Lecture 6 The Reform of Public Bureaucracy Introduction to Public Bureaucracy

Bureaucratic Bigness and Badness: Argument on the Size of Bureaucracy Growth, Aging and Badness Downs: “Government bureaus are susceptible to unimpeded growth because a lack of competitive market pressures and excuses of officials from the need to weigh the marginal costs and returns of further spending” Niskanen: “The way administrators maximize payoffs for themselves is to secure a continuously expanded budget, regardless of need” Ostrom: “The administrative state should be replaced by a system of small-scale, competitive, and internally democratic service enterprises”

Bureaucratic Bigness and Badness: Argument on the Political Power of Bureaucracy Discretion and Bureaucratic Power Friedrich: “It is impossible for administrators to receive prior instructions for all of their actions and hence, to be responsible, they must frequently act within their own discretion, utilizing all available knowledge as interpreted by expertise”; “consequent reactions by other must be carefully anticipated (“rule of anticipated reactions”)” Multiple Control and Autonomy Traditional view is that bureaucracy is subject to multiple controls; Yet a measure of agency autonomy is the “lifeblood of administration.”

Bureaucratic Bigness and Badness: Argument on the Political Power of Bureaucracy Professionalism Bureaucratic professionals are subject to numerous checks; On the positive side, professionalism promotes bureaucratic responsibility and accountability through professional norms, as well as democratic decision rules. Inequity and Drift Preservation of the Constitution and the building of consensus are more important than its own interests; bureaucracy, in fact, it actively seeks to alleviate inequity and policy drift.

Strategies and Tactics for Administrative Reform • Downsizing - Limited the growth of government spending and tax revenues, but its effect on the quality of services and the efficiency of administration is still questionable. Reengineering - All organizations must undertake fundamental and radical reinvention and redesign of their tasks, processes, and structures, in order to achieve dramatic improvements in “performance”.

Strategies and Tactics for Administrative Reform Continuous improvement - A more gradual, continuous bottom-up movement - This movement is strongly associated with total quality management (TQM) and emphasizes better quality to improve cost. TQM (Deming) - The key to quality is that management needed to create the kind of organizational culture that was receptive to the quality concept.

Downsizing Government is too big, so shrink government Set arbitrary ceilings on taxes or personnel Originated at state level in 1970s, continued through 1990s and 2000s Strategies 1) Goal: Lower expenditures 2) Direction: Outside-in 3) Central focus: Size 4) Action: Discontinuous

Assessing Downsizing Pros - Has limited growth of government spending and tax revenues Cons - Unclear effects on quality of services and efficiency of administration - Principal-agent relationship and transaction costs - More symbolic for officeholders

Reengineering Reengineering: reform by starting all over, redesign of work process of three C’s (customers, competition, and change) Examples 1) Customer service movement - Emphasizes how to identify customers and incentives for employees to serve customers better 2) Performance management - Reshapes incentives throughout the system 3) E-government - Greater transparency for democratic accountability

Assessing Reengineering Great influence on Gore’s “reinventing government” George W. Bush’s “President’s Management Agenda” implemented aggressive reengineering approach ex. E-government Many believe reengineering is a high-risk venture

Continuous Improvement Continuous improvement: more gradual, continuous bottom-up movement to top of organization Assessment - Takes longer than reengineering; utilized more - Many state and local reforms

Conclusion about Reforms Reformers have mixed and matched ideas. Reforms have produced significant effects in case of some developed countries. Management matters only to the degree to which it matters politically. Many reforms have created big and sometimes unexpected new problems.

Discussion Questions People want to get “better services” at “lower costs.” These two values are compatible? The larger government means that people need to pay higher costs for better services?