Outsourced Government Action: The Accountability Challenge

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Outsourced Government Action The Accountability
Challenge

• Dr. Laura S. Jensen, Director
• Center for Public Administration and Policy

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New Public Management (NPM) reforms a global
phenomenon since the late 1970s.

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New Public Management (NPM) reforms a global
phenomenon since the late 1970s.

• Root idea behind reforms Traditional,
  bureaucratic government was rigid, slow, and
  unresponsive.

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New Public Management (NPM) reforms a global
phenomenon since the late 1970s.

• Root idea behind reforms Traditional,
  bureaucratic government was rigid, slow, and
  unresponsive.
• Reforms sought to
• Replace rigid, rule-bound authority with
  flexibility

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New Public Management (NPM) reforms a global
phenomenon since the late 1970s.

• Root idea behind reforms Traditional,
  bureaucratic government was rigid, slow, and
  unresponsive.
• Reforms sought to
• Replace rigid, rule-bound authority with
  flexibility
• Replace old focus on institutional structure
  with new focus on improving process

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New Public Management (NPM) reforms a global
phenomenon since the late 1970s.

• Root idea behind reforms Traditional,
  bureaucratic government was rigid, slow, and
  unresponsive.
• Reforms sought to
• Replace rigid, rule-bound authority with
  flexibility
• Replace old focus on institutional structure
  with new focus on improving process
• Replace traditional stability of agencies and
  budgets with market-style competition

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New Public Management (NPM) reforms a global
phenomenon since the late 1970s.

• International variations in
• Timing of reforms

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New Public Management (NPM) reforms a global
phenomenon since the late 1970s.

• International variations in
• Timing of reforms
• Specific content of reforms

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New Public Management (NPM) reforms a global
phenomenon since the late 1970s.

• International variations in
• Timing of reforms
• Specific content of reforms
• Outcomes of reforms

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New Public Management (NPM) reforms a global
phenomenon since the late 1970s.

• International variations in
• Timing of reforms
• Specific content of reforms
• Outcomes of reforms
• Public administration scholars have been working
  to understand these variations.

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A core research finding CONTEXT IS IMPORTANT

• The outcomes of reforms depend upon the context
  in which reforms take place.

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A core research finding CONTEXT IS IMPORTANT

• The outcomes of reforms depend upon the context
  in which reforms take place.
• Key contextual variables influencing reform
  outcomes include
• State strength/capacity

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A core research finding CONTEXT IS IMPORTANT

• The outcomes of reforms depend upon the context
  in which reforms take place.
• Key contextual variables influencing reform
  outcomes include
• State strength/capacity
• Degree of state centralization

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A core research finding CONTEXT IS IMPORTANT

• The outcomes of reforms depend upon the context
  in which reforms take place.
• Key contextual variables influencing reform
  outcomes include
• State strength/capacity
• Degree of state centralization
• Political culture

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A core research finding CONTEXT IS IMPORTANT

• The outcomes of reforms depend upon the context
  in which reforms take place.
• Key contextual variables influencing reform
  outcomes include
• State strength/capacity
• Degree of state centralization
• Political culture
• Public law

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The United States Context

• State strength high
• Degree of state centralization low due to formal
  structure
• Separation of powers (legislative, executive,
  judicial)
• Federalism (dual sovereignty U.S. Government
  and the states)

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The United States Context

• Political culture
• individualistic
• rights-oriented
• strong belief in equal treatment by government
• strong belief in accountability for government
  action
• since the 1970s, diminished faith in
  governments ability to solve problems, but
  continued reliance upon government to remedy
  problems and intervene in crises.

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The United States Context

• Public law foundation underlying government
  action broad, deep, well-established
• U.S. Constitution (1789)
• 50 state-level constitutions
• national and state statutes
• national and state administrative regulations
• history of significant judicial policy-making

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Outsourcing extends to core governmental
functions in the United States

• International wars
• Example reliance upon contractors such as
  Blackwater, U.S.A., for security support in
  Iraq
• Domestic security
• Example the changing Federal Protective Service
  and its role in Louisiana after Hurricane Katrina
• Regulation
• Example drafting of environmental regulations
  for the U.S. Environmental Protection Agency
  (EPA) by private law firms

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An example of U.S. policymaking and
implementation involving contracting out welfare
governance

• U.S. Congress enacts welfare reform law, 1996
  establishes broad goals and policy, creates a
  Federal grant program

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An example of U.S. policy making and
implementation involving contracting out welfare
governance

• U.S. Congress enacts welfare reform law, 1996
  establishes broad goals and policy, creates a
  Federal grant program
• Specifics of program development/administrative
  rulemaking delegated to U.S. Department of Health
  and Human Services

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An example of U.S. policy making and
implementation involving contracting out welfare
governance

• U.S. Congress enacts welfare reform law, 1996
  establishes broad goals and policy, creates a
  Federal grant program
• Specifics of program development/administrative
  rulemaking delegated to U.S. Department of Health
  and Human Services
• States are responsible for implementation each
  state develops its own welfare programs using
  Federal grant funds and additional own-source
  funding

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An example of U.S. policy making and
implementation involving contracting out welfare
governance

• U.S. Congress enacts welfare reform law, 1996
  establishes broad goals and policy, creates a
  Federal grant program
• Specifics of program development/administrative
  rulemaking delegated to U.S. Department of Health
  and Human Services
• States are responsible for implementation each
  state develops its own welfare programs using
  Federal grant funds and additional own-source
  funding
• States rely upon a combination of local
  governments, nonprofit organizations, and
  for-profit firms for service delivery, program
  management, and program evaluation

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An example of U.S. policy making and
implementation involving contracting out welfare
governance

• U.S. Congress enacts welfare reform law, 1996
  establishes broad goals and policy, creates a
  Federal grant program
• Specifics of program development/administrative
  rulemaking delegated to U.S. Department of Health
  and Human Services
• States are responsible for implementation each
  state develops its own welfare programs using
  Federal grant funds and additional own-source
  funding
• States rely upon a combination of local
  governments, nonprofit organizations, and
  for-profit firms for service delivery, program
  management, and program evaluation
• Local governments may also contract with
  nonprofit organizations and for-profit firms for
  service delivery, program management, and program
  evaluation

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Some observations on this arrangement

• Lines of authority and responsibility are
  complex, intertwined, and attenuated
• Significant distance between the original
  principal (the U.S. Congress) and ultimate
  agents of welfare program implementation
• Nongovernmental agents are not bound by the laws
  governing the behavior of government actors
  unless contracts demand compliance with public
  law

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Welfare reform outcomes related to outsourcing

• Positive outcomes
• Flexibility allowed attention to particular
  regional and local needs
• Some innovation in methods of public assistance

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Welfare reform outcomes related to outsourcing

• Negative outcomes
• Some for-profit welfare providers creamed
  clients (helped in only the easiest cases)
• Citizens were treated unequally many were left
  in poverty
• Talent drain experienced personnel were
  recruited by for- and non-profits state and
  local government loss of capacity
• Mission creep some non-profits become more
  business-like, form for-profit subsidiaries
  (considered a loss to the voluntary sector)
• Lack of accountability (fiscal, legal,
  political)

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What explains these negative outcomes?Contextual
factors include

• Administrative reforms in the 1950s and 1960s
  that presumed adequate government capacity for
  oversight but did not guarantee it
• Judicial doctrine that was not well suited to
  the development and expansion of a
  hyper-decentralized, mixed regime (see Jensen and
  Kennedy)
• Swing in public opinion toward a utopian vision
  of markets and market competition
• Simplistic program evaluation metrics

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Conclusions about outsourcing that may be drawn
from the negative U.S. welfare reform outcomes

• Need to design better contract systems that
  avoid perverse incentives and distortions in
  contractors willingness to serve the public
  interest
• Need to improve outsourcing processes so that
  competent, responsible providers are selected
• Need to improve contract management
• Need to improve accountability for the use of
  public authority and funding, especially when
  programs involve vulnerable populations

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In sum

• Good governance requires more, not less,
  government capacity and involvement in regulation
  and oversight!