Download problems of bureaucratic organization

PO 111: INTRODUCTION TO
AMERICAN POLITICS
Summer I (2014)
Claire Leavitt
Boston University
TABLE OF CONTENTS
• What is “bureaucracy”?
• What do government agencies do?
– Types of government agencies
• Problems with bureaucratic organization:
– Differing incentives
– Muddled hierarchies and “thickening”
– Principal agent problem (misaligned incentives)
– Overlapping principal-agent relationships
• Possibilities for reform?
WHAT IS BUREAUCRACY?
• A type of organizational structure
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Hierarchical command structure (pyramidal)
Division of labor by comparative advantage
Consistent set of rules that govern action
Advancement according to merit
Impartiality
Overarching collective goal
• Problems arise not in spite of but because of
these structural characteristics
WHAT DO GOVERNMENT
AGENCIES DO?
• Public agencies in the modern era are
generally bureaucratic
• Part of the executive branch
• Responsibility for implementing the law
and overseeing a particular policy arena
• Fifteen governmental departments
– All department Secretaries are members of
presidential cabinet
OTHER TYPES OF GOVERNMENT
AGENCIES
• Independent Executive Agencies
– Independent of departmental control for
political reasons
– Directors appointed by the president and
report directly to the president
– Examples: CIA; NASA; Peace Corps; EPA
OTHER TYPES OF GOVERNMENT
AGENCIES
• Regulatory Commissions
– Independent from both Congress and the
president
– Non-partisan; free from political influence
– Directors appointed by the president
– Examples: Federal Reserve; FEC; FCC;
SEC
OTHER TYPES OF GOVERNMENT
AGENCIES
• Public Corporations
– Operate like private corporations but with
public money and Congressional oversight
– Examples: US Postal Service; Amtrak
PROBLEMS OF BUREAUCRATIC
ORGANIZATION: #1
• Institutional incentives in government
agencies differ from the private sector
– Maximization of efficiency greater in private
sector
– Differing purposes: profit versus
social/policy goals
– Congressional constraints on resource
redistribution within a department
– Innovation not rewarded in public sector
due to top-down constraints
PROBLEMS OF BUREAUCRATIC
ORGANIZATION: #2
• Muddled Hierarchies and “Thickening”:
– Ideal organizational structure is tightly-packed
pyramid
– Bureaucracy has been growing and thickening
since the 1950s

IDEAL

PRESENT
FUTURE
PROBLEMS OF BUREAUCRATIC
ORGANIZATION: #2
• Why does thickening occur?
– Retention of talented employees
– Change in the perception and prestige of
government work
– Politicization: Non-career civil servants
appointed to agency positions by the
president
• Jacksonian patronage versus the merit system
• Return to an era of politicization
• Lack of clear command structure
PROBLEMS OF BUREAUCRATIC
ORGANIZATION: #3
• The principal-agent problem
– Conflict that occurs when the principal and
the agent have different incentives,
interests and access to information
– Principals want their directives carried out
faithfully
– Agents want to maximize personal benefits
within the constraints set by the principal
– Principals don’t always know if an agent is
carrying out their will
PROBLEMS OF BUREAUCRATIC
ORGANIZATION: #3
• Examples of the principal-agent problem
– Truman and MacArthur
– The US Constitution
• Some delegations of authority were necessary
for government to work
• But how do you prevent agents from becoming
tyrannical?
• American people (P)  federal institutions (A)
• Congress (P)  other branches (A)
PROBLEMS OF BUREAUCRATIC
ORGANIZATION: #4
• Multiple and Overlapping Principal-Agent
Relationships
– The bureaucracy is an agent to four
principals:
• The American people
• The president
• Congress
• The courts
– Each of these principals has more than
thirty different agents (all govt. agencies)
PROBLEMS OF BUREAUCRATIC
ORGANIZATION: #4
• Each agent (government agency) also
acts as a principal for two of its own
agents:
– The agency’s different bureaus and
employees
– Private contractors and non-governmental
organizations (outsourcing)
PROBLEMS OF BUREAUCRATIC
ORGANIZATION: #4
• Complicated network of delegable relationships
Congress
Employees
Executive
branch
Managers
American people
Federal courts
Governmental
agencies
Bureaus
Non-governmental
contractors
POSSIBLE REFORMS?
• Reorganization?
• Decrease politicization?
• Inspired leadership?
• Eliminate federal deficit and regulatory red
tape?
• Increased delegation from Congress to
agencies; increased bureaucratic autonomy?