Brookings: Experts - Donald F. Kettl

A. Alfred Taubman Forum on Improving Government Performance

Tue, 22 Mar 2011 08:30:00 -0400

Event Information

March 22, 2011
8:30 AM - 1:00 PM EDT

Falk Auditorium
The Brookings Institution
1775 Massachusetts Ave., NW
Washington, DC

Federal government performance is at a crisis point. According to a recent CNN/Opinion Research national survey, 86 percent of Americans believe the federal government is broken. Voters view government agencies as inefficient and wasteful, trust in government is at an all-time low and most Americans do not view elected officials as effective problem-solvers.

On March 22, the Brookings Institution hosted a half-day conference on improving government performance, efficiency and effectiveness. The second annual A. Alfred Taubman Forum convened leaders from government, academia, and administrative agencies to discuss concrete policy actions to improve federal government performance and to overcome obstacles that hinder good governance. Questions to be explored included: How can we reform our political institutions? How can we improve federal agency performance? Where will we get our future federal workforce and what is the role of technology in making agencies more transparent and efficient?

To discuss these challenges were Jeffrey Zients, chief performance officer and deputy director, White House Office of Management and Budget; Joseph Goldman, interim executive director, Campaign for Stronger Democracy; and Shelley Metzenbaum, associate director for performance and management, White House Office of Management and Budget.

Following each panel, the participants took questions from the audience.

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Transcript

Event Materials

Participants

Panelists

Jeffrey Zients

Deputy Director for Management and Chief Performance Officer
Office of Management and Budget, The White House

Joseph Goldman

Interim Executive Director
Campaign for Stronger Democracy

Kathryn Newcomer

Professor of Public Policy and Public Administration and Director, School of Public Policy and Public Administration
The George Washington University

Shelley H. Metzenbaum

Associate Director for Performance and Personnel Management
Office of Management and Budget, The White House

The Next Government of the United States: Why Our Institutions Fail Us and How to Fix Them

Wed, 17 Dec 2008 14:00:00 -0500

Event Information

December 17, 2008
2:00 PM - 3:30 PM EST

Saul/Zilkha Rooms
The Brookings Institution
1775 Massachusetts Avenue, NW
Washington, DC 20036

The next administration will face the reality that our 20th century government is no match for our 21st century problems. In The Next Government of the United States: Why Our Institutions Fail Us and How to Fix Them (Norton, January 2009), Brookings Nonresident Senior Fellow Donald Kettl writes that our current process of governance has fallen out of sync with the increasingly complex problems that plague the U.S. government. Drawing data from crises like the government’s tragic failure to tackle the plight of Hurricane Katrina’s victims, Kettl outlines the big issues: hamstrung bureaucracies, a Congress with tunnel vision and leaders who too often fail to lead.

On December 17, Brookings Senior Fellow William Galston moderated a discussion with Kettl to examine the governance challenges facing the next administration and offer solutions to the policy problems plaguing our government. They were joined by Elaine Kamarck, lecturer in public policy at the Harvard Kennedy School of Government, and Jonathan Breul, executive director of the IBM Center for the Business of Government.

This event is part of the Governing Ideas series intended to broaden the discussion of governance issues through forums on timely and relevant books on history, culture, legal norms and practices, values and religion.

Transcript

Transcript (.pdf)

Event Materials

20081217_government_institutions

Participants

Moderator

Panelists

Elaine Kamarck

Lecturer in Public Policy, Harvard Kennedy School of Government

Jonathan Breul

Executive Director, IBM Center for the Business of Government

The Global Public Management Revolution : Second Edition

Donald F. Kettl — Mon, 01 Aug 2005 00:00:00 -0400

Brookings Institution Press 2005 108pp.

Over the past quarter century, governments around the world have launched ambitious efforts to reform the way they manage. Citizens have demanded smaller, cheaper, more effective governments while asking for more programs and better services. To resolve this paradox, governments are experimenting with many ideas to improve performance and production and to reduce costs. In this new edition of The Global Public Management Revolution, Donald F. Kettl charts the basic models of reform being employed worldwide.

Reviewing the standard strategies and tactics behind these reforms, the book identifies six common core ideas:

greater productivity
more public reliance on private markets
a stronger service orientation
devolution to subnational government
increased capacity to formulate and evaluate policy
enhanced accountability

Kettl predicts that reform and reinvention will likely become mantras for governments of all stripes. Ultimately, this means coupling the reform impulse with governance—government's increasingly important relationship with civil society and the institutions that shape modern life.

ABOUT THE AUTHOR

Donald F. Kettl

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The Department of Homeland Security's First Year : A Report Card

Donald F. Kettl, ed. — Sat, 01 May 2004 00:00:00 -0400

Century Foundation 2004 152pp.

On March 1, 2002, the most extensive reorganization of federal agencies since the end of World War II occurred. With the creation of the Department of Homeland Security (DHS), twenty-two agencies comprising 180,000 federal workers were merged into a single department whose principal mission is to prevent and respond to terrorist attacks.

This report evaluates how effective the DHS has been in its first year while highlighting problems that have occurred to date. In addition to the overview section, written by Donald F. Kettl, the report features a section on aviation security by E. Marla Felcher; a section on intelligence by Gregory F. Treverton; a section on immigration by T. Alexander Aleinikoff, and a section on state and local issues by Anne M. Khademian.

ABOUT THE EDITOR

Donald F. Kettl

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A Long Way from Austin

Donald F. Kettl — Tue, 01 Apr 2003 00:00:00 -0500

Yet again, the nation's governors were hopeful when one of their own was elected president. George W. Bush rode to Washington on the record he built in Texas, and he pledged to transform federal relations with statehouses around the country.

"I loved being the governor of Texas," Bush told the governors at a state dinner shortly after his inauguration. "In my six years, I placed great value on the advice of fellow governors, and made many friendships which continue to this day."

Two years into his term, however, White House relations with the governors are as rocky as they've been in decades. States (and localities as well) are complaining that long-promised funds for homeland security have amounted to only a trickle. The administration's proposal to stem the states' hemorrhaging Medicaid budgets generated a tepid response.

More than a dozen states have filed suit to block the Bush administration's reinterpretation of regulations governing coal-fired power plants, while seven state attorneys general are suing EPA for failure to regulate carbon dioxide emissions.

In sum, fissures are spreading throughout the intergovernmental system. So much for the hope of some governors that, by electing one of their own, the states would have a friend in the White House.

That's scarcely surprising. Four of the past five presidents have been governors, and none has proved much of a friend to the states. Jimmy Carter, who had been governor of Georgia for a single four-year term, came to the White House in 1977 at a time that represented the high water mark for federal aid, especially grants for traditional urban programs, such as community development. The water began to recede shortly after Carter took office. Ronald Reagan, a two-term California governor, sharply accelerated the federal rollback. Bill Clinton, who had been a governor for 12 years—longer than any president in U.S. history—ended "welfare as we know it" by passing the toughest problems back to the states to deal with.

President George W. Bush has, if anything, been even less sympathetic to his former colleagues. There is no better example of that than the dispute over Medicaid. When the governors came to Washington in February, facing enormous budget shortfalls for which Medicaid costs were in large part responsible, they were met at the White House with what one participant, Democratic Governor Gary Locke of Washington State, referred to as "nothing but great smiles and rhetoric." U.S. Health and Human Services Secretary Tommy Thompson offered the governors a Medicaid relief plan that made no provision for prescription drugs or other discretionary state Medicaid costs, a plan that most of the governors dismissed as providing no real relief at all.

Why does this scenario replay itself in one administration after another? In part, it's because the world looks—and works—a lot different from the Oval Office. As the events of September 11 painfully underlined, international issues tend to squeeze domestic problems off the president's agenda. Candidate Bush pledged to keep the United States out of Third World nation-building. President Bush found himself committed to it, first in Afghanistan and then in Iraq. While the administration has shown interest in spending domestic money to provide drug coverage to senior citizens—an investment likely to repay itself in political dividends for the Republican Party—sympathy for the states and their problems is not on the agenda.

But it would be a mistake to portray this tension simply as a battle between a former governor and 50 current state chief executives. It also reflects differences of opinion within the ranks of the governors themselves.

During the Washington meeting in February, Democratic governors clashed with their Republican colleagues over the whole issue of federal aid. The Democrats arrived intending to push for a big boost in it. "We didn't come to Washington," said Democratic Governor Tom Vilsack of Iowa, "to be potted plants or cheerleaders for administration policies." Republican governors may not have aspired to be potted plants either, but they quickly disassociated themselves from the request for substantial federal help. A closed-door meeting finally produced a weaker consensus document.

Even the National Governors' Association, long respected as a bipartisan Washington arm for research and lobbying, is under attack from within. Two states with Republican governors—Texas and Hawaii—have withdrawn from NGA, and conservative organizations have pushed more governors to do the same. Idaho Governor Dirk Kempthorne, the incoming NGA chairman, has promised staff changes, but that hasn't silenced the chorus of conservative activists who complain that governors of both parties are simply in the habit of trekking to Washington to support a "tax-and-spend agenda."

The dispute between the states and Washington is about the flow of federal cash. But, more fundamentally, it reveals deep divisions among the governors about what government ought to do—and who ought to pay.

Authors

Donald F. Kettl

Publication: Governing Magazine

Bush and the 50 Beggars

Donald F. Kettl — Sat, 01 Feb 2003 00:00:00 -0500

The nation's governors were hoping for good news a few weeks ago when President Bush announced his economic plans. But except for a modest proposal on unemployment insurance, they were left out in the winter cold.

With their budgets facing the most serious crisis since World War II, the governors had been lobbying hard for federal help. What they really wanted was at least a short-term resuscitation of federal revenue sharing, which ended in 1982. They would have settled for a change in the federal reimbursement for Medicaid, which could have eased some of the pressure on state budgets. They got neither. Bush instead advanced a bold stroke to restructure the federal tax system, removing even the modest $10 billion aid package for the states that his advisers had discussed. The states are left on their own with a budget hole of $90 billion, which threatens to soak up the entire short-term economic stimulus Bush proposed.

So what we're likely to get is an economic wash and political conflict. Who's at fault here? The feds, for failing to extend a helping hand when the states need it most? Or the states, for digging themselves into a hole and whining when Bush refused to lift them out of it?

The answer is a bit of both. If Bush truly were interested in jump-starting the economy out of its lethargy, pumping money through the states would be a quick way of doing it. But it's clear that long-term revision of the tax code is far more important to him than short-term economic stimulus.

The states must plead guilty to having hitched their spending to the boom economy of the 1990s. They forgot "Stein's Law," derived by the late economist Herbert Stein: "Things that can't go on forever—won't." When the economy collapsed, states found themselves hooked on spending increases they couldn't support.

Then, at precisely the same moment revenues collapsed, health care costs exploded. Spending for doctor visits, hospital stays and, especially, prescription drugs, swelled at the highest rate in a decade. Health care expenses now constitute 30 percent of state spending. In 2002 alone, Medicaid costs rose 13.2 percent, compared with just 1.3 percent for state spending as a whole. These health cost increases have all but swamped states' efforts to control the rest of their budgets.

The Bush tax proposals, should they become law, threaten to further aggravate the problems. State and local bonds are exempt from federal taxation, which allows these governments to borrow in capital markets at low rates. If the administration succeeds in its effort to create an exemption for corporate capital gains income as well, the advantage of investing in state bonds will decrease, and state borrowing costs will go up. And because, in the interest of tax simplification, most states have tied their income taxes to the federal code, eliminating federal taxes on capital gains would automatically eliminate state taxes on those same gains, costing state treasuries even more money.

All these forces—state spending pegged to unsustainable revenue growth, the sudden increase in health care costs and the risk of further revenue erosion from the Bush plan—threaten a profound crisis for state policy makers. Aggravating it is the projection of most economists that the U.S. economy will not grow fast enough to bail out the states anytime soon.

In the end, the states will still need some form of help from the feds to put their budgets back on a stable footing. The big monster in the states' budgetary basement is health care: treating the uninsured, providing long-term care for the elderly and subsidizing prescription drugs. As the Baby Boomers approach retirement, all these expenses promise to grow. Without federal action to manage health costs, that budgetary problem may be beyond the capacity of even the most fiscally prudent state government to solve.

We are a long way from the salad days of federal-state relations in the 1960s and early '70s. At that time, the feds saw state and local problems as their own. Democrats and Republicans joined together to provide federal funds to leverage state and local action. The partnership might have been paternalistic, but it shaped policy for decades.

When budget deficits hit in the late 1970s and early '80s, federal-state ties became increasingly frayed, and they have been frayed ever since. They further unraveled last year with the Bush administration's loosening of air-pollution regulations, which complicated the job many states face in meeting pollution standards. The current tax plan makes the situation worse.

The states can—indeed, they must—deal with some of these problems by putting their spending back into balance with a realistic view of their revenues. They need to update their tax structures. But it's hard to see how they can solve their fundamental fiscal problems without some new partnership emerging between themselves and the federal government.

Authors

Donald F. Kettl

Publication: Governing Magazine

Sacramento Rules

Donald F. Kettl — Sun, 01 Dec 2002 00:00:00 -0500

At the rate things are going, the head of the U.S. Environmental Protection Agency may not be setting much environmental policy a decade from now.

It's scarcely the case that EPA won't have anything to do. Recent agency administrators, both Republican and Democratic, have been pinned down in a fierce guerrilla battle between members of Congress who wish to lighten the regulatory burden of environmental rules and others who would toughen pollution standards and reduce global warming. In fact, the administrator's job increasingly has been to chart EPA's course through the political crossfire. But as the mElee has raged in Washington, the policy initiative has shifted to the states—and to a certain extent, foreign governments. For automakers in particular, the focus this year has been on California, not on Congress or the EPA.

Californians, of course, have as much at stake as anyone in the campaign to clean the air. Pollution problems in the Los Angeles basin are legendary. The state has consistently set tougher standards than required by federal regulation, and in the past 25 years, the results have been remarkable. The number of health advisories for high levels of ozone shrank from 166 in 1976 to just 15 in 2001.

In July, California took another tough step. The legislature passed a bill requiring all cars sold in the state after 2009 to meet tough standards for greenhouse gases, the carbon-based emissions that scientists believe promote global warming. Carmakers had waged a fierce battle against the California bill but could not defeat it.

In signing it, Governor Gray Davis chided federal officials for "failing to ratify the Kyoto treaty on global warming." They "missed their opportunity to do the right thing," Davis said. "So it is left to California, the nation's most-populous state and the world's 5th-largest economy, to take the lead." California was proud, as the governor put it, to "join the long-standing and successful effort of European nations against global warming."

In March 2001, President Bush had announced plans to withdraw the United States from the Kyoto treaty, the international pact dealing with the greenhouse gas issue. But California's legislation rendered that decision moot, at least for carbon dioxide pollution from cars. No automaker can afford to ignore California and its huge market. In the 1970s, when California mandated catalytic converters to scrub auto exhaust, it soon became impossible to buy cars in Wisconsin or Texas that did not contain the device as well. That will be the case for the greenhouse gas rules now. As California goes, at least in air pollution, so goes the nation. Instead of focusing their attentions on Washington, auto lobbyists find themselves trooping off to Sacramento to haggle over the details of the new regulations.

One of the important details they are haggling over is diesel fuel. New-generation diesel engines are more fuel-efficient than many gasoline-powered engines. That means less energy consumption and fewer carbon dioxide emissions. And that, in turn, has brought California regulators into close negotiations with automakers about production of diesel-powered cars.

For those who have long seen diesels as blue-smoke-belching behemoths, it might seem unlikely that government would be encouraging a shift to diesel engines. Or, for that matter, that the government making the decisions would be in a state capital, not Washington. But that's exactly what's happening.

All this, in turn, has led to new ties between state regulators and the European Union. European nations have been working as hard and long on global warming as anyone. The EU's aggressive efforts to reduce greenhouse gases have led to new diesel technologies. So California regulators find themselves steering in the same direction as their counterparts abroad.

Put together, this means that American policy for auto emissions is subtly shifting course, driven by activities at the state and international levels. It's not that EPA doesn't matter. It's just that the Washington political battles that consume EPA aren't really central to the shaping of long-term environmental policy.

State governments have long prided themselves as the nation's policy laboratories, and healthy competition among them always promises to generate new breakthroughs. But there's also risk involved in having the country's environmental policy evolve through accidental bits and bumps, without a national debate about what's truly in the national interest.

Risky or not, however, the trend is briskly underway. Jeffrey Immelt, General Electric's chief executive, has said that 99 percent of all new regulations the company faces are, over time, going to come not from the federal government but from the EU. Combined with the growing state activism on regulatory issues, this creates a potent combination that the feds may be unable to match, even if they start paying attention. Congress and the EPA may look around one day and discover to their displeasure that they spent precious years fighting interest-group battles that turned out to matter less and less.

Authors

Donald F. Kettl

Publication: Governing Magazine

Connecting the Dots

Donald F. Kettl — Tue, 01 Oct 2002 00:00:00 -0400

By any measure, the creation of the new Department of Homeland Security is an historic event. Not since the establishment of the Department of Defense in 1947 has the federal government attempted to bring together so many different functions. In fact, the new reorganization is more sweeping than the creation of DOD was, with more agencies serving a broader array of purposes struggling to fit under the same roof.

President Bush and members of Congress raced to set up the new department because they feared the jumble of existing agencies had created opportunities for terrorists to slip through—and hampered the government's ability to block future attacks. Bush launched his proposal on the very day FBI agent Coleen M. Rowley told a congressional committee that she had warned her superiors before September 11 of suspicious people seeking flight training, but that her warnings had gone unheeded. Listening to stories like hers would make anyone worry about how to connect the dots of security information; among those most obsessed with dot connection has been the president himself. But while it's unquestionably a good idea to launch a cabinet-level effort, President Bush's plan leaves important dots unconnected: namely, the critical relationships between federal strategists and state-local first responders.

That awful September 11 morning revealed worrisome gaps in the federal-state-local system—from Mayor Rudolph Giuliani's struggle to reach the White House by cell phone to the problems the nation's capital had in deploying its emergency plan. In the weeks that followed, the same problem played out repeatedly around the country.

Officials in Wisconsin dealt with more than 400 anthrax scares, not one of which proved real. Determining that the scares were in fact false alarms stretched first responders and the state testing lab to the breaking point and revealed obvious weaknesses in state capacity.

Even worse were the gaps that emerged in local preparedness. Fire fighters and police officers swarmed to the scene in Madison, the state capital, when one company's worried workers found a suspicious powder. It took 45 minutes for the employees to realize they should call the government's communicable-disease specialist. When the specialist finally arrived on the scene, the fire fighters wouldn't allow her to cross the crime-scene tape.

Neighboring communities discovered that their police officers couldn't talk to each other in emergencies because their radio frequencies were incompatible. The New York fire department's own investigation has revealed that communication breakdowns were the most serious problem at the World Trade Center disaster—but in many parts of the country, communication systems are even more poorly connected.

The surveys of state and local preparedness, moreover, show big gaps in the degree of protection. The nation's state and local governments vary widely in their capacity to prepare for and respond to terrorist attacks. But they are the ones who must build an effective security system that can operate almost instantly when it has to. The federal government cannot do this for them, no matter how much money or effort it puts into the problem.

The most important dots to be connected, in short, are the ones that exist between the new homeland security department and the homes of people all over America. The Bush plan still leaves most of them unconnected. It's a top-down plan without any real strategy to work from the bottom up. If there was any bit of luck at all in the terrorist attacks of September 11, it is that the most serious attacks occurred in the city best equipped to respond. Had they happened anywhere else, the consequences might have proven far worse.

The new department will provoke fierce bureaucratic battles in Washington, and these battles will receive the bulk of the media coverage. But it will be urgent to put them behind us as soon as possible and focus on the basic problems—how to organize governments throughout the country to get the job done.

What would a realistic, carefully constructed federal plan to fight terrorism look like? To start with, it would unite federal, state, and local officials in a crash program to define the foundation of preparedness. The federal government would set the basic standards that all state and local governments should meet, just as it does for programs ranging from Medicaid to highway construction. The feds would structure federal grants as incentives to reach the goals, and assess state and local performance against them. The new agency would gauge best practices and help state and local officials teach each other new methods and strategies, and cut months, if not years, off the learning curve.

Most of all, the federal government would focus on the central mission—security and preparedness—and would fashion a productive partnership with the people who work the front lines. If instead of connecting the dots between Washington and the front lines, the new agency becomes mired in turf conflict, we risk leaving ourselves even more vulnerable to the new risks we face.

Authors

Donald F. Kettl

Publication: Governing Magazine

Federalism: Dusting Off 'Dignity'

Donald F. Kettl — Thu, 01 Aug 2002 00:00:00 -0400

A few years ago, South Carolina business owners launched the Tropic Sea, a casino boat for "cruises to nowhere." The boat has suddenly become a cruise to a very important somewhere—new limits on federal control of state policy.

The Tropic Sea sailed into an ongoing battle in South Carolina politics. While developers were launching ships like this one to lure tourists, several state legislators and local officials had been campaigning against them because of the gambling connection. When the Tropic Sea asked permission to dock at Charleston's State Ports Authority Pier, the authority said no. The boat ended up at anchor in the harbor while its owners sought help from the Federal Maritime Commission. The commission sided with the boat owners but was overturned by a federal appeals court. Then the case went to the U.S. Supreme Court, where South Carolina argued that, as a state government, it wasn't subject to the jurisdiction of the Maritime Commission. In a bitter 5-4 decision at the end of its term this June, the Supreme Court agreed.

Writing for the majority, Justice Clarence Thomas built his argument on the little-noticed 11th Amendment to the U.S. Constitution, which holds that the judicial power of the federal government does not extend to the states. In doing so, he was striking one more blow for "dual federalism"—a long-dormant idea that is now very much back in judicial vogue. For decades after World War II, crucial court decisions ignored dual federalism and made use of the "equal protection" clause of the 14th Amendment to justify virtually any federal intervention in state matters. But in a series of decisions by Chief Justice William Rehnquist, and especially with the most recent opinion by Justice Thomas, dual federalism has surged again.

In ruling for South Carolina, Thomas admitted that there was little textual evidence to support his position. Rather, he said, dual federalism was "embedded in our constitutional structure." It helps uphold the "dignity" of the states as dual sovereigns. That, he said, is the core of the issue.

In fact, the "dignity" of the states is a new constitutional standard. The 11th Amendment explicitly applies to federal courts, not federal administrators. There is profound irony in the move by Thomas and the court's other conservatives, who long criticized liberals for making law from the bench, to extend the 11th Amendment so dramatically beyond what it actually says.

However, the decision is consistent with much of what the Rehnquist Court has been saying. Over the past few terms, court majorities have gradually chipped away at federal power and worked to strengthen the role of the states. Every major decision on an issue of federalism has been by a vote of 5-4, built on the conservative bloc of Rehnquist, Thomas, Anthony Kennedy, Sandra Day O'Connor and Antonin Scalia. The disputes have become increasingly intense and, as New York Times reporter Linda Greenhouse put it, "These days, federalism means war."

The battles have become so sharp, in fact, that a nominee's views on federalism could become one of the critical issues in selecting the next Supreme Court justice. Whoever takes that next vacancy may determine whether the court remains on its current dual federalism course or backs away.

But just how far is the court prepared to go in pursuing dual federalism? It has already ruled that workers can't sue states for discrimination under federal age and disability standards. It has protected states from suits by people claiming unfair competition from state activities in the marketplace, such as photocopying by state universities. Bit by bit, the court has extended state power in many directions at federal expense.

In the next term, the court will hear new cases that could even further expand state sovereignty. It will consider a case from Maine on whether states can force pharmaceutical companies to cut the prices of drugs sold to uninsured residents. In a Kentucky case, the court will rule on whether HMOs can be required by a state to accept any health care provider who agrees to the HMO's contract terms. And it will consider a Nevada challenge dealing with whether states must give employees unpaid leave for emergencies.

Before long, however, the pursuit of state "dignity" and the precedents for federal equal protection are bound to have a direct collision. State protection against federal labor standards will crash into federal guarantees of civil rights and civil liberties. This may come in debates over family leave or prescription drug controls, in voting rights or transportation of nuclear waste. It's clear that, at some point, the court will draw the line and hold federal interests paramount—but it's not clear where or when the line will be drawn.

As political scientist Howard Gillman noted recently, federalism has become "the biggest and deepest disagreement about the nature of our constitutional system." The disagreement will only intensify as we wade deeper into the real meaning of states' "dignity."

Authors

Donald F. Kettl

Publication: Governing Magazine

'West Wing' Fallout

Donald F. Kettl — Sat, 01 Jun 2002 00:00:00 -0400

New Mexico Governor Gary Johnson wanted to make sure his constituents didn't worry about how real the April 3 episode of NBC's popular drama, "The West Wing," might appear to be. He told citizens that the fiery crash of a truck carrying spent nuclear fuel rods was "completely fictional." Nevada's emergency responders, he said in a press release, "are trained to deal with any possible problems."

Governor Johnson found himself straddling a strange line between TV fiction and real-life fact. The nation's ongoing battles about what to do with nuclear waste are more amazing than anything fiction could produce. Power companies once promised that nuclear power would be too cheap to meter and that they could reprocess used fuel. In fact, nuclear power never became cheap and the reprocessing industry never became cost effective. Used fuel rods piled up in temporary underwater pools near their reactors. They have to be put somewhere, since they remain dangerously radioactive for at least 10,000 years. Storage pools are short-term solutions at best.

Years ago, the federal government promised to put the fuel rods into a permanent storage facility in a stable underground geological formation. For federal scientists, the ideal answer seemed to be Yucca Mountain, Nevada, a desolate ridge at the edge of the federal atomic weapons test site. But after 20 years of study and $7 billion of research, the Yucca Mountain facility has yet to open. The fuel rods are piling up at more than 100 facilities around the country, and power companies are worried about what to do with them.

The longer scientists looked at Yucca Mountain, the less sure they became about how well it would work. The area suffered an earthquake in 1992, and the region has a history of volcanoes. Water could seep into the storage area and corrode the casks.

As the science has become more uncertain, the politics have become clearer. Nevada has the usual two senators but only two members in the House of Representatives—and there are 433 other representatives who don't want the fuel rods in their states. The act Congress passed to place the waste at Yucca allows Nevada's governor to veto the plan. Not surprisingly, Governor Kenny Guinn did do so. Congress can override the veto, and it's likely that it will do so.

When the nation's founders wrote the Constitution back in 1787, they worried that larger, more populous states could gang up on smaller ones. They never anticipated issues such as nuclear-waste storage, yet they'd certainly recognize the battles.

For Nevada's campaign to stop Yucca Mountain, the "West Wing" episode was a godsend. The state launched a media campaign pointing out that the plan would require thousands of waste shipments through 43 states and suggesting that the "West Wing" accident scenario could be repeated hundreds of times.

Those worries strengthened the hand of Democratic Whip Harry Reid, who has led the campaign among Democrats to stop Yucca Mountain. Reid had surrendered his chairmanship of the Senate environment committee to Senator Jim Jeffords when Jeffords left the Republican Party. That cemented the Democrats' takeover of the Senate. Reid's colleagues had a hard time rejecting his case against Yucca Mountain after his sacrifice turned so many Democrats into committee chairmen.

Congressional Republicans faced their own dilemma. President Bush had joined them in supporting the Yucca plan. But that meant going against Republican Governor Guinn and jeopardizing key Republican members of Congress in a year when every seat counts toward control of the Senate and House.

Nevada officials recruited two former White House chiefs of staff: Kenneth Duberstein from the Reagan administration and John Podesta from the Clinton team. The nuclear industry signed up the chief of staff for the first Bush administration, John Sununu, and former vice presidential candidate Geraldine Ferraro. With former Clinton press secretary Dee Dee Myers writing the "West Wing" episode, it was an all-star cast.

Beyond the TV sets and ad campaigns, however, lay deeper issues. Homeland security analysts worried about the risk of leaving the spent fuel at nuclear power plants. The containment buildings at these sites have been hardened to reduce the odds of radiation leaking in case of an accident or a plane crash, but the underwater storage pools contain highly reactive materials in unreinforced buildings. For terrorists tempted to create a "dirty bomb," the spent fuel rods offer a tempting target.

Science simply can't answer, with any reasonable certainty, how well the Yucca Mountain facility would perform for thousands of years or how much real risk we face in transporting spent fuel to it. We have to put this stuff somewhere, but the process comes with huge uncertainties. Some of them are concentrated on a small number of citizens for a long time. Many of us will share other risks for a shorter time.

In the end, the scientific quandaries boil down to governance puzzles. They frame problems more intensely than any TV show.

Authors

Donald F. Kettl

Publication: Governing Magazine

Government by Traffic Light

Donald F. Kettl — Mon, 01 Apr 2002 00:00:00 -0500

The Bush administration's performance-measurement plans may mean a new challenge to state and local control.

Almost lost in the crossfire over President Bush's budget for the coming year is a new emphasis on performance in the federal bureaucracy. "Dollars will go to programs that work," the budget says, and "those programs that don't work will be reformed, constrained, or face closure." If this new process sticks, it could have a huge impact not only on the way Washington operates but on the federal relationship with state and local governments.

Cabinet officers were stunned this year when they went to the White House to make their annual budget appeals. The President and his staff sent them back to their agencies with an unmistakable message: Too many programs are not performing well—so big changes have to be made. Whatever the difficulties might be, the Bush administration seems determined to use performance measures to drive its future budget decisions. The president has said he'll hold cabinet officials personally responsible for the programs they manage.

In order to do this, Bush's people have set up a rather simple system of scorekeeping by "traffic lights." Agencies get a green light for success, yellow for mixed results and red for unsatisfactory progress. Some 130 separate scores have already been assigned in the categories of human capital, competitive sourcing, financial management, e-government and integrating budgeting and performance. The grading is pretty tough. Among the entire 130, graders at the Office of Management and Budget gave only one "green light," to the National Science Foundation for financial management. On the other hand, the scorecard is chock full of "red lights." Many departments with important intergovernmental responsibilities—including Education, Health and Human Services, Housing and Urban Development, Interior, and Transportation—got red lights across the board.

Cynics have dismissed the effort as one more in a long line of failed budget schemes. There's reason, however, to think that things might be different this time. Unlike previous budget reforms, this one has been written into law, which makes it harder for the process to evaporate.

If making this processs work at the federal level seems a little problematical, it is even more problematical as it relates to governments further down the scale. In any program that involves more than one level of government, responsibility is shared and goals vary widely. Part of the mission of most intergovernmental programs, in fact, is providing federal money to support state and local goals. Federal officials have not yet thought through how to incorporate these goals in the process. Nor have they determined how to accommodate the wide variation of state and local approaches in such areas as Medicaid and welfare reform.

Measurement also becomes more difficult as more jurisdictions are involved. There have to be multiple traffic lights, ones that take into account state and sometimes local performance. So far, those don't exist. The existing traffic lights incorporate only a federal perspective. A substantial amount of work needs to be done to expand them.

Ultimately, the idea behind the system isn't just to scold the weak performers—it's also to reward good programs and to increase incentives for high performance. To improve performance across the board, the budget proposes an incentive grant program for states that do the best job.

Just how many incentive grants there will be remains questionable. As Governing's annual performance report cards have revealed, few state and local governments currently have robust performance-measurement systems in place. If the system is weak in its pieces, it is nonexistent in linking its elements. Any measure of how well diverse governments pursue their interrelated goals and link them to budgetary decisions would surely produce red lights across the board.

What will happen if the administration further tightens the screws on the performance system but the system isn't ready for the complexities of federalism? The result could be a subtle but crucial centralization in federal grant programs. The more that money follows results—and results are defined by federal agencies—the less flexibility state and local officials will have. Unless they can mount their own performance systems to push back on the federal process, state and local officials could find their discretion eroded by federal performance standards that will be difficult for them to meet.

It's hard to argue with the basic goal of this process. When money is tight, it ought to be spent on the programs that produce the best results. Coupling performance measures with budget decisions is one sure way to get everyone's attention. But it's also important that, in our zeal to use the new performance tool, we don't erode the genuine sharing of responsibility on which the success of so many intergovernmental programs will depend.

To see the traffic-light scorecard, go to the Office of Management and Budget Web site at http://www.whitehouse.gov/omb/budget/fy2003/bud09.html

Authors

Donald F. Kettl

Publication: Governing Magazine

Environmental Governance : A Report on the Next Generation of Environmental Policy

Donald F. Kettl — Wed, 02 Jan 2002 00:00:00 -0500

Brookings Institution Press 2002 203pp.

Environmental policy has been the focus of reform efforts for more than a generation. Now policymakers face a new and challenging set of issues: how to develop strategies for attacking new environmental problems, how to develop better strategies for solving the old ones, and how to do both in ways that are more efficient, less taxing, and engender less political opposition. On one level, environmental performance is the problem. On a broader level, the question is how reshaped intergovernmental partnerships will affect how America is governed.

This book charts the politics of the next generation of environmental policy: how citizens will sort competing goals and responsibilities, how conflict and collaboration will shape the policy options, and how the nation's political institutions will respond.

These issues raise tough political problems that will define which options are viable and how different options will reshape politics. The contributors outline a path to fresh perspectives on the critical problems that must be addressed.

Contributors: Christopher H. Foreman Jr. (University of Maryland, Brookings Institution), Donald F. Kettl (University of Wisconsin-Madison, Brookings Institution), Shelley H. Metzenbaum (University of Maryland), Barry G. Rabe (University of Michigan), Graham K. Wilson (University of Wisconsin-Madison)

About the Editor

Donald F. Kettl is professor of public affairs and political science at the University of Wisconsin-Madison, Robert M. La Follette School of Public Affairs. He is also a nonresident senior fellow at the Brookings Institution. His recent books include The Global Public Management Revolution: A Report on the Transformation of Governance (Brookings, 2000) and The Transformation of Governance: Public Administration for the 21st Century.

ABOUT THE AUTHOR

Donald F. Kettl

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Has Government Been 'Reinvented'?

Donald F. Kettl — Thu, 04 May 2000 00:00:00 -0400

Let me thank the Subcommittee for allowing me this opportunity to discuss the status of the Clinton administration's "reinventing government" initiatives. This is a critical issue—not only for assessing the administration's accomplishments but also for charting the strategies and tactics of the next administration, whoever is president. For the last seven years, I have been leading an effort at the Brookings Institution to assess the results of the Clinton administration's "reinventing government" initiative. At this stage, we can draw the following conclusions:

Reinventing government is a work in progress.

Exhibit 1

Substantial downsizing of the federal workforce has in fact occurred—but substantial issues remain.

There have been big improvements in customer service and procurement reform.

The "reinvention laboratories" demonstrate the potential of reinvention.

There has been uneven attention in the "reinvention" effort to resolving the problems identified in GAO's "High-Risk Areas" and OMB's "Priority Management Objectives."

Throughout the government, application of "reinvention" has been uneven. Some agencies, like the Federal Emergency Management Agency, are now dramatically different. Some departments, like the State and Commerce Departments, have seen less-dramatic change. Future progress hinges on making more progress across the federal government.

No matter who is president in 2001, reinvention will have to continue, even if under a different name.

Let me discuss these issues in turn.

Downsizing and Budget Savings

There is no doubt that the federal civilian workforce is now substantially smaller than at the beginning of the Clinton administration. As Exhibit 2 shows, the workforce has shrunk by 19 percent, to 1.8 million workers. These reductions bring the federal civilian workforce to a level lower than any time since 1960.

The reductions have fallen unevenly throughout the federal government, as Exhibit 3 shows. Civilian employment in the Department of Defense has shrunk by almost 30 percent, with reductions in Energy (25 percent) and Housing and Urban Development (23 percent) not far behind. On the other hand, three cabinet departments have grown: Commerce (especially to manage the census); State (to cope with international pressures); and Justice (to increase the number of guards at federal prisons).

These reductions have raised several questions:

Would the downsizing have happened anyway?

If "reinventing government" downsized the bureaucracy, did it rightsize it as well?

How does downsizing affect the federal government's pending retirement crisis?

The downsizing accounts for about half ($54.8 billion) of the $111.8 billion in savings the Clinton administration claims from "reinventing government." The downsizing reductions are clear and the estimates are reliable. Of the other half, most come from savings in procurement ($12.3 billion) and improvements in agency management. These savings are difficult to prove, since it is impossible to say with certainty what the government would have spent for these functions in the absence of reform. It might be possible to contest some of these estimates. However, in my judgment these estimates are certainly reasonable.

One question often raised is whether the "downsized" workers have been replaced by private contractors. Good numbers on government procurement are notoriously difficult to produce. However, the General Services Administration Government Procurement Data System reveals that, from fiscal year 1992 through fiscal year 1999, the federal government's total procurement budget actually dropped slightly, by about $1 billion. The number of contract actions—contracts negotiated—decreased by 48 percent. The number of defense contracts shrank more quickly than the number of contracts elsewhere in the government (a 52 percent decrease in the number of defense contracts, versus a 42 percent decrease elsewhere). Total defense spending via contracts shrank slightly (by 1 percent), while contract spending elsewhere in the government grew slightly (by 1 percent). Thus, it is difficult to make the case that the downsized workers produced an increase in contracting.

In short, "reinventing government" has significantly downsized the bureaucracy and produced substantial cost savings. However, the effort has not attacked the critical workforce issues facing the federal government.

Customer Service and Procurement Reform

The Clinton administration launched a major customer-service initiative as part of "reinventing government." Under an executive order to develop customer-service standards, all federal agencies had been forced to confront whom they were in business to serve. Administration officials now count more than 4,000 customer service standards for more than 570 government agencies and programs.

The customer service effort has been widespread and unprecedented. It has achieved substantial success. For example, in 1995 the Social Security Administration was judged as having the best toll-free customer service—better, in fact, than the nation's leading private companies. A customer-satisfaction survey (compiled by Arthur Andersen, the University of Michigan Business School, and the American Society for Quality and released in December 1999) showed that federal agencies scored 68.6, compared with the private-sector rating of 72. Agencies that provided direct services tended to receive higher satisfaction scores than those that wrote rules, imposed fines, or enforced laws. The survey was rudimentary and raised methodological questions. Agencies surveyed, for example, could choose the customers and the services on which they were judged. For example, the survey gauged the attitudes of the parents of Head Start students, who might be expected to have high opinions of the program, but not first-grade teachers, who instruct Head Start's graduates.

Some parts of the government have struggled mightily with the customer-service problem. For example, the Internal Revenue Service must balance its goal of making tax compliance easier with its other principal task of maximizing tax collections. However, the IRS has not yet succeeded in balancing these two objectives. In part, this is because the job itself is daunting. In part, this is because Congress has sent the IRS complex, changing, and often conflicting signals.

Moreover, the customer-service effort raises difficult questions:

Who is the customer?

How can we draw the customer connection?

How can government avoid hypersensitivity to customer wishes?

too

How can government balance top-down and bottom-up pressures?

How can government balance customer service with other, often conflicting objectives?

These big issues raise a deeper question. The "customer" model is powerful and, in fact, has generated great progress. However, because government is responsible for a wider array of objectives than private-sector companies, it must pursue more than just customer service. Indeed, some of "reinventing government" harshest critics have complained about just this issue in suggesting that the pursuit of customer service is dangerous. It is hard to argue with a substantial effort to make government friendlier and easier to deal with. The Clinton administration has made great progress on this score. However, we continue to face important challenges in finding the right balance between responsiveness and other important public objectives.

Along with customer service, the Clinton administration has also achieved substantial progress in procurement reform. With procurement cards, reengineering of the procurement process, and more flexible results-based procurement processes, "reinventing government" has substantially transformed the government's procurement system. The administration claims $12 billion in savings from procurement reform. These figures are difficult to confirm, since it is impossible to know what procurement costs would have been in the absence of the reforms. However, the claimed savings are, in my opinion, eminently reasonable. The procurement and customer-service reforms surely rank as one of "reinventing government's" most impressive accomplishments.

Reinvention Laboratories

"Reinventing government" licensed "reinvention laboratories" throughout the government. The reinvention labs were designed as places where managers could experiment with innovative ways of delivering services more cheaply and effectively. In some cases, the reinvention labs institutionalized reforms that were underway before President Clinton took office. In general, however, the reinvention lab program provided top-level support and encouragement for these efforts. It also encouraged the spread of the effort throughout the federal government. More than 340 reinvention labs have sprung up.

For example, managers in radiology departments at Veterans Affairs hospitals developed new electronic links that reduced the need for on-call radiologists. Postal workers in Newton, Massachusetts saved $50 million with a "movers guide" and "welcome kit" that improved service and reduced the Postal Service's costs.

The reinvention labs are a clear success. They demonstrate how much energetic managers can accomplish, with the right support. Because the labs operate within the federal government's overall management framework, they also demonstrate how many of the federal government's management problems are self-inflicted. If there is a problem in the reinvention lab program, it is the difficulty of cumulating the lessons learned, so that they can guide the broader reform movement. The small size of the headquarters operation of "reinventing government," housed in the National Partnership for Reinventing Government, has made it very difficult to conduct the extensive evaluations that the reinvention lab effort needs.

Strategic Focus: High-Risk Areas and Priority Management Objectives

For years, the General Accounting Office has identified "high-risk areas" in which management problems threaten to reduce program effectiveness and increase program costs. The "reinventing government" initiative has not dealt directly with the problems that GAO has identified. There have been important initiatives, ranging from improvements in information technology and agency-specific reforms, like those in the IRS, General Services Administration, and the Federal Emergency Management Agency. Reinvention, however, has focused more on downsizing and operational improvements than on the broad, systemic management problems that GAO has identified in its high-risk list.

The Office of Management and Budget has identified "priority management objectives," ranging from managing the Year 2000 computer problem and acquisition reform to improving Department of Energy contract management and modernizing student aid. These objectives are fully consistent with "reinventing government" and, in fact, represent cooperative efforts between OMB and the agencies involved. The agencies, for their part, have launched their own reforms in the spirit of "reinventing government." However, efforts to date suggest two conclusions. First, these "priority management objectives" have depended on OMB's energetic pursuit of the goals. They have been less important to the "reinventing" effort, except to the degree that "reinventing government has encouraged agencies to develop their own aggressive reforms. Second, significant problems remain in tackling many of these "priority management objectives." The Y2K effort was surely an unqualified success. But from IRS reforms to managing risks in the space program, major challenges remain.

The "reinventing government" initiative has developed its own list of "high-impact agencies." The goal is to identify those agencies that produce programs that citizens care most about—and to focus the agencies' attention on delivering better results. The endeavor is at an early stage but shows important signs of progress. Some of the efforts reinforce the focus of GAO and OMB on more systemic management problems. However, because "reinventing government" has tended to concentrate on downsizing and process improvements (like customer service and procurement reform), it has had less impact on the problems that OMB and GAO have identified.

It is clear, moreover, that reinvention has been an uneven phenomenon throughout the federal government. A 1996 Merit Systems Protection Board survey, more than three years after the NPR's launch, showed that only 37 percent of federal employees believed that their organization had made reinvention a top priority. The NPR's management improvement goals penetrated far less into the Pentagon than in civilian agencies. Morale in many agencies was poor. Only 20 percent of federal workers said that the NPR had brought positive change to government. Where the NPR was a top priority, 59 percent of employees thought productivity had improved; where it was not, only 32 percent thought productivity was better. Where the NPR's goals received emphasis, employees were three times as likely to think that government organizations had made good use of their abilities. They were almost twice as likely to believe that they had been given greater flexibility. Government employees' attitudes varied with how much top managers made reinvention a priority.

Next steps in "reinventing government" will have to deal more directly with the fundamental structural problems that GAO and OMB have identified. It will also have to ensure wider buy-in across the federal government.

The Future of "Reinvention"

While the Clinton administration's reinventing government initiative unquestionably encountered serious problems, it nevertheless produced genuine accomplishment in its first five years. It saved a significant amount of money, brought substantial managerial reforms (especially in customer service and procurement processes), and promoted a more performance-based discussion on government's functions.

"Reinventing government's" shortcomings, though, are as instructive as its early successes. President Clinton's bold proclamation about the end of "big government" missed the far more important, if much more subtle, transformation in the way government works in the United States. The federal government is no longer organized for the job that law and the Constitution charge it to do. Devolution, contracting out, and other third-party strategies have grown significantly. The federal government's capacity to manage these programs has not grown to keep pace. Many of government's most significant management problems are a direct result of this mismatch of capacity and strategy. Without fundamental reforms in civil service, information technology, and financial management, this mismatch will continue to grow. The result can only be more tales of a government poorly equipped to accomplish its most important work.

With the budget deficit disappearing, the defining reality of American domestic policy since the late 1960s has evaporated. Unlike the fall of the Berlin Wall—the defining reality of a generation of American foreign policy—the demise of the budget deficit scarcely brought dancing and celebration. That is because two other deficits, quieter but just as important, remain: government's performance deficit—the gap between government's goals and its results—and its confidence deficit—citizens' trust in government's ability to get its job done. Management reform—improving government's ability to achieve its results—is the key to reducing the performance deficit. Reducing government's performance deficit, in turn, is the key to progress on the confidence deficit.

Making government work better thus is a goal that both political parties have little choice but to embrace. Indeed, management reform has become a truly global phenomenon, and American elected officials, of both parties, have little choice but to continue to pursue such reforms in the future. The public is unlikely to reward candidates for improving the way government works—Americans naturally tend to expect their public services to work smoothly and have often balked at rewarding government workers for doing their tax-funded jobs. But government officials also have little alternative but to work hard to improve performance, if only because embarrassing failures can have electoral repercussions—and because every penny of increased productivity is a tax that does not have to be raised or an expenditure that does not have to be cut. That is what makes a continued effort to reinvent American government an inevitable if, perhaps, thankless task. A constant battle for management reform is the one sure bet in American politics, regardless of who is elected president in November.

Back to Exhibit 1 The "Reinventing Government" Report Card
Category	Grade	Comments
Downsizing	B	Accomplished the goal, but planning to match the downsized workforce with agency missions was weak.
Identifying objectives of government	D	The NPR sought in 1995 to focus on what government should do—but the effort evaporated as the Republican threat faded.
Procurement reform	A	Fundamental transformation of procurement system. Some vendors complain, but the system is far more efficient than it was.
Customer service	B+	Great progress in some agencies, but major failures in othersnotably the IRS.
Disaster avoidance	B-	Substantial efforts in many agencies, notably FEMA. Spectacular failures in others, notably the IRS. The big test: the Y2K problem.
Political leadership	C+	Consistently strong leadership from the top but inconsistent below. Federal workers have gotten mixed signals.
Performance improvements	C+	Linkage of NPR with the Government Performance and Results Act is inconsistent.
Improved results in "high-impact" programs	INC	Good strategy—but likelihood of achieving goals is low.
Service coordination	INC	Efforts to improve the coordination of service delivery are embryonic.
Relations with Congress	D	Efforts to develop legislative support for NPR initiatives have, with the exception of procurement reform, been weak and ineffective. Support from Congress: poor.
Improvements in citizen confidence in government	C	The steady slide in public trust and confidence in government has ended, but that has more to do with a healthy economy than improved government performance.
Inspiration from other governments, private-sector reforms	B-	Wide survey of other ideas—but more a grab-bag of options than a careful analysis of which ones fit federal problems.
Effort	A+	No administration in history has invested such sustained, high-level attention to management reform efforts.
*OVERALL GRADE*	B	Substantial progress made over first five years, but much more work lies ahead. Successive administrations will have little choice but to continue the NPR in some form.

Source for report card:

Donald F. Kettl, Reinventing Government: A Fifth-Year Report Card (Washington: Brookings Institution, September 1998).

Back to text

SOURCE: U.S. Office of Personnel Management Office of Workforce Information Monthly Report of Federal Civilian Employment (SF 113-A)
Revised March 28, 2000

Back to text

Exhibit 3

Federal Executive Branch Employment

%

CHANGE

1993-2000

EXECUTIVE BRANCH (Excludes USPS & Postal Rate Commission) -19.0

Defense -29.6

Energy -24.7

Housing and Urban Development -23.1

Agriculture -18.0

Veterans Affairs -16.5

Interior -14.6

Labor -10.2

Transportation -9.3

Treasury -7.4

Education -5.0

Health and Human Services (includes Social Security Administration) -4.4

Commerce* 16.6

State 19.6

Justice 27.8

Federal Deposit Insurance Corporation -67.1

General Services Administration -31.8

NASA -26.7

Environmental Protection Agency -0.6

Federal Emergency Management Agency 9.2

* Does not include 31,587 temporary census enumerators.

Figures are preliminary and subject to agency revisions.

SOURCE: U.S. Office of Personnel Management

      Office of Workforce Information

      Monthly Report of Federal Civilian Employment (SF 113-A)

      March 25, 2000

Authors

Donald F. Kettl

Publication: House Committee on Rules; Senate Committee on Governmental Affairs

The Global Public Management Revolution : A Report on the Transformation of Governance

Donald F. Kettl — Thu, 16 Mar 2000 00:00:00 -0500

Brookings Institution Press 2000 96pp.

Second Edition Available Spring 2005

Over the last two decades, governments around the world have launched ambitious efforts to reform the way they manage their programs. Citizens in nations like Mongolia and Sweden, New Zealand, and the United States have demanded smaller, cheaper, more effective governments. They have also asked for more programs and better services. To resolve this paradox, governments have experimented with scores of ideas to be more productive, to improve performance, and to reduce costs. In The Global Public Management Revolution, Donald F. Kettl charts the basic models of reform that are being employed worldwide, including New Zealand's "new public management," the U.S. effort at "reinventing government," and related efforts in developed and developing nations.

In reviewing the standard strategies and tactics behind these reforms, Kettl has identified six common core ideas: the search for greater productivity; more public reliance on private markets; a stronger orientation toward service; more decentralization from national to subnational governments; increased capacity to devise and track public policy; and tactics to enhance accountability for results. Kettl predicts that reform and reinvention will likely become mantras for governments of all stripes, requiring the instinct for reform to be hardwired into government practice. Ultimately, this strategy means coupling the reform impulse with governance-government's increasingly important relationship with civil society and the institutions that shape modern life.

ABOUT THE AUTHOR

Donald F. Kettl

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Hearing on Restructuring the Department of Energy

Donald F. Kettl — Tue, 13 Jul 1999 00:00:00 -0400

Summary

As Senator Warren Rudman's report, Science at Its Best, Security at Its Worst elegantly makes clear, the Department of Energy's vast laboratory and weapons-production complex suffers from serious problems. These problems gravely threaten national security. As we reform the department, however, we ought to ensure that we actually solve the problem. The proposals for a quasi-independent new agency could well cripple DOE's capacity to achieve its mission.

DOE's problems clearly result in part from a dysfunctional organizational structure that is the legacy of previous reorganizations, from the Manhattan Project to the present. The Department would benefit from an organizational housecleaning. Any restructuring must meet six criteria:

The restructuring must enhance DOE's capacity to perform its mission.
The restructuring must improve coordination within DOE-both between headquarters and the field, and among the diverse elements of DOE's mission.
The restructuring must create clear lines of accountability for this mission.
The restructuring must promote national security.
The restructuring must help redefine DOE's culture.
The restructuring must create a high-performing organization.

Reformers ought to look carefully at the experiences of NASA for clues about how to reshape a high-risk, high-tech, contractor-driven government agency.

Introduction

As Senator Warren Rudman's report, Science at Its Best, Security at Its Worst elegantly makes clear, the Department of Energy's vast laboratory and weapons-production complex suffers from serious problems. These problems threaten national security. As we reform the department, however, we ought to ensure that we actually solve the problem—and we must not cripple DOE's capacity to achieve its mission.

We are now debating the creation of a semi-autonomous Agency for Nuclear Stewardship. The Agency would be located inside the Department of Energy and under the direction of a new Under Secretary. There are also proposals to take DOE's nuclear functions completely out of the Department and put them into a new, independent agency or to transfer the functions to the Department of Defense.

How should we think through these options? DOE's problems clearly result in part from a dysfunctional organizational structure that is the legacy of previous reorganizations dating from the Manhattan Project. The Department would benefit from an organizational housecleaning. But any restructuring needs to meet six criteria:

The restructuring must enhance DOE's capacity to perform its mission. DOE has a complex job to do. The structure must support the job to be done.
The restructuring must improve coordination within DOE-both between headquarters and the field, and among the diverse elements of DOE's mission. We can design failure into the restructuring from the beginning: If we focus single-mindedly on restructuring headquarters without improving links with the field; or if we look only at DOE's nuclear weapons programs without coordinating them with the Department's other activities. The structure must support the much-needed coordination.
The restructuring must create clear lines of accountability for this mission. DOE now has too many organizational layers between top officials and its field operations. The structure must be clear on who is in charge.
The restructuring must promote national security. But national security is not what DOE does; it is how it does it. Real reform requires weaving a clear concern for national security into the very fabric of DOE's operations, not trying to make national security itself the mission.
The restructuring must help redefine DOE's culture. The national security problem flows from a culture rooted deeply in the Department's structure. The new structure must help define and support a new culture that pursues effective results and ensures national security.
The restructuring must create a high-performing organization. The structure must require DOE to set clear, high standards for performance. It should reward the Department's managers for a good job and impose tough penalties for failure.

The instinct to reorganize the Department of Energy to attack the national-security problem is surely understandable. DOE, in fact, needs restructuring. There is grave risk, however, that a restructuring that simply re-shuffles boxes at headquarters will fail to solve the real problems in the field. In the process we could well stir up so much dust that we would lose valuable time in pursuing more fundamental, more effective reforms.

We Ought to Make Sure We Solve the Right Problem

The national-security problems within the DOE complex have their roots in the Department's field operations. For decades, the national laboratories have produced cutting-edge research. The production facilities produced ever-more-effective weapons. Over time, however, these operations have bred an organizational culture that, in turn, has fed the national security problems we now seek to cure. Indeed, Senator Rudman's panel identified culture as "a factor that complicates, perhaps even undermines, the ability of the Department to consistently implement its security procedures" (p. 11).

DOE has a long history of reorganizing to improve its operations. Unless we aggressively reshape the underlying organizational culture, the reorganization proposal would simply fall into the same old trap. This is precisely the lesson of reengineering and reinvention in the nation's most successful public organizations and private corporations.

The existing culture within DOE's field operations grows from fifty years of experience rooted in the Manhattan Project. To protect the nation's first nuclear bombs from enemy attack, strategists scattered research and production facilities throughout the nation. To ensure that no one had critical information about the overall plan, the Project's managers focused workers independently on narrow projects. And to gear up the process quickly, the Project relied almost exclusively on government-owned, contractor-operated (GOCO) facilities.

With the end of the Cold War came two dramatic changes in DOE's operations: a desire for more-open scientific exchange in the national labs; and the need to clean up the by-products of a half-century's nuclear weapons production. DOE found itself with these new missions but also with an old, even dysfunctional structure. The result was double trouble: organizational structures that did not support new missions, and disparate organizations cobbled together from existing components. The result? Precisely the patterns we have already observed:

National security problems born out of the self-governing autonomy of field (usually non-governmental) employees;
Management problems in the waste storage and environmental remediation programs;
Difficulty of top managers in gaining control of field operations.

The cause: Headquarters officials had great difficulty in transforming the half-century-old culture that once made the American nuclear-weapons program the keystone of the nation's defense but which now fits new missions poorly. The current spy scandal is the product of 50 years of decisions about DOE's structure and operations. Separating nuclear-related activities into a quasi-independent agency would further worsen the fit between the department's missions, its culture, and its structure.

This is the key problem. We ought to focus our efforts on solving it. The experience of the best public and private organizations teaches an important lesson: Reorganization, in itself, never does the job. Reengineering large organizations begins with top officials who redefine what they want the organization to look like; who then walk the talk; and who use the tools at their disposal to transform the organization. Restructuring can sometimes be an important tool. But it can never be the only—or even the principal—tool. To focus on reorganization as the first step is to court failure.

The core DOE problem is changing the culture of field operations. If we seek to solve problems simply by restructuring headquarters, we will fail to solve the problem and will only encourage the dysfunctional culture to continue.

We Need to Understand that DOE Does Have a Coordination Problem-But It's Vertical, Not Horizontal

The proposal for an agency for nuclear stewardship operates under an implicit assumption: There are problems with the nuclear weapons/national laboratories programs that can best be solved through horizontal coordination—pulling all related national-security functions together into one headquarters office and giving a single person responsibility for managing them.

DOE's fundamental problems, however, are vertical: ensuring that the department's vast network of private contractors and relatively autonomous research laboratories (acting from below) consistently follow national policy (set from above). In fact, according to GAO estimates, contractors are responsible for about 90 percent of DOE's work. The evidence suggests that the national-security problems grew out of the locally defined, professionally dominated culture of the research labs. This culture put emphasis on research-driven free exchange of information, at the cost of national security.

Concentrating all DOE activities in a new semi-autonomous agency has a double risk. It risks recreating DOE's problems and burying them at a lower level of the bureaucracy. And it risks focusing attention on national security to the exclusion of the Department's mission. DOE must guarantee the nation's nuclear secrets. But to do so effectively, top officials must weave high concern for national security into everything that DOE does, not simply restructure headquarters to make national security a higher priority.

Indeed, this is precisely the lesson that the Challenger disaster teaches. Following that tragedy, NASA did not make safety the central organizational scheme at headquarters. Rather, NASA officials made safety the #1 priority for everything that NASA did. It became the way that NASA conducted its business; it was not the business NASA was in.

DOE needs to solve the right problem. It needs to make national security the #1 priority for everything it does. The recent problems with the national laboratories reflect broad, recurring, and deeply rooted problems in the department's operations. DOE officials have struggled for years to encourage the contractors and the labs to act consistently with national policy, as reports over the years by the General Accounting Office have shown.

Restructuring national security operations at headquarters can be an important first step in making national security the Department's top priority. However, the missing link in the restructuring proposals is connection link between headquarters and the Department's field operations, and especially the link between DOE and its contractor network. The national security problem simply cannot be solved without building that link.

The protection of national security needs to be job #1 at DOE. But the only way to make that happen is to work at headquarters to change behavior in the field. The restructuring will fail if this does not happen-and none of the restructuring proposals have yet tackled that problem.

We Need to Understand that a Single-Minded Focus on National Security Could Weaken the Department's Environmental, Safety, and Health Protection Missions

Fifty years of nuclear weapons production has left behind an environmental legacy that will take decades to clean up. DOE has already had difficulty coordinating its environmental, safety, and health protection units with its production and research operations. National security is of unquestioned importance. But it is not the only goal that DOE must seek. That is especially true for those who live near contaminated and dangerous facilities in the DOE weapons complex.

Restructuring the DOE nuclear weapons complex at headquarters not only raises problems of linkage with the field. It also raises questions about how DOE will link the national-security-oriented missions with the environment, safety, and health protection missions. The restructuring proposals would create high walls—figuratively and symbolically—around the nuclear operations; the latter requires substantial communication among the components. That is especially true if DOE is to build the requisite trust and confidence in citizens and its partners in state and local governments.

DOE's most difficult problem is tackling new missions with old systems. Its new missions are fundamentally different from the old: conducting nuclear research in the post-cold-war world, at a time when exchange of scientific ideas has become much more important; and the shift from nuclear weapons production.

National security is absolutely central to DOE's mission. However, national security is not what DOE doe—it is how it must do it.

For any organization, public or private, to be successful, its structure needs to support its mission. DOE's structure needs to be constructed to promote its core missions. The proposed restructuring does not define sharply or reckon with DOE's reinvented missions. It does not enhance DOE's capacity to achieve these missions. In fact, it simply recreates much of DOE's existing operations in a subunit, buries the units responsible for the success of the new missions, and fails to connect headquarters more effectively with the field. The proposals lower, not raise, the role of the units responsible for the department's 21st-century mission.

In fact, DOE's emerging role is the integration of national security with its enduring missions:

environmental cleanup
safe storage of nuclear materials
maintenance of the nuclear arsenal
scientific research

DOE needs to do so in a way that enhances the trust and confidence of citizens and its partners in state and local governments.

DOE's success requires breaking down the vertical silos built over 50 years of history. It requires replacing them with new, horizontal coordination. And it requires action in Washington to ensure that this coordination happens. The proposed independent agency, by reinventing vertical silos in Washington, would make it harder to ensure coordination between Washington and the field. Restructuring headquarters in the pursuit of one aim—no matter how important, like national security—would make it far more difficult to ensure that other mission-critical goals were accomplished as well.

Citizen groups around the country have already voiced grave concern about vesting the agency that created the radioactive waste with the responsibility for cleaning it up. For more than a decade, these groups have complained bitterly that the department has not treated the remediation issues seriously. The department faces daunting challenges for cleaning up the nuclear legacy—and for devising a plan for the safe long-term storage of radioactive wastes. DOE has already been criticized for paying insufficient attention to these critical cross-cutting issues.

These problems would be significant in a new quasi-independent agency within DOE. The problems would be greatly magnified if an agency were created outside DOE, for that would vastly multiply the problems of coordinating the nuclear functions with the closely related research, environment, health, and safety missions.

The various restructuring plans could bury responsibility for solving them even more deeply in the DOE bureaucracy-or push responsibility outside DOE and far away from closely related missions. This could weaken the coordination among the various components and make it far more difficult for DOE to manage its core functions-especially environmental, safety, and health protection, which require strong partnerships with communities around the nation.

We Need to Ensure that Restructuring Increases Accountability

The most fundamental principle of management is to define an organization's job clearly and then hold the organization's manager accountable for getting the job done. The restructuring plans are unclear about who will be responsible for what, and that could seriously confuse accountability for results.

The plan to create a new Under Secretary within DOE to manage nuclear operations is unclear about the division of responsibility for basic policy, security, counterintelligence, and other key functions. Some restructuring plans would place virtually all responsibility in the hands of the Under Secretary, without clear accountability to the Secretary.

The firmly established tradition in American public management, supported by a score of blue-ribbon commissions throughout the 20th century, vests clear responsibility in the cabinet Secretary. Putting an Under Secretary in a position of side-stepping the Secretary could only create uncertainty about accountability. Framing responsibilities in a way that makes it hard to tell who is responsible for what would surely make things even worse. Paul Light's thorough research shows quite clearly that increasing the layers within the bureaucracy multiplies the problems of management and accountability. The goal of any restructuring ought to be to streamline the DOE bureaucracy and dramatically reduce the number of layers from top to bottom.

GAO has found that DOE already suffers from serious accountability problems. As its January 1999 report on the department's performance and accountability concludes, "DOE's ineffective organizational structure blurs accountability, allowing problems to go undetected and remain uncorrected"(p. 7). The last thing DOE needs is a "reform" that makes this problem worse.

The proposal to create a separate, independent Agency would solve the accountability problem: the Agency's administrator would have clear responsibility for the nuclear complex. It would, however, vastly increase the problems of coordinating the nuclear operations with the research, health, safety, and environmental missions. It would thus gain added accountability at an unacceptable cost in effectiveness.

The proposals for a separate office are unclear about who is responsible for what. That risks muddying accountability for the very problems they seek to solve.

We Need to Find the Right Model to Guide DOE's Restructuring

Reformers have pointed to other federal agencies as models for DOE's restructuring. The models have ranged from the Bureau of Land Management and the National Weather Service. The idea is to create a quasi-independent unit with clear responsibilities yet with operating independence from their home departments.

These are poor models, however, for several reasons. First, their missions are fundamentally different. DOE deals with nuclear materials, which inherently carry higher risk than either land management or weather forecasting. Second, DOE relies almost completely on contractors to perform its work. The lessons of BLM or NWS do not apply to DOE.

A far better model is NASA. Its high-risk, technology-intensive, contractor-dependent operations are similar to DOE. To attack these problems, its managers have led one of the most aggressive reinventions throughout the federal government. In the wake of the Challenger disaster, NASA officials put safety at the core of everything that NASA does-it was not what NASA did; it was how NASA did it.

NASA, for example, now requires its field offices ensure that contractors meet ISO 9000 quality standards. NASA headquarters assesses the management processes of its field offices through ISO 9000-drive internal audits. It is now developing financial management and performance assessment systems to ensure accountability. Although the new systems are not yet all in place, they provide a guide about how a contractor-dependent, high-tech government agency can transform its operations.

In short, top NASA officials redefined the agency's culture and insisted that its workers—both government employees and contractors—make safety the watchword. In the process, NASA fundamentally redefined the relationship between its headquarters and its field operations, including the Jet Propulsion Laboratory (a government-owned/contractor-operated facility, like many of DOE's facilities).

NASA has shown that a performance-driven system can transform the culture of a contractor-dependent agency. Reformers should look there for counsel in restructuring DOE. They should be very careful about choosing the wrong models, which could lead to dangerous prescriptions.

Conclusion

The proposal for a quasi-independent Agency for nuclear stewardship focuses on precisely the right issue: improving national security in the nation's nuclear complex. However, it misdiagnoses the problem. It could well well make the real problem worse. It fails to strengthen DOE's links to its field operations and misses the critical imperative to redefine DOE's culture. It fails to focus on improving DOE's capacity to pursue its 21st century missions.

DOE needs to work aggressively to improve its operations. DOE's restructuring ought to be comprehensive, but it ought to focus on improving the Department's capacity to accomplish its mission and to streamline its accountability.

We need to begin by ensuring that we identify the right problem-and devising a workable strategy to solve it.

Authors

Donald F. Kettl

Publication: House Committee on Commerce, Subcommittee on Energy and Power; House Committee on Science, Subcommittee on Energy and the Environment

Global Reinvention: Basic Issues, Questions Ahead

Donald F. Kettl — Thu, 14 Jan 1999 00:00:00 -0500

In the late 1970s and early 1980s, governments around the world found themselves simultaneously confronted by remarkably similar pressures. Citizens demanded smaller, more effective governments. They wanted more responsive services, more efficiently delivered. Developed nations struggled to reshape their social welfare and economic policy apparatus, while developing nations sought to create social and economic systems that could compete effectively in the globalizing economy. While the chords of reform varied, the underlying theme was remarkably common. Citizens demanded a reinvention of the way their governments operated—and of the relationships between government and citizens.

Faced with huge challenges, governments everywhere launched major innovations. In some countries there were fundamental structural changes, like the privatization of railroads, airlines, and telephone companies. In other countries, there were profound process changes, like customer service and improvements in the public procurement system. These changes took place against a backdrop of fundamental social and political changes, from toppling the Berlin Wall to the end of apartheid. European nations tackled the fundamental issues of the new union, East Asian nations launched substantial state-supported economic development strategies and in Eastern Europe countries struggled to democratize. In the United States, a major tax-reduction movement accompanied an assault on the federal budget deficit and President Bill Clinton and Vice President Al Gores major campaign to "reinvent government."

Viewed up close, these changes certainly flowed from the special problems each nation confronted. Viewed from a higher altitude, however, it is impossible to miss the worldwide nature of these changes. The scope, breadth, and pace of change proved stunning and universal. It proved nothing less than a global revolution, spread by the dawn of the information age and by the inescapable demands of citizens. A careful look at this revolution helps show the fundamental problems it was launched to solve; common themes nations used in attacking these problems; important lessons they learned; and the tough questions that lie ahead.

This paper will examine some of the issues to be discussed at the January 1999 Global Forum on Reinventing Government. It cannot be comprehensive. Indeed, the experiences and lessons of the worlds nations over the last twenty years are far too rich to capture in any document, no matter how detailed. Neither can this paper provide clear answers. But those who have looked carefully at global reinvention invariably come away with something even more important: a sometimes surprising realization of the universality of the basic questions. This paper is intended as a way to shape those discussions; to provide a foundation for thinking about the lessons the past generation of innovations has taught; and to begin identifying the questions that the next generation of reform must solve.

Basic Issues

Any careful look at this puzzle must begin with a basic question: Why did so many governments around the world launch such fundamental reforms in such a short period of time? It is impossible to miss either the flood of new government strategies or the remarkable resonance of the basic strategies. Governments virtually everywhere downsized, privatized, reengineered, and sought improved customer service. They worked to improve the performance of government and reduce its costs. They tried to increase; the skills of government workers, the flexibility government workers had to do their jobs and the accountability of government workers to governmental policy. They pared back government services while attempting to regain citizen trust. They struggled to define their new relationships with an increasingly global community, where neither economic nor social policies could be pursued in isolation

Why did the "size-of-government" issue burst so suddenly and universally into the civic consciousness? Developed nations, in the late 1970s and early 1980s, found themselves confronted by extraordinarily powerful demands for reducing the size of government. These demands, furthermore, were largely unrelated to how big government actually was. In 1980, government at all levels in Australia amounted to 31.4 percent of gross domestic product. In Canada, it was 39.6 percent; in New Zealand, it was over 50 percent, in the United Kingdom, 43.0 percent; in the United States, 31.4 percent; and in Sweden, 60.1 percent. Government employees ranged from 16 percent of all workers in Australia and the US to 21 percent in the United Kingdom to 30 percent in Sweden. Despite these huge differences in the actual size of government, the government-reform, government-cutting movement hit all of these nations at about the same time.

In part, this movement grew out of the profound economic crises of the 1970s. Economic orthodoxy had grown up to tackle either high inflation or high unemployment. It was ill-equipped to deal with both—"stagflation"— as it plagued the global economy following the decades oil shocks. Slower economic growth and higher inflation ate away at many citizens standard of living. That, in turn, made taxes all the more burdensome. Policy makers found themselves pressed for new ideas to fuel the creation of jobs and stable incomes, but in searching for solutions they found themselves hamstrung by a generation of regulatory and protectionist schemes that bound up their nations economies. Some nations, like Canada, faced a crippling deficit. Others, like New Zealand, faced tight budgets and stark challenges to their industries. A plea to shrink government accompanied demands to untie the constraints on private markets—to use more market-based competition to fuel growth and, in the process, serve as a model to reform government as well.

To complicate the issue, these economic pressures eroded the standard of living of many families. They found themselves working harder—even putting both spouses to work—to live as well. These family strains created further pressures to cut government spending and the tax burdens that supported it.

Reformers also sought to shrink—or at least reinvent—government for another reason. In program after program, performance lagged promise. Governments, and government officials, faced rising citizen expectations and lower confidence in their ability to deliver. In part, this was because citizens behaved as citizens have always behaved. They wanted ever-higher levels of service in exchange for ever-lower taxes, and elected officials often abetted this unbalanced equation through their campaign rhetoric. In part, this was because governments were trying to do very hard things, like eliminate poverty and promote global competitiveness. And in part, this was clearly because performance was, far too often, poor.

So in addition to shrinking the size of government, governments faced the very real challenge of improving the performance of their programs. Doing either- -cutting programs or improving performance—would have been challenging enough. Doing both simultaneously proved far, far more difficult.

Add to that one further element. Governments, like private companies, found themselves struggling with the demands of the transformation from the industrial age to the information age. The delivery of public services became far less a process of creating efficient but straightforward processes and much more a matter of creating and managing complex partnerships between government and civil society. Governments everywhere relied much more on contracting out, and on other indirect service processes. They confronted new management challenges in using these new processes. And they did so in the midst of an information revolution so vast that reform ideas sparked copycats around the world before their originator had a chance to determine whether they actually worked. In fact, the idea of innovation itself became an important force promoting the global government reform movement.

Developing nations faced these problems—and more. Some countries, like South Africa, strove to move from apartheid to a more integrated social and economic structure. Korea and other nations in the region worked to create, and then struggled to sustain, economic growth. Brazil sought social reform in the midst of rapid economic change. The developing nations, confronting the same ever-more-globalized economy, encountered all the issues of the more-developed nations. But they struggled as well to solve these problems in the midst of often-stunning tensions and problems. For many of these countries the big questions were not about governmental "reinvention" but about government "invention."

In short, the 1980s and 1990s saw both big challenges and sweeping change. Change is constant, of course, and anyone in the midst of it tends to see its implications as global. Every small wave looks like a tsunami to pilots of small sailboats. The waves of innovation at the end of the twentieth century, however, were in fact far larger than most. They swept across more nations more quickly. They responded to problems as important for their breadth as for their universality. They prompted government-based innovations remarkable for their scope and for how broadly they were shared. Governments everywhere sought a new equilibrium: a new balance in the expectations their citizens placed on them; the tax resources they provided; the services they expected; the administrative mechanisms they used; and perhaps most important, the relationships between citizens and their governments. Not since the dawn of the industrial age had such fundamental changes swept so far so fast through so many governments.

Strategies and Tactics

As the reform movement spread throughout the world, it developed common characteristics.

— The search for a "smaller" government—through efficiency gains rather than cutting programs.

Citizens contended that government had gotten too big. They insisted on lower taxes. To meet these imperatives, governments often responded not by eliminating programs but by seeking increased efficiency in existing ones. Nations with large state-owned businesses, from the United Kingdom to Mexico and New Zealand to Portugal, sold many of them off. The United States accomplished the largest downsizing of its federal government workforce in history and balanced its budget for the first time in decades. But these actions could only reduce the size of government so far. In the developed nations citizens had come to like many aspects of the social welfare state and in developing nations it became clear that some sort of social welfare state would be needed to protect citizens from the vagaries of a market economy. That left governments little choice but to seek more efficient ways of delivering services. If citizens made anything clear, it is that they expected the same level of services for less tax revenue—and that they expected governments to find some way of doing more with less. Citizens insistence on a smaller government was not matched by an appetite for cutting services

— The development of new processes-like reengineering of service systems, contracting out, performance management, and accrual accounting—to promote those efficiency gains.

In the past, governments would have tackled such problems by reorganizing. Faced with the size problem and the efficiency imperative, however, restructuring proved only of limited help. The United States for decades had tackled this challenge by contracting out—relying on partnerships with private and non-governmental organizations for service delivery. Other nations, like Canada, began aggressively developing such partnerships. New Zealand pioneered performance-based management, tied with accrual accounting and service contracts. Australia pushed farther in developing outcome-based measurement systems. The United States pursued perhaps the most ambitious performance system, seeking to link strategic plans and outcome measures with budget systems and legislative decisions. These systems, are more tightly integrated with both management strategies and political decisions than previous attempts.

— A new focus on transparency of government operations.

Some nations, like the United States, have for years had tough open records and government-in-the-sunshine laws. The government-reform movement picked up many of these themes and made transparency—clarity in governments goals, openness of information on government processes, and straightforward language about results—a central goal. New Zealand's contract-based system of management made transparency its keystone. And as nations like Hungary, Albania, Poland, and Estonia developed new administrative structures to meet their pressing needs, transparency was a core value.

— A strong emphasis on customer service.

Reformers shared the judgment that rigid top-down processes dominated government programs. That, in the eyes of the reformers, limited governments responsiveness. They took a page from private-sector managers and focused heavily on government from the bottom-up. The United Kingdom advanced a Citizens Charter with explicit promises about customer service, such as rebates for late train service. Canada worked to produce improved one-stop shopping for citizens, while all federal agencies in the United States developed customer-service plans. Flipping the focus of government-from top-down direction by senior officials to bottom-up responsiveness to citizens—aimed to improve citizen satisfaction, reduce distrust, and improve efficiency.

These strategies and tactics varied significantly. More conservative governments focused on cutting taxes and then using lowered revenue to force spending cuts. Margaret Thatchers government in the United Kingdom, followed quickly by Ronald Reagan's government in the United States, framed this strategy. More-liberal governments focused instead on finding which programs to cut and concentrated on improving governments efficiency and effectiveness (producing more high-quality services for the same tax level) and citizen satisfaction (with a special emphasis on customer service). Indeed, in the United Kingdom (with Prime Minister Tony Blair) and the United States (with President Bill Clinton), these more-liberal governments replaced the more-conservative regimes. Their political success, in turn, inspired other left-of-center governments in Europe, most notably in Germany.

These government reform problems led governments everywhere to the productivity challenge: avoiding tax increases, delivering tax cuts where possible, and finding new tactics to avoid reducing fundamentally the level of government services. Governments tried to reinvent themselves through a constant stream of innovations. Locked into the tough challenge of avoiding both tax increases or service cuts, governments struggled to find an alternative. Reinvention was the answer.

Less-developed nations faced all these pressures—finding greater productivity in government services and dealing with the squeeze between taxpayer resistance and service demands. In addition, many nations struggled with traditions and deep-rooted problems that made it difficult to mount the same efforts as more-developed nations. Korea, for example, explored customer service while struggling with the age old tradition of gratuities to front line bureaucrats. Many Southeast Asian and Latin American nations worked to strengthen their economies and redress large disparities between the rich and poor—without increasing government regulation. Indeed, these nations shared the problems of the more-developed world, added special problems of their own, and faced the imperative for quickly making their societies and economies competitive on the world stage.

Questions Ahead

With the turn of the century, the global reinvention movement will mark two decades of experience. The experience has been remarkable for its breadth, depth, and energy. But what questions lie ahead?

— What are the limits to government's reliance on private markets, for both ideas and management partnerships?

Drawing on a fundamental belief on the superiority of private-sector management, conservative reformers have proposed turning many of governments services back to the private sector. Even liberal reformers have relied heavily on non-governmental organizations for delivering services. These partnerships unquestionably added great flexibility to public service systems, especially in providing new and innovative ways of delivering government services without the government having to do the job itself. The competition they brought made service delivery more efficient and provided powerful incentives to government workers to improve their own work. They did not, however, demonstrate that governments could close shop on the services most important to citizens. Governments exist because private markets cannot—or will not—provide services as the public wants. After the initial sales of state owned assets, from telephone companies to airlines, governments tended to build partnerships for service delivery. Nonetheless, governments decided what ought to be done and provided the funds for doing it; non-governmental organizations worked increasingly as contractors to do public work. The Netherlands, for example, built new strategies for public-private partnerships. In developed countries the real challenge of global reinvention thus has become determining how to manage the new and often very complex partnerships that increasingly dominated service delivery. In developing countries the challenge is the creation of a vibrant, open civil society that can form some of these new partnerships with the public sector. What are the limits to privatization and public-private partnerships? What does it take to manage them effectively?

— How can performance measurement systems strengthen these partnerships?

The bedrock of global reinvention has been performance-based management: giving government workers and their partners more flexibility in devising service strategies while holding them more accountable for the results they produce. New Zealand took this notion farther than any nation, with contracts that specified what outputs managers were responsible for producing and measures that assessed how good a job they did. Australia tended to rely more on program evaluation and a broader assessment of outcomes. The United States took perhaps the boldest step of any nation with its legislative mandate for each government agency to develop strategic plans and measures for assessing their outcomes. Developing and implementing these measurement plans, however, has proven daunting. Measuring outputs is hard enough. Moving to the next step of assessing outcomes—what broader results the outcomes produce—is harder yet. Creating effective measures for activities managed through partnerships—service delivery systems that governments manage only indirectly—is harder yet. But as the job gets harder, measuring results become even more important in systems of indirect partnerships. What potential does performance measurement have for managing twenty-first century government? And what problems must governments solve to develop effective performance measurement systems?

— How can governments mesh these new performance-based measures with their existing processes and structures?

Governments not only launched major new reinventions, innovations, and partnerships. In the process, they ventured into turf far beyond their existing procedures. It is one thing to develop tactics for managing traditional government services through hierarchically structured, authority-based systems. It is quite another to devise techniques for measuring performance and to hold contracted agents and nongovernmental partners accountable. Some nations—notably New Zealand, Canada, Australia, and the United Kingdom—invested substantial effort in improving their capacity. But how different is this capacity from the processes that have traditionally guided government management? How do governments need to alter the incentives for government workers to make this process work well?

— How does "reinventing government" redefine the relationship between governments and their citizens?

Some of the new strategies, such as "make the managers manage" strategies like in New Zealands contract-management system, were top-down: policy makers specified goals and held managers responsible for results through written statements of goals and performance management. But other strategies, like "let the managers manage" strategies like the American "reinventing government" process, were bottom-up: policy makers sought to sweep away the regulations and processes that prevented managers from doing their job. Both strategies changed the relationship between government and its citizens. Both asked government managers to pay far more attention to the interests and needs of citizens, and both asked citizens to connect far more closely with government. Analysts debated how well these strategies worked in practice, but they brought governments and their citizens into new relationships with each other. How should government manage these new relationships?

Since the early 1980s, governments around the world have struggled to reinvent themselves—to match their strategies and tactics to new citizen demands, to reduce their size while maintaining services, and to improve their capacity to meet the challenges of twenty-first century government. Amidst such rapid change, governments likewise struggled to redefine their role. Economic analysts, after all, seem to suggest that, with a globalized economy, governments matter less. At the same time, reformers are pushing national governmental power down to the local level and social power from government out to private markets and market-like processes. In an era of devolution and globalization, what is the role of national governments?

In part, of course, the answer is that nation states must provide for national defense,shape national economic and social policy, steer the nations governance, and define the civic culture. The government, moreover, is responsible for defining the national interest, as its people see it, and for ensuring that its governmental system (including its network of nongovernmental partners) works to further that interest. This challenge is far larger than most nations have yet recognized. Thus, the global reform movement has not only reshaped the processes, structures, and functions of government, in both developed and developing nations. It has also raised a fundamental—and largely unanswered—challenge about the role of the state in the information age.

Along with this new challenge to governments role is the question about how government needs to equip itself for its job. While governments have spun out a dizzying array of innovations, they have faced problems building the capacity to implement those reforms. Indeed, reform of the government service—the people who do governments work, the training they need, and the values they convey—has been one of the most difficult parts of government reform. Because the rate of innovation has been so rapid there has been to date little systematic efforts to determine how well these reforms actually work—in identifying success, in avoiding failure, and in detecting the difference. With innovations spreading, quite literally, at the speed of light it is time to consider both how to build the capacity of civil servants and how to assess the results of innovation.

Liberals and conservatives continue to battle over the size-of-government issue. Conservatives have, in many nations, cleverly pressed to lower taxes as a strategy to force cuts in government programs. But so long as citizens continue to want most of the services they are receiving, the conservative government-reducing strategy faces limits. Liberals, including "Third Way" advocates like Britain's Tony Blair and Germany's Gerhard Schroeder, confront a different problem. They pledge to sustain the level of services by improving governments productivity through market-like mechanisms. But can they improve productivity enough to satisfy citizens and to avoid a new wave of public demands for lower taxes and smaller governments?

The tradeoffs are stark, and the political implications are huge. It is one thing to suggest—correctly, as it turns out—that government is in the midst of a major transformation from the industrial to the information age. It is quite another to confront the harsh and unforgiving political realities of the government-reform movement. Governments around the world have launched major reforms because they have had no alternative. They now need to think through issue of capacity and how to engage their citizens in the new systems they are creating.

The global reform movement thus is the foundation for new approaches to governance. The answers produced by the reform movement are anything but clear. But the global scope and innovative sweep of the innovations clearly chart the questions that the next steps in the global reform movement must answer.

Authors

Donald F. Kettl

Publication: Global Forum on Reinventing Government

The Battle Over Fixing the IRS

Donald F. Kettl — Tue, 01 Dec 1998 00:00:00 -0500

In a dozen B-movies from the 1950's cowboys formed a posse, saddled up, and rode around shooting into the air. There was always a lot of noise and bad dialogue, but little real action. The battle over reforming the Internal Revenue Service has much the same character. There is no doubt that the IRS is a troubled agency that badly needs fixing, but there is serious doubt that the reform bill Congress is considering will do much to solve the problem - and a good chance it will make things worse.

The movement to fix the IRS got huge boosts from a June congressional commission report and September congressional hearings featuring testimony by wronged taxpayers and by IRS agents, veiled behind confessional screens, who admitted taxpayer abuses. The House Republican leadership seized on the hearings and the public's eternal distrust of tax collectors to embarrass the Clinton administration into big concessions. In November, with only four dissenting votes, the House passed a major IRS reform bill.

The bill contains many solid proposals, but two issues are troublesome: creating a new board, dominated by individuals from the private sector, to make key decisions about IRS governance; and putting the burden of proof on the government in tax-court cases. There is little evidence that these changes would cure the IRS's problems - and strong evidence that they could deepen the agency's predicament.

To attack the IRS's governance problems, the House voted to create a new 11-member board that includes the secretary of the Treasury, the IRS commissioner, a representative of Treasury Department employees, and eight representatives from the private sector. The IRS reform commission had concluded that top Treasury officials had failed to provide effective leadership to correct mounting IRS problems and that private-sector ideas and a corporate-style board could provide a firmer hand and better ideas.

The new board, however, poses three big problems. First, it would create serious and unavoidable conflicts of interest. The problem is not so much having experienced private-sector officials set the IRS's course. It is having them serve on the board part-time - probably only a day a month. Sooner or later - probably sooner - every private-sector member would face a vote that would affect the operations of the business or organization from which he or she came. Such conflicts of interest are unavoidable. Even monks and nuns would have to recuse themselves from decisions shaping IRS policy on auditing nonprofit charitable organizations. No private-sector company would fill its board with competitors or others who might have conflicts of interest in setting corporate policy.

Second, no private-sector company would focus so strongly on structuring its board without also rethinking its operations, from top to bottom. Tales of failed corporate shakeups, triggered by changes concentrated at the top, litter the private sector. Nothing in the IRS will change until senior managers find a way to grab the agency by its bureaucratic lapels and shake reform into it. The private-sector board is an unlikely tool to accomplish this.

Third, the bill gives the board considerable power over IRS operations. The board would have broad authority to approve the IRS strategic plan and the agency's budget. But there are serious problems in putting such governmental powers into the hands of a board dominated by private-sector officials. And there is also the likelihood of serious confusion over managerial responsibility and democratic accountability. While the board would approve the IRS budget, the Treasury secretary would retain the power to submit the budget to the Office of Management and Budget. The board, meanwhile, would have the power to approve the IRS strategic plan (including decisions like how to target audits and what balance to set between compliance enforcement and taxpayer assistance). The likely result of such divided responsibilities is confusion - what to do and how to pay for it - that could well further undermine the public's already shaky confidence in the IRS.

The proposal to reverse the burden of proof, likewise, creates serious problems. The argument for the shift is this: why assume defendants are innocent until proven guilty in most courts, but assume taxpayers are guilty until they prove themselves innocent before the IRS? In fact, the bill would reverse the burden of proof only in tax court and only on questions of fact (not of law). Taxpayers would still be responsible for demonstrating good-faith compliance in all the steps leading up to trial.

Despite the bold rhetoric, the proposal would probably affect only a few thousand taxpayers a year. Unscrupulous taxpayers might be tempted to destroy records - the IRS could not prove guilt without finding the evidence. The IRS in response would have to be even more aggressive in audits to ensure it collected evidence it needed to win in court, even as it tried to be warmer and fuzzier in dealing with taxpayers.

Both the bill's flagship reforms, therefore, are much less than they seem, yet they create the potential for great mischief - precisely what the IRS needs least. The agency does have huge problems to solve: a customer-service effort that too often leaves taxpayers unsatisfied; an enforcement program that too often has trampled on taxpayers' rights; and an information system that, even after a $4 billion investment, does not equip the agency for the job it must do.

What would a genuine reform look like? First, inconsistent political leadership has crippled the IRS. The IRS will never change until top Treasury officials make reform a top priority and until Congress provides the necessary support. In recent years both Treasury Secretary Robert Rubin and Congress have put strong efforts behind reform. The key from here lies in a continued steady hand.

Second, the IRS needs strong management. The appointment of information management expert Charles O. Rossotti to head the agency is a good start, but the commissioner needs room to work and a mandate for action. The commissioner should be hired on a five-year contract that holds him or her accountable for performance and provides rewards for work well done. The performance goals, in turn, ought to guide agency operations from top to bottom. That strategy drove reform of New Zealand's tax agency and could vastly improve the IRS.

Third, IRS managers need far more flexibility: managerial, budgetary, personnel, and procurement. Up against the world's smartest tax experts, they need the ability to stay even by building the best systems, hiring the best people, training them effectively, and motivating them to perform.

Fourth, the IRS badly needs the insights of both citizens and smart private-sector managers. There ought to be a board to provide such counsel - but it ought not to be placed in the chain of command. That could only disrupt the accountability of public officials for public programs.

On one level, of course, no change can ever truly "reform" the IRS. Since revolutionaries tossed English tea into Boston Harbor, Americans have never liked tax collectors. Trying to extract payments that taxpayers really don't want to make will never be easy or pleasant, no matter how strong the IRS's commitment to friendly, solid advice. But shooting guns into the air is not the answer. The troubled IRS needs solid reforms that solve the real problems.

Authors

Donald F. Kettl

Environmental Policy: The Next Generation

Donald F. Kettl — Thu, 01 Oct 1998 00:00:00 -0400

As we near the 30th anniversary of Earth Day and the creation of the Environmental Protection Agency, it is time to take stock of what our environmental policies have accomplished, and the limitations they must now overcome. Along with the demonstrable victories of cleaner air and water, the first generation of environmental policy has also engendered ungainly bureaucracies, high costs, political polarization, and a litigious atmosphere. Market-based approaches, consensus-building, non-point-source regulations, and performance-based measures are all promising strategies for the second generation of environmental policy, but none by itself is a panacea. Moreover, along with organizational and technological challenges, we must address fundamental questions about who should determine our environmental goals.

POLICY BRIEF #37

As the thirtieth anniversary of the first Earth Day and the creation of the Environmental Protection Agency (EPA) approaches in 2000, a tough question looms: What will the next generation of environmental policy look like? The first generation of environmental policy made substantial progress. Air pollution, for example, dropped significantly even as the nation's population, automobile miles driven, and industrial production grew. But what will constitute the next generation of environmental protection? There is no support for declaring victory and deregulating the environment. At the same time, however, the costs—economic and political—of current environmental policy have risen to the point that continuation of this regime is unsupportable. How can we maintain the first generation's commitment to a clean environment, develop new strategies for attacking problems that the first generation left unanswered, and crack the tough economic and political dilemmas that the first wave of environmental regulations left in its wake?

Lessons from the First Generation

The first generation of environmental policy accomplished several things:

The regulations unquestionably produced dramatic environmental improvements. Many dirty waters became swimmable, fishable, and drinkable again. Boston Harbor, Galveston Bay, and the Connecticut River are all far cleaner. Even Cleveland's Cuyahoga River, famous for its oily film, obnoxious smell—and for catching fire in 1969—now sports tourist cruise ships and only occasional visible residue. The war on air pollution has reduced smog, even in places like Los Angeles, and some waste dumps have been reclaimed while others have been safely contained.
But despite the wins, the first generation left major economic and political problems. Companies increasingly are complaining about the high cost of compliance. Estimates of the costs of meeting environmental regulations vary widely, from the Office of Management and Budget's estimate of $144 billion per year to $185 billion annually, as researchers from Johns Hopkins University contend. These large costs, not surprisingly, engender complaints and often resentment from the businesses that must pay them. These businesses complain that the rules have outlived their usefulness, that they cost jobs, and make American firms less competitive with companies abroad. Environmental regulations have become so contentious that it is an article of faith in the environmental community that any important regulation will end up in court. The litigiousness of the process increases the costs and aggravation of everyone involved. It makes the EPA hyper-cautious in drafting regulations, companies hyper-concerned about potential impacts, and environmental groups hyper-sensitive about the risk to environmental quality of a process hard to predict, let alone manage. The constant battling and bickering adds enormously to everyone's costs, often without producing significant environmental gains.
The economic and legal costs of the system have increased the political stakes. In 1995, Republicans used environmental regulations as a key example in their campaign to reduce the cost of federal rules. "I am a conservationist," said Tom DeLay (R-Tex.) about the Clean Air Act, "but I do not believe in being a Gestapo-type government imposing regulations on the American public." Democrats capitalized on the Republican campaign to portray themselves as protectors of clean soil, water, and air and, when the dust cleared, the EPA's conservative opponents had retreated.
The EPA found itself squeezed between a status quo increasingly hard to defend and new problems that existing policies were inadequate to solve. The EPA would not be killed, but neither could it remain unchanged.

Challenges for the Second Generation

Although the EPA has fought off political challenges, it faces new problems that it cannot easily attack with its existing tools. While the first generation focused on reducing the kinds of pollution for which sources could be readily identified, the second generation must tackle a dual problem. First, some pollution sources were left relatively untouched by the first generation. Second, the first generation of rules had great difficulty in attacking non-point source pollution—pollution without immediately identifiable origins. The second generation thus faces the tough challenge of devising new, more cost-effective strategies for even more difficult pollution problems.

The great advances in the first generation of environmental policy came in addressing pollution from point sources: cars, factories, and other sources of pollution where regulators could establish a direct link between the cause and the effect. That, in turn, allowed them to develop pollution-reducing technologies. In cars, for example, special canisters and new engine designs have dramatically reduced automobile exhaust pollution. Scrubbers have removed particles from factory smokestacks while new sewage treatment technologies have made rivers cleaner. But while there has been substantial progress in reducing point source pollution, further gains are increasingly costly because the easy victories from technological improvements have already been won.

Reducing automobile and manufacturing pollution has often proven much easier than lessening contamination from large poultry ranches, fertilizer runoff from farms, and the growing environmental risks from homeowners dousing their lawns with pesticides. Such non-point source pollutants pose an important challenge to the continuing campaign to clean the environment. Fertilizer runoff into rivers, for example, threatens both the balance of life downstream (fish die if water becomes too nitrogen-rich) and the long-run sustainability of agriculture (short-term overuse of fertilizers can disrupt the long-run productivity of the land). Traditional command-and-control regulations work poorly against non-point source pollution problems.

To complicate the problem, such non-point sources are virtually universal and extend from large commercial operations to individual families. More is required than just installing new technology, like smokestack scrubbers or catalytic converters. Widespread sources of pollution create a new breed of complex collective-action problems. No strategy can be successful without developing creative new technologies along with broad participation and behavioral changes by almost everyone. Further complicating the issue is the growing recognition of pollution problems such as global warming that know no national boundaries. The collective-action dilemma is not limited to local communities or even national policies. Reducing non-point source pollution problems, especially greenhouse gases, requires policy strategies that encompass the world. The second generation requires a fresh, boundary-spanning approach: across technologies, geographic boundaries, environmental media, and socio-economic groups.

Non-point source pollution dilemmas also stretch across the EPA's traditional media based focus, in which regulation has been organized by air, water, and soil. Companies have long complained that the EPA's media based approach has sent a constant parade of different inspectors into their facilities. This multiplies their costs and complicates their operations. Moreover, some environmentalists have begun arguing that such a fragmented approach reduces the effectiveness of environmental regulations and prevents citizens from exercising an effective voice; it is the company's operations, after all, that are being regulated, not the different media. Reformers have argued for an approach that is more place- than media-based: one set of environmental standards to cover an operation; one integrated set of permits to regulate them; and one inspector to oversee the overall pattern of compliance. For an agency that has long been both Washington-based and media-centered, such a geographical focus poses enormous challenges.

First-generation problems remain unresolved as these new second-generation issues arise. Hundreds of Superfund toxic waste dumps remain untreated. Fifty years of nuclear weapons production have left a cold war mortgage that will take perhaps a century to pay. For example, in Hanford, Washington, toxic and radioactive sludge—in many cases the exact composition and potential risks are unknown—are seeping from buried underground tanks toward the Columbia River. Dangerous gases are building in other tanks and threaten to explode. In cases of both Superfund and radioactive waste, the cleanup will require quite literally hundreds of billions of dollars, scores of years, and new approaches that lie beyond currently affordable technology. The savings-and-loan bailout of the 1980s pales in comparison.

These second-generation problems stretch the EPA far beyond its traditional ways of doing business into complex new partnerships—with other nations, with state and local governments, with private companies, and with citizens. They pose daunting technological—and political—problems. Most importantly, they focus as much on governance as management. They require the EPA to chart new relationships with those who share responsibility for environmental quality. Increasingly, that means building partnerships with everyone involved.

Second-Generation Environmental Strategies

The central problem for twenty-first century environmental policy is how to develop new strategies for attacking new environmental problems, how to develop better strategies for solving the old ones, and how to do both in ways that are more efficient, less taxing, and engender less political opposition. The most promising strategies move from a front-end approach, designing and enforcing regulatory systems, to a back-end focus, setting goals and allowing participants to determine how best to meet them. If the first generation of environmental strategies was concerned with compliance, the second generation promises to focus on performance. The EPA is pursuing two strategies: market-based approaches designed to use competition to increase efficiency; and federalism forces designed to build new state-federal partnerships.

One market-based approach with which the EPA is experimenting is emissions trading. Coal-fired and oil-fired power plants and industrial boilers, for example, produce sulfur dioxide, which rises into the atmosphere and later falls as acid rain. Under the EPA's guidance, states establish ceilings on allowable sulfur dioxide emissions. Some companies have found it cheaper than others to reduce emissions; they get credits, which they can sell to other companies that find the job more expensive. Traditional regulation would have mandated all operations to reduce pollution to the same level, regardless of cost. Emissions trading uses the competitive market to define who can best reduce pollution and how. Through it, the EPA was able to reduce sulfur dioxide emissions by 30 percent, and to reduce compliance costs for boiler operators to less than command-and-control regulations would have permitted. Satisfied with its success, the EPA is planning an expansion of emissions trading to other pollutants, including nitrogen dioxide, a key component of smog.

For all its merits, however, emissions trading has sharp limitations.

It works only for pollutants for which markets can be established. This requires the ability to measure the pollutant and clearly identify its origin, which makes the practice difficult to apply to non-point-source pollution. It requires agreement on allowable levels of pollution, which makes it difficult to apply to high-risk carcinogens and nucleotides, cases in which even minimal exposure can prove dangerous. Such judgment calls also make it difficult to apply to pollutants with high political visibility (and, therefore, political risk). Emissions trading requires the ability to isolate the pollutant and its effects, which makes this approach a difficult fit for companies with complex cross-media pollution problems. Finally, it requires the ability to create and sustain a workable market, which limits the technique to large-scale operations with the capacity to cost out their alternatives. (Reduce pollution below the ceiling and sell the credits, or buy credits from other operations because it costs less than meeting the standards?) Small companies are likely to find it difficult to play such a complex game. These problems leave emissions trading an important, useful, but ultimately limited twenty-first-century strategy.

For other problems not readily reducible to pollution markets, the EPA has been quietly exploring new performance-based partnerships with the states. Although the EPA has long devolved operating responsibility for environmental regulations to the states, new experiments give them far greater responsibility for designing and maintaining environmental management systems in exchange for reports on their performance. Over the last 25 years the states have become the EPA's front-line managers for many regulatory programs. The process has often proven just as burdensome to the states as the regulations have been for private companies. The states, not surprisingly, have proven just as fed up as the private sector with the high costs of the current system and have led the charge for performance-based partnerships.

The transformation of environmental devolution from enforcement to performance has proven widely attractive. Making it work, however, requires solving two tough problems. The first is building the partnerships and holding them together. The partnerships depend on building trust by measuring performance, but this technology is now rudimentary at best. The strategy, therefore, requires constructing new measurement methodologies. The second problem is building the confidence of everyone—companies, environmental groups, neighborhood associations, state regulators, the EPA, and elected officials at all levels—in the process and its decisions. Because performance-based systems tend also to be community-based systems, success depends on getting the groups who often warred in the past to work together. That in turn requires building trust among the participants in both the performance-based process and the results it produces.

Underlying all of these issues is the public interest puzzle: While the battles over environmental regulation often become enmeshed in hyper-technical how questions, they typically boil down to critical who problems. Who will shape environmental policy? Whose values will prevail? How will the decision process be structured, and whose voices will be heard? Many environmental groups are quite frank in asserting that they view performance-based regulation as a tactic to turn more decisions over to private industry and to state environmental agencies they have captured. Performance measurement, they fear, is simply an effort to reduce government's commitment to a clean environment. So, along with the big questions of the cost of regulations for all players comes the problem of devising a structure for resolving those questions. Who speaks for citizens, and how should their voice be heard?

The process, then, is not only about reducing the costs of environmental regulation while improving environmental quality, but also about reconstituting the process of environmental debate and defining which values prevail. On one level, then, this is a problem of environmental performance. On a broader level, it is about how reshaped intergovernmental partnerships will affect how America is governed.

Environmental Policy for the New Millennium

The challenge of environmental policy for the new millennium is to do everything that the first generation of environmental policy did—but to do it better—and to devise a second generation of environmental policy to solve problems that the first generation did not or could not. At the core of the second generation is a shift from inputs (including inspections and rulemakings) to outcomes (most notably performance). It seeks to reduce everyone's costs, lower the political heat, and improve results. But even more importantly, the second generation of environmental policy revolves around fundamental and richly layered questions of governance:

Policy. What should be the nation's policy toward the environment? How much are we willing to pay for how much environmental improvement?
EPA Management. Since the second generation requires new management technologies, how can the EPA effectively develop and prove these new technologies? And since many of these technologies are experimental, the EPA will have to maintain first-generation regulations while perfecting second-generation strategies. What problems will the EPA face in simultaneously pursuing two so different regulatory approaches?
Devolution. The second-generation strategies involve substantial devolution to private markets and state governments. How can the EPA construct the trustworthy performance systems required to make the market- and federalism-based systems work effectively?
Participation. Because the second-generation strategies heighten the importance of reaching beyond traditional boundaries, how will these boundaries be overcome—and who will reach beyond them? The more second-generation environmental policy problems emerge, the more everyone—governments, companies, and citizens, in the United States and around the world—must come into partnership. How will these partnerships be created and sustained?

The second generation of environmental policy promises to create the mother of all devolution projects, with implications even greater than welfare reform. The political and administrative relationships are, if anything, more complex. Yet the state of knowledge is far less than in welfare reform.

It is a policy arena of massive experimentation, uncertain results, complex relationships, and an inescapable mandate for improvement. It is clear that neither the EPA nor the states can stay where they are. It is equally clear that they must learn to go where no one has gone before. Market incentives are part of the mix, but they fail to attack many of the hardest problems. Those problems are being left to the states, with the states held accountable to national policy through performance measurement. While many states have eagerly seized the flexibility that environmental partnerships offer, many of them so far have used the tool primarily to smooth the paperwork processes. Preventing pollution, improving environmental performance, and integrating approaches across media have lagged behind. The performance-based process, therefore, is more an embryonic idea than a proven practice.

The states will be wending their way through the intricate interrelationships of companies, interest groups, cross-media pollution problems, and technical uncertainties. This devolution requires solving tough political problems—most notably building a consensus that is trustworthy. It also requires increasing management capacity—especially to produce the environmental performance measures on which the system depends.

Within the environmental community, there are powerful forces betting that the states will fail; they are ready to call for a retreat to first-generation command-and-control regulations. Among opponents of environmental regulation, there are powerful forces ready to renew the call for rolling back the rules. Finding a route between these regressive reactions will require skillful navigation. The EPA will be in the wheelhouse to steer the effort. But the states will be manning the oars.

Authors

Donald F. Kettl

Reinventing Government : A Fifth Year Report Card

Donald F. Kettl — Tue, 01 Sep 1998 00:00:00 -0400

Brookings Institution Press 1998 140pp.

As the Clinton administration marks the fifth anniversary of its "reinventing government" campaign, what has it produced? This report, one of Brookings' continuing analyses of management reform, examines the content and accomplishments of reinventing government, as well as the missing pieces it has yet to tackle.

Reinventing government has often been presented as a revolution in government management. In truth it is less a revolutionary than an evolutionary movement. To its great credit, reinventing government has evolved to the point that it has recognized the central dilemma: redefining accountability for performance in the many programs where government's partners share responsibility for performance. However, reinventing government has et to develop or implement strategies to solve this problem. For that matter, though, it is a problem bedeviling government reformers around the world. If the answers are as yet unclear, the question at least is the right one. It is the question ensuring that, whoever is elected president in 2000, reinventing government in some form must continue.

ABOUT THE AUTHOR

Donald F. Kettl

Ordering Information:

{9ABF977A-E4A6-41C8-B030-0FD655E07DBF}, 978-0-8157-4915-8, $14.95 Order

After the Reforms

Donald F. Kettl — Wed, 01 Apr 1998 00:00:00 -0500

The Clinton administration has boldly proclaimed the success of the first phase of its reinventing government movement, the launch of a second phase promoting ?America @ Our Best,? and the end of the era of big government. All in all, that?s an impressive claim and an ambitious agenda. But if all this is true, why has it failed to ignite public opinion and transform the national debate over the future of American government? After all, the Clinton administration?s reward for hard work on the first phase of reinventing government was voters giving Republicans control of both houses of Congress for the first time in a generation.

It is true, not completely, but enough certainly for the administration to have a right to crow. Vice President Al Gore has celebrated his effort as one of ?the best-kept secrets in government? and proclaimed (with the help of the cartoon character Dilbert) that government has become more ?businesslike.? Gore wrote, ?government reinvention is happening,? marked by the smallest federal civilian workforce in more than 30 years, a reduction in red tape (especially for procurement), easier access to government agencies through better information technology, and improved customer service for citizens. In fact, Gore proudly proclaimed in 1997 that the federal government was being ?run like America?s best businesses.?

Now the administration is launching Phase II of reinventing government. The National Performance Review is now the National Partnership for Reinventing Government. It is moving to a new address and building ?the office of the future,? with far fewer desks than people. It promises a stronger focus on an information-age government and even better customer service. It has also broadened its focus to build a ?safe and healthy America,? ?safe communities,? a ?strong economy? and the ?best-managed government ever.? The administration is focusing its efforts on 32 ?high-impact agencies? that deal most directly with citizens, and where the failure to reform quickly?as in the case of the IRS?could undermine the entire effort.

The strategy is clear:

Move past downsizing, which hurt morale inside the government and failed to win political points outside.
Build on the demonstrable successes in reforming government?s process, like customer service.
Prevent future IRS crises.
Broaden the initiative?s political appeal by focusing on the policy problems that Americans care most about.

The strategy is in part political. Al Gore is best known for jokes about his stiffness, his interest in the environment and his effort to reinvent government. A Gore-for-President campaign will need to answer the question, ?What has reinventing government really accomplished??

The strategy is also an effort to reinvigorate the federal government reform movement, which has lost momentum over the last year. The goal: Build an information-age government managed as well as America?s best companies. The tactic: Use process reforms to motivate people on the inside and broad policy goals to excite people on the outside. And here is Phase II?s central dilemma. Its inside game focuses on improving the federal government?s performance. Its outside game, however, promises results that the federal government has little role in producing. Federal leverage over the economy is indirect at best, weak in the short term and hard to measure in any event. Local governments police the streets, even if they are aided by some extra cops funded by federal grants. The health and safety of the nation as a whole is obviously everyone?s first concern, but the forces that shape it are so complex that assigning responsibility (or, for that matter, blame or credit) is difficult indeed.

Phase II thus risks making pledges on which it can?t deliver and focusing government employees on processes indirectly linked at best with Phase II?s broader policy agenda. The gap between mega-politics and front-line management was always a problem for Phase I. Phase II, in the search for political relevance, threatens to make the gap unbridgeable. It?s a long, long way from better customer service and improved information technology to a strong economy and safe communities.

This isn?t to say that reinventing government doesn?t continue to be a good, even a splendid, idea. Even a casual survey of big national problems demonstrates clearly that the federal government requires significant management reform to solve them. The Federal Aviation Administration is worried about how to keep the air traffic control system working after New Year?s Eve in 1999. The Agriculture Department is struggling to develop new inspection systems to prevent food-borne illness. The IRS has a monumental problem of repairing its image (while, of course, getting people to do what they really don?t want to do to begin with). The Environmental Protection Agency is struggling to redefine its partnerships with the states to deal with a fresh generation of environmental problems. The Pentagon faces a huge challenge of modernizing its force as its budget shrinks.

Indeed, if we didn?t already have reinventing government, someone would have to invent it. No matter who wins the presidency in 2000, the President will have no alternative but to continue the reinvention campaign, no matter what it might be called.

Moreover, regardless of one?s views on the Clinton administration?s effort, it is impossible to miss the fact that government reform has become an important, and inescapable, global phenomenon. Governments from New Zealand to Canada, Australia to the United Kingdom, and from Korea to Brazil are knee-deep in fundamental transformation. Management reform is sweeping the American states and cities.

So, despite the critics of reinvention, there clearly is something important and fundamental going on here. The problem is figuring out exactly what.

The Real Problems Management reforms have been the constant?indeed, accelerating?answer to the problems of American governance, as Paul Light argues in The Tides of Reform (Yale University Press, 1997). But if reform is the answer, what is the question? The reinventing movement demonstrated yet again the American impulse toward endless tides of reform, with new waves washing over government but neither really attacking nor sharply defining its fundamental problems. The question buried in the foam is how to adapt America?s system of governance to emerging policy strategies that are neither hierarchically organized nor managed through authority. This is more than just a transition from the industrial age to the information age. It is the challenge of finding administrative leverage over the problems for which government is responsible and political support for hard choices that have to be made.

The inescapable reality is that the federal government is organized for a world that no longer exists. Government is organized hierarchically and managed through authority, but its fundamental strategies increasingly are neither. The federal government, in particular, does relatively little itself. It mails Social Security checks, manages air-traffic control, inspects meat, collects taxes, among other functions. But it does most of its work through contracts with the for-profit and not-for-profit sectors, grants to state and local governments, special provisions in the tax code, and regulations on corporate and individual behavior.

Tax breaks for home ownership dwarf federal spending for welfare. The Energy Department is little more than a hollow shell over a vast network of contractors. The actual provision of services in Medicare and Medicaid occurs through private doctors; private contractors (notably regional Blue Cross/Blue Shield operations) process the paperwork and mail the checks. Welfare reform works through federal devolution to the states, devolution by the states to local governments, and often contracting out by local governments to for-profit and not-for-profit organizations on the front lines. When welfare recipients seek to move from the dole to independence, few, and sometimes none, of the people they encounter will be government employees.

In the process, a fundamental mismatch has arisen between government?s formal structures and processes and the realities of what government does and how it does it. It is little wonder, therefore, that government has such a hard time doing its job. While the federal budget deficit has gradually evaporated, the federal performance deficit remains large and serious.

The Clinton administration?s reinventing government movement has achieved notable and impressive results. But at its core the effort has failed to grapple with this performance deficit and its underlying cause: the attempt to use processes built for hierarchical authority to run a government built heavily on partnerships and managed through proxies.

Reinvention cannot succeed at any level without a broader strategy for understanding and attacking the basic question: How can government organize itself to do the jobs that citizens now ask it to do? Indeed, the administration?s newest reinvention spin takes it even further from this central puzzle by widening the gap between the inside and outside games. Asking the question and producing effective answers requires coming to grips with the public attitudes toward government and the changing shape of government programs.

The Force of Public Opinion Poll results show the driving force of this question and the implications for failing to attack it. In 1997, the Council for Excellence in Government commissioned a Hart-Teeter poll which showed ?a striking loss of confidence compared to 20 years ago,? with the loss ?most pronounced at the federal level.? Only 22 percent of Americans have a ?great deal? or ?quite a lot? confidence in the federal government. State and local governments did better, but only marginally, with 32 percent and 38 percent confidence ratings, respectively. Nearly half of Americans believe that government has hindered, not helped, the search for the American dream. And 42 percent cannot name even one success of the federal government over the last 30 years. The government is ?not living up to citizens? expectations,? the pollsters found.

What causes such poor performance? The overwhelming majority of respondents (76 percent) say the problem lies in ?wasteful government spending.? Yet the respondents do not believe the cause is hopeless. More than three-fourths of those surveyed (77 percent) believe improved management could improve government effectiveness. Only 19 percent of respondents believe government is doomed to ineffectiveness no matter what it does. A majority of 54 percent say government?s top priority should be ?to make government more effective through better management,? instead of ?to make government smaller by cutting programs? (8 percent). The poll demonstrates an intuitive sense that the nation?s most important problems, its governing strategies and its management capacity are disconnected.

How can government truly be reinvented in ways that both reduce the performance deficit and restore public faith in government? The problem is deeply rooted in a system straining to do a job for which it was never designed.

The victory in the war against big government, to the extent it constitutes a real victory at all, is limited. Whatever rhetorical flourishes it feeds, it misses the critical problems. The revolution in government policy is creating new strategies for attacking social problems that lie far beyond the realm of experience.

The program-cutting, government-reinventing revolutions barely scratch the surface. After programs are cut, government faces the task of effectively delivering the programs that remain. Government faces the challenge of devising new systems for managing new strategies and producing quality service from a shrunken workforce.

Moreover, as government?s programs and delivery systems become more intricate, society faces the challenge of rethinking accountability. The question is how to hold government responsible for the programs that reach farther, through more difficult administrative processes, than ever before. To reduce its performance deficit and restore public confidence, government must manage effectively in a fuzzy-boundary world.

Crossing the Lines Government, especially at the federal level, is triply crippled. It does not have the apparatus, either intellectually or pragmatically, to cope with the policy world that has emerged. Policy-makers are incessantly cobbling together reforms that do not fully match the problems and then are not given enough time to see how productive they might be. If reinventing government is the answer, and if the question is how to deal with fuzzy boundaries, then how can American government deal with the gap between them?

Bridging the gap requires building connections among four approaches:

(1) Building organizations more on horizontal than vertical lines, as a supplement to (or perhaps a replacement for) hierarchical organization. Government has long been moving its production processes into strategies that require integration across hosts of boundaries. The trend began slowly, accelerated through World War II, and has been cemented by the major policy decisions of the second half of the 20th century.

Policy implementation depends on effective management of integrated policy networks. Reformers need to begin with the notion that networks, not hierarchies, define the government of the 21st century. They need to develop new relationships based on the management of processes (like contracts and devolution), products (like toxic-waste cleanup or welfare reform) and performance (especially the results that the networks produce). While this approach is still in its infancy, it offers great promise.

(2) Strengthening information technology to form the bridge across fuzzy boundaries. Organizations, public and private, are as much patterns of communication as systems to produce goods and services. When communication has to leap across organizational boundaries, communication problems inevitably multiply. From the tragedy of the Challenger disaster to mishaps in fighting wars, the importance of managing information is manifest. The problem multiplies as programs become more complex and the flood of data swells.

Tools must not be constrained by organizational hierarchies. Information, especially computer-based information, is just such a tool. Computers, the Internet, and the World Wide Web have rendered the hierarchy meaningless when it comes to collecting and analyzing information. From reducing fraud to improving service coordination, information technology provides a powerful tool.

However, government?s growing reliance on complex information systems has produced large risks as well as significant gains. The General Accounting Office has identified agencies ranging from the FAA to the IRS whose information system management problems threaten both loss of investment and system failure. Government needs to invest in the people smarts and the machinery needed to create and run effective information management systems.

(3) Relying on performance-based management to provide the incentives to cross the bridges. Managers must find a way to focus all of the organizations in the network on solving the same problems in the same way. Focusing on results provides the needed compass.

The Government Performance and Results Act, which requires agencies to identify strategic goals and their success in achieving them, is the keystone.

(4) Inspiring leadership to lead the crossings. Despite the development of new processes, technologies and measurement standards, public management remains a people problem. It is a matter most fundamentally of leadership.

The federal government needs to work much harder at recruiting, training, motivating and leading its workforce. That means fundamental civil service reform is an inescapable element of any real reinvention. And the more government relies on intricate partnerships and complex technologies, the more it needs effective leaders. The paradox of information-age government is that its performance depends more on the skill of its workers than ever before.

The Progressives reinvented government by believing it could tackle society?s most important problems through new structures and processes. American government at the dawn of the 21st century stands at the brink of a transformation just as fundamental.

Its elected officials and public managers must devise a system where responsibility for achieving results is increasingly shared across fuzzy boundaries. This is the question to which reinventing government is the answer. But success requires a much deeper understanding of the question and far more effective tools to bridge government?s fuzzy boundaries. That is the only way government?s performance deficit will narrow as the budget deficit has.

Authors

Donald F. Kettl

Publication: Government Executive

Federal Executive Branch Employment

		%
		CHANGE
		1993-2000
EXECUTIVE BRANCH (Excludes USPS & Postal Rate Commission)		-19.0
Defense		-29.6
Energy		-24.7
Housing and Urban Development		-23.1
Agriculture		-18.0
Veterans Affairs		-16.5
Interior		-14.6
Labor		-10.2
Transportation		-9.3
Treasury		-7.4
Education		-5.0
Health and Human Services (includes Social Security Administration)		-4.4
Commerce*		16.6
State		19.6
Justice		27.8
Federal Deposit Insurance Corporation		-67.1
General Services Administration		-31.8
NASA		-26.7
Environmental Protection Agency		-0.6
Federal Emergency Management Agency		9.2

* Does not include 31,587 temporary census enumerators.

Figures are preliminary and subject to agency revisions.

SOURCE: U.S. Office of Personnel Management
Office of Workforce Information
Monthly Report of Federal Civilian Employment (SF 113-A)
March 25, 2000