Chapter 13 The bureaucracy

Bernie Madoff and the SEC Bernie Madoff’s Ponzi scheme may have cost investors up to $65 million Many organizations failed after Madoff ‘s crimes discovered Securities and Exchange Commission had numerous complaints that it failed to follow up on properly Subsequent SEC analysis claimed errors due to inexperienced staff A painful reminder that we depend on regulatory agencies to protect us

Bernard Madoff

Organization Matters Laws passed by Congress are implemented by the government’s bureaucracy Bureaucracies play central role in today’s governments and society as a whole Organization of a particular bureaucracy depends on its political demands and needs of its clients Organization also affects a bureaucracy’s ability to accomplish its work

The Development of the Bureaucratic State American public concerned with size of bureaucracy Government at all levels grow enormously during 20th century Society increasingly more complex Attitudes towards regulation of business and government’s role in social welfare changed Ambitious bureaucrats have expanded organizations to add responsibilities

Not So Big by Comparison Compared with other Western democracies, U.S. government relatively small Most of these countries offer more welfare and social service benefits to citizens Taxes in these countries proportionately higher

Can We Reduce the Size of Government? Even incumbents “run against the government” Many Americans lack confidence in government and believe it wastes money Serious budget cuts require significant reductions in programs Proposed reductions of specific programs face opposition and are politically risky

Can We Reduce the Size of Government? Debate on reductions in bureaucracy shaped by ideology and size of budget deficit Reagan saw small government as enhancing personal freedom Obama sees government as a way to promote equality and protect citizens Not always good politics to downsize government An upside to providing a benefit to citizens

The Organization of Government Bureaucracy in Washington actually a collection of smaller bureaucracies Departments cover broad areas of government responsibility Independent Agencies stand alone, some controlled by president and some self-governed regulatory commissions Government Corporations perform services that could be provided by private sector but Congress believes should be done by government

Figure 13.1 Bureaucrats at Work

The Civil Service National bureaucracy almost 2.8 million civilian employees Diverse jobs make up 2% of U.S. workforce Senior Executive Service top level Most hired under civil service Pendleton Act (1883) designed to reduce patronage with merit hiring Pay and benefits of federal jobs compare favorably with private sector

Figure 13.2 Diversity Lags

Figure 13.3 Good Jobs, Good Benefits

Presidential Control over the Bureaucracy Civil service and other reforms insulate government workers from party politics Presidents appoint about 3,000 people to high-level positions Around 1,000 require Senate confirmation Pluralism can pull agencies in directions contrary to president’s wishes

Bureaucratic Policymaking Agencies make policy when Congress authorizes them to administer a program Regulations established to carry out laws create policy Congress has prerogative to override regulations it dislikes Congress can punish agencies by cutting budgets, altering programs, or holding up Senate confirmations

Administrative Discretion Administrative regulations legally binding Critics of bureaucracy complain agencies granted too much discretion When agency directives from Congress vague, bureaucrats develop policy details Greatest discretion to agencies involved in domestic and global security

Rule Making Administrative process that results in issuance of regulations Allows interested parties to comment on proposed rules Regulations often require individuals and corporations to act against own self-interest Freedom versus order

And Now for a Real Challenge: Regulate the World Some scientists fear global warming an emergency Debate exists over long-term implications International cooperation needed because greenhouse gas emissions know no borders U.S. concerned about fairness of any enforcement China resistant to any regulation or enforcement

Land and Sea Yearly Mean Temperature, 1880-2000

Administrative Policymaking: Informal Policies Difficult to define precise values and goals rationally Many related goals incompatible “Best” policy may be one on which most people can agree Constraints of competing policy objectives, opposing political forces, incomplete information, and pressures of time sometimes result in incrementalism

The Culture of Bureaucracy Interactions with bureaucrats sometimes frustrating because they are inflexible or lack authority to get things done Sometimes flexibility limited by legal requirements and need to treat everyone equally All bureaucracies have norms that guide behavior Sense of mission affects decisions about agency objectives

Problems in Implementing Policy Paper policies must be put into practice with processes May not do what they were designed to do Trial-and-error common Difficulties emerge when policies unclear or involve many different agencies and layers of government Implementation sometimes by contracts with private sector or not-for-profits

Los Angeles Smog

Mortgage Relief

Problems in Implementing Policy The many obstacles to effective implementation mean patience and analysis essential ingredients to policymaking So, implementation a gradual process where trial and error eventually lead to policies that work

Reforming the Bureaucracy: More Control or Less? Administrative reforms have taken many forms over the years Deregulation Competition Performance standards No magic bullet

Deregulation Reduced government role lets market forces of supply and demand take over Popular with conservatives Considerable deregulation in 1970s and 1980s Difficult with health and safety issues One way is to allow companies flexibility in how to meet standards Can also require more transparency and accountability

Competition and Outsourcing Conservatives want government to act more like businesses Some believe if agencies are not as efficient as private sector, service should be given to private sector Competitive bidding for services to administer programs common

Performance Standards Holding agencies accountable for reaching quantifiable goals Government Performance and Results Act sets requirements Concern that if agencies set own goals, will set them to easily achievable levels or that show agency in best light What an agency thinks it can achieve versus what would be most valuable to achieve