998. Novak, William J. The People’s Welfare: Law and Regulation in Nineteenth-Century America. Chapel Hill, NC: University of North Carolina Press, 1996. Salamon, Lester. America’s Nonprofit Sector: A Primer. 2nd ed. New York: Foundation Center, 1999.

NOTES 1. Thomas Janoski, Citizenship and Civil Society: A Framework of Rights and Obligations in Liberal, Traditional, and Social Democratic Regimes (New York: Cambridge University Press, 1998), pp. 12–13. 2. Max Weber, “Politics as a Vocation,” in Max Weber: Essays in Sociology, ed., with an introduction, by H.H. Gerth and C. Wright Mills (London: Routledge, 1991), p. 78. 3. Office of Federal Procurement Policy (OFPP) Policy Letter 92–1, “Inherently Governmental Functions” (September 23, 1992). 4. Janoski, Citizenship and Civil Society, p. 14. 5. Ibid. 6. Lester Salamon, America’s Nonprofit Sector: A Primer, 2nd ed. (New York: Foundation Center, 1999), pp. 22, 80, 98. 7. See M. Bryna Sanger, The Welfare Marketplace: Privatization and Welfare Reform (Washington, DC: Brookings Institution Press, 2003), pp. 49–71. 8. For a variety of views, see, for example, Mark E. Warren, Democracy and Association (Princeton, NJ: Princeton University Press, 2001); David T. Beito, Peter Gordon, and Alexander Tabarrok, eds., The Voluntary City: Choice, Community, and Civil Society (Ann Arbor, MI: University of Michigan Press, 2002); and Theda Skocpol, Diminished Democracy: From Membership to Management in American Civic Life (Norman, OK: University of Oklahoma Press, 2003). 9. Salamon, America’s Nonprofit Sector, pp. 10–11. 10. Janoski, Citizenship and Civil Society, pp. 13–14. 11. For a more nuanced view of the role of families in American society, see Adam Bellow, In Praise of Nepotism: A Natural History (New York: Doubleday, 2003). 12. William J. Novak, The People’s Welfare: Law and Regulation in Nineteenth-Century America (Chapel Hill, NC: University of North Carolina, 1996), p. 9. Copyright © 1996, University of North Carolina Press. Materials reprinted with permission. 13. Ibid., p. 236.

CHAPTER 18 Context: The Government Sector PREVIEW Chapter 18 examines the government sector. It begins with an overview of federalism and the four levels of government institutions that participate in the policymaking process. It then turns to a brief history of the evolution of the relationships between these four levels and the complexity that these arrangements for governance introduce into policy production. As you read this chapter, keep in mind these key questions. • • • • • • • •

What are the basic powers delegated to the national government by the Constitution? What events or factors have both limited and expanded the powers of national government? What are the basic powers of state governments? What are the various forms of local governments? What are the differences between inter- and intralevel relationships between governments? What is meant by “the well-regulated society” and how has the role of government changed over the centuries? What is meant by the term “liberal state”? Why has there been a rebirth of federalism since the 1980s?

18.1 INTRODUCTION Chapter 18 briefly outlines the structure and evolution of governmental institutions in American society. We begin with a survey of the four levels of government institutions that participate in the policymaking process. These institutions comprise what we now term the public sector. Then we sketch a brief history of the evolution of the relationships between the layers of American federalism. In chapter 19 we will broaden our focus to include the complex and evolving relationships between the market, civil, private, and government sectors. In this quick overview of a very complicated subject, we wish to emphasize three main points: First, the number and variety of institutions and organizational forms in American public policymaking are remarkable. Americans are creative social engineers, constantly inventing new ways of getting things done. Social institutions matter. Second, history matters. The institutions of federalism have been in constant turmoil and change since the earliest days of the American republic. Not only have the states served as laboratories of democracy where both experimentation and competition have been the norm, not the exception, but at every level multiple institutions have vied for a piece of the action. 446

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The system of checks and balances that characterizes the relationships between legislative, executive, and judicial branches of the federal government has been replicated at the state, local, and even neighborhood levels. “Competitive government” and competitive policymaking have been a fact of American life from the very beginning. The scorecard of American federalism changes from year to year. Finally, the practice of American federalism has always been infinitely more complicated than the theories. Legislators, executives, judges, and even policy analysts have espoused innumerable notions of how governance in America ought to work, but their deeds have almost always given lie to their words. This aspect of American pragmatism was most eloquently stated by John Mitchell, former Nixon attorney general and Watergate planner, when he said “Watch what we do, not what we say.” 18.2 OVERVIEW Originally, the Constitution established a two-tiered system of government that allocated both shared and separate powers to both national and state governments. The nature of federal-state relations was a subject of controversy at the Constitutional Convention in 1787 and has remained so ever since. Though the Civil War determined that states could not secede from the Union, federal-state relationships have always been subject to conflict. However, the original two-level hierarchy has been superseded—in fact, if not in law—by an increasingly complex four-level hierarchical pyramid of governmental institutions. To focus on federal-state relations is to overlook important forces for change over the past century. Figure 18.1 summarizes the four-level structure of American governmental federalism together with estimated numbers of organizations for each category of institution. Figure 18.1 The Structure of American Governmental Institutions

The following subsections briefly outline the nature of each of these institutions. 18.3 FEDER AL GOVERNMENT In Article I, Section 8, the U.S. Constitution enumerates the powers delegated to the national government. These powers include the areas of:

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Taxation and borrowing Currency and coinage Regulation of interstate and foreign commerce Foreign relations and treaty making National defense Postal service Patents and copyrights

More broadly, the Constitution also gives the national government the power to “make all laws which shall be necessary and proper” for the execution of all powers vested in the U.S. government. This rather sparse grant of authority was significantly enlarged by the Supreme Court ruling in McCulloch v. Maryland (1819), which recognized the “implied powers” of Congress to do whatever is “necessary and proper to implement its specified functions.”1 The Civil War reasserted the supremacy of the federal government, as did the Fourteenth Amendment (1868), which greatly enlarged the scope of federal authority over the states. Finally, the ratification of the Sixteenth Amendment in 1913, permitting taxation of personal incomes, gave the federal government the resources it needed to create and fund the programs of the modern welfare state. Despite all the talk of “devolution” and the “new federalism,” the preeminent role of the federal government remains unchallenged. As the Supreme Court decision in Bush v. Gore2 demonstrates, even the most ardent advocates of states’ rights and limitations on the authority of the federal government will—when push comes to shove—find the mantle of federal supremacy irresistible. However, the powers of the federal government are limited—some say hamstrung3—by the constitutional provisions for three separate branches of government at the national level—Congress, the presidency, and the courts. The federal government may be supreme, for all intents and purposes, but the system of checks and balances mandating the sharing of policymaking power by the three branches severely constrains freedom of action at the national level. The powers of the federal government are—with few exceptions—shared powers subject to scrutiny, review, and revision by nominally coequal partners in the policymaking process. Congress, the executive branch, and the federal judiciary all make policy, but they almost never make policy together. The concept of arbitrary power is fundamentally alien to the American psyche and American political, social, and even economic institutions. How does the federal government exercise its powers over state, local, and neighborhood institutions? As might be expected, the two primary tools are the carrot and the stick. The carrot consists of fiscal aid—primarily in the form of grants—to state, local, and neighborhood governments. While the bulk of these grants use state and local agencies as conduits for delivering federal programs, direct federal funding provides a significant, if gradually decreasing, share of state and local budgets. With or without strings, fiscal aid gives the federal government significant power over the policymaking activities of state and local governments. The stick consists of federal mandates or requirements levied on lower-level governments. “A mandate is an intergovernmental regulation imposed by one government on another government, which requires the receiving government to advance specific social goals or meet certain standards; usually, but not always, mandates are a condition for accepting a grant-in-aid.”4 Mandates—whether funded or unfunded—are imposed on lower-level governments by Congress, the president, the federal bureaucracy, and even the federal courts. Federal mandates may or may not include a carrot, but they certainly impose financial and regulatory burdens on state, local, and neighborhood governments. Despite recent attempts to limit the ability

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of federal agencies to impose costly program requirements on state and local governments, federal mandates in the form of congressional statutes, executive orders, administrative regulations, or judicial remedies are not going to disappear soon from the repertoire of federal policymaking. 1 8 . 4 S TAT E G OV E R N M E N T State governments were the first units of government to be organized in constitutional form after the Declaration of Independence. Ratification of the Constitution depended on the states, although authority over the formation and status of new states later became the prerogative of the federal government. While the drafting of the U.S. Constitution was heavily influenced by earlier innovations in state constitution building in the years prior to 1787, the federal government has served as the model for state constitutions ever since. The range of variation among state constitutions is surprisingly great, but most state government institutions have been crafted in the image of the U.S. Constitution. States are key actors in the intergovernmental system of policy production. They function both as the “fulcrums of governmental activity and at other times as mediators” between the federal and local levels.5 States also control the organization and funding of, and provide resources to, local governments. As the architects of local forms of governance, from towns and cities to counties and special districts, states exercise fundamental organizing authority over a growing array of institutional types within their jurisdiction. In addition, states exercise controls over local government similar to those of the federal government over states. States fund local governments to an even greater extent than the federal government funds state programs. Fully 30 percent of local government outlays are provided by the states.6 Similarly, state mandates on local governments are just as prevalent—and as controversial—as federal mandates. Most states require fiscal impact assessments for new programs, and ten states have even passed constitutional amendments prohibiting imposition of unfunded mandates.7 Finally, states serve as laboratories of policy experimentation and provide the primary mode of transmission, if not production, of benefits. State influence “pervades all areas of domestic policy performing ‘some part of almost everything and the whole of very little.’”8 Through their exercise of primary authority over education, welfare, and transportation as well as their influence over programs funded by the federal government, states may be the most powerful partner in the federal system.9

MINI-CASE 18.1 Getting Our Fair Share—The Perennial Problem States regularly complain that they don’t get their fair share. That is, they send more money to Washington, D.C., than they get back in terms of their proportional share of federal spending. This old saw is trotted out as a rallying cry in a variety of ways. Predictably, every decade, at census-taking time, states seek to maximize their population demographics and the numbers of beneficiaries eligible for various federal programs. A favorite campaign issue of candidates is often how well or poorly their state fares in the competition for federal dollars. So, it was no surprise when California governor Arnold Schwarzenegger added his name to the long list of state politicians complaining about being short-changed by the federal govern-

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ment. Shortly after his election he made highly publicized protests to President Bush, a fellow Republican, that California received only 84 cents out of every dollar sent to Washington, D.C., and demanded that California get its fair share of the federal taxes it sends East. These complaints were quickly followed by a laundry list of requests, including $455 million more in federal funding for social services, more funds to help with illegal immigration, and greater port security. Key Californians then followed up on these preliminaries by sending delegations to buttonhole members of Congress as key items on the legislative agenda were debated. Complaints by states about “getting our fair share” are a ritual in the politics of federalism. They go to the core of the problem of redistribution in policy production as well as to the politics of policymaking in a federally organized constitutional system. The problem of equity between states is endemic and not solvable. Nonetheless, it is a continual source of tension that demands ongoing consideration from those involved in policy production.

18.5 LOCAL GOVERNMENT Local government is the most numerous and varied form of government. Local governments can be divided into five distinct types: municipalities, counties, townships, school districts, and special districts.10 18.5.1 Municipalities Of the various local government forms, municipalities, commonly called cities and towns, are the most familiar. Municipalities are corporate communities, formed through charters issued by state legislatures. Like other corporations, municipalities can own property, make contracts, sue, and be sued, but unlike private corporations, may, in most instances, exercise only those powers authorized by state law and act only for public purposes. Municipalities are general-purpose, local governments providing a broad range of services to citizens within their boundaries, deriving revenues from state government, property and sales taxes, and other fees and licenses, and incurring debt under limited conditions. Municipalities typically deliver a broader range of services than counties or other forms of local government. 18.5.2 Counties States are also divided territorially into units called counties. Counties are geographic subdivisions delineated by the states to deliver basic state services to local areas. Initially administrative units of states, counties are gaining in importance as entities capable of producing regional services for unincorporated areas and for metropolitan areas, including both cities and suburbs. Traditionally, counties were organized as territorial entities, not as public corporations capable of owning property or incurring debt. However, more and more counties are becoming hybrids, with institutions, services, and authority increasingly resembling those of municipalities. 18.5.3 Townships Townships are local governments that provide public services for residents in a geographic area. Unlike municipalities, townships are not incorporated or public corporations. Only twenty states

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in the Northeast and Midwest have townships as a form of local government. In some states, townships provide services and have the operating characteristics of mini-municipalities. In others, townships are little more than subdivisions of county governments. Townships in the New England states are best known for the town meeting form of government in which all or some residents meet annually to elect officers and conduct the community’s business.11 18.5.4 School Districts School districts are forms of local government organized under state laws that provide public elementary, secondary, and even higher education services to their inhabitants. “Forty-five states use school districts to make policy for and manage their public schools.”12 Independent school districts should be distinguished from dependent school systems, where public schools are administered by departments of state, county, municipal, or township governments. In some states, both forms of governance for schools can be found. The vesting of public education authority in autonomous local government institutions is stark evidence of the special place of education in American public life. 18.5.5 Special Districts A last, and evermore more prevalent, form is the special district. Special districts are entities authorized to perform a specific local function, such as provide water and sewer service or transportation for schools. “Unlike other types of local governments, which are chiefly reliant on the property tax for their revenues . . . nearly a third of special districts derive some or all of their income from user fees, such as charges for electricity or tolls for bridges.”13 Special districts often take mixed territorial and corporate form, with statutorily defined rights, such as raising revenue or acquiring property for public use. Some forms are empowered to incur debt that is neither guaranteed nor subject to popular vote. Others are empowered to generate profits and to issue revenue bonds, but not to tax. Special-purpose governments are the fastest-growing type of local government and are creative instruments designed to produce specific services. For example, the Golden Gate Bridge and Highway District was formed in 1928 to fund and manage the Golden Gate Bridge while the Times Square Alliance was responsible for the rehabilitation of Times Squares in the 1990s. So-called Business Improvement Districts are a widely used method of funding roads, stadiums, and other economic development projects. They are often used to overcome duplication in regions with multiple competing municipal jurisdictions. Unencumbered by financial restrictions on incurring public debt, special districts have been the technology of choice for local policy production in recent years. 18.6 NEIGHBORHOOD GOVERNMENT There is a fourth level of governance often overlooked in standard texts on American government. In the past half century, a new level and form of governance has exploded onto the American scene. This new layer of neighborhood government consists of residential community associations (RCAs), otherwise known as common-interest communities. “Common interest communities include condominiums, planned unit developments (PUDs), and housing cooperatives. Common interest developments all have common ownership of residential property, mandatory membership of all owners in an association that governs the use of the common property, and

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governing documents that provide a ‘constitution’ by which the association and its members are governed.”14 RCAs are private, nonprofit corporations established by developers with local government approval and governed by the homeowners. As of 2003 there were approximately 250,000 RCAs in the United States. Approximately fifty million Americans, or one-sixth of the total population, live in RCAs. Finally, 1.25 million people serve on the governing boards of RCAs.15 While not, technically speaking, truly governmental entities, RCAs have become the face of governance for a large share of the population. “For millions of Americans, RCAs have become a governing entity that is as important to them as their town or city government. Like the public sector, RCAs provide goods and services and have the power to tax residents to pay for them. In addition, like the public sector’s policing powers, RCAs regulate their residents’ behavior. Moreover, like the public sector, RCAs have elective institutions based on republican principles that determine such issues as what is considered appropriate behavior in the neighborhood, what the punishments will be for violating those norms and what type and level of services will be provided in the neighborhood.”16 Many Americans gain their experience with policymaking not indirectly through C-Span or CNN, but rather directly, at RCA board meetings and elections. The history of RCAs goes back to ancient Rome, where condominiums were prevalent as early as the sixth century B.C. The first homeowners’ association appeared in the United States in 1844, but planned developments did not appear in any number until the early twentieth century. As late as the 1960s there were fewer than 1,000 RCAs, and these were located mostly in exclusive urban and suburban neighborhoods. By the 1970s, however, the rising demand for housing and community services, increasing prices, and fiscal pressures on local governments made RCAs popular with all three participants—developers, homebuyers, and local governments. Since homeowners living in RCAs paid for many of their own community services, the burden on local taxpayers decreased. Thus, RCAs have proliferated to the point that more than four of every five new housing starts in the past decade have been built as part of RCAs. While privately organized, all RCAs share four basic functions. They • • • •

Manage the common property of the community, including roads, parking lots, lawns, tennis courts, swimming pools, and other amenities Contract with vendors to provide community services such as trash collection, lawn care, street repair, and local security Tax their members through regular and special assessments to pay for the provision of services and enforce these assessments through liens on member property Protect both real estate value and aesthetics of the community by “enforcing the covenants, conditions, and restrictions (CC&Rs) that are attached to each home’s deed.”17

Thus, for many American homeowners, RCAs represent public policymaking “up close and personal.” While RCAs are often criticized as being undemocratic, they bring the experience of policymaking into the living rooms of tens of millions of American citizens. 1 8 . 7 T H E N E T W O R K O F G OV E R N M E N TA L FEDERALISM How do these diverse governmental institutions interact? Figure 18.2 shows the two dimensions of U.S. intergovernmental relations. Federal-state and state-local transactions are examples of inter-level relationships between

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Figure 18.2 Intergovernmental Relationships in American Federalism Federal

State Local Neighborhood

Inter

ieve

l

el

riev

Inte

governmental units of different scale or scope. Generally speaking, these relationships are hierarchical—that is, the relationships are between superior (geographically larger) and subordinate (smaller) entities. Intra- or within-level relationships are typically those between different units at the same level—for example, between two states or between two local governments within the same state. Sometimes these relationships are formal and quasi-governmental, as in the case of international or regional organizations. Yet, the category of intralevel relationships can be expanded to include transactions between separate institutions of the same governmental unit, such as executive-legislative dealings at federal or state levels. As we have seen, the policymaking process almost always involves intra-level relationships and typically demands the participation of governmental units at multiple levels in the pyramid shown in Figure 18.2. Most policy outputs are the result of a network of policy producers. As we shall see in chapter 19, this network also includes an ever-changing kaleidoscope of nongovernmental institutions. 1 8 . 8 T H E E VO LU T I O N O F G OV E R N M E N TA L FEDERALISM Americans like to look backward in time to a simpler world where citizens could pursue life, liberty, and happiness without the manifold intrusions and constraints of “big government.” In this hazy vision of a pre-modern Garden of Eden, citizens worked together to solve their own problems without the arbitrary interference of Big Brother. When big government did appear on the scene, it was typically corrupt and ineffective—with the occasional exception or last-minute rescue. Government policymaking was minimal at best and government regulation was unheard of. Farmers, ranchers, tradesmen, laborers, and cowboys could pursue their destinies, free from the stifling rules and regulations of modern government. Unfortunately, modern scholarship paints a radically different picture of the historical role of government institutions in American life. While the locus of power has indeed shifted from local to national levels, government institutions have always played a major role in regulating the lives of American citizens. Government rules and regulations have always been with us. The real issue is not government versus society, but rather government by whom and how. Figure 18.3 summarizes the three eras of American governance as presented by William Novak.

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Figure 18.3 American Governmental Regimes

COLONIAL RULE

WELLREGULATED GOVERNANCE

THE LIBERAL STATE

Time Period

17th-18th Century (to 1787)

19th Century (1787-1877)

20th Century (1877 to present)

Locus of Authority

Locality

State and Local Government

Central Government

Preferred Social Unit of Governance

Household

Self-Governed Community

Individual

Preferred Method of Governance

Mediation

Regulation

Administration

Rule of Law

Custom

Common Law

Constitutional Law

Source: William J Novak, From the People’s Welfare: Law and Regulation in Nineteenth-Century America. Copyright © 1996 by the University of North Carolina Press. Used by permission of the publisher.

The government sector—or its equivalent—has always played an extensive, indeed formative, role in the lives of American citizens.18 American government has always been intrusive. What has changed over the centuries is Which government did the intruding, Where and How. 18.8.1 Early Period: To 1877 William Novak has characterized America in the nineteenth century as a “well-regulated society” governed by powerful communitarian social norms, expansive common law, and the overwhelming presence of state and local supervision of society.19 Government—especially state and local government—was a creative force in shaping the contours of modern society. Armed with a far-reaching conception of law and state serving the people’s welfare, public officials defined the safety, health, morals, and commercial concerns of citizens as objects of state policy and governmental regulation. All private interests and rights were subordinated to these primary public objectives. . . . The nineteenth century was not an era of laissezfaire or statelessness . . . . On the contrary, the fundamental social and economic relations of the nineteenth century—the market, the city and the countryside, the family, the laborer, the proprietor, the good neighbor, the good citizen—were formed and transformed in this period as the constant objects of governance and regulation.20 States and local communities were responsible for the economic and social well-being of citizens. Policies enforced local community consensus and values through pervasive regulation and

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oversight. Local authority was exercised comprehensively, extending from regulations punishing or excluding undesirables, licensing entertainers, and preventing card playing, to broad regulation of the conditions of commerce for numerous local businesses.21 The requisites of a well-ordered society were defined locally and formed the basis for policies affecting daily life. Given the preeminent role of state and local regulation in nineteenth-century America, what role did the federal government play? How did governmental federalism work? From the earliest years of the Republic, the federal government played an active role in building an American nation through economic development. The federal government worked closely with state and local authorities to produce domestic improvements needed to foster economic growth. “When problems arose, solutions were sought that would harmonize with the reality of the times, involving government whenever and wherever necessary, generally at every level” of government.22 “The first generation identified roads, canals, schools, and technological innovations as the instruments of improvement that urgently deserved public attention” and such “public works of internal improvement . . . lay well within the presumed legitimate authority of revolutionary governments.”23 The infrastructure of the new nation was the product of the cooperative efforts of all levels of American government and sectors of American society. From the earliest days, local beneficiaries of Army Corps of Engineers projects were expected to share in some of the costs, as the federal government regularly supplied expertise to state and local projects in a form of “services in aid.”24 Direct cash grants and grants of material for various projects were common, as were contracting and procurement. By the early 1800s, all levels of government participated as partners in such local and national projects as the construction of the Erie Canal, the Cumberland or National Road, and the effort to build a Dismal Swamp Canal in Virginia. One early prototype of present-day mixed arrangements for cooperative policy production was the Hartford, Connecticut, Deaf and Dumb Asylum, a school founded by Thomas Gallaudet in 1817. The school was jointly funded by several levels of government through revenues from a specific land grant by Congress, by annual appropriations by the New England states, by private contributions, and by student fees.25 Railroads were built by combining the authority of states to grant land, issue bonds in the financial markets, and patronize them with mail contracts, along with the efforts of private companies chartered for that purpose by legislatures. When the federal government launched the project to span the nation with a transcontinental railroad, it simply copied a model of production developed earlier by states and local governments. Early patterns of joint governmental participation and creative financing for projects of internal improvement began to flounder within a few decades, however. Sectional jealousies, patronage, partisanship, and corruption undermined support for the principle of an activist role for the federal government in internal improvements. With the spectacular failure of several projects, the rise of Jacksonian Democracy and President Jackson’s crusade against a National Bank, the financial panics of 1819 and 1837 that almost bankrupted several state governments, and evidence that politicians regularly lined their pockets through such projects, large-scale public works sponsored by governments were discredited. By the 1840s, the view “that republican governments ought never to engage in large public works of internal improvement” was becoming widespread.26 Only after that time “did the private capital market, nursed into being by a generation’s experiments in public investment, step forward and claim a theoretical and practical superiority over public enterprise.”27 Many sources detail the rich history of the pragmatic, piecemeal search for collaborative ways to produce benefits desired by all sectors of government in common. The evidence points to early expectations for intergovernmental cooperation in meeting basic policy needs, especially those

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sustaining the westward expansion of the United States, from the building of infrastructure (roads, bridges, and railroads) to education and the disposition of public lands. It also suggests that “the triumph of laissez faire . . . was not the natural or intended result of American revolutionary republicanism” but rather the result of “an abdication of governmental authorities” that seemed incapable of “untangling the multitude of forces that were paralyzing democratic government.”28 A new class of entrepreneurs and a new commercial sector creating a market for the competing economic interests of citizens slowly emerged to displace and limit what had initially been viewed as state prerogatives. 18.8.2 The Liberal State: 1877 to 1980 The late nineteenth century and most of the twentieth century witnessed growth in the administrative state in tandem with the slow accumulation of federal preeminence in policymaking. The reasons for this centralization of authority are many and interrelated: post–Civil War Reconstruction in the South; the closing of the western frontier and an emerging national, as opposed to regional, identity; industrialization and the growing power of the commercial sector; periodic economic recessions; nationally organized communication and distributions systems; and the requirements of a continued presence in international affairs. Replacing the “well-regulated society as a mode of law and governance was the American liberal state . . . Its central attribute was the simultaneous pursuit of two seemingly antagonistic tendencies—the centralization of power and the individualization of subjects.”29 Accompanying the “sectoralization” of public life into commercial and civil arenas for private action was the emergence of a stronger federal government, which was forced to deal with the growing power of corporations and other newly emerging groups within society while copying organizational and management techniques from these same entities. Events in the first half of the twentieth century accelerated this transformation. The Great Depression of the 1930s and two World Wars exposed the limitations of reliance on state and local institutions to meet public needs on a national scale and created momentum for centralizing authority over the economy and other arenas of social welfare in the federal government. In the 1930s, the impact of the Depression and Roosevelt’s national initiatives to resurrect the economy overpowered entrenched presumptions about the constitutional basis of federalism. Reversing fields after more than a century of precedent, the Supreme Court erased limitations on federal policymaking authority under the commerce clause and broadened the scope of federal powers to tax and provide for the general welfare. For the next sixty years, the courts consistently sustained the expansion of federal authority and stricter limits on state powers. This revolution in judicial interpretation framed an explosion of federal policy initiatives. Federal programs created major new domains of national policy activity—previously the arena for state and local governmental action. In marked contrast to federal programs concentrating on the areas of transportation and specialized educational needs before 1933, health, employment security, and welfare programs were the focus of New Deal policymaking. Grants, in many forms, became the instrument of choice for delivering relief, reform, and economic recovery. With World War II stimulating domestic economic recovery, several of FDR’s emergency relief programs were replaced by efforts to mobilize industrial capacity to meet wartime demands. Mimicking modern business organizations, government adopted a model of an efficient, centralized, administrative, nonpolitical bureaucracy.30 Starting at the municipal level, this movement spread to higher levels of government. In 1913, President Taft created a Bureau of Efficiency. President Wilson argued for a professional cadre of government administrators. Roosevelt established a Committee on Administrative Management, the Brownlow Committee. Programs such

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as the Tennessee Valley Authority set up government corporations and adapted practices and procedures developed earlier by large integrated private corporations. Most important were forecasting needs, planning, scheduling, and cost accounting methodologies as adopted by the War Production Board to coordinate and integrate production by contractors to meet war needs. These later became standard operating procedures across the government sector in postwar America.31 This pattern continues today as “tides” of management techniques pioneered in the commercial sector periodically migrate into the public sector.32 The return to a peacetime Cold War economy added another layer of federal activities designed to stimulate action across numerous areas increasingly seen as legitimate domains of federal responsibility. Programs for agricultural marketing services, airport construction, scientific research, hospital construction, mental health, disaster relief, cancer control, heart disease, urban renewal, civil defense, aid to the disabled, fish restoration, and school construction were added during the Truman presidency.33 By 1960, four programs—highway construction, old-age assistance, aid to dependent children, and employment security—accounted for almost three-quarters of federal assistance. The proportion of federal and state budget expenditures for such programs increased steadily between 1952 and 1959, rising from 11.2 to 14.1 percent of all federal nondefense spending and from 10 to 14 percent of state spending.34 Many of these programs relied on states as intermediate units for policy production with responsibilities for planning and controlling the large new federal programs. The 1960s, with President Johnson’s Great Society programs, transformed the policy landscape again in two ways: by further expanding the domains of federal initiatives and introducing federal regulatory controls. More grant programs were enacted during Johnson’s presidency than in all previous years combined.35 Programs were designed to channel aid directly to local jurisdictions, sometimes bypassing the states. Federal policies focused on the social and economic needs of the poor and on urban areas. These programs were accompanied by periodic efforts to decentralize and streamline the complex mechanisms for delivering promised benefits. Equally important was the development of the technology of rulemaking for extending federal authority over policy production. Each new program was accompanied by extensive rules imposed by federal agencies and programs over production by participating institutions. These were accompanied by cross-cutting regulations and orders making funding dependent on compliance with an ever-lengthening list of federal mandates. Starting with the nondiscrimination requirements of the Civil Rights Acts of 1964 and extending from highway beautification and environmental protection to workplace safety and historic preservation, federal policymakers learned to leverage the carrot of federal funding with the stick of termination for noncompliance. This solution raised the issues and costs associated with regulation by the federal government exponentially. 18.8.3 The “Rebirth” of Federalism: 1980 to the Present Federalism as a strategy for sharing the production of policy benefits has undergone a revival over the past two decades. Devolution, decentralization, and privatization are now buzzwords of federal policymakers. Responsibilities for policy delivery are farmed out to state and local governments and institutions in the commercial and voluntary sectors. States have strengthened their institutional and productive capacities to diversify their revenue base and to oversee the delivery of policy benefits. States have assumed greater operational responsibility over policy programs as the federal government has increasingly relied on states to manage both production and delivery. Additionally, federal policymakers have sought new partners in the commercial and not-for-profit sectors. With welfare reform as a leading example, states are now far more involved in developing,

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as well as supplementing, federal policies. Intergovernmental relations hold great promise but also pose the challenge of mastering complexity. Yet the federal government continues to dominate policymaking. Programs are often delivered and funded by states and local institutions while authority remains concentrated in Washington. Federal mandates require schools to provide equal education for all children with disabilities and impose complex obligations but provide only a fraction of the promised funding from federal coffers (on average, a fourth). To counter this trend, the Unfunded Mandates Reform Act of 1995, a symbolic gesture to states, promised, but did not deliver, federal resources. Perhaps the most important long-term effect of devolution has been the fielding of increasingly complex and elongated policy production processes that further weaken the already fragile links between policy authority, implementation, and delivery. As devolution evolves, responsibility for results becomes increasingly diffuse. For many, decentralization raises another set of questions: that of capture by special interests in the commercial and civil sectors. Problems encountered in federal efforts to monitor and enforce compliance multiply with devolution and invite judicial enforcement rather than legislative reform or executive oversight. Federal administrators understand well congressional reluctance to impose drastic discipline such as terminating programs or withholding funding. They also understand the structure of interests that buttress programs in Congress. The response is greater reliance by administrators for self-protection on the legalisms of regulation and procedure. The most recent round of regulatory reforms, imposed in the name of reinventing government, relies on improved management practices, again borrowed from the commercial sector. During the 1990s, the General Accounting Office, Office of Management and Budget, and Federal Accounting Standards Advisory Board quietly revolutionized public management practices. In response to legislative reforms and the demands of delivering federal benefits via “third-party government,” new standards governing financial reporting and performance tracking were deployed. These standards apply not only to government agencies, but also to all institutions involved in the policy production process. Just as government contractors have done for decades, state and local governments, nonprofits, and other institutions have had to adopt federal standards for financial accounting and reporting as the price for accepting federal taxpayer dollars. This standardization is being expanded to include data management, information security, and related areas. The flip side of devolution and decentralization has been—and will continue to be—the penetration of federally mandated administrative standards into every sector of American society. After sixty years of silence, the Supreme Court weighed in again on the question of federalism. In the 1990s the Rehnquist Court launched a two-pronged assault on the free hand of the national government. First, it placed some restrictions on federal authority over states by setting some limits on congressional authority under the commerce clause, Article I, Section 8 of the U.S. Constitution. The Court struck down federal penalties under the Gun-Free School Zones Act for carrying guns within 1,000 feet of a school,36 limited the authority of Congress in the Religious Freedom and Restoration Act to combat alleged infringements of religious liberty by state and local governments,37 and ruled against provisions of the Violence Against Women Act that gave victims of gender-related violence a federal civil right to sue.38 The Court found the commerce clause in the Constitution insufficient to justify these exercises of congressional authority. In the second prong of the attack, the court restricted the jurisdiction of federal courts to hear suits against states under federal law. The Supreme Court asserted constitutional limits under the Eleventh Amendment against states being sued for damages under federal law by individuals in federal court. The Court decided that Congress did not have the power to abrogate state immunity

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MINI-CASE 18.2 Air Pollution—Nudging Policymakers California, as the most populous state, is often at the head of the list in nudging federal and state policymakers in new directions. On matters of air pollution it regularly leads the nation in policy innovation. In yet another effort to improve air quality, the California Air Resources Board adopted a new set of sweeping regulations aimed at moving American automakers off square one. Issued in September 2004, the regulations require that exhaust emissions from cars and light trucks be reduced by 25 percent, and in SUVs and larger trucks by 18 percent, by 2016. Opposition from the auto industry came swiftly and loudly. Industry officials argued that the costs were too high, the technology was not available, and that the board did not have the authority to adopt such sweeping regulations. They are threatening to sue. But, the automakers may just have to accommodate California’s new rules. California accounts for 10 percent of the national auto market and its market share frees it to set its own vehicle pollution standards. Federal regulators can and do create minimum standards for vehicle emissions, but they have not, to date, preempted a state’s right to set higher standards. This leaves all automakers seeking to sell cars in the state of California in the position of complying with the state’s new standards. Finally, many other states now follow California’s lead on standards for clean air. The nation as a whole may just have moved toward significant improvements in limiting vehicle emissions, despite the federal government’s reluctance to take the lead.

by authorizing Indian tribes to sue a state in federal court over gaming contracts.39 This precedent has subsequently been applied to suits against state governments for age and disability discrimination prohibited by federal statutes.40 18.9 CONCLUSIONS The early years of the twenty-first century are witnessing at least some limits to the “rebirth of federalism” of the 1980s and 1990s. The same Supreme Court that sought to protect the states from congressional impositions had no problem finding a compelling federal interest in overruling the supreme court of Florida in the case of Bush v. Gore.41 More important, the terrorist attacks of September 11, 2001, have been cited as justification for a rapid expansion of presidential authority in the area of national security that harkens back to the legal precedents of Franklin Roosevelt during World War II. Even in domestic affairs, the era of big government is resurgent. After more than a decade of rhetoric about abolishing the Department of Education, a Republican Congress passed a sweeping education bill increasing federal funding and mandating student testing, with financial penalties for noncompliance by the states. Given a choice between advancing ideology and producing results, American public policymakers have usually chosen the latter. The only constant in American public policymaking is change—change in the institutions, organizations, and technologies of policy production to respond to the new challenges of an ever-changing world.

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CASE STUDY Dead on Arrival: Bioterrorism and Smallpox Vaccination On January 10, 2003, President Bush rolled up his shirtsleeves and was vaccinated against smallpox. This was in spite of the fact that no one on earth has contracted a case of naturally occurring smallpox since 1977! This action followed his announcement three weeks earlier of plans to vaccinate 500,000 civilian health care volunteers and another 500,000 active-duty military personnel over the next three to four months. A second stage in the plan to prepare Americans against bioterrorists armed with smallpox was set to follow several months later with plans to vaccinate another 10.5 million health workers and first responders when additional supplies of the vaccine became available. The well-laid plans of the president and his advisors, Tommy Thompson, secretary of Health and Human Services (HHS), and Julie Gerberding, director of the Centers for Disease Control and Prevention (CDC), never got off the ground, as the smallpox initiative fizzled. Although vaccination for the projected numbers of military personnel was accomplished because it was mandatory, less than 10 percent of the expected population of health care volunteers across the fifty states stepped forward to be vaccinated. Given such poor results, little was heard about moving to stage two and federal officials remained silent about the lack of response from state and local health care workers. Indeed, ten months later, Gerberding went so far as to say that the United States “didn’t actually have a vaccination program.”42 A year later, however, federal officials continued to voice concern about the nation’s lack of preparedness against bioterrorism generally, and smallpox specifically.43 Obviously, there has been a mismatch between problem and solution in this initial attempt to develop domestic policies to counter bioterrorism. The smallpox vaccination effort is a classic example of the failure of policymakers to factor institutional constraints and the lessons of history into the creation of new initiatives, particularly those requiring cooperation across levels and sectors of government. It is a problem complicated, in large part, by federalism, where synchronizing policy production between the several levels of government is often difficult. This is especially true when a policy combines issues of national defense, traditionally the prerogative of the federal government, and public health, historically dominated by state governments. Preventing bioterrorism is a new policy enterprise operating at the intersections of public health and homeland security. The smallpox vaccination failure reminds us once again about the challenges of designing programs dependent on the cooperation of multiple governments. Historical Setting Smallpox—The Problem Smallpox has been a leading cause of human death throughout history. Smallpox is a viral disease with a 30 percent case fatality rate. It is highly contagious. There is no effective treatment for smallpox once the disease strikes, although it can be prevented through vaccination. The advent and refinement of vaccines for smallpox plus global efforts at immunization resulted in the elimination of smallpox worldwide, with no reported cases since 1977. Eradication plus the adverse reaction of a small proportion of those receiving the live vaccine led American public health officials in 1972 to discontinue inoculations against smallpox. Since 1983, no nation has vaccinated

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against smallpox because the risks of adverse reactions to immunization far outweighed those of contracting the disease. Ironically, today, the very success of prevention now makes vast numbers of people once again susceptible to smallpox. Smallpox has long accompanied warfare, with epidemics often following the movement of troops and devastating nearby civilian populations. History also provides evidence of smallpox being deliberately used as a weapon against enemies.44 Only in the past century have peoples come to view the use of biological (as well as chemical) weapons as illegitimate. In 1972, the United States, the Soviet Union, and more than 100 other nations committed themselves to eliminating such weapons. The “Biological and Toxin Weapons Convention . . . prohibited the possession of deadly biological agents, except for research into such defensive measures as vaccines, detectors, and protective gear.”45 Despite this convention, treaty loopholes undermined compliance. Research on biological weapons, especially on anthrax and smallpox by the Soviet Union, continued surreptitiously. Under the treaty, the United States, within some limitations, gradually dismantled its capacity to develop agents of bioterrorism, including smallpox. The CDC maintained a small inventory of old smallpox vaccine manufactured during the 1970s. The prevailing remedial strategy for utilizing this vaccine in case of an outbreak of smallpox, termed ring vaccination, also dates from the 1970s. Ring vaccination requires isolating or quarantining anyone suspected of having the disease, identifying and vaccinating that person’s primary contacts (family, friends, neighbors, and coworkers), and repeating that process for contacts of the contacts (secondary and tertiary) as necessary. By the 1990s, information about several nations engaged in developing biological weapons had leaked into the public domain, stimulated initially by the first Gulf War and later by information from Russian scientists after the breakup of the Soviet Union. The federal government reluctantly began to pay attention. In 1999, the United States, despite strong objections by many, decided to delay its compliance with a 1996 recommendation by the World Health Organization that its last remaining stocks of the smallpox virus and vaccines be destroyed by June 2000. Clearly, the international environment was changing. The anthrax attacks on American citizens in October 2001 provided a wake-up call. As a nation we were not prepared. For policymakers, the one piece of good news out of those attacks was the success of antibiotics in treating victims of anthrax. The medical community now knew that anthrax, a disease that is not transmissible between people, could be treated after infection. Consequently, widespread immunization of the population with the cumbersome anthrax vaccine was not necessary. These events then moved smallpox to the head of the federal agenda on bioterrorism, for two reasons: first, there is no treatment for smallpox once contracted; and, second, there is an effective vaccine against smallpox. Immunization—The Solution Smallpox was the first infectious disease for which vaccination was made generally available and the first to be totally eradicated. Edward Jenner first produced a vaccine capable of protecting against smallpox in 1796. Even then it took another century before a solution to the problem of how to immunize its citizens was devised and gained acceptance in the United States. Devising, but more important, implementing, a strategy for vaccinating the American public against smallpox emerged over the period of a century at the level of state and local governments. Once mastered, the technology of policy delivery for smallpox vaccination became the prototype for immunization against other infectious diseases with vaccines as

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they were developed. The history of this evolution is instructive in terms of efforts to limit the potential for bioterrorism. Although compulsory immunization was begun in the 1800s in a few European countries, progress in the United States was more sporadic and local.46 The early 1800s saw several failed initiatives. President Jefferson attempted to develop a safer transportation system for Jenner’s vaccine and to publicize the need for vaccination programs by the states. One state, Maryland, tried but failed to raise funds for a state vaccination agency. A city, New Orleans, required compulsory vaccination briefly during the epidemic of 1802. In 1813 Congress empowered President Madison to “appoint an agent to preserve . . . vaccine, and to furnish the same to any citizen of the United States.”47 However, this law was repealed in 1822 when an accident in transporting the vaccine led to a smallpox outbreak. Generally, in the nineteenth century, support and opposition to vaccination varied with the ebb and flow of local smallpox epidemics. The same pattern characterized the measures taken by public health officials. From a public health perspective, the breakthrough came in the form of identifying an institutional mechanism for leveraging compulsory vaccination—specifically, with its linkage to a separate policy domain, education. Over the nineteenth century, the compulsory public school movement was gathering momentum. Yet large numbers of children brought together in classrooms were a breeding ground for smallpox. “Not surprisingly, the driving force behind school vaccination requirements and compulsory vaccination laws were outbreaks of smallpox.”48 Cities were the first to respond, with Boston mandating vaccination for all children entering school in 1827. Three decades later a few states followed suit. Massachusetts passed the first school vaccination law in 1855, followed by New York in 1862, Connecticut in 1872, Wisconsin in 1882, Arkansas in 1882, Virginia in 1882, Iowa in 1889, California in 1888, and Pennsylvania in 1895. The linkage between immunization and school attendance provided the crucial technology for policy delivery. Except for smallpox, mandatory immunizations required to enroll in school were not common practice until the middle of the twentieth century. Today all states require children to be vaccinated before entering school, although the list of diseases to be immunized against varies by state. As smallpox became less widespread, the practice of compulsory vaccination encountered growing opposition, both on scientific and medical and on religious and philosophical grounds. In terms of smallpox, the vaccine carries some risks of complications. These include complications associated with eczema, with abnormal host reactions, with generalized vaccinia, and with the accidental inoculation of others. These resulted in one to two deaths and sixty to seventy nonfatal side effects per million doses administered. Because the risks from vaccination were greater than the risks of contracting smallpox, vaccination was discontinued and the vaccine withdrawn from production in the 1970s.49 There has been little effort to refine or improve vaccines against smallpox since. Institutional Setting: Federal and State Roles Responsibility for national defense belongs almost exclusively to the federal government, whereas basic authority for delivering public health to citizens rests primarily with state governments. Over time, the federal government has supplemented public health policy delivery by the states primarily through the carrot of funding incentives based on Congress’s exercise of its spending power under the Constitution. As a consequence, public health services across the United States now involve a complex web of programs jointly funded by federal, state, and local governments. How homeland security, a new policy arena combining elements from the domains of public health and defense, should function is now being worked out. The failure to consider how to reconfigure

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established institutional relationships to accommodate a newly defined policy problem was central to the failure of the Bush administration’s first smallpox initiative in 2003. In terms of immunization practices, states control vaccination, provide the administrative infrastructure for overseeing compliance, and work with local officials and providers. Fifty different state legislatures decide who should be vaccinated and when, while their health departments implement the numerous state and federal programs affecting immunization practices. To this day, school entry remains the leveraging mechanism for mandatory immunization. On the other hand, federal infrastructure related to protecting the public against numerous infectious diseases is heavily concentrated on the development and support of vaccines, on collecting and distributing data related to vaccine-susceptible and other infectious diseases, and on providing guidance on practices associated with immunization. Here the CDC, an agency within HHS supported by numerous advisory committees, plays a key role. The framework of law that permits compulsory vaccination was assembled over two centuries, driven by efforts to limit smallpox. The first and most basic question to be resolved was whether or not states could compel vaccination. It was first raised in Vermont in 1830,50 but not finally resolved as a matter of constitutional law until 1905, when the U.S. Supreme Court let stand a Massachusetts law empowering local boards of public health to compel individuals to be vaccinated under a state’s police powers.51 Seventeen years later, the Supreme Court upheld compulsory school vaccination.52 Today, courts regularly sustain policies designed to protect public health from numerous problems with varying degrees of invasiveness from vaccination, inspection, quarantine, fluoridation, and abatement of unsanitary or unhealthy conditions to regulation of environmental quality and licensure of health personnel. Although police powers presumptively belong to states, such authority has also been found to be a prerogative of the federal government when Congress expresses its clear and manifest intent to do so. Congress has never acted to mandate vaccination, traditionally the prerogative of state authorities. However, it has exercised its spending authority under the Constitution to oversee state efforts through federal regulations under the provisions of the Public Health Service Act.53 “If a state or local government participates in a federally funded immunization program, it must, among other things, have a . . . plan to assure that children begin and complete their immunizations on schedule” and a “plan to systematically immunize susceptible children at school entry through vigorous enforcement of school immunization laws.”54 There are some limits on governmental authority to compel vaccination. These are derived from constitutional provisions protecting the privacy, liberty, and due process rights of individuals. These limits have been defined only recently, a product of extensive litigation by civil rights advocates, primarily in the context of the HIV/AIDS epidemic. Related to this are evolving views about the rights of private individuals to refuse treatment and confinement in various forms. Despite this, Jacobson v. Massachusetts remains good law, and compulsory treatment is constitutional if authorized by statute and if public health authorities believe the individual poses a significant risk of transmission.55 A Failed First Round—The Smallpox Vaccination Initiative Historically, support for immunization ebbs and flows with the immediacy of a perceived threat from a disease. Ironically, in the time it took after 9/11 for the federal government to gear up institutionally with programs and funding to address potential threats from bioterrorists, public fears receded. When the smallpox immunization plan was announced, the administration was gearing up for a war against Iraq rationalized, in large part, by fears of weapons of mass destruc-

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tion, including biological agents. With war looming, protecting civilians on the home front was a priority for officials in the Bush administration. The availability of a proven vaccine to prevent smallpox, the most likely and most devastating biological agent available to bioterrorists, made the logic of a program of immunization irresistible. The Plan The plan originated with the Advisory Committee on Immunization Practices (ACIP), an advisory committee of the CDC with responsibilities for input about vaccination and immunization. In June 2002, the ACIP recommended that state and local officials identify a limited number (20,000) of health care personnel willing to volunteer as first responders to be vaccinated and then to care for suspected or confirmed cases of smallpox. This group would also help to vaccinate the larger civilian population should that step be necessary. By September, the CDC, in consultation with HHS, had vastly expanded the ACIPs initial recommendations. In the HHS-CDC version, the number of volunteers was raised to 500,000 and state officials were asked to identify at least twenty sites and sufficient health care personnel within each state capable of vaccinating one million people within a seven-to-ten-day time frame. “What began as a small, conservative approach by the government for protecting against the unlikely event of a smallpox attack . . . rapidly develop[ed] into a broad aggressive proposal.”56 Simultaneously, the federal government moved to expand its perilously limited supply of smallpox vaccine. By late summer it announced the purchase of $428 million in smallpox vaccine to be made available to states. At the same time, the incentives of federal funding were activated to push states to act. Under the Public Health Threats and Emergencies Act of 2000,57 Congress expanded the federal government’s role in improving the public health capacity of state and local governments through funding for state planning and evaluation grants. Using this authority, in February 2002 Congress added an extra $918,000,000 in funding for the year in the form of cooperative agreement awards for states to prepare for bioterrorism, specifically to engage in pre-event planning for an outbreak of smallpox. To apply, states had to submit their work plans to the CDC by April 15, 2002—a very short turnaround time. Funding then was released for states to develop their actual immunization plans. By December 12, 2002, the HHS secretary was able to announce that the CDC had received sixty-two general plans from states, territories, and municipalities, and that 450,000 public health and health care volunteers in over 3,300 health care facilities were soon to be immunized under plans submitted by forty-nine states and cities. All the pieces in the first stage in a program to immunize health care personnel were now in place. With ample press coverage of his immunization on January 10, 2003, President Bush launched this new federal program. On January 21, the first shipments of 50,000 doses of vaccine were distributed to eleven states in amounts specified by their individual state plans. Three days later the first vaccinations occurred in Connecticut, when four out of an expected twenty volunteers showed up.58 Originally, planners estimated it would take thirty days to complete the first round of inoculations. One month later, only 4,200 volunteers had been immunized, despite the fact that the federal government had delivered 274,000 doses of vaccine to the states. Participation reached its high point during a three-week period starting with the last week in February, when more than 14,000 volunteers were vaccinated. By late March, it was clear that the ambitious federal goals for immunizations would not be met. Confusion over these disappointing results was evident in a CDC announcement that for the time being it was putting stage two plans on hold59 while Thompson, the HHS secretary, stuck to his guns about plans to inoculate 10 million emergency medical technicians, firefighters, and police officers. By the end of April, 34,541 volunteers had

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been immunized, a number that increased to just under 40,000 by the end of November 2003. No state fulfilled even half of the target number established in its plans submitted to the CDC in December 2002. The Problems Success in immunizing the projected numbers of health care personnel depended on local volunteers willing to step forward. The target group included various health care practitioners, primarily public health personnel and hospital-based physicians and nurses. Many in these groups proved to be most reluctant. Objections surfaced from several perspectives. First were medical issues associated with the well-known side effects and complications associated with the safety of the vaccine. There was little evidence of adverse events beyond the rates anticipated. Further, there were no reported complications from transmission to other contacts—a particularly worrisome scenario to physician volunteers working with sick patients in hospital settings. Second were legal issues. Two problems dominated this debate: liability for injuries associated with the vaccine and compensation for employers and employees for time lost from work attributable to immunization. Originally, the Bush administration had argued that state workmen’s compensation programs would fill this gap. However, “the failure to anticipate this compensation issue was a major mistake.”60 Despite giving immunity from claims to the manufacturers of the smallpox vaccine, Congress did not act until April to create a compensation fund for those adversely affected by the side effects of immunization.61 By then it was too late. Third were political issues and two sets of calculations about the risks of smallpox. One was national in scope, involving an assessment of its possible use in bioterrorism. The availability of a proven preventive measure in the form of a vaccine would appear to make immunization the obvious course of action, even if the threat of attack is not imminent. A second set of calculations was personal in nature and involved an individual’s assessment of risks to himself or herself and to those at work and at home. From a perspective of self-interest, there were few reasons to volunteer for an immunization with known side effects without being convinced of the immediacy of the threat. Individual health care providers and local hospitals felt free to second-guess the threat. Among the health care personnel who volunteered to be immunized, results differed widely by state and region. As of the last update by the CDC in 2003, there was little correlation between states in terms of population and numbers vaccinated. The two most populous states, California and Texas, immunized 1,854 and 4,313 volunteers, respectively. States with the fewest volunteers Nevada (17) and Arizona (39) trailed far behind. The United States has now expanded its capacity to protect against an outbreak of smallpox but that capability neither corresponds to the distribution of population across the nation nor meets the administration’s inflated policy goals. Instead, the results more closely reflect the original June 2002 recommendations of the ACIP, the group of experts charged with advising the CDC. An Autopsy What went wrong? Why did the smallpox vaccination plan fizzle? Here, an understanding of the historical context and the problems of cooperation that characterize policymaking institutions in a federal system provide important answers. We list five factors that contributed to the failure of the vaccine initiative here.

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• The first factor is the dilemma of designing the domain of bioterrorism. Is it a matter of public health and therefore subject primarily to the authority of state governments, or a matter of national defense, subject to the authority of the federal government? New patterns of cooperative federalism are being worked out in this new policy domain, but in 2003 this disconnect helped to sink the smallpox initiative. • The second factor is the history of infectious diseases and the manner in which governments have responded. States are responsible for public health and are the level of government with the authority to require immunization. The federal government regularly offers generous incentives for states to act through funding and research but it cannot compel immunization. • The third factor is the evolution of universal immunization as a prerequisite to school entry for children. This practice has been the only effective mechanism for enforcing mandatory immunization—and then it is only applied to children. Voluntary immunization for adults has always been problematic and of limited effectiveness in reaching target populations. The volunteers targeted for vaccination in the smallpox initiative were employees in public, for-profit, and not-for-profit institutions, few of which could require immunization at that time. • The fourth factor is that the more effective a vaccine is in preventing a disease, the less familiar we become with the horrible consequences of that disease and the greater the risks appear to be of immunization. When an outbreak of smallpox is not imminent, there are few incentives for volunteers to risk vaccination. • The fifth factor is the tie between the smallpox initiative and the war against Iraq. Timing drove both the rationale and the expanded goals of this plan. As a consequence, a program designed by federal officials that targeted local volunteers was compromised and the obstacles to cooperation posed by the policy delivery in a federal system ignored. The question remains, how could a program that anticipates bioterrorists using smallpox against American civilians have been better designed to avoid problems of coordination among levels of government? Two suggestions come to the fore. One would be for Congress to pass legislation authorizing the federal government to require civilians to be vaccinated under special circumstances. This would be politically contentious, at the very least. A second would be to leverage Medicare regulations or accreditation criteria to require hospitals to employ specified numbers of previously vaccinated health care personnel—mechanisms already widely used to enact numerous federal policy priorities. The challenges raised by the smallpox initiative, the first attempt to design policies to protect Americans against bioterrorism, have yet to be resolved by American policymakers.

KEY TERMS federalism—a form of government in which authority is distributed between a central government and a number of constituent territorial units. In the United States, the national or central authority is termed the federal government, while the constituent territorial units are state governments. Residential Community Associates (RCAs) or common interest communities—housing developments characterized by common ownership of some elements of their residential property, by

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mandatory membership of all owners in an association that governs the use of the common property, and by governing documents that provide a “constitution” by which the association and its members are governed. special districts—governmental entities with statutorily defined rights authorizing them to perform a specific local or regional function, such as providing water and operating sewer districts. QUESTIONS FOR DISCUSSION 1. Evaluate this statement: “Government institutions have always played a major role in regulating the lives of American citizens. Changes over the past two centuries have been less in the scope of government authority than in the role of federal, as opposed to state and local, government.” 2. Why has the increasing concentration of power in the national government been accompanied by the emergence of a private sector built around individual and group rights? 3. How may threats posed by terrorism affect the balance of policymaking authorities between national, state, and local governments? 4. The case study describes multiple, sometimes inconsistent, and often confusing approaches to policy production by states and by the national government. To what degree is consistency and coordination between state and federal rules for one program area desirable? Alternatively, to what degree does such inconsistency and variety create a laboratory for policy experimentation and, in the long term, generate better policy solutions? 5. To what degree, and how, should the federal government be involved in K–12 education? Traditionally, K–12 schools have been the policy responsibility of local districts and state governments. You may wish to refer to materials from the case study in chapter 16 in formulating your response. SUGGESTED READINGS Burns, Nancy. The Formation of American Local Governments: Private Values in Public Institutions. New York: Oxford University Press, 1994. Chandler, Alfred D, Jr., “The Large Industrial Corporation and the Making of the Modern American Economy.” In Institutions in Modern America: Innovation in Structure and Process, ed. Stephen E. Ambrose. Baltimore, MD: Johns Hopkins University Press, 1967, pp. 77–101. Dilger, Robert Jay. Neighborhood Politics: Residential Community Associations in American Governance. New York: New York University Press, 1992. Elazar, Daniel J. American Federalism: A View from the State. 2nd ed. New York: Thomas Y. Crowell, 1972. ———. The American Partnership: Intergovernmental Co-operation in the Nineteenth-Century United States. Chicago, IL: University of Chicago Press, 1962. Henry, Nicholas. Public Administration and Public Affairs. 8th ed. Upper Saddle River, NJ: Prentice Hall, 2001. Larson, John Lauritz. Internal Improvement: National Public Works and the Promise of Popular Government in the Early United States. Chapel Hill, NC: University of North Carolina Press, 2001. Light, Paul C. The Tides of Reform: Making Government Work, 1945–1995. New Haven, CT: Yale University Press, 1997. Nelson, Robert H. Private Neighborhoods and the Transformation of Local Government. Washington, DC: Urban Institute Press, 2005. Novak, William J. The People’s Welfare: Law and Regulation in Nineteenth-Century America. Chapel Hill, NC: University of North Carolina Press, 1996. Rauch, Jonathan. Government’s End: Why Washington Stopped Working. New York: Public Affairs, 1999. Walker, David B. The Rebirth of Federalism: Slouching Toward Washington. Chatham, NJ: Chatham House Publishers, 1995.

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NOTES 1. McCulloch v. Maryland, 4 Wheat (17 U.S.) 316; 4 L. Ed. 579 (1819). 2. Bush v. Gore, 531 U.S. 98 (2000). 3. Jonathan Rauch, Government’s End: Why Washington Stopped Working (New York: Public Affairs, 1999). 4. Nicholas Henry, Public Administration and Public Affairs, 8th ed. (Upper Saddle River, NJ: Prentice Hall, 2001), p. 368. 5. Patricia S. Florestano and Vincent L. Marando, The States and the Metropolis (New York: Marcel Dekker, 1981), p. 11. 6. Henry, Public Administration and Public Affairs, p. 375. 7. Ibid. 8. Florestano and Marando, States and the Metropolis, p. 12, footnote 30, quoting Harvey C. Mansfield. 9. Ibid., p. 12. 10. Ibid., pp. 57–58. 11. Henry, Public Administration and Public Affairs, pp. 378–79. 12. Ibid., p. 379. 13. Ibid., pp. 380–81. 14. Karen Christensen, “Book Review of Common Interest Communities: Private Governments and the Public Interest,” Berkeley Planning Journal 10 (1995): 126–30. 15. Community Associations Institute, “Data on U.S. Community Associations,” available at www. caionline.org/about/facts.cfm. 16. Robert Jay Dilger, Neighborhood Politics: Residential Community Associations in American Governance (New York: New York University Press, 1992), p. 62. 17. Ibid., p. 23. 18. William Novak, The People’s Welfare: Law and Regulation in Nineteenth-Century America (Chapel Hill, NC: University of North Carolina Press, 1996), p. 238. Copyright © 1996, University of North Carolina Press. Materials reprinted with permission. 19. See also Morton Keller, Affairs of State: Public Life in Late Nineteenth Century America (London: Harvard University Press, 1977); and Leonard P. Curry, The Corporate City: The American City as a Political Entity, 1800–1850 (Westport, CT: Greenwood Press, 1997). 20. Novak, People’s Welfare, pp. 235–36. 21. Nancy Burns, The Formation of American Local Governments: Private Values in Public Institutions (New York: Oxford University Press, 1994). 22. Daniel J. Elazar, The American Partnership: Intergovernmental Co-operation in the Nineteenth-Century United States (Chicago, IL: University of Chicago Press, 1962), p. 298. 23. John Lauritz Larson, Internal Improvement: National Public Works and the Promise of Popular Government in the Early United States (Chapel Hill, NC: University of North Carolina Press, 2001), p. 3. 24. Elazar, American Partnership, p. 302. 25. Ibid., p. 116. 26. Larson, Internal Improvement, p. 6. 27. Ibid. 28. Larson, Internal Improvement, p. 6. 29. Novak, People’s Welfare, p. 240. 30. Geert Bouckaert, “Public Productivity in Retrospective,” in Public Productivity Handbook, ed. Marc Holzer (New York: Marcel Dekker, 1992), pp. 15-46. 31. Alfred D. Chandler, Jr., “The Large Industrial Corporation and the Making of the Modern American Economy,” in Institutions in Modern America: Innovation in Structure and Process, ed. Stephen E. Ambrose (Baltimore, MD: Johns Hopkins University Press, 1967), pp. 92, 94. 32. Paul C. Light, The Tides of Reform: Making Government Work, 1945–1995 (New Haven, CT: Yale University Press, 1997). 33. David B. Walker, The Rebirth of Federalism: Slouching Toward Washington (Chatham, NJ: Chatham House Publishers, 1995), p. 103. 34. Ibid., p. 105. 35. Ibid., p. 132.

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36. United States v. Lopez, 514 U.S. 549 (1995). 37. City of Boerne v. Flores, 521 U.S. 507 (1997). 38. United States v. Morrison, 529 U.S. 598 (2000). 39. Seminole Tribe of Florida v. Florida, 517 U.S. 44 (1996). 40. Kimel v. Florida Board of Regents, 528 U.S. 62 (1999); Board of Trustees v. Garrett, 531 U.S. 356 (2001). 41. 531 U.S. 98 (2000). 42. David McGlinchey, “CDC Director Denies Existence of Smallpox Immunization Program,” Government Executive Magazine (November 19, 2003), available at www.govexec.com. 43. Ceci Connolly, “Bioterror Preparedness Still Lacking, Health Group Concludes,” Washington Post, December 12, 2003, A2; Ceci Connolly, “Classified Look at U.S. Biodefense Nearly Finished,” Washington Post, December 16, 2003, A2. 44. Elizabeth A. Fenn, Pox Americana (New York: Hill and Wang, 2001). 45. Judith Miller, Stephen Engelberg, and William Broad, Biological Weapons and America’s Secret War (New York: Simon and Schuster, 2001), p. 63. 46. James G. Hodge, Jr., and Lawrence O. Gostin, “School Vaccination Requirements: Historical, Social and Legal Perspectives,” Kentucky Law Journal 90 (2001–2002): 841. 47. Ibid., p. 844. 48. Ibid., p. 851. 49. For further information see, Donald A. Henderson, “Smallpox and Vaccinia,” in Vaccines, 4th ed., eds. Stanley A. Plotkin and Walter A. Orenstein (Philadelphia, PA: W.B. Saunders Company, 2004), pp. 123–53. 50. Hazen v. Strong, 2 Vt. 427 (Vt. 1830). 51. Jacobson v. Massachusetts, 197 U.S. 11 (1905). 52. Zucht v. King, 260 U.S. 174 (1922). 53. 42 U.S.C. § 262. 54. 42 C.F.R. § 51(b) 204. See also Paula A. Offit and Charles J. Hackett, “Multiple Vaccines and the Immune System,” in Vaccines, eds. Plotkin and Orenstein, p. 1594. 55. Lawrence O. Gostin, Public Health Law: Power, Duty, Restraint (Berkeley, CA: University of California Press, 2000), p. 220. 56. Ceci Connolly, “Smallpox Vaccine Program Readied,” Washington Post, July 8, 2002, A1. 57. P.L. 106–505 November, 2000, 42 U.S.C. §201. 58. Pamela Ferdinand and Ceci Connolly, “Turnout Low at Launch of Domestic War on Smallpox,” Washington Post, January 25, 2003, A12. 59. Ceci Connolly, “Bush Smallpox Inoculation Plan Near Standstill,” Washington Post, February 24, 2003, A6. 60. Doug Campos, Medical Director for Clinical Services, Maricopa County Department of Health, Phoenix, Arizona, as quoted in Ceci Connolly, “Bush Smallpox Inoculation Plan Near Standstill,” A6. 61. Smallpox Emergency Personnel Protection Act of 2003, P.L 108–20 (H.R. 1770), April 2003.

CHAPTER 19 Context: Market, Civil, and Private Sectors PREVIEW Chapter 19 extends our discussion of the context for policymaking from the government sector to the other three sectors in American society: market, civil, and private. It explores the structure and evolution of each sector and ties that discussion to the current context. It argues that distinctions between market, civil, private, and government sectors, are relatively recent and that the United States has a long history of creativity and pragmatism in the strategies that have been devised to serve public policy needs. As you read this chapter, keep in mind these key questions. • • • • •

How did the market sector emerge in the mid-to-late nineteenth century? What are the dimensions of joint production between the market and the government sector and its impact on public policy production? How did the civil sector emerge in the late nineteenth century? What are the dimensions of joint production between the civil and the government sector and its impact on public policy production? How did a private sector emerge during the twentieth century? Why?

19.1 INTRODUCTION In chapter 17 we introduced the four institutional sectors that together comprise context for contemporary American public policymaking. We then explored the structure and evolution of the governmental sector in some detail in chapter 18. In this chapter we describe the organization and history of the remaining three policy sectors: market, civil, and private. 19.2 THE MARKET SECTOR Most studies of American public policymaking assume that the market or commercial sector and the government sector are separate and autonomous entities. They assume the commercial sector somehow predates the government sector and that a—or the—primary role of government is to manage the failures or excesses of the marketplace. No myth of American governance is more enduring or further from the truth. Indeed, the commercial sector as we know it today is an outgrowth or offshoot of public society in eighteenth- and nineteenth-century America. Both 470

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the market and government evolved symbiotically out of colonial and postcolonial public life. To ask how government can or should manage the marketplace is to pose the wrong question. The question is not if, but how, government and marketplace should work together. In the following pages we survey the emergence of the market or commercial sector as a distinct sphere of activity and the role of commercial enterprises in the policy production process. The federal framework of governance was crucial to the evolution of a distinctive market sector in the United States. The dispersion of authority across the several levels of governance facilitated the development of the commercial and civil sectors as well as the emergence of other institutional types to fill the vacuum left by these restrictions on and sharing of governmental authority. Further, to the extent that commercial enterprises have been the principal objects of government attention and regulation, commercial practices have also been primary sources of innovation in government. Whether or not government administrators have been “captured” by their clienteles, they have tended to adopt the management practices and techniques of their commercial counterparts. This section concludes with a short description of the capabilities and potential liabilities of government corporations and government-owned enterprises as increasingly prominent technologies for policy delivery. 19.2.1 Evolution of the Market Sector Distinctions between the government and market sectors are relatively recent. From colonial days, policies affecting commerce were both locally determined and comprehensive in scope. Local officials relied primarily on three instruments—licensing, inspection, and ordinances—to regulate a broad spectrum of daily economic activities. Local farmers and tradesmen sold their goods under the supervision of local authorities, who were responsible for the public well-being. A sample from a description of commercial activities overseen by St. Louis authorities in the early nineteenth century includes . . . the gauging of liquors, oils, and other liquids; the inspection of barreled and packaged foodstuffs such as beef, pork, flour . . . (the) weighing and measuring of hay, coal, wood, and lime . . . the inspection of lumber, stone . . . and brick size . . . the licensing of liquor retailers, theatrical performances, and other public exhibitions, public transportation vehicles, games, auctions, and auctioneers . . . the power to fix ferry rates . . . the capacity of vehicles carrying wood, coal, and lime, . . . regulate pawn-brokers, money-changing brokers, hawkers, and peddlers, . . . and certify the competence of apothecaries . . . regulate the vending of meat, poultry, and vegetables, . . . the weight, quality, and price of bread and the rates and practices of chimney sweeps.1 Further, in 1800 there were relatively few profit-seeking enterprises, as we currently understand the term, in the United States—335 by one count.2 Of these, most were concerned with infrastructure development (roads, bridges, canals, waterworks, and harbors as well as banks and insurance), with relatively few engaged in manufacturing and selling to the general public. A study of charters issued in Pennsylvania from 1790 to 1860 estimated that only 8 percent were awarded to manufacturing or business entities, whereas 88 percent authorized the provision of transportation, utility, and financial services.3 Manufacturing occurred primarily in self-contained, local, labor-intensive units. There were few challenges to the power of the local community to regulate economic activity before the Civil War.4 As the forces of industrialization and national development gained momentum in the nineteenth

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century, so too did a separate commercial sector begin to emerge out of the public society. From the perspective of economic history, “the modern corporation had its beginnings in the 1850s with the swift spread of the railroad network and the factory system during that decade.”5 Railroads provided the model for raising funds needed for such extensive capital investment through joint public-private stock companies and the sale of corporate stocks and bonds—an approach pioneered by the state sector in the early 1800s. Except for the textile and related industries, factory production and commercial manufacturing experienced only limited expansion before the development of adequate, all-weather rail transportation systems. By the 1850s, but especially after the Civil War, decentralized local manufacturing operations and small businesses multiplied rapidly across the nation. As this happened, local governments found themselves more and more dependent on the economic fortunes of manufacturers within their jurisdiction—a fact subversive of their legitimacy as public authorities and of their ability to regulate such entities. The question then becomes: how were these roles transformed? How did an independent commercial sector emerge to counterbalance or, as some might argue, to dominate the government sector? Answers may be found in several sources: the evolution of new forms of legal instruments/ authorities capable of sustaining independent corporate activity; the autonomy over economic activity provided to local states by a federalist system of governance; and the eventual imitation of business practices by governments. 19.2.1.1 Evolution of Legal Instruments Charters, special contracts issued first by kings and later by legislatures, established corporate entities authorized to perform functions deemed to be “in the public interest.” These corporations were franchises, or privileges, granted to numerous types of entities for special purposes. Cities and towns were incorporated and received charters, as did churches, charities, schools, and a few commercial enterprises. “The right of incorporation as practiced in early America was a special gift (accompanied by special privileges) bestowed by the polity upon select associations as quid pro quo for the performance of special duties and obligations.”6 No distinction between public and private was made between these commercial, municipal, and associational groups. All were corporations, chartered and regulated by the state and operating only within that state. A corporate charter offered several benefits: standing at law, rights to own and dispose of property, limited liability, and other privileges as specified in the charter at the time of issuance. The authority granted to these corporations was limited, however, to those powers explicitly designated in the charter, and it was subject to the police power of the state and to periodic revisions by the issuing legislature. Corporations could issue stock, but not own stock in other corporations. Corporations were artificial legal entities, closely regulated by charters issued by legislatures and subject to legislative amendment. Slowly, during the nineteenth century, courts carved out distinctions between types of charters that, over time, transformed corporations from entities subservient to public purposes into organizations with commercial and other independently defined goals. This occurred in several steps that first separated out and distinguished governmental from other corporate forms and then, through a series of judicial decisions, offered special protections from government interference to specific types of corporations.7 Key steps in the evolution of the modern private corporation were: • Passage by New York in 1811 of the first incorporation law providing for a separate or distinct type of charter to form a manufacturing company.8

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• The decision by the Supreme Court in Dartmouth College (1819),9 distinguishing between charters that, once granted by a legislature, could be subsequently amended by the legislature and those that, once issued, could not later be altered. The former are now called public and quasi-governmental corporations, whereas the latter are private corporations. For the latter, the Court’s decision meant that a charter, once issued, could not be subsequently revised by the issuing legislature. • After the Civil War, the spread of generalized incorporation statutes creating uniform state standards administered by state officials. These statutes replaced the traditional practice of state legislatures issuing corporate charters on a case-by-case basis. • A decision by the Supreme Court in Santa Clara v. Southern Pacific Railroad (1886)10 that corporations are legal “persons” entitled to substantive due-process protections under the Fourteenth Amendment and endowed with the same “economic status as ordinary, private, constitutionally protected enterprises rather than as special, public creations of the state.”11 By the end of the nineteenth century, judicial changes to the corporate form had created a framework of legal authority for both the independent commercial and civil sectors to operate through the mechanism of corporate charters. 19.2.1.2 Greenhouse Effects of Federalism A second force behind the emerging commercial sector was our federal structure for governance. Federalism fostered experimentation and competition between the states to develop new institutional forms for responding to the changing needs of an industrializing nation. “Federalism provided regional states with relative autonomy over economic activity within their geographic boundaries. Federalism required regional states to generate revenues to cover their governance costs.”12 In the nineteenth century, the federal government largely abstained from exercising authority over business enterprises. Instead, corporations were creations of states and sources of revenue to fund public services. Yet, slowly, the balance of power reversed itself with the expansion of commerce and industry, especially after the Civil War. Typically, state revenue needs came to depend on the business earnings of local enterprises and on the jobs generated by the same local companies. This dependence gradually transformed the relationship between commercial enterprises and governments. The “tail” of jobs and economic good times began to wag “the dog” of government. Further, as businesses and needs for capital resources grew, states sought to accommodate these interests. States found themselves in a competitive spiral, with each seeking to encourage the development of its own businesses and to enrich its own state coffers. Such competition often took the form of expanding corporate rights under state charters. Leading the way in the 1880s to 1890s was New Jersey, which instituted two key changes that forever altered the landscape of how American businesses were organized: empowering one corporation to hold stock in another, and giving corporations the right to hold property outside the state of its incorporation. These changes provided a legal framework for organizing holding companies, for greater access to capital markets, and for the vertical integration of businesses across many states. They also provoked a “race to the bottom,” in which states competed to attract corporations to organize within their state boundaries by lowering barriers to and controls over business activity. To counterbalance state willingness to grant unlimited authority to corporations, the federal

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government entered the policy arena with the Sherman Antitrust Act of 1890. This legislation, however, had only limited impact, because the technology employed regulated rather than supplanted these new corporate forms.13 Between 1880 and 1910 a powerful and autonomous commercial sector emerged, which often dominated the government sector. Corporations, organized vertically, controlled not only manufacturing, but also the purchase and supply of raw materials and sales and distribution of finished products. This transformed business in America. The “large, integrated, industrial corporation appeared suddenly and dramatically on the American scene during the last two decades of the nineteenth century.”14 Enabling this change were several key factors: new technologies of industrial production; new legal forms for holding companies; the expansion of both internal and external markets; the development of financial markets for raising large amounts of capital within the United States; improved transportation and distribution systems; and a class of industrial entrepreneurs or “robber barons.” Changes to state incorporation laws facilitated corporate mergers. Mergers introduced economies of scale and permitted companies to consolidate and coordinate business in a mass market—now with the blessing of states. These changes raised once again endemic problems associated with the close embrace of business and government—although this time on a national, rather than local, scale.15 19.2.1.3 Continuing Changes in the Twentieth Century Events further impacted the development of the commercial sector and its growing influence over governments. Periodic economic recessions throughout the nineteenth and twentieth centuries disrupted commercial activity, with ever-broadening consequences for the nation as a whole. What had been local became national in scope and impact. The stock market crash in 1929 and the Great Depression of the 1930s confirmed the importance of this now separate and independent commercial sector and the inadequacy of traditional forms of government authority in regulating market practices at the state and local level. In the 1930s, governments sought to reassert some of its traditional authority over the now fully formed commercial sector. But, only the federal government had sufficient resources and legitimacy to take strong action. Yet, these actions engendered stubborn opposition. The Constitution, which provides for the exercise of national authority over interstate, as contrasted with intrastate, commerce, the province of state and local authorities, was reinterpreted by the Supreme Court to reflect the new reality of a national economy. From a historical perspective, these initiatives may be viewed as reasserting authority traditionally exercised by the government sector, albeit at a federal, rather than state or local, level. The last three decades of the twentieth century witnessed further rounds of change in the way corporations are organized to respond to the forces of globalization. High debt, capital shortages, and declining profits led to corporate restructuring, mergers and acquisitions, and market consolidation across nations. Corporations acquired complex, multilayered subsidiaries and created flexible, performance-based managerial strategies necessary to administer decentralized organizations. However, when the economic bubble of the 1990s burst at the beginning of the twenty-first century, the pendulum of government-commercial relations appeared to swing back in the opposite direction. Businesses and their executives have been increasingly placed under the spotlight of public scrutiny, and subjected to additional regulation and even criminal prosecution.

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MINI-CASE 19.1 Bringing Baseball Back to D.C. In the fall of 2004, almost thirty years to the day when the old Washington Senators baseball team played their last game in the city, Mayor Anthony Williams announced that major league baseball would return to Washington, D.C. The former Montreal Expos were moving to D.C., and most residents were delighted. Years of lobbying had finally brought a team back to the nation’s capitol. A few skeptics, however, raised their voices. What had the mayor promised to relocate the team to the District? Where would the new team play? How much would a new stadium cost? Would the District’s taxpayers be stuck with the bill? As excitement about the announcement subsided, the hard work of figuring out how to pay for a stadium for the team began. The mayor proposed that the city build a new stadium along the waterfront of the Anacostia River, an area badly in need of renewal. Estimates that it would cost $440 million soon began to escalate. Eighteen months later a fractured city council finally agreed to construction of a stadium that combined public with private financing. The District would sell bonds capped at $611 million to finance construction. Revenue to repay this debt would come from the $11 to 14 million yearly derived from in-stadium taxes on tickets, concessions and merchandise, from the $21 to 24 million yearly generated by a new tax on businesses with gross receipts of $3 million or more and from $5.5 million in yearly rent on a thirty year lease with the team itself. The agreement requires the team to pick up any cost overruns for construction in excess of $611 million. Until the ballpark opens, sometime during the 2008 season, the Washington Nationals will continue to play at R.F.K. Stadium, also owned by the District. So, why the reluctance of some to support a private venture with public revenues? Some feel that publicly owned stadiums are bad investments and point to the failures of such ventures to deliver economic benefits as promised. They cite the Texas Rangers’ home in Arlington Park, the White Sox’ stadium in Chicago, and the Brewers’ stadium in Milwaukee as examples. Others look to the successes of stadiums in San Francisco and Cleveland in stimulating the revival of decaying urban neighborhoods. Washington, D.C., itself has benefited mightily from two other such projects, the MCI Center, which houses both professional and collegiate basketball, and its convention center. Again and again, city councilors face questions about public–market partnerships, in this case a new baseball team, and how far they are willing to commit public revenues to a private enterprise.

19.2.2 Joint Production: Market and Government Sectors From the earliest period, governments have been intimately involved in commercial activities, both directly and indirectly. Joint production takes two forms: contracting and hybrid (mixed publicprivate) organizations. Contracting involves the government in procurement, whether as a purchaser of goods and services for its own use directly, or indirectly, through projects and contracts (see chapters 11 and 13). Government also participates, whether actively or passively, in numerous forms of hybrid organizations established to accomplish publicly identified purposes. As described in chapter 10, today these are generically termed government corporations or government-sponsored enterprises.

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19.2.2.1 Contracting In the first decade of the twenty-first century we hear much about public-private partnerships and market-based governance, as if they were something new or innovative. In reality, public-private partnerships are as old as the American republic. Government has always contracted for needed goods and services not directly produced by the state. Since George Washington complained about substandard supplies purchased for his troops and paid privateers (ship owners) to roam the oceans capturing cargoes from the ships of hostile nations during the Revolution, governments at all levels have contracted with individuals and manufacturers on an ongoing basis. Each major war stimulated additional rounds of government procurement. In recent years, the federal role has been transformed from passive customer to active player in stimulating changes in production and technology. Much research and development (R&D) now occurs in response to government-created incentives. Within both the commercial and civil sectors numerous businesses and not-for-profits now depend on government contracts and grants for their existence. While there may be a competitive market for government funding in many areas, such as grants for medical research, in other areas there are fewer commercial entities eager to develop and supply complex technology. Military and aerospace suppliers are examples of commercial entities where the government may be the sole customer for many of their product lines. Contracting is an activity mostly hidden from public view. Yet, as we saw in chapter 13, it is a major technology of policy production and can “be considered the major activity of the United States government.”16 Estimates are that employees working under government contracts outnumber civil service employees by ratios of 2:1 to 4:1.17 While the 1990s saw legislative initiatives to streamline government procurement and contracting, the impact of such periodic reforms is unclear. By one assessment, “if someone were asked to devise a contracting system for the federal government, it is inconceivable that one reasonable person or a committee of reasonable people could come up with our current system.”18 19.2.2.2 Government-Commercial Hybrids A second aspect of joint production involves the proliferation of mixed public-private organizational forms. Hybrid agencies appeared early in our history, often when the state sought to encourage commercial development of needed infrastructure, such as canals, roads, railroads, and a national banking system. Such projects involved the cooperation of all levels of government to supply funds, services, and equipment. Governments retained some measure of control over these projects, which were often organized as joint-stock companies chartered by a legislature. Following legislative authorization, stock was issued, a portion of which was purchased by the sponsoring government, other states and municipalities, and often, private individuals. Control was vested in a board of directors appointed in some combination by the several stockholders and the government, with the voting power of each party established in the charter of incorporation. The state then occasionally assumed other financial obligations, whether through yearly appropriations or as insurer of corporate financial stability.19 Such hybrids are now termed government corporations or government-sponsored enterprises (GSEs). They represent a compromise between policy produced exclusively within a public agency or by a private corporation. Such enterprises are business entities funded or subsidized in part by government to produce or sell goods or services. Often such enterprises enjoy authority to expropriate property and to raise revenue, often by issuing tax-exempt bonds, but are subject to greater regulatory oversight. In structure and purpose they demonstrate a variety that cannot

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be easily summarized. All are organized to meet needs as specified in authorizing legislation. Two very real advantages of hybrids are their administrative independence to minimize political interference and their “off-budget” public financing. In fact, most hybrids operate under the umbrella of state governments, although counting is difficult because there are no clear lines to distinguish government corporations from special districts as organizational forms of authority. Estimates of the number of state-authorized government corporations vary widely.20 Some of the largest include the Municipal Electric Authority of Georgia; the New York State Municipal Assistance Corporation (Big MAC), established to refinance the debt of New York City; the New Jersey Wastewater Treatment Trust, created to lend money to local governments for constructing and upgrading sewage facilities; and the California Housing Finance Agency, created to finance low- and moderate-income housing. The fees and revenues generated by such hybrids are growing faster than income to states and municipalities from sales, property, and income taxes, while expenditures comprise about one-third of the operating expenses of state governments.21 Joint public-commercial sector production has a long history. Hybrid agencies are continually updated and reoutfitted as instruments for producing policy benefits. They have many advantages, offering political and fiscal sanctuary in periods of deficits and divided political loyalties. They are mechanisms that have expanded the scope and resources available to governments at all levels while deflecting the direct political and financial consequences of public production. 19.2.3 Contemporary Relations and Privatization Disenchantment in the1980s with the inability of government to solve policy problems as promised fueled interest in the private sector once again as both model and partner in policy production. Public-sector services are criticized as monopolistic, inefficient, bureaucratic, resistant to innovation, unresponsive to beneficiaries, and prone to politics. In contrast, the virtues of private-sector organizations are touted as remedies for many public policy functions.22 Momentum to privatize government services at all levels and to impose the discipline of the market on public policy production has been increasing for decades. So, too, have efforts to import popular strategies of business management into standard government practice. In all, the logic is one of improving productivity across the domains of government policymaking. Privatization is a buzzword used by many interested in designing better policy production systems. This interest reflects both a reaction to recent history and a rediscovery of past approaches. The benefits from many of the major social welfare and other infrastructure initiatives of the 1960s were provided through program grants provided by the federal government but delivered in the form of contracts administered by numerous private agencies, both for profit and not for profit—a period described as the rise of third-party government.23 This revolution in policy production via the private sector went unremarked, however, until recently. Questions about the effectiveness and design of policy delivery and production only moved front and center with the Reagan era retrenchment. President Reagan led a two-pronged effort to limit the role of the federal government and to privatize policy delivery. As documented by Lester Salamon,24 this effort starved many of the nonprofits that had emerged as the primary mechanisms for delivering government-funded human services, but only slowed expansion of the federal policy role. These events did succeed in stimulating scholarly and popular discussion about the appropriate balance between the government and private sectors in producing policy benefits. The result was a sea change in how public-sector officials view the roles of their agencies.25 Government is now seen by many as functioning best in its role of raising revenue and setting

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MINI-CASE 19.2 Comparing Performance Between the Private and Public Sectors New data are adding fuel to the fire in the always contentious debate over privatization. The second Bush administration launched its competitive sourcing initiative. This requires federal employees to compete with private contractors if they want to keep work in house rather than to be performed out of house by nongovernmental companies. The Office of Management and Budget (OMB) has responsibility for tracking and reporting on the relative performance of public- versus private-sector employees in such competitions. Such information allows OMB to accumulate evidence about the relative advantages and disadvantages of privatization in policy production. Early reports are that public employees are faring well. For example, in 2003, 17,595 federal jobs were subject to outsourcing competition. Of these, 15,660, or 89 percent, were found to be best performed by federal workers. The Department of Defense conducted the largest number of outsourcing competitions, involving 9,200 positions, with 81 percent remaining in house. Some agencies, including the Departments of Labor and Homeland Security as well as the Smithsonian and the OMB itself, conducted none. Other agencies simply ignored the competitive sourcing guidelines and continued to transfer the work of federal employees to the private sector. Conducting competitive sourcing competitions costs money—$88 million in fiscal 2003—but the OMB projected savings of $1.1 billion in reduced personnel costs and overhead to offset these costs for the year. Competitive sourcing has downsides. First are the costs to agencies and programs of preparing in-house bids. These were not counted in OMB estimates. Second are the effects on other agency programs and services, that cut corners to ensure the competitiveness of the agency’s bid. Third are complaints by private contractors that the playing field may not be level. Finally, when work is moved into the private sector, federal employees do not automatically lose their jobs but are often reassigned instead.

social priorities “while utilizing the private sector for what it does best—organizing the production of goods and services.”26 Critics warn, however, that “the government’s reliance upon the private sector has grown faster than its ability to manage it,”27 and that the “cost-savings argument masks a genuine anti-government worker sentiment.”28 Production via private contractors is touted as a way to reduce costs. Private-sector institutions are less constrained by government rules or civil service requirements and enjoy greater flexibility in terms of employment conditions and labor costs. Private-sector companies have greater flexibility in work assignments, control over hours, and wages and fringe benefits. Moreover, in terms of the privatization of policy production, the federal government, which only spends about 14 percent of its outlays on labor costs, benefits far more than state and local governments, who spend over half their budgets on personnel costs. Evidence indicates that, under competitive conditions, contracting with private-sector entities appears to save money. A competitive market of suppliers helps preserve arm’s-length transactions between providers and producers. With the exception of social service programs, “the programs most likely to be contracted out are those for which the services are already available in the private market.”29

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Yet finding private suppliers is not always possible. At that point, lack of competition distorts the dynamics between provider and deliverer. Where the market of potential private suppliers is limited, the boundaries between governments and their contracting partners become porous, with the result being increased costs. As with the infamous case of the Department of Defense’s $640 toilet seats, the interests of buyer and seller become indistinguishable. The rationale for privatization is based on the assumption that the relationship between the government as provider and the contracting entity as project manager and deliverer will be at arm’s-length, with contracting entities faithfully serving the policy goals of the government. The integrity of that relationship is conditioned on the capacity of the government to monitor performance, however. With the vast scale and scope of public-private partnerships plus the difficulties of obtaining information, the interests of both parties often diverge. Frequently, private contractors simply “end-run” their public program overseers and establish independent ties to the politicians, agency administrators, and legislators responsible for program administration. 19.3 THE CIVIL SECTOR Unlike other nations, the United States delivers almost all of its formally organized religious, cultural, human service, and research activities through private, nonprofit organizations. The civil sector now employs over 10 percent of the nation’s workforce.30 It is comprised of many varied types of organizations, from political parties, interest groups, and social movements to voluntary and welfare associations, health care organizations, and religious bodies. All pursue some version of a public or civic good as motivating and organizing principles. In this sense, the civil and government sectors overlap. Many see the civil sector as a conduit bringing interests to governments and government to individuals at all levels. They gauge the health of democracy by the status of its civic sector and culture.31 How and why has this sector emerged to occupy such an important role in the delivery of policy benefits? 19.3.1 Historical Background As an independent sector of social interaction, the civil sector shares similarities in origins and organizational development with the commercial sector. Its origins may also be traced to eighteenth- and nineteenth-century America, where such entities were authorized by charters to serve defined public purposes. State involvement with entities we now term charitable and volunteer organizations has deep roots. Religion, the “godmother” of the civil sector, is its oldest, largest, and most generously supported component.32 In seventeenth- and eighteenth-century America, churches occupied the entire space of what we now term the civil sector. In the seventeenth and eighteenth centuries churches depended on royal grants, corporate patents, and explicit local covenants issued by states as their legal sources of authority. Church, state, and business “were so closely connected as to be sometimes almost indistinguishable.”33 In the slow process of disentanglement from state sponsorship and the benefits of state funding, churches received preferential treatment in areas of property taxation and other forms of public support, although in no systematic or consistent way.34 But, growing religious diversity led to the separation of church and state and played an important role in the political debates leading to the Revolution.35 The U.S. Constitution addressed the issue of church-state relations by prohibiting state interference with, or the establishment of, religion. The Constitution also established the legal basis for the civil sector by ensuring the rights of the people to assemble and petition the government to redress grievances.

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The idea of “voluntary” as opposed to “state-compelled” religion took hold only slowly. As the number of religious denominations multiplied, so too did associated agencies dedicated to the idea of good works on behalf of others. Charitable endeavors became evidence of people’s faith and virtue in an increasingly secular state. These changes produced numerous religiously motivated local entities, often offshoots of churches, dedicated to human betterment. From abolitionist societies to schools and orphanages, myriad local associations emerged, with each religious group often organizing its own. This pattern spread across the nation. The result was a complex web of local civic associations providing educational, health, and social services to their communities. These associations offered alternative opportunities for participation for groups excluded from the political process. These associations, in turn, came to be used by nineteenth-century local governments to deliver community services. For women and other disenfranchised groups, these organizations opened channels of participation in American civic life.36 Many civil sector organizations such as hospitals, colleges, and social service agencies, originated as charitable endeavors associated with local churches. Almost all of this tradition developed in association with issues of social welfare, especially in the fields of health care, social welfare, and higher education. Practices varied widely by state and city. States with large urban immigrant populations often relied more on such channels for serving needy populations. These ranged from early support for colleges, hospitals, and mental institutions in the nineteenth century to support for local cultural institutions by the Works Progress Administration in the 1930s. In the 1960s the scope of government involvement with not-for-profits was radically transformed through federal funding for social welfare policies. Another strand of this story involves what we now term civic or voluntary associations outside the realm of religion. As early as 1835, de Tocqueville commented on the number and variety of interest groups in America and their importance to democratic governance. He observed that active involvement of the citizenry through such associations served to develop a layer of mediating institutions, check the growth and power of government, and articulate citizen interests across the multiple levels of government.37 In modern terminology, such civic and voluntary groups served as a source of social capital necessary to engage political participation and sustain democracy.38 In addition, the organization and evolution of civic associations mimicked the structure of government sector institutions. Many nationwide membership associations appeared relatively early and in great numbers in our constitutional history.39 This paralleled the extension of voting rights to most adult males and the development of competing political parties. “The American political system rewarded movements and associations able to coordinate efforts at the national, state, and local level.”40 Thus, groups such as the Masons, Odd Fellows, the American AntiSlavery Society, the Improved Order of Red Men, and the American Temperance Society adopted a federated model of organization at national, state, and local levels and replicated it as the nation expanded westward. Once established, later groups, such as veterans associations, PTAs, YMCAs, the Knights of Columbus, and the American Farm Bureau, replicated this organizational strategy. This category of multitiered national federations, as opposed to locally based entities, played a key role in the subsequent institutionalization of American voluntarism. These federations simultaneously sustained the intimacy of local memberships and connections to the state and local levels. They presaged modern interest groups. The twentieth century witnessed the maturation and secularization of the civil sector. Congress added incentives in 1894 for charitable giving with the first direct federal tax on individual and corporate income. Using a public benefit rationale, Congress exempted from income tax organizations with charitable, religious, or educational purposes—a provision repeated and expanded in

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every subsequent version of that tax.41 It defined nonprofit status by requiring that the net earnings be devoted to the purpose for which the organization was formed. With such fiscal incentives, large, secular, not-for-profit entities blossomed, as did new classes of organizations—foundations, research universities, professional associations, and social service federations. Foundations established by business tycoons like John D. Rockefeller and Andrew Carnegie transformed the scale and mission of nonprofit institutions. Nonsectarian and scientific institutions with interests in medical care, health care, education, and research developed. From the American Medical Association, labor unions, the Blue Cross movement, the Community Chest, and United Way, the numbers and types of not-for-profits multiplied. The patina of science, scientific methods, and efficiency was often used to justify the gradual abandonment of a religious basis for human services.42 Despite this expansion in the first half of the twentieth century, state and local governments continued to provide most of the funds for schools and for care of the poor, the elderly, and the sick through subsidies to the many local unofficial governmental entities. This pattern was not without controversy, however, as some began to argue that government alone was more capable of providing comprehensive, efficient, fair, and modern services for people.43 Only in the 1960s was the role of the federal government formally redefined and expanded into the domain of social services. Yet, production continued to rely heavily on the nonprofit sector. This required some recalibration in the long-established relationships between local and state authorities and the nonprofit sector. 19.3.2 Joint Production: Civil and Government Sectors Several differences, primarily arising from how revenue is generated, distinguish private nonprofits from for-profit entities. For-profit organizations generate income through producing and selling good and services. Not-for-profits must also raise revenue to cover their costs, but often rely on many different sources. They seek funding from gifts, contributions, and donations to support their missions. By the late 1970s, government funds became a principal source of revenue for nonprofits as these agencies assumed responsibilities for delivering government-financed human services.44 Not-for-profits also share other characteristics in common: tax-exempt status, prohibitions against distributing profits, commitment to some public or socially altruistic purpose, and restrictions on political lobbying. These differences have implications for nonprofits in terms of organization, stability, and their dependence on the external environment. Social welfare policy production was “projectized” with the War on Poverty programs, as governments contracted with not-for-profits to deliver specific services to targeted populations. This technology of production, funneling money to not-for-profit community organizations, resulted, in part, from distrust of public-sector institutions.45 Many government-sponsored not-for-profits, especially the range of community action agencies, were born in response.46 Fiscal support for nonprofits from the government now takes many forms: direct grants and contracts; fees and other purchases of units of service; tax credits, deductions, and subsidies; tax-exempt bonds; and regulatory preferences. These devices for transferring revenue have been a boon for nonprofits, although many have become dependent on this source of revenue. Nonprofit revenues from government have grown much faster than from other sources. In New York State, not-for-profits now receive about 40 percent of their funding from governments.47 Health services delivered by nonprofits are the beneficiaries of over half of these funds.48 “Employment by the non-profit sector, as a share of total employment, increased by almost exactly the amount as the decline in government employment from 1977 to 1996.”49

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This infusion of resources into not-for-profits raises its own sets of problems. There are inevitable discrepancies between government expectations and the dynamics of production by not-for-profits. Government objectives look primarily at criteria of equity, responsiveness, accountability, efficiency, and fiscal integrity, whereas not-for-profit service agencies value effectiveness, individual needs, and responsiveness.50 Nonprofits, as community-based agencies, are often less concerned with providing a minimum of service to all clients from a broad target group than with responding to local conditions and providing individual services intensively to those compatible with the agency’s mission. Public agencies often operate on a first-come, first-served basis rather than on a most-deserving basis in working with beneficiaries. From a governmental perspective, not-for-profits often skim their clientele. Not-for-profits, on the other hand, need to protect the interests of their professional staff, often employed at below-market wages, in working personally and intensively with individuals who can benefit from services. Tensions inevitably arise when governments, usually motivated by a cost-saving mentality, seek to regulate access by tinkering with eligibility criteria for agency clienteles. Other problem areas include frequent delays in government reimbursements for services, periodic renegotiations of service contracts, the burden of government paperwork, and regular efforts to cut funding. Providing social services presents other special problems of policy privatization. The first problem involves limits on the competitive market. Often there are few qualified not-for-profit vendors of social services. As a consequence, contracts tend to be negotiated, rather than put up for bid. Government managers often seek to waive the bidding process or circumvent it by specifying unique qualifications tailored to the intended nonprofit in the bid proposal. Kettl describes this as “less a competitive market than a negotiated network.”51 A second problem is a bias against change and toward continuity in service. The populations served by many not-for-profits are often vulnerable and unstable. Competition and changes to delivery systems are disruptive to social systems and increase the long-term costs of service to both the government as purchaser and the not-for-profit as deliverer. These promote a tendency to create mutually dependent long-term relationships between providers and deliverers. A third problem is the labor-intensive nature of social services work, which compromises the capacity of governments to oversee production and delivery of social services. A final problem involves accountability and growing demands for nonprofits to demonstrate results. Continued emphasis on the “marketization” of services, from pressures to develop customer service standards and adopt business practices to increased competition between producers, may be expected, especially from the federal government.52 Demonstrating results via strategies of performance evaluation and outcomes is difficult to structure and implement in nonprofits. Agency service contract objectives are traditionally stated in terms of units of service to be performed or in units of time. Management is based on inputs and processes rather than outputs and outcomes. Reputational validity, rather than performance outcomes, has long been the standard for evaluating performance by not-for-profits.53 The United Way is pioneering efforts to move not-for-profits toward adopting outcomes and performance measures. Again, there may be some evidence that in this revolution, as with many previous management trends, form may be prevailing over substance.54 This background provides a second take on the discussion in earlier chapters about the merits of public versus private delivery of policy benefits to people. It places in context our long history of integrated delivery, especially in the arena of social welfare policies. 1 9 . 4 T H E P R I VA T E S E C T O R The private sector—together with the private rights that define it—is the most recent of the four

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social sectors to emerge. The existence of a private sector depends on an independent sphere of action accruing to citizens because of the rights accorded them under the Constitution. Historically, there were few clearly defined private rights until the Civil War and the passage of the Thirteenth, Fourteenth, and Fifteenth Amendments. Even then, private or individual interests were subservient to the public or common good as articulated by local and state governments and the common law until well into the twentieth century. The attachment of rights directly to individuals is primarily a twentieth-century phenomenon. The development of a private sector was propelled by the centralization of government power, the idea of civil rights, and an increasing focus on federal constitutional authority. “Liberal constitutionalism thrived on and reinforced the separation of public from private, state power from individual right.”55 The consequence of the rise of a centralized but distant federal state responsible for the people’s welfare has been counterbalanced in part by a private sector consisting of individual citizens reliant for the articulation of their interests on civil liberties and rights found in the Constitution. 19.4.1 Historical Background The story of the private sector is one of slowly expanding rights attached to individuals rather than to the state. Alternatively, this may be understood as the evolution of meaningful limitations placed on governmental authority over individuals. Designed to remedy the lack of protections for individuals in the Constitution, the Bill of Rights, ratified in 1791, provided restrictions on the authority of the federal, as opposed to state governments.56 The Civil War amendments, especially the Fourteenth Amendment (1868), were designed in part to remedy this by extending the protections of the first ten amendments to cover the actions of government authorities at the state and local levels. In addition, the Fourteenth Amendment introduced new constitutional concepts, including clauses dealing with the privileges and immunities or rights of citizens of the United States, due process, and equal protection. Such language emphasized the freedoms, rather than the duties, of individual citizens. However, the post–Civil War history of judicial enforcement of individual rights under the Bill of Rights and the Fourteenth Amendment has been anything but straightforward. Only in the early and middle twentieth century, with judicial help, did the arena of independent rights attached to individuals emerge as a clear counterweight to the authority of the government sector, especially at the state and local levels. Once established, rights of individuals operate prospectively, as limits on governments in public policy actions. Property and religious rights were the earliest rights to be identified as belonging to individuals. The right of religious conscience, although not of separation of church from state, was among the earliest to be recognized. In the arena of property rights, the lines between private and public ownership of land and individual rights in property emerged only gradually. The concept of the commons, a form of mixed public and private ownership in which significant portions of local, productive agricultural land were shared by citizens, disappeared in the early nineteenth century.57 The rights of private-property owners against the exercise of police and expropriation powers by state and local governments were much later in being fully enunciated. For example, the property rights of owners versus state governments in eminent domain proceedings were not confirmed until 1897.58 Other protections for individuals against the actions of state authorities had to wait until the twentieth-century revolution in civil rights that profoundly altered the relationship between individuals and the state. Much of this change arose from the actions of interest groups seeking policy goals

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through judicial, rather than legislative, means. The extension of such rights accumulated only slowly during the first half of the twentieth century, accelerating rapidly with the civil rights movement in the 1950s and 1960s. Fundamental changes in the way courts began to construe the role of law, especially constitutional law, resulted in distinguishing spheres of public and private life and served to carve out a sector where states may only interfere with individual actions on limited grounds. Courts now place prohibitions on states’ authority in many policy arenas. Individuals gained First Amendment rights of speech against the power of the state in 1925,59 of press in 1931,60 and of religion in a series of cases in the 1960s.61 Fourth Amendment protections against unreasonable searches and seizure were added in 1961.62 Minimal federal constitutional protections against arbitrariness in state criminal and civil proceedings are also recent. Beginning in 1932, the Supreme Court enunciated a limited right to counsel as essential to due process in some criminal cases63 and all felony cases in 1963.64 Rights of privacy and personal autonomy were introduced in 1925 when the Court prohibited a state (Oregon) from compelling all children to attend public, as opposed to religious, schools.65 These rights have been extended to areas such as marriage, family relationships, contraception, abortion, and, perhaps, even the right to die. Courts now identify extensive due process rights any time a government takes action affecting a liberty or property interest. In terms of policymaking, this requires state agencies to make procedures for adjudication available to aggrieved beneficiaries across almost the entire range of policy production. The equal protection clause of the Fourteenth Amendment is the source for another series of rights. It offers protections against arbitrariness in classifications directly impacting the delivery of policy benefits. From classifications involving race, national origin, religion, sex, and alienage to policies dealing with access to the courts, interstate migration, voting, ballot access, and, after the election of 2000, the counting of votes, the Court continues to define policy authority over an expanding array of policy domains. As a consequence, the judicial role in policymaking continues to grow. 19.4.2 The Private Sector and Policy Production The developing private sector may offset, in part, the migration of authority from the local to the national level in the government sector and the consolidation of corporate power in the commercial sector. The sanctity of private civil rights and liberties has been grafted onto public understanding of the modern American state, as have clearer distinctions between public and private life. We now have a distinct sector of protected individual action within the larger framework of civil interactions. Before the twentieth century, the Bill of Rights had limited only the authority of the national government, as opposed to state and local governments, in terms of the rights of citizens. Rights now attach to individuals across all levels of government. Individual needs and clear distinctions between public and private life now compete with considerations of the well-being of the aggregate community as a framework for balancing public values and interests. The government is now viewed both as the purveyor of benefits and as the protector of rights for individuals. Some argue that the rise of the private sector may have had unintended consequences. As more voices speak through more access points to the policy process, fewer citizens would appear to be participating, whether measured through voting or through opinion surveys ascertaining levels of public trust. Social capital is in short supply.66 Unlike citizens in the nineteenth century, “everyday Americans are increasingly mere spectators of public affairs.”67 Contributing to this phenomenon are the proliferation of many small groups of activists with intense commitments to singular causes, often only tangentially relevant to the values and concerns of most citizens, and the role of money, which increasingly displaces time as the currency of the policymaking process. The result is a

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Source: Non Sequitur © 2002 Wiley Miller. Dist. By UNIVERSAL PRESS SYNDICATE. Reprinted with permission. All rights reserved.

disconnect between the top and the bottom levels in the policy process, between individual rights and concepts of a common good. “Too many valuable aspects of the old civic America are not being reproduced or reinvented in the new public world run by member-less organizations.”68 President Kennedy’s eloquent words, spoken during his inaugural address in 1961— “Ask not what your country can do for you but rather what you can do for your country”— would appear to reflect an earlier era in American history. Nostalgia for those times, however, does not appear to offset the “me” generation of Americans, characterized by one social commentator as “bobos” (bourgeois bohemians) who view government with ever-greater disillusionment and cynicism and who are concerned primarily with what government can do for them.69 A private sector focused on the rights of individuals is now firmly entrenched, with legitimate claims on American public policy and policymaking. 19.5 AMERICAN FEDER ALISM: CONCLUSIONS The United States has a long history of combining the four sectors of society creatively to serve public policy needs. Policy production has never been confined to the government sector alone. The relative size of the civil and market sectors has changed over time. New arrangements for delivering policy benefits have evolved in tandem with changes in the array of mediating institutions.70 Distinctions between public and private are relatively recent, the result of the gradual carving out of commercial, civil, and private sectors from what, three centuries ago, was entirely public. A closer look, however, reveals differences of degree rather than of kind. Indeed, these distinctions may be changing once again.

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As more and more problems are brought to government, producing the desired solutions becomes more complex and concerns about performance and results more pressing. An information economy, driven by technology, the Internet, and greater emphases on speed, flexibility, and results is compounding an already unpredictable environment for policymaking. Policy production would appear to be responding in several ways. Most important is the erosion of clear boundaries between public and private. Next is the apparent evolution toward more fluid, norm-based, and inductive models for policy guidance and standards, somewhat more akin to nineteenth-century reliance on common law approaches. Together, these trends may add flexibility to our policy production system, which is characterized, at least starting in the second half of the twentieth century, by rules, a deductive legal model, and rights-based, public, and administrative law. In some respects we may be moving “back to the future.”

CASE STUDY “A Hand Up, Not a Hand Out”—Delivering Goodwill Debbie picks her way slowly across the work floor at her local Goodwill Industries. She has had cerebral palsy since birth and has difficulty with balance and walking. Uncontrollable twitching makes maneuvering her arms and hands problematic and writing almost impossible. Speaking is also difficult and she has to labor to make others understand her. Yet Debbie has a keen mind and a wonderful sense of humor. She may be trapped in a body that severely limits what she can do but she tries to live as normal a life as possible. Debbie lives with her mother, is active in her church, and communicates with other “differently abled” persons via the Internet. She hopes someday to be able to get married.71 Each day Debbie works part time at Goodwill in their commercial services department, which performs contract work for numerous businesses in the community. She particularly enjoys the daily interactions with her fellow workers and is proud that she brings home a regular paycheck with benefits. Debbie values her independence and her ability to earn a living. In its modern form, Goodwill sells used goods and takes those profits to subsidize programs that help people with disabilities obtain employment. Goodwill is a brand name for 180 or so local notfor-profit agencies that deliver a mix of market-funded and publicly and privately funded services to residents in their local communities. This contemporary approach to delivering employment services to people in need has evolved over more than a century. The story of Goodwill typifies the evolution of efforts by Americans to serve those in need. It is a story of accommodation and adaptation to events and changes in American society and a case study of the tangled relationships between the market, civil, and private sectors that characterize policy delivery in the United States today. Beginnings—Experimenting with a Model Like most twentieth-century charitable endeavors, Goodwill was rooted in religion. It began as mission to the urban poor in Boston in the early 1890s, the era when the settlement house movement first appeared in American cities. Together with a group of student ministers from Boston University, Edgar Helms set out to establish a Methodist mission house in Boston’s North End, one of the poorest and most crime-ridden parts of the city and home to hundreds of thousands of newly arrived immigrants. Helms’s first efforts foundered on the rock of religion, as the various ethnic groups jealously guarded their own religious traditions against proselytizing. A few years later, Helms tried again. In 1895 he took over an unused church in Boston’s South

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End but took a different tack. This time he came up with a genuinely new solution, refined through trial and error. Helms sought to create jobs for the destitute of Boston. His inspiration was recycling: to ask city merchants and well-to-do residents of the city to donate clothing and goods and then to train the poor to clean and repair them for reuse. At first he gave the rehabilitated goods away. This quickly backfired, as distributions of free goods to the poor resulted in chaos—a neighborhood feeding frenzy. His next inspiration was to create a resale market: to resell the rehabilitated goods at token prices to the poor and recycle the income from the sales back into wages for training workers to rehabilitate donations and for other programs for the poor. This worked well. It preserved the dignity of purchasers and workers alike. Helms’s motto was, “Not charity but a chance.” The more income earned, the more support for job training and other programs for the poor. All this began under the umbrella of the Methodist Church. Alongside workshops for training workers, Helms, an ordained minister, established a church, but this time with a difference. His church, called the Church of All Nations, was a place for fellowship between the many different ethnic and religious immigrants served by his training programs, rather than a proselytizing instrument. Many different ministers and congregations were welcomed into the Church of All Nations, where they could conduct services for their own groups in their own languages. Ties to the Methodist Church were periodically strained by this novel approach. Indeed, a first set of battles occurred when the church wanted income from the sale of used goods by Goodwill to be dedicated to church priorities rather than to expanded programs for the poor. Helms rejected this, although he always sought to maintain his ties to the Methodist Church. In addition to job training and placement, Helms rapidly expanded the variety of programs offered to the poor. In its first decades of operation, Goodwill housed and fed the poor, homeless, and elderly in an era before Social Security. It offered child care services for the working poor, created summer fresh-air camps so that children who had never left the city could experience the out-of-doors, conducted night schools for those needing education and literacy training, and offered counseling for alcoholics and others in need. It started numerous stores to sell its recycled goods and operated factories to rehabilitate goods as well as to manufacture rugs and blankets out of donated materials. It even screened movies during the hot summer for all who wanted to watch. Thousands were served each year. Finances, however, were always precarious. Needs always outstripped resources. Replicating the Model Helms’s idea caught on quickly. Goodwill was formally incorporated under Massachusetts law in 1905 as a nonprofit, charitable corporation, a new form of agency at the time. Goodwill owned numerous stores, factories, a church building, and housing for workers, but struggled to meet its mortgages and payroll and to stave off bankruptcy. Nonetheless, a good idea began to spread.In 1910 a second organization named the Bureau of Goodwill Industries was created and chartered to promote Helms’s model for recycling people and goods nationwide. In 1915, the first Goodwill agency outside the Boston area opened its doors in Brooklyn, New York, followed in rapid succession by San Francisco (1916), St. Louis (1916), Los Angeles (1917), Cincinnati (1917), and Baltimore (1917). In many of these cities, the new Goodwills received start-up funding from the Methodist Church. In 1916, at its general conference, the Methodist Church set up a centenary fund through its Board of Home Missions, which was dedicated, in part, to helping with the costs of founding new Goodwills. The 1920s, an era of prosperity for many Americans, was a decade of expansion and consolidation for the Goodwill movement. Most, but not all, of the early Goodwills received funding from the Board of Missions to purchase buildings. By 1925, there were twenty-one Goodwills affiliated

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with the Methodist Church, eighteen of these were separately incorporated under state laws. Ten also received funding from their local community chests. Two were associated with other Protestant denominations (Baptist and Presbyterian).72 Several others operated independently. Helms insisted on several key points. First was local autonomy for each new Goodwill. Second was an increasing focus on job training as the primary mission for these organizations. Third was the importance of its religious and charitable purposes. Yet Helms consistently warned Goodwills against using any of their income to subsidize the expenses of any minister or church affiliated with its workshops and training programs. He insisted that Goodwills serve all peoples without regard to religion, race, or ethnicity.73 In 1925, the Methodist Church sought to disenfranchise all non-Methodist Goodwills, an effort that Helms fought vigorously. In a compromise, the Methodist Church removed Goodwills from its Board of Home Missions and created a separate entity, the Council of Goodwill Industries, dominated by members loyal to Helms. This marked the beginning of a slow process of disengagement between Goodwill and the Methodist Church. The new Council allowed Helms to build cooperative relationships with all Goodwills and to encourage the founding of more Goodwills. As the Depression deepened, the church was less and less able to supply funds, and the ties between the two further weakened. By the end of the Second World War, the separation was more or less complete. The national organization became Goodwill Industries of America. The only remnant of its ties to the Methodist Church were in provisions that one-third to one-fourth of the membership on its national board should come from locals with Methodist roots, a provision that eventually fell by the wayside. By 1938 Goodwill had established itself as a major presence in job training for the unemployed and disabled. That year it employed 28,000 workers, two-thirds of whom were disabled, and successfully placed 5,000 more in jobs. By its fiftieth anniversary in 1952, there were 101 Goodwills in the United States and Canada, each offering programs and services tailored to the needs of the local communities they served. By its centennial year, there were 180 Goodwills across the United States and 45 others in 34 nations. There still is no standard model for a local Goodwill. Each is organized in response to different community needs and contexts. Each focuses on vocational rehabilitation but differs in terms of populations served, programming, and ways to generate revenue. Today, the national organization, Goodwill Industries International, operates as a loose confederation of participating members that collects dues, supplies consulting services, and represents the policy interests of the locals before the federal government, but has little real authority over its local agencies. Adapting to Change Timing is often crucial. Over the twentieth century many of the events that profoundly affected Americans also shaped the evolution of Goodwill. Helms’s model for funding and delivering social and employment services was well-suited to the changing policy environment of the first half of the twentieth century.The Goodwill movement caught on just at the time that citizens began to view government as having greater responsibility for helping its less-fortunate citizens. The first signs of greater government involvement appeared briefly after the First World War. In 1918 Congress passed the Vocational Rehabilitation Act and established the Office of Vocational Rehabilitation (OVR) to assist disabled veterans. In terms of organizations in the civil sector, the Red Cross, not Goodwill, stepped up to the plate. Among leadership in the Goodwills, many at that time resisted working with governments. This reaction changed over the years, as more and more Goodwills at the local level gained experience in helping those with disabilities and in working with public officials.

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A permanent federal role in providing services to the poor and disabled came with the deepening Depression in the 1930s. President Roosevelt’s first initiative, the National Recovery Administration (NRA), established ambitious programs for the unemployed, including provisions targeted at the disabled. The NRA provided grants to support “sheltered workshops” or programs to employ severely disabled workers. In its first foray into the arena of federal policymaking, Goodwills sought, and were initially denied, eligibility to apply for grants through NRA programs. Goodwills were deemed to be philanthropic, rather than cooperative, organizations for the unemployed, as required by the statute. Goodwill then tried lobbying President Roosevelt directly through his advisor Harry Hopkins. Before the problem could be resolved, the Supreme Court found the NRA to be unconstitutional. Despite this setback, FDR continued to push for programs to help disabled workers. In 1935 he formed a committee on sheltered workshops. From this time forward, Goodwill made sure it had a seat at the federal table. Gradually, the federal government assembled programs, small and large, targeting those with disabilities and creating models for service delivery. The Vending Stand Program, requiring concession stands in federal buildings to be staffed by the blind, and providing funds to workshops to train the blind, was a first step in 1936. Later the federal government moved to reorganize and strengthen the OVR. The Fair Labor Standards Act, establishing a minimum wage and limiting the number of hours an employee could work, became law in 1939. Goodwills were covered under its provisions for sheltered workshops. Goodwill leaders participated on the Department of Labor’s advisory committee. The Second World War greatly expanded federal demands for materiel and manpower. The federal government launched programs to salvage key materials and Goodwill became a primary contractor in this effort. The government looked to the disabled to help fill wartime manpower need. The Barden-Lafollette Act was a key breakthrough in 1943, when Congress offered money to induce state rehabilitation offices to develop programs to train mentally and physically disabled workers and to pay for their costs of living during training. This was a change in the way the federal government moved funds to local program delivery. A few months later, the Smith Hughes Act authorized public education units to work with private organizations, such as Goodwill, to train disabled students. A National Council on Rehabilitation, a group of thirty organizations, was set up to coordinate private-sector relationships with the various sectors of government. Goodwill had a seat on the executive council. The head of the national organization also encouraged local Goodwills to participate in the growing numbers of grant programs, especially those for veterans, sponsored by state and federal governments. He warned that the government could well decide to create its own programs for training the disabled and asked them to prove they could do the job, despite the changes to Goodwill’s operations required to comply with government regulations.74 Local agencies responded. By 1945, more than half had regular working relationships with state authorities and agencies. In 1946, when Congress next addressed the Vocational Rehabilitation Act to assess how well it met the needs of disabled war veterans, it found that 80 percent could be rehabilitated in existing facilities with only 20 percent needing special facilities and care. The Director of Vocational Rehabilitation recommended more grants-in-aid for sheltered workshops and a broadening of social security provisions for these workers.75 The federal government sponsored several initiatives to employ the handicapped and in 1948 the OVR reported that federal-state partnerships, along with the private efforts of organizations such as Goodwill, had trained and placed 53,000 disabled workers, with another 120,000 in training and 200,000 on waiting lists.76 By 1950, much of the framework by which Goodwill generates revenues for its programs and delivers services and training to people today was in place. In the half century since, Goodwill has

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continued to generate much of the revenue that supports its programs through its sales of donated goods. In that it is unique. The Rehabilitation Act of 1973 reoriented the delivery of services by providers to emphasize community-based programming rather than sheltered workshops whenever possible. It also signaled the arrival of the disability rights movement and is widely viewed as the precursor to the Americans with Disabilities Act of 1991. The 1973 act added another stream of funding. In response, a new generation of community-based groups was born, emphasizing the rights of individuals with disabilities to receive services locally. Once again, Goodwill adapted. It expanded its capacity to train workers in community settings in an environment encouraging the proliferation of and competition between not-for-profit and, increasingly, for-profit agencies. One impact of such proliferation is specialization, as grants today are narrowly targeted toward niche populations requiring highly specialized services. Presentday Goodwills have adapted and offer numerous specialized programs geared toward receiving government grants. Change continues to shape the development of the present-day Goodwill movement. The 1996 Welfare Reform Act and other federal programs have encouraged states to contract out the delivery of social services to private agencies—a trend that only makes the world of services for disabled populations more complex. Adding to the complexity are federal mandates seeking to improve outcomes and ensure accountability, initiatives that are once again beginning to change the dynamics of public-private partnerships through more, rather than less, government oversight.77 Delivery—All Service Is Local To understand Goodwills today and what they do in the twenty-first century, we now turn our attention to the local level and examine how a Goodwill serves its community. Our example, Goodwill Industries of South East Iowa (GISEA), is a not-for-profit agency serving a seven-county region in Iowa. It is based in two cities, Iowa City and Cedar Rapids, but operates stores and provides services throughout its geographic area.78 GISEA is a relative latecomer. It was one of several new Goodwills founded in the 1960s to meet the demands for local services, as large numbers of those previously institutionalized returned to their communities. Community activists, especially those from the local Association for Retarded Citizens, Kiwanis Club members, and the local council of churches, along with community leaders and parents, provided the impetus to organize. Initially, GISEA provided a small nondenominational chapel for its employees but this was soon closed. The idea of community-based services meant that the disabled should attend their own local churches. GISEA’s first effort was to organize a donations-resale business employing the disabled. At the same time, it sought to expand its programming for various populations in the disabled community by seeking several different revenue streams. Forty years later, GISEA generates more than $12 million in annual revenues, serves over 950 people yearly, and places each year more than 275 in jobs in the community. It is a major regional provider of services to those with disabilities in southeastern Iowa. Its staff is among the most respected service providers in the area. Funding a local Goodwill is a complex business. GISEA has developed several sources of revenue to fund its programs over the decades. Here are the sources, broken down into five categories: First is revenue from its stores. Retail sales provide about 70 to 75 percent of GISEA’s yearly budget. The retail area funds itself and in so doing supports numerous clients, most of whom are either moving through transitional programming aimed toward employment in the regular workforce

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or permanently limited to sheltered employment. Profits, approximately 20 percent of revenue in 2003, are then used to support other programs offered by GISEA that are either not adequately funded by other sources or not supported by any external agency. An example is a Wheels to Work program to help low-income people employed in the community with their transportation needs. GISEA solicits cars as donations, sells those not suited to repair, applies that revenue to repairing the rest, and gives the cars to low-income people. GISEA helps with the costs of insurance and repairs for a year and, at the end of that year, gives a clear title to the recipient. Wheels to Work is neither self-supporting nor funded through grants. Second is revenue from services and grants offered through the various counties served by GISEA. About 18 to 19 percent of the operating budget comes from governments directly. This revenue comes from many sources—local property taxes and state and federal government. Federal funds comprise about 79 percent of this amount, most coming in the form of block grants, with state and local governments often required to match these funds. These funds are then distributed to counties to be used for purchase of service contracts and for various grants-funded programs. GISEA, along with other local service providers, bids for contracts and grants from the county, usually by submitting information about its capacity to provide programming and its projected costs. Contracts for services are negotiated for county-designated programs yearly. GISEA bills the county government after services are delivered. Most grants are federal, from programs in the departments of Education, Labor and Housing, and Urban Development. Each grant specifies a set of tasks to be accomplished and clients to be served within the grant period. GISEA decides whether to compete for an award. Generally GISEA prefers to apply for multiyear grants, in part because short-term grants may involve large start-up costs, disrupt staffing patterns, and carry no guarantee of renewal. Third is revenue from contracts for work performed for local business and industry—approximately 5 percent of its yearly revenue. As part of its job training programs, GISEA seeks contracts that allow its clients to gain skills as they transition into the workforce. These contracts may be for work performed on-site, within GISEA’s centers, or off-site. For example, GISEA has contracts for recycling of various materials at the local Rockwell Collins plant, for light assembly work for local manufacturers, and for housekeeping at local hotels and janitorial services at several locations. Fourth is funding from the two local United Ways in the region served by GISEA. United Way provides about 2 percent of GISEA’s annual revenue. United Way funds often supplement specific programs offered by GISEA that local boards identify as important but underfunded. The United Way helps GISEA to improve its capacity to provide services. Fifth are charitable donations. Most important are the donations of clothing and goods from the public that are the items offered for resale in GISEA’s stores. Items not suitable for resale in local stores generate income from salvage. Donations are at the heart of its retail business. In addition, GISEA does limited annual fund-raising, comprising less than 1 percent of its annual budget. Twice in its history GISEA has also appealed to the community for help with capital projects to build or renovate facilities that house its programs and services. GISEA serves many different groups of people. Among the categories of people served are those with mental retardation, mental illness, physical disabilities, brain injuries, learning disabilities, and substance abuse problems, as well as the homeless and residents in public housing. To meet varying needs, GISEA offers more than fifteen different types of employment-related programming, six of which are listed below. • Assessment services assist adults and high school students in special education programs in identifying their employment and career interests, strengths, and needs and make recommendations

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about ways to overcome barriers to employment. Included are programs for vocational evaluation, work evaluation, and community-based assessment. • Assistive technology services use adaptive technologies or devices to increase the independence of the person served. GISEA offers training to enhance computer and communication skills and living environments through the use of adaptive technologies. • Case-management services help with the advocacy, referral, support, and administrative processes for persons not able to make decisions or manage their affairs on their own. GISEA provides such services for persons with brain injuries and their families. • Community employment services match the interests and abilities of individuals with the employment needs of local business and industry. These include job placement and supported employment, including staff working as off-site job trainers, plus services to help youth and criminal offenders with mild to moderate disabilities make the transition to work. Other programs assist with transportation to work, either by supplementing the costs of rides or by providing a car. • Facility-based vocational services are offered on-site, within GISEA’s own stores and centers. Work adjustment, occupational skills training, and other programs are designed to improve job-related attitudes, behaviors, and skills and then to work toward the individual gaining greater employment independence. Skills training is offered in several fields: retail, clerical, computer operations, janitorial, and dock/warehouse. • Supported community living services work with individuals with disabilities in the community to improve their capacity to live independently. These services include meal preparation, household chore completion, emergency planning, scheduling, transportation, shopping, recreation, managing money, and advocacy, as needed. Many of these separate programs mirror grant opportunities supported by both government and charitable foundations at local, state, and even federal levels. Over a forty-year period, GISEA has become a major player among agencies delivering employment-related services to people with disabilities in southeast Iowa. Its evolution and expansion track the growing trends of privatization and specialization in social services generally. Most of GISEA’s programs reflect the vagaries of federal, state, and local initiatives and funding. Its core business, however, permits GISEA some stability and independence as an independent agency. Many local nonprofits also engaged in the delivery of social services are not as fortunate. What Does It Mean—Mutual Dependencies So what does this story tell us? It tells us about many Debbies and how their needs are met. It describes constant needs and a century of changing arrangements to meet those needs. It is a tale of efforts, first by churches and individuals, and then, by groups, to help alleviate suffering. It is a tale about the gradual transformation of government and its expanding role in meeting the needs of some of its citizens. Yet, even when moved to action, governments need help in delivering benefits and have come to depend on local agencies in communities across the land. The agencies involved in delivery are infinitely varied, each with its own distinctive history, context, staffing, and programming. Government and private agencies depend on each other to address problems of unemployment and disability. And where are we headed? Some characterize contemporary patterns for delivering federal- and state-funded services as a “hollowed out” state and lament the lack of mechanisms of control over third-party providers.79 The case study presented here suggests otherwise. At least in the field of employment for those with disabilities, policy has always been jointly produced. The state has never

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had a solid core of programming. Indeed, governments can only create, regulate, and fund services. Delivery, at least in terms of employment services for the disabled, has always been local, dependent on community-based agencies. This has not and will not change in the foreseeable future. So, the question then is one of control. How should the governments that fund services oversee their delivery? And to what degree? What does accountability mean for local agencies and for government within the framework of the delivery system? How much of their limited funds should such agencies devote to generating evidence of compliance and to measuring results? Answers are currently under debate. Larger, more established local agencies may have the resources and experience to adapt, but smaller, niche organizations, formed to meet newly defined needs, may encounter greater burdens. This may slow the emergence of innovative agencies and the spread of practical solutions that often emerge at the local level—something we may want to guard against.

KEY TERMS charters—special contracts initially issued by legislatures, and subsequently by state agencies, that establish independent corporate entities. Charters are grants of authority from a state that accord rights and privileges and impose special duties and obligations to an entity. joint production—policy produced through the combined efforts of the public and market sectors. Joint production takes two forms: contracting and hybrid (mixed public-private) organizations. QUESTIONS FOR DISCUSSION 1. Evaluate this statement: “The question is not if, but how government and the marketplace should work together.” 2. How did the federal structure of our government institutions influence the evolution of the market/commercial sector? What evidence is there of continuing evolution? 3. What are the advantages and disadvantages of joint policy production reliant on the marketand civil-sector institutions? To what degree should the evolution of hybrid institutions be encouraged? 4. Evaluate this statement: “In the United States the delivery of goods and services to individuals and groups, especially in the domain of social services, could not be accomplished without institutions in the civil sector.” 5. Evaluate this statement: “The emergence of the private sector, with its focus on individuals and individual rights, has created a disconnect between the ideas of the common good and individual rights and has eroded social capital and public trust to be replaced by the ‘me’ generation.” 6. To what degree is President Kennedy’s 1961 statement, “Ask not what your country can do for you but rather what you can do for your country” outdated? SUGGESTED READINGS Boris, Elizabeth T., and C. Eugene Steuerle, eds. Nonprofits and Government: Collaboration and Conflict. Washington, DC: Urban Institute Press, 1999. Chandler, Alfred D., Jr. “The Large Industrial Corporation and the Making of the Modern American Econ-

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omy,” in Institutions in Modern America: Innovation in Structure and Process, ed. Stephen E. Ambrose. Baltimore, MD: Johns Hopkins University Press, 1967, pp. 77–101. Curry, Leonard P. The Corporate City: The American City as a Political Entity, 1800–1850. Westport, CT: Greenwood Press, 1997. Elazar, Daniel J. American Federalism: A View from the States. 2nd ed. New York: Thomas Y. Crowell, 1972. Frumkin, Peter. On Being Nonprofit: A Conceptual and Policy Primer. Cambridge, MA: Harvard University Press, 2002. Hall, Peter Dobkin. Inventing the Nonprofit Sector. Baltimore, MD: Johns Hopkins University Press, 1992. Hammack, David C., ed. Making the Nonprofit Sector in the United States: A Reader. Bloomington, IN: Indiana University Press, 1998. Hanrahan, John D. Government by Contract. New York: W.W. Norton and Company, 1983. Kettl, Donald. Sharing Power: Public Governance and Private Markets. Washington, DC: Brookings Institution, 1993. Light, Paul C. Making Nonprofits Work. Washington, DC: Brookings Institution, 2000. Nagle, James F. A History of Government Contracting. Washington, DC: George Washington University Press, 1992. Novak, William J. The People’s Welfare: Law and Regulation in Nineteenth Century America. Chapel Hill, NC: University of North Carolina Press, 1996. O’Neill, Michael. The Third America: The Emergence of the Nonprofit Sector in the United States. San Francisco, CA: Jossey-Bass, 1989. Prechel, Harland. Big Business and the State: Historical Transitions and Corporate Transformation, 1880s– 1990s. Albany, NY: State University of New York Press, 2000. Putnam, Robert D. Bowling Alone: The Collapse and Revival of American Community. New York: Simon & Schuster, 2000. Rosenau, Pauline V., ed. Public-Private Policy Relationships. Cambridge, MA: MIT Press, 2000. Salamon, Lester, ed. Beyond Privatization: The Tools of Government Action. Washington, DC: Urban Institute Press, 1989. Salamon, Lester. Partners in Public Service: Government-Nonprofit Relations in the Modern Welfare State. Baltimore, MD: Johns Hopkins University Press, 1995. Skocpol, Theda. Diminished Democracy: From Membership to Management in American Civic Life. Norman, OK: University of Oklahoma Press, 2003. Skocpol, Theda, and Morris P. Fiorina. eds. Civic Engagement in American Democracy. Washington, DC: Brookings Institution, 1999. Smith, Steven, and Michael Lipsky. Nonprofits for Hire: The Welfare State in the Age of Contracting. Cambridge, MA: Harvard University Press, 1993.

NOTES 1. Leonard P. Curry, The Corporate City: The American City as a Political Entity, 1800–1850 (Westport, CT: Greenwood Press, 1997), p. 211. 2. William J. Novak, The People’s Welfare: Law and Regulation in Nineteenth Century America (Chapel Hill, NC: University of North Carolina Press, 1996), p. 106. Copyright © 1996, University of North Carolina. Materials reprinted with permission. See footnote 112, referencing Joseph S. Davis, Essays in the Earlier History of American Corporation, Vol. 2 (Cambridge, MA: Harvard University Press, 1917), pp. 24–27. 3. Novak, The People’s Welfare, p. 106, footnote 113, referencing James Willard Hurst, The Legitimacy of the Business Corporation in the Law of the United States, 1780–1970 (Charlottesville, VA: University of Virginia Press, 1970), pp. 14–15; and Louis Hartz, Economic Policy and Democratic Thought: Pennsylvania, 1776–1860 (Cambridge, MA: Harvard University Press, 1948), p. 38. 4. Novak, The People’s Welfare, p. 104. 5. Alfred D. Chandler, Jr., “The Large Industrial Corporation and the Making of the Modern American Economy,” in Institutions in Modern America: Innovation in Structure and Process, ed. Stephen E. Ambrose (Baltimore, MD: Johns Hopkins University Press, 1967), p. 74. 6. Novak, The People’s Welfare, p. 105. 7. Ibid., p. 107.

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8. Harland Prechel, Big Business and the State: Historical Transitions and Corporate Transformation, 1880s–1990s (Albany, NY: State University of New York Press, 2000), p. 26. 9. Trustees of Dartmouth College v. Woodward, 4 Wheat (U.S.) 518 (1819). 10. 118 U.S. 394 (1886). 11. Novak, The People’s Welfare, p. 107. 12. Prechel, Big Business and the State, p. 25. 13. Ibid., p. 36. 14. Chandler, “The Large Industrial Corporation,” p. 74. 15. Prechel, Big Business and the State, pp. 42–39. 16. John D. Hanrahan, Government by Contract (New York: W.W. Norton & Company, 1983), p. 21. 17. Ibid. 18. James F. Nagle, A History of Government Contracting (Washington, DC: George Washington University Press, 1992), p. 519. 19. This discussion relies in large part on Daniel Elazar, American Federalism: A View from the State, 2nd ed. (New York: Thomas Y. Crowell, 1972). 20. Compare Donald Axelrod, Shadow Government: The Hidden World of Public Authorities (New York: John Wiley & Sons, 1992), p. 17 with Jerry Mitchell, The American Experiment with Government Corporations (Armonk, NY: M.E. Sharpe, 1999), pp. 15–16. 21. Ibid., pp. 19–20. 22. E.S. Savas, Alternatives for Delivering Public Services: Toward Improved Performance (Boulder, CO: Westview Press, 1977), p. 223. 23. Lester M. Salamon, ed., Beyond Privatization: The Tools of Government Action (Washington, DC: Urban Institute Press, 1989), p. 10. 24. Lester M. Salamon, Partners in Public Service: Government-Nonprofit Relations in the Modern Welfare State (Baltimore, MD: Johns Hopkins University Press, 1995). 25. Nicholas Lovrich, Jr., “Policy Partnering Between the Public and the Not-for-Profit Sectors,” in PublicPrivate Policy Relationships, ed. Pauline V. Rosenau (Cambridge, MA: MIT Press, 2000), p. 193. 26. Salamon, Beyond Privatization, p. 11. 27. Donald Kettl, Sharing Power: Public Governance and Private Markets (Washington, DC: Brookings Institution, 1993), p. 20. 28. Ibid., p. 161. 29. Ibid., p. 159. 30. David C. Hammack, ed., Making the Nonprofit Sector in the United States: A Reader (Bloomington, IN: Indiana University Press, 1998), p. xv. 31. For further reading see Gabriel Almond and Sidney Verba, The Civic Culture (Princeton, NJ: Princeton University Press, 1963). 32. Michael O’Neill, The Third America: The Emergence of the Nonprofit Sector in the United States (San Francisco, CA: Jossey-Bass, 1989), p. 20. 33. O’Neill, The Third America, p. 24. 34. E.C. Lashbrooke, Jr., Tax Exempt Organizations (Westport, CT: Quorum Books, 1985), p. 1. 35. Hammack, Making the Nonprofit Sector, p. xvii. 36. See Kathleen D. McCarthy, “Parallel Power Strudtures: Women and the Voluntary Sphere, 1990,” in Making the Nonprofit Sector in the United States, ed. Hammack, pp. 248–63. 37. Alexis de Tocqueville, Democracy in America, ed. Richard D. Heffner (New York: Mentor Books, 1956). The two volumes were originally published in 1835 and 1840. 38. Robert D. Putnam, Making Democracy Work: Civic Traditions in Modern Italy (Princeton, NJ: Princeton University Press, 1993); and Robert D. Putnam, Bowling Alone: The Collapse and Revival of American Community (New York: Simon & Schuster, 2000). 39. Theda Skopcol, Marshall Ganz, and Ziad Munson, “A Nation of Organizers: The Institutional Origins of Civic Voluntarism in the United States,” American Political Science Review 94, no. 3 (September 2000): 527–46. 40. Ibid., p. 533. 41. Lashbrooke, Tax Exempt Organizations, p. 4. 42. Amos G. Warner (1908), “Argument against Public Subsidies to Private Charities,” in Making the Nonprofit Sector, ed. Hammack, p. 285. 43. Ibid., p. 286.

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44. Salamon, Partners in Public Service, p. 1. 45. Kettl, Sharing Power, p. 168. 46. Steven Smith and Michael Lipsky, Nonprofits for Hire: The Welfare State in the Age of Contracting (Cambridge, MA: Harvard University Press, 1993). 47. Kettl, Sharing Power, p. 170. 48. C. Eugene Steuerle and Virginia A. Hodgkinson, “Meeting Social Needs: Comparing the Resources of the Independent Sector and Government,” in Nonprofits and Government: Collaboration and Conflict, ed. Elizabeth T. Boris and C. Eugene Steuerle (Washington, DC: Urban Institute Press, 1999), p. 92. 49. Ibid., p. 88. 50. Smith and Lipsky, Nonprofits for Hire, pp. 120–27. 51. Kettl, Sharing Power, p. 172. 52. Paul C. Light, Making Nonprofits Work (Washington, DC: Brookings Institution, 2000), p. 73. 53. Smith and Lipsky, Nonprofits for Hire, p. 131. 54. Light, Making Nonprofits Work, p. 73. 55. Novak, The People’s Welfare, p. 245. 56. Barron v. Baltimore, 8 L.Ed. 672 (1833). 57. Stuart Banner, “The Political Function of the Commons: Changing Conceptions of Property and Sovereignty in Missouri, 1750–1850,” American Journal of Legal History 41 (January 1997): 61–93. 58. Chicago B. & Q Railroad v. Chicago, 166 U.S. 226 (1897). 59. Gitlow v. New York, 268 U.S. 652 (1925). 60. Near v. Minnesota, 283 U.S. 697 (1931). 61. See Engel v. Vitale, 370 U.S. 421 (1962); Epperson v. Arkansas, 393 U.S. 97 (1968); Lemon v. Kurtzman, 403 U.S. 602 (1971); Sherbert v. Verner, 374 U.S. 398 (1963); and Wisconsin v. Yoder, 406 U.S. 205 (1972). 62 . Mapp v. Ohio, 367 U.S. 643 (1961). 63. Powell v. Alabama, 287 U.S. 45 (1932). 64. Gideon v. Wainwright, 372 U.S. 335 (1963). 65. Pierce v. Society of Sisters, 268 U.S. 510 (1926). 66. See, for example, James S. Coleman, Foundations of Social Theory (New York: Belknap Press, 1994); Putnam, Bowling Alone: The Collapse and Revival of American Community; and Theda Skopcol and Morris P. Fiorina, eds., Civic Engagement in American Democracy (Washington, DC: Brookings Institution, 1999). 67. Skopcol and Fiorina, Civic Engagement in American Democracy, p. 2. 68. Ibid., p. 499. 69. David Brooks, Bobos in Paradise (New York: Simon & Schuster, 2000). 70. Stephen H. Linder and Pauline V. Rosenau, “Mapping the Terrain of the Public-Private Policy Partnership,” in Public-Private Policy Relationships, ed. Rosenau, p. 9. 71. Based on a true story, as recounted by Steve Mundahl, 100 Years of Goodwill: Touching Lives Through the Power of Work (Greensboro, NC: Circe Press, 2002). 72. John Fulton Lewis, Goodwill: For the Love of People (Washington, DC: Goodwill Industries of America, 1977). p. 137. 73. Ibid., p. 119. 74. Ibid., p. 264. 75. Ibid., pp. 293–94. 76. Ibid., p. 316. 77. Mary Bryna Sanger and Strobe Talbott, The Welfare Marketplace: Privatization and Welfare Reform (Washington, DC: Brookings Institution, 2003). 78. Materials for this section are based on the coauthor’s service on the board of directors of Goodwill Industries of Southeast Iowa. 79. H. Brinton Milward and Keith G. Provan, “Governing the Hollow State,” Journal of Public Administration Research and Theory 2 (2000): 359–79.

CHAPTER 20 Content: Policies and Policymaking PREVIEW As you read this chapter, keep in mind these key questions. • • • • • • • • •

What is a policy domain? What is an issue? What is a policy niche? How do domains, issues, and niches evolve? What is a policy venue and what is venue shopping? How can policy maps be used to track the evolution of policies? What are policy networks and what forms do they take? How are policy networks managed? How do policies change?

20.1 INTRODUCTION In this chapter we focus on the relationships between policy content and the policymaking process. In chapters 17 through 19 we outlined the Where of policy levels and sectors. Policy is made at national, state, local, and neighborhood levels by government, market, civil, and private institutions. Although the technologies may be roughly the same, making policy for your local homeowners association differs from making policy in Congress. And the involvement of government bureaucrats, commercial contractors, faith-based organizations, or private volunteers also matters. However, policy entrepreneurs and policymakers don’t just make policy, they make policy about something. About health care or jobs or clean air or terrorism or schools or national defense. While many policymakers—for example, legislators, executives, judges—deal with a broad range of policy issues, others specialize. They focus on a relatively narrow range of topics or issues. This is particularly true in the world of policy advocacy. Lobbying organizations crystallize around specific issues—a disease like AIDS, a commodity like peanuts, or a technology like the Internet. Different issues have different origins and histories, involve different organizations, and utilize different methods of production and delivery. As we shall see, these differences can be mapped and tracked throughout the life history—or more accurately, each life cycle—of a public policy. Finally, we change perspectives entirely and look at how policies change in the making. Instead of viewing how process or context affects public policy, we now examine how policies evolve and influence both process and context. 497

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20.2 DOMAINS Put simply, a policy domain is a substantive focus of concern for policymaking. When we talk about policy domains we are usually talking about a broad area or arena of policymaking such as national defense, energy, health care, or homeland security. How do we know when a policy domain exists? We observe the participants in the policymaking process and see how they define their boundaries of concern and action. “A national policy domain is therefore a set of actors with major concerns about a substantive area, whose preferences and actions on policy events must be taken into account by the other domain participants.”1 Or to put it more succinctly, a policy domain is a “system of mutually oriented organizational actors.”2 When policy entrepreneurs and policymakers pay attention to one another, they create their own policy arena or system of action. Participants in health care policymaking tend to interact primarily with other participants in the health care domain and only infrequently with participants in other domains such as national defense or agriculture or energy. Or course, these boundaries are quite fluid—health care issues do intersect with national defense and farmers do produce corn to be processed into gasohol—but interaction within a policy domain is usually much higher than among policy subsystems. Moreover, as we shall see, when policymakers and policymaking cross these invisible boundaries, unusual and sometimes unanticipated things happen. The literature on public policymaking is replete with various terms for policy domains—for example, policy subsystems,3 issue networks,4 policy communities,5 and portfolios.6 While each of these terms has its specific interpretation and uses, they all spring from a common concept—that policymaking takes place within specialized arenas and that the characteristics of these arenas make a difference in the policymaking process. That is, for different domains we should expect to see different configurations of inputs, production technologies, outputs, and outcomes. Thus, the notion of policy domain or subsystem or community is useful to both policy actors and policy analysts. Domains are, indeed, handy as such points of reference, at least as ideas. First, domains and what they do within them are understood by public officials. They can talk about their work in each domain, and people can talk back to them about their domain activities. The health domain is a different place from the labor domain in federal policy making. Second, domains give meaning to a common set of problems, such as higher education or welfare. Domains, in that sense, have integrating properties. They’re like sticky glue, but not super glue. What any one advocate within a domain does may have transactional effects on the other participants. . . . Third, domains house institutional policy bases.7 A domain is sort of like a policy nation or country—the inhabitants all speak the same language and recognize that they all—at least to some extent—share a common fate. Thus, a policy domain is the subsystem or set of policy actors where the policymaking process takes place, as shown in Figure 20.1 (see facing page). However, the concept of a policy domain or subsystem has its limitations. “Domains, first of all, are not mutually exclusive. Is food safety part of agriculture or health care? Second, all issues needn’t fit only one domain. For example, water protection fits policies of the agricultural domain, as well as those of commerce and manufacturing, and pretty much everything else . . . . As a consequence, very few organized interests are participants in only a single policy domain, or even at only a single moment in time.”8 Policy domains inevitably overlap, and this overlap increases as new issues arise at the periphery

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Figure 20.1 Policymaking and Policy Domains

Policy Outcomes

Outputs

Inputs

Production!

Domain _

of each policy domain. As a result, the phenomenon of growing interdependence among policy sectors that we observed in chapter 17 also holds true for policy domains. While Figure 20.2 illustrates this growing interdependence among just two policy domains, in reality there are many policy domains with overlapping boundaries and interacting institutions. Figure 20.2 Growing Interdependence of Policy Domains

Core

Domain A

Domain B

Domain A

Domain B

Periphery While policymaking at the core of a domain—for example, farm subsidies in the agricultural domain—may still remain relatively isolated from “external” influences, much of the action now takes place at the periphery. Here, actors and institutions from multiple policy domains get involved, making the trajectory of policy issues from inputs to outputs and outcomes ever more complex and unpredictable. Moreover, policy domains change. The boundaries of policy domains are constantly shifting as new issues arise and existing institutions extend their reach. New technologies or problems appear—the Internet, cloning, SARS—and policy institutions expand their repertoires and adapt their tools to accommodate. Policy domains evolve, as shown in Figure 20.3 (see next page). Over time, the boundaries of policy domains both stretch and shrink to manage new policies that emerge. For example, in the wake of 9/11 and the anthrax attacks in the fall of 2001, bioter-

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Figure 20.3 Evolution of Policy Domains

Domain A

Domain B

Domain A

Domain B

rorism suddenly moved to the top of the public agenda. But, should bioterrorism policymaking be housed in the public health domain, the national security domain, or both? Existing policy subsystems compete with each other for “ownership” of new problems, and the compromises that result produce a complicated mosaic of contorted, overlapping boundaries that make sense only to their institutional participants. While we would like to think of policy domains as neat circles with clearly defined borders, in reality, policy domains—like America’s gerrymandered voting districts—resemble a crazy quilt of bizarre shapes and institutional boundaries. Finally, policy domains not only evolve, they can—on rare occasions—be created from scratch. As a result of public pressure, major crises, or both, policymakers carve out pieces of existing policy subsystems and merge them into a new, integrated policy domain. In response to the energy crisis of the 1970s, Congress glued a diverse array of agencies and missions together to form the Energy Department—thereby creating an institutional center for an autonomous energy domain. Three years later, in 1980, the Department of Education was born, thus legitimizing an existing policy subsystem. Most recently, in 2003, the Department of Homeland Security (DHS) was formed out of twenty-two federal agencies. Virtually overnight, the president and Congress fashioned a new policy domain with a mission that had been almost unimaginable before September 11, 2001, as illustrated in Figure 20.4. Figure 20.4 Homeland Security: A New Policy Domain

Emergency Preparedness] Intelligence

National Defense

National Defense

Intelligence

Homeland Security Transportation

Public Health Public Safety

Public Health

Transportation Public Safety

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However, unlike the departments of Energy and Education, the new department could not take advantage of a preexisting community of interest, either inside or outside the government. There were virtually no committees, lobbies, think tanks, or other institutions dedicated to the mission of “homeland security” before the creation of the department. A vast government department has been created, but a true policy subsystem is still a work in progress.

MINI-CASE 20.1 Protecting One’s Image in a Crowded Domain On September 10, 2004, the NBC television network premiered a new dramatic series in its lineup of programs for the fall. The series, Medical Investigation, a combination of ER and CSI, followed a team of biomedical sleuths around the world while they track down deadly diseases that threaten peoples’ lives. The show was loosely based on real-life incidents and people who worked for the Epidemic Intelligence Service (EIS), a branch of the federal Centers for Disease Control and Prevention (CDC). Staff from the CDC worked with the show’s producers for months to help with accuracy and realism. EIS staff actually does chase diseases around the earth seeking to protect American citizens and others from the deadly ravages of outbreaks of Ebola, AIDs, anthrax, and avian flu. So, why was there a problem? The show depicted its heroes as employees of the National Institutes of Health (NIH), not the CDC. The NIH, a much larger, richer, better-known federal agency, was credited with work actually performed by CDC. By the time the mistake was recognized, several episodes had been shot and the roles set in concrete, at least according to the producers. CDC types were apoplectic. Some saw a conspiracy on the part of Health and Human Services (HHS), the department overseeing both the CDC and NIH, in failing to act to correct the error quickly enough. Some at NIH worried that the show’s dramatic exaggerations, with agents seducing reporters, picking locks in numerous illegal entries, and bullying citizens, would rebound against NIH. Fortunately for CDC and NIH, the show never caught on and was soon cancelled. 20.3 ISSUES What goes on inside policy domains? From a policy entrepreneur’s perspective, a domain is a logical grouping of policy issues. In chapter 4 we defined an issue as a problem wrapped in people. An issue is a problem that has garnered alternative solutions, advocates, stakeholders, and public recognition. An issue bundles the What and Who of public policymaking together. As we have suggested previously, issues—not problems—are the primary objects or raw materials of policy production. Unlike policy analysts, policymakers cannot deal with problems and their solutions in isolation. They must work with the whole bundle, with the entire network of interests that surround a policy problem. Every policy domain, therefore, has a population of issues, as illustrated with the stars in Figure 20.5 (see next page). There are two aspects of policy issues that merit further attention. 20.3.1 Multiple Domains The first thing to note with Figure 20.5 is that some issues may belong to more than one domain. Bioterrorism, for example, fits in both public health and homeland security domains. Institutions in both

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Figure 20.5 Issues and Policy Domains

Domain A

Domain B

domains jockey for roles in the policy production process. And sometimes the participants can manage to move an issue from one domain to another—for example, from transportation to homeland security or from education or transportation or from just about any other policy domain to national defense. Indeed, during the long years of the Cold War with the Soviet Union, labeling a policy issue as vital to the national defense became a standard tactic for policy advocates. This argument was used to advance such diverse policy initiatives as interstate highway construction, federal funding for higher education, and even civil rights. In every era, some policy domains are hot and others are not, so efforts to shift policy issues to hot domains is a permanent feature of policymaking in the United States. In the post9/11 world, both national defense and nascent homeland security domains have become the focus of public attention and the institutional neighborhoods of choice for policy issues from diverse origins.

MINI-CASE 20.2 Reconfiguring the Intelligence Community Who has heard of the Bureau of Diplomatic Security? Turns out very few have. Yet, it is the granddaddy of security agencies, dating from World War I, and provides security and intelligence services for those in the State Department. First called the Bureau of Secret Intelligence, it started with eight employees. Over the last dozen years, the number of its agents has doubled. It now has more agents deployed around the world than any other American law enforcement agency. Today, Diplomatic Security is lodged deep inside the State Department, a part of the Foreign Service, and employs 1,400 agents and a staff of 32,000. Its mission is to analyze threats and develop plans for protecting diplomatic personnel and other Americans working abroad. The Bureau of Diplomatic Security plays a central role in combating terrorism. Charged with protecting U.S. diplomatic interests, it protects high-profile Americans abroad, including the 2004 U.S. Olympic Team in Athens, as well as foreign leaders like Hamid Karzai of Afghanistan. It provides security for places like the U.S. embassies in Baghdad, Kenya, and Tanzania, the targets of al Qaeda bombs. It administers the Rewards for Justice Program and has paid out more than $57 million to informants to prevent terrorism or catch terrorists, including the reward offered for the capture of Saddam Hussein.

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So why was the Bureau not up for grabs in the post-9/11 reorganization of the intelligence and security communities? Why is it not one of those agencies being reshuffled, along with the CIA, the FBI, the Secret Service, the Defense Intelligence Agency, or any of the other agencies with security and intelligence responsibilities? Does the status of Diplomatic Security simply reflect the “slicing and dicing” of intelligence and security functions into ever-smaller pieces? Or, does its long history and association with the State Department, plus the fact that few are aware of it serve it well? When domains are reconfigured, sometimes a low profile protects an agency—at least from the perspective of those within the agency.

20.3.2 Policy Niches Policy issues also differ in size or scale. Or, more precisely, issues vary in the number of participants and the level of activity involved. Some issues mobilize hundreds of lobbying groups and capture public attention. Other issues remained confined to a small circle of interests and receive only occasional media coverage. The size of the issue stars in Figure 20.5 indicates differences in the scope of activity among policy issues. What is remarkable is that, at any one time, most of the activity is focused on a very small number of hotly contested issues, while most issues involve few participants and relatively little conflict. Studies at both national and state levels have repeatedly demonstrated that the distribution of lobbying activity is highly skewed. “The vast majority of lobbying occurs in a tiny fraction of the issues. Conversely, in the vast bulk of issues on which interest groups are active, they have the grounds relatively to themselves.”9 Most issues dwell in relative obscurity, involve only a handful of policy advocates, and are characterized by limited conflict. They fit the mold of client politics as described in chapter 4, where a few benefit greatly, but the costs are widely distributed. The classic examples of client politics are subsidies to targeted groups of farmers. The preponderance of issues engenders little attention from either interest groups or the public. The obvious question is: Why? Why do most issues live in the political shadows? In the first instance, many—perhaps most—issues fit the model of client politics. Most problems affect only a relatively small group of individuals and these individuals have a vast assortment of tools and techniques available to help them transform private interest into public policy. Moreover, legislators must master client politics to survive. Legislators succeed to the extent that they can get the public to pay for benefits for their constituents. Of course, sometimes these narrowly defined issues grab media and public attention, but that is the exception, not the rule. The second reason is the nature of public, or rather media, attention. The public’s attention span is quite limited, so media coverage tends to go to the extremes of either no coverage or nonstop coverage. Most issues dwell in the shadows, because the klieg lights of media attention shine brightly only on the “crisis du jour.” A final reason is that policy entrepreneurs like it that way. Policy entrepreneurs prefer the shadows to the spotlight. They prefer to carve out their own policy niche. The term niche is borrowed from the study of ecology and refers to the role a particular interest group or entrepreneur plays in a policy domain or subsystem. A group needs to define its own identity if it is to have an impact on the policymaking process. “To have a niche, first of all, have a recognizable issue and stick with it. Or at least have a small set of core issues necessary to that interest. That’s where issue selection becomes so important. A good issue will be around for a long time. A bad issue won’t be. Second, to have a recognizable niche, an interest needs to play politics in a predictable way, a way that other policy participants expect this particular interest to behave. . . . There are more active interests out there in

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politics. That creates competition for time and attention. It’s not so easy to win access. Recognizable and predictable lobbies get in first.”10 So what is the impact of all these policy entrepreneurs trying to build their own individual policy niches in the landscape of a policy domain? In the first place, “nichers” seek to define issues as narrowly as possible. They slice policy issues into manageable pieces. Second, they look for issues with which they can win. “[I]n order to avoid risks, and thus become labeled a loser interest, niche followers try to select issues that others ignore. This not only minimizes competition among those who represent related things, it also makes it more likely that an interest can win.”11 As a result, policy domains are characterized by the proliferation, miniaturization, and balkanization of issues. Issues not only multiply, they get smaller and smaller and less connected with other issues. Thus, issue density increases, as illustrated in Figure 20.6, but policy coherence declines. Figure 20.6 Proliferation of Issue Niches in a Policy Domain

Domain A

Domain A

Policymaking has increasingly become the art of bundling dozens, or even hundreds, of “micropolicies,” many of which bear little relationship to one another and some of which conflict.

MINI-CASE 20.3 Target a Niche to Get Things Done Who says individuals don’t have an impact on policy? Or that the system doesn’t respond to people? Don’t tell that to Janette Fennel, who has become a one-woman auto-safety crusader who gets results. Fennell became an activist after she and her husband were robbed at gunpoint and locked in the trunk of their car in 1995. After their escape, she set out to ensure that no one else would have to endure such an ordeal. Turns out she was not alone—260 people had died from being locked in their trunks over a twenty-year period. Armed with evidence of a larger problem, she lobbied the National Highway Traffic Safety Administration (NHTSA) to generate a rule requiring car manufacturers to install trunk release buttons in every vehicle. In 2000, NHTSA did just that. Building on her success, Fennell then turned her attention to another issue—making power window switches on cars childproof. Again, she collected data documenting twenty-three deaths of children strangled by power windows. Again, the NHTSA responded, this time ordering all vehicles to change their power window switches by 2008. Her next goal is to require

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automakers to install cameras in the backs of vehicles to prevent drivers from backing over people. She has already documented ninety-one deaths in 2003 attributable to the problem. And how does the NHTSA react to this one-woman policymaker? Although praising what she has done, officials also complain about their attention being diverted from more comprehensive issues, like speeding or drunk driving.

20.4 JURISDICTIONS Policy entrepreneurs tend to view policy domains as homes for issues. Issues are the primary inputs into the policymaking process. Policymakers, on the other hand, have a different view. While the boundaries of policy domains are determined by the perceptions of policy stakeholders, the scope of government action is grounded in law. As we have seen in chapter 9, government action is limited by authority. It is the authority of law that determines the boundaries of policy domains for government actors. These boundaries are called jurisdictions. Jurisdiction governs the scope of authority, specifically: • • •

Where authority can be exercised Over whom Over what kinds of issues

The jurisdiction of state courts and legislatures ends at the state line, whereas federal jurisdiction is prescribed by the Constitution. Similarly, courts can only decide cases brought before them; they have limited control over their policy agendas. Finally, public officials are empowered to decide on some types of issues and enjoined from deciding on others. Legislatures can decide on the penalties for criminal acts, but they cannot prosecute individuals for committing those acts. Similarly, the executive branch cannot arrest you and keep you in jail forever as an enemy combatant without some due process of law. While policy entrepreneurs can choose their competency or policy niche, policymakers acquire theirs primarily—though not exclusively—by virtue of the offices they hold. However, that does not mean that policymakers do not defend and attempt to expand their jurisdictions as fiercely as policy entrepreneurs compete for niches. Jurisdictions are essentially property rights over policy issues.12 Jurisdictions are turf. And protecting turf is a survival instinct that policymakers share with nearly all animal species. 20.4.1 Venues In chapter 9 we examined six different sources of authority in public policymaking. They are: • • • • • •

Constitutional law Statutory law or legislative authority Executive authority Judicial authority Administrative authority Direct or popular authority

Public policymakers derive their authority—and thus their jurisdictions or scope of action—from one or more of these sources. Therefore, the first step in policy production is to choose what kinds

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of authority and which authorities to rely on to get things done. If you want to regulate the tobacco industry, do you go to Congress to pass legislation, to the Food and Drug Administration to write punitive regulations, or to the courts to seek civil damages against tobacco companies? Or do you do all three? Each source of authority has limitations on its jurisdiction, so choosing the right kind of authority to fit the needs of one’s issue is critical to the success of the policymaking process. However, selecting a jurisdiction is more complicated than simply choosing a specific authority tool or strategy. As we saw in part V, the American political system is a federal system, with multiple layers of authority. If one cannot regulate cigarette smoking at the federal level, then one can try the state level or—failing that—the local or neighborhood levels of government. Thus, the choice of policy jurisdictions has two dimensions—both what kind of authority and where it shall be exercised. Figure 20.7 shows the matrix of policy jurisdictions or policy venues available to policy entrepreneurs. Figure 20.7 Venues for Public Policymaking

Source of Authority Level

Constitutional

Legislative

Statutory

Executive

Judicial

Administrative

Direct (Popular)

National

(1)

State (50) Local (87,525) Including both general purpose (38.967) and special purpose governments

“Policy venues are the institutional locations where authoritative decisions are made concerning a given issue.”13 There are 87,576 governmental units in the United States and the vast majority of these offer multiple sources of authority or alternative policy venues. Literally speaking, there are hundreds of thousands of policy venues where public policies can be advocated and enacted. Finding a congenial venue—that is, venue shopping—is a major step in the policymaking process. “Venue shopping is an important part of the policy process because it suggests one way that reformers can affect policy change without necessarily having to mobilize large numbers of people, or without having to acquire the resources necessary to compete in venues controlled by their opponents. Indeed, advocacy groups may have little choice but to search for an alternative venue when significant barriers prevent their meaningful participation in others. Under such circumstances, it is more accurate to say that an advocacy group is settling for a venue rather than shopping for one, as shopping implies some degree of choice.”14 Policy advocates and policymakers have hundreds of thousands of laboratories where they can experiment with policy tools and technologies. If you want to promote same-sex marriages, you can surely find someone in authority somewhere to further your agenda. Or, if you wish to halt the transport of nuclear waste you can find a city council or mayor to issue a ban. While federal and state authorities can and do intervene to impose limits to policy experimentation, the number and diversity of venues means that innovators can almost always find their niche somewhere.

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20.4.2 Public Agencies While the vast majority of policy venues have geographically limited jurisdictions, many have broad authority to decide on a wide range of policy issues. As we saw in chapter 10, this is why they are called “general-purpose governments.” This means that the same public officials in a particular venue have the authority to make policy commitments that may impact a wide range of policy domains. The scope and reach of authority of the U.S. Supreme Court are far greater than that of a local city council, yet both are general-purpose decision-making institutions. Unlike “special-purpose governments,” they are policy generalists, not specialists. In contrast, public agencies are policy specialists by definition. They are authorized by general-purpose governments to make public policy within a defined sphere of competency. Like niche-dwelling policy entrepreneurs, the work of public administrators is usually domain specific. Public administrators specialize in public health, public safety, labor, economics, the environment, or one of the score of functional areas we call policy domains. While legislators, executives, and judges move easily from one policy domain to another, bureaucrats are—by virtue of their position—participants in a specialized policy domain. However, to say that public agencies belong to policy domains is to put the cart before the horse. The relationship between public agencies and policy domains is symbiotic. The issues and interest groups that populate a policy domain do not evolve in a vacuum. Interest groups thrive when they are successful and they succeed when governments institute agencies and programs to achieve their policy objectives. As the scope of government activity grows, so too do the scope and diversity of the policy domains that surround them. As agencies multiply and grow they create their own organizational cultures and networks of stakeholders. And if these networks become large enough, they can lobby Congress or state legislatures to spin off a new mega-agency or department that serves as the focal point for a new policy domain. That is how the Department of Veterans Affairs was spun off from the Department of Defense, how the Education Department emerged out of Health, Education, and Welfare, how the Energy Department merged programs from several government departments, and, most recently, how the Department of Homeland Security was created. Department and domain coevolved. The structure of government and the structuring of policymaking activities evolve symbiotically. Therefore, from the perspective of policy producers, the contours of policy domains coincide largely—though not completely—with the boundaries of agency jurisdictions. What really matters as an organizing principle is not the subject matter at hand, but where you have to go to get things done. Policy domains are less conceptual or psychological constructs than operational ones. Participants in a policy domain do share a common fate—they must work on, with, and for the same public agencies. From a producer’s point of view, the picture of policy domains shown in Figure 20.5 should be populated with programs, as illustrated in Figure 20.8 (top of next page), because programs are where issues are transformed into results. To be sure, some policy domains span multiple government departments. Most notably, the intelligence community is called a community precisely because it spans multiple agencies—the Central Intelligence Agency and the National Security Agency—as well as pieces of major government departments—the departments of Defense, Energy, Justice, Treasury, and Homeland Security. While many intelligence programs combine the efforts of multiple departments and agencies, the participants inevitably bring their organizational cultures and turf interests to the table. Since the catastrophic intelligence failures of 9/11 and the lead up to the invasion of Iraq, reformers have argued vociferously for a centralized organization to manage intelligence operations and budgets.

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Figure 20.8 Policy Domains and Policy Programs Department (Domain) A

Department (Domain) B

Only time will tell if bureaucratic reorganization can bring some measure of coherence to the competing fiefdoms of the intelligence community. 20.4.3 Legislatures Bureaucratic organizations and policy domains evolve relatively slowly. While it took Congress about a year to create the Department of Homeland Security, it will take many more years to transform the associated agencies, interest groups, and policy producers into a working community. Legislators, however, must negotiate turf on a week-to-week or even day-to-day basis. In order to manage the vast array of issues that come before them, legislatures set up a committee system that allocates jurisdiction over categories of policy issues to individual committees for consideration. These committees have the expertise to evaluate policy proposals and make recommendations for action to the legislature as a whole. The problem is that new bills dealing with new issues threaten the jurisdictions of legislative committees on an ongoing basis. In legislative politics, who owns an issue is often as or even more important than what is done about it. “Within legislatures, jurisdictions distinguish one committee from another. They are, in almost every sense, a lawmaker’s legislative power base. It is no wonder that committee boundaries are hotly contested. . . . Why fight over committee jurisdictions? These battles are about power and influence in their rawest forms. They are about property rights over public policies.”15 Not surprisingly, recent studies have shown that the allocation of jurisdictional rights to policy issues is crumbling under the weight of the sheer number and diversity of policy issues. One study of jurisdictional ambiguity in Congress concluded that “Today’s committee system is choc-a-block with conflicting, overlapping, redundant, and confusing jurisdictional arrangements, despite periodic attempts to simplify the committee system and make it more responsive to the majority . . . . The decline in jurisdictional clarity . . . is an inevitable consequence of an ever-more-dense public agenda. As Congress considers a greater number of distinct issues, the clarity of its committee system inevitably has had to decline.”16 The deluge of policy issues is making it more difficult for legislators and legislative committees to defend their turf. As a result, multiple committees are often involved in the production of legislation and public policies bear the imprint of dozens, if not hundreds, of craftsmen. What, then, are the impacts of jurisdictional ambiguity and fragmentation on the policymaking process? On the one hand, policies sewn together like quilts from many hands can make life difficult for

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those entrusted with policy delivery. Many times, the pieces don’t quite fit together. When policy commitments emerge from a single jurisdiction, policy design is likely to be more coherent and the authors’ objectives transparent to policy producers. When legislation is cobbled together from disparate sources, program management becomes a challenging task indeed. On the other hand, a system of ambiguous and fragmented committee jurisdictions opens the door to new participants and new ideas. “The overlap between issues makes predicting policy outcomes more difficult since jurisdictions sometimes change, but this dynamic also gives the institution greater ability to produce policy change as new ways emerge of thinking about old issues. Clarity of jurisdictional authority may be efficient in some senses, but it can lead to entrenched and sometimes unrepresentative subsystems of power . . . . A committee system with broad and vaguely defined jurisdictions would be much less likely to develop such biases than a system of committees where each one held unquestioned authority over a narrow, but clearly defined, issue-area.”17 The same could be said for the American political system as a whole. Thousands of venues with overlapping and competing jurisdictions make for continual ferment but slow progress for American public policies. Innovation is everywhere but systemic change moves at the speed of a glacier. With hundreds of thousands of venues, new policy solutions can always find a testing ground somewhere and old solutions never die. Systemic change happens, but it happens because of imitation and contagion, not rational design. 20.5 POLICY MAPS In the preceding sections we reviewed the relationships between policy issues and authority—that is, jurisdictions—and policy domains. However, issues and authority are two of many pieces of the policymaking process we examined in parts II, III, and IV. To understand the bigger picture, we need to stand back and revisit the entire policymaking process within the larger context sketched out in chapters 17 through 19. Policies and policy domains differ over the entire policymaking cycle as well as with respect to the geopolitical levels and sectors of American society. These differences can be plotted on a simple grid that combines both process- and context-related dimensions. In chapters 7 and 8 we introduced policy mapping—a simple technique for displaying the history of a policy as it evolves from inputs to production. In Figure 7.4 we displayed the key components of policy inputs—problems, solutions, issues, politics, access, and finally, agendas—as a sequence of columns or steps in the formation of policy inputs. Similarly, in Figure 8.1 we showed the evolution of policy production as policymakers make decisions about how to use the technologies of authority, agency, program, rules, contract, and budget to deliver policy outputs. Of course, real life is never as simple or linear as the matrices presented in Figures 7.4 and 8.1, but every policy initiative involves hundreds, if not thousands, of choices about the tactics, technologies, and techniques of policy formation and production. The matrices in Figures 7.4 and 8.1 do not explain anything, but they do provide a visual representation of the critical tasks and components that go into the making of almost every public policy. Now that we have explored the context of public policymaking, we can step back from the detailed process description and combine process and context in one high-level graphic. Figure 20.9 (see next page) maps the steps in the policymaking process (horizontal dimension) against the context of policy levels and sectors (vertical dimension). It includes, in addition, references to the location in this text where each major component is discussed. The process, or horizontal, dimension captures the major phases of the policymaking process and the six major technologies of policy production. The arrows show that the process steps

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Figure 20.9 Policy Map: Process and Context

CONTEXT LEVEL (Part V)

SECTOR (PartV)

POLICYMAKING

PROCESS

PRODUCTION (Part III)

INPUTS (Part II)

Authority Agency Program Rule Contract Budget

OUTPUTS (Part IV)

OUTCOMES (Part IV)

Government National

Market Civil Private Government

State

Market Civil Private Government

Local

Market Civil Private

occur repeatedly or iteratively over the life of a policy. Of course, Figure 20.9 hides all of the complexity that lies inside each of the process cells or boxes. Thus, the input cell includes all the components of policy inputs we examined in part II and the authority cell conceals the alternative techniques—constitutional, legislative, executive, judicial, administrative, and direct—detailed in chapter 9. While we have broken out the six technologies of policy production, for purposes of presentation we have omitted the components and techniques examined in the sections on policy inputs (part II, chapters 4–7), outputs (part IV, chapter 15), and outcomes (part IV, chapter 16). A complete matrix of the policymaking process would subdivide the input, output, and outcome columns into the respective components and techniques examined in parts II and IV. In contrast with Figures 7.4 and 8.1, however, the vertical dimension now displays the two dimensions of policy context discussed in chapters 17–19: level and sector.18 The vertical dimension of the policy map now indicates Where the action is taking place. Policy inputs, production, outputs, and outcomes happen somewhere. • • • •

Where do problems and issues arise? Where are policies produced? Where are the target populations located and benefits and burdens targeted? Where are the consequences of public policies felt?

Figure 20.9 is designed to help visualize the complicated trajectories that policy initiatives take through American society. As we suggested in the discussion of venue shopping above, public policies tend to ricochet around American society and the American polity in sometimes unpredictable fashion. A family dispute over a comatose patient in a Florida nursing home suddenly appears on the agenda of the Congress and the Supreme Court. Local courts in San Francisco recognize same-sex marriages and policymakers at every level of government across the nation are abruptly engaged in making fundamental

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decisions about the rights of citizens. An indictment for violating Texas campaign laws brings down a speaker of the U.S. House of Representatives. Policy inputs in one location lead to policy production in another and policy outputs and outcomes in entirely different policy arenas. Figure 20.9 helps the analyst pinpoint the venue in terms of geography and sector at each step of the way. Thus, the matrix shown in Figure 20.9 facilitates a rudimentary path analysis of an individual policy or a policy domain as a whole. Different kinds of policies exhibit characteristically different paths through the policymaking process. For example, defense policymaking is largely confined to the national level and government, with the market sector producing supplies and equipment and the civil sector (universities) often generating the research used in military technologies. This pattern may be changing, with the increasing reliance on the National Guard to fight our wars. Conversely, policies governing marriage as a legal status have—until recently—been almost exclusively in the preserve of state governments and civil-sector organizations. Nevertheless, the trend in all domains has been toward more and more multisector and multilevel policymaking. Not only are federal, state, and local governments relying increasingly on market and civil organizations for policy formulation and delivery, they are also working with each other as partners in policy production. Paths from policy problem to policy outcome are becoming more complicated. Policy maps help visualize this complexity. Figure 20.10 provides an example of a policy map. Figure 20.10

A Path Analysis of Policymaking in Response to Wall Street Corruption

CONTEXT LEVEL

SECTOR

POLICYMAKING PROCESS INPUTS OUTPUTS OUTCOMES PRODUCTION Benefits Problems Objectives Solutions Burdens Impacts Authority Agency Program Rule Contract Budget Issues Target Group Conditions

Government National

Market Civil Private Government

State

Market Civil Private

During 2002, the attorney general of New York State, Elliot Spitzer, began an investigation of corrupt practices by Wall Street brokerage firms. Although the attorney general of New York does not have the authority to regulate these companies, Spitzer brought civil cases successfully seeking damages against these firms in the New York State courts. Soon, other attorneys general of other states followed suit. Shamed into action by Spitzer, the Securities and Exchange Commission and Congress got into the act, passing new laws and regulations governing the reporting requirements for Wall Street brokerages. As shown in Figure 20.10, the issue arose in the market sector at the national level and was solved by parallel production paths at the state and federal levels. State

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policies directly benefited individuals by forcing the companies to recompense injured customers, while federal policies imposed new burdens directly on the firms themselves. What Figure 20.10 provides is a relatively simple picture of a policy’s path through time and space. Figure 20.11 below offers another illustration of a policy map. It tracks the path of the failed initiative in 2003 to immunize local health care workers against smallpox—the case study at the end of chapter 18. Figure 20.11 A Path Analysis of the Smallpox Vaccination Program

CONTEXT LEVEL

SECTOR

POLICYMAKING PROCESS INPUTS OUTPUTS OUTCOMES PRODUCTION Benefits Problems Objectives Solutions Authority Agency Program Rule Contract Budget Burdens Impacts Issues Target Group Conditions

Government National

Market Civil Private Government

State

Market Civil Private Government

Local

Market Civil

Private

As illustrated by Figure 20.11, the flaws in policy design appear on the map as absences in linkages between the various production technologies and the sectors that lead to the target population—in this case volunteers employed by local hospitals and health care providers. The plan to immunize 500,000 volunteers against smallpox originated almost completely with federal policymakers reacting to anthrax attacks against American civilians and the anticipation of a war against Iraq, which was justified, in large part, by Iraq’s alleged possession of weapons of mass destruction. Federal policymakers sought no new authority at either federal or state levels for vaccination and created no formal program staffed by personnel with long-term responsibilities for outputs and outcomes. Instead, the smallpox immunization plan was designed as a one-shot (no pun intended) operation, piggybacking on existing agencies and rules. Federal policymakers limited their initiative to issuing guidelines, creating new contracts (grants), and funding (budgets). Even then, there was no mechanism to ensure that federal policy objectives and funds were channeled through the states to reach the local level where hospitals (both for profit and not-for-profit) would recruit employees, in their capacity as private individuals, to volunteer to be vaccinated. No one was accountable. As a consequence, results varied widely by state and region, with those vaccinated totaling less than 10 percent of the numbers anticipated.

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In a sense, a policy map visualizes the pit stops or venues that a policy passes through as it matures from problem to production to results. It forces the analyst to evaluate: • • • •

Where a policy issue is born. National policies may have local origins and local policies often have national origins. Just as policy entrepreneurs shop for distant venues, policymakers are ever on the lookout for problems, wherever they may arise. Where policies are produced and how. Producing results requires multiple technologies and the contributions of multiple levels and sectors of society. Where policy benefits and burdens are delivered. Policy outputs don’t always end up in the same locale as the policy problem. Where policy impacts are felt. Policy outcomes rarely match policy objectives. What happens and where often differ from what was intended and expected.

As a result, policy maps can be used both retrospectively and prospectively. Looking backward, the map serves as a template for reconstructing the history of an individual policy or group of policies. The analyst tracks the evolution of a policy from problem to outcome, moving from left to right on the grid. This is the case study approach. Looking forward, policymakers can use the map as a design template. What tools should be used to deliver which outputs to what effect and where? Policy maps expand upon the program logic models introduced in chapter 11 by adding the Where to the process of policy design. As we have seen, making public policy increasingly involves the coordinated efforts of individuals and organizations from every sector of society at national, state, local, and even neighborhood levels. As policy designs grow ever more complicated, it becomes virtually impossible to account for who does what, where, and why. When private contractors were discovered torturing prisoners in Iraq, it took months to reconstruct the chain of policy decisions that led to that outcome. The policymaking process has become opaque to even its most astute practitioners. Thus, policy maps can help practitioners visualize the complexity of the policies they create. 20.6 NETWORKS Policy maps help us locate the policymaking process in its context. They situate the How of public policymaking in the Where of policy context. Policy maps offer a simple picture of what happens where. When we get down into the details, however, the concept of a policy network can help us understand more precisely Who does What with Whom. 20.6.1 What Is a Policy Network? The concept of a network is widely used to describe a pattern of relationships between interdependent actors. These actors can be individuals or organizations and they often belong to multiple policy levels and sectors. In its most basic form, a network is simply a set of individuals and organizations who share a common fate and who interact with one another. In the world of public policy, networks arise “as a response to the ever-denser patterns of interdependence and interference that increasingly cut across pre-established demarcations of organizational, political, and sectoral boundaries and levels.”19 If we looked closely at a policy domain, we can identify a number of policy networks, as shown in Figure 20.12 (see top of next page). Viewed from the perspective of policy entrepreneurs, these networks of joint action are typically mobilized around policy issues and are generally called issue networks. However,

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Figure 20.12 Policy Networks in a Policy Domain

from the point of view of policymakers, these same structures of social action organize around policy programs and may be called production networks. While there are institutional and legal boundaries between policy advocacy and policy production, these barriers are easily circumvented in practice. Few policy advocates abstain from participation in policy production and even fewer policy producers refrain from policy advocacy. Indeed, as we noted in chapter 16, policymakers benefit as much or more from the policymaking process than do the nominal beneficiaries. Advocates are producers, and producers are advocates. And both advocates and policymakers can and often are the beneficiaries—both intended and actual—of the policymaking process. So, any static picture of policy networks is highly misleading. Policy networks typically include actors from all four phases of the policymaking process, as illustrated in Figure 20.13.

Figure 20.13 Networks and the Policymaking Process

Policy OUTCOMES

Losers INPUTs

OUTputs

Losers INPUTs

Winners & Polocy Enterpreneurs

Production Policymakers

Domain

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Networks not only link participants within each phase—that is, entrepreneurs, policymakers, target populations, and actual winners and losers—they also join these diverse groups of stakeholders together. While we can isolate issue “subnets” focused on policy advocacy, or production subnets consisting of policymakers themselves, these distinctions are more analytical than operational. 20.6.2 Networks and Horizontal Governance Although the term network can be metaphorically applied to just about any pattern of relationships among agents or nodes, it is most fruitfully used in contrast to the concepts of hierarchy on the one hand and market on the other. “For hierarchical forms of coordination, the key features for governance are rule-bounded bureaucracy, authority, administration, and superordination and subordination, while for market forms, the key features are price, self-interest, competition, and formal contracts.”20 When you go to work and follow the directions of your boss you are participating in a hierarchical form of social organization. At the grocery store or on eBay, you are part of a market. However, when you organize an outing with your classmates or neighbors you are a member of a network. In a network, no one has the authority to compel another to behave in a certain way and you coordinate your actions with others directly, and not through the mechanism of prices. This is the same concept of network that we first introduced in chapter 11. There we defined networking as the most elementary form of horizontal governance. Horizontal governance is joint or coordinated action for policy production where no single actor—be it an individual, program, or agency—can command the compliance of others. Forms of horizontal governance can be arrayed on a spectrum from networks—as the most basic form—to partnerships, as shown in Figure 20.14. Figure 20.14 Networks and Horizontal Governance Types of Horizontal Governance Networking (Network)

Coordination (Coalition}

Cooperation (Alliance)

Collaboration (Partnership)

Definition

Exchanging information lor mutual benefit

Exchanging information & harmonizing activities lo achieve a common purpose

Exchanging information, harmonizing activities & sharing resources to achieve a common purpose

Exchanging information, harmonizing activities, & willingness to enhance capacities of partners to achieve a common purpose

Time

Minimal time commitments

Moderate time commitments

Substantial time commitments

Substantial time commitments

Relationship

Informal

Formal

Written agreements

Contracts

Resources

No mutual sharing of resources

Minimal sharing of resources

Extensive sharing of resources & some sharing of risks. responsibilities & rewards

Full sharing ol resources, responsibilities, risks & rewards

Source: Arthur T Himmelman, Collaboration for a Change: Definitions, Decision-making Models, Roles and Collaboration Process Guide (revised November 2002), at www.futurehealth.ucsf.edu/pdf_files/4achange.pdf.

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While usage of the terms network, coalition, alliance, and partnership varies widely in the literature, Figure 20.14 offers a systematic framework for comparing policy networks across time and space. Although we use the term network as a convenient label to cover all four levels of horizontal governance, differences in the degree of coordination and commitment do matter. The partners in a partnership do behave quite differently from the members of an information-sharing network. The former share resources, responsibilities, risks, and rewards that the latter manage individually. Thus, we need to remember that in talking about policy networks in general we are limiting ourselves to the basic, or lowest-common-denominator, features of collaborative action.21 Moreover, if networks are a form of horizontal governance, then we must specifically exclude outsourcing as a form of network governance. Networking involves cooperative action by autonomous actors or agents. The participants are peers—they cannot command others to obey. They do not exercise authority over others. In outsourcing, authority remains exclusively with the government agent. The relationship is fundamentally hierarchical, not collaborative—the contractor performs a service for the government and for a fee and not with the government. While some forms of public-private partnerships include elements of collaborative action among peers, in most cases government is the sole source of policy objectives, of the authority to act, and of the financial resources to support action. When governments procure weapons systems or computers or garbage collection services from private contractors, the relationship is hierarchical and asymmetric. Were it not for government authority, agency, rules, and funding, the contractor would not be there in the first place. As we saw in chapter 13, procurement contracts can be terminated at the will of the government. Government agencies have the upper hand. To call such asymmetric relationships a network or partnership is to sap all meaning out of the contrast between vertical and horizontal governance. 20.6.3 Why Policy Networks? In recent years, policy networks and horizontal governance have emerged as a primary focus of interest on the part of both practitioners and policy analysts alike. While state and local policymakers have been practicing horizontal governance for decades, or even centuries, the practice of collaborative governance has moved to the front burner of twenty-first century governance for two related reasons. In the first place, policymakers are addressing more and more complex problems. The easy ones have been solved and what remains are the kinds of “wicked problems” we examined in chapter 4. Wicked problems are those that involve diverse and often distant stakeholders who disagree not only over solutions but, more important, over the definition of the problem itself. Wicked problems do not lend themselves to solutions, because there is no agreement over either the problem or the solution. Second, wicked problems transcend the jurisdictions of American public policymakers. As we have seen, American public policymaking unfolds in hundreds of thousands of venues, from the marble buildings in Washington to local offices and courthouses in towns, cities, and counties across the nation. Authority is fragmented and overlapping and no jurisdiction has the power to make wicked problems go away or even just get better. Moreover, the fragmentation of authority offers opponents of policy solutions countless venues where policy production can be blocked. If you lose in the legislature, you can win in the courts, in the bureaucracy, or via initiative petition. The nature of wicked problems combines with the organization of American government to make the application of authority through vertical governance an increasingly futile venture for public policymakers.

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Therefore, collaborative governance through loose networks or more formalized partnerships is a necessity. Getting broad stakeholder participation and commitment is a must. Indeed, some analysts have suggested that network forms of organization are one of the defining features of twenty-first-century problem solving. Just as the bureaucratic organization was the signature organizational form during the industrial age, the emerging information or knowledge age gives rise to the network, where persons link across internal functions, organization boundaries, and even geographic boundaries. The world is characterized by extreme complexity and diversity where power is dispersed, not centralized; tasks are becoming de-differentiated, rather than subdivided and specialized; and where society worldwide demands greater freedom and individuation, rather than integration. In such a world, an organizational form based on individuation, dispersed power, and de-differentiation is necessary; the network structure is that form. Therefore, this is a strong suggestion that a network is the only organizational form designed to be applied to post modern concerns.22 While hierarchy and authority are not about to disappear, policy networks have become the technology of the day for policy analysts and policymakers, at least in the first decade of the twenty-first century. 20.6.4 Types of Networks Networks are boundary-spanning social organizations. They cut across both organizational and institutional borders. So, the logical way to classify policy networks is according to the institutional boundaries they inhabit or span. 20.6.4.1 Intergovernmental (Interagency) Networks In the first instance, the participants in a policy network may be governments or government agencies. That is, either individual governments or their subordinate agencies may be the principal members of a network. For example, local governments may cooperate to share public information or jointly manage the provision of common services such as mass transit or public utilities. At local and state levels, such intergovernmental cooperation is quite common, and studies have demonstrated that approximately 15 percent of municipal services are provided by means of intergovernmental cooperation. As we saw in chapter 13, the primary tools for building intergovernmental networks are interagency agreements. Most states have laws governing the form and content of interagency agreements within—and sometime across—their boundaries. While intergovernmental networks typically come together to solve specific problems or deliver targeted services, they can and sometimes do transform themselves into new special-purpose government units. 20.6.4.2 Multilevel Government Networks Intergovernmental networks may include multiple levels of governments. Thus, federal agencies may form partnerships with state and local agencies to exchange information, share

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resources, or even deliver services. Such collaborative efforts fit the model of horizontal governance because they involve the voluntary participation of public agencies with independent bases of authority. They operate based on negotiation and consensus, not unilateral command. Of course, different levels of government bring different resources to the table. State and local participation may depend in large part on federal contributions in one form or another. Though all participants in an intergovernmental network may be equal in theory, some are obviously more equal than others. Participating agencies cannot check their authority and their respective turfs at the door. Interagency “networks work around and between issues of agency control. The authority of jurisdiction is not easily let go.”23 Vertical and horizontal governance can coexist. So, for example, part of the remarkable about-face in improving the effectiveness of the Federal Emergency Management Agency (FEMA) may be attributed to a change in multilevel relationships brought about by changes in leadership. In the 1990s, Director Jamie Lee Witt made concerted efforts to establish strong working relationships with state and local governments to plan cooperatively to share the burdens of disaster relief. The failure to maintain these relationships by subsequent directors may have led to FEMA’s implosion in the New Orleans flood a few years later. 20.6.4.3 Multisector Networks So far we have limited our purview to networks composed of governments and their agencies. However, the vast majority of policy networks are multisector in nature. They include organizations and actors from the market, civil, and private sectors in addition to government entities. In multisector networks, governments partner with commercial firms, nonprofits, and/or private individuals. Local religious leaders, along with local business and government leaders, form ecumenical organizations to find shelter for the homeless or build low-income housing. Governors regularly convene task forces of representatives of industry and nonprofits to work on some problem in hopes that the bonds that form morph into supportive networks and long-term partners in policymaking. These partnerships differ significantly in form and function from the kinds of outsourcing contracts that are sometimes labeled public-private partnerships. The latter are generally built on procurement contracts where scope of effort, division of responsibilities, and funding are unilaterally determined by the government partner. Multisector partnerships are usually based on memoranda of agreement or interagency agreements negotiated by the partners. Such agreements are legally unenforceable and partners can walk away voluntarily without penalties. Thus, the landscape of policy networks is complex, as illustrated in Figure 20.15 (facing page). Policy networks may be intergovernmental, multilevel, multisector, or some combination of all three. While we generally think of government-to-market (G2M) or government-to-civil (G2C) partnerships, government-to-private (G2P) arrangements are becoming increasingly common as governments rely on wealthy donors to fund public services and agencies bring citizen stakeholders into the policy production process. Thus, public universities are increasingly dependent on wealthy donors to fund new initiatives, from athletic facilities to cancer research labs and professorships. Local police rely on citizen review boards to manage complaints for them. And at all levels of government, public monuments are designed and built with citizen participation and gifts. While multisector, multilevel networks may bring key stakeholders to the table to help address wicked problems, they also make partners of organizations and individuals with diverse interests, resources, and locations.

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Figure 20.15 Levels, Sectors, and Policy Networks

National LEVELS

State Local Government

Market

Civil

Private

S E C T O R S 20.6.5 Managing Policy Networks To summarize, policymaking is generally performed by policy networks composed of policy advocates, policymakers, target groups, and others impacted by the policy. The agents or nodes in these networks are organizations or individuals that belong to one or more sectors and levels of society. The idea that policymaking proceeds in a linear fashion from advocate to policymaker to target group to winners and losers is a gross—though perhaps necessary—simplification of what happens in the real world. Advocates, policymakers, target groups and winners/losers all communicate with one another in the ongoing patterns of social relations we call networks. The concept of policy networks helps us locate the Who and Where of the policymaking process. As we have seen, the concept of network or horizontal governance has evolved in direct contrast to authority-based, vertical governance. So, managing policy networks—or more precisely, policy coalitions, alliances, and partnerships—should differ significantly from managing bureaucratic agencies. The question is, differ how? In the first instance, participation in a network is voluntary. Members participate to further some common good and not because they are required to or because of simple financial reward. Since members must be motivated to contribute and can exit at any time, network management focuses first and foremost on negotiating the goals of collective action and the boundaries of network participation. What members seek to accomplish and who participates in the network are inextricably linked. The more ambitious the mission statement, the broader the membership must be to accomplish those ends. Thus, community networks formed to address such wicked problems as drug use, youth violence, or environmental pollution must engage a broad spectrum of community stakeholders in order to achieve results. However, the greater the number and diversity of participants, the more difficult it is to define and maintain a common purpose. So network managers must spend significant amounts of time promoting complementary missions and developing memberships. They must reconcile what they want to accomplish with the participants whose help they need to enlist. In contrast, bureaucratic organizations have missions more or less defined in law and have the resources to pay third-party contractors to

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MINICASE 20.4 Binge Drinking on (and off) Campus So what is your college doing about binge drinking? It is a wicked problem, if there ever was one. In one “Big Ten” city, the University of Iowa is trying to partner with local community activists and city officials to keep students under the age of twenty-one out of the local bar scene. But this creates major headaches in a city where the university is located in the middle of the downtown, an area dominated by bars and restaurants, after a new supermall a few miles away siphoned off most other downtown merchants. Moreover, many local residents fear that denying access to bars would only push the party scene into their residential neighborhoods One solution offered to the problem in this case has been a partnership funded by a grant from the Robert Wood Johnson Foundation to assemble a coalition of those wanting to change the environment that encourages high-risk drinking. The coalition’s goals are to get the city council to limit access to the local bars, to get local police to enforce existing laws more strictly, to amend the local disorderly house ordinance, and to encourage the university and local entrepreneurs to offer more activities for college students. The university’s dean of students administers the grant. Representatives of the downtown merchants, local bar owners, churches, the police, the city council, various alcohol education programs, the K–12 schools, and respected community leaders all belong to the network and work hard to plan activities and strategies for minimizing high-risk drinking. So, how are they getting the many different local groups to work together? City council members have long been willing to ban all those under twenty-one from entering the bars, but, to date, have postponed such action in favor of working with local bar owners, student government leaders from the university, and local police to enforce existing laws. A compromise proposal raised the age at which students could enter the bars and enjoy the music and dancing but not be served alcohol from eighteen to nineteen. Progress is slow. The compromise has proved difficult to enforce. Students are still regularly caught drinking. Several bars have been shut down temporarily for violations. The city council understands that punishing bar owners too severely also impacts the viability of downtown businesses.

do their work for them. They don’t have to trade off identity for participation, at least not as a first order of business. Second, authority in networks is derivative or pooled and based more on expertise than on law. Participants in networks bring “a measure of delegated authority, that is, ability to speak on behalf of and to commit agency resources.”24 The legal authority of a network is derived from the sum of the authorities that the members bring to the table. Networks must act through their members. Nor can they act for their members, because the legal or semilegal agreements that form the basis of network action are generally unenforceable in courts of law. So, network managers must stitch the fragments of delegated authority that members bring with them into coherent missions and courses of action. Networks rely on other sources of authority, such as the expertise of their members or their reputation in the community at large in order to get things done. While legal

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authority works best when joined with technical expertise and standing in the community, things can and do get done without it. Third, decision making is based on consensus. This begins with defining the ground rules for how decisions will be made, where, when, and by whom. Networks must be built from the ground up; formal procedures are seldom adequate to the task of reaching consensus on what to do. For action-oriented networks like alliances or partnerships, the first step is to draft a memorandum of agreement, interagency agreement, charter, contract, or other group “constitution.” As we saw in chapter 13, contracts and contract-like instruments serve as the enabling technology for horizontal governance. Then formal or informal procedures for managing the network’s agenda must be worked out, since members must work through the conflicting agendas brought by the representatives of participating organizations. Unlike the leaders of hierarchical organizations, network managers do not enjoy the tools of authority and defined jurisdictions in controlling the influx of issues onto their agendas. And ultimately, the often self-selected leaders of networks must settle on rules for making decisions. While consensus on policy commitments may prove elusive, consensus on the policymaking process is critical, or losers will simply walk away from the table. Finally, networks thrive on trust. “It is clear that networks are held together by purpose and social capital, plus mutual respect or trust . . . . Social capital, or the built-up reservoir of good will that flows from different organizations working together for mutual productive gain, no doubt is the ‘glue’ that holds people together or the ‘motivator’ that moves the process along. But in terms of what helps to steer networks, it is clearly trust, the obligation to be concerned with others’ interests, that allows for the network to do its work, select its leaders, keep its members, and, most important, to broker those decisions it must make.”25 Trust is what gives the losing side on policy issues the hope that their turn will come next, the incentive to stick around for another day. Trust, however, is not faith, but must be demonstrated and earned over time. Thus, success is vital to the staying power of networks because it rewards the voluntary efforts of members and creates the expectation that the individual agendas of participating organizations can indeed be furthered. While vertical governance may benefit from the trust of both the governed and the governors, horizontal governance cannot live without it. [T]he “how-tos” associated with effective network management reflect not a brave new world, but a world of managerial activity that is very similar to what exists inside the organization and which is discussed in the general public management literature. What managers do to solve network-level problems are very nearly the same actions they take to solve organization-level problems. It goes without saying that network management may be more difficult, more consequential, and more demanding; managers agree with that statement. However, whereas the organizational and institutional structure of networks is unlike a hierarchy . . . the differences in management are mainly in application rather than in principle.26 We should be careful to make too much of the differences between vertical and horizontal governance. The differences are matters of degree and not of kind. As we saw in chapters 12 and 13, the boundaries between authority or rule-based governance and contract-based governance are becoming more and more indistinct. Authority is but one of several technologies of governance. In a world where policy advocates search for favorable venues from among the hundreds of thousands of competing jurisdictions in American society, policymaking almost inevitably involves the creative juggling of authorities. Few policy commitments are immune from revision or reversal in other policy jurisdictions. Therefore, the principles of

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network management really mirror the fragmented and decentralized nature of public policymaking in the United States. Nevertheless, the effective management of policy networks is perhaps the key challenge facing policy practitioners and analysts today. How can public policymakers produce results through horizontal governance? Although the initial response to the terrorist attacks of 9/11 was to reassert the primacy of unilateral authority at the national level, the limitations of vertical governance have become increasingly apparent as the shock of events recedes into memory. The establishment of a new government bureaucracy—the Department of Homeland Security—symbolizes the reemergence of vertical governance. However, as evidence of the shortcomings and failures of DHS accumulate, momentum has begun to shift back to collaborative approaches to public policymaking in the domain of public safety and elsewhere. Like public health, public safety cannot be delivered by bureaucratic fiat. It requires the collaboration of thousands of local governments, commercial enterprises, civil associations, and private individuals. The scope and the challenge of horizontal governance can only increase in the coming years. 20.7 POLICY CHANGE In the preceding sections we have examined how the policymaking process combines with context to shape American public policy. We are now able to step back and look at the bigger picture. How do public policies change, and why? First and foremost, we have suggested that policy change is cyclical and iterative, as shown in Figure 20.16. Figure 20.16

The Cyclical Nature of Policy Change

Inputs

Outcomes T1

T2

T3

T4

T5

TIME

Production

Outputs

The demands of the annual budget process and the American propensity for change mean that most public policies are reviewed and renewed on an annual or biannual basis. The cyclical nature of policy change may be less pronounced in judicial venues, where the budget process does not apply and judges have limited ability to set their own agendas. Nevertheless, even in the courts, policy issues are continually revisited, although somewhat less predictably. The only constant in American public policymaking is change. However, iterative and cyclical change is almost always incremental change. So much work and so many hands are involved in the budget process that major upheavals in public

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policies are quite rare. Once a policy is in place, once the initial policymaking cycle has been completed and the panoply of authorities, agencies, programs, rules, contracts, and budgets is in place, major changes are difficult to accomplish. Budgets may be cut, programs may be trimmed, rules may be overturned, and contracts may lapse, but systemic change is truly exceptional. There are too many pieces to the puzzle and too many interests involved to undo public policies easily. Nevertheless, things change, crises do happen, and stakeholders do on occasion demand radical change. So, every once in a great while, policy earthquakes happen. This pattern of frequent lowlevel change, interspersed with rare periods of cataclysmic change, has been labeled punctuated equilibrium.27 What drives policy change, in this view, is not the constellation of forces within a particular venue or jurisdiction, but rather the migration of policy issues from venue to venue. When policy entrepreneurs shift venues, they must inevitably reframe policy issues to fit the jurisdictional requirements and politics of the new venue. What works in Congress will not work in the federal courts or in governors’ mansions or on initiative petitions. Policies change when policy issues change jurisdictions. Policies must adapt to the different technologies and tools used in each new venue. And all of these have spillover effects. Thus, it is the imperative to travel, to seek out new jurisdictions where success is possible, that drives policy change in the American system. Finally, do policies ever die? Do the cycles of iterative change depicted in Figure 20.16 ever end? Or, to rephrase the question more precisely, do policy problems ever get solved, resolved, dissolved, or absolved, and simply fade away? Does the policy cycle end with a final set of outcomes? If we limit our focus to the technologies and practices of public policymaking, then the answer is yes. Budgets for policies can be and are cut; programs and contracts are cancelled; rules are terminated; on occasion organizations disappear; and finally—and most rarely—policy authority may be terminated. Policy objectives may remain relatively constant, even though the technologies and practices come and go. The army no longer uses horses, now an outmoded technology (except at military funerals), but they do still have cavalry units, all sorts of armored vehicles on wheels and wings for transporting soldiers, weapons, and equipment into battle—functions similar to those performed by horses in bygone eras. However, policy outcomes almost never solve or resolve policy problems. More typically, outcomes recast problems, which change problem definitions, which result in new policy commitments, production tools, outputs, and outcomes. Policies don’t die; they morph into new policies with different names, different artifacts, and different constellations of policy stakeholders. Human ingenuity in creating problems far exceeds human inventiveness in solving them. Thus, policies beget new policies as people seek ever-greater mastery over their environment and each other. In this sense, policies rarely, if ever, die. They are simply reborn as new policy problems.28

CASE STUDY Smoke ’n Mirrors—The Life Cycle of an Issue Smoking has fallen from grace. A half century ago, smoking was glamorous. Practically every movie featured stars puffing on cigarettes. Numerous songs, from the sensual “Smoke Gets in Your Eyes” to the silly “Smoke, Smoke, Smoke that Cigarette,” to the more recent “Light It Up,” tout cigarettes in some way. The impact was not lost on Americans. In World War II, cigarettes were deemed so essential to the war effort that the military supplied them free to soldiers, and tobacco farmers were exempted from the draft. President Roosevelt was regularly photographed with his cigarette and cigarette holder. “By 1961 per capita annual consumption of cigarettes for all

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Americans age eighteen and over reached a record 4,171, or eleven and a half cigarettes for every person every day.”29 The tobacco industry was a key player in American politics and in several important states, employing more than 650,000 workers and generating more than $15 billion in tax revenues yearly in 1994.30 Smoking began to decline, however, as evidence of its long-term effects on health seeped into public awareness. The first reports were about lung cancer—25,000 deaths in 1954. By the mid1980s, smoking-related deaths accounted for at least one in five deaths in America. By the turn of the century, smoking was banned from most public buildings, and smokers had become outcasts, forced to huddle out of doors to satisfy their cravings. Why the reversal of fortune? How did smokers go from trendsetters to pariahs, and tobacco companies from political untouchables to defendants in a federal lawsuit alleging industrywide racketeering and corruption? The story of tobacco illustrates the life cycle of a policy issue, from a problem flying well below the radar screen of public officials to a priority for the public health community. The story of smoking and tobacco illustrates the uneven course of policymaking from issue to public policy—with most of it playing out in less-familiar forums of policy production. The availability of multiple venues and technologies of production offered networks of opponents and proponents of smoking a smorgasbord of opportunities to pursue their objectives. It took almost a half a century to bring the tobacco industry under the watchful eye of federal policymakers. Even today, that journey is not complete. Tobacco and smoking emerged as topics of public policymaking in many, often competing, venues and agencies, as coalitions formed and reformed over a half century. It is a tale best unraveled chronologically. Fall from Grace: Building the Case Against Smoking Although a few reports linking cancer to smoking appeared as early as the 1930s, clear evidence linking the two only emerged in the 1950s. Epidemiological studies gradually established the association between smoking and lung cancer, with the incidence of disease tied to the length and frequency of cigarette usage. By the mid-1950s, this accumulating evidence found its way into the popular press, “giving rise to a ‘cancer scare’ and a temporary drop in the incidence of smoking.”31 This brief skirmish prompted the tobacco industry to take its first steps in response. They sought to mitigate the health effects of their products by lowering the nicotine and tar levels in cigarettes and putting filters on them. Cigarette consumption soon soared to even higher levels, with public concerns about the health effects of smoking again relegated to the back burner. Nonetheless, advocacy coalitions were forming, with public health and medical researchers on one side and the tobacco industry on the other. The beginning of the tobacco wars is usually attributed to a critical input—the report issued by the Surgeon General’s Advisory Committee on Smoking and Health in January 1964. That report, compiled by a committee of experts appointed by Surgeon General Luther Terry involved a comprehensive review of research on smoking to date. It documented compelling evidence that smoking causes lung cancer, and indicated that the risks of dying from lung cancer for men who smoked were about ten times those for nonsmokers. It also documented the strong effects of smoking on mortality from other diseases. It labeled cigarette smoking a health hazard and recommended policymakers take appropriate action to mitigate its effects. A linkage between two previously separate policy domains was now solidly established. Tobacco, traditionally a matter for those primarily concerned with agriculture, now had to deal with issues of public health. The Surgeon General’s Report (1964) marked the beginning of a realignment of policy domains, with new networks forming, especially by those involved with public health. These broadened

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over the next decade, as the political climate changed. By most accounts, 1964 was the high point in cigarette consumption in the United States.32 Consumption of cigarettes gradually declined as knowledge about the hazards of smoking spread and resistance to smoking coalesced. The United States dropped from second in the world in per capita consumption of cigarettes to eleventh in the decade between 1980 and 1990. These declines leveled off for adults by the mid-1990s, and rates of smoking for youth again began to rise. At the same time, decades of cigarette consumption were taking their toll on Americans’ health. By the mid-1980s, when the Centers for Disease Control and Prevention (CDC) began tracking deaths attributable in some way to smoking, estimates rose to over 430,000 deaths yearly for all smoking-related diseases. In 1992, the Environmental Protection Agency (EPA) opened another evidentiary front by issuing a carefully researched report on the secondhand effects of smoking on health. This news added more fuel to the fire, and groups to the antismoking coalition. In terms of policy inputs, clear-cut evidence was critical in motivating stakeholders in the policy production process and in eventually modifying the behaviors of the smoking public. Accessing the Technologies of Production Tobacco has long been the subject of public policymaking at the state level. “Late in the nineteenth century or early in the twentieth, nearly all state governments in the United States enacted laws restricting tobacco.”33 Typically, these were aimed at preventing minors from purchasing cigarettes. Only in the 1960s did activists, armed with data on the public health effects of cigarettes, target the federal government in pursuit of more comprehensive strategies to deter smoking. This strategy promised better and faster results than reliance on the slow, piecemeal nature of state-by-state approaches. Yet the larger environment of federal policymaking was not ripe for major changes. This meant that activists had to shop for narrower, friendly venues and tailor their proposals to their jurisdictions. Subsequently, most of the action focused on agency rulemaking, followed by congressional reaction to reject, modify, or confirm policies developed within the bureaucracy. The regulatory agencies were the first venue targeted by stakeholders. Seven days after the Surgeon General’s Report was published, the Federal Trade Commission (FTC), an independent regulatory commission, announced proceedings to require health warning labels on all cigarette packages and advertisements. The FTC has jurisdiction over false and misleading advertising and had previously acted to regulate the advertising wars between tobacco companies proclaiming the health benefits of reduced tar and nicotine levels in their cigarettes. Staff at the FTC closely followed the development of the report and were primed to act. The FTC published its proposed rules in the Federal Register but never took the next step of formal adoption after the chairman of the House Committee on Interstate and Foreign Commerce requested a postponement. This sequence of events propelled Congress, in the summer of 1965, to pass the Federal Cigarette Labeling and Advertising Act.34 Weaker than the proposed FTC rules, the act required warnings only on cigarette packs and cartons, limited any further FTC initiatives on tobacco until July 1969, required the surgeon general to report annually on smoking and health, and preempted any action by state governments to regulate cigarette labeling or advertising. Antismoking types viewed the 1965 legislation as a victory for tobacco interests. Later, Congress extended the moratorium on FTC action and required it to keep Congress in the loop during any future rulemaking. So, antismoking advocates had to search for another venue. They found it in the Federal Communications Commission (FCC), a federal regulatory agency with jurisdiction over public broadcast journalism. Again, rules were the technology of choice, with the FCC issuing rules in

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1967 applying the fairness doctrine to cigarette advertising. This required that all radio and TV advertising for cigarettes be offset by information on the health effects of smoking. These rules lasted until January 1971, when Congress reacted once again with legislation banning cigarette advertising on radio and TV. The next round in what was now a familiar strategy took place in 1973 at the Federal Aviation Administration (FAA), the agency with jurisdiction over the airline industry, and in 1974 and 1976 at the Interstate Commerce Commission (ICC), the agency with jurisdiction over ground-based common carriers. The FAA issued rules requiring the segregation of smokers and nonsmokers on airlines in 1973, while the ICC did the same for buses in 1974 and trains in 1976. In the interim, despite its wings being clipped by Congress, the FTC reached deeper into the toolbox of rulemaking to vigorously enforce Congress’s existing requirements for health warning labels on cigarette packaging. In 1971 it threatened to adjudicate complaints against those companies that failed to comply with the 1965 legislation and issued standards or safe harbors for labeling by the tobacco industry. The industry quickly agreed to comply. In 1981 the FTC broadened this approach with a major report highly critical of the industry’s advertising practices. This report was released by FTC staff early in 1981 without the endorsement of the agency’s commissioners and before the new president took office. President Reagan soon replaced the activist chairman of the FTC, a longtime opponent of tobacco.35 During this period, other federal agencies with policy responsibilities for public health were also chipping away at the problem of smoking with whatever technologies were available. An Office on Smoking and Health was created in the Department of Health, Education, and Welfare (HEW) in 1964. Various secretaries of HEW and their surgeon generals used their offices as bully pulpits for publicizing the evils of tobacco. In 1972, smoking in all departmental conference rooms and auditoriums, sections of cafeterias, and certain work areas was banned by order of the secretary of HEW. In 1976, the General Services Administration issued guidelines for smoking in all government buildings. Smoking was banned in all Veterans Administration hospitals by 1993—an order that was reversed because of loud protests from veterans. Since the mid-1980s, the CDC has regularly issued reports to the public on deaths attributable to smoking. Cumulatively, this has created an overwhelming body of evidence on smoking as the leading preventable cause of death in the nation. Over the same time period Congress took a series of baby steps designed, in part, to begin to rein in the tobacco industry and, in part, as a reaction to initiatives by federal agencies. Much of what Congress did actually protected the tobacco industry from further regulation. Tobacco products were excluded from new laws requiring the labeling of hazardous or toxic substances. Similarly, Congress consistently rebuffed efforts over this period to give the Food and Drug Administration (FDA) jurisdiction over tobacco as a drug. Yet, there were minor victories for antismoking activists, mostly to play catch-up with existing agency policies. Labeling requirements on cigarettes were strengthened twice, in 1969 and 1984, following FTC recommendations. In 1982, Congress increased taxes on cigarettes for the first time since 1951, and followed up with increases in 1990 and 1993—tripling the federal excise tax from eight to twenty-four cents per pack. In exchange, Congress adjusted agricultural price supports for tobacco growers. In 1988, Congress banned smoking on domestic airline flights over two hours in length and extended the ban to all domestic flights two years later. In 1992, Congress mandated that state agencies actively control access to tobacco. It added teeth to existing state laws prohibiting the sale of tobacco to anyone under eighteen by requiring enforcement by all state and local governments receiving federal grant funds. To avoid losing up to 40 percent of their funding for mental health and substance abuse programming, states had

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to conduct random, unannounced inspections of vendors selling cigarettes and to submit yearly reports to the federal government on their enforcement activities.36 Paralleling efforts at the federal level, the antismoking movement gathered momentum in the states. With California often in the lead, many western and upper midwestern states and local governments moved to adopt antismoking ordinances. Berkeley, California, was the first to adopt an antismoking ordinance in 1977. Although public workplaces were the first to be targeted, such ordinances were rapidly applied more broadly to private worksites and public accommodations. By 1995, the CDC and the National Cancer Institute counted 1,238 state laws on tobacco control. States in the deep South and border states lagged in these efforts. In a similar pattern, states also raised excise taxes on cigarettes both as a deterrent to smoking and as a source of revenue for antismoking education programs. Missing from all of these initiatives was the FDA. Repeatedly silenced by Congress in the 1960s and 1970s, the FDA remained out of the fray until the 1990s. David Kessler, appointed FDA commissioner by the first President Bush, declared tobacco to be a drug subject to regulation by the FDA in 1994. He did this by arguing that nicotine, rather than tobacco, was the source of addiction and a drug subject to FDA jurisdiction under the terms of its authorizing statute, the Food, Drug and Cosmetic Act of 1938. Antismoking legislators quickly arranged subcommittee hearings in the spring of 1994 to give Kessler a forum for presenting the FDA’s new position and for presenting research in support of his position. Tobacco industry officials appearing as rebuttal witnesses were captured on television denying that nicotine was addictive. All sides spent the next few months jockeying for position as elections in the fall diverted attention. Almost a year later, the FDA’s proposed regulations appeared in the Federal Register in August 1995, were finalized a year later, and went into effect in 1997. The regulations focused on tightening the prohibitions on sales or distribution to minors and on limiting advertising or promotional materials for tobacco products. The latter provisions asserted authority over practices that were traditionally handled by the FTC. Within hours of their promulgation, tobacco manufacturers filed suit, challenging the FDA’s authority to issue such regulations. By the mid-1990s, however, all eyes were on the courts, which would become the venue of choice for dealing with the tobacco industry. A new era was beginning. Breaking the Logjam—Finding Leverage Litigation has long been used to change directions in public policy. Opponents of tobacco filed numerous suits over three decades on behalf of those suffering the ill effects of years of smoking. These cases came in two clusters—the 1950s and 1960s and the mid-1980s to early 1990s. All of the suits were adamantly opposed by the tobacco companies at every stage in the litigation. The companies relentlessly refused to settle or pay a cent to plaintiffs. “Of the 813 cases filed, only 23 were tried.”37 The companies prevailed in all but two cases, and those two produced mixed verdicts that then were successfully appealed. The track record for opponents of big tobacco who sought to use the courts to change public policy was bleak. Yet, the tools of litigation available to adversaries in courts were undergoing subtle but critical changes over the four decades covered by this case study. These changes created new legal mechanisms that eventually redirected the course of public policies on smoking and made winning such cases possible by 1997. All of these changes occurred in state courts. These new tools of litigation included a redefined standard for product liability, the emergence of the doctrine of comparative negligence, new tools for discovering evidence, and a new format for litigation, allowing class actions. Indeed, as David Kessler, the former FDA commissioner argued, “litigation . . . emerged as the strongest weapon to chip away at the power of the industry.”38

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Most early litigation involved claims by individuals of negligence or of a failure to warn users about the dangers of smoking. Generally, manufacturers whose products were intrinsically harmful could not be sued if their products conformed to a standard of reasonableness. Product liability was only available as a cause of action if that product could be shown to be defective. Based on this logic, courts regularly found that “good tobacco is not unreasonably dangerous merely because the effects of smoking may be harmful.”39 By the mid-1980s the legal standard for product liability was changing, allowing courts to hold manufacturers responsible for “injur[ies] from products that were inherently dangerous even if they were not defective.”40 The adoption by most states of the doctrine of comparative negligence also altered the landscape for litigation. Previously, any finding that a plaintiff had contributed in some way to his or her injury completely barred an award of damages. Comparative negligence allows juries to award damages even if a plaintiff is partially at fault in causing the injury. Juries allocate damages, subtracting from the award whatever percentage of the fault they attribute to the plaintiff’s actions. In litigation over the health effects of smoking, the doctrine of comparative negligence still allows a plaintiff with lung cancer who initially decides to smoke to collect damages. A third breakthrough involved discovery and greater judicial willingness to allow access to information and documents developed in one case to be used in other cases. Evidence has long been religiously guarded by lawyers under expansive interpretations of the doctrines of lawyerclient privilege and lawyer work product, both of which were used to shield tobacco companies for years from discovery. Expanded evidence-gathering tools were especially helpful in uncovering documents generated internally by tobacco companies searching for safer cigarettes. Finally, the availability of class-action lawsuits, which allowed similar claims involving similar facts to be resolved in a single lawsuit, created incentives, given the potential for large damage awards and fees, for attorneys to devote more resources to claims by smokers. By the early 1990s, a group of lawyers experienced in large-scale tort litigation against a variety of products, from asbestos and cars to silicone breast implants, was available to pursue claims against the tobacco industry. These lawyers now turned their attention to class-action lawsuits against the tobacco industry in state courts. The straw that broke “Joe Camel’s” proverbial back in 1994 was the filing of Moore v. American Tobacco Co. et al., That suit represented a relatively rare phenomenon in the field of public policymaking—a new solution.41 The innovation involved the creation of a new cause of action or legal claim brought by a state against the tobacco industry. After carefully selecting a court and a “friendly” judge within the state court system, the attorney general of Mississippi filed suit in May 1994. That suit sought to recover the health care expenditures incurred by Mississippi on behalf of the state’s Medicaid recipients suffering from smoking-related illnesses. The attorney general argued that the tobacco companies had been “unjustly enriched” from the profits of sales to residents of the state without having to bear the costs resulting from use of their products. In 1997, the Mississippi Supreme Court dismissed a challenge by the state’s governor to the authority of the attorney general to file such a lawsuit, the last of several procedural hurdles before the actual trial. In the interim, attorneys general in other states filed similar lawsuits seeking reimbursement for their Medicaid expenditures. The writing on the wall was clear. In 1996 the industry lost its very first negligence case to an individual smoker in Florida who collected $750,000—a breakthrough attributed to the numerous documents obtained from tobacco companies that circulated through the legal community. In addition, Liggett, the smallest and most economically vulnerable of the cigarette manufacturers, had settled another pending negligence case and agreed to turn over notes from its meetings with other companies on smoking and health. That fall, the stocks of the tobacco companies took a

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nosedive. The industry’s long unbroken string of victories had ended, there was disunity in the ranks, and the economic viability of the tobacco industry seemed in jeopardy. The tobacco industry asked to negotiate a comprehensive settlement with the states. On March 30, 1997, the two sides sat down to figure out the terms of an agreement. Throughout, the key issue was money. From the industry’s perspective, the issue was “how much money the companies would pay and how much protection from legal damages they would get in return.”42 From the perspective of the attorneys general, although their stated goal was reimbursement to states for health care expenses incurred on behalf of smokers, in reality they focused on “how much the companies could pay without going bankrupt.”43 The attorneys general received substantial behindthe-scenes help from the White House throughout the negotiations. On June 20, 1997, thirty-nine states and representatives of the tobacco industry signed an agreement. The tobacco industry settled for $368.5 billion, including $60 billion in punitive damages to be paid into a trust fund for distribution to the states over several decades. It agreed to sweeping restrictions on advertising and marketing, especially those targeted to adolescents, to submit to the exercise of major new regulatory authority by the FDA, to pay for the costs incurred by various agencies in enforcing these restrictions, to disband the industry’s lobbying groups, and to reform the tobacco industry itself, especially if efforts to decrease smoking by those under eighteen were not effective. In return, the tobacco industry got a promise that class-action lawsuits against it would be banned and that total annual damage awards would be capped at $5 billion in the future. Enter (and Exit) the Feds The 1997 settlement agreement between the tobacco industry and the states promised what it couldn’t deliver. Any promise to limit class actions, to authorize the FDA to regulate tobacco, or to cap damage awards required approval by Congress. Such approval was not forthcoming. Despite intensive lobbying by both sides in the settlement, the politics of smoking undercut any momentum for congressional passage. While the tobacco industry and the attorneys general campaigned to gain legislative approval, advocates from many seemingly unrelated domains lobbied against passage. The most outspoken were public health activists, who labeled the agreement a sellout to big tobacco by lawyers and businessmen. Many were upset both by the compromises made and by not being at the table during settlement negotiations. Included in this group was David Kessler, former FDA commissioner. Tobacco growers were also opposed, as the agreement did not anticipate their interests. Trial lawyers objected to the limitations on lawsuits and the capping of potential damages. Antitrust attorneys rejected the deal because it protected the tobacco companies from the antitrust laws. Even the public registered skepticism about the agreement and whether it would ever limit sales of cigarettes. Proponents, on the other hand, were lukewarm at best. To support the interests of the tobacco industry was to be on the wrong side for many. Although the Clinton administration welcomed the settlement, it refused to play a leadership role in promoting it to Congress. Furthermore, the federal government announced it wanted a share of the states’ proceeds as reimbursement for that portion of Medicaid expenditures funded by federal tax dollars. Estimates were that this could amount to 70 percent of the settlement dollars. Congressional supporters were also wary. Again, no legislators had been at the negotiating table. Many among the more liberal legislators sympathized with those in the public health domain, wanted broader prohibitions, and saw a window of opportunity. Many Republicans, on the other hand, were pulled in several directions. Most did not want to be labeled as being “pro-tobacco” by supporting the settlement, despite their traditional ties to this group. Nor did they want to encourage litigation by supporting the interests

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of trial lawyers, a heavily Democratic group. Eventually, in 1998, bipartisan sponsors Senator Kent Conrad (D-ND) and Senator John McCain (R-AZ) were identified to shepherd the proposed legislation through Congress. That measure rapidly bogged down. McCain, who was seeking the presidential nomination at the time, rewrote the measure to be far tougher on the tobacco industry. When the Senate Commerce Committee approved his revision, the tobacco industry swung into action with an advertising campaign. Using an array of stalling procedures to defuse the politics of the proposed legislation and delay a direct vote on the floor, the Senate eventually killed the bill in June 1998, when a vote to invoke cloture (stop debate) failed to pass and the bill was returned to committee. There would be no federal legislation to put teeth in the settlement agreement. Cigarette manufacturers remained vulnerable to class-action lawsuits and large damage awards. Congressional inaction gutted the core of the settlement agreement, which appeared to be dead. Yet this failure was but another scene in a never-ending drama. It simply shifted momentum to other venues and other technologies of policymaking. By 1998, the fate of another strand of policy, the regulations issued in 1996 giving the FDA authority to regulate tobacco as a drug, hung in the balance after being challenged in federal court by the tobacco industry. A federal appeals court ruled against the FDA’s interpretation of its authorizing statute and, in 2000, the Supreme Court agreed by a 5-4 majority.44 The Court based its opinion on the fact that Congress had repeatedly rejected attempts to classify tobacco as a drug. This put an abrupt halt to the FDA’s effort to regulate tobacco. And Back to the States Stymied at the federal level, attention turned once again to the states. The question remained how to resurrect the 1997 agreement between state attorneys general and tobacco manufacturers without resorting to federal legislation. One option was to get states to renegotiate the settlement agreement. Yet, getting fifty very different states to work cooperatively is never easy. Nonetheless, they succeeded in producing the so-called Master Settlement Agreement, a comprehensive agreement between forty-six states, in November 1998. The remaining four states (Mississippi, Florida, Texas, and Minnesota) had each previously negotiated a separate deal with the tobacco companies. The Master Settlement Agreement was a watered-down version of the earlier settlement. It provided more than $206 billion over twenty-five years to the signatories in addition to the $40 billion to be paid to the four states in their separate deal. State governments agreed to drop existing litigation against the industry and not to sue the tobacco companies in the future. However, the agreement contained no protections against large damage awards or against private suits in state courts by individuals or classes of victims. In exchange, the industry, comprised mainly of the four largest manufacturers, agreed not to challenge the states’ authority to regulate tobacco and to restrict advertising and marketing, especially efforts targeting youth. The industry also agreed to limit their political activities and disband their primary lobbying organizations. To include those manufacturers not participating in the agreement, nonsignatories were required to place large amounts in individual state escrow accounts before being allowed to sell their products and to ensure they could pay damage awards arising out of future litigation. To avoid the design pitfall in the 1997 agreement making it dependent on congressional legislation, the master settlement adopted another novel approach to enforcement and to requiring action by state legislatures. It contained a model consent decree, including most provisions of the settlement, which required approval by the courts in each state. Once approved, the agreement was judicially enforceable—a mechanism that sidestepped any need for legislation and much political controversy.

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Reaction to the Master Settlement Agreement was predictable. Monies began to flow directly into state treasuries in the fall of 1999 and states began to figure out how to spend these new revenues. While the largest proportion of these funds went to health care services (43.2 percent) and smoking prevention programs (10 percent), other state programs, from property tax relief (Illinois) to flood control (North Dakota) also benefited.45 State treasuries also benefited from revenues from increased taxes imposed on the sale of cigarettes. Many argue that these new-found sources of funding have created a new dependency, creating a partnership between the tobacco industry and state governments, now anxious not to kill the goose that laid a golden egg. From the other side of the policy spectrum, public health interests claimed the master agreement did not go far enough. Initially, their opposition was directed at state officials and aimed at delaying court approval. Predictably, those unhappy with the settlement again turned their attention to what they now perceived to be a more receptive venue—the federal government. There, federal officials and politicians alike continued to be unhappy about being excluded from the large pot of money from tobacco manufacturers now available to states. Policy and Smoking—The Gift that Keeps on Giving As always, success in one venue reenergizes policymakers in another. And, so, federal officials sought to play catch-up in regulating the tobacco industry. They did so by updating the strategy used by the states with such success—litigation. In September 1999, the Department of Justice (DOJ) filed civil suit in federal court on two claims: one paralleled the now familiar state claims seeking recovery for medical care costs to the Medicaid program and the second tried a new tack, alleging that tobacco manufacturers had engaged in a conspiracy to defraud and mislead the public about the effects of smoking under the federal Racketeer Influenced and Corrupt Organizations Act (RICO), a statute originally designed to reach organized crime networks. Initially, federal lawyers hoped to force the industry to the bargaining table and quickly obtain a stream of funding, plus regulatory authority over manufacturers. It was not to be. The tobacco industry opted to dig in and fight. Subsequently, a federal district court dismissed the government’s claims for recovery under Medicaid a year later but let the lawsuit continue on the RICO cause of action. After four years of procedural skirmishing, which generated 645 court orders and 120 million pages of documents and cost the government alone $135 million in taxpayer funds, the trial on racketeering began in the fall of 2004.46 To prevail in its suit for $280 billion in allegedly ill-gotten profits, the government had not only to show past fraud on the part of the companies in deliberately undermining evidence about the effects of smoking on health but also demonstrate that cigarette makers intended to continue the alleged fraud into the future. Once again, critical policy decisions about smoking and tobacco were in the hands of judges, only this time in federal court. In the spring of 2005, after eight months of courtroom argument, the federal government, in a move that stunned public health activists, reduced its claim for damages to $10 billion. In response, the presiding judge pressured both sides to settle the case. Not to be deterred, another suit, this one seeking to recover $60 billion in costs of smoking-related illnesses to the federal government, was then filed against the cigarette industry in the summer of 2005 by a group of senior citizens.47 That’s not to say that state courts are out of the loop. Litigation still remains the preferred technology and state courts the venue for making policy in this domain. Plaintiffs with smokingrelated illnesses continue to exercise their rights to sue in state courts under the master agreement. Indeed, they now win occasionally and obtain large damage awards, often reduced upon appeal. In one Florida case, the damages awarded were so high ($144.9 billion) that the state legislature

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passed a law reducing the amount of bond to be paid before an appeal could be filed. The industry continues to fight these suits tooth and nail—a necessity if they are to remain in business—and usually prevails. However, litigation consumes resources: Philip Morris alone defended 454 cases and spent $933 million in legal costs between 2002 and 2004.48 Private health insurers and union health funds have tried to replicate the strategy used by the states by arguing for reimbursement of expenditures for smokers under their coverage. To date, these claims have been denied. Finally, imitating federal litigation, a private insurer sued for and received $17.8 million in compensatory damages in a suit under state fair trade and deceptive practices law. After its failure to pass legislation in 1998 in support of the first state agreement on smoking, Congress maintained a relatively low profile on the matter of smoking and tobacco. With the change from the Clinton to the Bush administrations and Republican control of Congress, proponents of stricter regulation of tobacco encountered greater obstacles. Despite this, old proposals occasionally resurface, invigorated by the changing dynamics in the policy environment. This often creates strange bedfellows. In 2004 tobacco growers and public health advocates joined together to seek congressional legislation to buy out financially stressed tobacco growers in exchange for granting regulatory authority over tobacco to the FDA. How to pay for the $9.6 billion price tag was the sticking point. Similarly, legislators continue to be reluctant to give authority to the FDA to regulate tobacco as a drug. There is always another page in this story and more chapters in this saga. Summary—So, Where Are We? What about results? Does any of this matter? The short answer is yes. But, as always, how one interprets the evidence depends on how one sees the problem. Here there is continuing disagreement. Smoking has steadily declined since the beginning of the official campaign against tobacco use. Between 1965 and 1997, smoking fell from 43.4 to 24.7 percent of adults.49 The CDC hailed this “post-1963 drop in tobacco use as one of the ten greatest public health achievements of the twentieth century.”50 Yet, despite overall success, problems remain—especially concerns about youth smoking. Whereas adult and youth smoking declined in tandem until the 1990s, after that point in time, smoking among adults stabilized but increased for youth. Smoking among teens rose until 1996–97 when more than a third of all high school seniors reported regular cigarette usage.51 Not unexpectedly this accounted for rates of smoking increase for twenty-one- to twentyfour-year-olds from 24 to 31 percent between 1990 and 2002.52 So what impact has the 1998 Master Settlement Agreement had on smoking, especially youth smoking? First we know that another decline in youth smoking began about the time the agreement was being negotiated. Smoking among high schoolers began a steady decline from 1996–97 through 2004. By 2005 only 23.2 percent of twelfth graders reported smoking. However, researchers report that “The rate of decline in their use of cigarettes has been decelerating over the past several years” . . . and foresee “an end of the decline in teen smoking.”53 The next question is, why these trends? What causes smokers to stop? The limited time period since 1998 complicates full understanding of results directly attributable to the settlement agreement. Nonetheless, there is preliminary evidence that tells us what seems to work.54 Before the agreement, the mean price per pack of cigarettes across all states was $2.74, whereas by 2002 it had risen to almost $4.00 per pack. Researchers identify price as the greatest deterrent to smoking, with the greatest impact on the youngest smokers (eighteen- to twenty-year-olds). “For a $1 increase in the price of a pack of cigarettes, the probability of smoking would fall by 2.5 percentage points for 18 to 20 year olds and by approximately 1 percentage point for older age groups.”55 To date, other approaches, from advertising and clean air restrictions to licensing, would appear to

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have less impact. Yet we do not know how far price can go as a deterrent to smoking, especially youth smoking. So, what can be said at the end of this story about smoking, and what does it tell us about policies and policymaking? What is clear after forty years is that there are no final answers and few stopping points in policymaking related to smoking and tobacco. One set of approaches generates the next set of questions in ever more complicated cycles of issues and subsets of issues, stakeholders and impacts. Furthermore, there are so many venues and jurisdictions available for pursuing new initiatives and experimenting with new solutions that policy is never completely settled. Legislatures, agencies, courts, laws, regulations, judicial decisions, are all grist for the policy mill. Retrospectively, many initiatives fail, but some succeed, and, in turn, generate momentum for replication, whether at the federal or state levels. As approaches incubate in different venues and jurisdictions, they generate proponents and opponents, and, over time, networks of like-minded stakeholders. Groups and individuals within these networks respond and, on occasion, change tack or even shift allegiances as the dictates of time and interest change. Everyone sees the problem through their own eyes, with their own interests in view, which results in changes to the composition of advocacy coalitions. Policy is never done; it evolves. A policy is never a finished product. So, how do we understand the dynamics of policymaking? Policy is time and path dependent, accumulating slowly, step-by-step, piece-by-piece. It can be mapped across level, sector, and technology. Knowledge of these paths requires background and a working knowledge of the issues and domain in question. History and context matter.

KEY TERMS domain—the substantive problems or content areas addressed by government action in some form; a grouping of related problems dealing with similar subject matter. issue networks—networks of joint action mobilized around policy issues. jurisdictions—the authority sources that determine the boundaries of policy domains for government actors. Jurisdictions govern the scope of authority for policymaking. network—a pattern of relationships between interdependent actors who share a common fate. Policy networks typically consist of individuals and organizations from multiple policy sectors and levels. policy map—a grid for tracking the path of a policy, from inputs to production to outputs and outcomes across levels (national, state, and local) and sectors (government, market, civil, and private). policy niche—a specialized role or policy position occupied by an interest group in a policy domain. venues—the institutional locations where authoritative policy decisions may be made. These include the more than 87,000 governmental units, many with multiple sources of authority over policies. venue shopping—the process of seeking new and more hospitable venues for policymaking.

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QUESTIONS FOR DISCUSSION 1. Using the newly emerging arena of homeland security, evaluate this statement: “The relationship between public agencies and policy domains is symbiotic.” 2. Evaluate this statement: “The thousands of venues for American policymaking, with their overlapping and competing jurisdictions, make for continual ferment but slow progress for most public policies.” Select an example to illustrate your argument. Can you identify a contrary example? 3. Do you agree with the statement “Policymaking is becoming ever more politicized”? Why? Develop an analysis in support of your response. 4. To what degree does the miniaturization of policies lead to frustration with policymakers and policymaking? Why? 5. To what degree does the involvement of the federal government over an ever-broadening number of policy domains make policy delivery more complex and any assignment of direct responsibility for results more remote? 6. Do you agree with the statement “Policies don’t die, they morph into new policies with different names, different artifacts, and different constellations of policy stakeholders”? Again, support your position with examples. 7. How do the historical and institutional contexts of policy production in one domain constrain and/or promote future policymaking initiatives in that domain? SUGGESTED READINGS Agranoff, Robert, and Michael McGuire. “Big Questions in Public Network Management Research,” Journal of Public Administration Research and Theory 11, no. 3 (2003): 295–326. Baumgartner, Frank R., and Bryan D. Jones. Agendas and Instability in American Politics. Chicago, IL: University of Chicago Press, 1993. Baumgartner, Frank R., and Beth L. Leech. “Interest Niches and Policy Bandwagons: Patterns of Interest Group Involvement in National Politics,” The Journal of Politics 63, no. 4 (November 2001): 1191–1213. Browne, William P. Groups, Interests, and U.S. Public Policy. Washington, DC: Georgetown University Press, 1998. Heclo, Hugh. “Issue Networks and the Executive Establishment.” In The New American Political System, ed. Anthony S. King, pp. 87–124. Washington, DC: American Enterprise Institute, 1978. Heinz, John P., et al. The Hollow Core: Private Interests in National Policy Making. Cambridge, MA: Harvard University Press, 1993. Himmelman, Arthur T. Collaboration for a Change: Definitions, Decision-Making Models, Roles, and Collaboration Process Guide (revised November 2002). Available at www.futurehealth.ucsf.edu/pdf_files/4achange.pdf. King, David C. Turf Wars: How Congressional Committees Claim Jurisdiction. Chicago, IL: University of Chicago Press, 1997. Laumann, Edward O., and David Knoke. The Organizational State: Social Choice in National Policy Domains. Madison, WI: University of Wisconsin Press, 1987. Radin, Beryl A., et al. New Governance for Rural America: Creating Intergovernmental Partnerships. Lawrence, KS: University Press of Kansas, 1996. Stein, Robert M., and Kenneth N. Bickers. Perpetuating the Pork Barrel: Policy Subsystems and American Democracy. New York: Cambridge University Press, 1998. Thompson, Grahame F. Between Hierarchies and Markets: The Logic and Limits of Network Forms of Organization. New York: Oxford University Press, 2003.

NOTES 1. Edward O. Laumann and David Knoke, The Organizational State: Social Choice in National Policy Domains (Madison, WI: University of Wisconsin Press, 1987), p. 10.

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2. John P. Heinz, et al., The Hollow Core: Private Interests in National Policy Making (Cambridge, MA: Harvard University Press, 1993), p. 8. 3. Frank R. Baumgartner and Bryan D. Jones, Agendas and Instability in American Politics (Chicago, IL: University of Chicago Press, 1993). 4. Hugh Heclo, “Issue Networks and the Executive Establishment,” in The New American Political System, ed. Anthony S. King (Washington, DC: American Enterprise Institute, 1978), pp. 87–124. 5. John Kingdon, Agendas, Alternatives, and Public Policies, 2nd ed. (New York: Addison-Wesley Longman, 1995). 6. Robert M. Stein and Kenneth N. Bickers, Perpetuating the Pork Barrel: Policy Subsystems and American Democracy (New York: Cambridge University Press, 1998). 7. William P. Browne, Groups, Interests, and U.S. Public Policy (Washington, DC: Georgetown University Press, 1998), pp. 216–17. Copyright © 1998, Georgetown University Press. Materials reprinted with permission. 8. Ibid., p. 217. 9. Frank R. Baumgartner and Beth L. Leech, “Interest Niches and Policy Bandwagons: Patterns of Interest Group Involvement in National Politics,” The Journal of Politics 63, no. 4 (November 2001): 1202. For data on lobbying in the states, see Virginia Gray and David Lowery, The Population Ecology of Interest Representation: Lobbying Communities in the American States (Ann Arbor, MI: University of Michigan Press, 1996). 10. Browne, Groups, Interests, and U.S. Public Policy, p. 220. 11. Ibid., p. 222. 12. David C. King, Turf Wars: How Congressional Committees Claim Jurisdiction (Chicago, IL: University of Chicago Press, 1997), p. 11. 13. Baumgartner and Jones, Agendas and Instability in American Politics, p. 32. 14. Sarah B. Pralle, “Venue Shopping, Political Strategy, and Policy Change: The Internationalization of Canadian Forest Advocacy,” Journal of Public Policy 23, no. 3 (2003): 255. 15. King, Turf Wars, pp. 11–12. 16. Frank R. Baumgartner, Bryan D. Jones, and Michael C. MacLeod, “The Evolution of Legislative Jurisdictions,” The Journal of Politics 62, no. 2 (May 2000): 344–45. 17. Ibid., p. 346. 18. In order to simplify the policy map we have omitted the neighborhood level in Figure 20.9. 19. Grahame F. Thompson, Between Hierarchies and Markets: The Logic and Limits of Network Forms of Organization (New York: Oxford University Press, 2003), p. 161. 20. Ibid., p. 52. 21. For a similar classification of the different kinds of policy networks, see National Academy of Public Administration, Powering the Future: High Performance Partnerships (Washington, DC, April 2003), available at http://www.napawash.org/publications.html. 22. Robert Agranoff and Michael McGuire, “Big Questions in Public Network Management Research,” Journal of Public Administration Research and Theory 11, no. 3 (2003): 295–326. 23. Robert Agranoff, “Is Managing Within Intergovernmental Networks Changing the Boundaries of Government? A Preliminary Report,” paper prepared for Second Annual Founders Forum, American Society for Public Administration, 64th National Conference, Washington, DC (March 2003), p. 11. 24. Robert Agranoff, “Leveraging Networks: A Guide for Public Managers Working across Organizations,” IBM Endowment for the Business of Government, March 2003, p. 11, available at www.businessofgovernment.org/pdfs/AgranoffReport.pdf. 25. Ibid., p. 22. 26. Michael McGuire, “Is It Really So Strange? A Critical Look at the ‘Network Management Is Different from Hierarchical Management Perspective,’” paper delivered at the 7th Biannual Public Management Research Conference at Georgetown University (October 9–11, 2003), available at www.pmranet.org/conferences/georgetownpapers/McGuire.pdf. 27. See Baumgartner and Jones, Agendas and Instability in American Politics, pp. 3–24. 28. For a different perspective on policy termination, see Iris Geva-May, “Riding the Wave of Opportunity: Termination in Public Policy,” Journal of Public Administration Research and Theory 14, no. 3 (2004): 309–333. 29. Martha A. Derthick, Up in Smoke: From Legislation to Litigation in Tobacco Politics (Washington, DC: Congressional Quarterly Press, 2002), p. 10, citing Richard Kluger, Ashes to Ashes: America’s Hundred-Year Cigarette War, the Public Health, and the Unabashed Triumph of Philip Morris (New York: Knopf, 1996), pp. 183–84. This case study draws heavily on materials in the Derthick book.

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30. Ceci Connolly and John Mintz, “For Big Tobacco, a Future Without GOP Support,” Washington Post, March 29, 1998, A1. 31. Derthick, Up in Smoke, p. 9. 32. Ibid., Figure 11–1, p. 210. 33. Ibid., p. 8. 34. Pub. L. 89–92, Sec. 2 (July 27, 1965), 15 U.S.C. §1331. 35. Derthick, Up in Smoke, p. 14. 36. Section 1926 of the Public Health Service Act, as added by the Alcohol, Drug Abuse and Mental Health Administration Reorganization Act of 1992 (P. Law 102–321, § 202). 37. Derthick, Up in Smoke, p. 27. 38. David Kessler, A Question of Intent: A Great American Battle with a Deadly Industry (New York: Public Affairs, Perseus Books Group, 2001), p. 393. 39. Robert Rabin, “A Socio-Legal History of the Tobacco Tort Litigation,” Stanford Law Review 44 (April 1992): 863, quoting from the American Law Institute’s statement on standards of liability in tort for defective products. 40. Derthick, Up in Smoke, p. 30. 41. Ibid., chapter 5. Because this case was settled, no formal court opinion was issued. 42. Ibid., p. 83. 43. Ibid. 44. Food and Drug Administration et al. v. Brown & Williamson Tobacco Corp. et al., 529 U.S. 120 (2000). 45. Derthick, Up in Smoke, pp. 183–84. 46. Marc Kaufman, “U.S. Racketeering Trial Against Tobacco Industry Is Set to Start,” Washington Post, September 23, 2004, available at www.washingtonpost.com. 47. Michael Janofsky, “Big Tobacco, in Court Again. But the Stock Is Still Up,” New York Times, August 14, 2005, A15. 48. Ibid. 49. Derthick, Up in Smoke, p. 209. 50 Ibid., citing the Centers for Disease Control and Prevention, “Achievements in Public Health, 19001999: Tobacco Use—United States, 1900–1999,” Morbidity and Mortality Weekly Report, vol. 48 (November 5, 1999), 980–993. 51. University of Michigan and the National Institute on Drug Abuse, Monitoring the Future (December 19, 2005), Table 7, “Cigarettes: Trends in Thirty-Day Prevalence of Use by Subgroups for Twelfth Graders,” at www.monitoringthe future.org. 52. This discussion draws on research reported by Frank A. Sloan and Justin G. Trogdon, “The Impact of the Master Settlement Agreement on Cigarette Consumption,” Journal of Policy Analysis and Management 23, no. 4 (Fall 2004), p. 846. 53. University of Michigan and the National Institute on Drug Abuse, Monitoring the Future, pp. 1, 3. 54. Sloan and Trogdon, “The Impact of the Master Settlement Agreement on Cigarette Consumption,” p. 852. 55. Ibid., p. 847.

PART VI Conclusions

We have ended a lengthy journey. In parts II, III, and IV we examined the policymaking process in detail. We focused on the How of public policy. Making public policy is a complex process that involves numerous activities, countless actors, and a wide variety of technologies and practices. All U.S. citizens participate—to one extent or another—in the American policymaking process. In part V we surveyed the context in which this process unfolds and the content of public policies. We saw how the Where and What interacts with the How of the policymaking process. With hundreds of thousands of venues and an ever-expanding array of policy issues, the policymaking process is subject to an infinite number of variations according to place and subject matter. While we can talk about policymaking in general, we cannot overlook the local circumstances that determine the evolution of individual policies. There are no universal recipes for American public policymakers, only guidelines and practices that must be tailored to the individual case. Throughout this text we have introduced a number of themes about the study and practice of American public policymaking. Now that we have completed the voyage, it is time to recapitulate some of the major points of the text and suggest directions for further research. VI.1 POLICYMAKING First and foremost, we have focused on how policy is made. That is, on how policy actors do their work. Policymaking is work, and making public policy is a vocation for millions of Americans and an avocation for millions more. Here we have presented a broad survey of the kinds of activities involved in transforming problems into public action. However, policymaking is not the same as policy analysis. Policymaking focuses on the How, while policy analysis concentrates on the What of public policy. Policy analysis is problem-centric, answering the questions: What is the situation and what can be done about? What is, or should be, the “technical” solution? While policymakers are problem solvers, they cannot disentangle the problem from the web of human interests that surround it. Policymaking is issue-centric. Issues are technical problems wrapped in politics. Making policy is solving, resolving, dissolving, or absolving both the technical and political dimensions of problems. In this text we have focused on the making of public policies and not on the analysis of public problems.1 537

538

CONCLUSIONS

Moreover, we argue that process increasingly trumps policy. While policymakers are consumers of policy analysis, the process has become so complicated, fragmented, and contested that policy often takes a backseat to procedure. Getting something done now takes precedence over making a difference later. Agendas drive outputs and overshadow outcomes. Miscellaneous policy solutions are sliced and diced and combined in such a way—for example, in omnibus legislation—that the individual ingredients are as much a mystery to legislators as they are to the public. More than two decades ago John Kingdon introduced the term “policy primeval soup” to describe the environment in which policies are formed.2 Today policy is served to the public in large vats of “policy bouillabaisse” consisting of a medley of policy scraps and seasoned with a seemingly random assortment of pork projects. These massive helpings of “policy stew” serve the interests of institutions in getting things done even if they serve no policy constituency well. They often benefit the process stakeholders more than the target populations. The real winners in this environment are the entrepreneurs who can master their policy niches and the policymakers who get to claim results now and the opportunity to revisit and repair these results in the next session. In short, as the opportunities for policy innovation shrink, the importance of policy process grows. Understanding the practice of American public policy has never been more important. VI.2 TECHNOLOGIES AND PR ACTICES Second, we have focused on the technologies and practices that policy entrepreneurs and policymakers use to craft public policy. We use the term technology to refer to the fundamental institutions of public action—for example, agenda, authority, and contract. We use the term practice to describe the repertoires of technologies, techniques, tools, and skills that policy actors use to do their jobs. Crafting public policy is not unlike building a home—and then remodeling it every year. To construct a house requires multiple technologies—architecture, carpentry, electronics, communications, plumbing, heating—each with its own set of practices. Similarly, making public policy involves issues, agendas, authorities, agencies, programs, outputs, and other social or “soft” technologies of public action. While it may sound strange to talk about contracts or budgets as technologies, they are the means or instruments that policy actors use to get things done. Making public policy is a process of selecting the appropriate technologies and specific practices and procedures to produce results.3 Policy technologies are toolboxes for public action.4 The term technology has another advantage. It reminds us that these institutionalized social practices are human inventions that are constantly changing. A century ago, the concept of a public budget was just being invented. Fifty years ago, the terms program and project were coming into vogue, but tools to manage them were primitive at best. Today, policy networks, performance budgeting, regulatory negotiation, earned-value project management, and e-government form the cutting edge of policymaking technology. A half century from now, some of these technologies and techniques may be old hat, some may be replaced by newer versions, and others may disappear entirely. The technologies of policy advocacy and policy production are constantly changing. The policymaking process and technology evolve together, both substantively and procedurally. Neither is immutable; neither should be examined in isolation. V I . 3 R E S U LT S The third theme has been the focus on results. Public policymaking is all about public action. Americans expect their public and private leaders to solve problems and deliver results. And despite two decades of rhetoric about government being the problem and not the solution, Americans still turn to public policymakers to solve their problems, big and small. As we have seen, there is

CONCLUSIONS

539

nothing new about the disconnect between public rhetoric and public action. Nineteenth-century Americans relied on their local authorities to regulate commerce and control crime just as much as twenty-first-century Americans rely on the Department of Homeland Security (DHS) and the Federal Emergency Management Agency (FEMA) to protect them from terrorism and natural disasters. The issue has never been whether government should be active or passive, but rather who is acting, for whom, and for what. Americans have always held public policymakers accountable for results, but the question has been, which policymakers and what results? For the most part, Americans have turned a blind eye to the methods used when the outcomes were good. They worry about means only when things go bad. But above all, they value action for action’s sake. Their heroes are the Lincolns, Roosevelts, and Reagans, and not the Buchanans, Coolidges, and Carters. Doing nothing is not an option. Nevertheless, performance did not become a driving force in the practice of public policy until the early 1990s. While politicians talked about results and sometimes achieved them, the study of public policymaking focused on process and procedure. The emphasis—be it tacit or explicit—was on doing things the “right” way rather than doing the “right” things. The 1990s saw the beginnings of a paradigm shift that is continuing today. The reasons for this shift are clear, at least in retrospect. In the first place, the government sector was simply following in the path first blazed by the commercial or market sector. Economy and efficiency were not sufficient for success in either business or governance. Second, communications and information technologies have made the job of measuring policy performance much easier. We may argue about what can or should be measured, but we can produce quantitative answers to the question “What happened?” When things go wrong, we see those events repeated. Third, as policies become ever more densely packed and commingled together, it is increasingly difficult to demonstrate success to the American public. The era of big programs with big results—like Social Security or Medicare—are long gone. And when big programs like prescription drug benefits for Medicare seniors are enacted, they are so difficult to understand and deliver that the voices of approval are drowned in a sea of discontent. Today, both policy entrepreneurs and policymakers must work very hard to demonstrate that they really make a difference in the lives of the American public. That is why mastery of the process and control over the agenda has become so important to policy advocates and policymakers alike. At least this enables them to deliver a lot of minigoods to a broad array of niche constituencies. Finally, Americans have become far more sophisticated consumers of public policy. They are more skeptical of promises and understand the difference between what governments do and the consequences of public actions, the difference between outputs and outcomes. They can distinguish between hype and reality, between quantity and quality. Thus, both policymakers and the public have endorsed performance as the primary criterion for public action. Everybody believes in results. The challenge is how to produce them. This text views the policymaking process as a means to craft effective public action. The point of the process, after all, is to get results. Nevertheless, achieving policy outcomes is by no means an easy assignment, nor is it an unambiguous good. Nor are results a sufficient criterion for public policy evaluation. There are many policy objectives and policy technologies that are unethical, immoral, illegal, or just plain inappropriate. Public officials are accountable for much more than good results.5 Every approach to public policymaking has its own peculiar pathologies. Whereas proceduralism led to red tape, buck passing, and a whole catalogue of sins of the administrative state, performance-based governance encourages policy actors to massage the numbers or cheat on tests of policy quality. Just as corporate CEOs cooked the books to show profitable quarterly

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results to stockholders during the “go-go” years of the late 1990s, policymakers tilt the scales to demonstrate short-term success to their constituents. Both the language of policymaking and the behavior of policymakers are changing, albeit slowly. Everyone is learning to talk the talk of performance management. But that does not necessarily mean that the public good will thereby be served. Policy entrepreneurs and policymakers must learn to design and deliver public policies more effectively. Performance may not be the whole story, but it is a necessary beginning. V I . 4 H I S T O R Y A N D L AW Throughout this text we have examined the institutions, technologies, and practices of American public policymaking in their historical context. Institutions and technologies evolve, just as public policies do. To understand the paths that policies take we need to understand the “state of the art” in policy production at a particular time and place. Policies and the means to produce them co-evolve, and both are subject to the constraints of path dependence. “Path dependence has to mean, if it is to mean anything, that once a country or region has started down a track, the costs of reversal are very high. There will be other choice points, but the entrenchments of certain institutional arrangements obstruct an easy reversal of the initial choice. Perhaps the better metaphor is a tree, rather than a path. From the same trunk, there are many different branches and smaller branches. Although it is possible to turn around or to clamber from one to another—and essential if the chosen branch dies—the branch on which a climber begins is the one she tends to follow.”6 Past decisions limit future choices. The technologies and practices used to craft public policies get locked in over time. While twenty-first-century policymakers may have a wide assortment of tools available to deliver public education or social security, the costs of reconfiguring public policies and the domains in which they are embedded are enormous. Policymakers do not start with a blank slate. They must contend with both the legacy of the past and the uncertainties of the future. The same principle applies to the art and science of public policymaking. It is a craft in constant evolution, so we must be careful to qualify our observations with respect to time and space. History matters. Moreover, it matters most particularly in American law. As Oona Hathaway has observed, “The doctrine of stare decisis that is central to our common law system creates an explicitly pathdependent process. The past forms the point of departure for the present. The present, in turn, forms the point of departure for the future. Therefore, the historical path leading to each new outcome or decision directly shapes that outcome in specific and systematic ways. Oliver Wendell Holmes was thus correct when he said that understanding the history of the law is central to understanding the law as it is today.”7 The same could be said for the institutions and technologies of public policy. For law and lawyers have always played a central role in American public policymaking. Looking for precedents and best practices has always been at heart of the American practice of public policymaking. And when policymakers do undertake new policy initiatives, they seek to “lock in” these new programs and make them painful for subsequent generations to change. Making policy makes history and history makes precedent and precedents are usually—though not always—given weight by future generations of policymakers. In the preceding pages we have only hinted at the relationship between history and public policy, but a new generation of scholars has taken up this challenge.8 V I . 5 I M I TAT I O N A N D D I V E R S I T Y Closely related to the role of history in public policymaking is that of imitation or mimesis.9 When policy actors choose policy techniques or strategies, they select from a repertoire of practices that

CONCLUSIONS

541

have been documented or demonstrated by others. Policy actors don’t create, they imitate. They search for analogous problems and solutions in the past or in other policy domains and tailor these solutions to their current situation. Policymaking is not theory-driven, it is case-driven. Policymakers scour history or poll their colleagues for relevant models of action to copy. To make policy is to produce policy deliverables, primarily, though not exclusively, in the form of legislation, orders, rules, plans, and the like. To create these deliverables, policy actors duplicate other policy deliverables from other times and places. For example, this is how the initial occupation of Iraq was conceived and carried out by L. Paul Bremer, former American proconsul in Baghdad. Bremer, a historian by training, then reached over to his desk for a thick briefing book that laid out detailed timelines for the development of each Iraqi ministry. He pointed out a chart that he consulted more than any other: “MILESTONES: Iraq and Germany.” It laid out the handover of state institutions during the 1945–52 occupation of Germany, side by side with corresponding plans for Iraq over a more compressed period. That way, Bremer said, he could “keep track of where we are versus Germany.” The U.S. occupation embraced that model so completely that officials lifted whole passages from Marshall Plan-era documents in designing the future of Iraq—once forgetting, in a section dealing with currency, to change “Reichsmark” to “dinar.”10 Policymakers rarely have the time or skills to analyze problems and their solutions in textbook fashion, so they copy from others. Mostly they borrow from the past,11 but increasingly they look to contemporaneous “best practices” or “benchmarks” to imitate. By and large, Americans are pragmatists, not ideologues. They look to practice, not principle. They discover what has worked in the past and apply it to the present. Policymakers are continually recycling and reinventing old solutions for new problems. This practice fits nicely with a model of institutional change first proposed by Paul J. DiMaggio and Walter W. Powell. They posited three mechanisms for the homogenization of practices among organizations: • •

•

Mimetic isomorphism—the modeling of policies and practices on those of other organizations, as discussed above Coercive isomorphism—the imposition of policies and practices by one organization on another, for example, the imposition of federal civil rights requirements on government contractors or the imposition of uniform accounting standards by OMB on educational and other nonprofit organizations Normative isomorphism—the promulgation and diffusion of professional and technical standards by standards bodies such as the International Standards Organization, American National Standards Institute, or the Project Management Institute12

Recent research has concluded that all three mechanisms play a more significant role in publicsector organizations as compared to both commercial and nonprofit organizations.13 Government organizations, in short, tend to be more conformist than nongovernmental bodies. They try to look alike and act alike. We know, however, that they don’t succeed in conforming. One of the hallmarks of American public policymaking is the diversity of venues and the widespread phenomenon of venue shopping. Policy entrepreneurs have literally hundreds of thousands of venues in which to pursue their policy objectives. Venue shopping succeeds because every venue is different and there is almost

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CONCLUSIONS

always someplace where a policy advocate can succeed. There is usually some city or county or town or neighborhood association that will take up the banner of your personal cause. Thus, the forces of conformity are in constant struggle with the realities of diversity in American public policymaking. This tension plays out every day in almost every government body across the length and breadth of the United States. VI.6 CASE STUDIES Finally, materials in this text are designed to support case studies of public policy across a broad spectrum of policy domains. Case study methods are not as common in the study of public policy as they are in the study of law and business. The purpose of a case study is to examine a real-life phenomenon within its real-life context. In particular, a case study • • •

“Copes with the technically distinctive situation in which there will be many more variables of interest than data points, and as one result Relies on multiple sources of evidence, with data needing to converge in a triangulating fashion, and as another result Benefits from the prior development of theoretical propositions to guide data collection and analysis.”14

Case studies are particularly useful in isolating a phenomenon from its context. This has been our aim in describing the practices of American public policymaking and then examining their use in various policy contexts. Cataloguing the means of policy production has little benefit unless we understand how these tools have been applied in a wide range of policy domains and venues. To recognize what works and what doesn’t, we need to walk in the shoes of policy actors as they choose alternative methods to get the job done. Case studies enable us to bridge the worlds of policy study and policymaking. That is why this text has introduced the technique of policy mapping. Policy maps enable students to visualize the policy process as a series of steps, each involving the selection of alternative strategies or practices to get the job done. Policy maps help us to reconstruct the policy trajectories of the past and envision the choices involved in designing public policies for the future. They can help inform and advance the practice of American public policymaking. NOTES 1. For introductions to policy analysis, see David L. Weimer and Aidan R. Vining, Policy Analysis: Concepts and Practice, 3rd ed. (New York: Prentice Hall, 1998); William N. Dunn, Public Policy Analysis: An Introduction, 3rd ed.(New York: Prentice Hall, 2003); or Edith Stokey and Richard Zeckhauser, A Primer for Policy Analysis (New York: W.W. Norton, 1978). 2. John W. Kingdon, Agendas, Alternatives, and Public Policies 1st ed. (New York: Addison-Wesley, 1984). 3. The point of departure for our treatment of technology is John D. Montgomery’s Technology and Civic Life: Making and Implementing Development Decisions (Cambridge MA: MIT Press, 1974). Instead of the interplay between technology and civic life, we have changed the focus to the technologies of civic life. We argue that the soft technologies of civic institutions and practices are as, if not more, important than the hard technologies of science and engineering. Nevertheless, we share many of the same concerns with institutional decision making and policy design explored in Montgomery’s study. 4. For a Web-based repository of tools and techniques for community development, see the Community Tool Box, sponsored by the University of Kansas, at ctb.ku.edu/.

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5. For example, see Robert D. Behn, Rethinking Democratic Accountability (Washington, DC: Brookings Institution Press, 2002) and Richard Mulgan, Holding Power to Account: Accountability in Modern Democracies (New York: Palgrave Macmillan, 2004), for two quite different takes on standards of accountability. 6. Margaret Levi, “A Model, a Method, and a Map: Rational Choice in Comparative and Historical Analysis,” in Comparative Politics: Rationality, Culture, and Structure, ed. Mark I. Lichbach and Alan S. Zuckerman (Cambridge, UK: Cambridge University Press, 1997), p. 28, quoted in Paul Pierson, Politics in Time: History, Institutions, and Social Analysis (Princeton, NJ: Princeton University Press, 2004), p. 20. 7. Oona A. Hathaway, “Path Dependence in the Law: The Course and Pattern of Legal Change in a Common Law System,” Iowa Law Review 86, no. 2 (January 2001): 163. 8. For example, Paul Pierson, Politics in Time; Julian E. Zelizer, “Clio’s Lost Tribe: Public Policy History Since 1978,” Journal of Policy History 12, no. 3 (2000): 369–94; and Jacob S. Hacker, The Divided Welfare State: The Battle over Public and Private Benefits in the United States (New York: Cambridge University Press, 2002). 9. For the seminal discussion of imitation or mimetic isomorphism in institutional analysis, see Paul J. DiMaggio and Walter W. Powell, “The Iron Cage Revisited: Institutional Isomorphism and Collective Rationality,” in The New Institutionalism in Organizational Analysis, ed. Walter W. Powell and Paul J. DiMaggio (Chicago IL: University of Chicago Press, 1991), pp. 63–82. For a discussion of the literature on the related, but narrower concepts of policy transfer and lesson drawing, see Oliver James and Martin Lodge, “The Limitations of ‘Policy Transfer’ and ‘Lesson Drawing’ for Public Policy Research,” Political Studies Review 1, no. 2 (2003): 179–93. 10. Michael Hirsh, “Endgame: How Will We Know When We Can Finally Leave?” Washington Post, September 26, 2004, B1. 11. For an examination of the uses of history, see Richard E. Neustadt and Ernest R. May, Thinking in Time: The Uses of History for Decision Makers (New York: Free Press, 1988). Also, see Zelizer, “Clio’s Lost Tribe.” 12. DiMaggio and Powell, “The Iron Cage Revisited,” pp. 67–74. 13. See Peter Frumkin and Joseph Galaskiewicz, “Institutional Isomorphism and Public Sector Organizations,” Journal of Public Administration Research and Theory 14, no. 3 (2004): 283–307. 14. Robert K. Yin, Case Study Research: Design and Methods, 3rd ed. (Thousand Oaks, CA: Sage Publications, 2003), pp. 13–14.

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Index Boldface page references indicate illustrations or tables. Abortion policy, 91, 94, 144 Absolution, 43 Abu Ghraib prison contract, 317 Access, 25 Accountability, 4, 235, 277, 317-318 Acquisition procedures, simplified, 303 Action, 6, 168-169 Actors. See also specific types as beneficiaries, 413-414 changes in, 4 as component of public policymaking model, 18, 22-25 definition of, 18 policy entrepreneurs, 22-23 policymakers, 23-24 practices and, 18-19 target populations, 24 technologies and, 18-19 types of, 413 winners and losers, 24 Adams, John, 68-69 Adams, Sam, 82 Administration for Children and Families (ACF), 261-262 Administrative agencies, 204-205 Administrative authority, 182-183, 186-188, 201 Administrative Procedures Act (APA) (1946), 172, 182, 260, 276-278, 280, 286, 298 Administrative rules, 276-279, 283-285 Admission procedures for allocation mechanisms, 388 Advisory committees and commissions, 210 Advocacy think tanks, 80 AFDC, 260, 263 Affirmative action policy, 185-191 Agency, 196-226 agreements between, 310-311 authority and, 196, 197 budgets, 344 case studies, 205, 215-222 definition of, 26, 196-198 deviations and, 304

Agency (continued) executive influence on, 214, 214 funding of, 202 government (public) administrative agencies, 204-205 advisory committees or commissions, 207 departments, 204-205 government corporations, 207-208 government-sponsored enterprises, 208-209 independent regulatory agencies, 206-207 governments as, 198-199 housekeeping functions, 201-202, 201, 219-221 networks between, 517 nongovernment (private), 210-212 as organization, 197-198 outcomes and, 212-213, 212 outputs and, 212-213, 212 overview of, 196, 203 private, 199-200, 210-212 production and, 26, 27, 196, 203-204, 203, 332 program and, 231-232, 231, 232, 235 public, 199, 201-202, 482, 507-508 public sector, 314 as relationship, 196-197, 197 rules and, 277 state action doctrine and, 202-203 strategies for design of, 213-215, 214 U.S. Supreme Court and, 197 Agenda, 128-160 case studies, 134-135, 150-157 definition of, 25, 129-130 institutions and setting bureaucracy, 139-140, 141 constitutional amendments, 145-146 courts, 140-145 executives, 137-139 initiatives, 146-147 legislatures, 130-137 overview, 130 referenda, 146-147 overview of, 128-129, 147-148, 147 policy maps and, 148-149, 148 process of setting, 147-148, 147

545

546 Aggregation challenge, 254, 254 Aid for Dependent Children (AFDC), 260, 263 Air pollution rules, 286-291, 459 Allocation methods decisions, 386 outputs and, 27, 27, 365, 386-388 principles, 386-387 procedures, 387-388 Amendments, constitutional, 130, 145-146, 173 American Customer Satisfaction Index (ACSI), 251 American Hospital Association (AHA), 152 American Lung Association, 287 American Medical Association (AMA), 152 American public policymaking. See also Foundations of American public policymaking; Levels of American public policymaking; Sectors in American public policymaking approach to, 4 authority and, 196-197, 197 change and, 4 competition and, 447 as field of study, 9-12 focus on, 3 initiatives and, 146-147 investigations and, congressional, 136 lobbying and, 23 new journalism and, 83-84 newspapers and, 83-85 politics and, 66-68 practice of, 12-13 religious Right and, 94 results and, 7 scope of, 12-13 think tanks and, 80-81 American Revolution, 66-68, 172 Americans with Disabilities Act (1991), 490 Amicus curiae, 144 Analysis of policy, 3-5, 51, 537, 541 APA (1946), 172, 182, 260, 276-278, 280, 286, 298 Apparent authority, 170 Appellate review, 142-144 Applied technology, 10 Appointments and public policymaking, 69-70 Appropriation authorization, 346 Appropriation legislative authority, 175-176 Appropriations, 347, 350 Arthur Andersen, 119-120 Articles of Confederation, 173 Associated Press, 83 Association for the Advancement of Retired People, 103 Attribution problems, 255-256 Audits, 136 Authority, 168-195 action and, 168-169 administrative, 182-183, 186-188, 201 agency and, 196, 197

INDEX Authority (continued) American public policymaking and, 196-197, 197 apparent, 170 appropriation legislative, 175-176 budget, 349, 349 case studies, 177, 181-182, 185-191 constitutional, 172-174 to contract, 201 definition of, 26, 168-169 executive, 177-179 express, 170 implied, 170 interpretive, 179-180 judicial, 179-181, 189-190 law and, 169-171 legislative, 174-177, 187-188 for money, receiving and spending, 201 overview of, 168 as patchwork quilt, 191 popular, 183-184, 190-191 production and, 18, 26, 27, 184-185, 332 program and, 235 public policymaking and, 169-171 remedial, 180-181 sources of public, 171-172, 171, 185 statutory, 176-177, 201 U.S. Constitution and, 170-173, 179 variety of, 168 Authorization legislative authority, 175 Bacon, Francis, 5 Bakke, Allen, 190 Bakke decision, 190 Baseball stadiums, financing, 475 Baucus, Max, 154 Bauer, Gary, 93 Baumgartner, Frank, 22 Beach sand replacement policy, 385 Beneficial outcomes, 416, 416 Beneficiaries, 413-414 Benefits to public classifications empirical, 381-385 normative, 379-381 operational, 377, 378 overview, 376-377 examples of, 7 outputs and, 27, 27, 365, 376-377, 379-385 Bennett, W. Lance, 87-88 Benny, Jack, 85 Bensten, Ken, 121 Bereuter, Doug, 153 Bidding, 303, 305-306 Biegun, Stephen, 108 Big government, 366-367, 453 Bill of Rights, 145, 203, 484

INDEX Binge drinking policy, 520 Bioterrorism, 460-466 BlackBerry technology, 89 Blame, 48 Blanket purchase agreement, 317 Block grants, 309 Blogs, 89 Boeing, 211, 318-324 Borski, Robert, 108 Brady, Matthew, 83 Bremer, L. Paul, 541 Broadcasting, 85-89 Brookings Institution, 10, 78, 80, 104 Brouillette, Dan, 108 Browne, William P., 73, 75 Brownlow Committee, 456 Brown v. Board of Education, 144, 187 Budget Enforcement Act (1990), 338 Budgets, 329-362 agency, 344 appropriation authorization and, 346 appropriations and, 347, 350 authority, 349, 349 case studies, 340, 351, 354-358 concurrent budget resolution and, 346 continuing resolutions and, 347 deficits and, 336-339 definition of, 26, 329 earmarks and, 337-338, 354-358 entitlements and, 336 evolution of deficits and, 336-339 from 1865 to Progressive Era, 334-335 overview of, 334 state and local budgeting, 340-341 twenty-first century, 339 World War II through Vietnam, 336 between World Wars, 335 execution, 349, 349 line-item veto and, 338 local, 340-341 managing federal, 341-342 omnibus budgeting and, 337 oversight, 350-351 overview of, 329-331 passback and, 345 performance budgeting and, 352-353, 352, 353 phases budget execution and control, 348-351, 349 executive budget formulation, 343-345, 343 legislative enactment, 345-348, 345 politics of, 353-354 process for, 342-343, 343 production and, 26, 27, 331-332, 348 raising money and, 333 reconciliation action and, 346

547 Budgets (continued) spending money and, 333 state, 340-431 Burdens to public classifications of empirical, 381-385 normative, 379-381 operational, 377, 378 overview, 376-377 examples of, 7 outputs and, 27, 27, 365, 376-377, 379-385 Bureau of Budget (BOB), 335 Bureau of Census, 204 Bureaucracy agenda setting and, 139-141, 141 definition of, 139 public policymaking and, 140 Bureau of Diplomatic Security, 502-503 Bureau of Land Management, 204 Bush, George H.W., 64, 120, 122 Bush, George W., 47, 53, 56, 58, 71, 94, 101, 120-121, 123, 155-156, 170, 178, 216, 302, 314, 321-322, 419, 438, 450, 460 Bush, Jeb, 54 Bush v. Gore, 448, 459 Business Improvement Districts, 451 Business organizations, 73-74 Byrd, Harry, 92-93 Cabinet-level prototype, 216 CACI International, 317 California Air Resources Board, 459 California Employees’ Retirement System (CALPERS), 118 Campaign contributions, 109, 122 Campaign Finance Reform Act (2002), 109 Campus security policy, 64 Card, Andrew, 321-322 Carnegie, Andrew, 78, 481 Carrots (economic policy instruments), 381-382, 448 Carter, Jimmy, 92 Carville, James, 121 Case studies agency, 205, 215-222 agenda, 134-135, 150-157 authority, 177, 181-182, 185-191 budgets, 340, 351, 354-358 content, 523-533 context, 486-493 contracts, 301, 305-306, 312, 317, 318-324 domain, 501, 502-503 function of, 542 government sector, 449-450, 459 inputs, 64, 90-95 lobbying, 107-108, 117-125 market sector, 475

548 Case studies (continued) methodology of, 4, 542 networks, 520 niches, 504-505 outcomes, 403-404, 419-428 outputs, 373, 385, 388-394 performance measurement, 251 private sector, 478 problems, 45, 50, 53-59 program, 247-248, 251, 259, 260-628 public sector, 478 rules, 275, 285, 286-291 sectors in American public policymaking, 486-493 solutions, 45 Cash transfers, 383 Catalog of Federal Domestic Assistance, 376-377, 382, 384 Categorical grants, 308-309 Cato Institute, 80, 104 Causal challenge, 255, 255 Causes and problems, 48 CBO, 336-337 Center for Medicare and Medicaid Services (CMS), 151, 155-156 Centralization of power, 456 CFR, 278-280, 279, 281 CFTC, 122-123 Chads, problem of hanging, 53-59 Change in policy, 4, 522-523, 522 Charges, 384 Charters, 472-473 Cheney, Dick, 120, 123 Chertoff, Michael, 221 Chewco, 118-119 Chief Financial Officers Act (1990), 207 Chinman, Matthew, 236-237 Christian Coalition, 91-92 Christian Right, 92-94 Churchill, Winston, 85 Circular A-76, 302 Civic associations, 480 Civil Rights Act (1964), 187, 457 Civil sector definition of, 30, 434, 438 government sector and, 481-482 historical background of, 479-481 overview of, 434-435, 434, 440-441, 440, 470, 479 types of, 440-441, 440 Civil War, 83 Class action lawsuits, 143 Classification systems, 49 Clean Air Act (1970), 286-289 Cleary, Jeanne, 64 Clemens, Elisabeth, 75

INDEX Client politics, 52 Clinton, Bill, 80, 87, 115, 123, 178, 287, 290-291, 302, 339, 529 CMS, 151, 155-156 Coalitions, 111, 134 Code of Federal Regulations (CFR), 278-280, 279, 281 Coercive isomorphism, 541 Cold War, 12, 79, 457 Collaboration, 243, 245, 314 Collective goods, 381 Colorado River Compact, 312 Committee action on laws, 133 Committee on Administrative Management, 456 Committee for Public Information, 84 Committees of Correspondence, 82 Commodity Futures Trading Commission (CFTC), 122-123 Common-interest communities, 451 Common-pool goods, 380 Commons, concept of, 483 Communications Act (1934), 85 Compensatory relief, 180 Competition, 313-314, 447, 478 Compromise, 134 Concurrent activities, 16, 16 Concurrent budget resolution (CBR), 346 Conditions, 28, 40-41 Conference action on laws, 134 Confirmations, Senate, 136 Congressional Budget and Impoundment Control Act (1974), 336 Congressional Budget Office (CBO), 336-337 Conrad, Kent, 530 Constitutional authority, 172-174 Constitutional Convention (1787), 173 Consumption, 379-380, 379 Content, 497-536 case study, 523-533 as component of policymaking process model, 19-20 domain and, 498-501, 499, 500 issues, 501-504, 502 jurisdictions and, 32, 505-509 networks and, 32, 32, 513-522 overview of, 31, 433-435, 434, 497 policy maps and, 509-513, 510, 511 venues and, 32, 505-506, 506, 541 Context, 470-496 case study, 486-493 as component of policymaking process model, 19, 19 levels of American public policymaking and, 29-30, 31, 433-435, 433 overview of, 29, 433-435, 434 sectors in American public policymaking and, 29-31, 31, 433-435, 434

549

INDEX Continuing resolutions (CR), 347 Contracting, 475-476 Contracting officer (CO), 305 Contract lobbyists, 105, 105 Contracts, 295-328 Abu Ghraib prison, 317 authority and, 261 bidding and, 303, 305-306 case studies, 301, 305-306, 312, 317, 318-324 collaboration and, 314 competition and, 313-314 cooperative agreements and, 308-310 cost-reimbursement, 304 definition of, 26, 296 fixed-price, 304 for-profit corporations and, 211 grants and, 308-309 incentive delivery, 304 interagency agreements and, 310-311 interstate compacts and, 311-312 labor-hour, 304-305 law and, 315 letter, 305 overview of, 295-296 of Pentagon, 299 practical issues and, 316-317 price gouging and, 305-306 private, 297 privatization and, 314-315 procurement case study, 301 decision to contract, 302-303 definition of, 299 evolution of government contracting, 299-301 formation of contract, 303-304 franchises, 305 management of contract, 305, 316 overview of, 299 types of contracts, 304-305 production and, 26, 27, 296-297 public, 296-298 regulations versus, 298, 298 regulatory, 312-313 service delivery, 306-308 time-materials, 304-305 Control, story of, 48 Cook, Timothy, 82 Cooperation, 245 Cooperative agreements, 308-310 Coordination, 244 Coping organizations, 213 Cornyn, John, 121 Corporate interests, 73-74 Corrective taxes, 384 Cost-benefit evaluation, 251 Cost-reimbursement contracts, 304

Coughlin, Father (“Radio Priest”), 86 Counties, 450 Counting, 48-49, 53-59 Courts. See also U.S. Supreme Court agenda setting and, 140-145 appellate review, 142-144 authority of, 179-181, 189-190 definition of, 130 judicial review and, 173-174, 183 litigation and, 142-143 Craft organizations, 213 Crawford, Lester, 275 Cunning of reason, 5 Customer satisfaction, measuring, 251 Cyclical process, 17, 17 Czar model prototype, 216 Dartmouth College decision, 473 Data cost versus data quality, 256 Davis, Gray, 58 Deaf and Dumb Asylum (Hartford, Connecticut), 455 Decentralization of power, 458 Declaration of Independence, 172 Declarative relief, 180 Decline, story of, 48 Defense public policymaking, 20, 511 Defensive campaigns, 111 Defensive lobbying, 103 Deficits, 336-339 DeLay, Tom, 135 Delegation doctrine, 197 Demonstrations, 112 Department of Agriculture, 259, 373 Department of Commerce, 204 Department of Defense (DOD), 318-324 Department of Education, 231 Department of Health, Education, and Welfare (HEW), 526 Department of Health and Human Services (HHS), 204, 261 Department of Homeland Security (DHS), 214-222, 220, 500, 500 Department of the Interior, 204 Department of Justice (DOJ), 45, 119, 531 Departments, 204-205. See also specific names Depression, 79, 456 de Tocqueville, Alex, 90-91, 480 Deviations, 304 Dewey, John, 8, 40, 164 DHS, 214-222, 220, 500, 500 Dicks, Norman, 321-322 DiMaggio, Paul J., 541 Direct delivery, 243 Direct lobbying, 106-107, 106 Direct target populations, 374 Discretionary grants, 308

550 Discretionary spending, 338 Dissolution, 43 Distributive policies, 400 Diversity, 540-542 DNA testing, 50 DOD, 318-324 DOJ, 45, 119, 531 Domain case studies, 501, 502-503 content and, 498-501, 499, 500 definition of, 19, 498 educational, 19-20 evolution of, 499-500, 500 interdependence of, 499, 499 issues and, 501-504, 502 multiple, 501-502, 502 networks and, 32, 32, 513, 514 public policymaking and, 32, 32, 498-501, 499, 500 terms for, 498 Domestic assistance, types of, 377, 378 “Don’t ask, don’t tell” policy, 178 Druyun, Darleen, 320, 323 Due process, 144 Dunn, William, 40 Earmarks, 337-338, 354-358 Economic goods, 381 Economic Recovery Act (1981), 338 Economic regulations, 384-385 Economy Act, 310 Edison, Thomas, 9, 12 Educational public policymaking, 19-20, 354-358. See also specific laws EEOC, 188-189 Efficiency, 387 Electing policymakers, 65-66 Electioneering, 93-94 Electoral College, 68, 145 Elster, Jonathan, 386 Emerald Isle (North Carolina), 385 Emergency contraceptive policy, 275 Empirical outputs, 372, 381-385 Enabling legislative authority, 175 Enron, 117-125 Entitlements, 336 Entrepreneurial politics, 52 Environment. See Context Environmental Protection Agency (EPA), 286-291 Equal Employment Opportunity Commission (EEOC), 188-189 Equality principle, 386-387 Evaluation cost-benefit, 251 impact, 250 outcome, 250, 415-418, 416, 426-427

INDEX Evaluation (continued) process, 250 program, 239, 249-251 Evans, Donald, 123 Events, 28, 42 Exclusion, 379-380, 379 Executive orders, 178-179, 187, 201 Executives agency and, influence on, 214, 214 agenda setting and, 137-139 authority of, 177-179 budget phases and, 343-345, 343 definition of, 130 presidential agenda and, 138 role of, 137 schedules, 137-138 tools of, 138-139 Export-Import Bank, 123 Express authority, 170 Failures of policy, 417-418 FAIR (1998), 302-303 Fair Labor Standards Act, 489 Fair share to states, 449-450 False Claims Act, 248 Falwell, Jerry, 92, 94 FAR, 301, 303, 306, 310 Farm Credit System, 209 Farm subsidies, 373 FASA (1994), 285, 301, 303 FASAB, 230, 253 FCC, 525-526 FDA, 275, 285, 526-527, 529, 530, 532 Federal Accounting Standards Advisory Board (FASAB), 230, 253 Federal Acquisition Regulations (FAR), 301, 303, 306, 310 Federal Acquisition Streamlining Act (FASA) (1994), 285, 301, 303 Federal Activities Inventory Reform (FAIR) (1998), 302-303 Federal Advisory Committee Act (1972), 210 Federal Aviation Administration (FAA), 526 Federal Communications Commission (FCC), 525-526 Federal Emergency Management Agency (FEMA), 216, 221, 385, 518, 539 Federal Energy Policy Act (1992), 122 Federal Energy Regulatory Commission (FERC), 122-123 Federal government, 447-449. See also Government; specific agencies Federal Grant and Cooperative Agreement Act (1977), 310 Federalism eras of colonial rule (to 1787), 454 liberal state (1877-1980), 454, 456-457

551

INDEX Federalism eras of (continued) overview of, 453-454, 454 rebirth (1980 to present), 457-459 well-regulated governance (1787-1877), 454-456, 454 market sector and, 473-474 network of, 452-453, 453 sectors in American public policymaking and, 485-486 structure of, 447, 447 U.S. Supreme Court and, 458-459 Federally Funded Research and Development Centers (FFRDCs), 80 Federal Radio Commission (FRC), 85 Federal Register, 278, 283, 525 Federal Reserve Board, 206 Federal Savings and Loan Insurance Corporation, 209 Federal Trade Commission (FTC), 525-526 FEMA, 216, 221, 385, 518, 539 FERC, 122-123 Fiascoes in policy, 417 Final outputs, 371 First Amendment, 484 Fisher, Linda, 121 Fisher, Peter, 121 501(c)(3) groups, 75 Fixed-price contracts, 304 Floor action on laws, 133-134 Focusing events, 42 Food and Drug Administration (FDA), 275, 285, 526-527, 529, 530, 532 Food stamps policy, 259 Ford Corporation, 108 Formal rules and rulemaking, 274-275, 281-283 For-profit corporations, 210-211 Foundations of American public policymaking, 5-14 definitions policy, 5-7, 6, 7 politics, 8-9 public, 7-8 experimental nature, 12 field of study, 9-12 founders (1950s-60s), 10 invention, 12 law, 13 overview of, 5 practices, 12-13 reaction and retrenchment (1970s-80s), 10-11 renewal (1990s to present), 11-12 scope of, 12-13 technologies, 12 Fourteenth Amendment, 203, 483-484 Fourth Amendment, 484 Framework of policymaking. See Model of policymaking process

Franchises, 305 Franklin, Benjamin, 86 Franklin, James, 82 Free rider problem, 381 FTC, 525-526 Gaebler, Ted, 245 Gallaudet, Thomas, 455 GAO, 136, 176, 230, 236, 253, 335, 405-406 GASB, 252-253 General Accounting Office [renamed Government Accountability Office in 2004] (GAO), 136, 176, 230, 236, 253, 335, 405-406 General-purpose government, 199 General Services Administration (GSA), 317, 526 Geographical or geopolitical dimension of American public policymaking. See Levels of American public policymaking Gerberding, Julie, 460 GI bill, 403-404 Gideon v. Wainwright, 144 Gingrich, Newt, 87-88 GISEA, 490-492 Goals, 238 Golden Gate Bridge and Highway District, 451 Gonzalez, Elian, 47 Goods, 379-381, 379, 383 Goodwill (charitable organization), 486-493 Goodwill advertising campaigns, 110 Goodwill Industries of South East Iowa (GISEA), 490-492 Gore, Al, 53-54, 56, 155 Government and agency, 198-199 big, 366-367, 453 competitive, 314 cooperative agreements and, 308-310 definition of, 198 federal, 447-449 general-purpose, 199 grants, 308-309 horizontal, 242-245, 515-516, 515 insurance, 383 local, 30, 65, 433, 450-451 national, 30, 66, 433 neighborhood, 30, 65, 433, 451-452 as problem, 11 quality management in, 406 rulemaking and, 273 special-purpose, 199, 451 state, 30, 66, 433, 449-450, 459 technologies of, 26, 27 Government Accountability Office. See General Accounting Office (GAO) Government Accounting Standards Board (GASB), 252-253

552 Government agencies. See also specific names administrative agencies, 204-205 advisory committees or commissions, 207 departments, 204-205 government corporations, 207-208 government-sponsored enterprises, 208-209 independent regulatory agencies, 206-207 Government-commercial hybrids, 475-477 Government contractors, 80 Government Corporation Control Act (1945), 207 Government corporations, 207-208, 475 Government Performance and Results Act (GPRA) (1993), 20, 253, 257, 342, 344 Government sector, 446-469 case studies, 449-450, 459 civil sector and, 481-482 definition of, 30, 434 federal, 447-449 federalism and evolution of, 453-458 network of, 452-453, 453 local, 450-451 market sector and, 475-477 neighborhood, 451-452 overview of, 434-435, 434, 437-439, 446-447, 459 state, 449-450 structure of, 447, 447 Government-sponsored enterprises (GSEs), 208-209, 253, 475-476 GPRA (1993), 20, 253, 257, 342, 344 Graham, Billy, 94, 168 Gramm, Phil, 120 Gramm-Rudman-Hollings Act (GRH) (1985), 338 Gramm, Wendy, 120-122 Grants, 308-309, 383-384 Grassley, Chuck, 150, 152-155 Grassroots lobbying, 111-112 Great Depression, 79, 456 Great Society programs, 10, 457 Green Hornet, The (radio show), 85 Gridlock, political, 134 Griggs v. Duke Power Co., 190 Grutter v. Bollinger, 190 GSEs, 208-209, 253, 475-476 Guidelines, 284. See also Rules Gun-Free School Zones Act, 458 Halliburton, 120, 211 Hastert, Dennis, 321-322 Hathaway, Oona, 540 Hatry, Harry, 374 Hawking, Steven, 168 HCFA, 155-156 Health care election cycles and, 101 Medicare and

INDEX Health care (continued) Part D, 22, 24 prescription drug benefits, 22, 24, 129-130, 150-157, 259 reform, 150-157 Plan B and, 275 politics and, 101 service delivery contracts and, 306-307 standards and, 285 Health Care Financing Administration (HCFA), 155-156 Health Maintenance Organizations (HMOs), 306-307 Hearst, William Randolph, 84 Hebert, Curtis, 123 Helms, Edgar, 486-487 Help America Vote Act (2002), 58 Helplessness, story of, 48 Heritage Foundation, 78, 104 HHS, 204, 261 Higher Education Act (1965), 134-135 Historical approach to public policymaking, 4, 540 Hitler, Adolf, 85 HMOs, 306-307 Homeland security, 215-222 Hoover Institute, 8 Hopkins, Harry, 489 Horizontal governance, 242-245, 515-516, 515 Housekeeping functions, 201-202, 201, 219-221 Hrebenar, Ronald, 110 Hurricane Isabel, 385 Hurricane Katrina, 221, 417 Hutchinson, Kay Bailey, 120 Hybrid policy institutions, 441, 442 ICC, 206, 526 Ickes, Harold, 186 Images and problems, 47, 87 Imitation and public policymaking, 540-542 Immunization policy, 461-466, 512, 512 Impact evaluation, 250 Impacts, 28, 409-411, 410 Implied authority, 170 Incentive delivery contracts, 304 Incorporation, 472-473 Independent regulatory agencies, 206-207 Indirect lobbying, 108-112, 108 Indirect target populations, 374 Individual goods, 380 Individualization of subjects, 456 Informal rules, 274 Infotainment, 83 In-house lobbyists, 105, 105 Initiative petition, 146 Initiatives, 112, 130, 146-147, 183-184 Inputs. See also specific types access, 25 agendas, 25

553

INDEX Inputs (continued) business organizations, 73-74 as component in policymaking process model, 20, 25, 25, 37 definition of, 20 interest groups, 74-77 issues, 25 outcomes and, 406-407 overview of, 37-38, 37, 38 policy entrepreneurs, 72-73 policy maps and, 33, 148-149, 148, 149 politics, 25 problems and, 37 in program logic model, 240, 240 solutions, 25 technologies for, 25, 25 think tanks, 77-81 Institutional approach to public policy, 4 Insurance, government, 383 Intelligence, reconfiguring, 502-503 Interagency agreements, 310-311 Interagency networks, 517 Interdependent activities, 16-17, 17 Interest groups definition of, 74 distinction of, 74-75 historical background of, 75-76 inputs and, 74-77 modern, 75-77 politics and, 52 public policymaking and, 74-75 technologies and, 76-77 variety of, 480 Intergovernmental networks, 517 Intermediate outputs, 371 Internet, 89-90 Interpretive authority, 179-180 Interpretive rules, 277 Interstate Commerce Commission (ICC), 206, 526 Interstate compacts, 311-312 Invention, 12 Investigations, congressional, 136 Iraq prisoners, interrogation of, 317 Isomorphism, 541 Issue networks, 513 Issues. See also specific types definition of, 25 domain and, 501-504, 502 life cycle of, 523-533 policymakers and, 51 politics and, 52, 52 problems and, 50-53 Iterative process, 17, 17, 21-22, 21 Jackson, Andrew, 68, 455 Janoski, Thomas, 30, 434, 438

Jedi, 118 Jefferson, Thomas, 68, 70, 300 John, King, 172 Johnson, Lyndon, 47, 178, 187, 457 Joint Commission on Accreditation of Health Care Organizations (JCAHO), 285 Joint Energy Development Investments (Jedi), 118 Joint production, 475-477, 481 Jones, Bryan, 22 Judicial authority, 179-181, 189-190 Judicial review, 173-174, 183 Jurisdictions, 32, 505-509 Kennedy, Edward, 154 Kennedy, John F., 336, 485 Kerry, John, 101 Kessler, David, 529 Kettl, Donald, 482 Kidney transplant policy, 388-394 Kingdon, John, 43, 63, 90, 130 Knights of Columbus, 75 Kristol, William, 120 K Street lawyers, 23 K Street Project, 71-72 Kudlow, Larry, 120 Kyoto Treaty, 123 Labor-hour contracts, 304-305 Laissez faire policy, 456 Latent effects of policy, 410, 410 Law. See also specific cases and laws amicus curiae, 144 authority and, 169-171 committee action on, 133 contracts and, 315 floor action on, 133-134 foundations of American public policymaking and, 13 lawmaking process and, 132-136, 132 litigation, 142-143 presidential action on, 134 public policymaking and, 540 remedies in civil cases, 180 rules and, 277-278 writ of certiorari, 144 Lawsuits, 142-143. See also specific cases Lay, Kenneth, 119-123 Legislation. See also specific laws authorizing, 175-176 drafting, 133 organic or enabling, 175 Legislatures agenda setting and, 130-137 authority of, 174-177, 187-188 budget phases and, 345-348, 345

554 Legislatures (continued) definition of, 130 jurisdictions and, 508-509 lawmaking, 132-136, 132 oversight, 136, 183 overview of, 130, 137 practices of, 18-19 reorganization of, 134-135 schedules, 131-132 technologies of, 18-19 Letdown effect of policy, 410, 410 Letter contracts, 305 Levels of American public policymaking. See also specific categories categories of, 30, 433 context and, 29-30, 31, 433-435, 433 definition of, 30 overview of, 433-435, 434 Life support policy, 177 Limbaugh, Rush, 86 Lincoln, Abraham, 83 Lindsey, Lawrence, 120, 123-124 Line-item veto, 338 Line Item Veto Act (1996), 356 Litigation, 142-143. See also specific cases Loans and loan guarantees, 383 Lobbying, 100-127 American public policymaking and, 23 case studies, 107-108, 117-125 contract, 105, 105 defensive, 103 definition of, 100, 102 direct lobbying, 106-107, 106 Enron, 117-125 function of, 102 grassroots, 111-112 indirect lobbying, 108-112, 108 information and, supplying, 104 in-house, 105, 105 interest groups and, 111 offensive, 103 overview of, 100 practices, 18-19 professionalization of, 105 public and, 111-112 public opinion and, 113-117 relationship building and, 103-104 revolving door and, 105 strategies, 102-105 targets, 102 technologies, 18-19 Lobbying Disclosure Act, 121 Local budgets, 340-341 Local government and level, 30, 65, 433, 450-451 Lockheed Martin, 211 Long-term outcomes, 240-241, 401, 402, 408, 423-425

INDEX Losers, 24, 373-374, 411-414 Lowi, Theodore, 400-401 Luce, Henry, 84 Machiavelli, Niccolò, 5, 8-9 Magna Carta, 172 Maintenance of effort (MOE), 263 Majoritarian politics, 52 Maltese Falcon, The, 40 Managed care organizations (MCOs), 307 Management-by-objectives (MBO), 336 Mandates, 448-449 Mandatory grants, 308 Mandelbrot set, 257 Manhattan Project, 10 Mapping. See Policy maps Marbury v. Madison, 69, 173 March, James G., 276 March of Time, The (newsreels), 86 Market sector case study, 475 definition of, 30, 434, 438 evolution of, 471-474 federalism and, 473-474 government sector and, 475-477 overview of, 434-435, 434, 439-440, 470-471 privatization and, 477-479 Martin v. Hunter’s Lessee, 173 Mass media, emergence of, 83 Master Settlement Agreement, 530-532 McCain, John, 93, 322, 530 McCarthy, Joseph, 86 McCulloch v. Maryland, 448 McKinley, William, 84 Media cable and, 88 evolution of, 81-83 infotainment and, 83 Internet, 89-90 mass, emergence of, 83 new journalism and, 83-84 newspapers, 83-85 overview of, 81 production and, 110-111 radio, 85-86 televangelism and, 94-95 television, 86-89 twentieth-century, 84-90 Medicaid program, 307, 531 Medical Investigation (television series), 501 Medicare Part D, 22, 24 prescription drug benefits, 22, 24, 129-130, 150-157, 259 reform, 150-157 Medicare Prescription Drug and Modernization Act, 154

INDEX Merit, 387 Metaphors and problems, 47 Mid-term outcomes, 240, 401, 402, 408, 422-423 Military tribunals, 178 Mimetic isomorphism, 541 Model of policymaking process, 15-36. See also specific components concurrent activities, 16, 16 detailed, 25, 29, 29 framework components actors, 18 content, 19-20 context, 19, 19 overview of, 15 practices, 18-19 process and activities, 15-18, 16 roles, 18, 22 technologies, 18-19 interdependent activities, 16-17, 17 iterative or cyclical, 17, 17 overview of, 15, 34-35, 363 policy maps, 33-34, 33, 34 process components actors, 22-25 inputs, 20, 25, 25, 37 outcomes, 20, 27-28, 28, 398-399, 399 outputs, 20, 26-27, 27 overview of, 20-21, 21, 22 production, 20, 25-26, 27 roles, 22-25 simple process, 16, 16 Money, raising and spending, 333, 338. See also Budgets Monopolies, natural, 380 Moore v. American Tobacco Co. et al, 528 Moral Majority, 91-92 Moss, David, 368-369 Mourning, Alonzo, 388 Multilevel government networks, 517-518 Multisector networks, 518, 518 Municipalities, 450 Murrow, Edward R., 85-86 Mussolini, Benito, 85 Nader, Ralph, 63 NAEP, 422-423 Narrow-casting, 85-86, 88 Narrow tailoring, 412, 412 National Assessment of Education Progress (NAEP), 422-423 National Association of Realtors, 108 National Bank, 455 National Conference of Catholic Bishops, 91 National Council on Rehabilitation, 489 National Energy Policy Development Group, 289 National Environmental Policy Act, 312

555 National government and level, 30, 66, 433 National Governors Association, 111 National Highway Traffic Safety Administration (NHTSA), 504-505 National Institutes of Health (NIH), 205, 357 National Labor Relations Act (NRLA) (1935), 186 National Labor Relations Board (NLRB), 186-187, 278 National Merit Scholarship Program, 376 National Organ Transplant Act (1987), 212, 390 National Quality Research Center, 251 National Recovery Administration (NRA), 489 National Rifle Association, 75, 103 National Science Foundation (NSF), 357 NCLB (2001), 22, 419-428 Need, 387 Needs assessment, 237 Negotiated rulemaking, 283 Negotiated Rulemaking Act (1990), 283, 313 Negotiation, 303 Neighborhood government and level, 30, 65, 433, 451-452 Networking, 244 Networks between agencies, 517 case study, 520 content and, 513-522 definition of, 513-515, 514 domain and, 32, 32, 513, 514 of federalism, 452-453, 453 function of, 516-517 horizontal government and, 515-516, 515 interagency, 517 intergovernmental, 517 issue, 513 managing, 519-522 multilevel government, 517-518 multisector, 518, 518 overview of, 513 policy maps and, 513-522 production, 514 public policymaking and, 32, 32, 514, 514 reason for, 516-517 types of, 517-518, 518 New Deal programs, 10, 186, 197, 407, 456 New journalism, 83-84 New Orleans flood, 221 New source review (NSR), 289-290 Newspapers, 83-85 NHTSA, 504-505 Niches, 503-505, 504 NIH, 205, 357 9/11 events (2001), 12, 45, 215 Nixon, Richard, 139, 189 NLRA (1935), 186 NLRB, 186-187, 278 No Child Left Behind Act (NCLB) (2001), 22, 419-428

556 Nondelegation doctrine, 197 Nondiscretionary spending, 338 Nongovernment (private) agencies, 210-212 Nonprofit organizations, 440, 440, 481 Normative isomorphism, 541 Normative outputs, 371, 379-381 North, Oliver, 86, 93 Not-for-profit organizations, 211-212, 481-482 Notice and comment rulemaking, 283 Novak, William J., 367, 369, 443, 453 Null outcomes, 416, 416 Numbers and problems, 48-49 Object classes, 352 Objectives, 28, 238, 400-401 OBRA (1981), 337-338, 346 Occupational Safety and Health Administration (OSHA), 278 Offensive campaigns, 111 Offensive lobbying, 103 Office of Communications, 139 Office of Federal Contract Compliance (OFCC), 187-189 Office of Federal Procurement Policy (OFPP), 303-304 Office of Inspector General (IG), 136 Office of Intergovernmental Relations, 139 Office of Legislative Affairs, 139 Office of Management and Budget (OMB), 138-139, 206, 236, 245, 252-253, 302, 335, 341-342, 344-345, 478 Office of National Drug Control Policy (ONDCP), 231-232, 405 Office of Political Affairs, 139 Office of Presidential Scheduling, 139 Office of Public Liaison, 138-139 Office of Vocational Rehabilitation (OVR), 488-489 Oleszek, Walter, 131 OMB, 138-139, 206, 236, 245, 252-253, 302, 335, 341-342, 344-345, 478 Omnibus appropriations, 347 Omnibus budgeting, 337 Omnibus Budget Reconciliation Act (1990), 208 Omnibus Budget Reconciliation Act (OBRA) (1981), 337-338, 346 ONDCP, 231-232, 405 O’Neil, Paul, 123 Operational outputs, 371, 377, 378 Orders, 278, 283-284. See also Executive orders; Rules Organic legislative authority, 175 Osborne, David E., 245 Outcomes, 398-431. See also specific types agency and, 212-213, 212 anticipated versus unanticipated, 415, 416 beneficial, 416, 416 case studies, 403-404, 419-428 conditions, 28, 40-41

INDEX Outcomes (continued) definition of, 20, 399-400 designing, 407-409, 408 dimensions of, 28, 28 evaluation, 250, 415-418, 416, 426-427 events, 28, 42 impacts and, 409-411, 410 inputs and, 406-407 intended versus unintended, 415, 416 long-term, 240-241, 401, 402, 408, 423-425 losers and, 411-414 mid-term, 240, 401, 402, 408, 422-423 in model of policymaking process, 27-28, 28, 398-399, 399 null, 416, 416 objectives and, 400-401 outputs and, 370-371, 405-406 overview of, 398 perverse, 416, 416 policy failures and, 417-418 policy maps and, 33, 33, 34 policy performance and, 418-419 policy versus program, 404-405, 404 primary effects of, 415, 416 problems and, 44 program, 404-405, 404, 405 in program logic model, 240-241, 240 program versus project, 405, 405 scope of, 402, 402 short-term, 240, 401, 402, 408, 421-422 side effects of, 415, 416 situations, 7, 28, 40 for social programs, 401, 402 spillover effects and, 403, 403 stakeholders and, 413-414 targets versus recipients and, 411-413, 412 time of, 402, 402 winners and, 411-414 Outputs, 365-397. See also specific types agency and, 212-213, 212 allocation methods and, 27, 27, 365, 386-388 analysis of, 371-372 benefits to public and, 27, 27, 365, 376-377, 379-385 burdens to public and, 27, 27, 365, 376-377, 379-385 case studies, 373, 385, 388-394 classification of, 371-372 as component in policymaking process model, 20, 26-27, 27 components of, 365-366, 366 definition of, 20 empirical, 372, 381-385 final, 371 history of, 366-371 intermediate, 371

INDEX Outputs (continued) normative, 371, 379-381 operational, 371, 377, 378 outcomes and, 370-371, 405-406 overview of, 365 policy maps and, 33, 33 production and, 365, 370 in program logic model, 240, 240 risk and, 368-369, 369 target populations and, 26-27, 27, 365, 372-376, 377 Outreach, 138-139 Outsourcing, 243-244 Overcounting, 55 Overinclusiveness, 412, 412 Overseas Private Investment Corporation (OPIC), 123 Oversight budget, 350-351 legislative, 136, 183 program, 235 PACs, 74, 109 Partial mismatch, 412, 412 PART questionnaire, 245, 342 Party platforms, 109-110 Passback, 345 Path dependence, 540 Patriot Act, 45 Patton, George S., 9 Pay-as-you-go (PAYGO), 338 Pentagon, 299 Perfect fit, 412-413, 412 Perfectly mismatched, 412, 412 Performance budgeting, 352-353, 352, 353 Performance measurement aggregate challenge and, 254, 254 background information about, 252-253 case study, 251 causal challenge and, 255-256, 255 Government Performance and Results Act, 253-254 politics and, 256-257 Permanent campaign, 115 Perry, Rick, 121 Personality and public policymaking, 68-69 Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA), 260-261 Perverse incentives, 255 Perverse outcomes, 416, 416 Placement procedures for allocation mechanisms, 388 Plan B, 275 Planned unit developments (PUDs), 451 Planning-programming-budgeting system (PPBS), 336 “Poison pill” provisions, 174 Policy. See also American public policymaking; Public policymaking; specific policies

557 Policy. See also American public policymaking; Public policymaking; specific policies (continued) action, 6 analysis, 3-5, 51, 537, 541 beneficial effects of, 416, 416 change in, 4, 522-523, 522 definition of, 5-7, 6, 7 distributive, 400 failures, 417-418 fiascoes, 417 formulation, 6 goods, 379-381, 379, 383 impacts, 28, 409-411, 410 implementation, 6 latent effects of, 410, 410 letdown effect of, 410, 410 making, 6-7, 6, 7 niches, 503-505, 504 null effects of, 416, 416 objectives, 28, 238, 400-401 performance, 418-419 perverse effects of, 416, 416 politics and, 8-9 primary effects of, 415, 416 private, 7-8 processing, 139 process versus, 537-538 program versus, 404-405, 404 redistributive, 400-401 regulatory, 400 side effects of, 415, 416 sleeper effects of, 410, 410 spillover effects of, 403, 403 stakeholders, 206, 247, 413-414, 425-426 studies, 10 tools, 165 windows, 130 Policy actors. See Actors Policy change, 4, 522-523, 522 Policy domain. See Domain Policy entrepreneurs, 63-99. See also specific types alternative institutions and, 102 as beneficiaries, 413-414 business organizations, 73-74 definition of, 22 inputs and, 72-73 interest groups, 74-77 media, 81-90 motivation of, 22-23 overview of, 63-65 policymakers and, 100 production and, 104-105, 105 public opinion and, 102, 115 role of, 72-73 solutions and, 7 think tanks, 77-81

558 Policy entrepreneurs (continued) venues and, 541 Policy environment. See Context Policy inputs. See Inputs Policymakers accountability of, 4 definition of, 23, 413 electing, 65-66 issues and, 51 policy entrepreneurs and, 100 in policymaking process, 23, 413-414 public opinion and, 115 universe of, 25 Policy maps agenda and, 148-149, 148 alternative context of, 34, 34 content and, 509-513, 510, 511 format of, 33 inputs and, 33, 148-149, 148, 149 model of policymaking process and, 33-34, 33, 34 networks and, 513-522 outcomes and, 33, 33, 34 outputs and, 33, 33 overview of, 509 policy change and, 522-523, 522 production and, 33, 166-167, 166 purpose of, 33 smallpox vaccination program, 512, 512 of Wall Street corruption, 511-512, 511 Policy networks. See Networks Policy outcomes. See Outcomes Policy outputs. See Outputs Policy Paradox, The (Stone), 46 Policy primeval soup, 43 Policy problems, 41, 41. See also Problems Policy production. See Production Policy program. See Program Policy roles. See Roles Policy science, 10 Policy sectors, 437-445. See also specific sectors government sector, 437-439 market sector, 439-440 civil sector, 440-441 private sector, 441 Policy technologies. See Technologies Political action committees (PACs), 74, 109 Political parties, 65, 70-72, 109-110 Political science, 10 Politicking, 9 Politics American public policymaking and, 66-68 appointments and, 69-70 of budgets, 353-354 client, 52 definition of, 8-9, 25, 65

INDEX Politics (continued) electing policymakers, 65-66 electioneering and, 93-94 entrepreneurial, 52 gridlock and, 134 health care and, 101 interest groups and, 52 issues and, 52, 52 majoritarian, 52 as means, 109-110 performance measurement and, 256-257 personality and, 68-69 playing, 9 policy and, 8-9 political parties and, 65, 70-72, 109-110 “pork” and, 134, 337, 355-358, 400 public policymaking and, 65-72 religion and, 90-95 types of, 52-53, 52 Polling, 102, 114-116 Popular authority, 183-184, 190-191 “Pork,” 134, 337, 355-358, 400 Portney, Paul, 121 Powell, Walter W., 541 Practices actors and, 18-19 changes in, 4 as component of policymaking process model, 18-19 definition of, 18, 538 in foundations of American public policymaking, 12-13 homogenization of, 541 of legislatures, 18-19 lobbying, 18-19 public policymaking and, 4, 12, 538 Practitioner audience, 34 Prescription drug policies, 22, 24, 129-130, 150-157, 259 Presidential action on laws, 134 Presidential agenda, 138 Presidential election (2000), 53-59, 170 Presidential legislation, 178-179, 187, 201 President’s Management Agenda (PMA), 341 Pressman, Jeffrey L., 416 Price controls, 178 Price gouging, 305-306 Primary effects of policy, 415, 416 Private agencies, 199-200, 210-212 Private contracts, 297 Private policymaking, 7-8 Private sector case study, 478 definition of, 30, 434, 438 historical background of, 483-484 overview of, 410, 434-435, 434, 441, 482-483

INDEX Private sector (continued) production and, 484-485 public sector versus, 478, 485 Privatization, 314-315, 477-479 Problems, 39-62 as abstractions, 47 attribution, 255-256 case studies, 45, 50, 53-59 causes and, 48 change and, 63 conditions and, 40-41 definition of, 25, 46-49 events and, 42 government as cause of, 11 images and, 47, 87 inputs and, 37 issues and, 50-53 metaphors and, 47 nature of, 45-46 numbers and, 48-49 outcomes and, 44 overview of, 39, 53 policy versus social, 41, 41 public policymaking and, 39 situations and, 40 solutions and, 42-43, 45 stories and, 47-48 wicked, 45-46, 520 Procedural organizations, 213 Procedural rules, 277 Process of concurrent activities, 16, 16 definition of, 15-16 evaluation, 250 of interdependent activities, 16-17, 17 iterative or cyclical, 17, 17 simple, 16, 16 Procurement contracts case study, 301 decision to contract and, 302-303 definition of, 299 evolution of government contracting and, 299-301 formation of contract and, 303-304 franchises and, 305 management of contract and, 305 overview of, 299 types of, 304-305 Production. See also specific components agency and, 26, 27, 196, 203-204, 203, 332 authority and, 18, 26, 27, 184-185, 332 budgets and, 26, 27, 331-332, 348 competition in, 314 as component in policymaking process model, 20, 25-26, 27 contracts and, 26, 27, 296-297

559 Production (continued) definition of, 20 information and, 104 joint, 475-477, 481 legislative enactment of budgets and, 348 media and, 110-111 networks, 514 organizations, 212-213 outputs and, 365, 370 overview of, 147-148, 147, 161-162, 161, 162 path dependence and, 540 policy entrepreneurs and, 104-105, 105 policy maps and, 33, 166-167, 166 private sector and, 484-485 programs and, 26, 27, 227-228, 228, 332 rules and, 26, 27, 276, 286 social welfare, 481 technologies of, 26, 27, 162, 162, 164-166, 196 U.S. Constitution and, 172 Program, 227-272 accountability, 235 activities, 229, 229, 239-240, 240 agency and, 231-232, 231, 232, 235 authority and, 235 beneficiaries, 401 best practices and, 238 case studies, 247-248, 251, 259, 260-268 classifying, 232, 233, 234 creation, 234-235 definition of, 26, 229-231, 538 design art of, 236-239, 241 background, 235-236 logical model, 239-241 methodology, 236, 237 evaluation, 239, 249-251 evolution of, 257, 258, 259 execution of, 239 fit of, 238 goals of, 229, 229, 235, 238 management, 235, 246-248, 246 multiple, 229-230, 229 needs assessment and, 237 objectives, 235, 238 outcomes, 404-405, 404, 405 oversight, 235 overview of, 227-228, 260 performance measurement aggregate challenge, 254, 254 background information about, 252-253 case study, 251 causal challenge, 255-256, 255 Government Performance and Results Act, 253-254 politics and, 256-257 plan, 239

560 Program (continued) policy versus, 404-405, 404 production and, 26, 27, 227-228, 228, 332 project management and, 248-249, 249 project versus, 405, 405 resources, 235, 238 service delivery strategies, 242-246, 242, 263-265, 482 sustaining, 239 theory, 239 time frame for, 235 Program Assessment Rating Tool (PART) questionnaire, 245, 342 Program logic model, 239-241, 240 Program manager, 246-247, 246 Progressive Policy Institute, 80 Project management, 248-249, 250 Project outcomes, 404-405, 405 Projects, 248-249, 249, 538 Protests, 112 Public agency, 199, 201-202, 482, 507-508 Public contracts, 296-298 Public, definition of, 7-8 Public and lobbying, 111-112 Public management, 3 Public opinion 113-117 definition of, 100, 113 determining, 113-115 lobbying and, 113-117 policy entrepreneurs and, 102, 115 policy fiascoes and, 417 policymakers and, 115 polling and, 102, 114-116 public policymaking and, 115-116 Public policymaking. See also American public policymaking; Model of policymaking process in American society, 29 appointments and, 69-70 approaches to, 4 authority and, 169-171 basics of, 6-7, 6 bureaucracy and, 140 case study methodology and, 4 concept of, 7-8 cycle of, 29, 331, 331, 433 defense, 20, 511 definition of, 3 diversity and, 540-542 domain and, 32, 32, 498-501, 499, 500 educational, 19-20, 354-358 electing policymakers, 65-66 focus of, 3 historical approach to, 4, 540 holistic view of, 3 imitation and, 540-542 institutional approach to, 4

INDEX Public policymaking (continued) interest groups and, 74-75 law and, 540 media and, twentieth-century, 84-90 networks and, 32, 32, 514, 514 paradigm shift in, 4 path dependence and, 540 personality and, 68-69 policy analysis versus, 3-4, 537 political parties and, 65, 70-72 politics and, 65-72 practices and, 4, 12, 538 private policymaking versus, 7-8 problems and, 39 process of, simple, 7, 7 process versus policy and, 537-538 public management and, 3 public opinion and, 115-116 reality of, 7 results and, 538-540 social engineering and, 44 as strategic action, 6 technologies and, 4, 538 Public sector agencies, 314 case study, 478 private sector versus, 478, 485 Public Works Administration (PWA), 186 Pulitzer, Joseph, 84 Punctuated equilibrium, 22, 22 Quality management in government, 406 Queuing, 387, 388-394 R&D, 300-301 Racial profiling, 49 Racial segregation, 144, 187 Racketeer Influenced and Corrupt Organization Act (RICO), 531 Radio, 85-86 Radio Act (1927), 85 Radio Commission (FRC), 85 RAND Corporation, 10, 78-79 RCAs, 451-452 Reagan, Ronald, 11, 94, 281, 477 Reconciliation action, 346 Redistributive policies, 400-401 Reed, Ralph, 120-121 Referenda, 112, 130, 183-184 Regula, Ralph, 356 Regulations, 243, 298, 298, 382, 384-385 Regulatory contracts, 312-313 Regulatory policies, 400 Rehabilitation Act (1973), 490 Reinventing Government (Osborne and Gaebler), 245

INDEX Religion, 90-95, 479-480 Religious Freedom and Restoration Act, 458 Remedial authority, 180-181 Remington, Frederick, 84 Reorganization, congressional, 134 Reporting entities, 201 Republican Party, 92 Residential community associations (RCAs), 451-452 Resolution, 43 Resource Management Offices (RMOs), 341 Results, 7, 363-364, 363, 538-540. See also Outcomes; Outputs Revolving door and lobbying, 105 Rice, Condoleezza, 108 Ridge, Tom, 216-217, 221 Right, religious, 90-95 Ring vaccination, 461 Risk-management policy, 368-369, 369 Risk and outputs, 368-369, 369 Rittel, Horst, 45 Robertson, Pat, 91-93, 94 Roberts, Oral, 94 Roche, James, 320 Rockefeller, John D., 78, 481 Roe v. Wade, 91, 144 Roles as component in policymaking process model, 18, 22-25 definition of, 18 rules and, 276 Roosevelt, Franklin Delano, 10, 79, 85, 178, 403, 456, 489, 523 Roosevelt, Theodore, 84, 137 Rotary Club, 75 Rove, Karl, 121 Rubin, Robert, 123 Rulemaking, 273, 277, 279-283, 282, 457 Rules, 273-294 administrative, 276-279, 283-285 advantages of, 277 agency and, 277 air pollution, 286-291, 459 case studies, 275, 285, 286-291 classification of, 278-279, 279 definition of, 273-275 formal, 274-275 guidelines and, 284 informal, 274 interpretive, 277 law and, 277-278 orders and, 278, 283-284 overview of, 273 procedural, 277 production and, 26, 27, 276, 286 roles and, 276 rulemaking and, 273, 277, 279-283, 282, 457

561 Rules (continued) standards and, 284-285 substantive, 278 Rules Committee, 133 Rumsfeld, Donald, 121 Rural Equity Payment Index Reform Act (2002), 153 Russell Sage Foundation, 78 Salamon, Lester, 410-411, 440, 477 Sambur, Marvin, 320 Same-sex marriage policy, 181-182 Santa Clara v. Southern Pacific Railroad, 473 Savas, E. S., 379 Schiavo, Theresa, 177 Schlozman, Kay Lehman, 106 School districts, 451 Schudson, Michael, 66-67 Schwarzenegger, Arnold, 58, 449-450 Sears, Michael, 320 Sectors in American public policymaking. See also specific categories case study, 486-493 categories of, 30, 433 civil, 434, 438, 440-441 context and, 29-31, 31, 433-435, 434 definition of, 30 evolution of, 443-444, 443 federalism and, 485-486 future of, 444, 444 government, 434, 437-439 hybrid, 441, 442 market, 434, 438-440 overview of, 433-435, 434, 437-438 private, 434, 438, 441 relationships among, 441, 442 role of, 30 Selection procedures for allocation mechanisms, 387-388 Senate confirmations, 136 Seniority, 387 September 11 terrorist attacks (2001), 12, 45, 215 Sermons (information influencing people), 382 Service delivery contracts, 306-308 Service delivery strategies, 242-246, 242, 263-265, 482 Servicemen’s Readjustment Act, 403-404 Services, 383 Shakespeare, William, 5 Sherman Antitrust Act (1890), 474 Shimanoff, Susan B., 273 Short-term outcomes, 401, 402, 408, 421-422 Side effects of policy, 415, 416 Significant results versus significant change, 256 Simple process, 16, 16 Situations, 7, 28, 40 Sleeper effects of policy, 410, 410 Smallpox vaccinations, 82, 460-466, 512, 512

562 Smith, James E., 78-79 Smoking policy, 523-533 Social problems, 41, 41 Social programs, 401, 402. See also specific types Social regulations, 385 Social Security crisis, 340 Solutions, 7, 25, 42-43, 45 Special districts, 451 Special-purpose government, 199, 451 Specific relief, 180 Spillover effects of policy, 403, 403 Spitzer, Elliot, 511 Spoils system, 71 Stakeholders, 206, 247, 413-414, 425-426 Standards, 284-285. See also Rules State action doctrine, 202-203 State budgets, 340-341 State Children’s Health Insurance Program (SCHIP), 351 State government and level, 30, 66, 433, 449-450, 459 State procurement, 301 Status-based principles, 387 Statutory authority, 176-177, 201 Stern, Howard, 85 Stevens, Ted, 321, 323 Sticks (economic policy instruments), 382, 448 Stone, Deborah, 46, 48-49 Stories and problems, 47-48 Student audience, 35 Student Right-to-Know and Campus Security Act (1990), 64 Subagents, 197 Substantive rules, 278 Surgeon General’s Report (1964), 524-525 Swaggart, Jimmy, 94 Synecdoches, 47 Taft, William Howard, 456 TANF, 260-266 Target populations as beneficiaries, 374-375, 413-414 classification of in practice, 376, 377 in theory, 375-376 definition of, 24, 372 direct, 374 end beneficiaries and, 374-375 groups, 375 indirect, 374 individuals, 375 intermediate beneficiaries and, 374-375 outputs and, 26-27, 27, 365, 372-376, 377 in program logic model, 240, 240 recipients versus, 411-413, 412 Tauzin, Billy, 154 Taxes and taxation, 75, 200, 338, 383-384

INDEX Tax Reform Act (1986), 338 Teacher audience, 35 Technologies, 163-167. See also specific types actors and, 18-19 of administrative authority, 201 applied, 10 changes in, 4 codes of, 164 as component of policymaking process model, 18-19 definition of, 4, 18, 163, 538 faith in, 9 in foundations of American public policymaking, 12 of governance, 26, 27 for inputs, 25, 25 interest groups and, 76-77 Internet, 89-90 of legislatures, 18-19 lobbying, 18-19 overview of, 163-164 pollution and, 10 production, 26, 27, 162, 162, 164-166, 196 public policymaking and, 4, 538 rulemaking, 457 types of, 167 usage of term, 164-166 voting, 55-56, 58 wireless, 89 Televangelism, 94-95 Television, 86-89 Temporary Assistance for Needy Families (TANF), 260-266 Tennessee Valley Authority, 457 Terri’s Law, 177 Terrorism, 12, 45, 215 Think tanks, 77-81, 104 Thomas, Lowell, 86 Thomas, William, 154-156 Thompson, Tommy, 156, 460 Tierney, John T., 106 Time-materials contracts, 304-305 Time-related principle, 387 Times Square Alliance, 451 Title VII of Civil Rights Act (1964), 187-188 Toll goods, 380 Tools. See Technologies Townships, 450-451 Tradable permits, 384 Tweed, William Marcy, 73 Undercounting, 55 Underinclusiveness, 412, 412 Unfunded Mandates Reform Act (1995), 458 Uniform Code of Military Justice, 307 United Network for Organ Sharing (UNOS), 212, 390-392

563

INDEX United Steelworkers v. Weber, 190 United Way, 482 Universities, 80 UNOS, 212, 390-392 Urban Institute, 10 U.S. Air Force, 318-324 U.S. Conference of Bishops, 91 U.S. Constitution adoption of, 172 advice and consent of Senate and, 69 amendments to, 130, 145-146, 173 authority and, 170-173, 179 church-state relations and, 479 federal government and, 447-448 interstate compacts and, 311 judicial authority and, 179 production and, 172 state constitution building and, 449 writing of, 67 U.S. Court of Appeals, 144 U.S. Supreme Court. See also specific cases abortion and, 91 affirmative action and, 185-191 agency and, 197 Bush (George W.) and, 94 charters and, 473 counsel and, right to, 484 federalism and, 458-459 interstate compacts and, 311 judicial interpretations and, 144 judicial review and, 173-174 Presidential election (2000) and, 57-58, 448 public contracts and, 297 scope of, 507 state action doctrine and, 202 U.S. tax code, 75 Vaccination policy, 461-466, 512, 512 Varmus, Harold, 205 Vedung, Evert, 416 Venues, 32, 505-506, 506, 541 Venue shopping, 506, 541-542 Vertical governance, 242-244 Video news releases (VNRs), 86-87 Violence Against Women Act, 458

Vocational Rehabilitation Act, 488-489 Voting Rights Act (1965), 54 Voting technologies, 55-56, 58 Vouchers, 384 W-2 program, 263-265 Wall Street corruption, 511-512, 511 War against drugs, 47 War metaphors, 47 Warner, John, 321, 323 War on Poverty programs, 10, 47, 481 War Production Board, 457 Washington, George, 9, 68, 82, 178, 476 Waxman, Henry, 124 Web (Internet), 89-90 Webber, Melvin, 45 Weblogs, 89 Weed, Thurlow, 73 Welch, Joseph, 86 Welfare policies, 260-268, 481 Whistle-blowers, 247-248 White, Thomas, Jr., 120-121 Whitney, Eli, 300 Wicked problems, 45-46, 520 Wildavsky, Aaron, 42, 44, 257, 406, 416 Williams, Anthony, 475 Wilson, James Q., 51-53, 212 Wilson, Woodrow, 84, 182, 456 Winchell, Walter, 86 Windows, policy, 130 Winners, 24, 373-374, 411-414 Wireless technologies, 89 Wisconsin Works (W-2) program, 263-265 Witt, Jamie Lee, 518 Workfare, 263-264 World War I, 84 World War II, 10, 79, 300-301 Wright brothers, 12 Writ of certiorari, 144 Yzaguirre, Max, 120 Zenger, Peter, 82 Zero-based-budgeting (ZBB), 336 Zoellick, Robert B., 120

Selden Biggs is a management and program analyst for the Department of Homeland Security. Trained as a political scientist, he taught at Harvard University, the universities of Montana and California-Riverside, and Mary Baldwin College. He has worked for the Library of Congress and has more than fifteen years of experience as a contractor and consultant for the departments of Defense, Energy, and Justice, the Environmental Protection Agency, and other federal agencies. Lelia Helms is professor of educational policy and leadership studies at the University of Iowa. Trained as a political scientist and lawyer, she has held faculty positions in political science at the State University of New York, Brockport; Northeastern University; and the University of Maryland. She has also worked in the U.S. Department of Education and as a staff attorney with Legal Services of Iowa. She has authored numerous articles in the areas of policy, law, education, and health.