WORK DISCUSSED IN THIS ESSAY
National Performance Review, From Red Tape to Results: Creating a Government That Works Better and Costs Less (The Gore Report), 1993.
Making government work better is newly fashionable. Bashing bureaucracy has been popular since Richard Nixon's presidency and has grown in popularity with voters frustrated by deficits, an uncertain economy, and "politics as usual"--and egged on by opportunistic politicians. The idea was given a positive spin in David Osborne and Ted Gaebler's Reinventing Government. Their upbeat principles put administrative reform on the political agenda and even in airport book shops. The reform bibliography has since lengthened, capped by From Red Tape to Results: Creating a Government That Works Better and Costs Less, Vice President Al Gore's report on the administration's "National Performance Review" of federal administration.
Liberals, of course, have a major stake in effective government, for government is the necessary instrument of liberal purposes. When activist government fails, conservatives can smugly say, We told you so. Achieving a humane and just state requires effective public agencies, capable leaders, and sufficient executive power to define and execute a compelling vision of economic opportunity and social justice. When welfare departments, public transit systems, and public schools fail to perform, their failures not only discredit sensible policies but also undermine faith in government and feed the urge to shrink and privatize it.
Yet liberals have been less than enthusiastic about administrative reform. Perhaps this is because recent reform agendas--the postwar Hoover commissions, Lyndon Johnson's planning-programming-budgeting system (PPBS), Nixon's management by objectives (MBO), Jimmy Carter's zero-base budgeting (ZBB), and the total quality management (TQM) movement--seem ephemeral to the ongoing challenge of creating liberal policies. Perhaps it is because government reform is so difficult and politically unrewarding. Perhaps it is out of deference to public employee unions or out of fear of executive imperialism. For too many liberals, policies are what matter, not bureaucracies.
This stance is, of course, self-defeating. As Steven Kelman has argued in these pages ("The Renewal of the Public Sector," Summer 1990), "No serious advocate of a positive role for government can any longer ignore the challenge of the renewal of the public sector." But is reinventing government the right bandwagon to jump on? Is the Gore report a plausible blueprint?
Whose Ox is Gored?
"As our title makes clear," says Gore in his preface, "the National Performance Review is about moving from red tape to results to create a government that works better and costs less." The problems with government as we know it are several, says Gore. One is "enormous, unseen waste." A second is the ineffectiveness of the programs churned out by the legislative process "one after another, year after year," with no thought given to their design, resulting in a "performance deficit" that has alienated the public.
These are only surface manifestations of a deeper problem: reliance on "large, top-down, centralized bureaucracies to do the public's business," most of them "monopolies, with few incentives to innovate or improve." For the most part, bureaucratic accountability is about punishing mistakes. As a result, these bureaucracies have become rule-bound, with failures of control begetting more controls, producing "a culture of fear and resignation."
The solution to this deeper problem is "entrepreneurial government" based on four "bedrock principles": cutting red tape, putting customers first, empowering employees to get results, and cutting back to basics--producing better government for less. These principles are indivisible: "To create organizations that deliver value to American taxpayers, we must embrace all four." But "we need not jettison the traditional values that underlie democratic governance--values such as equal opportunity, justice, diversity, and democracy. We hold these values dear. We need to transform bureaucracies precisely because they have failed to nurture these values." The vice president claims that the recommendations will save $108 billion over five years. "We also expect that the reinventions we propose will allow us to reduce the size of the civilian, non-postal work force by 12 percent over the next five years [and] bring the federal work force below two million employees for the first time since 1967."
The bulk of the Gore report comprises chapters elaborating each of the four principles. First, the report offers six steps "to strip away the red tape": streamline the budget process, decentralize personnel policy, streamline procurement, reorient the inspectors general toward a focus on performance, eliminate regulations, and deregulate state and local governments. Each step is spelled out as a program of changes that range from the revolutionary (biennial budgets and appropriations) to the esoteric (end the use of full-time-equivalent personnel ceilings to control costs). Most are general and hortatory, a pattern reflected in subsequent chapters: "Dramatically simplify the current [personnel] classification system."
The aim of putting customers first, the second principle, is to "imbue the federal government--from top to bottom--with a driving sense of accountability." The idea is to end government monopolies by "transplanting some aspects of the business world into the public arena." With a bow to the quality revolution sweeping American businesses, four specific steps are proposed: giving customers a voice through regular solicitation of their views, making service organizations compete in service delivery, creating market dynamics in areas where government monopolies do serve the public interest (like air traffic control), and using market mechanisms instead of new programs to solve problems (as in pollution reduction and public housing).
Empowering employees to get results, the third principle, requires a "culture of public entrepreneurship." The idea, again obeying "the quality imperative," is "to do everything smarter, better, faster, cheaper." To accomplish the necessary transformation of employee motivations, decision making will be decentralized, replacing process compliance with accountability for clearly understood, feasible outcomes; employees will be trained in cutting-edge technologies; the quality of work life will be improved by initiating family-friendly policies and abolishing the time clock; the adversarial relationship between unions and management will be ended; and, to advance these steps, the government's top managers will assume responsibility for their implementation.
The final principle, cutting back to basics, obviously won't occur by targeting programs for extinction, Gore argues; everybody's tried that. Instead, cultural changes will create incentives to streamline programs and reduce costs. This re-engineering of government would require seeking an item veto, closing or consolidating field and regional offices, selling or eliminating programs ranging from the Alaska Power Administration to the President's Intelligence Oversight Board, raising user fees and collecting debts, authorizing the creation of innovation funds, and expanding the use of new technologies.
A concluding chapter candidly warns of the discomfort such a transformation will engender and outlines steps already under way: reinvention teams and labs in every department, performance agreements with cabinet officers, and establishment of the President's Management Council. For inspiration, the report quotes Daniel Burnham's exhortation to "make no little plans."
Reactions, Over- and Under-
Published with extraordinary fanfare, the Gore report was bound to be controversial. It is too easily dismissed as just another naive assault on the bureaucratic fortress and too easily embraced as an administration commitment to cutting the size and cost of government. Both responses trivialize the report's significance.
Pregnable Bureaucracy. The notion that ours is a top-down, unaccountable bureaucracy is a myth. Because of the inherent tensions between the branches of government, a tension designed into our Constitution, Americans were never fated to have the kinds of impenetrable and ultra-professional bureaucracies like those in Europe and Japan. Our democratic institutions lead an examined life. The need to make government work better is a leitmotif of American politics, and throughout our history the meaning of "reform" has oscillated between depoliticized professionalism and greater democratization.
The first successful reform movement was led by Jacksonians, who, contesting the elitism of the Federalists, installed the spoils system and the long ballot to bring government closer to the people. After rampant abuse of patronage by political machines, counter-reform in the 1880s instituted the civil service. Reforming spoils politics and strengthening administrative capacity were salient issues with business, professional, and middle-class urban voters who were to coalesce into the Progressive movement. With intellectual support from political scientist Woodrow Wilson, Progressives worked to separate politics from administration by creating a corps of neutral, competent civil servants efficiently organized into bureaus. The "bureaucratic paradigm," as Michael Barzelay calls it in Breaking Through Bureaucracy, was a hierarchical, specialized, professional, and honest public administration.
It is important to note, however, that the bureaucratic paradigm included accountability for performance. For government to be efficient, said Woodrow Wilson in The Study of Administration, "it must discover the simplest arrangements by which responsibility can be unmistakably fixed upon officials." The Taft Commission of 1912 advocated performance budgeting, as did the first postwar Hoover Commission in 1949.
But from the Progressive era through Nixon's New Federalism, the growth of a permanent government of proliferating bureaus staffed by tenured civil servants has been countered by moves to strengthen political control over administration through executive budgets, strong central offices staffed by patronage, authority to reorganize, and agency administration by political appointees subject to legislative confirmation.
Seen against this history, the Gore proposals are another in the succession of moves to strengthen executive command of bureaucracy. Of course, executive power has to be checked by the courts and by legislatures, which have sought to maintain the balance of political power by increasing their advisory role and their oversight and analytic capacities. The most acute analyses of policy implementation are done by agents of the Congress: the General Accounting Office and the Congressional Budget Office (CBO). As a result, America's bureaucracy, far from being an impenetrable monolith, is the most accountable in the world, and Gore's national performance review should be welcomed as another step toward constructive change rather than another quixotic tilt.
Tastes Great? Less Filling! The administration put a bullet through its own foot by equating government reinvention with cost savings. For one thing, the costs of government are notoriously difficult to project and even more difficult to control. Picking apart inflated savings estimates is easy sport for Washington's veteran budget experts in the CBO and elsewhere, and that should warn the administration off a tendency to equate success with deficit reduction. For another, government that works better in producing customer satisfaction may cost more, not less. For example, even centrist welfare reformers like Richard Nathan call for a doubling of appropriations for the JOBS program. Welfare reform, long-term health care, day care, retraining, public investment, and the rest of even the New Democrat litany will cost more, not less. Programs often do not work well, and their customers often are unhappy with them, because they are understaffed and poorly supervised. Lawsuits against welfare and mental health agencies in many states generally require more, not fewer, resources. Even if bureaucrats can be replaced by technology, government that works better is not necessarily cheaper.
Hare or Tortoise? Some critics have faulted the report as too sweeping in its goals and too impatient in its timing. Government cannot be reinvented because it was never invented, argue John J. DiIulio, Jr., Gerald Garvey, and Donald F. Kettl in Improving Government: An Owner's Manual. Bureaucracy evolved bit by bit, and its reform must be similarly evolutionary, experimental, and incremental. They are correct that real change will be evolutionary, but how does a process of evolutionary change toward a specific goal get started and stay focused? Here, the administration's strategy, while risky, makes sense: attract maximum attention to the cause of reform with a bold vision and clear evidence of intent to follow through. The resulting momentum is essential if directed, incremental change is to be possible at all. Indeed, the current focus on customers and quality service is already having good results, especially in federal agencies and in states and localities where the need for good management is now taken seriously. The fanfare surrounding the Gore report has emboldened change agents everywhere, an important achievement.
What Gore Reinvents
Three issues of far greater import are raised by the Gore proposals, however. They are, first, the Gore report's concept of governance, which emphasizes entrepreneurialism; second, the logic underlying its specific proposals, which emphasizes accountability through performance measurement; and, finally, its neutrality toward the substantive purposes of public programs, which tends toward an emphasis on the technical aspects of management.
Entrepreneurial or Civic? The proponents of reinvention have stressed the obsolescence of the long-reigning Wilsonian paradigm of bureaucratic professionalization. But the apparent inertia of our bureaucracy obscures an original and enduring tension between two opposing images of governance. The first image, civic or Jeffersonian, is of the town meeting in which all citizens have influence according to their willingness to participate. This image fosters inclusiveness, deliberation, and responsiveness through the dispersal of authority, multi-directional accountability, an empowered public, and the primacy of the democratic process. The second, an entrepreneurial image that evokes the centralist and businesslike approach of Hamilton, is that of an enterprise increasing its earnings and market share through successful product development, technological advances, and a productive and well-deployed work force. This image fosters toughmindedness, efficient use of scarce resources, a commitment to shareholders, a necessary concentration of executive authority, and the primacy of results.
Recent literature on administrative reform reflects this tension between the civic and entrepreneurial ideals. For example, among the civic idealists, Charles Lindblom, in Inquiry and Change, argues for a self-directing society featuring virtually continuous interchange between citizens and functionaries and a broad and rigorous competition of ideas until sufficient clarity and convergence are reached within the electorate to permit political authorities to act. In a similar spirit, Robert Reich, now the secretary of labor, advises managers to enter into a deliberative relationship with the public and its intermediaries. "You are not a policy entrepreneur," he writes in Public Management in a Democratic Society. "But neither are you a neutral and passive public servant. . . . You are instead a participant in an ongoing public deliberation about how problems are to be defined and understood, what the range of possible solutions might be, and who should have the responsibility for solving them." In The Spirit of Community, Amitai Etzioni advocates the mobilization of "under-represented majorities" to create a politics of change after the model of the Progressive movement "to shore up our values, responsibilities, institutions, and communities" and, in behalf of a genuine public interest, decimate the special interests that dominate political life.
The opposing image is executive-led government that is entrepreneurial in the style of what the Kennedy School's Alan Altschuler, in his preface to Breaking Through Bureaucracy, calls the new business managerial vision. This image is reflected in the recent reinventing government literature. The movement's awe of business practice is carefully concealed--Osborne and Gaebler, Barzelay, and others take great pains to cite examples drawn from recent government experience and say that government isn't a business--but the spirit, as the Gore report acknowledges, is the Hamiltonian one of looking to successful executives.
Thus though Osborne and Gaebler are rightly credited with giving focus to the contemporary movement for government reform, the progenitors of the movement are Tom Peters and Robert Waterman. Their In Search of Excellence first proclaimed the virtue of "fawning on customers" and argued for replacing the reigning rational model of hierarchy and control with an intuitive view of managerial leadership. These values are most clearly reflected in Barzelay's Breaking Through Bureaucracy. He, like Peters and Waterman, argues for replacing the old Wilsonian paradigm with a new, post-bureaucratic paradigm. His government agencies are "customer-driven service organizations" that empower ordinary employees to produce tangible results for citizens-as-consumers of public goods and services. Value is the imperative.
Widely credited to Osborne's inspiration, the Gore report is briskly entrepreneurial. In a curiously worded passage, the Gore report actually seems skeptical about community power. "By `customer,' we do not mean `citizen.' A citizen can participate in democratic decision-making; a customer receives benefits from a specific service. . . . In a democracy, citizens and customers both matter. But when they vote, citizens seldom have much chance to influence the behavior of public institutions. . . . Citizens own their government, but private businesses they do not own work much harder to cater to their needs." So, in Gore's conception, not only must government redefine citizens as customers, but citizens must redefine themselves as customers demanding a government "worth what [they] pay for it."
By seeking to mimic the most entrepreneurial business organizations and recast citizens as customers of the great governmental Kmart, however, the Gore blueprint glosses over the challenge that entrepreneurialism poses to the principle that government's unique role is to promote the common good and protect citizens from the arbitrary and capricious exercise of power and the abuse of fiduciary trust. There is a reason why ours is a government of laws and not of autonomous, bottom-line entrepreneurs: unmonitored power is often abused and entrepreneurial zeal is often misdirected, and citizens are the losers.
Performance Anxiety. The entrepreneurial advocates are right, however, in saying that accountability to citizens does not automatically require layers of hierarchy and truckloads of rules. In Mandate for Change, David Osborne's chapter argues that performance measurement is the essential ingredient in reinventing government: if you "define agencies' missions and goals, measure how well they achieve those goals, and develop budget and pay systems that reward organizations for success," public employees will become obsessive about reliable, efficient performance because they have no choice. Indeed, the key idea in the report seems to be that entrepreneurial government is made accountable to democratic values by performance measurement.
To obtain appropriate goals and measures, we cannot rely on the same political processes that cause the problem. Thus in an ostensibly anti-Wilsonian program we discover, ironically, the Wilsonian impulse to professionalize and depoliticize. Gore assigns to the Office of Management and Budget the role of setting up the new system. Osborne would go much further. In Mandate for Change, he proposed a National Information Agency to "improve the federal government's capacity to collect, analyze, and disseminate data"; a Performance Review Office insulated from political pressure to help agencies develop performance measures; a Program Design Office within OMB to "hire experts, gather and sift the relevant literature, and begin to articulate design principles that underlie success"; and a Sunset Commission to "review all programs and regulations to determine whether they should be reauthorized."
The explanation for this irony lies in different meanings of performance in the Wilsonian-bureaucratic paradigm and in the Gore approach. In the former, performance means activity--the work to be done or the service rendered--and performance measures are chosen to gauge government productivity--the measurable output achieved per unit of budgetary input. In the reinventing government lexicon, performance means results, defined in the Gore report as "measures of how government programs and policies affect their customers."
If there is fatal flaw in the performance logic, it is in the notion that performance measures can somehow short-circuit the political process and be made precise and unambiguous. To see the weakness of this logic, it will prove helpful to turn to the most politically unlikely of fields, mathematics.
Mathematicians have a notion called algorithmic complexity, the shortest set of instructions that will generate a given sequence of observed outcomes. A string of random numbers is extremely complex because its generation requires instructions as long and complex as the sequence itself. Far simpler are the laws of physics, highly compressed mathematical formulas from which vast numbers of accurate predictions concerning the natural universe can be generated. Thus complexity is equivalent to a lack of order and predictability. The goal of science is algorithmic compressibility, simpler ways to represent and predict natural phenomena.
The problem with government, in these terms, is that its outcomes are too disorderly, even random, because the instructions that generate them--the red tape--are too complex: hundreds of thousands of pages of statutes, regulations, guidelines, court rulings, job descriptions, bulletins, and so on. As Clinton and Gore showed in releasing the Gore report, it takes forklifts to hoist them. The goal of systematizers from Taft to Reagan and now Clinton and Gore has been to compress the governmental algorithm into simple executive instructions-- perform or else--that will create unambiguous, efficient order and, it is presumed, greater satisfaction all around.
But neither citizens nor politicians behave like atomic particles. We cannot combine them according to logical formulas and produce predictable reactions. One need consider only the proliferation of subcommittees, interest groups, lobbyists, and special government districts to understand why there is disorder and unpredictability in government. Citizens--as employees, members of interest groups, taxpayers, investors, parents, residents of cities and neighborhoods-- organize and press for special attention. And the system responds, if not voluntarily, then after being taken to court. Thus chain reactions of political activity create new molecules of political interest that add to governmental complexity and to performance ambiguity.
Even more than before, the goals of most public policies are complicated and ambiguous, the means for achieving them uncertain, the conflicts of interest intense. Choosing measures of performance and collecting relevant data sounds easy until you confront the complexities associated with virtually every area of government activity. Indeed, budget expert Allen Schick observes in The Washington Monthly (September 1993), "They've got so much data on performance already that they don't know what to do with it." Even a sympathetic General Accounting Office concluded recently that "performance measures have not attained sufficient credibility to influence resource allocation decisions."
If not ignored, performance measures are diluted until every zealous interest is mollified and simple order is destroyed. Why isn't a national student achievement test already turning schools into engines of high performance? Consider the Clinton administration's union-supported counterproposal to measure school delivery capacity instead of academic achievement. (You can't hold a teacher responsible for student achievement if the teacher lacks resources and autonomy and has overcrowded classrooms.) From legislators, we will begin to hear, "I don't care what the experts say; who knows better if a program is needed and how well it is performing than the citizens in my district?"
Finally, there is little genuine political pressure to allow bureaucrats to be more entrepreneurial and experimental with public funds. Instead, there is a great deal of pressure on them to cover their posteriors. Americans want their taxes to be low and used only for collective goods they value; they want the services they receive to be on time and inexpensive; they want to be heard when they are dissatisfied; they want administrators to be honest, knowledgeable, fair, and competent. Beyond these, they want to be left alone. It is unlikely that citizens with these attitudes will agree with Gore that "we must let our managers and workers fail . . . we must learn to let go."
What Is Being Managed? The final significant issue raised by the Gore report is the utility of assuming neutrality toward policy. "The National Performance Review focused primarily on how government should work, not what it should do." As an exercise, this is not unreasonable. It permits identification of generic management problems and generic tools to solve them. The danger lies in overemphasizing the technocratic aspects of public management, thereby disassociating the tasks of political and administrative leadership from the technical aspects of management, a mistake I called in an earlier book (Managing the Public's Business) "management without managers."
Nonetheless, effective public management is ultimately measured by the success of public policies. Public policy implementation, is not, in fact or even metaphorically, a business; putting customers first is not the same as putting the needs of citizens first. Fairness, just treatment, opportunity, security of person and property, participation in social deliberations, rule of law: these are the generic goals of government. They cannot be achieved solely through markets nor measured by highly compressed algorithms.
Liberal administrative reform, then, should focus on ensuring that government can deliver on the promise of economic opportunity and social justice in meeting the goals of liberal legislation. Programs that liberals endorse must perform well, whether they serve disadvantaged individuals, families, and communities--like welfare departments and public transit agencies--ensure environmental survival and prudence in national security, or protect individuals from predatory business practices and promote their legitimate rights. For the 384 recommendations in the Gore report, the right question is: will they advance liberal policy goals?
A great many of them will. Recommendations such as "allow agencies to create innovation capital funds," "clarify the goals and objectives of federal programs," and "develop an agreed-upon approach for dealing with management failures, crises, and chronic program difficulties" will simplify and refocus program activity, free up resources for better uses, and promote energetic and creative behavior by public officials. But effective public managers will recognize that the reinvention system in the form of 384 recommendations is not the solution any more than PPBS, MBO, ZBB, or TQM are the solution.
Consider the Gore report's recommendations to "eliminate at least 50 percent of all congressionally mandated reports" and "to reduce by at least 50 percent the number of internal regulations, and the number of pages of regulations, within 3 years." By themselves, they make no policy sense. They could just as easily have been endorsed by Nixon, Reagan, or Bush, and they could actually hinder liberal purposes by reducing the administration's ability to establish and enforce policy goals. So they must be measured against their impact on specific policy objectives. For example, will reducing paperwork cut Medicare and Medicaid costs without restricting access to care?
At the same time, promoting good management in large public agencies may require an occasional break with traditionally liberal power bases--public employee unions, teachers, and so on--in order to achieve efficient, mission-oriented programs. Still, it is better that system improvements be designed by people committed to liberal principles than by those for whom arbitrary results, such as fewer pages of regulations, are ends in themselves.
Finally, liberal administration is necessarily entrepreneurial in that it requires sufficient concentration of executive power to offset the particularism and favoritism of local, highly fragmented interests. As Paul Peterson argued in City Limits, local government is, because of competition for revenue-generating industry, biased against distributive justice. An important liberal responsibility might well be to insist on restoring Hamilton's vision (in Federalist 70) of energy in the political executive as "a leading character in the definition of good government." The Gore report already has been catalytic, and public administration is enlivened by a palpable new energy. Properly mobilized on behalf of good policies, the movement to reinvent government will enter the history of administrative reform as a useful step forward.
