Is Reinventing Government Enough?
by Louis Winnick
Reinventing Government, David Osborne and Ted Gaebler's influential book, has been widely acclaimed for lighting the way to smarter, leaner government. The volume's dust jacket is decorated with praise from no less than Bill Clinton: "This book should be read by every elected official in America. Those of us who want to revitalize government . . . have to reinvent it. This book gives us the blueprint." William Weld, the Republican governor of Massachusetts, adds that "David Osborne and Ted Gaebler are truly original thinkers." Their book, he says, is "required reading in the Weld administration."
Reinventing Government arrived in April 1992 with a favoring wind at its back. By a host of indicators, citizens' confidence in the political establishment was steadily dwindling. In an age of political stasis, Osborne and Gaebler offer self-assured answers to the conundrums of government. "What we are describing," they write, "is nothing less than a shift in the basic model of governance used in America. This shift is under way all around us, but because we are not looking for it--because we assume that all governments have to be big, centralized, and bureaucratic--we seldom see it. We are blind to the new realities, because they do not fit our preconceptions.... What we need most if this revolution is to succeed . . . is a new way of thinking about government--in short, a new paradigm."
The authors maintain that the realization of this ambitious goal is uncontroversial and within grasp. The central problem of governments today, they write, is "not what they do, but how they operate." Debates about "what government should do, and for whom" are "secondary today." Accordingly, Osborne and Gaebler's book presents a veritable L.L. Bean catalog of several hundred exemplary innovations in public management, most at the state and local level. But contrary to President Clinton's evaluation, Reinventing Government is anything but a blueprint. Rather, like a merchandise catalogue, it tends to be light on critical analysis and heavy on heightened prose.
The authors describe a series of useful but only marginally significant administrative innovations, many still fragile and insufficiently tested. And they omit or glide past three crucial problems. First, governmental innovations have a high failure rate. Second, while certain innovations multiply almost effortlessly, others, including many of the ones cited in Reinventing Government, remain unreplicated. Third, even successfully imitated innovations, including certain varieties of privatization, typically yield few benefits.
It is my contention that Osborne and Gaebler are mistaken--that the fundamental problem of government is not one of inept administration, but of an overload of policy mandates. A real paradigmatic shift would require far more than a change in methods. The old paradigm, in which every problem is answered with a program, must give way to a recognition that government has vastly overextended itself. What is needed is not managerial reinvention, however ingenious, but sweeping disinvention, however painful.
Transience is the inevitable hazard of creative endeavors. As in the process of natural selection, the vast majority of departures from the norm quickly die, either at birth or before attaining reproductive capacity. The mortality rate of private-sector reinventions is woefully high, judging from the lopsided ratio of fallow to productive patents. There is no reason to believe the extinction rate of governmental reinventions is any lower.
What has become of the many innovations introduced or promised during the Great Society's feverish years? Republican reinventions, dating back to the Nixon administration, have also not persisted. We should be wary of public-sector reinventions that are born amidst great fanfare but die with remarkably few obituaries.
Any contemporary list of public-sector reinventions must be considered provisional. A sampling of the larger foundations' annual reports from the 1960s, filled with innovations that turned out to be ephemeral, is fair warning of how Reinventing Government might read ten years hence. In short, the book is a directory of extant innovations, many destined to prove no more durable than predecessors.
Osborne and Gaebler are not oblivious to the risk of failure. But they devote a mere four paragraphs to that possibility, tossing in a few examples and attributing them, dismissively, to politics or selfish public-sector unions. They treat the phenomenon of failure as if it were an awkward exception and not the fate of most innovations.
Rapid replication is perhaps the best market test of an innovation's real worth. This is demonstrated by the spontaneous diffusion, at wildfire velocity, of such creations as 911 emergency service, vanity license plates, zero-coupon municipal bonds, magnet schools, and local community development corporations. If replication is the rough equivalent of market sales, Reinventing Government largely describes an inventory of unsold merchandise.
To be sure, a public innovation can be locally successful and long-lived, while flourishing only in the environs of its birthplace. But a collection of nonreproducing local innovations hardly represents the paradigmatic shift Osborne and Gaebler promise. Yet the authors are silent on the subject of replication, except for a passing note that innovations replicate far more successfully in the private than in the public sector. Unfortunately, the mechanisms of replication are probably the most neglected and least studied aspect of the reinvention theme.
Diffusion of innovations tends to follow two general paths. One is horizontal or spontaneous: some ideas are so self-evidently beneficial that they are swiftly and enthusiastically imported by vast numbers of juris- dictions. One thing these successfully replicating innovations have in common is their "winner-winner" character. Their benefits come at no great cost to anyone. Because technical innovations are more likely than social ones to embody such qualities, they are more often adopted voluntarily by multi- tudinous jurisdictions.
The second path of diffusing innovations is vertical. A central actor--the federal or state government or the judiciary--seeks, by command, "bribe," or penalty (often in combination), to plant a given reinvention in a variety of jurisdictions. This occurs most frequently in the social sphere, where a locality might be hostile to an idea (racial integration) or find its adop- tion too costly without full or partial subsidy (Food Stamps, Chapter I educational aid, Medicaid). Other reinventions (equalization of electoral districts, formulas for preferential minority recruitment, "Robin Hood" redistribution of school aid) are enacted by the judiciary's imperium.
Private foundations play an important role in social-service innovation, appropriating hundreds of millions of dollars in grants both to spur new mod- els and to replicate existing ones. Foundations have also pioneered the techniques of evaluation, thereby helping develop it into a genuine discipline. At times private philanthropy has stood in the vanguard of government; many of the Great Society's community action and development programs were large-scale versions of prior foundation initiatives. But more often, foundations work in tandem with public agencies by funding tasks that are difficult for government to carry out, such as objective evaluations, international explorations and exchanges, and baseline studies. Thriving and still-replicating philanthropic innovations include the "I Have a Dream" program (college scholarships as an incentive for inner-city youths to stay in school), community development corporations, and Neighborhood Housing Services.
A cardinal reason why so many public-sector innovations are slow to travel is that prospective adopters have to be persuaded of early and substantial benefits relative to perceived costs. As Professor Alan Altshuler, director of Harvard University's Program on Innovations in State and Local Government, has noted, "What gets diffused isn't what is most central to the innovators, but what is most central to the adopters." Because the bottom line for a politician is the next election, a strategy of diffusion "must include providing politicians with opportunities for political benefit."
Osborne and Gaebler are square on target in their account of bureaucratic inertia and the politician's electoral calculus. But they are remiss in their inattention to the limited benefits of most innovations, even when political obstacles are overcome. Objectively evaluated, the net gains of innovation are seldom breathtaking, in both the social and technical fields.
The class of managerial reinventions with the best potential for more than marginal benefits is privatization. Broadly defined, privatization is the deliberate shift of a wide range of public functions and activities from public to private hands. "Government should steer, not row, the boat" is the privatization movement's rallying cry, echoed by Osborne and Gaebler.
Privatization has long been advocated by conservatives, who call on government to relinquish many of its functions to the private market. But most discussion of privatization today concerns a more modest variety: contract procurement. Although this form of privatization has few strong opponents, there are plenty of skeptics doubtful about the scope and magnitude of its potential benefits.
The relationship between the public and private spheres, even in reasonably competitive markets, inevitably breeds a sleaze factor. This takes the form of outright corruption at times, but of political contributions more often. Protecting the government against corruption and favoritism inflicts substantial public costs. To assure the integrity of contracts, public officials must vigilantly monitor every stage of the process from bid to completion. Such intense surveillance imposes budgetary and administrative burdens. The costs of complying with such regulations are inevitably reflected in higher bids. Moreover, because of these bureaucratic burdens, many of the most competent vendors refuse to enter the public market at all, except when driven there by hard times. The steadiest bidders are those most adept at working the system--certainly no warranty of efficiency.
What about the nonprofit sector, which figures prominently in the delivery of social services? Such contracts seem a natural arrangement: religious and charitable organizations have a venerable history in the field, social services are rarely amenable to standardized specifications, and such contracts are thought to be too "people-sensitive" to be trusted to profit-seeking private markets.
Presumably, the absence of a profit motive assures dedicated performance and faithful service. But nonprofit status does not always ensure competent or, lamentably, even trustworthy performance. It is no secret that many con- tract-supported, community-based organizations are the equivalent of old-style political clubhouses. Further, many new and small community-based nonprofits, though impeccably honest, are exasperatingly undermanaged and susceptible to premature collapse.
A further problem with privatization, especially in today's urban milieu, is "creaming." Private service providers, gazing at the bottom line, are prone to shun the underclass, abandoning it to the public sector. For example, in New York, Bellevue and Kings County hospitals must accept patients that Mt. Sinai and Maimonides gladly avoid. Surely Al Shanker is right when he warns that under an unconstrained school voucher, private schools would screen out and expel the worst students, leaving them for the public schools, which would then score poorly in any comparative evaluation.
In sum, while the case for more privatization is solid, mobilizing the private sector to row government's boats is not the grand solution claimed by uncritical advocates. Given the practical limitations on carving out additions and the demonstrated fallibility of the contracting process, it is unrealistic to think that privatization could bring about more than modest improvements in the way America's states and cities are governed.
Even if the bulk of Osborne and Gaebler's managerial reforms were more successful and more widely copied, the result would still be undeserving of so ennobling a laurel as "government reinvented." Genuinely radical transformations in government cannot occur without radical transformations in policy, in the fundamental "what" of government as distinguished from the procedural "how." Admire it or not, FDR's New Deal was such a transformation, as were Lyndon Johnson's Great Society and the government reforged by Ronald Reagan during his momentous first term. The plight that Osborne and Gaebler describe--of government bloated and overreaching, overprivileged and mistrusted--owes immeasurably more to the sweep of misguided policies than to the creep of misguided management.
I wish not to overstate the case. Rationally ordered public management is a precious jewel. So, too, the mindset that impels some creative official to rejigger his/her mousetrap to the greater misfortune of the mice. The pursuit of efficient management and innovative techniques must be ubiquitous and insistent. I myself have had a long and rewarding association with two robust institutions lastingly pledged to higher standards of public management. Both are content to toil at small, but useful tasks in the betterment of government administration and are highly esteemed for their contributions.
But the quest for ironclad efficiency never has been and never can be a transcendent priority of a democratic society, for inefficiency within the paralyzing system of checks and balances and exquisitely wrought rules of due process, is carved into the granite tablets of federal and state constitutions. The obstacles to the enviable public-management order of a command-and-control regime, even of so benign an autocracy as Singapore, is the cost borne by a society that values freedom far more than efficiency.
Today's government has been nationalized, reinvented as juggernaut. Its overseers lead an enormous military establishment; its custodians control a gigantic welfare state and legions of environmental regulators. Terrain once inhabited by a lonely Brookings Institution is now densely crowded with policy and research centers, on-campus and freestanding, of every imaginable philosophical persuasion. Their astonishing diversity is unified by a common urge--to influence policy by adding, subtracting, or redirecting public-sector functions. True, many policy organizations find time to deal with government's administrative inefficiencies. But by and large, that's not what makes the public's heart beat. When the habitues of think tanks are called to the MacNeil/Lehrer Newshour, it is not to debate the impact of General Accepted Accounting Principles or the virtues of program-based budgets.
Such matters are not only less interesting but also far less important than the fundamental question of what we expect government to do. In electing to deal with government's means rather than its ends, Osborne and Gaebler negate both their title and their thesis. The course of contemporary gov- ernment cannot be reversed, nor can its relentless budget expansions and regulatory intrusions be checked, unless its ambitions are scaled back. Massive government will not be shrunk by marginal reinventions, only by massive disinventions. As James Q. Wilson has written, "You can have less bureaucracy only if you have less government."
From IPA Report, Winter 1995
Louis Winnick, Vice Chair of the IPA Board of Trustees, is Senior Consultant at the Fund for the City of New York. Formerly Deputy Vice President at the Ford Foundation, Dr. Winnick has many years experience in New York State and City government. This article is a revision of his original, which appeared in City Journal, Summer 1993.