“In a period in which American public life in the United States is a complex

and often bewildering subject, Nicholas Henry brings diamond-like clarity,

thorough scholarship, fascinating examples, current data, and entertaining
illustrations to the subject. The reader and the nation are better off for it.”
– James D. Carroll, former Program Director,
The Brookings Institution, USA

“This latest edition of a classic textbook retains the principles and practical
guidance needed by today’s students and administrators, and adds the latest
trends and insights required to confront effectively and efficiently the chal-
lenges of our rapidly changing social and political environment.”
– Naomi B. Lynn, University of Illinois at Springfield, USA
Public Administration and
Public Affairs

Public Administration and Public Affairs demonstrates how to govern effi-

ciently, effectively, and responsibly in an age of political corruption and
crises in public finance. Providing a comprehensive, accessible, and humor-
ous introduction to the field of Public Administration, this text is designed
specifically for those with little to no background in the field. Now in its 13th
edition, this beloved book includes:
■ Engaging, timely new sections designed to make students think, such as
“Why Are So Many Leaders Losers?” and “Even Terrorists Like Good
Government”
■ Comparisons throughout of the challenges and opportunities found
in the nonprofit sector vs. the public sector (sections such as “The
Dissatisfied Bureaucrat, the Satisfied Nonprofit Professional?”)
■ Extensive new material on e-governance, performance management,
HRM, intersectoral and intergovernmental administration, government
contracting, public budgeting, and ethics.
The 13th edition is complete with an Instructor’s Manual, Testbank, and
PowerPoint slides for instructors, as well as Learning Objectives and Self-test
Questions for students, making it the ideal primer for public administration/
management, public affairs, and nonprofit management courses.

Nicholas Henry is Professor Emeritus of Public Administration and President

Emeritus at Georgia Southern University, USA.
Public Administration and
Public Affairs
Thirteenth Edition

NICHOLAS HENRY
Georgia Southern University
Thirteenth edition published 2018
by Routledge
711 Third Avenue, New York, NY 10017

and by Routledge
2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN

Routledge is an imprint of the Taylor & Francis Group, an informa business

© 2018 Taylor & Francis

The right of Nicholas Henry to be identified as author of this work has been asserted by him in
accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988.

All rights reserved. No part of this book may be reprinted or reproduced or utilized in any form
or by any electronic, mechanical, or other means, now known or hereafter invented, including
photocopying and recording, or in any information storage or retrieval system, without
permission in writing from the publishers.

Trademark notice: Product or corporate names may be trademarks or registered trademarks,

and are used only for identification and explanation without intent to infringe.

First edition published by Prentice-Hall 1975

Twelfth edition published by Routledge 2016

Library of Congress Cataloging in Publication Data

Names: Henry, Nicholas, 1943– author.
Title: Public administration and public affairs / by Nicholas Henry.
Description: Thirteenth edition. | New York : Routledge, 2017. | Includes bibliographical
references and index.
Identifiers: LCCN 2017014970| ISBN 9781138693500 (hardback : alk. paper) |
ISBN 9781138693524 (pbk. : alk. paper) | ISBN 9781315530536 (ebook)
Subjects: LCSH: Public administration.
Classification: LCC JF1351 .H45 2017 | DDC 351.73--dc23
LC record available at https://lccn.loc.gov/2017014970

ISBN: 978-1-138-69350-0 (hbk)

ISBN: 978-1-138-69352-4 (pbk)
ISBN: 978-1-315-53053-6 (ebk)

Typeset in Sabon and Bell

by Servis Filmsetting Ltd, Stockport, Cheshire

Visit the eResource: www.routledge.com/9781138693524

 CONTENTS

Preface to the Thirteenth Edition xviii

Acknowledgments xx

Part I In Defense of Governing Well 1

Chapter 1 Big Democracy, Big Bureaucracy 10

Chapter 2 Paradigms of Public Administration 35

Part II Public and Nonprofit Organizations 55

Chapter 3 The Threads of Organizations: Theories 56

Chapter 4 The Fabric of Organizations: Forces 78
Chapter 5 The Fibers of Organizations: People 113

Part III Public and Nonprofit Management: Curbing Corruption, Enhancing Efficiency 143

Chapter 6 Clarifying Complexity: The Public’s Information Resource 156

Chapter 7 The Constant Quest: Efficient and Effective Governance 192
Chapter 8 The Public Trough: Financing and Budgeting Governments 232
Chapter 9 Managing Human Capital in the Public and Nonprofit Sectors 294

Part IV Implementing Public Policy 379

Chapter 10 Understanding and Improving Public Policy 381

Chapter 11 Intersectoral Administration 397
Chapter 12 Intergovernmental Administration 460
Chapter 13 Toward a Bureaucratic Ethic 500

Index 512
 D E TA I L E D TA B L E O F C O N T E N T S
Preface to the Thirteenth Edition xviii
Acknowledgments xx
PART I In Defense of Governing
Well 1
Do We Need Government? 1
The Wrecking-Crew View 1
Wrecking Government and Wrecking
America 1
Is Graft Good? 3
Fighting for Fraud: Corruption Improves
Public Services 4
Fighting for Fraud: Corruption Brings
Prosperity 4
Fighting Fraud: The Many Reasons to Do So
A Globally Fading Philosophy 5 Presidents versus Bureaucrats: Mobilizing
What Is Good Government? 6
Good Government Is Uncorrupted 6
Good Government Is Democratic 6
Good Government Is Able 6
The Place of Public Administration 6
Notes 7
CHAPTER 1
Big Democracy, Big Bureaucracy 10
An Unpromising Precis 10
The Indians and the English 10
Administration by Ambassadors:
The Articles of Confederation 10
Administration by Legislators:
The First State Constitutions 11
Administration by Enfeebled Executives:
Jefferson Prevails 11
A Culture of Constraint 12
Americans and Their Governments 12
Governing in a Distrusting Culture 12
The Consequences of Constraint 13
Hobbled Elected Chief Executives 13
Hobbled Governments 16
Hobbled Governmental Growth 16
The Bureaucrat: Brained, Blamed, and Bouncing
Back 17
Bashing Bureaucrats 17
Are Bureaucrats to Blame? 18
The Bureaucrat: Government’s Savior? 19
A Paradoxical Power: The Gray Eminence of the
Public Administrator 19
Staying Power 19
Discretionary Power 20
Policymaking Power 20
Stopping Power 22
4
The Contest for Control 23
the Bureaucracy 23
Governors versus Legislators: The Battle for
the Bureaucracy 24
Managers and the Control of Local
Government 25
Knowledge: The Base of Bureaucratic Power 25
Knowledge Is Power 25
Knowledge, Power, and the Public
Interest 26
Notes 26
CHAPTER 2
Paradigms of Public Administration 35
The Beginning 35
Think Tanks for Public Service 35
Public Administration and the Intellectuals:
The Fortuitous Year of 1914 35
Paradigm 1: The Politics/Administration Dichotomy,
1900–1926 36

The Uses of the Dichotomy 36
The Dilemma of the Dichotomy 36
Paradigm 2: Principles of Public Administration,
1927–1937 37
A Reputational Zenith 37
The Meaning of Principles 37
What the Pioneers of Public Administration Got
Right 38
Professional Public Administration Improves
Governing 38
The City or County Manager Improves
Governing 38
The Council-Manager Form of Government
Improves Governing 38
The Challenge, 1938–1950 39
Deflating the Dichotomy 39
Puncturing the Principles 40
The Wreckage and Its Reactions 40
Paradigm 3: Public Administration as Political
Science, 1950–1970 41
Consternation and Contempt 41
The Impact of Political Science: Bureaucracy
in the Service of Democracy 41
Paradigm 4: Public Administration as
Management, 1950–1970 42
The “Groundswell” of Management 42
“Fundamentally Alike in All Unimportant
Respects” 42
The Impact of Management: Understanding
the “Public” in Public Administration 43
Evaporation Averted, 1965–1975 44
The Forces of Separatism 44
Saving a Field 44
Paradigm 5: Public Administration as Public
Administration, 1990–Present 44
NASPAA’s Nascency 45
The Statistics of Secession and Success 45
From Politics/Administration Dichotomy to
Political–Administrative Continuum 45
Logics: Politics and Administration 46
Paradigm 6: Governance, 1990–Present 47
“Making a Mesh of Things”: The Rise of
Governance 47
DETAILED TABLE OF CONTENTS ix
Does Governance Work? 47
Public Administration, Happy at Last 48
Notes 48
PART II Public and Nonprofit
Organizations 55
CHAPTER 3
The Threads of Organizations: Theories 56
The Closed Model of Organizations 56
Characteristics of the Closed Model
of Organizations 56
Bureaucratic Theory 57
Scientific Management 57
Administrative Management 58
The Open Model of Organizations 59
Characteristics of the Open Model
of Organizations 59
Human Relations 60
Organization Development 65
The Organization as a Unit in Its
Environment 66
The Closed and Open Models: The Essential
Differences 67
Assumptions about the Organization’s
Environment 67
Assumptions about the Human Condition 68
Assumptions about the Role and Legitimacy
of Organizational Power 68
Assumptions about Manipulating Members
of Organizations 69
Assumptions about the Moral Significance
of Organizations in Society 70
Conjoining Opposites: The Drive to Reduce
Uncertainty 71
Uncertainty Reduction: Reconciling the Open
and the Closed 71
Responding to Organizational Uncertainty 71
Are Public and Nonprofit Organizations
Different? 72
Notes 73
 x DETAILED TABLE OF CONTENTS
CHAPTER 4
The Fabric of Organizations: Forces 78
Organizational Knowledge 78
Information and Hierarchy 78
Organizational Knowledge and Strategic
Decision Making 79
Strategic Decision Making in Organizations 80
The Bounds of Individual Rationality 80
The Bounds of Organizational Rationality 82
Bounded Rationality and the Implementation
of Strategic Decisions 84
Decision Making in Public Organizations:
A Different Dynamic 85
Decision Making in Nonprofit Organizations:
More Talk, Fights, Risk 88
A Monumental Map Mess in Georgia 88
Administration in Organizations 89
The Power of Subordinates 89
The Powers of Administrators 90
The Mechanisms of Administrative
Control 90
Administration in Public Organizations:
A Different Dynamic 90
Limited Change: The Impact of Technology and
People on the Public Organization 91
The Likely Limited Role of Technology 91
People Changing Their Public
Organization 92
Unlimited Change: The Impact of the Environment
on the Public Organization 93
Change in Public Organizations: Politics,
Pressures, and Prohibitions 93
Ordering Agency Openness 93
The Osmotic Impact of the Agency’s
Environment 95
La Bureaucratie 95
Hierarchy and Government 96
Red Tape and Government 97
You Can Lead a Bureaucracy to Slaughter, but
You Can’t Make It Shrink 99
Administrative Autonomy and the Performance
of Public Organizations 100
The Impact of the Environment on the Independent
Organization 100
The Cesspool Syndrome: How Independent
Organizations Die 100
Defying Death in the Independent Sector 101
Notes 101
CHAPTER 5
The Fibers of Organizations: People 113
Why Work for the People? 113
The Draw of the Public Sector 113
The Draw of the Independent Sector 114
The Behavioral Bureaucrat 115
“Administrative Man” 115
“The Bureaucratic Personality” and “The
Unbureaucratic Personality” 115
The Energetic, Committed Bureaucrat 115
The Dissatisfied Bureaucrat, the Satisfied
Nonprofit Professional? 116
A Management Challenge 117
Growing into the Organization 117
Born to Conserve or Born to Rebel? 117
Life’s Turning Points 118
Turning Points and the Organization 118
National Culture and the Organization 119
Dimensions of National Culture 119
Patterns of Geography and Language 120
National Culture and Organizational
Behavior 120
Getting Ahead 120
Organizational Politics 121
Institutionalists: Loyal and Lethargic 121
Specialists: Professional and
Maladjusted 121
Institutionalists, Specialists, and
Organizational Innovation 122
Hybrids: Political and Unpredictable 122
What Is Leadership? 122
The Leadership Literature 122
Leadership or Administration? 123
Are Leaders Needed? 123
Learning Leadership: The Evolution of a
Theory 125
The Leader: Alone and Glorious, 1900–
1930 125

The Leader in the Grip of the Group,
1930–1970 125
Culture and Charisma: The Leader and the
Organization, 1970–Present 126
Leading Public and Nonprofit Organizations 128
Leadership at the Top 128
Sector and Successful Leadership 129
Why Are So Many Leaders Losers? 130
Mostly Male 131
“The Psycho-Path to Disaster” 131
Race and the Unconscious 131
Hey, Good Lookin’! Whatcha Got Cookin’?
Money and Bias, of Course 131
Swoon Song 132
The Public Perspective 132
Notes 132
PART III Public and Nonprofit
Management: Curbing Corruption,
Enhancing Efficiency 143
Corruption’s Causes and Continuance: The Larger
Picture 143
Corruption’s Causes 143
Corruption’s Continuance 144
Comprehending Corruption in America 144
Tradition! Good Old Graft 144
Corruption as Conquest: Janitorial Joys 145
Corruption as Culture: Murder and
Mortification 145
Fraud in the Independent Sector 146
The Evolution of American Graft 147
Graft Parties On, 1900–1940 147
Graft as a Nuisance, 1940–1970 147
Our New and Messy Meaning of Corruption,
1970–Present 147
Confronting Corruption in America 148
Perceptions of American Corruption 148
The Extent of Fraud 148
Inhibiting American Graft: Cultural, Political,
and Structural Factors 149
Curbing Corruption: The Case for Balance
and Will 149
DETAILED TABLE OF CONTENTS xi
Prosecuting Corruption: The Crucial Federal
Role 150
Big Graft: Deep, Systemic, and Legal 150
From Anticorruption to Efficiency: The Morphing
of Public Management 151
Notes 152
CHAPTER 6
Clarifying Complexity: The Public’s
Information Resource 156
Data for Public Administrators 156
The Data Deluge 156
Focusing and Narrowing Decision
Options 157
Knowledge Management: Managing the Public’s
Information Resource 158
Uniquely Governmental: Complexity and
Immensity 158
Managing the Nation’s Knowledge 160
Subnational Knowledge Management 164
Best Practices for Knowledge
Management 166
Privacy versus Policy: The Particular Problem of
the Public Computer 166
Stealing You: Identity Theft 166
Protecting Privacy: Federal Efforts 167
Protecting Privacy at the Grass Roots 168
Cybercrime 168
Hacking: Harrowing and Humiliating 169
Cyberspying: Sinister and Slippery 170
Cybersecurity 171
Federal Cyber In-Security 171
Cybersecurity in the States 173
Additional Actions Needed for Attacking
Hacking 173
E-Gov: Lean, Seen, and Clean Government 174
Federal.gov 174
State.gov 174
Local.gov 175
In Love with E-Gov 175
E-Gov and Graft: A Double-Edged
Sword 176
 xii DETAILED TABLE OF CONTENTS
The Information Resource and the Future of
Governing 177
Open Data and Effective Governance 178
Blue Skies? 178
From Bureaucrat to Infocrat? 179
Notes 179
CHAPTER 7
The Constant Quest: Efficient and Effective
Governance 192
Why Can’t Government Be More Effective
and Efficient? 193
Three Fundamental Reasons 193
Eight Political Reasons 193
Why Can’t Government—and the Nonprofit
Sector—Be More Efficient and Effective? 196
Process Change Equals Glacial
Change 197
Technology, Productivity, and Service
Quality 197
Understanding Public Productivity 197
Productive Definitions 197
Ghettos in the Vastness 197
The Evolution of Public Efficiency
and Effectiveness 198
Measuring Public and Nonprofit
Performance 201
Some Benefits of Performance
Measurement 201
Some Limitations of Performance
Measurement 202
Measuring Federal Performance 202
Measuring State Performance 203
Measuring Local Performance 204
Measuring Nonprofit Performance 204
Permutations and Practices of Performance
Measurement 205
Measures: The Fundamental Five 205
The Measurement Mire 205
Benchmarking Performance: From
Measurement to Comparison 206
Accounting for Public Performance 207
Reporting Performance 208
Pruning the Plethora of Performance
Measures 208
Two Measured Notes of Measurement
Hope 210
Lessons Learned: Minimizing the Pitfalls of
Performance Measurement 210
Lessons Learned about Measures 210
Lessons Learned about Process 210
Lessons Learned about People 211
Evaluating Public and Nonprofit Programs 211
Public and Nonprofit Program Evaluation:
Purposes and Paranoia 211
Permutations of Public and Nonprofit Program
Evaluation 212
Evaluating Federal Programs 213
Evaluating State and Local Programs 213
Uniquely Governmental: The Inspector
General 214
Evaluating Nonprofit, Public-Serving
Programs 215
Public and Nonprofit Program Evaluation in
Practice 215
Selecting Evaluators: Inside or Outside
Jobs? 215
What Is Your Problem? 216
Designing the Evaluation 216
Implementing Evaluations 217
Using Public and Nonprofit Program Evaluations 218
Passive or Active Evaluation? 218
Does Program Evaluation Matter? 219
Notes 219
CHAPTER 8
The Public Trough: Financing and Budgeting
Governments 232
Defining Public Finance 232
Financing the Federal Government 232
Federal General Revenue 232
Social Insurance and Retirement
Receipts 233
Federal Expenditures 233
Grass-Roots’ Revenues 234
General Revenue 234

Own Source Revenue 234
Financing State Governments 235
State General Revenue 235
State Other Than General Revenue 236
State Expenditures 236
State Tax and Expenditure Limitations 237
Financing Local Governments 237
Local General Revenue 237
Local Other Than General Revenue 239
Local Expenditures 239
Local Tax and Expenditure Limitations 239
Taxing Times: Determining Tolerable Taxes 240
The Five Fundamental Features of Tolerable
Taxes 240
Understanding the Income Tax 241
Understanding the Sales Tax 242
Understanding the Property Tax 243
The Future of Taxes 244
The Widening Wealth Gap and Its Crushing
Consequences 244
Rethinking Federal Taxes 244
Rethinking State and Local Taxes 245
Of Deficits and Debt: Washington’s Gifts 246
Understanding Federal Deficits 246
Congress’s Quixotic Quest: Decreasing Deficits,
1985–2001 246
Federal Fiscal Follies 2001–2012 247
A Remarkable Reversal, 2013–Present 249
Understanding Federal Debt 250
Subnational Sorrows 250
Linked 251
Healthcare: The Ultimate Linkage 251
Pensions and Public Penury 252
State and Local Debt 254
Grass-Roots Borrowing: The Mysterious
Municipal Bond 254
The Blessing of Bankruptcy? 255
From Fiscal Falter to Flinty Fate 256
Is Revenue Running Out? 257
A Dismal Science: Deficits, Debt, and
Democracy 258
A Muted Note of Hope 258
Public Budgeting: Spending for Public Policy
DETAILED TABLE OF CONTENTS xiii
Line-Item Budgeting, 1921–1949 259
Reform! Introducing the Public Budget 259
What Is Line-Item Budgeting? 259
The Legacies of Line-Item Budgeting 260
Program/Performance Budgeting,
1950–1964 260
The New Deal and the Need for a New
Budget 260
Clarifying Programs and Performance 260
What Is Program/Performance
Budgeting? 261
The Legacies of Program/Performance
Budgeting 261
Planning-Programming-Budgeting System,
1965–1971 261
An Emerging New Standard for Budgetary
Theory 261
What Is Planning-Programming-Budgeting
System? 262
The Legacies of Planning-Programming-
Budgeting System 262
Budgeting-by-Objectives, 1972–1977 263
What Is Budgeting-by-Objectives? 263
The Legacies of Budgeting and Managing by
Objectives 263
Zero-Base Budgeting, 1977–1980 263
What Is Zero-Base Budgeting? 264
The Legacies of Zero-Base Budgeting 264
Target Base Budgeting, 1981–Present 264
What Is Target Base Budgeting? 264
Cutback Management: TBB’s Administrative
Adjunct 265
The Legacies of Target Base Budgeting 267
Performance-Based Budgeting, 1993–
Present 267
What Is Performance-Based Budgeting? 267
Budgeting for Federal Performance 268
Budgeting for State Performance 268
Budgeting for Local Performance 269
The Possible Legacy of Performance-Based
Budgeting 269
Two Useful, but Rarely Used, Budgetary Tools 269
The Biennial Budget 269
258 The Budget Rollover 270
 xiv DETAILED TABLE OF CONTENTS
Acquiring Budgets: Administrators and
Arguments 270
Standing Strategies for Securing
Budgets 270
Opportunistic Tactics for Securing
Budgets 271
The Budget-Minimizing Bureaucrat 271
Legislating Budgets: Politicians and Power 271
Legislating Federal Budgets 271
Legislating State Budgets 273
Legislating Local Budgets 275
“Budgeteers”: Humble Nevermore 275
Notes 276
CHAPTER 9
Managing Human Capital in the Public and
Nonprofit Sectors 294
Who Wants to Work for the Public or Nonprofit
Sectors? And Who Doesn’t? 294
The Evolution of Public Human Capital
Management 295
Government by Gentlemen, 1789–1827 295
Government by Spoilers, 1828–1880 295
Government by the Good, 1881–1905 296
Government by Scientific Managers,
1906–1936 297
Government by Policymaking Administrators,
1937–1954 297
Government by Professionals,
1955–Present 297
The Civil Service System: The Meaning
of Merit 298
The Meaning of Merit 298
The Profession of Public Human Capital
Management 298
Recruiting Bureaucrats 299
Hiring Bureaucrats 300
Classifying Bureaucrats 302
Rating Bureaucrats 303
Paying Bureaucrats 303
Training Bureaucrats 304
Bolstering Bureaucrats’ Bravery 305
Securing Bureaucrats’ Jobs 309
Keeping Competent Bureaucrats 309
The Slippage of the Civil Service System 309
A Faltering Federal Civil Service 309
Civil Service Slippage at the Grass
Roots 311
The Impact of Civil Service Reform 312
A Modest Proposal 312
The Collective System: Blue-Collar
Bureaucrats 312
The Scope of Organized Labor 312
A Unique Value 313
Want to Fire Your Boss? 313
Bargaining with Governments 314
Pay and Public Unions 315
Striking Government 315
Days of Glory . . . Gone 316
A Threatening Court? 316
Are Public Unions Good or Bad for the Public?
A Summing Up 317
The Political Executive System: Policymaking and
Politics in Public Administration 317
Political Executives in Washington 318
Political Executives at the Grass Roots 321
Experience and Sector: Our New
Understanding of Public Executive
Quality 322
Specialized Public Professional Systems: The
Person over the Position 322
The Scope of Specialized Public Professional
Systems 323
The Public Implications of Specialized Public
Professionalism 323
The Professional Public Administration System:
Embracing the Professions of Politics and
Management 323
The Roots of the Professional Public
Administration System 323
Reforming Classification 324
Managing Public and Nonprofit Employees’
Performance 325
Performance Management Challenge 1:
Appraising Employees’ Performance 326
Performance Management Challenge 2:
Coping with Incompetents 327

Performance Management Challenge 3:
Performance and Pay 331
The Prospects of Performance
Management 334
Defying Discrimination: The Extension of Civil
Rights and the Entry of Affirmative Action 335
Civil Rights for Protected Classes 335
Civil Rights for Sexual Minorities 335
Affirmative Action for Protected Classes 336
Federal Enforcement of Affirmative
Action 337
Affirmative Action and the Grass-Roots
Governments 337
“Reverse Discrimination” and the Quota
Question 338
Tests: The Validation Vexation 339
Women’s Work? 340
What a Strange Trip It’s Been: The Unique
Experiences of Minority and Women Public
Administrators 342
Backlash! 344
Is Affirmative Action a Defensible
Policy? 345
The Effects of the Efforts 346
A Demographic Solution? 349
Notes 350
PART IV Implementing Public
Policy 379
Notes 380
CHAPTER 10
Understanding and Improving Public
Policy 381
Public Policy Analysis: A Brief History 381
Public Policy and the Policymakers 381
Public Policy and the Professoriate 381
The Incrementalist Paradigm of Public
Policymaking 382
The Elite/Mass Model 382
The Group Model 383
The Systems Model 383
The Institutionalist Model 383
DETAILED TABLE OF CONTENTS xv
The Neo-Institutionalist Model 383
The Organized Anarchy Model 384
The Rationalist Paradigm of Public
Policymaking 386
The Rational Choice Model 387
The Public Goods and Services Model 388
Paradigmatic Problems 389
Arguments over Incrementalism 389
Incremental Policymaking? Not So
Much 389
A Pair of Pouting Paradigms 390
A Third Approach: The Strategic Planning
Paradigm of Public and Nonprofit
Policymaking 390
Public Strategic Planning 391
Nonprofit Strategic Planning 392
Successful Strategic Planning: Executives,
Planners, Continuity, and Budgets 393
Notes 393
CHAPTER 11
Intersectoral Administration 397
Why Privatize? 397
Federal Privatization 399
Federal Fire Sales 400
The Enormity of Acquisitions 400
Federal Philosophies of Purchasing 400
Washington’s Buying Bureaucracy 402
The Case Against Federal Contracting 403
The Shadow Government: Contractors,
Consultants, and Lobbyists 403
A Crisis of Competence 407
A Crisis of Corruption 413
Is Business Better? 415
Success! The Reforms of 2009 and
Beyond 415
Outsourcing’s Unabashed Outcome: Wealthier
Washingtonians 416
Privatizing in the States 417
The States Resistant 417
Motives, Money, and Management 417
The States’ Slower Revolving Doors 418
 xvi DETAILED TABLE OF CONTENTS
Privatizing by Local Governments 418
Selling Assets, Buying Goods, and Privatizing
Facilities 418
Privatizing Local Services 418
Outsourcing in Extremis 419
Why Local Governments Privatize
Services 419
Why Local Governments Do Not Privatize
Services 420
Managing Privatized Local Services 421
The Firmly Shut Revolving Door 422
Which Sector Delivers Public Services
Best? 422
Does Government Partnering with the Private
and Nonprofit Sectors Deliver Services More
Effectively and Efficiently? 422
Does Government Partnering with the Private
and Nonprofit Sectors Deliver Services More
Equitably? 423
Privatizing Public Service Delivery: Lessons
Learned 423
The Businesses of Governments 424
Enterprising Washington 424
State and Local Enterprises and the Public
Authority 426
Creating, Governing, and Administering Public
Authorities 427
The Relatively Unconstrained Power of
Governments at the Fringe: Have They Used
It Well? 428
The Independent Sector: Big, Growing, and
Influential 429
Serving Themselves or Serving
Others 429
The Good that the Third Sector Does 430
A Remarkably Respected Sector 430
Governments and the Independent
Sector 430
A Case of Independent Governance:
Neighborhoods Renascent 435
Implementation by Individuals: Volunteers
and Vouchers 436
Volunteering for Government 436
Vouching for Citizen Service 437
Notes 438
CHAPTER 12
Intergovernmental Administration 460
Some Systemic Findings about Federalism 460
Federal Systems versus Unitary Systems 460
Findings from the States and Communities:
Trust and Innovation 461
Governments, the Constitution, and
the Courts 461
America’s Proliferating Governments 461
The Constitution: The Functions of
Federalism 462
The Courts: Necessary and Proper Implied
Federal Powers 462
The Evolution of Intergovernmental
Administration 462
The Layer Cake: Dual Federalism,
1789–1932 462
The Marble Cake: Cooperative Federalism,
1933–1958 463
The Pound Cake: Co-Optative Federalism,
1959–1978 463
The Crumble Cake: Competitive Federalism,
1979–2008 464
The Angel Food Cake: Manna-from-Heaven
Federalism, 2009–Present 465
Fiscal Federalism 466
A World Turned Upside Down: A Century of
Fiscal Change 466
The Grant-in-Aid: Foundation of Fiscal
Federalism 466
Getting Theirs: Governments Lobbying
Governments 467
Federal Grants: Distortions at the Grass
Roots 467
Those Rascally Recipients! 469
Fiscal Federalism in the States 469
Regulatory Federalism 469
Ruling Robustly 469
The Mandates Maw 470
The Wreckage of Regulatory Federalism 471
Deregulating Regulatory Federalism? 472
Money, Mandates, and Washington: Now
What? 472
Washington’s Intergovernmental Role: One
Fine Mess after Another 472

The Capable States 475
Sorting Out Federalism: Who Should Do
What? 475
A Federal Reset? 476
Federalism among Equals: The States 476
Interstate Cooperation 476
Interstate Conflict 477
Intergovernmental Administration in the
States 477
Creatures of the States 477
The Insidious Introduction of Home Rule 477
A Steadier Helping Hand 478
A Slow Centralization of State Power 478
Intergovernmental Administration among Local
Governments 478
Local Collaboration and Service
Delivery 478
Motivations to Collaborate 479
The Context of Collaboration 479
Concerns over Collaboration: Community
Counts 480
Recurring Regionalism 480
Consolidating and Centralizing Local
Services 481
Place, People, and Power: The Puzzle of
Metropolitan Governance 481
The City: In Sickness and in Health 481
The Metropolis: Lots of Little, Layered Local
Governments 482
Ultralocalism: The Quest for Metropolitan
Efficiency 482
Gargantua: The Quest for Metropolitan
Efficiency—and Equity 484
The Efficiency Question 484
Mincing Toward Metro 485
Notes 486
DETAILED TABLE OF CONTENTS xvii
CHAPTER 13
Toward a Bureaucratic Ethic 500
Codes and Commissions: The Rise of Public Sector
Ethics 500
Ethics for the Public Professions 500
Ethics for Governments 500
Practicing Ethical Public and Nonprofit
Administration 501
Ethical Environments 501
Committing to Ethics 502
Do Morals Matter? 502
Bureaucracy’s Bane: Determining the Public
Interest 503
Bureaucratic Accountability: Skirting the
Question 503
Organizational Humanism: Addressing the
Question, but Irrelevantly So 503
Can Normative Theory Help? Four Philosophies of
the Public Interest 504
Institutionalism: Morally Muddling
Through 504
Perfectionism: Promoting Perfect
People 504
Utilitarianism: The Most Benefits for the Most
People 505
Fairness: A Theory of Justice 505
Does Philosophy Matter? 506
What Is to Be Done? Implementing Ethical Public
Administration 506
The Passion of Public Administration 507
Big Democracy, Big Decisions 509
Notes 509
Index 512
 P R E FA C E T O T H E T H I R T E E N T H E D I T I O N

P
ublic Administration and Public Affairs is, at root, about the public interest.
It explains both the means used to fulfill the public interest, and the human
panoply that is the public interest.
Public Administration and Public Affairs, despite its orientation toward U.S.
readers, has been translated and published in Chinese, Japanese, Romanian, and
portions of it in Spanish. There is also an Indian edition and other national edi-
tions in English. We relate this polyglot publishing history to demonstrate that, with
accelerating appreciation, public administration is seen around the globe as central
to “good government,” and good government, as we explain in the introduction to
Part I, is seen by the world’s people as central to a good life.

WHAT’S NEW?
The thirteenth edition of Public Administration and Public Affairs has been signifi-
cantly revised, expanded, and updated. Most notably, we have concentrated on three
developments of singular consequence. They are:
■ Public administration’s reinvigorated concern with curbing corruption.
■ The rise of the nonprofit sector in governing and administering the state.
■ And the current, and likely long-term, crises in public finance.
There is a great deal of brand new information in this edition. A few highlights
follow.
■ Why are so many leaders losers? Because they too often are men, white,
handsome, tall, and sociopathic.
■ Bridgegate: The George Washington Bridge “repairs” as illustrative of the
damaging impact of the environment on public organizations.
■ The Supreme Court and the legalization of corruption. Campaign
contributions, the uniquely complex and huge federal tax code, and the
facilitation of corruption. E-government reduces official corruption, but
opens new opportunities for fraudsters. The growing problem of healthcare
fraud.
■ The emergence of big data analytics, enterprise risk management,
PerformanceStat, open data, and chief data officers as paladins of more efficient
governance.
■ Gone: the hack of the U.S. Office of Personnel Management and the theft of
22.5 million federal personnel records.
■ The Supreme Court and its undermining of whistleblowers and public unions.
■ The crushing costs of healthcare, pensions and public penury, costly budget
“cuts,” and two rarely used but useful budgetary tools, the budget rollover and
the biennial budget.
xviii
 PREFACE TO THE THIRTEENTH EDITION xix

■ The obsessive focus of emergency financial managers and the fate of Flint, Michigan.
■ The return to government of cognitive ability tests for hiring and promotion.
■ Snowed: Edward Snowden and federal incompetence in contracting.
■ The case against federal contracting: lobbying, incompetence, corruption, and a growing body of
proof that government is better than business in delivering public programs.
■ Outsourcing’s unabashed outcome: wealthier Washingtonians.
■ The 115 “entities” that constitute the federal fringe government.
■ Governments’ support of the third sector and nonprofits’ little-known support of government.
■ Fractured federalism, deceptive federalism, and governments lobbying governments.

WHAT’S OLD?
What’s old? This book. It is now nearing its sixth decade.
Writing textbooks is unique. Paul Krugman, Nobel laureate and a columnist for the New York Times,
and Robin Wells, also a distinguished economist, wrote a textbook that consumed “five years of intense
work.” Wells described writing it as “excruciatingly hard” because, as Krugman explained, a textbook
“has to be impeccable. If you’re writing an academic paper, if you have some stuff that’s blurrily written,
that won’t do much harm. If you write a newspaper article, and a third of your readers don’t get it, that’s
a success. But a textbook has to be perfect.”1
As one who also has written academic papers, newspaper articles, and textbooks (alas, the Nobel has
stubbornly eluded us), we concur that a textbook should be perfect. A textbook has a far longer reach, a
far larger audience, and a far deeper impact than virtually any other intellectual medium.
We doubt, frankly, that Public Administration and Public Affairs is perfect. But we keep trying.

NOTE
1. Larissa MacFarquhar, “The Deflationist,” The New Yorker (March 1, 2010), pp. 38–49. The quotations are on
p. 47.
 ACKNOWLEDGMENTS

I
owe an unpayable intellectual debt to at least three of my teachers, Lynton Keith
Caldwell, Jack T. Johnson, and York Y. Wilbern. Later, Frank J. Sackton intro-
duced me to the classroom of the practical world. All, regrettably, are deceased,
but their beneficent influence lives on.
I am indebted to my editors at Routledge for their good cheer, hard work, and
solid advice in producing what you are reading.
I also am indebted to my colleagues, students, and the book’s reviewers who
have had such a constructive influence on the continuing evolution of Public
Administration and Public Affairs.
As always, my wife, Muriel, and my children, Adrienne and Miles, and their
spouses, Kevin and Anna, provided the deepest level of support. The book is for them,
and, much to my gratification, my grandchildren, Callum, Margaret, and Charlotte.

Nicholas Henry
Savannah, Georgia

xx

In Defense of Governing Well
Bureaucracy is in our bones. Prehistoric evidence
unearthed at archeological digs suggests that the
rudiments of a bureaucratic social order were in
place 19,000 years ago.1
DO WE NEED GOVERNMENT?
Not everyone agrees that bureaucracy and govern-
ment are basic to society. Some contend, in a distorted
extension of Thomas Paine’s dictum “that govern-
ment is best which governs least,” that the very best
government is no government at all. As a prominent
conservative explains, “What holds together the con-
servative movement” is that conservatives “want the
government to go away.”2
The Wrecking-Crew View
It has been argued that, when those who want the
government to go away are in power, they delib-
erately delegitimize government in the eyes of
the public. Restrained by only what is politically
infeasible, these “no-government conservatives”3
act as a “wrecking crew” that sabotages govern-
mental competence; tolerates, even encourages,
corruption; and  privatizes or sheds altogether
core public  responsibilities.4 It is this perspective
that has encouraged the founding of roughly a thou-
sand extreme anti-government groups (the number
varies widely from year to year), such as those
that  influenced the bombers of a federal building
in  1995, that killed 168 adults and children, and
the  armed takeover and trashing of federal facili-
ties in Oregon, in 2015,  resulting in one death by
shooting.
PART
Americans do not subscribe to the wrecking-
crew view. Out of thirteen major issues,
majorities state that the federal government
should play a major role  in twelve (the excep-
tion is space exploration).  Most Republicans
and  Democrats agree  that Washington should
play a  prominent role  in  controlling terrorism,
responding  to  natural  disasters,  and managing
food, medicine  safety,  infrastructure,  and  even
immigration.5
Perhaps the clearest and most critical example
of the wrecking-crew mentality is that of regulation,
an area often touted by these advocates as a burden
from which Americans demand relief. Yet, when
queried about regulating specific industries, three
times more citizens, on average, want more regula-
tion than those who want less.6
Underlying the wreckers’ ideology is their belief
that more governmental regulation equals fewer
jobs, and vice versa. Research, however, consistently
shows that there is no evidence supporting this view.
In the aggregate, the jobs lost to regulation (for
example, the jobs lost in a factory that produced
lead additives for gasoline because of air pollution
regulations) are replaced elsewhere in the economy
(e.g., in a factory that makes catalytic converters,
which control automobile emissions). It is, in short,
a wash.7
Wrecking Government and Wrecking
America
That the public could benefit from more responsi-
ble regulation of some industries seems plausible.
Consider some evidence.
 2 PA R T I In Defense of Governing Well
Wrecking the Environment On April 20, 2010,
BP’s (formerly British Petroleum) thirty-story-tall
Deepwater Horizon oilrig in the Gulf of Mexico
exploded, listed, and sank. Eleven crewmen’s lives
ended, and the most disastrous oil spill in American
history began. Ultimately, nearly 5 million barrels
of crude polluted the Gulf. The company could not
have been drilling in the Gulf had it not received a
federal permit to do so.
Which BP had indeed received, despite its spec-
tacularly tawdry safety record. Over the three years
preceding the spill, the Occupational Health and
Safety Administration cited BP for 760 “egregious
willful” safety violations. These are the agency’s
most severe violations out of five types, and apply
only to violations of those rules that are “designed
to prevent catastrophic events.” How many cita-
tions for egregious willful violations had all other
oil companies combined accumulated over the same
period? One.8
The regulatory agency that had licensed BP
to drill in the Gulf was the Minerals Management
Service (MMS), a little-known bureau of 1,700
employees created by the interior secretary in 1982.
It is charged with issuing permits to, and collecting
royalties from, companies that drill offshore.
MMS’s regulatory record was at least as tawdry
as BP’s safety record. The agency, which collects
more non-tax revenue—$9 billion per year—than
any other, had for decades failed to collect bil-
lions in royalties due it.9 MMS’s administrators
“routinely overruled staff scientists whose findings
highlight the environmental risks of drilling,” and
scientists “repeatedly had their scientific findings
changed to indicate no environmental impact.” It
would slander boilerplate to apply that term to BP’s
582-page “oil spill response plan” that it submit-
ted to MMS to establish the Deepwater Horizon.
Besides stating that “no significant adverse impacts
are expected” from a spill, it notes that walruses
(which have not wallowed in the Gulf since the Ice
Age) would be protected; provides an address for
the “rapid deployment of spill response resources”
that turned out to be that of a Japanese home shop-
ping network; and “never once discusses how to
stop a deepwater blowout . . .. Nobody” at MMS
“read it.”10
Nor, apparently, had anyone read any of the
nearly identical plans, “all written by the same
tiny Texas subcontractor,” submitted by the four
other major offshore drillers, all but one of which
also referenced those walruses in the Gulf.11 All
five of the major companies’ spill response plans
amounted to the longest works of maritime fiction
since Moby-Dick.
MMS was also riddled with corruption.
According to a federal report, the agency had a
“culture of ethical failure.” Not surprising in light of
the fact that three out of every four of the more than
600 lobbyists who lobby for the oil and gas industry
are former federal employees, including two former
directors of MMS. “Nowhere has government and
industry coziness been on display more clearly than
at MMS.”12
Besides being incompetent and corrupt, MMS’s
administrators were just plain dumb. During the
week following the president’s declaration of a mor-
atorium on offshore drilling and the issuance of
waivers, with oil still gushing into the Gulf, MMS
granted seven permits and five waivers.13
In 2011, the Government Accountability Office
belatedly declared the management of oil and gas
resources to be a “high-risk area” that required extra
federal attention to prevent waste, fraud, and abuse;
it still remains one.
In the midst of the spill, MMS was hastily
renamed the Bureau of Ocean Energy Management,
Regulation and Enforcement, an exhaustingly long
moniker that should discourage future journalistic
coverage of the agency.
Wrecking the Economy Three decades after the
steady deregulation of the financial sector that
began in the early 1980s, America’s foremost busi-
ness magazine stated that, “It is chillingly clear that
U.S. financial institutions have for a good while been
regulated no more stringently than, say, demolition
derby drivers.”14
Demolition is a fitting word. In the late 2000s,
the United States narrowly escaped economic
collapse. Near, or perhaps at, the heart of that
barely-missed meltdown were over-the-counter
derivatives, which are highly leveraged financial
exotica, such as mortgage-backed securities, that
many analysts think caused the crisis. In 2003, the
legendary investor, Warren Buffet, dubbed these
derivatives “weapons of mass financial destruction,”
and warned that they involved “huge-scale fraud.”15

Derivatives were introduced in the 1980s and
flourished in a secretive, “completely dark market”
about which regulators were also in the dark.16
When the derivatives market peaked in June 2008,
its face (or “notional”) value was an absurd and
inconceivable $683 trillion,17 and almost all of it
was owned by America’s biggest banks.
When the head of a small regulatory agency
attempted, in the late 1990s, to persuade Washington
to regulate derivatives, she ran into rock-hard resist-
ance. She was stunned when the chair of the Federal
Reserve, Alan Greenspan, informed her that he
did not “believe that fraud . . . was something that
regulators should worry about [because] the free
market self-corrects and takes care of fraudulent
actors.”18
In 2000, at the urging of Greenspan, the treas-
ury secretary, and the financial industry (which
has five lobbyists on its payroll for every member
of Congress19), Congress passed the Commodity
Futures Modernization Act, which declared illegal
any federal or state regulation of over-the-counter
derivatives.
In less than a year and a half after the resultant
“Great Recession” struck in 2007–2009, the stock
market had lost an astounding 56 percent of its
value, more than had been lost over the same period
during the Great Depression. Two years after its
start, 8.7 million jobs were gone, four times more
than in the severe, double-dip recession of 1980–
1982.20 Five years after the Great Recession ended,
the percentage of children living in poverty had risen
from 18 percent to 22 percent, an increase of more
than a fifth.21
In 2015, Standard & Poor’s, the world’s largest
credit ratings firm, was fined almost $1.4 billion
over its risky rating of mortgage-backed securities
that had led to the Great Recession, and, in 2017,
Moody’s was fined nearly $864 million for the same
reason. No executives were prosecuted.
Equal Opportunity Wreckage The wrecking-crew
mentality is an equal-opportunity ideology. It hurts
rich and poor alike.
Here is an example of the former: the chief
business regulator, the Securities and Exchange
Commission (SEC), received, over the course of
sixteen years, “more than ample information,”
including “six substantive complaints that should
PA R T I In Defense of Governing Well 3
have raised significant red flags” and two articles that
“appeared in reputable publications,” that financier
Bernard Madoff was swindling his wealthy inves-
tors, including several charities. Yet, “a thorough and
competent investigation . . . was never performed.”22
Not that one was really needed; a whistleblower
tried in vain to convince SEC that Madoff was a
crook, showing its inept staff that, if Madoff were
a baseball player, he would have a batting average
of 960 each and every year, and hit only doubles, a
pair of statistical impossibilities.23 Madoff’s machi-
nations eventually were ratted out by his own sons,
and, by the time he was sentenced to 150 years in
prison, Madoff had “made off” with an estimated
$65 billion, marking it the biggest Ponzi scheme in
the history of the Milky Way Galaxy—well, at least
of Planet Earth.
Here is an example of the latter: the federal
Wage and Hour Division, which is charged with
assuring that employers do not steal their employ-
ees’ wages, is “an ineffective system” that “dis-
courages wage theft complaints”; is beset with
“sluggish response times [of] months to years”; is
characterized by a refusal to “compel employers to
pay” their employees what they owe them; and is
rife with “inadequately investigated” cases in which
some investigators “lied about investigative work
performed and did not investigate.” The Division
“instructed many offices” to alter their databases to
hide the fact that they had made “low wage workers
vulnerable to wage theft.”24
All the quotations and findings in the foregoing
examples (with the exception of the whistleblower’s
baseball calculations) appeared not in lurid press
accounts, but in official government reports. These
reports draw short of charging the agencies with
corruption, but whether they are corrupt or merely
incompetent (if staggeringly so), is either condition
good for society? Some scholars think so.
IS GRAFT GOOD?
Graft, or corruption, is the conduct of dishonest
practices. This is the nicest definition; standard dic-
tionaries also offer such nouns as “putrefaction,”
“perversion,” “depravity,” and “debasement” in
their several definitions. Corruption’s etymological
roots reflect these descriptions; the Latin corrumpere
can mean bribe—or it can mean destruction.
 4 PA R T I In Defense of Governing Well
Defying even the basic definition of corruption
is the contention that graft-ridden government can
be good. It has two components: the political and
the economic. Both positions have been touted,
often enthusiastically, by political scientists,25 who
sometimes seem to act as cheerleaders for political
corruption.
Fighting for Fraud: Corruption Improves
Public Services
The political argument for corruption is an old
chestnut originated by a distinguished political sci-
entist (the American Political Science Association’s
Prize for Excellence is named in his honor), who
studied corruption in Chicago. Although, ironically,
he was personally an ardent reformer, his work still
is cited, approvingly, in mainstream texts.26
Graft’s political justification is that corrupt
political machines “work,” and perform “many
important social functions.” In exchange for votes
and the public’s tolerance for politicians and their
toadies who plunder the public till, ward heelers fix
their constituents’ traffic tickets, get them jobs, lower
their tax bills, waive zoning and building codes, and
attend their funerals, among a slew of other services,
some more licit than others. (To be fair, up until the
1940s or so, these practices often saved immigrants’
livelihoods, but no longer.) When an “upper-class
elite [of] reformers and do-gooders,” this argument
implicitly continues, replaces responsive political
machines with lumbering, lethargic, legalistic public
bureaucracies, the needs of the poor, and even of
better-off taxpayers, are seldom met.27
This romanticized defense of corruption has
scant evidentiary support. Corruption slashes gov-
ernments’ legitimate revenue by as much as half,
and, with it, public services, and adds from 3 to 10
percent to the cost of legitimate services because citi-
zens must bribe officials to acquire them.28
Fighting for Fraud: Corruption Brings
Prosperity
The other argument for corruption, though origi-
nated by a sociologist,29 is economic; it holds that
graft munificently paves the way for longer-term
prosperity. “Grease money” amounts to “speed
money,” in that bribes are used to circumvent a
blocking bureaucracy, thereby accelerating eco-
nomic development.30
Unfortunately for this perspective, it is increas-
ingly clear that “efficient grease” actually retards
prosperity. Not one of the nineteen impoverished
nations that have been granted debt service relief
through the Heavily Indebted Poor Countries
Initiative is rated as having anything better than
“serious to severe” governmental corruption.31 The
rate of investment in countries with high and unpre-
dictable rates of corruption is almost half of that in
low-corruption countries.32 An analysis of more than
a hundred countries found that, when corruption
increases by about two points on a ten-point scale,
investment decreases by 4 percent, and gross domes-
tic product falls by half a percent.33 Corruption
inflates the prices of goods by as much as a fifth,34
and severely curtails personal income growth for just
about everyone, but especially for the poor, thereby
intensifying income inequality. Graft even decreases
the years that children spend in school.35
The World Bank estimates that, globally, some
$1 trillion dollars in bribes are paid to government
officials each year.36 So obviously some people—the
corruptors—are making a ton of money, right?
Well, no. Bribery costs even the bribers. Three
surveys of 2,400 businesses in fifty-eight nations
found that “firms that pay more bribes are also
likely to spend more, not less, management time with
bureaucrats negotiating regulations, and face higher,
not lower, costs of capital.”37 When firms increase
their bribes to bureaucrats by 1 percent, their annual
growth rate declines by an average of 3.3 percent.38
The evidence, in sum, is overwhelming that cor-
ruption brings not prosperity, but poverty.
FIGHTING FRAUD: THE MANY
REASONS TO DO SO
The fact that graft reduces public services, increases
their costs, and impoverishes the citizenry is reason
enough to fight fraud. But there are many more
reasons.
When people perceive that their government is
corrupt, particularly when that perception occurs
rather suddenly (as the function, for example, of an
abnormally improving economy), popular dissatis-
faction with democracy grows, trust in institutions

declines, government’s legitimacy erodes, and
“rule-breaking behavior” expands.39 At its worst,
corruption can be so deeply offensive that it can
leave some citizens with a raging thirst for violent
vengeance. When captured prisoners were ques-
tioned in Afghanistan, the leading reason that they
gave for joining the Taliban was not a commitment
to Islam or anti-Americanism, but the corruption of
the Afghan government.40
When countries curb corruption, good things
happen: poverty and child mortality rates decline,
and per capita income and literacy rates rise, among
other benefits.41
The United States is not immune to corruption.
Long-term state government corruption, in tandem
with high state unemployment rates, produces greater
income inequality among citizens and reduces real
personal incomes, education levels, and unionization
rates, all to statistically significant degrees.42
Corruption also causes state spending to be arti-
ficially elevated. In the ten most corrupt American
states, as measured by the number of graft convic-
tions per 10,000 public employees over thirty-two
years, total annual spending would have been
reduced by 5.2 percent of the mean state expend-
iture per capita (or $1,308 per capita) over eleven
years if their corruption had merely matched the
average level of corruption in all the states. In
addition, corruption distorts spending by favoring
“bribe-generating” expenditures, notably for con-
struction, highways, and borrowing, among others,
and at the expense of education, welfare, health, and
hospitals.43
A GLOBALLY FADING
PHILOSOPHY
According to the World Bank, corruption was
“treated as a taboo subject” by the development
community for decades.44 In fact, one study found
that corrupt countries were more likely to attract
European foreign aid (with the exception of
Scandinavian aid) than relatively honest ones.45
This regrettable philosophy may have been a
consequence of corrupt countries contending that
what the West labeled as corruption was really a
“cultural” trait, and to think otherwise amounted
to racism. The dubious philosophy probably began
PA R T I In Defense of Governing Well 5
to fade as early as 1974, when the Portuguese
overthrew their corrupt Fascist rulers. In so doing,
Portugal ignited an international wildfire that con-
tinues to incinerate many national Gordian knots
that intertwine corruption and repression. (The
two are inextricably tangled largely because each
flourishes where there is no meaningful law.) In the
1980s, mass demonstrations erupted against graft
and dictators in China and countries in Central Asia
and Eastern Europe. As a result, communist China
converted to capitalism; the Soviet Union collapsed;
and all its satellite states and many of its provinces
were liberated.
The wildfire rages on, and is directed against
corruption at least as much as repression. In the
2000s, Xi Jinping, now China’s president, intro-
duced masters of public administration curricula
in dozens of top universities across the country in
the hope of curbing corruption, and, as president,
initiated China’s toughest anti-graft campaign since
the country embraced capitalism. In Russia, “reform
[is] not only about human rights. It’s about getting
people [in power] to stop stealing.”46
Today, anti-corruption forces have gone global.
The World Bank now recognizes that “corruption is
one of the most serious obstacles to development.”47
The United Nations Development Programme, the
world’s largest aid agency, has made “good govern-
ment” its “top priority in poverty fighting” on the
grounds that “without good government, reliance on
trickle-down economic development and a host of
other strategies will not work.”48
There is much additional global good news.
The United Nations Convention against Corruption
of 2003 has some 140 member nations. Relatively
honest governments have passed laws that penal-
ize graft beyond their borders, such as the United
States’ Foreign Corrupt Practices Act (which has
proven effective in reducing American invest-
ments in corrupt countries49) and Magnitsky Act
and Britain’s Bribery Act. Business interests have
formed anti-corruption cooperatives, such as the
International Corporate Governance Network and
the Financial Action Network, among others. The
Open Government Network, with nearly sixty
national governments as members, is dedicated to
securing “concrete commitments” from its members
to battle graft. Transparency International, which
annually ranks the globe’s nations by how corrupt
 6 PA R T I In Defense of Governing Well
they are perceived to be, has mushroomed in influ-
ence. National anti-corruption movements are
popping up throughout Africa and Asia, and there is
now an International Anti-Corruption Day.
WHAT IS GOOD GOVERNMENT
A few years ago, captured correspondence revealed
that various jihadist groups yearned to be the stew-
ards of good governance in those areas that they
occasionally conquered, and inevitably lost because
they formed such horrific and incompetent “gov-
ernments” that the governed rebelled or held out
for rescue. The most prominent such group, the
Islamic State (IS), learned from its mistakes; after it
took a vast stretch of Iraq and Syria, in 2014, its
leader called on Muslim public administrators from
around the world to help it manage its newly cap-
tured provinces. Although IS continues to lop off
hands and heads in territories that it conquers, for
a period of time it also hired accountants, restored
electricity, and paid long-unpaid bureaucrats (ini-
tially, some citizens from IS-occupied territories said
that IS was “actually less corrupt and provided more
efficient services . . . than previous Syrian and Iraqi
governments”);50 IS still issues annual reports, and
even has an equivalent of the U.S. Food and Drug
Administration. Eventually, however, basic services,
such as water supplies, essentially vanished and
“taxes” rocketed, as IS and similar jihadists faced
increasingly effective military opponents.
As this episode reveals, even terrorists like good
government. But what is it?
Good government is uncorrupted, democratic,
and competent.
Good Government Is Uncorrupted
Aside from a few intellectuals who mud-wrestle on
the slippery slopes of “corruption that ‘works’” and
“efficient grease,” everyone knows that honest gov-
ernance is good government. Globally, the leading
“very big problem” in surveys is corrupt political
leaders.51
Good Government Is Democratic
Democracy is good government. A massive and
ongoing study finds that “the basic ideas of
democracy are virtually universally accepted around
the world,” regardless of culture, and that these ideas
are “viewed as the only game in town,” even by the
residents of dictatorships.52
Bureaucrats are crucial to popular support of
democracy. A study of thirty-five democratic coun-
tries concluded that “citizens’ evaluation of public
administration is related more strongly to their
satisfaction with democracy than other explana-
tions—such as political trust, electoral fairness, and
political efficacy.” Public administrators play “the
central role  . . . in sustaining citizen support for
democracy.”53
Good Government Is Able
The central role that bureaucrats play in sustaining
democracy leads to our third component of good
government: competence.
As with uncorrupted and democratic govern-
ment, well-managed government enhances the daily
lives of people. An analysis of twenty-nine nations
found that “the efficient delivery of public services
can directly affect welfare, and good governance has
been shown to be associated with higher rates of
. . . growth in incomes.”54 A study of the American
states found that a high level of “state management
capacity” to govern efficiently “clearly . . . contrib-
utes directly to improving the overall quality of life
for state citizens.”55
Governments’ often-heroic response to the
terrorist attacks of 2001 brought a doubling in
popular trust in government.56 Conversely, the price
of weak, brittle, and clumsy government can be
steep. Governments’ bungled response to Hurricane
Katrina, in 2005, resulted in a ten-point plummet
in Americans’ faith in their governments’ ability to
protect them.57
President Barack Obama, in his first inaugural
address, phrased the matter well: “The question we
ask today is not whether government is too big or
too small, but whether it works.”58
That is precisely what this book is about.
The Place of Public Administration
Good government, then, rests on three pillars:
honesty, democracy, and competency. Public

administrators, as we shall see throughout this book,
are essential to each.
Public administration is a broad-ranging and
amorphous combination of theory and practice that
is meant to promote a superior understanding of
government and its relationship with the society it
governs, as well as to encourage public policies more
responsive to social needs and to institute managerial
practices attuned to effectiveness, efficiency, and the
deeper human requisites of the citizenry. Admittedly,
the preceding sentence is itself rather broad ranging
and amorphous (although one reviewer of this book
described our definition as “a classic”59), but for our
purposes it will suffice.
In Chapter 1, we review the longstanding and
everlasting tension between bureaucracy and democ-
racy in the United States. In Chapter 2, we review
the intellectual evolution of public administration.
How public administrators see themselves and their
proper field of action in a democracy deeply affects
the health of democracy itself.
So welcome to Public Administration and Public
Affairs, and welcome to one of the most exciting and
rewarding career possibilities on earth.
NOTES
1. Scott Van Nystrom and Luella C. Nystrom,
“Bureaucracy in Prehistory: Case Evidence from
Mammoth Bone Dwellers on the Russian Steppes,”
International Journal of Public Administration 21
(Winter 1998), pp. 7–23.
2. Newt Gingrich, former Republican Speaker
of the House, as quoted in John Cassidy, “The
Ringleader,” The New Yorker (August 1, 2005),
pp. 42–53. The quotation is on p. 46.
3. Jon Favreau, “Jon Favreau on the Destructive Rise
of No-Government Conservatives,” The Daily
Beast (July 30, 2013).
4. Thomas Frank, The Wrecking Crew: How
Conservatives Rule (New York: Macmillan, 2008).
5. Pew Research Center, “Beyond Distrust: How
Americans View Their Government,” People-press.
org (November 23, 2015).
6. As derived from data in Meg Bostrom, By, or for,
the People? A Meta-analysis of Public Opinion
of Government (New York: Demos, 2006), p. 33.
Figures are for 2003.
7. Cary Coglianese, Adam M. Finkel, and Christopher
Carrigan, eds., Does Regulation Kill Jobs?
PA R T I In Defense of Governing Well 7
(Philadelphia: University of Pennsylvania Press,
2014).
8. Jim Morris and M.B. Pell, Renegade Refiner:
OSHA Says BP Has “Systemic Safety Problem”
(Washington, DC: Center for Public Integrity,
2010), pp. 3, 1. Figures are for June 2007–February
2010.
9. U.S. Government Accountability Office, Mineral
Revenues: Data Management Problems and
Reliance on Self-Reported Data for Compliance
Efforts Put MMS Royalty Collections at Risk,
GAO-08-893R Mineral Revenues (Washington,
DC: U.S. Government Printing Office, 2008).
10. Tim Dickinson, “The Spill, The Scandal and the
President,” Rollingstone.com (June 8, 2010).
11. Steven Mufson and Juliet Eilperin, “Lawmakers
Attack Plans Oil Companies Had in Place to Deal
with a Spill,” Washington Post (June 15, 2010).
12. Ibid. Figures are for 2009.
13. Ian Urbina, “Despite Moratorium, Drilling Projects
Move Ahead,” New York Times (May 23, 2010).
14. Carol J. Loomis, “Derivatives: The Risk That
Still Won’t Go Away,” Fortune (July 6, 2009),
pp. 55–60. The quotation is on p. 55.
15. Warren Buffett, quoted in “Buffett Warns on
Investment ‘Time Bomb,’” BBC News (March 4,
2003).
16. Public Broadcasting System, “The Warning,”
Frontline (October 20, 2009).
17. Stephen Feglewski, Roy C. Smith, and Ingo Walter,
“Geithner’s Plan for Derivatives,” Forbes (May 18,
2009).
18. Public Broadcasting System, “The Warning.”
19. Ibid.
20. Don Lee, “U.S. Unemployment Rate Falls
Unexpectedly, but Job Losses Continue,” Los
Angeles Times (February 6, 2010).
21. Annie E. Casey Foundation, Kids Count: 2015
Data Book (Baltimore, MD: Author, 2015).
22. Office of the Inspector General, U.S. Securities and
Exchange Commission, Report of Investigation,
Case No. OIG-509, Investigation of Failure of the
SEC to Uncover Bernard Madoff’s Ponzi Scheme,
Executive Summary (Washington, DC: Author,
2009), p. 1.
23. Henry Markopolis, appearing on Morning Joe,
MSNBC (August 24, 2011).
24. U.S. Government Accountability Office,
Department of Labor: Wage and Hour Division’s
Complaint Intake and Investigative Processes
Leave Low Wage Workers Vulnerable to Wage
 8 PA R T I In Defense of Governing Well
Theft, GAO-09-458T (Washington, DC: U.S.
Government Printing Office, 2009), Highlights
page.
25. See, for example, James Q. Wilson, “Corruption
Is Not Always Scandalous,” New York Times
Magazine (April 28, 1968), pp. 54–62, and Samuel
P. Huntington, Political Order in Changing
Societies (New York: Norton, 1968).
26. Harold F. Gosnell, Machine Politics: Chicago Model
(Chicago: University of Chicago Press, 1937).
27. Thomas R. Dye, Politics in States and Communities,
9th ed. (Upper Saddle River, NJ: Prentice-Hall,
1997), pp. 292, 299.
28. Rick Stapenhurst and Sahr Kpundeh, eds.,
Curbing Corruption: Toward a Model for Building
National Integrity (Washington, DC: World Bank,
1999).
29. Robert K. Merton, Social Theory and Social
Structures (New York: Free Press, 1957).
30. Daniel Kaufmann and Shang-Jin Wei, Does “Grease
Money” Speed Up the Wheels of Commerce?
(Cambridge, MA: National Bureau of Economic
Research, 1999).
31. World Bank Institute, as cited in Transparency
International, Perceived Corruption Index, 2005
(Berlin: Author, 2005).
32. World Bank, World Development Report, 1997
(Washington, DC: Oxford University Press, 1997),
pp. 102–104.
33. Paolo Mauro, Why Worry About Corruption?
(Washington, DC: International Monetary Fund,
1997), pp. 9–10. Figures are for 1982–1995.
34. Stapenhurst and Kpundeh, Curbing Corruption.
35. Sanjeev Gupta, Hamid Davoodi, and Rosa Alonso-
Terme, Does Corruption Affect Income Inequality
and Poverty? (Washington, DC: International
Monetary Fund, 1998).
36. Leslie Wayne, “Hits, and Misses, in a War on
Bribery,” New York Times (March 10, 2012).
Figure is for 2001–2002.
37. Kaufmann and Wei, Does “Grease Money” Speed
Up the Wheels of Commerce? Abstract page.
38. Jakob Fisman and Raymond J. Svensson, “Are
Corruption and Taxation Really Harmful to
Growth? Firm Level Evidence,” Journal of Deve-
lopment Economics 83 (May 2007), pp. 63–75.
39. Manuel Villoria, Greg G. Van Ryzen, and Cecelia
F. Lavena, “Social and Political Consequences
of Corruption: A Study of Public Perceptions in
Spain,” Public Administration Review 73 (January/
February 2013), pp. 85–96.
40. Sarah Chayes, Thieves of the State: Why Corruption
Threatens Global Security (New York: Norton,
2015).
41. Stapenhurst and Kpundeh, Curbing Corruption.
42. Nicholas Apergis, Oguzhan Dincer, and James
Payne, “The Relationship between Corruption
and Income Inequality in U.S. States: Evidence
from a Panel Cointegration and Error Correction
Model,” Public Choice 145 (October 2010),
pp. 125–135.
43. Cheol Liu and John L. Mikesell, “The Impact
of Public Officials’ Corruption on the Size
and Allocation of U.S. State Spending,” Public
Administration Review 74 (May/June 2014),
pp.  346–358. State corruption rankings are for
1976–2008. Spending figures are for 1997–2008.
44. Stapenhurst and Kpundeh, Curbing Corruption.
45. Alberto Alesina and Beatrice Weder, Do Corrupt
Governments Receive Less Foreign Aid?
(Cambridge, MA: National Bureau of Economic
Research, 1999).
46. Anne Applebaum, “The Anti-Corruption Move-
ment: Human Rights’ Natural Partner,” Washington
Post (December 12, 2012).
47. James Anderson, Joel Hellman, Geraint Jones,
et al., Anticorruption in Transition: A Contribution
to the Policy Debate (Washington, DC: World
Bank, 2000), p. xiv.
48. Barbara Crosette, “U.N. Says Bad Government Is
Often Cause of Poverty,” New York Times (April 5,
2000).
49. James R. Hines, Jr., Forbidden Payment: Foreign
Bribery and American Business after 1977
(Cambridge, MA: National Bureau of Economic
Research, 1995).
50. Kevin Sullivan, “Spoils for the Rulers, Terror for
the Ruled,” Washington Post (October 1, 2015).
51. Pew Global Attitudes Project, Global Opinion
Trends, 2002–2007 (Washington, DC: Author,
2008), p. 34. Figures are for 2007.
52. Pippa Norris, as quoted in Richard Morin, “Islam
and Democracy,” Washington Post (April 28,
2002).
53. Gal Ariely, Emile Kolthoff, Michael Macaulay, and
Frank Anechiarico, “Public Administration and
Citizen Satisfaction with Democracy: Cross-
National Evidence,” International Review of
Administrative Sciences 79 (December 2013),
pp.  747–766. The quotations are on p. 747.
Emphasis added.
54. Stephen Knack, Social Capital and the Quality

of Government: Evidence from the U.S. States
(Washington, DC: World Bank Development
Research Group, 2000), p. 24. Emphasis added.
55. Jerrell D. Coggburn and Saundra K. Schneider,
“The Relationship between State Government
Performance and State Quality of Life,” Inter-
national Journal of Public Administration 26
(December 2003), pp. 1337–1358. The quotation
is on p. 1337. Emphasis added.
56. G. Calvin McKenzie and Judith M. Labiner,
Opportunity Lost: The Rise and Fall of Trust and
PA R T I In Defense of Governing Well 9
Confidence in Government after September 11
(Washington, DC: Brookings, 2002), p. 3.
57. Kathy Frankovic, “Polls Show Skepticism of
Katrina Recovery,” CBS News (August 29, 2007).
58. Barack Obama, Inaugural Address (Washington,
DC: U.S. Government Printing Office, January 20,
2009).
59. William H. Harader, “Whither Public Administra-
tion?” Public Administration Review 37 (January/
February 1977), pp. 97–102. The quotation is on
p. 98.
CHAPTER
Big Democracy, Big
Bureaucracy
T
“ he true test of a good government is its apti-
tude and tendency to produce a good admin-
istration.” So wrote a famous founder of the United
States, Alexander Hamilton, in “No. 68” of The
Federalist Papers, the superb essays about govern-
ance that preceded the Constitution. (So convinced
was Hamilton of this that he repeated the sentence,
verbatim, in “No. 76.”)
Were he alive today, Hamilton might be dis-
appointed in a public bureaucracy that appears, at
least, to be atrophied when compared with its coun-
terparts in most other developed democracies. This
seeming bureaucratic flaccidity is a consequence of
an entrenched national culture and careful political
design.
AN UNPROMISING PRECIS
The roots of Americans’ profound suspicion of exec-
utive authority are deeply sunk, and are apparent in
the nation’s earliest influences and origins.
The Indians and the English
One such influence was the Native Americans, who
surrounded the early European settlers. Hence, the
“framers of the Constitution . . . were pervaded
by Indian images of liberty.”1 The vast Iroquois
Confederation was emblematic of executive con-
straint: “Their whole civil policy was averse to the
concentration of power in any single individual.”2
Another influence was the English, who governed
their colonists with a firm hand but resisted royal
10
rule on their own sceptered isle. No less an authority
than Woodrow Wilson, the acknowledged academic
founder of American public administration, observed
that, “The English race long and successfully studied
the art of curbing executive power to the constant
neglect of the art of perfecting executive methods.”3
The Indians and the English set a governing
tone that, in the eighteenth century, expressed itself
in three formats that outlined Americans’ enduring
social contract, or that unwritten agreement between
the governed and their governments, often more
understood than expressed, that defines and limits
the responsibilities of each.
Administration by Ambassadors:
The Articles of Confederation
One such format was the woefully misnamed Articles
of Confederation and Perpetual Union, which, from
1781 to 1789, provided the first framework for the
new nation and exemplified Americans’ contempt
for princely prerogatives.
There was no chief executive. In fact, the first
draft of the Articles, written in 1776, was rejected
by the Second Continental Congress on the specific
grounds that it had proposed an executive, and this
bias against executive authority extended to every
national officeholder; under the Articles, every con-
tinental official had a one-year term, and each one
was subject to term limits.4
The states reigned supreme under the Articles.
Congress was less a legislature and more a conven-
tion of powerless state ambassadors, chosen by state

assemblies, which could recall them at will. National
administrators reported directly to congressional
committees.
When Daniel Shays launched, in 1786, his rebel-
lion against the government of Massachusetts—a
rebellion that had to be put down solely by the com-
monwealth’s militia—it became clear that the Articles
were a failed vehicle for national governance.
Administration by Legislators: The First
State Constitutions
At about the same time that the Articles of
Confederation were being written, eleven states
were busily drafting their own constitutions and
they reflected the Articles’ anti-executive paranoia.
In ten states, governors were appointed by legis-
latures or the courts and were granted terms of a
single year. Nine states aggressively limited, or even
denied, their chief executives the veto and appoint-
ment power. All executive power, and most judicial
power, resided in the state legislatures or in “privy
councils” composed mostly of elected officials who
usually were appointed by legislators.
At least one petulant English observer foresaw
the impossibility of his former colonies to ever found
a government worthy of the name, and he attributed
this failure to Americans’ fixation on a weak exec-
utive: “As to the future grandeur of America, and
its being a rising empire under one head, whether
Republican or Monarchial, it is one of the idlest and
most visionary notions that was ever conceived even
by writers of romance.”5
Administration by Enfeebled Executives:
Jefferson Prevails
Layering and striating all of this early American activ-
ity in drafting confederations and constitutions was
our third expression of the emerging social contract:
the massive brilliance of America’s founders, but par-
ticularly that of Hamilton and Thomas Jefferson. “So
baked into our civic DNA is this that today, more
than two centuries after our founding, our language
and behavior still are shaped and influenced by the
alternatives represented by the two men.”6
Hamiltonian Energy Hamilton was not only, like
Jefferson, one of America’s first public administrators
Big Democracy, Big Bureaucracy 11
(he was its first treasury secretary), but likely its first
scholar of public administration, too. Hamilton was
contemplating a “full investigation of the history and
science of civil government and . . . practical results
of various modifications of it upon the freedom and
happiness of mankind.”7 In other words, Hamilton
was about to write the world’s first textbook in
public administration, a project terminated by his
death in a duel.
Hamilton extolled a strong chief executive,
equating a strong executive with the “energy” needed
to make a government function: “A feeble executive
[by contrast] implies a feeble execution of govern-
ment. A feeble execution is but another phrase for
a bad execution; and a government ill executed . . .
must be, in practice, a bad government.”8 Things, in
sum, had to get done.
Even more than a strong chief executive,
Hamilton advocated a very strong bureaucracy. He
urged that department heads be paid exceptionally
well, that they possess substantial powers, and that
their tenure in office should extend beyond that of
the chief executive who appointed them.
Jeffersonian Constraint In stark contrast to
Hamilton, Jefferson held a “profound distrust of
bureaucracy,” and “was no friend . . . to profession-
alism in public administration.”9
As we explain in the introduction to Part III
and Chapter 7, the founders were concerned about
governmental efficiency and honesty, two values that
gave birth to American public administration. But
it was Jefferson’s argument against an active public
administration that prevailed.
Jefferson’s victory is indicated by the fact that
the word, “administration” (or its cognates), appears
in The Federalist Papers a remarkable 124 times—
more frequently than “Congress,” “President,” and
“Supreme Court.”10 Yet, the word is nowhere to
be found in the Constitution that James Madison,
Jefferson’s disciple, largely framed.
Ironically, the more experience that Jefferson
gained as a public official, the more that he forsook
this position, ultimately reversing his views, and
advocating far greater powers for public execu-
tives. In his retirement, Jefferson even argued that
the “laws of necessity . . . are of higher obligation
[than] a scrupulous adherence to written law,”11 an
opinion as disquieting as Richard Nixon’s, uttered
 12 PA R T I In Defense of Governing Well

167 years later: “If the president does it, that means
it’s not illegal.”12
A CULTURE OF CONSTRAINT
These eighteenth-century expressions of govern-
ment’s role reflected an already-formed American
political culture that continues unabated today.
Americans and Their Governments
Americans’ perspective on the proper place of
government differs radically from that of Europeans.
Fifty-eight percent of Americans think that the
“freedom to pursue life’s goals without state interfer-
ence” is more important than that the “state guar-
antees nobody is in need,” which just 35 percent
believe  to be more important. Among Britons,
Germans, French, and Spaniards, these percentages
range from 30 to 38 percent and from 55 to 67 percent,
respectively. Similarly, 36 percent of Americans agree
that “success in life is determined by forces outside
our control,” but 62 percent disagree with the state-
ment. From 41 to 72 percent of the respondents in
the four European countries agree, and from 27 to 55
percent disagree.13 Large majorities of Americans of
all races believe that “poor people have become too
dependent on government assistance programs.”14
Not for nothing has Europe been called America’s
biggest blue state.
More broadly, the greatest governmental gap
between Americans and the rest of the world is their
relationship with the state. The American social con-
tract, forged in revolution, leashes government with
a taut tether. Those who govern are, in every sense,
the citizenry’s “servants,” and, consequently, the
American social contract may be reduced to a word.
That word is: constraint.
Such phrases as “the hollow government,”
“government by gridlock,” and “demosclerosis” all
suggest a governance jammed by malfunctioning
political mechanisms. In reality, however, turbid gov-
ernance is a consequence of an American culture that
places a high premium on constraining what govern-
ments do. So ingrained is this culture of constraint
that serious scholars of American public adminis-
tration have been known to argue against activist
administrative reforms precisely because they could
displace constrained, “prudential judgment” by “dis-
creet ‘mandarins.’”15
An American culture of administrative con-
straint is unique to the public sector, and is quite
the opposite from that of the private sector, with its
rapacious, robber-baron roots. Consider the assess-
ment by Ted Turner, the spectacularly innovative and
candid entrepreneur who founded CNN and other
cable networks: “You play to win. And you know
you’ve won when the government stops you.”16
Governing in a Distrusting Culture
Constrained governance is inextricably enmeshed
in Americans’ distrust of government. As Figure 1-1
shows, only 22 percent of Americans trust government.

70

60

50

40

30

20
19 8
19 0
19 2
19 4
19 6
68

19 0
19 2
19 4
19 6
19 8
19 0
19 2
19 4
19 6
19 8
19 0
19 2
19 4
19 6
20 8
20 0
02
04

12
5
6
6
6
6

7
7
7
7
7
8
8
8
8
8
9
9
9
9
9
0
19

19

20

20

FIGURE 1-1
Trust in Government Index 1958–2012
Source: The National Election Studies, University of Michigan. The NES Guide to public Opinion and Behavior (Ann Arbor, MI: Author, 2005).

Distrust of Government Americans’ distrust
focuses on government’s size, direction, performance,
and power.17 They reserve their deepest distrust for
those parts of government that house elected offi-
cials, and display their highest trust for agencies with
public safety or military missions, findings that “are
consistent to a large extent with findings in other
Western countries.”18
Over thirteen years, the number of Americans
who thought that the federal, state, and local gov-
ernments have a “negative impact” on their day-to-
day lives grew, on average, by more than three-fifths,
a startling increase, and those who felt that govern-
ments’ impact was positive plummeted by a fourth.19
Not even half, a declining proportion of Americans,
think that government is “really run for the benefit
of all the people.”20 The decline in trust of govern-
ment is not limited to the United States, and appears
to be global.21
Public administrators’ opinions track those
of the general public. Top federal, state, and local
executives believe that “there is a deeply systemic
problem with our governance system,” which “is not
performing the way it should.”22
Ominously, the public’s distrust of govern-
ment may be morphing from a political distrust
(e.g., a gridlocked, unacceptably partisan Congress)
to an institutional distrust, a leeriness caused by
strings of institutional failures, such as the pathetic
roll-out of HealthCare.gov, the General Services
Administration’s high-rolling “conferences” in Las
Vegas and other resorts, and the deadly corruption
that afflicts the Veterans Health Administration,
to name a few. In this light, it is worrisome that a
survey of likely voters found that an astonishing 64
percent thought that “things in the U.S. feel like they
are out of control right now.”23
Why Trust Matters Public trust in government is
critically important to good governance.
Some Diverse and Unexpected Correlations High
levels of trust in government correlate, positively
and internationally, with: less political corruption24
(public esteem, a corollary of trust, for government
also associates with lower corruption25); better “gov-
ernment performance on the economy”;26 greater
economic growth and opportunity;27 superior “per-
ceived outcomes” by networks of governments;28
Big Democracy, Big Bureaucracy 13
less “negative” popular evaluations of the perfor-
mance of the entire political system;29 and even with
lower rates of street crime.30
In the United States, high levels of trust in gov-
ernment not only associate with lower levels of cor-
ruption31 and street crime,32 but also with energetic
and widespread public policy innovation.33 In the
view of local officials, there is a very robust connec-
tion between high trust and deeper engagement by
citizens in local policymaking.34
High Trust Equals High Performance Of greatest
importance, public trust and esteem are “positively
related” with high performance by public agencies
and greater citizen satisfaction with public services,
a “strong correlation” that is “not unusual and is
acknowledged in the literature.”35 This strong corre-
lation appears to be universal in democracies,36 and
it exists because trust “helps determine how much
power citizens grant” to their governments, which,
in turn, “is what allows citizens to grant the flexibil-
ity required for bureaucrats to effectively govern.”37
Indeed, trust trumps public participation in agency
decision making, accessibility of services, and even
equality of treatment as a correlate with higher
public performance.38
Certainly, these patterns are found in the
United  States. There is a clear correlation, for
example, between plentiful social capital (an index
composed of “generalized trust and strong civic
norms”) and high-performing state governments.39
Similarly, as state budgets improve, popular trust in
state governments rises.40 A study of the thirty-five
largest American cities found that a 5 percent
increase in popular trust in their government
resulted in a 1 percent hike in that government’s
performance.41
THE CONSEQUENCES
OF CONSTRAINT
Constraint. What are its consequences in the context
of American governments?
Hobbled Elected Chief Executives
A notable consequence is the hobbling of elected
chief executives at every level of government.
 14 PA R T I In Defense of Governing Well
The Domesticated Presidency Largely as a con-
sequence of a largesse of Lilliputian leashes that
Congress has imposed on executive action, there is
a historic “presidential tendency” to be “reactive” in
domestic politics, where power must be shared with
Congress and often is reined in by the courts, but to
be “proactive . . . powerful, costly . . . energetic,” and
interventionist in foreign affairs.42 This reality has
endured for the life of the nation.
Consider, first, Thomas Jefferson. In domes-
tic matters, Jefferson is one of only seven presi-
dents, and the sole two-term president, who never
vetoed an act of Congress. Yet, in foreign affairs, he
acted with stunning boldness. A case-in-point is the
Louisiana Purchase. With no consultation whatso-
ever with Congress, Jefferson assigned two of his
public administrators to “merely inquire” about
buying from France “The Floridas”—which were
Spain’s, but who knew?—and New Orleans. When
France unexpectedly offered the entire Louisiana
Territory, Jefferson’s administrators snapped it up—
without, in turn, consulting Jefferson. This unilat-
eral act doubled the size of the nation – hardly a
dilettantish dabbling in diplomacy. So controversial
was “this extraordinary example of administrative
discretion” that a band of respected political leaders
tried to organize a secession of Northern states!43
Consider, second, Bill Clinton. In 1998, a surreal
spectacle of this schizoid duality unfolded when the
House of Representatives voted to impeach him (for
only the second time in history) on charges pertaining
entirely to domestic affairs, while President Clinton
simultaneously launched a major and sustained air
war against Iraq because it refused to cooperate with
weapons inspectors from the United Nations.
In the administration of the nation, Jeffersonian
constraint prevails—but only in domestic affairs. In
foreign ones, Katy bar the door; Hamiltonian energy
is rampant.
Constraining Governors Governors gradually
have gained executive power over the last three
centuries—since 1960, state constitutional revisions
have lengthened their terms of office and strength-
ened their powers of appointment, budgeting, and the
veto44—but they still remain tightly constrained. For
example, state agency heads accord their governors
and legislators essentially identical levels of influence
in agency “rulemaking,” which is a pseudonym for
agency policymaking, and this has been consistently
the case for more than a quarter century; “legislators
exert major influence on agency rules.”45
An Insipid Appointment Power Out of six “institu-
tional powers” available to the governors, the power
to appoint ranks as the weakest.46 More than half
of key state administrators are not appointed by
the governor. Of the almost 2,000 major adminis-
trative officers in the fifty states, 750 are appointed
by someone or some body other than the governor,
and nearly 300 are elected directly by the people.47
When we add in those state administrators who are
less than major, the total number who are elected
separately surpasses 500, or more than ten per state,
on average, a number that has “changed little” since
1955.48
When agency heads are “outside the orbit of
control by the governor via appointment,” not-
so-good things happen. Compared with those
appointed by the governor, these state executives not
only are somewhat more attuned to legislators than
to their governors, they also attribute a significantly
“higher level of influence” to special interests when
making policy, and lobbyists’ access to their agencies
is “definitely greater.”49
Lieutenant Governors, Term Limits, and Recalls
There are additional constraints on executive power
in the states.
One is the fact that, in twenty-four of the
forty-three states with lieutenant governors (we are
not counting Tennessee and West Virginia, which
accord that title to the senate president), the gov-
ernor and lieutenant governor are elected inde-
pendently,50 and, presumably, have political agendas
that differ. (In 1804, Americans relieved the federal
government of this potentially destabilizing conflict,
as it applied to the president and vice president, by
ratifying the Twelfth Amendment.)
Another is term limits—or the lack of them.
Most elected state administrators —from more
than half to all, depending on the office51—and
legislators in thirty-five states,52 may be re-elected
without limit, a potentially huge political advantage.
By contrast, governors in only fourteen states have
unlimited terms.53
In 1908, Oregon introduced the state recall,
or a specially called election, initiated by voters

signing petitions, that determines whether or not an
elected officeholder may complete his or her term.
Most often, the recall petition must be signed by 25
percent of all registered voters or by 25 percent of
voters who voted in the last election, “the highest
signature threshold for any type of petition.”54
Thirty-six states have laws allowing for the recall of
some elected state or local officials.55 Three states
permit the recall of any official, elected or not, and
seven specifically include federal officials as subject
to recalls.56
Nineteen states and the District of Columbia
permit the recall of elected state (or district) offi-
cials and, although it has been used only three times
against sitting governors (twice successfully),57 it is
a growing constraint. Of the thirty-two successful
recalls of state legislators conducted over 102 years,
a third have taken place since 2011.58
Constraining Local Elected Chief Executives Local
elected chief executives typically have powers barely
worthy of the noun.
Puny Political Powers Almost three-quarters of
county commission chairs,59 roughly half of the
mayors of towns and townships,60 and nearly a
fourth of city mayors,61 are not elected to office
by popular vote. Instead, they are selected by their
fellow council members or even by mindless rota-
tion, thereby denying them their own electoral
power bases.
By contrast, legions of more specialized local
executives, such as sheriffs, treasurers, tax collec-
tors, coroners, and clerks, are, as required by state
constitutions, voted into office. On average, county
voters elect an astounding fourteen “row officers”
(so named for the rows and rows of these positions
that appear on the ballot), and township voters elect
five. City voters elect an average of only two, but,
in 14 percent of cities, residents elect some or all
department heads, and, in 25 percent, these admin-
istrators are appointed not by the mayor, but by the
city council.62
Fifty-four percent of mayors and other local chief
elected officers have terms of fewer than four years,
and 33 percent (the next highest) have terms of just
two years;63 95 percent have no veto power.64
Thirty-one percent of cities and towns split
their powers between two elected chief executives
Big Democracy, Big Bureaucracy 15
(86 percent of whom are part-timers), a mayor and
a council president, and in just 11 percent (a declin-
ing number) of these jurisdictions does the mayor or
president have the exclusive authority to make and
recommend a budget.65 In those cities where depart-
ment heads are appointed, only 17 percent (and
shrinking) of mayors or council presidents have the
sole power of appointment.66
Puny powers indeed.
The Rising Recall The local recall was invented
in 1903 by Los Angeles, and today twenty-nine
states permit voters in at least some of their local
jurisdictions to recall their elected chief executives,
as well as  city council members and other city
officials,  county commissioners and other county
officials, sheriffs, school and special district board
members, or state legislators.67 Even though many
mayors, council presidents, county commission
chairs, and board members of special districts are
not elected by voters, they still may be recalled
by them.
Voters in 56 percent of cities and towns (recall
petitions are filed in about 5 percent of them annu-
ally),68 and in 55 percent of counties69 may recall
local officials. An estimated three-fourths of all
local recall elections are at the city council or school
board level.70 From 14 to 19 percent of the officials
facing these elections are recalled, with the board
members of special districts being the leading losers,
at 80 percent.71
Only about two-fifths of the total “recall
efforts” aimed at all local officials ultimately make
it to the ballot. From a fourth to a third of these
efforts are targeted at mayors and council presi-
dents,72 and typically are initiated because of service
cuts or tax hikes. There are, of course, some idiosyn-
cratic reasons as well, such as the Ogden, Kansas,
mayor who was recalled because he had fired two
lifeguards. About a fourth of recall elections result in
mayors resigning or being voted out of office.73 City
council members comprise about half of all local
recall efforts.74
Historically, local recall efforts were rare. From
1911 through 2001, recall efforts were attempted in
just ten of those years; beginning in 2002, however,
recall efforts have occurred in every year without
exception. Moreover, from 1911 through 2007,
local recall efforts never exceeded three per year. In
 16 PA R T I In Defense of Governing Well
2007, in keeping with tradition, there were three,
but, in 2008, there were a record eight. Then, in
2009, out of nowhere, 100 local recall efforts were
made, challenging not only a single elected official,
but often entire councils, commissions, and boards.
Recall efforts continued to climb steadily, and, by
2014, there were 189, targeting 387 local officials.75
The surge in recall efforts likely will continue,
and is attributable, in part, to the rise of informa-
tion technology, which has produced more reliable
voter registration lists; relatedly, social media have
made petition signing much easier (if you want to
recall a public official, there is an app for that). The
nationalization of recall elections also is an impor-
tant factor. An example: of the nearly $64 million
spent (unsuccessfully) in 2012 to recall Wisconsin’s
governor because of his anti-union policies, more
than half was contributed by unions and conserva-
tive groups external to the state.76
Hobbled Governments
The constraints that Americans have imposed on
their elected chief executives extend to the institu-
tion of government itself.
Constraining the Federal Government The
American founders created a Constitution that
divides power between the national and state govern-
ments, and checks and balances federal power among
its executive, legislative, and adjudicative branches.
More contemporaneously, as we elaborate in Chapter
11, the federal government has ceded significant
power to private and nonprofit organizations. In the
2010s, a sharply divided Congress has proven to be
the least productive in history (details follow).
Constraining the Grass Roots The people have
imposed on their state and local governments the
devices of direct democracy, or the use of specially
called elections to approve or disapprove policy
proposals or to retain or remove elected officials.
“Every state has some form of legislative process
which allows the government to place issues on the
ballot.”77
Though direct democracy clearly constrains
governments, it also associates with some good
things: it likely renders governments more respon-
sive to the electorate, and it correlates positively
with lower levels of corruption; an analysis of
fifty-seven democratic nations found that the more
that direct democracy was present, the smaller the
shadow economy.78
Constraining State Governments Perhaps the least
direct device of direct democracy is the referendum,
or a legislatively authorized popular vote to approve
or disapprove proposed policy. Invented by South
Dakota, in 1898, it has since spread to twenty-three
states, and voters typically approve from three-
quarters to four-fifths of them.79
South Dakota, also in 1898, gave us the initia-
tive, or initiative petition, which places an issue on
the ballot by gathering a stipulated percentage of
registered voters’ signatures on a petition. Two dozen
states now have it.80 The states’ use of the initiative
has nearly quadrupled since the 1960s, when fewer
than a hundred were on state ballots, to a record 377
in the 1990s and 374 in the 2000s, a number second
only to the nineties.81 Slightly more than two-fifths
of all 2,421 state initiatives, beginning with the first
one, in 1904, have been approved by voters.82
State initiatives can be costly and often are pro-
moted by special interests. In the eleven states with
long histories of initiatives, corporations and bil-
lionaires spent more than $1 billion over eighteen
months either for or against initiatives that involved
taxes, casinos, and political fundraising by unions,
among other policies.83
Constraining Local Governments Local govern-
ments use most of the devices of direct democracy
even more liberally than do states. Seventy percent
of cities have the referendum, and 92 percent have
the initiative.84 More than seven out of ten counties
allow the referendum and the initiative.85
Hobbled Governmental Growth
A culture of constraint restrains governmental
growth.
American governments do grow. By the close
of the 1800s, federal, state, and local government
workers accounted for not even 2 percent of the
population, and government revenues at all levels
amounted to about 8 percent of the economy.86 The
proportion of all government workers since has more
than tripled, accounting for more than 7  percent

of the population,87 and revenues collected by all
governments, at more than 19 percent of the gross
domestic product (GDP), have more than doubled
their share of the economy.88
The heart of our matter, however, is this: Do
American governments grow as fast and as big as
governments elsewhere?
No, they do not. Constrained governmen-
tal growth has been particularly evident since
1978, when California’s notorious initiative,
Proposition  13, was voted in by a two-to-one
popular margin. Proposition 13 slashed, and effec-
tively capped, all local property taxes, and made
California the only state that requires a two-thirds
vote in the legislature both to adopt a budget and
to raise any tax.
Proposition 13 not only had a devastating
impact on California’s education, infrastructure,
and finances, but, despite its status as the enduring
and iconic symbol of the revolt against governmen-
tal growth, flatly failed to stanch that growth. The
lost property tax revenue was replaced by sales and
income tax revenue. California has the highest sales
tax and personal income tax in the country for top
earners, and one of the highest corporate income
tax rates (which may, in part, explain why it has the
third worst business climate of the states). In 1978,
the state had the highest overall tax burden, and
thirty-five years later, it still had the highest overall
tax burden.89
Between 1946 (the year following the end of
World War II) and 1978 (the year of Proposition
13, which most observers peg as the year of the
tax revolt’s first shot heard around the nation), the
revenue collected by the federal government as a per-
centage of personal income grew by about one-half
of 1 percent per year (17 percent over thirty-two
years), and the revenues of state and local govern-
ments as a percentage of personal income grew by
4 percent per year, nearly doubling over the same
period. But after 1978, federal revenue as a percent-
age of personal income essentially held flat, and after
2001, as a consequence of unprecedented federal tax
cuts, it actually declined.90 Similarly, after 1978, the
growth of state and local revenues as a percentage of
personal income was slashed by three-fourths to a
growth rate of about 1 percent per year.91 Today, all
taxes imposed by all governments are at their lowest
levels as a percentage of personal income since the
Big Democracy, Big Bureaucracy 17
1950s, “before the advent of the most expensive
transfer programs,” such as Medicare.92 One result:
today, only 1 percent of Americans rank the tax
system as the country’s top problem.93
American governments are substantially smaller
than are governments in other developed democra-
cies. Whereas the revenue collected by all American
governments amounts to 26 percent of GDP, those
collected by the governments of thirty-four devel-
oped democracies, including the United States,
amount to an unweighted average of over 34 percent
of their respective GDPs–– a fourth higher take than
in the United States, which ranks thirty-first lowest
(only Chile, Mexico, and South Korea are lower).94
Not only does the United States have a lower overall
tax rate than almost all comparable countries, but,
remarkably, each type of American tax—income,
sales, property, and payroll tax—is lower than its
counterpart tax in these nations.95
Perhaps more than any other measures, the
relatively slow rate of America’s long-term govern-
mental growth and the comparatively small size
of American governments, stand as testaments to
America’s culture of governmental constraint.
THE BUREAUCRAT: BRAINED,
BLAMED, AND BOUNCING BACK
America’s culture of constrained governance has
unique effects on its public administrators.
Bashing Bureaucrats
A major effect is bureaucrat bashing. Wide swaths
of American institutions single out the bureaucrat as
the craven cause of governmental failure.
Politicians’ Pandering Politicians routinely run
against the bureaucracy in their ceaseless grubbing
for votes. The campaign mantra of bureaucratic
“waste, fraud, and abuse” has been a self-serving
rhetorical standard of office seekers for more than
a generation.96
Once elected to office, politicians are radically
more contemptuous of public administrators than
are the voters whose support they sought. The pro-
portions of elected officials who characterize public
administrators as “dull” or who “make red tape” are
 18 PA R T I In Defense of Governing Well
twice those of the general public, and the percentage
of politicians who describe them as “bureaucratic”
is three times that of the citizenry.97 When speak-
ing on the floor of the U.S. House, Representatives
call public administrators “bureaucrats” 70 percent
of the time, and 84 percent of these references are
clearly pejorative.98
Academia’s Undercutting Intellectuals foster an
image of bureaucracy that ranges from its being
merely unresponsive to dangerously undemocratic.
This anti-public-administration propaganda begins
at an early age. American children’s literature
portrays public servants as measurably less benev-
olent and competent than does British children’s
literature.99
Over three-fourths of introductory college
textbooks on American government portray public
administrators as “government employees who stay
on forever,” and two-thirds demonize governmental
bureaucracy as “all powerful and out of control.”100
“The most deeply rooted and persistent misconcep-
tion” of these texts is that public administrators “are
not accountable.”101
Media’s Mordancy Judging by what evidence
we have, the news media’s coverage of the public
bureaucracy is not good. Over the course of two
decades, 80 percent of the televised news stories
about the federal government, and 70 percent of
the printed ones, focused on the executive branch,
and only a third—or, more commonly, depending
on the medium, less—of those that focused on the
executive branch’s “job performance” were positive
in tone.102
Media’s mordancy is not confined to the news.
Thirty percent of television’s prime-time enter-
tainment episodes present civil servants in a posi-
tive light  and 22 percent in a negative one—“as
robotic paper shufflers or abrasive malcontents
who were too  lazy, apathetic or self-absorbed to
serve the public” (the remaining 48 percent portray
them in  neutral, “unmemorable roles”); these
figures that  have remained fairly constant since
the mid-twentieth century.103 Perhaps we should
not be surprised that young adults’ “favorite TV
public servant” is the casually corrupt, and defini-
tively dumb, animated Mayor Joe Quimby of The
Simpsons.104
Are Bureaucrats to Blame?
Do Americans really believe that their public admin-
istrators are against them?
The Public Likes Public Administrators Evidently
not. Overall, “the American public does not appear
as disdainful of bureaucrats as the projected media
image would indicate.”105 More than seven out of
every ten Americans have stated that they have a
favorable opinion of government workers.106 Only
6 percent of Americans blame government employ-
ees for “what is wrong with government,” com-
pared with four times that number, 24 percent,
who say elected officeholders are responsible for
government’s failures.107 Seventy-three percent of
Americans have “a lot of” (22 percent) or “some”
(51 percent) confidence in federal civilian workers;
“Americans like federal workers a lot more than
their bosses.”108
Why do Americans like public administrators
in spite of their deepening distrust of elected leaders
and government, and the unremitting bombardment
fired by politicians, professors, reporters, and enter-
tainers blasting bureaucrats?
Encountering Bureaucrats Because bureaucrats
deliver. Polls prove it.
About two-thirds of Americans who have asked
federal, state, or local bureaucrats to do some-
thing unusual for them—that is, their request was
not a routine matter—found their civil servants to
be helpful,109 a striking proportion that belies the
stereotype of inflexible, impersonal bureaucrats.
Nearly three-quarters of Americans report that “the
people at the [government] office” are very efficient
(43 percent) or fairly efficient (31 percent) in handling
their problems, and more than three-fourths feel that
they are treated fairly; indeed, only 12 percent think
that they are treated unfairly.110
American bureaucrats give generally good
service, too. At least one survey found “no system-
atic difference in attitudes” among citizens about the
quality of selected private services and comparable
federal, state, and local ones.111
In annual surveys that have been conducted for
well over a decade, selected federal agencies have
received “customer experience” scores from the
public that range from sixty-four to seventy-two out

of 100 possible points. These are lower scores than
what businesses typically receive, which generally
are accorded scores in the mid-seventies,112 and they
have been declining since 2012,113 perhaps because
of “cutbacks in agency budgets and staffs, which
have made it difficult to provide quality service.”114
The federal government, probably like most govern-
ments, usually receives the lowest scores for accessi-
bility, timeliness, and efficiency of services,115 not a
surprising finding in light of the fact that citizens, as
opposed to customers, have little choice in selecting
public service providers.
Even though 59 percent of registered voters
are “frustrated” with the federal government, and
22 percent are “angry” with it,116 a surprising 58
percent of the citizenry view federal agencies favora-
bly. When asked whether they had positive or neg-
ative opinions about eight agencies, seven received
positive responses, ranging from 51 to 70 percent.
Only the Internal Revenue Service was ranked unfa-
vorably by most respondents (no surprise, that), but,
at 48 percent, not by much.117
From three-fifths to over four-fifths of the public
report that they are satisfied or highly satisfied with
state governmental services,118 and local services
garner “generally favorable assessments” from more
than 200,000 citizens in forty states.119
The Bureaucrat: Government’s Savior?
Ironically, those battered and bruised bureaucrats
may be leading the way in restoring Americans’ trust
in government.
Seventy percent of Americans have low expec-
tations about obtaining good governmental services,
but more Americans, 77 percent, who actually expe-
rience public services feel that they receive services
of high quality.120
The consequences of these positive experiences
with governments are varied. Overall, Americans
who have had good experiences with an agency (32
percent, versus 18 percent who have not) are “three
times more likely to give a positive performance
rating” to “government in general” (41 percent
versus 14 percent).121 Those citizens who have had
positive personal dealings with an agency, but who
hold a deeply negative view about government in
general, express highly positive opinions about that
particular agency but their negative view of the
Big Democracy, Big Bureaucracy 19
institution of government persists.122 This phenom-
enon has been labeled “bureauphobia,” and it may
affect as much as a fifth of those who deal with agen-
cies.123
The high regard that Americans have for agen-
cies with which they have dealt is significant because
“the impact of a negative experience with a public
agency is much more pronounced than the effect
of a positive one . . .. Decreasing the number of
disappointed clients will have a stronger effect on
increasing trust in . . . government than increasing
the number of already well-pleased clients.”124
A PARADOXICAL POWER:
THE GRAY EMINENCE OF THE
PUBLIC ADMINISTRATOR
So what does all this mean for the American public
administrator? It means that the United States has
produced a paradoxical public administration char-
acterized by cultural, institutional, and legal limits
on executive action, and by a nonetheless powerful
public administrative class. “The fragmented mana-
gerial climate of government” actually grants public
administrators more opportunities for acquiring
power than are available to their corporate coun-
terparts.125
Staying Power
Of considerable, but often underappreciated, impor-
tance is the staying power of bureaucracies and the
bureaucrats in them, a power that permits them to
wait out elected officeholders and the policies that
they push.
Of 175 federal agencies, only 15 percent dis-
appeared over a half century, a “death rate” that
was far below that of business failures during the
same period, leading to the conclusion that, by
and large, government organizations are “immor-
tal.”126 Examples include the Commission for the
Standardization of Screw Threads, formed in 1918
with a sixty-day life span, and the Federal Helium
Reserve, created by Congress in 1925 to assure the
Army Air Corps a continuing supply of fuel for its
cutting-edge (at the time) aeronautical technology—
blimps. These and others, if differently titled, remain
with us today.
 20 PA R T I In Defense of Governing Well
Just as bureaucracies stay on, so do bureau-
crats. As we detail in Chapter 9, the median job
tenure for workers in all governments is more than
twice as long as that for employees in the private
sector, and, depending on the level of government,
top public careerists average from seventeen to
twenty-six years on public payrolls. Forty-three
percent of federal civilian workers, 38 percent of
state government employees, and 37 percent of the
local workforce are fifty years old or older; for the
private sector, this figure is just 29 percent of all
employees.127
Bureaucracies and bureaucrats endure.
Discretionary Power
Discretionary power refers to a public administra-
tor’s authority to make and administer regulatory
and bureaucratic policies, and to interpret and
implement legislative policies.
Discretion counts. In the American states, for
example, “greater managerial discretion,” in tandem
with deregulation, “drove reforms” in the critical
areas of budgeting, procurement, and personnel,
and, in all three areas, these reforms left “a deep and
long legacy.”128
Legislatures frequently enable bureaucratic
discretion. For instance, Congress, in 1988, effec-
tively granted the Federal Emergency Management
Agency total authority to determine not only how
much  assistance is needed in a disaster, but even
how much aid is desirable.129
Often, however, administrators exercise discre-
tion sans specific legislative instructions. Federal
administrators “fill out” 71 percent of new laws by
appending proscriptions and procedures that have
the force of law.130 The Army Corps of Engineers, for
instance, has elected to interpret “navigable waters”
to mean “wetlands” in a law that does not mention
“wetlands,” which, of course, are neither navigable
nor waters.131
For fifty years, Congress battled bureaucratic
discretion by imposing on agencies the legislative
veto, or the repeal by the legislature of an execu-
tive action, such as new rules; from 1932 to 1980,
Congress inserted legislative vetoes into 555 provi-
sions in 355 acts, expanding its use over time (by
the 1970s, the final full decade of its use, legislative
vetoes had exploded by 507 percent).132 In 1983, the
Supreme Court declared the practice to be unconsti-
tutional.133
In 2017, Congress remembered its Congressional
Review Act of 1996, which allows Congress to review
how agencies fill in the blanks in a law (which, as just
noted, happens more often than not), but only when
Congress specifically grants such an authority to the
agencies in that law. The objective is to assure that
agencies hew closely to the spirit of the law. Congress
has at least sixty days to conduct this review, and, if
majorities in both chambers pass a “joint resolution
of disapproval” and the president signs it, then the
agencies’ fill-in (in reality a rule) is terminated.
The act has been successfully implemented
only once, when the president signed a resolution in
2001, but the president vetoed five resolutions since.
With the election, in 2016, of a president and major-
ities in the House and Senate, all of the same party,
the Congressional Review Act is receiving renewed
attention. But the difference between a legislative
veto and a congressional veto of how agencies have
filled in legislative blanks strikes us as dim; given the
judiciary’s negative position on the legislative veto, it
would not be surprising if it took a similar position
on the Congressional Review Act.
Policymaking Power
Aside from the actual decision to select a public
policy (a decision that, as we detail in Chapter 10, is
uniquely idiosyncratic for each policy process), pol-
icymaking is composed of three main steps: setting
the policy agenda, or discovering and expressing
social problems that need addressing; developing
options about how to resolve those problems; and
implementing the policy.134 Bureaucrats play signif-
icant roles—sometimes decisive roles—in all three
policymaking steps.
Rulemaking as Policymaking Rulemaking embod-
ies the grayest of gray bureaucratic eminences. All
bureaucracies make rules, and rulemaking has been
described as “the single most important function
performed by agencies of government.”135 Why?
Because rules can be a euphemism for policies,
sometimes very big policies. The various estimates of
the annual impact of federal regulations on society
range from more than $260 billion to over $2 tril-
lion.136 Since 2003, federal agencies have churned

out an average of eighty-one “major regulations”
(as defined by the Congressional Budget Office) per
year, and each one may “have an annual effect on the
economy of $100 million or more.”137
Policymaking via rules, rather than legislation,
accelerates when legislatures stymie. In recent years,
Congress has exemplified this dilemma. The 112th
Congress of 2011–2013 enacted into law 152 public
bills (or bills that apply to everyone, in contrast to
private bills, which apply to groups or individu-
als, such as naming a post office), and the 113th of
2013–2014 passed 142, the fewest in history—
by contrast, Harry Truman’s “do-nothing” 80th
Congress of 1947–1948 enacted 906 public bills.
Americans were well aware of Congress’s
stalemate. From 56 to 58 percent of Democrats,
Republicans, and independents believe that the
“political system can work fine, members of
Congress are the problem.”138 Just 26 percent of
Americans think that “more progress” is being
made at “the national level” in dealing with “major
challenges facing the country,” compared with 64
percent who believe that the “state and local level”
is making more progress.139
Confronted with these realities, President Barack
Obama, beginning in the fall of 2011, became “one
of the most prolific authors of major regulations in
presidential history,” issuing hundreds of “rules”
that affected, just as profoundly as any laws, the
minimum wage, civil rights, the environment, and
dozens of other vital areas.140
Policymaking by Federal Administrators Although
“no one set of actors dominates the process” of
federal agenda setting, “elected politicians and their
appointees come closer than any other.” Top pres-
idential appointees rank higher than the president
and members of Congress in setting the agenda, and
are followed closely by staffers in the White House
and Congress.141
Career civil servants in the executive branch are
less involved in agenda setting, but they are extremely
significant—more so than political appointees—in
structuring alternative policies. Careerists have “yet
more” impact on the final policy process, that of
implementing policy.142
There are about 29,000 unelected employ-
ees in the institutional center of national policy-
making, Congress,143 a number that includes some
Big Democracy, Big Bureaucracy 21
21,000 personal and committee staffers (up from
fewer than 2,500 in 1948),144 and the employees of
the Government Accountability Office, Library of
Congress, and Congressional Budget Office. These
professionals, but particularly staffers, wield signifi-
cant power in the policymaking process.145
Policymaking by State Administrators Public
administrators play comparable policymaking roles
in the states. A five-decades-long study of state
agency heads finds that these executives consistently
allocate half their time to “policy development”
and “building political support”; the other half is
spent on “internal management.”146 In state exec-
utive offices, administrative professionalism itself
ranks “as an important influence” in state policy
formation, equaling “other more commonly studied
state  characteristics,” including the most powerful
political forces, such as special interests and ideol-
ogies.147
The nation’s more than 7,300 state legislators
employ 28,000 full-time legislative staffers and
another 5,000 when the legislatures are in session.148
Just three legislatures fail to provide their standing
committees with professional staffs;149 none did so
in 1960.150
As with Congress, the role of these staffs is a
powerful one. As a former state legislative staffer
put it, “The most remarkable discovery that I made
during my tenure as a staff member was the amount
of power I had over bills on which I worked.”151
Policymaking by Local Administrators Most of
the research on policymaking power in local gov-
ernments focuses on city and town managers, or
nonpartisan chief appointed executives who manage
85 percent of all municipalities, a growing number,
and 100 percent of the biggest cities—those with 1
million people or more.152 Their “policy role con-
sumes approximately one-third” of their time,153 a
share that has held steady since the mid-1980s.154 In
1973, when the first national survey of city manag-
ers on the topic was conducted, 64 percent reported
that they initiated, set, or shaped policy in their
cities; four decades later, 90 percent said this,155 with
a stunning 100 percent of city and county managers
playing “a significant role” in initiating policy pro-
posals (48 percent do so frequently, and 40 percent
always).156
 22 PA R T I In Defense of Governing Well
The rise of the local manager as a policymaker
is not without its tensions: As the managers’ “exter-
nal” policymaking leadership deepens, their “inter-
nal” administrative authority lessens.157
Lethargic Local Legislators The expanding policy-
making power of local administrators has occurred
in part because local elected officials have ceded
their responsibilities to them.
Most city council members “are ambivalent
about making policy decisions,” are uninvolved
in policymaking and mission development, and
approve of their managers’ taking over these respon-
sibilities that, legally, are theirs.158 The longer that
a city council member has served on the council,
the greater the deference that he or she has for city
administrators.159
Other local councils demonstrate a compara-
ble lack of interest in policymaking. Virtually all
researchers who have addressed this issue in county
governments find that county commissioners also
“are relatively uninvolved in policy formation,” a
vacuum that is typically filled by county adminis-
trators,160 who are the equivalents of city managers.
These appointed officials administer 56 percent, an
expanding number, of all counties.161
In school districts, the school superintendent
is the major formulator of educational policy, and
school boards adopt the policies recommended by
their superintendents an astonishing 99 percent of
the time. “The superintendent—far more than the
board—is identified publicly as the ‘governor’ of
education.”162
The executive directors of special districts typ-
ically report to boards of directors who often have
scant interest in district business, and almost always
are accorded a wide policymaking berth.163
Is this accretion by bureaucrats of local policy-
making power a good thing? It likely is. An extensive
investigation found that local “democratic account-
ability” is greatly enhanced by city managers who
actively involve themselves in local policymaking,
and this is particularly true in light of “the dimin-
ishing role of elected officials in providing political
guidance.”164
The Demise of Democracy? Local managers are
not merely making public policy. They are replac-
ing local legislators as the effective political
representatives of the people. “This finding repre-
sents a significant departure” from previous research,
and marks a new nadir for local democracy.165
A remarkable 70 percent of city managers spend
“more than half their time . . . on self-selected tasks
[rather] than on tasks imposed by others,” such as
council members, leaving them free “to work on
tasks that they find most appealing.” What these
managers find most appealing is: taking “a more
active political role” in their communities; exhibiting
“a strong preference” to communicate directly with
citizens (another analysis found that city managers
“have not taken advantage of the Internet to bring
citizens closer to their governments because these
officials strongly prefer traditional citizen participa-
tion”166); and to “more directly and visibly influence
the development of public policy by working more
closely with citizens and assuming the mantle of
community leadership.”167
Ninety-four percent of city and county manag-
ers “go out into the community and engage directly
with the public on policy issues” (54 percent do so
frequently or always). Once these issues become
policy, 95 percent of them “exercise significant lati-
tude and discretion in the interpretation and admin-
istration of governing board policy” (three-quarters
do so frequently or always).168
Is there any remaining rationale to elect local
legislators to office?
Stopping Power
Bureaucrats, in brief, have the power to do things.
They also possess the power to not do things.
Consider the case of John R. Bolton as arms-
control chief in the State Department. During
President George W. Bush’s first term, Bolton alleg-
edly stymied for two years the disposal of sixty-eight
tons of Russian plutonium capable of fueling 8,000
nuclear bombs (a task that he was charged with facil-
itating, not undermining); withheld American support
from Europe for a joint approach regarding Iran’s
nuclear plans; and blocked a new initiative concerning
the sharing of civilian nuclear technology with India.
In 2005, the president appointed a new secre-
tary of state and Bolton as ambassador to the United
Nations, moves that effectively cut Bolton out from
these policymaking loops. Almost immediately,
the logjams on these and other issues broke. As a

former official at Foggy Bottom put it, “through-
out his career . . . he was always playing the stopper
role . . .. Even when there was an obvious interest by
the president to move things forward, Bolton often
found ways of stopping things by tying the intera-
gency process in knots.”169 Or, as a federal adminis-
trator phrased it when addressing another incident
of bureaucratic stopping power, “policy is not what
the president says in speeches. Policy is what emerges
from interagency meetings.”170
THE CONTEST FOR CONTROL
In light of the impressive quantum of power that
bureaucrats have accrued in both the executive and
legislative branches of governments, how do elected
chief executives control “their” bureaucracies?
Presidents versus Bureaucrats: Mobilizing
the Bureaucracy
Nowhere is this challenge more daunting than in
that biggest bureaucracy of all, the federal service.
Presidential Frustration Consider the following
comments made by presidents about “their” bureau-
cracy.
■ Harry Truman: “I thought I was the president,
but when it comes to these bureaucrats, I can’t
do a damn thing.”171
■ John F. Kennedy told a caller, “I agree with you,
but I don’t know if the government will.”172
■ Richard Nixon: “We have no discipline in
this bureaucracy! We never fire anybody! We
never reprimand anybody! We never demote
anybody!”173
■ Jimmy Carter, in the final year of his
presidency: “Before I became president, I
realized and was warned that dealing with the
federal bureaucracy would be one of worst
problems I would have to face. It has been
worse than I had anticipated.”174
Why do presidents feel this way? We offer a couple
of small but revealing examples.
Some years ago, President Kennedy was pestered
by his brother, Attorney General Robert Kennedy,
over the fact that, during his daily commute, he
could see a large sign directing drivers to the Central
Big Democracy, Big Bureaucracy 23
Intelligence Agency’s headquarters, which, in his
view, should not be advertised. President Kennedy
ordered an aide to have the sign removed; the aide,
in turn, directed the Interior Department to remove
it. Nothing happened. A few days later, the presi-
dent repeated his order. Again, nothing happened.
Aggravated by both the bureaucracy and his brother’s
badgering, the president personally called the official
in charge of signs: “This is Jack Kennedy. It’s eleven
o’clock in the morning. I want that sign down by the
time the attorney general goes home tonight, and I’m
holding you personally responsible.” The sign was
removed and the president had learned a lesson: “I
now understand that for a president to get something
done in this country, he’s got to say it three times.”175
Such an understanding of supposed bureau-
cratic inertia is held by most presidents. But quite
the opposite can occur. President Carter’s daughter,
Amy, was having difficulty one Friday afternoon
on a homework problem about the industrial rev-
olution. Amy asked her mother for help, who asked
an aide if she knew the answer. The aide called the
Labor Department for assistance. Labor was pleased
to oblige. On Sunday, a truck pulled up to the White
House with Amy’s answer: a massive computer
printout, costing an estimated $300,000 and requir-
ing a special team of analysts to work overtime. The
Department thought it was responding to an order
from the president. Amy received a “C” for her
homework assignment.176
Bringing Bureaucracy to Heel? As these incidents
reveal, gaining presidential control over a colossal
bureaucracy involves clarity and communication,
skill and will. Some presidents have no clear vision
of what they want to do (George H. W. Bush,177 Bill
Clinton178). Others do not comprehend the criticality
of the bureaucracy in securing their place in history
(Nixon, at least in his first term,179 and Clinton,180
who imprudently kept his naïve and rash campaign
promise to cut the White House staff by a fourth,
filled the resultant vacuum with unpaid interns, one
of whom he had an affair with, leading to his dis-
barment and impeachment). Hence, not much gets
done. Still others do have strategic goals, and appre-
ciate the civil service’s importance in attaining them,
but lack the skills needed to master the bureaucracy.
Lyndon Johnson,181 Nixon in his second term,182
and Carter183 are exemplary.
 24 PA R T I In Defense of Governing Well
We offer two opposing and extreme examples
of presidents’ attitudes and actions in bringing their
bureaucracies to heel.
Executive Expertise The president who was
most skilled in mobilizing his bureaucracy behind
his vision was Ronald Reagan. So devoted were
Reagan’s appointees that they served, on average,
about 50 percent longer than those appointed by
Clinton and the two Presidents Bush.184
Of greater importance, “few if any presidential
administrations come to Washington with as clear a
game plan as the Reagan administration had,” and
this clarity was critical to its relative bureaucratic
success. Reagan centralized personnel selection in
the White House; appointed loyal fellow ideologues
not only as Cabinet secretaries, but even to opera-
tional positions deep in the bureaucracy (often, long
before he appointed the secretaries to whom they
ultimately reported), and then decentralized power
to them.185
Crucially, Reagan did not eschew competence in
his appointments. “Ronald Reagan pursued manag-
ers,” and he “shrewdly coupled loyalty to the Reagan
agenda with federal management experience.”186
Presidential Indifference President George W.
Bush seems to have had neither a program, other
than cutting taxes and invading Afghanistan and
Iraq, nor an ability to manage the bureaucracy—or
even an interest in doing so. Former insiders portray
him not as the self-declared “decider,” but rather
as a dissociated ditherer on most important issues,
allowing them to fester among his executives. When
a policy eventually was chosen, he typically failed to
marshal his bureaucracy behind it.
Here is how Bush’s National Security Adviser,
in an “extraordinary remark,” put it: Bush “will talk
with great authority and assertiveness . . .. ‘This is
what we are going to do.’ And he won’t mean it.
Because he will not have gone through the consid-
ered process where he finally is prepared to say, ‘I’ve
decided.’” Historians will conclude from the written
record that, “‘Well, he decided on this day to do such
and such.’ It’s not true. It’s not history. It’s a fact, but
it’s a misleading fact.”187
Control and Autonomy There can be little doubt
that the immensity, complexity, and publicness of
the federal service are unique presidential challenges,
but an irony in presidents’ exertions to bring their
bureaucracy to heel is that the problem often resides
not with the bureaucrats, but with them. As we
have noted, some presidents do not have a concrete
mission in mind, and, without one, coherent policy
directives, other than a demand for loyalty, are often
absent.
When the president’s program is clear, top
federal careerists are extraordinarily responsive,
even by White House standards. For more than forty
years, from almost four-fifths to more than nine-
tenths, depending on the administration, of all
presidential appointees have fulsomely praised the
competence and responsiveness of career public
administrators.188 The “evidence is overwhelming
that experienced political appointees, regardless of
administration, party, or ideology, believe that career
executives are both competent and responsive.”189
The central question is less one of presidential
dominance of their bureaucracies versus the bureau-
crats’ drive for autonomy, and more of a recognition
that “democratic control and bureaucratic auton-
omy are not incompatible.” When elected executives
and public administrators respect each other and
work together, the governed benefit.190
A Bureaucracy Newly Girded Bureaucratic sab-
otage of presidential policies, while not utterly
absent,191 is so rare as to be almost nonexistent.
Federal administrators, however, do resist the politi-
cization of their agencies, and they are getting better
at it. Over time, “the capacity of the bureaucracy
to fight back” presidential attempts to undermine
its professionalism “has improved substantially—
because of shifting cultural attitudes about the legiti-
macy of bureaucratic dissent, better legal protections
for whistle-blowers . . . technological changes that
have made it easier to broadcast leaks . . . [and] a
lucrative market for insider accounts of the adminis-
tration’s decision making.” These add up “to a signif-
icant new check on presidential authority.”192
Governors versus Legislators: The Battle for
the Bureaucracy
“The struggle to control state bureaucracy is one of
the long-standing conflicts of state politics,”193 and
it pits governors against legislators.

In 1964, only 32 percent of state agency heads
reported that their governors had greater control
over their agencies than the legislature, and 44
percent said that the legislature had more control.
Today, these figures have reversed to 45 percent and
32 percent, respectively.194
On the other hand, empirical research finds that
governors and legislatures are essentially dead even
in their control of executive agencies. The gover-
nors’ influence over their agencies in four vital areas
dealing with policy development is statistically the
same as that of the legislatures’ influence over the
agencies.195 Similarly, the proportion of state budget
chiefs who report that their governors’ power to
shape budgets has slipped by almost two-fifths over
twelve years, and only about a third of them think
that their governors are their states’ principal budget
maker.196
Over time, governors have gained some power
over their bureaucracies, but it is indisputable that
their authority remains severely constrained. A
half-century-long study of some 1,000 state agencies
concludes that “the degree of executive control in
the American states is modest at best.”197
Managers and the Control of Local
Government
Until the 1950s, approximately, local elected offi-
cials often served as their jurisdictions’ main man-
agers. No more.
In 65 percent of all municipalities, the city or
town manager has the exclusive responsibility for
developing the budget, and in another 8 percent
the manager and the mayor develop the budget
together; in 10 percent, the budget is developed
solely by another bureaucrat, the chief financial
officer.198
In 37 percent, the manager has sole authority
to appoint department heads, and in 11 percent
the manager shares this power with the mayor.199
In council-manager cities, which account for 59
percent of all cities and half of all cities with popula-
tions of 1 million or more, the city manager has the
exclusive authority to appoint department heads in
59 percent, and, in an additional 17 percent, jointly
with the mayor or council.200
In 56 percent of all counties, county adminis-
trators have the exclusive authority to develop the
Big Democracy, Big Bureaucracy 25
budget, and, in 22 percent, they may both form the
budget and hire and fire department heads.201
As the “governors” of education, school super-
intendents are their districts’ chief administrators,202
and the executive directors of special districts
enjoy  managerial and policymaking “opportunities
enviable to their counterparts in government and
industry.”203
KNOWLEDGE: THE BASE OF
BUREAUCRATIC POWER
Question: How has the bureaucracy grown so in
political importance and independence?
Knowledge Is Power
Answer: Because the old saw, “knowledge is power,”
has never been more salient than it is today.
Public administrators work in bureaucracies,
and bureaucracies are more likely to be found in big,
complicated systems and societies, where knowl-
edge is critical to success and often to survival. The
more economically and socially complex states, for
instance, also have the more advanced, informed,
and well-developed legislative bureaucracies.204 The
larger the city, the likelier the city manager will be
intensely involved in municipal policymaking.205
School superintendents have far more power relative
to their school boards in big cities, substantially less
power in the suburbs, and even less power in small
towns.206
Max Weber, the famous theorist on bureau-
cracy, noted a century ago: “In facing a parliament,
a bureaucracy, out of a sure power instinct, fights
every attempt of the parliament to gain knowl-
edge by means of its own experts or from interest
groups.”207 Consider, for example, city managers,
most of whom strongly oppose a staff for the mayor
and 60 percent of whom resist a full-time, paid city
council: “this item evoked the strongest expression
of opinion in the entire series of questions.”208
When forces external to the executive branch do
gain knowledge, they also gain power at its expense.
When governors, legislators, or lobbyists “have
informational advantages over estimated program
costs” relative to state agency heads, they “signifi-
cantly affect agency budget requests.”209 The more
 26 PA R T I In Defense of Governing Well
highly professionalized the state legislature, and the
larger its staff, the lower the influence of the execu-
tive agencies in their own policy areas.210
As a matter of course, bureaucracy and knowl-
edge reside most frequently in the executive branch.
Potentially, however, any branch of government, and
any special interest, can create its own bureaucratic
knowledge base, and when it does, power follows.
Knowledge, Power, and the Public Interest
As we all know, power can be misused, and, because
knowledge is power, knowledge sometimes is delib-
erately distorted to serve the powerful. Consider
some examples:
■ President Nixon ordered his Bureau of Labor
Statistics to stop holding news conferences
in which politically-embarrassing monthly
unemployment figure were released and
interpreted.211
■ Vice President Al Gore “drove some
environmental researchers out of government
positions because their views on global warming
and ozone depletion clashed with his own.”212
■ Toward the close of President George W. Bush’s
second term, the Associated Press noted “a
pattern by the Bush administration not to seek
input from its scientists” concerning science-
based policy, relying instead on lawyers and
ideologues.213 Sixty percent of nearly 1,600
scientists in the Environmental Protection
Agency214 and 58 percent of more than 1,600
climate scientists in seven federal agencies,215
reported that they had experienced “political
interference” with their work over the past five
years.
■ A parallel pattern of ignoring or
misrepresenting informed sources was evident
regarding 9/11 and the subsequent decision
to invade Iraq. The White House scotched the
9/11 Commission’s conclusion that officials
of the Federal Aviation Administration
had ignored numerous advanced warnings
concerning possible airline hijackings and
suicide missions by Al Qaeda terrorists.216
In an apparent effort to drum up support
for the invasion of Iraq, the under secretary
of defense for policy, according to the
Defense Department’s own inspector general,
manufactured a case for an Iraq–Al Qaeda
relationship that was never vetted by the
intelligence community and not supported by
intelligence. A “Senior Intelligence Analyst . . .
countered, point-by-point, each instance of an
alleged tie between Iraq and al-Qaida” pushed
by the under secretary.217
■ And, in a sad reprise of an earlier presidency,
the Bureau of Labor Statistics, in 2005, was
ordered to stop reporting mass layoffs.218
Fortunately, these incidents are the exception, not
the rule. “Politics as usual? Not really. Hard as it
may be to believe . . . the executive branch has tradi-
tionally succeeded at hewing to the ideals of objec-
tivity and nonpartisanship.” Government agencies
“have produced reliable numbers, even when those
numbers have made sitting Presidents look worse. . ..
The people who have made this possible are among
the most heavily scorned figures in American life—
George Wallace’s ‘pointy-headed bureaucrats.’” Yet,
these bureaucrats are “the only professionals in
government—the only ones to say what they think
instead of what they believe their bosses and voters
want them to. Would we trust the unemployment
numbers if, every time a new President came along,
he replaced the entire Bureau of Labor Statistics
with a new crop of cronies and campaign aides?”219
Therein lies the power—and the honor—of the
public administrator.
NOTES
1. Charles C. Mann, “The Founding Sachems,” New
York Times (July 4, 2005).
2. Ethnographer Lewis Henry Morgan, as quoted in
ibid.
3. Woodrow Wilson, “The Study of Administration,”
Political Science Quarterly 2 (June/July 1887),
pp. 197–222. The quotation is on p. 206.
4. Garry Wills, A Necessary Evil: A History of
American Distrust of Government (New York:
Simon & Schuster, 1999), p. 66.
5. Josiah Tucker, as quoted in Page Smith, The
Constitution: A Documentary and Narrative
History (New York: Morrow Quill, 1980), p. 82.
6. James Keene, “American Governance’s Funda-
mental Tension,” Governing.com (September 29,
2016).

7. William Kent, Memoirs and Letters of James Kent
(Boston: Little, Brown, 1898), pp. 327–328. Kent
was a contemporary of Hamilton’s.
8. Alexander Hamilton, The Federalist No. 70.
9. Lynton K. Caldwell, “The Administrative
Republic: The Contrasting Legacies of Hamilton
and Jefferson,” Public Administration Quarterly
13 (Winter 1990), pp. 470–494. The quotation is
on p. 482.
10. Linda J. Bilmes, “Federalist Nos. 67–77: How
Would Publius Envision the Civil Service Today?”
Public Administration Review Supplement to
Volume 71 (December 2011), pp. S98–S104.
11. Quoted in Wills, A Necessary Evil, p. 53.
12. Interview of April 6, 1977, with David Frost, in
http://www.historycommons.org.
13. Pew Global Attitudes Project, The American-
Western European Values Gap (Washington, DC:
Pew Research Center, 2011), p. 1. Figures are for
2011.
14. Pew Research Center for the People & the Press,
Independents Take Center Stage in Obama Era
(May 21, 2009), Section 2.
15. John Kane and Haig Patapan, “In Search of
Prudence: The Hidden Problem of Managerial
Reform,” Public Administration Review 66
(September/October 2006), pp. 711–724. The
quotation is on p. 711.
16. Quoted (p. 154) in Ken Auletta, “The Lost
Tycoon,” The New Yorker (April 23 & 30, 2001),
pp. 138–163.
17. Pew Research Center for the People and the Press,
Deconstructing Distrust: How Americans View
Government (Washington, DC: Author, 1998),
p. 2.
18. Shlomo Mizrahi, Eran Vigoda-Gadot, and
Gregg Van Ryzin, “Public Sector Management,
Trust, Performance, and Participation,” Public
Performance & Management Review 32
(December 2010), pp. 268–312. The quotation is
on p. 268.
19. As derived from data in Pew Research Center
for the People & the Press, Distrust, Discontent,
Anger and Partisan Rancor, Section 3. Figures are
for 1997–2010.
20. Pew Research Center for the People & the Press,
Independents Take Center Stage in Obama Era,
Section 2. Figure, 49 percent, is for 2010. In 1987,
57 percent thought this.
21. Uri Friedman, “Trust in Government Is Collapsing
Around the World,” Govexec.com (July 5, 2016).
Big Democracy, Big Bureaucracy 27
22. National Academy of Public Administration, Key
Issues of Governance, Public Management, and
Public Administration (Washington, DC: Author,
1999), p. 6.
23. Politico, Likely Voters in Competitive U.S. House
and Senate Races (Washington, DC: Author,
2014), Q. 23.
24. Richard Wike and Kathleen Holzwart, Where
Trust Is High, Crime and Corruption Are Low
(Washington, DC: Pew Global Attitudes Project,
2008). Data are for 2007.
25. Geoffrey Brennan and Philip Pettit, The Economy
of Esteem (New York: Oxford University Press,
2004).
26. Akira Nakamura and Soonhee Kim, “Public Trust
in Government in Japan and South Korea: Does
the Rise of Critical Citizens Matter?” Public
Administration Review 70 (September/October
2010), pp. 801–810. The quotation is on p. 801.
27. Vadim Radaev, “Coping with Distrust in Emerging
Russian Markets,” Distrust, Russell Hardin, ed.
(New York: Russell Sage Foundation, 2004), pp.
233–245.
28. Erik-Hans Klijn, Jurian Edelenbos, and Bram
Steijn, “Trust in Governance Networks: Its
Impact on Outcomes,” Administration & Society
42 (April 2010), pp. 193–221. The quotation is on
p. 193.
29. Christopher J. Anderson and Yuliya V. Tverdova,
“Corruption, Political Allegiances, and Attitudes
Toward Government in Contemporary
Democracies,” American Journal of Politics 47
(January 2003), pp. 91–109. Data are for 1996.
30. Wike and Holzwart, Where Trust Is High, Crime
and Corruption Are Low.
31. Ibid.
32. Gary LaFree, Losing Legitimacy: Street Crime
and the Decline of Social Institutions in America
(Boulder, CO: Westview, 1998).
33. Marc J. Heatherington, Why Trust Matters:
Declining Political Trust and the Demise of
Liberalism (Princeton, NJ: Princeton University
Press, 2004).
34. William Barnes and Bonnie Mann, Making Local
Democracy Work: Municipal Officials’ Views
about Public Engagement (Washington, DC:
National League of Cities, 2010), p. 18. Data are
for 2009.
35. Shlomo Mizrahi, Eran Vigoda-Gadot, and Nissim
Cohen, “Trust, Participation, and Performance in
Public Administration: An Empirical Examination
 28 PA R T I In Defense of Governing Well
of Health Services in Israel,” Public Performance
& Management Review 33 (September 2009),
pp. 7–33. The quotations are on pp. 7, 27.
36. Brennan and Pettit, The Economy of Esteem.
37. Christopher A. Cooper, H. Gibbs Knotts, and
Kathleen M. Brennan, “The Importance of Trust
in Government for Public Administration: The
Case of Zoning,” Public Administration Review
68 (May/June 2008), pp. 459–467. The quota-
tions are on pp. 459, 464.
38. Mizrahi, Vigoda-Gadot, and Cohen, “Trust,
Participation, and Performance in Public
Administration.”
39. Stephen Knack, Social Capital and the Quality
of Government: Evidence from the U.S. States,
(Washington, DC: World Bank, 2000).
40. Gallup’s 2012 annual governance survey as
cited in Jim Malewitz, “Survey: As State Budgets
Improve, So Does Trust in Government,” Stateline
(September 27, 2012).
41. Johnny Goldfinger and Margaret R. Ferguson,
“Social Capital and Governmental Performance
in Large American Cities,” State and Local
Government Review 41 (Winter 2009), pp. 25–36.
The data are on p. 32.
42. Caldwell, “The Administrative Republic,”
pp. 483–484.
43. Stephanie P. Newbold, “Statesmanship and Ethics:
The Case of Thomas Jefferson’s Dirty Hands,”
Public Administration Review 65 (November/
December 2005), pp. 669–677. The quotations
are on p. 671.
44. Thad Beyle, “The Governors,” Politics in the
American States: A Comparative Analysis, 6th
ed., Virginia Gray and Herbert Jacob, eds.
(Washington, DC: CQ Press, 1996), pp. 207–252.
45. Cheryl M. Miller and Deil S. Wright, “Who’s
Minding Which Store? Institutional and Other
Actors’ Influence on Administrative Rulemaking in
State Agencies, 1978–2004,” Public Administration
Quarterly 33 (Fall 2009), pp. 397–428. The quo-
tation is on p. 403.
46. Thad L. Beyle, “Enhancing Executive Leadership
in the States,” State and Local Government
Review 27 (Winter 1995), pp. 18–35.
47. National Commission on the State and Local
Public Service, Hard Truths/Tough Choices: An
Agenda for State and Local Government Reform,
First Report (Albany, NY: Nelson A. Rockefeller
Institute of Government, State University of New
York, 1993), pp. 16–17.
48. Beyle, “Enhancing Executive Leadership in the
States,” pp. 20–21. Figures are for 1955–1994.
49. Miller and Wright, “Who’s Minding Which Store?”
p. 410.
50. Marsha Mercer, “In Many States, Lieutenant
Governors Take on Larger Role,” Stateline (April
7, 2015). Figure is for 2015; South Carolina will
switch to team elections in 2018.
51. As derived from data in Council of State
Governments, Book of the States, 2015 (Lexington,
KY: Author, 2015), Table 4.10.
52. National Conference of State Legislatures, Legis-
lative Term Limits: An Overview (Washington,
DC: Author, 2010). Figure is for 2010.
53. As derived from data in Council of State
Governments, Book of the States, 2015, Table 4.9.
54. Ballotpedia, Recall (Madison, WI: Author, 2015).
55. Ballotpedia, Laws Governing Recall (Madison,
WI: Author, 2015).
56. Ballotpedia, Recall.
57. National Council of State Legislators, Recall of
State Officials (Washington, DC: Author, 2013).
Figures are for 2013.
58. Reid Wilson, “The Era of the Recall,” Washington
Post (September 3, 2013). Figures are for
1911–2013 and 2011–2013.
59. Tanis J. Salant, “Trends in County Government
Structures,” Municipal Year Book, 2004
(Washington, DC: International City/County
Management Association, 2004), pp. 35–41.
Figure (p. 39) is for 2002.
60. U.S. Bureau of Census, Census of Governments,
1992, Vol. 1, No. 2 (Washington, DC: U.S.
Government Printing Office, 1995), pp. 9–19.
Figure is for 1992, and includes council presidents.
61. Evelina R. Moulder, “Municipal Form of
Government: Trends in Structure, Responsibility,
and Composition,” Municipal Year Book, 2008
(Washington, DC: International City/County
Management Association, 2008), pp. 35–41.
Figure (p. 38) is for 2006, and includes council
presidents.
62. U.S. Bureau of Census, Census of Governments,
1992, pp. 9–19.
63. James H. Svara and Jennifer Claire Auer, “Per-
spectives on Changes in City Government Structure,”
Municipal Year Book, 2013 (Washington, DC:
City/County Management Association, 2013),
pp. 17–34. Figures (p. 24) are for 2011.
64. Salant, “Trends in County Government Struc-
tures,” p. 39. Figure is for 2002.

65. Moulder, “Municipal Form of Government,”
pp. 38–40.
66. Susan A. MacManus and Charles S. Bullock,
III, “The Form, Structure, and Composition of
America’s Municipalities in the New Millennium,”
Municipal Year Book, 2003 (Washington, DC:
International City/County Management Asso-
ciation, 2003), pp. 3–18. Figure (p. 12) is for 2001.
67. National Council of State Legislators, Recall of
State Officials. Figure is for 2013.
68. Svara and Auer, “Perspectives on Changes in City
Government Structure,” p. 31. Figure is for 2011.
69. Edgar E. Ramirez de la Cruz, “County Form  of
Government: Trends in Structure and Com-
position,” Municipal Year Book, 2009 (Washington,
DC: International City/County Management
Association, 2009), pp. 21–27. Figure is for 2007.
70. National Council of State Legislators, Recall of
State Officials.
71. Ballotpedia, Ballotpedia’s 2013 Recall Analysis
and Ballotpedia’s 2014 Recall Analysis (Madison,
WI: Author, 2013, 2014).
72. Ballotpedia, Political Recall Efforts (Madison, WI:
Author, 2011–2014). Figures are for 2011–2014.
73. Ryan Holeywell, “Recall Fever,” Governing (April
2011), pp. 44–48.
74. Ballotpedia, Political Recall Efforts. Figures are
for 2011–2014.
75. Ballotpedia, Political Recall Efforts, 1911–2014,
and Ballotpedia’s 2014 Political Recall Analysis.
We have subtracted from Ballotpedia’s 2014
totals a recall effort aimed at “one state official.”
76. Wilson, “The Era of the Recall.”
77. Initiative and Referendum Institute, “State I &
R,” Ballotwatch (Los Angeles: Author, 2015).
78. Desiree Teobaldelli and Friedrich Schneider, “The
Influence of Direct Democracy on the Shadow
Economy,” Public Choice 157 (December 2013),
pp. 543–567.
79. Initiative and Referendum Institute, Ballotwatch
(Los Angeles: Author, 2014).
80. National Conference of State Legislatures,
Initiative, Referendum and Recall (Washington,
DC: Author, 2013). Figure is for 2013.
81. Initiative and Referendum Institute, Overview of
Initiative Use, 1904–2009 (Los Angeles: Author,
2013), p. 1. Figures exclude initiatives seeking
to repeal laws and refer only to those seeking to
enact new laws or constitutional amendments.
82. As derived from data in ibid. and Initiative and
Referendum Institute, Ballotwatch (Los Angeles,
Big Democracy, Big Bureaucracy 29
Author, 2011), p. 1. Figure excludes initiatives
seeking to repeal laws and refers only to those
seeking to enact new laws or constitutional
amendments.
83. Reid Wilson, “Initiative Spending Booms Past
$1 Billion as Corporations Sponsor Their Own
Proposals,” Washington Post (November 8,
2013). Figure is for 2012–2013.
84. Svara and Auer, “Perspectives on Changes in City
Government Structure,” p. 31. Figures are for 2011;
figure for initiatives includes popular referenda.
85. Ramirez de la Cruz, “County Form of Govern-
ment,” p. 26. Figures, 71 and 72 percent, respec-
tively, are for 2007. Figure for initiatives includes
popular referenda.
86. U.S. Advisory Commission on Intergovernmental
Relations, The Federal Role in the Federal System:
The Dynamics of Growth, A Crisis of Confidence
and Competence, A-77 (Washington, DC: U.S.
Government Printing Office, 1980), pp. 131, 111.
87. As derived from data in ProQuest LLC, ProQuest
Statistical Abstract of the United States, 2016, 4th
ed. (Bethesda, MD: Author, 2016), Tables 2, 484.
Figure is for 2013.
88. U.S. Office of Management and Budget, “Historical
Tables,” The President’s Budget for Fiscal Year
2017 (Washington, DC: U.S. Government
Publishing Office, 2016), Table 2.3. Figure is for
2017.
89. Noah Glyn and Scott Drenkard, Prop 13 in
California, 35 Years Later (Washington, DC: Tax
Foundation, 2014). Figures are for 1978–2013.
90. As derived from data in American Council on
Intergovernmental Relations, Significant Features
of Fiscal Federalism, 1995, Vol. 2 (Washington,
DC: Author, 1998), p. 54, for 1978–1994 growth
rates, and David Osborne and Peter Hutchinson,
The Price of Government: Getting the Results We
Need in an Age of Permanent Fiscal Crisis (New
York: Basic Books, 2004), pp. 44–47, for subse-
quent growth rates.
91. As derived from data in American Council on
Intergovernmental Relations, Significant Features
of Fiscal Federalism, 1995, Vol. 2, p. 54. Current
growth rates are for 1978–1994. State and local
revenue growth refers to revenue derived from
these governments’ own revenue sources and does
not include intergovernmental revenue trans-
ferred to them by other governments.
92. John E. Petersen, “Debtor’s Dilemma,” Governing
(May 2004), p. 78.
 30 PA R T I In Defense of Governing Well
93. Gallup Poll, as cited in Robert J. Samuelson, “The
Tax Revolt, RIP?” Washington Post (April 13,
2015).
94. Organisation for Economic Co-operation and
Development, “Revenue Statistics 2015—United
States,” OECD Revenue Statistics 2015 (Paris:
Author, 2016).
95. Sven Steinmo, “Why Is Government So Small in
America?” Governance 8 (July 1995), pp. 303–334.
96. Annenberg Campaign Data Base, as cited in
Paul C. Light, The True Size of Government
(Washington, DC: Brookings, 1999), p. 88.
97. Subcommittee on Intergovernmental Relations,
Committee on Government Operations, U.S.
Senate, Confidence and Concern: Citizens View
American Government, A Survey of Public
Attitudes, Part 2, 93rd Congress, 1st Session
(Washington, DC: U.S. Government Printing
Office, 1973), p. 310. Data are for 1973.
98. Thad E. Hall, “Live Bureaucrats and Dead
Public Servants: How People in Government Are
Discussed on the Floor of the House,” Public
Administration Review 62 (March 2002), pp.
242–251.
99. Marc Schwerdt, “Stories of Service: Public Service
in the Children’s Literature of United States and
Great Britain,” Politics and Policy 31 (June 2003),
pp. 195–214.
100. Beverly A. Cigler and Heidi L. Neiswender,
“Bureaucracy in the Introductory American
Government Textbook,” Public Administration
Review 51 (September/October 1991), pp. 442–
450. The quotation is on p. 444.
101. David J. Lorenzo, “Countering Popular Mis-
conceptions of Federal Bureaucracies in American
Government Classes,” Political Science and
Politics 32 (December 1999), pp. 743–747. The
quotation is on p. 744.
102. Council for Excellence in Government and Center
for Media and Public Affairs, Government: In
and Out of the News (Washington, DC: Authors,
2003), pp. 6, 5, 36, 125, 75. Figures are the com-
bined averages for 1981, 1993, 2001.
103. S. Robert Lichter, Linda S. Lichter, and Dan
Amundson, Changing Images of Government
in TV Entertainment (Washington, DC: Center
for Media and Public Affairs and Council for
Excellence in Government, 2002), pp. 8, 12.
Figures are for 1999–2001.
104. Council for Excellence in Government, Gallup,
and Accenture, The Appeal of Public Service:
Who. . . What. . . and How? (Washington, DC:
Authors, 2008), p. 6.
105. Charles T. Goodsell, The Case for Bureaucracy: A
Public Administration Polemic, 2nd ed. (Chatham,
NJ: Chatham House, 1985), p. 106.
106. Pew Research Center for the People and the Press,
Deconstructing Distrust, p. 2.
107. Council for Excellence in Government and Hart-
Teeter Poll, America Unplugged: Citizens and
Their Government (Washington, DC: Authors,
1999), p. 4. Figures are for 1999.
108. George Washington University Battleground Poll,
Faith in Federal Employees Remains High Despite
Washington’s Image (Washington, DC: Author,
2014). Figures are for 2014.
109. Subcommittee on Intergovernmental Relations,
Committee on Government Operations, U.S.
Senate, Confidence and Concern, Part 1, pp. 173–
175, and Part 2, pp. 301, 303, 305, 311, 313, 315,
319, 321. Data are for 1973.
110. Daniel Katz, Barbara A. Gutek, Robert L. Kahn,
and Eugenia Barton, Bureaucratic Encounters
(Ann Arbor, MI: University of Michigan, 1975),
pp. 64, 68, 69, 221. Data are for 1973.
111. Theodore H. Poister and Gary T. Henry, “Citizen
Ratings of Public and Private Service Quality: A
Comparative Perspective,” Public Administration
Review 54 (March/April 1994), pp. 155–160. The
quotation is on p. 155.
112. American Customer Satisfaction Index, Special
Report on Government Services and ACSI Federal
Government Report 2014 (Ann Arbor, MI:
Author, 2011 and 2015), p. 1 and p. 1. Figures are
averages, 1999–2014.
113. American Customer Satisfaction Index, ACSI
Federal Government Report 2014.
114. “Declining Satisfaction with Government in 5
Charts,” GovExec.com (March 15, 2015).
115. Claes Fornell, ACSI Commentary: Federal
Government (Ann Arbor, MI: American Customer
Satisfaction Index, 2011), p. 2.
116. Pew Research Center, Views of the Primaries,
Press Coverage of Candidates, Attitudes about
Government and the Country (Washington, DC:
Author, 2016). Figures are for 2016.
117. Pew Research Center, Most View the CDC
Favorably; VA’s Image Slips (Washington, DC:
Author, 2015). Figures are for 2015.
118. As derived from data in Subcommittee on
Intergovernmental Relations, Committee on
Government Operations, U.S. Senate, Confidence

and Concern, Part 1, pp. 173–175, and Part 2,
pp. 301, 303, 305, 311, 313, 315, 319, 321; and
Stuart M. Schmidt, “Client-Oriented Evaluation
of Public Agency Effectiveness,” Administration
& Society 8 (February 1977), pp. 403–422.
119. Thomas I. Miller and Michelle A. Miller,“Standards
of Excellence: U.S. Residents’ Evaluations of Local
Government Services,” Public Administration
Review 51 (November/December 1991), pp. 503–
514. The quotation is on p. 503.
120. Claes Fornell, ACSI Commentary: Federal
Government Scores (Ann Arbor, MI: American
Customer Satisfaction Index, December 14,
2006). Figures pertain to federal services, and are
for 2006.
121. Partnership for Public Service and Gallup
Consulting, In the Public We Trust: Renewing
the Connection between the Federal Government
and the Public (Washington, DC, and New York:
Authors, 2008), p. 3. Figures are for 2008.
122. As derived from data in Pew Research Center
for the People and the Press, Performance and
Purpose: Constituents Rate Government Agencies
(Washington, DC: Author, 2000). Data are for
federal agencies in 2000.
123. Eloisa del Pino, Ines Calzada, and Jose M. Diaz-
Pulido, “Conceptualizing and Explaining Bureau-
phobia: Contours, Scope, and Determinants,”
Public Administration Review 76 (September/
October 2016), pp. 725–736.
124. Jarl K. Kampen, Steven Van de Walle, and Geert
Bouckaert, “Assessing the Relation Between
Satisfaction with Public Service Delivery and Trust
in Government: The Impact of the Predisposition
of Citizens Toward Government on Evaluation
of Its Performance,” Public Performance &
Management Review 29 (June 2006), pp. 387–
404. The quotation is on pp. 399–400.
125. Richard A. Loverd, “Gaining the Power to Lead,”
Leadership for the Public Service: Power and
Policy in Action, Richard A. Loverd, ed. (Upper
Saddle River, NJ: Prentice-Hall, 1997), pp. 1–16.
The quotation is on p. 7.
126. Herbert Kaufman, Are Government Organizations
Immortal? (Washington, DC: Brookings, 1976).
The years covered were 1923–1973.
127. As derived from data in Partnership for Public
Service and Booz Allen Hamilton, Unrealized
Vision: Reimagining the Senior Executive Service
(Washington, DC, and Herndon, VA: Authors,
2009), p. 7. Data are for 2008.
Big Democracy, Big Bureaucracy 31
128. Jeffrey L. Brudney, Brendan Burke, Chung-Lae
Cho, and Deil S. Wright, “No ‘One Best Way’
to Manage Change: Developing and Describing
Distinct Administrative Reform Dimensions Across
the Fifty American States, Public Administration
Quarterly 33 (Summer 2009), pp. 197–222. The
quotations are on p. 206.
129. The legislation is the Robert T. Stafford Disaster
Relief and Emergency Assistance Act of 1988.
130. Kenneth J. Meier and Laurence J. O’Toole, Jr.,
Bureaucracy in a Democratic State: A Governance
Perspective (Baltimore, MD: Johns Hopkins
University Press, 2006), p. 60.
131. The legislation is the 1972 amendments to the
Federal Water Pollution Control Act of 1956.
132. As derived from data in Cornelius M. Kerwin and
Scott R. Furlong, Rulemaking: How Government
Agencies Write Law and Make Policy, 4th ed.
(Washington, DC: CQ Press, 2011), p. 230.
133. The case is U.S. Immigration and Naturalization
Service v. Chadha.
134. John W. Kingdon, Agendas, Alternatives, and
Public Policies (Boston: Little, Brown, 1984).
135. Cornelius M. Kerwin and Scott R. Furlong,
Rulemaking: How Government Agencies Write
Law and Make Policy, 4th ed. (Washington, DC:
CQ Press, 2011), p. xi.
136. Maeve P. Curry, Methods of Estimating the Total
Cost of Federal Regulations (Washington, DC:
Congressional Research Service, 2016), p. 2.
137. As derived from data in U.S. Government Account-
ability Office, Federal Rulemaking: Agencies
Could Take Additional Steps to Respond to Public
Comments, GAO-13-21 (Washington, DC: U.S.
Government Printing Office, 2013), Highlights page.
Data are for 2003–2010, when 568 major regula-
tions were finalized. The 2009–2015 period (when
560 major regulations were issued) also averaged
eighty-one major regulations annually. See Benyamin
Applebaum and Michael D. Shear, “Once Skeptical
of Executive Power, Obama Has Come to Embrace
It,” New York Times (August 13, 2016).
138. Pew Research Center for the People & the Press,
Majority Says the Government Threatens Their
Personal Rights (Washington, DC: Author, 2013),
p. 2.
139. Allstate and National Journal, Heartland Monitor
XXII (Washington, DC: FTI Consulting, 2015),
Q. 18. Figures are for 2015.
140. Applebaum and Shear, “Once Skeptical of Executive
Power, Obama Has Come to Embrace It.”
 32 PA R T I In Defense of Governing Well
141. Kingdon, Agendas, Alternatives, and Public
Policies, p. 7. Emphasis added.
142. Ibid., pp. 46, 34.
143. ProQuest LLC, ProQuest Statistical Abstract of
the United States, 2016, Table 515. Figure is for
2014.
144. Mike Causey, “Hill Staff, Then and Now,”
Washington Post (September 30, 1991), and
“Washington Pots and Kettles,” Baltimore Sun
(October 27, 1991).
145. Kingdon, Agendas, Alternatives, and Public
Policies, p. 34.
146. Jeffrey L. Brudney, Cynthia J. Bowling, and Deil
S. Wright, Continuity and Change in Public
Administration Across the 50 States: Linking
Practice, Theory, and Research through the
American State Administrators Project, 1964–
2008 (Auburn, AL: Center for Governmental
Services, Auburn University, 2010), p. 6. Figures
are for 1964–2008.
147. Jerrell D. Coggburn and Saundra K. Schneider,
“The Quality of Management and Government
Performance: An Empirical Analysis of the
American States,” Public Administration Review
63 (March/April 2003), pp. 206–213. The quota-
tions are on p. 206.
148. Karl Kurtz and Brian Weberg, “The State of Staff,”
State Legislatures (July/August 2009), pp. 42–45.
Figures are for 2009.
149. As derived from data in Council of State
Governments, Book of the States, 2015,
Table 3.22.
150. Herbert L. Wiltsee, “Legislative Service Agencies,”
Book of the States, 1961–62 (Lexington, KY:
Council of State Governments, 1962), p. 67.
151. Michael J. BeVier, Politics Backstage: Inside the
California Legislature (Philadelphia: Temple
University Press, 1979), p. 229.
152. Svara and Auer, “Perspectives on Changes in City
Government Structure,” p. 22. Figures are for 2011.
153. Jerri Killian and Enamul Choudhury, “Continuity
and Change in the Role of City Managers,”
Municipal Year Book, 2010 (Washington,
DC: International City/County Management
Association, 2010), pp. 10–18. The quotation is
on p. 16. Figure is for 2010.
154. Charldean Newell and David M. Ammons, “Role
Emphases of City Managers and Other Municipal
Executives,” Public Administration Review 47
(May/June 1987), pp. 246–253. Datum (p. 249) is
for 1985.
155. Kimberly L. Nelson and James H. Svara, “The
Roles of Local Government Managers in Theory
and Practice: A Centennial Perspective,” Public
Administration Review 75 (January/February
2015), pp. 49–61. Current figure (p. 52) is for
2012.
156. International City/County Management Asso-
ciation, ICMA State of the Profession 2012
Survey Results (Washington, DC: Author, 2013),
Q. 21d.
157. Yahong Zhang and Richard C. Feiock, “City
Managers’ Policy Leadership in Council-Manager
Cities,” Journal of Public Administration Research
and Theory 20 (April 2010), pp. 461–476.
158. James H. Svara, “The Shifting Boundaries between
Elected Officials in Large Council-Manager
Cities,” Public Administration Review 59 (January/
February 1999), pp. 44–53. The quotation is on
p. 50.
159. John Nalbandian, “Politics and Administration
in Council-Manager Government: Differences
between Newly Elected and Senior Council
Members,” Public Administration Review 64
(March/April 2004), pp. 200–209.
160. James H. Svara, “Leadership and Profession-
alism  in County Government,” The American
County: Frontiers of Knowledge, Donald C.
Menzel, ed. (Tuscaloosa, AL: University of
Alabama Press, 1996), pp. 109–127. The quota-
tion is on p. 118.
161. Edgar E. Ramirez de la Cruz, “County Form
of Government: Trends in Structure and
Composition,” Municipal Year Book, 2009
(Washington, DC: International City/County
Management Association, 2009), pp. 21–27.
Figure (p. 24) is for 2007.
162. Harvey J. Tucker and L. Harmon Ziegler,
Professionals versus the Public: Attitudes,
Communication, and Response in School Districts
(New York: Longman, 1980), p. 143.
163. Jerry Mitchell, The American Experiment with
Government Corporations (Armonk, NY: M. E.
Sharpe, 1998), p. 95.
164. Tansu Demir and Ronald C. Nyhan, “The
Politics-Administration Dichotomy: An Empirical
Search for Correspondence between Theory
and Practice,” Public Administration Review 68
(January/February 2008), pp. 81–96. The quota-
tion is on p. 92.
165. Killian and Choudhury, “Continuity and Change
in the Role of City Managers,” pp. 16–17.

166. Stephen Kwamena Aikens and Dale Krane, “Are
Public Officials Obstacles to Citizen-Centered
E-Government? An Examination of Municipal
Administrators’ Motivations and Actions,” State
and Local Government Review 42 (Spring 2010),
pp. 87–103. The quotation is on p. 87.
167. Killian and Choudhury, “Continuity and Change
in the Role of City Managers,” pp. 15–18.
168. International City/County Management Asso-
ciation, ICMA State of the Profession 2012
Survey Results, Q. 21i, Q. 21g.
169. Peter Baker and Dafnia Linzer, “Policy Shifts
Felt after Bolton’s Departure from State Dept.,”
Washington Post (June 20, 2005).
170. Peter Baker, “As Democracy Push Falters, Bush
Feels Like a ‘Dissident,’” Washington Post (August
20, 2007).
171. Quoted in Clinton Rossiter, The American
Presidency (New York: New American Library,
1956), p. 42.
172. Quoted in Richard P. Nathan, The  Adminis-
trative Presidency (New York: Macmillan, 1983),
p. 1.
173. Quoted in Richard P. Nathan, The Plot That
Failed: Nixon and the Administrative Presidency
(New York: Wiley, 1975), p. 69.
174. Quoted in Haynes Johnson, “Tests,” Washington
Post (April 30, 1978).
175. Quoted in Peter Goldman, et al., “The Presidency:
Can Anyone Do the Job?” Newsweek (January
26, 1981), p. 41.
176. United Press International, “Amy’s Homework
Aid Likely Costs Thousands,” Arizona Republic
(February 9, 1981).
177. David Mervin, George Bush and the Guardianship
Presidency (New York: Macmillan, 1996).
178. Joel D. Aberbach and Bert A. Rockman, In the
Web of Politics: Three Decades of the U.S. Federal
Executive (Washington, DC: Brookings, 2000),
pp. 39–40.
179. Nathan, The Plot That Failed.
180. Aberbach and Rockman, In the Web of Politics,
pp. 39–40.
181. Randall B. Woods, LBJ: Architect of American
Ambition (New York: Free Press, 2006).
182. Nathan, The Plot That Failed.
183. Aberbach and Rockman, In the Web of Politics,
pp. 32–35.
184. B. Dan Wood and Miner P. Marchbanks, III,
“What Determines How Long Political Appointees
Serve?” Journal of Public Administration Research
Big Democracy, Big Bureaucracy 33
and Theory 18 (July 2008), pp. 375–396. The
figure and quotation are on p. 392.
185. Aberbach and Rockman, In the Web of Politics,
pp. 35–37. The quotation is on p. 35.
186. Shirley Anne Warshaw, “White House Control
of Domestic Policy Making: The Reagan Years,”
Public Administration Review 55 (May/June
1995), pp. 247–253. The quotation is on p. 250.
187. Bob Woodward, “10 Take Aways From the
Bush Years,” Washington Post (January 18,
2009). Woodward is quoting Stephen J. Hadley’s
“extraordinary remark” of March 8, 2008.
188. Paul C. Light and Virginia L. Thomas, The Merit
and Reputation of an Administration: Presidential
Appointees on the Appointments Process
(Washington, DC: Brookings, 2000), pp. 9, 31, 32.
189. Pfiffner, “Political Appointees and Career
Executives,” p. 61.
190. Doo-Rae Kim, “Political Control and Bureaucratic
Autonomy Revisited: A Multi-Institutional Anal-
ysis of OSHA Enforcement,” Journal of Public
Administration Research and Theory 18 (January
2008), pp. 33–55. The quotation is on p. 33.
191. Marissa Martino Golden, What Motivates
Bureaucrats? Politics and Administration during
the Reagan Years (New York: Columbia Univer-
sity Press, 2000). The Environmental Protection
Agency and the Civil Rights Division of the
Justice Department resisted Reagan administra-
tion efforts to pull back their initiatives.
192. Alasdair Roberts, as quoted in Donald Moynihan,
“A Crisis of Authority? A Conversation with
Alasdair Roberts about the Bush Years,” Public
Administration Review 68 (May/June 2008), pp.
516–522. The quotation is on p. 517.
193. Thad Beyle and Margaret Ferguson, “Governors
and the Executive Branch,” Politics in the
American States: A Comparative Analysis, 9th ed.
(Washington, DC: CQ Press, 2008), pp. 192–228.
The quotation is on p. 217.
194. Brudney, Bowling, and Wright, Continuity and
Change in Public Administration Across the 50
States, p. 17. Current figures are for 2008.
195. F. Ted Hebert, “Governors as Chief Administrators
and Managers,” Handbook of State Government
Administration, John J. Gargan, ed. (New York:
Marcel Dekker, 2000), pp. 107–126.
196. Figures are for 1982–1994. Sources and details
are in Chapter 8.
197. Yoo-Sung Choi, Chung-Lee Cho, and Deil S.
Wright, “Administrative Autonomy among
 34 PA R T I In Defense of Governing Well
American State Agencies: An Empirical Analysis of
Fragmentation and Functionalism,” International
Journal of Public Administration 27 (January
2004), pp. 373–398. The quotation is on p. 394.
198. Moulder, “Municipal Form of Government,” p. 7.
Figures are for 2006.
199. MacManus and Bullock, “The Form, Structure,
and Composition of America’s Municipalities in
the New Millennium,” p. 12. Figures are for 2001.
200. Svara and Auer, “Perspectives on Changes in City
Government Structure,” pp. 20, 28. Figures are
for 2011.
201. Salant, “Trends in County Government Structure.”
Figures are for 2002.
202. Tucker and Ziegler, Professionals versus the
Public, p. 143.
203. Jerry Mitchell, “Policy Functions and Issues
for Public Authorities,” Public Authorities and
Public Policy: The Business of Government, Jerry
Mitchell, ed. (Westport, CN: Praeger, 1992),
pp. 1–14. The quotation is on p. 6.
204. Stephanie Owings and Rainald Borck, “Legislative
Professionalism and Government Spending: Do
Citizen Legislators Really Spend Less?” Public
Finance Review 20 (May 2000), pp. 210–225.
205. Robert J. Huntley and Robert J. McDonald,
“Urban Managers: Managerial Style and Social
Roles,” Municipal Year Book, 1975 (Washington,
DC: International City Management Association,
1975), pp. 149–159. The datum is on p. 153.
206. Ziegler and Jennings, Governing American
Schools, pp. 177–178.
207. Max Weber, From Max Weber: Essays in Sociology,
H. H. Gerth and C. Wright Mills, eds. (New York:
Oxford University Press, 1946), p. 233.
208. Huntley and McDonald, “Urban Managers,”
p. 150.
209. Jay Eungha Ryu, Cynthia J. Bowling, Chung-
Lae Cho, and Deil S. Wright, “Effects of
Administrators’ Aspirations, Political Principals’
Priorities, and Interest Groups’ Influence on State
Agency Budget Requests,” Public Budgeting &
Finance 27 (Summer 2007), pp. 22–49. The quo-
tations are on pp. 41, 43. Figures are for 1998.
210. Matthew Potoski and Neal Woods, “Designing
State Clean Air Agencies: Administrative
Procedures and Bureaucratic Autonomy,” Journal
of Public Administration Research and Theory 11
(April 2001), pp. 203–221.
211. David E. Rosenbaum, “Politics as Usual, and Then
Some,” New York Times (September 20, 2005).
212. Ibid.
213. Dina Cappiello, Associated Press, “Bush
Administration to Relax Protected-Species Rule,”
Savannah Morning News (August 12, 2008).
214. Union of Concerned Scientists, Interference at the
EPA: Science and Politics at the Environmental
Protection Agency (Cambridge, MA: USC
Publications, 2008), p. 2. Figure is for 2007.
215. Union of Concerned Scientists, Atmosphere of
Pressure: Political Interference in Federal Climate
Science (Cambridge, MA: USC Publications,
2007), p. 2. Figure is for 2006.
216. Eric Lichtblau, “9/11 Report Cites Many
Warnings about Hijackings,” New York Times
(February 10, 2005).
217. Deputy Inspector General for Intelligence, Review
of the Pre-Iraqi War Activities of the Office of the
Under Secretary of Defense for Policy (Washington,
DC: Office of the Inspector General, U.S.
Department of Defense, February 9, 2007), p. 8.
218. James Surowiecki, “Hail to the Geek,” The New
Yorker (April 19 and 26, 2004), p. 70.
219. Ibid.

Paradigms of Public
Administration
P ublic administration has developed as an intellec-
tual and professional field through a succession
of six paradigms—that is, how the field has “seen
itself” in the past and present.
THE BEGINNING
That uniquely academic president, Woodrow
Wilson, is commonly thought to be the founder
of public administration in the United States. In
1887,  Wilson introduced Americans to the field
with an essay titled, “The Study of Administration.”1
In it, the future president observed that it “is
getting  harder to  run a constitution than to
frame  one,” and called  for  the  bringing of more
intellectual resources to bear in the management of
the state.
Think Tanks for Public Service
Aside from Wilson’s formative essay, public admin-
istration’s intellectual roots were planted in practical
ground—even in the streets. The reformist “public
service movement” that was sweeping the American
political landscape in the early twentieth century
was a factor in John D. Rockefeller’s decision, in
1906, to found, and fund, the New York Bureau
of Municipal  Research. The Bureau was a proto-
type of what we now know as “think tanks,” and,
although its focus was limited to New York City, it
was extraordinarily creative in laying the intellectual
and practical groundwork of what public adminis-
tration should be.
CHAPTER
Tammany Hall, the corrupt political machine
that ran the city, felt directly threatened by the
bureau, referring to it as “The Bureau of Municipal
Besmirch,” and initiated a smear campaign designed
to emasculate it. The campaign backfired, and
encouraged reformers in other cities to emulate the
Bureau’s success.2 By 1928, seventy-four cities had
research bureaus.3
Public Administration and the Intellectuals:
The Fortuitous Year of 1914
At the turn of the last century, academia was openly
disdainful of public administration.
Public Administration: “No Career for a
Gentleman” Perhaps because professional public
administration was being practiced solely in
sordid city streets, the occupants of ivory towers
had no interest in stooping to its level. During the
first decade of the twentieth century, Ms. E. H.
Harriman offered $250,000 to the presidents of
Harvard, Yale, and Columbia to start a school of
public administration. She found them to be “polite
but amused” by her proposal, advising her that they
had no intention of sending their “graduates into
a blind alley” that led to “no career for a gentle-
man.” Rejected by the Ivy League, Harriman gave
her money to the New York Bureau of Municipal
Research, stipulating that it create, in 1911, its
Training School for Public Service, which produced
the nation’s first corps of trained public adminis-
trators. (Ultimately, Mary Harriman prevailed. In
35
 36 PA R T I In Defense of Governing Well
1924, the bureau gave its Training School, lock,
stock, and students, to  Syracuse University, where
it became the Maxwell School of Citizenship and
Public Affairs.)4
Turning Sharply: Academia’s Reconsideration
Eventually, universities reconsidered. In 1912, an
influential scholarly journal devoted an entire issue
to municipal research bureaus,5 and, in 1914, aca-
demia’s attitudes evidenced a sharp turnabout. In
that year, the American Political Science Association’s
(APSA) Committee on Practical Training for Public
Service, which had been founded only two years
earlier, persuaded the reformist mayor of New
York to welcome the nation’s first “Conference on
Universities as Related to Public Service.” The con-
ference recommended, with unusual foresight, that
“professional schools,” and possibly new degrees,
be established to educate public administrators,6
and its attendees founded the freestanding Society
for the Promotion of Training for the Public Service.
Although the Society ceased its activities in 1917
(it was effectively a casualty of World War I), it
nonetheless served as an inspirational model in the
founding, a generation later, of the field’s principal
professional association, the American Society for
Public Administration.
Also in 1914, the APSA announced that one of
political science’s four core missions was to educate
“experts and to prepare specialists for governmental
positions.”7 And it was in 1914 that the first gradu-
ate degree in public (actually, municipal) administra-
tion was introduced—by the University of Michigan,
which placed the program in its political science
department, thereby establishing a precedent that
soon waxed into a national template. Public admin-
istration would stand for decades as a prominent
pillar of political science.
PARADIGM 1: THE POLITICS/
ADMINISTRATION DICHOTOMY,
1900–1926
In his groundbreaking book, Politics and Admini-
stration, published in 1900, Frank J. Goodnow
contended that there were “two distinct functions
of government,” which he identified with the title
of his tome. “Politics,” wrote Goodnow, “has to do
with policies or expressions of the state will,” while
administration “has to do with the execution of
these policies.”8 Goodnow’s point—that elected pol-
iticians and appointed public administrators do dif-
ferent things—eventually was labeled by academics
as the politics/administration dichotomy.
The Uses of the Dichotomy
As a practical matter, the politics/administration
dichotomy offered some protection for a fledgling
profession, particularly when the Great Depression
struck in 1929. The dichotomy held that public
administrators merely brought efficiency to the exe-
cution of policies made by elected politicians, and
thus, in their bland, bloodless, apolitical, and clerical
way, more than paid for themselves.
This is not to say that the dichotomy amounted
to nothing more than a cynical defense of a nascent
and threatened profession. It also was a deeply
believed rationale for a profession of public admin-
istration, one that still has some salience to this day.
Even though city managers, for instance, assume a
highly activist leadership and policymaking role in
their governments (recall Chapter 1), many, if not
most, are still uncomfortable with this role because,
as research indicates,9 it is a passionate “article of
faith among city managers that they are merely
administrators and do not involve themselves in
politics.”10
The Dilemma of the Dichotomy
Because those who ardently believed in the politics/
administration dichotomy would not accept the
reality that public administrators often make policy,
it plagued the field for decades, ultimately displacing
the founders’ idea that, while politicians and admin-
istrators did different things, they nonetheless must
work together for the greater good.
Regrettably, such subtleties were overlooked
as public administration sought its identity during
this period. Leonard D. White’s Introduction to the
Study of Public Administration of 1926, the first
textbook devoted to the field, expressed the pro-
gressive value of public administration at the time:
politics must be cleaved from administration so that
the field can develop as a pure science which will
assure the attainment of governmental efficiency.

This perspective provided the intellectual base for
public administration’s next paradigm.
PARADIGM 2: PRINCIPLES
OF PUBLIC ADMINISTRATION,
1927–1937
In 1927, W. F. Willoughby’s book, Principles of
Public Administration, appeared as the second
fully-fledged text in the field. Its title alone indi-
cated  the new thrust of public administration:
That public administrators would be effective if
they learned  and applied scientific principles of
administration.
Willoughby’s textbook reflected intellectual
trends that suffused the whole of management
theory, and public administration was no exception.
In this regard, the field’s infatuation with prin-
ciples of administration stood in stark contrast
with its ongoing embrace of the politics/admin-
istration dichotomy, which was unique to public
administration.
A Reputational Zenith
The status of public administration soared during the
principles-of-administration period. “Professional
associations for government employees had grown
with ‘unexampled rapidity’ . . . and governments
were calling on the public administration commu-
nity to provide advice on administrative problems
more and more frequently.”11
Money and Power Its rising stature can be attrib-
uted, at least in part, to the Rockefeller family,
whose interest in the field remained undiminished
following its success with the New York Bureau
of Municipal Research. Rockefeller philanthro-
pies poured millions of dollars into the profession,
leaving “no important part of the public administra-
tion community . . . untouched. . .. A person could
not have spoken about the field of public adminis-
tration in 1925 and had confidence that the audi-
ence knew what was meant. In 1937, the situation
was quite different. . .. and governments were calling
on the public administration community to provide
advice on administrative problems more and more
frequently.”12
Paradigms of Public Administration 37
An Academic Backtrack By the late 1920s, there
may have been thirty to forty universities with
public administration programs, and “many were so
subordinated to political science departments that
their survival was in doubt.”13 This bleak condition
soon changed. Between 1927 and 1936, the number
of universities that offered public administration
courses quadrupled.14
So rapid was public administration’s rise that
the academic community grew worried over tradi-
tional turfs. In 1935, Princeton University hosted a
national conference that produced a report which
differed radically from the one issued in 1914.
Rather than advocating separate schools and degrees
for budding bureaucrats, the 1935 conference found
itself “unable to find any single formula which
warrants the establishment of an isolated college
or university program which alone will emphasize
preparation exclusively for the public service.” Only
a “university-wide approach” would suffice.15
If public administration were to be denied a
place on university organization charts, then it also
would be denied a place in universities.
The Meaning of Principles
By the very fact that the principles of administra-
tion were indeed principles—that is, by definition,
they “worked” in any administrative setting without
exception—it therefore followed that they could be
applied successfully anywhere.
In 1937, the community of public administra-
tion expressed this perspective in a singular volume
that has come to be called the field’s “high-noon
of orthodoxy”:16 Luther H. Gulick and Lyndall
Urwick’s Papers on the Science of Administration.
Principles were important to Gulick and Urwick,
but where those principles were applied was not.
“It is the general thesis of this paper that there are
principles which . . . should govern arrangements for
human association of any kind. . .. irrespective of the
purpose of the enterprise, the personnel comprising
it, or any constitutional, political, or social theory
underlying its creation.”17
Gulick and Urwick (though perhaps more so
in Gulick’s case) understood that their “principles”
were not immutable facts of nature, but were simply
helpful touch points in conveying an understand-
ing of “What is the work of the chief executive?”18
 38 PA R T I In Defense of Governing Well
(Their answer was “POSDCORB,” an influen-
tial acronym that stood for Planning, Organizing,
Staffing, Directing, CO-ordinating, Reporting, and
Budgeting.)
Nevertheless, Gulick and Urwick also were
aware that their still-spindly profession needed
nourishment if it were to survive, and realized that
a “science of administration,” based on scientific
“principles,” was a publicly-appealing image—
indeed, “science” amounted to an “unassailable
principle” in its own right.19 Whatever the merits
might have been of promoting an unassailable
public administration, however, casting the field as
a pure science saddled it with an ultimately unten-
able paradigm.
WHAT THE PIONEERS OF PUBLIC
ADMINISTRATION GOT RIGHT
Although the faith that the pioneering public admin-
istration scholars had in the dichotomy and admin-
istrative principles was, as we review shortly, largely
misplaced, research confirms that those pioneers
were pretty much right about what public adminis-
tration could and should be. Most of their thinking
focused on local government, where, at the time, the
vast bulk of public spending, employees, and corrup-
tion were found.
Professional Public Administration
Improves Governing
Perhaps the central insight of these early scholars
is that professionalism improves governing. Career
federal executives are measurably and significantly
more productive public administrators than are
those who are political appointees.20 Mayors who
are greatly involved administratively, and who have
high levels of education and deep job-related expe-
rience, put more pupils in schools,21 collect more
property taxes, and spend more on social programs
than less educated and experienced mayors.22 The
professionalizing reforms of local government that
were advocated by the first public administration
professors—home rule, few governmental jurisdic-
tions, and short ballots, among others—all corre-
late positively with more efficient and responsive
government.23
The City or County Manager Improves
Governing
The primary professional devised by the public
administration pioneers was the local government’s
chief appointed executive (the first such manager
was appointed in 1908), and these professionals
clearly have fulfilled the pioneers’ hopes.
When making decisions, city managers are much
more responsive to citizens than are mayors of cities
without city managers.24 “The most consistent pre-
dictor” that a city council will agree to proposals for
more efficient and effective governance is the pres-
ence of a city manager who has long been in office.25
The presence of appointed top managers also
enhances teamwork. There is greater political-
administrative teamwork in cities that have a city
manager than there is in these cities that lack one.26
Studies of American county governments similarly
find that “county managers are adept at people skills
and consensus building, perhaps even more so than
city managers.”27
Teamwork is important because it has a direct
impact on a local government’s fortunes. A densely
careful study of local governments in fourteen
Western countries, including the United States, found
that mayors and city managers “are not engaged in
a zero-sum contest for control,” but instead have
“interdependency and reciprocal influence.”28 When
these managers “always” promote team building, 74
percent of city councils and county commissions are
rated “highly effective” as decision-making bodies,
but just 53 percent are so rated when top admin-
istrators “never or occasionally” promote team
building.29
The Council-Manager Form of Government
Improves Governing
The pioneers also strongly advocated the adoption
of another of their inventions, the council-manager
plan, or council-manager form of government, in
which the local government’s elected council votes
to hire and fire the government’s top appointed exec-
utive and approve budgets and policies, but essen-
tially forbids council members from mucking about
in day-to-day administration. The first council-
manager plan was adopted by a local government
in 1912.

Just as the field’s first thinkers thought it would,
the council-manager plan has curtailed corrup-
tion. It “allows administrators and elected officers
to more  easily resist opportunistic behavior”
(i.e., corrupt behavior) relative to mayor-council
communities.30
The council-manager plan also has rendered
local services far more efficient, effective, and
responsive than in any other governmental form.
For starters, council-manager governments are
unusually curious about whether they are, in fact,
efficient and effective. More than three-fourths
of council-manager municipalities systematically
inquire about their citizens’ satisfaction with spe-
cific services; no other governmental form (e.g.,
mayor-council, commission, town meeting) comes
even remotely close.31
When a city most exemplifies the values of
council-manager government, its citizens “are
more likely to rate the quality of city services in the
top category” than are citizens who are governed
by any other type of local government.32 In fact,
council-manager cities so satisfy their citizens that
voting turnout in these “administrative cities” is
much lower than in “political cities.” “Voter turnout
is dependent on the form of government” used by a
community.33
In a reflection of the presence of top appointed
managers, the council-manager plan also promotes
teamwork in governing. In council-manager govern-
ments, “elected officials and administrators . . . have
extensive interactions,”34 and there is a growing
“complementarity” between them.35 Enhanced
teamwork also reduces conflict, and here again
the council-manager plan leads all other forms.
Indeed,  “form of government is the only statis-
tically significant factor”—not population size,
urban  or  suburban location, finances, socioeco-
nomic conditions, or types of council elections—“to
account for levels of conflict and cooperation in the
decision-making process.”36 The council-manager
form extends the council’s reduced conflict to the
larger community: just 5 percent of the “political
discourse” in council-manager cities is “very polar-
ized and strident, often rude,” the lowest percent-
age out of five municipal governmental forms.37
Less conflict and more cooperation in governing, of
course, directly increase public productivity. People
benefit.
Paradigms of Public Administration 39
THE CHALLENGE, 1938–1950
Dissent from mainstream public administration
accelerated in the 1940s in two mutually reinforc-
ing directions. One objection was that politics and
administration could never be separated in any
remotely sensible fashion. The other was that the
principles of administration were something less
than the final expression of managerial rationality.
Deflating the Dichotomy
Two subtle intellectual shifts were causing the poli-
tics/administration dichotomy to be questioned.
The Demise of the Dichotomy One such shift was
positive in tone. Public administration scholars were
shyly noting as early as the 1930s that making public
policy remained, certainly, “a question for statesmen,
but officials can effect in some manner the turning of
the scales.”38 In other words, public administrators,
like politicians, could mold public policy, too.
The second shift was negative. Over the years,
a peculiar perversion had warped what likely was
the original meaning of the politics/administration
dichotomy. “Politics” initially had meant only par-
tisan (and often corrupt) politics. By the 1930s,
however, “politics” had been expanded in its schol-
arly meaning to include public policymaking, and
public administrators, in accordance with the
dichotomy, should not enter this forbidden “politi-
cal” zone.
In 1946, a book of readings written by fourteen
scholars, most of whom had extensive experience
as public administrators, forcefully questioned the
assumption that politics and administration could
be cleanly and clearly sundered.39 Were not what
appeared to be neutral “administrative” decisions
often heavily laden with policy preferences? The
short answer was, “Yes.”
The abandonment of the politics/administra-
tion dichotomy culminated in 1950 when a leading
scholar wrote in the field’s leading journal that, “A
theory of public administration means in our time a
theory of politics also.”40 With this declaration, the
dichotomy died.
A Dead Dichotomy, a Diminished Field As a con-
sequence, the nature of the field was fundamentally
 40 PA R T I In Defense of Governing Well
altered, and also, sadly, diminished. The field’s
founders had harbored no qualms about the wisdom
of differentiating public administration from the hoi
polloi of politics because they firmly believed that
only a knowledgeable, noble elite (that is, public
administrators) could pull the people from their
pestilent cistern of civic suffering, and into the light
of prosperity and progress. Consider what Wilson
wrote in this regard: “the many, the people. . . . are
selfish, ignorant, timid, stubborn. . . . they are not
the children of reason.” Hence, “bureaucracy can
exist only where” it is entirely “removed from the
common political lives of the people.”41
Wow. We forget, perhaps mercifully, just how
arrogant the field’s first thinkers could be. But it
was an arrogance that, whatever its drawbacks,
did imbue the public-administration pioneers with
a sense of mission, leadership, superiority, and élan
that was largely lost when public administration
became as “common” as politics. With time, the
revisionist ideology that politics and administration
were inseparable—indeed, indistinguishable—took
root and rigidified.
Puncturing the Principles
A simultaneous, and even more elemental, challenge
was the contention that there could be no such thing
as a “principle” of administration.
In 1947, Herbert Simon published Administrative
Behavior, his revolutionary and devastating critique
of management theory. Although Simon was not
alone in his questioning of managerial principles,
or what he dubbed dismissively as “the proverbs of
administration,”42 his volume had such intellectual
force that it led to Simon’s receiving the Nobel Prize
in 1978.
Simon wrote that “a fatal defect of the current
principles of administration” is that for “almost
every principle one can find an equally plausible and
acceptable contradictory principle,” thus rendering
the whole idea of principles moot.43
For example, the traditional administrative
literature held that clear internal communica-
tion was  essential to effective managerial control,
but it promoted at least two contrary princi-
ples for achieving clarity of communication. One
principle was  narrow span of control—that is, a
manager could manage only a limited number of
subordinates  if orders were to be communicated
effectively. Such an organization inevitably would
have a “tall” hierarchy.
Span of control makes sense up to a point. Yet,
the administrative literature argued with equal vigor
for another principle that was vital for clear com-
munication: minimal message handling. The fewer
people who passed a message up or down the hierar-
chy, the clearer and less distorted the message would
be. This, too, makes sense up to a point. The hierar-
chy required to bring the bureaucracy in accord with
this principle, however, would be “flat.”
Obviously to Simon and now to us, the two
“principles” are mutually contradictory, and there-
fore, by definition, cannot be principles. This
dilemma drenched the whole of the management lit-
erature, including public administration, but it was
never more than suspected of being so stark a case
until Simon published his book.
THE WRECKAGE AND ITS
REACTIONS
By mid-century, the wreckage had been wrought. The
two defining pillars of public administration—the
politics/administration dichotomy and the principles
of public administration—had been abandoned by
creative intellects in the field, leaving it bereft of a
distinct intellectual identity.
Simon himself was rather mellow about the
future, writing that, “Can anything be salvaged  in
the construction of an administrative theory? As a
matter of fact, almost everything can be salvaged.”44
When it came to public administration, however, a
revolutionary approach was once again in order.
Simon proposed that there be two kinds of
“public administrationists”45 (that is, the pro-
fessors, in contrast to the public administrators)
working in harmony: Those scholars concerned
with developing “a pure science of administration”
based on “a thorough grounding in social psychol-
ogy,” and those concerned with “prescribing for
public policy,” an enterprise that “cannot stop when
it has swallowed up the whole of political science;
it must attempt to absorb economics and sociology
as well.”46
Political science, which was the first field that
Simon fingered for public administration to swallow

up whole, had its own reasons for keeping public
administration under its thumb. A distinguished
political scientist of this period wrote that politi-
cal science, “with the exception of public adminis-
tration,” its most prestigious subfield, was “almost
generally stigmatized as the least advanced” social
science by government and academia alike.47
And political scientists had reason to fear that
they might lose public administration: The found-
ing, in 1939, of the American Society for Public
Administration was “above all an attempt to loosen
Public Administration from the restraints of political
science.”48
Political scientists were not about to ignore
their looming dismemberment, or, perhaps more
accurately, their eclipse; by the early 1950s, nearly
two-thirds (65 percent) of the 105 universities offer-
ing public administration courses housed them in
political science departments.49 In 1952, an article
appeared in political science’s preeminent journal
that put the matter plainly, calling for the continued
“dominion of political science over public adminis-
tration,” its “strange and unnatural child.”50
PARADIGM 3: PUBLIC
ADMINISTRATION AS POLITICAL
SCIENCE, 1950–1970
As a result of these and related concerns, public
administrationists wormed their way back into the
warm and welcoming womb (or so they thought)
of the mother discipline, political science. Some
political scientists, however, tried to smother their
“strange and unnatural” progeny in it.
Consternation and Contempt
Paradigm 3 began as an exercise in reestablishing the
linkages between public administration and political
science. But there were issues.
The public administrationists were no longer
really sure what they should be doing, groping for
answers to the point that “the study of public admin-
istration in the United States” during this period was
“characterized by the absence of any fully compre-
hensive intellectual framework.”51
For their part, political scientists were willing
to absorb public administration into their larger
Paradigms of Public Administration 41
and loftier realm, but the price of admission was
steep: public administration would shrivel to an
“emphasis,” an “area of interest,” even a “synonym”
of political science.52 Observers commented that,
“public administration stands in danger of . . .
senescence,”53 and “that lusty young giant of a
decade ago, may now ‘evaporate’ as a field.”54
And evaporation during this perilous period
was not improbable. Over ten years, a meager 4
percent of all the articles published in the five major
political science journals dealt with public admin-
istration,55 and political scientists who identified
public administration as their “primary field of
interest” shrank by a shattering two-thirds, from
35 percent to just 12 percent.56 During the 1960s,
the American Political Science Association moved
“officially or formally” to rid itself of public admin-
istration,57 and, even as late as 1977, the APSA’s
president dismissed it as an “intellectual waste-
land.”58 A leading public administrationist wrote
during this period that political scientists’ opinions
of his field often dripped with “undisguised con-
tempt or hostility. We are now hardly welcome in
the house of our youth.”59
The Impact of Political Science:
Bureaucracy in the Service of
Democracy
Despite the disdain with which “the mother disci-
pline” often treated public administration, political
science likely was a salutary former of the field in
laying some of its normative foundations, such as
pluralism and equality under law, among other dem-
ocratic values.
Beyond providing these values, however, politi-
cal science seems to have less utility in the education
of public administrators. Asks a scholar: “What can
political science contribute to the improvement of
practitioner skill? An overview of the major intel-
lectual approaches within political science suggests
the answer is ‘not much.’”60 Or, to put the matter
plainly, political science educates for (to quote
one particularly lucid synopsis) “intellectualized
understanding” of public administration, whereas
public administration educates for “knowledge-
able action,”61 and these epistemologies—academic
versus professional—are fundamentally different
Zeitgeists.
 42 PA R T I In Defense of Governing Well
PARADIGM 4: PUBLIC
ADMINISTRATION AS
MANAGEMENT, 1950–1970
Partly because of their second-class citizenship in
a number of political science departments, a few
public administrationists began searching for an
alternative. They found it in management, some-
times called administrative science or generic man-
agement, which holds that sector, culture, institution,
mission, whatever, are of little consequence to effi-
cient and effective administration, and that “a body
of knowledge”—statistics, economics, accounting,
operations research, and organization theory are
often cited—“exists that is common to the fields of
administration.”62
Paradigm 4 occurred roughly concurrently in
time with Paradigm 3, although it never received
the broadly-based favor that political science once
garnered from public administrationists. But in both
the Political Science and Management paradigms,
the essential thrust was one of public administra-
tion losing its identity within the confines of some
“larger” concept.
Cornell University’s Graduate School of
Management, founded in 1948, is generally thought
to be the first academic unit that embraced the idea
of generic management. Public administrationists who
toiled in these schools (which, as a practical matter,
were rarely “management” schools but “business”
schools), while not as actively reviled as those in some
political science departments, were treated, at best,
with indifference, shivering in the drafty attic of an
absent-minded aunt who often forgot to serve meals.
The “Groundswell” of Management
During the 1950s and 1960s, a spate of scholars
writing in a variety of journals accelerated the drum-
beat of generic management as the logical succes-
sor to more “parochial” paradigms, such as public
administration and business administration. In
1956, the important journal, Administrative Science
Quarterly, was founded on the premise that public,
private, and other institutional distinctions of man-
agement were false.
By the early sixties, a national survey of grad-
uate programs in public administration concluded
that “management” was “a groundswell develop-
ment that tends to pervade all others.”63 Suddenly
it seemed that a number of public administration-
ists were rediscovering the line in Wilson’s seminal
essay of 1887: “the field of administration is a field
of business. It is removed from the hurry and strife
of politics.”64
“Fundamentally Alike in All Unimportant
Respects”
Is public administration a subfield of management?
Does public administration, at root, amount to little
more than an understanding of civil service regula-
tions, while the core administrative functions remain
essentially the same, whether they are practiced in
businesses, nonprofit organizations, or governments?
The Erratic Impact of the Intellectuals In light
of the management scholars’ contention that a
singular body of knowledge exists that unites all
administrative “fields,” it is noteworthy that there
is a “substantial amount of disagreement about
the commonality of administrative tools and tech-
niques” among generic management schools, and no
fewer than thirty different courses in these schools
comprise the “basic requirements” for a master’s
degree!65 If, indeed, management is management is
management, then why is there no reasonably con-
sistent curriculum among the nation’s management
schools?
Given the national incoherence of generic man-
agement curricula, it is reasonable to conclude that
something is missing.
What Is Missing? Actually, quite a lot is missing.
Specifically, function, institution, and sector are
absent.
Experiential data support the contention that
public administration is unique. Those successful
businesspeople who have become public executives
are among the first to deny that there are significant
similarities between the public and private sectors.66
Public administrators who enter the corporate world
experience comparable difficulties of transition.67
Even entering the nonprofit sector represents, for
both successful elected officials and businesspeople,
“a journey to Mars” or to a long-lost primitive past
in which “we’re bartering chickens for tools!”68

Empirical evidence similarly suggests that the
single most important key to managerial effective-
ness in government is not wide-ranging experiences
as executives in other sectors, but the depth of one’s
experience as a public administrator.69 On a per-
sonal level, it appears that a substantial background
in business may handicap a subsequent career in
government. Although there is usually an immediate
promotion involved for businesspeople who switch
to government, the longer the time spent working
in the private sector before entering public service,
the lesser the likelihood that public administrators
will be promoted and supervise large numbers of
employees.70
As we shall see in Part II, a burgeoning trove
of research that empirically compares public, non-
profit, and private organizations casts grave doubt
that management can be fruitfully approached as a
seamless entity, except in the broadest strokes con-
ceivable. The emerging consensus of both practi-
tioners and scholars increasingly appears to be that
public and private management are, to cite Wallace
Sayre’s old saw, “fundamentally alike in all unimpor-
tant respects.”71
The Impact of Management: Understanding
the “Public” in Public Administration
The unambiguously clear impact of the management
paradigm is that it pushed public administration
scholars into rethinking what the “public” in public
administration really meant.
Defining the “public” in public administration
has long been a knotty problem for academics, in
part because Western culture has never completely
sorted out the “complex-structured concept” of
“publicness” and “privateness.”72 Publicness and
privateness in society are composed of three dimen-
sions: agency, interest, and access.
The Agency, or Institutional, Definition of
“Public” Agency refers to the distinction between
an institution that acts on behalf everyone (that is, it
acts publicly), and an institution that acts only in its
own behalf (it acts privately).
Traditionally, public administrationists have
thought that the “public” in public administration
refers to the institution of government and its agen-
cies, and this definition still dominates thinking in
Paradigms of Public Administration 43
the field. Seven out of ten books about public organ-
ization theory take an “agency” perspective, as
opposed to an “interest” or “access” view.73
Regrettably, the real world renders this approach
problematic. Privatization, the third sector, and
similar phenomena blur institutional distinctions,
and conspire to make an institutionally-defined
public administration an elusive entity.
The Interest, or Philosophic, Definition of
“Public” Interest is concerned with who benefits.
It is in the (public) interest of government to benefit
everyone it governs; it is in the (private) interest of
the for-profit firm to benefit only its owners.
During the 1970s, public administrationists
moved toward a meaning of “public” that focused
less on agencies and more on whose interest was
affected. Thus, rather than concentrating on the
Department of Defense, for instance, and leaving,
say, Boeing Corporation to business scholars, public
administrationists explored the Pentagon’s contrac-
tual relationships with Boeing because they involved
the public interest.
The Access, or Organizational, Definition of
“Public” Our final dimension of “publicness”
and “privateness” is that of access, which addresses
the degree of openness to the public found in an
organization’s activities, space, information, and
resources.
As we explain in Part II, compared with private
and nonprofit organizations, public agencies are
outrageously accessible. In fact, an astounding 94
percent of cities and counties (up from 84 percent
just three years earlier) invite such access, and proac-
tively “provide citizens with the resources necessary
to solve problems and implement decisions.” Some
four-fifths of these governments grant outsiders
access to their staffers, data, and reports, and nearly
two-fifths give them budgets.74
Three Interlocked Understandings of “Public”
Our  three definitions of public administration—
institutional, interest, and organizational—are in no
way mutually exclusive. Rather, they are mutually
reinforcing. Of equal importance, these definitions
clarify not only the “public” in public administra-
tion, but also demonstrate that “publicness,” and
hence public administration, is unique.
 44 PA R T I In Defense of Governing Well
EVAPORATION AVERTED,
1965–1975
Today, the raw peril confronting the field of public
administration as a consequence of its being buried
alive (even if it was barely alive) in political science or
management is not fully appreciated. By the 1960s,
the field’s “evaporation” was arguably imminent.
The Forces of Separatism
Even at its nadir during the period of Paradigms 3
and 4, however, public administration was sowing, if
unconsciously, the seeds of its own renaissance.
In the corridors of power, practitioners’ pride
was emerging, as witnessed by the founding, in 1967,
of the National Academy of Public Administration.
Its founders purposely created an association of the
nation’s most distinguished public administrators
and academics that could serve as a resource in the
solution of public problems—much like the National
Academy of Sciences (founded in 1863) serves as the
nation’s single most authoritative adviser to govern-
ment on scientific matters. Both academies are the
only ones chartered by Congress.
In the halls of academe, it was becoming increas-
ingly clear to public adminstrationists that neither
political science nor management addressed their
interests, nor could they. Political science’s intellec-
tual focus is pluralist, specialized, and communal,
whereas public administration’s is elitist, synthesiz-
ing, and hierarchical. Management’s focus is exclu-
sively technical, whereas public administration’s is
both technical and normative. These realizations
crystallized when, in 1970, public administrationists
organized their own, independent academic associa-
tion (details follow).
In sum, both the practitioner and academic
communities of public administration were moving
toward an enhanced self-awareness.
Saving a Field
The forces of scholastic separatism were strength-
ened and accelerated by the professoriate’s growing
and worrying realization that their field was of
rapidly declining utility to practitioners of public
administration.
“I was particularly shocked by a meeting I
attended [in 1972] at Dulles Airport in Washington,
DC,” reminisced the founding dean of a then-new
school of public affairs, “between the assistant
secretaries of personnel for all of the major U.S.
government agencies, and ten or so [nationally dis-
tinguished] public administration/affairs school
deans.
“The secretaries warned us they were fed up
with the unpredictable quality and backgrounds of
our MPA [master of public administration] students,
and their inability to have useful management skills
that were of direct use when they joined the gov-
ernment. The agencies said if we did not improve
this situation, they would no longer . . . recruit new
employees from our schools.
“The other deans and I took this as a direct
challenge to the credibility and existence of our pro-
grams. . ..”75
The situation was much the same at the state
and local levels. When this writer became the first
director of a newly-freestanding public administra-
tion program, in 1975, he was similarly shocked to
find that subnational agencies consistently failed to
mention in their recruitment materials the MPA as
a qualification for public administrative positions;
they did cite, frequently, the master of business
administration as an earnestly sought-after qualifi-
cation! Ample anecdotal evidence indicated that this
situation was much the same nationally.
The forces of the 1960s that promoted the inde-
pendence of public administration likely would have
withered had not skillful educational leaders mar-
shaled those forces in the 1970s. Had those leaders
not prevailed, the field might well be, at best, an eva-
nescent academic sycophant, gasping for life, or, at
worst, dead.
PARADIGM 5: PUBLIC
ADMINISTRATON AS PUBLIC
ADMINISTRATION, 1970–PRESENT
“Public administration as public administration”
refers to public administration’s successful break
with both political science and management, and
its emergence as an autonomous field of study and
practice, free at last from snide asides by political
scientists about public administration’s predilection

for “nuts and bolts” and absent condescending com-
ments by business faculties about the “sinecures” of
gutless government bureaucrats.
NASPAA’s Nascency
Academic programs in public administration
first banded together in 1958, when the long-
extinct Council on Graduate Education for Public
Administration was founded in a depressing attempt
to shield the field from being starved by political
science and management. But it was only in 1970,
when the National Association of Schools of Public
Affairs and Administration (NASPAA) was birthed,
that public administration definitively declared its
epistemological independence.
NASPAA is composed of 285 of America’s
master of public administration and related (e.g.,
public affairs, public policy) master’s degree pro-
grams—essentially all such programs in the United
States. In 1983, NASPAA’s members voted to become
the nation’s professional accrediting agency for these
degrees.
One hundred eighty-four MPA and related
degree programs are accredited by NASPAA, and its
accreditation associates with greater prestige, more
effective programs, an enhanced ability to recruit
higher quality faculty and students, and, in contrast
to the chaotic core curricula found in schools of
management, NASPAA-accredited programs offer a
consistent core curriculum nationally.76
In 2013, NASPAA changed its name to the
Network of Schools of Public Policy, Affairs, and
Administration, but still refers to itself as NASPAA.
Don’t ask.
The Statistics of Secession and Success
Public administration’s secession and resultant
success are real.
A fourth of all 285 MPA programs are in free-
standing schools or colleges of public administration
(and similar titles) that report directly to the central
administration. Nineteen percent are in independ-
ent departments. Twelve percent are institutes or
centers that may or may not be freestanding. In sum,
from 44 to 56 percent of public administration and
related programs are free of other fields. Twenty-
six percent of all programs remain in political
Paradigms of Public Administration 45
science departments, and 14 percent are in business
schools.77
The move toward an autonomous academic
field has been good for public administration. The
most effective MPA programs are those that are
administered by freestanding schools and depart-
ments78 (all of the top ten programs, as consistently
ranked by U.S. News & World Report, are inde-
pendent schools), and these units are experiencing
the fastest rates of student growth of all organiza-
tional types.79
Over the course of five decades, the number
of MPA and related programs and the students
enrolled in them nearly tripled.80 Of those 28,000
students (a significant undercount, as 31 percent
of programs failed to respond to the survey), 57
percent are women and 31 percent are “persons of
diversity.”81
From Politics/Administration Dichotomy to
Political–Administrative Continuum
Central, perhaps, to Paradigm 5 is the resurrection of
the politics/administration dichotomy that defined
public administration’s origins a century ago. But
the dichotomy has re-emerged in a significantly new
form—as a political–administrative continuum,
rather than as a politics/administration division—
that furnishes the field with an intellectual gravitas
that is sensible, understandable, and workable.
Public administration rejects Paradigm 1’s
notion that public administration crouches, or ought
to crouch, behind a dichotomizing firewall that pro-
tects it from politics. Nor does public administra-
tion accept the puckering premise of Paradigms 3
and 4—that public administration is nonexistent,
amounting to nothing more than an unformed,
indistinguishable blob, sliming the awesome archi-
tectures of politics and management.
In Paradigm 5, politics and public administra-
tion do co-exist on the same social continuum, but
as separate and distinct formations of logic, whose
activities sometimes overlap. At the far ends of that
continuum, political acts (such as appointing to gov-
ernment jobs unqualified nephews) can be distin-
guished from administrative acts (such as appointing
to government jobs the most qualified applicants
drawn from a competitive pool), and easily so. This
is not rocket science. True, it may be less easy to
46 PA R T I In Defense of Governing Well
LOGICS: POLITICS AND ADMINISTRATION
Shirley Sherrod is the daughter of an African-
American farmer. In 1965, when she was seventeen,
her father was fatally shot in the back by a white
farmer. An all-white grand jury in Baker County,
Georgia, filed no charges, so no one could be tried for
his murder. Her mother and she remained in
southwest Georgia and became dedicated civil rights
activists.
Forty-five years later, in 2010, when Sherrod
was the U.S. Department of Agriculture’s director
of rural development for Georgia, a conservative
blogger released a portion of a videotape, broadcast
by Fox News, of Sherrod addressing a banquet hosted
by the National Association for the Advancement of
Colored People (NAACP). In her address, Sherrod
recounted an incident in which she said that, two
dozen years earlier, she had not given a white farmer
facing the loss of his farm “the full force of what
I could do.” The NAACP’s national president and
a heaving host of others denounced her remark as
racist and, according to Sherrod, officials in her
Department and the White House intensely pressured
her to resign.
Sherrod resigned. No more than ten hours and
twenty-two minutes had elapsed from the blogger’s
initial release of the edited videotape to Sherrod’s
resignation.*
As Sherrod had tried in vain to explain, her
comment had been ripped out of context. The entire
tape of her speech revealed that Sherrod had gone
on to state that she had rejected her first, admittedly
prejudiced, instinct, recognizing that “there is no
difference between us,” and had in fact accorded
the farmer her full force in successfully saving his
farm. The farmer in question said that Sherrod had
exhibited “no racist attitude. Heck no. . .. I was never
treated nicer.” His wife added that they have long
_________
* The blogger released the videotape at 11:18 on the morning
of July 19, 2010, and “Fox News Alert” reported at 9:04 that
evening that Sherrod “resigned just a short time ago.”
been friends with Sherrod, in part because, “She
helped us save our farm by getting in there and doing
everything she could do.”
The White House and the Department apologized
to Sherrod. The secretary of agriculture offered to
reinstate her. Sherrod declined.
This episode epitomizes the logic of politics. It differs
starkly from the logic of administration.
The logic of politics demands that, for reasons
of personal professional survival, politicians rid
themselves of harmful controversies (and all
controversies are harmful politically) as quickly and as
expeditiously as possible. Hence, Sherrod’s (allegedly)
forced resignation was instant; she was the harmful
controversy.
By contrast, the logic of administration demands
that, for reasons of personal professional survival,
among others, executives learn the relevant facts
before acting. Had an impartial fact-finding inquiry
been mounted, which would have quickly exposed the
blogger’s malicious misdirection, Sherrod would not
have been pressured to resign.
The trick in public administration is to reconcile
political and administrative reasoning, a reconciliation
that often is difficult but is far from impossible.
(In the foregoing fiasco, simply viewing the entire
videotape, an undertaking that would have consumed
less than an hour, would have aborted vast political
embarrassment.) This is why public administration
is uniquely complex and deeply fascinating. Public
administration blends politics and management,
and, as an intellectual and professional enterprise,
supersedes both.
Sources: Will Bunch, “The Story behind the 1965 Killing
of Sherrod’s Dad,” Huffington Post (July 21, 2010); Karen
Tumulty and Ed O’Keefe, “Fired USDA Official Receives
Apologies from White House, Vilsak,” Washington Post
(July 22, 2010); and Media Matters for America, Timeline
of Breitbart’s Sherrod Smear, http://mediamatters.org/
research/201007220004.

separate the political from the administrative in the
middle reaches of that continuum, but we nonethe-
less understand that politics’ values relate more to
power, community, pluralism, personality, loyalty,
emotion, and ideology, whereas public adminis-
tration’s values relate more to fairness, hierarchy,
elitism, impersonality, professionalism, analysis, and
neutrality.
PARADIGM 6: GOVERNANCE,
1990–PRESENT
The roles of the profit, nonprofit, and public sectors
are metamorphosing in heretofore almost unimagi-
nable ways. Most particularly, these sectoral changes
profoundly alter how we govern.
Globalization, the Internet, and social media,
among other forces, are pressuring American gov-
ernments to relinquish, by design or default, their
traditional responsibilities to citizens, other govern-
ments, and other sectors.
As a scholarly wit winsomely asked, “Wither
the state?”82
“Making a Mesh of Things”: The Rise
of Governance
We are, in sum, moving away from government, or
the control over citizens and the delivery of public
benefits by institutions of the state, and we are
moving toward governance (also known as govern-
ing by network, horizontal governing, and governing
by partnering), or configurations of laws, policies,
and organizations that control citizens and deliver
public benefits. Government is institutional; govern-
ance is institutional and networked.
Some seven decades ago, a distinguished scholar
foretold of governing by network, defining public
administration as “making a mesh of things,”83 a
mesh that is amply documented. A unique analysis
of more than 800 empirical studies, covering a range
of disciplines, found a general shifting away from
“hierarchical government” and a distinct movement
toward “horizontal governing,” involving “a gradual
addition of new administrative forms.”84
In Washington, “getting the government to
operate as a single entity instead of as a set of sep-
arate, disconnected agencies and programs—should
Paradigms of Public Administration 47
be a key issue.”85 The Government Performance and
Results Act Modernization Act of 2010 recognizes
this, and requires interagency collaboration (the
current federal buzzwords are “enterprise man-
agement” and “enterprise government”), ranging
from sharing information to effectively implement-
ing policy across several agencies. The act man-
dates, significantly, that the Office of Management
and Budget and certain congressional committees
develop a handful of long-range, “cross-agency,”
government-wide priority goals every two years, an
especially vexing challenge. Although most agency
officials state that that the act has improved col-
laboration,86 two years after the first fourteen of
Washington’s “interim” cross-agency goals had
been set, progress could not be reported for six (or
more than two-fifths) because they “lacked either a
quantitative target or the data needed to track pro-
gress.”87 (As we explain in Chapter 7, quantifying
some public goals is not always possible.)
An astounding 97 percent of city and county
managers report that they “use collaboration as a
management strategy.” Collaboration is employed
most heavily in the areas of infrastructure, followed
by “fire/emergency management” and economic
development.88 Local administrators with economic
development responsibilities spend one full working
day out of five on “handling the interdependencies
between their organizations and others,” and city
governments link their activities with an average of
sixty other public, private, and nonprofit organiza-
tions.89 Public administrators spend less time alone
in their offices than corporate managers, and, when
they are by themselves, are on the telephone almost
twice as long.90
In a similar vein, nonprofit organizations collab-
orating with other nonprofits is a growing trend, and
includes establishing collaborative grant-making
processes and the consolidation of several nonprof-
its’ financial management, and then outsourcing it.91
Does Governance Work?
A “meta-analytical study [of] 137 cases of collabo-
rative governance across a range of policy sectors”
concluded that making a mesh of things seems to
work reasonably well.92 Governing by partnering
correlates, significantly and positively, with agencies
that perform better than agencies that work alone.93
 48 PA R T I In Defense of Governing Well
We offer four examples:
■ The leading “positive results of collaboration,”
cited by more than four-fifths of city and
county managers, are introducing greater
economic benefits and “better public service.”94
■ There is a positive correlation between intense
collaboration among public organizations and
a high level of satisfaction held by clients.95
■ “At a minimum, managerial networking boosts
educational performance” in school districts.96
■ Focused deterrence is a network-based method
designed to reduce gang-related violence
by coordinating police, prosecutors, social
workers, clergy, outreach workers, victims,
former gang members, social-network analysts,
and public and private employers, among
others. Used in about sixty diverse cities,
the approach has often been spectacularly
successful, with homicides in several cities
cut by half or more in just two years. In High
Point, North Carolina, focused deterrence
eliminated in a single day an open-air drug
market that had endured for decades, despite
unremitting “cuff-and-stuff” attempts to close
it, and it had yet to return five years later.97
Governance is not a panacea. No paradigm is, and
other paradigms, depending on “the nature of the
task” at hand, may be more useful, as “unexpected
mismatches” of approach and task inevitably fail.98
Nearly four-fifths of local managers say that collab-
oration’s most significant challenge is “turf wars,”
and almost two-thirds find it to be time-consum-
ing.99 In fact, it appears that “networking overall, as
an aggregate concept, has no impact on [governmen-
tal] performance.” Rather, specific parts of networks
interacting with each other is what boosts perfor-
mance.100
A large-scale analysis found that certain “crit-
ical variables” must be present for governance to
succeed. They are: trust; commitment; solid leader-
ship (well-educated, younger public chief executives
who exhibit a “concern with self-development” are
more effective organizational collaborators than are
their less-educated, older counterparts who have
little interest in self-improvement101); a history of co-
operation; incentives to collaborate; balanced power
and resources among the participants; face-to-face
conversation among the collaborators; and a shared
understanding of processes, people, and goals. When
it comes to governance, “small wins” matter a lot.102
Governance also works well in the independ-
ent sector. Among its benefits are greater efficiency
and organizational stability, and fewer overlapping
programs.103 “Political networking increases [non-
profits’] advocacy effectiveness and community net-
working increases organizational effectiveness.”104
PUBLIC ADMINISTRATION,
HAPPY AT LAST
Public administration now straddles two paradigms.
One asserts its independence as a stand-alone, self-
aware field of study and practice. The other asserts
its paramount purpose—creating and implementing
social change for social good.
Both paradigms are complementary and mutu-
ally reinforcing. Without independence, public
administration would be a sorry, surly suppli-
cant, shorn of the capacity to chart its own course.
Without purpose, independence would be irrelevant.
This joyful, codependent, paradigmatic merger
has been a long time coming, but it has come. And
it has arrived in style. Just as public administration
was a prestigious model for managers in all sectors
during the 1930s, so it is today: As a major business
journal argued, “Public governance . . . offers a dis-
tinct set of ideas for how corporate governance can
be improved in practice,” especially in the areas of
“manager compensation, division of power within
firms, rules of succession to top positions, and insti-
tutionalized competition in core areas of the cor-
poration. . .. To an even larger extent,” these ideas
“could be applied to not-for-profit firms.”105
Public administration, happy at last.
NOTES
1. Woodrow Wilson, “The Study of Administration,”
Political Science Quarterly 2 (June/July 1887),
pp. 197–222.
2. Daniel W. Williams, “Evolution of Performance
Measurement until 1930,” Administration &
Society 36 (May 2004), pp. 131–165.
3. As derived from data in Institute of Public
Administration, http://www.theipa.org/aboutipa/
history.html.

4. Luther Gulick, “George Maxwell Had a Dream: A
Historical Note with a Comment on the Future,”
American Public Administration: Past, Present,
Future, Frederick C. Mosher, ed. (University, AL:
University of Alabama Press, 1975), pp. 253–267.
The quotation is on p. 257.
5. “Efficiency in City Government,” Annals of the
American Academy of Political and Social Science
XLI (May 12, 1912).
6. Committee on Practical Training for Public
Service, American Political Science Association,
Proposed Plan for Training Schools for Public
Service (Madison, WI: American Political Science
Association, 1914), p. 3.
7. American Political Science Association,
Proceedings of the American Political Science
Association, 1913–1914 (Washington, DC:
Author, 1915), p. 264.
8. Frank J. Goodnow, Politics and Administration
(New York: Macmillan, 1900), pp. 10–11.
9. Robert T. Golembiewski and Gerald T. Gabris,
“Today’s City Managers: A Legacy of Success-
Becoming-Failure,” Public Administration Review
54 (November/December 1994), pp. 525–530.
10. Alan Ehrenhalt, “The Mayor-Manager Merger,”
Governing (October 2006), pp. 9–10. The quota-
tion is on p. 9.
11. Alasdair Roberts, “Demonstrating Neutrality:
The Rockefeller Philanthropies and the Evo-
lution of Public Administration, 1927–1936,”
Public  Administration Review 54 (May/June
1994), pp. 221–228. The quotation is on p. 222.
The quotation concerning “unexampled rapidity”
is by Leonard D. White, Trends in Public Admini-
stration (New York: McGraw-Hill, 1933).
12. Ibid., p. 222.
13. Alice B. Stone and Donald C. Stone, “Early Deve-
lopment of Education in Public  Administration,”
in American Public  Administration, pp. 11–48.
The quotation is on p. 30.
14. Roberts, “Demonstrating Neutrality,” p. 222.
15. Morris B. Lambie, ed., Training for the Public
Service: The Report and Recommendations
of a Conference Sponsored by the Public
Administration Clearing House (Chicago: Public
Administration Clearing House, 1935).
16. The famous phrase was first written by Wallace
Sayre in “Premises of Public Administration: Past
and Emerging,” Public Administration Review 18
(March/April 1958), pp. 102–105. The quotation
is on p. 104.
Paradigms of Public Administration 49
17. L. Urwick, “Organization as a Technical Problem,”
Papers on the Science of Administration, Luther
Gulick and L. Urwick, eds. (New York: Institute
of Public Administration, 1937), pp. 47–88. The
quotation is on p. 49.
18. Luther H. Gulick, “Notes on the  Theory  of
Organization,” Papers on the Science of Adminis-
tration, pp. 1–46. The quotation is on p. 9.
19. Alasdair Roberts, “The Unassailable Principle:
Why Luther Gulick Searched for a Science of
Administration,” International Journal of Public
Administration 21 (June 1998), pp. 235–274.
20. Lewis, Political Appointments, Bureau Chiefs,
and Federal Management Performance. Details
are in Chapter 9.
21. Claudia N. Avellaneda, “Municipal Performance:
Does Mayoral Quality Matter?” Journal of Public
Administration Research and Theory 19 (April
2009), pp. 285–312.
22. Claudia N. Avellaneda, “Mayoral Quality and
Local Public Finance,” Public Administration
Review 69 (May/June 2009), pp. 469–486.
23. Alejandro Rodriguez, “Reformed County
Government and Service Delivery Performance:
An Integrated Study of Florida Counties,”
International Journal of Public Administration 30
(10, 2007), pp. 973–994.
24. David H. Folz and P. Edward French, Managing
America’s Small Communities: People, Politics,
and Performance (Lanham, MD: Rowman and
Littlefield, 2005).
25. Timothy B. Krebs and John P. Peliserro, “What
Influences City Council Adoption and Support
for Reinventing Government? Environmental
or Institutional Factors?” Public Administration
Review 70 (March/April 2010), pp. 258–267. The
quotation is on p. 263.
26. Karl Nollenberger, “Cooperation and Conflict in
Governmental Decision Making in Mid-Sized U.S.
Cities,” Municipal Year Book, 2008 (Washington,
DC: International City/County Management
Association, 2008), pp. 9–15.
27. James H. Svara, “Leadership and Profession-
alism  in County Government,” The American
County: Frontiers of Knowledge, Donald C.
Menzel, ed. (Tuscaloosa, AL: University of
Alabama Press, 1996), pp. 109–127. The quota-
tion is on p. 124.
28. Poul Erik Mouritzen and James H. Svara,
Leadership at the Apex: Politicians and
Administrators in Western Local Governments
 50 PA R T I In Defense of Governing Well
(Pittsburgh, PA: University of Pittsburgh Press,
2002), p. 258.
29. Kimberly L. Nelson and James H. Svara,
“Upholding and Expanding the Roles of Local
Government Managers: State of the Profession
2012,” Municipal Year Book, 2014 (Washington,
DC: International City/County Management
Association, 2014), pp. 3–20. The figures are on
p. 13, and include the 29 percent of the top city
administrators who were not in mayor-council
cities and the 24 percent of top county adminis-
trators who were elected. Counties comprised 12
percent of the governments surveyed (p. 6).
30. Richard C. Feiock and Jaehoon Kim, “Credible
Commitment and Council-Manager Government:
Implications for Policy Instrument Choices,”
Public Administration Review 63 (September/
October 2003), pp. 616–625. The quotation is on
p. 616.
31. Evelina R. Moulder, “Citizen Engagement: An
Evolving Process,” Municipal Year Book, 2010
(Washington, DC: International City/County
Management Association, 2010), pp. 28–32.
Figures, 76 and 58 percent (p. 31), respectively,
are for 2009.
32. Curtis Wood and Yongmao Fan, “The Performance
of the Adapted City from the Perspective of
Citizens,” Public Performance & Management
Review 31 (March 2008), pp. 407–430. The quo-
tation is on p. 407.
33. Curtis Wood, “Voter Turnout in City Elections,”
Urban Affairs Review 38 (November 2002), pp.
209–231. The quotations are on p. 209. Emphasis
added.
34. James H. Svara, “The Search for Meaning in
Political-Administrative Relations in Local
Government,” International Journal of Public
Administration 29 (12, 2006), pp. 1065–1090.
The quotation is on p. 1065.
35. Tansu Demir, “The Complementarity View:
Exploring a Continuum in Political-Administrative
Relations,” Public Administration Review 69
(September/October 2009), pp. 876–888.
36. Nollenberger, “Cooperation and Conflict in
Governmental Decision Making in Mid-Sized
U.S. Cities,” p. 9. Emphasis added.
37. Nelson and Svara, “Upholding and Expanding the
Roles of Local Government Managers,” p. 14.
38. E. Pendleton Herring, Public Administration and
the Public Interest (New York: McGraw-Hill,
1936), p. vii.
39. Fritz Morstein Marx, ed., Elements of Public
Administration (New York: Prentice-Hall, 1946).
40. John Merriman Gaus, “Trends in the Theory of
Public Administration,” Public Administration
Review 10 (Summer 1950), pp. 161–168. The
quotation is on p. 168.
41. Wilson, “The Study of the Administration,”
pp. 501, 504.
42. Herbert A. Simon, “The Proverbs of
Administration,” Public Administration Review 6
(Winter 1946), pp. 53–67.
43. Herbert A. Simon, Administrative Behavior:
A Study of Decision-Making Processes in
Administrative Organization, 3rd ed. (New York:
Free Press, 1976), p. 20.
44. Ibid., p. 38.
45. The term, public administrationist, apparently
was coined by Dwight Waldo in his “Public
Administration,” Political Science: Advance of the
Discipline, Marian D. Irish, ed. (Englewood Cliffs,
NJ: Prentice-Hall, 1968), pp. 153–189. The phrase
appears on p. 154. Waldo wrote that he could not
think of a better title, and hence was forced to use
“an awkward expression in lack of an adroit one.”
46. Herbert A. Simon, “A Comment on ‘The Science
of Public Administration,’” Public Administration
Review 7 (Summer 1947), pp. 200–203. The quo-
tation is on p. 202.
47. David Easton, The Political System (New York:
Knopf, 1953), pp. 38, 40.
48. Dwight Waldo, “Introduction: Trends and Issues in
Education for Public Administration,” Education
for Public Service, 1979, Guthrie S. Birkhead and
James D. Carroll, eds. (Syracuse, NY: Maxwell
School of Citizenship and Public Affairs, Syracuse
University, 1979), pp. 13–26. The quotation is on
p. 15.
49. Patricia W. Ingraham and Alfred Zuck, “Public
Affairs and Administration Education: An
Overview and Look Ahead from the NASPAA
Perspective,” Journal of Public Administration
Education 2 (October 1996), pp. 161–174.
50. Roscoe Martin, “Political Science and Public
Administration – A Note on the State of the
Union,” American Political Science Review 46
(September 1952), pp. 660–676. The quotations
are on pp. 665, 661.
51. William J. Siffin, “The New Public Administration:
Its Study in the United States,” Public
Administration 24 (Winter 1956), pp. 365–376.
The quotation is on p. 367.

52. Martin Landau, “The Concept of Decision-
Making in the ‘Field’ of Public Administration,”
Concepts and Issues in Administrative Behavior,
Sidney Mailick and Edward H. Van Ness, eds.
(Englewood Cliffs, NJ: Prentice-Hall, 1962),
pp. 1–29.
53. Frederick C. Mosher, “Research in Public Admini-
stration: Some Notes and Suggestions,” Public
Administration Review 16 (Summer 1956),
pp. 169–178. The quotation is on p. 171.
54. Landau, “The Concept of Decision-Making in the
‘Field’ of Public Administration,” p. 2.
55. Jack L. Walker, “Brother, Can You Paradigm?” PS 5
(Fall 1972), pp. 419–422. Figure is for 1960–
1970.
56. Albert Somit and Joseph Tanenhaus, American
Political Science: A Profile of a Discipline (New
York: Atherton, 1964), pp. 52, 54. Figures are for
1953–1963.
57. Waldo, “Public Administration,” p. 154.
58. Heinz Eulau (1977), as quoted in Krishna
K. Tummala, “Comparative Study and the Section
on International and Comparative Administration
(SICA),” Public Administration Review 58
(January/February 1998), p. 21.
59. Dwight Waldo, “Scope of the Theory of Public
Administration,” Theory and Practice of Public
Administration: Scope, Objectives, and Methods,
Monograph 8, James C. Charlesworth, ed. (Phila-
delphia: American Academy of Political and Social
Sciences, 1968), pp. 1–26. The quotation is on p. 8.
60. David L. Weiner, “Political Science, Practitioner
Skill, and Public Management,” Public Admini-
stration Review 52 (May/June 1992), pp.  240–
245. The quotation is on p. 241.
61. Caldwell, “Public Administration and the
Universities,” p. 57.
62. Kenneth L. Kraemer and James L. Perry, “Camelot
Revisited: Public Administration Education in a
Generic School,” Education for Public Service,
1980, Guthrie S. Birkhead and James D. Carroll,
eds. (Syracuse, NY: Maxwell School of Citizenship
and Public Affairs, Syracuse University, 1980),
pp. 87–102. The quotation is on p. 91.
63. Ward Stewart, Graduate Study in Public Admini-
stration: A Guide to Graduate Programs, Report
to the U.S. Department of Health, Education,
and Welfare (Washington, DC: U.S. Government
Printing Office, 1961), p. 39.
64. Wilson, “The Study of Administration,” p. 209.
65. Kraemer and Perry, “Camelot Revisited,” p. 92.
Paradigms of Public Administration 51
66. See, for example, James M. Kouzes, “Why
Businessmen Fail in Government,” New York
Times (March 8, 1987).
67. Donald Rumsfeld, “A Politician-Turned-Executive
Surveys Both Worlds,” Fortune (September 10,
1979), pp. 50–54.
68. Clara Miller, “The Looking-Glass World of Non-
profit Money: Managing in For-Profits’ Shadow
Universe,” Nonprofitquarterly.org (December 21,
2005).
69. David E. Lewis, Political Appointments, Bureau
Chiefs, and Federal Management Performance
(Princeton, NJ: Woodrow Wilson School of Public
and International Affairs, Princeton University,
2005). Details are in Chapter 9.
70. Barry Bozeman and Branco Ponomariov, “Sector
Switching from a Business to a Government Job:
Fast-Track Career or Fast-Track to Nowhere?”
Public Administration Review 69 (January/
February 2009), pp. 77–91.
71. The original expression of Sayre’s mythic and
enduring pronunciemento is unclear. Graham
T. Allison, Jr. reports that, after being a formative
figure in the planning of the nation’s first generic
school of management, at Cornell University,
Sayre departed for Columbia University and,
evidently as a parting shot, issued his famous
aphorism. See Allison’s “Public and Private
Management: Are They Fundamentally Alike in
All Unimportant Respects?” Public Management,
Public and Private Perspectives, James L. Perry
and Kenneth L. Kraemer, eds. (Palo Alto, CA:
Mayfield, 1983), pp. 72–92.
72. Stanley I. Benn and Gerald F. Gaus, “The Public
and the Private: Concepts and Action,” Public and
Private Social Life, S. I. Benn and G. F. Gaus, eds.
(New York: St. Martin’s, 1983), pp. 3–27. The
quotation is on p. 5. The following discussion is
based on this book.
73. James L. Perry, Hal G. Rainey, and Barry
Bozeman, “The Public-Private Distinction in
Organization  Theory: A Critique and Research
Strategy,” Paper presented by the 1985 Annual
Meeting of the American Political Science
Association (New Orleans, August 29–September
1, 1985), Table 1.
74. Evelina R. Moulder, “Citizen Engagement: An
Evolving Process,” Municipal Year Book, 2010
(Washington, DC: International City/County
Management Association, 2010), pp. 28–32.
Emphasis added. Data (p. 30) are for 2009.
 52 PA R T I In Defense of Governing Well
75. Charles F. Bonser, “Institutionalizing a Discipline:
The Evolution of Public Administration
Education in the United States,” Paper prepared
for 2015 TPC Conference, National University
of Public Service, Budapest, Hungary, May 2015,
pp. 10–11. Emphasis added.
76. Mark R. Daniels, “Public Administration as an
Emergent Profession: A Survey of Attitudes about
the Review and Accreditation of Programs,”
Paper presented at the National Conference
of  the  American Society for Public Admini-
stration, New York, April, 1993, and J. Norman
Baldwin, “Comparison of Perceived Effectiveness
of MPA Programs Administered Under Different
Institutional Arrangements,” Public Admini-
stration Review 48 (September/October 1988),
pp. 876–884.
77. Bonser, “Institutionalizing a Discipline,” p. 12.
Data are for 2014.
78. Baldwin, “Comparison of Perceived Effectiveness
of MPA Programs Administered Under Different
Institutional Arrangements,” p. 876.
79. Robert A. Cleary, “Masters Programs in PA
Continue to Expand,” PA Times, 19 (December 1,
1996), pp. 2, 14.
80. NASPAA Data Center, 2013–2014 Annual
Program Survey Results (Washington, DC:
Author, 2015), and National Association of
Schools of Public Affairs and Administration,
1986 Directory: Programs in Public Affairs and
Administration (Washington, DC: Author, 1986),
p. xix. Data are for 1973–2014.
81. NASPAA Data Center, 2013–2014 Annual
Program Survey Results.
82. Ira Sharkansky, Wither the State? Politics and
Public Enterprise in Three Countries (Chatham,
NJ: Chatham House, 1979).
83. Paul H. Appleby, Policy and Administration
(Tuscaloosa, AL: University of Alabama Press,
1949), p. 15.
84. Carolyn J. Hill, “Is Hierarchical Government in
Decline? Evidence from Empirical Research,”
Journal of Public Administration Research and
Theory 15 (Spring 2005), pp. 173–196. The quo-
tations are on p. 173.
85. Jane E. Fountain, Building an Enterprise
Government (Washington, DC: Partnership for
Public Service and IBM Center for The Business
of Government, 2016), p. 5.
86. U.S. Government Accountability Office,
Managing for Results: Agencies Report Positive
Effects of Data-Driven Reviews on Performance
but Some Should Strengthen Practices, GAO-15-
579 (Washington, DC: U.S. Government Printing
Office, 2015), Highlights page.
87. U.S. Government Accountability Office, Managing
for Results: OMB Should Strengthen Reviews of
Cross-Agency Goals, GAO-14-526 (Washington,
DC: U.S. Government Publishing Office, 2014),
Highlights page.
88. Rosemary O’Leary and Catherine M. Gerard.
“Collaborative Governance and Leadership: A
2012 Survey of Local Government Collaboration,”
Municipal Year Book, 2013 (Washington, DC
International City/County Management Asso-
ciation, 2013), pp. 57–70. The quotations are on
pp. 57, 59, 61
89. Robert Agranoff and Michael McGuire,
“American Federalism and the Search for Models
of Management,” Public Administration Review
61 (November/December 2001), pp. 671–681.
The quotation is on p. 677.
90. Lyman W. Porter and John Van Maanen, “Task
Accomplishment and the Management of Time,”
Managing for Accomplishment, Bernard Bass,
ed. (Lexington, MA: Lexington Books, 1970),
pp. 180–192.
91. Erin Lamb, “Collaboration: The Nonprofit Trend,”
Nonprofitquarterly.org (February 2, 2015).
92. Chris Ansell and Alison Gash, “Collaborative
Governance in Theory and Practice,” Journal of
Public Administration Research and Theory 18
(October 2008), pp. 543–571.
93. Rhys Andrews and Tom Entwistle, “Does Cross-
Sectoral Partnership Deliver? An Empirical Explo-
ration of Public Service Effectiveness, Efficiency,
and Equity,” Journal of Public Administration
Research and Theory 20 (July 2010), pp. 679–701.
Details are in Chapters 11 and 12.
94. O’Leary and Gerard, “Collaborative Governance
and Leadership,” p. 64.
95. Keith G. Provan and H. Brinton Milward, “A
Preliminary Theory of Interorganizational Effect-
iveness: A Comparative Study of Four Community
Mental Health Systems,” Administrative Science
Quarterly 40 (Spring 1995), pp. 1–33.
96. Laurence J. O’Toole, Jr. and Kenneth J. Meier,
“Desperately Seeking Selznick: Cooptation and
the Dark Side of Public Management in Net-
works,” Public Administration Review 64
(November/ December 2004), pp. 681–693. The
quotation is on p. 690.

97. John Seabrook, “Don’t Shoot,” The New Yorker
(June 22, 2009), pp. 32–41.
98. Jorgen Svensson, Willem Trommel, and
Tineke Lantink, “Reemployment Services in
the Netherlands: A Comparative Study of
Bureaucratic, Market, and Network Forms of
Organization,” Public Administration Review 68
(May/June 2008), pp. 505–515. The quotations
are on p. 514.
99. O’Leary and Gerard, “Collaborative Governance
and Leadership,” pp. 66, 65.
100. Richard M. Walker, Rhys Andrews, George A.
Boyne, et al., “Wakeup Call: Strategic Manage-
ment, Network Alarms, and Performance,” Public
Administration Review 70 (September/October
2010) pp. 731–741. The quotation is on p. 738.
101. Marc Esteve, George Boyne, Vicenta Sierra, and
Tamyko Ysa, “Organizational Collaboration in
Paradigms of Public Administration 53
the Public Sector: Do Chief Executives Make a
Difference?” Journal of Public Administration
Research & Theory 23 (October 2013), pp. 927–
952.
102. Ansell and Gash, “Collaborative Governance in
Theory and Practice,” p. 543.
103. Lamb, “Collaboration.”
104. Morgan Johansen and Kelley LaRoux,
“Managerial Networking in Nonprofit Orga-
nizations: The Impact of Networking on Orga-
nizational and Advocacy Effectiveness,” Public
Administration Review 73 (March/April 2013),
pp. 355–363. The quotation is on p. 355.
105. Matthias Benz and Bruno S. Frey, “Corporate
Governance: What Can We Learn from Public
Governance?” Academy of Management Review
32 (January 2007), pp. 92–104. The quotations
are on pp. 101, 92.

Public and Nonprofit
Organizations
In the following chapters, we explain organiza-
tions—their threads of theory, fabric of forces, and
fibers of people.
We focus, of course, on public and public-
serving nonprofit organizations, which are collectivi-
ties of people whose mission emphasizes the delivery
of goods and services that benefit people outside,
rather than people inside, the organization. It is a
realistic definition because it implicitly recognizes
that these organizations are not necessarily peopled
by would-be saints; hence, the purpose of public and
nonprofit organizations only “emphasizes” benefit-
ing others, a nuance which accepts that these organ-
izations, like private ones, can legitimately benefit
their own employees, too. Still, the emphasis on
serving others is real, and it associates with some
very real differences.
All organizations, whether public, private, or
nonprofit, have some basic similarities, and we shall
review these, but our real interest lies in revealing
PART
II
behavioral differences among organizations by
sector. The public sector is composed of govern-
ments, government agencies, and government cor-
porations. The private sector includes profit-seeking
companies. The nonprofit sector, also known as the
independent, voluntary, emerging, hybrid, or third
sector, is made up of privately-owned organizations
that do not seek profits. Technically, the nonprofit
sector is a part of the private sector, but we treat it as
a stand-alone sector (one of its titles, after all, is the
“third sector”). At the risk of getting ahead of our-
selves, we refer the reader to Figure 11-1, in Chapter
11, for a breakdown of the characteristics of each of
the three sectors.
Part II may be that portion of this book that will
have the most lasting value for you as you function in
the world of organizations. It discusses why bureau-
crats behave in the ways they do, and attempts to
help you gain a bit of insight when working in the
public or nonprofit sector.
CHAPTER

The Threads of
Organization: Theories

B ecause organizations are different creatures to

different people, organizations are “defined”
according to the contexts and perspectives peculiar
to the person doing the defining. Nevertheless, we
can, at least, posit certain characteristics that are
common to all organizations.
Organizations:
■ are purposeful, complex human collectivities;
■ are characterized by secondary (or impersonal)
relationships;
■ have specialized and limited goals;
■ are characterized by sustained cooperative
activity;
■ are integrated within a larger social system;
■ provide services or products to their
environment; and
■ are dependent upon exchanges with their
environment.
Organization theorists, using essentially this list of
characteristics but stressing different items in it, have
produced a vast body of literature on the nature of
organizations. This literature can be viewed as a
long lanyard plaited of two yarns, each with its own
threads. Each of those threads of theory has contrib-
uted something of lasting value to our understand-
ing of organizations and their administration, but,
as we shall see, each thread is tattered and torn in its
own unique way.
56
THE CLOSED MODEL OF
ORGANIZATIONS
Our first yarn is the closed model of organizations,
which goes by many names. Bureaucratic, hierar-
chical, formal, rational, and mechanistic are some
of them.
Characteristics of the Closed Model
of Organizations
We rely on a classic analysis in listing the principal
features of the closed model of organizations:1
■ Routine tasks occur in stable conditions.
■ Task specialization (i.e., a division of labor) is
central.
■ Means (or the proper way to do a job) are
emphasized.
■ Conflict within the organization is adjudicated
from the top.
■ “Responsibility” (or what one is supposed
to do, one’s formal job description) is
emphasized.
■ One’s primary sense of responsibility and
loyalty is to the bureaucratic subunit to
which one is assigned (such as the accounting
department).
■ The organization is perceived as a hierarchic
structure (that is, the structure “looks” like a
pyramid).
■ Knowledge is inclusive only at the top of
the hierarchy (in other words, only the chief
executive knows everything).

■ Interaction between people in the organization
tends to be vertical (that is, one takes orders
from above and transmits orders below), but
not horizontal.
■ The style of interaction is directed toward
obedience, command, and clear superior/
subordinate relationships.
■ Loyalty and obedience to one’s superior and
the organization generally are emphasized,
sometimes at the expense of performance.
■ Prestige is “internalized,” that is, personal
status in the organization is determined largely
by one’s formal office and rank.
So runs our closed model of organizations. And it is
just that—a model. No organization meets all twelve
of its features in practice. Among organizations that
are widely known, the Department of Defense likely
comes closest to accomplishing the requisites of the
closed model, but the Pentagon’s exceptions to the
model are obvious, such as highly unstable condi-
tions during wartime.
There are at least three theoretical threads that
have thrived within the closed model’s framework.
Bureaucratic Theory
The earliest school of the closed model is that of
bureaucratic theory, or the study of the impersonal
organization, and the execution, and enforcement of
legal rules in organizations. Its best-known represent-
ative is Max Weber, a remarkable German sociologist
who wrote around the turn of the twentieth century.
Although “bureaucracy” is common in all sectors,
Weber cast his theory of bureaucracy squarely in the
public one.
In what is perhaps a too-succinct summary, the
features of bureaucracy are:
■ hierarchy;
■ promotion based on professional merit
and skill;
■ the development of a career service;
■ reliance on and use of rules and regulations;
and
■ impersonality of relationships among
career-professionals in the bureaucracy
and with their clientele.
The Threads of Organization: Theories 57
To Weber, an impersonal, rule-abiding, efficient,
merit-based career service provided the surest way of
fulfilling the public interest in the face of a politi-
cally fragmented Germany and an arrogant,  pow-
erful, yet somewhat silly aristocracy. Weber, in a
large sense, was not anti-humanist in his thinking, as
has been alleged, but the effects of the bureaucracy
that he so loudly touted could be, both to the citizens
who were governed by the bureaucrats, and to the
bureaucrats themselves.
Weber’s rigidly rational theory was warmly
welcomed by the first American public administra-
tionists, who embraced it as an erudite justification
of their values, all of which shared an abhorrence
with messy politics. Woodrow Wilson’s closest
adviser, Colonel Edward House, anonymously
wrote a novel that memorably expresses this revul-
sion. In it, the president is replaced by an omnip-
otent “Administrator of the Republic” who resides
in a monastic barracks, spurning the distractive
fripperies of the White House, and who ends the
odious political “rule of the bosses.” Congress is dis-
banded in favor creating numerous “boards,” each
composed of five neutral experts who are charged
with reforming the courts, taxes, railroads, “the
unsanitary custom of burial in cemeteries,” and
anything else that could benefit from a dose of the
Administrator’s common sense—in other words,
just about everything.2 (This perspective remains
remarkably persistent; nearly a third of Americans
think that policymaking should be shorn from
elected officials and turned over to “non-elected
experts,” and nearly another third prefer that it go
to businesspeople.3)
Scientific Management
Another rivulet of research in the closed model is
scientific management (more popularly known as
“time-motion” studies), which is the analysis of
workflow processes as the means of raising organ-
izational productivity.
Workers as “Gear Wheels” Scientific manage-
ment’s overriding concern is to increase production,
and it does this by making human beings as effi-
cient as, and more like, machines. To quote one of
the school’s founders, “it is absolutely necessary for
 58 PA R T I I Public and Nonprofit Organizations
every man in an organization to become one of a
train of gear wheels.”4
Key representatives of the scientific manage-
ment school include Frederick Taylor (who gave this
school its name with his 1911 volume, Principles
of Scientific Management), and Frank and Lillian
Gilbreth. The person-as-machine perspective, replete
with all its discomfiting overtones, is on clear display
in Taylor’s writings. A notorious example is Taylor’s
story of Schmidt, a pig-iron hauler, whom Taylor
declared to be “stupid . . . phlegmatic . . . [and] more
nearly resembles in his mental make-up the ox than
any other type.” After Taylor analyzed Schmidt’s
physical movements, he ordered him to change how
he moved his body and, as a result of these “scien-
tific” alterations, Schmidt’s production went up from
twelve and a half tons of pig-iron hauled per day to
forty-seven tons.5
Similarly, the Gilbreths developed the concept of
the “therblig,” each one of which represented a cat-
egory of eighteen basic human motions—all physi-
cal activity fell into a therblig class of one type or
another.6 (The scientific management crowd rarely
was constrained by modesty, false or otherwise; try
reading therblig backwards.)
The person-as-machine perspective has a dis-
tasteful aura. But rendering workers more physi-
cally efficient could benefit the workers (who, in the
early twentieth century, were commonly paid on a
piecework basis), as well as their bosses, and even
clients. Frank Gilbreth, for example, applied his
therbligs to surgery techniques in hospitals, and the
sharply-ordered “Scalpel! Sponge!” slapped into a
surgeon’s palm by a hyper-efficient nurse is a direct
result of Gilbreth’s operating-room studies.7 Prior to
Gilbreth’s analysis, surgeons rustled around for their
own instruments with one hand, evidently holding
open the incision with the other.
Frank Gilbreth’s wife, Lillian, held a professor-
ship at Purdue University that was split between
its schools of Management and Home Economics,
and gave us kitchen islands, rolling kitchen carts,
and cookery’s “work triangle.”8 As “the mother”
of scientific management9 (Taylor is the “Father of
Scientific Management”—it says so on his tomb-
stone), she was featured on a U.S. postage stamp,
advised six presidents of the United States, and bore
Frank, at his request, six boys and six girls, two of
whom wrote Cheaper by the Dozen, a rollicking
account of life in a scientifically-managed house-
hold.
The Lasting Impact of a Fraud? A deeper criti-
cism of scientific management is that “there was
almost no science to it.”10 Taylor’s Schmidt was
likely fictional,11 his methodologies were idiosyn-
cratic at best, and he never published the actual data
on which his theory was based.12 Whether “Speedy
Taylor,” as he was called, was “a shameless fraud is
a matter of some debate, but not, it must be said,
much.”13 Taylor’s sometimes brutal applications of
his theory (the Gilbreths were much more humane)
brought about strikes by exhausted workers (recall-
ing the old saw, “the flogging will stop when morale
improves”) and a hostile congressional investiga-
tion. (Perhaps it should give us pause that Taylor
thought public administration to be “on the whole
good.”14)
Nevertheless, the impact of scientific manage-
ment was stunning, and in every sector. Herbert
Hoover, as commerce secretary (1921–1928) and
later as president, took Taylor’s writings to heart,
declaring a “war on waste” in both government
and business. Taylor was central in organizing
America’s first graduate school to offer a degree in
business (at Harvard, in 1908). His theories under-
lay the Soviet Union’s first five-year economic plan.
They were given their “fullest application by Henry
Ford, who,” following Speedy Taylor’s example,
“measured his workers’ movements on the assem-
bly line with a stopwatch.”15 “The world of man-
agement”—including public management, where
“Taylor’s ghost” may “still haunt the halls of gov-
ernment”16—“remains deeply Taylorist in its foun-
dations.”17
Administrative Management
Our final literature of the closed model is admin-
istrative management, also called generic man-
agement, which is the discovery and application
of universal, scientific, administrative principles
that can improve any organization’s efficiency
and effectiveness. (Administrative management’s
oddly redundant title reflected its adherents’ desire
to distinguish it from the more physical scientific
management.) Unfortunately for this school, as
we explained in Chapter 2, there are no universal,

scientific, administrative principles, but, as we noted
earlier, every school, including this one, has made
some contributions of consequence.
The scholars of administrative management
devoted their energies to the discovery of mana-
gerial principles that worked in any and all insti-
tutional settings—from corporations and clubs,
to governments and gulags—and in any and all
cultural contexts—from Boston and Botswana, to
Paris and Patagonia. Writers in this stream usually
offered up very specific principles of administration:
The public administration scholars, Luther Gulick
and Lyndall Urwick listed seven “principles” (recall
POSDCORB, in Chapter 2); James D. Mooney and
Alan C. Reiley, in their aptly-titled and influential
work, The Principles of Organization, found four;
another, Henri Fayol, unearthed fourteen.18 Among
the premier scholars in this tradition, Mary Parker
Follett was one of the few who fudged when it came
to enumerating principles of administration, but
then she was unusually ahead of her time, perhaps
because her intellectual roots were deeply planted in
public administration.19
Follett’s ideas (as channeled through W. Edwards
Deming, of total-quality-management fame) were
implemented by Japanese automakers, who applied
them with enormous success, at least up to a point.
Japan’s Toyota, after faithfully following Follett’s
philosophy for more than fifty years, abandoned it
in favor of overtaking General Motors as the globe’s
biggest automaker (which it did) by embracing
“disastrous policies adopted after 2000, when top
management’s thinking changed sharply in a direc-
tion that, while consistent with that of most other
Western companies, would never have been toler-
ated at Toyota in the past.”20 One result: Toyota’s
global rolling recalls in 2010 and 2011 to correct
safety issues in more than fourteen million vehicles,
its largest number ever. Worse, Toyota executives
lied to federal investigators, lies that resulted in a
$1.2 billion fine in 2014.
With the emergence of administrative manage-
ment, a hint surfaced that presaged a revolution
in organization theory, one that ultimately would
bluntly question a foundation of its two theoreti-
cal predecessors, bureaucratic theory and scientific
management. That hint was: underlings and toilers
in organizations conceivably might have minds of
their own.
The Threads of Organization: Theories 59
It was not much of an inkling, but it is inti-
mated, if perversely, in Mooney and Reiley’s con-
tention that the “indoctrination” of workers is vital
to well-managed organizations; they thought that
the Catholic church had done a simply swell job
of indoctrination over the preceding 2,000 years.21
The idea that workers could think is much more
apparent in Follett’s writing, who was suggesting
power sharing, stakeholder theory, and team build-
ing in 1924!22
As Follett exemplifies, the administrative man-
agement writers were among the first to express a
dawning recognition that subordinates were people
(like managers) and could think (almost like manag-
ers). This breakthrough provided a basis for organi-
zation theory’s next paradigm, the open model.
THE OPEN MODEL
OF ORGANIZATIONS
As with the closed model, the open model goes by
many names. Collegial, competitive, free market,
informal, natural, and organic are some of them.
The origins of the open model actually precede
those of the closed model by more than a century and
a half, and can be traced to Count Louis de Rouvroy
Saint-Simon, the brilliant French social thinker, and
to his protégée Auguste Comte, the “father of soci-
ology.” Both speculated on administration of the
future: technology would spawn new professions;
administrators would be appointed on the basis of
skill rather than heredity; and organizations would
be created spontaneously, evolve “naturally,” and be
a liberating force for humanity.23
Characteristics of the Open Model
of Organizations
The principal features of the open model of organi-
zation are:24
■ Nonroutine tasks occur in unstable
conditions.
■ Specialized knowledge contributes to common
tasks (thus differing from the closed model’s
specialized task notion in that the specialized
knowledge possessed by any one member of
the organization may be applied profitably to
 60 PA R T I I Public and Nonprofit Organizations
a variety of tasks undertaken by various other
members of the organization).
■ Ends (or getting the job done), rather than
means, are emphasized.
■ Conflict within the organization is adjusted by
interaction with peers, rather than adjudicated
from the top.
■ “Shedding of responsibility” is emphasized
(in other words, formal job descriptions
are discarded in favor of all organizational
members contributing to all organizational
problems).
■ One’s sense of responsibility and loyalty is to
the organization as a whole.
■ The organization is perceived as a fluidic
network structure (that is, the organization
“looks” like an amoeba).
■ Knowledge can be located anywhere in the
organization (in other words, everybody knows
something relevant about the organization, but
no one, including the chief executive, knows
everything).
■ Interaction between people in the organization
tends to be horizontal (that is, peers interact
with peers), as well as vertical.
■ The style of interaction is directed toward
accomplishment, “advice” (rather than
commands), and is characterized by a
“myth of peerage,” which envelops even the
most obvious superordinate/subordinate
relationships.
■ Task achievement and excellence of
performance in accomplishing a task are
emphasized, sometimes at the expense of
obedience to one’s superiors.
■ Prestige is “externalized” (i.e., personal status
in the organization is determined largely by
one’s professional ability and reputation, rather
than by office and rank).
So runs our open model of organizations, which,
like the closed model, does not exist in actual-
ity, although a major university might come close
(which is why the open model occasionally is called
the “collegial” model). But exceptions are apparent;
for instance, in universities one is likely to find a
higher degree of loyalty to the subunit (such as the
academic department) than to the organization as
a whole.
As with the closed model, three threads com-
prise the open model of organizations.
Human Relations
The first of our three threads, human relations, is
the study of people’s problems, opportunities, and
interactions in organizations. It focuses on organiza-
tional variables, such as personal motivations, never
considered in the closed model.
The Hawthorne Experiments In 1924, Elton Mayo
and Fritz J. Roethlisberger began a series of studies
(later known as “the Hawthorne experiments,” for
the location of the plant) of working conditions
and worker behavior at a Western Electric factory.
Ultimately, the research involved six massive, and
hugely influential, studies conducted over eight
years.
Ironically, their experiment was predicated on
the then-plausible Taylorian hypothesis that workers
would respond like “gear wheels” to changes in
working conditions. To test it, they altered the inten-
sity of light available to a group of selected workers,
expecting that the dimmer the light the lower their
productivity. The lights were turned down and pro-
duction went up. Mayo and Roethlisberger were dis-
concerted. They dimmed the lights to near darkness,
and production kept climbing.
Among the explanations of this phenomenon
that later came forth were: human workers probably
are not entirely like machines; the Western Electric
workers were responding to some motivating varia-
ble other than the lighting, or despite the lack of it;
and that the likely variable in question was that they
had been told that they were being watched25—a
condition that became known as the “Hawthorne
effect.”
The Hawthorne experiments have grown
increasingly controversial over time. Some re-
examinations of the data conclude that factors
other than human relations drove greater produc-
tivity, such as the observed workers’ fear of being
laid off and that, unlike other workers, they were
given rest periods and group pay incentives;26 others
counter that the original findings remain valid.27
(For what it is worth, we tend to agree with the
former assessment.) Nevertheless, the experiments
rooted the idea deep into management theory that

unquantifiable relationships (or “human relations”)
between workers and managers, and among workers
themselves, are significant determinants of workers’
productivity.
A Hierarchy of Human Needs: From Job
Satisfaction to Self-Actualization The Hawthorne
experiments inspired much research on job satisfac-
tion—that is, what factors contribute to, or detract
from, employees’ acceptance of, and even happiness
with, their employment. An early and important
contribution to this research is the “hierarchy of
human needs” developed by A. H. Maslow. Maslow
perceived job-related human desires to be based,
first, on physiological needs (such as eating), which
provided the foundation for a person’s next great-
est need, economic security, then love or belong-
ingness, followed by self-esteem, and ultimately
self-actualization.
Self-actualization refers to a person growing,
maturing, and achieving a deep inner sense of
self-worth as he or she relates to his or her job.
Maslow wrote that these “highly evolved” self-
actualized people assimilated “their work into the
identity, into the self, i.e., work actually becomes
part of the self, part of the individual’s definition of
himself.”28
Hygienic Factors and Motivator Factors Frederick
Herzberg extended Maslow’s hierarchy of human
needs to his “motivation-hygiene theory,” which
holds that there are two classes of phenomena that
make people feel good or bad about their jobs.
One class relates to the context of the job, and
includes such factors as working conditions, organ-
izational policies, and salary. Herzberg called these
“extrinsic” dimensions hygienic factors, so named
because they are needed to avoid worker dissatis-
faction, but fail, in and of themselves, to provide
satisfaction and engagement. Hygienic factors cor-
respond, more or less, with the base of Maslow’s
pyramid of human needs, where physiological and
security needs are found,
Herzberg’s second category relates to the content
of the job, and includes such factors as professional
and personal challenge, appreciation of a job well
done by supervisors and peers, and a sense of being
responsible for important matters. Herzberg called
these “intrinsic” aspects motivator factors.29
The Threads of Organization: Theories 61
Motivators relate, by and large, with the upper
reaches of Maslow’s pyramid—belongingness and
self-esteem, but not necessarily with self-actual-
ization. Belongingness and self-esteem result in
employees who are satisfied with their jobs, whereas
self-actualization refers to one’s job becoming part
of one’s definition of self, which is beyond mere job
satisfaction; self-actualization verges on obsession.
Hygienic or Motivator Factors: What Matters to
Public and Nonprofit Employees? What matters
more to public and nonprofit employees, hygienic
factors, such as pay and perks, or motivators, such
as praise and producing?
Hygienic factors do not count for much among
these workers. Consider, for example, salary, perhaps
the most definitively hygienic factor of all. As we
elaborate in Chapter 5, large-scale studies find that
government workers are “significantly less moti-
vated by salary” than are private-sector workers.30
Without question, motivator factors dominate.
And they appear to be more important to govern-
ment and nonprofit workers than they are to other
and larger working populations. Motivator factors
have an even greater impact among top public
administrators than among lower-level ones.31
For over three decades, roughly nine out of
every ten federal employees have stated that “the
work I do is meaningful” or “important”32 com-
pared with about half of all Americans who state,
in a similar vein, that “a feeling of accomplishment”
is the “most important” single aspect of their jobs.33
Federal managers are much more likely than their
counterparts in business to “come to work” because
of the “nature of their jobs.”34
State government workers “are more motivated
to perform their work when they have clearly under-
stood and challenging tasks that they feel are impor-
tant and achievable.”35
More than two-thirds of nonprofit employ-
ees report that they are given the chance to do the
things that they do best and that their colleagues
are willing to help other employees learn new skills,
compared with about half of federal and corporate
employees.36
Hygienic or Motivator Factors: What Matters
to Organizations? It may be comforting, in a
bleeding-heart sort of way, to know that motivators
 62 PA R T I I Public and Nonprofit Organizations
matter most to employees, but do they, or hygienic
factors, matter more in advancing the interests of the
organization?
Hygienic factors count, but not much. There is
simply no discernible relationship between generous
hygienic policies (e.g., lengthy vacations, etc.)—or
stingy ones—and more profitable companies.37
Hygienic factors “are like tickets to the ballpark—
they can get you into the game, but they can’t help
you win.”38
Motivator factors are more complicated. In and
of themselves, they add more to employees’ job satis-
faction than do hygienic factors, and job satisfaction
can be, but not necessarily is, a positive component
in organizational productivity. But job satisfaction is
merely that; one can be satisfied with one’s job, but
contribute to one’s organization so minimally that it
suffices only to avoid dismissal.
Enter Employee Engagement The multitude of
acolytes spawned by Maslow and Herzberg eventu-
ally began concentrating on what can help organi-
zations win. Their answer is: employee engagement.
Employee engagement holds that workers
have a rational commitment (that is, employees’
logical understanding that their employment ben-
efits them financially and professionally—basically,
an extension of Herzberg’s hygienic factors) and
an emotional commitment (i.e., the visceral pride
and enjoyment that employees derive from their
work and organization—arguably an extension of
Herzberg’s motivator factors) to their organization
that inspire them to exert their very best effort on
their organization’s behalf.39 Employee engage-
ment expands the employee’s psychic bonding
with his or  her job (that is, Maslow’s self-actual-
ization,  should it be realized) to the whole of the
organization.
A variety of large-scale analyses show that
“employee engagement surpasses satisfaction as an
indicator of [individual and organizational] pro-
ductivity.”40 And an individual’s job satisfaction
per se was about all that Maslow and Herzberg
were  really concerned with, but it is insufficient
as a prod of  productivity. Wally, the bespectacled,
coffee-addicted slacker nonpareil in the comic
strip Dilbert,  exemplifies the satisfied, even happy,
employee who also is spectacularly disengaged and
unproductive.
The Power of Public Employee Engagement
“Multiple research studies have demonstrated the
positive relationship between high levels of employee
engagement and desired organizational outcomes,”41
perhaps because managers with high talent levels are
twice as likely to be engaged than those with low
talent.42 Like all organizations, governments benefit
from engaged employees.
Federal employees who are engaged with their
jobs are up to three times less likely to perceive mis-
conduct than are their disengaged (and presumably
more critical) colleagues,43 although, when engaged
workers do notice misconduct, they are more likely
to report it;44 both behaviors reduce risk for the
organization.
Those federal agencies with the highest pro-
portions of engaged employees, have: much higher
performance and accountability scores; far less like-
lihood that employees will leave the agency; much
lower injury and sick leave rates; and far fewer dis-
crimination complaints. These differences are not
merely statistically significant; those agencies with
many engaged employees frequently boast measures
of agency quality that are two or three times greater
than those of agencies with few.45 Disengaged federal
employees, by contrast, cost their government from
an estimated $18 billion46 to $65 billion47 annually
in lost productivity. The evidence is sufficiently com-
pelling that the feds, in 2014, set goals for greater
employee engagement, took surveys of engagement,
and broke down the results for more than 20,000
federal offices.
An analysis of state workers amplifies our
understanding of those conditions that associate
with more productive government workers. Public
employee performance heightens when: the worker’s
job role is clear (“role ambiguity negatively affects
job performance”); the employee directly contrib-
utes to the fulfillment of the agency’s mission; and
when the worker perceives that the agency not only
is adequately funded, but that the agency also spends
those funds efficiently.48
Regrettably for governments, their disengaged,
and relatively unproductive, workers are less likely
to voluntarily leave their employers than are their
disengaged colleagues in the private sector, in part
because they are “less likely to enjoy the pension
and  health-care benefits that most government
workers get.”49

Engaging Government and Nonprofit Workers
Although specific figures vary (sometimes widely),
most employees fail to engage. The United States is
a global leader in its proportion of engaged employ-
ees,50 but just 30 percent of America’s some 100
million full-time workers are engaged with their
jobs; half “are just kind of present,” and a fifth “are
actively disengaged.”51
America’s public employees handily surpass
these overall figures. Two-thirds of federal workers
are engaged in their work.52 “Less than half of
state and local employees are fully engaged in their
jobs”53—still substantially higher than the national
employee proportion of three out of ten workers
who are engaged at all. Engagement, however, is
strikingly strong at the upper echelons of state and
local governments, at least as measured by time
spent. State department heads typically work over
fifty hours per week.54 City managers 55 and assistant
city managers56 also work, on average, more than
fifty hours per week, and 69 percent of “executives
and senior managers in cities, counties and special
districts. . .. regularly work more than 40 hours [per
week] with no additional compensation”57—figures
that have held steady for decades.
Workers in the independent sector appear to be
even more engaged. “The mean level of nonprofit
managers’ job involvement is significantly greater
than for public managers.”58 Nonprofit “managers”
work 14 percent longer hours per week than state
“managers.”59
What Engages Workers? Six conditions of
employee engagement are the factors most clearly
associated with organizational productivity. They
are: when employees feel that they know what is
expected of them at work; have what they need to do
their jobs right; have the opportunity “to do what I
do best every day”; receive recognition for work well
done over the last seven days; believe that someone
at work cares about them as a person (regrettably,
there is “total unawareness . . . across all levels of
management. . .. [of employee] conditions that
foster positive emotions, strong emotions, strong
motivation and favourable perceptions of the work
itself”60); and think that there is someone at work
who encourages their development (98 percent of
employees who receive little or no feedback are dis-
engaged from their jobs; those who receive positive
The Threads of Organization: Theories 63
feedback are thirty times more likely to be engaged,
and even negative feedback increases engagement by
a factor of twenty times61). Companies that fulfill
these conditions score markedly higher on the four
critical measures of corporate strength: productivity,
profit, employee retention, and customer satisfac-
tion.62
Rude, Crude, and Lewd: What Disengages Workers?
“Toxic workers,” or employees who are thieves,
fraudsters, sexual harassers, or similar sociopaths
can infect colleagues with their toxicity and result
in massive employee disengagement from their jobs
and organizations. Hence, neutralizing toxic workers
“enhances performance to a much greater extent
than replacing an average worker with a superstar
worker.” In fact, hiring or retaining an employee who
is “both highly productive and toxic” results in a cor-
porate profit that is “still net negative” and retention
“no longer makes sense.”63
Two types of toxic workers are, unfortunately,
common: uncivil boors and unconstrained bullies.
Uncivil Actions Organizational incivility is “the
exchange of seemingly inconsequential inconsider-
ate words and deeds that violate conventional norms
of workplace conduct.”64
An astonishing 98 percent of American cor-
porate workers and executives report that they
have been direct targets of uncivil behavior, and
those who are “treated rudely” at least once a
week doubled over fourteen years, from a fourth
to half.65 To be fair, there are those grasping, nar-
cissistic employees who believe themselves to be
“entitled,” and are more prone than other workers
“to feel that they are victims of abuse and to react
in undesirable ways.”66 We do not know just how
many self-described “victims” of rudeness are actu-
ally self-centered egoists, but it is perhaps pertinent
that nearly 11 percent of American workers over-
estimate how productive they are relative to other
Americans, the highest proportion by far among
thirteen other developed countries (Canada ranks
next highest, at over 7 percent).67
Incivility’s presence may veil deeper pathologies,
such as racism and sexism;68 once started, rudeness
spreads quickly, “like catching a cold”;69 and it can
morph into an “incivility spiral” of “increasingly
intense aggressive behaviors.”70
 64 PA R T I I Public and Nonprofit Organizations
Incivility’s organizational costs are considerable.
Eighty percent of workers and executives who think
that they were victims of uncivil acts report that they
lose work time “worrying about the incident”; 78
percent state that their commitment to their company
declined, and 66 percent say that their performance
declined (in a startling study, when medical teams
received minor insults before conducting simulated
surgeries on babies, more babies “died” than when
insults had not been received71); 63 percent lose time
“avoiding the offender”; 48 percent intentionally
decrease their “work effort,” and 38 percent inten-
tionally decrease their “work quality”;72 30 percent
were less creative and produced a fourth fewer new
ideas; and 12 percent voluntarily left the organiza-
tion because of incivility. Incivility also associates
with less teamwork.73 By contrast, civility and com-
pliments from colleagues lead to the recipient acti-
vating the “best self” in himself or herself, which can
result in improved job performance.74
What happens to the perpetrators of incivil-
ity? On the surface, not much. Only 1 percent to
6 percent of employees who experience incivility
report it.75 Dig a bit deeper, however, and the uncivil
suffer. Three-fifths of perceived incivility is inflicted
by supervisors on their subordinates, and their sub-
ordinates sneakily subvert them; a fifth of those
miffed workers stall in responding to their super-
visors’ requests,76 and a third spread unflattering
rumors about them.77 Whether civil or uncivil, man-
agers and executives in Fortune 1000 firms report
that they spend 13 percent of their work time (or
seven weeks per year) dealing with the turbulent
wake of incivility.78
Bully Pulpits Bullying is incivility on steroids, and
refers to overbearing and intimidating behavior.
Bullies are not nice, nor even competent,
employees. Supervisors who bully often perceive
their victims as threats, or just enjoy bullying.79
Arrogance, often a component of bullying (its
behavioral characteristics include anger and a desire
to dominate), clearly correlates with low self-esteem,
low verbal and numerical abilities, and low perfor-
mance ratings.80
Thirty-seven percent of employees in all sectors
report that they have been bullied at work. Seventy-
two percent of bullies are supervisors (three-quarters
of all employees who voluntarily “leave their jobs
are actually quitting their boss”81); 57 percent of
those bullied are women; and, when women are
bullied, 71 percent of their bullies are women.82
Bullying bosses focus on minorities, employees with
little job security, and even highly-paid employees in
high-pressure organizations or during downsizing.83
Unsurprisingly, bullying by bosses occurs most fre-
quently at workplaces in all sectors that are char-
acterized by poor procedures, inadequate planning,
and incompetent managers.84
The organizational costs of bullying are far
higher than those of incivility. An impressive four-
fifths of the victims of bullying voluntarily depart
for other organizations (40 percent), are “termi-
nated, driven out” (24 percent), or transfer to
other departments (16 percent).85 These departures
tote up when we realize that turnover costs range
from a third to two-and-a-half times the salary of
each  employee who leaves.86 Talented employees
are  the first to depart; 32 percent of employers
report that  their “top performers left their organ-
ization” in a single year.87 In those organizations
where bullying is chronic, strong unions are often
a consequence.88
As with uncivil employees, not much official
action is taken against bullies. Sixty-eight percent of
corporate executives state that their company took
action when bullying was discovered, but 88 percent
of the victims report that no action was taken, “a
major disconnect.”89
Incivility, Bullying, and Government Governments
may be leading the way down these rude roads
and  bullying byways. A fourth of government
employees have observed “abusive or intimidating
behavior” by co-workers over the past year (23
percent of federal workers and 26 percent each
of state and local employees), compared with 21
percent of businesspeople and 19 percent of non-
profit employees.90
Bullying in government reflects the same pat-
terns, noted earlier, that occur elsewhere, with the
added feature that more bullying occurs in those
public workplaces which are less representative of
the populations that they serve.91
In the public sector, the costs of incivility and
bullying can be quite a bit higher than in the other
two, particularly when executives fail to actively
squelch such behavior. When President George

W. Bush and others were being briefed, in 2002,
about the Iraq war plan, Defense Secretary Donald
Rumsfeld snatched a copy of the Pentagon’s brief-
ing slides from the hands of National Security
Adviser Condoleezza Rice, saying, “You won’t be
needing that.” Bush responded with, “I’ll let you
two work it out,” and left. “Instead of a team of
rivals, Bush wound up with a team of back-stabbers
with long-running, poisonous disagreements about
foreign policy fundamentals.”92
Organization Development
Another important subfield of the open model is
organization development (OD), which is a planned,
organization-wide attempt directed from the top
that is designed to increase organizational effective-
ness and viability through calculated interventions
in the active workings of the organization, using
knowledge from the behavioral sciences.93
OD: Mission and Methods The mission of organ-
ization development is to: improve the individual
member’s ability to get along with other members;
legitimize human emotions in the organization;
increase mutual understanding among members;
reduce tensions; enhance “team management”
and intergroup cooperation; develop more effec-
tive methods of conflict resolution using non-
authoritarian and interactive methods; and evolve
less structured and more “organic” organizations.
“The basic value underlying all organization-
development theory and practice is that of choice.
Through . . . the collection and feedback of relevant
data to relevant people, more choices become avail-
able and hence better decisions are made.”94
Organization development owes its origins to
the social psychologist, Kurt Lewin, and his ground-
breaking “Harwood studies” (named after Harwood
Manufacturing, a textile plant) of 1939–1947. Over
time, techniques (e.g., sensitivity training, employee
surveys) were developed that encouraged interper-
sonal candor and the creation of an interwoven
“managerial grid” that facilitated coordination
within the organization. Outside consultants who
specialize in OD (what the field calls “third party
change agents”) usually oversee all these group-and-
feedback activities, and they call their consultations
“interventions.”
The Threads of Organization: Theories 65
OD: The Public Experience Perhaps as many as
half of all organization development interventions
occur in governments, and more than four-fifths
of government workers who participated in them
report positive and intended effects on their agen-
cies; less than a tenth report negative effects.95 These
rates were quite comparable to the private sector’s
experience with OD.96 OD interventions in public
agencies “seem to be equally effective” as corporate
interventions when it comes to “enhancing both
individual development and organizational perfor-
mance,” but less so in affecting structures, goals,
procedures, and rewards97—not surprising, as legis-
latures and civil service commissions, not agencies,
usually control these factors.
Interestingly, it is the public sector (specifically, a
metropolitan county’s sheriff’s department) that has
hosted “the longest longitudinal study” ever (over
thirty years and counting) of OD’s long-term effects.
These include: lower turnover; more resources;
fewer jailbreaks and citizen complaints; and meas-
urably improved leadership and organizational
effectiveness.98
OD: Crises and Caveats Despite its successes,
however, “a number of senior practitioners . . .
believe that the profession has lost its way.”99 OD
was “faddish” during the 1960s, “under attack” in
the 1970s, and morphed into so “many forms during
the 1980s and 1990s” that it is now “hardly recog-
nizable” and may end up as “a historical artifact.”100
Which may have occurred: “Most . . . [OD] policies
are remnants of the 20th century.”101
Organization development’s disarray may stem
from its basics.
One such basic is the field’s premise that more
open and less tense employees are more satisfied
(even happier) employees, and, hence, more produc-
tive employees. But, as we reviewed earlier, merely
satisfied workers are not necessarily productive
workers. Employee engagement, not necessarily
more open and relaxed employees, is the key to
heightened organizational productivity.
More fundamental is the field’s founding notion
that the more choices available to employees, the
more productive they and their organization will be;
recall that “choice [is] the basic value underlying all
organization-development theory and practice.”102
Researchers have found that when people have
 66 PA R T I I Public and Nonprofit Organizations
more, rather than fewer, options they believe that
their choices will result in better performance, a
belief heartily endorsed by the OD scholars. In fact,
the reverse is true, both organizationally and per-
sonally. “The costs of choice freedom outweigh its
benefits. . .. As a result, those who have the option
to choose exercise it, yet end up performing worse
and feeling worse than those who do not have that
option.”103 So basic is this reality that, one year after
paraplegics have been completely paralyzed (thereby
drastically decreasing their previously available
choices), and one year after lottery winners have
won large lotteries (vastly increasing their choices),
their happiness levels are virtually identical.104
The Executive’s Dilemma OD’s prime value seems
to be less one of organizational productivity and
more one of employee happiness. In fact, some of
the field’s adherents worry that the very idea of using
OD to boost organizational performance is a sell-
out of the field’s mission of improving individual
lives in the workplace. The bottom line and “the
mind-set of management” have perverted organi-
zation development; as a consequence, employees
trapped in “the grubby realities of worklife soon
figure out whose side [these] breezy, self-assured,
and excessively articulate” OD consultants are truly
on.105 They are, contemptibly (in this perspective),
on management’s side.
All this is, of course, fine. It is admirable that
organization development exists as a profession to
help people lead happier organizational lives. And,
as we have reviewed, there are correlations between
OD interventions and greater organizational pro-
ductivity. Executives who hire OD consultants to
enhance their organizations’ performance, however,
should be aware that their priority may not be
shared by those “third party change agents” whom
they hire.
The Organization as a Unit in Its
Environment
Our third school of the open model can be traced at
least as far back as the 1930s,106 and this theoretical
thread is undergoing a significant revitalization.
Adapting to the Environment This research is
characterized by its use of the organization as
a whole as its analytical unit (in contrast to the
other schools’ preference for the small group),
and its focus on pressures emanating from the
environment.  Organization theorists often refer
to this  literary stream as adaptive systems or con-
tingency  theory, which holds that organizations
are  themselves, and function in, dynamic net-
works in which forces act and react to one another,
and are able to cohere and stabilize only when their
competition and collaboration achieve a rough
balance.
In this construct, the organization’s environ-
ment is almost overwhelming, an “ever-changing
screen,” through which the organization, by con-
tinually assuming “different shapes and sizes,” must
pass or be “swept away.”107 Hence, these research-
ers have found that more flexible organizations are
more likely to endure in rapidly-changing environ-
ments,108 and that higher-performing organizations
match the complexity of their environments.109
Theorists differ over precisely how organiza-
tions adapt to their environments.110
Adapting Biologically One school, known as pop-
ulation ecology or organizational ecology, holds that
organizational adaptation is a biological, evolution-
ary process; organizations that cannot adapt die.
The blind spots in this view are several. In the
biological world, survival is defined in terms of col-
lectivities (i.e., whole species); adaptation occurs at
the cellular level and is determined by genetic sport;
and an organism’s adaptation matches perfectly
with its environment. In the organizational world,
however, survival is defined in terms of individual
units (i.e., an organization); adaptation occurs at the
societal level and is determined, at least in part, by
rational action; and an organization’s adaptation
matches imperfectly with its environment.
Adapting Rationally Other theorists hold that
organizational survival and success are entirely
attributable to human rationality, a perspective
that flourishes in business schools and in the lead-
ership literature. The problem here (and one that
it shares with the organizational ecologists) is that,
although the rationalists understand that organ-
izations dwell in environments characterized by
competition and conflict, they fail to appreciate
that organizations themselves are competitive and

conflicted. Organizations are not happy families,
but rather pastiches of passive and aggressive,
astute and dumb, and ethical and unethical people,
groups, and divisions, each with its own goals and
methods.
Adapting Politically Luckily, there is a school that
reconciles the biological and rational metaphors. It
does so by focusing on political interactions.
The political approach to organizational
adaptation is realistic in that, first, it recognizes
that organizations are highly diverse, with mul-
tiple divisions of labor and vastly different goals
held by  their members, and, second, with few
exceptions  (e.g., prisons), their members are free
to leave.  This combination of many internal dif-
ferences and few  sanctions allows organizations
to adapt both biologically,  in that environmental
forces affect discrete organizational elements (e.g.,
individuals, divisions) differently (and not just the
“whole” organization), and rationally, in that each
of these elements is dealing with those forces in
logical ways that protect its own interests. In the
political model, organizational adaptation com-
bines heart and head—about as apt a description as
we can imagine.
The Environment of the Public Organization
Perhaps the classic analysis of organizational
adaptation in the public sector is Philip Selznick’s
study of the Tennessee Valley Authority (TVA). In
it, Selznick introduced the notion of co-optation,
which occurred when TVA’s directors won over
hostile local interests by cajolery, veiled bribery,
and token representation in policymaking.111 Some
forty years later, however, those local interests that
ostensibly had been co-opted had waxed consid-
erably more powerful, and, in fact, could “foster
new operative goals for TVA” and “prevent TVA
initiated modifications of those goals.”112 Who had
co-opted whom?
As the studies of TVA imply, the task envi-
ronment has an unusually heavy and distorting
impact on the public organization. If the litera-
ture on the differences between public, nonprofit,
and private organizations agrees on anything, it is
that public organizations must deal with far more
environmental constraints and pressures than non-
profit and private organizations. This reality deeply
The Threads of Organization: Theories 67
affects every aspect of the public organization: pro-
cesses, structure, decision making, effectiveness—
everything.
THE CLOSED AND OPEN MODELS:
THE ESSENTIAL DIFFERENCES
We have reviewed two, eminently disparate,
models of organizations, but they do share a pair
of basic  assumptions: Both models assume that
organizations are not suicidal, and that they will
try not only to survive, but to thrive. Beyond these
commonalities, however, the models split over five,
deeply different, assumptions about how the world
works.
Assumptions about the Organization’s
Environment
One such difference is the models’ assumptions
about their respective external environments. Each
works in the environment posited for it, but not in
the other.
A closed-model organization, with its tall,
many-layered hierarchy, inflexible bureaucracy, and
rigid routines, is superbly suited for its posited envi-
ronment—one that is stable and devoid of surprises.
Should its environment be shattered, however, and a
chaotic environment, replete with swirling and con-
fusing forces, smashes in, then our closed organiza-
tion would (if it were unable to loosen up and adapt)
perish from its own rigidities.
By contrast, the open-model organization—with
its flat hierarchy, flexible responses, and minimal, if
any, routines—is supremely suited for its posited
environment—one that is tumultuous and replete
with surprises. The open organization’s inherent
ability to nimbly respond to fast-paced, one-of-a-
kind changes in its turbulent environment assures
its survival. Should it find itself, however, in a new
environment that is characterized by stability, slow-
ness, repetition, predictability, and boredom, then
our open organization would die from its inability
to tighten up, bureaucratize, and routinize in ways
that efficiently correspond to its new environmental
realities. “Inventing the wheel” for each and every
external challenge not only would no longer work;
it would kill the organization.
 68 PA R T I I Public and Nonprofit Organizations
Assumptions about the Human Condition
The second difference between the closed and open
models parallels the first, in that their respective
models of human beings differ but are appropriate
for each.
Theory X and Theory Y Douglas McGregor
famously named these models “Theory X” and
“Theory Y.”113 Theory X assumes that motivation to
work is an individual matter, and that most people
do not like work, prefer close supervision, cannot
contribute creatively to the solution of organiza-
tional problems, and are motivated by the threat of
punishment. It is apparent that organizations exem-
plifying the closed model not only would fit, but pos-
sibly might be appealing, to Theory X people.
Theory Y, by contrast, assumes that motiva-
tion to work is a group matter, and, given the right
conditions, most people can enjoy work as much
as play, exercise self-control and prefer doing
jobs in their own way, solve organizational prob-
lems creatively,  and often are motivated by social
and ego rewards. It is apparent that organizations
predicated on the open model likely would attract
Theory Y people.
The Riddle of Rational Interest A related facet
of human nature posited by the two models is the
problem of rational interest, or how people define
their self-interest and the rationale that they use to
fulfill it.
In the closed model, rational interest means that
everyone in the organization has the same goal (that
is, the organization’s official mission) and agrees on
how to achieve that goal in an optimal fashion.
In the open model, however, rational interest
means that each person in the organization has
his or her own unique goals (e.g., getting ahead,
enjoying work), and has his or her own personal
way to achieve those goals. Each person’s real
goals are not only disparate, but often in conflict
with the goals of other members and possibly with
the mission of their own organization. The way in
which each person chooses to fulfill his or her goals
also is unique; executives vying for a promotion,
for instance, may employ entirely different means
to win it, ranging from badgering their bosses to
brown-nosing them.
Happily, in most agencies, public administrators’
“self-interests do not necessarily run counter to the
organization’s overall interests, in that they reflect a
desire to make a useful contribution to the perfor-
mance of their organization. . .. The assumption of
an inherent conflict between self- and collective inter-
ests is not always valid, particularly in a public sector
context.”114 Given the extraordinarily high level of
nonprofit employees’ engagement, noted earlier, it
seems reasonable to conclude that much the same
could be said of the independent sector.
Assumptions about the Role and Legitimacy
of Organizational Power
Power, in an organizational context, simply means
getting people to do what you want them to do. The
models divide not only on how to exercise organ-
izational power, but also on whether it should be
exercised at all.
Power in the Closed Model The closed model has
no qualms about employing power. Its theorists
believe in orders and obedience, rules and regula-
tions, punctuality and punctiliousness. The callous
use of authoritarian coercion is seen as entirely
legitimate.
Power in the Open Model In complete contrast
to the closed model, the open model views coer-
cion as reprehensible, and, indeed, the open model
occasionally appears to argue against the presence
of organizational power altogether. Relying on it is
condemned as dehumanizing, “dematurizing,” and
not at all nice.115
Regrettably, the open modelists’ distaste for
power leads to a contradiction in their theory of
organizational behavior. On the one hand, they
argue that the exercise of authoritarian power makes
people miserable, and misery undermines the attain-
ment of organizational goals; ergo, terminate the use
of power and unhappy-unproductive workers will
blossom into “happy-productive workers” who will
fulfill those goals.116
On the other hand, these same scholars also
agree that even happy workers remain uniquely
individual beings who still harbor their own per-
sonal objectives that may or may not coincide with
organizational missions. But which one prevails, the

worker or the organization? “Either the individual
is autonomous or the organization is dominant, for
the very notion of individualism wars against even
benevolent organization”; reconciling the two may
be a “hopeless task.”117
The Quirk in Collective Action The open model-
ists’ contradictory and hopeless task suggests that
large organizations, such as governments, face severe
challenges in motivating their employees to work for
the benefit of the whole organization—that is, for
the common collective good.
On the face of it, this is weird. If, for example,
International Widget’s employees all worked
together and succeeded in fulfilling their company’s
mission of becoming the world’s most profitable cor-
poration, then they would, at least potentially, profit,
too. So why do employees stubbornly and divi-
sively persist in viewing their organization’s official
mission not as an end, but merely as one of several
means to an end—their end? Why do they not join in
the organizational equivalent of singing “Kumbaya”
and get with the program?
Because, as Mancur Olson has enlightened us,
doing so makes little sense. Even though all organi-
zational members would benefit from attaining the
collective good (that is, by fulfilling their organiza-
tion’s mission), it is nonetheless irrational for any one
member to voluntarily sacrifice to achieve that col-
lective good. Why, for example, would an employee
voluntarily work without compensation? Better to
let other employees work for free so that the non-
volunteer can freeload. And, unless the organization
is composed of “altruistic” or “irrational” employees,
no one else in the organization will volunteer, either.118
The Inescapability of Organizational Power If
organizations depended on each member’s unique
rational interest to attain their common goals, as
advocated in the open model, then organizations
would be pushed toward actions that are collec-
tively ruinous. Hence, coercion is mandatory in any
organization whose members are rational and self-
interested if the common good—the organization’s
stated purpose—is to be realized.
Power is fundamental to the very idea of organ-
ization. Most open-model theorists seem to accept,
if poutingly, the immutable reality of organizational
power. But some seem not to.
The Threads of Organization: Theories 69
Assumptions about Manipulating Members
of Organizations
Manipulation is the techniques employed to exer-
cise organizational power. As with power itself, the
two models part company on its use.
Manipulation in the Closed Model A manipulative
technique occasionally used by public administra-
tors in the Third Reich, about as closed-model an
organization as one is likely to find, was leveling a
Luger at a subordinate’s neck to persuade him or her
to execute an order.
In closed-model organizations, manipulation is
obvious, coercive, and legitimate. The human and
organizational dysfunctions of authoritarian manip-
ulation are clear: fear, rigidity, secrecy, narrowness,
alienation, falsification, and stultification number
among them. But there are also human advantages
to the crudities of the closed model’s manipulations:
people in closed-model organizations “know where
they stand.” The coerciveness of the closed model
is for people who like things straightforward and
clear-cut.
Manipulation in the Open Model Manipulation in
the open model is far paler in hue than the red-meat
methods of the closed model, and its exercise is dis-
creet, disguised, and obfuscated.
Recall our twelve characteristics of the open
model; “advice,” “adjustment,” “myths of peerage,”
and supportive relationships number prominently
among them. These and similarly insinuating subtle-
ties comprise the manipulative methods of the open
model. A distinguished scholar of organization devel-
opment, for example, has written that one’s “good
mornings” must be “appropriately” tailored in tone
to each of their recipients if one wishes to smooth
the way for attaining organizational goals.119
The advantages of the open model’s social-
psychological manipulation are clear: openness,
communication, teamwork, and innovation are
some of them. But there are also liabilities. The open
model’s nuanced manipulative methods are “just a
more subtle form of bureaucratic control. . .. to get
each worker to participate in an ever more refined
form of [his or her] enslavement.”120 Because they
camouflage the unavoidable exercise of power in
organizations, as they are meant to do, people in
 70 PA R T I I Public and Nonprofit Organizations
open organizations, unlike those in closed organiza-
tions, may never be sure “where they stand.”
Of greater significance, if members think that
they do know where they stand, their knowledge
may be the end-product of a manipulation of their
psyches so profound as to render them analogous to
the “conditioned” human shell of the protagonist in
George Orwell’s 1984, who uncontrollably shrieked
“Long Live Big Brother!” even as he despised him.
Eric Fromm expresses this idea with his concept of
willing submissiveness; that is, even though organ-
izational subordinates may appear to have “team
spirit” (and actually may have been so successfully
manipulated as to believe they have it), the psy-
chological techniques used to create their willing
submissiveness induces, in reality, a subliminal and
deep resentment toward their superiors bordering
on hatred.121 There is, in fact, empirical research
suggesting that this is precisely what happens in
organizations that use the open model’s manipula-
tive techniques.122
Assumptions about the Moral Significance
of Organizations in Society
Our final distinction between the closed and open
models is particularly germane to the study of public
and nonprofit administration, and centers on how
their respective theorists have viewed the organiza-
tion and its moral relationship with the larger society.
The Moral View of the Closed Model The Ur closed
modelist, Max Weber, believed that bureaucracy,
“Rational”
Bureaucracy
“nonrational” society
FIGURE 3-1
The Closed Model’s View:
Organizations and Society
replete with its own internal injustices, dehuman-
izing rules, and monocratic arbitrariness, was vital,
in its very rigidity and rationalism, in mitigating
the unorganized societal lunacy that surrounded it.
If Weber’s notion of the bureaucracy’s stand-alone
station in society could be illustrated, it would look
something like Figure 3-1.
Weber was not unsympathetic to the plight
of the individual bureaucrat. In fact, he deplored
what bureaucratic settings could do to the human
spirit, sighing that the passion for bureaucracy
among his German students “is enough to drive
one to despair.”123 But, when all was said and done,
Weber could accept the dehumanization of society’s
public servants, who were somehow apart from the
other citizens, on the grounds that bureaucracy was
essential to social progress and the elimination of
injustice.
The Moral View of the Open Model In marked
contrast, the open-model theorists hold that every
citizen, bureaucrat and non-bureaucrat alike, is
encased in some sort of bureaucratic organization.
Society is a series of overlapping and interacting
organizations, and there is no unorganized, irra-
tional society “out there,” roiling beyond organiza-
tional boundaries. The open model’s concept that
society is bureaucracy looks like Figure 3-2.
In this school, bureaucracy’s domination of
society is not a good thing. “Bureaucracy gives birth
to a new species of inhuman beings. . .. incapable
of emotion and devoid of will,”124 as exemplified,
perhaps, by the Finnish public administrator who, in
FIGURE 3-2
The Open Model’s View:
Organizations as Society

2004, died at his office desk and was not recognized
as dead by his some 100 co-workers on the same
floor, including thirty in his own department, for two
days; his demise was discovered only when a friend
arrived to join him for lunch.125
Thus, for the public bureaucracy to dehuman-
ize its own bureaucrats in order to advance social
justice is self-defeating because the bureaucrat and
the citizen are one and the same. Indeed, to treat a
member of an organization, particularly a subordi-
nate, badly is immoral because there is no higher
morality to excuse such treatment, as there is in the
closed model. In the open model, what is good for
the person is good for the people.
Who Must Be Sacrificed? These differing views
about bureaucracy and society lead to starkly differ-
ent ethical conclusions about just who must pay the
price of advancing society.
Those who advocate the closed model state
that the organization’s clerks and laborers must be
sacrificed for the larger good of creating a fairer,
more honest, more equitable, and more transparent
society. Because only bureaucracy can achieve these
ends, and the bureaucracy’s executives are its engine,
their chief tool—the human spirit of the bureaucra-
cy’s clerks and laborers—can be legitimately sacri-
ficed for the good of the larger cause.
Those who advocate the open model state that
the creation of a more just society (which is cast in
precisely the same terms as in the closed model) is
not facilitated by bureaucracy, as the closed model
contends, but is blocked by them; hence, the organ-
ization itself must be sacrificed. If destroying the
organization is impractical (as it likely is), then at
least indoctrinating, transforming, and, if necessary,
replacing (ideally with nonhierarchical teams of
clerks and laborers) those “inhuman beings” who
comprise its leadership, will suffice.
CONJOINING OPPOSITES: THE
DRIVE TO REDUCE UNCERTAINTY
Students of organizations may be initially puzzled
by the two fundamentally different paradigms of
organization theory. The closed model assumes
that people hate work, organizations are rational,
their environments are stable, coercion is basic,
The Threads of Organization: Theories 71
bureaucrats are different from citizens, and bureau-
cracies are the saviors of society. The open model
assumes that people love work, organizations are
irrational, their environments are unstable, coer-
cion is unacceptable, bureaucrats and citizens are
one and the same, and bureaucracies are the bane
of society. These are basic differences. Can they be
reconciled?
Uncertainty Reduction: Reconciling
the Open and the Closed
Yes, they can. Reconciling the open and closed
models begins with the open model’s world view—
that is, organizations are spontaneous collectivities
of people with their own goals and drives, who are
operating uncertainly in an unstable environment.
This is not a bad set of assumptions about any organ-
ization that is just getting started. But no organiza-
tion can last long in a state of near nature. Nature is
unpredictable and uncertain, and all organizations
are extraordinarily averse to uncertainty. So organ-
izations are possessed by an overpowering need to
reduce uncertainty—that is, to routinize and ration-
alize the organization’s internal workings and its
relations with its environment whenever and wher-
ever possible. This organizational need to reduce
uncertainty reflects the deeply human need to do the
same: psychologists tell us that the more certain we
are, the happier we are.126
In sum, we now understand that: organizations
and their environments constantly change; organi-
zations and the people in them try to survive and
thrive; and organizations and the people in them
learn from their mistakes, failures, and successes.
Responding to Organizational Uncertainty
Organizational uncertainty may spring from sources
inside and outside the organization, and whether the
source is internal or external can shape organiza-
tional strategies in addressing uncertainty.
Responses to Internal Sources of Uncertainty If
the sources of organizational uncertainty are inter-
nal, then the organization will strive to reduce
uncertainty by centralizing. Centralizing techniques
include: indoctrinating all members of the organiza-
tion “to respond only to commands from the central
 72 PA R T I I Public and Nonprofit Organizations
leadership and from no other source”; controlling
all communication involving “vexing suborganiza-
tions” in an effort to nip “nonconforming thought”
and “deviant behavior”; intensifying surveillance of
troublesome subunits; “detaching key operations,”
such as the control of funds, from deviating depart-
ments, “thus reducing their self-containment and
increasing their vulnerability to central direction”;
and, finally, expelling offending units, a radical act
that amounts to “a contraction of boundaries con-
stituting a withdrawal from internal sources of
uncertainty.”127
Responses to External Sources of Uncertainty If,
however, the sources of organizational uncertainty
are external—that is, they are in the organization’s
task environment—then the organization will seek
to reduce that uncertainty by absorbing the outside
sources of uncertainty into the organization itself. It
does this by expanding its boundaries—by growing.
Co-optation, described earlier, is one form that this
incorporation of external uncertainties might take;
the effort by an organization to control some facet of
the natural environment (for example, to engage in
flood control) is another form; to merge or ally with
competitive organizations is yet another. Ironically,
decentralization often is required if an organization
is to expand, and decentralization can result in new,
internal sources of uncertainty.
If the expansion of an organization’s boundaries
is blocked, then the organization will seek to reduce
its exchanges with its environment—“withdrawal
from the source of uncertainty, as it were.”128 A firm
uncertain about its future supplies might decide to
stockpile or produce its own manufacturing com-
ponents. Entire nations, particularly in Asia, have
been known to reduce their external uncertainties
by radically reducing exchanges with other nations
and launching self-sufficiency policies; the invariable
consequence, however, is an elevation of costs and a
lowering of living standards.
The Public Organization and Environmental
Uncertainty In the public sector, those administra-
tors who perceive high levels of political, social, and
economic uncertainty in their organizations’ envi-
ronments also harbor concerns about their organi-
zations’ “inertia”; consult with citizens a lot; and, of
greatest importance, maintain a responsive, curious,
and exploratory “strategic stance” relative to their
external environments.129
When these public administrators worry about
environmental uncertainty, the public can benefit.
Public agencies “that perceive high levels of uncer-
tainty in their external political environment perform
better than those that perceive that environment to
be certain,” and this linkage is “positive and statis-
tically significant. . .. even when controlling for past
performance, service expenditure, and external con-
straints.” This correlation pertains, however, only
to the public organization’s political environment;
“perceptions of the relative level of uncertainty in
the social and economic circumstances are unrelated
to their service achievements.”130
ARE PUBLIC AND NONPROFIT
ORGANIZATIONS DIFFERENT?
Historically, organization theorists have minimized,
ignored, or denied that organizations can be usefully
classified along behavioral and sectoral lines (the
profoundly influential sociologist, Talcott Parsons,
likely set the standard in this regard), contending
instead that organizations are organizations are
organizations. “Virtually all the major contribu-
tions to the field were conceived to apply broadly
across all types of organizations. . .. The distinction
between public and private organizations received
short shrift.”131 As a consequence, there was, for at
least three-quarters of the twentieth century, “not a
single general work on organization theory that pays
systematic attention to the distinctive features of the
public bureaucracy.”132
Researchers are now focusing more on the
unique properties of public—and nonprofit—
organizations than they have in the not-so-distant
past. This new focus is still coming in fits and
starts—what is arguably organization theory’s most
prestigious academic journal, Administrative Science
Quarterly, has slashed its articles that deal with
public and nonprofit organizations by more than
70 percent over two decades133—but it is coming,
and it has produced a respectable literature. As we
shall learn in the following two chapters, govern-
mental, independent, and private organizations do
indeed differ from one another, and in highly impor-
tant ways.

So, yes, public and nonprofit organizations are
different.
NOTES
1. Tom Burns and G. M. Stalker, The Management
of Innovation (London: Tavistock, 1961).
2. Edward Mandell House (anonymous), Philip Dru:
Administrator: A Story of Tomorrow, 1920–1935
(New York: B. W. Huebsch, 1912), pp. 262, 249.
3. John R. Hibbing and Elizabeth Theiss-Morse,
“Americans’ Desire for Stealth Democracy: How
Declining Trust Boosts Political Participation,”
Paper presented at the Annual Meeting of the
Midwest Political Science Association (Chicago,
April 2001), Table 1.
4. Frederick W. Taylor, quoted in Peter J. Boyer, “The
Road Ahead,” The New Yorker (April 27, 2009),
pp. 44–57. The quotation is on p. 49.
5. Frederick W. Taylor, Principles of Scientific
Management (New York: Harper & Row, 1911),
p. 59.
6. Frank B. Gilbreth and Lillian M. Gilbreth,
Applied Motion Study: A Collection of Papers on
the Efficient Method of Industrial Preparedness
(New York: Sturgis & Walton, 1917).
7. Frank B. Gilbreth, “Scientific Management in the
Hospital,” The Modern Hospital 3 (November
1914), pp. 321–324.
8. Jill Lepore, “Not So Fast,” The New Yorker
(October 12, 2009), pp. 114–122.
9. Susan Reverby, “The Search for the Hospital
Yardstick: Nursing and the Rationalization of
Hospital Work,” Health Care in America: Essays
in Social History, Susan Reverby and David
Rosner, eds. (Philadelphia: Temple University
Press, 1979), pp. 206–225. The quotation is on
p. 218.
10. Matthew Stewart, “The Management Myth,” The
Atlantic (June 2006), pp. 80–87. The quotation is
on p. 81.
11. Charles D. Wrege and Amedeo G. Perroni,
“Taylor’s Pig-Tale: A Historical Analysis of
Frederick W. Taylor’s Pig-Iron Experiment,”
Academy of Management Journal 17 (March
1974), pp. 6–27.
12. Stewart, “The Management Myth,” p. 82.
13. Lepore, “Not So Fast,” p. 114.
14. Frederick Taylor, “Government Efficiency,”
Bulletin of the Taylor Society 2 (December 1916),
pp. 7–13. The quotation is on p. 7.
The Threads of Organization: Theories 73
15. Boyer, “The Road Ahead,” p. 44.
16. Hindy Lauer Schachter, “Does Frederick Taylor’s
Ghost Still Haunt the Halls of Government? A
Look at the Concept of Governmental Efficiency
in Our Time,” Public Administration Review 67
(September/October 2007), pp. 800–810.
17. Stewart, “The Management Myth,” p. 82.
18. Henri Fayol, General and Industrial Management
(London: Pittman, 1930).
19. M. P. Follett’s (her nom de plume) total scholarly
output consisted of two books that were exclu-
sively about government, and one book and a
book chapter that were broadly relevant to organ-
izations in all sectors.
20. H. Thomas Johnson, an expert on Toyota, as
quoted in Cal Thomas, “Principles Come before
Profits,” Savannah Morning News (March 3,
2010).
21. James D. Mooney and Alan C. Reiley, The
Principles of Organization (New York: Harper &
Row, 1939).
22. M. P. Follett, Creative Experience (New York:
Longmans, Green, 1924).
23. Alvin W. Gouldner, “Organizational Analysis,”
Sociology Today, Robert K. Merton, Leonard
Broom, and Leonard S. Cottrell, Jr., eds. (New
York: Basic Books, 1959), pp. 400–428.
24. Burns and Stalker, The Management of
Innovation.
25. Fritz J. Roethlisberger and William J. Dickson,
Management and the Worker (Cambridge:
Harvard University Press, 1939).
26. One example is Richard Herbert Franke and James
D. Kaul, “The Hawthorne Experiments: First
Statistical Interpretation,” American Sociological
Review 43 (October, 1978), pp. 623–643.
27. One example is Stephen R.G. Jones, “Worker
Interdependence and Output: The Hawthorne
Studies Reevaluated,” American Sociological
Review (April, 1990), pp. 176–190.
28. Abraham Maslow, Eupsychian Management: A
Journal (Homewood, IL: Dorsey, 1965), p. 1.
29. Frederick Herzberg, with Bernard Mausner and
Barbara B. Snyderman, The Motivation to Work
(New York: Wiley, 1959).
30. Marc Buelens and Herman Van den Broek, “An
Analysis of Work Motivation between Public
and Private Sector Organizations,” Public
Administration Review 67 (January/February
2007), pp. 65–72. The quotation is on p. 67.
31. Ibid.
 74 PA R T I I Public and Nonprofit Organizations
32. U.S. Merit Systems Protection Board, The Federal
Government: A Model Employer or a Work
in Progress? Perspectives from 25 Years of the
Merit Principles Survey (Washington, DC: U.S.
Government Printing Office, 2008), p. 20, and U.S.
Office of Personnel Management, 2010, 2011 and
2015 Federal Employee Viewpoint Survey Results
(Washington, DC: U.S. Government Printing/
Publishing Office, 2010, 2011, 2015, 2016),
Q. 13. U.S. Merit Systems Protection Board, 2009
Employee Survey Results (Washington, DC: U.S.
Government Printing Office, 2010), p. 3, Q. 5.
Figure is for eight MSPB surveys, 1986–2009, and
six OPM surveys, 2010–2016.
33. Karlyn Bowman, Attitudes About Work and
Leisure in America (Washington, DC: American
Leadership Institute, 2001), Table W-9. Data are
for 1973–1994.
34. Princeton Survey Research Associates and the
Brookings Institution, Health of the Public Service
(Washington, DC: Authors, 2001). Data are for
2001.
35. Bradley E. Wright, “Public Service and Motivation:
Does Mission Matter?” Public Administration
Review 67 (January/February 2007), pp. 54–64.
The quotation is on p. 60.
36. Brookings Institution, Winning the Talent War:
Brookings Survey Finds the Nonprofit Sector Has
the Most Dedicated Workforce (Washington, DC:
Author, 2002), p. 2.
37. Nick Bloom, Tobias Kretschmer, and John
Van Reenen, Work-Life Balance, Management
Practices and Productivity (London: Centre for
Economic Performance, 2006).
38. Marcus Buckingham and Curt Coffman, First,
Break All the Rules: What the World’s Greatest
Managers Do Differently (New York: Simon and
Schuster, 1999), p. 29.
39. Robert J. Vance, Employee Engagement and
Commitment: A Guide to Understanding,
Measuring and Increasing Engagement in Your
Organization (Alexandria, VA: Society for Human
Resource Management, 2006).
40. U.S. Merit Systems Protection Board, The Power
of Federal Employee Engagement (Washington,
DC: U.S. Government Printing Office, 2008), p. 3.
41. U.S. Merit Systems Protection Board, Managing
for Engagement, p. 2.
42. Jim Harter, “Managers with High Talent Twice
as Likely to Be Engaged,” (Princeton, NJ: Gallup,
April 2, 2015).
43. As derived from data in U.S. Merit Systems
Protection Board, Prohibited Personnel Practices:
Employee Perceptions (Washington, DC: U.S.
Government Printing Office, 2011), p. 37. Figure
is for 2010.
44. Ethics Resource Center and Hay Group, Ethics
and Employee Engagement (Washington, DC:
Authors, 2010), p. 4. This is a study of private
companies.
45. U.S. Merit Systems Protection Board, The Power
of Federal Employee Engagement, pp. 27–36.
Data are for 2005.
46. Gallup, as cited in GovExec Staff, “Disengaged
Employees, Lackluster Pay and More,” Govexec.
com (December 17, 2014).
47. Deloitte, as cited in Clement Christensen, “4
Reasons Why Investing in Employee Engagement
Matters,” Government Executive (March 26,
2013).
48. James Gerard Caillier, “Factors Affecting
Job Performance in Public Agencies,” Public
Performance & Management Review 34
(December 2010), pp. 139–165. The quotation is
on p. 139.
49. Pricewaterhouse Coopers as cited in Katherine
Barrett and Richard Greene, “What Employee
Surveys Reveal about Working in Government,”
Governing.com (June 9, 2016).
50. As derived from data in The Marcus Buckingham
Company, StandOut Global Engagement Index
(New York: Author, 2015).
51. David Hassell, “Unlocking Potential with
Employee Engagement,” TalentCulture (March
10, 2014), p. 2. Emphasis is original.
52. U.S. Office of Personnel Management, 2011 and
2016 Federal Employee Viewpoint Survey Results,
pp. 20, 8.
53. International Public Management Association for
Human Resources, as cited in Barrett and Greene,
“What Employee Surveys Reveal about Working
in Government.”
54. Jeffrey L. Brudney and Deil S. Wright, “The
‘Revolt in Dullsville’ Revisited: Lessons for
Theory, Practice, and Research from the American
State Administrators Project, 1964–2008,” Public
Administration Review 70 (January/February
2010), pp. 26–37. The data are on p. 29.
55. Jerri Killian and Enamul Choudhury, “Continuity
and Change in the Role of City Managers,”
Municipal Year Book, 2010 (Washington,
DC: International City/County Management

Association, 2010), pp. 10–18. Data (p. 15) are
for 2010.
56. Charldean Newell and David M. Ammons, “Role
Emphases of City Managers and Other Municipal
Executives,” Public Administration Review 47
(May/June 1987), pp. 246–253. Data (pp. 247–
248) are for 1985.
57. Katherine Barrett and Richard Greene, “Is a
40-Hour Workweek Enough in Government?”
Governing.com (July 21, 2016).
58. Jessica Word and Sung Min Park, “Working
across the Divide: Job Involvement in the Public
and  Nonprofit Sectors,” Review of Public
Personnel Administration 29 (June 2009),
pp.  103–133. The quotation is on p. 103; the
datum is on p. 108.
59. Mary K. Feeney and Barry Bozeman, “Staying
Late: Comparing Work Hours in Public and
Nonprofit Sectors,” American Review of
Public  Administration 39 (September 2009),
pp. 459–477.
60. Teresa Amabile and Steven Kramer, “The Progress
Principle: Optimizing Inner Work Life to Create
Value,” Rotman Magazine (Winter 2012),
pp. 28–33. The quotations are on pp. 28, 31.
61. Hassell, “Unlocking Potential with Employee
Engagement,” p. 3.
62. Buckingham and Coffman, First, Break All the
Rules, pp. 21–49. This purports to be “the largest
study of its kind ever undertaken.”
63. Michael Housman and Dylan Minor, Toxic
Workers, Working Paper 16-057 (Cambridge,
MA: Harvard Business School, 2015), pp. 1, 23.
64. Christine L. Porath and Christine M. Pearson,
“The Cost of Bad Behavior,” Organizational
Dynamics 39 (January–March 2010), pp. 63–71.
The quotation is on p. 64.
65. Christine Porath and Christine Pearson, “The
Price of Incivility,” Harvard Business Review
(January–February 2013), pp. 114–121. Figures
are for 1998–2011.
66. Paul Harvey, Kenneth J. Harris, William E. Gillis,
and Mark J. Martinko, “Abusive Supervision and
the Entitled Employee,” The Leadership Quarterly
(April 2014), pp. 204–217. The quotation is on
p. 204.
67. Joon Ian Wong, Americans Think They Work
Harder than Everyone Else—They Don’t (New
York: Quartz, 2016).
68. Lilia M. Cortina, “Unseen Injustice: Incivility
as Modern Discrimination in Organizations,”
The Threads of Organization: Theories 75
Academy of Management Review 33 (January
2008), pp. 55–75.
69. Trevor Foulk, Andrew Woolum, and Amir Erez,
“Catching Rudeness Is Like Catching a Cold:
The Contagion Effects of Low-Intensity Negative
Behaviors,” Journal of Applied Psychology 101
(January 2016), pp. 50–67.
70. Lynne M. Andersson and Christine M. Pearson,
“Tit for Tat? The Spiraling Effect of Incivility in the
Workplace,” Academy of Management Review 24
(4, 1999), pp. 452–471. The quotation is on p. 452.
71. Arieh Riskin, Amir Erez, Trevor A. Foulk, et  al.,
“The Impact of Rudeness on Medical Team
Performance: A Randomized Trial,” Pediatrics
136 (September 2015), pp. 487–495.
72. Porath and Pearson, “The Price of Incivility,”
pp. 115–116.
73. Porath and Pearson, “The Cost of Bad Behavior,”
pp. 64–66.
74. Daniel Cable, Jooa Julia Lee, Francesca Gino,
and Bradley R. Staats, How Best-Self Activation
Influences Emotions, Physiology and Employment
Relationships, Harvard Business School NOM
Unit Working Paper No. 16-029 (September 17,
2015).
75. Lilia M. Cortina and Vicki J. Magley, “Patterns
and Profiles of Responses to Incivility in the
Workplace,” Journal of Occupational Health
Psychology 14 (July 2009), pp. 272–288.
76. Porath and Pearson, “The Cost of Bad Behavior,”
pp. 64–65.
77. Christine M. Pearson and Christine L. Porath,
“On the Nature, Consequences and Remedies of
Workplace Incivility: No Time for ‘Nice’? Think
Again,” Academy of Management Executive 19
(February 2005), pp. 7–18. The data are on p. 11.
78. Porath and Pearson, “The Price of Incivility.”
79. Vincent J. Roscigno, Steven H. Lopez, and
Randy Hodson, “Supervisory Bullying, Status
Inequalities and Organizational Context,” Social
Forces 87 (March 2009), pp. 1561–1589.
80. Russell E. Johnson, Stanley B. Silverman, Aarti
Shyamsunder, et al., “Acting Superior but
Actually Inferior? Correlates and Consequences
of Workplace Arrogance,” Human Performance
23 (November/December 2010), pp. 403–427.
81. Maren Hogan, “Defining Qualities of the Worst
Managers,” SmartBlog on Leadership (May 20,
2014).
82. Workplace Bullying Institute and Zogby
International, U.S. Workplace Bullying Survey
 76 PA R T I I Public and Nonprofit Organizations
(Bellingham, WA, and Washington, DC: Authors,
2008), p. 1.
83. Roscigno, Lopez, and Hodson, “Supervisory
Bullying, Status Inequalities and Organizational
Context.”
84. Roscigno, Lopez, and Hodson, “Supervisory
Bullying, Status Inequalities and Organizational
Context.”
85. Workplace Bullying Institute and Zogby Inter-
national, U.S. Workplace Bullying Survey, p.  16.
Figures are for 2007.
86. U.S. Department of Labor study, as cited in Scott
Shortenhaus, Strategies for Working with Busi-
nesses and High Growth Industries (Washington,
DC: U.S. Department of Health and Human
Services, 2006).
87. Hassell, “Unlocking Potential with Employee
Engagement,” p. 2. Figure is for 2012.
88. Roscigno, Lopez, and Hodson, “Supervisory
Bullying, Status Inequalities and Organizational
Context.”
89. Workplace Bullying Institute and Zogby, 2013
WBI-Zogby Workplace Bullying from the
Perspective of U.S. Business Leaders (Bellingham,
WA, and Washington, DC: Authors, 2013). The
quotation is on p. 5.
90. Ethics Resource Center, National Govern-
ment Ethics Survey: An Inside View of Public Sector
Ethics, pp. 2, 20, 25, 31; National Nonprofit Ethics
Survey: An Inside View of Nonprofit Sector Ethics),
p. 15; and National Business Ethics Survey: An
Inside View of Private Sector Ethics (Arlington,
VA: Author, 2008), p. 14. Figures are for 2007.
91. Rhys Andrews and Rachel Ashworth, “Represent-
ation and Inclusion in Public Organizations:
Evidence from the U.K. Civil Service,” Public
Administration Review 75 (March/April 2015),
pp. 279–288.
92. Bob Woodward, “10 Take Aways From the Bush
Years,” Washington Post (January 18, 2009).
93. Richard Beckhard, Organizational Development:
Strategies and Models (Reading, MA: Addison-
Wesley, 1969), pp. 20–24.
94. Warren G. Bennis, Organizational Development:
Its Nature, Origins, and Prospects (Reading, MA:
Addison-Wesley, 1969), p. 17.
95. Robert T. Golembiewski, Carl W. Proehl, Jr., and
David Sink, “Success of OD Applications in the
Public Sector: Toting Up the Score for a Decade,
More or Less,” Public Administration Review 41
(November/December 1981), pp. 679–682.
96. Jerry Porras, “The Comparative Impact of
Different OD Techniques and Intervention
Intensities,” Journal of Applied Behavioral Science
15 (April, 1979), pp. 156–178.
97. Peter J. Robertson and Sonal J. Seneviratne,
“Outcomes of Planned Organizational Change in
the Public Sector: A Meta-Analytic Comparison to
the Private Sector,” Public Administration Review
55 (November/December 1995), pp. 547–558.
The quotation is on p. 554.
98. R. Wayne Boss, Benjamin B. Dunford, Alan D.
Boss, and Mark L. McConkie, “Sustainable
Change in the Public Sector: The Longitudinal
Benefits of Organization Development,” Journal
of Applied Behavioral Science 46 (December
2010), pp. 436–472.
99. W. Warner Burke, “The New Agenda for Organi-
zation Development,” Organizational Dynamics
25 (June 1997), pp. 6–20. The quotation is on
p. 8.
100. Larry E. Greiner and Thomas G. Cummings,
“Wanted: OD More Alive Than Dead!” Journal
of Applied Behavioral Science 40 (Winter 2004),
pp. 374–391. The quotation is on p. 374.
101. Greg Young, Women, Naturally Better Leaders
for the 21st Century (New York: Routledge,
2016), p. 11.
102. Bennis, Organizational Development, p. 17.
103. Simona Botti and Christopher K. Hsee, “Dazed
and Confused by Choice: How the Temporal
Costs of Choice Freedom Lead to Undesirable
Outcomes,” Organizational Behavior and Human
Decision Processes 112 (July 2010), pp. 161–171.
The quotations are on p. 161.
104. Dan Gilbert, “The Surprising Science of
Happiness,” Ted.com (February 2004).
105. Thomas H. Fitzgerald, “The O.D. Practitioner
in the Business World: Theory vs. Reality,”
Organizational Dynamics 16 (Summer 1987), pp.
20–34. The quotations are on pp. 25, 27.
106. Chester I. Barnard, The Functions of the Executive
(Cambridge, MA: Harvard University Press,
1938).
107. Herbert Kaufman, Time, Chance, and
Organizations: Natural Selection in a Perilous
Environment (Chatham, NJ: Chatham House,
1985), p. 67.
108. Paul R. Lawrence and Jay W. Lorsch, Organization
and Environment: Managing Differentiation and
Integration (Cambridge, MA: Harvard University
Press, 1967).

109. Peter M. Blau and R. A. Schoenherr, The Structure
of Organization (New York: Basic Books, 1971).
110. Much of the thinking in this and the following
five paragraphs is drawn from Donald Chisholm,
“Organizational Response to Environmental
Change,” Paper presented at the Annual
Meeting  of the American Political Science
Association (New Orleans, August 29–September
1, 1985).
111. Philip Selznick, TVA and the Grass Roots
(Berkeley, CA: University of California Press,
1949).
112. Richard A. Cuoto, “TVA’s Old and New Grass
Roots: A Reexamination of Cooptation,”
Administration & Society 19 (February 1988),
pp. 443–455.
113. Douglas McGregor, The Theory of Human
Enterprise (New York: McGraw-Hill, 1960).
114. Peter J. Robertson, Feng Wang, and Supamas
Trivisvavet, “Self- and Collective Interest in Public
Organizations: An Empirical Investigation,”
Public Performance & Management Review 31
(September 2007), pp. 54–84. The quotation is on
p. 54.
115. Chris Argyris, Organization and Innovation
(Homewood, IL: Richard D. Irwin, 1965).
116. T. A. Wright and B. M. Staw, “Affect and
Favorable Work Outcomes: Two Longitudinal
Tests of the Happy-Productive Worker Thesis,”
Journal of Organizational Behavior 20 (January
1999), pp. 1–23.
117. Allen Schick, “The Trauma of Politics: Public
Administration in the Sixties,” American Public
Administration: Past, Present, Future, Frederick
C. Mosher, ed. (Tuscaloosa, AL: University of
Alabama Press, 1975), pp. 142–180. The quota-
tion is on p. 170.
118. Mancur Olson, Jr., The Logic of Collective
Action: Public Goods and the Theory of Groups
(Cambridge, UK: Cambridge University Press,
1965).
119. Robert T. Golembiewski, Behavior and
Organizations (Chicago: Rand-McNally, 1962).
The Threads of Organization: Theories 77
120. Stewart, “The Management Myth,” p. 85.
121. Eric Fromm, The Art of Loving (New York:
Harper & Row, 1956).
122. See, for just one example of this research, Catherine
Casey, “‘Come, Join Our Family’: Discipline
and Integration in Corporate Organizational
Culture,” Human Relations 52 (February 1999),
pp. 155–178.
123. Max Weber, quoted in Elizabeth Kolbert, “Why
Work? A Hundred Years of the Protestant Work
Ethic,” The New Yorker (November 29, 2004),
pp. 157, 160.
124. Ralph P. Hummel, The Bureaucratic Experience:
A Critique of Life in the Modern Organization,
4th ed. (New York: St. Martin’s, 1994), p. 3.
125. Roland Paulsen, “The Art of Not Working at
Work,” Theatlantic.com (November 3, 2014).
126. Daniel Gilbert, Stumbling on Happiness (London:
Vintage, 2007).
127. Kaufman, Time, Chance, and Organizations,
p. 44.
128. Ibid., p. 43.
129. Rhys Andrews, “Perceived Environmental
Uncertainty in Public Organizations: An Empirical
Exploration,” Public Performance & Management
Review 32 (September 2008), pp.  25–50. The
quotations are on p. 41.
130. Ibid., p. 41.
131. Hal G. Rainey, Understanding and Managing
Public Organizations, 2nd ed. (San Francisco,
Jossey-Bass, 1997), p. 55.
132. Donald P. Warwick, in collaboration with
Marvin Meade and Theodore Reed, A Theory
of Public Bureaucracy: Politics, Personality,
and Organization in the State Department
(Cambridge, MA: Harvard University Press,
1975), p. 190.
133. As derived from data in Jeffrey Pfeffer, “Like Ships
Passing in the Night: The Separate Literatures of
Organization Theory and Public Management,”
International Public Management Journal 43 (4,
2006), pp. 457–465. Decline from 44 percent of
all articles to 13 percent is for 1985–2005.
CHAPTER
The Fabric of
Organizations: Forces
H ow do organizations adapt to the fury of
forces that roil in them and in the society sur-
rounding them? To answer this question, research-
ers  weave  the threads of theory into a fabric.
Sometimes they weave a tapestry, other times a
drop cloth.
ORGANIZATIONAL KNOWLEDGE
Knowledge and information have been defined as
“what changes us,”1 or data (i.e., facts that have
no coherent meaning to the person who is aware
of them) that become meaningful. Organizational
knowledge, or organizational intelligence, is not only
the process of collecting yet one more datum to com-
plete a puzzle, but, of greater importance, it is also a
process of interpreting data to solve mysteries. Data
organizations have—usually in spades. Knowledge
is more elusive. There is no indication, for example,
that, despite many times more data, Americans are
any more knowledgeable about public affairs than
they were in 1950.2
Information and Hierarchy
If knowledge changes us, then it is disconcerting to
know that organizations change knowledge.
Absorbing Uncertainty One of the more intrigu-
ing ways in which organizations distort knowledge
is called uncertainty absorption, whereby informa-
tion that initially is regarded as uncertain and “soft”
by the people who collect it becomes increasingly
78
certain and “hard” as it is sent up through the
decision-making hierarchy.3
Consider, for example, the Central Intelligence
Agency’s (CIA) efforts to detect Iraq’s weapons of
mass destruction. The agency had had no spies in
Iraq for five years before the invasion of 2003, and
its “assessments were increasingly based on very
limited information.” Although the CIA’s analysts
expressed their reservations, those passages “tended
to drop off as the reports would go up the food
chain. . .. As a result, virtually everyone in the United
States intelligence community . . . thought Iraq still
had the illicit weapons. . .. And the government
became a victim of its own certainty.”4
Centralization and the Fate of Intelligence In
closed, centralized organizations, information dis-
tortion often is intertwined with personal power.
For a full year prior to the invasion of Iraq, the
research director of Iraq’s intelligence agency wrote
“three assessments saying that the Americans would
attack Iraq and that we had no chance to resist
them.” The director provided these reports to one
General Abed, Iraqi President Saddam Hussein’s
most trusted aide (he was allowed, uniquely, to pack
a pistol in Saddam’s presence), but Abed “refused
to give these [assessments] to the President. . .. Like
everyone else, he was afraid to tell him the truth.”5
Decentralization and the Fate of Intelligence Even
when people trust each other and are working as a
team, both of which are emblematic of the open,
decentralized organization, information still may fail

to reach the people who need it and can act on it. In
these organizations, the pathology appears to be less
one of fear (although even presidents must “beg for
the bad news” because subordinates “will not give
it to you naturally”6) and more one of fumbling.
Perhaps the iconic instance of how bureaucracies in
democracies can falter in informing those who need
to know is the shambolic failure, in 1941, of anyone
to definitively alert the American troops at Pearl
Harbor that they expected the Japanese to attack.
Turf and Bureaucratic Jealousies An informational
pathology that seems to be particularly present in
public organizations, whether centralized or decen-
tralized, concerns “turf,” or agency rivalries that
revolve around the control of areas of responsibility.
Here is an example of this pathology in a cen-
tralized organizational context: The notorious World
War II spy, “Cicero,” who was the valet of the British
ambassador at Ankara, sold astonishingly accurate
and detailed intelligence concerning the planned
D-Day invasion of Europe to one Ludwig Moyzisch,
who then sent it to the Nazi foreign minister, Joachim
von Ribbentrop. The foreign minister was involved
in a bitter power struggle with the Reich Security
Office, and he loathed Franz von Papen, the German
ambassador to Turkey; Moyzich, as it happened,
not only reported to the Reich Security Office, but
also was an attaché on Papen’s staff. So Ribbentrop
found it expedient to bury Cicero’s information, and
with it, perhaps, the Third Reich.7
And here is an instance of the pathology in a
decentralized government: Even though fifty to sixty
professionals in the CIA knew by March 2000 that
two of the Al Qaeda hijackers involved in the ter-
rorist attacks of September 11, 2001, were in the
United States, no one informed the Federal Bureau
of Investigation, which is charged with internal secu-
rity, of their presence.8
Hierarchy, Handling, and Information Organi-
zational structure, in short, is no panacea for curing
pathologies of organizational information. We do
know, however, that there is a model of hierarchi-
cal distortion: the more hierarchical layers there are,
the more organizational subunits that are charged
with similar responsibilities, and the more that infor-
mation is “handled” as it is passed up, down, and
around the bureaucracy, the more likely it is that the
The Fabric of Organizations: Forces 79
information will be delayed and distorted, and the
less likely that it will reach someone who can intel-
ligently act on it.9
It is striking that, following 9/11, federal poli-
cymakers determinedly ignored this fact of informa-
tional life. Washington’s response to that attack—a
rapid and enormous expansion of the intelligence
community—produced: bureaucratic overlap (for
instance, fifty-one agencies charged with the narrow
responsibility of tracking money flows among ter-
rorists); inefficiency (analysts publish about 50,000
intelligence reports per year, “a volume so large
that many are routinely ignored”); disarray (1,271
federal organizations and 1,931 companies charged
with terrorism duties, toiling in 10,000 locations
across America); and blurred lines of authority (an
estimated 854,000 professionals had top secret
clearances nine years following the attacks). These
dysfunctions have, apparently, weakened the intel-
ligence agencies’ capacity to “connect the dots” and
disrupt future terrorist acts.10
Organizational Knowledge and Strategic
Decision Making
All of us are inundated by data (Chapter 6 has the
scary details), and we often are unable to salvage
from this flood the knowledge that we need to
make good decisions. The economist Friedrich
Hayek famously extended this idea to organizations,
arguing that no one person could ever have enough
information to make rational strategic decisions.
(Unless noted otherwise, strategic decisions—that
is, the creation of important policies with significant
consequences—are the sole focus of our discussions
of decision making.) Hayek held that market and
other environmental forces provided the best infor-
mation for decision making.11
Know-Nothing Decision Making Perhaps we
should not be too surprised, therefore, that decision
makers “ask for reports and do not read them. They
act first and receive requested information later, and
do not seem to be concerned about the order.”12 As
much as four-fifths of organizational information
may be requested, filed away, and never used.13
Worse, the costs of collecting this unused infor-
mation are horrendously high. Seventy-one percent
of workers say that their main job is “tracking down
 80 PA R T I I Public and Nonprofit Organizations
information,”14 and 44 percent of managers who
must search for information believe that its cost
exceeds its value.15 Because the people who gather
knowledge and the decision makers who purport-
edly use it dwell in different organizational worlds,
the expense of collecting information is largely
hidden and, as a result, organizations over-invest in
information.16
One explanation for this behavior is that organi-
zations are not too bright. There is, however, another
possibility: organizational sophistication.
Information as Symbol “The acts of seeking and
using information in decisions have important sym-
bolic value” because they cloak their actors with
legitimacy, “a necessary property of effective deci-
sions.” Hence, the “conspicuous consumption of
information,” whether done consciously or not, “is a
sensible strategy for decision makers” because their
decisions not only are more readily implemented, but
organizations with elaborate information systems
also house more effective decision makers than those
without them.17
The symbolism syndrome seems to be particu-
larly present in public administration; the consump-
tion of information is “more conspicuous in policy
making than in engineering, more conspicuous in the
public sector than in the private, more conspicuous
at the top of an organization than at the bottom.”18
A study of defense contracts, for example, found
“no empirical evidence” that gathering information
controlled costs or enhanced quality, but that there
nonetheless was “substantial evidence” supporting
the “symbolic hypothesis” of information’s organi-
zational role.19 It is worth noting in this regard that
55 percent of federal chief information officers ques-
tion the reliability of their own agencies’ data.20
In sum, research on how information is used in
decision making implies that the process is less than
rational. And, to an extraordinary extent, it is not
rational.
STRATEGIC DECISION MAKING
IN ORGANIZATIONS
The principal reason underlying this darker side of
decision making is that the people who make deci-
sions, like all people, are often less than logical.
The Bounds of Individual Rationality
Every decision maker is boxed in by mental and
social bounds.
The Decision Premise All human beings make
decisions on the basis of their decision premises,
or the unique values and viewpoints held by each
organizational member, and on which he or she
bases every decision he or she makes regarding the
organization.21
Sector plays a part in forming individual deci-
sion premises. “The values of profitability, compet-
itiveness, and customer orientation,” for example,
“have a greater influence on business decisions; in
public organizations, values such as legitimacy, law-
fulness, accountability, and impartiality play a larger
role.”22
The organization also has a role. It can render
its members’ decision premises more reflective of the
organization’s values, and, when it does, it produces
happier employees who stay longer with the organ-
ization.23 Still, regardless of how much sector and
organization may mold individual decision premises,
people do not make more rational decisions.
Bounded Rationality and Dysrationalia This
is because the human species is beset by bounded
rationality; that is, the reasoning powers of the
human mind are bound to a small and simple plot
compared with the vastness and complexity of the
territory spanned by the problems that human minds
are expected (expected, at least, by traditional theo-
rists in economics and management) to comprehend
and solve.24
Research buttresses the reality of the bounded
brain. The human mind can distinguish a maximum
of just seven categories of phenomena at a time, but
beyond that number loses track.25
Emotion colors decision making. A decision is
first made as an emotional response to one’s envi-
ronment,26 and this is especially the case when there
have been recent and dramatic events in it; conse-
quently, decision makers often misstate the problem
to be solved.27 If anger is among the decision maker’s
emotional responses, the likelihood of unethical
decisions increases, but if fear or little emotion are
present, then ethical decisions become more possi-
ble.28 Although this emotional phase is sometimes

criticized as an impediment to rational decision
making, emotion is central to decision making;
people who cannot process emotions also struggle
to make decisions.29
Later, more rational responses to environmen-
tal events overlay the initial emotional ones.30 When
this phase is reached, decision makers usually are
overcautious, favoring stability over change,31 and
tend to prefer information that protects them against
anticipated losses over information that they can use
to make gains.32
Decision makers typically use heuristic thinking
(or “rules of thumb”), which is invariably flawed,
and base their decisions on their perception of the
status quo, rather than on an objective compar-
ison of known variables.33 Options that provide
quick returns generally are preferred to those that
delay them, even though delay may bring superior
returns.34
“In short, our brains are naturally lazy.” At
its worst, bounded rationality can degenerate into
dysrationalia, or “the inability to think and behave
rationally despite having adequate intelligence.”
President George W. Bush, in the view of at least
one noted psychologist, was a dysrationalic deci-
sion maker, as the examples provided in Chapters 1
and 9, and later in this one, suggest.35
“Satisficing” Decisions Bounded rationality, in
sum, results in suboptimal decisions. If not optimal,
then, what are they?
Herbert Simon answered this question by
making up a word. He called the decisions made by
people in organizations “satisficing” decisions—that
is, they satisfied the makers of decisions and sufficed
enough for the organization to get by, or, combined,
satisficed.36 This was radical thinking in its day (and,
in some circles, it still is), when top executives were
assumed to be omniscient.
Victims of Groupthink Regrettably, in addition
to their own bounded minds, decision makers are
limited by other factors as well. Because stress accom-
panies decision making, avoidance and denial are
frequently the handmaidens of the decision process.
When stressed decision makers are making deci-
sions within the context of a tightly knit in-group,
“groupthink” is the consequence. Groupthink is
an over-conformity among decision makers that
The Fabric of Organizations: Forces 81
displaces critical thinking, and “is likely to result in
irrational and dehumanizing actions directed against
out-groups.”37
Instances of groupthink include the American
decision to invade Iraq. The basis of that decision
was the “erroneous National Intelligence Estimate
of October 2002,”38 which was “the Intelligence
Community’s most authoritative and comprehensive
judgment.”39
How this happened, as recorded in official
reports, is a primer on groupthink: “At some point,
[the intelligence community’s] premises stopped
being working hypotheses and became more or less
unrebuttable conclusions; worse, the intelligence
system became too willing to find confirmations of
them in evidence that should have been recognized at
the time to be of dubious reliability. Collectors and
analysts too readily accepted any evidence that sup-
ported their theory that Iraq had stockpiles and was
developing weapons programs, and they explained
away or simply disregarded evidence that pointed in
other directions.”40
This destructive dynamic extended to the White
House. President George W. Bush never called for
a debate among his staff about whether there was
a connection between Al Qaeda and Iraq, “one key
reason” justifying America’s war with Iraq, which
arguably was the most critical decision of his pres-
idency. Startlingly, Bush “sometimes assumed that
he knew his aides’ private views [about an invasion]
without asking them one-on-one”; Bush, in fact,
never sought the advice of his secretaries of defense
and state and CIA director. Nor, for that matter, did
he consult his own father, who, in 1991, had led a
successful invasion of Iraq.41
Making Good Decisions Despite the many mental
and social obstacles that inhibit good strategic deci-
sion making, good decision makers remain.
Vigilant Decision Making Vigilant decision
making consists of employing ways to encourage
the group to participate more effectively in making
good decisions and to minimize groupthink.42 These
group-improving means include: employing a large
number of techniques to encourage dissent; bring-
ing in “representatives of people in the organization
with different points of view,” rather than relying
solely on “trusted staff”; critically assessing the
 82 PA R T I I Public and Nonprofit Organizations
costs and risks of each choice; and plumbing diverse
sources of knowledge.43
Fast Decision Making Not only do good decision
makers gather more data and counsel more exten-
sively than poor decision makers when making
decisions, they also develop more alternatives to
solve problems. Counter-intuitively, even though
these activities are time consuming, they never-
theless make their decisions more rapidly than do
those who do not engage in them. These unexpected
patterns of information-sensitive, advice-seeking,
option-generating—yet speedy—decision making
lead to “superior performance” by executives.44
Thinking Dispositions Thinking dispositions are
rational, psychological, decision-making touch-
stones that, surprisingly, do not correlate, or, at
best, only weakly so, with cognitive ability. They
include: a capacity for thoughtful reflection; digging
out information before deciding (good decision
makers in government rely on written sources and
“outside academics” much more than mediocre
decision makers45); trying to match one’s degree of
certainty with the strength of the evidence; examin-
ing one’s biases and correcting for them; a willing-
ness to wait until good solutions become apparent;46
and consciously countering confirmation bias, or
the regrettable reality that first impressions (which,
recall, often misstate the problem) “are remarkably
perseverant and unresponsive to new input, even
when such input logically negates the original bias
of the impressions.”47 As one ages, however, the like-
lihood of one using thinking dispositions lessens,
and they are partially replaced by a greater reliance
on bias and irrationality; the consequence is riskier
decisions.48
Forget All That: Courageous Decision Making The
techniques of vigilant decision making, and perhaps
some of the thinking dispositions, are discarded
when those public administrators who have estab-
lished reputations for excellence are confronted with
making a particular type of tough decision: the cou-
rageous decision.
In an analysis of how “outstanding” and ran-
domly-selected federal senior executives made “their
most difficult” decisions, “the central, and to us sur-
prising finding,” was that the outstanding executives
were much less likely than the randomly-selected
ones to consult any advisers and to engage in any
“information-gathering of some sort.” In other
words, they knew what was right. Outstanding
executives were much more likely to say that their
difficulties stemmed from combinations of high pro-
spective costs; notably, their decisions would: be
widely unpopular with colleagues, overseers, and
external stakeholders; flout “the wishes of their own
Administration”; involve “emotionally wrenching
issues regarding employees”; or simply gore too
many oxen. Fully half of the outstanding executives,
compared with a fifth of the randomly-selected ones,
“essentially made the decision themselves.”
“The executive must be able to organize for
vigilant decision-making for . . . important decisions,
but be prepared to turn this approach off when
courage is required.”49
The Bounds of Organizational Rationality
Just as the rationality of organizational members is
bounded, so is the rationality of organizations them-
selves.
Types of Organizational Decision Making How an
organization makes decisions depends on whether
its stakeholders agree or disagree about what their
organization should do (that is, its goals), and
agree or disagree about what causes the attainment
of those goals. Table 4-1 matches these “decision
issues” with decision-making strategies.50
Efficiency and Analytical Decision Making In
organizations in which everyone agrees on organiza-
tional objectives and how to fulfill them, efficiency is
readily apparent. Executives in our hypothetical cor-
poration of International Widget have a solid notion
of what they want to do (maximize profits), and they
understand how to cause those profits (manufacture
widgets cheaply and sell them aggressively).
Because efficiency is obvious in businesses, ana-
lytical decision making is dominant; there is little or
no debate about cause and effect, and decisions are
made on the basis of shared perceptions.
Effectiveness and Judgmental Decision Making As
we explain in Chapter 7, in many public and non-
profit organizations efficiency is very difficult to
 The Fabric of Organizations: Forces 83

TABLE 4-1
Societal Assessment and Organizational Decision-Making Strategies
by Causation and Outcome
Standards of Desirability and Preferred Outcomes
Crystallized Standards and
Agreement about Outcomes
Agreement Efficiency, or economic, tests are
used by society to assess the
organization.
Beliefs about Computational, or analytical,
cause and decision making is used by the
effect organization.
Example: a research lab
Disagreement Effectiveness tests are used
by society to assess the
organization.
Judgmental decision making is
used by the organization.
Example: Department
of Defense
Ambiguous Standards and
Disagreement about Outcomes
Social tests are used by society to
assess the organization.
Compromise, or bargaining,
decision making is used by the
organization.
Example: Congress
Social tests are used by society
to assess the organization.
Inspirational and/or authoritarian
decision making is used by the
organization.
Example: Some nonprofit
social service agencies

determine. Effectiveness, or an organization’s ability Inspirational and/or Authoritarian Decision

to fully complete its tasks, however, is usually easier
to assess.
In these organizations, in which members still
agree about goals but are uncertain about how to
achieve them, decisions are made judgmentally.
Hence, we see Homeland Security spending as much
money as it can muster as a means of maximizing
its goal of effectiveness (that is, its untested security
capability), but International Widget spending as
little money as possible as a means of maximizing its
goal (that is, its profits).
Compromising, or Bargaining, Decision Making In
those organizations in which members believe that
they know what causes what, but who disagree
about organizational goals, neither efficiency nor
effectiveness is clear. So what is a decider to do?
Under these conditions, compromising, or bar-
gaining, decision making is in order. The classic
example is any legislature; legislative decision
makers agree that a proposed law will cause certain
outcomes, but disagree about the desirability of
those outcomes.
Making What sort of strategies can an organ-
ization use when its decision makers disagree
about both goals and causality? And, yes, there
are such “organizations.”51 As we detail in
Chapter 10, some organizations in the third sector
seem  to  exemplify  this combination, and their
members are not  merely  uncertain about whether
or not  they are  achieving  their goals; they are
uncertain even  about what  those goals  are. Under
these circumstances, inspirational decision making,
or authoritarian decision  making, or both, are
favored.
Inspirational and authoritarian decision making
are employed in these organizations because the
alternative could be chaos; when decision makers
are unable to discern efficiency and effectiveness,
rational (i.e., analytical), or even partially rational
(i.e., judgmental), decision-making “strategies”
simply are not possible. “Inspiring” the organi-
zation, and/or cracking down on dissidents (who
are  no more qualified than the decision makers
to make decisions), are the only decision-making
options left.
 84 PA R T I I Public and Nonprofit Organizations
Mismatching Organizations and Decision Making
Table 4-1 illustrates which decision-making strategy
ought to be used by each type of organization if deci-
sions are to succeed. Unfortunately, in nearly six out
of ten strategic decisions, decision makers select a
strategy that is inappropriate to the kinds of bounds
that constrain their organization. As a result, these
decisions “were much less successful” than those
that were made in conjunction with the decision
strategy that matched (as shown in Table 4-1) their
type of organization.52
Organized Anarchies and the Garbage Can of
Decision Making The messiest forms of decision
making—that is, judgmental, compromising, inspi-
rational, and authoritarian decision making—all
associate with public or nonprofit organizations.
These messy methods characterize organized anar-
chies, which are composed of a “loose collection of
ideas” in which participants do not define their pref-
erences very precisely and do not fully understand
what their organization actually does.53
Organized anarchies use an erratic, irrational
decision-making process that is a figurative “garbage
can.” In making decisions, the organized anarchy
“bumbles along, and discovers preferences through
action more than it acts on the basis of preferences,”
resulting in decisions that are “a collection of choices
looking for problems . . . solutions looking for issues
to which they might be the answer, and decision
makers looking for work.”54
Bounded Rationality and the
Implementation of Strategic Decisions
Just as making big decisions is beset by bounded
rationality, so is implementing them. Studies of 467
strategic decisions in all sectors found that decision
makers rely on four implementation tactics (selected
by top and middle managers with roughly equal fre-
quency), and that the more commonly used tactics
rarely correlated with the successful implementa-
tion, or even with the quality, of the decision.55
Persuasion Our first tactic is persuasion, which
relies on “experts” to sell a new policy, and it is used
to implement 49 percent of decisions. Decisions that
are persuasively implemented have an average adop-
tion rate of 58 percent and are rated as “adequate to
good” decisions. Persuasion consumes the most time
of all four tactics, and seems to be favored by public
administrators, who spend an inordinate amount of
their time talking with subordinates and peers; “this
talk accomplishes administration.”56
Recently, the emergence of “the nudge” has
made persuasion a more effective tactic. “Nudge”
is shorthand for the framing of policies and pro-
cedures in ways (such as by simplifying choices
and sending reminders) that more effectively per-
suade people to adopt and implement them.57 The
president introduced, in 2009, the nudge to regu-
latory agencies; established, in 2014, a Social and
Behavioral Sciences Team to promote it; and, in
2015, issued Executive Order 13707 to implement
the nudge government-wide. Its use has increased
college enrollments of low-income applicants and
reduced federal employees’ waste of paper, among
other achievements.
Edicts The edict, which simply orders that a policy
be executed, is employed to implement 30 percent of
decisions. The edict is the least effective tactic, with,
at best, a successful average adoption rate of 50
percent, and it associates with the lowest quality of
decision: “adequate.” Public administrators disdain
the edict, and rarely administer by “appealing to
authority or using strong-arm tactics.”58
Participation Participation refers to stakeholders
cooperatively implementing the decision, and it is
used 13 percent of the time. Participation averages
an adoption rate of 80 percent and associates with
“good to outstanding” decisions. Although there is
no known instance of all stakeholders participat-
ing (“token” participation is more common),59 the
broader and deeper the participation, the greater
the rate of successful adoption of the decision.60
Participative decision making is markedly present in
government agencies.61
Intervention Finally, intervention, used to execute
a modest 8 percent of decisions, involves managers
justifying a need for change, establishing new perfor-
mance standards, and demonstrating the feasibility
of the decision and the improvements that will result
from it.
With a 90 percent adoption rate and the strong-
est association with “good to outstanding” decisions,

it is both the most the most successful and the least
used tactic. Its resource demands are modest, its
implementation the fastest, and it works effectively
“regardless of the situation.”62
In contrast to executives in other sectors, those
in government appear to rely heavily on intervention,
overcoming “bureaucratic obstacles” by introducing
training programs (24  percent), demonstrating the
benefits of new policies (23  percent), consultating
with stakeholders (20 percent), and persistence (20
percent) to get their way.63 Public administrators use
far more kinds of control mechanisms and informa-
tion sources than do corporate managers to imple-
ment decisions.64
Effective administration, it appears, is not dic-
tated by decree; it is done by the down and dirty,
and this seems to be especially the case in the public
sector. As a seasoned federal administrator put it,
“A presidential declaration doesn’t make much
happen.” Rather, intervention “is what presidential
management means—not hovering above the grimy
fray, but plunging into it and getting dirty.”65
Decision Making in Public Organizations:
A Different Dynamic
Whether the sector is public or private “creates
substantive differences” in decision making.66 Here
are some.
An Attenuated Autonomy About six out of ten
Americans think that protesting against “unjust
public policies” and participating in “community
decision-making” are “very important . . . obliga-
tions” that they “owe the country.”67 In part because
of these views, public administrators are “monitored
by everyone around them.”68 Over the past twelve
months, 19 percent of local residents had contacted
elected officials (longtime and wealthier residents
and baby boomers contact them the most), and 24
percent had attended a local public meeting (a prac-
tice favored by longtime, older, and wealthier resi-
dents).69
Legislatures, of course, also attenuate agency
autonomy, and the greater the partisan split in the
legislature, the less discretionary authority that the
legislature will grant to its agencies.70
Hence, decision making in public organiza-
tions is less autonomous than in their private and
The Fabric of Organizations: Forces 85
nonprofit counterparts,71 and procedures are more
constricting.72 Overall, “the image of public organ-
izations that emerges is one of little organizational
coherence in the identification of strategic decisions.
In addition, the ability of top-level managers to
control the decisions and actions of their organiza-
tions is called into question.”73
Bargaining versus Analyzing When making deci-
sions, public administrators “place too great an
emphasis on bargaining . . . but they do seem to
understand the limits of analysis,” in contrast to
corporate managers, who “seem to place too much
reliance on analytics and too little on bargaining.”
Public administrators believe that negotiating, in and
of itself, legitimizes decisions, and thereby creates,
unfortunately, “a false perception of support for a
decision.”74
A Complex Process Governments’ decision makers
must deal with vastly more, and more complex, deci-
sion criteria that are far broader in scope than those
in business,75 who are measurably more likely to
focus on a single and straightforward datum—that
of financial performance—when making decisions.76
As we describe in Chapter 6, new information tech-
nologies have proven helpful in sorting and simpli-
fying data for all decision makers, but the unique
complexity of public decision making persists none-
theless.
Taking It Slowly and Cautiously Public executives
who have business experience view governments as
conservative cultures that are slow to change,77 and
research suggests that decisions are indeed made
more slowly in public organizations than in private
ones.78
Slower decision making may be a product of
the fact that civilian agencies are less likely to take
risks than private companies, regardless of the
organizational mission.79 A large-scale study of state
and local employees found that an astounding 40
percent of them had “high risk aversion” (another
30 percent had high to moderate risk aversion), and
just 2 percent had “low risk aversion.”80
Any organization with a cautionary culture
and cautious administrators is also likelier than less
cautious organizations to have top managers who
have low levels of trust in their employees; a fuzzier
 86 PA R T I I Public and Nonprofit Organizations
organizational mission (these two characteristics
seem to be especially salient); ribbons of red tape;
weak linkages between promotion and performance;
and high involvement with elected officials.81 Most
of these features generally are found far more fre-
quently in the public sector than in the other two.
The Vortex: Participation and Consultation
“Publicness is associated with greater decision par-
ticipation [increasingly, agencies form decisions by
using “large-group interaction methods” that can
involve as many as 2,000 people at one time82], but
not smoothness.”83
Indeed not. Governments’ decision makers swirl
sporadically through a “vortex” of intense meetings
and conversations with each other, and are much
more likely than those in private organizations to
engage in both formal and informal interaction with
others when making decisions.84
Consulting with Whom? Public administrators
network extensively with internal “peers and under-
lings” when making decisions.85 This is a good thing:
A thorough review concludes that “the greatest
organizational gains from employee participation
[in decision making] may come from producing
better decisions.”86
In marked contrast to business managers,
however, when public administrators make deci-
sions they often “discount networking” with “exter-
nal constituencies,” notably agency clients, citizens,
and oversight bodies. This is not such a good thing.
If clients and overseers were more involved in public
administrators’ decision making, it would “improve
their chances of success.”87
Ignoring Clients and Citizens Public bureaucrats
tend to resist the involvement of clients and other
citizens when making decisions. This is an error.
When federal agencies hold public meetings
when making rules, they encounter fewer “rulemak-
ing stalemates” and are sued less frequently over the
rules than are agencies that held few or no meet-
ings; “public meetings can improve administrative
behavior.”88
In the states, agency heads “are less than satis-
fied” with clients’ and citizens’ very marginal influ-
ence on their decision making, even though they
themselves consider their influence to be trivial.89
Unfortunately for them, and their states, there is
empirically “strong support” for the proposition that
“citizen input provides [state] administrators with
valuable site-specific information and contributes
to more efficient and effective public programs.”90
State agencies that have higher levels of autonomy
and a greater control of their budgets are more open
to public comment than are less autonomous agen-
cies with weaker budgetary control.91
Although city and county managers can,
and do, handily shut out “troublesome” outsider
involvement, even in communities where “citizens
are ranked high in terms of placing pressure on the
administration to include them in the deliberative
process,”92 these policymakers are at least begin-
ning to communicate with citizens much more
substantively than in the past (recall Chapter 1 in
this regard).93 This is to the good, as higher levels
of perceived public participation in local hearings
and budget formulation lead to a greater sense of
accountability among administrators in improving
program performance, and citizen involvement asso-
ciates positively with more responsive policies and
higher public trust.94 All of this results in a benefi-
cent cycle of increasingly better local governance.95
Ignoring Bosses and Overseers At the oversight
level, public administrators are, surprisingly, less
than fully communicative with the legislators or
board members to whom they report, and this lapse
“has important implications. Oversight bodies have
a big impact on public sector decisions. Their scru-
tiny can be intense, and politics is far more pervasive
than in private organizations.”96
The disinclination of public administrators to
consult with their overseers may have its roots in
their lack of confidence in them. Executives with
backgrounds in both government and business
think that, compared with corporate board direc-
tors, legislators are less consistent, less informed on
issues, less likely to agree with administrators on
organizational goals,97 and even that government is
less transparent than business.98
Moreover, oversight bodies question agency
decisions in particularly vexing ways, and this,
too, can curtail communication. Legislators and
board members “derail” agency decisions “after a
decision is made, and long after the objecting over-
sight body has been asked for their views. . .. Public

organizations face fickle oversight, not the pervasive
monitoring and tinkering with ideas that the litera-
ture suggests.”99
Caution, Communication, and Unappreciated
Peril Because public administrators usually have
negotiated intensively (at least with peers and
underlings) in making their decisions, they often are
supremely confident in their quality and ultimate
success. Unfortunately, they seriously underestimate
the level of risk that their decisions entail, which is
a direct result of their poor communication with
their clients, citizens, and overseers. Corporate deci-
sion makers, by contrast, view “the same decisions”
produced by such a process “as having considerable
risk,” and these public/private differences hold up
“no matter the cognitive makeup of the manager or
the culture to which he or she was exposed.”100
Obviously, decision makers who ignore their
clients and bosses can produce decisions that “can
be very dangerous” to the decision makers, especially
“if an oversight body opposes” their decisions.101
Yet, this may be precisely the decision-making situa-
tion in public organizations.
The Quality Question In sum, decision making
in public organizations, in contrast to its practice in
private ones, seems to be: a process that relies more on
bargaining than analysis; is slower, sloppier, and
murkier; is more intense, constrained, and compli-
cated; is more consultative, but containing elements of
groupthink; and is risk averse, but unwittingly risky.
There is little research that clearly links each
of these characteristics with objectively-defined
better or worse decisions, but what data we have
do not augur well for public organizational decision
making. As we have noted, participative decision
making is present in public agencies, and, even when
confined only to agency employees, it associates with
superior decisions.102 But the negatives outnumber
the positives: limited decision-making autonomy,103
slow decision making,104 and a tendency toward
groupthink105 all correlate with poorer decisions,
and each, to some degree, characterizes decision
making in governments.
In one of the few attempts to match the
decision-making techniques used by each sector with
the quality and successful implementation of the
decisions made, it was determined that government
The Fabric of Organizations: Forces 87
managers who relied primarily on soliciting the
views of experts and used hard data made the
highest quality decisions. Public administrators who
relied more on studying issues or bargaining with
stakeholders were less successful.106
Life-or-Death Decisions: Imprimatur of the Public
Sector When making risky decisions, all decision
makers play to some extent to their own biases.107
The riskiest of decisions are those that can result in
people living or dying, a risk that is almost exclusive
to the public sector.
Two crucial factors emerge when life-or-death
decisions are being made. They are: hope and time.
If the decision maker perceives that there is some
reason to hope for a problem’s future solution that
will be superior to the choices presently available,
then he or she will adopt a decision-making strat-
egy of coolly rational vigilance—that is, the decision
maker not only will use most of the techniques of
vigilant decision making and thinking dispositions
that characterize good decision making, but also will
develop several options, a contingency plan, and a
fully thought-out execution.
If, however, the decision maker has no hope
for a satisfactory solution, then he or she is more
likely  to engage in dysrationalic defensive avoid-
ance,  a posture in which denial, rigidity, and pro-
crastination reign. Defensive avoidance “satisfies a
powerful emotional need” to avoid the possibility of
failure and guilt by inducing “pseudocalm” in the
decision maker.
Defensive avoidance works fine, at least for the
dilatory decider, until time runs out. When events
close in, the decision maker’s defensive avoidance
is shattered, “thought processes are disrupted,” and
he or she snaps into hypervigilance mode, searching
“frantically for a solution” that promises “immedi-
ate relief.”108
The price of this syndrome can be horrendously
high. For two years, Philadelphia’s otherwise able
and hands-on mayor had defensively avoided dealing
with a scofflaw cult that had been outrageously
abusing its neighbors for more than a decade, even
though the mayor had long been informed that he
had the legal authority to remove the commune from
its premises. When media pressure and angry resi-
dents finally brought the matter to a head, in 1985,
two brief meetings were held, a planning group was
 88 PA R T I I Public and Nonprofit Organizations
appointed that was “remarkably low in rank for such
a major operation,” and the mayor repaired to his
home before police served warrants at the cult’s row
house. The commune refused to be served; police
unleashed water and tear gas; the cult responded
with bullets, and the police retaliated with more
than 8,000 rounds of firepower. Philadelphia’s city
manager informed the mayor that police had pro-
posed dropping from a helicopter a bomb on the
commune’s roof, and “the mayor paused only thirty
seconds before approving the idea.” The result?
A MONUMENTAL MAP MESS IN GEORGIA
We have noted that public agencies are far more
influenced by factors in their external environments
than are private companies and nonprofit associations.
To cite just one example, the decisions made by public
organizations, no matter how managerially rational,
are exposed far more frequently to second-guessing
and reversal by environmental forces. Here is an
instance of what we mean.
The Georgia Department of Transportation had finally
decided to clean up its map. The Department designs
and publishes the state’s official travel map, and its
administrators had been fretting for at least eight years
over how to make their map clearer and more useful to
most travelers.
Clarifying Georgia’s official map was no mean
challenge. It was strewn with unincorporated
communities that are so small that the U.S. Census
Bureau does not recognize them. In Georgia, there are
519 of these boroughs, and in 2006 the Department
of Transportation made the unusual, if understandable,
decision to eliminate all of them from the map’s 2007
edition.
In its decision to unclutter its cartography, the
Department deleted such delightful designations
as Rose Dhu, Dewy Rose, and Due West; Phinizy,
Funkhouser, and Flowery Tree; Pin Point and Poetry
Tulip; Retreat and Roosterville; Cloudland and Kansas;
Sand Hill and Sandfly; Ty Ty and Talking Rock; Hemp
and Hickory Level; Jake and Juliette; Lowell and Clem;
Chattoogaville and Centralhatcheee; Gum Branch and
“One of the most astounding debacles in the history
of American municipal government,” including an
inferno that swept through three city blocks, leaving
sixty-one homes in cinders, 250 people homeless, and
six adults and five children dead.109
Decision Making in Nonprofit
Organizations: More Talk, Fights, Risk
Decision making in the third sector has its own
distinctiveness.
Dry Branch; Deepstep and Sharp Top; Between and
Experiment; and Gay and Climax.
Some victimized villages had long histories,
cultural significance, or really outraged residents who
protested that the decision was “a slap in the face.”
Transportation officials responded to these and other
“pretty impassioned” objections with, “the map was
getting illegible.”
Still, the Department quickly reinstated thirty-one
“placeholders,” as the Census Bureau dismissively
dubs very small communities, and pledged to
reconsider more. The governor then wrote the
Department’s board, asking it to “take another look”
at its decision, and, fewer than twenty-four hours
later (and less than a month after the Department
had announced its decision to simplify its map), the
board reversed itself and reinstated all the vanished
villages.
The Georgia Department of Transportation had met
its Waterloo. Nevertheless, the fine folks in Waterloo, as
well as those solid souls in Yellow Dirt, Hopeulikit, and
Po Biddy Crossroads, remain vigilant.
Sources: Gene Bluestein, Associated Press, “Official State
Map Zaps 519 Communities,” Atlanta Journal-Constitution
(December 10, 2006) and “Georgia May Return Hundreds
of Towns That Were Wiped off the Map,” Savannah Morning
News (December 15, 2006). “DOT Has Lost Its Way on Map
Plan” (editorial) and Jack Wilkinson, “Folks Wiped off State
Map Take Offense,” both in Atlanta Journal-Constitution
(December 15, 2006), and Ariel Hart, “Tiny Towns Go Back
on Highway Map,” Atlanta Journal-Constitution (January 4,
2007).

Consultative Decision Making Nonprofit strategic
decision makers appear to be uniquely consultative;
they “recycle” decisions back to earlier stages in
the decision-making process, and take many more
“steps” than in the private sector.110 This process
works well for the third sector (but not for the other
two), as bargaining in nonprofit organizations asso-
ciates with making better decisions and implement-
ing them successfully.111
Conflictive Decision Making Conflicts break
out earlier in the decision-making process of non-
profit organizations than in for-profit ones, and
third-sector executives—who believe that conflict
defines  issues  more sharply and thus produces
better decisions—are less averse to conflict than
are their corporate counterparts, who think just the
opposite.112
Riskier Decision Making Third-sector admin-
istrators are especially fond of throwing the dice,
and have been known to radically change the very
missions of their organizations if they thought it
useful,113 an option not available to public agen-
cies and a limited one for private companies.
Twenty-six percent of managers and profession-
als  in the  independent sector report that their
organization encourages them “to take risks,” com-
pared with 21 percent of federal administrators
and 20  percent of for-profit managers. Nonprofit
employees also are much less concerned with
compensation and  job security than are those in
government and the  private  sector.114 With  the
obvious exception of the public sector’s dominance
of life-or-death decision making,  these  charac-
teristics strongly  suggest that decision  making  in
the third  sector is a riskier  business than in the
other two.
ADMINISTRATION IN
ORGANIZATIONS
An important variant of decision making is admin-
istration, or strategic decision making writ small.
Administration is based on coalitions, or informal
alliances designed to advance individual goals.
Coalitions appear to be basic to the human condi-
tion, and “many biologists believe that . . . we are a
The Fabric of Organizations: Forces 89
‘coalitional’ species; groups compete with each other
for status and influence.”115
We note this reality because, from the perspec-
tive of organization theory, coalition management
deftly defines the art of administration: “In the
highly complex organization, power is dispersed. . ..
[and] the central power figure is the individual who
can manage the [dominant] coalition.”116 “The true
basis for human action is not avarice—the lust for
personal gain and comfort, but envy—the lust for
primacy.”117
The Power of Subordinates
Some seventy years ago, Simon observed that sub-
ordinates, especially “professional men, [are] apt
to have relatively narrow zones of acceptance” of
administrative directives, “particularly in the areas
of their own professional competences. . .. In a very
real sense, [the administrator] is merely a bus driver
whose passengers will leave him unless he takes
them in the direction they wish to go. They leave
him only minor discretion.”118
Simon’s notion has merit for public admin-
istrators. Guerrilla government describes career
bureaucrats who, quietly or brazenly, work against
the wishes of their superiors, for good or ill.119 The
empirical evidence suggests that both public exec-
utives and elected politicians have only “limited
influence” over the “street-level bureaucrats” who
implement policy; these bureaucrats’ understand-
ing of the policy and their “knowledge of the rules”
are “more important” to them than their superiors’
preferences.120
Public administrators, at least the more tal-
ented ones, seem to appreciate these administrative
limitations. They comprehend that their subordi-
nates demand their “obedience to roles. . .. Cabinet
officers . . . no less than a clerk, [are] constrained to
perform their roles in such a way as to demonstrate
obeisance to norms. . .. To unseasoned actors, behav-
ing capriciously . . . might seem the quintessential
evidence of power. But such a strategy cannot endure
in an organized setting.”121
Humbleness and humility, in sum, count;
“humble CEOs connect to top and middle manag-
ers” by making both groups feel empowered, and
this, in turn, “is connected to integration in the top
management team.”122
 90 PA R T I I Public and Nonprofit Organizations
The Powers of Administrators
Fortunately, researchers have identified two kinds of
administrative, or leadership, power that facilitate
subordinates’ acceptance of their executives’ roles.
One is position power, a category that includes
four “power bases.” They are: Control, specifically
of information and the work environment; reward
power, or the positive recognition of another; coer-
cive power, or the capacity to punish; and legitimate
power, or the acceptance of the leader by others.
The other kind of power is personal power, and
this includes three power bases: Expert power, or
the perception that the leader is knowledgeable; ref-
erent power, or the personal attraction that a leader
holds for others; and charisma, or the leader’s ability
and will to exert great change.123
Corporate managers exercise a very high level
of control over the critical positional power bases of
rewards, coercion, and legitimacy, but public admin-
istrators have little, if any, control over them and are
reduced to relying on personal power bases to lead.
It is noteworthy in this regard that public employees
perceive their executives to be far more inspirational
and personally involved with them than do corpo-
rate employees.124
The Mechanisms of Administrative Control
Once administrators have established their power
bases, then they can exercise greater power. They do
this through six major “mechanisms of administra-
tive control.”
These mechanisms include: supervision, or the
direct observation and provision of feedback to sub-
ordinates; input control, or the cutting or increas-
ing of resources to subunits; behavior control, or
the structuring by administrators of individual and
group activities; output control, or the evaluation
of subunits’ productivity; selection-socialization
control, or the internalization of selected norms and
values in subunits; and environmental control, or the
constraints imposed by the organization’s external
task environment (public administrators implement
environmental control by obtaining feedback from
their communities).
Public administrators, relative to their coun-
terparts in the private sector, use all six mecha-
nisms in surprisingly broad and balanced ways.
Supervision is the least effective control mechanism,
but the remaining five all bring desired administra-
tive results. Public administrators must use “a more
complex system of control” than business manag-
ers because they “have to supervise a workforce
employing an unclear technology.”125
Administration in Public Organizations:
A Different Dynamic
The tasks that public administrators must adminis-
ter are far more “complex” than those managed by
private managers,126 rendering public administra-
tion all the more difficult.
The Whirlwind Public administrators have little
control over how they use their time, and are more
“rushed” to get things done.127 They are far more
consumed with managing crises, and devote far
more time to doing so, than their private-sector
counterparts.128
More effective public administrators are more
flexible and accord scant effort to “time manage-
ment” and planning than less effective public admin-
istrators. Quite the contrary holds true in the private
sector: more effective industrial managers plan their
days, and less effective ones do not.129
Public administration, it appears, is different.
The Pressures To “accomplish” their convoluted
and ill-defined missions, public administrators must
confront many more “conflicting environmental
demands” and “external stakeholders” than business
managers.130
Consider budgets. “External” actors, notably
legislators and lobbyists, appear to be “more crucial”
in forming agency budgets than are agency ambi-
tions, executives, and even performance.131
Or consider personnel. Subordinates are more
difficult to control because they often are not hired
by those to whom they report, and can ally them-
selves with powerful outside interests.132
Here is an example: the notorious closing,
in 2013, of two of the three lanes to the George
Washington Bridge, the most heavily trafficked
bridge in America, rendering Fort Lee, New Jersey,
into the equivalent of a parking lot for four days.
The closings seem to have been a result of guberna-
torial appointments to, and alleged interference in,

the Port Authority of New York and New Jersey,
which owns the bridge. The Authority, which a had
a well-deserved reputation for administrative excel-
lence since its founding in 1921, was decimated by
the terrorist attacks of 2001 on New York’s Twin
Towers, in which eighty-four of its top administra-
tors, including its able executive director, perished.
According to an outside audit, the tragedy “took a
significant emotional toll on the psyche of the organ-
ization.” New Jersey’s governor, first elected in 2010,
immediately “set about stuffing the weakened agency
with his supporters,” who numbered eighty when the
lanes were closed, allegedly by an Authority appoin-
tee of the New Jersey governor and at the governor’s
office’s request. By the time of the closing, top-level
New Jerseyans and New Yorkers at the Authority
“were barely speaking” to one another, including,
apparently, the board chair (a New Jerseyan) and
its executive director (a New Yorker), who was not
informed of the lane closings for all four days, and
ordered them opened when he learned of them.133
The Port Authority exemplifies those realities
that force public executives to interact far more fre-
quently and formally with outside groups than their
corporate counterparts,134 sometimes for good, and
other times not.
Despite these handicaps, however, public admin-
istrators serve the public with grace. “The ‘insensi-
tive’ stereotype” of government bureaucrats—that
they are “uncaring, inflexible. . .. and generally
inept in dealing with the public”—is simply wrong.
“The modal finding indicates public employees who
are more sensitive than private employees. Public
employees value qualities associated with sensitiv-
ity, empathy, broad mindedness, good interpersonal
relations, forgiveness, politeness, helpfulness—more
than or equal to private employees.”135 Ironically
(and inaccurately), however, public managers are
overly self-critical on this score, and “tend to feel
that their organizations satisfy customers less than
do private organizations with their products and
services.”136
Lessons Learned Public administrators have
learned some practical lessons about how to admin-
ister well. Here are the main ones.137
■ Hire with care, and be alert to an employee’s
performance during the probationary period.
The Fabric of Organizations: Forces 91
■ Engage new employees with a welcoming
first-year program that introduces them to the
agency’s culture.
■ Communicate to build trust. Ask employees
for their feedback and advice, and tell them
whether you used it; meet regularly with each
employee to review progress; and lead by
example.
■ Hold employees accountable for their
performance.
■ Closely link recognition, rewards, and
sanctions to performance.
■ Give all employees the opportunity to grow
and develop.
LIMITED CHANGE: THE IMPACT
OF TECHNOLOGY AND PEOPLE ON
THE PUBLIC ORGANIZATON
Governments are not associated with swift-paced
change. As one study put it, “high-publicness organi-
zations . . . show a slow change rate” and “a low rate
of change.”138 But public organizations do change.
The Likely Limited Role of Technology
Without question, the organization’s technology, or
what the organization does and how it does it, is
central to what any organization is, and changing
its technology causes systemic change throughout
any organization. However, legislatures rarely, if
ever, allow a government agency to change what
it does, and public technology is itself resistant to
change.
Executives who have served in the private and
public sectors believe, accurately, that, compared to
business, government and nonprofits are driven by
processes.139 Changing a process in any organization
involves extensive convincing and coordinating, and
is a much slower affair than changing a product. A
study of 101 banks found that, over eleven years,
“product innovations [were] adopted at a greater
rate and speed than process innovations.”140 Hence,
even within the same type of organization, and even
within the same organization, processes change
much more slowly than do products.
Governments and nonprofits produce processes,
such as policies, programs, and services; rarely do
 92 PA R T I I Public and Nonprofit Organizations
they produce products, such as pickles, planes, and
widgets. It follows that the public or nonprofit
organization necessarily changes less rapidly than
do private organizations, simply because of the
process-intensive nature of its work.
People Changing Their Public
Organization
If not technology, then what about people?
It is commonly thought that government
bureaucrats resist organizational change and busi-
ness executives relish it. Wrong. A study of 343 man-
agers in both sectors unearthed an “unexpected”
finding: “Public managers are more change-oriented
than managers in business organizations.” Relative
to business managers, public administrators are
much likelier to generate new ideas and projects;
are more imaginative, intuitive, experimental, and
future-oriented; exploit more possibilities (and, in
the process, are more inclined to ignore “practical
realities”); hold stronger opinions about the need
for organizational change; and are much more prone
to introduce new processes, services, and reorgani-
zations. “Business managers’ potential for [organi-
zational] change is actually comparable to Swedish
vicars”—in other words, not much.141
Middle Managers: Paladins of Public
Change Who is more likely to cause change in gov-
ernments—elected officeholders, nonprofit public-
interest groups, agency clients, citizens, or stodgy old
bureaucrats? The bureaucrats, hands down. “Despite
controls . . . career public servants” at all levels of
government “do innovate,” and initiate innovations
far more frequently than any other group.142
Contrary to conventional wisdom, it is not
necessarily the top bureaucrats who change public
organizations, although public executives hired
from outside the organization associate positively
with “comprehensive organizational change.”143 “A
surprising result” of a study of significant change in
governments over eight years “is that the most fre-
quent initiators of innovations were not politicians
[who account for 18 to 36 percent of all innova-
tions] . . . or even agency heads [23 to 36 percent,
although senior public managers, while “con-
servative and  cautious in the implementation of
major organizational change,” prefer implementing
systemic change to tinkering144] . . . but middle
managers [30 to 62 percent] and front-line staff”
(24 to 29 percent).145
Human Choice or Environmental Determinism?
Organizational members count in changing their
organizations. But do they count as much as the
riptides of the darkling sea that drenches the
organization?
All organizations’ external environments are
growing more complex, and this complexity is heavy
with organizational and personal peril. The sociol-
ogist, Charles Perrow, famously identified normal,
or inevitable, accidents as those disasters that are
born of the complexity inherent in “human-machine
systems.” Examples range from airplane crashes to
meltdowns of nuclear power plants. Interactions in
these normal accidents “are not only unexpected,
but are incomprehensible for some critical period of
time.”146
How well, or if, organizational decision makers
can deal with complex environmental forces is “one
of the most pervasive and central arguments” in the
field.147 That argument is human choice (that is, the
organization’s decision makers choose organiza-
tional destiny) versus environmental determinism
(the environment’s powerful forces determine organ-
izational destiny).
It does not behoove us to review at length
this professorial dispute.148 In a nutshell, however,
the  advocates of human choice hold that leader-
ship is significant, perhaps paramount, in achiev-
ing  organizational success. Others have a more
pantheistic perspective: “The Tolstoyan view of
leaders as chips tossed about by the tides of history
rather than masters of events cannot be rejected a
priori.”149
We do not subscribe to the view that the organ-
ization’s people are merely the pathetic pawns
of omnipotent environmental forces—and with
reason: a decade-long international study, for
instance, determined that (mostly private-sector)
managers’  one-point increment on a five-point
“management score” associated with a 23 percent
increase in productivity.150 We do believe, however,
that the public organization’s environment makes it
harder for people in the public sector than in the
private and independent sectors to change their
organizations.

UNLIMITED CHANGE: THE
IMPACT OF THE ENVIRONMENT
ON THE PUBLIC ORGANIZATION
The environment that surrounds and suffuses the
public organization appears to be the primal engine
of its change.
Change in Public Organizations: Politics,
Pressures, and Prohibitions
Government agencies are pressured to change when
specific elements in their environments change.
Agencies that are dominated by professionals are
pushed to adjust when outside observers perceive a
loss of professional competence; those that are pro-
tected by patrons, such as legislators, are threatened
with change when they lose their patrons; and those
that have endlessly churned the same old unrespon-
sive rut suddenly are challenged by new and sus-
tained expectations.
Pressure to change is no guarantee of change.
Frustratingly, even when public administrators pro-
actively address these challenges, change still remains
stymied unless the agency’s leaders can gain “the
support of oversight bodies,” and then only when
agencies “are allowed to be responsive” to environ-
mental demands. “Creating such arrangements is
always difficult and often impossible.”151
Ordering Agency Openness
All legislatures pass laws that change their govern-
ments’ agencies. Some statutes radically open public
organizations to all manner of penetration by innu-
merable environmental forces, and to an extent that
is unheard of in the other sectors.
Burned by Sunshine An example is provided by
sunshine laws, which require that agencies provide,
with some restrictions, to those who request it any
information that they have about anyone and any-
thing. The federal government, all the states, and the
District of Columbia have sunshine laws.152
The federal sunshine law is the Freedom of
Information Act (FOIA) of 1966, which exempts
information pertaining to national security, citizen
privacy, and Congress. Some 700,000 FOIA requests,
The Fabric of Organizations: Forces 93
on average, are received and processed each year by
all agencies, at a cost of more than $480 million.153
To meet an FOIA request, federal administrators
must execute no fewer than fifteen distinct tasks,
and it takes from ten to 100 median days to do so.154
The workload caused by FOIA requests grows
ever more onerous, largely because of radically
rising requests (up by 57 percent over ten years155),
burgeoning backlogs, and a steady decline in the
nearly 4,000 employees currently assigned to handle
requests.156 Two-thirds of the agencies are now
unable to fulfill “basic FOIA requests.”157 Irritated
requesters filed 3,350 lawsuits over ten years against
agencies, which, in their view, had failed to respond
adequately; a sampling of 1,672 of these lawsuits
found that a modest 7 percent of them were decided
largely in the filers’ favor.158
In 2016, Congress passed the FOIA Improvement
Act, which added further to agencies’ workloads.
The act codified the “presumption of openness” of
all federal records, effectively requiring that records
be released unless there is a foreseeable harm or legal
prohibition in doing so; set a time limit of twenty-five
years on how long agencies could keep confidential
records of internal deliberations; required a proac-
tive release of information on persons expressing
several times their interest in certain records; and
established a Chief FOIA Officers Council to enforce
and promote all this.
In the states, similar problems persist.
Washington State identified “more than 250 open
government-related issues,” several of which
resulted in six-figure fines imposed on state and
local agencies. Some states have undertaken costly
training programs to comply with sunshine laws;
in Washington, the training involves a substantial
5,000 to 6,000 officials.159
While there is doubtless much good that derives
from sunshine laws, they clearly distract public
administrators from the efficient fulfillment of their
agencies’ missions.
Influenced by Agency Advisory Committees Many
public agencies are legislatively required to appoint
advisory committees that recommend policies. In
Washington alone, there are about a thousand active
committees in any given year composed of more
than 70,000 members advising around fifty agen-
cies, at an annual cost of more than $350 million,
 94 PA R T I I Public and Nonprofit Organizations
averaged over ten years. They hold more than 7,000
meetings a year, and, of those committees that meet
(a fifth hold no meetings annually), 71 percent of
their meetings are closed to the public.160
Often, agency advisory committees are domi-
nated by the special interests that their agencies reg-
ulate. Almost a fourth of federal committee members
themselves think that their committees have too
many members whose interests are directly affected
by the advice that their committees provide to their
agencies.161
“Because of concerns that special interests had
too much influence over federal agency decision
makers,” Congress passed the toothless Federal
Advisory Committee Act of 1972, which appoints
the General Services Administration and the Office
of Government Ethics as loose overseers of commit-
tee appointments. Unsurprisingly, “some agencies
may continue to inappropriately use representa-
tives” of regulated interests, as there are no penalties
for noncompliance with the act.162 In 2010, a presi-
dential memorandum removed all registered lobby-
ists from federal advisory committees, and, although
lobbying groups complained, special interests likely
continue to be represented.
The states also open their agency advisory
committees to special interests: 65 percent of state
lobbyists list “serving on advisory committees” as a
favored influencing technique.163
Undermined by Administrative Procedure Acts An
even more agency-permeating, and more question-
able, class of legislation is administrative procedure
statutes that federal, state, and local legislatures
have enacted.
Administrative procedure acts permit “notice
and comment” by the public about proposed agency
rules, a requirement that conventional wisdom hails
as “refreshingly democratic.”164 Research indicates,
however, that notices and comments are neither
refreshing nor democratic.
Federal Rulemaking and Special Interest Power
Federal agencies spend, on average, about four years
(ranging from one year to an astonishing fourteen)
to make a rule.165
This vast amount of time implies that agencies
must deal with formidable forces when making rules,
and they do—specifically, special interests. Special
interests view agency rulemaking with great seri-
ousness because, as we explained in Chapter 1, an
agency’s “rule” can amount to a major public policy.
Agency rulemaking is relatively unconstrained
by the president, Congress, and the courts;166 it is
special interests that wield the power.
These interests are effective. Federal agencies
alter 49 percent of their decisions in favor of lob-
byists purely as a result of the formal notice-and-
comment process.167 Even allowing for a bit of
braggadocio, it is nonetheless notable that from
over a fourth to more than two-fifths of lobbyists
claim that they have their way in federal rulemaking
three-quarters of the time,168 with business interests
enjoying a “disproportionate influence over rule-
making outputs.”169
Perhaps because federal rule makers are con-
cerned about the disproportionate influence of
special interests, for 35 percent of proposed major
rules, and for 44 percent of proposed minor rules,
the feds fail to notify the public that it can comment
them.170
State Rulemaking and Special Interest Power All
states and the District of Columbia have adminis-
trative procedure acts, and they open agencies to a
startling quantum of special interest power.
Special interests’ general influence with state
agencies that are making rules is impressive;
77 percent of state lobbyists submit comments
on proposed rules and even “help draft regula-
tions,” and more than half engage “in regulatory
negotiations.”171
Administrative procedure acts are crucial in
both the access and influence of special interests. The
greater the access to state agencies enabled by an
administrative procedure act, the higher that agency
heads will rank the impact of interest groups on their
agencies’ rulemaking,172 an opinion fortified by fact:
“As the interactions between . . . agencies and third
parties increase, so too does the influence of these
parties over agency policies and decisions.”173 In
forty-five states, lobbyists may go over the agency’s
head and appeal to entities that review any new rules
proposed (proposed, not enacted) by an agency.174
Access brings results. “Interest group power . . .
is significantly influential” in an estimated 80 percent
of state agency rulemaking.175 As with federal
patterns, business interests dominate the states’

notice-and-comment process, and benefit most from
it relative to other groups.176
The Osmotic Impact of the Agency’s
Environment
Perhaps of greater impact on the inner workings of
government agencies are not laws, but rather envi-
ronmental forces that frequently are more nuanced
than we realize.
Of course, all of us are aware that, in gov-
ernment, legislatures, which distribute budgets
and make laws, have an obvious impact on public
bureaucracies. But, even in this pure power rela-
tionship, there are unspoken subtleties. States with
congressional committee members who oversee the
Federal Emergency Management Agency receive
much larger disaster-relief funds than those states
without them, even though the emergencies are of
comparable severity.177 The Internal Revenue Service
audits far fewer individual income tax returns from
taxpayers in congressional districts that are impor-
tant electorally to the president or which have repre-
sentatives on key oversight committees.178
Other environmental forces do not even know
that they are forces.
Consider this: If a disease is merely men-
tioned in the Washington Post twelve times over
twelve months, then one full month, on average, is
knocked off the time that it takes the Food and Drug
Administration to approve a drug that purports to
alleviate it. If the ailment is mentioned two-dozen
times over a year, then the approval time declines by
two months, and so on. This is the case regardless of
the severity of the disease, its frequency, its cost, and
the availability of other drugs.179
Or this: Not only does coverage in the New
York Times about a disaster abroad associate with
a heightened probability that the United States will
send assistance to the afflicted country, but each
story results, on average, in almost $600,000 more
in additional aid. One story in the Times is worth
more in American disaster relief than 1,500 deaths.
This remains the case even after controlling for
national wealth and the number of people killed or
left homeless.180
These instances bespeak an environmen-
tal determinism of a rare order. The public
organization is so attuned to nuances in its task
The Fabric of Organizations: Forces 95
environment—subtleties that only it, apparently, can
sense—that it readily and even radically responds to
them. The environment need not be comprised only
of obvious and brutish forces to change the public
organization; osmosis works, too.
Whether they are rough or refined, environ-
mental forces change the accountability, structure,
hierarchy, procedures, and autonomy of public
organizations far more profoundly than these pres-
sures alter private and nonprofit organizations.
La Bureaucratie
The word, bureaucracy, derives from the French
bureau, or office, and the Greek kratos, or power,
which combine, in French, as la bureaucratie. By the
early nineteenth century, the word had wended its
way to Britain as the Anglicized bureaucracy, which
then meant (in Britain, at least), “office,” or “admin-
istrative,” “tyranny.”181
There is a small but “growing of set of empiri-
cal findings that suggest public organizations are not
always highly bureaucratic,”182 but, as the quotation
itself suggests, governments are far more subject to
unique environmental pressures than are businesses
and nonprofits, and those pressures result in rela-
tively greater bureaucratization.
Government bureaucracies can be frustrating,
silly, or both.
Consider frustration. A fifth of politically-
appointed executives in Washington cite the
“bureaucratic nature of government” as an obstacle
to “recruiting future political leaders.” Of the more
than four-fifths of federal career executives who
have considered leaving government, 31 percent
report that a main motivation is its “bureaucracy/
inflexibility/slowness,”183 as exemplified by the
average of twelve years that it takes for an endan-
gered species to be placed on the federal endangered
species list; forty-two such species became extinct
while waiting.184
Consider silliness. A few years ago, a Secret
Service agent dutifully registered his Glock pistol
before boarding a plane. The agent then passed
through airport security, which discovered that he
was carrying a penknife. Security returned to the
agent his Glock, but confiscated his penknife.185
Consider both. The U.S. Office of Strategic
Services, the precursor to the CIA, published, in
 96 PA R T I I Public and Nonprofit Organizations
1944, a secret thirty-two page Simple Sabotage Field
Manual instructing its Second-World-War spies in
such techniques as how to burn down buildings.
Chapter 5 is dedicated to tips on how to sabotage
the effectiveness of one’s organization via jiu-jitsu-
like moves that are common in bureaucracies. These
include: “misunderstanding” orders; droning on end-
lessly at meetings (a third of work-meeting attendees
report feeling drowsy or actually napping during
a meeting186); referring matters to committees for
further study (and assuring that the committees are
as large as possible—never fewer than five members);
referring matters already decided back for more dis-
cussion; undermining efficient workers and promot-
ing inefficient ones; and, when really critical work
must be done, holding a conference instead.187 The
manual’s anonymous writers, thoroughly steeped in
government, understood bureaucracy and its many
foibles.
Standard dictionaries generally agree on the
following: Bureaucracy is a combination of organ-
izational hierarchy and red tape. Hierarchy refers to
layers of administrative units ranked one above the
other. Red tape is a large number of reports, forms,
procedures, and, most especially, rules.
Hierarchy and red tape are symbiotic. Hierarchy
produces red tape: “the larger the number of hier-
archical levels, the greater the demand for explicit
rules.”188 And red tape produces hierarchy: legisla-
tive rulemaking adds to “the structural complexity
of bureaucratic action” in all sectors.189
A consideration of bureaucracy’s two defining
components follows.
Hierarchy and Government
Our first half of bureaucracy is hierarchy.
High on the Hierarchic Hog Governments live
high on the hierarchic hog. Two-fifths of federal
employees at all ranks say that, in their agencies,
there are “too many layers of supervisors and man-
agers” between them and top management, com-
pared to less than a fourth each of business190 and
nonprofit employees191 who say this.
In contrast to corporate hierarchies, which are
dramatically flattening (over seventeen years, man-
agerial levels between division heads and the CEO
declined by a fourth),192 the public hierarchy, at least
at the national level, is heightening. Over fifty-six
years, the number of layers of federal senior man-
agement grew by more than three times, hitting
seventy-one managerial layers in 2016.193 For good
measure, over thirteen years twenty new layers of
middle management were added as well.194
Government’s girth grows, too. Over fifty-six
years, the number of cabinet departments more than
doubled to fifteen in 2016, and the number of federal
executives in them burgeoned by more than six times,
toting up to 3,265 in 2016. As a result, innovative,
but odd, executive titles are increasingly common,
such as Deputy Assistant Deputy Administrator and
Principal Deputy Deputy Assistant Secretary.195 We
are not making these up.
Over thirteen years, 13,000 more middle man-
agers were added to the federal hierarchy, while, over
twenty-two years, the number of lower-level federal
employees plummeted by two-thirds.196 These trends
may explain why, over eleven years, the proportion
of supervisors and managers in the federal workforce
grew by 7.5 percent, but the average number of sub-
ordinates whom they supervised actually declined by
7 percent, and currently stands at fewer than eight
subordinates per supervisor.197
The situation seems to be quite a bit better at
the state and local levels. Managers, who comprise
12.7 percent of all “management, professional, and
related” workers in the private sector, account for
just 8.1 percent of these employees in the public
sector, or a remarkable difference of more than
36 percent. The federal government comes relatively
close to the corporate marker, at 11.6 percent, or
9 percent fewer managers, but state governments, at
8.8 percent, have 31 percent fewer managers than
the private sector, and local governments, with just
6.3 percent of their management, professional, and
related employees who are managers, amounts to a
striking difference of 50 percent.198
Hierarchy and Effective Government How much
hierarchy is too much?
Anthony Downs’s famous law of hierarchy con-
tends that the taller (i.e., the more hierarchical layers)
and more complex the hierarchy, the more effort and
expense that are required for “internal” administra-
tion to the detriment of “external” achievement.199
In the public sector, hierarchy can both under-
mine and improve organizational effectiveness. For

example, more hierarchy in schools correlates with
lower academic performance by pupils,200 but also
with better attendance and lower dropout rates.201
In fact, the extent of hierarchy “is not related” to
governmental failures. Instead, “the only consistent
results” of empirical investigations are that public
organizational failures correlate with a large number
of goals and a high level of difficulty involved in
achieving those goals,202 a relationship that also is
common in other sectors.
Where hierarchy contributes most to public
organizational effectiveness is in those agencies that
are playing defense. Greater hierarchy associates
with centralized decision making, which, in turn,
“works best” in defending the organization against
external threats. Lesser hierarchy correlates with
decentralized decision making, which works best
when agencies are prospecting for new opportunities
in their environments.203
Goldilocks Hierarchy All that said, however, if
we use organizational size as an indicator of hier-
archy, we find that Downs’s law accrues signifi-
cant support. An analysis of ninety-seven federal
agencies concluded that large size, as measured by
personnel and budgets, correlates positively with
lower goal achievement. So does small size, at least
when  measured by only the number of employ-
ees.  In these cases, effectiveness increases with
employee growth  until an “optimal, ‘Goldilocks’
organizational size—not too small, not too big,
but  just right’’ is attained. Should the agency’s
workers continue to expand, however, the effective-
ness of  both  individual  employees and the agency
fades.204
The same indicator may be present in state gov-
ernments; larger state governments have more inci-
dents of corruption (as measured by the proportions
of public officials convicted for graft) than smaller
ones.205
Red Tape and Government
Bureaucracy’s other half is red tape.
Ribbons of Red Tape Public organizations are
wrapped in more red tape than are private and
nonprofit ones (the independent sector has the least
red tape206)—ribbons more—that are spooled out
The Fabric of Organizations: Forces 97
almost entirely by external sources, such as special
interests and legislatures.207
Reams of Reports A basic building block of red
tape is reports. Congress first required that an
agency (the Mint) write an annual report in 1792,
but today that steadily-expanding number is 4,238
annual reports208 from 466 agencies and nonprofit
organizations, ranging from the state of the asso-
ciation of veterans of the Spanish-American War
(two reports per year, actually, even though the last
veteran died in 1992) to dog- and cat-fur protec-
tion (involving “at least 15 employees in at least
six different offices”). The estimated annual cost
of these reports is $163 million. Many go unread
by congressional members and staffers (one staffer
stated, “We used them as doorstops. Literally. The
thicker ones, we used them as doorstops”), and a
few bright bureaucrats have quietly stopped sending
them; no one in Congress has noticed. Nevertheless,
these reports stick around; one analysis concluded
that only about 6 percent could be usefully aban-
doned,209 although Congress has identified only
six-tenths of 1 percent that could be eliminated or
consolidated.210
Rules Rule As we explained in Chapter 1, a
bureaucracy’s rules can have the same or larger
social impact as a legislature’s laws. Here, however,
we concentrate on the centrality of rules in red tape.
The amount of government rules more than
doubles every decade because “the stock of rules
expands due to a powerful internal dynamic: that is,
rules breed rules.”211
Washington publishes from 2,500 to 4,500 new
regulations per year, ranging from the routine to the
profound.212 More than seven out of every ten laws
enacted by Congress spawn rules written in agen-
cies that are meant to “clarify the policy sketched in
legislation.”213 These and other rules add up; there
are sixteen federal regulations, on average, for every
law.214 These regulations are rarely brief; the annual
compendium of federal rules, The Federal Register,
typically tops 80,000 pages.215
Smaller governments are not immune. Michi-
gan’s government has some 17,100 rules.216 There
are sixty-four separate sources of law governing
New York City’s public schools, including 850 pages
of state law, another 720 pages of state regulations,
 98 PA R T I I Public and Nonprofit Organizations
15,000 formal decisions by the state commissioner
of education, hundreds of pages of collective bar-
gaining agreements, thousands of pages of federal
law affecting schools, and more thousands of
pages of regulations promulgated by the schools’
chancellor.217
The Riddle of Red Tape What do we actually know
about red tape (i.e., reports, rules, procedures, etc.)
and efficient governance? Not much. Although red
tape is almost universally blamed for public admin-
istration’s inefficiencies, a “purported relationship
[that] is central to public management theory and
practice” (a third of top state administrators, for
example, cite “less red tape” as a primary reason for
privatizing some of their programs218), there is, in
fact, a “dearth of research on the red tape-perfor-
mance hypothesis.”219
Red Tape’s Known Negatives Here is what we
know about red tape and its negative, or potentially
negative, impact on governance.
Red Tape and Bigger Bureaucracies Red tape
births more bureaucrats. Legislative rulemaking in
general introduces more “actors . . . to the [policy]
implementation process.”220 When Washington
imposes more regulations on the intergovernmen-
tal grants system, school districts respond by hiring
more administrators.221
Red Tape, Communication, and Public Performance
Red tape can affect “task-oriented communica-
tion” in agencies to the point that it raises or lowers
agency performance. In agencies with “an average
level of rule orientation,” these directives increase
“the likelihood of excellent performance” by a fifth,
but, in those with higher-than-average rule orienta-
tions, “even excellent communication is linked to
decreases in performance.”222
Red Tape and Client Fairness Internal red tape,
or the kind that restricts public employees but not
agency clients, “surprisingly . . . does have a substan-
tial impact on equity.” This type of red tape “inflicts
considerable damage” on the fairness with which
agency clients are treated, possibly because red tape
penalizes those clients who are “less able to under-
stand and overcome” complicated rules, and internal
red tape constrains public employees from helping
them.223
Perceptions of Red Tape and Public Worker
Productivity For at least a generation, and
longer,224 public employees have been far more
convinced (and, as noted earlier, accurately so225)
than their private-sector counterparts that their
organizations ensnare them in greater tangles
of red tape.226 But even when public managers
and private consultants are working together on
the same  project, “government managers per-
ceive higher levels of organizational red tape and
contracting red tape than their  consultants.”227
Similarly, red tape  affects the job involvement of
nonprofit managers much less  negatively than it
affects that of their government counterparts,228
and nonprofit employees are less likely than public
workers to think that red tape renders their tasks
more complicated.229
This is not good for public employee produc-
tivity. Government managers who perceive higher
levels of red tape believe that they are stressed,230
and that their performance is inadequately recog-
nized.231 These managers are: less engaged in their
jobs;232 more risk aversive;233 more dissatisfied with
their jobs;234 and display greater alienation—red
tape “is a consistently negative and statistically sig-
nificant influence in all alienation models.”235
Public administrators who perceive a lot of red
tape have narrow frames of reference,236 and work
in highly unionized governments.237 (Public union
members who are highly committed to union values,
however, see less red tape in their agencies relative
to those with lower commitment.238) Those manag-
ers who report less red tape have “broader frames
of reference” and “richer career experiences” than
those who perceive more,239 and work in govern-
ments that have introduced significant personnel
reforms.240
Red Tape and Efficiency The reality is that red
tape sometimes causes inefficiencies, but often it does
not, and sometimes it can increase efficiency. To gain
an idea of red tape’s role in the efficiency of one’s
own organization, one should scan the following
areas: red tape’s functionality, or dysfunctionality,
in achieving goals; whether its compliance burden
is heavy or light; and how employees experience red

tape in their own jobs.241 What we know about red
tape’s role in efficiency follows.
Red Tape’s Negligible Effect on Productivity In
what may be the most detailed examination of “the
red tape myth” to date, it was determined that red
tape’s supposedly negative impact on public per-
formance is “somewhat weaker and less pervasive
than public management theory and conventional
wisdom suggest. . .. [It] does not have any salient
effects on efficiency [and] does not seem to have any
appreciable impact on customer satisfaction” with
agency services.242
More specifically, at least in the views of public
employees, “not all forms of red tape are equally
important from a performance perspective.” The
presence of red tape in information systems does
associate negatively with the “perceived effective-
ness” of those systems, but red tape is “borderline
insignificant” in human resources and its perceived
effects on procurement and budgeting are “not sta-
tistically significant.”243
Green Tape Rules need not be “red tape” in the sense
that they foment negativity among public adminis-
trators. Rules can be green tape, or well-formulated
regulations that facilitate “higher rule abidance”
and, thereby, greater agency efficiency. “Compliance
with rules . . . can be an essential element of both a
project’s success and its accountability.”244 Written
(not spoken) rules that are not overly controlling,
whose purposes are understood by stakeholders, and
which clearly work effectively, “significantly corre-
late” with green tape. Consistency in applying rules,
oddly, seems not to matter.245
Goldilocks Rules As green tape implies, just as
there is “Goldilocks hierarchy,” noted earlier, there
also seem to be Goldilocks rules. The most effective
rules, in other words, are neither overly vague nor
overly prescriptive, in that those “moderate” rules
that balance flexibility of implementation with clear
guidelines are the most effective and productive.246
In fact, when rules violate either of these poles, the
possibility of public corruption is enhanced.247
Red Tape and Longer-Term Efficiencies Where red
tape may have its most positive effect is by inducing
longer-term organizational efficiencies.
The Fabric of Organizations: Forces 99
Internally, a body of rules “radically reduces the
number of decisions” that an executive “must make
without sacrificing centralized coordination,”248 a
condition that almost defines efficiency.
Externally, rules help an organization to
“increasingly respond to environmental challenges
in a programmed way.” Over time, a bureaucracy’s
rules expand “with decreasing increments” because
a corpus of intelligent rules has boosted organiza-
tional efficiency by adapting organizational proce-
dures to patterns of environmental pressures.249
There is, however, more at stake than efficiency.
The “bureaucratization of the nation-state has
wrought a fundamental transformation whereby
rules themselves have become the primary means
through which social change is accomplished.”250
Rigid rules and inflexible procedures help assure
that bureaucrats and citizens alike are treated fairly,
impartially, and equally. In a word, red tape can
provide justice, an idea that is central to democratic
government.
You Can Lead a Bureaucracy to Slaughter
but You Can’t Make It Shrink
Can governments be made less bureaucratic? Not
really: public organizations “are imprisoned” by the
environments that they inhabit.251
Their imprisonment is a consequence of their
operating, by necessity and definition, in non-market
environments, a condition that deprives them of a
simple, accurate measure of their organizational
success: making money. Making money, by contrast,
is the universal measure of efficiency and effective-
ness for businesses (in the form of profits) and non-
profit organizations (if not “profits,” technically,
then at least balancing the books).
Public agencies thus “are caught in a complex
of external relationships and to cope they develop
high levels of internal control.”252 These controls, of
course, are hierarchy and red tape, which, in com-
bination, clumsily and incompletely substitute for
the straightforward money metric that is denied to
governments. Hierarchy and red tape control spend-
ing, coordinate activities, and work to assure the fair
treatment of clients and employees.
There is little that can be done to change this
fact of public organizational life. “The confluence
of top-down and bottom-up pressures” emanating
 100 PA R T I I Public and Nonprofit Organizations
from the public organization’s environment renders
“simple hierarchy . . . the only possibility for public
agencies,” and their “organizational survival is
increasingly based on conformity to externally
imposed rules. . .. External agents . . . cannot them-
selves remove the conditions that favor tall hierar-
chies and elaborate systems of rules.”253 So, even
if those “external agents,” such as elected officials,
slash the resources of public agencies, their hierar-
chies and red tape still persist undiminished.
“You can lead a bureaucracy to slaughter but
you can’t make it shrink.”254
Administrative Autonomy and the
Performance of Public Organizations
Our final point about the power of the public
organization’s environment is that, because the
environment constrains the autonomy of public
organizations more than private and nonprofit ones,
it weakens their performance. National surveys of
local public works directors, for example, consist-
ently find that working in a “political environment”
is the primary set of “impediments to effective man-
agement.”255 By contrast, when public organizations
are granted greater independence, at least up to a
point, they perform better.
Empirical investigations almost uniformly
draw this conclusion. We cite three out of many.
Citizen advisory boards are more effective in
meeting their goals when they have a higher “degree
of independence” from external actors.256 “The
best” public  school districts out of 534 of them
“are affected by far fewer forces in their environ-
ments.”257 And if “poor performers” among two
dozen nuclear power plants, which are under close
regulatory scrutiny, “are given more autonomy, this
analysis suggests, their safety record is likely to
improve.”258
THE IMPACT OF THE
ENVIRONMENT ON THE
INDEPENDENT ORGANIZATION
Organizations in the independent sector also
are highly influenced by their external environ-
ments. Resistance to internal change by stakehold-
ers outside a nonprofit, for example, is a major
difficulty—perhaps the major difficulty—often
encountered by nonprofits seeking change.259
The Cesspool Syndrome: How Independent
Organizations Die
Due largely to the whimsies of external forces, non-
profit organizations are more likely to “die” than
are public agencies. This is especially true if the
organization is young (at least 17 percent of new
American nonprofits disappear within ten years260),
small, and located in an area where the popula-
tion is not growing.261 Mission can play a part,
too. “Corporations engage in espionage against
nonprofits [or at least those with missions, such as
consumer rights, that they disapprove of] with near
impunity.”262
How does the independent organization deal
with these environmental pressures? Here is how a
college library dealt with them.
The library summoned fourteen sequen-
tial strategies to cope, including: queuing at peak
periods (e.g., keeping library patrons in waiting
rooms “outside” the organization); setting priorities
within the queue; eliminating the lowest priorities;
expediting the most frequent requests; encouraging
entrepreneurs to provide services for several librar-
ies at lower cost; creating branch facilities; creat-
ing  a mobile reserve (such as teams of personnel
transferable to units as needed); developing spe-
cific performance standards; reducing those stand-
ards soon  thereafter; brainstorming for a “magic
formula”; promoting self-service (for example,
letting patrons into the stacks, an uncommon
practice at the time—librarians themselves would
retrieve requested volumes), which is a radical strat-
egy because it represents a deliberate reduction of
organizational sovereignty; “escaping” by permit-
ting a takeover or accepting mass resignations;
limiting work to capacity as determined by rigid
rules, the denial of error, and the refusal of chal-
lenge; and, ultimately, salvaging component units,
which is the equivalent of death for larger nonprofit
organizations.263
The library, in a very real sense, had no choice
but to play out this scenario. Unlike the Defense
Department, it could not rely on legislative largesse,
and, unlike International Widget, it could not control
environmental demands by simply hiking prices.

Nonprofit organizations often respond to
increasing environmental stress in the way our
hapless library did—that is, by becoming more neg-
ative, rigid, and irrational. When small, independent
colleges “moved from moderate to severe decline,”
decision making centralized, planning atrophied,
inflexibility hardened, the “college’s climate” polit-
icized, and “special-interest group activity” accel-
erated.264 This is “the cesspool syndrome.” As the
organization accommodates decline, “dreck,” rather
than “cream” (which can and does depart), rises to
top, thereby furthering more decline.265
Defying Death in the Independent Sector
How do nonprofit organizations avert dying?
Characteristics of Successful Third-Sector
Organizations Size and mission matter.
Nonprofit organizations that are larger and
which have larger boards of directors receive, rel-
ative to their smaller counterparts, more donations
from all sources.266 Organizational size makes no
difference in the ability of nonprofits to adaptively
innovate (an obviously important component of
survival and success), with one significant excep-
tion: the bigger the board, the greater the number of
organizational innovations in all areas.267
Mission matters. In general, donors favor those
organizations that focus on art and culture, and are
statistically less enthusiastic about those with mis-
sions involving law, public advocacy, and health
and human services.268 “High net worth” donors,
however, give most frequently to nonprofits that
focus on “basic human needs,” followed by missions
involving religion, health, and youth and family ser-
vices, respectively. The “number one reason” why
these wealthy donors give to a nonprofit, identified
by 54 percent of them, is its mission.269
Internally Averting Decline Those independent
organizations that are most able to stave off envi-
ronmental threats and to thrive are more likely
to: establish stable organizational hierarchies;
assign  explicit responsibilities for each employee;
affiliate their organizations with larger and similar
enterprises; recruit “a high percentage of higher
functionaries among board members”; assure diver-
sity among supporters and members;270 and avoid
The Fabric of Organizations: Forces 101
a debt level that is higher than those of similar
organizations (a higher debt causes donors to with-
draw).271
Those charities that act on the principle that
charity begins at home, prosper. A 1 percent increase
in their fundraising budgets results in a 1.36 percent
increase in contributions.272 If, however, a nonprofit’s
funds are perceived as excessive, then future dona-
tions take a hit.273
A nonprofit’s subunits’ propensity to share
information and cooperate with one another also
can defend against decline; “the trigger of decline,”
in fact, often forces these behaviors, which, in turn,
reverse decline.274
Externally Averting Decline “The most impor-
tant consideration in order to avoid organizational
death” in the independent sector is to vigorously
engage in “extroverted activities, which enhance an
organization’s visibility and embeddedness in the
local community.” These activities include devel-
oping “broad external ties” with governments,
donors, and others in order to “avoid social closure
and ensure access to resources.”275 Nonprofits that
diversify and reach out to their environments enjoy a
faster rate of organizational growth than those that
do not, although those that are more reliant on fees
and sales are partial exceptions.276
This sort of inter-organizational cooperation
in a hostile environment also is attainable in public
organizations, where “inevitable” conflict among
similarly charged agencies can be supplanted by pro-
ductive cooperation,277 but it is essentially unobtain-
able to private firms.278
NOTES
1. Stafford Beer, “Managing Modern Complexity,”
The Management of Information and Knowledge.
Panel on Science and Technology (11th meeting).
Proceedings before the Committee on Science
and Astronautics. U.S. House of Representatives,
91st Congress, Second Session, January 27, 1970,
No. 15 (Washington, DC: U.S. Government
Printing Office, 1970), pp. 41–62. The quotation
is on p. 43.
2. Bree Nordenson, “Overload! Journalism’s
Battle for Relevance in an Age of Too Much
Information,” Columbia Journalism Review
 102 PA R T I I Public and Nonprofit Organizations
(November/December 2008), http://www.cjr.org/
magazine/novemberdecember08.php.
3. James G. March and Herbert A. Simon, Organi-
zations (New York: John Wiley, 1958), p. 165.
4. James Risen, “Ex-Inspector Says CIA Missed
Disarray in Iraqi Arms Program,” New York
Times (January 26, 2004).
5. Samir Khairi Tawfik, as quoted in Jon Lee
Anderson, “Saddam’s Ear,” The New Yorker (May
5, 2003), p. 68.
6. Jamie Gorelick, as quoted in Joel Achenbach,
“What Does a President Really Do All Day?”
Washington Post (April 27, 2008).
7. Moyzisch, however, had the last word, and his
revenge, by writing after the war a book detail-
ing the episode: L. C. Moyzich, Operation Cicero
(New York: Coward-McCann, 1950). In 1952, his
book was made into an Oscar-nominated movie,
5 Fingers. Moyzich, somewhat appropriately, was
played by Peter Lorre.
8. U.S. Office of the Inspector General, Central
Intelligence Agency, OIG Report on CIA
Accountability with respect to the 9/11 Attacks
(Washington, DC: Author, June 2005), pp. xiii–xiv.
9. Gordon Tullock, The Politics of Bureaucracy
(Washington, DC: Public Affairs Press, 1965),
pp. 137–141.
10. Dana Priest and William M. Arkin, “A Hidden
World, Growing Beyond Control,” Washington
Post (July 19, 2010). Data are for 2010.
11. See, for example, Friedrich Hayek, “The Use of
Knowledge in Society,” American Economic
Review 35 (Fall 1945), pp. 519–530.
12. Martha S. Feldman and James G. March,
“Information in Organizations as Signal and
Symbol,” Administrative Science Quarterly 26
(June 1981), pp. 171–186. The quotation is on
p. 182.
13. Hemphill and Associates, as cited in “Data Data,”
Inc. Magazine (January 1999), p. 70.
14. Pitney Bowes, Workplace Communications in the
21st Century, as cited in ibid.
15. Reuters Business Information Survey, as cited in
ibid.
16. Feldman and March, “Information in Organi-
zations as Signal and Symbol.”
17. Ibid., p. 178.
18. Ibid., p. 183.
19. E. Sam Overman and Donna T. Lorraine,
“Information for Control: Another Management
Proverb?” Public Administration Review 54
(March/April 1994), pp. 193–196. The quotations
are on p. 195.
20. Grant Thornton and Professional Services
Council, 2015 Federal CIO and CISO Survey:
Expanding the Role of the CIO (Alexandria and
Arlington, VA: Author, 2015), p. 14.
21. Herbert A. Simon, Administrative Behavior: A
Study of Decision-Making Processes in Admini-
stration Organizations, 3rd ed. (New York: Free
Press, 1958), pp. 48–52.
22. Gjalt de Graaf and Zeger van der Wal, “On Value
Differences Experienced by Sector Switchers,”
Administration & Society 40 (March 2008),
pp. 79–103. The quotation is on p. 79.
23. Jennifer A. Chatman, “Matching People and
Organizations: Selection and Socialization in
Public Accounting Firms,” Administrative Science
Quarterly 26 (September 1991), pp. 459–484.
24. Simon, Administrative Behavior.
25. George Miller, “The Magic Number Seven, Plus
or Minus Two,” Psychological Review 63 (March
1956), pp. 81–97.
26. Suzanne Langer, Mind: An Essay on Feeling (Balti-
more: Johns Hopkins University Press, 1988).
27. John S. Hammond, III, Ralph L. Keeney, and
Howard Raiffa, “The Hidden Traps in Decis-
ion Making,” Harvard Business Review 76
(September/October 1998), pp. 47–58.
28. Vykinta Kigyte, Shane Connelly, Chase Thiel, and
Lynn Davenport, “The Influence of Anger, Fear,
and Emotion Regulation on Ethical Decision
Making,” Human Performance 25 (4, 2013),
pp. 297–326.
29. Antoine Bechara, “The Role of Emotion in
Decision-Making: Evidence from Neurological
Patients with Orbitofrontal Damage,” Brain and
Cognition 55 (1, 2004), pp. 30–40.
30. Langer, Mind.
31. Daniel Kahneman and Amos Tversky, “Choices,
Values, Frames,” American Psychologist 39 (June
1984), pp. 341–350.
32. James Brown and Zi-Lei Qiu, “Satisficing When
Buying Information,” Organizational Behavior
and Human Decision Processes 51 (June 1992),
pp. 471–482.
33. Kahneman and Tversky, “Choices, Values, Frames.”
34. Robert Frank, “Shrewdly Irrational,” Sociological
Forum 2 (September 1987), pp. 21–41.
35. Keith E. Stanovich, What Intelligence Tests Miss:
The Psychology of Rational Thought (New Haven,
CN: Yale University Press, 2009), pp. 66, 2.

36. Simon, Administrative Behavior.
37. Irving Janis, Victims of Groupthink (Boston:
Houghton-Mifflin, 1972), p. 13.
38. Commission on the Intelligence Capabilities of
the United States Regarding Weapons of Mass
Destruction, Report to the President of the
United States (Washington, DC: U.S. Government
Printing Office, 2005), p. 10.
39. Select Committee on Intelligence, United States
Senate, 109th Congress, Report on Postwar Find-
ings About Iraq’s WMD Programs and Links to
Terrorism and How They Compare with Prewar
Assessments, together with Additional Views
(Washington, DC: U.S. Government Printing
Office, 2006), pp. 5–6.
40. Commission on the Intelligence Capabilities of
the United States Regarding Weapons of Mass
Destruction, Report to the President of the United
States, p. 10.
41. Bob Woodward, “10 Take Aways From the Bush
Years,” Washington Post (January 18, 2009).
42. Irving L. Janis, Groupthink (Boston: Houghton
Mifflin, 1982).
43. Steve Kelman, Ronald Sanders, Sarah Taylor,
and Gayatri Pandit, “I Won’t Back Down”?:
Complexity and Courage in U.S. Federal Executive
Decision-Making (Cambridge, MA: Harvard Ash
Center, 2014), pp. 12–13.
44. Kathleen M. Eisenhardt, “Making Fast Strategic
Decisions in High-Velocity Environments,”
Academy of Management Journal 32 (September
1989), pp. 543–576.
45. Kelman, Sanders, Taylor, and Pandit, “I Won’t
Back Down”?, p. 12.
46. Robert H. Ennis, Critical Thinking (Upper Saddle
River, NJ: Prentice-Hall, 1996).
47. Lee Ross, Mark R. Lepper, and Michael Hubbard,
“Perseverance in Self-perception and Social
Perception: Biased Attributional Processes in the
Debriefing Paradigm,” Journal of Personality and
Social Psychology 32 (5, 1975), pp. 880–891. The
quotation is on p. 880.
48. Valerie F. Reyna, Christina F. Chick, Jonathan
C. Corbin, and Andrew N. Hsia, “Developmental
Reversal in Risky Decision Making: Intelligence
Agents Show Larger Decision Biases than College
Students,” Psychological Science 25 (January
2014), pp. 76–84.
49. Kelman, Sanders, Taylor, and Pandit, “I Won’t
Back Down”?, pp. 5, 8, 9, 11.
50. Table 4-1 is partly based on James D. Thompson and
The Fabric of Organizations: Forces 103
Arthur Tuden,“Strategies, Structures, and Processes
of Organizational Decision,”  Comparative Studies
in Administration, James D. Thompson, Peter
B.  Hammond, Robert W. Hawkes, et al., eds.
(Pittsburgh: University of Pittsburgh Press, 1959),
pp. 195–216.
51. Melissa M. Stone, Barbara Bigelow, and William
Crittenden, “Research on Strategic Management
in Nonprofit Organizations: Synthesis, Analysis,
and Future Directions,” Administration & Society
31 (July 1999), pp. 378–423.
52. Paul C. Nutt, “Making Strategic Choices,” Journal
of Management Studies 39 (January 2002),
pp. 57–96. The quotation is on p. 67.
53. Michael Cohen, James G. March, and Johan
Olsen, “A Garbage Can Model of Organizational
Choice,” Administrative Science Quarterly 17
(March 1972), pp. 1–25.
54. Ibid., pp. 1–2.
55. Unless noted otherwise, this discussion is based
on Paul C. Nutt, “Tactics of Implementation,”
Academy of Management Journal 29 (July 1986),
pp. 230–261, and Nutt’s “Leverage, Resistance,
and  the  Success of Implementation Approaches,”
Journal of Management Studies 35 (March
1998), pp. 213–240. We are citing in the text only
percentages that are drawn from the larger and
more recent study (376 decisions), but the per-
centages from the earlier study (ninety-one) are
comparable.
56. Peter C. Gronn, “Talk as Work: The Accomplishment
of School Administration,” Administrative Science
Quarterly 28 (March 1983), pp. 1–21.
57. Richard H. Thaler and Cass R. Sunstein, Nudge:
Improving Decisions about Health, Wealth, and
Happiness (New York: Penguin, 2009).
58. Sandford Borins, “Loose Cannons and Rule
Breakers, or Enterprising Leaders? Some Evidence
about Innovative Public Managers,” Public
Administration Review 60 (November/December
2000), pp. 498–507.
59. Nutt, “Tactics of Implementation,” and Nutt,
“Leverage, Resistance, and the Success of
Implementation Approaches.”
60. David J. Hickson, Richard. J. Butler, David Cray,
et al., Top Decisions: Strategic Decision Making
in Organizations (San Francisco: Jossey-Bass,
1986).
61. James L. Perry, Debra Mesch, and Laurie
Paarlberg, “Motivating Employees in a New
Governance Era: The Performance Paradigm
 104 PA R T I I Public and Nonprofit Organizations
Revisited,” Public Administration Review 66
(July/August 2006), pp. 505–514.
62. Nutt, “Leverage, Resistance, and the Success of
Implementation Approaches,” pp. 222, 232.
63. Borins, “Loose Cannons and Rule Breakers, or
Enterprising Leaders?” p. 505.
64. Kent D. Peterson, “Mechanisms of Administrative
Control over Managers in Educational
Organizations,” Administrative Science Quarterly
29 (December 1984), pp. 576–581.
65. Daniel Benjamin, “The Decider Who Can’t Make
Up His Mind,” Washington Post (July 6, 2008).
66. Gordon Kingsley and Pamela Norton Reed,
“Decision Process Models and Organizational
Context: Level and Sector Make a Difference,”
Public Productivity & Management Review 14
(Summer 1991), pp. 397–413. The quotation is
on p. 409.
67. Meg Bostrom, By, or for, the People? A Meta-
analysis of Public Opinion of Government (New
York: Demos, 2006), p. 24. Figures, 61 and 59
percent, respectively, are for 1999.
68. Peterson, “Mechanisms of Administrative Control
over Managers in Educational Organizations,”
p. 595.
69. National Research Center, as cited in Mike
Maciag, “Speaking Up,” Governing (July 2014),
pp. 56–57. Figures are for 2012–2014.
70. Cole D. Taratoot and David C. Nixon, “With
Strings Attached: Statutory Delegations of
Authority to the Executive Branch,” Public
Administration Review 71 (July/August 2011),
pp. 637–644.
71. Marianne Antonsen and Torben Beck Jorgensen,
“The ‘Publicness’ of Public Organizations,” Public
Administration 75 (Summer 1997), pp. 337–357.
72. Lewis C. Mainzer, Political Bureaucracy (Glen-
view, IL: Scott, Foresman, 1973).
73. Kingsley and Reed, “Decision Process Models and
Organizational Context,” p. 409.
74. Paul C. Nutt, “Comparing Public and Private
Sector Decision-Making Practices,” Journal of
Public Administration Research and Theory 16
(April 2006), pp. 289–318. The quotation is on
p. 312.
75. Marianne Antonsen and Torben Beck Jorgensen,
“The ‘Publicness’ of Public Organizations,” Public
Administration 75 (Summer 1997), pp. 337–357.
76. Charles R. Schwenk, “Conflict in Organizational
Decision Making: An Exploratory Study of
Its Effects in For-Profit and Not-for-Profit
Organizations,” Management Science 36 (January
1990), pp. 436–448.
77. Thomas R. Davies, “The Inside Story,” Governing
(December 2003), p. 64.
78. Robert T. Golembiewski, Humanizing Public
Organizations (Mt. Airy, MD: Lomond, 1985).
79. Myung Jae Moon, “The Pursuit of Managerial
Innovation: Does Organization Matter?” Public
Administration Review 59 (January/February
1999), pp. 31–43.
80. Paul J. Yakoboski and Joshua M. Franzel, 2014
Retirement Confidence Survey of the State and
Local Government Workforce (Washington,
DC: TIAA-CREF Institute and Center for
Governmental Excellence, 2014), p. 5.
81. Barry Bozeman and Gordon Kingsley, “Risk
Culture in Public and Private Organizations,”
Public Administration Review 58 (March/April
1998), pp. 109–118.
82. John M. Bryson and Sharon R. Anderson, “Ap-
plying Large-Group Interaction Methods in the
Planning and Implementation of Major Change
Efforts,” Public Administration Review 60 (March/
April 2000), pp. 143–162.
83. David Coursey and Barry Bozeman, “Decision
Making in Public and Private Organizations:
A Test of Alternative Concepts of ‘Publicness’,”
Public Administration Review 50 (September/
October 1990), p. 525.
84. Hickson, Butler, Cray, et al., Top Decisions.
85. Nutt, “Comparing Public and Private Sector
Decision-Making Practices,” p. 312.
86. Perry, Mesch, and Paarlberg, “Motivating Emplo-
yees in a New Governance Era,” p. 509. Emphasis
is original.
87. Nutt, “Comparing Public and Private Sector
Decision-Making Practices,” p. 312.
88. Jongkon Lee, “Public Meetings for Efficient Ad-
ministrative Performance in the United States,” Public
Performance & Management Review 37 (March
2014), pp. 388–411. The quotations are on p. 388.
89. Jeffrey L. Brudney and Deil S. Wright, “The
‘Revolt in Dullsville’ Revisited: Lessons for
Theory, Practice, and Research from the American
State Administrators Project, 1964–2008,” Public
Administration Review 70 (January/February
2010), pp. 26–37. The quotations are on p. 30.
Data are for 1984, 1994, 2004.
90. Milena I. Neshkova and Hai (David) Guo, “Public
Participation and Organizational Performance:
Evidence from State Agencies,” Journal of

Public  Administration Research and Theory 22
(April 2012), pp. 267–288. The quotation is on
p. 267.
91. Milena Neshkova,“Does Agency Autonomy Foster
Public Participation?” Public Administration
Review 74 (January/February 2014), pp. 64–74.
92. Kaifeng Yang and Kathe Callahan, “Citizen
Involvement Efforts and Bureaucratic  Respon-
siveness: Participatory Values, Stakeholder
Pressures, and Administrative Practicality,” Public
Administration Review 67 (March/April 2007),
pp. 249–264. The quotation is on p. 257.
93. Jerri Killian and Enamul Choudhury, “Continuity
and Change in the Role of City Managers,”
Municipal Year Book, 2010 (Washington, DC:
International City/County Management Asso-
ciation, 2010), pp. 10–18.
94. Donna Milam Handley and Michael Howell-
Moroney, “Ordering Stakeholder Relationships
and Citizen Participation: Evidence from the
Community Development Block Grant Program,”
Public Administration Review 70 (July/August
2010), pp. 601–620.
95. Christopher A. Cooper, H. Gibbs Knotts, and
Kathleen M. Brennan, “The Importance of Trust
in Government for Public Administration: The
Case of Zoning,” Public Administration Review
68 (May/June 2008), pp. 459–467.
96. Nutt, “Comparing Public and Private Sector
Decision-Making Practices,” p. 312.
97. W. Michael Blumenthal, “Candid Reflections of a
Businessman in Washington,” Fortune (January
29, 1979), pp. 2, 6, 49; Donald Rumsfeld, “A
Politician-Turned-Executive Surveys Both Worlds,”
Fortune (September 10, 1979), pp. 88, 94.
98. Davies, “The Inside Story,” p. 64.
99. Nutt, “Comparing Public and Private Sector
Decision-Making Practices,” p. 313. Emphasis is
original.
100. Ibid., p. 312.
101. Ibid.
102. Perry, Mesch, and Paarlberg, “Motivating
Employees in a New Governance Era.”
103. Marshall W. Meyer, Bureaucratic Structure and
Authority: Coordination and Control in 254
Government Agencies (New York: Harper &
Row, 1972).
104. Eisenhardt, “Making Fast Strategic Decisions in
High-Velocity Environments.”
105. Janis, Victims of Groupthink.
106. Paul C. Nutt, “Public-Private Differences and the
The Fabric of Organizations: Forces 105
Assessment of Alternatives for Decision Making,”
Journal of Public Administration Research and
Theory 9 (April 1999), pp. 305–349.
107. Michael L. DeKay, Dalia Patino-Echeverri, and
Paul S. Fischbeck, “Distortion of Probability
and Outcome Information in Risky Decisions,”
Organizational Behavior and Human Decision
Processes 109 (May 2009), pp. 78–92.
108. Irving L. Janis and Leon Mann, Decision Making:
A Psychological Analysis of Conflict, Choice,
and Commitment (New York: Free Press, 1977),
pp. 46, 85, 51, 74.
109. Jack H. Nagel, “Psychological Obstacles to
Administrative Responsibility: Lessons of the
MOVE Disaster,” Journal of Policy Analysis and
Management 10 (Winter 1991), pp. 1–23. The
quotations are on pp. 9, 1.
110. Schwenk, “Conflict in Organizational Decision
Making.”
111. Nutt, “Public-Private Differences and the
Assessment of Alternatives for Decision Making.”
112. Schwenk, “Conflict in Organizational Decision
Making.”
113. See, for example, Melissa Middleton Stone,
“Competing Contexts: The Evolution of a
Nonprofit Organization’s Governance System
in Multiple Environments,” Administration &
Society 28 (May 1996), pp. 61–89.
114. Brookings Institution, Health of the Nonprofit,
For-Profit, and Public Service Sectors (Princeton,
NJ: Princeton Survey Research Associates 2002),
p. 3.
115. Robert Wright, “The Accidental Creationist,” The
New Yorker (December 13, 1999), p. 63.
116. James D. Thompson, Organization in Action:
Social Science Bases of Administrative Theory
(New York: McGraw-Hill, 1967), p. 142.
117. James G. March, A Primer on Decision Making:
How Decisions Happen (New York: Free Press,
1994), p. 119.
118. Simon, Administrative Behavior, pp. 131, 134.
119. Rosemary O’Leary, The Ethics of Dissent:
Managing Guerrilla Government (Washington,
DC: CQ Press, 2006).
120. Peter J. May and Soren C. Winter, “Politicians,
Managers, and Street-Level Bureaucrats:
Influences on Policy Implementation,” Journal of
Public Administration Research and Theory 19
(July 2009), pp. 453–476. The quotations are on
p. 470.
121. Nicole Woolsey Biggart and Gary G. Hamilton,
 106 PA R T I I Public and Nonprofit Organizations
“The Power of Obedience,” Administrative Science
Quarterly 29 (December 1984), pp. 540–549.
The quotation is on p. 548.
122. Amy Y. Ou, Anne S. Tsui, Angelo J. Kinicki, et al.,
“Humble Chief Executive Officers’ Connections
to Top Management Team Integration and Middle
Managers’ Responses,” Administrative Science
Quarterly 59 (March 2014), pp. 34–72.
123. John R. P. French, Jr. and Bertram Raven, “The
Bases of Social Power,” Group Dynamics:
Research and Theory, Dorwin Cartwright and
Alvin Zander, eds. (New York: Harper & Row,
1968), pp. 238–259; Bass, Stodgill’s Handbook of
Leadership, Rev. ed.; and Gary A. Yukl, Leadership
in Organizations, 2nd ed. (Englewood Cliffs, NJ:
Prentice-Hall, 1989). French and Raven originated
the five powers of reward, coercion, legitimacy,
reference, and expertise. Later, Bass added cha-
risma and Yukl added control over information
and the work environment.
124. Leanne E. Atwater and Wendy J. Wright,
“Power and Transformational and Transactional
Leadership in Public and Private Organizations,”
International Journal of Public Administration 9
(June 1996), pp. 963–990.
125. Peterson, “Mechanisms of Administrative Control
over Managers in Educational Organizations,”
p. 595.
126. Antonsen and Jorgensen, “The ‘Publicness’ of
Public Organizations,” p. 337.
127. Lyman W. Porter and John Van Maanen, “Task
Accomplishment and the Management of Time,”
Managing for Accomplishment, Bernard Bass,
ed. (Lexington, MA: Lexington Books, 1970),
pp. 180–192.
128. Alan W. Lau, Cynthia W. Pavett, and Arthur
R.  Newman, “The Nature of Managerial Work:
A Comparison of Public and Private Sector Jobs,”
Academy of Management Proceedings (August
1980), pp. 339–343.
129. Ibid.
130. Antonsen and Jorgensen, “The ‘Publicness’ of
Public Organizations,” p. 337.
131. Jay Eungha Ryu, Cynthia J. Bowling, Chung-
Lae Cho, and Deil S. Wright, “Effects of
Administrators’ Aspirations, Political Principals’
Priorities, and Interest Groups’ Influence on State
Agency Budget Requests,” Public Budgeting &
Finance 27 (Summer 2007), pp. 22–49. The quo-
tation is on p. 43.
132. John W. Macy, Public Service: The Human Side
of  Government (New York: Harper & Row,
1971).
133. Elizabeth Kolbert, “Red Light,” The New Yorker
(January 27, 2014), pp. 19–20.
134. Henry Mintzberg, The Structure of Organizations
(Englewood Cliffs, NJ: Prentice-Hall, 1979).
135. J. Norman Baldwin, “Public Versus Private
Employees: Debunking Stereotypes,” Review of
Public Personnel Administration 11 (Fall 1990–
Spring 1991), pp. 1–27. The quotations are on
p. 9.
136. Moon, “The Pursuit of Managerial Innovation,”
p. 38.
137. With exception noted, the following list is based,
with some license taken, on U.S. Merit Systems
Protection Board, Managing for Engagement:
Communication, Connection, and Courage
(Washington, DC: U.S. Government Printing
Office, 2009), pp. 66–74.
138. Antonsen and Jorgensen, “The ‘Publicness’ of
Public Organizations,” pp. 350–351.
139. Davies, “The Inside Story,” p. 64.
140. Fariborz Damanpour and Shathi Gopalakrishnan,
“The Dynamics of the Adoption of Product
and  Process Innovations in Organizations,”
Journal of Management Studies 38 (January
2001), pp.  45–66. The years covered were
1982–1993.
141. Jon Aarum Andersen, “Assessing Public Managers’
Change-Oriented Behavior: Are Private Managers
Caught in the Doldrums?” International Journal of
Public Administration 33 (May 2010), pp. 335–345.
The quotations are on pp. 335, 337, 342, respec-
tively; the data are on p. 341.
142. Borins, “Loose Cannons and Rule Breakers, or
Enterprising Leaders?” p. 500.
143. Anders R. Villadsen, “New Executives from
Inside or Outside? The Effect of Executive
Replacement on Organizational Change,” Public
Administration Review 72 (September/October
2012), pp. 731–740.
144. Kuotsai Tom Liou and Ronnie Korosic, “Imple-
menting Organizational Reform Strategies in State
Governments,” Public Administration Quarterly
33 (Fall 2009), pp. 429–452. The quotation is on
p. 445.
145. Borins, “Loose Cannons and Rule Breakers, or
Enterprising Leaders?” p. 500. Total figures add
up to more than 100 percent because some inno-
vations had more than one initiator.
146. Charles Perrow, Normal Accidents: Living with

High-Risk Technologies, 2nd ed. (Princeton, NJ:
Princeton University Press, 1999), p. 9. Emphasis
is original.
147. Lawrence G. Hrebiniak and William F. Joyce,
“Organizational Adaptation: Strategic Choice
and Environmental Determinism,” Administrative
Science Quarterly 30 (September 1985), pp. 336–
349. The quotation is on p. 336.
148. We have changed our mind. In earlier editions
of this book, we held a different view and dis-
coursed at length on the academic disputations
involving organizational determinism and choice.
The reader may wish to consult the eighth edition
(2001), pp. 101–105.
149. Herbert Kaufman, Time, Chance, and
Organizations: Natural Selection in a Perilous
Environment Chatham, NJ: Chatham House,
(1985), p. 69.
150. Nicholas Bloom, Raffaella Sadun, and John Van
Reenen, “Does Management Really Work?”
Harvard Business Review 90 (November 2012),
pp. 77–80, 82, 148.
151. Paul C. Nutt, “Prompting the Transformation of
Public Organizations,” Public Performance &
Management Review 27 (June 2004), pp. 9–33.
The quotations are on pp. 27, 25, 30. Emphasis
added.
152. As derived from data in Freedom of Information
Center, University of Missouri, State FOI Laws
(Columbia, MO: Author, 2008), http://www.
nfoic.org/foi-center/state-foi-laws.html.
153. U.S. Department of Justice, Summary of Fiscal
Year 2015 Annual FOIA Reports Published
(Washington, DC: U.S. Government Publishing
Office, 2016).
154. As derived from data in U.S. Government
Accountability Office, Freedom of Information
Act: Processing Trends Show Importance of
Improvement Plans, GAO 07-491T (Washington,
DC: U.S. Government Printing Office, 2007),
pp. 6, 28.
155. U.S. Government Accountability Office, Freedom
of Information Act: Litigation Costs for Justice
and Agencies Could Not Be Fully Determined,
GAO-16-667 (Washington, DC: U.S. Government
Publishing Office, 2016), Highlights page. Figure
is for 2006–2015.
156. Sean McCalley, “Agencies: Record-setting FOIA
Backlog Out of Control,” Federalnewsradio.com
(May 8, 2015).
157. Katherine McIntire Peters, “Two-Thirds of
The Fabric of Organizations: Forces 107
Agencies Fail to Fulfill Basic FOIA Requests,”
Govexec.com (April 28, 2015). Figure is for
2015.
158. U.S. Government Accountability Office, Freedom
of Information Act: Litigation Costs for Justice
and Agencies Could Not Be Fully Determined,
Highlights page.
159. Jenni Bergal, “States Train Officials in Public
Records Access,” Stateline (November 24, 2014).
160. Wendy Ginsberg, The Federal Advisory
Committee Act: Analysis of Operations and Costs
(Washington, DC: U.S. Congressional Research
Service, 2015). Figures are for 2004–2014. Final
two meeting figures are for 2014.
161. Thomas Cronin and Norman Thomas, “Federal
Advisory Processes: Advice and Discontent,”
Science 171 (February 26, 1971), pp. 771–779.
162. U.S. Government Accountability Office, Federal
Advisory Committee Act: Issues Related to the
Independence and Balance of Advisory Com-
mittees, GAO-08-611T (Washington, DC: U.S.
Government Printing Office, 2008), Highlights
page.
163. Anthony J. Nownes, Clive S. Thomas, and Ronald
J. Hrebenar, “Interest Groups in the States,”
Politics in the American States: A Comparative
Analysis, 9th ed., Virginia Gray and Russell L.
Hanson, eds. (Washington, DC: CQ Press, 2008),
pp. 98–126. Figure (p. 107) is for Ohio and West
Virginia.
164. Michael Asimow, “On Pressing McNollgast to the
Limits: The Problem of Regulatory Costs,” Law
and Contemporary Problems 57 (Winter 1994),
pp. 127–137. The quotation is on p. 129.
165. U.S. Government Accountability Office, Federal
Rulemaking: Improvements Needed to Monitoring
and Evaluation of Rules Development as Well as
to the Transparency of OMB Regulatory Reviews,
GAO-09-205 (Washington, DC: U.S. Government
Printing Office, 2009), Highlights page.
166. Jason Webb Yackee and Susan Webb Yackee,
“Administrative Procedures and Bureaucratic Per-
formance: Is Federal Agency Rule-making ‘Ossi-
fied’?” Journal of Public Administration Research
and Theory 20 (April 2010), pp. 261–282.
167. As derived from data (p. 117) in Susan Webb
Yackee, “Sweet-Talking the Fourth Branch:
The Influence of Interest Group Comments on
Federal Agency Rulemaking,” Journal of Public
Administration Research and Theory 16 (January
2006), pp. 103–124.
 108 PA R T I I Public and Nonprofit Organizations
168. Cornelius M. Kerwin, Rulemaking: How Govern-
ment Agencies Write Law and Make Policy, 3rd ed.
(Washington, DC: CQ Press, 2003), p. 205.
169. Jason Webb Yackee and Susan Webb Yackee, “A
Bias Towards Business? Assessing Interest Group
Influence on the U.S. Bureaucracy,” Journal of
Politics 68 (February 2006), pp. 128–139. The
quotation is on p. 129.
170. U.S. Government Accountability Office, Federal
Rulemaking: Agencies Could Take Additional
Steps to Respond to Public Comments, GAO-13-
21 (Washington, DC: U.S. Government Printing
Office, 2012), Highlights page.
171. Nownes, Thomas, and Hrebenar, “Interest Groups
in the States,” p. 107.
172. Neal D. Woods, “Promoting Participation? An
Examination of Rulemaking Notification and
Access Procedures,” Public Administration Review
69 (May/June 2006), pp. 518–530.
173. Christine A. Kelleher and Susan Webb Yackee,
“Who’s Whispering in Your Ear? The Influence
of Third Parties Over State Agency Decisions,”
Political Research Quarterly 59 (December 2006),
pp. 629–643. The quotation is on p. 629.
174. Dennis O. Grady and Kathleen M. Simon, “Political
Constraints and Bureaucratic Discretion: The Case
of State Government Rule Making,” Politics &
Policy 30 (December 2002), pp. 650–655. Data
are for 1997.
175. Paul Teske, Regulation in the States (Washington,
DC: Brookings, 2004), p. 195. We are extrapolat-
ing somewhat liberally from Teske’s findings, who
notes that interest groups are “significantly influ-
ential in eight of the ten cases” that he analyzes in
his book. These cases are quantitative analyses of
ten policy areas in all the states.
176. Christopher Jewell and Lisa Bero, “Public Parti-
cipation and Claimsmaking: Evidence Utilization
and Divergent Policy Frames in California’s
Ergonomics Rulemaking,” Journal of Public
Administration Research and Theory 17 (October
2007), pp. 625–650.
177. Thomas A. Garrett and Russell Sobel, “The
Political Economy of FEMA Disaster Payments,”
Economic Inquiry 41 (July 2003), pp. 496–509.
178. Marilyn Young, William F. Shugart, II, and
Michael Reksulak, “The Political Economy of
the IRS,” Economics & Politics 13 (July 2001),
pp. 201–220.
179. Daniel P. Carpenter, “Groups, the Media, Agency
Waiting Costs, and FDA Drug Approval,”
American Journal of Political Science 46 (July
2003), pp. 490–505. A total of 450 new drugs
were reviewed, 1977–2000.
180. A. Cooper Drury, Richard Stuart Olson, and
Douglas A. Van Belle, “The Politics of Human-
itarian Aid: U.S. Foreign Disaster Assistance,
1964–1995,” Journal of Politics 67 (May 2005),
pp. 454–473. A total of 2,337 disasters were
reviewed.
181. Matthew Holden, Jr., Continuity and Disruption:
Essays in Public Administration (Pittsburgh:
University of Pittsburgh Press, 1996), p. 58.
182. Bradley E. Wright and Sanjay K. Pandey,
“Transformational Leadership in the Public
Sector: Does Structure Matter?” Journal of Public
Administration Research and Theory 20 (January
2010), pp. 75–89. The quotation is on p. 84.
183. Mark A. Abramson, Steven A. Clyburn, and
Elizabeth Mercier, Results of the Government
Leadership Survey: A 1999 Survey of
Federal Executives (Washington, DC: The
PricewaterhouseCoopers Endowment for the
Business of Government, 1999), pp. 8–9.
184. Kaita Karath, “Yet Another Thing Driving Species
to Extinction: U.S Government Bureaucracy,”
Govexec.com (August 29, 2016).
185. Tom Brokaw witnessed and recounted this inci-
dent on “Morning Joe,” CSNBC Cable Television
(November 24, 2010).
186. Hilton Hotels, Inc., Wake Up! 1 in 3 of Your
Meeting Attendees Are Falling Asleep (New York:
Author, 2016).
187. Strategic Services (Provisional), Simple Sabotage
Field Manual (Washington, DC: Author, 1944).
188. Donald P. Warwick, with Marvin Meade and
Theodore Reed, A Theory of Public Bureaucracy:
Politics, Personality, and Organization in the
State Department (Cambridge, MA: Harvard
University Press, 1975), p. 114.
189. Meier and O’Toole, Bureaucracy in a Democratic
State, p. 62.
190. Brookings Institution, Health of the Public
Service (Princeton, NJ: Princeton Survey Research
Associates, 2001), http://www.brook.edu. Figures
are for 2001.
191. Brookings Institution, Health of the Nonprofit,
For-Profit, and Public Service Sectors, p. 14.
Figure is for 2001.
192. Raghuram Rajan and Julie Wulf, The Flattening
Firm: Evidence from Panel Data on the Changing
Nature of Corporate Hierarchies, NBER Working

Paper 9633 (Washington, DC: National Bureau
of Economic Research, 2003). Figure is for
1986–2003.
193. Paul C. Light, People on People on People:
Fact Sheet on the Continuing Thickening of
Government (New York: New York University,
2017), p. 1. In 1960, there were seventeen layers.
194. Paul C. Light, Creating High Performance Govern-
ment: A Once-in-a-Generation Opportunity
(New York: New York University, 2011), p. 10.
Figure is for 1980–1992.
195. Light, People on People on People, pp. 1, 3–4. In
1960, there were seven cabinet departments and
451 senior executives.
196. Light, Creating High Performance Government,
p. 10. Middle managers figure is for 1980–1992.
Lower-level employees figure is for 1983–2003.
197. As derived from data in U.S. Merit Systems Protect-
ion Board, As Supervisors Retire: An Opportunity
to Reshape Organizations (Washington, DC: U.S.
Government Printing Office, 2009), p. 6. Figures
are for 1998–2008.
198. Gerald Mayer, Selected Characteristics of Private
and Public Sector Workers (Washington, DC: U.S.
Congressional Research Service, 2014), p. 16.
Figures are for 2013.
199. Anthony Downs, Inside Bureaucracy (Boston:
Little, Brown, 1967), pp. 75–78, 262.
200. John Bohte, “School Bureaucracy and Student
Performance at the Local Level,” Public Admini-
stration Review 61 (January/February 2001),
pp. 92–99.
201. Kevin B. Smith and Christopher W. Larimer, “A
Mixed Relationship: Bureaucracy and School
Performance,” Public Administration Review 64
(November/December 2004), pp. 728–736.
202. Kenneth J. Meier and John Bohte, “Not with a
Bang, but a Whimper: Explaining Organizational
Failures,” Administration & Society 35 (March
2003), pp. 104–121. The quotations are on
p. 104.
203. Rhys Andrews, George A. Boyne, Jennifer
Law, and Richard M. Walker, “Centralization,
Organizational Strategy, and Public Service
Performance,” Journal of Public Administration
Research and Theory 19 (January 2009), pp.
57–80. The quotation is on p. 57.
204. Chan Su Jung, “Navigating a Rough Terrain
of Management: Examining the Relationship
between Organizational Size and Effectiveness,”
Journal of Public Administration Research and
The Fabric of Organizations: Forces 109
Theory 23 (October 2012), pp. 663–686. The
quotation is on p. 678.
205. Rajeev K. Goel and Michael A. Nelson,“Corruption
and Government Size: A Disaggregated Analysis,”
Public Choice 97 (October 1998), pp. 107–120.
Data are for 1983–1987.
206. Philip H. Mirvis and Edward J. Hackett, “Work
and Work Force Characteristics in the Nonprofit
Sector,” Monthly Labor Review 106 (April 1983),
pp. 3–12.
207. Warwick, et al., A Theory of Public Bureaucracy,
pp. 72–80, 188–191.
208. Figure is for 2016.
209. “Unrequired Reading,” Washington Post (May 3,
2014). Figures are for 2014.
210. Congress eliminated fifty-three reports in 2014
and identified another 223 that could be elimi-
nated or consolidated in 2016.
211. Arjen van Witteloostuijn and Gjalt de Jong,
“Ecology of National Rule Birth: A Longitudinal
Study of Dutch Higher Education Law, 1960–
2004,” Journal of Public Administration Research
and Theory 20 (January 2010), pp. 187–213. The
quotation is on p. 207.
212. Lisa Rein, “Obama Wants Regulations to Be
Effective, but Agencies Are Ignoring His Orders,
Study Finds,” Washington Post (November 5,
2015).
213. Meier and O’Toole, Bureaucracy in a Democratic
State, p. 60.
214. Clyde Wayne Crews, Jr., Ten Thousand
Commandments 2015: An Annual Snapshot of
the Federal Regulatory State (Washington, DC:
Competitive Enterprise Institute, 2016), p. 2.
215. U.S. Office of the Federal Register, Federal
Register Pages Published Annually (Washington,
DC: Author, 2016).
216. Associated Press, “Michigan Announces Net
Reduction of 2,100 Rules,” Freep.com (November
12, 2015). Figure is for 2015.
217. Diane Ravitch, “Burden of Rules, Regulations Is
Eroding School Discipline,” Savannah Morning
News (January 3, 2005).
218. Keon S. Chi, Kelley A. Arnold, and Heather M.
Perkins, “Privatization in State Government:
Trends and Issues,” Spectrum 76 (Fall 2003),
p. 14. Figure is for 2002.
219. Gene A. Brewer and Richard M. Walker,
“The Impact of Red Tape on Governmental
Performance: An Empirical Analysis,” Journal of
Public Administration Research and Theory 20
 110 PA R T I I Public and Nonprofit Organizations
(January 2010), pp. 233–257. The quotation is on
p. 234.
220. Meier and O’Toole, Bureaucracy in a Democratic
State, p. 62.
221. John Meyer, W. Richard Scott, and David Strang,
“Centralization, Fragmentation, and School
District Complexity,” Administrative Science
Quarterly 32 (June 1987), pp. 188–201.
222. James L. Garnett, Justin Marlowe, and Sanjay
K. Pandey, “Penetrating the Performance
Predicament: Communication as a Mediator
or Moderator of Organizational Culture’s
Impact  on Public Organizational Performance,”
Public Administration Review 68 (March/April
2008), pp. 266–281. The quotations are on
p. 277.
223. Brewer and Walker, “The Impact of Red Tape
on Governmental Performance,” pp. 233, 248.
Emphasis is original.
224. Mirvis and Hackett, “Work and Work Force
Characteristics in the Nonprofit Sector.”
225. Warwick, et al., A Theory of Public Bureaucracy,
pp. 72–80, 188–191,
226. Moon, “The Pursuit of Managerial Innovation,”
p. 38.
227. Mary K. Feeney and Barry Bozeman, “Stakeholder
Red Tape: Comparing Perceptions of Public
Managers and Their Private Consultants,”
Public Administration Review 69 (July/August
2009),  pp. 710–726. The quotation is on
p. 710.
228. Jessica Word and Sung Min Park, “Working across
the Divide: Job Involvement in the Public and
Nonprofit Sectors,” Review of Public Personnel
Administration 29 (June 2009), pp. 103–133. The
quotation is on p. 125.
229. Mary K. Feeney and Hal G. Rainey, “Personnel
Flexibility and Red Tape in Public and Nonprofit
Organizations: Distinctions Due to Institutional
and Political Accountability,” Journal of Public
Administration Research and Theory 20 (October
2010), pp. 801–826.
230. David Giauque, Simon Anderfuhren-Biget, and
Frederic Varone, “Stress Perception in Public
Organisations,” Review of Public Personnel
Administration 33 (March 2013), pp. 58–83.
231. Hal G. Rainey, Sanjay Pandey, and Barry Bozeman,
“Research Note: Public and Private Managers’
Perception of Red Tape,” Public Admini-
stration Review 55 (November/December 1995),
pp. 567–574.
232. Word and Park, “Working across the Divide: Job
Involvement in the Public and Nonprofit Sectors,”
pp. 103–133. The quotation is on p. 125.
233. Bozeman and Kingsley, “Risk Culture in Public
and Private Organizations.”
234. Feeney and Bozeman, “Stakeholder Red Tape,”
p. 721.
235. Leisha DeHart-Davis and Sanjay K. Pandey “Red
Tape and Public Employees: Does Perceived Rule
Dysfunction Alienate Managers? Journal of Public
Administration Research and Theory 15 (January
2005), pp. 133–149.
236. Branco L. Ponomariov and P. Craig Boardman,
“Organizational Pathology Compared to What?
Impacts of Job Characteristics and Career
Trajectory on Perceptions of Organizational Red
Tape,” Public Administration Review 71 (July/
August 2011), pp. 582–597.
237. Feeney and Rainey, “Personnel Flexibility and
Red Tape in Public and Nonprofit Organizations,”
p. 819.
238. Randall Davis, “Union Commitment and
Stakeholder Red Tape,” Review of Public
Personnel Administration 33 (December 2013),
pp. 365–383.
239. Ponomariov and Boardman, “Organizational
Pathology Compared to What?” p. 593.
240. Feeney and Bozeman, “Stakeholder Red Tape,”
p. 819.
241. Nina M. van Loon, Peter L. M. Leisink, Eva Knies,
and Gene A. Brewer, “Red Tape: Developing and
Validating a New Job-Centered Measure,” Public
Administration Review 76 (July/August 2016),
pp. 662–673.
242. Brewer and Walker, “The Impact of Red Tape on
Governmental Performance,” pp. 247–248.
243. Sanjay K. Pandey, David H. Coursey, and Donald
P. Moynihan, “Organizational Effectiveness and
Bureaucratic Red Tape: A Multimethod Study,”
Public Performance & Management Review 30
(March 2007), pp. 398–425. The quotation is on
p. 416.
244. David S. Kassel, “Performance, Accountability,
and the Debate over Rules,” Public Administration
Review 68 (March/April 2008), pp. 241–252. The
quotation is on p. 241.
245. Leisha DeHart-Davis, “Green Tape and Public
Employee Rule Abidance: Why Organizational
Rule Attributes Matter,” Public Administration
Review 69 (September/October 2009), pp. 901–
910. The quotations are on p. 906.

246. Paraskevi S. Christoforou and Blake E. Ashforth,
“Revisiting the Debate on the Relationship
between Display Rules and Performance:
Consolidating the Explicitness of Display Rules,”
Journal of Applied Psychology 100 (January
2015), pp. 249–261.
247. Gjalt de Graaf and L.W.J.C. Huberts, “Portraying
the Nature of Corruption Using an Exploratory
Case Study Design,” Public Administration
Review 68 (July/August 2008), pp. 640–653.
248. Downs, Inside Bureaucracy, p. 145.
249. Martin Schulz, “Limits to Bureaucratic Growth:
The Density Dependence of Organizational Rule
Birth,” Administrative Science Quarterly 43
(December 1998), pp. 845–876. The quotations
are on pp. 845, 870.
250. Marshall W. Meyer, Change in Public Bureau-
cracies (Cambridge, UK: Cambridge University
Press, 1979), p. 219.
251. Antonsen and Jorgensen, “The ‘Publicness’ of Public
Organizations,” p. 350. Emphasis is original.
252. Ibid.
253. Warwick, et al., A Theory of Public Bureaucracy,
pp. 76, 192, 200, 210.
254. Ibid., p. 210.
255. Claire L. Felbinger, “Impediments to Effective
Management in Bureaucracies: The Perceptions
of Public Works Directors,” Public Productivity
& Management Review 14 (Autumn 1990),
pp. 7–17. The quotations are on pp. 12, 15.
256. David G. Houghton, “Citizen Advisory Boards:
Autonomy and Effectiveness,” American Review
of Public Administration 18 (September 1988),
pp. 282–295. The quotation is on p. 293.
257. Jeff Gill and Kenneth J. Meier, “Ralph’s Pretty-
Good Grocery versus Ralph’s Super Market:
Separating Excellent Agencies from the Good
Ones,” Public Administration Review 61 (January/
February 2001), pp. 9–17. The quotation is on
p. 14.
258. Alfred A. Marcus, “Implementing Externally
Induced Innovations: A Comparison of Rule-
Bound and Autonomous Approaches,” Academy
of Management Journal 31 (June 1988), pp. 235–
256. The quotation is on p 249.
259. Sean Buchanan and Patricia Bradshaw, “The
Voice from Outside: Stakeholder Resistance in
Nonprofit Organizations,” Nonprofitquarterly.
org (December 13, 2011).
260. Teresa D. Harrison and Christopher A. Laincz,
“Entry and Exit in the Nonprofit Sector,” B.E.
The Fabric of Organizations: Forces 111
Journal of Economic Analysis & Policy 8 (July
2008), pp. 1–19.
261. Dag Wollebaek, “Survival in Local Voluntary
Associations,” Nonprofit Management &
Leadership 19 (Spring 2009), pp. 267–284.
262. Gary Ruskin, Spooky Business: Corporate
Espionage against Nonprofit Organizations
(Washington, DC: Essential Information, 2013).
The quotation is on p. 4.
263. Richard L. Meier, “Communications Overload:
Proposals from the Study of a University Library,”
Administrative Science Quarterly 7 (March 1963),
pp. 529–544. The quotation is on p. 540.
264. John D. Sellars, “The Warning Signs of Insti-
tutional Decline,” Trusteeship 2 (November/
December 1994), p. 13.
265. Arthur G. Bedeian and Achilles A. Armenakis, “The
Cesspool Syndrome: How Dreck Floats to the Top
of Declining Organizations,” Academy of Manage-
ment Executive 12 (February 1998), pp. 58–67.
266. Greg Chen, “Does Meeting Standards Affect
Charitable Giving? An Empirical Study of
New York Metropolitan Charities,” Nonprofit
Management & Leadership 19 (Spring 2009),
pp. 349–365.
267. Kristina Jaskyte, “Does Size Really Matter?
Organizational Size and Innovations in Nonprofit
Organizations,” Nonprofit Management &
Leadership 24 (Winter 2013), pp. 229–247.
268. Chen, “Does Meeting Standards Affect Charitable
Giving?”
269. Ruth McCambridge, “Stalking the High Net
Worth Donor: U.S. Trust Report Provides
Guidance on Their Habits,” Nonprofitquarterly.
org (October 25, 2016).
270. Wollebaek, “Survival in Local Voluntary Asso-
ciations,” p. 274.
271. Thad Calabrese and Cleopatra Grizzle, “Debt,
Donors, and the Decision to Give,” Journal of
Public Budgeting, Accounting & Financial Man-
agement 24 (Summer 2012), pp. 221–254.
272. Chen, “Does Meeting Standards Affect Charitable
Giving?”
273. Thad D. Calabrese, “Do Donors Penalize Non-
profit Organizations with Accumulated Wealth?”
Public Administration Review 71 (November/
December 2011), pp. 859–869.
274. Dean C. Ludwig, “Adapting to a Declining
Environment: Lessons from a Religious Order,”
Organization Science 4 (February 1993),
pp. 41–56. The quotation is on p. 54.
 112 PA R T I I Public and Nonprofit Organizations
275. Wollebaek, “Survival in Local Voluntary Asso-
ciations,” pp. 272, 273, 280.
276. Joseph Galaskiewicz, Wolfgang Bielefeld, and
Myron Dowell, “Networks and Organizational
Growth: A Study of Community-Based Non-
profits,” Administrative Science Quarterly 51
(September 2006), pp. 337–380.
277. Richard Callahan, “Governance: The Collision of
Politics and Cooperation,” Public Administration
Review 67 (March/April 2007), pp. 290–301.
278. Kathryn R. Harrigan, “Strategic Formulation in
Declining Industries,” Academy of Management
Review 4 (June 1980), pp. 599–604.

The Fibers of
Organizations: People
“
T hreads” served as our metaphor for theo-
ries of organizations. “Fabric” referred to the
interwoven forces that form organizations. And
“fibres”—the woof, weft, and tensile strength of
organizations—describes people in organizations.
WHY WORK FOR THE PEOPLE?
Sixty-three percent of government workers prefer to
work for government rather than business (preferred
by 36 percent),1 and local government employees
appear to feel the most positive about working for
government.2
The Draw of the Public Sector
The reasons why people enter, or do not enter, public
service are reasonably clear.
Starkly Different Values Those people who enter
government careers have high public service moti-
vation (i.e., the desire to serve society in a secular
context), positive views of the public sector, and
negative perceptions of the private one. Those who
enter business hold values that are “completely
opposite. . .. Differences between both groups are
larger and more classical than current literature and
previous studies suggest.”3
Money Does Not Make Their World Go Around As
we noted in Chapter 3, high salaries are consider-
ably less important to those who work in govern-
ment than they are to those who enter the corporate
CHAPTER
sphere. Perhaps it should not surprise us, then, that
public administrators also value advancement less,4
and score “significantly higher” in their tolerance for
delayed gratification5 than corporate managers.
Where compensation does matter to public
employees is as a way of keeping score. In an experi-
ment, a random sample of state workers was granted
full knowledge of their colleagues’ salaries. Those
with salaries below the median for their depart-
ments and for the same jobs reported much lower
satisfaction with both their pay and their jobs, and
there was a “significant increase in the likelihood of
looking for a new job.” Those employees earning
above the median, however, reported no higher sat-
isfaction at all, and were no more inclined to stay
with their employer than they had been before they
knew that their pay was higher than the median.6
When it comes to compensation, governments
can’t win.
Making a Difference The classic view of public
administration is that of a calling, and, to a surpris-
ing degree, it still is. A study of zookeepers found that
they “were more likely to see their work as a moral
duty, to sacrifice pay, personal time, and comfort.”7
During the disastrous roll-out of HealthCare.gov, in
2013, frontline workers bent the rules and worked
overtime to help applicants gain access to services far
more than they “moved away” from serving clients
under extraordinarily difficult circumstances.8
Additional research confirms that mission
matters.9 Thirty-seven percent of federal managers
and professionals cite “doing something worthwhile”
113
 114 PA R T I I Public and Nonprofit Organizations
as their primary reason for taking their jobs, com-
pared with just 28 percent of businesspeople.10
Holding a public administrative office correlates
more strongly with public service motivation than
any other factor, including even one’s “personal char-
acteristics.”11 (Personal characteristics that associate
with high levels of public service motivation include
women, people with more education, and members
of professional associations.12)
There is a tangible connection between public
service motivation and making a difference—a good
difference.
Organizationally, “public service motivation
tends to be positively related to job satisfaction,
choosing a public sector job, individual and organ-
izational performance, organizational and job com-
mitment, person-organization fit, and organizational
citizenship behavior.” It also associates with reduced
“turnover intentions” among employees. A massive
literature review found that not only could public
agencies identify their applicants’ levels of public
service motivation when hiring, but that effective
managers could raise their employees’ public service
motivation.13
Public administrators’ service motivation also
associates with a desire to do something worth-
while that extends beyond bureaucracy’s bounds.
They bring their service ethos to the professional
associations that they join, “and these values, in
turn, are positively related to board behavior.”14
Governments’ managers are more compassionate
than the average American;15 they volunteer for
charity work (educational and political organiza-
tions are favored16), they match them in contrib-
uting money to charity,17 they donate blood more
frequently than their private-sector counterparts,
and “Overall, public servants are far more active in
civic affairs than are other citizens,” and appear to
be “catalysts” in improving society at large.18 This is
a good thing, as a large body of research finds that
volunteering for,19 and giving money to,20 others
correlate with better health and happiness and
employees’ perception that their work positively
affects the well-being of others, which is one of job
satisfaction’s most important components.21
A Deep-Seated Need for Security There is a
fourth motivation underlying why people work for
government, and it eclipses all else. It is: job security.
Sixty-six percent of federal administrators and
professionals say that “job security” was their prin-
cipal motivation for accepting their jobs (including
nearly half, a plurality, of upper-level new federal
hires,22 and an astounding 97 percent of entry-level
ones,23 who say this), compared with 57 percent of
for-profit managers.24 The need for security tran-
scends one’s public career; those who work in the
public sector also share a uniquely strong desire
for secure retirements.25 In contrast to compensa-
tion, governments win in this sphere: government
employees at all levels are satisfied with their pen-
sions (82  percent) and retirement healthcare insur-
ance (80 percent), compared with nongovernment
employees’ 57 percent for each of the two job
aspects; these are the highest disparities in the study
of thirteen aspects.26
The Draw of the Independent Sector
The sector with the most committed professionals is
the independent one.
Money matters much less to these workers than
those in other sectors. Full-time nonprofit employ-
ees earn only 67 percent of what for-profit employ-
ees earn in salaries and benefits, and 73 percent of
what government workers earn, yet rate their pay
as fair.27 (At least sixty-seven nonprofit chief exec-
utives, however, are paid between $500,000 and
$1 million—compensation that exceeds that of
any public counterpart—and the median CEO pay
exceeds $120,000.28)
The opportunity to do “something worthwhile”
in their organizations means much more. An impres-
sive 65 percent say this is why they work in the inde-
pendent sector, a percentage that is two-fifths higher
than that for the federal sector and almost three-
fifths higher than the corporate one.29 “Purpose-
driven” Americans, according to one study, make
up 28 percent of the population, but account for
46  percent of nonprofit employees, second only to
educators, at 48 percent.30 Those who work in non-
profit organizations also serve as volunteers more
intensively than either their public31 or private32
counterparts.
And job security means much less to nonprofit
employees. A slender 30 percent state that “having
a secure pay check” is the primary reason they
accepted their jobs, compared with 59 percent of

federal employees and 68 percent of private-sector
managers.33 Nonprofit employees are more inclined
to undertake riskier behavior and make riskier
choices than are workers in the other two sectors.34
THE BEHAVIORAL BUREAUCRAT
Organizational people are different. Very different.
“Administrative Man”
In Models of Man,35 Herbert Simon contrasted psy-
chological, or Freudian, man, as the model of the
human condition used by psychologists to predict
the behavior of individual persons who are beset by
ticks, quirks, and emotional needs, with rational, or
economic, man, which is the model used by econ-
omists to predict the behavior of the economy.
Economic man has the same goal (acquiring money)
as everyone else in the economy, and behaves (ration-
ally) just like everyone else to achieve it.
Administrative man bridges psychological man
and rational man. Administrative man has all the
unique idiosyncrasies and limited reasoning power
of psychological man, but, like economic man, also
understands the mission of the organization, and
knows that his or her interests and those of the
organization can be somehow synchronous and
complementary. (Recall, in this light, our discussion
of “rational interest” in Chapter 3.)
“The Bureaucratic Personality” and “The
Unbureaucratic Personality”
This freakish fusion of the Freudian and the fiscal,
when combined with any organization’s obses-
sion with minimizing uncertainty, can produce
“the bureaucratic personality,” a phrase that res-
onates with “Veblen’s concept of ‘trained incap-
acity,’ Dewey’s notion of ‘occupational psychosis’
or Warnotte’s view of ‘professional deformation.’”
Rendering the bureaucracy ever more rigidly rule-
bound results in “overconformity” among its
bureaucrats, who have made inflexibility and indif-
ference an art form.36
Not all bureaucrats succumb to this sad syn-
drome, and some American public administrators
working in centralized bureaucracies that are berib-
boned in reams of red tape rebel by developing an
The Fibers of Organizations: People 115
“unbureaucratic personality” that is found in non-
conformist, risk-prone public administrators who
bend rules in order to provide better service.37 Of
greater importance, the syndrome itself seems to be
weak or even absent in most American bureaucra-
cies. As we explained in Chapter 1, the vast major-
ity of Americans are pleased by how bureaucrats
treat them, indicating that citizens are dealing either
with unbureaucratic rule-benders or (we think more
likely) rule-abiding bureaucrats in agencies that are
suffused with a public-service ethic. As noted in
Chapter 4, following well-designed regulations can,
in fact, lead to greater public organizational success
and accountability, thereby completing this benefi-
cent circle.
The Energetic, Committed Bureaucrat
Americans work hard. On average, they work
longer than do workers in other developed countries
(among which the United States ranks twenty-eighth,
or ninth from the bottom, for a healthy “work-life
balance”38), or about thirty-four hours per week; a
fifth of Americans work forty-nine hours or more
per week,39 and more than two-fifths take no vaca-
tions, not even of one day.40 And their work hours
are growing; Americans work eleven more hours per
week, on average, than they did in the 1970s.41
Public Administrators Public administrators seem
to “hang in there” with the same tenacity as their
private-sector counterparts,42 and studies “do not
indicate a terrible malaise in the public sector if the
private sector is used as a baseline.”43
Where employees in the public and private
sectors diverge is in the depth of commitment to
their jobs, and some research suggests that public
administrators may hold a passion for their work
that borders on the unhealthy. Half of federal exec-
utives, but not much more than a third of business
executives, say that their career provides them with
the most “life satisfaction.”44
Bureaucratic Burnout Burnout among American
managers attains “serious proportions in both
arenas,” but burnout in the public sector is “not
appreciably worse” than in the private sector.45
Eighty-five percent of federal employees who are
eighteen to twenty-nine years old feel that they get
 116 PA R T I I Public and Nonprofit Organizations
to use their “strengths to do what you do best every
day” at work versus 82 percent of their non-federal
counterparts. But, at thirty and thereafter, federal
workers say this consistently less frequently than do
non-federal employees, and, when they are sixty-five
or older, there is an eleven point gap between the
two groups.46 Growing federal retirement rates
reflect this possible burnout; the federal workforce
already is shrinking, and, by 2017, 31 percent of
federal employees were eligible to retire.47
Burnout is not limited to the feds. “City employ-
ees feel more time stress than their state and federal
counterparts,”48 and it is indisputable that some
types of local employment, such as public safety,
have inherently high levels of stress.
Nonprofit Professionals Nonprofit employees may
be the most devoted to their jobs. They score highest
in “total energy and investment in the job,” followed
by government workers and corporate employees,
respectively.49
The Dissatisfied Bureaucrat, the Satisfied
Nonprofit Professional?
Most Americans like their work. National polls
taken over three decades find that, in nearly every
survey, four-fifths of Americans report that they are
satisfied with their jobs, two-thirds would take the
same job again “without hesitation,” and only one
out of eight is dissatisfied with his or her job.50
Bureaucratic Satisfaction Bureaucrats provide
some variation on these themes, although the
research on this topic is singularly opaque, and con-
tradictory findings on the job satisfaction of public
administrators are “equally abundant.”51 There is,
however, at least one commonality in this literature:
public employees who possess emotional intelli-
gence, or the ability to comprehend, harness, and
manage moods in themselves and in others, are more
satisfied with their jobs than are those who lack such
intelligence.52
From the 1960s through the 1970s, the
job  satisfaction of federal workers was low and
falling lower.53 For the last three decades, however,
job satisfaction has risen steadily, and, over thirty
years, from 64 to 75 percent of federal employees
report that they are not only satisfied in their jobs,54
but more than six out of ten also would recom-
mend their government as a place to work55—more
than doubling from under a fourth in the mid-
1980s.56
As we noted in Chapter 3, federal employee
engagement (of which, recall, job satisfaction is one
of four components) decreased in the 2010s, and the
same may be said of their job satisfaction. Federal
workers’ morale is the lowest it has ever been since
an annual survey of federal workers began in 2003.
“In every measure of workplace satisfaction, federal
employees ranked significantly lower than their
private sector counterparts. The one exception:
federal workers are more likely to enjoy their jobs,”
with 96 percent of them “willing to put in extra
effort to accomplish their work.”57
State and local employees slightly lead federal
workers in their overall job satisfaction: state
employees by two percentage points, and local ones
by five.58
Third-Sector Satisfaction Nonprofit workers,
however, may be the happiest of campers. A remark-
able 58 percent say that they are “very satisfied
with their jobs overall,” and no other sector comes
close to this: 49 percent of federal employees and
44 percent of corporate ones are “very satisfied,”59
and 39 percent of state workers and 50 percent of
local employees “liked their jobs very much.”60
Gaining Recognition: The Frustrated, Hypercritical
Bureaucrat Public administrators are significantly
less satisfied with how they are recognized than are
their corporate counterparts.61 Recall that, when
public professionals learn that their peers are earning
higher salaries than they are for the same work (and
pay is a potent form of recognition), their dissatis-
faction soars and the job search is on.62
The reasons underlying public administrators’
frustration are enigmatic. It may be a consequence
of uniquely high psychological needs for recogni-
tion, or their unhappiness “could simply reflect more
stringent norms or expectations among government
managers” of their colleagues than are held by cor-
porate executives.63
There is, in fact, some evidence that public
administrators do hold their colleagues to unusu-
ally high, even harsh, standards. A review of surveys
found that “Federal workers are the major purveyors

of the misrepresentation that the government has
too many poor performers. . . . Federal workers seem
almost obsessed with describing the poor-performer
problem.”64
Gaining Recognition: The Upbeat Nonprofit
Professional Twenty-six percent of nonprofit pro-
fessionals say that their organizations need to do
better in rewarding “a job well done.”65 This is half
or less of the proportions (noted earlier) of federal
and private-sector employees who are unhappy
about their recognition. This low level of nonprofit
dissatisfaction is all the more impressive when we
realize that independent-sector employees are less
likely to be promoted on the basis of performance
(and are less likely to be promoted, period) than are
their counterparts in the private sector.66
A Management Challenge
So here we have, in sum, the public and nonprofit
managers’ maze: Compared with business admin-
istrators, government executives are faced with
employees who are hypercritical loners determined
to do something of social importance, pouting prima
donnas demanding unremitting recognition but who
are uninterested in being bought off with monetary
bonuses.
Managers in the independent sector share these
characteristics—with a vengeance. They are more
committed to making a difference in society and
have lower needs for wealth, recognition, and job
security than either public administrators or private
ones. According to some research, nonprofit employ-
ees also have a greater need to dominate colleagues
and may be wilier in getting their way than are their
private-sector counterparts.67
Certainly, these are precisely the kinds of quali-
ties that we want in our public and nonprofit admin-
istrators. But they make for a tough workforce to
manage—and to be managed by.
GROWING INTO THE
ORGANIZATION
The circumstances under which people are born and
how they mature determine how people perceive
their organization and behave in it.
The Fibers of Organizations: People 117
Born to Conserve or Born to Rebel?
Let us consider, first, birth. The order of the per-
son’s birth relative to his or her siblings, if any, is
the primary factor in determining a person’s pro-
pensity to rebel—that is, to engage in revolutionary
creativity.68
Those who are “firstborns” in a family iden-
tify with power and strength, and, when “later-
borns”  enter into the family picture, firstborns
use their power, strength (and size), to defend their
position in the family structure (and perhaps long
after they have left it; adult firstborns with siblings
have substantially less net worth than those without
siblings69). Firstborns tend to be more jealous,
aggressive, defensive, and confident than later-
borns,  and are overrepresented among Nobel  lau-
reates  and political leaders. Winston Churchill,
George  Washington, and Rush Limbaugh are
firstborns.
Laterborns (and firstborns who had deep con-
flicts with their parents), by contrast, tend to identify
with fellow underdogs, question authority and the
status quo, be more open, imaginative, independ-
ent, generous, and liberal than their firstborn sib-
lings. Laterborns are disproportionately represented
among explorers, rebels, and heretics. Vladimir
Lenin, Thomas Jefferson, and Bill Gates are later-
borns.
Why is this? The answer is biological and
Darwinian: Childhood is the search for a stable
niche in the family structure, just as evolution is
the  result of the cell’s search for a stable niche in
nature. Both processes pertain to Charles Darwin’s
“principle of divergence,” which holds that diver-
sification (whether in the family or in nature) is a
tactic that helps the individual minimize competi-
tion with  other individuals for scarce resources.
Therefore, it “pays” firstborns to be conservers
and protective of all the love and rewards that they
(once) were receiving from their families on an
exclusive basis, just as it “pays” laterborns to seek
new ways of gaining entry to that love and those
rewards.
Though not infallible, birth order is the major
determining factor in explaining why some people
defend the establishment and other revolt against it.
Firstborns are, literally, born to conserve. Laterborns
are, literally, born to rebel.
 118 PA R T I I Public and Nonprofit Organizations
Life’s Turning Points
Birth order plays a large part in the progressive
mastery of psychological tasks that determine what
sort of an adult one becomes. How one approaches
these tasks is known as “turning points.”
The first turning point occurs from birth to
year one, when trust or mistrust is inculcated into
one’s psyche as a result of one’s early experiences
with others. From one to six, the development
of autonomy (which “concentrates on keeping
potential rivals out . . . most often directed against
encroachments by younger siblings”) versus shame
and doubt. From six to ten, initiative (that is, “antic-
ipatory rivalry” directed against “those who have
been there first”) or guilt. From ten to fourteen,
industry (the child  “learns to win recognition by
producing things”) or inferiority. From fourteen to
twenty, identity versus role confusion. From twenty
to forty, intimacy or isolation. From forty to sixty-
five, generativity (an “interest in guiding the next
generation  . . . a parental kind of responsibility”)
versus stagnation. And from sixty-five until death,
ego integrity (“an emotional integration which
permits participation by followership as well as
acceptance of the responsibility of leadership”), as
opposed to overwhelming despair.70
Should one take a negative path at any given
turning point, all is not lost; with effort, a positive
path can be taken at the next turning point.71 We
know that most Americans (who already are among
the happiest people on earth72) choose positive paths
because most grow happier as they grow older. In
their younger years, men and African-Americans are
less happy than women and whites, but these differ-
ences vanish over time.73
Turning Points and the Organization
Life’s turning points are reflected in organizational
behavior.
Reality Shock When twenty-somethings enter
their first “real” jobs, then “reality shock” often can
slap them in the chops, and they must cope with
bottom-scraping disillusion. In the public sector,
students who have governmental internships are
measurably more cynical about, and less trustful of,
government, and hold a stronger belief that public
employees are incompetent, dishonest, and lazy, than
students who do not have internships.74
Reality shock is, regrettably, pervasive: “Studies
have consistently found that almost all workers in
all sectors are engaged when they begin a job,” but,
just six months later, not even two-fifths of them
remain engaged.75
Settle Down! By their thirties, employees have
overcome their reality shock and enter a period of
“settling down”76 and “career consolidation.”77 Not
everyone, however, settles down. In one examination,
a tenth of the sample remained “perpetual boys” and
never matured, while a larger group simply stag-
nated;78 in another, 45 percent of managers “had
major difficulties” during their career-consolidation
phase and could not create the basis for “an even
moderately satisfactory mid-life.”79
Mid-Life. Crisis! Although a “mid-life transition”
may occur from one’s late thirties through early
sixties, it is more likely to happen during one’s
mid-forties, and it may be experienced more by
women than by men.80 One adopts new lifestyles,
spouses, and careers; or one accepts that one’s life
and work have gone as far as they are likely to go,
and is fine with it; or one becomes embittered over
one’s sorry lot.81
It appears that if one has less egocentrism and
narcissism, and more tolerance, flexibility, and open-
ness, one improves one’s chances of weathering the
mid-life crisis.82 But some administrators find this
period so traumatic that they become “organiza-
tional sleepwalkers.”83
Meaning, Identity, and Disengagement Con-
tentment with one’s life and organization typically
rebounds during the late forties and fifties. This is a
period of “acceptance,”84 or “keeping the meaning”
of one’s life and personal principles.85 Alternatively,
however, people can become inflexible over a set of
principles that may have grown hollow over time.
The roller coaster of intertwined life and career
takes yet another dip in the mid-to-late fifties,
and continues to decline, although not as rapidly,
through the early sixties as one nears retirement.86
“As people enter mid-life, extrinsic rewards for
higher levels of performance and achievement lose
their luster, as interest in affirming one’s identity and

concerns for protecting the self-concept increase.”87
“The longer employees work in an organization, the
more engagement decreases until only 20 percent are
engaged after 10 years of service.”88
Opportunity Lost These realities betoken a lost
opportunity for public executives. Not only are ener-
gized young Turks enduring a disorienting reality
shock, but experienced old hands are withering:
“a better job of managing industrial scrap is done
than of managing the careers of older workers” in
the United States.89 The organization that is shrewd
enough to invest extra time and attention to its
employees in their twenties, and which provides
opportunities for counseling their youthful col-
leagues to employees in their sixties, not only could
reverse alienation among both the young and the
old, but also have a happier, more productive, and
more loyal workforce. Commonsensical as this is,
there is, regrettably, “a strong aversion on the part of
both mentors and protégés” in government toward
an organizational program that would impose such
relationships.90
NATIONAL CULTURE AND THE
ORGANIZATION
Just as birth order and aging influence how people
inside organizations behave in them, so does the
larger society in which they live. National culture,
or “the collective mental programming of people
in an environment,”91 is perhaps the single greatest
external determinant of organizational behavior.
One indicator: senior corporate executives judge a
startling 42 percent of their managers assigned to
projects overseas to have failed.92
Dimensions of National Culture
Certainly the most systematic and massive attempt
to categorize national cultures in ways that are
potentially useful to managers is by Geert Hofstede,
who identified five dimensions of national culture.93
Power Distance One dimension is power distance,
which refers to “the extent to which a society accepts
the fact that power in institutions and organizations
is distributed unequally.”94 Societies characterized
The Fibers of Organizations: People 119
by “small” power distance believe, among other
things, that: inequality should be minimized; super-
iors should be accessible; and all should have equal
rights. Cultures with a “large” power distance believe
that: a social order rightly assures proper inequal-
ities in society; superiors should be inaccessible; and
power should have privileges.
Uncertainty Avoidance Uncertainty avoidance
is the degree to which a culture feels threatened
by ambiguity. Cultures with “weak” uncertainty
avoidance have lower stress levels; believe time is
free; accept dissent; are more risk prone; are youth
oriented; and are not enamored by a lot of rules.
“Strong” uncertainty-avoidance cultures: experience
greater stress; believe time is money; promote con-
sensus over dissent; are security conscious, distrust-
ful of the young, and like a lot of rules.
Individualism-Collectivism Indivi dualism-
collectivism refers to a continuum ranging from
personal to social centeredness. In an individualist
culture society is seen as a loose grouping of people
whose primary concern is caring for themselves;
leadership is the ideal; and decisions are made by the
individual. In a collectivist culture: society reflects
a tight social framework in which in-groups are
distinguished from out-groups, and the in-group is
expected to take care of the individual member in
exchange for his or her total allegiance to it; mem-
bership in the in-group is the ideal; and decisions are
made by the group.
Masculinity-Femininity The masculinity-feminin-
ity dimension is a continuum ranging from a mas-
culine pole, in which assertiveness, performance,
money, independence, ambition, and indifference to
others dominate, to a feminine extreme in which nur-
turing, the environment, interdependence, service,
and caring for others are the preeminent values.
Long-Term/Short-Term Orientation Finally, long-
term/short-term orientation refers to a cultural per-
spective relative to time. Nations with a long-term
orientation are directed toward the future, and value
thrift and persistence. Countries with a short-term
orientation are more poised toward the past and
present, and place premiums on respect for tradition
and fulfilling social obligations.
 120 PA R T I I Public and Nonprofit Organizations
Patterns of Geography and Language
Countries tend to group along these dimensions by
geographic proximity. For example, the seven Latin
American countries that Hofstede surveyed are all cul-
tures that accept large inequalities of power relation-
ships, strongly avoid uncertainty, and are collectivist.
Asian countries are large power  distance countries,
collectivist, and have a long-term orientation.
Common language plays a part, too. All ten
English-speaking countries, including those in
Africa and Asia, are accepting of uncertainty and
are masculine; and, except for those in Asia, all are
individualistic.
The United States: is a small power distance
country; a weak uncertainty avoidance nation
(in fact, it is well below average, indicating high
risk-taking propensities and tolerance for dissent); is
exceptionally individualistic and masculine; and has
a short-term orientation.
National Culture and Organizational
Behavior
National culture affects organizational behavior in
intriguing ways.
GETTING AHEAD
National cultures are reflected in their bureaucracies,
even when those bureaucracies administer cultures far
removed from their own. From 1858 to 1947, the Civil
Services of the Crown in India (composed, typically, of
about 1,000 civil servants, of whom about a fifth were
routinely absent due to leaves and illness) administered
some 400 million Indians, Pakistanis, Bangladeshis,
and Burmese. Their management was sufficiently
adroit that Joseph Stalin, the Soviet dictator,
grumbled in 1939 to Joachim von Ribbentrop, the
Nazi foreign minister, that it was “ridiculous . . . that
a few hundred Englishmen should dominate India.”
How did one advance in such a civil service? Here
is one way.
Sir David Barr, “a man who was bald and diffident
as well as talented,” was persuaded to remind Lord
National Culture and Managerial Authority In
general, the smaller a culture’s power distance, the
less power that management has, and subordinates
are more likely to participate in decision making. In
the smallest power distance countries (e.g., Israel,
Norway) “the very idea of management prerogatives
is not accepted.”95
Nations with large power distances, such as
France and Italy, show little interest in participative
decision making, suggesting that workers in these cul-
tures “feel even more comfortable with superiors who
are real autocrats,”96 and they are much more accept-
ing of bullying by bosses than are workers in small
power distance societies.97 Even so, large power dis-
tance associates with a high level of stress at work.98
National Culture and the American Organization
American organizations, on the whole, tend to
protect the rights of individuals more effectively, are
better attuned to reality, are characterized by more
cooperation and innovation, and are generally more
open than European organizations. But the uniquely
heavy presence of professional specializations (a
product of American culture) in American organ-
izations leads to the creation of many centers of
Curzon, viceroy of India (1899–1905), that he
would be suitable for promotion to the Residency at
Hyderabad. Sir David sent a telegram to the viceroy
that read, in its entirety, “Psalm 132, verse 1.” Lord
Curzon looked up the biblical citation, which states:
“Lord, remember David.” Curzon, then in the hills of
northern India, telegraphed back, “Psalm 75, verse 6.”
(“For promotion cometh neither from the East, nor
from the West, nor from the South.”) Encouraged, Sir
David replied, “Psalm 121, verse 1.” (“I will lift up
mine eyes to the hills, from whence cometh my help.”)
The viceroy ended the exchange with, “I Kings, 2, verse
23,” which reads, “Go up, thou bald head.”
Sir David had won his promotion.
Source: David Gilmour, The Ruling Caste: Imperial Lives
in the Victorian Raj (New York: Farrar, Straus and Giroux,
2005), pp. 217–218.

authority that produce an abnormally high number
of jurisdictional disputes and render coordination
difficult.
Americans’ passion for due process of law
(another cultural characteristic) results in reams of
rules to protect each employee from injustices. But
more rules compound the turf wars and magnify the
role of the organization’s “lawyers,” or any official
who is in a position to delineate organizational turf
and untangle red tape. Lawyers, loosely defined,
often are effective enemies of innovation and change.
Hence, “willful individuals can block the intentions
of whole communities for a long time . . . and gen-
erally, a large number of vicious circles will protect
and reinforce local conservatism.”99
Despite these cultural obstacles, however, culture
also enhances organizational health. A meta-analysis
of 287 studies found that small power distance and
large individualism and masculinity, features that
are deeply embedded in American culture, correlate,
positively and strongly, with both high job satisfac-
tion and high performance.100
ORGANIZATIONAL POLITICS
In 1954, Dwaine Marvick published a little-known
monograph about the personality types that he dis-
covered among federal administrators and profes-
sionals. His research was prescient because, three
years later, the sociologist, Alvin Gouldner, published
his famous articles on “Cosmopolitans and Locals,”
based on his observations of employees in a small
college, which had an enduring academic impact.101
Marvick’s research, however, is more nuanced
and, obviously, more pertinent to public administra-
tors. Moreover, it is practical. Marvick asked, “What
must management do in order to cope with persons
having different career perspectives?”102 To answer
this, Marvick trisected public bureaucrats according
to “career types,” classifications that associate with
characteristics that can be found in any personnel
file. When combined with Marvick’s insights, these
data provide useful knowledge about one’s organi-
zational colleagues.
Institutionalists: Loyal and Lethargic
Marvick’s first career type is the institutionalists, who
correspond to Gouldner’s locals. Locals derive their
The Fibers of Organizations: People 121
power and sense of personal identity from internal
organizational factors; are loyal to the organization
as a whole; well satisfied with everything in it; sus-
picious of outsiders; and often are oriented toward
the past.
Marvick’s institutionalists are all that and
more. They are deeply demanding of organizational
advancement and prestige. (In contrast to nonprofit
managers, who place a high value on opportunities
for “increased responsibility,” government managers
prefer “advancement opportunities,”103 suggesting
that institutionalists may be closer to the norm in
public agencies than we might find comfortable.)
Institutionalists tend not to stress the task-oriented
features of their jobs, but prefer to emphasize its
benefits (recall that public administrators display an
inordinate interest in retirement plans104), and are
highly sociable, optimistic, complacent, and fiercely
loyal to their agency and co-workers.
Institutionalists can become rule-oriented and
inflexible; their sociability can degenerate into
cliquishness, their loyalty into recalcitrance to
change, and they resist objective performance evalu-
ation. Yet, institutionalists stabilize the bureaucracy,
and furnish the needed lubrication among interper-
sonal relationships.
The personnel files of institutionalists reveal
that they are typically mid-level bureaucrats with
long careers in government, often in the military;
are encumbered by few family ties; possess relatively
low educational attainments; and frequently change
positions (though do not necessarily advance) within
the government.
Specialists: Professional and Maladjusted
Specialists cluster at the opposite end of the spec-
trum. They are similar to Gouldner’s cosmopolitans,
who relate to factors external to the organization,
such as their professional associations; are more
loyal to a subunit of the organization than to the
organization as a whole; are dissatisfied with many
aspects of it; and are more highly educated, special-
ized, and alienated from their colleagues.
Again, as with institutionalists, Marvick’s spe-
cialists are all that and more. Specialists are not par-
ticularly concerned about advancement, and have
virtually no interest in organizational status. What
they do want very badly, however, is to use their
 122 PA R T I I Public and Nonprofit Organizations
professional skills. They are loners and are by far
the most critical of their agency’s performance and
of bureaucratic procedures generally; hence, they are
“manifestly maladjusted” in their working relation-
ships.105 Although they are less likely to be involved
in group decisions, specialists actually have more
influence within the agency than institutionalists.
Specialists tend to displace the agency’s goals
because their individual projects are more important
to them than the organization’s welfare, and this pro-
pensity can diminish organizational performance.
Moreover, their highly critical cast and lack of place
commitment can cause sinking morale. Yet, when
properly placed, specialists can get things done, and
they are not inclined to heighten organizational ten-
sions by competing politically with colleagues.
In terms of career histories, specialists usually
have more experience in private companies and less
military time than institutionalists; unlike institu-
tionalists, who occupy generalized managerial slots,
specialists are high ranking, highly educated, and,
obviously, highly specialized professionals.
Institutionalists, Specialists, and
Organizational Innovation
Although specialists traditionally have been credited
as the sole founts of organizational innovation, and
institutionalists as their wary obstructionists, we are
learning that organizational creativity is strength-
ened less when specialists work alone, and more
when specialists and institutionalists work together.
Specialists know better what to do, and institu-
tionalists know better how the organization could
do it. Less effective is a combination of two special-
ists; their outer-directed needs and ignorance of the
local organization result in less innovative organiza-
tions. The least innovative organizations are those
characterized by two institutionalists, neither one of
whom clearly understands what innovations might
be useful, so they choose few, if any.106
Hybrids: Political and Unpredictable
Gouldner found only two career types, cosmopoli-
tans and locals, in his campus observations. Marvick,
however, uncovered a third: hybrids, or politicized
experts. Hybrids draw their characteristics from
both institutionalists and specialists.
Like institutionalists, hybrids are very concerned
with acquiring executive positions and moving up
to higher-paying jobs (interestingly, in this light,
hybrids typically have far heavier family responsi-
bilities than either institutionalists or specialists), are
not especially critical of bureaucratic paraphernalia,
and are well adjusted to their jobs. Like specialists,
hybrids are uninterested in organizational prestige,
and become disgruntled when distracted from their
work.
Hybrids bring the most dangers and benefits to
the organization. Their chief peril lies in their insta-
bility. Hybrids are fair weather friends, “superficial
and showy performers.”107 Their lack of both place
and skill commitments renders them unpredictable.
Yet, precisely because they have no sublimated needs,
hybrids are the most likely to assess, accurately and
holistically, the dynamics and problems of the organ-
ization. Although later studies have concluded that
the person who is likeliest to enhance both organi-
zational stability and innovation is one who blends
the qualities of institutionalists and specialists—that
is, he or she is loyal to the organization and sensitive
to the environment108—Marvick found that hybrids
must be watched, for they are prone to change the
organization purely for their own self-betterment.
Hybrids’ personnel files show that they are
highly educated professionals, occupying relatively
high ranks, and have significant work experience in
both the private and public spheres.
WHAT IS LEADERSHIP?
The people generally cited as the likeliest to alter
organizations are called leaders.
The Leadership Literature
Although the term, “leader,” surfaced in the English
language around 1300, “leadership” did not appear
until another half millennium had passed.109 Given
its relatively recent origin, it is surprising that no
aspect of organizational behavior has had more
written about it than has leadership; the number
of publications about leadership appears to double
from each preceding decade,110 and there may be
some 10,000 published studies on the subject.111
Despite the fact that most of the country’s found-
ers, as recounted in Chapter 1, questioned the whole

idea of political leadership (John Adams, the second
president, wrote that the people should “consider
themselves the fountain of power. . .. They must be
taught to reverence themselves, instead of adoring
their [civil] servants, their generals, admirals,
bishops, and statesmen”112), the United States is the
frothing fount for much of the leadership literature.
Americans “are unabashed in their zest for leader-
ship [and] leadership has become something of a cult
concept,”113 as indicated by the fact that American
companies spend some $14 billion a year on leader-
ship-training seminars.114
Not so in other countries. The French, for
example, have no word that translates well as “lead-
ership” (the classic French word for leader is chef),
and are reduced, in a culture that officially bans the
Anglicization of its language, to referring to le lead-
ership, and leader is beginning to replace chef. (Zut,
alors!) Germans, Italians, Spaniards, and some Latin
Americans carry embarrassing fascist baggage in
their words for leader—führer in German, duce in
Italian, and caudillo or jefe in Spanish—which may
explain their intellectual disinclination to dwell on
leadership.
In light of its scholarly popularity, at least in the
United States, it is passing strange that so few agree
on what leadership even means. One reviewer found
that more than three-fifths of the writings on lead-
ership never defined it,115 and another unearthed
130 different definitions of leadership among those
writers who bothered to define it.116
Leadership “is an influence relationship among
leaders and followers who intend real change that
reflect their mutual purposes.”117 We like this defini-
tion because it stresses non-coercive manipulation by
both leaders and followers; the presence of multiple
leaders as well as multiple followers; the purposeful
attainment of substantive change; and teamwork.
Leadership or Administration?
Is leadership different from administration? Yes. Is
one more important to organizational success than
the other? No.
Leadership deals with change. Administration
copes with complexity. Both are equally vital to
organizational success.
Both leadership and administration involve
“deciding what needs to be done,” creating the work
The Fibers of Organizations: People 123
and relationships to achieve it, “and then trying
to insure that those people actually do the job.”
Leadership’s way of accomplishing these three tasks
is to set a direction—create a vision—for the organ-
ization, and then align people, communicate, and
inspire to fulfill it. Administration plans and budgets
for the vision, and organizes, staffs, controls activi-
ties, and solves problems to implement it.118
In periods of slow change and a placid environ-
ment, administration is of greater significance; in
times of rapid change and a turbulent environment,
leadership is. “A peace time army can usually survive
with good . . . management up and down the hierar-
chy . . . . A war time army, however, needs competent
leadership at all levels. No one yet has figured out
how to manage people effectively into battle; they
must be led.”119
Are Leaders Needed?
This dramatic and inspiring image of “The Leader”
at the head of charging warriors persuades the less
palpitating among us to ask: Are we being conned?
Do we really need leaders?
More precisely put, do organizations need hier-
archical leaders, or those people who occupy high
executive office? This question is even more radical
than that of whether we need leaders, because chief
executives do a lot more than lead. “Leadership”
is only one of ten distinct roles, such as distur-
bance handler and spokesperson, that an executive
plays,120 and these executive duties are common to
both the public and private sectors, perhaps because
“the private sector is becoming more like the public
sector.”121
The Leadership Con? At least one writer has
forcefully argued that top executives have kept
their posh positions by promoting an unexamined
ideology that assumes executives are needed; exec-
utives’ “dramaturgical” behavior (firm handshakes,
unwavering gazes, etc.) that conveys an image of
executive importance; and a “bureaupathologi-
cal” enforcement of rigid rules designed to assure
subordinates’ subservience and loyalty.122 One is
reminded by these techniques of Mel Brooks’ line in
his role as the governor in the film, Blazing Saddles:
“Gentlemen, we’ve got to protect our phony
baloney jobs here!”
 124 PA R T I I Public and Nonprofit Organizations
If executives are nothing more than con artists,
then how do organizations get things done? The
answer: Those who get things done in organizations
are Marvick’s specialists, who have the knowledge
and skills that are crucial to the achievement of
organizational objectives.123
The Limits of Leadership The preceding polemic
frames the question. But is it possible that organiza-
tions really do not need (or would even be better off
without) chief executives and top administrators?
Well, yes, at least in a fairly substantial minority
of organizations in all sectors. (We do not discuss
the private sector at length, but suffice it to note
that CEOs account for less than 5 percent of the
variation in corporate performance,124 and changes
in CEOs loom less large in generating profits than
do time, industry, and company characteristics.125)
Why? Because environmental forces, and, less com-
monly, internal ones (such as smoothly functioning
teams of employees), can render leaders moot.
In the Public Sector In the states, “there is little
evidence that a governor’s formal powers signifi-
cantly affect policy outcomes,” which “are attribut-
able largely to the impact of economic development
rather than to the governor’s power.”126 At the local
level, most of the variance in big-city budget alloca-
tions is attributable not to the entry of new mayors,
but rather to environmentally-determined charac-
teristics of the cities themselves.127 Public school
superintendents account for a modest three-tenths of
1 percent of “student differences in achievement. . ..
orders of magnitude smaller than that associated
with any other major component of the education
system,” including “student characteristics, teachers,
schools, and districts.”128
Internal organizational factors also can also
render hierarchical leadership “not always very
necessary, especially if community members do not
‘need’ a leader in order to be motivated to make
their contribution. . . . In some situations, especially
where the work or membership is intrinsically satis-
fying and work groups are cohesive, the presence of
a leader is redundant.”129 But even effective teams of
engaged employees are not always needed to render
executives irrelevant; placidity will do. An analy-
sis of college presidents concluded that 16 percent
presided over “uneventful” campuses “running ‘on
automatic’ . . . that do not need their presidential
leaders.”130
In the Nonprofit Sector The same external factors
trump leadership in the independent sector. An organ-
ization’s “external legitimacy” heavily outweighs
changes in internal leadership and management in
predicting the long-term survival of newly-founded,
social service organizations.131
Leaders Matter In a very real sense, however, these
analyses obscure a fundamental point, which is that
leaders can and do have an impact on their organiza-
tions. The real question is: How much impact?
In the Public Sector Despite the limitations on
public leadership, noted earlier, leadership has “an
enormous impact” on “follower satisfaction,”132
and, “ultimately, the research shows that supervi-
sory proficiency” in government “is critical to . . .
employee motivation, engagement . . . [and] reten-
tion.”133 Leaders are more effective than rules in
preempting ethical violations in public organiza-
tions.134
We also know that competent public leaders
correlate with effective governance. Public leaders
can make work more meaningful to their employees,
“which, in turn, has a positive influence on employee
job outcomes”; this is especially true in healthcare
and education programs, less so in local govern-
ment.135 “Leadership plays an important role”
in whether emergency managers view their crisis
networks as effective.136 “Mayoral quality is asso-
ciated with . . . improved local public finance.”137
Those governments that have superior manage-
ment capacity perform better than governments
with low capacity, and leadership, in turn, is central
in enhancing “the impact of capacity” on public
performance.138 Able government supervisors are
crucial “to individual and organizational perfor-
mance,”139 and high-quality leadership is central to
higher federal agency performance.140
In the Nonprofit Sector In the independent sector,
“managerial power” and ability are positively and
“highly correlated with job involvement” (which,
recall, is critical to higher individual and organiza-
tional performance), trumping even gender, age, eth-
nicity, and education.141

LEARNING LEADERSHIP: THE
EVOLUTION OF A THEORY
The evolution of leadership theory during the last
century and in this one has been characterized by
ebbs, eddies, and flows. “Contrary to popular belief,
none of the theories have become completely extinct.
They reappear decade after decade, sometimes dis-
guised, sometimes in another form, basically intact
and flourishing.”142
The Leader: Alone and Glorious,
1900–1930
We noted in Chapter 3 that the pioneers of man-
agement theory typically treated members of organ-
izations as identical automatons who did as they
were told. But there lurked in this early literature an
exception—the leader. When these writers consid-
ered the leader, their hearts beat aflutter; impersonal
sameness was tossed out the window, and creative,
visionary, and mythic heroes swaggered in.
The Triumph of the Will? No longer were schol-
ars talking about the limitless capacities of clerks to
cower and laborers to labor, but of dizzying social
forces that only leaders could bring to heel. A con-
ference held in 1927 defined leadership, in decidedly
Teutonic terminology, as “the ability to impress the
will of the leader on those led and induce obedience,
respect, loyalty, and cooperation.”143 This view, with
some modifications, persists decades later, when
leaders remained transcendent figures endowed
with a “gift of grace” who soared grandiosely at an
“institutional level” over torpid, timid technicians,
who toiled in the organization’s innards and kept its
hum-drum routines running from day to day.144
Leadership Traits Unsurprisingly, much ado was
made during this period about leaders’ “traits,” or
those personal qualities that made them leaders.
Researchers would score and compare “leaders”
(who typically were identified as leaders by nothing
more than the office that they held in the organi-
zation) with “followers” on such dimensions as
dominance, physical appearance, masculinity, and
other characteristics that were thought to constitute
leadership.
The Fibers of Organizations: People 125
A scholar who tried to make some sense of 120
of these trait studies (essentially all of them) could
discern no commonalities among leaders.145 If not
shared traits, then, what made them leaders?
The Leader in the Grip of the Group,
1930–1970
To answer this question, researchers began to study
how leaders interacted with small groups, and to
identify which of their behaviors associated with
effective leadership.
Leadership Behaviors By the 1940s, inspired
largely by Kurt Lewin’s seminal research on leader-
ship styles,146 researchers had identified two distinct
clusters of behaviors that they believed were useful
to leaders in providing leadership, and these clusters
have had a lasting impact on leadership theory.
One cluster is composed of consideration behav-
iors that relate to interpersonal warmth, concern for
the feelings of subordinates, and a participative/
communicative style of leadership. The other cluster
is structuring, or task, behaviors, and includes direct-
ness, obtaining task-related feedback, and achieving
goals.
Investigators in this tradition find that both
behavioral clusters can work well in leading groups,
but which cluster works depends upon the nature of
the group. Leadership is viewed as interactive and
nondirective, and leadership is defined as “personal-
ity in action under group conditions.”147
Scholars have developed two major approaches
to understand leaders’ behaviors and their groups’
responses to them.
Contingency Approaches One approach is rooted
in contingency theory, which, as we explained in
Chapter 3, treats the organization as an entity that
is constantly forced to adapt to its surrounding envi-
ronment. When applied to leadership, this approach
emphasizes that leaders must deal with contingen-
cies—that is, unexpected or unintended events or
possibilities
Fred Fiedler is perhaps the prime contributor
to this line of thought.148 Fiedler found that when
a group trusts its leader, has a clear task struc-
ture, and the leader has the power to reward and
punish followers, the leader has high control of the
 126 PA R T I I Public and Nonprofit Organizations
group. In a high-control situation, a task-motivated
leader  is  the leader with the most effective set of
behaviors.
When the group is distrusting, its task struc-
ture is ambivalent, and the leader has less power
to reward and punish, the leader has moderate
control. In these situations, a relationship-motivated
leader is needed because an invariably frustrated
task-motivated leader moves too quickly, too puni-
tively—and less effectively.
When the group is not supportive of its leader,
its task is foggy, and the leader’s authority to dis-
pense rewards and punishments is ambiguous, low
control is the consequence. In a low-control situa-
tion, which often amounts to a crisis situation, the
task-motivated leader once again surfaces as the
most effective.
Although the contingency model has been the
subject of some controversy, most empirical tests of
it find it to be reflective of the real world.149
Transactional Approaches Still, the contingency
approach has limitations. It concentrates only on the
problems confronting the leader in dealing with a
small group, but not the leader’s subordinates and
the problems confronting them. What kinds of trans-
actions, or exchanges, occur between and among
leaders and followers that facilitate or impair both
the leader’s and the group’s effectiveness?
Consideration behavior works best when the
group’s task is distasteful,150 and when its members
are open151 and have strong needs for personal
growth in their jobs.152 Structuring behavior is more
effective when the group’s task is unstructured,153
and when its members are dogmatic154 and content
with routine, even boring, work.155
Consideration, Trust, and Public Organizational
Performance When leaders employ considera-
tion behaviors in their decision making, the group’s
members’ “commitment to the decision, attachment
to the group, and trust in its leader” also increase.156
Just as popular trust in government correlates
very positively with better governing (recall Chapter
1), so it is with public leaders and their employees.
When public workers trust their leaders, those leaders
“preside over more productive organizations” than
do less trusted leaders, “and are better able to main-
tain and even increase organizational outcomes in
agencies challenged by low level of performance and
perturbations in the external environment.”157
“Cow Psychology” Ultimately, some scholars
who  studied leaders and groups got a bit carried
away. As early as the 1940s, leadership had
morphed, startlingly, into “that relationship which
is characterized by love of the members for the
central person.”158
It was, perhaps, this view that gave birth to the
phrase, “cow psychology,” or the disparaging term
applied to a literature that seemed to treat groups
as herds of cows, and “cow psychology” was how
leaders herded groups in the direction they wanted.
This unease translated into a new phase of leader-
ship theory, one that concentrated on the leader’s
relationships with not merely the group, but the
organization.
Culture and Charisma: The Leader and the
Organization, 1970–Present
By the 1970s, leadership researchers were finding
that, whereas small-group models could, in several
respects, be adapted successfully to large organiza-
tions, there were some differences.159
Leadership Behaviors and Organizational Cultures
One difference is the presence of organizational
culture, or the shared mores, customs, processes,
and attitudes of the organization’s members.
Organizational “culture affects leadership as much
as leadership affects culture.”160
The local organizational culture “matters most”
in the molding of corporate leaders—far more, in
fact, than the more cosmopolitan phenomenon of
professionalism. Employees who work for the same
company, no matter what their jobs, are 30 percent
more likely to exhibit similar leadership competen-
cies than are employees who have the identical job,
but who work in different companies.161 Culture
counts.
Transformation and Charisma During the 1970s
and 1980s, theorists became fascinated with trans-
formational leadership, which occurs “when one or
more persons engage with others in such a way that
leaders and followers raise one another to higher
levels of motivation and morality.”162 Eventually,

the concept was extended to a resurrection of Max
Weber’s notion of charisma. Charismatic leaders are
those “who by force of their personal abilities are
capable of having a profound and extraordinary
effect on followers,” causing them “to accomplish
outstanding feats,”163 and who possess an “idealized
vision” of the organization’s future that they attempt
to fulfill via unconventional, often risky, means.164
Whether this sort of leadership is called trans-
formational or charismatic, Max is back.
Does Charisma Transform? Often, charisma
does transform, or at least changes organizations
for the better. For example, charismatic leadership
associates positively with “increased financial per-
formance” in (of all things) banks,165 and a study
of mid-level managers in an energy company con-
cluded that “leadership effectiveness, as measured
by the achievement of organizational outcomes,
is a direct function of a leader’s transformational
behaviors.”166 In general, transformational leader-
ship associates with greater employee creativity, but
only when there is also an innovative organizational
climate and employees identify positively with their
leader.167 There are, however, variations in the public
and nonprofit sectors.
Charismatic Government At the very top of gov-
ernment, “personality and charisma do make a dif-
ference” in presidential performance.168 A study of
presidents from George Washington through George
W. Bush found that their “grandiose narcissism”
associated positively with “superior overall great-
ness,” and enhanced public persuasiveness, crisis
management, and agenda setting, but also with
more “congressional impeachment resolutions and
unethical behaviors.”169 “Strong leadership from
executives with strong commitment, a vision of
where they would like to go, and a willingness to
take risks” correlates positively with countries that
successfully make the wrenching transformation
from socialism to capitalism.170
When we slip a bit further down the chain of
command, however, the evidence blurs.
On the plus side, charisma can be helpful in
getting one’s way in small groups of government
workers.171 Transformational leaders appear to
increase public employees’ public service motiva-
tion and render them more focused on, and more
The Fibers of Organizations: People 127
committed to, their organization’s mission.172 They
have a greater, and positive, impact on public
workers who already have high levels of public
service motivation.173
In one study, transformational leaders alone
attained marginal gains in performance, but when
they caused their government employees to meet
the people whom their services benefitted, and they
placed their workers in situations that encouraged
them to change their own behavior (or either one),
“the performance effects . . . were much greater.”174
On the minus side, hierarchical authority (but
not red tape) and poor communication associate
with “a lower prevalence of transformational leader-
ship” in government,175 which is regrettable because,
as we have noted, such leadership can correlate with
creativity.176 Moreover, public transformational
leadership is characterized by its “ineffective imple-
mentation”;177 bears only a scant relationship to the
motivation of followers, and is “not significantly
related to unit performance.”178
Independent Charisma In nonprofit settings, the
findings are clearer and more upbeat. Female leaders
(who are found in the nonprofit sector far more
extensively than in the other two) have a more trans-
formative leadership style than do male leaders.179
Nonprofit workers display more “positive emo-
tions” for transformational leaders than for trans-
actional ones. When transformational leaders are
leading, independent employees’ workplace satisfac-
tion is higher, they work harder, their organizations
are more effective,180 administrative innovation is
greater,181 and they “positively affect” their organ-
izations’ fiscal accountability, mission adherence,
governance, and effectiveness.182 Volunteer satisfac-
tion is also higher, but, alas, transformational leader-
ship does not correlate with more donations.183
Transformation or Transaction? What the research
suggests is that charisma works best when charisma
is what the organization needs. The more critical
question, however, is one of matching the leader’s
behaviors with the needs of the organization.
Not all (in fact, passing few) organizations are in
need of transforming change, simply because they are
doing a “satisficing” job already. It is in these fairly
normal situations that transactional leadership—
which rests on a civilized exchange of views and
 128 PA R T I I Public and Nonprofit Organizations
arguments—has a special place. “Good leaders help
change their institutions, not through transforma-
tion and the articulation of new goals or values, but
through transactions that emphasize selected values
already in place and move the institution toward
attaining them. . . . Those who espouse the impor-
tance of transformational leadership should pause to
consider what life would be like in an organization
whose programs, procedures, and core values could
be called into question by each new president.”184
Transactional leaders do not abjure change, but,
unlike transformational leaders, they do avoid dra-
conian change because transmogrifying revolutions
can be destructive to a reasonably well-functioning
organization. Effective organizational leadership,
whether it is transformational or transactional, is
leadership that is tailored to the conditions of the
organization at the time.
LEADING PUBLIC AND
NONPROFIT ORGANIZATIONS
Leaving aside theories of leadership, how do leaders
actually lead? We start at the top.
Leadership at the Top
Boards of directors, or trustees, are small groups
that lead, oversee, make policy for, possess legal
control of, and form the mission of almost all organ-
izations. Research consistently indicates that the
more committed, energetic, and able board members
in every sector are, the more likely that their organi-
zations will exhibit high performance.185 Aside from
this commonality, however, board leadership varies
widely according to sector, but we concentrate here
only on public and nonprofit boards.
The Public-Sector Board Nearly all public exec-
utives report directly to boards of directors or their
rough equivalents, legislative oversight commit-
tees and local councils. Yet, “despite an enormous
amount of discussion about leadership in public
agencies, there has been relatively little broad-scale
empirical analysis.”186 Still, there is some.
As we observed in Chapter 1 (and discuss
further in Chapter 11), public executives often dom-
inate the bodies to which they nominally report. But
such power is much less easily acquired in an envi-
ronment in which public executives have little if any
control over the selection of board members. In a
deep difference with corporate and nonprofit boards,
government boards almost always are appointed by
legislatures or elected chief executives, or are elected
directly by the people.
Public-sector boards, in contrast to those in the
private and nonprofit sectors, often are composed
disproportionately of energetic and myopic busy-
bodies, nearly two-fifths of whom believe that their
primary duties are either both management and pol-
icymaking or just management, as opposed to just
policymaking. “Board governance is a prominent
part of public administration . . . and it is an unu-
sually intrusive part for public administrators who
report to boards.”187
This verity is especially the case in local
governments.
City council members are far more enthusias-
tic about mucking in “administrative matters” than
making policy, and this tendency is accelerating over
time.188 Many city councils are increasingly micro-
managing, provincial, parochial, bloated, bickering,
and balkanized bodies that give them “an image of
irresponsible flakiness.”189
“County commissioners are heavily involved in
administration,” with counts ranging from 44 to 80
percent of commissioners, depending on the study
and the administrative area, engaging in managerial
activities.190
Boards of education spend an astonishing 54
percent of their time on administration and only
3 percent on policy and oversight.191 Their “greatest
problem . . . is their tendency to micro-manage and
become bogged down in minutiae.”192
In a depressing parallel with corporate chief
executive officers (CEOs),193 when local govern-
ments are performing poorly, their chief adminis-
trative officers (who report to councils) often blame
their top team members, who then leave these organ-
izations at more rapid rates than their top adminis-
trators.194
The Third-Sector Board More than four-fifths
of nonprofit board chairs describe their leadership
style as one of delegating responsibility and consen-
sus- and team-building; just 8 percent ascribe to the
“take-charge, forge-ahead” school.195

The members of the boards of public-service
nonprofit organizations are difficult to recruit,
tend to be middle-aged and older, and, in contrast
to many public-sector boards, nonprofit boards
mostly do what they are supposed to do: that is,
they are “very active” in financial oversight and
policymaking, and largely uninvolved in day-to-day
management. Regrettably, at least from the perspec-
tives of the employees and missions of these organ-
izations, their boards of directors generally spurn
fund-raising.196
When nonprofit boards have few members
who are women, but many old, prestigious men, the
boards are lethargic and the executive director or
board chair calls most of the shots. Conversely, when
third-sector boards have a relatively large number of
women and younger members who have high levels
of commitment to the organization’s mission, the
board is dynamic and its members work effectively
as a team.197
More broadly, however, the dominance dynamic
often moves from the preeminence of the executive
director “to board-led control, and, subsequently,
to collaboration within a paradoxical trust-distrust
relationship.” Consequently, “no single mode of
CEO or board predominance” can be sustained over
time,198 which leads, of course, to dithering and
indecision.
A few boards, about a sixth, devote a dispro-
portionately large amount of time to raising funds at
the expense of their service mission. This  imbal-
ance  is more likely to occur when the organiza-
tion is  more financially dependent on a for-profit
corporation, there is “a racial mismatch between
the  board and agency clientele,” and the board is
dominated by “economic elites.”199 Relatedly, more
than 70  percent of board members have only a
limited  sense of accountability, believing that they
were accountable only to their board or to no
one.”200
A newer wrinkle in board membership is the
explosive expansion of finance professionals who
serve. Financiers, who comprise just 6 percent of the
private non-farm workforce, expanded their share of
nonprofit board memberships from 18 to 19 percent
to 34 to 40 percent, depending on the type of non-
profit, over twenty-eight years, an expansion that
seems to have profited the nonprofits: the percent-
age of the fifty largest donors who were in financial
The Fibers of Organizations: People 129
services soared from 10 percent to 36 percent over
eleven years.201
As with corporate boards (about four-fifths of
the CEOs “at most big companies” chair their own
boards202), there is an unseemly coziness among non-
profit board members and their executive directors.
Fifteen percent of third-sector CEOs serve as voting
board members,203 and their organizations suffer
pretty much across the board: financial oversight,
policymaking, and community relations are weaker,
and outside influence is stronger.204 Of greater sig-
nificance, when the executive director serves on the
board, the organization’s accountability is measur-
ably lessened (one study of community-based non-
profits found that their executive directors had views
that were more similar with each other than with
the residents of their own communities, even though
the communities were significantly different205), and
these organizations are less likely to have outside
audits and policies concerning whistle blowing and
conflicts of interest.206
This is unfortunate, as conflicts of inter-
est are often apparent. Twenty-one percent of all
public-serving nonprofit organizations, and 41
percent of the large ones, report that they have
engaged in “financial transactions with board
members.”207 The nation’s more than 2,300 non-
profit hospitals, which are among the largest non-
profits in the country, conduct business with their
board members at a rate that is six times greater
than all other types of nonprofits.208
There is some good news (at least for executive
directors) in these practices, however: when execu-
tive directors serve on their boards, their salaries are
higher than when they do not serve on the board.209
Sometimes this lagniappe is large, such as the family
foundation in Chicago that, over five years, paid two
family members more than $1 million, but donated
only $175,000 to charities.210
Sector and Successful Leadership
Just as the leadership behavior of board directors
differs markedly by sector, so does that of appointed
chief executives.
Successful Public Leadership Administrators in
both the public and private sectors agree that leaders
in government have considerably less discretion and
 130 PA R T I I Public and Nonprofit Organizations
authority to lead than their private-sector counter-
parts,211 and, logically, it follows that public exec-
utives also “are evaluated as better transactional
leaders” than transformational ones.212
Public versus Private Leadership Public and private
leaders display virtually identical “power-motivation
behavior,” or the desire to make an impact and
enhance one’s position213 (government leaders place
a premium on outperforming “someone else” by
surpassing “some self-imposed standard of excel-
lence”214), but, beyond that similarity, leaders’ behav-
ior differs sharply in the two sectors.
In contrast to the private sector, successful
public leaders are more desirous of change (and,
as we explained in Chapter 4, they are better than
private leadership in achieving it215), organizational
growth, and new projects, and they are more lawful
and less directive. Superiors and subordinates per-
ceive the executives of public agencies as being much
less successful when they direct and coordinate their
agencies (it is precisely the opposite in the private
sector), and much more effective when they closely
monitor their subordinates’ work for legal compli-
ance and reach out to lend a helping hand to their
fellow workers (again, just the reverse in corpora-
tions).216
A Supportive, Affective Public Leadership Helping
their employees is exceptionally important to
public-sector leaders. Federal executives score “sub-
stantially better” in their consideration behaviors
than on other measures.217 An astounding 78 percent
of city managers have a “primary leadership style”
(out of four possible styles) that is “high support-
ive and low directed behavior.”218 Public executives
are deeply committed to mentoring co-workers and
giving them the freedom to grow and mature in their
jobs, and their co-workers respond very favorably to
this treatment.219
The most effective leaders in the high-stress
fields of first responders, law enforcers, and social
workers are “affective leaders” who are skilled in
“emotional labor” that involves relationships and
rapport, compassion and connectedness. “Emotional
labor is inherent in effective public service.”220
Attaining Agency Objectives? Well, Not So Much
Unlike business leaders, public leaders do not
perceive that there is much of a match between their
leadership abilities and actually accomplishing their
agency’s goals.221 This, admittedly dubious, distinc-
tion may be ascribed to at least two possibilities.
One is that many agencies, at least those that
have quantifiable goals, have been shown to be
fulfilling them. The other is the fact that, as we
discuss throughout this book, agency missions are
frequently saturated by a pervasive and ethereal
vagueness compared with crisp corporate ones.
Small wonder, perhaps, that top public executives
are “consistently, and often dramatically, more
optimistic” about their agencies’ organizational
successes than are lower-placed agency workers,222
agency clients, and other outside stakeholders.223
When organizational success itself cannot be readily
understood, a condition that is not unknown (but
not, thankfully, universal) in the public sphere, then
leadership’s success, when defined in organizational
terms, is far less tenable. Thus, in the public sector,
successful leadership is cast in human terms.
Successful Nonprofit Leadership In addition to
nonprofit organizations’ uniquely avid receptivity
to transformational leaders, noted earlier, third-
sector executive directors, in contrast to their public
and private counterparts, place little emphasis on
involving their boards in “strategy and planning,”
“financial oversight,” “policy oversight,” provid-
ing “guidance and expertise” to the organization,
or even cultivating a good “relationship” between
themselves and their board members. Instead, 55
percent of top nonprofit executives rank “fund
development” first out of thirteen “key roles” that
their boards should play; no other role gains even
close to half.224
WHY ARE SO MANY LEADERS
LOSERS?
We have been singing the songs of successful leaders,
but we all have known stupendously inadequate
bosses in every sector, and these “leaders” can be
deeply destructive. A large literature review found
that employees’ hostile “attitudes towards the
leader” is the single most significant correlation
with employees’ “counterproductive work behav-
ior,” a phrase nicer than “sabotage,” but its rough

equivalent. The second highest correlation with
workers’ destructive behavior is the “bad leaders”
themselves, suggesting that employees’ negative
views of their leaders are based on the reality of their
leaders’ incompetence.225
How do these incompetents get selected?
Mediocrities, or worse, are chosen as top “leader-
ship material” in distressingly large numbers because
sociopathic, white, handsome, and tall men are over-
represented among them.
Mostly Male
Because we provide details in Chapter 9, we shall
note here only that male executives are significantly
overrepresented in the public sector (and much more
so in the private one). Men are underrepresented
in the independent sector, where female executives
dominate.
“The Psycho-Path to Disaster”
“Estimates vary, but approximately 3.9 percent of
corporate professionals can be described as having
psychopathic tendencies, a figure considerably higher
than is found in the general population, [where]
approximately one percent . . . falls within the psy-
chopath category.” Because executives who work in
the public and nonprofit sectors have, almost by defi-
nition, greater public service motivation than those
in the private one, we suspect that the proportion of
psychopaths in these sectors may be lower than 3.9
percent, but that is merely speculation and neither
sector is psychopath free, as indicated by incidents
of public and nonprofit corruption.
Psychopathic organizational leaders fall short of
monstrous psychopaths, such as Hitler and Stalin,
and are best described as “psychopaths lite,” or
sociopaths. They are masters of suck-up and kick-
down, “unburdened by a conscience,” and are glib,
callous, shameless, unremorseful, exploitive, para-
sitic, manipulative, impulsive, bullying (as we detail
in the introduction to Part III, corrupt public officials
often are “domineering”), self-centered, sexually
promiscuous, and chronic liars who blame others for
their failures. “The only thing that counts with these
people is to win.”226 “Winning,” in these sociopathic
terms, also includes isolating star-performing subor-
dinates because power-driven leaders perceive them
The Fibers of Organizations: People 131
as threats to their positions, despite the serious harm
that such isolation causes overall productivity.227
Sound familiar? We hope not.
Race and the Unconscious
Four-fifths of Americans have, at an unconscious
level, “pro-white associations,” which, for most
people, are “utterly incompatible” with their con-
scious values. “About half” of blacks have pro-white
associations, simply because blacks are a minority
that is embedded in a majoritarian culture which
links itself with “good things.”228
This is, perhaps, difficult to accept. But how else
does one explain, for example, that federal admin-
istrators increase their funding to nonprofits that
serve poor neighborhoods as neighborhood poverty
grows, but decrease their funding as these neigh-
borhoods’ African-American populations expand,
even though poverty still grows?229 It is very hard
to conclude (at least for us) that Washington is
awash with bureaucrats who are conscious racists,
but the unconscious argument seems, regrettably, to
have legs.
In 2015, the Supreme Court appeared to recog-
nize this reality, writing that “unconscious prejudices
and disguised animus . . . escape easy classification
as disparate [i.e., unfair] treatment,” but they existed
nonetheless.230
Hey, Good Lookin’! Whatcha Got Cookin’?
Money and Bias, of Course
“Physically formidable” men associate more in
most people’s minds with leadership potential than
weak-appearing men;231 “competent”-looking CEOs
run larger companies, on average, and enjoy an 11
to 14 percent greater compensation, than not-so-
competent-looking CEOs;232 and those who have
“facial attractiveness” associate positively with
short-term higher stock prices and more advanta-
geous mergers and acquisitions, but not with superior
personal or corporate performance.233 When times
get tough, a corporate CEO’s good looks correlate
with organizational harm; “inferences of leadership
ability from the faces of American [CEOs] predicted
their companies’ financial performance prior to the
Financial Crisis of 2008 but not after.”234 In fact,
it may be possible that some physically attractive
 132 PA R T I I Public and Nonprofit Organizations
CEOs have “too much executive presence,” and, by
“grooving on the perks,” holding too many “audi-
ences” in their offices, and making themselves the
“focal point” of communication, they distance them-
selves from productive employees, thereby reducing
organizational productivity.235
When attractive CEOs perceive themselves to
be attractive (which seems highly plausible for most
or all of them), they are more likely to support ine-
quality236—not a good sign for those seeking salary
raises.
There is a notable exception to the attrac-
tive-CEO/dysfunctional-organization relationship.
In a study of “large, visible donations” to nonprof-
its, men engaged in “competitive helping displays”
(think amorous peacocks) when they were solicited
by attractive women, giving donations that were
“around four times greater than when males give to
less-attractive female (or male) fundraisers or when
they respond to a large donation made by a female
donor.” (Competitive helping displays were not a
factor between female donors and male fundraisers,
whether attractive or unattractive.)237
Not an exception to the rule, but a variation
of it, is the appearance of the nonprofit executive.
Nonprofit executives who are the most successful
at raising money look more like teddy bears than
sharks. A study of the 100 highest-revenue non-
profits found that those CEOs whose faces exuded
“warmth” headed organizations that had higher total
revenue and privately-sourced funding and more effi-
cient fundraising than did those CEOs who looked
less cuddly and whose faces expressed “power.”238
Swoon Song
In addition, height counts, which gives men a
built-in advantage over most women. Of forty-three
American presidents, only five, or 12 percent, have
been significantly below the average height of
American men, and three have been barely below
the average height; the rest were taller.239 Each extra
inch over the average height results in an average
of about $1,000 more in annual income, after con-
trolling for education and experience, and taller
women earn more than shorter women.240
In a survey of “several hundred” Fortune
500 companies, their male CEOs (more than 95
percent of these CEOs are male or white241) were,
on average, just a fraction under six feet tall, or
three inches taller than the average American male.
Less than 15 percent of American men measure six
feet or taller, and fewer than 4 percent are at least
six feet two inches, compared with 58 percent and
“almost a third,” respectively, of the CEOs; less
than 1 percent of the CEOs were short, at under five
feet six. “Being short is probably as much a handi-
cap [to career success] . . . as being a woman or an
African-American. . .. We see a tall person and we
swoon.”242
The Public Perspective
In government, these problems are compounded by
institutional dysfunctions, notably the traditional
practice of promoting employees based on seniority
(which is “the only way to reward them for their . . .
contribution,” but which results in promoting “some
people who just stink at being supervisors”); the
difficulties (described in Chapter 9), often insur-
mountable ones, inherent in assessing employee per-
formance in the public sector (difficulties shared, to
be sure, by the independent sector); and legislative
resistance to investing in the civil service.243
So, why are so many leaders losers in all sectors?
Because leaders often are hired according to criteria
that have nothing to do with intelligence, experi-
ence, and ability.
NOTES
1. Mike Micheli, “Most Government Workers
Like Working in the Public Sector,” Government
Executive (December 4, 2012). Figures are for
2012.
2. Samantha L. Durst and Victor S. DeSantis, “The
Determinants of Job Satisfaction among Federal,
State, and Local Government Employees,” State
and Local Government Review 29 (Winter 1997),
pp. 7–16.
3. Zeger van der Wal and Anne Oosterbaan, “Govern-
ment or Business: Identifying Determinants of
MPA and MBA Students’ Career Preferences,”
Public Personnel Management 42 (June 2013),
pp. 230–258. The quotations are on p. 230.
4. Sean T. Lyons, Linda E. Duxbury, and Christopher
A. Higgins, “A Comparison of the Values and
Commitment of Private Sector, Public Sector,

and Parapublic Sector Employees,” Public
Administration Review 66 (July/August 2006),
pp. 605–618.
5. Richard W. Stackman, Patrick E. Connor, and
Boris W. Becker, “Sectoral Ethos: An Investigation
of the Personal Values Systems of Female and
Male Managers in the Public and Private Sectors,”
Journal of Public Administration Research and
Theory 16 (October 2006), pp. 577–597. The
quotation is on p. 577.
6. David Card, Alexandre Mas, Enrico Moretti, and
Emmanuel Saez, Inequality at Work: The Effect of
Peer Salaries on Job Satisfaction, NBER Working
Paper No. 16396 (Cambridge, MA: National
Bureau of Economic Research, 2010), p. 1.
7. J. Stuart Bunderson and Jeffery A. Thompson,
“The Call of the Wild: Zookeepers, Callings, and
the Double-edged Sword of Meaningful Work,”
Administrative Science Quarterly 54 (March
2009), pp. 32–57. The quotation is on p. 32.
8. Lars Tummers and Philip Rocco, “Serving Clients
When the Server Crashes: How Frontline Workers
Cope with E-Government Challenges,” Public
Administration Review 75 (November/December
2015), pp. 817–827.
9. Bradley E. Wright, “Public Service and Motivation:
Does Mission Matter?” Public Administration
Review 67 (January/February 2007), pp. 54–63.
10. Brookings Institution, Health of the Nonprofit,
For-Profit, and Public Service Sectors (Princeton,
NJ: Princeton Survey Research Associates 2002),
p. 3. Figures are for 2001.
11. Leonard Bright, “Public Employees with High
Levels of Public Service Motivation: Who Are
They, Where Are They, and What Do They Want?”
Review of Public Personnel Administration 25
(June 2005), pp. 138–154.
12. Donald P. Moynihan and Sanjay K. Pandey, “The
Role of Organizations in Fostering Public Service
Motivation,” Public Administration Review 67
(January/February 2007), pp. 40–53.
13. Adrian Ritz, Gene A. Brewer, and Oliver
Neumann, “Public Service Motivation: A
Systematic Literature Review and Outlook,”
Public Administration Review 76 (May/June
2016), pp. 414–426. The quotation is on p. 420.
14. Beth Gazley, “Good Governance Practices in
Professional Associations for Public Employees:
Evidence of a Public Service Ethos?” Public
Administration Review 74 (November/December
2014), pp. 736–747. The quotation is on p. 737.
The Fibers of Organizations: People 133
15. David J. Houston and Katherine E. Cartwright,
“Spirituality and Public Service,” Public Admini-
stration Review 67 (January/February 2007),
pp. 88–102.
16. Nevbahar Ertas, “Public Service Motivation
Theory and Voluntary Organizations,” Nonprofit
and Voluntary Sector Quarterly 43 (April 2014),
pp. 254–271.
17. David J. Houston, “‘Walking the Walk’ of Public
Service Motivation: Public Employees and
Charitable Gifts of Time, Blood, and Money,”
Journal of Public Administration Research and
Theory 16 (January 2006), pp. 67–86.
18. Gene A. Brewer, “Building Social Capital: Attitudes
and Behavior of Public Servants,” Journal of Public
Administration Research and Theory 13 (January
2003), pp. 5–20. The quotation is on p. 5.
19. Francesca Borgonovi, “Doing Well by Doing
Good: The Relationship between Formal Volun-
teering and Self-Reported Health and Happiness,”
Social Science & Medicine 66 (November 2008),
pp. 2321–2334.
20. Elizabeth W. Dunn, Lara B. Aknin, and Michael
I. Norton, “Spending Money on Others Promotes
Happiness,” Science 319 (March 21, 2008),
pp. 1687–1688.
21. J. Richard Hackman and Greg R. Oldham, “Moti-
vation through the Design Theory of Work: Test of
a Theory,” Organizational Behavior and Human
Performance 16 (August 1976), pp. 250–279.
22. U.S. Merit Systems Protection Board, In Search of
Highly Skilled Workers: A Study on the Hiring of
Upper Level Employees from Outside the Federal
Government (Washington, DC: U.S. Government
Printing Office, 2008), p. 29. Figure, 47 percent, is
for 2006.
23. U.S. Merit Systems Protection Board, Attracting the
Next Generation: A Look at Federal Entry-Level
New Hires (Washington, DC: U.S. Government
Printing Office, 2008), p. 35. Figure is for 2006.
24. Brookings Institution, Health of the Nonprofit,
For-Profit, and Public Service Sectors, p. 3. Figures
are for 2001.
25. Young-joo Lee and Vicky M. Wilkins, “More
Similarities or More Differences? Comparing
Public and Nonprofit Managers’ Job Motivations,”
Public Administration Review 71 (January/
February 2011), pp. 45–56.
26. Justin McCarthy, “Gov’t Workers Happier with
Retirement Plans, Other Benefits,” Gallup.com
(September 9, 2015).
 134 PA R T I I Public and Nonprofit Organizations
27. Philip H. Mirvis and Edward J. Hackett, “Work
and Work Force Characteristics in the Nonprofit
Sector,” Monthly Labor Review 106 (April 1983),
pp. 3–12. Data (pp. 7, 10) are for 1977.
28. Charity Navigator, 2014 CEO Compensation
Study (Glen Rock, NJ: Author, 2014), pp. 9, 3.
29. As derived from data in Brookings Institution,
Health of the Nonprofit, For-Profit, and Public
Service Sectors, p. 3. Figures are for 2001.
30. Anna Tavis and Imperative, 2015 Workforce
Purpose Index (New York: New York University,
2015).
31. Lee and Wilkins, “More Similarities or More
Differences?”
32. Houston, “‘Walking the Walk’ of Public Service
Motivation.”
33. Brookings Institution, Health of the Nonprofit,
For-Profit, and Public Service Sectors, p. 3. Figures
are for 2001.
34. Chung-An Chen and Barry Bozeman,
“Organizational Risk Aversion: The Public and
Non-Profit Sectors,” Public Management Review
14 (March 2012), pp. 377–402.
35. Herbert A. Simon, Models of Man, Social and
Rational (New York: John Wiley and Sons, 1957).
36. Robert K. Merton, “Bureaucratic Structure
and Personality,” Social Forces 18 (May 1940),
pp. 560–568. The quotations are on p. 563.
37. Leisha DeHart-Davis, “The Unbureaucratic
Personality,” Public Administration Review 67
(September/October 2007), pp. 892–903.
38. Organisation for Economic Co-operation and
Development, “Work-Life Balance,” OECD
Better Life Index (Washington, DC: Author,
2013).
39. Joanne H. Gavin and Richard O. Mason, “The
Virtuous Organization: The Value of Happiness
in the Workplace,” Organizational Dynamics 33
(Winter 2004), pp. 379–392.
40. Zainab Mudallal, “Nearly Half of Americans
Didn’t Take a Vacation Day in 2014,” Govexec.
com (January 6, 2015).
41. Maren Hogan, “Defining Qualities of the Worst
Managers,” SmartBlog on Leadership (May 20,
2014).
42. Hal G. Rainey, “Public Agencies and Private
Firms: Incentive Structures, Goals, and Individual
Roles,” Administration & Society 15 (August
1983), pp. 207–242.
43. Hal G. Rainey, Carol Traut, and Barry Blunt,
“Reward Expectancies and Other Work-Related
Attitudes in Public and Private Organizations: A
Review and Extension,” Paper presented at the
1985 Annual Meeting of the American Political
Science Association (New Orleans, August 29–
September 1, 1985), p. 9.
44. Barry Z. Posner and Warren H. Schmidt, “The
Values of Business and Federal Government
Executives: More Different Than Alike,” Public
Personnel Management 25 (Fall 1996), pp. 277–
290.
45. Robert T. Golebiewski, Robert A. Boudreau,
Ben-Chu Sun, et al., “Estimates of Burnout
in Public Agencies: Worldwide, How Many
Employees Have Which Degrees of Burnout, and
With What Consequences?” Public Administration
Review 58 (January/February 1998), pp. 59–64.
46. Steve Ander, Older U.S. Federal Employees Use
Their Strengths Less (Washington, DC: Gallup,
2013), p. 2.
47. U.S. Government Accountability Office, Federal
Workforce: Recent Trends in Federal Civilian
Employment and Compensation, GAO-14-215
(Washington, DC: U.S. Government Printing
Office, 2014), Highlights page. Shrinkage began
in 2013.
48. Tobin Im, “An Exploratory Study of Time Stress
and Its Causes among Government Employees,”
Public Administration Review 69 (January/
February 2009), pp. 104–115. The quotation is
on p. 112.
49. Mirvis and Hackett, “Work and Work Force
Characteristics in the Nonprofit Sector,” p. 10.
50. Karlyn Brown, Attitudes About Work and Leisure
in America (Washington, DC: American Enterprise
Institute, 2001). Figures are for 1972–2000.
51. Carole A. Jurkiewicz, Tom K. Massey, Jr., and
Roger G. Brown, “Motivation in Public and
Private Organizations: A Comparative Study,”
Public Productivity & Management Review 21
(March 1998), pp. 230–250. The quotation is on
p. 230.
52. Eran Vigoda-Gadot and Galit Meisler, “Emotions
in Management and the Management of
Emotions: The Impact of Emotional Intelligence
and Organizational Politics on Public Sector
Employees,” Public Administration Review 70
(January/February 2010), pp. 72–86.
53. Frank T. Paine, Stephen J. Carroll, and Burt A.
Leete,“Need Satisfactions of Managerial Personnel
in a Government Agency,” Journal of Applied
Psychology 50 (June 1966), pp. 247–249, and

Bruce E. Buchanan, II, “Government Managers,
Business Executives, and Organizational Commit-
ment,” Public Administration Review 34 (July/
August 1974), pp. 339–347.
54. U.S. Merit Systems Protection Board, The Federal
Government: A Model Employer or a Work
in Progress? Perspectives from 25 Years of the
Merit Principles Survey (Washington, DC: U.S.
Government Printing Office, 2008), p. 20, and U.S.
Office of Personnel Management, 2010, 2011,
and 2015 Federal Employee Viewpoint Survey
Results (Washington, DC: U.S. Government
Printing Office, 2010, 2011, 2015, 2016), Q. 13.
Figures are for 1986–2014.
55. U.S. Office of Personnel Management, 2016
Federal Employee Viewpoint Survey, Q. 40.
56. Warren H. Schmidt and Barry Z. Posner, “Values
and Expectations of City Managers in California,”
Public Administration Review 47 (September/
October 1987), pp. 404–409. The figure is on
p. 408.
57. Bill Brantley, “The Key to Government Employee
Engagement,” PA Times Online (March 3, 2015).
58. Samantha L. Durst and Victor S. DeSantis, “The
Determinants of Job Satisfaction among Federal,
State, and Local Government Employees,” State
and Local Government Review 29 (Winter 1997),
pp. 7–16. Figures are for 1988.
59. Brookings Institution, Health of the Nonprofit,
For-Profit, and Public Service Sectors, p. 6.  Figures
are for 2001. Emphasis added.
60. Durst and DeSantis, “The Determinants of Job
Satisfaction among Federal, State, and Local
Government Employees,” p. 12. Figures are for
1988.
61. Hal G. Rainey, “Perceptions of Incentives in
Business and Government: Implications for Civil
Service Reform,” Public Administration Review
39 (September/October 1979), pp. 440–448.
62. Card, Mas, Moretti, and Saez, Inequality at Work.
63. James L. Perry and Lyman W. Porter, “Factors
Affecting the Context for Motivation for Public
Organizations,” Academy of Management Review
7 (January 1982), pp. 89–98. The quotation is on
p. 96.
64. U.S. Office of Personnel Management, Poor
Performers in Government: A Quest for the
True Story (Washington, DC: U.S. Government
Printing Office, 1999), p. 36.
65. Paul C. Light, “The Content of Their Character:
The State of the Nonprofit Workforce,” Nonprofit
The Fibers of Organizations: People 135
Quarterly 9 (Fall 2002), pp. 6–16. The quotation
is on p. 12. Figure is for 2001.
66. Jed Devaro and Dana Brookshire, “Promotions
and Incentives in Nonprofit and For-Profit
Organizations,” Industrial & Labor Relations
Review 60 (April 2007), pp. 311–339.
67. James R. Rawls, Robert A. Ulrich, and Oscar T.
Nelson, “A. Comparison of Managers Entering
or Reentering the Profit and Nonprofit Sectors,”
Academy of Management Journal 18 (September
1975), pp. 616–622.
68. The following discussion is drawn from the
massive research of Frank U. Sulloway, Born to
Rebel (New York: Little, Brown, 1997).
69. Lisa A. Keister, “Sharing the Wealth: The Effects
of Siblings on Adults’ Wealth Ownership,” Demo-
graphy 40 (August 2003), pp. 521–542.
70. Erik H. Erikson, Childhood and Society (New
York: Norton, 1950), pp. 219–234. The quo-
tations are on pp. 224–226, 231, 233. Erikson,
perhaps the most well known of the adult psy-
chologists, does not segment adult development
by age spans as we do in the text, but we doubt
that most readers could easily identify with
some of the terms that he uses instead, such as
“muscular-anal” and “locomotor-genital.”
71. Ibid. This extra effort often benefits, in Erikson’s
view, from intense psychoanalysis.
72. John Helliwell, Richard Layard, and Jeffrey
Sachs, eds., World Happiness Report, 2016
(New York: Earth Institute, Columbia University,
2016), p. 20. The U.S. ranks thirteenth out of 157
countries.
73. Yang Yang, “Social Inequalities in Happiness in
the United States, 1972–2004: An Age-Period
Cohort Analysis,” American Sociological Review
73 (April 2008), pp. 204–226.
74. Nicholas Henry, “Are Internships Worthwhile?”
Public Administration Review 39 (May/June
1979), pp. 245–257.
75. U.S. Merit Systems Protection Board, Managing
for Engagement—Communication, Connection,
and Courage (Washington, DC: U.S. Government
Printing Office, 2009), p. 2.
76. Daniel J. Levinson, with Charlotte N. Darrow,
Edward B. Klein, Mariah H. Levinson, and
Braxton McKee, The Seasons of a Man’s Life
(Alfred A. Knopf, 1978), p. 79.
77. George E. Vaillant, Adaptation to Life (Boston:
Little, Brown, 1977).
78. Ibid., p. 228.
 136 PA R T I I Public and Nonprofit Organizations
79. Levinson, et al., The Seasons of a Man’s Life,
p. 320.
80. Roger Gould, Transformations: Growth and
Change in Adult Life (New York: Simon and
Schuster, 1978) p. 294.
81. Vaillant, Adaptation to Life, p. 234.
82. Michael Maccoby, The Leader (New York: Simon
& Schuster, 1981), p. 221.
83. Manfred F. R. Kets De Vries, “Organizational Sleep-
walkers: Emotional Distress at Mid-Life,” Human
Relations 52 (November 1999), pp. 1377–1401.
84. Manfred F. R. Kets de Vries, Danny Miller, et al.,
“Using the Life Cycle to Anticipate Satisfaction
at Work,” Journal of Forecasting (Spring 1984),
pp. 161–172.
85. Vaillant, Adaptation to Life.
86. Kets de Vries, Miller, et al., “Using the Life Cycle
to Anticipate Satisfaction at Work.”
87. Ruth Kanfer and Phillip L. Ackerman, “Aging,
Adult Development, and Work Motivation,”
Academy of Management Review 29 (July 2004),
pp. 440–458. The quotation is on p. 450.
88. U.S. Merit Systems Protection Board, Managing
for Engagement, p. 2.
89. Martin M. Greller and Linda K. Stroh, “Making
the Most of ‘Late-Career’ for Employers and
Workers Themselves: Becoming Elders Not
Relics,” Organizational Dynamics 33 (Spring
2004), pp. 202–214. The quotation is on p. 202.
90. Dee W. Henderson, “Enlightened Mentoring: A
Characteristic of Public Management,” Public
Administration Review 39 (November/December
1985), pp. 857–863. The quotation is on p. 863.
91. Geert Hofstede, “Motivation, Leadership, and
Organization: Do American Theories Apply
Abroad?” Organizational Dynamics 9 (Summer
1980), pp. 42–63. The quotation is on p. 43.
92. Right Management, Many Managers Found
to Fail in Overseas Assignments (Philadelphia:
Author, 2013).
93. The following discussion is drawn from Geert
Hofstede, Culture’s Consequences: International
Differences in Work-Related Values (Beverly
Hills, CA: Sage, 1980), and Geert Hofstede,
“Cultural Constraints in Management Theories,”
Academy of Management Executive 7 (January
1993), pp. 21–32.
94. Hofstede, “Motivation, Leadership, and Organi-
zation,” p. 54.
95. Ibid. p. 58.
96. Ibid., p. 57.
97. Jennifer Loh, Simon Lloyd D. Restubog, and
Thomas J. Zagenczyk, “Consequences of Work-
place Bullying on Employee Identification and
Satisfaction among Australians and Singaporeans,”
Journal of Cross-Cultural Psychology 41 (March
2010), pp. 236–252.
98. Mark F. Peterson, Peter B. Smith, et al., “Role
Conflict, Ambiguity, and Overload: A 21-Nation
Study,” Academy of Management Journal 38
(April 1995), pp. 429–452.
99. Michel Crozier, The Bureaucratic Phenomenon
(Chicago: University of Chicago Press, 1964),
p. 236.
100. Thomas W. H. Ng, Kelly L. Sorensen, and
Frederick K. K. Yim, “Does the Job Satisfaction-
Job Performance Relationship Vary across Cult-
ures?” Journal of Cross-Cultural Psychology 40
(September 2009), pp. 761–796.
101. Alvin W. Gouldner, “Cosmopolitans and Locals:
Toward an Analysis of Latent Social Roles,”
Administrative Science Quarterly 2 (December
1957 and March 1958), pp. 281–306 and 444–
480, respectively.
102. Dwaine Marvick, Career Perspectives in a Bur-
eaucratic Setting, University of Michigan Gov-
ernmental Studies, No. 27 (Ann Arbor, MI:
University of Michigan Press, 1954), p. 28.
103. Lee and Wilkins, “More Similarities or More Diff-
erences?” p. 45.
104. Ibid.
105. Marvick, Career Perspectives in a Bureaucratic
Setting, p. 134.
106. Thomas S. Robertson and Yoram Wind, “Organi-
zational Cosmopolitanism and Innovativeness,”
Academy of Management Journal 26 (June 1983),
pp. 332–338.
107. Marvick, Career Perspectives in a Bureaucratic
Setting, p. 145.
108. To cite just one example: Jean A. Wallace, “Org-
anizational and Professional Commitment in
Professional and Nonprofessional Organizations,”
Administrative Science Quarterly 40 (June 1995),
pp. 228–255.
109. Bernard M. Bass, Stogdill’s Handbook of Leader-
ship, Rev. ed. (New York: Free Press, 1981), p. 7.
The word “leadership” first appeared in the late
nineteenth century, and then only in writings
about the British parliament.
110. As derived from data in Joseph C. Rost, Leadership
for the Twenty-first Century (New York: Praeger,
1991), p. 46.

111. Bernard M. Bass, Stodgill’s Handbook of Lead-
ership: Theory, Research, and Managerial
Applications, 3rd ed. (New York: Free Press,
1990). Figure is an estimate. Bass counted more
than 7,800 published studies of leadership
as of the late 1980s, so our estimate likely is
conservative.
112. Quoted in Joshua Rothman, “Shut Up and Sit
Down,” The New Yorker (February 29, 2016),
pp. 64–69. The quotation is on p. 64.
113. “American Survey: The Leadership Thing,” The
Economist (December 9, 1995), p. 31.
114. Rothman, “Shut Up and Sit Down,” p. 64.
115. Rost, Leadership for the Twenty-first Century,
p.10. Figure is for circa 1910–1990.
116. James MacGregor Burns, Leadership (New York:
Harper & Row, 1978), p. 2.
117. Rost, Leadership for the Twenty-first Century,
p. 102.
118. John P. Kotter, “What Leaders Really Do,” Harvard
Business Review 68 (May/June 1990), pp. 103–
111. The quotations are on p. 104.
119. Ibid., p. 104.
120. Henry Mintzberg, The Nature of Managerial
Work (New York: Harper & Row, 1973).
121. Alan W. Lau, Arthur R. Newman, and Laurie
A. Broedling, “The Nature of Managerial Work in
the Public Sector,” Public Administration Review
40 (September/October 1980), pp. 513–520. The
quotation is on p. 519.
122. Victor A. Thompson, Modern Organizations
(New York: Knopf, 1961).
123. Ibid.
124. Ethan R. Mollick, “People and Process, Suits
and Innovators: The Role of Individuals in Firm
Performance,” Strategic Management Journal 33
(9, 2012), pp. 1001–1015.
125. Stanley Lieberson and James F. O’Connor,
“Leadership and Organizational Performance:
A Study of Large Corporations,” American Socio-
logical Review 37 (August 1972), pp. 117–130.
126. Thomas R. Dye, “Executive Power and Public
Policy in the States,” Western Political Quarterly
27 (December 1969), pp. 73–82. The quotation is
on p. 938.
127. G. R. Salancik and Jeffrey Pfeffer, “Constraints on
Administrative Discretion: The Limited Influence
of Mayors on City Budgets,” Urban Affairs
Quarterly 12 (April 1977), pp. 475–498.
128. Matthew M. Chingos, Grover J. (Russ)
Whitehurst, and Katharine M. Lindquist, School
The Fibers of Organizations: People 137
Superintendents: Vital or Irrelevant? (Washington,
DC: Brookings, 2014), p. 1.
129. Eleanor Fujita,The Evaluation of College Presidents:
Dimensions Used by Campus Leaders (College
Park, MD: National Center for Postsecondary
Governance and Finance, 1990), p. 20.
130. Anna Neumann and Estela M. Bensimon,
Constructing the Presidency: College Presidents’
Images of Their Leadership Roles, a Comparative
Study (College Park, MD: National Center for
Postsecondary Governance and Finance, 1990),
pp. 19–20. Emphasis added.
131. Jitendra V. Singh, David J. Tucker, and Robert
J. House, “Organizational Legitimacy and the
Liability of Newness,” Administrative Science
Quarterly 31 (June 1986), pp. 171–193.
132. Tracey Trottier, Montgomery Van Wart, and
XiaoHu Wang, “Examining the Nature and
Significance of Leadership in Government
Organizations,” Public Administration Review 68
(March/April 2008), pp. 319–333. The quotation
is on p. 329.
133. John Crum, “Improving the Performance of
Federal Supervisors,” Issues of Merit (Washington,
DC: U.S. Merit Systems Protection Board, April
2010), pp. 2–3. The quotation is on p. 2.
134. James Down, Richard Cowell, and Karen Morgan,
“What Determines Ethical Behavior in Public
Organizations: Is It Rules or Leadership?” Public
Administration Review 76 (November/December
2016), pp. 898–909.
135. Lars G. Tummers and Eva Knies, “Leadership and
Meaningful Work in the Public Sector,” Public
Administration Review 73 (November/December,
2013), pp. 859–868. The quotation is on p. 859.
136. Michael McGuire and Chris Silvia, “Does Leader-
ship in Networks Matter? Examining the Effects
of Leadership Behaviors on Managers’ Perceptions
of Network Effectiveness,” Public Performance &
Management Review 33 (September 2009), pp.
34–62. The quotation is on p. 54.
137. Claudia N. Avellaneda, “Mayoral Quality and
Local Public Finance,” Public Administration
Review 69 (May/June 2009), pp. 469–486. The
quotation is on p. 469.
138. Rhys Andrews and George A. Boyne, “Capacity,
Leadership, and Organizational Performance:
Testing the Black Box Model of Public Manage-
ment,” Public Administration Review 70 (May/
June 2010), pp. 443–453. The quotation is on
p. 450.
 138 PA R T I I Public and Nonprofit Organizations
139. Crum, “Improving the Performance of Federal
Supervisors,” p. 2.
140. Partnership for Public Service, The Federal
Leadership Challenge (Washington, DC: Author,
April 2012).
141. Jessica Word and Sung Min Park, “Working across
the Divide: Job Involvement in the Public and
Nonprofit Sectors,” Review of Public Personnel
Administration 29 (June 2009), pp. 103–133. The
quotation is on p. 126.
142. Rost, Leadership for the Twenty-first Century,
p. 28.
143. Quoted in ibid., p. 47.
144. Daniel Katz and Robert L. Kahn, The Social
Psychology of Organizations (New York: Wiley,
1966).
145. Ralph M. Stodgill, “Personal Factors Associated
with Leadership: A Survey of the Literature,”
Journal of Psychology 25 (June 1948), pp. 35–71.
146. Kurt Lewin, Ronald Lippitt, and Ralph K. White,
“Patterns of Aggressive Behavior in Experimentally
Created Social Climates,” Journal of Social
Psychology 10 (March 1939), pp. 271–299.
147. E. S. Bogardus, Leaders and Leadership (New
York: Appleton-Century, 1934), p. 3.
148. Fred E. Fiedler, A Theory of Leadership Effect-
iveness (New York: McGraw-Hill, 1967).
149. Michael J. Strube and Joseph E. Garcia, “A Meta-
Analytical Investigation of Fiedler’s Contingency
Model of Leadership Effectiveness,” Psychological
Bulletins 90 (September 1981), pp. 307–321.
150. Robert J. House, “A Path-Goal Theory of
Leadership,” Administrative Science Quarterly 16
(September 1971), pp. 321–338.
151. Stanley E. Weed, Terrance R. Mitchell, and
William Moffitt, “Leadership Style, Subordinate’s
Personality, and Task Type as Predictors of
Performance and Satisfaction With Supervision,”
Journal of Applied Psychology 61 (February
1976), pp. 58–66.
152. Ricky N. Griffin, “Relationships Among Indivi-
dual Task Design, and Leader Behavior Variables,”
Academy of Management Journal 23 (December
1980), pp. 665–683.
153. House, “A Path-Goal Theory of Leadership.”
154. Weed, Mitchell, and Moffitt, “Leadership Style,
Subordinate’s Personality, and Task Type as
Predictors of Performance and Satisfaction With
Supervision.”
155. Griffin, “Relationships Among Individual Task
Design, and Leader Behavior Variables.”
156. M. Audrey Korsgaard, David M. Schweiger,
and Harry J. Sapienza, “Building Commitment,
Attachment, and Trust in Strategic Decision-
Making Teams: The Role of Procedural Justice,”
Academy of Management Journal 38 (February
1995), pp. 60–85. The quotation is on p. 60.
157. Yoon Jik Cho and Evan J. Ringquist, “Managerial
Trustworthiness and Organizational Outcomes,”
Journal of Public Administration Research and
Theory 21 (January 2011), pp. 53–86. The quota-
tion is on p. 53.
158. Fred Redl, “Group Emotion and Leadership,”
Psychiatry 5 (November 1942), pp. 574–584. The
quotation is on p. 576.
159. Burns, Leadership.
160. Bernard M. Bass and Bruce J. Avolio, “Transfor-
mational Leadership and Organizational Culture,”
Public Administration Quarterly 17 (Spring 1993),
pp.112–122. The quotation is on p. 113.
161. Thomas Kell and Gregory T. Carrott, “Culture
Matters Most,” Harvard Business Review 83
(May 2005), pp. 22–24.
162. Burns, Leadership, p. 20.
163. Robert House, “A 1976 Theory of Charismatic
Leadership,” Leadership: The Cutting Edge, James
G. Hunt and Lars Larson, eds. (Carbondale, IL:
Southern Illinois University Press, 1977), pp. 189–
207. The quotation is on p. 196.
164. Jay A. Conger and Rabinda N. Kanungo,
“Toward a Behavioral Theory of Charismatic
Leadership in Organizational Settings,” Academy
of Management Review 12 (November 1987),
pp. 637–647.
165. Celeste P. M. Wilderom, Peter T. van den Berg,
and Uco J. Wiersma, “A Longitudinal Study
of the Effects of Charismatic Leadership and
Organizational Culture on Objective and Perceived
Corporate Performance,” The Leadership Quar-
terly 23 (October 2012), pp. 835–848. The quota-
tion is on p. 835.
166. Flavia Cavazotte, Valter Moreno, and Mateus
Hickmann, “Effects of Leader Intelligence, Per-
sonality and Emotional Intelligence on Trans-
formational Leadership and Managerial
Performance,” The Leadership Quarterly 23 (June
2012), pp. 443–455. The quotation is on p. 443.
167. Peng Wang and Joseph Rode, “Transformational
Leadership and Follower Creativity: The Mode-
rating Effects of Identification with Leader and
Organizational Climate,” Human Relations 63
(August 2010), pp. 1105–1128.

168. Robert J. House, William D. Spangler, and James
Woycke, “Personality and Charisma in the U.S.
Presidency: A Psychological Theory of Leader
Effectiveness,” Administrative Science Quarterly
36 (September 1991), pp. 364–396. The quota-
tion is on p. 364.
169. Ashley L. Watts, Scott O. Lilienfeld, Sarah Francis
Smith, et al., “The Double-Edged Sword of
Grandiose Narcissism: Implications for Successful
and Unsuccessful Leadership Among U.S.
Presidents,” Psychological Science 24 (December
2013), pp.  2379–2389. The quotations are on
p. 2379.
170. John Williamson and Stephen Haggard, “The
Political Conditions for Economic Reform,”
The Political Economy of Policy Reform, John
Williamson, ed. (Washington, DC: Institute for
International Economics, 1993), pp. 525–599. The
quotation is on p. 539.
171. Jason L. Jensen, “Getting One’s Way in
Group  Decision-Making: Influence Tactics Used
in Group Decision-Making Settings,” Public
Administration Review 67 (March/April 2007),
pp. 216–227.
172. Bradley E. Wright, Donald P. Moynihan, and Sanjay
K. Pandey, “Pulling the Levers: Transformational
Leadership, Public Service Motivation, and
Mission Valence,” Public Administration Review
72 (March/April 2012), pp. 206–215.
173. Nicola Belle, “Leading to Make a Difference: A
Field Experiment on the Performance Effects of
Transformational Leadership, Perceived Social
Impact, and Public Service Motivation,” Journal
of Public Administration Research & Theory 24
(January 2014), pp. 109–136.
174. Ibid., p. 109.
175. Bradley E. Wright and Sanjay K. Pandey, “Trans-
formational Leadership in the Public Sector: Does
Structure Matter?” Journal of Public Admini-
stration Research and Theory 20 (January 2010),
pp. 75–89. The quotation is on p. 85.
176. Wang and Rode, “Transformational Leadership
and Follower Creativity.”
177. Graeme Currie and Andy Lockett, “A Critique of
Transformational Leadership: Moral, Professional
and Contingent Dimensions of Leadership within
Public Services Organizations,” Human Relations
60 (February 2007), pp. 341–371. The quotation
is on p. 341.
178. Mansour Javidan and David A. Waldman,
“Exploring Charismatic Leadership in the Public
The Fibers of Organizations: People 139
Sector: Measurement and Consequences,” Public
Administration Review 63 (March/April 2003),
pp. 229–242. The quotation is on p. 229.
179. Marloes L. Van Engen and Tineke M. Willemsen,
“Sex and Leadership Styles: A Meta-Analysis of
Research Published in the 1990s,” Psychological
Reports 94 (February 2004), pp. 13–18.
180. Anette Rohmann, “Relationships between
Leadership Styles and Followers’ Emotional
Experience and Effectiveness in the Voluntary
Sector,” Nonprofit & Voluntary Sector Quarterly
38 (April 2009), pp. 270–286.
181. Kristina Jaskyte, “Predictors of Administrative
and Technological Innovations in Nonprofit
Organizations,” Public Administration Review 71
(January/February 2011), pp. 77–86.
182. Bobbi Watt Geer, Jill K. Maher, and Michele T.
Cole, “Managing Nonprofit Organizations: The
Importance of Transformational Leadership and
Commitment to Operating Standards for Non-
profit Accountability,” Public Performance  &
Management Review 32 (September 2008),
pp. 51–75.
183. Patrick Dwyer, Joyce Bono, Mark Snyder, et al.,
“Sources of Volunteer Motivation: Transformat-
ional Leadership and Personal Motives Influence
Outcomes,” Nonprofit Management and Leader-
ship 24 (Winter 2013), pp. 181–205.
184. Robert Birnbaum, How Academic Leadership
Works: Understanding Success and Failure in the
College Presidency (San Francisco: Jossey-Bass,
1992), pp. 30–31.
185. There is a spate of research that supports this
statement, but the following five-year study exam-
ined twenty-nine for-profit corporate boards, six
nonprofit boards, and four boards of government-
owned enterprises, and came to the same conclus-
ion. See: Richard Leblanc and James Gillies,
Inside the Boardroom (Mississauga, Canada:
Wiley, 2005).
186. Trottier, Van Wart, and Wang, “Examining the
Nature and Significance of Leadership in Govern-
ment Organizations,” p. 329.
187. Jerry Mitchell, “Representation in Government
Boards and Commissions,” Public Administration
Review 57 (March/April, 1997), pp. 160–167.
The quotation is on p. 166.
188. James H. Svara, “The Shifting Boundaries
between Elected Officials in Large Council-
Manager Cities,” Public Administration Review
59 (January/February 1999), pp. 44–53.
 140 PA R T I I Public and Nonprofit Organizations
189. Rob Gurwit, “Are City Councils a Relic of the
Past?” Governing (April 2003), pp. 20–24. The
quotation is on p. 21.
190. James H. Svara, “Leadership and Professionalism
in County Government,” The American County:
Frontiers of Knowledge, Donald C. Menzel, ed.
(Tuscaloosa, AL: University of Alabama Press,
1996), pp. 109–127. The quotation is on p. 118.
191. Lynn Olson and Ann Bradley, “Boards of
Contention,” Education Week Special Journal
Report (April 29, 1992) pp. 30–39.
192. Ellen Todras, The Changing Role of School
Boards, ERIC Digest No. 84 (Eugene, OR: Eric
Clearinghouse on Educational Management, May
1993), p. 1.
193. See, for example, Lucia Bebchuk and Jesse
Fried, Pay without Performance: The Unfulfilled
Promise of Executive Compensation (Cambridge,
MA: Harvard University Press, 2004).
194. George A. Boyne, Oliver James, Peter John,
and Nicolai Petrovsky, “Does Public Service
Performance Affect Top Management Turnover?”
Journal of Public Administration Research and
Theory 20, Supplement 2 (April 2010), pp. i261–
i279.
195. Judy Freiwirth, Mary Hiland, Michael Burns, et
al., “Voices of Board Chairs: A National Study
on the Perspectives of Nonprofit Board Chairs,”
Nonprofitquarterly.org (October 12, 2016).
196. Robert D. Herman, “Are Public Service Nonprofit
Boards Meeting Their Responsibilities?” Public
Administration Review 69 (May/June 2009),
pp. 387–390. The quotations are on p. 389.
197. Vic Murray, Pat Bradshaw, and Jacob Wolpin,
“Power In and Around Nonprofit Boards: A
Neglected Dimension of Governance,” Nonprofit
Management & Leadership 3 (Winter 1992), pp.
165–182.
198. Wendy Reid and Johanne Turbide, “Growth Crises
and Three Phases of Governance Response,”
Nonprofitquarterly.org (December 19, 2013).
199. Kelly LeRoux, “Managing Stakeholder Demands,”
Administration & Society 41 (April 2009), pp.
158–184. The quotations are on p. 158.
200. Judith L. Millesen, “Who ‘Owns’ Your Non-
profit?” The Nonprofit Quarterly (September 21,
2002).
201. Garry W. Jenkins, “The Wall Street Takeover of
Nonprofit Boards,” Stanford Social Innovation
Review 13 (Summer 2015), ssireview.org. Figures
are for 1989–2014 and 2003–2013, respectively.
202. Jonathan D. Glater and David Leonhardt, “Bill
Addressing Business Fraud Is Seen as First Step,”
New York Times (July 25, 2002).
203. Freiwirth, Hiland, Burns, et al., “Voices of Board
Chairs.” Figure is for 2016.
204. Francie Ostrower, Nonprofit Governance in the
United States: Findings on Performance and Acc-
ountability from the First National Representative
Study (Washington, DC: Urban Institute, 2007).
205. Rebeccaa J. Kassane and Jeff Gingerich, “Do
You See What I See? Nonprofit and Resident
Perceptions of Urban Neighborhood Problems,”
Nonprofit and Voluntary Sector Quarterly 33
(June 2004), pp. 311–333.
206. Herman, “Are Public Service Nonprofit Boards
Meeting Their Responsibilities?” p. 388.
207. Ibid. Figures are for 2006. A large organization is
one that spends at least $10 million annually.
208. Ruth McCambridge, “WSJ: Hospitals Do Business
with Board Members at 6X the Rate of Other
Nonprofits,” Nonprofitquarterly.org (August 22,
2016). Data are for 2014.
209. Edward R. Dyl, Howard L. Frant, and Craig A.
Stephenson, “Governance and Funds Allocation
in United States Medical Research Charities,”
Financial Accountability and Management 16
(November 2000), pp. 335–352.
210. U.S. Government Accountability Office, Tax-
Exempt Sector: Governance, Transparency, and
Oversight Are Critical for Maintaining Public
Trust, GAO-05-561T (Washington, DC: U.S.
Government Printing Office, 2005), pp. 13–14.
211. Robert Hooijberg and Jaepil Choi, “The Impact
of Organizational Characteristics on Leadership
Effectiveness Models: An Examination of
Leadership in Private and Public-Sector Organi-
zation,” Administration & Society 33 (September
2001), pp. 403–431.
212. Trottier, Van Wart, and Wang, “Examining the
Nature and Significance of Leadership in Govern-
ment Organizations,” p. 330.
213. Jon A. Andersen, “Assessing Public Managers’
Change-Oriented Behavior: Are Public Managers
in the Doldrums?” International Journal of Public
Administration 33 (May 2010), pp. 335–345. The
quotation is on p. 342.
214. Jon Aarum Andersen, “Public versus Private
Managers: How Public and Private Managers
Differ in Leadership Behavior,” Public Admini-
stration Review 70 (January/February 2010),
pp. 131–141. The quotations are on p. 137.

215. Andersen, “Assessing Public Managers’ Change-
Oriented Behavior.”
216. Hooijberg and Choi, “The Impact of Organi-
zational Characteristics on Leadership Effective-
ness Models.”
217. Trottier, Van Wart, and Wang, “Examining the
Nature and Significance of Leadership in Govern-
ment Organizations,” p. 329.
218. George L. Hanbury, II, “Leadership ‘Fit’ and
Effectiveness: Trust and Performance,” Paper pre-
sented at the Annual Conference of the American
Society for Public Administration (Phoenix, AZ,
March 2002), p. 27.
219. Hooijberg and Choi, “The Impact of Organi-
zational Characteristics on Leadership Effective-
ness Models.”
220. Meredith A. Newman, Mary E. Guy, and Sharon
H. Mastracci, “Beyond Cognition: Affective Lead-
ership and Emotional Labor,” Public Admini-
stration Review 69 (January/February 2009),
pp. 6–20. The quotation is on p. 17.
221. Hooijberg and Choi, “The Impact of Organi-
zational Characteristics on Leadership Effective-
ness Models.”
222. M. Andrew Frazier and James E. Swiss, “Con-
trasting Views of Results-Based Management
Tools from Different Organizational Levels,”
International Public Management Journal 11 (2,
2008), pp. 214–234. The quotation is on p. 214.
223. Rhys Andrews, George A. Boyne, Jae M. Moon,
and Richard M. Walker, “Assessing Organizational
Performance: Exploring Differences between
Internal and External Measures,” International
Public Management Journal 13 (2, 2010),
pp. 105–129.
224. William A. Brown and Chao Guo, “Exploring
the Key Roles for Nonprofit Boards,” Nonprofit
& Voluntary Sector Quarterly 39 (June 2010),
pp. 536–546.
225. Birgit Schyns and Jan Schilling, “How Bad Are
the Effects of Bad Leaders? A Meta-analysis
of Destructive Leadership and Its Outcomes,”
The Leadership Quarterly 24 (February 2013),
pp. 138–158. The quotations are on p. 138.
226. Manfred F. R. Kets de Vries, “The Psycho-Path to
Disaster: Coping with SOB Executives,” Organi-
zational Dynamics 43 (January–March 2014), pp.
17–26. The quotations are on pp. 18, 19.
227. Charleen R. Case and Jon K. Maner, “Divide and
Conquer: When and Why Leaders Undermine
the Cohesive Fabric of Their Group,” Journal of
The Fibers of Organizations: People 141
Personality and Social Psychology 107 (December
2014), pp. 1033–1055.
228. Malcolm Gladwell, Blink: The Power of Thinking
without Thinking (New York: Back Bay Books,
2007), pp. 84–88.
229. Eve E. Garrow, “Does Race Matter in Govern-
ment Funding of Nonprofit Human Services
Organizations? The Interaction of Neighborhood
Poverty and Race,” Journal of Public Admini-
stration Research & Theory 24 (April 2014),
pp. 381–405.
230. Justice Anthony Kennedy, in Texas Department
of Housing and Community Affairs v. Inclusive
Communities Project, Inc.
231. Aaron W. Lukaszewski, Zachary L. Simmons,
and James R. Cameron, “The Role of Physical
Formidability in Human Social Status Allocation,”
Journal of Personality and Social Psychology 110
(March 2016), pp. 385–406.
232. John R. Graham, Campbell R. Harvey, and Manju
Puri, “A Corporate Beauty Contest” (December
19, 2013). Paper presented at the American
Finance Association’s annual meeting, Denver,
CO, 2011.
233. Joseph T. Halford and Hung-Chia Hsu, “Beauty Is
Wealth: CEO Appearance and Shareholder Value”
(Milwaukee: University of Wisconsin-Milwaukee,
December 19, 2013).
234. Nicholas O. Rule and Konstantin O. Tskhay, “The
Influence of Economic Context on the Relation-
ship between Chief Executive Officer Facial App-
earance and Company Profits,” The Leadership
Quarterly 25 (October 2014), pp. 846–854. The
quotation is on p. 846.
235. Eblin Group, “Three Signs That You Have Too
Much Executive Presence,” Eblingroup.com
(April 9, 2015).
236. Peter Belmi and Margaret Neale, “Mirror, Mirror
on the Wall, Who’s the Fairest of Them All?
Thinking that One Is Attractive Increases the
Tendency to Support Inequality,” Organizational
Behavior and Human Decision Processes 124
(March 2014), pp. 133–149.
237. Nicholas J. Raihani and Sarah Smith, “Competitive
Helping in Online Giving,” Current Biology 25
(May 2015), pp. 1183–1186. The quotation is on
p. 1183.
238. Daniel E. Re and Nicholas O. Rule, “Predicting
Firm Success from the Facial Appearance of Chief
Executive Officers of Non-Profit Organizations”
(Toronto: University of Toronto, 2016).
 142 PA R T I I Public and Nonprofit Organizations
239. Gert Stulp, Abraham P. Buunk, Simon Verhulst,
and Thomas V. Pollet, “Tall Claims? Sense and
Nonsense about the Importance of Height in
US Presidents,” The Leadership Quarterly 24
(February 2013), pp. 159–171.
240. Steven E. Landsburg, “Short Changed,” Slate.com
(March 25, 2002).
241. DiversityInc. In 2013, 1.2 percent of these CEOs
were African-Americans, and 1.6 percent each were
Asian- or Hispanic-Americans, for a total of 4.4 per-
cent. In 2014, women accounted for 4.6 percent.
242. Gladwell, Blink, p. 5.
243. Kellie Lunney, “Ex-HR Chiefs: Some Federal
Managers Just Can’t Manage,” Government
Executive (December 5, 2013).

Public and Nonprofit
Management: Curbing
Corruption, Enhancing Efficiency
Public and nonprofit management is the develop-
ment or application of methodical and system-
atic techniques that are designed to analyze and
make the operations of governments and public-
service  nonprofit organizations more efficient and
effective.
In Part III, we review the public and nonprofit
sectors’ experiences with public management’s
major methods, each of which was initially estab-
lished, in large part and occasionally in whole part,
as a reaction to corrupt governance, and each still is
used to curb it.
CORRUPTION’S CAUSES AND
CONTINUANCE: THE LARGER
PICTURE
Before we enter in the thorny thicket of American cor-
ruption, let us address graft from a global perspective.
Corruption’s Causes
Corruption’s causes are structural, cultural, and, of
course, personal.
Governmental Structure and Graft A large
“number of administrative units in a country lowers
corruption,”1 and “the finding in earlier research
that federalism increases corruption is not robust”;2
in fact, the illegal, tax-evading, “shadow economy is
smaller in federal countries than in unitary states,”3
although “an increase in the income tax rate will
unambiguously increase the taxpayer’s level of
evasion.”4
PART
III
Fiscal decentralization, a corollary of federal
systems, also appears to reduce corruption in coun-
tries, even in those that are highly politicized.5
Culture and Corruption National cultures that
are poor and rural, and which have centralized
governments,6 politically disengaged citizenries,7 a
repressed press,8 citizens who are distrusting of each
other,9 greater regulatory activity (which seems to
offer more opportunities to corrupt),10 and poorly
paid public officials11 who were recruited into gov-
ernment by means other than a merit-based person-
nel system12 associate with high rates of corruption.
The impact of religion on global graft is
mixed,13 but in the United States, faith is irrelevant.
The depth of religious belief in the American states
“is not related to instances of government corrup-
tion . . . despite reasons to expect otherwise.”14
An agency’s culture also can encourage graft
when: there is no “clear integrity policy”; colleagues
are loyal to one another; and supervision is too lax
or too oppressive (surprisingly, oppression spawns
more misconduct than laxity).15 These cultural prob-
lems worsen, and the probability of graft rises, when
an agency is confronted by unrealistically high per-
formance goals, punishment is inflicted when they
are not met, and oversight is weak.16
The Corrupt Public Official Money is the leading
reason why public officials become corrupt (although,
“strikingly, the corrupt official rarely receives a gift
for which concrete compensation is expected”—
there is “no clear quid pro quo”), followed closely
by love, friendship, and status. Corrupt officials
often have domineering personalities, are popular,
 144 PA R T I I I Public and Nonprofit Management: Curbing Corruption, Enhancing Efficiency
and are viewed as effective, characteristics that give
them “space to maneuver.” (In fact, large physical
spaces, such as disproportionately big desks, can
cause the people occupying them to feel “more pow-
erful,” which, in turn, leads to “increases in dishon-
est behavior.”17) They slowly “‘slide down’ toward
corruption” and maintain “a long, institutionalized
relationship” with their corruptors. Corrupt officials
rarely think of themselves as corrupt, even though
they commit multiple corrupt acts.18 A variation
on this final point is that corrupt powerful people
who perceive that their power is legitimate are more
corrupt and hypocritical than are those who see
themselves as holding power illegitimately.19
Lord Acton’s famous phrase, uttered in 1887,
that, “Power tends to corrupt, and absolute power
corrupts absolutely,” is not really accurate. Gaining
power merely reveals its owner’s already-existing
character, for good or ill. Moral power holders do
not misuse their power, but less moral ones do. A
high level of power “interacting” with high testos-
terone in a leader often leads to the leader’s corrup-
tion.20 “Psychological research strongly suggests
that we should care a great deal about our leaders’
personalities . . . because no position is prestigious
or noble enough to make a person of questionable
character behave themselves.”21
Corruption’s Continuance
The continuance of those governmental and cultural
conditions, just listed, that produce corruption also
ensure its persistence. Additionally, the more central-
ized the government, the more “fused” that political
power is within it, and the less access that the press
has to the government, the more likely that corrupt
officials will survive attempts to prosecute them.22
Democracies are largely free of these conditions,
and the more vibrant the democracy—that is, large
numbers of citizens voting regularly in competitive
elections—the more honest the government.23 By
contrast, in democracies where there is low voter
turnout corruption often is deeply entrenched.24
Regrettably, some voters prefer corrupt democ-
racies to honest ones. In democratic jurisdictions,
graft often associates with reduced public spend-
ing. If citizens’ demands for services are “relatively
elastic,” then this association sometimes leads to
lower taxes. “Under this condition,” some citizens
who favor low taxes may “hold their noses and
vote” for continued corruption.25
COMPREHENDING CORRUPTION
IN AMERICA
Recall that in the introduction to Part I we out-
lined the prodigious public price of corruption, but,
beyond those data, what do we know about graft?
Not much: “In the literature on corruption, there is
much speculation on its nature, but there are hardly
any empirical qualitative studies on the nature of
corruption.”26 We address what there is here.
Tradition! Good Old Graft
Traditionally, political corruption has meant fraud
or graft—that is, crooked public (and, we are learn-
ing, nonprofit) officials embezzling governments’
or independent organizations’ money, or accepting
bribes to waste it. Graft committed by government
employees against their organizations accounts for
16 percent of all known graft, nonprofit workers
make up 12 percent, and business employees com-
prise the rest.27 Plundering the public and nonprofit
purses can range from a single perpetrator’s petty
larceny to the creation of a kleptocracy.
Corruption as Sneaky-Pete Politics Consider
a cluster of small, cheek-by-jowl towns in south-
eastern Los Angeles County, California. Each has
a largely working-class and immigrant population,
extraordinarily low voter turnout (often less than a
tenth of the electorate), high voter fraud, an unbal-
anced budget, exceptionally high taxes, deep debt,
and corruption at the top (corruption, we should
note, that is on steroids). Some examples follow.
Living Well in Bell As the result of a 2005 munici-
pal election in which fewer than 400 residents voted,
town officials lived well in Bell. Its city manager
commanded a compensation that topped out at
$1.5 million, but with the added bonus of guaran-
teed annual increases of 12 percent. (It greatly facil-
itated the city manager’s gluttonous graft that the
mayor, who signed off on all this and much more,
could not read English.) Compensation for other
officials ranged from $400,000 to $546,000. The
 PA R T I I I Public and Nonprofit Management: Curbing Corruption, Enhancing Efficiency
part-time mayor and other council members each
were paid almost $100,000. (Towns of comparable
size—30,000 to 40,000 people—pay their council
members an average wage of $4,800.28)
These and other irregularities almost bank-
rupted Bell. The mayor stoutly defended these sala-
ries, including his, by insisting that “our streets are
cleaner.” It is impossible to make this stuff up. In
2011, 95 percent of Bell’s voters recalled four council
members and elected a new mayor and council, none
of whom had ever held elected office.
After four years of legal wrangling, the judge
described the city manager as “a godfather of sorts,”
and sentenced him to twelve years in state prison
(not to mention close to three years in federal prison
for tax fraud) and fined him almost $9 million in res-
titution. The judge called the assistant city manager
“a hog,” and sentenced her to almost twelve years
and fined her more than $8 million. The mayor and
the other six council members received lesser but
still stiff fines, and three were sentenced to prison
and one to home confinement.
Maywood’s Miseries The luckless town of
Maywood, faced with a fiscal crisis, threatened with
cancellation of its insurance coverage, and fed up
with its historically surly police force, outsourced all
its services in 2010, with most, unfortunately, going
to neighboring Bell, which assigned its hoggish assis-
tant city manager to administer them. Just weeks
later, Bell’s scandals surfaced, and, within a year, the
town had dismissed Bell. But Bell had left a mess
in Maywood: missing records, no budget for nine
months, fiscal data so shambolic that it could not
be determined if the town was solvent, and a broad
federal investigation of Maywood officials.
Is There Something in the Water? There is more.
Two Commerce council members were convicted of
corruption in 2010 and 2012. Three former council
members in Lynwood were convicted, in 2012, of
misappropriation of funds, including illegally boost-
ing their own salaries. In 2013, Cudahy’s former
mayor, council member, and administrator were
convicted of extortion and accepting bribes. The list
goes on. Perhaps there is something in the water.
The Champ We cannot abandon the cornucopia of
corruption plaguing some little local governments in
145
a corner of Los Angeles County without acknowledg-
ing the league’s national champion: Rita Crundwell,
who served as the appointed treasurer and comp-
troller of Dixon (population, fewer than 16,000,
and Ronald Reagan’s boyhood home), Illinois, for
thirty years. Over that time, Crundwell embezzled
nearly $54 million, forcing the city to drastically cut
services, including letting employees go for lack of
funds, freezing salaries for two years, and nixing
the purchase of new radios for police. In 2013,
Crundwell was sentenced to nearly twenty years in
federal prison. Her embezzlement is thought to be
the largest municipal fraud in American history.
Corruption as Conquest: Janitorial Joys
On occasion, an otherwise-honest public agency is
effectively “captured” by a corrupt sub-organiza-
tion that, for all intents and purposes, is the reigning
power center that really runs, or at least sufficiently
intimidates, the larger organization.
An example is New York City’s 8,500 school
custodians, who control a half-billion dollar budget
for 1,200 schools. Custodial scandals have erupted
since 1924, and to this day the custodians are “sys-
tematically transforming their schools into enter-
prises for bribery, extortion, theft, and nepotism.”
Custodians give themselves, friends, and family “no-
show jobs” and pay them fraudulent overtime, steal
school funds to renovate their homes, and extort
contractors. “Most principals [are] terrified of what
they dubbed custodians’ ‘reigns of terror.’”29
Corruption as Culture: Murder and
Mortification
The most ominous sort of traditional graft is that
which defines the civic culture itself, and this kind of
corruption can morph into one mean monster.
Consider the case of Phenix City, in Russell
County, Alabama. Over the course of a century, both
localities had evolved in such a way that, by the
1950s, virtually every local official had some person-
ally-rewarding connection with racketeering; the rest
of Alabama was mortified. Alabama’s newly-elected
attorney general, who had won on the pledge that he
would clean up corruption, was assassinated shortly
after the election. Alabama’s governor appointed a
military force to take charge of both jurisdictions,
 146 PA R T I I I Public and Nonprofit Management: Curbing Corruption, Enhancing Efficiency
and declared martial law in Russell County. One
hundred fifty-two people eventually were convicted
of corruption.30
Fraud in the Independent Sector
There are three kinds of corruption in the independ-
ent sector: nonprofit organizations that defraud
governments, or defraud their donors, and nonprofit
employees who defraud their organizations.
Defrauding Government Two official examina-
tions of nonprofits found that from more than 3
percent (or more than 55,000) to nearly 4 percent
(64,200) of income-tax-exempt organizations owe
the federal government close to $1 billion in unpaid
taxes; about 70 percent of this tax debt is “substan-
tial” delinquent payroll taxes. The twenty-five most
egregious offenders repeatedly withheld employee
wages, paid their executives salaries of more than
$1 million, and attempted to bribe officials of
the Internal Revenue Service (IRS), among other
“abusive activity.”31
Defrauding Donors Nonprofits that defraud gov-
ernment are likely to also defraud their donors.
A notorious instance is Cancer Fund of America
(CFA), a title chosen by its founder, Jim Reynolds,
Sr., in order to confuse its prospective donors
with the wholly legitimate American Cancer
Society, which  had fired Reynolds for question-
able practices in 1984. Shortly thereafter, Reynolds
founded CFA.
CFA spent less than 5 percent of the $75
million that it collected over four decades on cancer
patients,32 but it was only one of a “wretched charity
empire” composed of four cancer charities, each
headed by a member of the Reynolds family, that
channeled 97 percent of the funds they raised (an
estimated $187 million) to the family.33
Although alarums had been sounded for years
and Reynolds’ “charities” occasionally paid some
fines, law enforcement did not get serious about
their scams until 2015, when all fifty state attor-
neys  general and the Federal Trade Commission
“pursued the most ambitious and largest multi-state
prosecution of a nonprofit” in history.34 In 2016,
the case was settled. The empire was dissolved, but
it had virtually no money left with which to repay
donors or anyone else. Reynolds surrendered an
unspecified amount of his personal assets to the
court, and was sternly ordered to never, ever get
into the charity business again; in other words, he
walked.
To say that the case’s outcome was unsatisfy-
ing is an understatement. Reynolds skated, in part,
because honest nonprofits characteristically ignore
the damage being done to them by corrupt nonprof-
its, and resist the sort of regulation that would quash
their frauds more quickly.35 And they also walked
because government was asleep at the switch; it is
telling that, despite clear evidence of fraud, it not
only took decades before official action began, but
that the IRS was nowhere to be found in the pros-
ecution of the tax-exempt wretched charity empire.
As a result of Washington’s atrophying oversight, the
states are increasingly aggressive in overseeing non-
profits.36
Defrauding Nonprofits “Charity officials stole or
misused at least $1.28 billion from 152 nonprofit
organizations over a seven-year period”—but “very
little empirical research about fraud in nonprof-
its exists.”37 We do know that 10 percent of 1,000
nonprofits reported to the IRS a “significant [but
unexplained] diversion of funds,” amounting to
more than a half-billion dollars over five years. This
is money that has “gone missing,” but where it has
gone, no one seems to know. One distinct possibil-
ity is that it illegally has gone missing into nonprofit
officials’ pockets.38
Almost all fraud committed against these organ-
izations (98 percent) is committed “solely by offend-
ers within the organization,” over a third of whom
are managers. More than three-fifths are women
(who, along with older employees, account for the
greatest losses), whereas in the other two sectors
most fraudsters are men. Corruption involving col-
lusion between employees and outsiders occurs in
just 2 percent of instances of fraud; nonprofit cor-
ruptive collusion appears to be lower than in the
private and public sectors.
The smaller the nonprofit, the likelier it is to be
a victim of fraud, “a finding counter to public-sector
fraud research.” Independent-sector organizations
are more likely to endure significantly heavier losses
to fraud when they neglect external audits, anony-
mous hot lines, and fiscal controls.39
 PA R T I I I Public and Nonprofit Management: Curbing Corruption, Enhancing Efficiency
THE EVOLUTION OF AMERICAN
GRAFT
The roots of Americans’ concern with corruption are
dense and deep, and extend to the very founding of
the United States itself: The word, “corruption,” or
some variant of it, appears in The Federalist Papers
no fewer than fifty-eight times.40
American perspectives on corruption, and the
ways in which Americans choose to battle it, have
altered over the years.
Graft Parties On, 1900–1940
During much of the twentieth century, and earlier,
political reformers attacked graft, which was pro-
foundly partisan, pervasive, and patronage-based, by
promoting the professionalism of public administra-
tion and isolating public administrators from politics
(recall Chapter 2). Ultimately, this “anti-patronage
vision of corruption control,” expanded into a “pro-
gressive vision” that argued for the wholesale reform
of the political system from top to bottom.41
Graft as a Nuisance, 1940–1970
By the 1940s, the reformers had made considerable
headway. A consequence was that graft was seen
less as a systemic problem, and more as a sporadic
phenomenon that could be dealt with over time by
applying the principles of administration (recall
Chapters 2 and 3) to improve governments’ organ-
ization, processes, and budgeting, which would
secure the public’s treasure. “Out of reform, moral
in its motivation, came reorganization, technical and
managerial in connotation.”42
Our New and Messy Meaning of Corruption,
1970–Present
The queerly comforting thing about good old-
fashioned graft is that we can readily understand
it. Beginning in the 1970s, however, corruption has
been perceived as including not only traditional
fraud, but other, less clear, meanings as well, notably
waste and abuse, among others. In the presiden-
tial election of 1960, the term, “waste, fraud, and
abuse,” was not uttered. It was spoken in subsequent
147
contests, however, and by the 1980 election, the
presidential candidates brayed the phrase no fewer
than eighty-three times; it has made strong showings
ever since.43
Fraud has always been with us, but more
recently fraud has taken on a renewed and even less
acceptable presence. The savings and loan scandal of
the 1980s, in which $125 billion of taxpayers’ treas-
ure were used to bail out thousands of savings and
loan associations that had, often fraudulently, “lost”
the savings of millions of investors, was the direct
result of their irresponsible deregulation. Multi-
billion-dollar levels of fraud in Medicare, Defense,
and Housing and Urban Development (and, in the
2000s, Big Fraud’s comeback in the reconstruc-
tions following the invasion of Iraq and Hurricane
Katrina) rendered the public even angrier over tra-
ditional fraud, and reinforced its intolerance of it.
Beginning in the 1970s, events exploded that
altered, perhaps permanently, the public’s perception
of corruption.
Waste and Incompetence as Corruption: The Fall of
New York New York City’s fiscal crisis of 1975, in
which the city narrowly averted default only because
Washington bailed it out with more than $9 billion,
was primarily a product of plain waste, or avoida-
ble expenses that result from inefficient practices or
systems, or inadequate controls.
The city’s debacle made a deep impression on
the public, which began to equate governmental
waste and incompetence with public corruption, a
perception that has grown over time. An academic
review of the literature on governmental waste iden-
tified a type of waste it titled, “Corruption, Fraud,
Theft, and Red Tape.”44 Red tape equates with cor-
ruption, fraud, and theft? The title of a mudsling-
ing book put it succinctly: Government Racket:
Washington Waste From A to Z.45 Waste is a racket?
Abuse as Corruption: The Fall of the White
House Between 1973 and 1975, a “third rate
burglary” (to quote the president’s press secretary)
metamorphosed into the mother of all political scan-
dals—“Watergate,” or President Richard Nixon’s
efforts to cover up his aides’ burglary of the offices
of his opposition’s party. Watergate, besides forcing
Nixon’s unprecedented resignation and incarcerat-
ing some forty top aides and burglars, also marked
 148 PA R T I I I Public and Nonprofit Management: Curbing Corruption, Enhancing Efficiency
the jelling of the public’s perception that abuse of
authority—or the illegal, unethical, or inappropriate
misuse of the power vested in one’s public office—
constitutes corruption.
Because Watergate’s abuse involved burglary
and perjury (but not fraud), it was flatly criminal.
However, a subsequent scandal, “Whitewater,” was
merely inappropriate and unethical, yet still roiled
the body politic almost as violently as had Watergate.
Whitewater concerned Congress’s appointment of a
special prosecutor to investigate some of President
Bill Clinton’s personal investments. The prosecutor
found no provable financial improprieties, but did
expose that the president had had an affair with a
White House intern.
Most Americans viewed the prosecutor’s
zealous expansion of his original mission to be, at
best, inappropriate, and Clinton’s sexual exploita-
tion of a young intern as unethical (and his lying
about it under oath was criminal). These abuses
led to the demise of the twenty-one-year-old inde-
pendent prosecutor law; the U.S. Supreme Court’s
unprecedented disbarment of a president; Congress’s
impeachment, trial, and acquittal of the president;
and hardened Americans’ opinion that abusing
power is corruption.
The Lump The result of these and similar incidents is
that not only does traditional fraud anger Americans
more than ever, but “corruption” has metamor-
phosed into a blurred lump in not just the popular
mind, but in everyone’s mind. Not only are fraud,
bribery, and graft perceived as corruption, as they
always have been, but waste, abuse, incompetence,
impropriety, indecency, and political differences now
are seen as corruption as well. These are really “less
serious ethical breaches than true corruption,” but
they nevertheless dilute “our focus on real corrup-
tion, which continues unabated,” a “trend” that has
been “accelerating over the last couple of decades.”46
Each of corruption’s new and messy meanings can be
and has been subject to criminal charges.
CONFRONTING CORRUPTION
IN AMERICA
What is the extent of political graft in the United
States, and what is being done about it?
Perceptions of American Corruption
The United States stacks up better than most in
popular perceptions as an honest government. It
ranks seventeenth out of 175 countries in terms of
its perceived corruption—not a mortifyingly low
ranking, certainly, but not one that conveys bragging
rights, either. From 1995 (when the ranking began)
to 2011, the United States’ ranking sank by more
than a third, hitting twenty-fourth in 2011, but,
beginning in 2012, the trend began to reverse.47
Over fifty years, the number of Americans
who said that “quite a few government officials are
crooked” more than doubled, from 24 percent to 52
percent.48 A majority states that “corrupt political
leaders” are the nation’s top problem.49
Government workers have their own views
about the extent of public corruption, and their
perceptions differ from those of the public. Federal,
state, and local employees report that “overtly
illegal” misconduct in their workplaces has declined
by an average of two-fifths over seven years.50
The Extent of Fraud
Annually, fewer than 3,000 public officials and
“others involved” (who comprise about a third of
the total) are charged, convicted, or awaiting trial
for public corruption.51 The leading charges are
theft and bribery in programs involving federal
funds; high ranking or elected officials are found in
only 2 percent of these corruption cases, and most
cases involve low-ranking federal or local officials.
Happily, overall corruption is in decline.52
Typically, from more than 300 to over 400 of
these prosecutions involve federal officials in any
given year.53 Four percent of federal employees have
observed over the past year the altering of financial
records in the federal government; 3 percent have
noted stealing; and 2 percent are aware of bribery.
These figures are bad, but not horrid. Federal
employees are “the only government employees to
indicate observance of misconduct at levels signifi-
cantly lower than the U.S. average.”54
Known financial fraud committed by federal
employees against the federal government accounts
for considerably less than 1 percent of the federal
budget. “Nevertheless, though relatively small in
terms of the percentage of the budget impacted,
 PA R T I I I Public and Nonprofit Management: Curbing Corruption, Enhancing Efficiency
[fraud] has proven to be extremely costly” simply
because of the immensity of the federal budget.55
From roughly 250 to 350 state officials and
from 600 to 750 local officials per year are charged,
convicted, or awaiting trial for public corruption.56
Seven percent of state workers and 6 percent of local
employees have observed over the past year the
altering of financial records in their governments; 8
percent of state workers and 10 percent of local ones
note theft; and 4 percent of each report bribery. The
rates of each of these perceived corruptions match
their U.S. averages.57
Inhibiting American Graft: Cultural,
Political, and Structural Factors
The United States is largely free of those national
cultural conditions, noted earlier, that encourage
corruption.
Cultural Inhibitors American culture, with its
premium on openness and access (or, as we discussed
in Chapter 5, its “small power distance”), discour-
ages corruption. Relative to large power distance
cultures, open and accessible countries “have a very
high proportion” of public employees who report
unethical or illegal conduct in their agencies; more
whistleblowers (in fact, most) receive “positive reac-
tions from peers”; and more (again, a majority) see
the misconduct corrected.58
Structural Inhibitors Americans enjoy a relatively
prosperous economy; live mostly in urban areas; and
their governments are bombarded unrelentingly by a
robust, sometimes rabid, press. These factors inhibit
corruption.
In addition, Americans are governed by a decen-
tralized and diffused public sector, a condition that,
as explained earlier, discourages graft on a global
scale.
An unexpected structural factor is population:
In those American states with isolated capitals in
sparsely populated regions, corruption is considera-
bly more common. This seems to be attributable, in
part, to less media coverage than the capital.59
Political Factors Incumbent public officials have
been known to make it difficult to vote, sometimes
to protect their fraudulent shenanigans (recall that
149
low voter turnout associates with greater corrup-
tion), and this pays off, at least for a select few.
Cities that discourage voter turnout through such
devices as holding local elections on dates that differ
from the dates of national or state elections (this
decreases turnout by 14 percent, on average), not
mailing polling place locations (5 percent), or requir-
ing voters to register one month before the election
(4 percent), among other inhibitors, correlate with
larger proportions of city council members who
both run for re-election and who win. Despite these
and other obstacles to voting in some jurisdictions,
however, municipal employees and homeowners
still turn out in impressively high numbers; in these
cities, “the proportion of the budget spent on payroll
is higher and the proportion of taxes from property
taxes is lower” than in cities that encourage turnout,
and significantly so. Hence, “a low-turnout envi-
ronment may allow incumbents to win reelection
without being responsive to the general public.”60
The good news is that, when there is a high
incidence of corruption in the American states,
voter turnout increases, a tribute to the honesty and
common sense of Americans.61
When it comes to corruption, voting counts.
Curbing Corruption: The Case for Balance
and Will
The field has come a long way in discovering devices
that can lead to cleaning up corrupt governance, but
there remains “confusion in the literature on which
anticorruption methods work best and most effi-
ciently.”62
Old, New, and a Balanced Approach Traditional
corruption controls—such as audits, inspections,
and civil service reform—work, but often only up to
a point. For example, all the recommendations (and
then some!) of the early-twentieth-century reform-
ers had long been in place in the Pentagon even as,
in the late twentieth century, it was being “sold” to
an unheard-of extent to corrupt private contractors.
These were the years of the infamous $600 toilet
seats, yet “hundreds of thousands of employees had
no task other than to keep scrupulously close tabs
on contractors. Seventy-nine separate offices issued
voluminous acquisition regulations. . . . [which]
equaled five times the length of Leo Tolstoy’s novel
 150 PA R T I I I Public and Nonprofit Management: Curbing Corruption, Enhancing Efficiency
War and Peace. The Army once promulgated fifteen
pages of specifications for sugar cookies alone.”63
Let us not be too quick to dismiss these hoary
practices because “a strong case can be made to
remain sharp” in using traditional controls, which
account for “approximately one-third” of all the
origins of corruption cases. No other method
of exposing public misconduct, such as whistle
blowing, remotely approaches this level.64
This is not to argue for abandoning newer
methods of corruption control that are being discov-
ered, if often inadvertently. For example, although
information systems, performance measures, and
public program evaluations all were adopted for
purposes other than curtailing corruption, each has
proven to be useful in doing so. New “fraud apps”
on smartphones (carried by about two-thirds of
American adults) have eclipsed traditional hot lines
for citizens reporting local corruption, and their
reports appear to be rising as a result.65
The key to curbing corruption is one of flexibly
and continuously mixing methods in a balanced and
sensitive manner. “The right mix of corruption con-
trols will undoubtedly differ” from government to
government, and from agency to agency within the
same government, and the “optimal mix” of those
controls will alter over time.66
Exposing Is Not Disposing We are not imply-
ing that the many methods of public management
can, in and of themselves, actually eliminate graft.
Rather, they were designed only to discourage cor-
ruption by making its entry less easy and its discov-
ery more likely.
Even to merely discourage graft, however, cor-
ruption controls must first be used. Otherwise, they
are irrelevant. Whatever the extent of the corrup-
tion—whether it is of the garden variety, such as
purloining a pencil from the office, or it is the garden
itself, such as a putrescence that permeates a polity—
political will is the ultimate key to its disposal.
Prosecuting Corruption: The Crucial
Federal Role
State and local governments investigate and prose-
cute fraud, some quite successfully. New York City’s
Department of Investigation, founded in 1873, is
exemplary; in just one decade, its officers arrested on
corruption charges half of the city’s taxi, building,
and plumbing inspectors.
But there are difficulties when grass-roots gov-
ernments pursue grass-roots graft. In New York’s
case, “It took a while to figure out how to do this—
more than a hundred years”—even though the
department’s “daily work consists of rounding up
people whose crimes are so small, so unnecessary,
and so amazingly stupid that their capture is an act
of mercy.”67
State attorneys general and district attorneys
“are generally not equipped with the resources
needed for a political undercover investigation”;
most are elected, which can lead to their reluctance
to investigate corrupt officials in their own parties;
and “they often are hampered by state laws that are
less expansive than federal ones.”68
As a consequence, the federal government is
central to the curtailment of corruption at every gov-
ernmental level, initiating “perhaps as many as 80
percent” of all prosecutions for public corruption in
the United States.69
Big Graft: Deep, Systemic, and Legal
We have been discussing American graft largely from
a small-ball perspective. But there are far deeper and
more systemic forms of corruption. Regrettably, at
least in Washington, these forms are entirely legal—
but are no less corrupt for it.
Washington’s Corrupt Perpetrations One such
form, which we discuss in detail in Chapter 11, is
Washington’s revolving door, which arguably has
rendered Congress and federal regulatory agencies
the handmaidens of special interests; Wall Street is
particularly notorious in this regard, but there are
many additional examples.
The other is the Supreme Court, which has effec-
tively ruled that money displaces people in politics,
and that corruption must be defined in such a starkly
limited way that the Court’s definition verges on the
inaccurate, or is, at best, breathtakingly incomplete.
Money Is Speech Congress first regulated money
in politics in 1907, when it passed the Tillman Act,
which banned corporate political contributions.
Over the next sixty-seven years, Congress enacted
laws that further restricted money’s political role.
 PA R T I I I Public and Nonprofit Management: Curbing Corruption, Enhancing Efficiency
Congress’s rationale throughout was consistently
the same: the outsized influence of a wealthy few
could cause corruption and greater political inequal-
ity, and undermine public trust of government.
In 1976, however, in Buckley v. Valeo, the
Court held seven-to-one that political donations
were a form of expression, and thus were pro-
tected under the First Amendment (the Freedom
of Speech Clause). The United States seems to be
alone in equating money with expression, as it is “a
view shared by no other Western democracy.”70 The
Court also rejected Congress’s longstanding position
that political contributions from the rich could lead
to political inequality.
Corporations Are People—Just a Different Sort
of People Who Never Die In 2010, in Citizens
United v. Federal Election Commission, the Court
confirmed, five-to-four, split along partisan lines,
the Orwellian notion that money is speech, and
further ruled that the Constitution protects not only
political donations from individuals, but also con-
tributions from associations of individuals, such as
corporations and unions. Thus the Court arrived
at the equally Orwellian conclusion that a corpora-
tion, which is “an association of individuals, created
by law or under authority of law, having a contin-
uous existence independent of the existences of its
members and powers and liabilities distinct from
those of its members,”71 is a person; it just happens
to be a person who is immortal and different from
individual persons, in that, for example, corpora-
tions do not breathe. For good measure, the Court
also redefined “undue influence” (which, of course,
is precisely what special interests want for their
money) to mean the much mellower, even positive,
“responsiveness.” Small wonder, perhaps, that about
four-fifths of Americans oppose Citizens United.72
Purchasing Public Policies The consequences of
Buckley and Citizens United? “There is quite possi-
bly more money in American politics today than at
any point in the country’s history.”73 And, perhaps,
fewer people contributing most of that money than
ever before: fewer than 32,000 donors accounted
for 29 percent of all disclosed political fundraising
at the federal level in 2014.74 (Since 2010, Congress
has been extraordinarily reluctant to force disclo-
sure of who makes campaign contributions.)
151
Both decisions have rendered the United States
tax code, at nearly four million words, the world’s
longest.75 Why? Because “America is unique among
democracies in requiring, at all levels of politics,
that vast amounts of cash be raised from the private
sector” to win elections. To raise this money, legis-
lators sell amendments to the tax code to special
interests, which may account for the fact that, since
2001, Congress has made, on average, one change
to the tax code every day.76 Buying an advantageous
line in the tax code is “the world’s ultimate ‘pay for
play’ setup.”77
Understandably, four-fifths of Americans,
“regardless of their political philosophy, party iden-
tification, age, education, sex, or income level,”
would vote to limit the amount of campaign money
that congressional candidates could spend.78
Graft as a Quid-Pro-Quo Microdot In 2014, the
Court plopped the cherry on this soured sundae
in McCutcheon v. Federal Election Commission,
decided five-to-four, again along partisan lines. The
ruling defined corruption in the most microscopic
and narrow terms conceivable: as a quid pro quo
(in essence, a direct bribe for a specific service),
even though corruption, as we explained earlier,
almost never operates as a quid pro quo, and, when
it rarely does so, it is confined largely to the lower
levels of the food chain. This was something that the
Founders had fully understood; of the hundreds of
occasions that the topic of graft surfaced during the
Constitutional Convention and in the subsequent
state ratification debates, corruption meant quid pro
quo only about 1 percent of the time.79
To expand the power of the rich in elections
in which each citizen supposedly is involved as an
equal with every other citizen, and then to limit
the prosecution of those who unduly influence pol-
icymakers to a form of graft that is almost never
present in actuality, is very deep and systemic cor-
ruption indeed.
FROM ANTICORRUPTION TO
EFFICIENCY: THE MORPHING OF
PUBLIC MANAGEMENT
A cruel irony of corruption controls is that, through
their increasingly labyrinthine fiscal systems and
 152 PA R T I I I Public and Nonprofit Management: Curbing Corruption, Enhancing Efficiency
time-consuming and enervating checks, rules, and
red tape, they can stymie efficient and productive
governing.80
Public administration, like any other phenom-
enon, is subject to W. Ross Ashby’s law of requisite
variety, which states that regulatory (or, in our case,
governing) mechanisms must equal in their com-
plexity those of the systems that they are meant to
control.81 In its public plumage, Ashby’s law pertains
not only to more tangled forms of corruption, but
also to increasingly convoluted problems of more
efficient governing.
In Part III, we address these complexities, which,
in the public and nonprofit sectors, are expressed
largely in terms of information systems, performance
measurement, program evaluation, finance, bevies of
budgetary formats, human capital management, and
the assessment and management of individual per-
formance, among other techniques; some are new,
others are old, and all are complicated.
Public officials sometimes get a bit carried away
with new management techniques. “These days the
hip subject” among politicians “is management
theory,”82 although those officials who indulge in
managerial “flavors of the month” are somewhat
delusional. Public organizations that “adopt fash-
ionable management practices” are statistically
more likely to be staffed by administrators who
“overestimate” their organizations’ service perfor-
mance relative to how their clients and other exter-
nal stakeholders view their performance.83
Worse, however, time and hard work are expended
by staff to establish one “management-by-best-seller”
technique, only to see it cavalierly discarded by top
management when another hot management notion
cruises down the consultants’ turnpike. “The level
of federal reform,” for instance, “appears to parallel
the frenzy of management improvement fads in busi-
ness. . .. Federal employees have faced one competing
reform after another, leading to confusion, wasted
motion, and frustration in priorities with fads and
fashions that are now out of favor.”84 State and local
governments are also complicit.
When managerial faddism strikes, those admin-
istrators who toil in the bureaucracy’s bowels some-
times are forced to behave like a school of fish,
darting without warning first one way and then
another, in a pointless effort to be “with it”—if also
witless. As a consequence, managers’ morale and
openness to new ideas plummet, but their frustration
and cynicism soar; a wait-them-out-and-wear-them-
down mentality emerges among careerists. Because
an unhappy workforce usually is an unproductive
workforce, goes the argument, the new techniques
are themselves counterproductive.
There is another side to this: a competition of
new approaches can result in improved adminis-
tration, if administrators are both confident and
discerning enough to pick and choose among tech-
niques—or even parts of techniques, old as well
as new—that would improve the performance of
their agencies and nonprofit organizations. It is
an approach that works. Although many of the
methods of public management “have ended up
being castigated and even ridiculed, these methods
have provided an ever-improving series of public
management techniques that can, and indeed are,
improving government performance.”85
Depending on the circumstances that public
and nonprofit administrators face, some or all of
the notions advanced in Part III could be useful and
rewarding. But to mindlessly adopt them simply
because they are there likely would result in less
effective management.
NOTES
1. Rajeev K. Goel and Michael A. Nelson, Causes of
Corruption: History, Geography and Government
(Helsinki, Finland: Bank of Finland Institute for
Economies in Transition, 2008), p. 17.
2. Alok K. Bohara, Neil J. Mitchell, and Carl
F. Mittendorff, “Compound Democracy and
the Control of Corruption: A Cross-Country
Investigation,” Policy Studies Journal 32 (Winter
2004), pp. 481–499. The quotation is on p. 481.
3. Desiree Teobaldelli, “Federalism and the Shadow
Economy,” Public Choice 146 (March 2011), pp.
269–289. The quotation is on p. 269.
4. Gideon Yaniv, “Tax Evasion, Conspicuous
Consumption, and the Income Tax Rate,” Public
Finance Review 41 (May 2013), pp. 302–316. The
quotation is on p. 302.
5. Yener Altunbas and John Thornton, “Fiscal
Decentralization and Governance,” Public Finance
Review 40 (January 2012), pp. 66–85.
6. Goel and Nelson, Causes of Corruption, p. 17.
7. Dong Chul Shim and Tae Ho Eom, “Anticorruption
Effects of Information Communication and
 PA R T I I I Public and Nonprofit Management: Curbing Corruption, Enhancing Efficiency
Technology (ICT) and Social Capital,” International
Review of Administrative Sciences 75 (March
2009), pp. 99–116.
8. Johann Graf Lambsdorff, “Corruption in Empirical
Research—A Review,” Paper presented at the
International Anti-Corruption Conference, (Durban,
South Africa, December 10–15, 1999), p. 11.
9. Rafael F. La Porta, Florencia Lopez-De-Silanes,
Andrei Shleifer, and Robert W. Vishny, “Trust in
Large Organizations,” AEA Papers and Proceedings
87 (May 1999).
10. Goel and Nelson, Causes of Corruption, p. 17.
11. Caroline Van Rijckeghem and Beatrice Weder,
Corruption and the Rate of Temptation: Do Low
Wages in the Civil Service Cause Corruption?
(New York: International Monetary Fund,
1997).
12. Peter B. Evans and James E. Rauch, “Bureaucratic
Structure and Economic Performance in Less
Developed Countries,” Journal of Public Economics
75 (January 2000), pp. 49–71.
13. Lambsdorff,“Corruption in Empirical Research—A
Review,” p. 13.
14. Patrick Flavin and Richard Letet, “Religion and
Government Corruption in the American States,”
Public Integrity 15 (Fall 2013), pp. 329–344. The
quotation is on p. 329.
15. Gjalt de Graaf and L.W.J.C. Huberts, “Portraying
the Nature of Corruption Using an Exploratory
Case Study Design,” Public Administration Review
68 (July/August 2008), pp. 640–653.
16. John Bohte and Kenneth J. Meier, “Goal
Displacement: Assessing the Motivation of
Organizational Cheating,” Public Administration
Review 60 (March/April 2000), pp. 173–182.
17. Andie J. Yapp, Abbie S. Wazlawek, Brian J. Lucas,
et al., “The Ergonomics of Dishonesty: The Effect
of Incidental Posture on Stealing, Cheating, and
Traffic Violations,” Psychological Science 24 (11,
2013), pp. 1–9.
18. De Graaf and Huberts, “Portraying the Nature
of Corruption Using an Exploratory Case Study
Design,” pp. 647, 643, 645, 644, 649, 648.
19. Joris Lammers, Diederik A. Stapel, and Adam
D. Galinsky, “Power Increases Hypocrisy:
Moralizing in Reasoning, Immorality in Behavior,”
Psychological Science 21 (May 2010), pp. 737–744.
20. Samuel Bendahan, Christian Zehnder, Francois
P. Pralong, and John Antonakis, “Leader
Corruption Depends on Power and Testosterone,”
ScienceDirect.com (July 7, 2014).
153
21. Michael W. Kraus, “Psychology Suggests that
Power Doesn’t Make People Bad—It Just Reveals
Their True Natures,” Govexec.com (October 14,
2016).
22. Moshe Maor, “Feeling the Heat? Anticorruption
Mechanisms in Comparative Perspective,”
Governance 17 (January 2004), pp. 1–28.
23. Alok K. Bohara, Neil J. Mitchell, and Carl
F. Mittendorff, “Compound Democracy and
the Control of Corruption: A Cross-Country
Investigation,” Policy Studies Journal 32 (Winter
2004), pp. 481–499.
24. Tetsuya Fujiwara, “The Impact of Political
Corruption on Voter Turnout in Industrial
Democracies,”  Paper presented at the Annual
Meeting of the Midwest Political Science
Association, (Chicago: April 2005).
25. Marco Pani, Hold Your Nose and Vote: Why Do
Some Democracies Tolerate Corruption? IMF
Working Paper No. 09/83 (Washington, DC:
International Monetary Fund, 2009), p. 1.
26. De Graaf and Huberts, “Portraying the Nature
of Corruption Using an Exploratory Case Study
Design,” p. 650.
27. Janet Greenlee, Mary Fischer, Teresa Gordon,
and Elizabeth Keating, “How to Steal from a
Nonprofit: Who Does It and How to Prevent It,”
Nonprofitquarterly.org (December 21, 2007).
28. Ruben Vives, “Bell Council Seeks Resignations of 3
City Officials,” Los Angeles Times (July 21, 2010).
29. Lydia Segal, “Roadblocks in Reforming Corrupt
Agencies: The Case of the New York City School
Custodians,” Public Administration Review 62
(July/August 2002), pp. 445–460. The quotations
are on pp. 445–446, 448.
30. For a good treatment of the Phenix City follies, see
Alan Grady, When Good Men Do Nothing: The
Assassination of Albert Patterson (Tuscaloosa, AL:
University of Alabama Press, 2003).
31. U.S. Treasury Inspector General for Tax
Administration, Some Tax-Exempt Organizations
Have Substantial Delinquent Payroll Taxes
(Washington, DC: U.S. Government Publishing
Office, 2014), pp. 8, 3. Figures are for FY 2012 (3.8
percent) and FY 2006 (3.1 percent).
32. Ruth McCambridge, “Cancer Charity Case
Settled—But the Money’s Gone and Reynolds
Walks,” Nonprofitquarterly.org (March 31, 2016).
33. Rick Cohen, “Reynolds’ ‘Wretched Charity Empire’
Finally Succumbs to Government Oversight,”
Nonprofitquarterly.org (May 20, 2015).
 154 PA R T I I I Public and Nonprofit Management: Curbing Corruption, Enhancing Efficiency
34. McCambridge, “Cancer Charity Case Settled—But
the Money’s Gone and Reynolds Walks.”
35. Cohen, “Reynolds’ ‘Wretched Charity Empire’
Finally Succumbs to Government Oversight.”
36. Lloyd Hitoshi Mayer, “The Rising of the States
in Nonprofit Oversight,” Nonprofitquarterly.org
(August 8, 2016).
37. Kristy Holtfreter, “Determinants of Fraud Losses in
Nonprofit Organizations,” Nonprofit Management
& Leadership 19 (Fall 2008), pp. 45–63. The quo-
tation is on p. 46.
38. Ruth McCambridge, “Washington Post Investigates
‘Significant Diversions’ in Nonprofit Funds as
Reported to IRS,” Nonprofitquarterly.org (October
23, 2013). Figures are for 2008–2013.
39. Holtfreter, “Determinants of Fraud Losses in
Nonprofit Organizations,” pp. 47, 52, 57.
40. George Will, “End Run on Free Speech,” Savannah
Morning News (May 25, 2009).
41. Frank Anechiarco and James B. Jacobs, “Visions of
Corruption Control and the Evolution of American
Public Administration,” Public Administration
Review 54 (September/October 1994), pp. 465–473.
The quotation is on p. 466.
42. Leonard D. White, The Administrative Histories:
The Federalists (New York: MacMillan, 1948),
p. 16.
43. Annenberg Campaign Data Base, as cited in Paul C.
Light, The True Size of Government (Washington,
DC: Brookings, 1999), p. 88.
44. William Stanberry and Fred Thompson, “Toward
a Political Economy of Government Waste: First
Step, Definitions,” Public Administration Review
55 (September/October 1995), pp. 418–427.
45. Martin L. Gross, Government Racket: Washington
Waste from A to Z (New York: Bantam, 1992).
46. Mark Funkhouser, “The 3 Flavors of Corruption,”
Governing.com (January 2015).
47. Transparency International, Corruption Perceptions
Index 2014 (Berlin: Author, 2015).
48. American National Election Studies, “Are Govern-
ment Officials Crooked, 1958–2008,” http://www.
electionstudies.org/nesguide/2ndtable/t5a_4_1.htm.
49. Pew Global Attitudes Project, Global Opinion
Trends, 2002-2007 (Washington, DC: Author,
2008), pp. 35, 114, 121. Figure, 51 percent, is for
2007. Only “illegal drugs” score higher.
50. As derived from data in Ethics Resource Center,
National Government Ethics Survey: An Inside
View of Public Sector Ethics (Arlington, VA:
Author, 2008), p. 3. Figure is for 2000–2007.
51. ProQuest LLC, ProQuest Statistical Abstract of the
United States, 2016 (Bethesda, MD: Author, 2016),
Table 369. Figures are for 2000, 2010, 2012, 2013.
52. Adriana S. Cordis and Jeffrey Milvo, “Measuring
Public Corruption in the United States: Evidence from
Administrative Records of Federal Prosecutions,”
Public Integrity 18 (2, 2016), pp. 127–148.
53. ProQuest LLC, ProQuest Statistical Abstract of
the United States, 2016, Table 369. Figures are for
2000, 2010, 2012, 2013.
54. Ethics Resource Center, National Government
Ethics Survey, pp. 20, 19. Figures are for 2007.
55. Sandra T. Welch, Sarah A. Holmes, and Jeffrey W.
Stawser, “Fraud in the Federal Government: Part
I—The Perpetrators and the Victims,” Government
Accountants Journal 46 (Spring 1997), pp. 24–27.
The quotation is on p. 24.
56. ProQuest LLC, ProQuest Statistical Abstract of
the United States, 2016, Table 369. Figures are for
2000, 2010, 2012, 2013.
57. Ethics Resource Center, National Government
Ethics Survey, pp. 25, 31. Figures are for 2007.
58. Marit Skivenes and Sissel Trygstad, “When
Whistle-Blowing Works: The Norwegian Case,”
Human Relations 63 (July 2010), pp. 1071–1097.
The quotation is on p. 1071.
59. Felipe R. Campante and Quoc-Ahn Do, Isolated
Capital Cities, Accountability and Corruption:
Evidence from US States (Cambridge, MA: Kennedy
School of Government, Harvard University, 2012).
60. Jessica Trounstine, “Turnout and Incumbency in
Local Elections,” Urban Affairs Review 49 (2, 2012),
pp. 167–189. The quotations are on pp. 189, 179.
61. Monica Escaleras, Peter Calcagno, and William
Shughart, “Corruption and Voter Participation,”
Public Finance Review 40 (November 2012),
pp. 789–815. The quotation is on p. 789.
62. De Graaf and Huberts, “Portraying the Nature
of Corruption Using an Exploratory Case Study
Design,” p. 650.
63. Andy Pasztor, When the Pentagon Was for
Sale: Inside America’s Biggest Defense Scandal
(New York: Scribner, 1995), p. 10.
64. Gjalt de Graaf, “A Report on Reporting: Why
Peers Report Integrity and Law Violations in Public
Organizations,” Public Administration Review 70
(September/October 2010), pp. 767–779. The quo-
tation is on p. 776.
65. Rebecca Beitsch, “New Apps Help Taxpayers
Report Waste, Fraud and Abuse,” Pewtrusts.org
(April 22, 2016).
 PA R T I I I Public and Nonprofit Management: Curbing Corruption, Enhancing Efficiency
66. Frank Anechiarco and James B. Jacobs, The
Pursuit of Absolute Integrity: How Corruption
Control Makes Government Ineffective (Chicago:
University of Chicago Press, 1996), p. 198.
67. Larissa MacFarquhar, “Busted,” The New Yorker
(February 1, 2010), pp. 50–57. The quotations are
on p. 53. “Decade” refers to the 1990s.
68. Alan Greenblatt, “The Corruption Puzzle,”
Governing (July 2008), pp. 24–30. The quotations
are on p. 29.
69. Corporate Crime Reporter, Public Corruption in
the United States (Washington, DC: Author, 2007).
70. Fareed Zakaria, “How Trump Exposed the
Corruption in the U.S. Tax Code,” Washington
Post (October 6, 2016).
71. “Corporation,” The Random House Dictionary of
the English Language, unabridged ed. (New York:
Random House, 1966), p. 327. Emphasis added.
72. ABC-Washington Post Poll 1, Public Views of
Citizens United v. Federal Election Commission
(Washington, DC: Authors, 2010).
73. Jill Lepore, “The Crooked and the Dead,” The New
Yorker (August 25, 2014), pp. 22–28. The quota-
tion is on p. 23.
74. Peter Olson-Phillips, Russ Choma, Sarah Bryner,
and Doug Weber, “The Political One Percent of
the One Percent: Megadonors Fuel Rising Cost
of Elections in 2014,” Sunlightfoundation.com
(April 30, 2015).
75. Sean D. Ehrlich, Access Points: An Institutional
Theory of Policy Bias and Policy Complexity
(New York: Oxford, 2011).
155
76. National Taxpayer Advocate, 2012 Annual Report
to Congress (Washington, DC: U.S, Government
Printing Office, 2013).
77. Zakaria, “How Trump Exposed the Corruption in
the U.S. Tax Code.”
78. Gallup Poll, as cited in Megan Thee-Brenan. “Polls
Show Broad Support for Campaign Spending
Caps,” New York Times (April 2, 2014).
79. Lepore, “The Crooked and the Dead,” p. 25.
80. Anechiarco and Jacobs, The Pursuit of Absolute
Integrity.
81. W. Ross Ashby, Introduction to Cybernetics
(London: Chapman and Hall, 1961).
82. “Leviathan Reengineered,” The Economist
(October 19, 1996), p. 41.
83. Rhys Andrews, George A. Boyne, Jae M. Moon,
and Richard M. Walker, “Assessing Organizational
Performance: Exploring Differences between Inter-
nal and External Measures,” International Public
Management Journal 13 (2, 2010), pp. 105–129.
The quotations are on p. 105.
84. Paul C. Light, “A Government Ill Executed: The
Depletion of the Federal Public Service,” Public
Administration Review 68 (May/June 2008),
pp. 413–419. The quotation is on p. 417.
85. Harry P. Hatry, “The Alphabet Soup Approach:
You’ll Love It!” The Public Manager 21 (Winter
1992–1993), pp. 8–12. The quotation is on p. 8.
CHAPTER
Clarifying Complexity:
The Public’s
Information Resource
I n an age in which information technology
(IT) saturates society, it is worth recalling the
little-known fact that the public sector has long
been crucial in inventing IT’s diverse devices.
A Census Bureau employee, Herman Hollerith,
invented for use in the 1890 census a punch card
and tabulation  machine, the forerunner of the
computer. (Hollerith later  founded the Tabulating
Recording  Company,  now known as IBM.) The
Defense Advanced Research Projects Agency was
central in creating the global positioning system, a
project it began in 1959, and, in 1969, the agency
invented “packet switching,” which led to the
Internet.
Despite immense and complex IT problems that
pervade the public sector, governments nevertheless
remain central to the viability of IT. Washington
spends more than $90 billion annually on IT, a sum
that not only is unequaled in the United States, but
likely the world. State and local governments spend
more than $60 billion each year, an amount that is
rising by about 4 percent annually.1
Some eight decades ago, Herbert Simon pre-
dicted that “how to process information” would
emerge as the core challenge for all executives.2 Simon
was more prescient than even he may have known.
Today, top public administrators do indeed spend
most of their time seeking and analyzing informa-
tion,3 and there are some 1.6 million “data-centric”
jobs in the federal, state, and local governments, or
7.4 percent of all public-sector employees. Eighteen
percent of all governments’ data-centric workers are
managers.4
156
DATA FOR PUBLIC
ADMINISTRATORS
Recall from Chapter 4 that the use of hard data,
typically provided by computers, has a direct rela-
tionship with public administrators making superior
decisions and with those decisions being accepted at
higher rates, correlations that appear to be unique
to government.5 For example, when counties adopt
IT, more people become involved in decision making
and better decisions are made, developments that
have, unsurprisingly, a positive and “direct effect on
performance.”6
So, with apologies for stating the obvious,
data are important in making good decisions. But
which data?
The Data Deluge
Never before in human history have there been
so many data. Globally, there are more than a
billion  websites7 that tote up to an estimated
1,000  exabytes of digital data. One exabyte (or
one quintillion bytes) equals 7,400 Libraries of
Congress, and digital data long ago surpassed
by  a factor of millions all the information in all
the books  ever written.8 The data deluge has
grown so  humongous that the increasingly inade-
quate exabytes have been replaced by zetabytes (a
number  followed  by  twenty-one zeros); by 2020,
the  worldwide  database  will  amount to forty-four
zetabytes.9

More than 200 billion emails are sent and
received per day worldwide, and the typical corpo-
rate user sends and receives an estimated 122 emails
each day; both numbers are growing.10 There is
reason to question how useful to public administra-
tors these emails are. Nearly half of federal employ-
ees are “uncomfortable” (26 percent), or “slightly”
so (22 percent), about “being candid in internal
email communications,” suggesting that prob-
lems are not being addressed in their discomfiting
entirety.11 Of the Pentagon’s 700 million monthly
emails, a slender 14 percent is “actually legitimate.
The rest are a mixture of malicious password phish-
ing attempts, chock full of viruses, or the bane of
modern humanity’s existence: spam.”12
Focusing and Narrowing Decision Options
How can the pathetically bounded rationality of
decision makers remotely comprehend this flood
of data? Much of the benefit derived from The
Computer in its ability to winnow data (or, as we
explained in Chapter 4, incoherent facts) that then
can be used as knowledge (or meaningful informa-
tion) in public and nonprofit decision making.
Organizations in all sectors have tried, with
some success, to convert data into knowledge. Most
of us are vaguely familiar with the management
information system, which passively summarizes
data in ways that are useful to decision makers and
is now a commonplace in all sectors. Less familiar,
perhaps, is the decision support system, which, in
tandem with decision makers, proactively analyzes
data and addresses unstructured issues, such as
“what if” scenarios.
Most public agencies have decision support
systems, most are pleased with them,13 and they can
save governments money.14 Three overlapping vari-
ations of these systems are increasingly vital in nar-
rowing administrative choices.
Geographic Information Systems A geographic
information system (GIS) is a location-related com-
puter program that typically combines geospatial
data with maps and aerial photographs. Its uses are
wide. Following the crash of the Columbia space
shuttle, in 2003, Washington used Texas’s GIS to
assist in recovering the widely scattered remains.
States use it to identify where roads need improved
The Public’s Information Resource 157
safety. Local fire fighters use GIS to determine the
fastest route to a fire.
Office of Management and Budget (OMB)
Circular A-16, issued in 1953 and revised many
times since, is the basis of federal GIS policy.
Regrettably, about half of the more than $4 billion
that Washington spends annually on its numerous
geographic information systems is “redundant.”15
National efforts have been made since 1990 to
coordinate federal and state geospatial data, but the
pricey problem is a stubborn one.
State and local governments are thought to
spend twice as much on geographic information
systems as Washington expends, or about $8 billion
per year.16 Sixty-five percent of cities and counties
have a GIS and related systems in operation.17
Enterprise Risk Management Enterprise risk
management is the use of analysis to determine the
potential opportunities or perils that accompany any
strategic decision in an effort to exploit the opportu-
nities and minimize the perils.
The Office of Federal Student Aid was the first
federal bureau to introduce enterprise risk man-
agement, in 2004, in an effort to reduce the high
default rate on the $1.2 trillion in student loans—a
sum “rivaling the entire loan business of JPMorgan
Chase with a staff roughly the size of the National
Weather Service”18—that it had made or guaranteed
loans to forty million borrowers. Its use was so suc-
cessful that the Government Accountability Office
(GAO) removed student loans from its “high-risk”
list of programs that are unduly vulnerable to fraud,
waste, abuse, and mismanagement.
Because enterprise risk management can sub-
stantially reduce risk taking, it is good to know
that federal agencies have been judged to be ahead
of corporations in their handling of risk manage-
ment.19 This is remarkable, given the fact that only
half of agencies have “a formalized risk manage-
ment function,” and just 20 percent have a “chief
risk officer.”20
Big Data Analytics Our final example of a deci-
sion support system is big data analytics, or simply
analytics, which is the extensive analysis of huge
amounts of data and the use of models to drive deci-
sion making. Potentially, big data analytics is a very
big deal.
 158 PA R T I I I Public and Nonprofit Management
Analytics has improved programs ranging from
how effectively teachers teach, to curbing politi-
cal graft (in New York, analytics led to arrest of
the speaker of the state assembly for alleged cor-
ruption), to “predictive policing,” which identifies
where a crime will occur before it happens (shades
of the 2002 movie, Minority Report, in which “pre-
guilty” people were arrested before they committed
the crime).
A survey of federal, state, and local cybersecu-
rity professionals found that 86 percent believed that
analytics would improve cybersecurity (although
just 28 percent were fully leveraging analytics to do
so, and only a third had made analytics a priority).21
The U.S. Office for Anticipating Surprise (yes, there
is such an agency) sponsors a competition for an
analytics “psychic” program that can foresee data
breaches days before they would occur.
The probability that analytics will be used is
greatly enhanced by high levels of governmental
transparency and accountability.22
Federal Big Data Seventy-four percent of federal
inspectors general (IGs) report that data analytics
has had “some” or a “major impact” in identifying
risk areas,23 and 71 percent “use data analytics to
identify potential audit or investigative targets,”
with “over 40%” stating that “at least” a fourth of
their investigations were initiated because they had
used analytics.24 All IGs have increased analytics
resources, with a fifth increasing these resources by
50 to 100 percent, and 5 percent by more than 100
percent over three years.25 It has been authoritatively
estimated that, by using big data analytics, particu-
larly in tax collection and healthcare, Washington
could reduce annual deficits by $220 billion.26
Unfortunately, there is some distance to travel.
Eighty-four percent of federal chief information
officers (CIOs) state that their data analytics systems
are in the early stages of maturity,27 and, worse, 52
percent of federal “leaders” have little understand-
ing of the method;28 in 2012, Washington began a
$200 million Big Data Research and Development
Initiative designed, in part, to correct this deficiency.
State Big Data A third of the states have at least
one big data project underway.29 Fourteen percent
of the states have placed data analytics as a “prior-
ity initiative” in developing “business insights” and
informing “policy decisions,” and 29 percent “have
developed some early applications” in doing so; 13
percent say that analytics’ use in these areas is “not
on the radar.”30 Sixty-seven percent of state auditors
have used analytics “to identify potential audit or
investigative targets,” and all have increased “avail-
able resources” for analytics, including 19 percent
who had increased resources by more than 100
percent.31
Even more resources may be needed, as the
cost of computer fraud to the states “likely has run
into the billions of dollars in recent years as states
have moved services online and as identity theft
has exploded. . .. [although] nobody knows the true
costs yet.” Fortunately, big data analytics is capable
of matching identities, and some states are using
this capacity to arrest fraudsters, saving millions.32
Thirteen percent of the states have placed data ana-
lytics as a “priority initiative” in combatting “fraud,
waste, and abuse,” and 42 percent “have developed
some early applications” in this area; just 5 percent
say that big data’s use against fraud is “not on the
radar.”33
Local Big Data Three-fourths of sixty-five mid-
sized and large American cities have “some form of
initiative around the use of data analytics.” Nearly a
fourth assigned a chief data officer to lead the initi-
ative.34
KNOWLEDGE MANAGEMENT:
MANAGING THE PUBLIC’S
INFORMATION RESOURCE
The public sector’s challenges of collecting, process-
ing, analyzing, and using information are known as
knowledge management.35
Uniquely Governmental: Complexity
and Immensity
In 2013, the U.S. Department of Health and Human
Services opened its new portal, HealthCare.gov,
designed to enable at least twenty million Americans
to buy affordable health insurance; it cost nearly
$1 billion. Its debut did not go swimmingly. On
its first day of operation, six people bought insur-
ance through it. (To add insult to injury, OMB’s IT

Dashboard continued through the day to flash a
green light following the crash, signaling that OMB
considered the portal to be “low risk.”) By its second
day, the number had soared to 248. A prominent jour-
nalist observed that “the mess that was Healthcare.
gov will be used to scare public administration stu-
dents for generations to come.”36 The fiasco did
have the benefit of focusing federal attention on the
disaster of digital governance in Washington more
intensely than ever before; new laws, agencies, and
programs quickly followed, all designed to address
this huge and pervasive problem.
Eventually, the glitches were largely eliminated
and enrollment hit its target, but HealthCare.gov
illustrates a pair of IT realities that are unique to
government: complexity and immensity.
Complexity “High-level data managers” in gov-
ernment deal with greater interdependence among
systems, more red tape, different criteria in pur-
chasing hardware, and more extensive “extra-
organizational linkages” than do their counterparts
in business,37 and, very likely, nonprofits as well.
Even by governmental standards, federal IT
networks are inordinately complex. Seventy-four
percent of federal IT executives state that their
networks are complex or very complex, with most
saying that complexity had increased in recent
years and that they expected it to continue to do so.
Complexity, according to more than half of these
executives surveyed, reduces IT reliability, speed,
security, and raises maintenance costs. (Facts support
these views: “inadequate capacity to manage tech-
nological complexity” is the “root cause” underly-
ing fourteen agencies being listed on GAO’s current
high-risk list.38) These executives believe that simpli-
fication would save, on average, 18 percent of their
IT budgets.39
A major component of IT’s complexity is that
of purchasing IT, an endeavor fraught with frag-
mentation and murk. Efforts to simplify it have met
with mixed success. More successful, perhaps, has
been PortfolioStat, an initiative launched in 2012
to reduce duplication in agencies’ IT investments,
which saved, over three years, “approximately
$1.1 billion,” an “understated” sum.40 The Federal
Information Technology Acquisition Reform Act
of 2014 is aimed at resolving the thorny issues that
beset federal IT purchasing.
The Public’s Information Resource 159
Regrettably, simplifying the public sector’s IT
has some complexities of its own. The American
Internet (including, certainly, governments’ infor-
mation systems) still is regulated, in part, by the
Communications Act of 1934, a law that originally
addressed the vexing complexities of rotary phones.
These complexities do redound to the public’s
benefit in one sense: governments’ “knowledge
workers” are most attracted to their jobs by “intel-
lectual stimulation and challenge.” Those in the
independent sector, by contrast, cite contributing
to society, and those in the private sector prefer the
opportunities for “advancement and prestige” that
their positions offer.41
Immensity Governments undertake the largest IT
projects of any sector, and the bigger the project,
the likelier it will fail. Indeed, any IT project that
is budgeted at $10 million or more, regardless of
sector, will fail at least partially.42 An estimated 20 to
30 percent of IT projects in all sectors are “total fail-
ures” (i.e., the project is abandoned), and 30 to 60
percent are “partial failures,” involving “cost over-
runs or other problems.”43 Especially cost overruns;
the average cost overrun for IT developments in all
sectors is almost 200 percent.44
A slim 18 percent of federal, state, and local
governments’ IT projects succeed, a success rate that
is from half to a third lower than projects in manu-
facturing, finance, and retail.45
A fifth of all “major investments” in federal IT
are at “medium risk” of failure, and about half of
1 percent were “moderately high or high risk.”46
Consider, for example, the Department of Homeland
Security’s $1.7 billion Electronic Immigration System
(originally budgeted at $536,000), which takes twice
as long to process immigration forms than it takes
clerks to process them by hand.47
It is, therefore, good news that, beginning in
2010, the feds were at last making “the tough man-
agement decisions to terminate, halt or turn around
failing projects,” possibly bringing to a “quiet
close . . . the era of grand design” in federal knowl-
edge management.48 Still, even though almost two-
thirds of agency CIOs rate upcoming IT projects at
a lower risk of failure than does GAO,49 progress is
evident: “78 percent of all federal IT projects deliver
on budget, which the government defines as being
within 10 percent of original budgeted costs,” and
 160 PA R T I I I Public and Nonprofit Management
“overall, 79 percent of agency IT projects are com-
pleted on time.”50
A third of the states have at least one big IT
project (almost three-fourths of these projects have
budgets exceeding $100 million) underway in at
least one department; 39 percent of their managers
thought that “the last several large, critical projects
[were] generally all successful,” and the rest were
“mixed.”51
Managing the Nation’s Knowledge
Seventy-two percent (up by a remarkable 10 points
in a year) of “federal leaders” state that digital tech-
nology increased their agency’s productivity, and 91
percent believe that it enables them “to better serve
stakeholders and do their own jobs more effec-
tively.”52 Yet, the federal government’s experience
with computers has been as maddening as comput-
ers themselves are beneficial.
The Federal IT Anti-System When the White
House’s first chief information officer arrived on
the scene in 2009, he discovered that his office had
one lone data center (“We had no redundancy”);
82 percent of all White House IT “had reached the
end of life”; during his first forty days on the job,
the White House’s email system was inoperative
23 percent of the time, including one period that
lasted twenty-one hours (“In my professional career,
there has not been a worst day since or ever”); and
that staffers, including the president’s chief of staff,
were still using floppy disks, an obsolete technology
dating from the 1980s.53
Outmoded IT Ancient and crumbling IT is not
limited to the White House. Federal agencies
spend, on average, 78 percent of their annual IT
budgets on running and maintaining outmoded
“legacy systems” (some agencies spend more than
90 percent), and the percentage is climbing. Some
legacy systems date back more than a half century
(the Department of the Treasury and its Internal
Revenue Service [IRS] have the oldest of any agency)
and their developers are long dead. These enormous
and increasing expenditures—$61 billion annually,
up 9 percent over seven years—have caused spend-
ing on “development, modernization, and enhance-
ment” to decrease by about a fourth over the same
period.54 Consequently, 52 percent of federal execu-
tives state that they do not have the IT services that
they need, and 63 percent say that the current speed,
or lack thereof, of IT services hinders their mission
effectiveness (“At least once a week, it takes up to an
hour just to log on”).55
Only 15 percent of federal executives think that
their agency is “making new technologies availa-
ble to its employees at the same pace as the private
sector.”56 This lapse may explain in part why “inad-
equate and aging information systems” are the basis
of twenty-three agencies’ appearance on GAO’s
high-risk list, and why improving “legacy infor-
mation systems” is, historically, the leading “root
solution” (out of seven) for agencies removing them-
selves from the list.57
A Managerial Morass Federal agencies spend an
average of more than $36,000 per employee on
IT, or more than six times larger than the less than
$5,000 per employee in the private sector; in the
view of some observers, the agencies are not getting
their money’s worth.58
Part of the frustration in improving federal
IT may be attributable to the failure of the system
that has been used to track its “progress.” Most of
OMB’s thirty-six indicators of agencies’ IT admin-
istrative progress, which cost from $150 million
to $308 million annually to track, “are not useful
for managing IT,” and two-thirds of the indicators
“only help agency CIOs to some or no extent.”59 A
year-long cooperative effort between the federal and
private sectors concluded that improved “technol-
ogy business management” could save the feds $5.8
billion over five years.60
Dysfunctional Decentralization Federal agencies,
on average, use a scant 27 percent of their com-
puters’ processing power, and under 40 percent
of their  storage power; servers in some agencies
stand idle 93 percent of the time.61 Forty percent of
federal “data assets” are stored four or more times,
at an estimated cost of nearly $17 billion over ten
years; over a fourth of the agencies are using more
than half of their storage space to keep copies of
redundant data.62 And, worse, these counts do not
include the one-third of Washington’s informa-
tion  services’ budget that is outsourced to private
companies.63

In 2010, an effort was initiated to consolidate
40 percent of all 10,584 energy-guzzling data centers
that the federal government maintained in that year.
Nearly seven years later, 4,300 had been cut, saving
nearly $3 billion, with additional savings projected
at $5 billion. Half of the consolidated or eliminated
centers had been cut by just five agencies;64 72
percent of federal IT managers said that their agency
had, over roughly the same period, kept the number
of their data centers the same or increased them.65
Still, the feds expected to cut 50 percent of their data
centers by 2019, surpassing the original goal of 40
percent.66
Public Pain The public suffers from these inef-
ficiencies and failures. Although the Paperwork
Reduction Act of 1980 demanded that agencies
lighten the public’s paperwork burden, that load
actually grew by 17 percent over six years, amount-
ing to more than eight billion, rapidly-growing,
“burden hours” on the public.67
The computer-based problems of the bureau-
cracy go beyond burdens. Because of “soft-
ware glitches,” for instance, the Social Security
Administration shortchanged some 700,000 retirees
by $850 million in Social Security payments, includ-
ing the multiple sclerosis victim who went without
payments for four years, accumulated $60,000 in
medical debts, and lost her house and car.68
Small wonder that 66 percent of Americans say
that they are satisfied with federal digital services,
compared with 70 percent for local governments and
nearly 77 percent for all sectors; even cable compa-
nies and airlines fare more favorably than the feds.69
Recent Efforts to Improve the Federal IT Anti-
System: Mixed Results IT morphs far faster than
federal efforts to manage it. Nearly four decades
after Congress, in 1980, passed the first Paperwork
Reduction Act (generally recognized as the initial
congressional attempt to improve federal IT), which
directed OMB to develop a government-wide infor-
mation resources management plan, OMB contin-
ues to plod away at it. In 2012, for example, the
feds began implementing a “digital government
strategy”; three years later, 65 percent of federal
executives did not know if their own agencies even
had a “digital strategy that is currently being imple-
mented.”70
The Public’s Information Resource 161
In 2014, the White House announced the
founding of the U.S. Digital Service, a centralized
agency charged with removing digital barriers to
service delivery government-wide, and placed it in
OMB. The Digital Service was soon backed up by
the Commerce Department, which includes at least
two agencies that are among the largest data col-
lectors in government. The department created, in
2015, the Commerce Data Corps designed to assist
agencies with IT.
In 2016, three existing programs—the Office
of Citizen Services and Innovative Technologies
and 18F (so named for its location at 18th and F
streets—who said that the feds are not the hippest
of cool cats?), both created by GSA in 2010 and
2014, respectively, and the Presidential Innovation
Fellows Program, founded by the White House
in 2012—were collapsed into a new bureau, the
Technology Transformation Service, within GSA.
It is charged with solving IT problems related to
customer service at the agency level, an area evi-
dently in need of help; only 45 percent of federal
clients think that agency representatives understand
their  digital needs, compared with 66 percent of
private-sector customers.71
Still, gains are gradually being made. Agency
managers are “generally satisfied” with the ser-
vices that they receive from the U.S. Digital Service
and 18F (pluralities are “very satisfied”).72 Yearly
“report cards” on buying and managing IT, issued
by Congress since 2015, grade most agencies with
a “C” or “D,” but “Fs” are declining and “As” occa-
sionally appear. Between 2010 and 2015, GAO
made 803 recommendations to improve IT acqui-
sitions and operations, and 46 percent of them had
been fully implemented by 2016.73
Managing People: A Federal Cyber Crisis There
are more than 100 different cyber job categories74
and some 93,000 civilian cyber workers in the
federal government, accounting for about one out
of every twenty-two federal employees.75 On the
face of it, they work in a culture that supports IT:
“An overwhelming majority” of federal executives
“across all demographics (93%) embrace digital
technology in the workplace,”76 but it is less clear
that these administrators extend their support for
information technology to the technologists respon-
sible for making the technology work. It is also
 162 PA R T I I I Public and Nonprofit Management
unclear whether Washington is hiring and retaining
the more talented knowledge workers.
People Problems at the Top The important
Information Technology Management Reform Act
of 1996, later re-titled to the Clinger-Cohen Act,
required that the twenty-seven largest agencies
appoint CIOs. In 2009, the president appointed the
first CIO and a complementing “federal chief tech-
nology officer” for the whole of government. Both
officials report directly to the president and work
together to coordinate IT planning, spending, and
policymaking.
In the view of some, the more than 250 federal
CIOs “have been set up for failure by a political and
bureaucratic system that has changed little since the
Clinger-Cohen Act became law.”77
There is much to support this statement. The
appointments process was, until recently, politicized
(“the Clinger-Cohen Act was totally bastardized
to fit political agendas”78) and remains slow to the
point of delaying important projects. Often, man-
agement skills are negligible, and their agency col-
leagues believe that CIOs “‘routinely do not follow
even some of the more basic project management
practices,’ leading to project failure after project
failure.”79 Consider, in this regard, HealthCare.
gov: despite the receipt of eighteen written warnings
(including eleven from top IT professionals in the
private sector) that the entire project was misman-
aged and off course, its federal developers ignored
them and ploughed blithely on, resulting in its spec-
tacular inaugural failure.80
The educational backgrounds of federal IT exec-
utives suggest that they may be in over their heads.
Out of twenty-four departmental and major agency
CIOs, just eight had degrees in IT fields. The major-
ity had majored in the liberal arts, science, business,
or non-IT-related engineering, among others; two
had master of public administration degrees.81
Ultimately, however, “the lack of authority
provided CIOs” amounts to “the greatest single
failure of government IT”;82 although the Clinger-
Cohen Act requires that CIOs in the twenty-three
major departments report directly to their secretary
or deputy secretary, half do not,83 even though 77
percent of these departments’ top CIOs think that it
is important to do so, an increase of more than two-
fifths from seven years earlier.84
Administrative difficulties for federal CIOs
appear to be growing. Out of thirteen major CIO
responsibilities, eight remained their responsibilities
at the same level over seven years, but CIOs actually
had lost ground in the remaining five.85
Deeper, cultural problems also are present,
notably the failure of federal executives to view IT
as a strategic asset (one compared “IT to toilets—
just necessary infrastructure, nothing special”), and
a general dissing of CIOs in general (“Sure, you have
a seat at the table, but you’re treated like a child who
has to sit with the adults because the kids’ table is
full”).86
All this considered, it should not surprise us
that, even though federal CIOs themselves state
that it takes three to five years “to become effec-
tive,” the median time in office for permanently-
appointed CIOs is a shocking one year and eleven
months (average CIO tenure in the private sector
is five years and eleven months, and lengthening87),
with most leaving because of the “political environ-
ment” and more lucrative opportunities elsewhere;88
senior-level federal software engineers, for example,
earn from $24,000 to $33,000 less than their coun-
terparts in the private sector.89
In 2014, some steps were taken to lift CIOs
out of their bureaucratic ruts when the Federal
Information Technology Acquisition Reform Act
(“the most significant federal IT reform since the
Clinger-Cohen Act of 1996”90) was enacted. Among
other advances, the act promised a significant role
for CIOs in decision making, budgeting (includ-
ing a required CIO approval of the IT portion of
their agencies’ annual budget requests to Congress),
and programming (including the banning of repro-
gramming an agency’s IT funds without its CIO’s
approval).
A related attempt at improving the IT executive
suites has been the appointment of chief data officers
(CDOs). The Federal Communications Commission
appointed the government’s first CDO, in 2010, and
at least seven additional civilian agencies, including
the largest, have followed suit. In 2015, the presi-
dent named the first government-wide CDO, porten-
tously titled the White House’s “chief data scientist
in residence.”
Although how CDOs differ from CIOs is still
sorting itself out, CDOs focus on the data them-
selves—e.g., data sharing, data transparency—and

CIOs concern themselves with information technol-
ogy—e.g., its purchase, its management.
One analysis concluded that 69 percent of
federal agencies with a CDO were managing big
data workloads and 61 percent were using big data
in decision making, compared with 40 percent and
28 percent, respectively, of those without one.91
CDOs are needed. For example, the Social Security
Administration listed 6.5 million recipients on its
rolls who, it stated, were 112 years old or older;
estimates are that there are around thirty-five people
worldwide of that remarkable age.92
People Problems in the Bureaucratic Bowels When
we descend from the apex of the federal IT hierar-
chy, we find that the problems among those occu-
pying humbler bureaucratic stations may be worse
than at the top; federal IT specialists have the
lowest employee engagement scores of any of five
“mission-critical” occupations surveyed—just 64
percent report that they are engaged in their work.93
Why is this?
One reason is perceived poor hiring. A slender
37 percent of IT specialists think that their agencies
are able to recruit people “with the right skills,”94
perhaps because, in part, it takes an average of more
than 100 days for federal agencies to hire IT special-
ists, compared with a norm of seven to fourteen days
in “the leading private sector companies.”95
Training is less than the best, with 34 percent
of IT workers stating that they are not satisfied with
it.96 Even though the Electronic Government Act
of 2002 requires it, agencies’ use of leading train-
ing practices for IT professionals is “generally not
extensive.”97
Regrettably, as a consequence of these and other
failures, top federal IT officials anticipate that from
20 to 70 percent of the federal IT workforce will
depart during the next five years,98 and more than
a third of IT specialists say that they “are actively
eyeing the exits.”99 In fact, 12 percent more IT
workers leave federal employment than are hired.100
Worryingly, for every federal IT worker who is under
thirty years old, there are ten who are over fifty, an
average age that is steadily increasing, and those IT
employees under thirty “are significantly less likely
to stay in the government for the long-term than
their predecessors did.”101 Not surprising, perhaps,
when we realize, for example, that entry level federal
The Public’s Information Resource 163
software engineers earn from $8,000 to $14,000
less than their corporate counterparts.102
Although the feds have tried to correct the
situation, their efforts have been ineffective, even
counterproductive. Despite, over twenty years,
hiring knowledge managers at higher grade levels,
paying them more, and promoting them faster
than  their comparably educated and experienced
counterparts in other fields, they perform at the
same levels and stay in government just as long.
Washington is paying more for less, or, at best, the
same.103
In 2015, Washington tried, once again, to seri-
ously address its IT personnel problems, hiring
3,000 new IT and cybersecurity professionals in that
year, and another 3,500 the next.
Records Management: From Risky to Responsible
In 1980 or thereabouts (no one is sure about the
year), federal records managers misplaced the
Wright brothers’ patent for the world’s first air-
plane. More than a generation later, in 2016,
researchers unearthed (literally) the priceless paper
from a fifteen-foot-high stack of records kept in
a Kansan  cave. Indiana Jones was not among
the  researchers,  but the circumstances would have
suited him.
Thus we arrive at another critical federal IT
issue: managing records. The Federal Records
Act of 1950 instructs agencies and the National
Archives and Records Administration to manage
their records in order to document all federal “pol-
icies and transactions,” hardly a trivial charge.
Each federal agency spends, on average, more
than $34 million per year managing an average of
209 million records, ranging from laws to emails.
Federal administrators estimate that they lose, on
average, 18 percent of their annual budgets due to
inefficient records management.104
Records grow. The administration of George W.
Bush generated “about 35 times the amount of data
produced by the Clinton administration,” its imme-
diate predecessor.105 Two years into his second term,
the administration of Barack Obama had surpassed
one billion emails (a record), which were added to
the twelve billion papers and parchments (enough
to circle the earth eighty-four times and for which
1.5 million trees had given their all) already in the
Archives.106
 164 PA R T I I I Public and Nonprofit Management
Despite records management’s centrality to
knowledge management, it received scant federal
attention for decades. In the 1930s, the chief archi-
vist stumbled over “‘valuable records . . . piled on
dust-covered shelves mingled higgledy-piggledy
with empty whiskey bottles,’”107 and GAO has been
calling Congress’s attention to this “remarkably per-
sistent” lapse since 1981.108
Recently, federal interest in records management
has picked up, and progress is evident. In 2011, the
president signed a memorandum meant to modernize
records management, and, by the close of 2014, from
twenty to twenty-three agencies out of twenty-four
had met all seven modernization requirements.109 In
2014, Congress enacted the Presidential and Federal
Records Act Amendments, the first statutory change
to the Federal Records Act of 1950, which enlarged
the definition of a “federal record” to include elec-
tronic documents. In 2015, the Coalition for Public
Sector Information Governance Leadership, a group
of nonprofit organizations, pitched in to help agen-
cies manage records.
The results of these initiatives were encouraging;
over five years those agencies rated as “high risk” in
their records management plummeted by more than
half, from 46 to 20 percent, and those rated “low
risk” septupled from 5 to 34 percent.110
Managing Telework Telework, a federal practice
initiated by Congress in 2000, refers to working
away from one’s office via computer.
Telework facilitates continuity of operations,
reduces employee absences, increases productivity,
and improves recruitment, retention, and work/life
balance. Nearly half a million federal employees
telework, a jump of 70 percent over three years.111
Fifty-two percent of federal managers say that
employees who telework are more productive, and
none say that they are less productive.112
Telework is an area ripe with potential savings.
“An estimated $14 billion annually could be derived
from Federal telework as a product of the Telework
Enhancement Act of 2010.”113 First, however,
Washington must get a better grip on managing
telework; for example, GSA, whose mission states,
in part, “to deliver the best value in . . . technology
services to government and the American people,” is
unable to determine how many full-time teleworkers
are on its own payroll.114
Subnational Knowledge Management
“IT challenges are even greater [than Washington’s]
at the state and local level as those governments
struggle to keep up with IT security threats and com-
pliance issues.”115 For starters, 64 percent of the grass-
roots governments must comply with often-complex
federal IT mandates, and 47 percent must comply
with three or more. Four percent of state IT officials
say that they “lack the necessary tools and processes
to monitor and effectively respond to issues,” but
four times that percentage—16 percent—of local
officials say the same. Sixty-one percent of state and
local IT professionals, the highest proportion, cite a
“limited budget” as their chief “IT governance and
compliance concern,” followed by 54 percent who
say “limited manpower.”116
Managing Knowledge in State Governments IT is a
vexatious problem in the states. Although 31 percent
of the states own and operate “all state IT assets and
operations,” the outsourcing of “some . . . IT appli-
cations and services” has nearly doubled, from 42 to
79 percent, over six years.117 Courthouses in all fifty
states have introduced some form of e-filing, and “at
least two dozen states have implemented statewide
e-filing for attorneys”; millions of dollars are being
saved and a lot of office space is being opened up as
a result.118
Still, problems persist. Nearly two dozen years
went by before all the states were in compliance
with the federal requirement that state informa-
tion systems for enforcing child support payments
be operational,119 and, even though Congress has
offered funds since 1994 for states to develop infor-
mation systems that detect child abusers, there is a
median delay of two-and-half years in bringing these
systems online.120 After six years had elapsed since
Congress enacted the legislation, just sixteen states
had completed applications for federal funding for
IT that tracks sex offenders.121
These difficulties may be ascribable to uncon-
nected and disconnected state CIOs, who are
present in every state. Unconnected because they
have an average tenure of just twenty-six months.122
And disconnected because an “overwhelming” 79
percent of CIOs blame “salary rates and pay grade
structures” as the prime obstacles in attracting and
retaining talent (the states’ minimum IT salaries are

25 percent below that of the private sector, and their
maximum salaries are 8 percent below123), followed
by the civil service system at 48 percent.124 Yet, the
able IT professionals themselves are far more con-
cerned with starkly different variables of job sat-
isfaction, placing their greatest emphasis on clear
communication, clear job descriptions, participa-
tory management, support for career development,
opportunities for advancement, and family-friendly
workplace policies.125 Forty-two percent of top state
CIOs do not report to the governor.126 (The public
sector is at least ahead of the independent sector in
this regard, where 59 percent of CIOs do not report
to the chief executive.127) In addition, CIO positions
are surprisingly political, with many CIOs resigning
when a new governor arrives.128
A few states also have chief data officers;
Colorado became the first state to appoint one, in
2010, and at least six more states followed. And
with good reason. Seven out of ten state officials in
forty-six states said that “data problems were fre-
quently or often an impediment to doing their busi-
ness effectively”; no one said “rarely.” California’s
state auditor uncovered that the government had
collected 200,000 hours of questionable sick leave
(“instead of eight hours [of sick leave] it was 80 and
in one case, 800”), valued at $6 million. Bad data, or
no data, are a consistently recurring problem in the
states (and localities), and are caused by: minimal
or no data sharing among agencies (or even within
agencies), poor definitions, privatization (“When
government services are privatized, often the data
on performance is greatly diminished”—Medicaid
is an outstanding example), ineffective centralized
controls over IT, and under-trained IT workers.129
Just as nonprofits joined to assist Washington
with its records management, noted earlier, so have
they begun to assist states in their data management.
Results First is dedicated to using data to improve
state governmental performance.
Managing Knowledge in Local Governments Local
governments are the nation’s information resource
leaders, accounting for some 9,000 different appli-
cations, or four times the number of federal digital
applications, and three times that of state applica-
tions.130 Small wonder that, in 2016, the prestig-
ious President’s Council of Advisors on Science and
Technology recommended that cities be placed at the
The Public’s Information Resource 165
center of federal technology and innovation policy,
and the White House followed up in the same year
with a $160 million program to fund “smart cities”
research.
Larger cities with higher voter registration levels
are likelier to adopt new electronic services for citi-
zens,131 and, when they do, they make major, long-
term improvements in their relations with citizens
and fiscal controls;132 an astonishing 92 percent of
municipal finance directors report that “computers
have improved their government’s efficiency and
productivity.”133
In light of this bounty of e-benefits, it is small
wonder that city managers rank the “use of new
technologies” in the top tier (out of four tiers) of
their priorities.134 But this high ranking also reflects
challenges, mostly involving relations between
administrators who provide computer services and
those who use them, and the difficulties of hiring and
training competent technical staff.
Nevertheless, local governments are making
major knowledge-management gains. In 1982, 22
percent of cities and counties contracted out their
“data processing” to private companies,135 a pro-
portion that has been nearly halved to 12 percent
today;136 59 percent now have their own separate
IT departments. Almost all cities and counties (94
percent) have put council agendas and minutes on
line; citizens can request services at 58 percent of
them, pay utility bills at 53 percent, and pay taxes
at 36 percent.137
Local governments seem to wring the great-
est efficiencies from IT. Eighty-seven percent, the
top scorer, of local officials say that e-government
has improved customer service, increased the effi-
ciency  of business processes (52 percent), changed
the role of departmental staff (39 percent), and
reduced the number of departmental staff overall
(8 percent).138
Relative to the federal and many state govern-
ments, some local governments have become the
“employer of choice” for IT professionals, “in spite
of public sector constraints.”139 New York City
became the first local government to appoint a CDO,
in 2011, followed by five more metropolises.140 Los
Angeles is not among them, which may explain why
the city recently discovered that it was losing more
than $20 million a year because of “fumbled tax
data.”141
 166 PA R T I I I Public and Nonprofit Management
Just as nonprofits have helped the federal and
state governments manage their data more pro-
ductively, so they have assisted local governments.
In 2015, Bloomberg Philanthropies created What
Works Cities, offering millions to aid cities in
improving city services through better data usage.
Harvard University’s Ash Center promotes “Data-
Smart City Solutions,” and Code for America uses
data-knowledgeable volunteers to render local ser-
vices more effective. There are other examples.
Best Practices for Knowledge Management
There is “an extremely limited body of knowledge”
about managing information resources in the public
sector,142 but what little there is143 we have reduced
to six guidelines that we believe have a particular
salience. They are:
■ Strong, skilled leadership is essential. Clear
communication of changing needs and the
unambiguous assignment of responsibility are
critical. Public employees in particular must be
pushed to “get with the program,” as they tend
to hunker down until this fad, too, shall pass.
■ The goals of new information systems must
clearly align with legislative and agency goals,
and be comprehensively integrated throughout
the organization. The clearer this strategic
alignment, the likelier that legislative support
will continue.
■ Organizational processes, not software or
hardware, should be the focus in introducing
and managing information resources. Once
the administrative processes are right, then the
software can be rewritten to accommodate
them.
■ Develop strong skills among information
resource managers, strong relationships
between these managers and the rest of the
organization, and rigorous performance
measures.
■ Minimize risks. New data systems can threaten
traditional turfs and political relationships.
To minimize these risks, wring agreements
about project specifications from department
heads, unbundle projects into separate modules
to isolate failures, and employ experts when
needed.
■ Remember to be a pessimistic, “recalcitrant,
suspicious, and skeptical adopter” of IT.144
Most information system projects fail.
PRIVACY VERSUS POLICY:
THE PARTICULAR PROBLEM
OF THE PUBLIC COMPUTER
Around 90 percent of Americans consistently state
that they are concerned over problems of personal
privacy,145 a dramatic increase from only 35 percent
in 1970.146
As the public information resource grows ever
more pervasive, a duo of devilish dilemmas has grown
ever more ominous. At what point does the collec-
tion of personal information for purposes of making
better public policy become an invasion of a citizen’s
privacy? Where lies the delicate balance between pro-
tecting the people and protecting the person?
Examples of this tension are many, such as the
intelligence community’s massive scooping up of
Americans’ telephone calls following 9/11 (“bulk
telephone metadata” were purged in 2015). Or
cellphone manufacturers’ selling phones so secure
(a terrorist’s dream) that even they, and often law
enforcement, cannot access their data.
An unusually vivid, but little known, instance of
the privacy-policy paradox is the denial of research-
ers’ access to personal “administrative micro-data”
held by American governments at all levels (a prac-
tice not followed in other democracies); this policy
has had a direct and negative impact on the adjust-
ment and improvement of policies and programs
because such data, which can be quickly “de-identi-
fied,” are far more accurate than are survey data.147
When  such shortsighted privacy policies are pre-
cluded, the public can benefit. For example, a 1979
injunction prohibiting media access to Medicare
records prevented Pulitzer-Prize-winning investiga-
tive reporting on fraud until a court overturned it;
privacy, at least for those who did not defraud the
government, was maintained in the reporting, and
costly corruption was exposed.
Stealing You: Identity Theft
Perhaps the invasion of privacy that Americans fear
most is identity theft, or the stealing of personal

information for fraudulent use, typically for eco-
nomic gain. Nearly 5 percent of the adult popula-
tion are victims of identity theft, with reported losses
amounting to more than $50 billion every year.148
Government officials may not be well attuned
to the sensitivity of private data. Twenty-eight
million identities are illegally released annually
from public-sector systems, two-thirds of which
are released by accident (most of the remainder
are released by hackers).149 In addition, about 200
million bits and pieces of personal records are
exposed—mostly, it appears, inadvertently—on
the Internet per year, many by public officials who
“viewed the new technology as a natural extension
of the public domain and rushed to put information
[e.g., divorces, bankruptcies] online.”150
Government is not the largest sector targeted
by identity thieves, but it is large. Over ten years,
“Government/Military” accounted for an average of
nearly 16 percent of all identity-theft “data breaches,”
and the closely associated “Education” and “Medical/
Health Care” categories accounted for averages of
more than 15 percent and 26 percent, respectively.151
These numbers are relative: no public theft remotely
compares with what happens in the private sector,
such as the more than one billion identities and com-
puter passwords looted from Yahoo, Inc., in 2016.
The federal government is especially vulner-
able to identity theft. Over five years, the number
of reported “security incidents involving person-
ally identifiable information” of federal employees
exploded by 144 percent, and, at last count, stood at
nearly 26,000 stolen identities per year.152
Most scams to file phony claims for federal tax
returns are based on stolen identities.153 In 2014,
identity thieves submitted fraudulent tax returns
amounting to $22.5 billion to the IRS (which, it
should be said, prevented or recovered 88 percent
of the funds involved), but the government still paid
out more than $3 billion to fraudsters. In 2015,
about 724,000 people’s personal information may
have been stolen from the IRS (another 570,000
attempts were clearly unsuccessful).154 In 2017, the
IRS launched its Identity Theft Tax Refund Fraud
Information Sharing and Analysis Center to further
reduce emerging and current identity theft schemes
leading to tax fraud.
The states are beset with similar problems.
Fifteen states and the District of Columbia flag
The Public’s Information Resource 167
“unusual” tax returns, and issue old-school paper
checks, a procedure that has had a “noticeable [and
positive] impact” in reducing improper payments
based on fraudulent tax returns.155
Where Washington needs the greatest improve-
ment is in notifying citizens when federal agencies
lose personal data to hackers. Although there is a
spate of federal laws and regulations requiring com-
panies and nonprofits to notify victims when their
personally identifiable information is compromised,
there is no federal policy requiring that federal agen-
cies do the same, and it appears that less than 30
percent of agencies bother to do so.156
Protecting Privacy: Federal Efforts
Just 6 percent of Americans say that they are “very
confident” that the records maintained by federal
agencies will be kept private and secure. Relatively
speaking, the feds fare well; out of eleven industries,
only credit card companies garner more popular
confidence than Washington, at 9 percent.157 Six
percent, however, is still a miniscule 6 percent.
As Americans’ worries have deepened, each of
the three branches of the federal government has
grown more involved in the issue.
The Judiciary’s Zone of Privacy In 1977, in
Whalen v. Roe, the Supreme Court recognized for
the first time a constitutionally protected “zone of
privacy” that entitles each person to have his or her
personal information kept private.
The courts since have developed a three-
pronged test, based on the Constitution’s Fourth
Amendment (the Unwarrantable Search and Seizure
Clause), that should be used in balancing an
employee’s right to privacy with an employer’s need
to know. These  tests are: reasonableness—man-
agement must obtain the consent of an employee
before it intrudes on his or her privacy; compelling
interest—a serious issue must be present; and job
relatedness—the intrusion cannot exceed the scope
of organizational necessity.
Congress, Privacy, and Policy Congress has
enacted two principal laws that reconcile personal
privacy with federal procedures. The Privacy Act of
1974 assures individual access to personal federal
records. The Electronic Government Act directs
 168 PA R T I I I Public and Nonprofit Management
agencies to provide “privacy impact assessments”
when purchasing new information technologies or
initiating new collections of personal information.
Congress has passed at least four additional laws
that protect people’s financial and other personal
records from monitoring by federal agencies, and
another five statutes that shield these records from
the view of colleges and corporations.
The Executive Branch and the Protection of
Privacy Aside from violations following 9/11,
federal agencies traditionally have “generally com-
plied with key requirements and guidance pertaining
to . . . privacy,”158 and compliance with the Privacy
Act is “generally high,” with 71 percent of agencies
enforcing “the requirement that personal informa-
tion should be complete, accurate, relevant, and
timely before it is disclosed to a nonfederal organ-
ization.”159 OMB has issued at least a half-dozen
memoranda that protect against identity theft, a
crime over which seven federal agencies have some
jurisdiction,160 and, in 2015, GAO added the protec-
tion of “personally identifiable information” to its
list of high-risk areas.
Federal officials take these directives seriously.
Over five years, 1,300 IRS employees were investi-
gated for prying in personal income tax returns, and
420 were found guilty.161
An accelerating trend is the appointment of
agency executives charged with protecting personal
privacy. The IRS, in 1993, appointed the federal gov-
ernment’s first “privacy advocate,” and Congress soon
began requiring, through legislation, “chief privacy
officers” in selected agencies. In 2007, Congress
passed the Implementing Recommendations of the
9/11 Commission Act, which extricated Congress
from this thorny thicket by authorizing the presi-
dent’s Privacy and Civil Liberties Oversight Board to
require any agencies that it chose to appoint privacy
and civil liberties officers. In 2013, the first chief
privacy officer was appointed to the White House,
and, in 2015, the White House announced the for-
mation of the first government-wide council (the
Federal Privacy Council) of chief privacy officers.
Protecting Privacy at the Grass Roots
Congress requires state and local agencies to shield
personal data. Three laws enacted since 1990 bar all
governments from releasing Social Security numbers,
disclosing personal information by state depart-
ments of motor vehicles, and electronically trans-
mitting personal health information. Only fourteen
states, however, comply with federal mandates con-
cerning the protection of personal data owned by
private companies.162
Although forty-six states have enacted privacy
laws, twenty-one states have no “privacy program”
in place to implement their laws (if they have laws
at all), nine are “just starting” a program, and eight
do not know if they have one.163 Those programs
that do exist seem primitive. For example, it is not
a great stride in privacy protection that “more than
20 states” (and some counties) have redacted Social
Security numbers from their records, yet tout this as
“a major shift in public records laws.”164 Nor is the
fact that just 11 percent of the states have a chief
privacy officer (defined as more than “75% of time
spent in managing privacy”), and 26 percent “have
no one dedicated to privacy issues.”165 By contrast,
77 percent of financial services companies have chief
privacy officers.166 All in all, it appears that more
state and local records of personal data are exposed
annually than are comparable federal records.167
There is some good news. Forty-seven states
have enacted “security freeze laws” that block
unauthorized persons from obtaining private credit
information,168 and forty-five require that citizens
be notified of data breaches that affect them.169
In 2013, ten states enacted more than two dozen
privacy laws,170 and, over two years, seventeen states
banned employers’ access to the personal social
media of their employees.171
CYBERCRIME
There are nearly 79,000 “publicly known cyberse-
curity vulnerabilities and exposures” in all sectors
“with more being added each day,”172 so it is not
surprising that the director of the Federal Bureau
of Investigation (FBI) has stated that “cyber risk
will shortly eclipse terrorism as our top domestic
threat.”173 No doubt he was aware that there are
“at least fifty-thousand computer viruses” infecting
the worldwide web, ranging from “worms” to “war
driving,” and “any fool can enter, alter, and destroy
even the most seemingly impregnable Web sites.”174
Speaking of fools, a survey of 1,000 American,

Australian, and European office workers found that
a fifth would sell their organizations’ passwords for
$1,000 or less.175
Hacking: Harrowing and Humiliating
Perhaps the most notorious form of cybercrime
is hacking, or the illegal accessing of databases.
Usually, hacking involves theft of some sort, but a
variation of hacking is hactivism, a blend of hacking
and activism that is disruptive hacking for a cause,
such as Black Lives Matter. Hactivism is aimed
largely at state and local governments.
Every year, approximately seven out of every ten
American organizations in all sectors are hacked,176
accounting for estimated annual losses of $100
billion.177 Fifty-nine percent of the American private
sector’s publicly-released data breaches are attrib-
utable to outside hackers. For all American govern-
ments it is 47 percent, and for the nonprofit sector it
is 44 percent.178
More than three-fifths of 1,600 cyber experts
predict that a major cyber “attack causing wide-
spread harm,” defined as “significant loss of life or
property losses/damage/theft at the levels of tens of
billions of dollars,” would occur sometime within
the next ten years.179
Some of the more virulent forms of hacking
include the following.
Robbery by Ransomware Ransomware occurs
when a hacker shuts down a computer and unlocks
it only after the owner has paid the hacker. From
2005 though 2015 the FBI received some 9,600
ransomware complaints from all sources, costing
more than $24 million annually.180 Then, in 2016,
the situation worsened—dramatically. “Unique ran-
somware attempts” (attempts, not complaints to the
FBI) exploded by an almost inconceivable 16,000
percent—from not even four million in 2015 to
more than 638 million attempts in 2016.181
Ransomware increasingly is being used against
governments, including American federal agencies,
police stations, hospitals, and even public librar-
ies.  Sixty-seven percent of government networks
and 72 percent of education networks in the United
States “triggered critical malware or ransomware
alerts, compared to just 39 percent of other net-
works triggering similar alerts.” State and local
The Public’s Information Resource 169
government networks are nearly twice as likely to
be infected with ransomware or similar malware
than are networks in small and medium-sized
businesses.182
Imperiled Infrastructure Eighty-four percent of
American public- and private-sector cybersecurity
professionals believe that a hack that “disrupts crit-
ical infrastructure,” such as dams and nuclear reac-
tors, is likely within the current year.183
They are right to be concerned. Government-
sponsored hackers, thought to be Chinese, Iranian,
Russian, and even some associated with the terrorist
Islamic State, tried to penetrate, or penetrated (an
estimated dozen attempts were successful in the
2000s), the U.S. electrical grid, including hackers
who stole vast and vital data from an electric
utility with eighty-two plants in eighteen states and
Canada. According to the Federal Energy Regulatory
Commission, “a coordinated attack on just nine
critical power stations could cause a coast-to-coast
blackout that could last months.”184
In 2003, GAO added “critical cyber infrastruc-
ture protection” to its list of high-risk areas, and it
is still on it.
In Government, We Steal Hardware! An underap-
preciated variant of hacking government databases
is the simple theft of computers themselves. These
thefts account for 19 percent of data breaches in the
global public sector,185 and a surprisingly similar
20 percent in the American one, compared with 11
percent in the American private sector and less than
5 percent in its nonprofit sector.186
Here is an example: in 2006, an employee of
the Department of Veterans Affairs, in violation of
standing, but laxly-enforced, regulations, took home
a departmental computer for work-related use. That
evening, the computer was stolen, and, with it, the
names, Social Security numbers, and other personal
information of more than twenty-six million veter-
ans. It was the largest theft of personal data from
a government in history. Fortunately, the computer
eventually was returned (anonymously), with no
apparent lifting of the data in it.
With the immense effort and expense involved
in defending against hacking, it turns out that gov-
ernments could be far more effective in their fight
against cybercrime if they just locked the doors.
 170 PA R T I I I Public and Nonprofit Management
Hacking the Federal Government National gov-
ernments around the globe experience nearly fifty
times more “cyber incidents” than any other indus-
try,187 and the government of the United States is no
exception.
More than half of federal agencies experience a
“cybersecurity incident” on a weekly (23 percent) or
daily (31 percent) basis.188 These incidents increased
by 1,303 percent over ten years, and currently stand
at around 80,000 annually,189 or about one in three
of all such incidents in all sectors in the United
States.190 All of these numbers could be higher
because the feds are not required to publicize their
data losses.
The largest reason for such losses, at 37 percent,
is “miscellaneous errors,” a category that includes
many relatively harmless minor mishaps, and 24
percent, the next highest, are “non-malicious inci-
dents.”191 Fifty-three percent (a growing proportion)
of federal IT managers believe that the major cause of
data breaches is careless or untrained federal employ-
ees (only 23 percent of these officials think that these
breaches are the mischief of malicious insiders), fol-
lowed by the “general hacking community,” at 46
percent, and foreign governments, at 38 percent.192
Hacking State Governments Among state agen-
cies, there is mostly good news. Over two years,
hacking declined by 45 percent and the insertion
of malicious software fell by 15 percent. External
financial fraud, such as stealing Medicaid benefits
by using stolen personal data, was up by two-thirds,
but had attained just 12 percent of all external
breaches.193
Cyberspying: Sinister and Slippery
A particularly nasty form of hacking is cyberspying,
or cyber espionage, which is the illegal penetration
of databases by foreign governments. Americans
seem to understand the gravity of cyber espionage;
their support for increased security measures to
protect national security has nearly doubled over
three years, from 24 to 46 percent.194
In 2015, the president declared cyberspying to
be a “national emergency.” He had reason.
The Extent of Cyber Espionage Cyber espio-
nage accounts for 16 percent of all known federal
data losses, substantially more than the worldwide
figure of the 1 percent of “cyber incidents” that are
attributed to “espionage.”195 The United States is
the prime target for international cyberattacks in all
sectors that likely are supported by a foreign country,
suffering more than twice as many of these cyberat-
tacks than the runner-up (Canada).196 The eighteen
federal agencies with the most sensitive information
cite “cyber attacks from ‘nations’ as the most serious
and most frequently-occurring threat to the security
of their systems.”197
Here are some examples: according to reports,
the Russians not only breached the emails of the
joint-chiefs-of-staff and the commander-in-chief,
but, in 2015, effectively strolled into the foyer of the
IRS website (no sophisticated malware was used)
and wandered out with $50 million in fraudulent
tax refunds, adversely affecting 330,000 taxpayers,
despite the fact that GAO had issued eight reports
over nine years warning IRS of vulnerabilities that
the Russians allegedly exploited. In 2016, American
intelligence officials stated that the Russian gov-
ernment had “weaponized” its hacking; it was
behind the penetration of the Democratic National
Committee during a presidential campaign, had
leaked potentially damaging information about its
candidate, and had attempted intrusions into voter
registration databases.
Oh, Oh, OPM In 2014, federal officials began to
suspect the presence of the mother of all cyber espi-
onage attacks. From 2012 through 2015, cyberspies,
this time alleged to be Chinese, penetrated the Office
of Personnel Management (OPM) and its contrac-
tors, and lifted the personnel records of 21.5 million
federal and contracted employees and many others.
The fingerprints of 5.6 million people were also
stolen. Federal officials voiced fears that the hackers
could identify American spies.
The assault on OPM was the largest known
breach of federal employees’ personal data, although
its magnitude was about all that was known. There
was “an interval of about 17 months during which
the United States likely will never know what data
the bad guys touched.”198
The cyberspy debacle was compounded by
OPM’s starkly maladroit management. OPM spent
less on cybersecurity than any other agency.199 Since
at least 2005, federal auditors and inspectors had

harshly and repeatedly warned OPM of its ghastly
cybersecurity. OPM was “shockingly careless” and
“encrypted nothing,” effectively granting “full access
to database administrators in China.”200 An inde-
pendent IT expert, on learning of OMB’s deficien-
cies, called them “shocking,” and another emailed,
“Reading now, jaw on floor.”201
During the crisis, OPM’s inspector general
wrote that OPM’s CIO had misinformed him and
had “hindered and interfered with” his office’s over-
sight.202 Such infighting surfaced, perhaps, because
the head of OPM at the time was a political appoin-
tee who had just left her previous job as the national
political director for the president’s re-election cam-
paign of 2012, and had no experience in personnel
management; she was forced to resign in 2015.
The good news is that the next OPM director,
Beth Cobert, had, after just a year and a half, taken
“OPM from the agency that suffered the biggest
hacks in the history of the federal government and
built it into a model of federal cybersecurity capabil-
ities and systems modernization.”203
CYBERSECURITY
Although securing the public’s knowledge resource
is vital, securing it is not being done well.
Federal Cyber In-Security
A third of federal IT units deal with, on average,
more than 1,000 security alerts every day, and 7
percent receive over 50,000 alerts daily, overwhelm-
ing volumes that amount to “something of a new
challenge” for security managers.204 These floods
may explain why 92 percent, and growing, of all
federal data breaches are detected by someone other
than the target.205
Just 26 percent of federal IT professionals feel
that their agencies’ data are “fully protected.”206
They have a point. Despite “hundreds of recom-
mendations” from federal inspectors, all of the
twenty-four major federal agencies “continue to be
afflicted by persistent information security control
weaknesses.”207
An extensive analysis of six industries found
that the effectiveness of the federal government’s
cybersecurity ranked third, and that of its defense
contractors ranked fourth.208 The security of federal
The Public’s Information Resource 171
websites scores an average of ten points lower than
that of their counterparts in the banking and social
media sectors.209
Once a cyberattack occurs, the feds are unlikely
to deal with it well. In 2014, GAO reported that the
twenty-four major agencies “did not consistently
demonstrate that they had effectively responded to
cyber incidents. . .. or take actions to prevent their
recurrence,” and this is still the case today.210 Just
40 percent of federal cyber executives think that
their “agency’s incident response plan is effective in
responding to cyber attacks.”211 More than three-
fifths of major federal agencies lack full contingency
plans should a cyberattack wipe their data clean,
such as happened to Sony Pictures Entertainment, in
2014 (of Sony’s some 7,000 employees, eleven con-
stituted its “information security team”).212
In 1997, GAO placed information security on
its list of high-risk areas, where it remains today.
Mysteries of the Federal Cybersecurity Workforce
Personnel problems are particularly vexing. There
are an estimated 125,000 to 135,000 federal cyber-
security personnel, an estimate that includes not only
civilian employees, but also contractors and soldiers
(roughly 70 percent of the total are employed by
the Pentagon). There is no official federal tally of,
and no one really knows, how many cybersecurity
workers there are in the government, or even in indi-
vidual agencies.213 It was only in 2014 that Congress
legislated that agencies designate a chief information
security officer (CISO).
The startling absence of basic data may be
attributable to the fact that, until 2016, there was no
consistent federal job description for cybersecurity,
a description that entails seven broad categories and
more than fifty work roles.214 This systemic weak-
ness may have underlain hiring difficulties. It takes,
on average, six months for two-thirds of federal
employers to hire qualified cybersecurity profession-
als, compared with one-third of industry employers
who say the same.215
Spending Madly. And Badly? In the four years
following 9/11, federal expenditures for computer
security quadrupled, then leveled off to about $6
billion annually, and, beginning in 2010, spending
doubled to between $10 billion and $14 billion, or
roughly 15 percent of the federal IT budget. “The
 172 PA R T I I I Public and Nonprofit Management
annual cybersecurity spending of the U.S. federal
government is bigger than any national cyber-
security market (including both public and private
sector), exceeding [by] at least twofold the largest
cybersecurity-spending countries.”216
Still, 75 percent of federal “IT decision makers
and influencers” list “budget constraints” as their
top challenge (out of six options) for protecting
their agencies’ data.217 And, despite its massive
spending relative to other countries, federal cyber-
security dollars are not always plentiful when com-
pared with the private sector; the cybersecurity
budget of the Department of Homeland Security,
which Congress charged in 2002 with protecting
the nation’s information infrastructure, is a fourth
less than the combined budgets of just two of the
nation’s leading banks.218 Those federal IT functions
that are contracted out to the private sector may be
in worse shape; more than half of these companies,
46 percent of which had experienced a breach over
the past year, had simultaneously cut spending on
cybersecurity.219
The President and Cybersecurity The beginning
of the executive branch’s interest in cybersecurity
is marked by OMB Circular A-130, issued in 1985,
which established an IT security certification process
managed by the National Institute of Standards and
Technology.
In 2003, the U.S. Computer Emergency Readiness
Team, a public-private partnership designed to co-
ordinate responses to cyberattacks, was launched,
and, in 2009, the Department of Homeland
Security opened its National Cybersecurity and
Communications Integration Center, charged with
coordinating the private and public sectors’ coun-
terattacks.
In 2015, the president created the Cyber
Threat Intelligence Integration Center to co-
ordinate terrorism-related information. The White
House released a Cybersecurity Strategy and
Implementation Plan, the first update of strategy
since the pre-smart-phones year of 2000, when a
revision of OMB Circular A-130 did so. During the
last seven months of 2015, “critical vulnerabilities”
in federal agencies were slashed from 363 to three.220
In 2016, the first government-wide chief infor-
mation security officer was hired. 2016 also saw
the unveiling of the first Federal Cybersecurity
Workforce Strategy, the first consolidated and coher-
ent Guide for Cybersecurity Event Recovery, and
the first Cybersecurity National Action Plan, which
addressed legacy IT, fragmented administrative pro-
cesses, and cyber workforce vacancies, among other
challenges. OMB Circular A-130 was revised (its first
major tweaking since 2000) to consolidate policy
updates, establish continuous security reviews, and
direct the implementation of the Cybersecurity
National Action Plan. The White House, for the first
time, identified who was in charge of responding to
cyberthreats to the United States—the Department
of Justice, with the Department of Homeland
Security responsible for responding to agency and
company requests for immediate help in fending off
hacker assaults.
Over time, federal agencies have shown them-
selves to be unusually open to executive recom-
mendations for improving their cybersecurity. An
astounding 94 percent of GAO’s recommendations
for information security improvements were imple-
mented by the agencies over twenty-six years (from
1983 through 2008). This is the highest agency
acceptance rate for any type of GAO recommen-
dation, surpassing the overall average rate by an
impressive thirteen points.221 More recently (from
2009 through 2015), GAO made “about 2,000
recommendations” to federal agencies to correct
or improve their cybersecurity, of which “about 58
percent” were implemented.222
Most neutral observers give the Obama admin-
istration high marks for trying to rectify the over-
whelming problems of federal cybersecurity (“the
administration took the cyber threat seriously from
day one. . .. [and] made an unprecedented all-fronts
effort to secure cyberspace”), but most observers
also conclude that, despite some significant suc-
cesses, federal cybersecurity is about where it started
at the beginning of the new administration, in 2009.
This running-in-place occurred because reforms
could not keep up with the pace of the constantly
shifting threat.223
Congress and Cybersecurity Congress has passed
more than fifty laws that have provisions relating
to information security. Some of the early form-
ative laws include the Computer Security Act of
1987, which authorized the National Institute of
Standards and Technology to develop computer

security standards; the Paperwork Reduction Act
of 1995, which placed responsibility for developing
cybersecurity policies with OMB; the Clinger-Cohen
Act of 1996, which directed agencies to enforce
those policies; and the Federal Information Security
Management Act (FISMA) of 2002, which created a
comprehensive cybersecurity framework.224
Although FISMA was “game-changing”
legislation that improved data security,225 the act also
resulted in “unsustainable” snarls of red tape because
it failed to distinguish between high- and low-level
risk,226 and wasted as much as $500 million a year
because of its “outdated manual reporting require-
ment”227—each year, agencies had to check off
boxes in paper binders to verify their security con-
trols, a creaky procedure that was ineffective against
hackers. (The 2016 update of OMB Circular A-130
replaced this box-checking with continuous reviews.)
To address some of these and a few other issues,
Congress passed, in 2014, the Federal Information
Security Modernization Act, a revision of FISMA,
which required CISOs in the agencies and author-
ized the secretary of homeland security to issue
“binding operational directives” to force agencies
to strengthen their cybersecurity. In 2015, Congress
enacted the Cybersecurity Information Sharing Act,
which permits the sharing of Internet information
between Washington and the private sector.
Unfortunately, there remains “no overarching
framework of legislation in place” that addresses
federal cybersecurity.228
Cybersecurity in the States
Seventy percent of state governments report at least
one data breach per year,229 suggesting a far lower
threat level than that of the federal government. Still,
the threat is serious. According to one expert, “You
can get pretty much everything on someone out of
state computers. . .. It makes them a very attractive
target to cybercriminals,”230 which may explain why
86 percent of state officials say that managing cyber-
security is among their most stressful responsibili-
ties, compared with 73 percent of federal officials.231
Although “most states do not have established
cybersecurity legislation in place,”232 98 percent of
the states (including the District of Columbia) have
chief information security officers, a heartening 90
percent of whom report directly to the state CIO.233
The Public’s Information Resource 173
A modest 27 percent of these CISOs are confident
in their states’ ability to protect themselves against
external attack, in contrast to a serene, and worri-
some, 66 percent of other “state officials” who also
have such confidence.234
Fifty-one percent of state CISOs have staffs
ranging from six to fifteen,235 a big jump from just
four years earlier, when 49 percent had staffs of one
to five236 (now just 24 percent do237); 83 percent of
state CIOs report that from 1 to 2 percent of their
states’ IT workforce are “dedicated cybersecurity
professionals.”238 These are disturbingly low numbers
when compared with the more than a hundred pro-
fessionals employed by financial services organiza-
tions of “similar size to that of an average state,”239
and their budgets are even tinier, amounting to just 1
to 2 percent of the states’ overall IT budgets.240 Fully
four-fifths of CISOs consider their underfunding to
be the number one barrier facing their programs; no
other concern comes remotely close.241
State CISOs have high turnover rates, largely
because of significantly larger salaries in the private
sector. “Half the states have new CISOs compared to
two years ago. . .. And half the ones in the jobs two
years ago were new compared to two years before
that.”242 Unfortunately, “people with IT security
skills are the most difficult to recruit and retain for
the states.”243 Small wonder that state CIOs have
placed “security” as the top skill set that they want
when recruiting and retaining IT employees.244
Additional Actions Needed for Attacking
Hacking
Cybersecurity in all sectors could be radically
improved without, it would seem, a hugely strenu-
ous effort. Simply addressing the top thirty known
cybersecurity vulnerabilities could help prevent as
much as 85 percent of all cyberattacks.245
Improving at least some cybersecurity weak-
nesses in the public sector seems comparably
straightforward, such as accelerating the hiring of
cybersecurity specialists, reforming their personnel
systems, and budgeting cybersecurity more care-
fully and generously. Resolving cybersecurity chal-
lenges with big data analytics remains potent but
underused. Surveys of federal, state, and local cyber-
security professionals found that 86 percent believed
that analytics would improve cybersecurity, although
 174 PA R T I I I Public and Nonprofit Management
just 28 percent were fully leveraging analytics to do
so, and only a third had made analytics a priority.246
“Experts and leading organizations” identify
“four key attributes of successful” information secu-
rity measures. They should be: “[1] quantifiable, [2]
meaningful (i.e., have targets for tracking progress,
be clearly defined, and be linked to organizational
priorities), [3] repeatable and consistent, and [4]
actionable.”
To determine whether information security
measures are indeed successful, they should be eval-
uated according to three criteria that are common
to all sectors. They are: the measure’s compliance
with standards, policies, and laws; the effectiveness
of information security controls; and the overall
impact of the information security program. In
securing information, federal agencies tend to rely
on compliance measures at the expense of more
effective impact measures,247 a condition that likely
is true among the grass-roots governments as well.
E-GOV: LEAN, SEEN, AND CLEAN
GOVERNMENT
The often gloomy caverns of public knowledge man-
agement do have at least one bright and shining light:
E-gov. Electronic government, e-government, e-gov,
dot-gov, or digital government is the introduction of
governmental websites that furnish information to
users and portals that facilitate services for users.
All governments in the United States offer more
than 5,300 e-gov websites; the federal government
provides from 1,300 to over 2,000 sites (counts vary,
depending on the counter), plus “24,000 sub-sites
and micro-sites.”248 All federal agencies and almost
all state and local agencies have websites, and 53
percent of all adult Internet users have visited at
least one.249 Sixty-five percent of Americans have
used the Internet to find data or information pertain-
ing to government. Of this 65 percent, 37 percent
search for federal information, 34 percent seek state
government data, and 32 percent look for local gov-
ernment information.250
Federal.gov
The Government Paperwork Elimination Act of
1998, which directs agencies to make as much
information as possible available electronically to
other agencies and the public, generally is cited as
the basis of federal e-gov.
Perhaps, however, federal e-gov’s greatest
impact is economic. Paper and print are pricey.
Washington spends $1.4 billion for printing and
reproduction each year.251 Just clicking the “Print”
icon on a federal computer costs agencies up to $2
billion a year, a cost that seems egregious when we
realize that federal employees discard 35 percent of
what they print on that same day.252
Electronic government offers the surest way to
significantly lower these costs. For example, it costs
the feds a dollar to issue a paper check, but just a
dime to do so electronically,253 and only 38 percent
of the 19 million invoices sent by all civilian agencies
annually are transmitted electronically; the remain-
ing 12 million are paper checks.254 “E-rulemaking”
by regulatory agencies could save $94 million over
three years.255 It costs the IRS just nineteen cents to
process an e-filed return, compared with a whopping
$3.29 to process a paper one;256 in 2016, the IRS
announced that it would eliminate 8 percent of its
personnel (or 7,000 jobs) as a result of its replacing
paper tax returns with electronic ones.
The potential savings of digital government
dawned on Congress in 1996, when it passed the
Debt Collection Improvement Act, which directed
agencies to make all payments, except tax refund
payments, via electronic fund transfers.
The effects have been salutary. More than four-
fifths of all federal benefits programs use at least
one electronic payment method,257 and over three-
quarters of all citizens who receive these payments
acquire them electronically.258 A satisfying 97 percent
of all income tax returns are filed electronically.259
Washington receives reasonably high marks
from its e-gov users. According to quarterly surveys,
federal agencies receive scores in the mid-seventies
(out of 100); scores of eighty or above reflect a
“threshold of excellence (highly satisfied visitors),”
whereas scores of seventy or lower reveal “much
room for improvement.” The comparable score for
the federal government “overall” is sixty-four.260
State.gov
The states have lagged somewhat in maximizing
their use of IT. Consider the state office in California

that verifies eligibility for Medicaid. In the absence
of an automated phone answering system, staff-
ers answer calls only after the phone has rung an
average of twenty-three times.261
Still, progress has been made. All the states
provide forms and information electronically for pur-
poses of professional licensing, and half permit at least
partial online registration for licensing. As a result of
mandates in the federal Personal Responsibility and
Work Opportunity Reconciliation Act of 1996, all
states now use bankcards to deliver some federal and
state welfare benefits.262 Thirty-six states have  an
electronic purchasing system, and most of the rest
are moving toward “e-procurement.”263 Purchasing
transaction costs have been slashed by more than 90
percent as states replace paper with computers.264
The states increasingly have been working with
one another to share and coordinate data. As a result
of Hurricane Katrina, five Gulf states formed, in
2014, the National Accuracy Clearinghouse, which
uses cutting edge IT to locate duplicate benefit appli-
cations almost in real time, flagging duplicates and
notifying the relevant states of them. “Alabama
and Mississippi saw a 74 percent and 71 percent
decrease, respectively, in the average number of dual
participants per month.”265
States that are the most likely to adopt
“e-government innovation” have larger economies;
better educated and more homogeneous popula-
tions; and Republican-controlled legislatures that are
highly professional, with committees dedicated to
e-gov in each chamber. It is the variables that do not
associate with the states’ use of e-gov, however, that
are surprising. These factors include: the presence of
an information technology department in the execu-
tive branch; governments that have higher per capita
revenues; higher urbanization; greater racial diver-
sity; higher voter turnout; more competitive parties;
and “greater policy liberalism” among citizens.266
Local.gov
By 2000, 96 percent of cities and counties had web-
sites, and progress was evident in providing more
sophisticated e-services.267 Local progress is all the
more impressive because, to expand web-based ser-
vices, local governments must surmount privacy
concerns, confidentiality laws,268 and financial obsta-
cles, and smaller governments often must overcome
The Public’s Information Resource 175
limited expertise as well.269 It follows, perhaps, that
a fourth of local governments contract out the oper-
ation of their websites to the private sector.270
In Love with E-Gov
Everybody loves e-gov.
Governments Love E-Gov More than eight out of
ten senior employees in the federal, state, and local
governments believe that digital government will
have a positive impact on government, and “not a
single public official” states that e-gov affects gov-
ernment operations negatively.271 One example: in
2015, Denver provided an app, called “pocketgov,”
to citizens seeking city services, ranging from report-
ing potholes to obtaining voter registration infor-
mation; the city saves $250,000 a year because the
resultant reduced call volume requires fewer staff.272
The Governed Love E-Gov Although there is
some evidence that most citizens rate governmental
portals lower than their commercial counterparts,273
90 percent of Americans believe that interacting elec-
tronically with government saves time and energy;274
75 percent of voters are more likely to vote for can-
didates who champion digital tools over those who
do not (liberals and conservatives agree that more
funding is needed for e-gov);275 and 62 percent of
citizens feel more positive about government because
of digital interactions.276 Two-thirds of e-gov users
think that e-gov has made it more convenient for
them to conduct transactions with the government,
and three-fourths credit it for making it easier to
stay informed about public services.277
These numbers are all the more gratifying when
we realize that prospective users may have had to
overcome the off-putting titles of some public portals,
such as the federal titles (now thankfully abandoned),
WhiteNoseSyndrome.gov, AmeriCorpse.gov, and
Dix.gov.278 We are not making these up.
A Surfeit of Satisfying Surprises Digital govern-
ment has brought benefits that have startled even its
most ardent advocates. Here are some.
E-Gov Promotes Civic Engagement People who
have greater access to the Internet, and who use it
more frequently (including access to, and use of,
 176 PA R T I I I Public and Nonprofit Management
government portals), “are more likely to be civi-
cally engaged,” ranging from voting to volunteering,
“than non-users.”279
E-Gov Encourages Trust in Government More
than six out of ten of Americans believe that e-gov
can make governments more accountable.280 The
more that citizens use governmental websites, the
more satisfied they are with e-gov; “e-government
satisfaction,” in turn, is positively associated with
trust in government.”281 Of the visitors to federal
websites who were highly satisfied with their expe-
rience, a remarkable 88 percent “put their trust
behind the agency.”282
E-Gov Improves Governing Digital government
associates with a bevy of markers that indicate
better governance. Fifty-two percent of federal
executives think it is important for interagency col-
laboration,283 and large majorities of local admin-
istrators believe that e-gov improves public service
to, and communication with, citizens.284 E-gov also
induces superior financial accountability and greater
transparency285 and “leads to radical and struc-
tural . . . political and administrative reforms” that
strengthen governments’ overall accountability.286
In 2014, the Digital Accountability and
Transparency Act (or DATA Act) was enacted,
which established government-wide data standards,
reduced the reporting requirements for the recipi-
ents of federal awards, and set uniform coding for
all federal spending. Such uniformity is desperately
needed, as, in just one year, well over half (or $619
billion) of federal “assistance awards (e.g., grants
and loans)” were improperly reported.287 The DATA
Act is modeled on the massive stimulus bill of 2009
(the American Recovery and Reinvestment Act), in
which less than 1 percent of spending was lost to
fraud, a percentage that is “significantly lower than
most government spending.”288
E-Gov and E-Graft: A Double-Edged Sword
Frustratingly, e-gov both reduces official graft and
raises public fraud.
E-Gov and Official Corruption E-gov correlates,
clearly, strongly, and positively, with the curtailment
of corruption.
When corrupt officials are denied face-to-face
contact with citizens and their transactions with
them are automatically recorded—conditions that
are greatly advanced by e-gov—the possibility of
bribery dramatically diminishes. Analyses of global
data not only support this relationship, but also
show that e-gov and IT have “a consistently positive
impact on reducing corruption” that matches those
of “traditional anti-corruption factors,” such as pro-
fessional and honest public administration and law
enforcement.289
E-Gov and Citizen E-Fraud Regrettably, e-gov also
correlates with high rates of fraud perpetrated on
governments by crooked citizens.
E-gov facilitates this fraud because govern-
ments send electronic payments automatically to
vast numbers of claimants. Federal agencies send
out more than 191 million checks and payments to
claimants every month.290 Most claims are adjudi-
cated by computers using rule-based systems, minus
any human intervention. Fraudsters need only to
learn the rules, then submit huge numbers of claims
electronically with relative impunity. “The IRS issues
1,100 refunds to the same address in Lithuania, and
there’s no software to catch this?”291
Improper Payments: The Essence of Electronic
Fraud The core of electronically defrauding gov-
ernments is improper payments, which are govern-
ment checks with incorrectly calculated sums, or
which are sent inadvertently to the wrong recipients,
such as dead people. Most federally-issued improper
payments are improperly high, but many are
improperly low. Improper payments peaked in Fiscal
Year 2010 at 5.5 percent of all federal outlays,292
and have been falling, if somewhat erratically, since.
Roughly a third of improper overpayments are “gen-
erally recoverable.”293
Over eleven years, all federal improper pay-
ments, found in 124 programs in twenty-two agen-
cies, totaled a startling $1 trillion.294 Improper
federal payments cost each federal taxpayer more
than $1,100 annually.295
Just ten programs account for 93 percent of all
improper payments.296 Three programs are especially
susceptible to fraud—Medicare, Medicaid, and the
Earned Income Tax Credit Program—and they pay
out more than 75 percent of all improper payments.297

Not all improper payments, by any means,
are the illegal loot of fraudsters, but some are.
Washington initially responded to electronic fraud
by concentrating on fraud, but largely overlooked
electronics. The Computer Matching Act of 1974
was an early, if limited, start in the right direction;
it  authorized the matching of data from two or
more information systems in an effort to minimize
fraud. Seven major agencies have signed eighty-
two agreements to match data.298 Some years
ago,  federal agencies estimated that they saved
“at least” $900 million each year through their
data-matching agreements,299 a sum that surely has
increased since.
Eventually, Washington caught on that e-gov
was the crucial tool of twenty-first-century fraud-
sters, but it was only in 2002 that Congress, for
the first time, passed legislation merely to ferret out
just how much money was being sent in improper
payments. Since then, Congress has enacted at least
seven additional laws to reduce electronic fraud
and improper payments by establishing procedures
for collecting overpayments, improving oversight,
directing agencies to share data on the deaths of
federal beneficiaries, and applying the techniques of
risk management and big data analytics.
This Is Sick! The Special Case of Healthcare
Fraud “Fraud, waste, abuse, error, and improper
payments” are estimated to account for as much as a
fourth of all healthcare payments made in the public
and private sectors. “True fraud has always been
estimated [since 1983, when tracking first began]
by many sources at 3 to 10 percent of total health
care payments,” with estimates of “waste, abuse, and
error” accounting for 15 to almost 30 percent.300
Two immense healthcare programs, Medicaid
(which serves the poor) and Medicare (the elderly),
are responsible for about half of all federal improper
payments,301 amounting to more than $70 billion
annually, with Medicare accounting for three-fifths
of the total.302 Medicaid’s questionable claims
were placed on GAO’s high-risk list in 2003, and
Medicare’s in 1990 (when the list was originated);
both remain on the list to this day, and their removal
from it likely would require legislation. As with
improper payments in general, it is not known how
many of these healthcare payments are fraudulent,
but some are.
The Public’s Information Resource 177
An estimated 10.5 percent of federal Medicaid
spending is lost to improper payments, a growing
amount;303 over the previous three years, Medicaid’s
improper payments averaged 9.8 percent.304 In
just one year, thirty-five state laws directed toward
Medicaid abuse were enacted; at least ten states have
appointed inspectors general just for Medicaid.305
An estimated 12.1 percent of Medicare spend-
ing is lost to improper payments,306 a percentage
that includes the largest known healthcare fraud
in U.S. history (uncovered in 2016), involving 301
perpetrators and 900 million fraudulently-obtained
Medicare dollars. Medicare fraud has grown so
profitable and penetrable that narcotics dealers and
organized crime are tapping into it.
None of this should be too shocking when we
realize that Medicaid and Medicare process almost
five million claims a day, and must respond within
thirty days. Due to limited funds, only about 3
percent of claims can be reviewed.307
Nevertheless, progress in the battle to curtail
healthcare fraud is underway and is paying off.
In 2013, Washington announced that the growth
rate in healthcare spending was the lowest ever in
forty-seven years, and that the rate of healthcare
price inflation was the lowest in fifty years, a pair
of satisfying and continuing trends that were attrib-
utable in part to the reduction of overpayments in
Medicare.308 In 2016, a chief data officer was hired
to, among other tasks, target healthcare fraud. A
federal task force dedicated to curtailing healthcare
fraud, created in 1997 (and supplemented, in 2007,
with a Medicare Fraud Strike Force), reports that it
has scooped up more than $29 billion over twenty
years in fraudulent claims, and, for every dollar
spent on detecting healthcare fraud, Washington
saves $6.10 (a three-year average), a sum that is
steadily increasing.309
THE INFORMATION RESOURCE
AND THE FUTURE OF GOVERNING
It is difficult to overstate the computer’s impact.
Galileo and Copernicus showed us that human beings
are not at the center of the universe, “attended by
sun and stars”; Darwin demonstrated that humanity
is not “the species created and specially endowed by
God with soul and reason”; with Freud, humankind
 178 PA R T I I I Public and Nonprofit Management
“ceased to be the species whose behavior was—
potentially—governable by rational mind”; and the
computer is teaching us that the human race is not
uniquely capable of intelligently manipulating its
environment.310
Consider how the computer is transfiguring
governance.
Open Data and Effective Governance
Open data, or open government, mean that govern-
ments render their information as accessible as is
possible to the public, often by sharing data among
agencies.
Over two years, the number of countries provid-
ing open government data sets more than doubled
to 106, or 55 percent of all members of the United
Nations.311 The federal government launched, in
2009, its open data site, data.gov, which has almost
200,000 data sets in seventy agencies; in 2016, data.
gov was expanded to the U.S. Data Federation to
implement government-wide data standardization,
among other goals. At least thirty-six states, and
forty-six cities and counties have created open data
sites since the first ones appeared in 2009.312
A third of official “publishers and users of open
data” at all governmental levels want “to make as
much of our data open as possible,” led by the feds,
at 56 percent, followed by the states (38 percent),
and counties and cities (32 and 31 percent, respec-
tively); 6 percent of all respondents “don’t produce
open data,” and 11 percent produce “the minimum
legally required,”313 which, one hopes, was not the
case of the Georgia state legislator who wrote his
re-election website only in Japanese, which trans-
lated into gibberish.314
Eighty-six percent of all public officials state that
open data increases citizens’ trust of government, 66
percent say that it “sparks economic development,”
and 25 percent report that their government is plan-
ning to invest more in open data within the next six
months.315
Public attitudes reflect official ones. Fifty-six
percent of Americans agree that open data will render
public officials more accountable to the public, and
from 45 to 49 percent think that open data result in
better government decisions, allow citizens “to have
more impact on government affairs,” and improve
the quality of government services.316
Open data also save money: capturing their
full potential could save governments worldwide
up to an estimated $1 trillion annually through
lowered costs and more efficient operations.317 In
San Francisco, for instance, riders’ access to real-
time public transit data saves the city more than $1
million per year.
Blue Skies?
Over a half-century, computers evolved from mon-
strous mainframes to pocket-sized pods and pads,
and now are entering a new paradigm that has sig-
nificant implications for government and, indeed, all
of society.
Cloud computing, or on-demand, utility, or grid
computing enables cheap, quick, and easy access to a
shared pool of computing resources that are elastic,
require minimal management, and are location- and
device-independent. In other words, due to addi-
tional network bandwidth and storage capacity, one
can inexpensively, or even at no cost, access informa-
tion at any time, from anywhere, and with anything.
Four billion people own at least one mobile device
(3.5 billion own a toothbrush), so “The Cloud” is
here to stay.318
Washington committed its agencies to cloud
computing in 2009. Fewer than 8 percent of agen-
cies’ estimated annual spending on IT is committed
to The Cloud, though this percentage is growing.319
Eighteen percent of federal CIOs are “just getting
started” in adopting The Cloud, and a slender 8
percent are “exactly where they wanted to be” with
it.320
Seventy-one percent of the states have a formal
“cloud first” policy (17 percent), or an informal
policy, or are developing a policy, and 76 percent are
using The Cloud to replace ancient legacy IT systems
(40 percent) or are developing a strategy to do so (90
percent of state CIOs consider at least a fifth of their
systems to be legacies).321
An impressive 90 percent of nonprofit organiza-
tions in eighty-eight countries are using cloud com-
puting.322
Some experts on the public cloud question that
vast savings—perhaps just 5 percent—will result
from it, but do believe that the increased flexibil-
ity, efficiency, and speed, among other advantages,
render The Cloud eminently worthwhile.323 Fifty-five

percent of federal IT professionals, for example,
say that cloud computing makes data management
easier.324
From Bureaucrat to “Infocrat”?
IT already is slimming those defining bases of
bureaucracy, hierarchy and red tape. IT receives
“high scores on . . . eliminating layers” of bureau-
cracy,325 and “is associated with reduction in red
tape.”326
The more transformative bureaucratic changes,
however, appear to be personal. “Infocrats,” who
communicate with citizens electronically, or not at all
(because IT communicates for them), are replacing
bureaucrats, who communicate personally.327 This
may not be such a bad thing for citizens, as research
indicates that when automation replaces face-to-face
interaction, bureaucratic bias is reduced and citizens
are more likely to receive the benefits to which they
are entitled.328 But it may not be such a good thing for
bureaucrats, as the emergence of computer-depend-
ent “screen-level” and “system-level bureaucracies”
shrivels administrative discretion and downgrades
traditional bureaucratic positions.329
And the growing public knowledge resource
may be a really bad thing for elected officeholders,
particularly for their hold on power. Because info-
crats are far more cognizant of the uses of this
resource than are elected officials, these “non-elected
public officials have a free playing field, [and] know
better than the people’s representatives” the con-
ditions and opinions of these representatives’ own
constituencies.330
The computer is not merely mutating governing.
It is transfiguring democracy.
NOTES
1. “Government Slideshow: IT Spending Priorities
in Local Government,” CIOInsight.com (June 10,
2010). Subnational governments spent $50 billion
in 2010–2011; figure has been updated, based on
4 percent annual increases, for 2015–2016.
2. Herbert A. Simon, Administrative Behavior:
A Study of Decision-Making Processes in
Administrative Organizations, 3rd ed. (New York:
Free Press, 1976), p. 292. The first edition was
published in 1945.
The Public’s Information Resource 179
3. See, for example, Marc A. Levin,“The Information-
Seeking Behavior of Local Government Officials,”
American Review of Public Administration 21
(December 1991), pp. 271–286.
4. William Hawk, Regina Powers, and Robert
Rubinovitz, The Importance of Data Occupations
in the U.S. Economy (Washington, DC: U.S.
Department of Commerce, 2015), pp. 13–14.
5. Paul C. Nutt, “Public-Private Differences and the
Assessment of Alternatives for Decision Making,”
Journal of Public Administration Research and
Theory 9 (April 1999), pp. 305–349.
6. Theresa Heintz and Stuart Bretschneider, “Infor-
mation Technology and Restructuring in Public
Organizations: Does Adoption of Information
Technology Affect Organizational Structures,
Communications, and Decision Making?” Journal
of Public Administration Research and Theory 10
(October 2000), pp. 801–828.
7. Adrienne LaFrance, “How Many Websites Are
There on the Internet?” Nextgov.com (September
30, 2015).
8. As derived from data in Bree Nordenson,
“Overload! Journalism’s Battle for Relevance in an
Age of Too Much Information,” Cjr.org (Columbia
Journalism Review) (November/December 2008).
9. Frank Konkel, “Assessing the Obama
Administration’s Tech Legacy,” Nextgov.com
(October 6, 2016).
10. The Radicati Group, Email Statistics Report,
2015–2019 (Palo Alto, CA.: Author, 2015), p. 4.
Figures are estimates for 2015.
11. Daniel Pitcairn and Zoe Grotophorst, “The
State of Internal Workplace Communication,”
Govexec.com (March 5, 2015).
12. Frank Konkel, “Only 1 in 7 of the Pentagon’s
Emails Is Legit,” Nextgov.com (September 23,
2015).
13. Robert P. McGowan and Gary A. Lombardo,
“Decision Support Systems in State Government:
Promises and Pitfalls,” Public Administration
Review, Special Issue: Public Management
Information Systems, 46 (November 1986), pp.
581–582.
14. C. E. Teasley, III, and Susan W. Harrell, “A Real
Garbage Can Model: Measuring the Costs of
Politics with Computer Assisted Decision Support
Software (DSS) Programs,” Public Administration
Quarterly 19 (Winter 1996), pp. 479–492.
15. U.S. General Accounting Office, Geographic
Information Systems: Challenges to Effective
 180 PA R T I I I Public and Nonprofit Management
Data Sharing, GAO-03-874T (Washington, DC:
U.S. Government Printing Office, 2003), p. 5.
16. U.S. General Accounting Office, Geographic
Information Systems: Challenges to Effective
Data Sharing, p. 6.
17. Donald F. Norris and Christopher Reddick,
“E-Government 2011: Trends and Innovations,”
Municipal Year Book, 2012 (Washington,
DC: International City/County Management
Association, 2012), pp. 83–94.
18. Danielle Douglas-Gabriel, “How the Attempt
to Fix Student Loans Got Bogged Down by the
Middlemen,” Washingtonpost.com (August 23,
2015).
19. Ponemon Institute and Tripwire, Inc., The State of
Risk-Based Security Management (Portland, OR:
Authors, 2013).
20. Grant Thornton and AGA, Driving Collaboration
and Innovation: Achieving the CFO Mission
in Uncertain Times (Alexandria, VA: Authors,
2014), pp. 3, 7. Figures are for 2014.
21. MeriTalk, Go Big Security (Alexandria, VA:
Author 2015).
22. Michael J. Keegan, “Introduction—Analytics
and Risk Management: Tools for Making Better
Decisions,” The Business of Government (Spring
2010), pp. 41–42.
23. Kearney & Company and Association of
Government Accountants, Accelerating Change:
The 2015 Inspector General Survey (Arlington,
VA: Authors, 2016), p. 16.
24. Kearney & Company and Association of
Government Accountants, Meeting Accountability
Challenges (Arlington, VA: Authors, 2014), p. 13.
Figures are for 2014.
25. Kearney & Company and Association of
Government Accountants, Accelerating Change,
p. 16. Figures are for 2012–2015.
26. Quadrennial Government Technology Review, as
cited in Joseph Marks, “Smarter Use of IT Could
Reduce the Deficit by $220 Billion, Group Says,”
Nextgov.com (October 30, 2012).
27. Grant Thornton and Professional Services
Council, 2015 Federal CIO and CISO Survey:
Expanding the Role of the CIO (Alexandria and
Arlington, VA: Author, 2015).
28. Rutrell Yasin, “How Agencies Can Reap More
Value from Analytics,” GCN (January 4, 2013).
29. As derived from data in National Association
of State Chief Information Officers, Grant
Thornton, and TechAmerica, The 2014 State
CIO Survey: Charting the Course (Lexington, KY,
Alexandria,  VA, and Washington, DC: Authors,
2014), p. 8.
30. National Association of State Chief Information
Officers, Grant Thornton, and CompTia, The
2016 State CIO Survey: The Adaptable State CIO
(Lexington, KY, Alexandria, VA, and Washington,
DC: Authors, 2016), p. 15.
31. Kearney & Company and Association of
Government Accountants, Meeting Accountability
Challenges, pp. 13–14. Figures are for 2014.
32. Jeffrey Stinson, “States Turn to Data to Hit Back
at Fraudsters,” Stateline (November 20, 2014).
33. National Association of State Chief Information
Officers, Grant Thornton, and CompTia, The
2016 State CIO Survey, p. 15.
34. Alfred T. Ho and Bo McCall, Ten Actions to
Implement Big Data Initiatives: A Study of 65
Cities (Washington, DC: IBM Center for The
Business of Government, 2016). The quotation is
on p. 1.
35. The notion of “knowledge management” first
appeared in Nicholas Henry, “Knowledge
Management: A New Concern for Public
Administration,” Public Administration Review
34 (May/June 1974), pp. 189–196. In 2006,
Oxford University Press issued a catalogue,
titled Knowledge Management & Information
Technology, touting more than fifty books and
journals in the area.
36. Ezra Klein, “Why Obamacare Makes Me
Optimistic about US Politics,” Vox (May 22,
2015).
37. Stuart Bretschneider, “Management Information
Systems in Public and Private Organizations: An
Empirical Test,” Public Administration Review 50
(September/October 1990), pp. 536–545.
38. Donald F. Kettl, Managing Risk, Improving
Results: Lessons for Improving Government
Management from GAO’s High-Risk List
(Washington, DC: IBM Center for the Business
of  Government, 2016), p. 16. Figures are for
2015.
39. MeriTalk, The Federal Simplicity Report:
Navigating Network Complexity (Washington,
DC: Author, 2014).
40. U.S. Government Accountability Office,
Information Technology: Additional OMB and
Agency Actions Needed to Ensure Portfolio
Savings Are Realized and Effectively Tracked,
GAO-15-296 (Washington, DC: U.S. Government

Publishing Office, 2015), Highlights page. Figure
is for 2013–2015.
41. Sean T. Lyons, Linda E. Duxbury, and Christopher
A. Higgins, “A Comparison of the Values of
Commitment of Private Sector, Public Sector,
and Parapublic Sector Employees,” Public
Administration Review 66 (July/August 2006),
pp. 605–618.
42. Standish Group, Extreme Chaos (West Yarmouth,
MA: Author, 2001).
43. Shaun Goldfinch, “Pessimism, Failure, and
Information Systems Development in the Public
Sector,” Public Administration Review 67
(September/October 2007), pp. 917–929. The
quotations are on p. 917.
44. Standish Group, Extreme Chaos.
45. Ibid.
46. As derived from data in U.S. Government
Accountability Office, Information Technology:
Reform Initiatives Can Help Improve Efficiency
and Effectiveness, GAO-14-671T (Washington,
DC: U.S. Government Printing Office, 2014),
Highlights page. Figures are for 2014.
47. U.S. Department of Homeland Security, Office
of Inspector General, U.S. Citizenship and Immi-
gration Services Information Technology Manage-
ment: Progress and Challenges (Washington, DC:
Author, 2014).
48. “Say Goodbye to the Era of Grand Design,”
Federal Computer Week (September 27, 2010),
p. 3.
49. U.S. Government Accountability Office, IT
Dashboard: Agencies Need to Fully Consider
Risks When Rating Their Major Investments,
GAO-16-494 (Washington, DC: U.S. Government
Publishing Office, 2016), Highlights page.
50. Jack Moore and Caitlin Fairchild, “A New Look
at How Federal IT Reform is Faring in 5 Charts,”
Nextgov.com (April 23, 2015).
51. National Association of State Chief Information
Officers, Grant Thornton, and TechAmerica, The
2014 State CIO Survey, pp. 7–9.
52. National Academy of Public Administration,
Federal Leaders Digital Insight Study (Washington,
DC: Author, 2016), pp. 4–5. Figures are for 2015.
53. Patrick Thibodeaux, “White House CIO’s First
40 Days Included ‘Worst Day’ Ever,” New York
Times (March 13, 2012).
54. As derived from data in U.S. Government
Accountability Office, Information Technology:
Federal Agencies Need to Address Legacy
The Public’s Information Resource 181
Systems, GAO-16-696T (Washington, DC: U.S.
Government Publishing Office, 2016), p. 9.
Figures are for FY 2010–FY 2017.
55. Government Business Council and Accenture,
Bringing Federal IT Up to Speed: A Candid
Survey of Federal Managers (Washington, DC,
and Arlington, VA: Authors, 2014), pp. 12, 14, 15.
56. National Academy of Public Administration,
Federal Leaders Digital Insight Study (2016), p. 4.
Data are for 2014.
57. Kettl, Managing Risk, Improving Results, pp. 16,
23. Data are for 2015 and 1990–2015, respec-
tively.
58. International Association of Information
Technology Asset Managers, Understanding the
Federal Government’s “IT Insecurity” Crisis
(Canton, OH: Author, 2015). Figures are for 2014.
59. U.S. Government Accountability Office, Federal
Chief Information Officers: Reporting to OMB
Can Be Improved by Further Streamlining and
Better Focusing on Priorities, GAO-15-106
(Washington, DC: U.S. Government Publishing
Office, 2015), p. 18.
60. Federal Commission on IT Cost, Opportunity,
Strategy, and Transparency, Report (New York:
TBM Council, 2016).
61. Geoff Colvin, “Uncle Sam’s First CIO,” Fortune
(July 25, 2011), pp. 56–61. Figures are for 2011.
62. MeriTalk, Consolidation Aggravation: Tip of
the Data Management Iceberg (Alexandria, VA:
Author, 2014).
63. As derived from data in U.S. General Accounting
Office, Contracting for Information Technology
Services, GAO-03-384R Contracting for IT
Services (Washington, DC: U.S. Government
Printing Office, 2003), p. 2, and Colleen O’Hara,
Diane Frank, and Dan Caterinicchia. “Budget
Hawks Watch IT Projects,” Federal Computer
Week (August 2001), pp. 28–30.
64. Frank Konkel, “The Government Finally May
Have Found All Its Data Centers,” Nextgov.com
(December 7, 2016). Figures are for FY 2010–FY
2015.
65. MeriTalk, Consolidation Aggravation. Figure is
for 2010–2014.
66. U.S. Government Accountability Office, Data
Center Consolidation: Agencies Making Progress,
but Planned Savings Goals Need to Be Established,
GAO-16-323 (Washington, DC: U.S. Government
Publishing Office, 2016), Highlights page. Figures
are for FY 2011–FY 2015.
 182 PA R T I I I Public and Nonprofit Management
67. U.S. General Accounting Office, Paperwork
Reduction Act, pp. 4–12. Figures are for 1995–
2001.
68. Vartabedian, “Federal Computers: A System Gone
Haywire?”
69. Partnership for Public Service and Accenture,
Serving Citizens: Strategies for Customer-Centered
Government in the Digital Age (Washington, DC,
and Arlington, VA: Authors, 2014). Figures are
for 2014.
70. National Academy of Public Administration,
Federal Leaders Digital Insight Study (Washington,
DC: Author, 2015), p. 5. Figure is for 2012–2015.
71. Sean Applegate, “How to Unleash the Full
Potential of Government Digital Services,”
Nextgov.com (March 21, 2016).
72. U.S. Government Accountability Office, Digital
Service Programs: Assessing Results and
Coordinating with Chief Information Officers
Can Improve Delivery of Federal Projects, GAO-
16-733T (Washington, DC: U.S. Government
Publishing Office, 2016), Highlights page.
73. U.S. Government Accountability Office, Infor-
mation Technology: Improved Implementation
of Reform Law Is Critical to Better Manage
Acquisitions and Operations GAO-17-263T
(Washington, DC: U.S. Government Publishing
Office, 2015), p. 7.
74. U.S. Office of Management and Budget,
E-Government Act Implementation (Washington,
DC: U.S. Government Publishing Office, 2015).
75. Partnership for Public Service and Booz Allen
Hamilton, Cyber In-Security II: Closing the
Federal Talent Gap (Washington, DC and
McLean, VA: Authors, 2015), p. 4. Figures are
official and are for 2014.
76. National Academy of Public Administration,
Federal Leaders Digital Insight Study (2016), p. 4.
Data are for 2014.
77. Allan Holmes, “Federal IT Flunks Out,” CIO
(May 15, 2006).
78. Ibid.
79. Allan Holmes, “5 Reasons Why Clinger-Cohen
Failed,” Nextgov.com (August 11, 2010).
80. Office of Inspector General, U.S. Department of
Health and Human Services, HealthCare.gov:
CMS Management of the Federal Marketplace, A
Case Study (Washington, DC: Author, 2016).
81. As derived from data in Eli Gorski, “What CIOs
Really Study,” Fcw.com (September 8, 2015).
82. Holmes, “Federal IT Flunks Out.”
83. Frank Konkel, “CIO Authority ‘Still a Major Issue’
Across Government,” Nextgov.com (December 7,
2016). Figure is for 2016.
84. As derived from data in U.S. Government
Accountability Office, Federal Chief Information
Officers: Opportunities Exist to Improve Role in
Information Technology Management, GAO-11-
634 (Washington, DC: U.S. Government Printing
Office, 2011), p. 24. Figures are for 2004–2011.
85. Ibid., p. 21. Figures are for 2004–2011.
86. Linda Cureton, “3 Reasons We Don’t Need
Federal CIOs,” Information Week Government
(July 22, 2014).
87. CIO Magazine staff, “2014 State of the CIO,”
Cio.com (January 2, 2014).
88. U.S. Government Accountability Office, Federal
Chief Information Officers: Responsibilities,
Reporting Relationships, Tenure, and Challenges,
GAO-04-823 (Washington, DC: U.S. Government
Printing Office, 2004), p. 20. Figures are for 2004.
89. Partnership for Public Service and Booz Allen
Hamilton, Cyber In-Security II, p. 25. Figures are
for 2015.
90. Grant Thornton and Professional Services Council,
2015 Federal CIO and CISO Survey, p. 4.
91. MeriTalk, Calling the Plays: The Evolving Role of
the CDO and Federal Big Data (Alexandria, VA:
Author, 2016).
92. U.S. Office of the Inspector General, Social Security
Administration, Audit Report: Numberholders
Age 112 or Older Who Did Not Have a Death
Entry on the Numident (Washington, DC: U.S.
Government Publishing Office, 2015).
93. Jack Moore, “Why Are Federal IT Workers So
Miserable?” Nextgov.com (October 8, 2015).
Figure is for 2015.
94. Ibid. Figure is for 2015.
95. Nancy Scola, “White House Launches ‘U.S.
Digital Service,’ with HealthCare.gov Fixer at the
Helm,” Washington Post (August 11, 2014).
96. Moore, “Why Are Federal IT Workers So
Miserable?” Figure is for 2015.
97. U.S. Government Accountability Office,
Information Technology: Training Can Be
Enhanced by Greater Use of Leading Practices,
GAO-04-791 (Washington, DC: U.S. Government
Printing Office, 2004), Highlights page.
98. TechAmerica and Grant Thornton, CIO/CISO
Insights: Achieving Results and Confronting
Obstacles (Arlington and Alexandria, VA:
Authors, 2014). Figures are for 2014.

99. Moore, “Why Are Federal IT Workers So
Miserable?” Figure is for 2015.
100. As derived from data in Partnership for Public
Service and Booz Allen Hamilton, Cyber
In-Security II, p. 5. Data are for 2014.
101. Grant Thornton and Professional Services Council,
2015 Federal CIO and CISO Survey, p. 2.
102. Partnership for Public Service and Booz Allen
Hamilton, Cyber In-Security II, p. 25. Data are
for 2014.
103. Gregory B. Lewis and Zhenhua Hu, “Information
Technology Workers in the Federal Service: More
Than a Quiet Crisis?” Review of Public Personnel
Administration 25 (September 2005), pp. 207–
224. The quotations are on pp. 207, 222. Data
are for 1976–2003.
104. Iron Mountain, Federal Records Management:
Managing the Storm (Washington, DC: Author,
2013).
105. U.S. Government Accountability Office,
Information Management: The Challenges of
Managing Electronic Records, GAO-10-838T
(Washington, DC: U.S. Government Printing
Office, 2010), p. 11.
106. Chief Archivist Robert Connor, quoted in Charles S.
Clark, “National Archives Chief Outlines 80-Year
Clean-Up Job,” Govexec.com (February 23,
2015).
107. Clark, “National Archives Chief Outlines 80-Year
Clean Up Job.”
108. U.S. Government Accountability Office,
Information Management: The Challenges of
Managing Electronic Records, p. 5.
109. U.S. Government Accountability Office,
Information Management: Additional Actions Are
Needed to Meet Requirements of the Managing
Federal Records Directive, GAO-15-339
(Washington, DC: U.S. Government Publishing
Office, 2015).
110. U.S. National Archives and Records
Administration, Records Management Self-
Assessment 2014 (Washington, DC: U.S.
Government Printing Office, 2015), p. i. Figures
are for 2010–2014.
111. Frank Konkel, “More Feds Telework Than Ever
Before Despite Managers’ Resistance,” Nextgov.
com (March 20, 2017). Figures are for 2012–
2015.
112. Brittany Ballenstedt, “Telework Participation
Skyrockets, Meets Less Management Resistance,”
Nextgov.com (April 30, 2013).
The Public’s Information Resource 183
113. Brittany Ballenstedt, “Federal Telework Surge
Could Save $14 Billion Annually,” Nextgov.com
(January 24, 2014).
114. U.S. General Services Administration, Office of
Inspector General, GSA’s Program for Managing
Virtual Employee and Teleworkers Needs
Improvement (Washington, DC: U.S. Government
Publishing Office, 2015).
115. Eric Pfeiffer, “Survey: Many State and Local
Governments Stuck in ‘Reactive Mode” for
IT Security Threats,” Government Executive
(November 29, 2014).
116. Dell Software, Maintain Your IT Budget with
Consistent Compliance Practices (Chantilly, VA:
Market Connections, 2014), pp. 4, 3, 6.
117. National Association of State Chief Information
Officers, Grant Thornton, and CompTia, The
2016 State CIO Survey, p. 5. Figures are for
2010–2016.
118. Jenni Bergal, “Courts Plunge Into the Digital
Age,” Stateline (December 8, 2014). Figures are
for 2013.
119. “S.C. Child Support System Almost Operational,”
Savannah Morning News (March 27, 2010).
120. U.S. General Accounting Office, Child Welfare:
States Face Challenges in Developing Information
Systems and Reporting Reliable Child Welfare Data,
GAO-04-267T (Washington, DC: U.S. Government
Printing Office, 2003). Figure is for 2003.
121. Maggie Clark, “States Still Resisting National Sex
Offender Law,” Stateline (October 1, 2012).
122. Ellen Perlman, “Topside Turnover,” Governing
(April 2007), p. 40. Figure is for 2007.
123. Kyle Roerink, “With $100 Million in IT Contracts,
Nevada Joins States Leaning on Private Sector,”
Las Vegas Sun (November 18, 2014). Figures are
for 2012.
124. National Association of State Chief Information
Officers, State IT Workforce: Under Pressure
(Lexington, KY: Author, 2011), p. 13. Figures are
for 2011.
125. Soonhee Kim, “IT Employee Job Satisfaction
in the Public Sector,” International Journal
of Public  Administration 32 (October 2009),
pp. 1070–1097.
126. As derived from data in Jack Gallt, Chris Dixon,
and Mary Gay Whitmer, “Trends in State
Information and Technology Management,”
Book of the States (Lexington, KY: Council of
State Governments, 2004), pp. 439–442. The data
are on p. 440. Figure is for 2003.
 184 PA R T I I I Public and Nonprofit Management
127. Ruth McCambridge, “Does Your Information
Technology Department Report to the CEO?
If Not, Why Not?” Nonprofitquarterly.org
(November 8, 2013). Figure is for 2013.
128. Jeffrey Stinson, “Elections Shake Up Top State IT
Jobs,” Stateline (November 6, 2014).
129. Katherine Barrett and Richard Greene, “The
Causes, Costs and Consequences of Bad Govern-
ment Data,” Governing.com (June 24, 2015).
Figure is for 2014.
130. Forester Research, Inc., as cited in “e-Gov
Momentum,” Governing (August 2001), p. 46.
These figures are projections.
131. Christopher Weare, Juliet A. Musso, and
Matthew L. Hale, “Electronic Democracy and the
Diffusion of Municipal Web Pages in California,”
Administration & Society 31 (March 1999),
pp. 3–27.
132. Alana Northrop, Kenneth L. Kraemer, Debora
Dunkle, et al., “Payoffs from Computerization:
Lessons Over Time,” Public Administration Review
50 (September/October 1990),” pp. 505–514.
133. Glen Hahn Cope, “Budgeting for Performance in
Local Government,” Municipal Year Book, 1995
(Washington, DC: International City/County
Management Association, 1995), pp. 42–52. The
quotation is on p. 51.
134. Jerri Killian and Enamul Choudhury, “Continuity
and Change in the Role of City Managers,”
Municipal Year Book, 2010 (Washington,
DC: International City/County Management
Association, 2010), pp. 10–18. Datum (p. 14) is
for 2010.
135. Harry P. Hatry and Carl F. Valente, “Alternative
Delivery Approaches Involving Increased Use of
the Private Sector,” Municipal Year Book, 1983
(Washington, DC: International City Management
Association, 1983), pp. 199–217. Figure is on
p. 200.
136. George C. Homsy and Mildred Warner,
“Intermunicipal Cooperation: The Growing
Reform,” Municipal Year Book, 2014
(Washington, DC: International City/County
Management Association, 2014), pp. 53–65.
Figure (p. 57) is for 2012.
137. Norris and Reddick, “E-Government 2011,”
pp. 86, 90.
138. Ibid., p. 89.
139. G. Zhiyong Lan, Lera Riley, and N. Joseph Cayer,
“How Can Local Government Become an Employer
of Choice for Technical Professionals? Lessons and
Experiences from the City of Phoenix,” Review of
Public Personnel Administration 25 (Fall 2005),
pp. 225–242. The quotations are on p. 225.
140. Steve Towns, “Which States and Cities Have Chief
Data Officers,” Government Technology (June 13,
2014).
141. Peter Jamison, “L.A. Is Losing $20 million a Year
because of Fumbled Tax Data, Audit Finds,” L.A.
Now (August 19, 2015).
142. Stephen J. Bajjaly, “Managing Emerging Infor-
mation Systems in the Public Sector,” Public
Productivity and Management Review 23
(September 1999), pp. 40–47. The quotation is on
p. 46.
143. We have relied largely on: Sharon S. Dawes,
Anthony M. Cresswell, and Theresa A. Pardo,
“From ‘Need to Know’ to ‘Need to Share’: Tangled
Problems of Information Boundaries, and the
Building of Public Sector Knowledge Networks,”
Public Administration Review 69 (May/June
2009), pp. 392–402; Bajjaly, “Managing Emerging
Information Systems in the Public Sector”; and U.S.
General Accounting Office, Improving Mission
Performance Through Strategic Information
Management and Technology.
144. Goldfinch, “Pessimism, Computer Failure, and
Information Systems Development in the Public
Sector,” p. 917.
145. Epic.org, Public Opinion on Privacy (Washington,
DC: Author, 2015).
146. Harris polls, as cited in Robert S. Boyd, “An
Eagle’s Eye,” Savannah Morning News (July 22,
1990).
147. David Card, Raj Chetty, Martin Feldstein, and
Emanuel Saez, Expanding Access to Administrative
Data for Research in the United States (Washington,
DC: National Science Foundation, 2011).
148. U.S. Government Accountability Office,  Iden-
tity Theft: Governments Have Acted to  Protect
Personally Identifiable Information, but Vulner-
abilities Remain, GAO-09-759T (Washington,
DC: U.S. Government Printing Office, 2009),
Highlights page.
149. Symantic, Symantic 2016 Internet Security Threat
Report (New York: Author, 2016).
150. John Pulley, “Sorting the Personal from the
Public,” Fcw.com (October 29, 2007). Figure is
for 2007, and is provided by Identity Truth.
151. Identity Theft Resource Center and IDT911, Data
Breach Reports (San Diego, CA: Author, 2016).
Figures are for 2005–2015.

152. As derived from data in U.S. Government
Accountability Office, Information Security:
Federal Agencies Need to Enhance Responses to
Data Breaches, GAO-14-487T (Washington, DC:
U.S. Government Printing Office, 2014), p. 3.
Figure is for 2009–2013.
153. Elaine S. Povitch, “It’s Tax Season, and States Are
Battling Bogus Requests for Refunds,” Pewtrusts.
org (February 16, 2016).
154. U.S. Government Accountability Office,
Information Security: IRS Needs to Further
Improve Controls over Taxpayer Data and
Continue to Combat Identity Theft Refund
Fraud, GAO-16-589T (Washington, DC: U.S.
Government Publishing Office, 2016), Highlights
page, p. 4.
155. Liz Farmer, “States Go Old School to Fight Tax
Fraud,” Governing.com (March 22, 2017). Figure
is for 2017.
156. U.S. Government Accountability Office, Infor-
mation Security: Federal Agencies Need to
Enhance Responses to Data Breaches.
157. Harry P. Madden, Americans’ Attitudes about
Privacy, Security and Surveillance (Washington,
DC: Pew Research Center, 2015), p. 4. Data are
for 2015.
158. U.S. General Accounting Office, Information
Management: Selected Agencies’ Handling of
Personal Information, p. 1.
159. U.S. General Accounting Office, Privacy Act:
OMB Leadership Needed to Improve Agency
Compliance, Highlights page.
160. U.S. Government Accountability Office,  Identity
Theft: Governments Have Acted to Protect  Per-
sonally Identifiable Information, but Vulner-
abilities Remain, pp. 17–18. OMB figure is for
2005–2009.
161. Kristin Davis, “Your Life Is Just a Stroke Away,”
Baltimore Sun (July 21, 1996).
162. Zeichner Risk Analytics study, as cited in Jonathan
Krim, “States Seen as Lax on Database Security,”
Washington Post (March 26, 2003). Data are for
2003.
163. Deloitte and National Association of State
Information Officers, State Governments at
Risk: A Call to Secure Citizen Data and Inspire
Public Trust (Washington, DC, and Lexington,
KY:  Authors, 2010), pp. 16–17. Figures are
for 2010.
164. Kay Stimson, “Secretaries of State: Focused
on Redacting Social Security Numbers from
The Public’s Information Resource 185
Public Records in the Digital Age,” Book of the
States, 2008 (Lexington, KY: Council of State
Governments, 2008), pp. 218–222. The quota-
tions are on p. 218. Figure is for 2008.
165. National Association of State Chief Information
Officers, Grant Thornton, and CompTia, The
2016 State CIO Survey, p. 23.
166. Deloitte and National Association of State
Information Officers, State Governments at Risk
(2010), pp. 15–16. Figures are for 2010.
167. William Jackson, “Data Breaches at State, Local
Agencies Expose Data about Millions,” Govern-
ment Computer News (October 20, 2008), p. 18.
168. U.S. Government Accountability Office,
Identity Theft: Governments Have Acted to
Protect Personally Identifiable Information, but
Vulnerabilities Remain, pp. 7–8. Figure is for
2009.
169. As derived from data in “States with Notice of
Security Breach Laws,” Defendyourdollars.org
(February 2010). Figure is for 2009.
170. Somini Sengupta, “No U.S. Action, So States Move
on Privacy Law,” New York Times (October 30,
2013).
171. Jeffrey Stinson, “Password Protected: States Pass
Anti-Snooping Laws,” Stateline (July 8, 2014).
Figure is for 2012–2014.
172. U.S. Government Accountability Office, Federal
Information Security: Actions Needed to Address
Challenges, GAO-16-885T (Washington, DC:
U.S. Government Publishing Office, 2016), p. 2.
Figure is for 2016.
173. Cited in Peter J. Beshar, “Ben Franklin’s Cyber
Solution,” The Hill (September 8, 2014).
174. Michael Specter, “The Doomsday Click,” The
New Yorker (May 28, 2001), pp. 101–107. The
quotations are on pp. 101–102.
175. Tom Temin, “Let’s Talk about Government
Corruption,” Federalnewsradio.com (March 31,
2016).
176. Computer Emergency Response Team, Carnegie
Mellon University, Cert/CC Statistics 1988–2005
(Philadelphia: Author, 2005), http://www.cert.org.
177. Michael McConnell, director, U.S. Office of
National Intelligence, as cited in Lawrence Wright,
“The Spymaster,” The New Yorker (January 21,
2008), pp. 51–52.
178. As derived from data in Privacy Rights
Clearinghouse, Chronology of Data Breaches
(San Diego, CA: Author, 2014). Figures are for
2013, and government figures include the military.
 186 PA R T I I I Public and Nonprofit Management
179. Lee Rainie, Janna Anderson, and Jennifer
Connolly, “Cyber Attacks Likely to Increase,” Pew
Research Internet Project (October 29, 2014).
Figures are for 2014–2025.
180. Jenni Bergal, “Criminals Increasingly Hold
Government Computers for Ransom,” Stateline
(October 13, 2016). Figure is for 2005–2015.
181. SonicWall, 2017 Annual Threat Report (Santa
Clara, CA: Author, 2017).
182. Sentinel IPS, as cited in GCN Staff, “Malware,
Ransomware Are Twice as Likely to Hit State,
Local Network,” Gcn.com (December 1, 2015).
Data are for 2015.
183. Isaca.org, ISACA January 2016 Cybersecurity
Snapshot US Results (Rolling Meadows, IL:
Author, 2016).
184. Garance Burke and Jonathan Fahey, “AP
Investigation: US Power Grid Vulnerable to
Foreign Hacks,” Yahoo.com (December 21, 2015).
185. Verizon, 2014 Data Breach Investigations Report:
Public Sector (New York: Author, 2014).
186. As derived from data in Privacy Rights
Clearinghouse, Chronology of Data Breaches.
Data are for 2013, and government figure includes
the military.
187. Verizon, 2014 Data Breach Investigations Report:
Public Sector.
188. Stephen Weigend, “Agencies Identify Biggest
Threats to Cybersecurity,” Federal Computer
Week (January 25, 2010), p. 33. Figures are for
2009.
189. U.S. Government Accountability Office, Federal
Information Security: Actions Needed to Address
Challenges, p. 3. Figures are for 2006–2015 and
2015, respectively.
190. U.S. Office of Management and Budget, Annual
Report to Congress: Federal Information
Security Management Act (Washington, DC: U.S.
Government Printing Office, 2014), p. 31. Figures
are for FY 2013.
191. Verizon, Inc., 2016 Data Breach Investigations
Report (New York: Author, 2016).
192. Solarwinds and Market Connections, Solarwinds
Federal Cybersecurity Survey 2015 (Washington,
DC, and Asheville, NC: Authors, 2014). Data are
for 2014.
193. Deloitte and National Association of State
Information Officers, State Governments at
Risk: A Call for Collaboration and Compliance
(Washington, DC, and Lexington, KY: Authors,
2012), p. 17. Figures are for 2012.
194. Lauren Cassani Davis, “How Do Americans
Weigh Privacy Versus National Security?”
Nextgov.com (February 3, 2016). Figures are for
2013–2016.
195. Verizon, Inc., 2016 Data Breach Investigations
Report.
196. John McDuling, “America Is the Prime Target
of International Cyberattacks,” Nextgov.com
(February 23, 2014). Datum is for 2013.
197. U.S. Government Accountability Office,
Information Security: Agencies Need to Improve
Controls over Selected High-Impact Systems,
GAO-16-501 (Washington, DC: U.S Government
Publishing Office, 2016), Highlights page.
198. Aliya Sternstein, “Congressional Probe Says OPM
Hackers Arrived in 2012 and We Will Never Know
What They Took.” Nextgov.com (September 7,
2016).
199. Jack Moore and Caitlin Fairchild, “Federal Cyber-
security by the Numbers: The Biggest Spenders and
the Biggest Threats,” Nextgov.com (April 5, 2016).
200. Ariel Rabkin, “How to Make Data Security a
Priority for the Government,” Techpolicydaily.
com (August 26, 2015).
201. Quoted in Steven Norton and Clint Boulton,
“Years of Tech Mismanagement Led to OPM
Breach, Resignation of Chief,” Wsj.com (July 10,
2015).
202. Patrick E. McFarland, quoted in Eric Yoder,
“OPM Officials Hindering Scrutiny of Hacked
Computer Systems, Watchdog Says,” Washington
Post (August 6, 2015).
203. Billy Mitchell, “How Beth Cobert Resurrected
OPM IT After Historic Cyber Breaches,”
Fedscoop.com (January 18, 2017).
204. FedScoop staff, “Cyber Alert Overload Creates
New Challenges for Feds,” Fedscoop.com (May
18, 2016).
205. Verizon, Inc., 2016 Data Breach Investigations
Report.
206. Market Connections, Federal Network Security
Survey Report (Alexandria, VA: Author, 2015),
p. 3. Figure is for 2015.
207. U.S. Government Accountability Office, Cyberse-
curity: Continued Attention Needed to Protect Our
Nation’s Critical Infrastructure and Information
Systems, pp. 10, 9. Datum is for 2010.
208. Ben Fagan, OPM Is Not Alone: More Third Party
Risk in the Federal Government (Cambridge,
MA: Bitsight Technologies, 2015). Data are for
2015.

209. Aliya Sternstein, “Who Needs Heartbleed
When Many Dot-Govs Don’t Even Encrypt
Communications?” Nextgov.com (June 11, 2014).
210. U.S. Government Accountability Office, Federal
Information Security: Actions Needed to Address
Challenges, p. 11.
211. ISC and KPMG, The State of Cybersecurity
from the Federal Cyber Executive Perspective
(Washington, DC: Authors, 2016), p. 14. Figure is
for 2016.
212. Aliya Sternstein, “Most Federal Agencies
Wouldn’t Be Able to Bounce Back from a Sony
Hack,” Nextgov.com (December 18, 2014).
213. Booz Allen Hamilton and Partnership for Public
Service, Cyber In-Security: Strengthening the
Federal Cybersecurity Workforce (Washington,
DC: Authors, 2009), p 7. Data are for 2009, and
exclude the intelligence agencies.
214. National Initiative for Cybersecurity Education,
NICE Cybersecurity Workforce Framework
(Washington, DC: Author, 2016).
215. FedScoop staff, “Cyber Alert Overload Creates
New Challenges for Feds.” Figures are for 2016.
216. Market Research Media, U.S. Federal Cyber-
security Market Forecast 2015–2020 (June  24,
2015).
217. Market Connections, Federal Network Security
Survey Report, pp. 17, 9. Figure is for 2015.
218. Frank Konkel, “Want to Avoid Another OPM?
Spend More, Industry Says,” Nextgov.com
(January 8, 2016).
219. Mohana Ravindranath, “Why Are Government
Contractors Cutting Their Cybersecurity
Budgets?” Nextgov.com (July 15, 2015). Data are
for 2014–2015.
220. Moore and Fairchild, “Federal Cybersecurity by
the Numbers.”
221. Daniel Byler, Steve Berman, Vishwa Kola, and
William D. Eggers, Accountability Quantified:
What 26 Years of GAO Reports Can Teach Us
about Government Management (Washington,
DC: Deloitte, 2015). Figures are for 1983–2008.
222. U.S. Government Accountability Office, Infor-
mation Security: Department of Education and
Other Federal Agencies Need to Better Implement
Controls, GAO-16-228T (Washington, DC: U.S.
Government Publishing Office, 2015), Highlights
page. Figures are for FY 2009–FY 2015.
223. Joseph Marks, “Obama’s Cyber Legacy: He Did
(Almost) Everything Right and It Still Turned Out
Wrong,” Nextgov.com (January 1, 2017).
The Public’s Information Resource 187
224. Eric A. Fischer, Federal Laws Relating to
Cybersecurity: Discussion of Proposed Revi-
sions  (Washington, DC: U.S. Congressional
Research Service, 2012), p. 2. Updated figure is
for 2016.
225. William Jackson, “Update: The Case for FISMA
Reform,” Government Computer News (April 5,
2010), p. 7.
226. Jamil Farshchi and Ahmad Douglas, “How
to Move Past the FISMA Mindset,” Federal
Computer Week (September 13, 2010), p. 20.
227. Wyatt Kash, “A Cyber Bill Worth Enacting,”
Government Computer News 29 (June 21, 2010),
p. 4.
228. Fischer, Federal Laws Relating to Cybersecurity,
p. 1.
229. Deloitte and National Association of State Chief
Information Officers, State Governments at
Risk: A Call for Collaboration and Compliance
(Washington, DC, and Lexington, KY: Authors,
2012), p. 3.
230. Srini Subramanian, as quoted in Jeffrey Stinson,
“Cyberattacks on State Databases Escalate,”
Stateline (October 2, 2014).
231. Ponemon Institute, as cited in Armanda Ziadeh,
“State v. Fed: Who Does Cyber Security Better?”
Gcn.com (November 4, 2015). Figures are for
2015.
232. Deloitte and National Association of State Chief
Information Officers, 2016 Deloitte-NASCIO
Cybersecurity Study (Washington, DC, and
Lexington, KY: Authors, 2016), p. 18.
233. Deloitte and National Association of State Chief
Information Officers, State Governments at Risk
(2014), pp. 7, 11.
234. Deloitte and National Association of State Chief
Information Officers, 2016 Deloitte-NASCIO
Cybersecurity Study, p. 3.
235. Ibid., p. 15.
236. Deloitte and National Association of State Chief
Information Officers, State Governments at Risk
(2014), p. 11. Figure is for 2012.
237. Deloitte and National Association of State Chief
Information Officers, 2016 Deloitte-NASCIO
Cybersecurity Study, p. 15.
238. National Association of State Chief Information
Officers, Grant Thornton, and CompTIA, 2016
State CIO Survey, p. 2.
239. Deloitte and National Association of State Chief
Information Officers, State Governments at Risk
(2010), p. 18.
 188 PA R T I I I Public and Nonprofit Management
240. Deloitte and National Association of State Chief
Information Officers, State Governments at Risk
(2014), p. 4.
241. Deloitte and National Association of State Chief
Information Officers, 2016 Deloitte-NASCIO
Cybersecurity Study, p. 7.
242. Stinson, “Elections Shake Up Top State IT Jobs.”
Data are for 2010–2012 and 2012–2014.
243. Steven Spano, as quoted in Jessie Bur, “States
Seek Federal Collaboration in Cybersecurity,”
Meritalk.com (May 24, 2016).
244. National Association of State Chief Information
Officers, The 2014 State CIO Top 10 (Washington,
DC: Author), pp. 2–13.
245. US-CERT, Alert (TA15-119A) Top 30 Targeted
High Risk Vulnerabilities (Washington, DC:
Author, 2015).
246. MeriTalk, Go Big Security (Alexandria, VA:
Author 2015).
247. U.S. Government Accountability Office, Infor-
mation Security: Concerted Effort Needed to
Improve Federal Performance Measures, GAO-
09-617 (Washington, DC: U.S. Government
Printing Office, 2009), Highlights page.
248. Jason Miller, “GSA Now in Charge of Dot-Gov
Domain Policy, Issuance,” Federal News Radio
(January 14, 2015).
249. ProQuest LLC, ProQuest Statistical Abstract of
the United States, 2016, 4th ed. (Bethesda, MD:
Author, 2016), Table 1166. Figure is for 2012.
250. Pew Research Center, Americans’ Views on Open
Government Data (Washington, DC: Author,
2015). Figures are for 2014–2015.
251. Nicole Blake Johnson, “Agencies Move to
Eliminate Paper Use, Boost Electronic Business,”
Federal Times (April, 2011), FederalTimes.com.
Figure is for 2010.
252. Stephen Seidel and Jason Ye, “Smarter Printing
Could Cut Costs, Energy Use in Half,” Nextgov.
com (May 16, 2013).
253. Johnson, “Agencies Move to Eliminate Paper
Use,  Boost Electronic Business.” Figures are for
2010.
254. Charles S. Clark, “Federal Paper Pushing Costs
Taxpayers Millions,” Govexec.com (December 8,
2015).
255. U.S. Government Accountability Office, Electronic
Rulemaking: Progress Made in Developing
Centralized E-Rulemaking System, GAO-05-777
(Washington, DC: U.S. Government Printing
Office, 2005), p. 7.
256. U.S. Government Accountability Office, 2010 Tax
Filing Season: IRS’s Performance Improved in
Some Key Areas, but Efficiency Gains Are Possible
in Others, GAO-11-111 (Washington, DC: U.S.
Government Printing Office, 2010), p. 6. Figures
are for 2009.
257. U.S. Government Accountability Office, Electronic
Payments: Many Programs Electronically
Disburse Federal Benefits, and More Outreach
Could Increase Use, GAO-08-645 (Washington,
DC: U.S. Government Printing Office, 2008),
Highlights page. Figures are for 2008.
258. U.S. General Accounting Office, Electronic
Transfers: Use by Federal Payment Recipients Has
Increased but Obstacles to Greater Participation
Remain, GAO-02-913 (Washington, DC: U.S.
Government Printing Office, 2002). Figure is for
2002.
259. “Administration Touts Progress on Goals,”
FederalTimes.com (February 13, 2014). Figure is
for 2013.
260. Dave Lewan, The ForeSee E-Government
Satisfaction Index (Q1 2015) (Ann Arbor, MI:
ForeSee, 2015), pp. 5–6.
261. Charles S. Clark, “‘Technophobic’ Washington
Drags Down Government Innovation, Carly
Fiorina Says,” Government Executive (January
2013).
262. Shane Harris, “Getting Down to Business,”
Governing (September 2002), p. 42.
263. National Association of State Procurement
Officials, 2015 Survey of State Procurement
Practices (Lexington, KY: Author, 2015), p. 5.
264. “Slowdown Ahead for Financing E-Procurement,”
Governing (July 2001), p. 70.
265. Stephanie Kanowitz, “State Data Clearinghouse
Cuts Duplicate Benefits Payments,” Gcn.com
(August 20, 2015).
266. Caroline J. Tolbert, Karen Mossberger, and
Ramona McNeal, “Institutions, Policy Innovation,
and E-Government in the American States, “Public
Administration Review 68 (May/June 2008),
pp. 549–563. The quotation is on p. 554.
267. John O’Looney, “Use of the Internet for Citizen
Participation and Service Delivery,” Municipal
Year Book, 2001 (Washington, DC: International
City/County Management Association, 2001),
pp. 28–34.
268. Civic Resource Group, Cities on the Internet,
2001: E-Government Applied (Santa Monica,
CA: Author, 2001). Figures are for 2001.

269. David Coursey, “E-Government: Trends, Benefits,
and Challenges,” Municipal Year Book, 2005
(Washington, DC: International City/County
Management Association, 2005), pp. 14–21.
270. Evelina R. Moulder, “E-Government: Trends,
Opportunities, and Challenges,” Municipal Year
Book, 2003 (Washington, DC: International
City/County Management Association, 2003),
pp. 39–45. Figure (p. 43) is for 2002.
271. Council for Excellence in Government, The New
E-Government Equation, p. 24. Figures are for
2003.
272. Charles Chieppo, “Government in Your Pocket,”
Governing.com (April 2015).
273. Forrest V. Morgeson, III, and Sunil Mithas,
“Does E-Government Measure Up to E-Business?
Comparing End User Perceptions of U.S. Federal
Government and E-Business Web Sites,” Public
Administration Review 69 (July/August 2009),
pp. 740–752.
274. Adobe Public Sector Blog, “A Frustrated
Citizenry” Adobe.com (October 21, 2015). Figure
is for 2015.
275. Adobe Public Sector Blog,“Digital Bipartisanship,”
Adobe.com (December 7, 2015). Data are for
2015.
276. Adobe Public Sector Blog, “A Frustrated
Citizenry.” Figure is for 2015.
277. Council for Excellence in Government, The New
E-Government Equation: Ease, Engagement,
Privacy and Protection (Washington, DC: Author,
2003), pp. 2, 5. Figures are for 2003.
278. Aliya Sternstein, “The Dot-Gov Rejects: The
1,000 Government Websites Shuttered Over Past
10 Years,” Nextgov.com (April 8, 2015).
279. Corporation for National and Community
Service and National Conference on Citizenship,
Civic Life in America: Key Findings on the Civic
Health of the Nation, Issue Brief (Washington,
DC: Authors, 2010), pp. 11, 22–23.
280. Council for Excellence in Government,
E-Government: To Connect, Protect, and Serve
Us (Washington, DC: Author, 2002), pp. 19–20.
Figures are for 2001.
281. Eric C. Welch, “Linking Citizen Satisfaction with
E-Government and Trust in Government,” Journal
of Public Administration Research and Theory 15
(Summer 2005), pp. 371–392. The quotation is on
p. 371.
282. Lewan, The ForeSee E-Government Satisfaction
Index, p. 6.
The Public’s Information Resource 189
283. Government Business Council and Accenture,
Bringing Federal IT Up to Speed, p. 18.
284. Coursey, “E-Government,” p. 17. Figure is for
2004.
285. Vicente Pina, Lourdes Torres, and Sonia Royo,
“Is E-Government Leading to More Accountable
and Transparent Local Governments? An Overall
View,” Financial Accountability & Management
26 (February 2010), pp. 3–20.
286. Hiroko Kudo, “Does E-Government Guarantee
Accountability in Public Sector? Experiences in
Italy and Japan,” Public Administration Quarterly
32 (April 2008), pp. 93–120. The quotations are
on p. 93.
287. As derived from data in U.S. Government
Accountability Office, Data Transparency:
Oversight Needed to Address Underreporting
and Inconsistencies on Federal Award Website,
GAO-14-476 (Washington, DC: U.S. Government
Printing Office, 2014), Highlights page. Figures
are for FY 2012.
288. Joseph Marks, “The Data Act Is About to Shake
Up Federal Operations,” Nextgov.com (April 28,
2014).
289. Dong Chul Shim and Tae Ho Eom, “E-Government
and Anti-Corruption: Empirical Analysis of
International Data,” International Journal of
Public Administration 31 (3, 2008), pp. 298–316.
The quotation is on p. 298.
290. As derived from data in Alec MacGillis, “Obama’s
‘70 Million Checks’ Per Month: Actually, It’s Even
More Than That,” Washington Post (July 26,
2011). Figure is for 2011.
291. Frank Abagnale, quoted in Charles C. Clark,
“Reformed Con Man Wows Agency Accountants
with Anti-Fraud Tips,” Govexec.com (September
15, 2015).
292. U.S. Government Accountability Office, Improper
Payments: Recent Efforts to Address Improper
Payments and Remaining Challenges, GAO-
11-575T (Washington, DC: U.S. Government
Printing Office, 2011), p. 3. Highlights page.
Figure is for FY 2010 (when improper payments
accounted for 5.5 percent of outlays) through FY
2013.
293. Sean Reilly, “Improper Payment Rate Falls Again,”
FederalTimes.com (December 31, 2013).
294. U.S. Government Accountability Office, Fiscal
Outlook: Addressing Improper Payments and
the Tax Gap Would Improve the Government’s
Fiscal Position, GAO-16-92T (Washington, DC:
 190 PA R T I I I Public and Nonprofit Management
U.S. Government Publishing Office, 2015), p. 3.
Figure is for FY 2003, when records were first
kept, through FY 2014.
295. Dan Zitting, “Follow the Data Trail: Using
Analytics to Defeat Fraud,” Routefifty.com
(March 5, 2017). Figure is for FY 2014.
296. U.S. Government Accountability Office,
Improper Payments: Moving Forward with
Governmentwide Reduction Strategies, GAO-
12-405T (Washington, DC: U.S. Government
Printing Office, 2012), Highlights page.
297. U.S. Government Accountability Office, Fiscal
Outlook: Addressing Improper Payments and
the Tax Gap Would Improve the Government’s
Fiscal Position, Highlights page. Figure is for FY
2014.
298. U.S. Government Accountability Office, Computer
Matching Act: OMB and Selected Agencies Need
to Ensure Consistent Implementation, GAO-14-
44 (Washington, DC: U.S. Government Printing
Office, 2014). Figure is for FY 2013. Three-point-
five percent figure is for FY 2009–FY 2014. Sixty-
five percent figure is for FY 2011.
299. U.S. Government Accountability Office, Taxpayer
Information: Options Exist to Enable Data
Sharing between IRS and USCIS but Each
Presents Challenges, GAO-06-100 (Washington,
DC: U.S. Government Printing Office, 2005), p. 1.
Figure is for 2000.
300. International Institute for Analytics, Health Care
Payment Integrity through Advanced Analytics
(Portland, OR: Author, 2015), pp. 1, 3.
301. U.S. Government Accounting Office, Improper
Payments: Progress Made but Challenges
Remain in Estimating and Reducing Improper
Payments, GAO-09-628T (Washington, DC: U.S.
Government Printing Office, 2009), Highlights
page. Figure is for FY 2008.
302. As derived from data in U.S. Department of
Health and Human Services, “Medicare/Payment
Accuracy” and “Medicaid/Payment Accuracy,”
Paymentaccuracy.gov. Figures are for FY 2015.
303. U.S. Government Accountability Office, Medicaid:
CMS Has Taken Steps, but Further Efforts Are
Needed to Control Improper Payments, GAO-
17-386T (Washington, DC: U.S. Government
Printing Office, 2017), Highlights page. Figure is
for FY 2016.
304. U.S. Department of Health and Human Services,
“Medicaid/Payment Accuracy.” Figure average is
for FY 2013–FY 2015.
305. Susan Milligan, “Medicaid Expansion Spurs
States Fight Fraud, Overpayments,” Pewstates
(March 4, 2014). Figures are for 2013.
306. U.S. Department of Health and Human Services,
“Medicare/Payment Accuracy.” Figure is average
for FY 2014–FY 2015.
307. Ibid.
308. Office of the President of the United States,
Trends in Health Care Cost Growth and the Role
of the Affordable Care Act (Washington, DC:
U.S. Government Printing Office, 2013), pp. 1–2.
Years covered are 1965–2012 and 1962–2012,
respectively.
308. U.S. Government Accountability Office, Medicaid:
CMS Has Taken Steps, but Further Efforts Are
Needed to Control Improper Payments, GAO-
17-386T (Washington, DC: U.S. Government
Publishing Office, 2017), Highlights page. Figure
is for FY 2016.
309. U.S. Department of Health and Human Services
and U.S. Department of Justice, Health Care Fraud
and Abuse Program: Annual Report for Fiscal
Year 2015 (Washington, DC: U.S. Government
Publishing Office, 2016), pp. 1, 8. Fraud recovery
figure is for 1997–2015. Return on investment
figure is average for 2013–2015.
310. Herbert A. Simon, The Shape of Automation for
Men and Management (New York: Harper &
Row, 1965), p. 52.
311. United Nations, as cited in Wyatt Kash, “Number
of Countries Embracing Open Government
Surges,” Fedscoop.com (August 1, 2016). Figures
are for 2014–2015.
312. Jeffrey Stinson, “Open Data Is Open for Business,”
Stateline (June 5, 2014). Figures are for 2014.
313. Socrata and EMC Research, 2016 Socrata Open
Data Benchmark Survey (Seattle, WA: Authors,
2016).
314. Tyler Jett, “State Rep. Tom Weldon’s Campaign
Website Entirely in Japanese,” Timesfreepress.
com (March 17, 2016).
315. Socrata and EMC Research, 2016 Socrata Open
Data Benchmark Survey.
316. Pew Research Center, Americans’ Views on Open
Government Data, p. 2. Figures are for 2014–2015.
317. McKinsey & Company, Public-Sector Digitization:
The Trillion-Dollar Challenge (Washington, DC:
Author, 2014).
318. Frank Konkel, “Why ‘Cloud Is Here to Stay,’”
Nextgov.com (March 16, 2015).
319. Frank Konkel, “Report: 97% of Government

Has IT Plan,” Nextgov.com (November 2, 2016).
Figure is for FY 2017.
320. Grant Thornton and Professional Services Council,
2015 Federal CIO and CISO Survey, p. 7.
321. National Association of State Chief Information
Officers, Grant Thornton, and CompTia, The
2016 State CIO Survey, pp. 11, 10.
322. TechSoup Global, 2012 Global Cloud Computing
Survey Results (San Francisco: Author, 2012).
323. Jason Miller, “Agencies Not Seeing Dollar Signs
in the Cloud,” Federal News Radio (January 16,
2015).
324. Robert L. Mitchell, “Redistricting for the Masses,”
Computerworld (May 23, 2011), pp. 21–23.
325. Kuotsai Tom Liou and Ronnie Korosec,
“Implementing Organizational Reform Strategies
in State Government,” Public Administration
Quarterly 33 (Fall 2009), pp. 429–452. The quo-
tation is on p. 447.
326. Eric W. Welch and Sanjay K. Pandey,
“E-Government and Bureaucracy: Toward a
The Public’s Information Resource 191
Better Understanding of Intranet Implementation
and Its Effect on Red Tape,” Journal of Public
Administration Research and Theory 17 (October
2007), pp. 379–404. The quotation is on p. 379.
327. Ignace Snellen, “Electronic Governance:
Implications for Citizens, Politicians and Public
Servants,” International Review of Administrative
Sciences 65 (June 2002), pp. 190–194.
328. Jeffrey B. Wenger and Vicky M. Wilkins, “At the
Discretion of Rogue Agents: How Automation
Improves Women’s Outcomes in Unemployment
Insurance,” Journal of Public Administration
Research and Theory 19 (April 2009), pp. 313–
333.
329. Mark Bovens and Stavros Zouridis, “From
Street-Level to System-Level Bureaucracies: How
Information and Communication Technology
Is Transforming Administrative Discretion and
Control,” Public Administration Review 62
(March/April 2002), pp. 174–184.
330. Snellen, “Electronic Governance,” p. 194.
CHAPTER

The Constant Quest:

Efficient and Effective
Governance
A ll governments have issues of efficiency
and effectiveness. A probably apocryphal
example: following World War II, a British com- ■
addressed to them . . . much time is spent on
unimportant business.”
Robert Morris: “No man living can attend
mission  charged with modernizing government the daily deliberations of Congress and
discovered that the civil service was paying a full- do executive parts of business at the
time  worker to light fires along the Dover cliffs same time.”
should a Spanish Armada loom, a fleet last spotted ■ Thomas Jefferson: “Nothing is so embarrassing
in 1588. nor so mischievous in a great assembly as the
Although our example might seem to belie it, details of execution. The smallest trifle of that
more productive public administration is colos- kind occupies [legislators’ time] as long as the
sally consequential. The federal government, for most important act of legislation, and takes
instance, could save as much as $995 billion by [the] place of everything else.”
2025 by increasing their efficiency by a modest 1
These frustrations over inefficient government
percent.1 If the feds “could achieve the 15 percent or
led James Madison, in particular, to use “an effi-
more productivity improvement we typically expect
ciency argument” for creating, as a vital part of
from a major private-sector change program,”
the nation’s new Constitution, a separate execu-
the savings would tally to “more than $445 per
tive branch authorized to implement congressional
citizen.”2 Multiply that figure by more than 330
legislation. “We have been taught that the separa-
million people, and suddenly we are talking about
tion of powers was meant to provide mutual checks,
real money.
with consequent inefficiency in operation,” a con-
Efficient and effective public administration
sequence  often hailed by political scientists as the
has lain leadenly on the minds of American public
reasonable price of protecting citizens from des-
officials even before there was a United States of
potic governmental efficiency. But the founders’
America. Consider some complaints about the lack
“primary  need was to achieve efficiency. . .. The
of productive public administration made by some
modern cult of checks as the primary virtue of
distinguished Americans who served in Congress
the  Constitution was not shared by its framers.”
under the Articles of Confederation, that odd
Indeed not. The term, “check,” appears a mere five
interregnum when the government had no exec-
times in the founders’ Federalist Papers, and then
utive branch, thereby forcing legislators to also be
only when referring to “governmental machin-
administrators:
ery,” and the word is nowhere to be found in the
Constitution.3
■ Thomas Burke: Because members of Congress
“cannot reject any [administrative] business

192

WHY CAN’T GOVERNMENT
BE MORE EFFICIENT AND
EFFECTIVE?
An analysis of the federal government’s forty-one
“most visible failures” (as determined by the amount
of news on such topics as the 9/11 attacks) over thir-
teen years found that its most notorious failures were
growing over time.4 Small wonder that an astonish-
ing 98 percent of Americans think that government
wastes “a lot” (72 percent) of or “some” (26 percent)
tax money. Federal officials concur; 66 percent cite
“achieving operational efficiency” as their “most
pressing” management issue, and nothing else comes
even remotely close.5
Public efficiency and effectiveness remain elusive
for the many reasons, which we explain next. Before
doing so, however, let us place these productivity
problems in perspective. In 1990, the Government
Accountability Office (GAO) created its “high-risk”
list of federal programs that are unduly vulnerable
to fraud, waste, abuse, and mismanagement; over
the ensuing twenty-five years, a total of fifty-seven
programs were placed on the list. These are hell-
ishly complex and difficult programs that require
enormous effort to be removed from the list (six
programs, which were among the original fourteen
placed on the list in 1990, are still on it), but it is
striking that two-fifths of them have been removed.
“The good news is that” these high-risk problems
“are solvable. . .. Although cynics might believe oth-
erwise, success is possible.”6
With that pleasantly upbeat note, we descend
into the depressing reasons underlying public
inefficiencies.
Three Fundamental Reasons
For cultural, structural, and environmental reasons—
reasons that are not subject to easy, or possibly even
human, change—government is unable to match the
efficiency of the private and nonprofit sectors.
Constrained American Governments As we
reviewed in Chapter 1 and throughout Part II,
American governments (but not private and inde-
pendent organizations) function in a culture that
is uniquely constraining; thus, they find it very
Efficient and Effective Governance 193
hard to change, even for reasons of gaining greater
efficiency.
Global Governmental Bureaucratization As we
discussed in Chapter 4, no government (not just
American ones) can be streamlined—that is, reduced
in its hierarchy and red tape—to the extent that a
company or nonprofit organization can be.
Environmental Turbulence When the external
environment of public organizations becomes more
turbulent—a condition that arguably is amplifying
over time—then that turbulence has a measurably
“negative effect” on the performance of government
agencies.7
Eight Political Reasons
In addition, there are eight political reasons why
American governments cannot attain the same level
of efficiency and effectiveness that is found in the
other two sectors. These, at least in theory, should be
more responsive to reform than the three preceding
reasons.
Public Unions What evidence we have suggests
that public unions can equate with less governmen-
tal efficiency and effectiveness. We address this in
Chapter 9.
Politicized Public Executives We also address in
Chapter 9, and in this chapter, the systemic ineffi-
ciencies that accompany public executives who
are hired more for political reasons than for their
administrative proficiency.
Dumb Public Policies Some public policies waste
money simply because they are self-evidently dumb,
at least from an administrative perspective, if not,
perhaps, from a political one. Does it really make
sense, for instance, to send monthly unemployment
checks to 2,362 millionaires and multi-millionaires?8
Or to ship coal from the United States to heat its mil-
itary bases in Germany (which has a lot of coal)?9
Other policies are formally assessed for their
efficiency and effectiveness, but continue to waste
money even after it is conclusively shown that they
are unproductive—or even counterproductive—
because they nevertheless are retained. “Despite
 194 PA R T I I I Public and Nonprofit Management
decades of efforts and trillions of dollars in spend-
ing, rigorous evaluations typically find that around
75 percent of [federal] programs or practices that
are intended help people do better at school or at
work have little or no effect.”10
For example, systematic evaluations have shown
the following: out of eleven of Washington’s “large
social programs,” initiated in 1990 and costing more
than $10 billion annually, ten showed only “weak or
no positive effects.” A federal after-school program
designed to improve students’ behavior positively
associated with increases in suspensions and other
punishable incidents. These and other dysfunctional
programs are still with us.11
Subnational governments are not immune. In
the states, the notorious “scared straight” programs,
in which youths are subjected to prison-style disci-
pline in an effort to dissuade them from criminal
behavior, actually results in an average of 12 percent
of its participants becoming more likely to commit
crimes.12 Of the estimated 25,000 teacher education
programs in universities, states closed or prevented
student enrollments in “fewer than 60” badly fal-
tering programs over five years, and just a dozen
education schools or departments were closed or
suspended.13
Local governments spent an estimated $12
billion over fifteen years to build or renovate
forty-five private sports stadiums; because tax-free
municipal bonds (explained in Chapter 8) were used
to finance thirty-two (or 71 percent) of them, federal
tax revenue shrank by $3.7 billion,14 and local gov-
ernments gained essentially nothing for their subsi-
dization: “A wide array of studies have shown that
professional teams add virtually no income to local
economies. In fact, some of them find that large
subsidies actually [take] . . . money out of the local
economy.”15
Parsing Policy Implementation A favorite pre-
occupation of legislatures is that of creating a
single public policy, and then scattering, like seeds
to the wind, slices of that policy among passels of
public agencies, with (of course) the firm mandate
that the agencies somehow manage the policy effi-
ciently and effectively. This is particularly the case
in Washington.
In an astonishing 85 percent of “new or sub-
stantially revised programs” enacted by Congress,
Congress demands that the program be implemented
by two or more entities; sometimes these entities are
other federal agencies, but often they are not, ren-
dering coordinated and efficient management even
more difficult.16
Worse, most federal agencies execute three or
more of the fifteen “budget functions”—that is,
Washington’s biggest, and wholly different, public
policies, such as “National Defense.” The Department
of Agriculture spends only about two-fifths of its
appropriated funds on agriculture; another two-
fifths goes to income security programs.17
It is, obviously, not easy for top administrators
to wrap their minds around multiple major policies
and still administer them well.
A Bevy of Bosses In contrast to the chief executive
officers of companies and nonprofit organizations,
who report to a single board of directors, the heads
of government agencies typically report to dozens of
their equivalents in the form of legislative oversight
committees. Consider the fate of the Department
of Homeland Security. The department “and its
subcomponents are accountable to more than 100
committees, subcommittees [at least eighty-eight
committees and subcommittees, and growing18],
caucuses and commissions. The redundancy places
an enormous burden on the department, consuming
staff who set aside departmental work to respond
to a multitude of congressional inquiries, and the
time of executives who are called to testify.”19 Every
Senator, and at least 412 of the 435 Representatives,
or 95 percent, have some degree of responsibility for
homeland security.20
Why is this? Because legislative committees
that oversee prominent public policies attract large
numbers of legislators, who are fully aware that
the resultant publicity enhances their prospects for
re-election. Indeed, when the 9/11 Commission rec-
ommended some consolidation, “committees were
unwilling to give up their piece of jurisdiction.”21
Hence, “there has been no move toward consolida-
tion of. . .. the crazy-quilt of congressional oversight”
of the department, a condition that “perpetuates the
fragmentation of responsibility that led to 9/11.”22
Ignorant, Uninterested, and Bullying Legislators
Members of Congress and their staffs exhibit an
ignorance of how executive agencies work. A former

staffer who later became an under secretary recalled,
“I was stunned at the things I had not known as
a Hill staffer about the challenges, restrictions and
complexities of operating in the executive branch—
relative ignorance about the budget process, the
federal hiring process, procurement and how rule-
making works.”23
Some of this ignorance is attributable to shorter
congressional tenures, which undermines congres-
sional learning about government. In the 2015–2016
session, nearly half of Representatives and Senators
had served six years or fewer.24
Despite the creation, in 2012, of a Government
Efficiency Caucus, there is also a declining con-
gressional interest in executive agencies. A former
Representative observed that “professional knowl-
edge is given less attention than it was decades ago,”
as indicated by the fact that the number of com-
mittee and subcommittee hearings is three-fifths of
what it was thirty years earlier, a decline that also
contributes to congressional ignorance about the
agencies. And the quality of those hearings is in
doubt. Former Defense Secretary and Director of
Central Intelligence, Robert Gates, wrote that most
members of Congress are “uncivil, incompetent in
fulfilling basic constitutional responsibilities, micro-
managerial, parochial, egotistical, thin-skinned,
often putting self (and reelection) before country,”
adding that congressional hearings are “rude, insult-
ing, belittling, bullying, and all too often highly per-
sonal attacks [that] . . . violated nearly every norm of
civil behavior as they postured and acted as judge,
jury, and executioner.”25 Stern letter to follow.
Duplication, Overlap, Fragmentation, and Related
Inefficiencies Legislatures are often guilty of cre-
ating programmatic duplication, overlap, and frag-
mentation, three particularly pernicious sources of
wasted dollars, but the federal government is exem-
plary in these questionable practices. An impressive
68 percent of federal managers state that agencies
are “ripe for cuts when it comes to eliminating waste
and redundancy.”26
Over the course of five years, the Government
Accountability Office identified 645 “actions,” or
ways to reduce or eliminate duplicative, overlapping,
or fragmented programs and practices and other
inefficiencies that were uncovered in some 249 policy
“areas” found in all fifteen cabinet departments and
Efficient and Effective Governance 195
“at least” seventeen additional agencies.27 Even after
GAO’s commendable (and continuing) digging, the
head of GAO stated before Congress that there still
is not even a complete list of federal programs.28
These redundancies brings not only vast
waste—eliminating or reducing these inefficiencies
“will result in approximately $125 billion in finan-
cial benefits” over fifteen years29—but also consider-
able hardship for both taxpayers and the recipients
of government services.
Here is an example that affects taxpayers:
Washington’s forty job training programs (four-
teen of which serve fewer than 4,000 trainees each,
and one serves just 318) are administered by seven
agencies at an annual cost of nearly $12 billion,
including administrative costs that range from an
eyebrow-raising 7 percent of all expenditures to an
eye-popping 20 percent.30
And here is an example—federal human ser-
vices programs—that affects clients: “Six federal
agencies . . . [and uncounted] state and local agen-
cies, as well as for-profit and nonprofit agencies
directly provide services. . .. This array of programs
[is] too fragmented and overly complex—for clients
to navigate, [and] for program operators to admin-
ister effectively. . .. Individuals often must visit mul-
tiple offices to apply for aid and provide the same
information and documentation each time. . .. The
complexity and variation in eligibility rules and
other requirements among programs contribute
to time-consuming and duplicative administrative
processes that add to overall costs. Some programs
provide similar services through separate programs,
resulting in additional inefficiencies.”31
When programmatic fragmentation, duplica-
tion, and overlap are avoided, efficiency soars. For
instance, the administrative expenses of the Social
Security Administration, which has the exclusive
authorization to manage Social Security programs,
have not exceeded 1 percent of its annual expendi-
tures since 1989.32 Similarly, the U.S. Postal Service,
which processes two-fifths of the world’s snail mail
and has suffered deep cuts (38 percent of all mail
deliveries now are delivered after 5:00 P.M. because
of staff cuts33), but retains the exclusive authoriza-
tion to deliver mail, ranks at the top of all federal
agencies for customer engagement,34 and is the most
efficient mail service out of all 159 national postal
services analyzed.35
 196 PA R T I I I Public and Nonprofit Management
Congress and the agencies are making progress.
Over five years, 51 percent of all 645 actions needed
to reduce overlap, fragmentation, duplication, and
waste had been fully addressed, 31 percent par-
tially so, and 18 percent had not yet been addressed,
saving $75 billion.36
The core of the problem, however, remains
Congress. It would appear that no program, no
matter that it is identical to a heaving host of others,
is so redundant that Congress not only will protect
it, but often add more redundancy. Should we be
surprised that it was only in 2010 that Congress,
for the very first time (!), required reports on pro-
grammatic duplication, fragmentation, overlap, and
related inefficiencies that it, itself, had created?
Iron Triangles Why do programmatic duplica-
tion, fragmentation, and overlap persist? Much
of the reason is the presence of the iron triangle,
or the exceptionally strong bonds that exist among
the agency, its legislative oversight committees, and
the affected special interests. Each of these three tri-
angular sides is direly threatened by any proposed
rearrangement of their relationships, and, therefore,
the iron triangle almost always succeeds in block-
ing executive branch reorganizations regardless of
the benefits, such as attaining greater efficiency, that
restructuring would bring.
Washington’s Iron Triangles Because any pro-
posed reorganization of the executive branch must
be approved by Congress, Congress is clearly the
federal triangle’s toughest side. In 1938, for example,
Franklin Delano Roosevelt, at the apogee of his pres-
idential power, was roundly crushed in Congress
when he attempted to implement the sensible rec-
ommendations of the prestigious Committee on
Administrative Management, noted in Chapter  2.
This “defeat . . . was the worst that President
Roosevelt would suffer in three terms as President.”37
As a consequence of the iron triangle, there have
been only a dozen “major” reorganizations over
sixty-four years, and some seem not all that major,
or even reorganizational, such as re-titling the War
Department to the Defense Department.38 In fact,
only one of these reorganizations has been deemed
successful (when Congress approved 70 percent of
the first Hoover Commission’s recommendations of
1949), and then only because the president worked
unusually closely with Congress.39 The remaining
eleven have “virtually never [been] combined to
eliminate program duplication. Missions are not
realigned or even rationalized. Program laps upon
program. Responsibilities are not coordinated.”40
Permit us a pertinent side note. GAO’s thought-
ful, multi-year research on governmental reorgan-
ization found that the odds of success increase if:
stakeholders are involved in decision making; exec-
utive and legislative roles are balanced and a con-
sensus is reached; high-risk areas are identified; and
programmatic duplication, overlap, and fragmenta-
tion are reduced.41
The States’ Iron Triangles Although “more than
half”42 of the governors are empowered, at least in
theory, to reorganize by executive order their civil
services,43 the iron triangle endures.
The states’ efforts to reorganize began in the
early twentieth century, and took the form of five
reorganizational waves.44 Despite all this roiling,
however, “by the middle of the twentieth century
state bureaucracies often contained one hundred to
two hundred units”45 all ostensibly reporting to the
governor, the legislature, or an independent board,
and coordinated management was hardly the rule.
Between 1965 and 1990, twenty-six states reduced
the number of their agencies, and, in limited ways,
reorganized, mostly by introducing, for the first
time, a cabinet-based executive branch.46 These
reorganizations were less than sweeping, and those
few agencies that were eliminated commonly “had
minuscule budgets,” or “their functions continue to
be performed by other agencies.”47 Each state typi-
cally retains hundreds of boards and commissions,
but unfilled vacancies persist, meetings are often
rare, redundancy is common, many missions long
have been met, and their costs are high.48
WHY CAN’T GOVERNMENT—
AND THE NONPROFIT SECTOR—
BE MORE EFFICIENT AND
EFFECTIVE?
There are two additional reasons why the public
sector cannot attain the efficiency and effectiveness
of the private sector, and which, uniquely, also apply
to the nonprofit sector.

Process Change Equals Glacial Change
It is an inescapable and stubborn fact that the core
activity of all governments, and essentially of all non-
profit organizations, is providing services. Providing
services is, of course, a process, and processes, as
we explained in Chapter 4, are far more difficult to
change, even for reasons of greater efficiency, than
are products, which are produced almost exclusively
by the private sector.
Technology, Productivity, and Service
Quality
In his uniquely insightful essays, William Baumol
has  shown how the public and independent
sectors also are unable to exploit new technologies
to boost productivity to the extent that the private
sector can.49
The Quality Quest In the product-intensive private
sector, investments can be made in technologies
that increase productivity by replacing labor. But in
the service-intensive public and nonprofit sectors,
technologies cannot replace labor because their
workers are direct, hands-on producers of services,
and quality is a defining component of service effi-
ciency and effectiveness. (The single most important
“operational issue,” by far, to senior government
executives in five developed countries, including
the United States, is “improved quality of service,”
identified by a remarkable 84 percent.50) Hence, it is
extremely difficult to make social workers more pro-
ductive by expanding their caseloads, to make police
and fire fighters more productive by decreasing their
numbers, or to make nonprofit program managers
more productive by cutting their funding. In these
instances, the quality of service inevitably suffers.
“The same might be said for playing a string quartet
with two instruments: More productive, perhaps,
but it’s not the same thing.”51
Happily, There Are Exceptions As with most gen-
eralizations, there are exceptions. Two technologies
have produced savings in all sectors.
One is technologies and practices that use less
energy and fewer resources. The federal government
has decreased its energy consumption by two-fifths,
since record keeping began in 1975.52
Efficient and Effective Governance 197
The other is information technology, which has
displaced labor. An example: In 1983, cleri-
cal  workers accounted for 20 percent of federal
civilian employees; today, they account for 6
percent.53  As a former federal secretary observed,
“The stuff I did  15 or 16 years ago is no longer
necessary. Now we all need some level of computer
literacy.”54
UNDERSTANDING PUBLIC
PRODUCTIVITY
Three-fourths of top public administrators cite
“improved productivity”—that tall, tough, prickly,
and dry Saguaro cactus of public management—as
their most important issue.55
Productive Definitions
We define productivity, a phrase subject to myriad
interpretations in the literature, as efficiency and
effectiveness in the public and nonprofit sectors.
Efficiency is the full accomplishment of a job
using the fewest resources possible, or “the biggest
bang for the buck.” Effectiveness is the full produc-
tion of the intended result.
We remind ourselves of these basic definitions
because the terms are not as universal as one might
expect. There is, for example, no word in Russian
for efficiency, although there is one for effective-
ness. Those who ever faced the fearsome might of
the Red Army know that the Russians understand
effectiveness.
There are additional notions that are impor-
tant in understanding public and nonprofit produc-
tivity. Inputs are the resources used by a program,
such as money, people, or time. Outputs are the
final products of a program, such as the amount of
trash collected per dollar expended. Outcomes, or
impacts, are the social or economic changes that are
produced by a program’s outputs, such as improved
public health resulting from trash collected and dis-
posed of.
Ghettos in the Vastness
“The amazing thing about public productivity
research is different clusters of researchers investigate
 198 PA R T I I I Public and Nonprofit Management
the same problems in different ways . . . the majority
of researchers in one cluster are not aware, let alone
familiar with, the studies of the other clusters . . .
all these differences put researchers into intellectual
ghettos.”56
Well said. The productivity literature tends
to focus on performance measurement and
program  evaluation, activities that we devote
the  bulk of this chapter to. In reality, however,
the  attainment of greater efficiency and effective-
ness  in the public and nonprofit sectors entails
methods that cover far vaster plains of ghet-
toized  territory. Hence, we address in this and
other chapters (or ghettos of our own making) the
primary proposals—e.g., introducing risk manage-
ment, eliminating improper payments, and broad-
ening electronic government, among many, many
others—for more efficient and effective governing
and managing.
There are also pre-existing conditions that
can, indirectly but clearly, raise or lower productiv-
ity. These include: creating a unit that shares best
practices, standardizes training, and solicits advice
from experts, which leads to later and greater
efficiencies;57 the presence of a national govern-
mental form that is federal (higher governmental
efficiency), rather than unitary (lower efficiency);58
assuring, as noted in Chapter 5, a reasonable level
of job security for public employees, while improv-
ing their performance; and expanding the manage-
ment of public programs. The federal government
meets only 64 percent of its strategic initiatives
and wastes more than a tenth (or $101 million)
for every $1  billion that it spends on projects and
programs.59  Only 11 percent of the federal, state,
and local governments  have senior-level program
managers or their equivalents, compared with
22 percent in the  private sector, and governments
risk $148 million (or 15  percent) out of every $1
billion spent because of poor program manage-
ment.60 (In  2016, Congress passed the Program
Management Improvement  and Accountability
Act, which instructed agencies  to  designate senior
administrators responsible for program manage-
ment strategy and policy, and provided them with
a career path.)
There is no lack of proven, practical ways to
improve public and nonprofit productivity. And they
are all over the map.
The Evolution of Public Efficiency and
Effectiveness
Aside from the creation of the Constitution itself
and, with it, an executive branch, governments’
attempts to improve their own productivity can be
traced back to at least 1816, when the U.S. House
of Representatives established a standing committee
to examine the operations of the War Department.61
Efficiency for Good Government, 1900–1939 In the
modern era, Washington first demonstrated that it was
concerned with federal productivity when President
Robert A. Taft appointed, in 1910, the Commission
on Economy and Efficiency. In 1937, the president’s
Committee on Administrative Management, detailed
in Chapter 2, published its  impressive report, and
minced no words about the centrality of efficiency to
good government: “Efficiency is thus axiom number
one in the value scale of administration. This brings
administration into apparent conflict with the value
scale of politics.”62
The states did not evidence much interest in
improving governmental efficiency until well into
the twentieth century, but this was far from the case
in local governments, where most governing was
done. At the beginning of the twentieth century, aside
from the national defense and diplomacy budgets,
nearly three-fourths of all public expenditures were
expended by local governments.63
The New York Bureau of Municipal Research,
founded in 1906, and its proliferous progeny (noted
in Chapter 2), were pioneers in the development
of public performance measures; many of these
“bureaus of efficiency” actually featured the word,
“efficiency” in their titles.64 What are now the
Government Finance Officers Association and the
International City/County Management Association
cast these local efforts on a national stage in the
1920s and 1930s.
Managing for Efficiency and Effectiveness, 1970–
1980 From the 1940s through the 1960s, gov-
ernments grew more interested in controlling costs,
largely by introducing new budgeting formats and
organization development efforts, and less con-
cerned with enhancing public productivity per se.
With the advent of the 1970s, however, this lack-
adaisical orientation altered rather dramatically.

Scholars suddenly were asking, “Why does public
administration ignore evaluation?”65
Federal Forward—Fitfully In 1970, a powerful
Senator alerted GAO that it was “distressing that we
have no real measures of the efficiency of the federal
sector.”66 The Senator was ignored by the execu-
tive branch, but not by the legislative one, which,
in 1978, passed the Inspector General Act, which
created offices of inspectors general (IGs) in federal
agencies. IGs, as we detail later, have since waxed
into powerful evaluators of federal performance.
State and Local Governments: Learning and
Leading The 1970s marked the first real com-
mitment by the states to assessing their programs.
Between 1970 and 1980, the number of states in
which most major agencies were conducting produc-
tivity analyses doubled, from one-fifth to two-fifths.67
The 1970s also were a decade for local govern-
ments to rediscover productivity, often as a conse-
quence of renewed professional interest in the area.
In 1971 fewer than two-fifths of these governments
had some form of program evaluation unit in even
one agency, a proportion that had burgeoned to
nearly two-thirds only five years later.68
A Mixed Passel of Productivity, 1981–1990
During the 1980s, governments’ efforts to improve
their efficiency and effectiveness varied widely by
governmental level.
A Committed Federal Bureaucracy Despite White
House resistance and a steep decline during the
1980s in federal funding for evaluating program per-
formance, the number of evaluations produced by
federal agencies remained about the same as in earlier
years, “suggesting continued executive branch inter-
est in obtaining evaluation information.”69 In 1982,
GAO created its Division of Program Evaluation
and Methodology, which “pioneered some of the
agency’s most groundbreaking studies.”70 (Although
the division was eliminated due to budget cuts, in
1996, its values arguably had seeped throughout
GAO over the fourteen years of its existence.) The
bureaucracy was at least holding its own.
State Stabilization and Local Leadership By the
mid-1980s, legislatures in thirty-five states had
Efficient and Effective Governance 199
expanded existing agencies or created new ones
charged with the state-wide evaluation of program
effectiveness and efficiency,71 but the number of
states in which most major agencies conducted pro-
ductivity analyses was only nominally more than it
had been at the close of the 1970s.72
Local governments more than retained their
position of leadership. By the end of the eighties,
an astounding four-fifths of municipal governments
were conducting program evaluations.73
A New Public Management, 1991–Present In the
final decade of the twentieth century, public man-
agers were so frustrated over being chained (they
believed) to antiquated practices which prohibited
them from governing well, that the term, “libera-
tion management,” was coined to express their felt
need for greater flexibility.74 Liberation management
soon morphed into the new public management
(also known as reinventing government or public
quality management), or a proactive commitment
to entrepreneurial and accountable innovation in
governance for the purpose of raising governmental
efficiency, effectiveness, and responsiveness.
The new public management’s main methods
for fulfilling this mission include: granting public
administrators greater freedom to manage, while
continuing to assure their accountability to the law,
professional values, and the public interest; enhanc-
ing competition and collaboration with other gov-
ernments and the private and nonprofit sectors;
greater accountability to, and transparency for, citi-
zens; and the aggressive use of knowledge to antici-
pate events and adapt to them.
All this leads to a much greater emphasis on
certain kinds of public management that have been
stressed only intermittently in the past, notably
performance measurement and feedback, program
evaluation, strategic planning, “customer” service,
training, decentralization, and streamlining procure-
ment, budgeting, and human resources management.
By the mid-1990s, when the new public man-
agement was faddishly hot, just 10 percent of
federal, state, and local agencies had had “no expe-
rience” with the bundle of techniques that comprise
it.75 And its impact on governmental efficiency may
have been deeper than commonly realized. One indi-
cation: From 1990 to 1999, employment by all gov-
ernments fell from 17 percent of the workforce to
 200 PA R T I I I Public and Nonprofit Management
15.7 percent, the lowest since the early 1960s and
the lowest in each of the years that followed, includ-
ing the Great Recession of 2007–2009.76
The New Federal Management Beginning in the
1990s, no president has let program performance
drift quietly away. And their bureaucrats back them,
consistently selecting “operational efficiency” as
their most pressing management issue.77
Within three months after being sworn into
office in 1993, President Bill Clinton created the
National Performance Review, composed of some
250 experienced federal employees, declaring that,
“Our goal is to make the entire federal government
both less expensive and more efficient.78
By 2000, the National Performance Review,
“the longest-running reform in the history of the
Federal Government,”79 had had nearly two-thirds
of its 1,200 recommendations implemented,80 pro-
ducing more than 4,000 new customer service stand-
ards and scrapping 250 programs, 2,000 field offices,
and 426,200 jobs.81 Historically, the federal civilian
workforce, which comprised about 1 percent of the
population from 1960 to 1990,82 was cut by an
unprecedented 11 percent during the nineties,83 and
federal civilian employees have accounted for two-
thirds of 1 percent of the population since 2000.84
Among the Review’s achievements were the intro-
duction of electronic tax filing and performance pay
for senior executives, but its unsophisticated cutting
of employees left some agencies so weakened that
they have yet to recover, and it is similarly regrettable
that the effort ignored serious civil service reform.85
In 2002, President George W. Bush replaced the
National Performance Review with his President’s
Management Agenda to implement management
reforms, a Performance Assessment Rating Tool
(PART) to grade agency progress, and a cross-
agency Performance Improvement Council (PIC) to
coordinate these activities. When Bush left the White
House, in 2009, more than 1,000 programs had been
assessed. Fewer than a fifth received the top rating
of “effective” (hardly a starry-eyed adjective); the
remainder were rated lower, including 3 percent that
were “ineffective” and 17 percent which could not
be assessed because of insufficient data. Congress
was unresponsive in making improvements.86
President Barack Obama had the good luck (if
that is the phrase) of implementing the American
Recovery and Reinvestment Act of 2009, which
required the speedy spending of hundreds of billions
of dollars in stimulus funds to shorten the Great
Recession. All top executives, including the presi-
dent, were acutely aware of the political risk should
fiscal scandals surface, and “that urgency brought
out the best in accountability and opportunities for
collaboration. It had us doing business differently,
without cutting corners. . .. driving through those
competing stakeholders in real time.”87
That drive included the abandonment of the
President’s Management Agenda and PART (which,
regrettably, had become “incredibly adversarial as
agencies became defensive”88), and the redirection
of the PIC’s mission into one of reconfiguring how
the government assessed program performance.
Obama moved instead to emphasizing priorities and
placing responsibility for improving performance
away from the Office of Management and Budget
(or OMB, which created an Evidence and Evaluation
team during this period) and to the agencies. Obama,
however, did create, in 2011, an Office of Social
Innovation and Civic Participation, charged with
integrating data with domestic policymaking, in the
White House. In 2016, Congress passed unanimously
the Evidence-based Policymaking Commission Act,
which founded the commission of that name.
The New State Management By the close of the
1990s, from 5 to 39 percent of state agencies had
fully implemented at least one of eleven innova-
tions stemming from the new public management,
a modest headway that led analysts to conclude
that “there is a clear possibility” that these reforms
“will not be widely and quickly adopted across the
states.”89
Nevertheless, when states do adopt these inno-
vations, efficiency frequently follows. A survey of
nearly 300 state agencies found that “taking risks,
being innovative, and being proactive [which is “the
most influential factor of the three”] contribute pos-
itively to organizational performance.”90
Interestingly, state employees are sophis-
ticated critics of the new public management’s
many methods; 72 percent of them believe that the
“harder,” more systematic and analytic techniques,
notably, strategic planning, performance measure-
ment, and process improvements, plus the “softer”
factor of performance feedback, have a significantly

greater impact on improving agency performance
than do the softer methods of customer service,
empowerment, teamwork, training, employee
awards, and recognition programs.91
The New Local Management City and county
administrators were the original engines behind
the new public management. It was they who, in
the early 1980s, introduced their governments to
Quality Circles, a technique that gathers small
groups of employees to analyze and solve problems
and which is generally acknowledged to be the basis
of the new public management.
Their enthusiasm has not lagged. City man-
agers support “reinvention” by better than nine to
one.92 “Nearly all” of them “believe that taxpay-
ers should be treated as customers, competition in
service delivery is acceptable, government should
be mission-driven and entrepreneurial, and non-tax
revenue sources should be developed.”93
Their enthusiasm is also infectious: “City coun-
cils are very agreeable to proposals to reinvent gov-
ernment,” adopting 70 percent of eight reforms that
associate with the new public management when
they are recommended by their city managers.94
Local governments are walking the reinvention
walk. Collaboration abounds; 55 percent of all city
and county services are delivered, in whole or in part,
by organizations other than the governments that
are paying for them.95 Customer service is on the
forefront; better than seven out of ten municipalities
have initiated new programs to improve services.96
The new public management works remarkably
well in local jurisdictions. Innovative entrepreneuri-
alism correlates positively with improved local gov-
ernmental performance.97 When local governments
adopt a “market orientation” in their governing,
“consumer satisfaction” becomes “quite strong,”
particularly when local officials view themselves as
competing with alternative service providers, such as
companies.98
MEASURING PUBLIC AND
NONPROFIT PERFORMANCE
A foundation of the public sector’s effort to improve
its efficiency and effectiveness is performance meas-
urement, or “the ongoing monitoring and reporting
Efficient and Effective Governance 201
of program accomplishments, particularly progress
towards pre-established goals.”99
Measuring performance is done by applying
performance measures, which are quantified indi-
cators of program efficiency. Performance measures
are also known as performance indicators, a nod to
the fact that public and nonprofit performance often
cannot be precisely measured, but, at best, merely
“indicated.”
Measuring public performance has grown
immeasurably as a dominating concern of both the
public and public administrators. Seventy percent
of Americans “favor creating a system of evaluating
government agencies by the [objective] results they
produce rather than by the programs they initiate
or the money they spend,”100 and many of the major
professional associations of public administrators
have officially endorsed performance measurement.
Some Benefits of Performance
Measurement
Raising the public and independent sectors’ effi-
ciency and effectiveness remains the prime potential
benefit of using performance measures, but there are
other rewards, too.
One is higher job satisfaction. More than eight
out of ten federal employees who believe that they
work in high-performing agencies report that they
are satisfied with their jobs, compared to six out of
ten government-wide.101
Another is the little-known finding that effective
performance measurement systems are interchange-
able—in other words, administrators, for the most
part, do not have to begin with the wheel, but can
borrow, or easily adapt, systems used in one policy
area and apply it in another, an advantage that brings
its own efficiencies. “Performance improvements can
be made by learning from other areas.”102
Performance measurement also can be effective
in ridding governments of probably inept politi-
cians and bureaucrats. When a local government’s
published performance scores are among the lowest
when compared with those of other localities, incum-
bents running for re-election suffer, on average, a 6
percent loss in voter support. (Unfortunately for
incumbents, high scores do not produce electoral
benefits.)103 And, when published performance
scores for core services drop by 10 percent, the
 202 PA R T I I I Public and Nonprofit Management
average turnover rate for local senior managers
increases by 3 percent.104
Perhaps, however, performance measurement’s
most lasting contribution may be its strengthening
of government’s legitimacy in society. Performance
measurement “is being embraced with equal fervor
by conservatives and liberals. Conservatives see it as
a way of bringing accountability to government; lib-
erals see it as a way to illustrate that government is
worth paying for—and may even be worth paying
more for.”105
Some Limitations of Performance
Measurement
The limitations of performance measures outnum-
ber their benefits, which is not to say that they are
useless; far from it. But before performance meas-
urement can deliver benefits, its limitations must be
understood.
Not Everything Can Be Measured Perhaps the
gravest limitation of performance measurement is
that quantifying the performance of some public
and nonprofit programs simply cannot be done.
Highway safety departments, for instance, with their
straightforward mission, have found performance
measures to be rewardingly productive, but child
welfare programs, with a necessarily more subjec-
tive, judgmental mission, have not.
In addition, efficiency is irrelevant for many
public programs because their concerns are values,
rights, or the law. Examples include whose picture
will be on the $20 bill and restoring voting rights
to felons.
Not Everyone Gets It Many bureaucrats also just
don’t get it. A large sampling of federal agencies
found that, rather than relying on the three stand-
ard performance indicators of inputs, outputs, and
outcomes, they instead used an astounding 1,355
differing (and growing106) “efficiency measures.”
Although “about 90 percent” of the agencies had
developed at least one efficiency measure, 42 percent
of these agencies lacked either an input measure (87
percent of the 42 percent) or an output or outcome
measure (13 percent). As GAO delicately put it,
“This could result in measures that do not capture
efficiency.”107
This lack of comprehension about performance
measures reflects the larger fact that, public execu-
tives, like all of us, are victims of bounded ration-
ality (discussed in Chapter 4), and this has a very
real impact on how they deal with performance
measures. At least twenty states, for example, are
developing or have performance-based funding of
higher education,108 and public university presi-
dents are much more likely to accept such funding
if: the state  legislature is largely Democratic
(Democrats are deemed more supportive of gov-
ernment programs than Republicans); graduation
rates are  high (an indicator common to success-
ful university performance); the environment in
which the information on university performance
is evaluated is  relatively  stable; and the presidents
themselves  hold a conservative political ideology
and  believe that performance-based funding is
desirable.109
Measuring Is Not Enough A massive and unusu-
ally sophisticated analysis found that merely meas-
uring program performance tends “to have a small
but positive impact on performance in public organ-
izations,” but when measuring is done by perfor-
mance management systems that use best practices,
then measuring is “two to three times more effective”
in improving organizational performance “than the
‘average’ performance management system.”
We list best practices for performance measure-
ment later in the chapter, but if a performance man-
agement system (a term that is “as much art as a
science” and for which “there is no single acceptable
definition”) contains at least two of the following
“important elements,” then its greater effectiveness
is relatively assured. These elements are: setting
goals and measures; using benchmarking (discussed
later) and incentives; using performance infor-
mation in strategic planning; using performance
evidence in decision making; linking budgets and
subgroup autonomy to the achievement of perfor-
mance goals; and publicizing performance targets
and results.110
Measuring Federal Performance
A “lack of good performance metrics” is a “root
cause” of programs having high financial and
other risks in twenty-three federal agencies, and

strengthening those metrics is a major means of
reducing those risks.111
Strengthening federal performance measure-
ment is new. In 1991, not even a tenth of federal
agencies were measuring their performance in
useable ways.112 In part because the federal gov-
ernment “came late to this revolution,”113 the feds’
ability to measure agency performance ranked “on a
scale of 10 about at a 2.”114
But Washington displayed an early determina-
tion to raise this ranking. The National Performance
Review, initiated by the president in 1993, and the
Government Performance and Results Act of 1993
(GPRA, also known as the Results Act) point by
their titles alone to this conclusion. The Results
Act, uniquely, marked the first time that Congress
required measurable program performance, a legal
basis that makes the fading of federal performance
measurement far less likely.
Partial Progress in the Second Millennium By
2004, almost nine out of ten agencies had perfor-
mance measures in place,115 and, by 2007, roughly
half of agency administrators were using informa-
tion obtained from performance measurement to a
“great or very great extent.”116
Nevertheless, even though federal administrators
are finding that using performance measurements
is becoming easier over time,117 government-wide
usage of performance information slipped slightly
over six years. Senior executives use such informa-
tion (48 percent of the agencies’ performance spe-
cialists state that their “department’s top leadership
uses performance data to drive decision-making to
a ‘great’ or ‘very great’ extent”118) more than their
non-senior counterparts, a gap that undermines the
more widespread use of performance information in
decision making.119
A glimmer of potential relief lies in the presi-
dent’s appointment, in 2009, of the federal govern-
ment’s first “chief performance officer,” who reports
directly to the president.
The Government Performance and Results
Act Modernization Act In 2010, the president
signed  into law the Government Performance
and Results Act Modernization Act (GPRA
Modernization Act), noted in Chapter 2, an act of
some significance.
Efficient and Effective Governance 203
Perhaps the GPRA Modernization Act’s most
notable new performance requirement is that if an
agency fails to meet its performance targets in three
years, Congress will consider revising or terminat-
ing the programs in question. The legislation also
mandated more performance reporting, and legis-
lated agency-based “chief operating officers” and
“program improvement officers” (PIOs); PIOs now
comprise the membership of the Performance
Improvement Council. As a Senator put it, “This is
the biggest little bill that nobody ever heard of.”120
In 2014, OMB reported that most of the GPRA
Modernization Act’s goals were met, or that “the
agencies achieved notable progress.”121 Agency-
based PIOs concur, with 74 percent giving their
agencies a grade of “B” or “A” in rating their “pro-
gress in performance management” since the act’s
passage.122 Most agency officials state that the act
has had a positive effect in achieving agency goals
and has improved accountability and efficiency;123
they also report greater use of performance informa-
tion as they “experience the routines established by
the Modernization Act.”124
It appears that only Congress is a slacker in
using performance information, with 53 percent of
PIOs saying that Congress uses their agencies’ per-
formance information “not at all” or “some” of the
time.125
Measuring State Performance
As with Washington, the state capitals are making
significant gains in measuring their performance.
Measurable State Strides Every state has a per-
formance management program, although the
sophistication and extent of those programs vary
widely, and all states mandate a budget process that
demands from agencies data that measure their pro-
grams’ outputs.126
Over ten years, forty-two states enacted
more than 100 laws that “support the use of
evidence-based programs.” Over three years, twenty-
nine states “reported using cost-benefit studies to
inform policy or budget decisions,” an increase of
48 percent,127 although, over the same period, every
state produced at least one cost-benefit analysis
(twenty-one, apparently, did not inform policy or
budget decisions).128
 204 PA R T I I I Public and Nonprofit Management
More than seven out of ten department admin-
istrators in the states say that the efficiency and
effectiveness of their agency has been enhanced
because of performance measures,129 and the data
support their views: Using performance measures in
state agencies correlates positively with improved
communication and service quality.130
Markers of Measurement Success Those states
that establish comprehensive systems for man-
aging performance are more likely to: integrate
goals throughout their agencies; provide strong
“strategic guidance”; balance bottom-up and top-
down approaches; and display significantly supe-
rior accountability and performance in their public
administration.131
Somewhat surprisingly, state legislatures that
are peopled by part-time citizen-legislators “are
associated with better administrative practices [in]
the managerial use of performance measures . . . than
professional legislatures.”132 A large state population
seems to be the sole variable that associates with the
states’ long-term use of performance measures.133
A Time to Trust? State agencies typically self-
report their own performance to their legislatures.
Unfortunately, there is the troubling reality that
legislators often do not trust those reports, and
they are less trusted by legislators than information
coming from any other source. Other than legisla-
tors’ own personal experiences with the agency,
outside audits of agency performance are legislators’
most trusted source of information.134
Measuring Local Performance
Performance measures are used by six out of ten
cities and counties, two-fifths of which use them
government-wide.135 More populous cities and those
with a city manager are the most likely to adopt per-
formance measures.136 Performance measurement
and management are likelier to be adopted and, cru-
cially, stay actively in place if introduced gradually,
rather than radically.137
From two-thirds to four-fifths of top city admin-
istrators cite the improvement of managerial and
budgetary decisions and the assurance of greater
accountability as their main reasons for adopting
performance measures,138 with 38 percent rating
them as “very effective” (only 5 percent say that they
are “ineffective”) in improving efficiency.139 Not
even 1 percent of city managers think that the payoff
derived from performance measures is not worth the
effort to adopt and use them.140
Those local governments that are most suc-
cessful in using these measures have: a participa-
tive management style; high levels of privatization;
an emphasis on economic development; a compar-
atively low reliance on state and federal sources of
revenue;141 politically conservative elected officials;142
extensive civil service reforms;143 and use measures
government-wide, not just in some bureaus.144
Unfortunately, local politicians are less inclined
to use performance information when they most
need to use it—when times are tough. Local “politi-
cians who face high fiscal austerity use performance
information to a lesser extent than colleagues who
face less fiscal austerity,” preferring instead to avoid
blame for cutting programs by questioning the infor-
mation’s reliability.145
In contrast to state legislators, local citizens are
more trusting and “find basic performance infor-
mation credible even when a local government is
reporting on itself.”146
Measuring Nonprofit Performance
In the nonprofit sector, performance measurement
remains an “emerging issue” that is relegated “pri-
marily, and almost exclusively, to monitor and assess
the use of funds.” The more significant challenge of
using performance measures to actually improve
organizational performance receives only “limited
attention.”147
Those relatively few nonprofit organiza-
tions that use performance measures find that
they pay  dividends. Employing a broad range of
performance measures correlates positively with
more  effective strategic decision making in non-
profit  organizations.148 Not only does using per-
formance measures associate with “substantial
improvement” in these organizations’ performance,
but, “somewhat surprisingly,” independent organ-
izations that used “common performance meas-
ures” received “large increases in funding” from
the state legislature.  Those that used measures
that were unique to them, by contrast, “were cut
dramatically.”149

PERMUTATIONS AND
PRACTICES OF PERFORMANCE
MEASUREMENT
Measuring public and nonprofit performance is
complicated, clarifying, and constrained.
Measures: The Fundamental Five
Governments use five, generally recognized, kinds
of performance measures. All levels of government
employ these indicators, and Washington’s use of
each of them grew at “statistically significant” rates
over a decade.150
Workload, or Output, Measures Workload, or
output, measures simply calculate the amount of
work performed. An example is tons of trash col-
lected. The federal, state, and local governments use
output indicators more than any other.151
Unit Cost, or Efficiency, Measures Unit cost, or
efficiency, measures assess the monetary expense of
a program’s inputs per unit of output. An example is
the cost of trash collected per residence.
Efficiency measures are used least by all govern-
mental levels.152 This is unfortunate, because using
efficiency indicators increases the probability that
governments will use them to improve operational
efficiency; output measures, by contrast, do not have
this association.153
The extent of governments’ use of the remain-
ing three indicators falls at levels between those of
workload and efficiency measures.154
Citizen Satisfaction Measures Citizen satisfaction
measures assess the extent to which a jurisdiction’s
residents feel that their needs have been met by a
program. Often this is done via surveys.
Outcome, Impact, or Effectiveness Measures
Outcome, impact, or effectiveness measures quantify
the extent to which a program’s goals are being met
and whether the desired effects are being fulfilled.
Service Quality Measures Service quality measures
are value-based assessments of management’s respon-
siveness to clients’ needs or expectations. These
Efficient and Effective Governance 205
measures usually focus on timeliness, accuracy, and
courtesy. Although responsiveness sometimes can
be objectively measured (for example, the time that
it takes for an ambulance to arrive at an accident),
determining whether or not the response is of ade-
quate quality is often a subjective judgment. (Does an
average arrival time of thirty minutes amount to ade-
quate service quality, or should it be five minutes?)
The Measurement Mire
At least eight issues of performance measurement
have been identified that public administrators
should be cognizant of before they employ them.155
Measuring the Wrong Thing Imprecision in defin-
ing what one wants to measure can result in meas-
uring something else entirely. This happens a lot; 18
percent of federal performance improvement officers
think that they, themselves, are “measuring the right
things to assess progress toward key agency goals”
just some of the time or not at all, and another 40
percent believe that they do so only moderately.156
Here is an example: In determining how much gov-
ernment should invest in health, safety, and related
programs, it was decided that government must
know how much a human life was worth, resulting
in widely varying determinations, depending on who
was doing the calculating. But the real question is
less the worth of a human life and more one of peo-
ple’s willingness to pay, through taxes, for their own
health, and this determination can be made through
analyzing opinion polls or prices in markets where
risk is a factor.
Using Meaningless—or Corrupted—Performance
Data Public and nonprofit administrators often
are constrained in collecting performance data, con-
straints that can range from the understandable to
the contemptible. Although it cannot be determined
how widespread these practices are, they all result in
unreliable performance data.
Put-upon public administrators have been
known to “estimate” their performance data simply
because collecting more accurate information is too
onerous or even impossible, as illustrated by some
court house clerks, who, when asked how they col-
lected data required for their weekly reports, replied,
“We put down something that sounds reasonable.”157
 206 PA R T I I I Public and Nonprofit Management
Less understandable are performance data that
result from “signals” by superiors. Consider, for
example, this: “During my more than 30 years as a
cop, I produced and sometimes created crime statis-
tics. . .. No official order was ever given to underre-
port or not report crimes . . . [but the] mayor didn’t
like high crime stats with no arrests.. . . Consequently,
it was a bad idea for a rookie to report a robbery
with no arrests.”158
And then there are those perfectly glowing data
that have been manufactured out of whole cloth, often
with the connivance of top executives. Examples
include the falsified records concerning patient wait
times in the Veterans Administration  (some veter-
ans died during extended waiting periods), and
the public education bureaucrats and teachers in at
least ten major cities who illegally upped their stu-
dents’ scores on standardized tests.
Unreliable or dishonest performance data
appear more frequently when: resources are scarce,
demands are extreme, the daily activities of adminis-
trators are not closely monitored, and performance
is linked to incentives and sanctions.159 Each of these
conditions, but especially the final one, was present
in the corruption of veterans’ and students’ data.
Differing Interpretations of the “Same” Concept
Different officials sometimes define what they
want to measure differently, and definitions often
have an impact on agency fortunes for good or
ill. If an agency “client,” for example, is defined as
someone who occasionally phones in, then the agen-
cy’s client-based budget is likelier to expand, but if
“client” is defined more narrowly (and more accu-
rately) as someone who regularly receives services,
then its budget could contract.
Displacing Goals “In Poland under communism,
the performance of furniture factories was meas-
ured in the tonnes of furniture shipped. As a result,
Poland now has the heaviest furniture on the
planet.”160 Weight displaced furniture as Poland’s
furniture-production goal because of the perfor-
mance measure used. However, had the Polish com-
munists instead stipulated free-standing items of
furniture, rather than tonnage, as their measure of
performance, Poland might now have the lightest—
and the tiniest—furniture on the planet.
Shifting Costs Instead of Saving Costs Because
agency programs are often measured in isolation,
program managers can claim that they are saving
public funds when in reality they are merely shift-
ing costs to other programs. For example, a hospital
allegedly shipped its dying patients to nursing homes
shortly before they expired—a practice that not only
shifted costs, but also resulted in splendidly declin-
ing mortality rates for the hospital.161
Disguising Subgroup Differences with Aggregate
Indicators By concentrating only on “the big
picture,” performance measures can hide criti-
cal (and perhaps, embarrassing) information. For
instance, the Census Bureau has been known to
report an annual rise in all Americans’ incomes (an
aggregate indicator of good news), but fail to note
that the rich are getting richer and the poor poorer
(or subgroup differences that are bad news).162
Ignoring the Limitations of Objective Measures
Even when properly done, measuring performance
can take us only so far. For years, the Internal
Revenue Service (IRS) measured the performance of
its agents on the basis of a single indicator: collection
rates. The result was some ruthless agents, dubious
practices, anguished taxpayers, and an overhauled,
reorganized, and redirected IRS when Congress
responded to rising public anger in 1998 by passing
the IRS Restructuring and Reform Act.
Failing to Address How and Why Questions When
performance measures are used in isolation, and
do not consider relevant how-and-why questions,
such as poor management or over-funding, they can
be useless or even counterproductive. What if, for
instance, the sole employer in a town closed down?
Performance measures of the town’s employment
agency would tell us only that the agency was failing
to find jobs for unemployed townspeople. They
would not tell us, however, that there were no jobs
in town.
Benchmarking Performance: From
Measurement to Comparison
Benchmarking is the comparison of a program’s
measurement data with data generated by exter-
nal, comparable programs. Governments that use

performance indicators typically track them over
time to determine whether performance is going
up or down. Benchmarking, however, does this and
more. It asks: Are we doing this particular job as
well as, or better or worse than, other organizations
like ours in similar circumstances?
Benchmarking’s Spread Information technology
is making benchmarking’s adoption easier,163 but its
spread is uneven.
In the mid-1990s, the federal government
founded a couple of benchmarking groups that
soon expired. Federal benchmarking was resur-
rected in 2013, when a cross-agency Benchmark
and Improve Mission-Support Operations group
was established to improve efficiency via bench-
marking, and, in  2014, OMB established a cross-
agency Benchmark and Improve Mission-Support
Operations, “the first-of-its-kind benchmarking
effort” at the twenty-four major agencies, involving
150 organizations and forty measures that meas-
ured performance in areas ranging from human
capital to contracting.164
Almost three-fourths of state agencies compare
their agencies’ performance data with data from
other government agencies, at least sometimes;165
a half-dozen states have actually enacted legisla-
tion that specifically requires their governments to
benchmark.166
Seventy percent of cities compare their perfor-
mance with similar programs conducted by other
governments or businesses “usually” (19 percent)
or “sometimes” (51 percent),167 and 31 percent of
cities and counties cooperatively coordinate formal
benchmarking systems.168
The independent sector uses benchmarking to
track and compare annual online giving.169
Benchmarking’s Benefits and Limitations Bench-
marking may be as close as the public and nonprofit
sectors can get to an equivalent of competition in
the free market, and this could result in greater
efficiency. An unusually thorough study of per-
formance management concluded that “bench-
marking, in particular, appears to be an effective
method  for  learning who is performing well.”170
Public administrators report that benchmarking
provides some “substantial benefits,” notably the
identification of unusually high programmatic
Efficient and Effective Governance 207
costs,171 and its use enhances the probability that
performance measures will influence governmental
operations.172
But there are problems. One is the all-too-
human resistance to criticism, which can adversely
affect benchmarking’s use. “Empirical research
shows that [some agencies] may ignore information
(including benchmark information) that indicates
that their relative performance is poor.”173
Benchmarking also remains difficult to imple-
ment, and perhaps the major impediment is that gov-
ernments, particularly local ones, often define terms
differently from one another. A study of seven big
cities across the globe, for example, found that just
six of some 1,200 performance indicators had been
applied in precisely the same way.174 And, unless
comparisons are precise, benchmarks are usually
useless.
Nonprofit organizations are, admirably, taking
it upon themselves to rectify this lack of a “common
language” in local benchmarking. In 2013, the
International Organization for Standardization
released “ISO 37120,” its eminently forgettable
moniker for forty-six benchmarks of municipal
success that can be applied worldwide. Similarly,
in 2014 the American Productivity and Quality
Center introduced its “City Government Process
Classification Framework,” which seems to have at
least diminished the phenomenon of “people debat-
ing about what services the city is offering.”175
Accounting for Public Performance
In 1972, largely as a result of interest displayed
by GAO, the nonprofit Financial Accounting
Foundation (FAF) was chartered with the mission
of improving public financial accountability. FAF
oversees two other independent organizations. The
Financial Accounting Standards Board (FASB) was
created in 1973 with a charge of improving federal
accounting, and, in 1993, its mission was expanded
to include nonprofit accounting. In 1984, the
Governmental Accounting Standards Board (GASB)
was founded with a similar charge, but aimed at
state and local governments. When New York
City nearly defaulted, in 1975, the state legislature
required that the city use accounting principles that
GASB embraced when it was founded nine years
later (in 2005, New York placed these principles in
 208 PA R T I I I Public and Nonprofit Management
its new city charter); the city has not neared bank-
ruptcy since.
FASB has promoted GAO’s use of performance
audits, which are examinations of public and non-
profit programs that are designed to determine
their efficiency and effectiveness. Similarly, from
its origins, GASB has moved “beyond the realm
of monetary accounting . . . and into the realm of
performance measurement.”176 In 1999, it issued its
innocuously titled, “Statement 34,” which calls for
comprehensive “performance reporting” by state
and local governments. Statement 34 quickly united
most of the major associations of grass-roots gov-
ernments in opposition to GASB (the Government
Finance Officers Association terminated its signif-
icant financial support of GASB and called for its
dissolution), resulting in a “new and higher level
of strain in the already-tense relationship between
GASB and state and local officials.”177
Why are subnational governments so threat-
ened? Because the ratings of municipal bonds, which
all state and local governments issue, are determined
by outside accountants; bond ratings, in turn, deter-
mine the cost to governments of borrowing money;
and the cost of borrowing money significantly
determines the cost of governing. Thanks to GSAB,
“management performance” now looms large in the
determination of municipal bond credit ratings.178
Today, all the states audit performance,179 as
do at least 70 percent of large American cities.180
These audits are taken seriously. An analysis of
3,788 potentially embarrassing performance audits
conducted in federal, state, and local agencies found
that only twenty-six were ignored by managers.181
When it comes to measuring governmental per-
formance, never underestimate those quiet power-
houses who sport green eyeshades.
Reporting Performance
Central to measuring performance is reporting it so
that citizens and decision makers can use it to save
taxpayers’ dollars.
Washington Measures Up “The United States
stands out” in the high quality of federal perfor-
mance reports. The quality of federal performance
reporting not only surpasses that of Australia,
Canada, and Ireland, but Washington’s reports also
contain “a relatively small number”—from thirty
to forty—of measures when compared not only
with those nations’ performance reports (more
than a hundred measures flood each of Australia’s
reports).182 A limited number of measures often is a
sure sign of high-quality reporting, in no small part
because it increases the likelihood that the report
will be read and acted upon.
Grass-Roots’ Performance Reporting Studies of
performance reports issued by state agencies and
city governments find low overall quality (although
cities exhibited “substantial progress made in quality
and quantity over the past 10 years”), with only 1
percent of state reports rated as high quality;183 local
reports’ quality was “virtually identical with our
study of state agencies.”184
State and local governments’ performance
reports often swamp their readers with measures.
A state case in point is Oregon, which ended up
with 259 state-wide measures (plus hundreds of
agency and local ones) during the 1990s, including
numeric targets for traveling in cities and entertain-
ing foreign visitors. A state official conceded that
Oregon’s performance measures were “a little out
of control.”185
“Many city and county governments use
between 150 and 1500 indicators,”186 and there may
be, on average, more than thirty performance meas-
ures for each municipal service.187
Pruning the Plethora of Performance
Measures
Using too many measures to assess agency perfor-
mance is counterproductive because doing so “is
daunting for most officials and for the public.”188
Fortunately, a pair of closely interrelated develop-
ments is rendering both statistics and the measures
that they underlie more useable to administrators.
They are PerformanceStat and dashboards.
PerformanceStat PerformanceStat is a catch-
all phrase that encompasses a variety of statistical
programs intended to fulfill specific performance
objectives by using pertinent current data that are
regularly shared, coordinated, and rapidly followed
up by decision makers. Most of the PerformanceStat
action is occurring at the local level.

PerformanceStat’s origins can be traced to
the New York Police Department’s CompStat
(for Comparative Statistics), initiated in 1994 and
designed to reduce serious crime via weekly analyses
of crime statistics in each of its precincts; the city’s
murder rate dropped by two-thirds in just five years.
In 2000, Baltimore expanded CompStat to CitiStat,
including not only law enforcement, but other areas
as well, and in only two years almost halved the
blood lead levels in children.189 Nearly two dozen
cities are copying Baltimore’s success190 (although
28 percent of cities and counties, mostly large ones,
use undefined “stat systems”191); examples include
CincyStat, which tracks eighteen municipal depart-
ments in Cincinnati, and BlightStat, which focuses
on urban decay in New Orleans.
In 2007, Maryland, inspired by Baltimore’s
success, adopted StateStat, the first state-wide
PerformanceStat. A “handful of states” are following
Maryland’s lead.192
“Some federal agencies” began, in the early 2010s,
to adopt their own versions of PerformanceStat,193
such as the Federal Emergency Management Agency
(FEMA), which created FEMAStat to improve its
crisis response. In 2015, OMB introduced FedStat
(not to be confused with FedStat.gov, a portal that
the public can access for federal statistics) for the
whole of government, in an effort comply with the
GPRA Modernization Act.
From Data to Dashboards Strategic measure-
ment, key management systems, total organiza-
tional performance systems, or outcome-oriented
performance management systems, all refer to the
winnowing and simplifying of performance meas-
ures and integrating them with large-scale goals.
This winnowing has brought us key performance
indicators (KPIs), also called key results measures,
or those measures that are central in attaining stra-
tegic goals. These indicators often are presented
in the form of dashboards, which clearly and suc-
cinctly summarize progress, or the lack thereof, in
achieving those goals. Increasingly, dashboards are
replacing inevitably-dated annual reports as records
of performance.
Dashboards also can save money. OMB created
an information technology (IT) dashboard, in
2009, to rate federal IT investments. OMB later
discovered that 24 percent of all 738 investments,
Efficient and Effective Governance 209
amounting to $8.7 billion, “were in need of manage-
ment attention.”194
The best dashboards are simple, such as
FEMA’s “Waffle House matrix.” Waffle House res-
taurants never close, but, should they do so during
an emergency, then FEMA instantly knows that it
has a more serious problem than is normal in the
community.195
Achieving dashboard simplicity, however, is far
from simple. In contrast to the well-received efforts
to develop a common “language” for local govern-
ments’ use in benchmarking, discussed earlier, KPIs
founder in a “quagmire” of well-meaning (and often
profitable) lists that offer from twenty-five to some
17,000 “key” indicators that are so generic (“the
problem with generic performance measures—
indeed, the problem with generic anything—is
that. . .. they can lull a manager into a nonthinking
[yet self-congratulatory] complacency”) that wading
through those lists to find a few KPIs that might be
useful to one’s own particular program is likely not
worth the time.196
Federal interest in developing dashboards
began with the Reports Consolidation Act of 2000,
which was enacted to “force agencies to build self-
discipline” in performance reporting, and which led
to improving their transparency and accountabil-
ity.197 In 2010, the Patient Protection and Affordable
Care Act set up the Commission on Key National
Indicators, charged with implementing such a
system.
The basis of the yet-to-be-developed government-
wide federal dashboard is more than seventy agen-
cies that currently collect statistics about their pro-
grams (more than fifty laws enacted since 1993
legislate unique performance measures for individ-
ual programs!198), each of which “was established
separately in response to different needs,” but,
together, amount to a “federal statistical system”
that is coordinated by ten “principal federal statis-
tical agencies.”199
An impressive 47 percent of cities and counties
link performance measures to goals stated in their
strategic plans and regularly review their progress,
and 17 percent use a dashboard-like “balanced
scorecard” of measures.200 Boston is developing
“CityScore,” which aims to “summarize dozens of
measures” into a single daily number on how well,
or badly, the city is performing.201
 210 PA R T I I I Public and Nonprofit Management
Two Measured Notes of Measurement Hope
Two phenomena appear to bode well for the future
of performance measurement.
A Tipping Point? One is that, for at least a couple
of reasons, we appear to have reached a tipping
point in our ability to use performance measures in
practical and productive ways.
First, the unrelenting fiscal squeeze on govern-
ments and third-sector organizations has promoted
more cost-effective programs, and performance meas-
ures are critical in determining cost-effectiveness.
Second, as a result of “better technology” and “a
growing body of research” compiled by “multiple
clearinghouses” over some twenty years, in tandem
with “easier access” to that research and other data,
administrators are at last able “to more accurately
measure the performance and cost-effectiveness” of
their services.202 These trends seem likely to intensify
over time.
Easily Assessing Public and Nonprofit
Competence The second reason has long been
with us, but overlooked. Although, throughout this
chapter, we have bemoaned the many difficulties
inherent in assessing the performance of public and
nonprofit organizations, there is a simple way to
judge at least their general operational competence,
and about which surprisingly little is written.
When public and nonprofit organizations take
an exceedingly long time to respond to requests,
both internal and external, for decisions, or never
respond, and when upper management demands
responses and reports from subordinates with
exceedingly brief deadlines, then one can be assured
that the organization is incompetently managed.
Incompetent management, of course, strongly
implies poor performance.
How is your organization doing?
LESSONS LEARNED: MINIMIZING
THE PITFALLS OF PERFORMANCE
MEASUREMENT
In sum, here is what we have learned about success-
fully measuring public and nonprofit performance,
and using those measures to improve performance:203
Lessons Learned about Measures
■ Be realistic about the political and
organizational context in which the measures
will be used—or not be used.
■ Align agency-wide measures with agency-wide
goals.
■ Always test measures in advance.
■ Keep the number of measures used to the
barest minimum.
■ Wherever possible, include quantifiable
outcome measures but assure that they
are pertinent to the program’s mission and
recognize that the broader the phenomenon
being measured, the less control that the agency
will have over outcomes.
■ Use benchmark measures and recognize
and grade unit performance as it pertains to
benchmarking.
■ Ensure that executive and legislative staffers
agree on what key performance indicators will
appear in budget documents “that legislators
will see.”204
■ When it comes to performance measures, trust
but always verify.
Lessons Learned about Process
■ Identify the organization’s key failure—its most
consequential performance deficit.
■ Assure the presence of the five internationally
recognized standards for high-quality
performance management, i.e., performance
goals that are specific, measurable, relevant,
achievable, and which have sensible deadlines
attached.205
■ Set a specific, and, if possible, quantifiable,
performance target. This is particularly
important. “The extent of performance
improvement is influenced positively by
the presence of a target,”206 and there is
“no evidence of any of the dysfunctional
effects” of performance targets, such as
managers ignoring untargeted programs, “that
have been hypothesized” in the literature.207
“Goal clarity” associates positively
with “more extensive results-oriented
reform efforts” and stakeholders’ commitment
to the agency.208

■ Improve the usefulness of performance
information by assuring that the information is
readily accessible, easily understood, and that
managers can and do use it to make decisions.
■ Link budgets and/or organizational autonomy
to the achievement of performance goals.
■ Use performance information in strategic
planning.
■ Be timely. Public administrators are finding
“performance-tracking software,” which
integrates budgetary and performance data,
to be extremely useful in this regard, causing
some governments to abandon annual, and
inevitably dated, management reports, “long
considered akin to the Bible among public-
sector managers.”209
■ Review, revise, and update measures frequently.
■ Check for distortions by ensuring that the
mission is actually being accomplished.
■ Communicate clearly. Present plainly. Organize
data around desired outcomes. Show not only
percentages of targets met, but trends as well.
Assure that the public can easily access and
understand performance information.
■ Learn to make modifications in order to ratchet
up performance again.
■ To assure that performance
measurement continues, secure its own
home in the bureaucracy; get it on the
organization chart.
Lessons Learned about People
■ Do not introduce performance measurement
unless vital political support is guaranteed.
■ Align views of senior administrators about
agency productivity with those of elected
politicians, as this “is associated with better
organizational performance.”210
■ Actively involve stakeholders. Including in
the process not only agency personnel, but
also “external professionals,” especially those
in the central budget office, “improves the
perception of measurement quality” among
stakeholders, notably legislators and agency
employees.211
■ Train personnel to use performance
information to make decisions, set performance
goals, develop performance measures, assess
Efficient and Effective Governance 211
the quality of performance data, and link the
data with the organization’s strategic goals.
■ Recognize that running a successful
measurement program does not require a
large staff, but that selecting enthusiastic and
adaptable people to manage it is essential.
■ Use personal incentives, including monetary
rewards, to achieve performance goals.
■ Be sensitive to the needs of frontline
supervisors because, according to some 1,500
studies, “the most effective way to improve
organizational performance is to improve first-
level supervisors.”212
■ Assure that top leadership demonstrates
its commitment and allocates resources to
achieving results.
■ Anticipate the emergence of transformational
leaders. “In direct contradiction with
expectations,” a public organization’s
use of performance measures positively
associates “with significant increases
in a chief administrative officer’s use of
transformational leadership behaviors.”213
Who knew?
EVALUATING PUBLIC AND
NONPROFIT PROGRAMS
Program evaluation is our second pillar of govern-
mental and nonprofit productivity.
Public and Nonprofit Program Evaluation:
Purposes and Paranoia
Public and nonprofit program evaluation, or evalu-
ation research, is the “individual systematic studies
conducted periodically or on an ad hoc basis to
assess how well a program is working.”214
Program evaluation differs from performance
measurement on two dimensions: focus and use.
Performance measurement focuses on whether a
program has achieved its measurable goals, whereas
a program evaluation examines a greater range of
information in a larger context.
In terms of use, performance measurement is
used mostly as an early warning system to manag-
ers should a program falter, and as a method for
improving accountability to the public; a program
 212 PA R T I I I Public and Nonprofit Management
evaluation, by contrast, is a deeper inquiry into a
program’s performance and context, and seeks to
develop a comprehensive assessment of how it might
be improved.
Although a program evaluation can be threat-
ening, especially to those who manage the program
being evaluated, its threat can be overstated. Not
even 1 percent of the evaluations of some 600
municipal programs “led to termination of the eval-
uated activities,” but 78 percent of these evalua-
tions “led to adjustments of program activities.”215
Despite the aura of paranoia that sometimes seems
to suffuse program evaluation, it draws far short of
a slash-and-burn attack on public or nonprofit man-
agement; it can result, however, in improving pro-
grammatic productivity.
Permutations of Public and Nonprofit
Program Evaluation
A diversity of forms of program evaluation has
flourished, and the many overlapping categories of
program evaluations likely exceed 100.216 For our
purposes, we have reduced the major taxonomies to
six types,217 and they comprise its “everyday reper-
toire,” representing “widespread agreement in the
field with regard to common practice in program
evaluation.”218 They are not particularly neat cate-
gories, and we present them, roughly, in the order
that they are appropriate to use as the program is
conducted over time.
Front-End Analyses A front-end analysis is a
program evaluation that estimates how feasible a
proposed new program might be and its possible
effects. An example is the GAO’s study of teenage
pregnancy that was provided to Congress before
legislation was introduced proposing service pro-
grams for pregnant teenagers.219
Evaluability Assessments An evaluability assess-
ment judges the reasonableness of the original
assumptions justifying a program. Usually conducted
early in the course of a program’s unfolding and
focusing on its implementation and management, it
determines whether a later and fuller evaluation is
worth undertaking. An example is the assessment of
whether the federal Senior Executive Service has met
its goals.220
Program and Problem Monitoring Program and
problem monitoring tracks how relevant issues
and methods of service delivery may be changing,
and whether the program remains in legal com-
pliance.  Its unique value is that it enables admin-
istrators to follow the evolution of problems
and the  program’s effect on them over time. An
example is the GAO’s study of the Comprehensive
Employment and Training Act, which tracked
changing program costs, characteristics of the par-
ticipants, and its effectiveness in placing partici-
pants in jobs.221
Process, or Implementation, Evaluations The
process, or implementation, evaluation assesses the
extent to which a program is operating as intended.
It can be very helpful in determining the effects of
a program on its clientele group, and, when used
in tandem with an effectiveness evaluation (dis-
cussed next), in answering questions of accountabil-
ity. Examples are those studies that focus on how
innovations in the public sector are circulated and
become routine among governments.222
Effectiveness, Outcome, or Impact Evaluations An
effectiveness, outcome, or impact evaluation assesses
the extent to which a program achieves its objec-
tives and identifies unintended outcomes. An
important aspect of these evaluations is that of esti-
mating whether a program’s outcomes would have
occurred anyway—that is, without the program.
“This, of course, is the quintessential accountability
question.”223
A well-known effectiveness evaluation is the
Kansas City Police Department’s study about the
effectiveness of police patrols in preventing crime. It
found that there were no statistically significant dif-
ferences in crime rates, citizen attitudes, the reported
number of crimes, citizen behavior, or even in the
rate of traffic accidents among areas where: no
police patrols were sent out, and police responded
only to specific calls for help; patrols were main-
tained at previous levels; and patrols were doubled
or tripled in size.224
Meta-Evaluations, or Evaluation Syntheses A
meta-evaluation, or an evaluation synthesis, which
is the most comprehensive, retrospective, and flex-
ible type of evaluation, re-analyzes findings from

previous evaluations to find out what has been
learned about a public program. An example is
GAO’s study of drinking-age laws and their effects
on highway safety.225
Evaluating Federal Programs
With performance measurement gaining federal
ground, program evaluation soon followed.
“Over a third” of federal agency officials use
evaluations to a “moderate or greater extent” to
support changes in budgets, policy, or program
management.226 The benefits of their use are sub-
stantial. Four-fifths of those federal managers who
were involved in program evaluations stated that the
evaluations improved program management or per-
formance and the assessment of its effectiveness or
value. Two-thirds thought that the evaluation con-
tributed “to allocating resources within a program,”
and more than three-fifths said that it streamlined
the program.227
Congress Gets With the Program A singular
development in this regard was the Government
Performance and Results Act of 1993, noted earlier,
which launched the first comprehensive effort to
evaluate federal productivity. Eleven additional,
interacting laws (the most significant of which is the
Chief Financial Officers Act of 1990, which is “the
most comprehensive financial management reform
legislation in 40 years,” resulting in “a clear cultural
change”228), enacted from 1978 to 1996, address
financial and information management. When exe-
cuted in tandem with the GPRA (and, of course, the
GPRA Modernization Act as well), they “provide
a powerful framework” for attaining stronger
“results-oriented management,” largely through
program evaluation.229 A monumentally impor-
tant product of these statutes debuted in 1998: the
federal government’s first-ever (!) government-wide
audited financial statements.
The Bureaucracy Struggles Despite this impres-
sive legal foundation, federal program evaluation
has some way to travel. The journey begins well
before an evaluation is undertaken, and here federal
administrators again have problems that reflect their
confusion, noted earlier, about what a performance
measure even is.
Efficient and Effective Governance 213
An examination of twenty-two “high priority”
regulations (which, as we discussed in Chapter 4, can
amount to vital public policies) proposed in 2014,
each of which would have an economic impact of
at least $100 million annually, found that the most
basic tenets of performance assessment were largely
ignored. Thirty-six percent of the proposed rules
failed to even state the problem that the rule was
meant to address (even though Executive Order
12866 of 1994 had mandated, twenty years earlier,
that the problem must be identified), and, in many
cases where the problem was stated, “it was not
related to the rules the agency proposed”; 64 percent
did not include any quantitative means to evaluate
the rules’ success; 77 percent failed to even sketch
how administrators intended to collect performance
data; and none contained a plan or time frame for
reviewing the regulations’ success or failure.230
Once a program is functioning, evaluating it can
be a hit or miss affair. Just 37 percent of federal man-
agers report that “an evaluation has been completed
within the past 5 years of any program . . . they were
involved in,” and 40 percent did not even know if
an evaluation had been completed.231 “About a
quarter” of these respondents “were not familiar
with their agencies’ various [program evaluation]
capacity-building activities.”232
Just a fourth of the twenty-four major agencies
have “a stable source of funding” for evaluation,233
a weakness that would appear to be easily recti-
fied: based on the “rough calculations” of biparti-
san experts in federal management, “less than $1
out of every $100 of [federal] government spending
is backed by even the most basic evidence that the
money is being spent wisely.”234
Evaluating State and Local Programs
The grass-roots governments have made significant
gains in evaluating their programs.
All states use some method of managing for
results,235 and budget offices in forty-five states
conduct program evaluations.236 The proportion of
states in which most major agencies conduct pro-
ductivity analyses more than doubled over three
decades, from a fifth to more than half.237
Performance evaluations can lead states to
engage in evidence-based policymaking, which is
“the systematic use of program evaluations and
 214 PA R T I I I Public and Nonprofit Management
outcome analyses (‘evidence’) to guide govern-
ment policy and funding decisions.” Five states—
Connecticut, Minnesota, Oregon, Utah, and
Washington—are the leaders in this field; eleven
states practice evidence-based policymaking more
than most; twenty-seven states and the District of
Columbia “demonstrate modest engagement”; and
seven states “are trailing.”238
Three-quarters of cities long have been using
program evaluations, a level that experts generally
believe to be the maximum that is reasonably possi-
ble for the adoption of any innovative technique of
public management. Thirty-six percent of municipal
administrators rate them as “very effective” in man-
aging and decision making.239
Uniquely Governmental: The
Inspector General
We noted earlier that, in 1978, Congress passed
the Inspector General Act, which has had lasting
and ongoing ramifications for federal productivity.
But IGs are not limited to federal agencies; they are
found at all governmental levels.
Inspectors general are public administrators
who are charged with evaluating government pro-
grams; improving agency performance; exposing
waste, fraud, and abuse; and helping administrators
eliminate these problems.
IGs: The Federal Experience Uniquely, IGs report
directly to the heads of agencies to which they are
assigned and to Congress. In the larger agencies, IGs
are appointed by the president and confirmed by
the Senate (in smaller agencies they are appointed
by agency heads with no Senate confirmation), and,
again uniquely, the presidentially-appointed IGs
may communicate directly to Congress without the
permission of OMB.
IGs are now emplaced in seventy-two federal
bureaus, employ more than 14,000 professionals,
and save the government nearly $47 billion annu-
ally via audit recommendations and recoveries, an
amount that increases each year. For every dollar
invested in inspectors general, the government saves
eighteen.240
Despite this commendable record, political
backing for the IGs ranges from indifference to out-
right hostility, as evidenced by politicians’ treatment
of the Office of the Special Inspector General for Iraq
Reconstruction. Created by Congress in 2003, the
office ultimately exposed corruption that resulted
in ninety convictions and 245 serious disciplinary
actions.241 A politically-embarrassed Congress and
a conniving White House secretly terminated it, in
2006, after it uncovered billions of dollars lost to mis-
management and theft; only after the press exposed
these machinations was the office reinstated.
In part because of this sorry episode, Congress
passed, in 2008, the Inspector General Reform Act,
which enhanced IGs’ training; made it more difficult
to remove or transfer IGs, among other adjustments
that enhanced their independence; and charged them
with addressing “integrity, economy, and effective-
ness issues that transcend individual Government
agencies.”
Even with this legislation, however, some agen-
cies resist cooperating with their own IGs, and
some IGs have been heavily politicized by the White
House (in 1981, President Ronald Reagan asked for
the resignations of all IGs) and Congress, such as
the temporary IG who improperly tampered with
reports in an effort to land a permanent appoint-
ment. When IGs are confirmed by the Senate (these
IGs “tend to be the closest to the president and are
among the most political”), which has the power
to decide in which agencies IGs should be Senate-
confirmed, there is “the strongest negative effect” on
the recovery of wasted funds, and agencies with the
highest number of political IGs “see the most drastic
decrease” in their effectiveness.242
Federal IGs also must deal with declining
resources and bureaucratic frustrations. Forty-
five percent of IGs report that their staffing levels
had declined over three years; 19 percent state that
turnover had increased over the past year, and just
7 percent say that turnover had decreased; and 43
percent report that the hiring process was “lengthy
and results in delays,” and an additional 18 percent
maintain that “significant re-engineering of the
process is needed.”243 In fact, the time that it takes
to hire IGs themselves has more than doubled from
the Reagan administration’s average of 224 days to
the Obama administration’s average of 613 days.244
IGs are not perfect, and they sometimes appear
to relish the role of a “gotcha gang” in unearth-
ing administrative inefficiencies, such as the IG
who was quoted in the Washington Post as stating

(he denied it) that his own agency had “a crime rate
higher than downtown Detroit.”245 Regrettably, there
remains only a tepid propensity of IGs to work with
line managers in writing their final recommendations,
and there is no measurable increase in their inclina-
tion to do so over time.246 Which may explain why
there are 15,222 IG recommendations that remain
unimplemented by the agencies, foregoing more than
$87 billion in potential savings, and why 11 percent
of all IG offices complain of “obstruction tactics” used
by their agencies to deny them agency documents.247
Congress tried to deal with this latter issue by
passing the Inspector General Empowerment Act of
2016, which assures IGs full and prompt access to
agency records.
Even with these difficulties, however, and in light
of the immense savings attributable to inspectors
general, “It is safe to say,” testified the Comptroller
General of the United States, “that the federal gov-
ernment is a lot better off today because of the IGs’
efforts.”248
The Relatively Well-Supported State IGs and
Auditors Fourteen states and the District of
Columbia have inspectors general,249 although all
states have state auditors, their rough equivalents.
When compared with their federal counterparts,
state IGs and auditors are reasonably well supported.
Twenty-one percent of state IGs and audi-
tors reported that the number of their staffers
had declined, or a third fewer than what federal
IGs reported, and 26 percent said that staff levels
had increased, a positive difference of nearly two-
fifths with federal IGs (of whom only 16 percent
reported increases). Just 9 percent of state IGs and
auditors said that turnover had climbed, or almost
three-fourths lower than that of federal IGs. Just
18 percent of state IGs and auditors had problems
with their state’s hiring process, a rate that is three-
fifths lower than that of their federal counterparts,
and a notable 73 percent felt that their state’s hiring
process was “timely,” a proportion that was more
than three times that of federal IGs, at 22 percent.250
Evaluating Nonprofit, Public-Serving
Programs
“Program evaluation is the ‘eat your vegetables’ of
the nonprofit sector,”251 but eating one’s vegetables,
Efficient and Effective Governance 215
if less tempting than eating dessert, usually results in
a healthier diner.
Central to a nonprofit program’s health, and
to the fiscal health of the nonprofit organization
itself, is the selection of its evaluator. When non-
profits tout their own program’s efficiency, the more
“efficient appearing” ones fare “no better over time
than less efficient appearing organizations” in terms
of donations.252 When, however, a respected exter-
nal evaluator gives an organization top marks for
its cost-effectiveness, then contributions can soar
as much as 30 percent higher than those with the
lowest scores. “Meeting one extra standard [of best
governance and management practices] is associated
with an increase in public support of more than 7
percent.”253
Similarly, when a prestigious external evaluator
gives a nonprofit organization a “pass” rating for its
accountability, it rakes in “statistically significant”
more donations, but a “did not pass” assessment has
a “nonsignificant” impact.254
Donors, in short, give to causes that they like,
regardless of the competency (and, perhaps, honesty)
with which those causes are managed. Donors,
however, give quite a bit more to well-managed—
and well-evaluated—causes.
PUBLIC AND NONPROFIT
PROGRAM EVALUATION
IN PRACTICE
Practicing program evaluation can be reduced to
four fundamental steps: selecting, defining, design-
ing, and implementing.
Selecting Evaluators: Inside
or Outside Jobs?
Program evaluators can be drawn from employees
inside the agency or nonprofit running the program,
or consultants hired from outside of it, but, irre-
spective of whether evaluators are insiders or out-
siders, only a program’s top executives should select
them; doing so relaxes, at least to some degree, the
natural tensions that exist between managers and
evaluators.255
Inside evaluators often have a more thorough
knowledge of the organization than outsiders, and
 216 PA R T I I I Public and Nonprofit Management
are in a better position to conduct the evaluation
over a longer period of time.
Outsiders are likelier to examine the program
more intensively and objectively than inside evalu-
ators. Regrettably, outside evaluators are also more
likely to engage in kerfuffles with program managers
because they are principally interested in long-term,
occasionally wholesale, change; are more accept-
ing of disruptions; and sometimes question the
basic premises of the organization itself. Outsiders
also have been known to flaunt their findings (and
their own self-assessed intelligence), and managers
to cover up failures—a less than stellar combina-
tion for a useable evaluation.256 Ironically, however,
because “people use paid advice significantly more
than free advice,”257 managers may be more inclined
to accept the evaluations of paid outsiders than of
“free” insiders.
The U.S. Department of Labor has organized
its program evaluations in a manner that exploits
the benefits of both internal and external evaluators
by establishing not only a central evaluation office,
but evaluation offices in each of its bureaus as well.
Its evaluators are “internal” to the department, but
“external” to the programs being evaluated, an
arrangement that has changed “a static organiza-
tional culture into one that integrates performance
management, evaluation- and innovation-based
processes.”258
What Is Your Problem?
The best program evaluations are the products of
detailed definitions and careful consideration.
Defining the Problem All the evaluation’s par-
ticipants, from evaluators to decision makers,
must fully comprehend the program’s history,
goals, and why it is being evaluated—that is, what
is the  problem to address. Attaining this systemic
understanding requires writing a list of the intended
benefits  (including qualitative ones) of the evalu-
ation; who will receive those benefits, or possible
unintended benefits or adverse consequences; and
those goals that may be in conflict with, or sup-
portive of, one another. “The importance of taking
such a comprehensive view of objectives [and
avoiding “oversimplified statements”] cannot be
overstated.”259
Critical to defining the problem is, oddly, defin-
ing success. That is, how do we know, and when
do we know, that our program is successful? When
program managers have clear understandings of
what programmatic success means, they can upgrade
their definition of success, and their productivity,
over time.260
Is Evaluating the Program Worthwhile? Once
the organization’s problem is defined, then another
question arises: Is the program worth the expense
and energy involved in evaluating it?
To answer this, five questions must be addressed:
■ Validity. How much confidence can
administrators have in the evaluation’s findings
and conclusions?
■ Relevance. Will its results be useful?
■ Significance. Will the research provide the
program’s administrators with substantially
more insights than they can glean from their
own observations?
■ Efficiency. Will the value of the research exceed
its cost?
■ Timeliness. Will the study be completed in time
to meet organizational schedules?
If the responses to these questions are affirmative,
then the evaluation is worth undertaking.
Designing the Evaluation
In designing a program evaluation “there is often
a tradeoff between the breadth of a study and the
precision of results,” a tradeoff that does not plague
basic research.261 With breadth comes fuzziness, and
with precision, narrowness.
The Study Plan Preparing a detailed study
plan is  the initial step in designing an evalua-
tion. A  study  plan should include the following
components:
■ A clear statement of the problem.
■ The objectives of the research.
■ A careful listing of the assumptions and
constraints to be used in addressing the
problem.
■ The resources to be committed.
■ The methods to be employed.

■ Measures of the evaluation’s attainment of its
objectives.
■ Lines of communication.
■ Specific procedures for amending the study
plan.
■ A schedule for completing major components
of the evaluation, including a final deadline.
■ Specific procedures for using the results of the
evaluation.
Comparing Groups When designing an effective-
ness evaluation, which arguably is the most reveal-
ing and useful type, evaluators often must create
a control group, composed of clients who are
excluded from receiving the benefits of a program,
and an experimental group, or clients who receive
its benefits. Doing so is their main, if not exclu-
sive, method of assessing a program’s effectiveness,
and this is especially true for human services pro-
grams, among others. Yet, as a practical matter, “it
is difficult to refuse service to those who seek it and
provide service to those who resist it.”262 If, however,
evaluators succumb to these pressures, the evalua-
tion will be ruined.
Privacy, Confidentiality, and Informed Consent Let
us add one more piquancy to this stew: Lawyers
have questioned the legality of evaluators randomly
assigning participants to control groups and exper-
imental groups.263 To fend off potential lawsuits, as
well as for ethical reasons, it is critical that evalua-
tors understand the notions of privacy, confidential-
ity, and informed consent, and that they incorporate
them into the evaluation’s design.
Privacy refers to the state of the person, and thus
is a matter between the evaluator and the respond-
ent. If the respondent freely answers the evaluator’s
questions, then privacy is protected, but if the ques-
tions are deemed by the respondent to be embarrass-
ing or prying, then it is not.
Confidentiality refers to a state of information.
The legal fact of the matter is that social science
research records, such as those obtained by evalu-
ators, are not protected under law as a privileged
communication, as are the records of lawyers and
physicians.
Informed consent refers to whether or not a
respondent understands what he or she is agreeing
to.
Efficient and Effective Governance 217
Implementing Evaluations
Once designed, the evaluation can be conducted, a
phase that has its own difficulties.
Darkling Desires One such difficulty is that of
evaluators’ hidden motives. Evaluators may wish
to make a program look better than it actually is—
inside evaluators for political reasons internal to the
organization conducting the program, and outside
evaluators as a means of enhancing their chances
for lucrative follow-up contracts. In human services
programs, for example, consultants conducting an
evaluation “will want to sign up only those clients
who seem to have the greatest chance of success, not
those with deeper and more intractable problems.
The process is known as ‘creaming.’”264
Competent and Incompetent Evaluators All pro-
fessions host members who are skilled and less
skilled, and program evaluation is no exception.
Among evaluators, the entrepreneur has excellent
analytical and political skills, and is the most adroit
at resolving programmatic issues; the politician is tal-
ented politically, but less so intellectually; the techni-
cian is solid analytically, but, politically, not so much;
and the pretender is a phony on both counts.265
Evaluators also have been typed as strategiz-
ers, who work effectively with program managers
as management consultants; academics, who rarely
even see managers (often, they dreamily “speculate,”
endlessly and unproductively, on evaluation’s role
in “democracy and efficiency,” or never progress
beyond “developing hypotheses, defining terms”266);
and paternalistic, condescending clinicians, who
treat managers as if they were diseased and they, the
clinicians, have the cure.267
One gets the idea. Program evaluators can range
from the intelligent and able, to the brainless and
pompous, to the self-serving and corrupt. Caveat
emptor.
Selections Have Consequences What are the con-
sequences of selecting an incompetent evaluator? We
offer two examples.
Private consultants breezily promised to evalu-
ate 120 drug treatment centers, interview 9,000 drug
abusers, and do it all in thirteen months, but, after
seven months, just nine centers had been evaluated
 218 PA R T I I I Public and Nonprofit Management
and 1,270 clients interviewed at a cost of more than
$2 million. The evaluation was abandoned.268
Another example: when a program chief
received, six months late, an evaluation conducted
by an outside firm, she discovered “not only that the
work was poor,” but that, to her dismay, the firm had
“lifted almost word for word” at least one section
of its report from her own work. “Can’t your staff
think for itself?” she asked. Inexcusably, her office
continued its $13 million contract, despite une-
quivocal proof that its plagiarizing personnel were
unqualified to evaluate programs. It wasn’t only the
evaluators who were incompetent.269
Unethical Evaluators When ethical issues arise in
conducting program evaluations, what do the eval-
uators do? More often than not, they disagree on
whether or not an ethical question is even present.
“The bad news is that one voice” among evaluators
“does not exist” when ethics are involved, although
evaluators who are for-profit, private consultants
are “less likely than those in other settings,” such as
universities, to think that a situation is unethical.270
Once it is determined that ethics have been vio-
lated, more than nine out of ten researchers report it,
but to whom they report it depends on how close they
are to the research. Three-fourths of research admin-
istrators will report unethical practices to “externally
accountable individuals,” ranging from university
officers to the press, whereas 58 percent of hands-on
researchers are more likely to report such incidents
to colleagues on their own research teams and to no
one else. This propensity among researchers raises
the question of whether their “behavior constitutes
professional self-regulation or cover-up.”271
USING PUBLIC AND NONPROFIT
PROGRAM EVALUATIONS
Are program evaluators responsible for the evalu-
ation being used, or, once they have completed the
evaluation, should they instead leave it to the tender
mercies of the program’s administrators?
Passive or Active Evaluation?
These questions lie at the heart of a consuming
debate in evaluation circles. One wing argues that,
because line administrators must deal with many
kinds of information, of which the evaluation is just
one part, it is appropriate for the evaluator to with-
draw once the evaluation is done.272
The other wing contends that the evaluator
should assume an active role in promoting the eval-
uation’s use, largely because of evaluators’ “con-
sensus” that decision makers “do not pay much
attention to the research their money is buying”
and that evaluations “bounce off the policy process
without making much of a dent.”273
There can be little question that this some-
times happens; to offer one, especially unfortu-
nate,  example: only half of the twenty-four major
federal agencies report that Congress requests, or
is even interested in, their “program evaluation
studies.”274
This is, of course, frustrating, and the evaluation
community increasingly appears to be tilting toward
a more activist role. Evaluators tout tactics—e.g.,
“rational persuasion,” “coercion and inducement,”
and, most notably, consensual cooperation, or
collaborative modes of evaluation (i.e., evalua-
tors establishing an intimate working relationship
with managers when evaluating their programs)—
designed to get their reports acted upon.275 There is,
in fact, evidence that “stakeholder involvement” in
evaluating programs facilitates “the meaningful use
of evaluations.”276
The peril of collaboration, of course, is one of
“misutilization,” which is evaluator-speak for those
“serious questions about the evaluator’s ability
to maintain a sufficiently bias-free stance due to
pressures emanating mainly from the program
community.”277 A survey of more than 2,500 pro-
fessional program evaluators found that 42 percent
had encountered “misrepresentation pressure,”
70 percent of whom had faced it more than once;
“stakeholder pressure led to actual misrepresenta-
tion in 16% of all episodes,” including instances in
which the evaluation was simply changed without
the evaluator’s consent.278
Among nonprofit organizations, collaborative
modes appear to corrupt evaluations because the
more power that “stakeholder groups” hold over
such factors as funding and data access, “the more
evaluators were willing to modify their [evaluation]
design choices to accommodate perceived stake-
holder concerns.”279

Does Program Evaluation Matter?
We rather favor the more passive, less collaborative
model in promoting evaluation use, not only because
it more tightly safeguards against program stake-
holders contaminating the evaluation, but for two
additional reasons as well.
Evaluations Are Used We noted earlier that some
federal program evaluations are never undertaken
(but should be), and Congress indicates no interest
in about half of those that are. Nevertheless, deci-
sion makers use evaluations more extensively and
immediately than evaluators seem to realize. Over
twenty-six years, GAO evaluated federal agencies’
programs that resulted in more than 40,000 rec-
ommendations for programmatic change; agen-
cies accepted and implemented a remarkable 81
percent of them.280 Recall also that the evaluations
of some 600 municipal programs led to adjustments
in almost four-fifths of them—essentially the same
proportion of GAO’s recommendations that were
accepted by federal agencies.281
Evaluations are used even more broadly when
the evaluator is competent282 and program manag-
ers believe that they and the evaluation have solid
political support. These managers are influenced by
“all types of information” that they glean from the
evaluation, largely spurning “anecdotal accounts” in
favor of “large-scale and case study data.”283
There is reason to believe that program evalua-
tions will be used even more in the future, as some
federal agencies have “given evaluation more clout”
by requiring local governments seeking federal
grants to implement only those policies that have
been professionally evaluated as being effective.284
Over five years, the departments of Education,
Health and Human Services, and Labor distributed
nearly $6 billion in grants to subnational govern-
ments for seven “proven programs”285—not a par-
ticularly sizable sum as federal intergovernmental
grants go, but clearly amounting to substantive steps
in the right direction.
Evaluations Are Enlightening Evaluation also
has longer-term effects that are both important
and under-recognized by evaluators. This is “the
enlightenment function” of evaluation research.
In this view (backed by some evidence), program
Efficient and Effective Governance 219
evaluation provides an “intellectual background”
for policymakers that outlasts those “operating fea-
sibilities” of the moment that stymie an evaluation’s
instant implementation. An evaluation creates a
“gradual cumulative effect” that changes “the con-
ventions policymakers abide by” and reorders “the
goals and priorities of the practical policy world.”286
Enlightenment seems to brighten when budgetary
pressures increase.287
Evaluation—and enlightenment—count.
NOTES
1. Bernard Le Masson, Brian J. Moran, and Steve
Rohleder, Coup D’etat: Radically Rethinking
Public Services (Alexandria, VA: Accenture, 2013).
2. Francois Bouvard, Thomas Dohrmann, and Nick
Lovegrove, “The Case for Government Reform
Now,” McKinsey Quarterly (June 2009) pp. 1–13.
The quotation is on p. 2. Figure is for FY 2010.
3. Garry Wills, A Necessary Evil: A History of American
Distrust of Government (New York: Simon &
Schuster, 1999), pp. 72–73, 75. Emphasis is original.
4. Paul C. Light, “A Cascade of Failures: Why
Government Fails and How to Stop It,” Brookings
(July 14, 2014). Data are for 2001–2014.
5. Excellence in Government, Survey: Federal Man-
agers Rank Operational Efficiency as Top Priority
in 2013 (Washington, DC: Author, 2013), p. 1.
6. Donald F. Kettl, Managing Risk, Improving Res-
ults: Lessons for Improving Government Man-
agement from GAO’s High-Risk List (Washington,
DC: IBM Center for the Business of Government,
2016), pp. 11, 22. Figures are for 1990–2015.
7. George Boyne and Kenneth Meier, “Environmental
Turbulence, Organizational Stability, and Public
Service Performance,” Administration & Society
40 (January 2009), pp. 799–824.
8. Donald Hirasuna, Receipt of Unemployment Insu-
rance by Higher-Income Unemployed Workers
(“Millionaires”) (Washington, DC: Congressional
Research Service, 2012), p. 4. Figure is for 2009.
9. John Kamensky, “Can We Focus on What Works?”
Govexec.com (June 17, 2015).
10. Ron Haskins, “Social Programs That Work,” New
York Times (December 31, 2014).
11. John Bridgeland and Peter Orszag, “Can
Government Play Moneyball?” The Atlantic
(July/August 2013), pp. 62–68.
12. Ibid.
 220 PA R T I I I Public and Nonprofit Management
13. Stephen Sawchuk, “States Slow to Close Faltering
Teacher Ed. Programs,” Education Week
(December 16, 2014). Data are for 2009–2010,
2013–2014.
14. Ted Gayer, Austin J. Drukker, and Alexander K.
Gold, Tax-Exempt Municipal Bonds and the
Financing of Professional Sports Stadiums
(Washington, DC: Brookings, 2016). Data are for
2000–2015.
15. Richard Florida, “The Never-Ending Stadium
Boondoggle,” Citylab (September 10, 2015).
16. Kenneth J. Meier and Laurence J. O’Toole, Jr.,
Bureaucracy in a Democratic State: A Governance
Perspective (Baltimore, MD: Johns Hopkins
University Press, 2006), p. 56.
17. U.S. General Accounting Office, Federal Budget:
Agency Obligations by Budget Function and
Object Classification for Fiscal Year 2003, GAO-
04-834 (Washington, DC: U.S. Government
Printing Office, 2004), Highlights page. Figures
are for 2003.
18. Partnership for Public Service and Booz Allen
Hamilton, Securing the Future: Management
Lessons of 9/11 (Washington, DC, and Herndon,
VA: Authors, 2011), p. 21. Figure is for 2011.
19. Partnership for Public Service, Government Dis-
service (Washington, DC: Author, 2015), p. 17.
20. Center for Strategic and International Studies
and Business Executives for National Security,
Untangling the Web: Congressional Oversight
and the Department of Homeland Security
(Washington, DC: Authors, 2004), p. 2. Figures
are for 2004.
21. Partnership for Public Service, Government
Disservice, p. 17.
22. Partnership for Public Service and Booz Allen
Hamilton, Securing the Future, p. 21.
23. Quoted in Partnership for Public Service, Govern-
ment Disservice, p. 9.
24. Ibid., p. 7.
25. Ibid., p. 14.
26. Kellie Lunney, “Federal Managers Support Cuts,
Fewer Contractors,” Government Executive
(November 7, 2011).
27. U.S. Government Accountability Office, 2017
Annual Report: Additional Opportunities to
Reduce Fragmentation, Overlap, and Duplication
and Achieve Other Financial Benefits, GAO-17-
491SP (Washington, DC: U.S. Government Publi-
shing Office, 2016), pp. 1–2, 4, 23–24. Figures are
for 2011–2016.
28. Emily Kopp, “Agencies Plow Ahead with DATA
Act Despite Big Hurdles,” Federalnewsradio.com
(July 29, 2015).
29. U.S. Government Accountability Office, 2016
Annual Report, p. 20. Figure is for 2010–2025.
30. Paul C. Light, Creating High Performance Gov-
ernment: A Once-in-a-Generation Opportunity
(New York: New York University, 2011), p. 21.
31. U.S. Government Accountability Office, Human
Services Programs: Opportunities to Reduce
Inefficiencies GAO-11-531T (Washington, DC:
U.S. Government Printing Office, 2011), Highlights
page.
32. Social Security Online, Actuarial Publications:
Administrative Expenses, http://www.ssa.gov/
oact/STATS/admin.html.
33. Lisa Rein and Lynh Bui, “Is Your Mail Arriving
After Dark? Service Cuts Are to Blame, Watchdog
Says,” Washington Post (July 22, 2014). Figure is
for 2013.
34. Forrester Research, U.S. Federal Customer Experi-
ence Index, 2015 (Cambridge, MA: Author, 2015).
35. Alberto Chong, Rafael La Porta, Florencio Lopez-
de-Silanes, and Andrei Shleifer, Letter Grading
Government Efficiency, Working Paper 18268
(Cambridge, MA: National Bureau of Economic
Research, 2012).
36. U.S. Government Accountability Office, 2017
Annual Report, pp. 7–8. Figures are for 2011–
2016.
37. Alasdair Roberts, “Why the Brownlow Committee
Failed: Neutrality and Partisanship in the Early
Years of Public Administration,” Administration
& Society 28 (May 1996), pp. 3–38. The quotation
is on p. 3.
38. Partnership for Public Service and Booz Allen
Hamilton, Securing the Future, p. 4. Figure is for
1947–2011.
39. U.S. General Accounting Office, Executive Reor-
ganization Authority: Balancing Executive and
Congressional Roles in Shaping the Federal
Government’s Structure, GAO-03-624T
(Washington, DC: U.S. Government Printing
Office, 2003), p. 9.
40. National Commission on the Public Service,
Urgent Business for America, p. 36.
41. U.S. Government Accountability Office, National
Protection and Programs Protectorate: Factors
to Consider when Reorganizing, GAO-16-140T
(Washington, DC: U.S. Government Publishing
Office, 2015), Highlights page.

42. Thad Beyle and Margaret Ferguson, “Governors
and the Executive Branch,” Politics in the American
States: A Comparative Analysis, 9th ed., Virginia
Gray and Russell L. Hanson, eds. (Washington,
DC: CQ Press, 2008), pp. 192–228. The quotation
is on p. 218.
43. Thad Beyle, “The Executive Branch,” State
Constitutions for the Twenty-first Century: The
Agenda of State Constitutional Reform (Albany,
NY: SUNY Press, 2006), pp. 67–84. The reference
is on p. 80.
44. Thad L. Beyle, “Enhancing Executive Leadership in
the States,” State and Local Government Review
27 (Winter 1995), pp. 18–35.
45. Richard C. Elling, “Administering State Programs:
Performance and Politics,” Politics in the American
States: A Comparative Analysis, 8th ed., Virginia
Gray and Russell L. Hanson, eds. (Washington,
DC: CQ Press, 2004), pp. 261–289.The quotation
is on p. 267.
46. James Conant, “Management Consequences
of the 1960–1990 ‘Modernization’ of State
Government,” Handbook of State Government
Administration, John J. Gargan, ed. (New York:
Marcel Dekker, 2000), pp. 13–32.
47. Elling, “Administering State Programs,” p. 267.
48. Katherine Barrett and Richard Greene, “Bidding
Boards Goodbye,” Governing (August 2009),
pp. 54–55.
49. See, for example, William Baumol, Welfare Econo-
mics and the Theory of the State (Cambridge, MA:
Harvard University Press, 1965), one of Baumol’s
numerous contributions.
50. KPMG International, Performance Agenda: An
International Government Survey (Toronto:
Author, 2007), p. 8. Figure is for 2007.
51. John E. Petersen, “Productivity Pinch,” Governing
(September 2003), p. 62.
52. U.S. Energy Information Administration, as cited
in Charles S. Clark, “Agency Energy Use Reduced
to 40-Year Low,” Govexec.com (December 7,
2015). Figure is for FY 1975–FY 2014.
53. U.S. Merit Systems Protection Board, The Federal
Government: A Model Employer or a Work in
Progress? Perspectives from 25 Years of the Merit
Principles Survey (Washington, DC: U.S. Govern-
ment Printing Office, 2008), p. 9. Current figure is
for 2007.
54. Susie M. Grant, as quoted in Michael A.
Fletcher, “A Sea Change in the Secretarial Pool,”
Washington Post (May 11, 2000).
Efficient and Effective Governance 221
55. KPMG International, Performance Agenda, p. 8.
Figure is for 2007.
56. Geert Bouckaert, “The History of the Productivity
Movement,” Public Productivity & Management
Review 14 (Fall 1990), pp. 53–89. The quotation
is on p. 83.
57. U.S. Government Accountability Office,
Streamlining Government: Key Practices from
Select Efficiency Initiatives Should Be Shared
Governmentwide, GA0-11-908 (Washington,
DC: U.S. Government Printing Office, 2011),
Highlights page.
58. Desiree Teobaldelli, “Federalism and the Shadow
Economy,” Public Choice 146 (March 2011),
pp. 269–289.
59. Project Management Institute, as cited in Charles
S. Clark, “Program Management Bill Heads to
Obama’s Desk,” Govexec.com (December 6,
2016).
60. Charles S. Clark, “Program Managers Too Scarce
in the Federal Government, Survey Concludes,”
Govexec.com (June 12, 2013).
61. U.S. Office of Personnel Management, Investing
in Federal Productivity and Quality (Washington,
DC: U.S. Government Printing Office, 1992).
62. Luther Gulick, “Science, Values, and Public
Administration,” Papers on the Science of
Administration, Luther Gulick and L. Urwick, eds.
(New York: Institute of Public Administration,
1937), pp. 189–195. The quotation is on p. 192.
63. Frederick C. Mosher and Orville F. Poland, The
Costs of American Governments: Facts, Trends,
Myths (New York: Dodd, Mead, 1964), pp. 12–15.
64. Mordecai Lee, Bureaus of Efficiency: Reforming
Local Government in the Progressive Era (Mil-
waukee, WI: Marquette University Press, 2008).
65. Orville F. Poland, “Why Does Public Admini-
stration Ignore Evaluation?” Public Administra-
tion Review 31 (March/April 1971), pp. 201–202.
The quotation is on p. 201.
66. Senator William Proxmire, quoted in Thomas
D. Morris, William H. Corbett, and Brian L.
Usilaner, “Productivity Measures in the Federal
Government,” Public Administration Review 32
(November/December 1972), pp. 753–763. The
quotation is on p. 754.
67. Robert C. Burns and Robert D. Lee, Jr., “The
Ups and Downs of State Budget Process Reform:
Experience of Three Decades,” Public Budgeting
& Finance 24 (Fall 2004), pp. 1–19. Figures
(p. 10) are for 1970–2000.
 222 PA R T I I I Public and Nonprofit Management
68. Richard E. Winnie, “Local Government Budgeting,
Program Planning, and Evaluation,” Urban Data
Services Report 4 (May 1972), entire issue, and
as derived from data in Rackham S. Fukuhara,
“Productivity Improvement in Cities,” Municipal
Year Book, 1977 (Washington, DC: International
City Management Association, 1977), pp. 193–
200. Figures are for 1971–1976.
69. U.S. General Accounting Office, Federal Eval-
uation: Fewer Units, Reduced Resources, Diff-
erent Studies From 1980, GAO/PEMD-87-9
(Washington, DC: U.S. Government Printing
Office, 1987), p. 1.
70. Juliet Eilperin, “Cuts Kill GAO Evaluation
Division,” Roll Call (July 11, 1996), p. 1.
71. Judith R. Brown, “Legislative Program Evaluation:
Refining a Legislative Service and a Profession,”
Public Administration Review 44 (May/June
1984), pp. 258–260.
72. Burns and Lee, “The Ups and Downs of State
Budget Process Reform,” p. 10.
73. Theodore H. Poister and Gregory Streib,
“Management Tools in Municipal Government:
Trends over the Past Decade,” Public Admini-
stration Review 49 (May/June 1989), pp. 240–
248. Figure is for 1987.
74. B. Guy Peters, The Future of Governing: Four
Emerging Models (Kansas City, KS: University
Press of Kansas, 1996).
75. Samantha L. Durst and Charldean Newell, “Better,
Faster, Stronger: Government Reinvention in
the 1990s,” American Review of Public Admini-
stration 29 (March 1999), pp. 61–76. The quota-
tion is on p. 63. Figure is for 1996.
76. Gerald Mayer, Selected Characteristics of Private
and Public Sector Workers (Washington, DC: U.S.
Congressional Research Service, 2014), p. 3. Years
following 1999 are 2000–2013.
77. Mark Micheli, “What the Heck is Operational
Efficiency?” Government Executive (February 1,
2013).
78. Cited in Al Gore, From Red Tape to Results:
Creating a Government That Works Better and
Costs Less, Report of the National Performance
Review (Washington, DC: U.S. Superintendent
of Documents, 1993), p. 1. In 1998, the National
Performance Review was re-titled the National
Partnership for Reinventing Government.
79. National Partnership for Reinventing Government,
“Accomplishments, 1993–2000: A Summary,”
History of the National Partnership for
Reinventing Government (Washington, DC:
Author, 2001), p. 1.
80. Al Gore, Creating a Government That Works
Better and Costs Less: Status Report of the
National Performance Review (Washington, DC:
U.S. Government Printing Office, 1994).
81. National Partnership for Reinventing Govern-
ment, “Accomplishments, 1993–2000,” pp. 1–2.
82. Max Stier, as cited in Fred Hiatt, “600,000 Bad
Hires?” Washington Post (April 27, 2009).
83. As derived from data in U.S. Bureau of Census,
Statistical Abstract of the United States, 2006,
125th ed. (Washington, DC: U.S. Government
Printing Office, 2006), Table 481.
84. Max Stier, as cited in Hiatt, “600,000 Bad Hires?”
85. Charles S. Clark, “Reinventing Government—
Two Decades Later,” Government Executive
(April 28, 2013).
86. Bridgeland and Orszag, “Can Government Play
Moneyball?”
87. Danny Werfel, Comptroller General of the United
States, quoted in Charles S. Clark, “Comptroller
Outlines Strategy to Simplify Government,”
Government Executive (February 6, 2013).
88. Charles S. Clark, “Could Obama’s Push for
Evidence-Based Program Evaluations Cross
Party Lines?” Government Executive (October 8,
2014).
89. Jeffrey L. Brudney, F. Ted Hebert, and Deil S.
Wright, “Reinventing Government in the
American States: Measuring and Explaining
Administrative Reform,” Public Administration
Review 59 (January/February 1999), pp. 19–30.
The quotation is on p. 29.
90. Younhee Kim, “Improving Performance in U.S.
State Governments: Risk-Taking, Innovativeness,
and Proactiveness Practices,” Public Performance
& Management Review 34 (September 2010),
pp. 104–129. The quotation is on p. 104.
91. Andy Frazier, “The Significance of the Hard
Framework on Agency Performance,” Public
Performance & Management Review 32
(September 2008), pp. 76–102. The quotations
are on p. 76.
92. Barry M. Feldman, “Reinventing Local Govern-
ment: Beyond Rhetoric to Action,” Municipal
Year Book, 1999 (Washington, DC: International
City/County Management Association, 1999), pp.
20–24. Data (pp. 23–24) are for 1998.
93. Richard C. Kearney, Barry M. Feldman, and
Carmine P. F. Scavo, “Reinventing Government:

City Manager Attitudes and Actions,” Public
Administration Review 60 (November/December
2000), pp. 535–548. Data (p. 544) are for 1997.
94. Timothy B. Krebs and John P. Peliserro, “What
Influences City Council Adoption and Support
for Reinventing Government? Environmental
or Institutional Factors?” Public Administration
Review 70 (March/April 2010), pp. 258–267.
Figure is for 1997. The quotation is on p. 260.
95. George C. Homsy and Mildred E. Warner,
“Intermunicipal Cooperation: The Growing
Reform,” Municipal Year Book, 2014
(Washington, DC: International City/County
Management Association, 2014), pp. 53–65.
Figure (p. 55) is for 2012.
96. Richard C. Kearney, “Reinventing Government
and Battling Budget Crises: Manager and Muni-
cipal Government Actions in 2003,” Municipal
Year Book, 2005 (Washington, DC: International
City/County Management Association, 2005), pp.
27–32. Figure (p. 31) is for 2003.
97. Rhys Andrews, George A. Boyne, and Richard M.
Walker, “Strategy Content and Organizational
Performance: An Empirical Analysis,” Public
Administration Review 66 (January/February
2006), pp. 52–63.
98. Richard M. Walker, Gene A. Brewer, George
A. Boyne, and Claudia N. Avellaneda, “Market
Orientation and Public Service Performance:
New Public Management Gone Mad?” Public
Administration Review 71 (September/October
2011), pp. 707–717. The quotations are on p. 714.
99. U.S. General Accounting Office, Performance
Measurement and Evaluation: Definitions and
Relationships, GAO/GGD-98-26 (Washington,
DC: U.S. Government Printing Office, 1998), p. 3.
100. Americans Talk Issues Foundation, as cited in
Kevin Merida, “Americans Want a Direct Say in
Decision-Making, Pollsters Find,” Washington
Post (April 17, 1994). Figure is for 1994.
101. U.S. Office of Personnel Management, Working
for the Government: What Federal Employees
Think, 1999 Employee Survey (Washington, DC:
U.S. Government Printing Office, 1999).
102. Ed Gerrish, “The Impact of Performance Man-
agement on Performance in Public Organizations:
A Meta-Analysis,” Public Administration Review
76 (January/February 2016), pp. 48–66. The quo-
tation is on p. 63.
103. Oliver James and Peter John, “Public Management
at the Ballot Box: Performance Information and
Efficient and Effective Governance 223
Electoral Support for Incumbent English Local
Governments,” Journal of Public Administration
Research and Theory 17 (October 2007),
pp. 567–580.
104. George A. Boyne, Oliver James, Peter John, and
Nicolai Petrovsky, “Does Public Service Perform-
ance Affect Top Management Turnover?” Journal
of Public Administration Research and Theory 20,
Supplement 2 (April 2010), pp. i261–i279.
105. Jonathan Walters, “The Benchmarking Craze,”
Governing (April 1994), p.37. Emphases are orig-
inal.
106. U.S. Government Accountability Office, Managing
for Results: Enhancing Agency Use of Performance
Information for Management Decision Making.
Trend is for 1997–2003.
107. U.S. Government Accountability Office, Stream-
lining Government: Opportunities Exist to Streng-
then OMB’s Approach to Improving Efficiency,
GAO-10-394 (Washington, DC: U.S. Government
Printing Office, 2010), pp. 8–9, Highlights page.
Data are for 2008–2010.
108. Katherine Barrett and Richard Greene, “States
Start Making Colleges Work for Funding,”
Governing.com (April 2016).
109. Thomas Rabovsky, “Support for Performance-
Based Funding: The Role of Political Ideology,
Performance, and Dysfunctional Information
Environments,” Public Administration Review 74
(November/December 2014), pp. 761–774.
110. Gerrish, “The Impact of Performance Management
on Performance in Public Organizations,” pp. 61,
51, 52, 50.
111. Donald F. Kettl, Managing Risk, Improving
Results: Lessons for Improving Government
Management from GAO’s High-Risk List
(Washington, DC: IBM Center for the Business of
Government, 2016), pp. 16, 23.
112. U.S. General Accounting Office, Program
Performance Measures. Federal Agency Collection
and Use of Performance Data, GAO/GGD-92-
65 (Washington, DC: U.S. Government Printing
Office, 1992), Highlights page.
113. Christopher Wye, quoted in Jeff Shear, “It’s Time
to Win One for the GPRA,” National Journal
(October 26, 1996), p. 1042.
114. Frank Hodsoll, quoted in Charles F. Bingham,
“Installing the M-Team,” Government Executive
(January 1992), p. 25.
115. U.S. Government Accountability Office, Managing
for Results: Enhancing Agency Use of Performance
 224 PA R T I I I Public and Nonprofit Management
Information for Management Decision Making,
GAO-05-927 (Washington, DC: U.S. Government
Printing Office, 2005), Highlights page. In 2004,
89 percent of federal agencies had performance
measures.
116. U.S. Government Accountability Office, Govern-
ment Performance: Lessons Learned for the Next
Administration on Using Performance Infor-
mation to Improve Results, GAO-08-1026T
(Washington, DC: U.S. Government Printing
Office, 2008), p. 8.
117. U.S. General Accounting Office, Results-Oriented
Government: GPRA Has Established a Solid
Foundation for Achieving Greater Results,
GAO-04-38 (Washington, DC: U.S. Government
Printing Office, 2004), p. 38.
118. Partnership for Public Service and Grant Thorn-
ton, Putting Together the Performance Pieces
(Washington, DC, and Alexandria, VA: Authors,
2015), pp. 2, 10. Figures are for 2015.
119. U.S. Government Accountability Office, Manag-
ing for Results: Agencies’ Trends in the Use of
Performance Information to Make Decisions,
GAO-14-747 (Washington, DC: U.S. Government
Printing Office, 2014), Highlights page.
120. Senator Mark Warner, quoted in John M.
Kamensky, “Congress Overhauls Results Act,
Wants Results,” PA Times (March/April 2011),
p. 8.
121. Charles S. Clark, “OMB Cites Progress on Agency
Performance Goals,” Government Executive
(February 13, 2014).
122. Partnership for Public Service and Grant Thornton,
Taking Measure: Moving from Process to Practice
in Performance Management (Washington, DC,
and Alexandria, VA: Authors, 2013), pp. 15, 14.
Figure is for 2013.
123. U.S. Government Accountability Office, Mana-
ging for Results: Agencies Report Positive Effects
of Data-Driven Reviews on Performance but
Some Should Strengthen Practices, GAO-15-579
(Washington, DC: U.S. Government Printing
Office, 2015), Highlights page.
124. Donald P. Moynihan and Alexander Kroll,
“Performance Management Routines That Work?
An Early Assessment of the GPRA Modernization
Act,” Public Administration Review 76 (March/
April 2016), pp. 314–323. The quotation is on
p. 314.
125. Partnership for Public Service and Grant Thorn-
ton, Taking Measure p. 10. Figure is for 2013.
126. Julie Melkers and Katherine Willoughby, Staying
the Course: The Use of Performance Measurements
in State Governments (Washington, DC: IBM
Center for the Business of Government, 2004).
127. Pew Charitable Trusts and MacArthur Foun-
dation, Evidence-Based Policymaking (Phila-
delphia, PA, and Washington, DC: Authors, 2014),
p. 3. Figures are for 2004–2014 and 2008–2011,
respectively.
128. Pew Charitable Trusts and MacArthur Foun-
dation, States’ Use of Cost-Benefit Analysis:
Improving Results for Taxpayers (Philadelphia,
PA, and Washington, DC: Authors, 2013), p. 4.
Figure is for 2008–2011.
129. Governmental Accounting Standards Board,
Performance Measurement at the State and Local
Levels: A Summary of Results (Washington, DC:
Author, 2002), p. 6. Figure is for 2001.
130. Katherine G. Willoughby, “Performance Measure-
ment and Budget Balancing: State Government
Perspectives,” Public Budgeting & Finance 24
(June 2004), pp. 21–39. Data are for 2003.
131. Donald P. Moynihan and Patricia W. Ingraham,
“Look for the Silver Lining: When Performance-
Based Accountability Systems Work,” Journal of
Public Administration Research and Theory 13
(Fall 2003), pp. 469–562.
132. Carolyn Bourdeaux and Grace Chikoto, “Legis-
lative Influence on Performance Management
Reform,” Public Administration Review 68
(March/April 2008), pp. 253–265. The quotation
is on p. 253.
133. Robert D. Lee, Jr. and Robert C. Burns,
“Performance Measurement in State Budgeting:
Advancement and Backsliding from 1990 to
1995,” Public Budgeting & Finance 20 (March
2000), pp. 38–54.
134. Carolyn Bourdeaux, “Integrating Performance
Information into Legislative Budget Processes,”
Public Performance & Management Review 31
(June 2008), pp. 547–569.
135. Anne Spray Kinney and John Ruggini, “Mea-
suring for a Purpose: Trends in Public-Sector
Measurement and Management Practices,”
Government Finance Review 24 (August 2008),
pp. 14–23. Figures (p. 16) are for 2006.
136. Theodore H. Poister and Gregory Streib, “Perfor-
mance Measurement in Municipal Government:
Assessing the State of the Practice,” Public
Administration Review 59 (July/August 1999),
pp. 325–335.

137. Ana Yetano, “What Drives the Institutionalization
of Performance Measurement and Management
in Local Government?” Public Performance &
Management Review 37 (September 2013), pp.
59–86.
138. David H. Folz, Reem Abdelrazek, and Yeonsoo
Chung, “The Adoption, Use, and Impacts of
Performance Measures in Medium-Size Cities:
Progress Toward Performance Management,”
Public Performance & Management Review 33
(September 2009), pp. 63–87. Data (p. 70) are for
2004.
139. Gregory Streib and Theodore H. Poister, “Perfor-
mance Measurement in Municipal Governments,”
Municipal Year Book, 1998 (Washington, DC:
International City/County Management Asso-
ciation, 1998), pp. 9–15. Figures (p. 11) are for
1997.
140. Robert P. McGowan and Theodore H. Poister,
“The Impact of Productivity Measurement
Systems on Municipal Performance,” Paper pre-
pared for delivery at the 1984 Annual Conference
of the American Political Science Association
in Washington, DC, August–September 1984,
pp. 12–13.
141. David H. Foly and William Lyons, “The
Measurement of Municipal Service Quality and
Productivity,” Public Productivity Review 10
(Winter 1986), pp. 21–33.
142. Bente Bjornholt, Martin Baekgaard, and Kurt
Houlberg, “Does Fiscal Austerity Affect Political
Decision-Makers’ Use and Perception of Perfor-
mance Information?” Public Performance &
Management Review 39 (3, 2016), pp. 560–580.
143. Jonathan P. West, “City Government Productivity
and Civil Service Reforms,” Public Productivity
Review 10 (Fall 1986), pp. 45–59.
144. Poister and Streib, “Performance Measurement in
Municipal Government.”
145. Bjornholt, Baekgaard, and Houlberg, “Does
Fiscal Austerity Affect Political Decision-Makers’
Use and Perception of Performance Information?”
p. 560.
146. Gregg G. Van Ryzin and Cecelia F. Lavena,
“The Credibility of Government Performance
Reporting,” Public Performance & Management
Review 37 (September 2013), pp. 87–103. The
quotation is on p. 87.
147. Claire Moxham, “Help or Hindrance? Examining
the Role of Performance Measurement in UK
Nonprofit Organizations,” Public Performance &
Efficient and Effective Governance 225
Management Review 33 (March 2010), pp. 342–
354. The quotations are on p. 342.
148. Kelly LeRoux and Nathaniel S. Wright, “Does Per-
formance Measurement Improve Strategic Deci-
sion Making? Findings from a National Survey
of Nonprofit Social Service Agencies,” Nonprofit
Leadership & Voluntary Sector Quarterly 39
(August 2010), pp. 571–587.
149. Janet Carlson, Alison S. Kelley, and Ken Smith,
“Government Performance Reforms and Non-
profit Human Services: 20 Years in Oregon,” Non-
profit Leadership & Voluntary Sector Quarterly
39 (March 2010), pp. 630–652. The quotations
are on p. 652.
150. U.S. Government Accountability Office, Govern-
ment Performance: Lessons Learned for the Next
Administration on Using Performance Informa-
tion to Improve Results, p. 4. “Decade” refers to
1997–2007.
151. As derived from data in: ibid., Figure 1, p. 4;
Governmental Accounting Standards Board, Per-
formance Measurement at the State and Local
Levels, pp. 5–6; and Poister and Streib, “Perfor-
mance Measurement in Municipal Government,”
p. 329. Federal data are for 2007; state data are
for 2001; and municipal data are for 1997.
152. Ibid., all three citations.
153. David N. Ammons and William C. Rivenbark,
“Factors Influencing the Use of Performance Data
to Improve Municipal Services: Evidence from the
North Carolina Benchmarking Project,” Public
Administration Review 68 (March/April 2008),
pp. 304–318.
154. As derived from data in: U.S. Government
Accountability Office, Government Performance:
Lessons Learned for the Next Administration
on Using Performance Information to Improve
Results, p. 4, Figure 1; Governmental Accounting
Standards Board, Performance Measurement at
the State and Local Levels, pp. 5–6; and Poister
and Streib, “Performance Measurement in
Municipal Government,” p. 329.
155. This discussion is based (with some modifications)
mostly on: Burt Perrin, “Effective Use and Misuse
of Performance Measurement,” American Journal
of Evaluation 19 (Fall 1998), pp. 367–379.
156. Partnership for Public Service and Grant
Thornton, Putting Together the Performance
Pieces, p. 13. Figures are for 2015.
157. Perrin, “Effective Use and Misuse of Performance
Evaluation,” p. 374.
 226 PA R T I I I Public and Nonprofit Management
158. Joseph T. McNamara, “Crime Statistics—Only
Game in Town,” Savannah Morning News
(February 5, 2002).
159. John Bohte and Kenneth J. Meier, “Goal
Displacement: Assessing the Motivation of
Organizational Cheating,” Public Administration
Review 60 (March/April 2000), pp. 173–182.
160. “Report on Business,” Toronto Globe and Mail,
“about 1996,” as quoted in Perrin, “Effective Use
and Misuse of Performance Evaluation,” p. 367.
161. Katherine Barrett and Richard Greene, “Poisoned
Measures,” Governing (May 1998), p. 60.
162. Cited in Perrin, “Effective Use and Misuse of
Performance Measurement,” p. 376. This occurred
in 1996.
163. Vicente Pina, Lourdes Torres, and Sonia Royo,
“Is E-Government Leading to More Accountable
and Transparent Local Governments? An Overall
View,” Financial Accountability & Management
26 (February 2010), pp. 3–20.
164. Charles S. Clark, “OMB Trumpets Progress on
Tracking Contractor Performance and Other
Cross-Agency Goals,” Govexec.com (December
19, 2014).
165. Melkers, Willoughby, James, et al. Performance
Measurement at the State and Local Levels, p. 12.
Figure is for 2001.
166. Julia Melkers and Katherine Willoughby, “The
State of the States: Performance-Based Budgeting
in 47 out of 50,” Public Administration Review
88 (January/February 1998), pp. 66–73.
167. Poister and Streib, “Performance Measurement in
Municipal Government,” p. 331.
168. Kinney and Ruggini, “Measuring for a Purpose,”
p. 18. Figure is for 2006.
169. Aine Creedon, “Benchmarks Study Indicates
Trends in Online Giving,” Nonprofitquarterly.org
(March 29, 2013).
170. Gerrish, “The Impact of Performance Management
on Performance in Public Organizations,” p. 63.
171. David N. Ammons, Charles Coe, and Michael
Lombardo, “Performance-Comparison Projects
in Local Government: Participants’ Perspectives,”
Public Administration Review 61 (January/
February 2001), pp. 100–110. The quotation is
on p. 106.
172. Ammons and Rivenbark, “Factors Influencing the
Use of Performance Data to Improve Municipal
Services.”
173. Sandra Tillema, “Public Sector Organizations’ Use
of Benchmarking for Performance Improvement:
Theoretical Analysis and Explorative Case Studies
in Dutch Water Boards,” Public Performance &
Management Review 30 (June 2007), pp. 496–
520. The quotation is on p. 516.
174. ERM, Global City Indicators Program Report
(Toronto: Author, 2008).
175. Eric Pfeiffer, “New Tool Creates ‘Common Langu-
age’ for Success in City Governments,” Govexec.
com (January 23, 2015).
176. Paul D. Epstein, “Redeeming the Promise of
Performance Measurement: Issues and Obstacles
for Governments in the United States,” Organi-
zational Performance and Measurement in the
Public Sector: Toward Service, Effort, and Accom-
plishment Reporting, Arie Halachmi and Geert
Bouckaert, eds. (Westport, CN: Quorum Books,
1996), pp. 51–76. The quotation is on p. 62.
177. Penelope Lemov, “Rough SEAs,” Governing
(February 2007), p. 53.
178. Dwight V. Denison, Wenli Yan, and Zhirong
(Jerry) Zhao, “Is Management Performance a
Factor in Municipal Bond Ratings? The Case
of Texas School Districts,” Public Budgeting &
Finance 27 (Winter 2007), pp. 86–98.
179. Council of State Governments, Book of the States,
2004 (Lexington, KY: Author, 2004), Table 4.29.
“Performance audits include economy and effi-
ciency audits and program audits.”
180. John D. Heaton, Linda J. Savage, and Judith K.
Welch, “Performance Auditing in Municipal
Governments,” Government Accountants Journal
42 (Summer 1993), pp. 51–60. Figure is for 1992.
181. Peter Babachicos, Daniel Kyle, et al., “Why Perfor-
mance Audits Preceding Scandals Were Ignored,”
Government Accountants Journal 45 (Spring
1996), pp. 10–18.
182. Richard Boyle, Performance Reporting: Insights
from International Practice (Washington, DC: IBM
Center for the Business of Government, 2009),
pp. 11, 13–14.
183. Ken A. Smith, Rita Hartung Cheng, Ola M. Smith,
and Ottalee Schiffel, “Performance Reporting by
State Agencies: Bridging the Gap between Current
Practices and GASB Suggested Criteria,” Journal
of Government Financial Reporting 57 (Summer
2008), pp. 42–47. Data are for 2007.
184. Kenneth A. Smith and Lee Schiffel, “Improvements
in City Government Performance Reporting,”
Journal of Government Financial Management 58
(Summer 2009), pp. 36–42. The quotations are on
pp. 37, 39. The ten-year data are for 1997–2007.

185. Dana Milbank, “It’s in the Cards that Oregon Will
Get Even Better by 2010,” Wall Street Journal
(December 9, 1996).
186. Ronald C. Nyhan and Herbert Marlowe, “Perfor-
mance Measurement in the Public Sector: Chal-
lenges and Opportunities,” Public Productivity &
Management Review 18 (Summer 1995), pp. 333–
348. The quotation is on p. 336.
187. Alfred Tat-Kei Ho and Anna Ya Ni, “Have Cities
Shifted to Outcome-Oriented Performance
Reporting?—A Content Analysis of City Budgets,”
Public Budgeting & Finance 25 (Summer 2005),
pp. 61–83. Datum (p. 72) is for 2002.
188. Nyhan and Marlowe, “Performance Measurement
in the Public Sector,” p. 336.
189. Mark A. Abramson, Jonathan D. Gould, and
John M. Kamensky, Four Trends Transforming
Government (Washington, DC: IBM Center for
the Business of Government, 2003), p. 10.
190. Timothy B. Clark, “Stats Surge Continues in
Cities and States,” GovExec.com (February 18,
2015). Figure is for 2015.
191. Kinney and Ruggini, “Measuring for a Purpose,”
p. 18. Figure is for 2006.
192. Clark, “Stats Surge Continues in Cities and
States.”
193. Ibid.
194. Kevin C. Desouza, Creating a Balanced Portfolio
of Information Technology Metrics (Washington,
DC: IBM Center for the Business of Government,
2015), p. 11. Figures are for 2015.
195. Jennifer Steinhauer and Michael S. Schmidt,
“Man Behind FEMA’s Makeover Built Philosophy
on Preparation,” New York Times (November 3,
2012).
196. Robert D. Behn, “Avoid Getting Caught in the
Quagmire of Key Performance Indicators,”
Government Executive (December 12, 2014).
197. Valerie J. Richardson, Increasing Transparency
and Accountability in Federal Performance
Reporting: Lessons from the OMB Pilot Program
(Washington, DC: IBM Center for the Business of
Government, 2009), p. 6.
198. Kathryn E. Newcomer, “How Does Program
Performance Assessment Affect Program
Management in the Federal Government?” Public
Performance & Management Review 30 (March
2007), pp. 332–350. The datum is on p. 334.
199. U.S. Government Accountability Office, Key
Indicator Systems: Experiences of Other National
and Subnational Systems Offer Insights for the
Efficient and Effective Governance 227
United States, GAO-11-396 (Washington, DC:
U.S. Government Printing Office, 2011), p. 10.
200. Kinney and Ruggini, “Measuring for a Purpose,”
pp. 18–19. Figures are for 2006.
201. Peter Schworm, “Boston Eyes Single Number to
Grade City Hall,” Bostonglobe.com (October 8,
2015).
202. Pew Charitable Trusts and MacArthur Founda-
tion, Evidence-Based Policymaking, pp. 3, 2.
203. In addition to works cited in the following bullets,
this discussion is based on Perrin, “Effective Use
and Misuse of Performance Evaluation”; Gerrish,
“The Impact of Performance Management on
Performance in Public Organizations”; Robert D.
Behn, Performance Leadership: 11 Better Prac-
tices That Can Ratchet Up Performance, 2nd ed.
(Washington, DC: IBM Center for the Business of
Government, 2006); U.S. Government Account-
ability Office, Managing for Results: Agencies’
Trends in the Use of Performance Information
to Make Decisions, p. 5; and Kathe Callahan
and Kathryn Kloby, Moving Toward Outcome-
Oriented Performance Measurement Systems
(Washington, DC: IBM Center for the Business of
Government, 2009).
204. Judy Zelio, Five Actions to Enhance State
Legislative Use of Performance Information
(Washington, DC: IBM Center for the Business of
Government, 2008), p. 3.
205. Boyle, Performance Reporting, p. 13.
206. George A. Boyne and Alex A. Chen, “Performance
Targets and Public Service Improvement,” Journal
of Public Administration Research and Theory 17
(October 2007), pp. 455–477. The quotation is on
p. 455.
207. Steven Kelman and John N. Friedman, “Perfor-
mance Improvement and Performance Dysfunct-
ion: An Empirical Examination of Distortionary
Impacts of the Emergency Room Wait-Time Target
in the English National Health Service,” Journal
of Public Administration Research and Theory 19
(October 2009), pp. 917–946. The quotation is on
p. 917.
208. Kaifeng Yang and Sanjay K. Pandey, “How
Do Perceived Political Environment and
Administrative Reform Affect Employee
Commitment?” Journal of Public Administration
Research and Theory 19 (April 2009), pp. 335–
360. The quotation is on p. 335.
209. Jonathan Walters, “Computing Performance,”
Governing (June 2010), pp. 48–49.
 228 PA R T I I I Public and Nonprofit Management
210. Richard M. Walker, Chan Su Jung, and George A.
Boyne, “Marching to Different Drummers? The
Performance Effects of Alignment between Political
and Managerial Perceptions of Performance
Management,” Public Administration Review 73
(November/December 2–13), pp. 833–844. The
quotation is on p. 833.
211. Yi Lu, “Improving the Design of Performance
Measures: The Role of Agencies,” Public Per-
formance & Management Review 32 (September
2008), pp. 7–24. The quotations are on p. 21.
212. U.S. Merit Systems Protection Board, A Call to
Action: Improving First-Level Supervision of
Federal Employees (Washington, DC: U.S Govern-
ment Printing Office, 2010), p. 1.
213. Bradley E. Wright and Sanjay K. Pandey, “Trans-
formational Leadership in the Public Sector: Does
Structure Matter?” Journal of Public Admini-
stration Research and Theory 20 (January 2010),
pp. 75–89. The quotation is on p. 85.
214. U.S. General Accounting Office, Performance
Measurement and Evaluation: Definitions and
Relationships, p. 3.
215. Peter Dahler-Larsen, “Surviving the Routinization
of Evaluation: The Administrative Use of Eva-
luations in Danish Municipalities,” Administration
& Society 32 (March 2000), pp. 70–92. The quo-
tation is on p. 70.
216. For examples, see the seventh edition (1998) of
this book, pp. 213–217.
217. We have collapsed the Evaluation Research Soci-
ety’s six types of program evaluation and the GAO’s
four into six types. See Evaluation Research Society
Standards Committee, “Evaluation Research
Society Standards for Program Evaluation,”
Standards for Evaluation Practice, P. H. Rossi, ed.
(San Francisco: Jossey-Bass, 1982) and U.S. General
Accounting Office, Performance Measurement
and Evaluation: Definitions and Relationships.
218. Eleanor Chelinsky, “Evaluating Public Programs,”
Handbook of Public Administration, James L.
Perry, ed. (San Francisco: Jossey-Bass, 1989), pp.
259–274. The quotation is on p. 269.
219. U.S. General Accounting Office, Teenage
Pregnancy: 500,000 Births a Year But Few Tested
Programs, GAO/PEMD-86-16BR, (Washington,
DC: U.S. Government Printing Office, 1986).
220. Bruce B. Buchanan, II, “The Senior Executive
Service: How Can We Tell If It Works?” Public
Administration Review 41 (May/June 1981),
pp. 349–358.
221. U.S. General Accounting Office, CETA Programs
for Disadvantaged Adults—What Do We Know
About Their Enrollees, Services, and Effectiveness?
GAO/IPE-82-2 (Washington, DC: U.S. Govern-
ment Printing Office, 1982).
222. Robert K. Yin, “Life Histories of Innovations:
How New Practices Become Routinized,” Public
Administration Review 41 (January/February
1981), pp. 21–28.
223. Chelinsky, “Evaluating Public Programs,” p. 268.
224. George L. Kelling, Tony Pate, Duane Dieckman,
and Charles E. Brown, The Kansas City
Preventive Patrol Experiment: Summary Report
(Washington, DC: The Police Foundation, 1974).
225. U.S. General Accounting Office, Drinking-Age
Laws: An Evaluation Synthesis of Their Impact on
Highway Safety, GAO/PEMD-87-10 (Washington,
DC: U.S. Government Printing Office, 1987).
226. U.S. Government Accountability Office, Program
Evaluation: Some Agencies Reported that Net-
working, Hiring, and Involving Program Staff
Help Build Capacity, GAO-15-25 (Washington,
DC: U.S. Government Printing Office, 2014),
Highlights page. Figures are for 2014.
227. U.S. Government Accountability Office, Program
Evaluation: Strategies to Facilitate Agencies’ Use
of Evaluation in Program Management and Policy
Making, GAO-13-570 (Washington, DC: U.S.
Government Printing Office, 2013), Highlights
page. Figures are for 2013.
228. U.S. Government Accountability Office, CFO
Act of 1990: Driving the Transformation of
Federal Financial Management, GAO-06-242T
(Washington, DC: U.S. Government Printing
Office, 2005), Highlights page.
229. U.S. General Accounting Office, Managing for
Results: The Statutory Framework for Perfor-
mance-Based Management and Accountability,
GAO/GGD/AIMD-98-52. (Washington, DC: U.S.
Government Printing Office, 1998), pp. 1, 3.
230. Sofie E. Miller, Learning from Experience:
Retrospective Review of Regulations in 2014
(Washington, DC: George Washington University
Regulatory Center, 2015).
231. U.S. Government Accountability Office, Program
Evaluation: Strategies to Facilitate Agencies’ Use
of Evaluation in Program Management and Policy
Making. Highlights page. Figures are for 2013.
232. U.S. Government Accountability Office, Program
Evaluation: Some Agencies Reported that
Networking, Hiring, and Involving Program Staff

Help Build Capacity, Highlights page. Figures are
for 2014.
233. Ibid. Figure is for 2014.
234. Bridgeland and Orszag, “Can Government Play
Moneyball?” p. 62.
235. Moynihan and Ingraham, “Look for the Silver
Lining,” p. 469.
236. National Association of State Budget Officers,
Budget Processes in the States (Washington, DC:
Author, 2008), p. 10. Figure is for 2008.
237. Burns and Lee, “The Ups and Downs of State
Budget Process Reform,” p. 10. Figures are for
1970–2000.
238. Pew Charitable Trusts and MacArthur Foun-
dation, How States Engage in Evidence-Based
Policymaking (Washington, DC, and Chicago:
Authors, 2017), p. 1. Figures are for 2016.
239. Theodore H. Poister and Gregory Streib, “Muni-
cipal Management Tools from 1976 to 1993: An
Overview and Update,” Public Productivity &
Management Review 18 (Winter 1994), pp. 115–
125. Figures (p. 122) are for 1993.
240. Council of the Inspectors General on Integrity and
Efficiency, Progress Report to the President, Fiscal
Year 2014 (Washington, DC: U.S. Government
Printing Office, 2015), p. i.
241. U.S. Office of the Special Inspector General for Iraq
Reconstruction, Learning from Iraq (Washington,
DC: U.S. Government Printing Office, 2013). This
was the office’s final report. Disciplinary actions
refer to suspensions and debarments, explained in
Chapter 11.
242. John Hudak and Grace Wallack,” Political
Appointees as Barriers to Government Efficiency
and Effectiveness,” Brookings.edu (April 11,
2016).
243. Kearney & Company and Association of
Government Accountants, Accelerating Change:
The 2015 Inspector General Survey (Alexandria,
VA: Authors, 2015), pp. 9, 12, 13. Figures are for
2012–2015, 2014–2015, and 2015, respectively.
244. Partnership for Public Service and Grant Thornton,
Walking the Line: Inspectors General Balancing
Independence and Impact (Washington, DC, and
Alexandria, VA: Authors, 2016), pp. 7–8.
245. Quoted in Tom Shoop, “The IG Enigma,”
Government Executive (January 1992), p. 39.
246. As derived from data in Kathryn E. Newcomer,
“Opportunities and Incentives for Improving
Program Quality: Auditing and Evaluating,”
Public Administration Review 54 (March/April
Efficient and Effective Governance 229
1994), pp. 147–154, and Kathryn E. Newcomer,
“The Changing Nature of Accountability:
The Role of the Inspector General in Federal
Agencies,” Public Administration Review 58
(March/April 1998), pp. 129–136. Data are for
1992–1996.
247. Committees on Homeland Security and Govern-
mental Affairs and the Judiciary, U.S. Senate,
Empowering Inspectors General: Supporting the
IG Community Could Save Billions for American
Taxpayers (Washington, DC: U.S. Government
Publishing Office, 2016), pp. 2–3. Data are for
2016.
248. U.S. General Accounting Office, Inspectors
General: Enhancing Federal Accountability, GAO-
04-117T (Washington, DC: U.S. Government
Printing Office, 2003), p. 1.
249. Eric Eyre, “W. Va. Lawmakers Propose Inspector
General Office to Root Out Corruption,”
Wvgazettemail.com (August 27, 2015). West
Virginia became the fourteenth state to hire an
inspector general in 2015.
250. As derived from data in Kearney & Company
and Association of Government Accountants,
Meeting Accountability Challenges (Alexandria,
VA: Authors, 2014), pp. 8, 10, 11. Figures are for
2013.
251. Steve Boland, “The Right Tools Can Make
Evaluation Less Painful, More Productive,”
Nonprofit Quarterly (January 23, 2012).
252. Peter Frumkin and Mark T. Kim, “Strategic
Positioning and the Financing of Nonprofit
Organizations: Is Efficiency Rewarded in the
Contributions Marketplace?” Public Admini-
stration Review 61 (May/June 2001), pp. 266–
275. The quotations are on p. 266.
253. Greg Chen, “Does Meeting Standards Affect
Charitable Giving? An Empirical Study of
New York Metropolitan Charities,” Nonprofit
Management & Leadership 19 (Spring 2009),
pp. 349–365. The quotation is on p. 363.
254. Margaret F. Sloan, “The Effects of Nonprofit
Accountability Ratings on Donor Behavior,”
Nonprofit Management & Voluntary Quarterly
38 (April 2009), pp. 220–236. The quotations are
on p. 220.
255. Henry W. Riecken, “Principal Components of the
Evaluation Process,” Professional Psychology 8
(November 1977), pp. 392–410.
256. Francis G. Caro, “Evaluation Research: An
Overview,” Readings in Evaluation Research,
 230 PA R T I I I Public and Nonprofit Management
Francis G. Caro, ed. (New York: Russell Sage
Foundation, 1971), pp. 1–34.
257. Francesca Gino, “Do We Listen to Advice Just
Because We Paid for It? The Impact of Advice
Cost on Its Use,” Organizational Behavior and
Human Decision Processes 107 (November
2008), pp. 234–245. The quotation is on p. 234.
258. Frank Konkel, “How the Right People Analyzing
the Best Data Are Transforming Government,”
Nextgov (May 23, 2014).
259. U.S. General Accounting Office, Evaluation and
Analysis to Support Decision-Making, p. 14.
260. Mary E. Poulin, Phillip R. Harris, and Peter R.
Jones, “The Significance of Definitions of Success
in Program Evaluation,” Evaluation Review 24
(October 2000), pp. 516–536.
261. U.S. General Accounting Office, Evaluation and
Analysis to Support Decision-Making, p. 13.
262. Caro, “Evaluation Research,” p. 24.
263. Riecken, “Principal Components of the Evaluation
Process,” p. 408.
264. Jonathan Walters, “Investing in Outcomes,”
Governing (June 2009), pp. 46–48. The quotation
is on p. 47.
265. Arnold J. Meltsner, Policy Analysts in the Bureau-
cracy (Berkeley, CA: University of California Press,
1976), pp. 50–81.
266. William D. Coplin, Astrid E. Merget, and Carolyn
Bourdeaux, “The Professional Researcher as
Change Agent in the Government-Performance
Movement,” Public Administration Review 62
(November/December 2002), pp. 699–711. The
quotations are on pp. 701–702.
267. K. A. Archebald, “Alternative Orientations to
Social Science Utilization,” Social Science Infor-
mant 9 (April 1970), pp. 7–35.
268. H. Donald Messer, “Drug Abuse Treatment: An
Evaluation That Wasn’t,” Program Evaluation at
HEW: Research Versus Reality: Part 1: Health,
James G. Abert, ed. (New York: Marcel Dekker,
1979), pp. 113–168.
269. Dr. Lois Ellen Datta, chief, Headstart Evaluation
Branch, Office of Education, as quoted in Daniel
Guttman and Daniel Willner, The Shadow
Government: The Government’s Multi-Billion
Dollar Giveaway of its Decision-Making Powers
to Private Management Consultants, “Experts,”
and Think Tanks (New York: Pantheon, 1976),
p. 167.
270. Michael Morris and Lynette R. Jacobs, “You
Got a Problem with That? Exploring Evaluators’
Disagreements about Ethics,” Evaluation Review
24 (August 2000), pp. 384–406. The quotations
are on pp. 384, 403.
271. Neil S. Wenger, Stanley G. Kornman, Richard Berk,
and Honghu Liu, “Reporting Unethical Research
Behavior,” Evaluation Review 23 (October 1999),
pp. 553–570. The quotation is on p. 553.
272. See, for example, Carol H. Weiss, “Evaluation
for Decisions: Is Anybody There? Does Anybody
Care?” Evaluation Practice 9 (Spring 1988),
pp. 5–19.
273. Carol H. Weiss, “Research for Policy’s Sake: The
Enlightenment Function of Social Research,”
Policy Analysis 3 (Fall 1977), pp. 531–545. The
quotation is on p. 532.
274. U.S. Government Accountability Office, Program
Evaluation: Some Agencies Reported that
Networking, Hiring, and Involving Program Staff
Help Build Capacity, Highlights page. Figure is
for 2014.
275. Thomas V. Bonoma, “Overcoming Resistance to
Change Recommended for Operating Programs,”
Professional Psychology 8 (November 1977),
pp. 451–463.
276. Kelli Johnson, Lija O. Greenseid, Stacie A. Toal,
et al., “Research on Evaluation Use: A Review
of the Empirical Literature from 1986 to 2005,”
American Journal of Evaluation 30 (September
2009), pp. 377–410. The quotations are on p. 377.
277. Lynn M. Shulha and J. Bradley Cousins, “Eva-
luation Use: Theory, Research, and Practice
Since 1986,” Evaluation Practice 18 (Fall 1997),
pp. 195–208. The quotation is on p. 200.
278. Michael Morris and Brittany Clark, “You Want
Me to Do What? Evaluators and the Pressure
to Misrepresent Findings,” American Journal of
Evaluation 34 (March 2013), pp. 57–70. The
quotations are on p. 57.
279. Tarek Azzam, “Evaluator Responsiveness to
Stakeholders,” American Journal of Evaluation
31 (March 2010), pp. 45–65. The quotation is on
p. 65.
280. Daniel Byler, Steve Berman, Vishwa Kola, and
William D. Eggers, Accountability Quantified:
What 26 Years of GAO Reports Can Teach Us
about Government Management (Washington,
DC: Deloitte, 2015). Figures are for 1983–2008.
281. Dahler-Larsen, “Surviving the Routinization of
Evaluation,” p. 70.
282. Johnson, Greenseid, Toal, et al., “Research on
Evaluation Use.”

283. Yang and Pandey, “How Do Perceived Political
Environment and Administrative Reform Affect
Employee Commitment?” p. 335.
284. Carol H. Weiss, Erin Murphy-Graham, Anthony
Petrosino, and Allison G. Gandhi, “The Fairy
Godmother—and Her Warts,” American Journal
of Evaluation 29 (March 2008), pp. 29–47. The
quotation is on p. 29.
Efficient and Effective Governance 231
285. Pew Charitable Trusts and MacArthur Foun-
dation, Evidence-Based Policymaking, p. 3. Figure
is for 2009–2014.
286. Weiss, “Research for Policy’s Sake,” pp. 535, 544.
287. John Bridgeland and Peter Orszag, “A Moneyball
Approach to Government,” Politico (October 18,
2013).
CHAPTER
The Public
Trough: Financing and
Budgeting Governments
I n government, money is blood. Currency courses
through the body politic, carrying with it civic
health or public pestilence, depending upon how
governments derive and disburse their dollars.
DEFINING PUBLIC FINANCE
Now for something more prosaic: definitions.
The basis for governments’ budgets is public
finance, or the raising by governments of revenues
that are then expended to fund public policies. Fiscal
policy is government’s effort to fund public pro-
grams through its taxing, spending, and borrowing
decisions. As a consequence of these decisions, the
vast majority of Americans pay less in federal, state,
and local taxes than they paid thirty years earlier.1
A general tax is the major method of generat-
ing general revenue. General revenue, or general-
purpose revenue, is money that the government
collects and may spend for any purpose. A general
fund is that part of the public budget which is com-
posed of general revenue. General fund expendi-
tures, or discretionary spending, is the allocation of
general revenue to fund any purpose. A special fund
is composed of those revenues that may be expended
only for a specific, pre-established purpose, or what
is known as nondiscretionary spending.
FINANCING THE FEDERAL
GOVERNMENT
Federal finance is fraught with foment.
232
Federal General Revenue
General revenue accounts for 62 percent of total
federal revenue, down by over a fourth from 89
percent in 1950.2
As we detail next, over the past seventy or so
years, the personal income tax has displaced vir-
tually all other sources of federal general revenue,
Social Security and Medicare, which are retirement
and health insurance programs for people aged
sixty-six and older, dominate special funds.
The Personal Income Tax The personal, or indi-
vidual, income tax, is a general tax on the annual
income of each person. It began (aside from a few
intermittent and brief appearances in the 1800s)
with the ratification, in 1913, of the Constitution’s
Sixteenth Amendment, which permits the federal
government to tax all incomes. The personal
income tax accounts for a whopping 77 percent of
Washington’s general revenue, up by more than two-
thirds from 46 percent in 1950.3
The Corporate Income Tax The corporate, or cor-
poration, income tax is a general tax on the annual
profits of businesses. The first federal corporate
income tax was enacted in 1909. It contributes 17
percent of general revenue, down by over two-fifths
from 30 percent in 1950.4
The Excise Tax The excise tax is a general tax
on specific items that usually is paid by their man-
ufacturer. The main excise taxes are placed on

companies that make gasoline, alcoholic beverages,
telephone systems, and tobacco products. From
the Revolutionary War through the early twentieth
century, the excise tax was Washington’s most pro-
ductive tax. Today it accounts for less than 5 percent
of general revenue, falling by more than three-
quarters from 22 percent in 1950.5
Gift and Estate Taxes The gift tax is a general
tax on the transfer of property by one person
to another, and the person making the transfer
receives  nothing,  or less than full value, in return.
The estate tax is a general tax on a person’s right
to transfer his or her property when he or she dies.
Together, gift and estate taxes account for less than
1 percent of general revenue, or half of their take
in 1950.6
Social Insurance and Retirement Receipts
Social insurance and retirement receipts are not
general revenue and cannot be used for discretion-
ary expenditures. They account for 33 percent of
total federal revenue, a tripling from 11 percent in
1950.7
The five special funds that comprise these
receipts are: Old-Age and Survivors Insurance (or
Social Security); Disability Insurance (nine major
programs, targeted, for the most part, at people aged
fifty to sixty-four); Hospital Insurance (or Medicare);
Unemployment Insurance; and relatively small sums
paid toward the retirement funds of federal and rail-
road employees.
Social Security and Medicare account for
84 percent of all social insurance and retirement
receipts.8 These two massive programs (which are
primarily responsible for the fact that Washington
spends seven times more, per capita, on the elderly
than it spends on children9) are funded with what
are called, with unfortunate coyness, “insurance
contributions.” Insurance contributions are actu-
ally a compulsory payroll tax, and they derive their
name from the Federal Insurance Contributions Act
(FICA) of 1935, which underwrites Social Security
and Medicare exclusively. Employers and employ-
ees pay this tax in equal shares, and their combined
tax rate has quintupled from about 3 percent of
payrolls in 1950 to over 15 percent currently. The
payroll taxes collected through FICA account for
Financing and Budgeting Governments 233
27 percent of total federal revenue, or more than a
quintupling from 5 percent in 1950.10
Federal Expenditures
Federal expenditures top $4 trilllion per year. After
adjusting for inflation, federal spending exploded by
a startling fivefold from 1950 to 2005.11 In general,
federal spending since 1950 gradually has lessened
for the military and enlarged for social programs,
and formula-based expenditures have cut deeply
into discretionary spending.
Spending on What? The federal government
spends 71 percent of its money on payments for
individuals, which are federal grants to individual
persons. In any given year, 35 percent of the 219
million Americans with personal incomes, whether
from government or other sources, receive some
kind of cash benefit from the federal government,12
but 55 percent of American adults (including major-
ities of both Democrats and Republicans) have,
at one time or another, received these payments
to individuals in the form of benefits from the
six major entitlement programs—Social Security,
Medicare, Medicaid, welfare, unemployment, and
food stamps.13 Fifteen percent of federal dollars is
allocated to national defense, and 6 percent pays the
interest on the national debt.14
Nondiscretionary versus Discretionary Expendi-
tures Another way of understanding federal
expenditures is to separate them into nondiscretion-
ary and discretionary spending.
Federal nondiscretionary spending is conducted
through twenty-six major mandatory and related
programs, a category that includes interest on the
national debt and sixteen large entitlement pro-
grams, such as Social Security and Medicare, which
are funded by formulas.
In 1962, only 32 percent of all federal expendi-
tures had to be spent on mandatory and related pro-
grams, and a comfortable 68 percent was reserved
for discretionary purposes. Over a half-century
later, these proportions had more than reversed:
69 percent of spending is for nondiscretionary pro-
grams, and 31 percent is for discretionary ones.15
We can gain a sense of the gravity of this rever-
sal when we realize that federal revenue amounts to
 234 PA R T I I I Public and Nonprofit Management
about 19 percent of gross domestic product (GDP);
mandatory programs spend around 13.6 percent
of GDP and are rising (in 1980, they accounted for
9.6 percent of GDP); and security-related programs
expend about 5 percent of GDP. Discretionary civil-
ian programs are being ever more squeezed.16
GRASS-ROOTS’ REVENUES
When we leave the world of Washington and con-
sider the financing of state and local governments,
new kinds, categories, and complexities of revenue
emerge.
General Revenue
In these governments, general revenue officially is
composed not only of general tax revenue, but also
of intergovernmental revenue, fees collected from
users of special public services, and miscellaneous
general sources.
Intergovernmental Revenue Intergovernmental
revenue is money that state and local governments
receive from other governments. Although intergov-
ernmental revenue is an official component of these
governments’ general revenue, which, in theory, can
be spent for anything, it is problematic because, in
reality, it typically arrives in state and local coffers
in the form of grants that narrowly specify how they
may be spent. The public finance community jus-
tifies its inclusion in general revenue because state
and local governments, at their own discretion and
volition, apply for and accept intergovernmental
grants and spend the intergovernmental revenue
in them.
User Fees A user fee, also called a service charge
or a fee for services, is generally related to a vol-
untary transaction or request for government goods
(such as a license to practice a profession) or services
(such as hospital care) that are above and beyond
what is normally available to the public. Although
user fees are appropriately associated with state
and local governments, the federal government also
collects user fees, amounting to about 1 percent of
federal general revenue.17
Like intergovernmental revenue, service charges
somewhat flout the philosophic foundation of general
revenue because they may not be spent for any
purpose that the legislature chooses. Instead,  they
are paid to, and kept by, the agency  providing
the service. The rationale for including user  fees
in general revenue is that governments are free to
choose to offer special services. No one mandated
that they do so; they did so at their discretion.
Earmarking General Revenue Complicating
further the role of general revenue at the grass roots
is the propensity of some governments to convert
general-purpose revenue into special purpose
revenue by earmarking general tax revenue for par-
ticular uses. California is a conspicuous example.
Some 500 amendments bind California’s constitu-
tion, rendering it, after India’s, the longest and most
convoluted in the world, containing “so many set-
asides and mandates that the legislature can control
only about seven per cent of the budget.”18 The
remaining 93 percent of general revenue effectively
has been reserved for special purposes, ranging from
prisons to schools.
Own Source Revenue
Due to the presence of intergovernmental revenue,
state and local governments must identify their own
source revenue, or income that these governments
garner from within their own boundaries.
There are two types of own source revenue.
General Revenue From Own Sources One type
is general revenue from own sources, which is all
general revenue, other than intergovernmental
revenue, collected by state or local governments—
specifically, general taxes, service charges, and mis-
cellaneous general revenue.
Other Than General Revenue The other type is
other than general revenue, which is own source
revenue that cannot be used for discretionary spend-
ing. There are three official sources of other than
general revenue.
Insurance Trusts One is insurance trusts that are
funded by government employees’ contributions to
three special funds. The funds are: workers’ compen-
sation funds for work-related injuries; unemploy-
ment insurance funds; and worker retirement funds.

Utilities and Liquor Stores The two other
sources of other than general revenue are
government-owned  and -operated utilities and
liquor stores. Both collect customer payments for
publicly provided goods.
Utilities are electric and gas power plants,
water and sewer works, and public transit. Most
utilities  are owned by local governments. Most
liquor stores are owned by the seventeen states that
have them, but only Pennsylvania and Utah exercise
complete control over all liquor sales. (FYI: alco-
holic beverages cost 7 percent more, on average,
when sold in state-owned stores than in private-
ly-held stores.19)
FINANCING STATE
GOVERNMENTS
The fifty states collect more than $2.1 trillion in
revenue annually.20
State General Revenue
Seventy-seven percent of total revenue is general
revenue, and 68 percent of the states’ general revenue
comes from their own sources.21
As we elaborate next, intergovernmental
revenue, the personal income tax, service charges,
and miscellaneous general revenue have grown
as the  states’ sources of general revenue, and at
the expense of the corporate income tax and the
sales tax.
State General Tax Revenue State general taxes
contribute 50 percent of all general revenue, having
shrunk by 29 percent since 1950, when their share
stood at an impressive 70 percent. Taxes’ portion of
own source general revenue, at 68 percent, has slid
by a fourth since 1950, when taxes accounted for 90
percent of own source general revenue.22
The State Sales Tax The most important tax for
the states is the sales tax, which is a general tax on
the selling price of goods and services that usually is
paid at the point-of-sale, such as a retail store. West
Virginia levied the first state sales tax in 1921, when
states relied heavily on property taxes, and today
forty-five states and the District of Columbia impose
Financing and Budgeting Governments 235
it.23 The sales tax accounts for 46 percent of all state
tax revenue, down by over a fifth from 59 percent in
1950.24
State Income Taxes The decline in sales tax
revenue is attributable to the rise of the state
income tax. Wisconsin was the first state to impose
an  income tax, both personal and corporate,
in 1911.
Forty-three states and the District of Columbia
levy the personal income tax, including two, New
Hampshire and Tennessee, which limit this tax
to dividends and interest income.25 Because of
New  Hampshire’s and Tennessee’s limitations, the
literature commonly states that there are forty-
one  states with a “general,” or “broad-based,”
personal income tax. The individual income
tax  generates 37 percent of state tax revenue,
more  than quadrupling its 9 percent share in
1950.26
Forty-six states and the District of Columbia
use the corporate income tax,27 which accounts for
5 percent of all state tax revenue,28 down from its
7 percent share in 1950.29 The 29 percent decline
of the state corporate income tax collections over
more than seven decades has been attributed to
shrewd tax planning by corporations30 that occurs
in tandem with a cutthroat competition among state
governments that are frantically lowering their cor-
porate income taxes to lure companies to relocate to
their states.31
State Intergovernmental Revenue As shown
in Figure 8-1, intergovernmental revenue con-
tributes 31 percent of the states’ general revenue.
Intergovernmental revenue’s share of the states’
general revenue has grown by more than two-fifths
since 1950, when it accounted for 22 percent.32
State Service Charges and Miscellany Charges
for services, led by education, account for 11
percent  of all general revenue and 16 percent of
general revenue that is derived from the states’ own
sources.
The remaining sources of state general revenue
are miscellaneous ones, primarily interest earnings
but also special assessments and property sales,
among others. Miscellaneous general revenue
accounts for 7 percent of total general revenue and
 236 PA R T I I I Public and Nonprofit Management

Federal Government

Federal Direct Grants Federal Pass-Through Grants Federal Direct Grants

to the States: Estimated to the States: Estimated to Localities: 5% of
20% of State Revenue 10% of State Revenue Local Revenue

State Governments
Intergovernmental Revenue Accounts for 31% of State General Revenue

Local Payments Federal Pass-Through State Direct Grants

to the States: 1% of Grants Passed by States to Localities: 20% of
State Revenue to Localities: 11% of Local Revenue
Local Revenue

Local Governments
Intergovernmental Revenue Accounts for 36% of Local General Revenue

FIGURE 8-1
Intergovernmental Revenue as Percentages of State and Local Governments’ General Revenue, Fiscal Year 2013
Sources: As derived from data in U.S. Bureau of the Census, “State and Local Government Finances by Level of Government and by State: 2013,”
Census of Governments, 2013 (Washington, DC: Author, 2016), and David B. Walker, The Rebirth of Federalism: Slouching toward Washington, 2nd
ed. (New York: Chatham House, 2000), p. 227.
Note: “Estimated” intergovernmental revenue refers only to estimates of pass-through and direct grants as percentages of total federal grants to the
states and localities; all other percentages are not estimated, and are firm.

11 percent of general revenue that is derived from
the states’ own sources.33
Combined, service charges and miscellaneous
general revenue account for 18 percent of all general
revenue (more than doubling from 8 percent in
1950) and 27 percent of own source general revenue
(a tripling from 9 percent).34 These two sources, plus
the less dramatic rise in intergovernmental revenue,
largely explain why taxes are declining as contribu-
tors to the states’ general funds.
State Other Than General Revenue
Other than general revenue (i.e., insurance trusts,
utilities, and liquor stores) makes up 23 percent of
total state revenue (a decrease of about a sixth since
the mid-twentieth century, when its share was 28
percent), and 44 percent of state own source general
revenue (increasing by  more than a fifth from 36
percent). Insurance trusts, with a share of 96 percent,
dominate this category.35
State Expenditures
In brief, state spending for public welfare and educa-
tion has displaced highways and kept other spending
flat over the last seven decades.
The states’ largest single expenditure for a
governmental program, at 39 percent of all direct
general expenditures (that is, excluding general

expenditures funded by intergovernmental revenue),
is public welfare, a tripling from 13 percent in
1950. Education accounts for 23 percent (about
four-fifths is for higher education), more than dou-
bling from  10  percent in 1950, followed by hospi-
tals and  health at 9 percent (two-thirds of which
is for  hospitals, and  hospitals and health nearly
match  the same proportion of 8 percent that they
had in 1950), and highways at 8 percent (less than
half of the 17 percent share that highways held in
1950).36
State Tax and Expenditure Limitations
The states do not like to tax, or even spend, and
thirty states have imposed on themselves at least one
tax or expenditure limitation, commonly known as
tax and expenditure limitations, or TELs.37
Seven state legislatures have legislated revenue
limits on their own state governments, including
three that also limit state expenditures. In addition,
since Arkansas originated the practice, in 1934,
sixteen states now require legislative “superma-
jorities,” ranging from 60 percent to 75 percent of
legislators’ votes in both chambers, to raise some
or all taxes, including three states that also require
voter approval; one, Colorado, requires only voter
approval to raise taxes.38
Twenty-six states cap expenditures, including
three that also limit taxes.39
The fiscal impact of these limits is small at
best.  Even the most effective tax-and-spend-
tamping policies (most notably, legislative super-
majorities and popular referenda) result in only
2 to 3 percent less spending, and, in the wealthier
states, caps actually correlate with more spending!40
Others find that “the ineffectiveness of [state TELs]
is unambiguous.”41
A study of TELs enacted in the forty-eight
contiguous states over twenty years found that,
contrary to their supporters’ claims, they had no
effect on the growth of both personal income per
capita and employment per capita, but did cor-
relate with a negative impact on a state’s level of
employment.42 Those TELs that place stricter limits
on state revenue correlate with lower credit ratings
(leading to higher interest payments), whereas those
that restrict spending associate with higher credit
ratings.43
Financing and Budgeting Governments 237
FINANCING LOCAL
GOVERNMENTS
America’s 90,056 local governments44—both
general-purpose governments (i.e., counties, cities,
towns, and townships), and special purpose govern-
ments (school districts and special districts)—collect
over $1.7 trillion in revenue annually.45 Not surpris-
ingly, “fiscal management” has been “the dominant
priority of city managers” (and likely of all top local
managers) ever since the first study of the issue was
conducted nearly forty years ago.46
Local General Revenue
General revenue accounts for 87 percent of all local
revenue, and 64 percent of local general revenue that
comes from local governments’ own sources.47
Details follow, but, in summary, local taxes have
declined as a share of local general revenue since
1950, but sales and personal income taxes have
increased their share of tax revenue at the expense
of the property tax. Service charges, miscellaneous
general revenue, and intergovernmental revenue
have grown as general revenue sources.
Local General Tax Revenue General tax revenue
contributes 35 percent of all local general revenue,
a portion that has shrunk by nearly half since 1950,
when it accounted for 68 percent. Still, taxes con-
tribute an impressive 64 percent of the general
revenue that local governments collect from their
own sources, a modest decline of 7 percent from
69 percent in 1950.48
The Local Property Tax The principal general tax
for local governments is the property tax, an ancient
form of taxation that is a general tax on personal
wealth. Homeowners pay the greatest share of the
tax, which, on average, amounts to 1 percent of their
homes’ value and 3 percent of their annual income.49
To determine a property’s value, governments
(counties usually are responsible for the administra-
tion of the property tax) hire and train professional
assessors, who employ one or more of the follow-
ing assessment methods: base the property’s value
on how much the property last sold for (a method
sometimes dubbed, with leaden irony, “welcome
 238 PA R T I I I Public and Nonprofit Management
stranger”); estimate the price that it currently
would fetch in the open market; estimate how much
it would cost to replace it; or estimate how much
sustainable net income it will produce. Once the
assessment is made, the property tax is levied on a
predetermined fraction (say, 60 percent) of the prop-
erty’s assessed value.
All states permit their local governments to levy
property taxes, which generate 73 percent of all local
tax dollars. In 1950, the property tax accounted for
88 percent of local tax revenue, a share that has
since slipped by a sixth. Even into the 1960s the
property tax continued to generate nearly nine out
of ten dollars of tax revenue.50
Bucking, but not reversing, this declining tax
trend is the fact that local governments will, among
other revenue-raising responses, raise the property
tax when the states cut their intergovernmental aid.
Cities and towns offset these cuts by raising the
property tax by an average of nine cents for each
state dollar cut,51 and school districts raise it by
twenty-three cents per dollar cut.52
Raising the property tax, however, can be
self-defeating. When the average income-tax deduc-
tions permitted for interest on home mortgage
payments and property taxes are doubled, average
spending per student in local public schools increases
by 10 percent; it appears that spending for other ser-
vices may also increase.53
In part, the shrinking of the property tax is
attributable to state legislatures allowing their local
governments to introduce competing sales and
income taxes. Forty-three states authorize their local
governments to levy, if they so choose, taxes on sales,
personal income, or both.54
The Local Sales Tax In 1950, just one state permit-
ted at least some of its local governments to collect
sales taxes,55 and today thirty-eight do.56 The sales
tax accounts for 12 percent of all local tax dollars,
doubling from 6 percent in 1950.57
Local Income Taxes Philadelphia introduced the
first local tax on personal income, in 1939, and cur-
rently seventeen states permit at least some types
of their local governments to impose a tax on indi-
vidual incomes or payrolls. Although the number
of local individual income taxes is in decline, it
still is used by 4,943 local jurisdictions, mostly
municipalities, and is paid by more than 23 million
people.58 Local personal income taxes account for
less than 5 percent of all local tax revenue, up from
a fraction of 1 percent in 1950.59
Seven states permit their local governments
to collect corporate income taxes. New York City
accounts for 84 percent of all locally collected cor-
porate income taxes, followed by the District of
Columbia, at 6 percent.60 The corporate income
tax amounts to about 1 percent of all local tax
revenue.61
Local Service Charges and Miscellany Just prior
to the tax revolt that was presaged, in 1978, by the
passage of California’s Proposition 13 (described
in Chapter 1), which slashed local property taxes,
charges, or fees, for local services, accounted for a
modest 11 percent of all municipal general revenue
in the country and 18 percent of cities’ general
revenue that came from their own sources.62 Since
1977, after adjusting for inflation and population
shifts, user charges exploded by 143 percent per
capita in the 112 largest cities, while taxes other
than the property tax shot up by 88 percent; the
property tax grew by a niggling 17 percent.63
Today, charges, led by hospitals and sewerage,
contribute nearly 18 percent of all local general
revenue and almost 28 percent of the general
revenue that local governments draw from their
own sources.64 Charges have increased by nearly
two-thirds as a proportion of local general revenues
since 1975, and by more than half as a share of local
general revenue from own sources.65
Hiking fees for services is clearly the pre-
ferred option for local governments. “Nearly three-
quarters” of city and town managers accord raising
service charges their “highest” preference (out of
nine possible responses) for dealing with stressed
budgets.66 Their attraction to service charges is
understandable. Unlike raising unpopular local
taxes, which only state legislatures can do, “all cities
have the discretion to impose charges.”67 In addition,
service charges also enable local (and, indeed, all)
governments to draw revenue from sources that are
tax exempt, such as charitable organizations. Cities
that have property tax limits and a strong-mayor
form of government, rather than a council-manager
form, are more likely to favor charges than those
that do not.68

Together, 82 percent of cities and counties
employ “user fees” to deliver services (only the prop-
erty tax, at 100 percent, ranks higher), a proportion
that does not include several other categories that
certainly sound like user fees, such as “development
review fees” (52 percent, the next highest), “local
impact fees” (37 percent), and “mortgage or prop-
erty transfer fees” (17 percent).69
The remaining sources of local general revenue
are miscellaneous ones, led by interest earnings.
Miscellaneous general revenue accounts for 5
percent of all local general revenue and 8 percent
of the general revenue that local governments draw
from their own sources.70
Combined, service charges and miscellaneous
general revenue account for 23 percent of all local
general revenue (more than doubling from 11
percent in 1950) and 36 percent of own source
general revenue (also more than doubling, from
17 percent).71
Local Intergovernmental Revenue Intergovern-
mental revenue, at 36 percent, surpasses by 1
percent general tax revenue’s contribution to all
local general revenue. Intergovernmental revenue’s
share has increased by over a tenth since 1950, when
it accounted for 32 percent.72
On paper, at least, 87 percent of local intergov-
ernmental revenue is provided by state governments
and 13 percent as direct federal grants.73 However,
an estimated one-third of the intergovernmental
revenue that local governments receive from their
states has actually been furnished by Washington
in the form of pass-through grants.74 Pass-through
grants are funds granted by the federal government
to the states with the stipulation that the states pass
on these funds to a “sub-recipient,” typically their
local governments, for use in specific programs that
have been earmarked by Washington.
If we count these federal pass-through
grants  as intergovernmental revenue that local-
ities receive  from Washington, rather than from
the states, then the money that Washington pro-
vides increases its share of local intergovernmental
revenue, rising from 13 percent (in direct federal
grants only) to an estimated 42 percent (direct
grants plus pass-through grants). Washington’s
contribution to local general revenue more than
triples from 5 percent to an estimated 16 percent.75
Financing and Budgeting Governments 239
Washington is a large, and largely hidden, source of
local revenue.
Figure 8-1 above illustrates these intergovern-
mental fiscal flows in terms of their percentages of
state and local general revenue.
Local Other Than General Revenue
Other than general revenue (i.e., utilities, insurance
trusts, and liquor stores) accounts for 13 percent of
total local revenue, up by more than two-fifths from
9 percent in the mid-twentieth century, and 23 percent
of local own source general revenue, up by more than
half from 15 percent.76 Almost two-thirds of other
than general revenue is generated by  local utilities,
followed by insurance trusts at over a third.77
Local Expenditures
Succinctly stated, local expenditures for hospitals
and health have expanded, while those for highways
and public welfare have shrunk as shares of direct
general spending over some seventy years.
Education accounts for 42 percent of total
direct general expenditures by all local governments,
not too far from its 39 percent share in 1950. More
than four-fifths of education funds are disbursed by
school districts.
Eleven percent of total direct general spending
by all local governments is channeled to public safety
(i.e., police, fire fighters, corrections, and inspec-
tions). Six percent of the total goes to police, which
was less than 5 percent in 1950. Less than 8 percent
is allocated to hospitals and health (three-fifths of
which is for hospitals, and hospitals and health are
up by three-fifths from their better than 5 percent
share in 1950), followed by interest on the debt
and highways, each of which consumes 4 percent.
(Highways accounted for nearly 12 percent in 1950,
a decline of two-thirds.) Public welfare accounts
for less than 4 percent of total direct expenditures,
down from over 9 percent in 1950, a decline of more
than half; counties spend about six out of every ten
of welfare dollars.78
Local Tax and Expenditure Limitations
As with the states, local governments also have tax
and expenditure limitations.
 240 PA R T I I I Public and Nonprofit Management
State-Imposed TELs Forty-six states have imposed
some form of TEL on their local governments. Four
of these states, however, require only that their local
governments fully disclose their finances, a wholly
reasonable “limitation.”79
Four states limit their local governments’
general revenue growth, and eight limit local general
expenditure growth.80
By far the states’ most favored form of local tax
limitation, however, focuses on their local govern-
ments’ primary source of tax revenue, the property
tax. As early as the 1880s, when the states began
granting home rule to their communities, legisla-
tures were restraining their local governments’ use
of the property tax,81 and today thirty-three states
limit property tax rates in their municipalities, coun-
ties, or school districts, including twenty-three that
impose this limit on all three types of local govern-
ment. A dozen states limit how much a property may
be assessed. Twenty-eight combine caps on both tax
rates and property assessments, a policy known as a
property tax levy limit, which constrains the growth
of overall property tax revenue.82
Local Voter-Imposed TELs Voters in 13 percent
of cities have enacted TELs on their municipal gov-
ernments that are “distinct from (and more stringent
than) any fiscal restriction imposed by their state gov-
ernment.” Of these cities, 42 percent constrain prop-
erty tax rates, 15 percent limit property tax levies,
and 7 percent cap assessments. Nine percent impose
limits on local sales taxes (no state legislature has
done this83), and 6 percent limit their own general
revenue or expenditures. Voters in cities with home
rule charters, that are in metropolitan areas which
have few municipalities, and that have rapidly chang-
ing populations are the most likely to adopt TELs.84
Do TELs Reflect Local Preferences? The irony in
local TELs, whether they are mandated by the states
or (in a small minority of municipalities) local voters,
is that most local residents display a firm willingness
to pay for local services. It is not at all clear that these
limitations actually are what most people want.
A survey of more than 1,400 households
in politically and fiscally conservative Phoenix,
Arizona, found that from more than half to nearly
four-fifths of all respondents were willing to pay
for twenty-three (or 82 percent) out of twenty-eight
local services, ranging from wastewater plants to
libraries. “These findings buttress previous reports
that residents will pay for local public services and
are willing to be reasonable when confronted with
matters of local public finance.”85 Stunningly, the
poor are “overwhelmingly” more willing to pay for
local services than are the wealthy.86
The Effects of Local TELs A massive study of
TELs’ impact on the finances of 724 cities over
thirty-six years found that TELs’ overall impact is
the reverse of what its advocates believe, and actu-
ally leads to more revenue. “TELs lead to consid-
erable reductions in property taxes but substantial
increases in sales taxes, income taxes, and user
charges per capita. . .. resulting in a net gain of total
municipal general own-source revenue per capita. . ..
TELs may have unintended consequences and lead
to bigger government.”87
TELs also raise other costs to citizens. An anal-
ysis of nearly 2,700 counties over thirty years con-
cluded that tax and expenditure limitations led to
increases in the counties’ service charges.88
TAXING TIMES: DETERMINING
TOLERABLE TAXES
In 1938, when taxes imposed by all governments
relieved Americans, on average, of 17 percent of
their income, “nearly half” of the citizenry thought
that they paid too much in taxes relative to what
they got in return. Today, a “remarkably similar”
46  percent think this, even though the average tax
bite has nearly doubled.89
That Americans’ views of taxes remain fairly
constant over time, even as their taxes rise, may
reflect tax systems that might be improving with age.
The Five Fundamental Features of
Tolerable Taxes
All tax systems share five features that determine
their tolerability to taxpayers. They are:90
■ Transparency: A tax’s structure that taxpayers
are able to understand.
■ Administerability: Government can collect the
tax easily and cost-effectively.

■ Simplicity: Low costs to taxpayers in
complying with tax policy.
■ Efficiency Costs: The price of creating and
collecting the tax.
■ Equity: The fairness of the tax. Happily, a
review of research on this issue concluded
that, “The United States has by far the most
progressive income, payroll, wealth and
property taxes of any developed country.”91
But, as we shall, see some equity problems
remain.
Adjusting any one of these elements invariably alters
each of the remaining four.
Understanding the Income Tax
The income tax is the single most consequential and
productive tax in public finance.
Issues with Income Taxes Together, personal and
corporate income taxes account for almost two-
fifths of all tax dollars collected by all governments,
including those governments that do not levy income
taxes.92
A regressive income tax taxes higher incomes
at a lower rate than it taxes lower incomes. A pro-
portional income tax, or flat tax, taxes all incomes,
high and low alike, at the same rate. A progressive
income tax taxes higher incomes at a higher rate
than it taxes lower incomes.
Although pollsters find that majorities of
Americans “have not heard the term ‘progres-
sive taxes,’ philosophically it is the approach they
prefer.”93 Accordingly, most governments, including
the federal one, that levy a broad-based personal
income tax try, at least nominally, to apply a mod-
erately progressive tax rate; eight of the forty-one
states with this tax, however, levy flat tax rates on
personal income.94
The federal corporate income tax is ostensibly
progressive, ranging from 15 to 35 percent. When
the average state corporate income tax is included,
corporations in the top tax tier pay just under
39 percent.
The states emulate Washington, but use a differ-
ent (and more straightforward) method: thirty-three
of the forty-seven states with a corporate income tax
employ a flat rate.95
Financing and Budgeting Governments 241
The Federal Experience Income taxes are vital
to federal finance. Washington’s taxes on personal
and corporate incomes amount to 54 percent of all
federal revenue, and the federal government rakes in
82 percent of all income-tax dollars collected by all
governments combined.96
The downside of federal income taxes is that
they fail, in the view of many, to fulfill the five crite-
ria of a tolerable tax.
Transparency Is Tarnished “Numerous tax provi-
sions have made it more difficult for taxpayers to
understand how their tax liabilities are calculated,
the logic behind the tax laws, and what other tax-
payers are required to pay.”97 Witness, for example,
the massive confusion among taxpayers concerning
tax policies: each year, the Internal Revenue Service
(IRS) receives 299 million website visits, 277 million
website searches, and 77 million telephone calls, and
all concern taxpayers’ tax questions.98
Administerability Is Occluded Administerability is
not merely the responsibility of the IRS, but is also a
duty of taxpayers, employers, tax professionals, and
a teeming host of others. Estimates of their adminis-
trative costs range from $100 billion to $200 billion
per year,99 so administerability is as important as the
word itself is awful.
Simplicity Is Scarce As we noted in the introduc-
tion to Part III, the United States’ tax code totes up to
nearly four million words, and is the world’s longest.
France’s and Germany’s tax codes are less than a
tenth of the length of that of the United States.100
The instruction booklet accompanying Form
1040, the individual itemized income tax form, has
grown from two pages in 1935 to 211 pages today.
Individual income taxpayers, 94  percent of whom
hire accountants or buy software to help them
prepare their tax returns, devote thirteen hours, on
average, to tax preparation.101 There are no compre-
hensive estimates of the cost to taxpayers of com-
plying with the federal tax system, but the broader
studies suggest a magnitude of 2 to 5  percent of
GDP.102 Small wonder that 56 percent of Americans
have a “negative reaction to doing their income
taxes,” and 26 percent “hate doing them.” (Twenty-
nine percent rather like the experience, and 5 percent
“love” it.)103
 242 PA R T I I I Public and Nonprofit Management
The complexity and staggering size of the
federal tax code likely lower business activity. The
United States’ top two “most problematic factors for
doing business” are tax rates and tax regulations,
respectively.104
Efficiency Is Impaired Though difficult to measure,
partial estimates “suggest that the overall efficiency
costs imposed by the tax system are large – on the
order of several percentage points” of GDP.105
Taxpayers’ voluntary compliance with tax
policy is central to a tax system’s efficiency, and it is
heartening that relatively few Americans deliberately
evade taxes. The untaxed underground economy in
the United States is estimated to be 8 percent of
GDP, compared with, say, Greece’s, at 30 percent.106
Nevertheless, because of persistent levels of noncom-
pliance by less than 9 percent of American taxpay-
ers, an estimated 16 to 17 percent of federal income
taxes owed go uncollected each year, figures that
decline by 3 points apiece after investigations are
conducted.107 Reducing this net tax gap (about $385
billion following recovery investigations) by just 1
percent would fund, for example, the annual budget
of the entire National Park Service.108
Equity Issues Tax expenditures—that is, exemp-
tions, tax credits, deductions, exclusions, deferrals,
preferential tax rates, and other loopholes—from
federal personal and corporate income taxes more
than doubled over thirty years, and the tax revenue
lost because of them tripled.109 Today, there are an
astonishing 169 personal and corporate income tax
expenditures, divided about equally between the two
income taxes, which reduce tax revenue by $1.23
trillion annually, an amount comparable to federal
discretionary spending.110
Personal Income and Payroll Taxes: Due in part
to tax expenditures, 45 percent of American house-
holds, almost all of them at the lower income rungs,
pay no federal personal income tax at all.111 Likely
because of the complexity engendered by this tangle
of tax expenditures, taxpayers do not always claim
what they are due; 14 percent of tax filers fail, for
example, to collect an education credit for which
they are probably eligible.112
A different sort of inequity pervades that
important variant of the personal income tax, the
compulsory payroll tax (or FICA, described earlier).
Its Social Security portion, which accounts for
more than four-fifths of the payroll tax, is quite
regressive. After an employee has been paid a set
amount ($118,500 in 2016) for the year, the Social
Security tax stops, and then re-starts at the begin-
ning of the next calendar year. (For example, if an
employee were paid $237,000 in 2016, then the
contribution to Social Security would disappear
from his or her paycheck after June, and reappear
in January of 2017.) If an employee’s annual pay
does not exceed the pre-established payroll limit,
then the tax never stops, and this is the case for
the vast majority of Americans: about four-fifths
of all  Americans,113  an  astounding 86 percent of
all households with wage earners, and about two-
thirds of all taxpayers (including retirees, who pay
no payroll tax), pay more in regressive payroll
taxes than they pay in progressive federal personal
income taxes.114
The remaining fifth of the payroll tax, Medicare,
differs from Social Security in that it has no payroll
cap, and is a flat tax. Nevertheless, the “average effec-
tive tax rate” of the payroll tax, both Social Security
and Medicare combined, is clearly regressive, with
the richest fifth of payroll taxpayers taxed at a rate
that is more than two-fifths lower than the average
rate paid by each of the remaining four fifths.115
The Corporate Income Tax: The federal cor-
porate income tax, like the personal one, also con-
tains equity issues, notably that of at least eighty
tax expenditures.116 As a result, and even though
the federal corporate income tax ostensibly ranks
among the most burdensome such tax in the world,
at least on paper, large profitable corporations paid,
on average over seven years, just 14 percent of
their pretax income in federal taxes. At least two-
thirds of all American corporations and 42 percent
of the larger ones paid no federal tax over seven
years, and nearly a fifth of all large companies that
made a profit paid no federal tax over five years.117
Washington loses more than $181 billion annually
in corporate income tax revenue because of tax
expenditures.118
Understanding the Sales Tax
The sales tax is the purview of the states, accounting
for 34 percent of the states’ (and almost 11 percent of
local governments’) own source general revenue.119

A Regressive Tax Although the sales tax taxes
all consumers at the same rate, its burden inevita-
bly falls on those consumers who are poor. Because
the poor must spend a greater proportion of their
money on essentials, such as medicine and food, the
indigent effectively are taxed at a higher rate than
are the wealthy.
States have attempted to alleviate the more
regressive elements of the sales tax by exempting
basic necessities. All of the forty-five states with a
sales tax exempt prescription drugs, and thirty-seven
exempt groceries.120 These sorts of measures relieve,
but cannot eliminate, the sales tax’s structurally
regressive nature.
Issues of Inequity, Intricacy, and Obscurantism In
addition, the sales tax seems to be uncommonly
buffeted by the political winds of the day. Powerful
(or at least stealthy) legislators have been known to
exempt favored constituents from the sales tax with
no apparent economic or philosophic rationale for
doing so.
Florida’s legislature, for example, has exempted
some 440 transactions from its sales tax, thereby
exempting more than two-fifths of all purchases
and slashing sales tax revenue by more than three
out of every ten sales-tax dollars.121 Charges for
charter fishing trips in Florida’s waters are exempt,
but not charges for fishing rods; food for racehorses
is exempt, but not food for cats and dogs; lawn
mowing services are exempt, but not lawn mowers.
One state senator confessed that he had voted
unwittingly for many of these exemptions because
they had been “sneaked through.”122
Florida is by no means the exception. Thirty
states have exempted the sale of custom computer
programs, and thirteen exempt “repairers.”123 The
logic justifying these and other exemptions is not
obvious.
Understanding the Property Tax
The property tax, as the principal tax for local gov-
ernments, accounts for 47 percent of local govern-
ments’ (and 1 percent of state governments’) own
source general revenue.124
Another Regressive Tax As with the sales tax,
the  property tax has some regressive elements,
Financing and Budgeting Governments 243
although it is generally less regressive than the sales
tax.125
As a practical matter, the property tax con-
centrates on people’s homes as its major source of
revenue. Middle-class homeowners have a relatively
large portion of their wealth tied up in their resi-
dences. By contrast, the wealthy have proportion-
ately less of their wealth parked in their homes.
Hence, the property tax collects a greater propor-
tion of the middle class’s wealth than it collects from
the rich. It also collects relatively more money from
the poor. The poor rent their homes more frequently
than the better-off classes, and their landlords pass
on the cost of their property taxes to their tenants.
Relieving Regression State governments have
attempted to ameliorate the regressiveness of the
local property tax through four main mechanisms.
One is assessing or taxing residential property
less than commercial property. Half the states either
assess residential property at lower levels (eighteen)
or tax residential property at lower rates (seven)
than commercial property.
Another is the circuit breaker, which auto-
matically “trips” when the property tax overloads
a property owner’s pre-established income level.
The owner is not required to pay above that level.
Thirty-five states have circuit breaker programs, and
two-thirds of these states offer circuit breakers to
renters as well as to homeowners.126 Because circuit
breakers often are poorly publicized and application
procedures can be onerous, however, it appears that
perhaps less than half of eligible property owners
take advantage of circuit breakers.127
Forty-seven states protect homeowners through
homestead exemptions, which shield from property
taxes some portion of the value of a home, or through
property tax credits, which straightforwardly reduce
the property tax bill. Twenty-six states apply one or
both of these interrelated policies to nearly all home-
owners, and the remainder limit them to the elderly
(eighteen states), disabled (twenty-three), or veterans
(forty-one). Fifty-seven percent of these programs
are funded entirely by local governments, 28 percent
by the states, and 15 percent by local and state gov-
ernments.128
While helpful, these attempts to ameliorate the
property tax cannot render it progressive because, as
with the sales tax, it is structurally regressive.
 244 PA R T I I I Public and Nonprofit Management
America’s Most Disliked Tax The property tax
is the most disliked tax among Americans.129 Not
only does it penalize property taxpayers with fixed
incomes, but it also has severe problems of adminis-
terability because it relies on the varying consistency
of government assessors who determine the value of
individual properties—a “lack of uniformity” that is
its “greatest problem.”130
THE FUTURE OF TAXES
Whether federal, state, or local, tax systems cry for
reform. A major reason (but not the only reason)
why reform is critical is the widening wealth gap,
which has been accelerated, in part, by tax policy.
The Widening Wealth Gap and Its Crushing
Consequences
About three-fifths of the public agree or strongly
agree that “differences in income in America [are]
too large,” a figure that has remained in this numer-
ical ballpark since the late 1980s.131
Americans’ belief is founded on fact. Since
1979, the top 1 percent of income earners more
than doubled their share of the nation’s inflation-
adjusted, after-tax income, rising from 8 percent to
17 percent, and now account for nearly 24 percent
of Americans’ total income, a share that has not
been seen since 1928. For the most affluent fifth,
income increased by 10 percent; for the three-fifths
of the population in the middle, it declined by 2 to
3 percent, and, for the bottom fifth, income slid by
18 percent.132 Over thirteen years, the middle class
shrank in every single state.133 America’s income gap
is not only far wider than Europe’s (with the single
exception of Georgia), Canada’s, and Japan’s, but
it is even wider than India’s, Iran’s, and Uganda’s,
among others.134
Well, so what? So quite a lot, actually. Putting
aside concerns over social justice that a wide wealth
gap can engender, the gap also has some very practi-
cal, and destructive, effects.
For one, large income disparities damage econo-
mies. Greater income inequality associates with less
rapid economic growth, whereas lesser inequality
correlates with faster growth.135
Lower economic growth associates, obvi-
ously, with lower tax revenue for all levels of
government. State government revenues, for
example, decrease as the wealth gap widens
because  the rich can, and do, shield their incomes
and assets more effectively than the poor and
middle class. Furthermore,  the rich spend  propor-
tionately less of their income  than  others, thereby
limiting revenue  generated  by the sales tax, on
which the states rely far more heavily than do the
federal and local governments. “A one-unit increase
in the share of income going to the top percentile [of
income earners] had a negative impact on [state] tax
revenue growth.”136
A related consequence is that income inequal-
ity stymies needed public policymaking. The greater
the income inequality, the deeper the political polar-
ization of the United States, which leads directly to
political gridlock.137
It follows that higher income inequality cor-
relates strongly and positively with less social and
economic upward mobility.138 Forty-three percent
of American children born to the poorest families
(the bottom fifth in income) remain in poverty as
adults, and a slender 4 percent become the highest
earners.139
Additional destructive social effects of wide
wealth inequalities include higher rates of homicide,
infant mortality, drug abuse, obesity, teenage births,
and imprisonment, and lower rates of life expec-
tancy and educational performance.140
Reforming tax policies, whether federal, state,
or local, can reduce the deleterious effects of the
wealth gap. There can be additional benefits as well,
but, depending on the reform, some damage is possi-
ble, too. We consider these next.
Rethinking Federal Taxes
Proposals for federal tax reform range from the
incremental to the radical.
Reforming Federal Income Taxes A satisfying
61 percent of Americans (including majorities of
Democrats, Republicans, and independents) view
their own federal tax payments as fair, and most
regard paying taxes as a civic duty. At least three-
fifths of Americans, however, are deeply troubled by
their perception that some corporations and wealthy
people do not pay their fair share of federal income
taxes.141

Enter reform. Proposed reforms of the income
tax focus on the rich, tax expenditures, and simpli-
fication.
Bracketing the Top The concentrating, after-
tax real income at the top has been abetted by
federal income tax policies that, over three decades,
increasingly have favored the very rich.142 The top
tax  bracket taxes individual annual incomes of
about $400,000 and higher at 39.6 percent. But the
top 400 earners rake in, on average, nearly a thou-
sand times that amount, or almost $345 million
annually per capita.143 Not only would a few more
brackets at the top bring in “tens of billions of
dollars” in new revenue, but they also would vastly
improve tax equity, with only marginal effects on
the remaining four factors. Adding more progres-
sive tax brackets is a proposed reform that, perhaps
unsurprisingly, garners “overwhelming support”
among taxpayers, both conservative as well as
liberal.144
Tackling Tax Expenditures Eliminating or nar-
rowing tax expenditures, particularly the two largest
loopholes—employer contributions to medical
insurance premiums and deductions of mortgage
interest on owner-occupied homes—not only would
render Washington’s income taxes more equitable,
but also more efficient, simple, transparent, and
administerable.145
Simplifying Taxes Simplifying income reporting
by integrating the personal and corporate income
taxes, or by replacing their progressive rates with flat
ones, would improve the system’s efficiency, simpli-
city, and administerability, but perhaps not its equity
and transparency.146
A Federal Tax on Consumption? Some reformers
focus not on income but on outgo, and urge that
Congress eliminate, or at least radically reduce, the
income tax and make up the loss with some sort of
consumption tax. American consumption taxes (i.e.,
sales and excise taxes) currently account for about
4 percent of GDP, much less than in Europe.147
Consumption taxes, while rife with equity issues,
can generate immense revenue.
One such proposal is the imposition of a national
retail sales tax. Less than a fourth of Americans think
Financing and Budgeting Governments 245
that a federal sales tax is a “good idea,” and nearly
two-fifths believe that it is a bad one.148
Another consumption tax is the value-added
tax, or VAT, which taxes the difference between a
firm’s sales and its purchases of goods and services,
the logic being that each sale marks a value added
to the product purchased. The VAT also has been
defined, less charitably, as “an embedded sales tax
that hides all those nickels and dimes along the pro-
duction chain.”149 Introduced in 1954 by France,
the VAT is now used by 136 countries, every one
of which also has an income tax. There is some evi-
dence that a value-added tax may be “less expen-
sive to administer than an income tax,” although it
is complex and compliance burdens are weighty.150
Rethinking State and Local Taxes
“Every state fails the basic test of tax fairness. . .. The
lower one’s income, the higher one’s overall effec-
tive state and local tax rate.”151 Still, over twenty-
seven years, combined federal and state tax policies
reduced income inequality; about two-thirds of that
reduction is attributable to the feds.152
The poorest fifth of Americans (who earn less
than $18,000) pay, on average, nearly 11 percent
of their incomes in state and local taxes, and the
rate steadily decreases, without exception, for each
wealthier quintile that follows, one after the other.
For example, on average, the next poorest fifth pays
slightly less than 10 percent; the wealthiest fifth
pay not even 8 percent, and the top 1 percent (who
earn a minimum of $419,000) pay a bit more than
5 percent. In the ten states with the most regressive
taxes, the poorest fifth can pay a rate that is as much
as seven times higher, and the middle fifth can pay a
rate that is up to three times higher, than that of the
richest 1 percent.153
As one would expect, the ten most regressive
states heavily rely on sales and excise taxes for their
revenue, and provide no circuit breakers for the
property tax; five of these states have “little or no
income tax,” three tax income at a flat rate, and two
have a “low top rate.”154
The personal income tax, however, is not
immune. Of the forty-one states with broad-
based personal income taxes, all but one (and the
District of Columbia) copy large swaths of the
income tax expenditures found in the federal tax
 246 PA R T I I I Public and Nonprofit Management
code—loopholes that often associate with effectively
regressive tax bills. Although these forty states are
not obliged to link their tax expenditures with federal
ones, the states appear to follow Washington’s lead;
when the federal personal income tax was last over-
hauled, in 1986, “most [states] accepted the bulk of
the changes.” Should the states copy the hypothetical
elimination of forty-two of the major federal per-
sonal income tax expenditures (which account for
80 percent of foregone federal revenue), then total
state individual income tax revenue would increase
by 34 percent.155
So, how should states and localities reform
their tax systems? Eliminate or reduce their reliance
on regressive taxes, particularly the sales tax, and
introduce or refine progressive taxes, especially the
personal income tax. The catch here, however, is
that the states’ income taxes, both personal and cor-
porate, are highly volatile and are becoming more
so, and the revenue that they generate is growing
at an ever-slowing rate, a “nasty combination” that
renders budgeting even more difficult.156
OF DEFICITS AND DEBTS:
WASHINGTON’S GIFTS
Much of the fiscal turmoil that is battering govern-
ments can be laid at Washington’s door.
Understanding Federal Deficits
A deficit occurs when a government’s annual spend-
ing exceeds its annual income. To make up the dif-
ference, the government raises taxes or borrows
money. For well over a generation, Congress has
favored lower taxes and bigger borrowing.
Federal Deficits and the Economy In general,
small or no federal deficits and little or no federal
borrowing are good for the economy because they
lower long-term interest rates and check inflation.
Under certain circumstances, such as a recession,
even very high deficit spending can actually help
restore the economy’s health.
Keeping in mind the caveat that economics is a
field distinctive for its disputatiousness (as a distin-
guished economist once remarked, “Ask five econo-
mists and you’ll get five different answers—six if one
went to Harvard”157), economists generally agree
that, as long as annual deficit spending does not
surpass annual economic growth, deficits cause little
economic harm. Many economists peg a relatively
safe rate of deficit spending at around 2 percent of
GDP or lower, and a perilous rate at 5 percent or
higher.158
The Awful Eighties The federal budget balanced
(that is, income equaled or surpassed outlays) in
two-thirds of the 129 years stretching from 1789 to
1916, after which fiscal discipline deteriorated.159
In only four years since 1950 have there been
surpluses. Historically, deficits have not been large
as a percentage of GDP, but, beginning in the 1980s,
this tradition was abandoned, as Washington’s
“commitment to traditional fiscal rules, such as bal-
ancing revenues and spending . . . eroded.”160
In just three years, deficits doubled from 3
percent of GDP in 1980, to an astonishing 6 percent
in 1983, and, by 1992, deficit spending had increased
fivefold. Observers attribute this quintupling to the
“watershed” Omnibus Budget Reconciliation Act of
1981, which cut individual income taxes by about a
fourth but ignored spending.161
Before 1980, conservatives had routinely
accused Washington of “tax-and-spend” profligacy;
after 1980, this profligacy was better described as
“borrow and spend”—or, as some wags would have
it, “spend and spend.”
Congress’s Quixotic Quest: Decreasing
Deficits, 1985–2001
Americans understand the gravity of the big and
unremitting deficits of the last four decades. “A
sweeping majority,” 70 percent, worry about the size
of the federal deficit “some” or “a lot.”162
Congress listened, and launched a long, and
quixotic, quest to lower deficit spending.
Failure Initially, Congress enacted two laws
designed to bring the deficit under control: the
Balanced Budget and Emergency Deficit Control
Acts of 1985 and 1987. The 1985 act was designed
to achieve a balanced budget by 1990, which the
1987 act extended to 1993, through sequestration,
or a series of automatic, across-the-board spend-
ing cuts (interest payments and most entitlement

programs were exempt) that would come into play
if the federal budget did not fall within $10 billion
of targeted deficit reductions. Congress avoided the
unpleasantness of sequestration by adopting overly
optimistic economic forecasts in its budget making,
and the laws never lived up to expectations.
Success Congress got relatively tough in 1990 and
passed the Budget Enforcement Act. The legislation
required that new discretionary spending, new tax
cuts, and congressional expansion of entitlement
programs (but, significantly, not budgetary expan-
sions that were already built into the design of these
programs) must be offset with new, or reallocated,
revenue. This requirement was known as “PAYGO,”
an acronym for “pay as you go.” PAYGO’s spending
caps were set in the legislation to expire automati-
cally in 2002.
Cents and Sensibility The Omnibus Budget
Reconciliation Act of 1993, which passed the Senate
by one vote (the vice president’s), raised taxes by
some $250 billion, and cut programs by a similar
amount, over five years. Mostly as a result of the
act and its predecessor, the Budget Enforcement Act,
from 1992 to 2000 federal spending as a percent-
age of GDP declined steadily by about 1 percent per
year.163
Frustration and Finances In 1996, a still-frustrated
Congress passed the Line-Item Veto Act, which,
remarkably, granted the president the line-item
veto, or rescission, which is the power of the elected
chief executive to delete parts of a bill passed by the
legislature, but still sign the remaining bill into law.
(Forty-three governors have this authority.) In 1998,
the Supreme Court ruled that the act was unconsti-
tutional because it allowed the president to “cancel”
a budget item, rather than “decline to spend” it.164
It seems clear that rescission would have lowered
deficits. If presidents had had the line-item veto, they
would have trimmed federal spending by an average
of nearly 7 percent annually over five years.165
Congressional Cheating Despite declining deficits,
deficit wrangling intensified, and, in 1997, Congress
enacted the Balanced Budget Act, which solemnly
pledged to eliminate federal deficits by 2002 via
more stringent spending caps.
Financing and Budgeting Governments 247
Congress almost immediately ignored the caps,
indulging in a spending frenzy that vitiated the
PAYGO principle that it had adopted in 1990. (In
2010, at the president’s request, Congress passed
the Statutory Pay-As-You-Go Act, which reinstated
PAYGO in law, a status that “can help prevent
further deterioration” of federal finances, but will
not balance budgets.166) Congressional wiliness in
circumventing the caps took many creative forms,
including simply raising the cap limit, but a favorite
was the use of “emergency” funding, which was
exempt under the act. “Emergencies” included
funding the decennial census, an item that has been
in the Constitution for all or parts of four centuries.
Average annual emergency funding in 1999–2002
was five times greater than in 1991–1998.167
Nirvana Attained? The Budget Surpluses In 1999
(Fiscal Year 1998), the federal government not
only had no deficit, but also produced an impres-
sive surplus of $70 billion. It was the first surplus
in twenty-nine years, or since 1968, when a modest
surplus of $3 billion was achieved. In 2000, the
surplus hit $127 billion, and, in 2001, $236 billion.
Though welcome, these surpluses were not
wholly deserving of full-throated cheering because
they included (as do all federal deficit/surplus cal-
culations) the surpluses generated by Social Security
and the Postal Service. Because Washington does
not include these unique “off-budget entities” in its
spending (i.e., in its budgets), but does include them
in its revenue, its books look better than they are.
For instance, including the off-budget entities in the
surplus budgets would have converted the 1999 and
2000 surpluses into deficits and eradicated most of
the 2001 surplus.168
Federal Fiscal Follies, 2001–2012
Washington welcomed the millennium with una-
bashed and unprecedented fiscal irresponsibility.
In 2001, Congress passed, at the president’s
urging, the Economic Growth and Tax Relief
Reconciliation Act, which cut federal taxes by a
record $1.35 trillion over ten years. Congress added,
expanded, accelerated, or deepened these and other
cuts over the ensuing six years.
As revenue shriveled, spending splurged. In
2002, the Budget Enforcement Act’s spending caps
 248 PA R T I I I Public and Nonprofit Management
automatically terminated and, with them, any legal
obstacles (no matter how limp) to profligacy. After
eight years in which federal spending as a percentage
of GDP had steadily declined, federal spending as a
percentage of GDP actually grew, from 18 percent of
GDP in 2001 to over 20 percent in 2007.169
Compounding these trends was war. Between
2001 and 2016, the wars on terror (e.g., Afghanistan,
Iraq, Pakistan, Syria), including interest rates on
borrowed money to fund them (about $500 billion),
cost nearly $3.7 trillion; when projected costs to
care for veterans are included, the total reaches
almost $4.8 trillion. Other than World War II, the
wars on terror were America’s costliest. And, unlike
other American wars, which were funded largely by
taxes, the wars on terror were funded almost entirely
by borrowing.170
Needless to say, these foolhardy fiscal policies
affected federal deficits, which, like a bad penny,
returned in 2002.
Fiscal Free-Fall and Keynesian Cures Then the
bottom fell out. In the final days of 2007, the United
States spiraled into economic free-fall, and sank into
the deepest recession since the Great Depression of
the 1930s.
In response, Washington applied Keynesian
measures. Between 2008 and 2010, Congress cut
taxes even deeper and pumped almost $2 trillion
into the economy. As a consequence, from 2009
through 2012 federal deficits were considerably
more than $1 trillion per year and, astoundingly,
ranged from 7  percent to more than 10 percent of
GDP. Times have been worse. The World War II
years saw deficits ranging from 14 to 30 percent of
GDP.171 Still, it is worth keeping in mind that only
eight nations have GDPs that are larger than each
one of America’s trillion-dollar-plus deficits.172
Stupidity Squared By 2011, Washington was bor-
rowing forty-one cents out of every dollar that it
spent, and, in January of that year, the largest fresh-
man class in more than sixty years entered the House
of Representatives. It was a perfect storm.
The storm sought to drown the debt ceiling. This
misleading moniker implies that Congress votes to
incur yet more debt, but, in reality, the debt ceiling
merely requires that Congress vote to pay the nation’s
debt that Congress itself already has racked up.
When the deadline for raising the debt ceiling
came up for renewal, in 2011, many of Congress’s
new members (who were far more passionate about
smaller, more constrained government than bal-
anced budgets) insisted that they would vote not to
raise it unless it was accompanied by spending cuts
and no new taxes. And they had the votes to block it.
The political establishment was shocked. The
debt ceiling had been raised routinely since the
Second Liberty Bond Act of 1917 established it.
The business establishment was even more
shaken, and understandably so. If the ceiling were
not extended, then the nation would default on its
debts. Default, or a debtor’s illegal refusal to pay a
debt, would assure long-term economic catastrophe.
To continue paying its debts, and avoid catastrophe,
Washington would have to cut spending by some
$600 billion per year, cuts that would be pretty cat-
astrophic in and of themselves.173
Calamity was barely averted when, with just a
few hours remaining before the United States would
be forced to stiff its creditors, Congress raised the
debt ceiling. The price was steep: No new revenues
but significant spending cuts—$917 billion over ten
years.
It got worse. In 2011, one of the three principal
credit rating firms lowered its rating of long-term
U.S. Treasury bonds from AAA, the highest possible
rating (which all rating agencies had accorded the
bonds since 1941), to AA+, the next highest, because
the firm’s analysts were concerned about the size of
the U.S. debt and, even more, by Washington’s ina-
bility to deal with it.
The debt-ceiling brawl itself cost more than an
additional $1.3 billion in added federal borrowing
costs and employee overtime,174 during which the
stock market plummeted by 17 percent. Household
wealth fell by $2.4 trillion between the second and
third quarters of 2011.175
Americans were not pleased with what they
viewed as an irresponsible political circus that rattled
their, and the globe’s, confidence in the nation’s
fiscal accountability. “Nearly three-quarters” of
Americans polled “offered a negative word” about
the budget negotiations, led by “ridiculous,” “dis-
gusting,” and “stupid”; “just 2 percent had any-
thing nice to say.”176 A clear majority favored, and
still favors, what virtually every economist believes
is a necessity: a balanced approach to a balanced

budget,  one that includes more revenue as well as
less spending.177
Stupidity Cubed The law that raised the debt ceiling
was the Budget Control Act of 2011, which also
stipulated that, if Congress failed to produce at least
$1.2 trillion in cuts before 2013, then, from 2013
to 2021, an annual across-the-board sequestration
totaling $1.2 trillion would automatically take place.
These mindless sequestrations were widely viewed
as so destructive (61 percent of Americans, including
majorities in both parties, would undo some or all of
the cuts, compared with just 18 percent who would
keep all of them178) that Congress would be forced
to make more reasoned cuts and add revenue.
Wrong. Sequestration began in 2013, and, over
that fiscal year alone, nineteen out of twenty-three
agencies surveyed curtailed hiring and/or cut train-
ing, sixteen reduced or delayed contracts for “core
mission activities,” and seven furloughed 770,000
employees.179 Sixty-one percent of federal contrac-
tors surveyed reported significant revenue losses
due to sequestration.180 It cost the states more than
$5 billion in federal grants and loans.181 Locally,
sequestration cut 41,000 very poor households from
rent assistance and enlarged class sizes in some ele-
mentary schools, among other negative effects.182
Sequestration cost Americans an estimated 1.6
million jobs over the year.183
Internationally, sequestration (along with the
federal government’s partial shutdown of 2013,
discussed later) altered national defense policies; a
former high American Defense executive reported
that his colleagues in four large Asian countries
agreed “that sequestration helped convince them
[of] the need to start adjusting strategic perspective
to accommodate a rise of China because apparently
the U.S. has a dysfunctional system and they can’t
even pay their government employees.”184
In the same year that sequestration began,
Representatives introduced a bill that would estab-
lish a national park on the moon! (We are not making
this up.) One is reminded of Walter Lippmann’s
famous phrase: “With exceptions so rare they are
regarded as miracles of nature, successful democratic
politicians are insecure and intimidated men.”185
In an apparent reality test of Lippmann’s assess-
ment, an intimidated Congress, in 2013, reacted
to the broad revulsion of its own recklessness and
Financing and Budgeting Governments 249
passed a Bipartisan Budget Act, which raised the
dollars permitted under the sequestration caps
for fiscal years 2014 through 2015 in exchange
for extending sequestration to 2022 and 2023. In
2015, Congress passed another Bipartisan Budget
Act, which increased spending by $112 billion. The
relieving result of both acts was that there were no
defense and nondefense sequestration cuts made in
fiscal years 2014 through 2017.
An Awful Anachronism The federal debt ceiling is
an anachronism. The only other democratic nation
with a comparable policy is Denmark.
Most American states also have debt caps, but
they are designed for flexibility and not to cap the
total debt level. More often than not, for example,
the states express these caps as ratios (e.g., 4 percent
of personal income), which reflect natural economic
growth, and eschew Washington’s policy of using
absolutist dollar amounts, a policy that increasingly
is causing grave fiscal mischief.186
A Remarkable Reversal, 2013–Present
Despite congressional hostility to raising taxes, in
2013 thirteen federal taxes went into effect that
were new, renewed, raised, or phased, ranging
from increased rates on capital gains on the highest
incomes, to the automatic renewal of the higher, pre-
2011 payroll tax for Social Security and Medicare.187
These taxes, plus spending cuts initiated in the same
year and lower-than-anticipated healthcare costs and
interest rates, resulted, beginning in 2013, in annual
deficits that were less than $1 trillion. In Fiscal Year
2015, the deficit was 2.5 percent of GDP; it is pro-
jected that deficits will range from 2.3 to 3.3 percent
of GDP from fiscal years 2016 to 2021 and quite
possibly less thereafter, as their trajectory after 2016
is essentially downhill. Since 2012, deficit spending
has fallen at a faster rate than at any time since the
end of World War II.188
This trend is very good news indeed: a perma-
nent deficit reduction of only 1 percent as a share
of GDP would, after fifty years, amount to nearly
$2,000 in real higher annual income for every man,
woman, and child in the United States.189
Still, difficulties remain. Under current policies,
Social Security’s trust fund will be “exhausted” by
2033,190 and Medicare’s trust (whose shortfalls for
 250 PA R T I I I Public and Nonprofit Management
just the program’s prescription benefit “alone exceed
the unfunded obligations for Social Security”191)
will remain fully solvent only until 2024.192
Understanding Federal Debt
Big deficits bring big debt. The federal government
owes a total debt of nearly $19.6 trillion193 (a sum
projected to hit more than $23 trillion by 2021), or
102 percent of annual GDP.194 Congress incurred
the nation’s first debt in 1790 ($75 million to finance
the Revolution), and the only year in which the
United States had no debt was in Fiscal Year 1834
(1834–1835).
Historically, a humongous federal debt has
been an aberration. From the nation’s first fiscal
year of 1797, the federal debt as a percentage of
the economy “rose substantially only as the result
of wars and recessions.”195 After 1980, however, this
pattern changed radically, even though the times
were mostly peaceful and prosperous.
Public, or National, Debt The traditional type of
federal debt is public, or national, debt, which is
composed largely of the federal government’s debts
owed to foreign countries and to holders of its
bonds, such as U.S. Savings Bonds.
In 1980, public debt accounted for nearly 26
percent of GDP. By the fall of 2007, just prior to the
advent of the Great Recession, it had swollen by a
third to over 35 percent. Public debt peaked at more
than 74 percent in 2015, and was projected to range
from more than 75 percent to nearly 77 percent of
GDP from 2016 to 2021. (The public debt’s all-
time record in this regard was achieved in 1946,
when it accounted for not quite 109 percent of the
economy.)196 Today, nearly half of the public debt is
the direct result of wars and tax cuts.197
Gross, or Total, Debt The other sort of federal debt
is relatively new and is known as gross, or total, debt,
or public debt plus intragovernmental debt, which
is composed mostly of debts owed to trust funds,
notably those of Social Security and Medicare.
Between 1980 and the fall of 2007, the gross
debt’s share of GDP nearly doubled, from 33
percent to 64 percent. It peaked in 2014 at almost
104 percent of GDP, and was projected to steadily
decline from over 105 percent to a bit more than
101 percent of GDP from 2016 to 2021. (The gross
debt’s record was achieved in 1946, when its share
was 122 percent of GDP.)198
Among those developed countries with the
highest total-debt-to-GDP ratios, the United States
ranks seventh. (Japan tops the list.) Almost 31
percent of it is owed to foreign countries, led by
China, which is owed less than 8 percent, followed
closely by Japan.199 The United States would have
to cut costs or raise revenues by nearly 12 percent
to bring down its gross debt to a reasonable level
by 2030; by contrast, that figure in twenty-five
developed countries amounts to an average of
8 percent.200
What Are the Consequences of Big Debt? It is not
entirely clear how debt, whether national or total,
affects the economy. Economists find “some evi-
dence” of a positive correlation between slow eco-
nomic growth and high governmental debt, but are
unsure about which one causes the other.201 What
is clearer is that a large debt: often requires higher
interest payments on it, thereby mandating higher
taxes or reduced services; hinders “policymakers’
ability to use tax and spending policies to respond
to unexpected challenges”; and heightens “the prob-
ability of a sudden fiscal crisis.”202
As we detail later in the chapter, state and local
governments are far less saddled by big debt than
is their federal cousin, and the same may be said of
the nonprofit sector, which seems to manage its debt
more frugally than the public one. It is estimated to
have from $440 billion to $550 billion in total long-
term debt, spending over $20 billion, or 3.7 percent
of its total debt, a year in interest payments. All in
all, there is “a fairly conservative and judicious use
of debt by the nonprofit sector.”203
SUBNATIONAL SORROWS
Subnational governments borrowed recklessly
during the early nineteenth century to fund infra-
structure projects, and, by 1840, they were defaulting
on their debts on a massive scale. One consequence
of these defaults is that all the states closely restrict
the finances of their local governments. Another
is that forty-nine states now require that their
budgets be balanced, and the sole state that does
not, Vermont, “typically has a balanced budget.”204

Besides providing fiscal responsibility, balanced
budget requirements also blunt the capacity of state
politicians to shift state spending to more politically
visible programs (usually at the expense of educa-
tion), such as corrections and welfare, just prior to
gubernatorial elections.205
Admittedly, some state governments have played
games in balancing their budgets (as has Congress),
such as leaving what “balanced budget” means
undefined, borrowing long-term to fund current
expenditures, or omitting long-term spending obli-
gations from their budgets. A regrettable result can
be a “never-ending sense of crisis, [which] leads to
stop-and-go funding of vital programs . . . stifles the
need for serious discussions about policy. . .. [and]
leaves states vulnerable when economic downturns
occur.”206 When all is said and done, however, state
and local governments long have taken “harsh
austerity measures” to balance their budgets “that
would face far more resistance in Washington.”207
Linked
Perversely, and despite these mostly good fiscal
efforts by subnational governments, “the fundamen-
tal fiscal problems of the federal government” and
those of state and local governments “are similar
and are linked.”208
Linked, indeed. Federal “negative impacts” on
the states, such as “the failure of the federal govern-
ment to solve problems in state finances that only
it can solve” (such as its shielding international tax
shelters from taxation, among other issues), have
reduced Washington’s “positive impacts” by fully
one-third, and these negativities are accelerating.209
Healthcare: The Ultimate Linkage
Nowhere is this linkage of federal, state, and local
fiscal challenges clearer than in healthcare.
The Cost of Public Healthcare Healthcare spend-
ing in the United States accounts for almost 18
percent of GDP.210 Federal, state, and local govern-
ment spending for healthcare accounts for more than
64 percent of all national healthcare spending, and
is projected to exceed 67 percent by 2024. (Unlike
official estimates, which calculate that all govern-
mental expenditures for healthcare is 43 percent of
Financing and Budgeting Governments 251
the total, this analysis includes costs associated with
public employees and healthcare-related tax breaks.)
American governments’ healthcare spending, at
11.2 percent of GDP, surpasses the total healthcare
expenditures of any other nation, including those
that provide universal healthcare.211
These impressive figures have particular signif-
icance for the grass-roots governments. Over three
decades, state and local governments’ health-related
spending nearly doubled, from 12 percent of overall
expenditures to 20 percent.212 It is projected that
healthcare’s costs for states and localities will surpass
all their other costs, including personnel, by 2060.213
On the other hand, the rate of growth in healthcare
costs is the slowest in five decades, at 1.6 percent
annually over five years and getting slower;214 this
slowing rate could relieve fiscal pressures for states
and localities (not to mention Washington).
Medicaid and Its Expansion Much of the overall
growth in publicly-provided healthcare is attribut-
able to Medicaid, a federal healthcare grant for the
poor that began in 1965. Over fourteen years, the
amount of the states’ own money spent on Medicaid
(which accounts for nearly 17 percent of the
states’ own general expenditures) grew by almost
two-fifths.215 Prior to the passage, in 2010, of the
Patient Protection and Affordable Care Act, which
expanded Medicaid’s coverage to 17 million addi-
tional recipients, the feds picked up 57 percent, on
average, of Medicaid’s costs. The states contributed
the rest, which, over fifteen years, crept modestly
upward, rising from 14.4 percent to 15.8 percent of
the states’ general fund dollars.216
With the expansion of Medicaid coverage, in
2010, Washington now provides an average of 67
percent of the more than $500 billion spent annu-
ally through Medicaid, and the states contribute the
rest.217 Washington covers or will cover, on average,
an estimated 93 percent over nine years, and the
states’ overall Medicaid costs inch up by less than
3 percent of what the states would have spent over
the same period without the Affordable Care Act’s
expanded coverage. This low estimate for the states
actually “overstates the net impact on state budgets
because it does not reflect the savings that state and
local governments will realize in healthcare costs
for the uninsured.”218 Nor does this modest esti-
mate reflect that about three-quarters (a growing
 252 PA R T I I I Public and Nonprofit Management
proportion) of the portion of Medicaid funding for
which the states are responsible are provided not by
the states, but instead by state taxes levied on health-
care providers, such as hospitals, and funds trans-
ferred to the states by their local governments.219
Moreover, those states that have accepted
expanded Medicaid (thirty-two by 2016, and slowly
growing), in contrast to states that have spurned it
(largely for ideological reasons), “have harvested
enormous rewards,” including: “drastically reduced”
uncompensated costs for charity cases, which states
must shoulder, a reduction that also has directly
strengthened struggling rural hospitals; superior
economic growth (Medicare-expansion states expe-
rienced annual growth rates of 2.4 percent in the
health sector, versus 1.8 percent in those that did
not accept expansion); and recipients who are more
satisfied with their healthcare than those in non-
expansion states, a satisfaction that translates into
“boosts in approval ratings” for governors in expan-
sion states.220
Healthcare for State and Local Employees and
Retirees The next highest subnational health-
related cost after Medicaid is health insurance for state
and local governments’ employees and retirees.221
Greater percentages of state and local govern-
ments offer health insurance to their employees than
do private-sector employers, and the percentage of
subnational public employees who choose to partici-
pate in healthcare coverage is considerably higher
than those in the private sector.222 Unsurprisingly,
80 percent of government workers are satisfied with
their health insurance benefits, compared with 57
percent of their corporate counterparts.223
Complications arise, however, in retirees’ health-
care insurance.
On the one hand, retirees’ health insurance is
relatively good. Forty-nine states offer newly-hired
employees some healthcare coverage when they
retire, and thirty-eight states contribute insurance
premiums toward healthcare coverage for their
retirees. By contrast, in private-sector firms with 200
employees or more, such coverage has declined from
66 percent of firms to 28 percent over twenty-five
years.224
On the other hand, subnational retirees’ health-
care benefits have suffered. Over fifteen years, one
state (Idaho) cancelled retiree health coverage for
new hires, at least five states stopped providing any
health premium contributions for certain retirees,
and “over a dozen” states raised age or service-year
requirements for retirees to be eligible for health
benefits.225
Subnational retirees’ healthcare benefits have
suffered because of high and rising costs. Retirees’
unfunded healthcare costs (that is, the shortfall
between the benefits that governments promised
to their retirees and what governments have saved
to pay for them), at $587 billion, are the second
largest long-term obligation that the states have—
larger even than the states’ outstanding debt, which
ranks third. Unfunded retiree healthcare liabilities
in the states amount to 4.2 percent of personal
income (which is a measure of the states’ economic
resources) in all fifty states.226
Pensions and Public Penury
Some 19.5 million subnational public employees
and 9 million beneficiaries227 are covered by almost
4,000 retirement plans. These are big increases; it
was only in 1947 that all states offered retirement
plans (the first such plans appeared in the 1920s),
and, by 1962, there were barely five million state and
local employees participating in fewer than 2,400
plans.228 Unlike the private sector, where federal law
governs pension plans and requires their insurance,
public retirement systems depend on the whimsies
of annual government revenues and public officials.
Underfunded Public Pensions Eighty-two percent
of all public workers are satisfied with their retire-
ment plans, compared with just 57 percent of non-
governmental employees.229 Yet, paradoxically, just
18 percent, and declining, of full-time subnational
government workers are “very confident” about the
prospects of their retirement incomes.230
Why is this? Perhaps it is because subnational
government employees are learning more about the
shaky finances underlying their “guaranteed” retire-
ment plans. State and local retirees’ unfunded pen-
sions, which, at $968 billion (at least), is the largest
unfunded obligation that the states have, and they
grow more rapidly than the other two long-term
obligations, retirees’ healthcare and subnational
debt. (Washington falls nearly $762 billion short of
what it needs to fully fund federal pensions,231 an

amount that almost seems sort of reasonable when
we consider its subnational counterparts.) When we
add unfunded healthcare benefits for state and local
retirees, the total is nearly $1.6 trillion; over three-
fifths of this amount is for pensions, and less than
two-fifths is for healthcare. The states’ unfunded
retirement costs tote up to 6.9 percent of personal
income; when combined with unfunded healthcare
liabilities for retirees, the total is 11.1 percent of per-
sonal income.232
The funding of state pension plans (which typ-
ically include local as well as state retirees) peaked
in 2001 at an admirable 100 percent, but since has
plummeted; state and local plans are 26 percent
short of the amount needed to meet their retirement
obligations.233 Just 41 percent of state governments
and the District of Columbia make their full annual
required contribution to their pension plans.234
The unfunded liability of state pension plans is the
equivalent of more than three full years of the states’
total general revenue, an equivalency that is “almost
exactly the same” for city and county plans.235
Unsurprisingly, the famed financier, Warren
Buffett, has called state and local pension plans a
“gigantic financial tapeworm.”236
Pension Politics Because the effects of pensions
on public finances are long-term, their fiscal impact
cannot possibly be known to anyone, including
those who fund the pensions.
This universal ignorance has only rarely
worried governments. Between 2000 and 2010
(years that included the Great Recession of 2007–
2009), thirty-one states passed laws that expanded
the range of state and local employees who can retire
when they reach fifty or fifty-five years of age or
after working twenty to twenty-five years; the con-
sequence has been “a massive increase in the scope
of who qualifies for retirement benefits.”237
Here is an example: In 1999, when California’s
economy was booming, the legislature blithely
accepted the state pension board’s recommendations
(the Senate did so after forty-five seconds of discus-
sion and with no dissenting votes238), and allowed
some workers to retire at age fifty with pensions
pegged at 90 percent of their salaries and lowered
the retirement age for others by five years (such as
the lifeguard who retired at fifty-seven with a six-
figure pension239), among a bevy of other benefits.
Financing and Budgeting Governments 253
(Why the legislature accepted so readily the pension
board’s recommendations is a mystery, as it has a
long history of questionable practices; for example,
the system’s chief executive confessed to accepting
bribes, including cash in paper bags, “covering years
of corruption.”240) California’s pension obligations
increased, on average, by more than 25 percent.241
Within a decade, these obligations were haunt-
ing the state like Marley’s ghost. A board member
of the state’s mammoth pension system (it covers
more than 1.6 million state and local employees,
excluding educators, and, with investments of $159
billion, is the largest public pension in the country)
admitted that, “This was probably the worst public
policy decision in the state’s history. . .. We had no
idea what we were doing.”242
Precisely. Politically astute and powerful public
unions exploit this universal ignorance of govern-
ments’ fiscal futures for their members’ ends. It
perhaps is no accident that, on average, state and
local governments contribute more than twice as
much to their pension funds than do their employ-
ees,243 or that from 2004 to 2016, the percentage
of state and local employee costs devoted to retire-
ment and savings nearly doubled, from 6 percent to
11 percent of those costs.244 But union negotiators
often are abetted by elected officials who are certain
in their knowledge that any future fiscal problems
generated by the catastrophically costly retirement
benefits that they negotiate will never be problems
for them.
Seventeen percent of retired members of
Congress, for example, receive annual pensions of at
least $100,000, compared with 1 percent of retired
federal employees.245 Legislators in eleven states
allow themselves retirement that is earlier than that
for most state workers (in Pennsylvania, the differ-
ence is ten years—fifty, as opposed to sixty, years
old); seventeen states add other earnings (four states)
or expense reimbursements (thirteen) to legislative
salaries, thereby inflating pensions (Kansas and
Kentucky add both); in a remarkable twenty-three
states, legislators, unlike most state employees, may
collect their state pensions and a state salary simul-
taneously, and without restrictions.246 In Kentucky,
state legislators’ pensions are well over four-fifths
funded in full, but the pension fund for state govern-
ment employees, entailing obligations of more than
$12 billion, is not even one-fifth funded.247
 254 PA R T I I I Public and Nonprofit Management
Bumbling Bureaucrats Questionable management
also undermines public pensions. Occasionally, this
management is more than questionable; in 2010, the
Securities and Exchange Commission (SEC) charged
New Jersey’s pension system with securities fraud,
an event that was historically unprecedented, and,
in 2013, it did so again with Illinois. Corruption is
a continuing problem in a number of public pension
systems.
Almost all states hire pricey outside manag-
ers, often who work on Wall Street, to manage
their pension funds, and “most state pensions hold
about 75 percent of their investments in risky assets
such as stocks, private equity or hedge funds.”248
(It appears that only Nevada does not rely on Wall
Street, and instead indexes its fund.) The states are
losing money with this arrangement. An analysis of
the thirty-three states with pension funds managed
by outsiders, which also had disclosed their data,
concluded that investing in passive index funds,
rather than in actively managed funds, would have
returned 1.62 percent more per year over five years.
Much of this differential is attributable not only to
these outside managers’ subpar investing (an analy-
sis of 660 state-administered plans graded 1 percent
of them as “A” and 11 percent as “F”249), but also
to the fees (often hidden) that they charge;250 total
disclosed and undisclosed fees charged to the states
tote up to an estimated $20 billion annually, plus
another $5 billion when cities’ and counties’ fees are
thrown in.251 “By indexing most of their portfolios
. . . the 33 state funds . . . could save $5 billion in
[disclosed] fees annually, while obtaining similar (or
better) returns to those of active managers,” poten-
tially reducing their “unfunded pension liabilities by
$70 billion within two years.”252
Consolidating what often is a plethora of local
retirement boards also brings savings. Consolidating
Massachusetts’ 105 local boards would save an esti-
mated $25 million per year, more than $2 million of
which is devoted to stipends for board members.253
The Consequences The people who suffer most
from cynical or maladroit managers are state and
local employees and pensioners. Over just three
years, thirty-five states reduced pension benefits for
current and (for the most part) future employees,
including eighteen that lowered benefits for retirees;
half the states raised employee contributions; and
three introduced a defined contribution plan, thereby
“shifting some investment risk to employees.”254
In addition, the courts have declared as fair
game the pensions of the retirees of bankrupt local
governments. This is new. Historically, the courts
have held that state constitutions protect public
pensions in these circumstances, but, in 2013, bank-
ruptcy judges ruled in separate cases involving
Detroit, Michigan, and Stockton, California, that the
Constitution of the United States and federal bank-
ruptcy laws trumped state constitutions, and that
retirees’ pensions could be cut.
State and Local Debt
State and local governments owe more than $2.9
trillion in outstanding debt. The states owe over $1.1
trillion, and localities owe more than $1.8 trillion.255
State and local governments always have
carried debt, but, unlike the federal government’s
debt, which is akin to a happy-go-lucky teenager’s
credit card debt, the grass-roots governments’ debt
generally has resembled a responsible homeowner’s
fixed mortgage. Forty-nine states prohibit them-
selves from spending in deficit; forty-eight states
impose debt ceilings on their cities, and forty on
their counties.256
“States and cities carry much less debt rela-
tive to the size of their economies than do troubled
national governments like those of Greece or Spain
(or the United States, for that matter),”257 devoting
from 5 to 8 percent of their revenue to paying inter-
est on their debt, “which is considered a reasonable
level.”258 There is “little evidence,” in fact, that the
size of state debt affects state borrowing costs.259
In the view of many analysts, “state and local
governments really don’t have a crushing debt
problem.” What they do have, of course, is a crush-
ing revenue problem.260
Still, subnational governments must pay off
their debts, and to do so they borrow.
Grass-Roots Borrowing: The Mysterious
Municipal Bond
State and local governments’ borrowing is executed
almost exclusively through a device that is unique to
them: the municipal bond. (A growing, but still rel-
atively small, trend is direct bank loans, which often

are unencumbered by disclosure requirements and
can be riskier for taxpayers.)
A municipal bond, or municipal security, is a cer-
tificate of ownership of a specified portion of a debt
due to be paid by a state agency or local government
to an individual holder and usually bearing a fixed
rate of interest. Special districts, school districts, and
similar statutory authorities issue 64 percent of all
long-term municipal bonds, municipalities and coun-
ties account for 19 percent, and the states issue 12
percent (another 5 percent are short-term bonds).261
They sell them in the $3.7  trillion municipal bond
market, the second largest securities market in the
nation, and the only major one that remains virtually
free from oversight by the Securities and Exchange
Commission.  That freedom may explain why, in
2016, the SEC announced (an unprecedented move)
its censure of seventy-one state and  local govern-
ments involving forty-five states for failing to disclose
certain financial information about municipal bonds
that they sold to investors, indicating a problem that,
according to the SEC, is “widespread and pervasive.”
Of Obligations and Money Makers There are two
major kinds of municipal bonds.
General obligation bonds have the full faith and
backing of the government issuing them, a backing
that includes raising taxes, if need be, to cover their
obligations. This may explain why most states and
two-thirds of cities and towns, which are among the
primary issuers of these bonds, require that all local
bond measures be approved by voters.262
Revenue bonds fund projects, such as college
dormitories, that generate revenue, and are by far
the most common bond issued by special-purpose
governments—school districts, special districts, and
public authorities. In contrast to general obligation
bonds, revenue bonds are “nonguaranteed,” and
lack the full faith and credit of the governments that
issue them, but compensate for this deficiency by
paying higher interest to their buyers.
Revenue bonds are now governments’ bond
of choice. In 1950, they accounted for a slender
17  percent of all municipal bond sales,263 peaked
in the mid-1980s at 80 percent,264 and have since
slipped to a still respectable 60 percent.265
Both general obligation and revenue bonds
rarely default; historically, far less than 1 percent
default.266
Financing and Budgeting Governments 255
Whoopee! Tax Free! Municipal bonds typically
sell quickly, and individual investors, who hold “up
to 75 percent of the total value of municipal securi-
ties outstanding,” are their biggest buyers.267
Why is this? Because the interest income gener-
ated by almost all of them is exempt from the federal
and most state and local taxes on personal income.
Congress exempts from the individual income
tax about 95 percent of all municipal bonds, and
has done so for as long as there has been such a tax
(the Revenue Act of 1913 initiated this policy), even
though, since 1992, the exemption, which is “one of
the largest” loopholes in the federal tax code, has
cost the government from almost $24 billion268 to
about $43 billion269 in lost revenue each year. There
is in Congress a Municipal Finance Caucus whose
sole purpose is that of protecting these bonds’ tax-
free status.
On the other hand, the tax break leverages more
than $400 billion a year for infrastructure projects.
Eliminating the exemption could increase state and
local borrowing costs by as much as 2 percent, and
hike infrastructure costs by 25 percent.270
Thirty-eight of the forty-three states that levy a
personal income tax (including New Hampshire and
Tennessee, which, as noted earlier, levy the tax only
on interest and related income) exempt the bonds’
interest income if the bonds were issued by them or
their local governments. Florida, Indiana, and the
District of Columbia extend this exemption to bonds
issued in every other state as well.271 These practices
were upheld by the Supreme Court in 2008.272
The Blessing of Bankruptcy?
There is a possible hatch through which some
governments could escape their fiscal woes: they
could declare bankruptcy, which is a legal finding
that imposes a court-supervised restructuring of a
debtor’s finances. Recently, there have been some
eye-popping public bankruptcies, such as Alabama’s
Jefferson County’s declaration of bankruptcy in
2011, which revealed a record-breaking $4.2 billion
in unpaid debt. The county was soon overshadowed
by Detroit, in 2013, when it filed for bankruptcy
to the tune of at least $18 billion, the biggest local
government bankruptcy ever, as measured by both
dollars and population. (Jefferson County righted its
finances in 2013 and Detroit in 2014.)
 256 PA R T I I I Public and Nonprofit Management
Congress does not allow state governments to
go bankrupt, but, with the passage, in 1934, of the
Municipal Bankruptcy Act, local governments may
default and declare bankruptcy under Chapter 9 of
the United States Code. The law prohibits federal
judges from mandating tax hikes in their restructur-
ing, but it does allow local governments to not only
stiff their creditors, but to also renege on their con-
tractual obligations.
About 650 local governments have filed for
bankruptcy since the first one, in 1937,273 and they
have averaged slightly more than eight per year since
1980. A slim 18 percent were general-purpose gov-
ernments;274 the rest were special-purpose govern-
ments, and almost all of these were special districts.275
Just twelve states permit Chapter 9 filings;
another dozen authorize bankruptcy under certain
conditions; three states allow their local govern-
ments limited authorization to declare bankruptcy;
and two specifically prohibit local bankruptcy. The
remaining twenty-one states simply do not address
the subject, in effect denying their localities the
FROM FISCAL FALTER TO FLINTY FATE
An emergency financial manager, commonly shortened
to emergency manager, is a state-appointed official who
takes over the finances of a local government, usually
after a court has placed it in receivership, and who
is charged with restructuring its debt. Receivership
occurs when a person legally is charged with custodial
responsibility for the property of others who cannot
meet their financial responsibilities or have actually
declared bankruptcy.
In Michigan, which has one of the most
sweeping local financial intervention laws in the
nation, emergency managers are appointed by
the governor, and report only to the governor and
the legislature. Unlike other states, they have no
obligation to consult with local residents and officials,
and have the exclusive authority to make all decisions
on local budgets and virtually everything else; local
residents and officials have the exclusive authority to
complain.
power to declare bankruptcy, as local governments
may not file petitions under Chapter 9 without the
authorization of their states.276
Typically, states rescue their fiscally faltering
localities: twenty-two states “actively and regularly
review” their local governments’ finances in an effort
to detect fiscal stress,277 and twenty states have laws
that authorize state intervention into the finances of
municipalities or counties that are in fiscal difficul-
ties; twenty-nine states can take over school districts
that are in fiscal or academic trouble. New Jersey
was the first to do so, in 1989, and, since then, the
states have taken over or reorganized about fifty
school districts nationwide.278 Rescue, however, is
by no means assured.
When all is said and done, declaring bankruptcy
is no panacea. “The fantasy of using bankruptcy to
suspend government runs up against a hard truth:
even in bankruptcy, cities and states don’t disap-
pear—nor do their obligations.” Almost always,
even bankrupt governments ultimately pay off their
debts.279
From 2010 to 2015, Michigan’s emergency
managers ruled six municipalities and five school
districts. In general, they proved to be effective. By
2016, after fifteen uninterrupted years of emergency
managers, no Michigan city was run by an emergency
manager, and just two school districts were. Without
its emergency manager, Detroit might still be in
bankruptcy.
Despite their fiscal competence, Michigan’s
emergency managers are permitted to be so tough
that their wards’ spirits can be broken. Pontiac’s
three sequential emergency managers over four years
“gutted” the city’s government, slashing its workforce
by more than four-fifths and its budget by about two-
fifths; Pontiac emerged from receivership, but it is
“not really a city anymore” (Yaccino).
Although Michigan’s emergency managers
are effective in purely fiscal matters, they can be
insensitive, or even blind, to larger public issues.
(continued)

(continued)
Nowhere does this reality ring more clearly than in
Flint, a city of 98,000 that lost half of its population
over fifty years and is plagued by a poverty rate of
42 percent. Though never bankrupt, Flint was placed in
receivership from 2002 to 2004 and again from 2011
to 2015. It was during these final four years that five
different emergency financial managers ran Flint. At
least two of them made decisions that had catastrophic
consequences for the lives of the city’s residents.
In April 2014, Flint’s drinking water was officially
switched from Lake Huron’s water, purified by Detroit,
to the Flint River’s water, treated by the Flint city’s
waterworks, as a cost-cutting measure.
Flint’s managers failed to add corrosion-control
chemicals (at a nominal cost of about $100 per day)
that were needed to offset the pipe corrosion caused
by the river water, which was nineteen times more
corrosive than the lake water. The river water leached
lead from Flint’s ancient pipes. Too much lead in blood
can cause life-long damage in speech, teeth, bones—
and brains—among other disabilities, particularly in
children. From 6,000 to 12,500 children were exposed
to lead poisoning, and the percentage of Flint’s children
with elevated blood-lead levels may have doubled to as
much as 5 percent. The poisonous water also associated
with breakouts in Flint of E. coli and Legionnaires’
disease (which killed a dozen people); more than 100
people suffered gastrointestinal disease because they
were afraid to wash their hands.
Almost immediately following the switch, Flint’s tap
water turned brown and smelly. State officials dismissed
the complaints of townspeople, national negative news
coverage, and the findings of experts who determined
that the water was dangerous. They also ignored
the implications of the decision by a local General
Motors plant to stop using Flint’s corrosive water in
manufacturing. (Not all state officials thought Flint’s
water was safe; at the height of the crisis, in January
Is Revenue Running Out?
Healthcare and pension costs, not to mention declin-
ing tax revenue (as we observed in Chapter 1, all
taxes imposed by all governments are at their lowest
Financing and Budgeting Governments 257
2015, state workers in Flint quietly placed purified
water coolers in their office building, even as state
officials in Lansing, the capital, were stonewalling.)
To add insult to injury, Flint residents paid more for
water during the crisis, than any of the 500 largest
community water providers across the nation until a
court order rolled back water charges in 2015.
In October 2015, eighteen months following the
switch to the lead-laden water, the state permitted Flint
to switch back to Lake Huron and Detroit for its water,
although toxicity remained because of infrastructure
damage caused by the river water and managerial
misfeasance.
Although federal, state, and local officials resigned
following the Flint crisis, there can be little doubt
that the state was almost solely responsible for it; in
April 2015, for example, as a condition for obtaining a
state loan of $7 million to right its finances, the state
prohibited Flint from returning to Detroit for its water.
(The prohibition was waived when, six months later,
the state provided Flint with $6 million to reconnect
with Detroit.) In 2016, largely as a result of the
Flint fiasco, Michigan’s credit rating was lowered and
criminal charges were filed against thirteen state and
local employees and engineering consultants, including
two of Flint’s former emergency managers. In 2017,
Michigan agreed to replace Flint’s lead or galvanized-
steel water lines by 2020, a replacement that would
be completed six years after the city’s residents began
drinking toxic water.
Flint, tragically, exemplifies the perils of public
administrators focusing narrowly and obsessively on
a single, if important, aspect of public management
(in Flint’s case, the public’s money) at the expense of
larger responsibilities (in Flint, the public’s permanent
disease, damage, and debilitation).
Sources: Steven Yaccino, “Lessons for Detroit in a City’s
Takeover,” New York Times (March 23, 2013), and various
news reports.
levels as a percentage of personal income since the
1950s280), have been burgeoning budgetary banes
for decades. Over thirty years, expenditures by state
and local governments “grew faster than own-source
 258 PA R T I I I Public and Nonprofit Management
revenues in almost all states.” Budgets balanced
because of the growth in federal grants, and also
because, during the final dozen of those years, states
and localities increasingly borrowed money, rather
than spend tax and other revenues, to fund capital
projects, such as roads and schools.281
This is not a sustainable situation; indeed, it is a
grim one. Closing the anticipated fiscal gap for sub-
national jurisdictions will require them to cut their
expenditures, or increase revenue, by 18 percent each
and every year until at least 2060,282 an increase of
27 percent from just one year earlier.283
A Dismal Science: Deficits, Debt,
and Democracy
In 1984, President Ronald Reagan quipped that he
was “not worried about the deficit. It is big enough
to take care of itself,” a comment bookended nearly
two decades later by Vice President Dick Cheney,
who reportedly stated, “deficits don’t matter.”
Both remarks lend credence to economists’
dismal doubt about democracy: Democracies are
unable to avoid burying future generations in debt
due to the need of elected policymakers to, as
Alexander Hamilton put it, boost “their own pop-
ularity or to make other sinister account” by giving
voters bigger benefits, lower taxes, and larger defi-
cits and debt. “The consequence is,” America’s first
treasury secretary continued, “that the Public Debt
swells, ’till its magnitude becomes enormous, and
the Burthens of the people gradually increase ’till
their weight becomes intolerable. Of such a state
of things, great disorders in the whole political
economy, convulsions & revolutions of Government,
are a Natural offspring.”284
Despite heartening trends in deficit reduction,
the core issue remains one of Congress’s refusal to
address national fiscal policy and debt. “It is not that
the size of the debt itself is the problem. . . . Instead,
it is the recent trend that is ominous. For that trend
results not from a deliberate political decision to
spend in deficit, but rather from nothing more than
the sum of myriad decisions regarding taxing and
spending that, collectively, now substitutes for fiscal
policy. In a very real sense, the federal government
has no fiscal policy, for the tail of political expedi-
ency has long wagged the dog of prudent policy in
Washington.”285
A Muted Note of Hope
Most of us have heard (often, it seems, endlessly)
of the need for greater transparency in govern-
ment. Transparency, without doubt, is a critical
component of good governance in general, but,
in public finance, greater transparency actually
correlates  measurably with greater fiscal account-
ability. As a unique study of forty-one countries
concluded, “the more information the budget dis-
closes,” the greater the likelihood that citizens will
hold politicians to account and that budgets will be
balanced.286
The bad news here is that, even though “at least
85 percent” of Americans agree “overwhelmingly . . .
across all levels of government” that public “officials
should be accountable to citizens about financial
management and . . . provide transparent finan-
cial information,” it appears that governments fail
to deliver on both scores. Although the figures are
improving, 51 percent of Americans are dissatisfied
with the federal government’s fiscal transparency
and accountability (so, for that matter, are federal
administrators287), 49 percent are less than satisfied
with those of state governments, and 40 percent
with local governments’.288
The good news, however, is that, beginning in
2009, Washington, by creating new websites, opened
its budgetary books to unprecedented levels of trans-
parency, and, through legislation and regulation, by
that same year had “tipped the balance” in the states
as well, pushing them “to the point of no return” in
increasing their own fiscal transparencies.289
When citizens know more about their govern-
ments’ money, governments manage it more respon-
sibly290—a muted note of hope on which we close
our discussion of public finance.
PUBLIC BUDGETING: SPENDING
FOR PUBLIC POLICY
In the United States, spending by all governments
amounted to 7.5 percent of GDP in 1913.291 One
hundred years later, that figure had quintupled to
37 percent.292
Spending is achieved by developing and imple-
menting a budget. A budget is “a series of goals with
price tags attached.”293

Budgets are beyond dollars. They are choices,
policies, and philosophies. Unsurprisingly, therefore,
“60 percent of all roll call votes in Congress are on
budget-related issues.”294
We shall address seven budgetary formats that
the public sector and some independent organizations
have used since the early twentieth century (earlier,
there was no budgeting). In government, these
formats reflect changing  public  opinion  about the
proper place of government,  expanding from a
narrow concern over corruption control to a focus
on government proactively and efficiently solving
large social problems.
Each budget system has federal, state,
local,  or even corporate antecedents that were
in use years  before the time frames (which apply
exclusively  to the federal government) indi-
cated in the  headings. And, while budget formats
may fade, they do not fade away. Like vam-
pires, budgetary formats  often metamorphose
into forms that differ  from their initial  incar-
nations, or, like  Frankenstein, parts of  them are
stitched  together in ways that  create new forms.
Budget systems always live beyond their nominal life
spans,  lurking  in the sunless recesses of budgetary
bureaucracies.295
LINE-ITEM BUDGETING,
1921–1949
During the early twentieth century, the budget was
expanded from a tool that kept track of expenses
(often inadequately) into a system for assuring gov-
ernmental honesty.
Reform! Introducing the Public Budget
The Progressive Movement expressed these dynam-
ics, and they ultimately resulted in historic budget-
ary change.
The Consolidated Executive Budget During the
early twentieth century, Progressives pushed two
reforms: fiscal reform, which advocated such novel-
ties as auditing governments’ books, and the “admin-
istrative integration movement,” which promoted
strengthening the power of the executive branch by
consolidating agencies.
Financing and Budgeting Governments 259
Both of these interrelated efforts pressured
governments to adopt a consolidated executive
budget, which is a comprehensive plan of expendi-
tures for the whole of government, formulated by
the elected chief executive, and subject to approval
by the legislature. The first consolidated executive
budget was adopted, via constitutional amendment,
by Maryland in 1916, largely because the state had
grossly overspent its revenues.
The Budget and Accounting Act of 1921 In
1912, the President’s Commission on Economy and
Efficiency proposed a consolidated executive budget
for the federal government (or, as the Commission
put it, simply “a national budget,” unconsciously
indicating just how primitive early public financial
management was),296 a suggestion fulfilled nearly
a decade later with the passage of the Budget and
Accounting Act of 1921. The act created the Bureau
of the Budget (BOB), reporting to the treasury sec-
retary, and established the General Accounting
Office (re-titled, in 2004, to the Government
Accountability Office, or GAO), which reports to
Congress, as the legislative check on federal money
management.
The Budget and Accounting Act was historic
legislation that radically improved federal efficiency
and finance. In its first year of operation, the Budget
Bureau cut federal expenditures by an astonishing
35 percent and raked in a record surplus.297
What Is Line-Item Budgeting?
The consolidated executive budget, a major gov-
ernmental innovation when introduced, nonethe-
less assumed a very traditional form: the Line-Item
Budget.
A Line-Item Budget is what most of us visualize
when we think about budgets. Each line on a sheet
of paper has an item, or object (for example, pencils,
112), on the left side followed by a cost ($75.00)
on the right side. Hence, the first public budgets
acquired their descriptive title of Line-Item, or
Objects-of-Expenditure, Budget which is the alloca-
tion of resources according to the cost of each item,
from pencils to personnel, used by an agency.
Honesty, Efficiency, and Inflexibility The Line-
Item Budget rapidly became associated with
 260 PA R T I I I Public and Nonprofit Management
governmental honesty, efficiency, and less propi-
tiously, inflexibility. In 1923, Charles G. Dawes,
as first director of the Budget Bureau, wrote: “The
Bureau of the Budget is concerned only with the
humbler and routine business of government. . . . it
is concerned with no question of policy, save that of
economy and efficiency.”298
Inputs and the Budgetary Treatment of Paperclips
and Parks The Line-Item Budget covers inputs
only, meaning that it deals only with what it takes
to make a project continue. Consider two examples:
paperclips and parks. Under a Line-Item Budget, the
only policy-related questions that a public admin-
istrator would be channeled into asking are: How
many paperclips do we need and what will they
cost? Or how many parks do we need and what will
it cost to build and maintain them?
The Legacies of Line-Item Budgeting
The Line-Item Budget fulfills a vital financial func-
tion: it shows in detail what public administrators are
spending their money on. Consequently, four-fifths of
all cities and counties still use Line-Item Budgeting,
often “in conjunction with another type of budget
format.”299 But its scope is limited, and when it is
used at broader organizational levels, it can result “in
micro-management at the macro level.”300
PROGRAM/PERFORMANCE
BUDGETING, 1950–1964
Although lone voices were heard through-
out the 1920s and 1930s advocating a budget
attuned  to  identifying broader programs and gov-
ernment performance, the shift to this kind of think-
ing came with President Franklin D. Roosevelt’s
New Deal.
The New Deal and the Need for
a New Budget
Roosevelt assumed the presidency in 1932, and
immediately focused federal power on wrenching the
economy out of the Great Depression. Between 1932
and 1940, federal expenditures more than doubled,
and the Budget Bureau faced up to this challenge
by expanding its staff by a factor of ten and relying
increasingly on public administrators, rather than
accountants, to manage federal spending. In 1939,
Executive Order 8248 formalized BOB’s new mana-
gerial emphasis by transferring it from the Treasury
Department to the newly-founded Executive Office
of the President.
Clarifying Programs and Performance
The broadening of budgeting into management illus-
trated with increasing clarity two growing problems
of federal administration: the rapidly deteriorat-
ing coherence of the budget itself and its failure to
capture how well policies performed.
The Programs Problem The Line-Item Budget has
no capacity to show policymakers what programs
public money is being spent for, and was never
meant to. The federal Line-Item Budget of 1949
dumped on its readers some one-and-a-half million
words printed on 1,625 pages. The first Hoover
Commission questioned the Line-Item Budget’s
utility as a document that facilitated more effective
public management, and advocated organizing the
budget by “programs.”301
The Performance Problem The second issue
involved the gnawing question of whether the
money being budgeted for public policies was actu-
ally doing any good. In the 1940s, the Budget Bureau
introduced “Functional Budgeting,” or “Activity
Budgeting,” which involved the development of per-
formance measures and standards and their linkage
to an agency’s budget. The first Hoover Commission
strongly encouraged BOB’s initiative, and gave it one
of the names by which we know it: “Performance
Budgeting.”
The Emergence of Program/Performance
Budgeting The Hoover Commission’s 1949 report
brought swift results. In that same year, Congress
passed amendments to the National Security Act
of 1947, which established Program/Performance
Budgeting (P/PB) in the Defense Department, and,
in 1950, Congress enacted the Budgeting and
Accounting Procedures Act, which emplaced it in
the remaining agencies. A new budgetary age was
at hand.

What Is Program/Performance Budgeting?
We call it Program/Performance Budgeting, but
this kind of budget more commonly is known as
either a Program Budget, emphasizing its budg-
eting of discrete operations, or a Performance
Budget,  stressing its focus on agency efficiency
and effectiveness and their measurement. In reality,
when it was introduced it did both, so we call it
Program/Performance  Budgeting and define it as
a system of resource allocation that organizes the
budget document by operations and links the pro-
ductivity  of  those operations with specific budget
amounts.
Inputs and Outputs P/PB considers outputs, as well
as inputs The Budget Bureau’s role evolved from a
fiduciary one to that of clarifying what policies the
budget was paying for and assuring efficiency in
program delivery.
Of Paperclips and Parks What did this new role
of the budget signify for our examples of paper-
clips and parks? In terms of programs, the Program/
Performance Budget asks: To what programs do
paperclips and parks pertain? Do we have a paper-
clips program? Do we have a parks program? In
terms of performance, P/PB asks: How many papers
will be clipped? How many people will be served by
the parks?
The Legacies of Program/Performance
Budgeting
The most lasting and pervasive impact of P/PB was
its organization of the budget by programs. It hauled
public administrators out of the micro-mire of the
Line-Item Budget and revealed the much bigger
picture of the programmatic purposes of the public
budget.
The other pillar of P/PB—its focus on meas-
uring results and linking those results with agency
budgets—was less successful, but merely its intro-
duction expanded the vision of budgeters from one
of controlling costs to viewing the budget as a means
of fulfilling public purposes.
Financing and Budgeting Governments 261
PLANNING-PROGRAMMING-
BUDGETING SYSTEM, 1965–1971
P/PB swept through governments, but, once its
sweep was complete, its limitations grew increas-
ingly aggravating.
An Emerging New Standard for Budgetary
Theory
Those limitations revolved around questions of per-
formance and policy.
The Performance Problem (Again) Half of
Program/Performance Budgeting, the performance
half, was not working well. As the second Hoover
Commission’s report of 1955 circumspectly noted
with exquisite tact, “the installation of performance
budgeting . . . has met with varying degrees of
success.”302
The Policy Problem Although P/PB rewards effi-
ciency in implementing public policy, or tries to,
it cannot enlighten us if those policies are worth
having in the first place. As a New York legislator
exclaimed after looking over his state’s Program/
Performance Budget, “Who the hell cares how much
a pound of laundry costs?”303 The more important
question is: Why is there a policy that requires the
state to wash laundry?
The Emergence of Planning-Programming-
Budgeting These concerns eventually led to an
interest in Planning-Programming-Budgeting System
(PPBS), also known as Planning-Programming-
Budgeting, a budgeting concept that was birthed
in the auto industry; variants of it had been used
as early as 1924 by General Motors Corporation.
Elements of PPBS first emerged  in  federal circles
during World War II, but it was in 1961, when
Robert McNamara, the chief executive officer of
Ford Motor Company, became secretary of defense,
that PPBS made its major impact.
The Defense establishment that McNamara
entered was beset by almost cutthroat competi-
tion among the services. McNamara and his “whiz
kids” (a not entirely affectionate appellation given
the McNamara team by the military) shook up the
 262 PA R T I I I Public and Nonprofit Management
services by reestablishing central control through
the imposition of Planning-Programming-Budgeting.
PPBS remains the Pentagon’s budgeting system to
this day.
President Lyndon B. Johnson was sufficiently
impressed that, in 1965, he ordered PPBS to be
adopted throughout the federal government.
What Is Planning-Programming-Budgeting
System?
The Planning-Programming-Budgeting System is a
method of resource allocation designed to improve
governmental efficiency and effectiveness by estab-
lishing long-range planning goals, analyzing the
costs and benefits of alternative programs that
would meet these goals, and articulating programs
as budgetary and legislative proposals and long-term
projections.304
Inputs, Outputs, Outcomes, and Alternatives PPBS
is concerned not only with inputs and outputs, but
also with outcomes (defined in Chapter 7—in other
words, impacts or effects) and alternatives. The
budget agency is seen more than ever before as a
centralized, systemic, planning, and policymaking
body—a far cry from Dawes’ statement of 1923
about budgeting being concerned with the “humbler
and routine business of government.”
Of Paperclips and Parks In terms of paperclips
and parks, PPBS expands our queries to include their
outcomes and alternatives.
To determine the outcomes, or effects, of paper-
clips, we must ask: What impact do clipped papers
have on the agency’s mission-related outcomes? We
then must ask about alternatives: Should we use
staples instead?
When we ask about the outcomes of parks, we
inevitably must ask: What are parks really meant to
do? Parks provide recreation, or an opportunity for
their visitors to “re-create.” But how do we deter-
mine this? Counting outputs, such as the number of
park visitors, no longer is adequate. Finding alter-
natives to parks is even tougher, and requires that
we consider the whole recreational system, and even
beyond. After all, those who visit parks in the wee
hours may be exclusively muggers and their victims,
lending an entirely new meaning to “re-creating.”
The Legacies of Programming-Planning-
Budgeting System
PPBS is, perhaps, the single most comprehensively
“rational” budgeting system ever perpetrated in
American governments.
Benefits of PPBS Washington’s experience with
PPBS suggests that PPBS brings benefits. Few federal
administrators ever “argued against the goals of
PPBS,” and it “is credited with instituting improve-
ment in federal program management,” including
better information, more systems analysis, and “a
long-standing legacy of increases in the amount and
quality of program evaluation.”305
When PPBS’s two dominant features, rigorous
rationality and analysis, are present in a government’s
budgetary format, then budget making “reduces
expenditures in aggregate.”306 This is, of course, pre-
cisely what public budgeting is meant to do.
Limitations of PPBS PPBS’s complexity, rigidity,
and obsession with details and uniformity are its
overriding weaknesses, and make it very difficult
to adopt and use. It did not help that, at least in
Washington, PPBS also was clumsily introduced.
President Johnson gave his administrators all of six
months to have PPBS up and running, but the sole
department to implement it successfully and perma-
nently, Defense, consumed no fewer than ten years
to phase it in.307
Understandably, perhaps, PPBS overwhelmed
most federal agencies. The secretary of agriculture,
whose department had been identified by the Budget
Bureau as one of only five that had made substantial
progress in adopting PPBS,308 phoned the director
of BOB and began the conversation with, “Elmer,
I have a stack of PPBS papers on my desk about
four feet high. What am I supposed to do with
them?”309 So traumatized were most federal admin-
istrators by their experience with PPBS, that, for the
remaining third of the twentieth century, every suc-
cessive budgetary format had, as defining features,
high levels of plasticity and an outstanding ease of
adoption.
It is doubtful that PPBS’s limitations can be
overcome. When a federal agency brought back
PPBS, in 2002, it found, seven years later, that the
same “difficulties that led to the abandonment [of

PPBS] by the civilian bureaucracy almost 40 years
ago” were still front and center.310
BUDGETING-BY-OBJECTIVES,
1972–1977
With Richard Nixon’s election as president in 1968,
the federal government moved steadily away from
the policy-planning mission of PPBS, and toward a
managerial and political one.
The clearest and earliest indicator of this shift
was the reorienting and renaming, in 1970, of the
Bureau of the Budget to the Office of Management
and Budget (OMB). Its new title reflected Nixon’s
effort to politicize federal management,311 and OMB
soon became known in Washington as the “Office
of Meddling and Bumbling,” a moniker that, thank-
fully, OMB has long since shed.
In 1971, OMB dispatched a memorandum to
all federal agencies that, “with remarkably little
comment,”312 officially terminated PPBS, rendering
it “an unthing.”313
Policymakers quickly turned to a new thing:
Budgeting-by-Objectives (BBO). In 1973, Nixon for-
mally initiated BBO with a memorandum to twenty-
one agencies, and, in 1975, OMB issued Circular
A-11, effectively extending BBO to all agencies.
What Is Budgeting-by-Objectives?
Budgeting-by-Objectives has its roots in a tech-
nique of project management called Management-
by-Objectives (MBO), which got its start in
the private sector.314 When used as a budget-
ing system,  MBO morphs into Budgeting-by-
Objectives,  which may be defined “a process
whereby organizational goals  . . . are set through
the participation of organizational members in
terms of results expected,”315 and resources are allo-
cated according to the extent to which those goals
are achieved.
Inputs, Outputs, and Outcomes BBO is concerned
with inputs, outputs, and outcomes, but not with
alternatives. It deals primarily with the effective-
ness of governmental programs, but when it comes
to pushing policymakers to ask what else might
government do to accomplish a particular social
Financing and Budgeting Governments 263
mission, BBO is at somewhat of a loss. Goals are set
centrally, but only after extensive consultation.
Of Paperclips and Parks In relating BBO to our
ongoing examples of paperclips and parks, we ask:
How much does it cost to keep us in paperclips and
parks? What do paperclips and parks actually do?
How effective are paperclips in achieving the agen-
cy’s mission? We do not ask, however, what alterna-
tives there are to paperclips or to parks.
The Legacies of Budgeting and Managing
by Objectives
We have scant statistical data about BBO’s linkage
with governments’ efficiency, but BBO’s foundation
and stalking horse, Management-by-Objectives,
clearly correlates with significant increases in public
productivity—gains of 58 percent, on average, and it
matches those of the private sector.316
Although the federal government’s brief
interlude with BBO left little legacy, “to some
extent,  the basic concepts of MBO—negotiating
goals and  holding subordinates accountable for
achieving  them—have survived in federal manage-
ment practices.”317 MBO has proven itself to be
quite “versatile” in local governments, especially
in the areas of “quality enhancement, cost control,
productivity improvement, and special problem
solving.”318
ZERO BASE BUDGETING,
1977–1980
A new face in the White House brought with it a
new budgeting concept. That new face was Jimmy
Carter’s, who, as governor of Georgia, was the first
elected executive to introduce Zero Base Budgeting
(ZBB) to government.
ZBB was not entirely unknown in federal
circles prior to Carter’s arrival; the Department
of Agriculture had been using it since the early
1960s.319 Nevertheless, in 1977, Carter broadened
ZBB to the whole of government through OMB
Bulletin No. 77-9. In contrast to PPBS, ZBB made
rapid headway. One seasoned bureaucrat noted,
“Never has any management fad so completely
taken over this town.”320
 264 PA R T I I I Public and Nonprofit Management
What Is Zero Base Budgeting?
Zero Base Budgeting is the allocation of resources
to agencies on the basis of those agencies periodi-
cally reevaluating, through intense consultation, the
need for all of the programs for which the agency
is responsible, and justifying the continuance or ter-
mination of each program in the agency’s budget
proposal. In other words, an agency reassesses what
it is doing from top to bottom from a hypothetical
“zero base.”
Alternatives The odd aspect about ZBB is that
it really does not pay much attention to inputs,
outputs, and outcomes. Rather, it fixates on alterna-
tives. What should we do instead?
Of Paperclips and Parks So what impact would
ZBB have on an agency’s use of paperclips or a city’s
parks program? At the agency level, the head of
the Office of Paper-Fastening Technologies would
be deciding between purchasing more paperclips,
staples, tape, or glue, but at the top level, the chief
executive might be choosing between purchasing
more paperclips or closing more parks. Ultimately,
paperclips and parks would be rank-ordered in
terms of their relative usefulness to the government’s
overall mission.
The Legacies of Zero Base Budgeting
Does Zero Base Budgeting work? Yes, but within
narrow limits and only under certain circumstances.
Benefits of ZBB Program managers clearly feel
that they participate more in the budgetary process,
and communication among all levels of the bureau-
cracy is enhanced when ZBB is introduced. These
seem to be the most conclusive findings of the
research.321
At the heart of ZBB is the prioritization of
programs, and this feature may be its most lasting
benefit, particularly in the states. In 1975, just prior
to ZBB’s adoption by Washington, not even three
out of ten state budgets prioritized programs, but
today more than eight out of ten rank them.322 At
the peak of ZBB’s popularity, thirty-six states had
enacted sunset laws, which automatically terminate
public programs after a set period of time, unless the
legislature specifically prohibits it; arguably, sunset
legislation is a direct result of zero-based thinking
about program prioritization.323
At the local level, city budget directors give ZBB
their highest ratings for its ability to facilitate the
reallocation of budgets to higher priorities and to
cut budgets rationally.324
Limitations of ZBB ZBB does not seem to reduce
spending by the federal and state governments,325
but it does increase paperwork. Federal paperwork
exploded by of 229 percent, on average, during
ZBB’s first year of implementation,326 and ZBB is
thought to outstrip even PPBS in producing paper.327
And, despite its radical-sounding title, Zero
Base Budgeting is far from revolutionary; very few
federal, state, and local agencies, and even indus-
trial organizations, submit ZBB budget requests that
actually start at zero.328 “ZBB was initially intended
to get away from ‘incrementalism’ but ended up by
being, perhaps, the most incremental of any budget-
ing approach.”329
TARGET BASE BUDGETING,
1981–PRESENT
In 1981, newly-elected President Ronald Reagan
abandoned the longstanding presidential tradition
of theatrically introducing a new budgetary format,
and instead quietly slipped in Target Base Budgeting
(TBB) by directing OMB only to officially terminate
its predecessor, ZBB. (Elements of ZBB nevertheless
persisted in federal budgeting until 1994.330) Even
though TBB was not entirely new to Washington
(some agencies had been using it by other names
since the 1940s331), Reagan’s embrace of it was revo-
lutionary, and today it continues to work in tandem
with its budgetary successors at all governmental
levels.
What Is Target Base Budgeting?
Target Base Budgeting, also known as Target
Budgeting, Fixed-Ceiling Budgeting, and Top-Down
Budgeting, is a method of allocating resources to
agencies in which agency spending limits (and, often,
agency goals, too), or “targets,” are set by the elected
chief executive.

The radical thing about Top-Down Budgeting
is that it reverses the traditional budgetary process,
which is “bottom-up”: instead of departments
sending their budget requests up the hierarchy, the
chief elected executive sends down to them the
budget that they are permitted to request (typically,
this target is based on revenue forecasts), and then
leaves the achievement of departmental goals to the
departments’ devices.
Inputs, Outputs, and Outcomes The most salient
feature of TBB is that it focuses on the chief exec-
utive’s sole mission (Reagan’s mission was, with the
exception of the armed forces, a smaller govern-
ment), and the mission is achieved by redirecting
resources (that is, inputs) to that mission to assure
the outputs and outcomes desired. Alternatives are
irrelevant; the government is not interested in them.
Of Paperclips and Parks In terms of how TBB
would deal with paperclips and parks, it might push
us into choosing either paperclips or parks to the
exclusion of all other programs. Let us say that we,
as the government’s top policymaker, chose paper-
clips. Parks would wither, as would all other public
programs, to the extent that we could politically
defend and advance our paperclip mission by prising
every penny from other programs.
Cutback Management: TBB’s Administrative
Adjunct
TBB is based on revenue, and when revenue declines,
the federal government, which had mindless seques-
tration imposed upon it, and the grass-roots govern-
ments, which are almost always mandated by law to
balance the books, must cut costs.
Costly Cost Cutting: Governments’ Self-Lobotomies
Cutting governments’ spending is fraught with
self-defeating snares. Cutting agencies that are
self-funded, make profits, collect taxes, or conduct
audits is particularly shortsighted. These sorts of
cuts have been described as a governmental “self-
lobotomy.”332
The Internal Revenue Service is a prime
example. IRS generates an estimated four dollars
for each dollar in its budget.333 Yet, over six years
(2010–2016), its funding was slashed 17 percent,
Financing and Budgeting Governments 265
controlling for inflation; its employees were reduced
by 14 percent, and its crucial enforcement staff by
23 percent. IRS’s workload, however, grew by 7
percent, or more than nine million new returns.334
As a result, IRS leaves around $400 billion a year
uncollected, or roughly the equivalent of the annual
federal deficit.
Because of budget and personnel cuts, there is
a less than 1 percent chance that the IRS will audit
your return,335 and performing fewer audits costs
Washington $8 billion annually;336 for every dollar
spent on tax enforcement, IRS collects six.337 In
Dallas, Texas, the IRS office no longer pursues tax-
payers who owe less than $1 million (if you owe
$999,000, you are home free in Dallas).338 This
decision seems particularly unwise when we learn
that “targeted” IRS audits “that focus on high-
income taxpayers produce more than $47 for every
$1  spent,”339 or about eight times more than the
return on normal tax enforcement.
Comparable cuts occur in the states. In Montana,
for example, each dollar cut from its revenue depart-
ment led to three dollars lost in revenue.340
Accountancy agencies also more than pay for
themselves. For every dollar invested in the budget
of the Government Accountability Office, its 3,000
employees return $112 in saved federal expendi-
tures.341
Our final example: over three years, Congress
cut almost $6.3 billion, adjusted for inflation, from
IRS (which suffered 70 percent of the total), GAO,
inspectors general (who generate $8.79 for every
one dollar in their budgets,342 yet rank budgetary
constraints as their top concern343), and “program
integrity initiatives” designed to reduce waste, fraud,
and abuse in two large departments. It is difficult to
conceive of a slew of more counterproductive cuts,
which “increased waste, fraud, and abuse by around
$27.2 billion over the same [three-year] time period.”
When we combine the $6.3 billion in cuts with the
$27.2 billion in lost funds that resulted from them,
there emerges “an estimated $20.9 billion in higher
budget deficits as a consequence of these misguided
austerity measures.”344
Although, as the foregoing findings suggest,
more information is becoming available about what
kinds of cuts “actually wind up costing money, real
specifics about how much every dollar in budgetary
cuts actually cost [still] are few and far between.”345
 266 PA R T I I I Public and Nonprofit Management
Enter Cutback Management Thus we arrive at an
administrative extension of TBB: cutback manage-
ment, which is the bundle of managerial techniques
that lower costs when governments are confronted
by fiscal constraints. State, but particularly local,
governments developed these techniques.
The techniques of cutback management include
short-term and long-term approaches.
Cutting Back for the Short Term Examples of
short-term cutbacks include reducing temporary
employees, deferring maintenance, and postponing
purchases.
Short-term cutback management does little
more than buy time; its cuts are inherently transi-
tory, and often harbor hidden long-term costs, but
appear to be the most commonly used.
Eighty to 90 percent of state agencies rely on
short-term methods, and they are handily their most
favored approach.346
Two short-term techniques are especially
common, and illuminate the deficiencies of the
approach.
Freezing Hiring One is the hiring freeze, which
means that, when employees quit or retire, no
replacement is hired or fewer vacancies are filled. A
problem arises when hiring freezes harm vital pro-
grams more than lesser ones.
Across-the-Board Budget Cuts Undifferentiated,
or across-the-board, budget cuts reduce the
budgets  of all agencies and programs by the same
percentage. Typically, these cuts hurt those agen-
cies that have a high proportion of skilled workers
providing critical services, such as those “analy-
sis shops” mentioned earlier, whereas they do not
have a major impact on agencies which deliver a
routine service, such as mowing highway medians,
that easily can be slowed down to accommodate a
budget cut.
Cutting Back for the Long Term Reducing expend-
itures permanently requires longer-term approaches.
An all-too-common, but misguided, proposal
in this regard is that of reorganizing government
agencies so that they can manage policy areas more
efficiently. As we explained in Chapter 7, such reor-
ganizations are difficult and often futile, and this
futility includes cutting costs. Reorganizations of the
federal government “virtually never” realize greater
cost savings;347 state reorganizations bring no new
“economies into bureaucracy”;348 and analyses of
restructuring in local governments arrive at compa-
rable conclusions.349
There are four primary techniques of cutback
management that are geared for the longer haul.
Improving Productivity As we detailed in Chapter
7, all levels of government are deeply engaged in
improving productivity in the forms of performance
measures and other methods. Sixty to 70 percent of
state agencies manage cutbacks by introducing pro-
ductivity improvements.350
Using Alternative Delivery Systems At root, alter-
native methods of service delivery are those means
of providing public services that rely, in whole or
part, on people who are not employees of the gov-
ernment sponsoring the program, and we review
these methods in Chapters 11 and 12. Forty to 60
percent of state agencies cut back by using these
approaches.351
Rearranging Intergovernmental Relations As  we
explain in Chapter 12, governments often can
achieve economies of scale and simplify processes by
entering into intergovernmental service agreements,
annexing adjacent territory (by local governments),
and undertaking regional approaches to governing.
From two- to three-fifths of state agencies reduce
fiscal stress by simply shifting their programs to
local governments.352
Prioritizing Programs Finally, agencies can prior-
itize programs, and then cut the lowest-ranked pro-
grams, a method favored by 60 to 70 percent of state
agencies.353
Lessons Learned Authorities agree that the fol-
lowing steps should be taken when faced with cut-
backs:354
■ Top management should lead efforts to manage
declining resources.
■ Be sure that all interested parties are informed
of the need for cutbacks, and solicit their views
on those cutbacks. Share information.

■ Big data analytics (described in Chapter 7)
should guide decision making.
■ Determine the criteria for how priorities
should be set. Ideally, these priorities should
be established well before the advent of a
budget crisis, as it is this step that can identify
programs that, if cut, could cost more money
than they save. While these criteria should be
determined by the chief executive, the views
of other employees in the agency should
be carefully considered, and if possible,
implemented. Use teams in planning cuts.
■ Establish a preliminary and tentative priority
list based on the explicit criteria that have been
developed for priority setting.
■ Attempt to build some public consensus
through various meetings to develop a final
priority list.
■ Ensure that elected officials and other pertinent
decision makers approve of the priority list.
■ Understand that there will never be complete
agreement in the priority setting process, but
keep explaining to the public at large and to
agency employees why the priorities have been
set in the manner that they have.
■ Preserve core organizational competencies by
“carefully managing the reduction of organized
complexity.” This process includes the finding
of a new identity for the downsized agency;
identifying and integrating its “key strategic
components”; taking care of those employees
being let go before assimilating those who
remain; and “dramatically” slowing the pace of
cutbacks by “strategically waiting.”355
■ Public executives faced with cutting public
programs should be accessible, and remain
honest, open, professional, and unflappable in
the painful process of prioritization. Cutback
management is, above all, a process of conflict
reduction.
The Legacies of Target Base Budgeting
In addition to cutback management, TBB has left
several legacies of consequence, all of them positive.
Budgetary Realism TBB is an unusually realistic
budgeting system because it is driven by revenue.
Agency budgets have a greater likelihood of reflecting
Financing and Budgeting Governments 267
available revenue because the chief executive is
setting their targets, based on projected revenue.
Seeing the Big Picture through a Common Language
of the Budget TBB also has greatly smoothed
communication between public administrators and
legislators by providing them with a common budget
vocabulary. This, in turn, has enhanced the ability of
top executives to understand, through a budgetary
lens, the “big picture” of how the whole of govern-
ment spends its funds—all its funds.
Enhancing Executive Control TBB’s top-down
target setting accords the elected chief executive
much more budgetary control over the agencies.
Prior to the adoption of TBB, elected chief execu-
tives relied on their agency heads to identify where
their budgets could be cut. “How does one convince
administrators to collect information that might
help others, but can only harm them?”356 The
answer, of course, is that one cannot. TBB resolves
this dilemma by capping or cutting agency budgets,
and then letting agency administrators deal with it.
PERFORMANCE-BASED
BUDGETING, 1993–PRESENT
A new budgeting phase is now with us, and it re-
invokes, for at least the third time in the evolution of
the budget, the vexing problem of paying for meas-
urable performance, rather than shelling out public
money to government agencies simply because the
agencies are there. Welcome to Performance-Based
Budgeting (PBB).
What Is Performance-Based Budgeting?
Performance-Based Budgeting, also known as
Budgeting for Results, Results Budgeting, Mission
Budgeting, Entrepreneurial Budgeting, Performance
Budgeting, and Performance-Informed Budgeting, is
a system of resource allocation that “links the per-
formance levels” of programs with “specific budget
amounts.”357
Inputs, Outputs, Alternatives, and Outcomes Even
though the scope of Performance-Based Budgeting
would seem, at first glance, to be as comprehensive as
 268 PA R T I I I Public and Nonprofit Management
Programming-Planning-Budgeting, it is less complex
and, probably, less ambitious.
Just like Program/Performance Budgeting,  PBB
addresses inputs and outputs. Somewhat like
Programming-Planning-Budgeting and Zero Base
Budgeting, PBB considers alternatives, but largely
in terms of alternative delivery systems that could
wring out greater efficiency and effectiveness; it
is much less likely than either format to consider
alternative policies. Like Programming-Planning-
Budgeting, Budgeting-by-Objectives, and Target
Base Budgeting, PBB also addresses outcomes, but
essentially just two: efficiency and effectiveness. And,
although PBB may be less challenging on some fronts
than Programming-Planning-Budgeting, it is far from
simple; three-fourths of state budgeters think that
PBB has “increased my workload.”358
Of Paperclips and Parks With the foregoing in
mind, PBB would steer budgeters to ask the follow-
ing questions: How many papers are being clipped?
How many people are the parks serving? Are there
alternative paper-fastening technologies and non-
park options that would be more efficient and effec-
tive? Are our desired outcomes—i.e., more efficient
and effective paper-fastening and park support ser-
vices—being realized?
Budgeting for Federal Performance
“The federal government has been pursuing per-
formance-informed budget reforms for more than
50 years”359 (at least), but, by 1990, this pursuit
enjoyed “far broader and more enthusiastic support
throughout the bureaucracy than earlier efforts.”360
Bureaucratic enthusiasm culminated in 1993 with the
passage of the Government Performance and Results
Act (also known as the Results Act), directing agen-
cies to link budget inputs with performance outcomes.
The early auguries are cautiously promising.
Federal fiscal and budgetary management improved
during the 1990s.361 During the following decade,
agencies’ performance scores affected agency
budget allocations in “statistically significant”362
and “limited yet important”363 ways. And, in the
2010s, these trends strengthened (63 percent of
agency-based performance improvement officers,
for example, state that “performance information
is used in making [agency] budget decisions”364),
despite the facts that a lurching economy and an ide-
ologically fractured Congress are known to under-
mine the full potential of federal PBB.365
Budgeting for State Performance
All the states now have laws or executive orders
that include the routine collection and reporting
of performance data for budgetary purposes.366
All but one of these requirements were enacted
after 1990,367 so the states’ interest in Performance-
Based Budgeting is recent, renewed, and real: 44
percent of state budget officers use the term “per-
formance budgeting” to describe their budgeting
approach.368 Thriving economies correlate, strongly
and positively, with the states’ intense usage of
PBB.369
Administrators, Legislators, and PBB An analysis
of the states’ use of PBB over fifteen years found that
it “is only selectively applied by legislators in most
states, whereas “top executive policy makers, middle
managers, and staff embrace and utilize PBB systems
more extensively,” largely because it “functions
more effectively for executive management than for
legislative purposes.”370
Still, PBB can have some impact on legislative
budget making. In 1993 legislatures in the five states
that led in PBB’s use were not swayed by perfor-
mance information,371 but, a dozen years later, such
information “influenced legislative budgeting delib-
erations” in the five leading states.372
There Oughtta Be a Law Surprisingly, whether
PBB is legislated or is an administrative policy makes
a significant difference in how well PBB functions.
Of the thirty-nine states where PBB is the law, 26
percent are “strong users of performance informa-
tion for budgetary decision making,” and 20 percent
are “weak” users. Of the eleven states without a law,
none are categorized as strong users, and 64 percent
as weak ones.
There also oughtta be a better law. The states
that use PBB most effectively have laws that often:
link their states’ budgets, performance measures,
and strategic plans; reward high performance and
sanction low performance; specify benchmarks,
outcome measures, a role for citizens, and the fre-
quency of performance reports; and identify who is

responsible for strategic planning, measuring, evalu-
ating, and checking.373
Benefits of Budgeting for State Performance
Three-quarters of state budget officers think that
PBB has made their states “better off,” and almost
two-fifths report that “some changes in appropria-
tions are directly attributable” to PBB.374
These changes bring benefits. “Those states that
have begun to make policy decisions based on [PBB]
have saved impressive amounts of money—some in
very short periods of time,” and have laid a “foun-
dation for a leaner, more effective government” in
the future.375 PBB has “a statistically significant and
positive effect on budget outcomes,” and the citizens
of these states benefit directly from it: state govern-
ments that use PBB spend $332 more per capita
annually than those that do not.376
Budgeting for Local Performance
Nearly half of cities and counties “use performance
measures to justify departmental budget requests.”377
Some four decades earlier, only a fourth of cities used
at least one measure in even one department, essen-
tially precluding the possibility of linking budgets
with performance.378 “About 70 percent” of the
largest cities and counties use performance measures
in their budgets.379
Almost three out of ten city managers have
recommended to their councils that they change
their “budget format to fund outcomes instead
of inputs,”380 and report that this was among the
most difficult, but worthwhile, innovations that they
undertook.381
Their efforts are not wasted: Twelve percent
of all cities reward their departments for meeting
their performance targets by granting them addi-
tional budget allocations.382 More than nine out
of ten of those cities that use performance meas-
ures city-wide (two-fifths of cities do so383) report
that budgetary reallocations have resulted from
using performance-measurement data, including 11
percent where reallocations were substantial.384 In
the context of traditional, incremental, public budg-
eting, these are significant shifts.
All in all, PBB, when “strong executive lead-
ership” is present, “can improve local budgeting
despite severe political constraints. . .. [and] can be
Financing and Budgeting Governments 269
used by managers to restructure activity planning
and reallocate resources.”385
The Possible Legacy of Performance-Based
Budgeting
Governments have tried tying budgets to perfor-
mance before, and typically have been disappointed.
As we explained in Chapter 7, measuring perfor-
mance in both the public and independent sectors
is fraught with difficult, and sometimes insurmount-
able, problems. “Although performance measures
have certainly helped management, you’d need to
look far and wide [at least in the opinion of these
observers] to find good examples of budgets that
have been clearly formed by performance meas-
ures.”386 If Performance-Based Budgeting fulfills the
investment being placed in it, then it will leave a
legacy of lasting magnitude.
TWO USEFUL, BUT RARELY USED,
BUDGETARY TOOLS
We have reviewed a bevy of budgetary formats, but,
regardless of the format used, legislatures rarely
permit agencies to use a pair of budgetary tools that
almost always facilitate greater efficiency, savings,
and other benefits.
The Biennial Budget
One is the biennial, or two-year, budget. Congress
traditionally has favored one-year, or annual,
budgets, but, in 2015, it passed the Bipartisan
Budget Act, which included a biennial budget.
Multiyear budgets are godsends for agencies; the
Pentagon commended (as did other agencies) the
biennial budget as “a break from almost a decade of
continuing resolutions, last-minute budget deals and
occasional government shutdowns. ‘Having some
certainty is absolutely huge for us.’”387
More broadly, biennial budgeting and appropri-
ating eases legislative workloads, permits improved
planning, allows for more thorough legislative over-
sight of departments, and makes it more likely that
the budget process is completed on time.388
Twenty states use two-year budgeting. One-year
budgets are used in the remaining thirty states.389
 270 PA R T I I I Public and Nonprofit Management
The Budget Rollover
A second useful tool is the budget, or allocation,
rollover, which is the ability of an agency to keep all,
or a portion, of its unspent budget dollars that were
allocated for the fiscal year, and spend those unspent
dollars in subsequent years.
Because rollovers are almost always disallowed
by legislatures, agencies expend what funds remain
during the final days of the fiscal year in a frenzied
effort to “prove” to allocators that they need, and
use, every single cent that they are allocated; to not
spend all of their budgets, and then return those
unspent dollars to the general fund, could convince
allocators that the agency is over-budgeted and
result in lower future budgets.
Hence, an analysis of 14.6 million federal pro-
curement contracts let over five years found that,
during the final week of the fiscal year, agencies spent
nearly five times as much on contracts than they
spent, on average, in each previous week of the fiscal
year.390 Everyone, from those who allocate budgets
to those who receive them, fully understands this
longstanding game of use-it-or-lose-it.
The game’s continuance is all the more puzzling,
however, when we realize that rollovers produce
both higher quality and larger savings.
A study of 686 federal information technology
(IT) contracts found that those contracts which were
procured in the final week of the fiscal year were,
according to the agencies’ chief information officers,
from two to six times more likely to be of lower
quality than contracts that were procured during
the preceding fifty-one weeks. By contrast, when a
rollover is permitted (the Department of Justice has
had, since 1992, the unique authority to roll over 4
percent of its IT appropriation), contracting quality
is quite high and there is no year-end spending
spike.391
Alternatively, Congress could fund the agencies
an estimated 13 percent less than it allocates cur-
rently, and the agencies would be signing contracts
that still would be comparable in quality to con-
tracts that are let without the benefit of rollovers.392
Introducing rollovers to federal agencies (not to
mention state and local ones, where the absence of
rollovers has been criticized as “a powerful disincen-
tive for agencies . . . to create efficiencies that result
in cost savings”393) might achieve historic savings
that could rival those that were attained almost
instantly when three new budgetary tools were
introduced, simultaneously, in 1921: consolidated
executive budgets, budget analysts, and account-
ants; recall that these tools cut federal spending by
an astonishing 35 percent in a single year.
ACQUIRING BUDGETS:
ADMINISTRATORS AND
ARGUMENTS
Conventional wisdom holds that rapidly-grow-
ing budgets result in more effective agencies. This,
however, seems not to be the case. Rather, stable
“budgetary incrementalism,” or minor annual
adjustments in an agency’s budget, has “a beneficial
effect” on agency performance.394
This fact of budgetary life, however, has not
restrained many bureaucrats from aggressively
seeking bigger budgets, and their most effective
method is political. “What really counts in helping
an agency get the appropriations it desires? As
several informants put it in almost identical words,
‘It’s not what’s in your estimates but how good a
politician you are that matters.’”395
To be a good budgetary politician requires the
use of standing strategies and opportunistic tactics.396
Standing Strategies for Securing Budgets
Standing strategies are used on a continuing basis by
an agency. There are three variants.
Find, Serve, and Use a Clientele for the Services
You Perform An agency, when threatened, mobi-
lizes its clients. Public safety and parks departments,
for example, often have solid bases of citizen defend-
ers, and they are not above deploying them in budg-
etary battles.
Establish Confidence in the Mind of the Reviewer
That You Can Carry Out the Complicated Program
(Which He or She Seldom Understands) Efficiently
and Effectively If those who allocate budgets
believe in an agency’s abilities, big budgets are
almost certain. A prime example is the Department
of Defense, at least when the Republican Party is in
power.

Capitalize on the Fragmentary Budgetary Review
Process The Pentagon has successfully argued that
the development of new weapons systems cannot
be held to a rigid schedule. When combined with
Congress’s fragmentary budget review process,
Defense projects are extended, often reluctantly, year
after year on the logic that there is little choice if the
research is to pay off.
Opportunistic Tactics for Securing Budgets
Opportunistic tactics are designed to capitalize on
unusual opportunities that might defend or expand
the agency’s budgetary base. There are three varia-
tions.
Guard Against Cuts in Old Programs There are
several ways that an agency can defend its programs,
but a favored one is to eliminate its most popular
ones. When the National Institutes of Health (NIH)
decided to start a dental research program, Congress
directed that it be funded by drawing money from
other programs. NIH obliged, cutting their pro-
grams in heart disease, cancer, and mental health.
Ultimately, Congress not only restored these funds,
but also boosted the budget for dental research.
Inch Ahead with Old Programs NIH traditionally
has inched ahead with old programs by reducing the
number of research grants (“Look! We’re economiz-
ing!”), but increasing the total dollars in them (thus
inching ahead).
Add New Programs When an agency wants to
add new programs, a truckload of tactics is at its
disposal. Because the new and novel often are dis-
trusted by those who allocate budgets, agencies
may present new programs as old and dull ones; as
only temporary; as money-savers; as ways to reduce
backlogs; as so trivial they warrant no examination;
or as merely logical continuations of old programs.
Selling new programs can deteriorate into “the
sort of haggling more likely to be found at a car deal-
ership than a Senate conference room.” For example,
“Air Force officials assured cost-conscious lawmak-
ers that they had swung a deal to get . . . Raptor
fighter jets for the bargain-basement price of $110
million each. Of course, if they wanted a few extras
that could lump another $40 million to $60 million
Financing and Budgeting Governments 271
onto the sticker price. Only when pressed did they
acknowledge that one of the extras happens to be
the engine.” As one Representative ruefully noted,
“I’ve learned that you’ve got to ask exactly the right
question at exactly the right time.”397
The Budget-Minimizing Bureaucrat
If the foregoing review of budget-acquiring strate-
gies and tactics sounds cynical, it is. To be cynical,
however, is not necessarily to be scrofulous.
Overall, government employees, relative to
private-sector workers, generally support policies,
such as bigger budgets, that lead to larger gov-
ernments,398 but, when we ascend a bit higher up
the public hierarchy, government executives “are
no more likely than the average citizen to favor
bigger government budgets.”399 Although there
are indications that some agency chiefs behave as
“budget-maximizing bureaucrats” who will always
try to fatten their budgets,400 most public execu-
tives are actually “budget-minimizing bureaucrats.”
Senior federal administrators “are more frugal and
less inclined to favor increased government spending
than the general public. . .. even on issues that fall
within their own departments’ jurisdictions.”401
A similar executive bias is found in state and
local governments. “To a substantial extent,” surveys
of state agency heads conducted over five decades
have “debunked” theories of budgetary “bureau-
cratic maximizing,” and find instead a “substantial
component of conservers.”402 And a stunning 92
percent of city managers report that “budgetary
constraints” are “very influential in their decision
making.”403
LEGISLATING BUDGETS:
POLITICIANS AND POWER
Just as getting a budget is a political process, so is
granting one.
Legislating Federal Budgets
Despite the recent adoption of a biennial budget
(which may or may not be continued), making
federal budgets is a process that increasingly is
nearing collapse.
 272 PA R T I I I Public and Nonprofit Management
The Congressional Budget and Impoundment
Control Act of 1974 In 1974, Congress decided
to gain a comprehensive grip on the budgetary
process, and enacted the Congressional Budget
and Impoundment Control Act, also known as the
Congressional Budget Act. The act introduced six
quasi-revolutionary changes into what had been an
impenetrable insiders’ budgetary game.
Comprehensive Budget Committees The Congress-
ional Budget Act established, for the very first time
(incredibly), in each chamber a budget committee
responsible for reviewing the president’s annual
budget proposals as a whole and determining their
potential effects on the economy.
Concurrent Budget Resolutions The act requires
that, on two prescribed dates every year, Congress
must vote explicitly on the budget as an entire
package and on budget priorities. In 1982, Congress
abandoned the first of these votes, which set budget-
ary targets, but retained the second on the “binding
concurrent budget resolution,” which remains the
only time that Congress votes on budget priorities,
total spending and revenue, and the size of the deficit.
Reconciliation The key in forcing Congress to
vote as a body on budgets is “reconciliation,” which
was “almost an afterthought in 1974, [but] has in
many ways become the most important part of the
process.”404 Reconciliation empowers the budget
committees in each chamber to require, if need be,
other committees to bring their policies’ costs within
overall spending limits. So central is this power
that, since 1974, federal budgets are expressed as
“Omnibus Budget Reconciliation Acts.”
A Budget-Making Timetable The act imposed
some logic on the budgetary process by stipulating,
among other requirements, that Congress may not
adjourn until all budgetary differences have been
ironed out.
Improved Spending Controls Patterns of “back-
door spending” had developed that were not
subject to the regular appropriations process, and
President Nixon had grown increasingly enamored
of impounding (that is, not spending) funds appro-
priated by Congress. The Act brought backdoor
spending under greater congressional control, and
the impoundment of funds was stringently limited.
The Congressional Budget Office Finally, the act
established a Congressional Budget Office (CBO) as
a budgetary counter bureaucracy to offset the power
of the president’s OMB, improve Congress’s analyti-
cal base, and make fiscal projections.
Congress Gets into the Act The Congressional
Budget Act has been described as “the most impor-
tant change in the budget process since the Budget
and Accounting Act of 1921.”405 The act let the
sun shine in on congressional budget making by
decentralizing Congress’s appropriations and
budget-making powers; assured that Congress
adopts budgets, openly and explicitly, by major-
ity vote; established a system for instilling fiscal
responsibility; and maintained the president’s budg-
etary role.
The Ruination of Resolution and Reconciliation
For  a generation, the act met expectations, and
forced Congress to vote on total spending and the
deficit’s size—votes that Congress frequently avoided
before the act’s passage in 1974—and it prevented
Congress from allocating funds which exceeded the
total spending that it had approved in the budget
resolution.
After Fiscal Year 1998, however, the budget
process and fiscal discipline have been largely aban-
doned. In fiscal years 1999, 2003, 2005, 2007, and
2011 through 2017 (the latest year at this writing),
Congress failed to pass binding concurrent budget
resolutions, the act’s key provision.406 Instead, one
or both chambers enacted deeming resolutions, an
unofficial device that gives, or “deems,” new spend-
ing caps for each appropriation, even though the
total budget has not been agreed upon. This, of
course, defeats the act’s purpose of strengthening
budgetary discipline.
A Tardy and Terrible Timetable Congress has
passed all twelve of its regular appropriations bills
on time in only six years since 1974.407 “The last
time Congress passed all of its spending bills by the
October 1 deadline, Seinfeld was on television and
people were dancing the Macarena,”408 or Fiscal
Year 1997.

When time runs out, Congress passes a continu-
ing spending resolution, or a continuing resolution,
which is a temporary appropriations act that typi-
cally permits an agency to spend what it was allo-
cated the previous year, but does not actually grant
it the money to do so. In all but three years out of
thirty-one, Congress has passed continuing resolu-
tions,409 which last, on average, three months. From
1999 to 2009, their duration lengthened,410 but,
since then, their duration steadily shortened, further
amplifying “the havoc caused by a disruptive budg-
etary process.”411
Because agency administrators are uncertain
about their budgets, they may hoard funds and post-
pone contracting and purchasing; worried contrac-
tors and vendors, consequently, raise prices. Hiring
is frozen. “You’re almost guaranteeing that there
will be incompetence, because the agencies don’t
have the resources to do the job.”412
The Radical New Role of Revenue Forecasting The
Congressional Budget Act requires that each year the
Congressional Budget Office make economic pro-
jections on which revenue forecasts can be based.
Regrettably, these forecasts have been “a bit too
high” (1.1 percent, on average) in every year over
thirty-six years; in some years, forecasts have over-
estimated revenue by 10 to 25 percent.413
Why is this? For one, economic forecasts are
based on a welter of changing variables, such as
pretax corporate profits, the GDP deflater, and the
yield on ten-year Treasury Notes, among many
others. “Each of these things is the product of mul-
tiple factors, and each of those depends on multiple
factors, and so on, with the whole thing becoming
an ever-branching Tree of Uncertainty.”414
For another, infinitesimal changes in economic
assumptions can yield immense differences in pre-
dicted federal revenue. The prospect of rosy scenar-
ios can tempt, and has tempted, budget makers into
tweaking economic assumptions in ways that ease,
but greatly distort, their revenue estimates.
Originally meant to guide policymaking,
revenue estimating, to quote a Washington lobbyist,
“has become policy.”415
Budget Brawls The Congressional Budget Act also
correlates with increasingly bitter budgetary battles
within Congress, which have resulted in eighteen
Financing and Budgeting Governments 273
department-wide or broader shutdowns in the
federal government since the act went into effect.416
The latest shutdown occurred in 2013, and was
triggered by a congressional dispute over the contin-
uance of the Patient Protection and Affordable Care
Act of 2010. At sixteen days, it was the third longest
in shutdown history, and it furloughed some 850,000
federal employees, or two-fifths of the civilian work-
force, who saw their incomes decline by 40 percent
and their weekly spending by 20 percent;417 it added
$2.5 billion in retroactive federal compensation
costs,418 and shrank the economy from an estimated
0.1 to 0.15 percent each week,419 including $414
million in lost local revenue because of 401 closed
national parks.420 Congress, which had precipitated
all this misery and much more, also suffered: ice
cream was cut from congressional lunches.421
The Emergence of OMB President Reagan, in his
first year in office (1981), transferred from the agency
heads to OMB their longstanding responsibility for
shepherding through Congress the president’s pro-
posed budgets. Not only was OMB’s budget-making
hand strengthened, but its policymaking hand was
as well, rendering OMB’s administrators “arguably
the most powerful people on the civilian side of the
government,” a stature that OMB has since retained
and broadened.422
Legislating State Budgets
Few of Washington’s bizarre budgetary byways are
found in state capitals.
Unlike Congress, state legislatures do not shut
down government. They do, however, run into budget
impasses, sometimes for months, largely because
of slowing revenue, and for the most part these
disputes are far less partisan than in Washington.
Nevertheless, employees are paid (occasionally
through emergency spending) and schools remain
open. Disruptions, however, do occur, and delays in
payments for social programs and to contractors are
common.423
There are, however, are two similarities between
state budgeting and federal budgeting.
First, as in Washington, all states have budget
offices in their legislative branches as well as in their
executive ones. Over time, these offices have grown
“more competitive in terms of their organizational
 274 PA R T I I I Public and Nonprofit Management
and technological capacities,” and their “struggle for
dominance” likely will continue.424
And, second, all states forecast revenue, a prac-
tice that has become central in budgeting at all gov-
ernmental levels.
Revenue Forecasting in the States: An Increasing
Inaccuracy All governors’ budget proposals
contain revenue estimates.
The accuracy of these estimates can be criti-
cal. In New York, for instance, a 1 percent error
in forecasting what the general fund’s revenue will
be amounts to nearly half of what the state spends
annually on public assistance.425
From 1975 through 1992, state forecasters’
revenue estimates were, on average, 2.1 percent
lower per year than the revenues that the states actu-
ally collected. This low-ball error was deliberate,
as budgeters were well aware that if they collected
more revenue than they projected, they would be
viewed as “heroes,” rather than as “villains.” When
economic times were tough, however, and accurate
forecasts were essential, “the average forecast error
. . . was near zero.”426
Since then, state revenue forecasting has grown
befogged. From 1987 through 2001, the median
error rate averaged 3.5 percent per year, but after
2001, the error rate grew; between 2009 and 2011, it
nearly doubled to 6 percent, falling off to more than
2 percent thereafter. Growing revenue volatility is the
culprit, particularly in the personal and corporate
income taxes, in which unpredictable fluctuations
caused by capital gains play an increasing role.427
In addition, “political pressures on budget fore-
casters [explain] a large fraction of forecast errors.”
In gubernatorial re-election years, the average
budget deficits are, on average, twenty-seven dollars
more per capita than in non-election years because
sitting governors demand rosy (and balanced) budg-
etary scenarios that will benefit their re-election.428
Compounding this growing mess is the recent
introduction of tax-cut “triggers,” which reduce
taxes or initiate tax refunds or credits provided
that revenue goals, based on increasingly inaccurate
revenue forecasts, will be met; at least eight states
have or will have triggers, and they are not working
well.429
When budget officers in both branches work
together, their governments gain more accurate
revenue forecasts than when they work separately.
These joint forecasts actually add small, but still
“significant dollar amounts,” to state budgets.430
A Withering of the Governors’ Budget-Making
Powers? The power to estimate revenue associates
positively with the power to shape the budget,431
and, in twenty-one states, these estimates are calcu-
lated in the legislature; they are done by the exec-
utive branch in sixteen states, and they are a joint
effort between the legislative and executive branches
in thirteen.432
The fact that less than a third of the governors
retain the exclusive power to forecast revenue reflects
a slipping budgetary authority. Gubernatorial budg-
etary power peaked in the mid-twentieth century,
when the introduction of the executive budget in the
states was largely completed. In only 36 percent of
the states do budget officials in both the legislative
and executive branches agree that their governors
are their states’ primary budget formulator,433 a
drop of nearly two-fifths over just a dozen years.434
In addition, the process of legislative budget
making itself erodes gubernatorial authority in most
states. As the budget is being formulated, legislatures
in twenty-nine states split their governors’ proposed
budget into “pieces” (that is, spending bills, often
hundreds of them), a practice that “increases the
chance that pieces of the budget will be isolated and
captured by special interest groups . . . weakening
executive authority.”435
“It is not so much that the governors have lost
[budget-forming] power in recent years as that the
legislatures have gained power.”436
The Rise of State Budget Offices Budget analysts
and similar professionals in state budget offices have
increased by a fifth since 1975,437 and their profes-
sionalism has deepened. Almost three-fifths of the
“professional personnel” in these offices have at
least a master’s degree,438 compared to not even a
sixth thirty years earlier,439 and fully eight out of ten
were working in their state governments prior to
their appointment.440
These trends have empowered the budgeters.
The proportion of state budget offices that control
the expenditure of legislatively-appropriated funds
by line agencies has grown over three decades
from about three-quarters to “virtually all budget

offices.”441 Budgeters are now policymakers, wield-
ing “significant influence in state policymaking.”442
Legislating Local Budgets
With the rapid introduction of chief administrative
officers into local governments during the twentieth
century and in this one, local budgeting significantly
improved its usefulness and accountability.
Revenue Forecasting in Local Governments All
cities and counties monitor financial trends and fore-
cast their revenues and expenses. In contrast to the
federal and state governments, revenue-estimating
tensions between executives and legislators are
largely absent because budget professionals in the
executive offices dominate local revenue forecasting.
Local legislators appear “to play only an informal,
indirect role” in the process.443
Local forecasters routinely under-forecast
revenue by 1 to 7 percent. “Unlike other levels of
government, local finance officials receive limited
political or bureaucratic scrutiny that might induce
more accurate forecasts.”444
Making and Managing Local Budgets Typically,
the city or county manager recommends a budget
to the local council, which approves the proposed
budget with few, if any, alterations of consequence.
However, citizens are quite involved in local budget
formulation. More than three-quarters of officials
state that their cities are very likely (45 percent) or
likely (31 percent) “to set up some sort of delibera-
tive public engagement process” to address specific
budgetary issues.445
Better financial management in local govern-
ments associates with outsiders. Top local finance
managers who are more innovative and attentive to
their governments’ financial viability are more likely
to have been hired from outside their government
rather than having been promoted from within,446
and appointing outside financial-oversight boards
appears to be “an effective tool” in improving local
fiscal accountability.447
Enter the State Budgeting in local governments
differs markedly from budgeting in the federal and
state governments because the states stipulate, often
in miasmic detail, how their local governments may
Financing and Budgeting Governments 275
budget. Forty-three states set the fiscal year for their
local governments. Laws in thirty-one states specify
the budget form that their cities must use, and thirty-
two states do so for counties. The clear trend is one
of additional states adopting these and other restric-
tions.448
State involvement in the budgetary affairs of
their local governments is sometimes needed, but
it is not without problems. Because they are often
part of state constitutions, state budgetary regula-
tions are usually rigid, across-the-board, and quickly
become dated; thus, they cause unnecessary ineffi-
ciencies in local administration. More gravely, they
sometimes favor special interests over the general
interest, thereby “creating budget processes” that
override local priorities and minimize services.449
“BUDGETEERS”: HUMBLE
NEVERMORE
More than 29,000 budget analysts work in American
governments, accounting for an impressive 88
percent of all budgeters in the country.450 They are
an ill-understood lot.
We quoted earlier the first budget director of
the United States to the effect that his office was
concerned only with the “humbler,” hum-drum,
housekeeping ticky-tack of government, and never,
heavens forefend, with any “question of policy.”451
This obsequious and misleading, but influential,
claim suggests not only that budgeting is humble, but
that budgeters are, too. (The ponderous irony here is
that the budgeter who made this claim was himself
far from humble; he also served as ambassador to
Britain, vice president, and, for good measure, won
the Nobel Peace Prize.) Some empathetic academ-
ics think that our benighted budgeters could benefit
from a bit of cheerleading, and the word, “budget-
eer,” is increasingly common in the literature—a sign
of an apparent effort to boost the presumably low
self-esteem of bottom-lining budgeters by identify-
ing them with more raffish company: buccaneers,
privateers, profiteers, musketeers, and mutineers.
We suspect that few, if any, budget officers need
a literary artifice to bolster their allegedly anemic
egos. Indeed, public budgeters seem quite comfort-
able in their own skins: as one of only two public
administrative professions commanding salaries
 276 PA R T I I I Public and Nonprofit Management
that are roughly comparable to those of their cor-
porate counterparts,452 budgeters are recognized
as highly valued contributors to good governance,
and they are happily immersing themselves in the
“humbler and routine business of government,”453
knowing full well that those routines, in reality,
often do involve determining major questions of
public policy.
NOTES
1. Binyamin Amin Appelbaum and Robert Gebeloff,
“Complaints Aside, Most Face Lower Tax Burden
than in 1980,” New York Times (November 29,
2012). Datum is for 1980–2012.
2. As derived from data in U.S. Office of Management
and Budget, “Historical Tables,” The President’s
Budget for Fiscal Year 2017 (Washington, DC:
U.S. Government Publishing Office, 2016), Tables
2.1, 2.5. Current figure is for FY 2015. For pur-
poses of this discussion, federal general revenue
is the sum of revenues provided by personal and
corporate income taxes, excise taxes, and gift and
estate taxes.
3. As derived from data in ibid. Current figure is for
FY 2015.
4. As derived from data in ibid. Current figure is for
FY 2015.
5. As derived from data in ibid. Current figure is for
FY 2015.
6. As derived from data in ibid., Tables 1.1, 2.5.
Current figure is for FY 2015.
7. Ibid., Table 2.2. Current figure is for FY 2015.
8. As derived from data in ibid., Table 2.4. Figure is
for FY 2015.
9. Julia B. Isaacs, Public Spending on Children
and the Elderly from a Life-Cycle Perspective
(Washington, DC: Brookings, 2009), p. 2.
10. As derived from data in U.S. Office of Management
and Budget, “Historical Tables,” Tables 1.1, 2.4.
Figure is for FY 2015.
11. John J. DiIulio, Jr., 10 Questions and Answers
about America’s “Big Government,” (Washington,
DC: Brookings.edu, 2017).
12. As derived from data in ProQuest LLC, ProQuest
Statistical Abstract United States, 2016, 4th ed.
(Bethesda, MD: Author, 2016), Tables 554, 557.
Figures are for FY 2013.
13. Pew Research Center, A Bipartisan Nation of
Beneficiaries (Washington, DC: Author, 2012).
14. As derived from data in ProQuest LLC, ProQuest
Statistical Abstract United States, 2016, Table
494. Figures are for FY 2015.
15. As derived from data in U.S. Office of Management
and Budget, “Historical Tables,” Tables 1.1, 8.5.
Figures are for FY 2015.
16. Jeffrey D. Sachs, “Our Dangerous Budget and
What to Do About It,” New York Review of
Books (February 6, 2014).
17. U.S. Government Accountability Office, Federal
User Fees: Fee Design Options and Implications
for Managing Revenue Instability, GAO-13-820
(Washington, DC: U.S. Government Printing
Office, 2013). Highlights page. Figure is for FY
2013.
18. Hendrik Hertzberg, “The States We’re In,” The
New Yorker (August 24, 2009), pp. 19–20. The
quotation is on p. 20.
19. Andrew Seaman, “Liquor Costs More at State-
Owned Stores in U.S.: Study,” Reuters Health
(November 7, 2012). Datum is for 2012.
20. U.S. Bureau of the Census, “State and Local
Government Finances by Level of Government
and by State,” Census of Governments, 2013
(Washington, DC: Author, 2016). Figure is for FY
2013.
21. As derived from data in ibid. Figure is for FY
2013.
22. As derived from data in ibid. and American
Council on Intergovernmental Relations, Signi-
ficant Features of Fiscal Federalism, 1995, Vol. 2,
pp. 73, 72. Current figures are for FY 2013.
23. As derived from data in Federation of Tax
Administrators, State Sales Tax Rates and Food
& Drug Exemptions (Washington, DC: Author,
2016). Figure is for 2016.
24. As derived from data in U.S. Bureau of the Census,
“State and Local Government Finances by Level
of Government and by State,” and American
Council on Intergovernmental Relations, Signi-
ficant Features of Fiscal Federalism, 1995, Vol. 2,
p. 72. Current figure is for FY 2013, and includes
taxes  on general and selective sales and gross
receipts.
25. As derived from data in Federation of Tax
Administrators, State Individual Income Taxes
(Washington, DC: Author, 2016). Figure is for FY
2016.
26. As derived from data in U.S. Bureau of the Census,
“State and Local Government Finances by Level of
Government and by State,” and American Council

on Intergovernmental Relations, Significant
Features of Fiscal Federalism, 1995, Vol. 2, p. 72.
Current figure is for 2013.
27. As derived from data in Federation of Tax
Administrators, Range of State Corporate Income
Tax Rates (Washington, DC: Author, 2016).
Figure is for FY 2016.
28. As derived from data in U.S. Bureau of the Census,
“State and Local Government Finances by Level
of Government and by State.” Figure is for FY
2013.
29. As derived from data in American Council on
Intergovernmental Relations, Significant Features
of Fiscal Federalism, 1995, Vol. 2, p. 72.
30. Gary Cornia, Kelly D. Edmiston, David L. Sjoquist,
et al., “The Disappearing State Corporate Income
Tax,” National Tax Journal 58 (March 2005),
pp. 115–139.
31. Robert Tannenwald, Are State and Local Revenue
Systems Obsolete? (Washington, DC: National
League of Cities, 2004).
32. As derived from data in American Council on
Intergovernmental Relations, Significant Features
of Fiscal Federalism, 1995, Vol. 2 (Washington
DC: Author, 1998), p. 73.
33. As derived from data in U.S. Bureau of the Census,
“State and Local Government Finances by Level
of Government and by State.” Figures are for FY
2013.
34. As derived from data in ibid. and American
Council on Intergovernmental Relations, Signifi-
cant Features of Fiscal Federalism, 1995, Vol. 2,
pp. 72–73. Current figures are for FY 2013.
35. As derived from data in ibid. (both citations, but
pp. 52, 72 for the latter). Current data are for FY
2013. “Mid-twentieth century” figures are for FY
1952.
36. As derived from data in ibid. (both citations, but
p. 85 for the latter). Current figures are for FY
2013.
37. Tax Policy Center, The Tax Policy Briefing Book
(Washington, DC: Author, 2010), Entry 3. Figure
is for 2008.
38. Bert Waisanen, State Tax and Expenditure
Limits—2008 (Denver, CO: National Conference
of State Legislatures, 2010). Figures are for
2008.
39. Ibid. Figures are for 2008.
40. Matthew Mitchell, T.E.L. It Like It Is: Do State
Tax and Expenditure Limits Actually Limit
Spending? Working Paper No. 10-71 (Fairfax,
Financing and Budgeting Governments 277
VA: Mercatus Center, George Mason University,
2010).
41. Benjamin Zycher, State and Local Spending: Do
Tax and Expenditure Limits Work? (Washington,
DC: American Enterprise Institute, 2013), p.1.
42. Suho Bae, Seong-gin Moon, and Changhoon
Jung, “Economic Effects of State-Level Tax and
Expenditure Limitations,” Public Administration
Review 72 (September/October 2012), pp. 649–
658. Data are for 1985–2005.
43. Judith Stallman, Steven Deller, Lindsay Amiel, and
Craig Maher, “Tax and Expenditure Limitations
and State Credit Ratings,” Public Finance Review
40 (September 2012), pp. 643–669.
44. ProQuest LLC, ProQuest Statistical Abstract
United States, 2016, 4th ed. (Bethesda, MD: 2016),
Table 459. Figure is for 2012.
45. U.S. Bureau of the Census, “State and Local
Government Finances by Level of Government
and by State.” Figure is for FY 2013.
46. Jerri Killian and Enamul Choudhury, “Continuity
and Change in the Role of City Managers,”
Municipal Year Book, 2010 (Washington,
DC: International City/County Management
Association, 2010), pp. 10–18. The quotation is
on p. 14. Emphasis added. The initial study of this
topic is Paul E. Peterson, City Limits (Chicago:
University of Chicago Press, 1981).
47. U.S. Bureau of the Census, “State and Local
Government Finances by Level of Government
and by State.” Figure is for FY 2013.
48. As derived from data in ibid. and American
Council on Intergovernmental Relations, Signifi-
cant Features of Fiscal Federalism, 1995, Vol. 2,
p. 75. Current figure is for FY 2013.
49. Tax Foundation, Property Taxes on Owner-
Occupied Housing, by State, tax-foundation+1
+property+tax+value+of+hom. Figures are for
2009.
50. As derived from data in U.S. Bureau of the
Census, “State and Local Government Finances
by Level of Government and by State,” and U.S.
Advisory  Commission on Intergovernmental
Relations, Significant Features of Fiscal Feder-
alism, 1995, Vol. 2, p. 74. Current figure is for FY
2013.
51. Yongshong Wu, “How Municipal Property
Tax Responded to State Aid Cuts: The Case of
Massachusetts Municipalities in the Post-2001
Fiscal Crisis,” Public Budgeting & Finance 29
(December 2009), pp. 74–89.
 278 PA R T I I I Public and Nonprofit Management
52. Richard F. Dye and Andrew Reschovsky,
“Property Tax Response to State Aid Cuts in the
Recent Fiscal Crisis,” Public Budgeting & Finance
28 (June 2008), pp. 87–111.
53. Kelly Edmiston and Kenneth Spong, “Tax
Incentives for Homeownership and the Provision
of Local Public Services,” Public Finance Review
40 (January 2012), pp. 116–144.
54. National Conference of State Legislatures, Local
Option Taxes (Denver, CO: Author, 2011). Figure
is for 2011.
55. Scott Mackey, Critical Issues in State-Local
Fiscal Policy, Part 2: A Guide to Local Option
Taxes (Denver, CO: National Conference of State
Legislatures, 1997).
56. National Conference of State Legislatures, Local
Option Taxes. Figure is for 2011.
57. As derived from data in U.S. Bureau of the Census,
“State and Local Government Finances by Level
of Government and by State,” and U.S. Advisory
Commission on Intergovernmental Relations,
Significant Features of Fiscal Federalism, 1995,
Vol. 2, p. 74. Current figure is for FY 2013.
58. Joseph Henchman and Jason Sapia, Local Income
Taxes: City- and County-Level Income and Wage
Taxes Continue to Wane (Washington, DC: Tax
Foundation, 2011). Figures are for 2008.
59. As derived from data in U.S. Bureau of the Census,
“State and Local Government Finances by Level
of Government and by State,” and U.S. Advisory
Commission on Intergovernmental Relat-
ions, Significant Features of Fiscal Federalism,
1995, Vol. 2, p. 74. Current figure is for FY
2013.
60. Taxpolicycenter.org, How Do State and Local
Corporate Income Taxes Work? (Washington,
DC: Author, 2016). Data are for 2015.
61. As derived from data in U.S. Bureau of the Census,
“State and Local Government Finances by Level
of Government and by State.” Figure is for FY
2013.
62. As derived from data in U.S. Bureau of the Census,
Statistical Abstract of the United States, 1986,
106th ed. (Washington, DC: U.S. Government
Printing Office, 1986), Table 475. Figures are for
1975.
63. Anthony Flint, “In Hard Times, Cities Turn to
Fees,” At Lincoln House (May 2015). Figures are
for 1977–2012.
64. As derived from data in U.S. Bureau of the Census,
“State and Local Government Finances by Level
of Government and by State.” Figures are for FY
2013.
65. As derived from data in U.S. Bureau of the
Census, Statistical Abstract of the United States,
1986, Table 475.
66. Richard C. Kearney, “Reinventing Government
and Battling Budget Crises: Manager and Muni-
cipal Government Actions in 2003,” Municipal
Year Book, 2005 (Washington, DC: International
City/County Management Association, 2005),
pp. 27–32. The quotations are on p. 30. Figure is
for 2003.
67. Bruce A. Wallin, Budgeting for Basics:
The Changing Landscape of City Finances
(Washington, DC: Brookings, 2005), p. 6.
68. Hee Soun Jang and Myungjung Kwon, “Enter-
prising Government: The Political and Financial
Effects of Fee-Supported Municipal Services,”
Public Administration Quarterly 38 (Summer
2014), pp. 128–162.
69. George C. Homsy and Mildred E. Warner. “Inter-
municipal Cooperation: The Growing Reform,”
Municipal Year Book, 2014 (Washington, DC:
International City/County Management Asso-
ciation, 2014), pp. 53–65. Data (p. 64) are for
2012.
70. As derived from data in U.S. Bureau of the Census,
“State and Local Government Finances by Level
of Government and by State.” Figures are for FY
2013.
71. As derived from data in ibid. and American
Council on Intergovernmental Relations, Signifi-
cant Features of Fiscal Federalism, 1995, Vol. 2,
p. 74.
72. As derived from data in ibid. (both citations).
Current figure is for FY 2013.
73. As derived from data in U.S. Bureau of the Census,
“State and Local Government Finances by Level
of Government and by State.” Figures are for FY
2013.
74. David B. Walker, The Rebirth of Federalism:
Slouching toward Washington, 2nd ed. (New
York: Chatham House, 2000), p. 227. Figure
is the  average for seven selected years, 1957–
1990.
75. As derived from data in U.S. Bureau of the
Census, “State and Local Government Finan-
ces by Level of Government and by State.” Figures
are for FY  2013. We have assumed that one-
third  of  federal aid to the states continues to be
pass-through grants to local governments.

76. As derived from data in ibid. and American
Council on Intergovernmental Relations, Signi-
ficant Features of Fiscal Federalism, 1995, Vol. 2,
pp. 52, 74. Current data are for FY 2013. “Mid-
twentieth century” figures are for 1952.
77. As derived from data in U.S. Bureau of the Census,
“State and Local Government Finances by Level
of Government and by State.” Figures are for FY
2013.
78. As derived from data in ibid. and American
Council on Intergovernmental Relations, Signi-
ficant Features of Fiscal Federalism, 1995, Vol. 2,
p. 87. Current figures are for FY 2013. Education
data exclude libraries.
79. Daniel R. Mullins and Bruce A. Wallin, “Tax
and Expenditure Limitations: Introduction and
Overview,” Public Budgeting & Finance 24
(December 2004), pp. 2–15. Figures (pp. 7, 4–5)
are for 2002.
80. Ibid., p. 7. Figures are for 2002.
81. U.S. Advisory Commission on Intergovernmental
Relations, Tax and Expenditure Limits on Local
Governments, M-194 (Washington, DC: U.S.
Government Printing Office, 1995), p. 1.
82. Mullins and Wallin, “Tax and Expenditure
Limitations,” p. 7. Figures are for 2002.
83. Ibid. Datum is for 2002.
84. Leah Brooks and Justin Phillips, “Municipally
Imposed Tax and Expenditure Limits,” Land
Lines 21 (April 2009), pp. 8–13. The quotation is
on p. 9. Data are for 2007.
85. Nicholas O. Alozie and Catherine McNamara,
“Gender Differences in Willingness to Pay for
Urban Public Services,” Urban Affairs Review 45
(January 2010), pp. 377–390. The quotation is on
p. 381.
86. Nicholas O. Alozie and Catherine McNamara,
“Poverty Status and Willingness to Pay for Local
Public Services,” Public Administration Quarterly
33 (Winter 2009), pp. 520–531. The quotation is
on p. 520.
87. Rui Sun, “Reevaluating the Effect of Tax and
Expenditure Limitations,” Public Finance Review
42 (January 2014), pp. 92–116. The quotation is
on p. 92. Data are for 1970–2006.
88. Changhoon Jung and Suho Bae, “Changing
Revenue and Expenditure Structure and the
Reliance on User Charges and Fees in American
Counties, 1972–2002,” American Review of
Public Administration 41 (January 2011), pp.
92–110.
Financing and Budgeting Governments 279
89. Nina Easton, “How Obama Plans to Pay for His
Agenda: A Little Tax Here. A Little Tax There.
And Soon You’re Talking Real Money,” Fortune
(May 24, 2010), p. 52. Current figures are for
2009, when taxes accounted for an average of
30 percent of income.
90. Much of the following discussion is drawn
from U.S. Government Accountability Office,
Understanding the Tax Reform Debate: Back-
ground, Criteria, and Questions, GAO-05-1009SP
(Washington, DC: U.S. Government Printing
Office, 2005).
91. Dylan Matthews, “Other Countries Don’t Have a
‘47%,’” Washington Post (September 19, 2012).
92. As derived from data in ProQuest LLC, ProQuest
Statistical Abstract United States, 2016, Tables
461, 498. Figure is for 2014.
93. Meg Bostrom, By, or for, the People? A Meta-
analysis of Public Opinion of Government (New
York: Demos, 2006), p. 18. Data are for 2003.
94. As derived from data in Federation of Tax
Administrators, State Individual Income Taxes.
Figure is for 2013.
95. As derived from data in Federation of Tax
Administrators, Range of State Corporate Income
Tax Rates. Figure is for 2013.
96. As derived from data in ProQuest LLC, ProQuest
Statistical Abstract United States, 2016, Tables
461, 498. Figures are for FY 2014.
97. U.S. Government Accountability Office, Under-
standing the Tax Reform Debate, p. 49.
98. U.S. Government Accountability Office, Tax
Administration: Information on Selected Foreign
Practices That May Provide Useful Insights,
GAO-11-439 (Washington, DC: U.S. Government
Printing Office, 2011), p. 4. Figures are for FY
2010.
99. U.S. Government Accountability Office, Under-
standing the Tax Reform Debate, p. 51.
100. Sean D. Ehrlich, Access Points: An Institutional
Theory of Policy Bias and Policy Complexity
(New York: Oxford, 2011).
101. Demian Brady, Tax Complexity 2016 (Alexandria,
VA: National Taxpayers Union, 2016).
102. U.S. Government Accountability Office, Tax
Policy: Summary of Estimates of the Cost of the
Federal Tax System, GAO-05-878 (Washington,
DC: U.S. Government Printing Office, 2005).
103. “A Third of Americans Say They Like Doing Their
Income Taxes,” Pew Research (April 11, 2013).
Figures are for 2013.
 280 PA R T I I I Public and Nonprofit Management
104. World Economic Forum, “United States 3rd,”
Global Competitive Index, 2016–2017 ed.
(Zurich: Author, 2016).
105. U.S. Government Accountability Office, Under-
standing the Tax Reform Debate, p. 40.
106. John E. Peterson, “Sacramento’s Socratic
Moment,” Governing (July 2010), p. 50.
107. Treasury Inspector General for Tax Admini-
stration, Delinquent Taxes May Not Be Collected
Because Required Research Was Not Always
Completed Prior to Closing Some Cases As
Currently Not Collectible (Washington, DC:
Author, 2014). Figures are for 2001 and 2006.
108. U.S. Government Accountability Office, Fiscal
Outlook: Addressing Improper Payments and the
Tax Gap Would Improve the Government’s Fiscal
Position, p. 34. Figures are for FY 2006.
109. U.S. Government Accountability Office, Gov-
ernment Performance and Accountability: Tax
Expenditures Represent a Substantial Federal
Commitment and Need to Be Reexamined, GAO-
05-690 (Washington, DC: U.S. Government
Printing Office, 2005). Figures are for 1974–2004.
110. U.S. Government Accountability Office, Tax
Expenditures: Opportunities Exist to Use
Budgeting and Agency Performance Processes to
Increase Oversight, GAO-16-622 (Washington,
DC: U.S. Government Publishing Office, 2016),
Highlights page. Data are for FY 2015.
111. Catie Hill, “45% of Americans Pay No Federal
Income Tax,” MarketWatch (April 18, 2016).
112. U.S. Government Accountability Office, Fiscal
Outlook: Addressing Improper Payments and
the Tax Gap Would Improve the Government’s
Fiscal Position, GAO-16-92T (Washington, DC:
U.S. Government Publishing Office, 2015), p. 37.
Figure is for FY 2009.
113. U.S. Treasury Department, as cited in Robert J.
Samuelson, “Tax Revolt, RIP?” Washington Post
(April 13, 2015).
114. Leonard E. Burman and Greg Leiserson, Two-
Thirds of Tax Units Pay More Payroll Than
Income Tax (Washington, DC: Tax Policy Center,
2007), p. 1. Figures are for 2006.
115. As derived from data in Rachel M. Johnson
and Jeffrey Rohaly, The Distribution of
Federal Taxes,  2009–12 (Washington, DC: Tax
Policy  Center, 2009), pp. 5, 8, 13, 20. Data are
for 2009–2012 and include Medicare and the
employee and employer portions of the Social
Security tax.
116. U.S. Government Accountability Office, Corporate
Tax Expenditures: Information on Estimated
Revenue Losses and Related Federal Spending
Programs GAO-13-339 (Washington, DC: U.S.
Government Printing Office, 2013), Highlights
page. Figure is for 2011.
117. U.S. Government Accountability Office, Corpo-
rate Income Tax: Most Large Profitable U.S.
Corporations Paid Tax but Effective Tax Rates
Differed Significantly from the Statutory Rate,
GAO-16-363 (Washington, DC: U.S. Government
Publishing Office, 2016), Highlights page. Figures
are for 2006–2012 and 2008–2012, respectively.
118. U.S. Government Accountability Office, Corpo-
rate Income Tax: Effective Tax Rates Can Differ
Significantly from the Statutory Rate, GAO-13-
520 (Washington, DC: U.S. Government Printing
Office, 2013), Highlights page. Figure is for
2010.
119. As derived from data in U.S. Bureau of the Census,
“State and Local Government Finances by Level
of Government and by State.” Figures are for FY
2013.
120. As derived from data in Federation of Tax
Administrators, State Sales Tax Rates and Food
& Drug Exemptions. Figures are for 2013.
121. George F. Will, “A Taxing Challenge,” Washington
Post (February 6, 2005).
122. Quoted in Michael Sandler, “State Sales Tax
‘Not in Synch,’” St. Petersburg Times (August 7,
2003).
123. U.S. Advisory Commission on Intergovernmental
Relations, Significant Features of Fiscal
Federalism, 1995, Vol. 1, M-197 (Washington,
DC: U.S. Government Printing Office, 1995), pp.
89–90. Figures are for 1994.
124. As derived from data in U.S. Bureau of the Census,
“State and Local Government Finances by Level
of Government and by State.” Figures are for FY
2013.
125. Institute on Taxation and Economic Policy,
Who Pays: A Distributional Analysis of the Tax
Systems in All Fifty States, 5th ed. (Washington,
DC: Author, 2015).
126. David Baer, State Programs and Practices for
Reducing Residential Property Taxes (Washington,
DC: American Association of Retired Persons,
2003), p. ii. Figures are for 2003.
127. Andrew Reschovsky, The State Role in Providing
Property Tax Relief (Madison, WI: University of
Wisconsin, no date), http://www.leg.state.nv.us.

128. Adam H. Longley, “How Do States Spell Relief?”
Land Lines (April 2015), pp. 24–31. Data are for
2012.
129. U.S. Advisory Commission on Intergovernmental
Relations, Changing Public Attitudes on Gover-
nments and Taxes, Reports S-1 through S-23
(Washington, DC: U.S. Government Printing
Office, 1972–1994).
130. John L. Mikesell, Fiscal Administration:
Analysis and Applications for the Public Sector
(Homewood, IL: Dorsey, 1982), p. 230.
131. “Repeated surveys by the National Opinion
Research Center since 1987,” as cited in Peter
Whoriskey, “With Executive Pay, Rich Pull Away
from the Rest of America,” Washington Post (June
18, 2011).
132. U.S. Congressional Budget Office, Trends in the
Distribution of Household Income between 1979
and 2007 (Washington, DC: U.S. Government
Printing Office, 2011).
133. Tim Henderson, “The Shrinking Middle Class,
Mapped State by State,” Stateline (March 19,
2015). Datum is for 2000–2013.
134. U.S. Central Intelligence Agency, “Distribution
of Family Income—Gini Index,” World Factbook
(Washington, DC: U.S. Government Printing
Office, 2016).
135. Jonathan D. Ostry, Andrew Berg, and
Charalambos  G. Tsangarides, Redistribution,
Inequality, and Growth (Washington, DC:
International Monetary Fund, 2014).
136. S&P Capital IQ, Income Inequality Weighs
on State Tax Revenues (New York: Author, 2014),
p. 1.
137. John Voorheis, Nolan McCarty, and Boris Shor,
Unequal Incomes, Ideology and Gridlock: How
Rising Inequality Increases Political Polarization
(Princeton, NJ: Princeton University Press,
2015).
138. Alan B. Kreuger, The Rise and Consequences
of Inequality in the United States (Washington,
DC: President’s Council of Economic Advisers,
2012).
139. AEI-Brookings Working Group on Poverty and
Opportunity, “Facts on Poverty and Opportunity
that Progressives and Conservatives Can Agree
On,” Brookings.edu (Washington, DC: Author,
2015).
140. Richard Wilkinson and Kate Pickett, The Spirit
Level: Why Greater Equality Makes Societies
Stronger (New York: Bloomsbury, 2009), p. 19.
Financing and Budgeting Governments 281
141. William A. Galston, Polling Spotlight: America’s
Shifting Attitudes on Taxes (Washington, DC:
Broookings.edu, 2017).
142. U.S. Congressional Budget Office, Trends in the
Distribution of Household Income, between
1979 and 2007.
143. David Cay Johnson, Tax Rates for Top 400
Earners Fall as Income Soars, Tax Analysts Doc
2010-3372 (Washington, DC: Tax Analysts,
2010). Figure is for 2007.
144. James Surewiecki, “Soak the Very, Very Rich,”
The New Yorker (August 16 & 23), p. 33. A
Quinnipiac poll of 2010 is cited.
145. President’s Advisory Panel on Federal Tax
Reform, Simple, Fair, & Pro-Growth: Proposals
to Fix America’s Tax System (Washington, DC:
U.S. Government Printing Office, 2005).
146. U.S. Government Accountability Office, Under-
standing the Tax Reform Debate, p. 22.
147. Eduardo, Porter, “Combating Inequality
May Require Broader Tax,” New York Times
(November 27, 2012).
148. Bostrom, By, or for, the People? p. 18. Figures, 24
and 38 percent, respectively, are for 2003.
149. Easton, “How Obama Plans to Pay for His
Agenda.”
150. U.S. Government Accountability Office, Value-
Added Taxes: Lessons Learned from Other
Countries on Compliance Risks, Administrative
Costs, Compliance Burden, and Transition, GAO-
08-566 (Washington, DC: U.S. Government
Printing Office, 2008). The quotation is on p. 4.
151. Institute on Taxation and Economic Policy,
Who Pays? A Distributional Analysis of the Tax
Systems in All Fifty States, 5th ed. (Washington,
DC: Author, 2015).
152. Daniel H. Cooper, Byron F. Lutz, and Michael J.
Palumbo, The Role of Taxes in Mitigating Income
Inequality Across the U.S. States (Boston, MA,
and Washington, DC: Federal Reserve Bank of
Boston and Federal Reserve Board, 2015). Data
are for 1984–2011.
153. Institute on Taxation and Economic Policy, Who
Pays? Figures are for 2015.
154. Ibid. Figures are for 2015.
155. Anne Stauffer and Mark Robyn, “Federal Tax
Reform Raises Questions, Possible Revenue
Changes for States,” Pewtrusts.org (March 8,
2016).
156. Elaine S. Povich, “Volatile Income Tax Revenue
Stumps States,” Stateline (October 13, 2014).
 282 PA R T I I I Public and Nonprofit Management
157. “Edgar Fiedler,” BrainyQuote.com.
158. Louis Uchitelle, “Politicians May Be Up in Arms
about Government Deficits, but Economists
Aren’t,” New York Times (November 8, 1996),
and John M. Berry, “The Deficit Is (a) Still Really
Big, or (b) No Big Deal,” Washington Post (March
24, 1994).
159. Allen Schick, The Federal Budget: Politics, Policy,
Process (Washington, DC: Brookings, 2007), p. 10.
160. The Peterson-Pew Commission on Budget
Reform, Tied to the Mast: Fiscal Rules and Their
Uses (Washington, DC: Author, 2011), p. 1.
161. Philip G. Joyce, “Congressional Budget Reform:
The Unanticipated Implications of Federal
Policymaking,” Public Administration Review 56
(July/August 1996), pp. 317–327. The quotation
is on p. 317.
162. Associated Press/Ipsos survey, as cited in Robert
Tanner, Associated Press, “Headed for a Crash?”
Savannah Morning News (September 4, 2005).
Figure is for 2005.
163. As derived from data in U.S. Office of Management
and Budget, “Historical Tables,” Table 1.2.
164. The case is Clinton v. City of New York.
165. U.S. General Accounting Office, Line-Item Veto:
Estimating Potential Savings, AFMD-92-7
(Washington, DC: U.S. Government Printing
Office, 1992). Figure is for 1984–1989.
166. U.S. Government Accountability Office, Budget
Process: Enforcing Fiscal Choices, GAO-11-626T
(Washington, DC: U.S. Government Printing
Office, 2011), p. 8.
167. U.S. Congressional Budget Office, The Budget
and Economic Outlook: Fiscal Years 2004–2013
(Washington, DC: U.S. Government Printing
Office, 2003), Appendix A.
168. U.S. Office of Management and Budget, “His-
torical Tables,” Table 1.1.
169. Ibid., Table 1.2.
170. Neta C. Crawford, Costs of War (Boston: Boston
University, 2016).
171. U.S. Office of Management and Budget, “His-
torical Tables,” Table 1.3.
172. As derived from data in International Monetary
Fund, Report for Selected Countries and Subjects
(New York: Author, 2010), Table 5. Data are for
2009.
173. Henry J. Aaron, “Our Outlaw President? Obama
Should Ignore the Debt Ceiling,” Brookings
(September 30, 2013).
174. U.S. Government Accountability Office, Debt
Limit: Analysis of 2011-2012 Actions Taken and
Effect of Delayed Increase on Borrowing Costs,
GAO-12-701 (Washington, DC: U.S. Government
Printing Office, 2012).
175. U.S. Department of the Treasury, The Potential
Macroeconomic Effect of Debt Ceiling Brink-
manship (Washington, DC: U.S. Government
Printing Office, 2013), p. 3.
176. Washington Post and Pew Research Center survey,
as cited in Jon Cohen, “Budget Talks in a Word:
‘Ridiculous,’ ‘Disgusting’ and ‘Stupid’ Top Poll,”
Washington Post (August 1, 2011).
177. CNN, Washington Post-ABC, and Pew Research
Center surveys, as cited in Peyton M. Crayhill,
“Polls: Did the Public Get What It Wanted
in  Debt  Deal?” Washington Post (August 1,
2011).
178. James Oliphant, “Poll: Majority of Americans
Say Bag Sequestration,” Government Executive
(December 10, 2013).
179. U.S. Government Accountability Office, 2013
Sequestration: Agencies Reduced Some Services
and Investments, While Taking Certain Actions
to Mitigate Effects, GAO-14-244 (Washington,
DC: U.S. Government Printing Office, 2014),
Highlights page.
180. Charles S. Clarke, “Contractors Report Revenue
Losses from Sequestration,” Government Exe-
cutive (December 17, 2013).
181. Rick Cohen “Economic Policy Institute:
Federal Sequester’s Effect on State Budgets,”
NonProfitQuarterly.org (June 3, 2013).
182. U.S. Government Accountability Office, 2013
Sequestration: Selected Federal Agencies Reduced
Some Services and Investments, While Taking
Short-Term Actions to Mitigate Effects, GAO-14-
452 (Washington, DC: U.S. Government Printing
Office, 2014).
183. Congressional Budget Office, as cited in Erik
Wasson, “CBO: Sequester Cuts Would Cost Up to
1.6 million Jobs through 2014,” The Hill (July 25,
2013).
184. Partnership for Public Service, Government
Disservice (Washington, DC: Author, 2015),
p. 24.
185. Walter Lippmann, The Public Philosophy (New
York: New American Library, 1955), p. 27.
186. Josh Goodman, “Debt Ceilings without Drama,”
Stateline (February 7, 2013).
187. Robert Bluey, “Commentary: 13 Tax Hikes for
2013,” Savannahnow.com (March 2, 2013).

188. U.S. Office of Management and Budget, “His-
torical Tables,” Table 1.3.
189. U.S. Government Accountability Office, Federal
Debt: Answers to Frequently Asked Questions,
An Update, GAO-04-485SP Federal Debt
(Washington, DC: U.S. Government Printing
Office, 2004), pp. 41–42. Figure is for 2003–2054.
190. U.S. Government Accountability Office, Citizen’s
Guide to the 2012 Financial Report of the United
States Government (Washington, DC: U.S. Gov-
ernment Printing Office, 2012), p. vi, n. 6.
191. U.S. Government Accountability Office, The
Nation’s Long-Term Fiscal Outlook, August
2007 Update: Despite Improvement in the
Annual Deficit, Federal Fiscal Policy Remains
Unsustainable, GAO-07-1261R (Washington,
DC: U.S. Government Printing Office, 2007), p. 2.
192. U.S. Government Accountability Office, Citizen’s
Guide to the 2012 Financial Report of the United
States Government, p. vi, n. 6.
193. U.S. Government Accountability Office, Financial
Audit: Bureau of the Fiscal Service’s Fiscal Years
2016 and 2015 Schedules of Federal Debt, GAO-
17-104 (Washington, DC: U.S. Government
Printing Office, 2016), Highlights page.
194. U.S. Office of Management and Budget, “His-
torical Tables,” Table 7.1. Current figure is for FY
2016.
195. U.S. Government Accountability Office, Federal
Debt: Answers to Frequently Asked Questions,
An Update, p. 17. Emphasis added.
196. U.S. Office of Management and Budget,
“Historical Tables,” Table 7.1.
197. Center on Budget and Policy Priorities, Tax Cuts,
Wars Account for Nearly Half of Public Debt by
2019 (Washington, DC: Author, 2012). Datum is
for 2001–2019.
198. U.S. Office of Management and Budget,
“Historical Tables,” Table 7.1.
199. As derived from data in Brian Dumaine, “Who’s
Most in Debt?” Fortune (August 15, 2011), p. 22.
Figures are for 2011.
200. International Monetary Fund, Fiscal Monitor
(New York: Author, 2015), Statistical Table 13a.
201. Balazs Egert, “Myth or Reality,” OECD Econo-
mics Department Working Papers, No. 993 (Paris:
OECD, 2012), p. 1.
202. U.S. Congressional Budget Office, CBO’s 2011
Long-Term Budget Outlook, pp. 3–4.
203. Woods Bowman, “The Price of Nonprofit Debt,”
Nonprofitquarterly.org (August 6, 2015).
Financing and Budgeting Governments 283
204. Katherine Barrett and Richard Greene, “Balancing
Act,” Governing (October 2011), pp. 64, 66. The
quotation is on p. 64.
205. Pi-Han Tsai, “State Fiscal Rules and Composition
Changes in Public Spending before the Election,”
Public Finance Review 42 (January 2014), pp.
58–91.
206. The Volcker Alliance, Truth and Integrity in State
Budgeting: Lessons from Three States (New York:
Author, 2015), p. 1.
207. Dan Morgan, “How States Handle Debt May Not
Work for Nation,” Washington Post (February 28,
1995).
208. U.S. Government Accountability Office, State
and Local Governments: Persistent Fiscal Chal-
lenges Will Likely Emerge within the Next
Decade, GAO-07-1080SP (Washington, DC: U.S.
Government Printing Office, 2007), pp. 2, 4.
209. Iris J. Lav, “Piling on Problems: How Federal
Policies Affect State Fiscal Conditions,” National
Tax Journal 56 (September 2003), pp. 535–554.
The quotation is on p. 538.
210. World Bank, Health Expenditure, Total (% of
GDP) (New York: Author, 2016).
211. David U. Himmelstein and Steffie Woolhandler,
“The Current and Projected Taxpayer Shares of
US Health Costs,” American Journal of Public
Health 106 (March 2016), pp. 449–452. Figures
are for 2013.
212. U.S. Government Accountability Office, State
and Local Governments: Fiscal Pressures Could
Have Implications for Future Delivery of Inter-
governmental Programs, Highlights page. Figures
are for 1978–2008.
213. U.S. Government Accountability Office, State
and Local Governments’ Fiscal Outlook: 2014
Update, GAO-15-224SP (Washington, DC: U.S.
Government Printing Office, 2014), p. 6.
214. David Brooks, “Great News! We’re not
Doomed  to Soaring Health Care Costs,” New
York Times (November 6, 2015). Figures are for
2010–2015.
215. As derived from data in “Medicaid Consumes
Growing Slice of States’ Dollars,” Pewtrusts.org
(June 11, 2015). Figures are for FY 2000–FY
2013.
216. John Holahan and Irene Headen, Medicaid Cover-
age and Spending in Health Reform (Washington,
DC: Kaiser Commission on Medicaid and the
Uninsured, 2010), p. 3. Figures are for 1995–
2010.
 284 PA R T I I I Public and Nonprofit Management
217. As derived from data in U.S. Government
Accountability Office, Medicaid: Overview of
Key Issues facing the Program, GAO-15-746T
(Washington, DC: U.S. Government Publishing
Office, 2015), Highlights page. Figures are for FY
2014.
218. January Angeles and Matt Broaddus, Federal
Government Will Pick Up Nearly All Costs
of Health Reform’s Medicaid Expansion
(Washington, DC: Center on Budget and Policy
Priorities, 2012), p. 1. Figures are for 2014–2022.
Emphasis is original.
219. U.S. Government Accountability Office, Medi-
caid Financing: States’ Increased Reliance on
Funds from Health Care Providers and Local
Governments Warrants Improved CMS Data
Collection, GAO-14-627 (Washington, DC: U.S.
Government Printing Office, 2014), Highlights
page. Figure, 74 percent, is for 2012 and pertains
to California, Illinois, and New York.
220. Benjamin Geyerhahn, “4 Ways States Benefit
When They Expand Medicaid,” Routefifty.com
(June 2, 2016).
221. U.S. Government Accountability Office, State and
Local Governments’ Fiscal Outlook: April 2013
Update, GAO-13-546SP (Washington, DC: U.S.
Government Printing Office, 2013), p. 4.
222. Rex L. Facer, II and Lori L. Wadsworth, “Emplo-
yee Benefits: Patterns and Challenges for Public
Organizations,” in Public Human Resource
Management: Problems and Prospects, 6th ed.,
Richard C. Kearney and Jerrell D. Coggburn, eds.
(Washington, DC: CQ Press, 2016), pp. 154–168.
Data (p. 157) are for 2012.
223. Justin McCarthy, “Gov’t Workers Happier with
Retirement Plans, Other Benefits,” Gallup.com
(September 9, 2015). Figures are for 2015.
224. Pew Charitable Trusts and MacArthur Found-
ation, State Retiree Health Plan Spending
(Washington, DC, and New York: Authors,
2016), pp. 2, 11. Figures are for 2013; decline
in private-sector healthcare figures are for 1988–
2013.
225. Ibid., p. 2. Data are for 2000–2015.
226. Pew Charitable Trusts, “Long-Term Obligations
Vary as a Share of State Resources,” Pewtrusts.
org (November 1, 2016). Data are for 2013.
227. As derived from data in U.S. Government Ac-
countability Office, State and Local Government
Pension Plans: Economic Downturn Spurs Efforts
to Address Costs and Sustainability, GAO-12-322
(Washington, DC: U.S. Government Printing
Office, 2012), Highlights page, and Nari Rhee,
Pensionomics 2014 (Washington, DC: National
Institute on Retirement Security, 2014), p. 2.
228. William G. Gale, Sarah E. Holmes, and David
C. John, Lessons for the States from the Federal
Government’s CSRS-to-FERS Transition
(Washington, DC: Brookings, 2016), p. 3. Current
figures are for 2013.
229. McCarthy, “Gov’t Workers Happier with
Retirement Plans, Other Benefits.” Figures are for
2015.
230. Paul J. Yakoboski and Joshua M. Franzel, 2014
Retirement Confidence Survey of the State and
Local Government Workforce (Washington, DC:
TIAA-CREF Institute and Center for State and
Local Government Excellence, 2014), p. 15.
231. Stephen Losey, “Federal Pension Systems’
Unfunded Liabilities Skyrocket,” Federal Times
(February 21, 2012). Figure is for 2011–2012.
232. Pew Charitable Trusts, “Long-Term Obligations
Vary as a Share of State Resources.” Figures are
for 2013.
233. Alicia H. Munnell and Jean-Pierre Aubry, The
Funding of State and Local Pensions, 2015-2020
(Boston: Center for Retirement Research, Boston
College, 2016). Figure is for 2015. Pew Center on
the States, The Trillion Dollar Gap: Underfunded
State Retirement Systems and the Road to Reform
(Washington, DC: Author, 2011), p. 1. Figure is
for FY 2010.
234. As derived from data in Keith Brainard and
Alex Brown, The Annual Required Contribution
Experience of State Retirement Plans, FY 01 to
FY 13 (Washington, DC: National Association of
State Retirement Administrators, 2015), pp. 2, 3.
Figure is for 2013.
235. Robert Novy-Marx and Joshua Rauh, “The Crisis
in Local Government Pensions in the United
States,” Paper presented at the Brookings-Nomura-
Wharton Research Conference on Growing
Old: Paying for Retirement and Institutional
Money Management after the Financial Crisis,
Washington, DC, October 15, 2010, p. 4. Figure,
3.2 years, is for 2006.
236. Quoted in Noah Buhayar and Zachary Tracer,
“Buffett Says Pension Tapeworm Means Decade
of Bad News,” Bloomberg (March 3, 2014).
237. Thomas Frank, “States Expand Lucrative
Pensions to More Jobs,” USA Today (December 9,
2011).

238. Charles Duhigg, “Public Unions Take On Boss
to Win Big Pensions,” New York Times (June 21,
2011).
239. Ibid.
240. Dale Kasler, “Ex-CalPERS Chief Admits Receiving
$200,000in Bribes in Paper Bag, Shoebox,”
Sacramento Bee (July 11, 2014).
241. Tad Friend, “Contract City,” The New Yorker
(September 5, 2011), pp. 34–40. The data are on
p. 38.
242. Ibid.
243. Iris J. Lav and Elizabeth McNichol, Misunder-
standings Regarding State Debt, Pensions, and
Retiree Health Costs Create Unnecessary Alarm
(Washington, DC: Center on Budget and Policy
Priorities, 2011), p. 14. Public employees con-
tributed 13 percent of public pension revenues,
employers 27 percent, and investment earnings 60
percent, 1982–2009.
244. U.S. Bureau of Labor Statistics, Employer Costs
for Employee Compensation (Washington, DC:
Author, 2016).
245. Stephen Losey, “1 in 6 Retired Lawmakers Get
Six-Figure Pensions,” Federal Times (November
6, 2012). Figures are for 2012.
246. As derived from data in Thomas Frank, “State
Lawmakers Pump Up Pensions in Ways that You
Can’t,” USAtoday.com (April 16, 2012).
247. John Cheves, “Kentucky Legislators Keep Their
Pensions Separate and Undisclosed,” Herald-
leader.com (November 20, 2016).
248. Andrew Vaz, “Unfunded State Pension Plans and
Investment Boards,” Patimes.org (February 17,
2017).
249. Urban Institute, The State of Retirement: Grading
America’s Public Pension Plans (Washington, DC:
Author, 2014).
250. Jeff Hooke and John J. Walters, Wall Street Fees
and Investment Returns for 33 State Pension
Funds (Rockville, MD: Maryland Public Policy
Institute, 2015).
251. Jeff Hooke, as cited in Liz Farmer, “The Hidden
Wall Street Fees That Could Be Costing Pensions
$20 Billion a Year,” Governing.com (May 24,
2016).
252. Hooke and Walters, Wall Street Fees and Invest-
ment Returns for 33 State Pension Funds, p. 2.
253. Marie Szaniszio, “Study: Consolidate State’s 105
Pension Systems,” Boston Herald (July 26, 2013).
254. U.S. Government Accountability Office, State
and Local Government Pension Plans: Economic
Financing and Budgeting Governments 285
Downturn Spurs Efforts to Address Costs and
Sustainability, Highlights page. Figures are for
2008–2011.
255. U.S. Bureau of the Census, “State and Local
Government Finances by Level of Government
and by State.” Figures are for FY 2013.
256. U.S. Advisory Commission on Intergovernmental
Relations, Tax and Expenditure Limits on Local
Governments, pp. 3, 5–10. Figures are for 1994.
257. Roger Lowenstein, “Broke Town, U.S.A.,” New
York Times (March 3, 2011).
258. Ryan Holeywell, “How Bad Is It?” Governing
(May 2011), pp. 26–30. The quotation is on p. 28.
259. Mark D. Robbins and Bill Simonsen, “Do Debt
Levels Influence State Borrowing Costs?” Public
Administration Review 72 (July/August 2012),
pp. 498–505.
260. Lowenstein, “Broke Town, U.S.A.” Robert
Kurtter, a managing director at Moody’s, is
quoted. Emphasis is original.
261. As derived from data in ProQuest LLC, ProQuest
Statistical Abstract United States, 2016, Table
469. Figures are for 2010.
262. Evelina R. Moulder, “Municipal Form of Gov-
ernment: Trends in Structure, Responsibility,
and Composition,” Municipal Year Book, 2008
(Washington, DC: International City/County
Management Association, 2008), pp. 3–8. Figure
(p. 6) is for 2006.
263. As derived from data in U.S. Bureau of the Census,
Statistical Abstract of the United States, 1951, 72nd
ed. (Washington, DC: U.S. Government Printing
Office, 1951). Table 406 refers to nonguaranteed
debt as a percentage of long-term debt.
264. As derived from data in U.S. Bureau of the Census,
Statistical Abstract of the United States, 1992,
112th ed. (Washington, DC: U.S. Government
Printing Office, 1992), Table 458.
265. As derived from data in ProQuest LLC, ProQuest
Statistical Abstract United States, 2016, Table
469. Figure is for 2015.
266. Lowenstein, “Broke Town, U.S.A.”
267. U.S. Government Accountability Office, Municipal
Securities: Options for Improving Continuing
Disclosure, GAO-12-698 (Washington, DC: U.S.
Government Printing Office, 2012), Highlights
page. Figure is for 2012.
268. U.S. Government Accountability Office, Tax
Policy: Tax-Exempt Status of Certain Bonds
Merits Reconsideration, and Apparent Noncom-
pliance with Issuance Cost Limitations Should Be
 286 PA R T I I I Public and Nonprofit Management
Addressed, GAO-08-364 (Washington, DC: U.S.
Government Printing Office, 2008), pp. 15–16.
269. Stephen C. Fehr, “Governors Fear Loss of Bond
Tax Exemption,” Stateline (February 26, 2013).
Figure is for 2012.
270. Ibid. Figures are for 2012.
271. As derived from data in Securities Industry and
Financial Markets Association (SIFMA), State
Taxation of Municipal Bonds for Individuals,
http://www.investinginbonds.com. Data are for
2014.
272. The case is Department of Revenue of Kentucky
v. Davis.
273. Martin Ives and Thad Calabrese, “Employee
Benefit Financing and Municipal Bankruptcy,”
Journal of Government Financial Management
62 (Spring 2013), pp. 12–18. Figure is for 1937–
2014.
274. Adrienne Lu, “States Intervene When School
Districts Hit Financial Trouble,” Stateline (May
24, 2014).
275. As derived from data in Holeywell, “How Bad Is
It?” p. 30. Figure is for 1980–2010.
276. Pew Charitable Trusts, The State Role in Local
Government Financial Stress (Washington, DC:
Author, 2013), p. 8. Figures are for 2013.
277. Pew Charitable Trusts, State Strategies to Detect
Local Fiscal Distress (Washington, DC: Pewtrusts.
org 2016).
278. Lu, “States Intervene When School Districts Hit
Financial Trouble.”
279. Lowenstein, “Broke Town, U.S.A.”
280. John E. Petersen, “Debtor’s Dilemma,” Governing
(May 2004), p. 78.
281. U.S. Government Accountability Office, State
and Local Governments: Fiscal Pressures
Could Have Implications for Future Delivery
of Intergovernmental Programs, GAO-10-899
(Washington, DC: U.S. Government Printing
Office, 2010). The quotation is on the Highlights
page. Thirty-year data are for 1977–2007.
Balanced-budget data are for 1995–2007.
282. U.S. Government Accountability Office, State
and Local Governments’ Fiscal Outlook: 2014
Update, p. 3. Figure is for 2014–2060.
283. U.S. Government Accountability Office, State and
Local Governments’ Fiscal Outlook: April 2013
Update, pp. 1–2. In 2013, the projected figure was
14.2 percent.
284. Alexander Hamilton, Report on a Plan for the
Further Support of Public Credit (January 16,
1795), as published in The Papers of Alexander
Hamilton, Vol. 18, Harold C. Syrett, ed. (New
York: Columbia University Press, 1973), p. 80.
285. John Steele Gordon, Hamilton’s Blessing: The
Extraordinary Life and Times of our National
Debt (New York: Walker, 1997), p. 5. Emphasis is
original.
286. Bernardino Benito and Francisco Bastida, “Budget
Transparency, Fiscal Performance, and Political
Turnout: An International Approach,” Public
Administration Review 69 (May/June 2009), pp.
403–417. The quotation is on p. 403.
287. U.S. Government Accountability Office,
Fiscal Year 2010 U.S. Government Financial
Statements: Federal Government Continues to
Face Financial Management and Long-Term
Fiscal Challenges, GAO-11-363T (Washington,
DC: U.S. Government Printing Office, 2011).
288. Association of Government Accountants, Public
Attitudes Toward Government Accountability
and Transparency 2010 (Alexandria, VA: Author,
2010), pp. 2–3. Figures are for 2009.
289. “Utah budget executive,” as quoted in John
Kamensky, “Transparency: New Frontier for
Performance Management,” The Business of
Government (June 2009), pp. 16–18. The quota-
tions are on p. 18.
290. International Monetary Fund, Fiscal Transparency,
Accountability, and Risk (New York: Author,
2012).
291. John Micklethwait and Adrian Woodridge, The
Fourth Revolution: The Global Race to Reinvent
the State (New York: Penguin Press, 2014),
p. 9.
292. “Chart 2.12, Government Spending as Pct GDP,”
Usgovernmentspending.com. Figure is for FY
2013.
293. Aaron Wildavsky, The Politics of the Budgetary
Process, 2nd ed. (Boston: Little, Brown, 1974),
p. 4.
294. Al Gore, From Red Tape to Results: Creating a
Government that Works Better and Costs Less,
Mission-Driven, Results-Oriented Budgeting
(Washington, DC: U.S. Government Printing
Office, 1993), p. 1.
295. Much of the following discussion, at least as it
pertains through the 1960s, is based on: Bertram
M. Gross, “The New Systems Budgeting,” Public
Administration Review 29 (March/April 1969),
pp. 113–137, and Allen Schick, “The Road to
PPB: The Stages of Budget Reform,” Public

Administration Review 26 (December 1966),
pp. 243–258.
296. President’s Commission on Economy and Eff-
iciency, The Need for a National Budget
(Washington, DC: Author, 1912).
297. “The Nobel Prize for Peace 1925,” Nobelprize.
com, http://nobelprize.org/, and as derived from
data in U.S. Office of Management and Budget,
“Historical Tables,” Table 1.1. Data are for FY
1921–FY 1922.
298. Charles G. Dawes, The First Year of the Budget
of the United States (Washington, DC: U.S.
Government Printing Office, 1923), p. ii.
299. Glen Hahn Cope, “Budgeting for Performance in
Local Government,” Municipal Year Book, 1995
(Washington, DC: International City/County
Management Association, 1995), pp. 42–52. The
quotation is on p. 42.
300. Verne B. Lewis, “Reflections on Budget Systems,”
Public Budgeting & Finance 8 (March 1988),
pp. 4–19. The quotation is on p. 7.
301. U.S. Commission on Organization of the Exe-
cutive Branch of Government, Budgeting and
Accounting (Washington, DC: U.S. Government
Printing Office, 1949), p. 8.
302. Quoted in U.S. General Accounting Office,
Performance Budgeting: Past Initiatives Offer
Insights for GPRA Implementation, GAO/
AIMD-97-46 (Washington, DC: U.S. Government
Printing Office, 1997), p. 34.
303. Quoted in Allen Schick, Budget Innovation in the
States (Washington, DC: Brookings, 1971), p. 127.
304. This definition is based on one contained in U.S.
General Accounting Office, Performance Budg-
eting: Past Initiatives Offer Insights for GPRA
Implementation, p. 35.
305. Ibid., p. 40.
306. Christopher G. Reddick, “Testing Rival Theories
of Budgetary Decision-Making in the U.S. States,”
Financial Accountability and Management 19
(Winter 2004), pp. 315–335. The quotation is on
p. 315.
307. U.S. General Accounting Office, Performance
Budgeting: Past Initiatives Offer Insights for
GPRA Implementation, pp. 35–41.
308. Edwin L. Harper, Fred A. Kramer, and Andrew M.
Rouse, Implementation and Use of PPB in Sixteen
Federal Agencies (Washington, DC: U.S. Bureau
of the Budget, 1969).
309. Orville Freeman, quoted in Lewis, “Reflections on
Budget Systems,” p. 11.
Financing and Budgeting Governments 287
310. William F. West, Eric Lindquist, and Katrina
N. Mosher-Howe, “NOAA’s Resurrection of
Program Budgeting: Déjà Vu All Over Again?”
Public Administration Review 69 (May/June
2009), pp. 435–447. The quotation is on
p. 435.
311. Richard P. Nathan, The Plot That Failed: Nixon
and the Administrative Presidency (New York:
John Wiley and Sons, 1975).
312. U.S. General Accounting Office, Performance
Budgeting: Past Initiatives Offer Insights for
GPRA Implementation, p. 39.
313. Allen Schick, “A Death in the Bureaucracy: The
Demise of Federal PPB,” Public Administration
Review 33 (March/April 1973), pp. 146–156. The
quotation is on p. 146.
314. The first major expression of MBO is gener-
ally credited to Peter Drucker, The Practice
of Management (New York: Harper & Row,
1954).
315. Jong S. Jun, “Management by Objectives and
the Public Sector, Introduction,” Public Admini-
stration Review 26 (January/February 1976), pp.
1–4. The quotation is on p. 3.
316. Robert Rodgers and John E. Hunter, “A Foun-
dation of Good Management Practice in
Government: Management by Objectives,” Public
Administration Review 52 (January/February
1992), pp. 27–39.
317. U.S. General Accounting Office, Performance
Budgeting: Past Initiatives Offer Insights for
GPRA Implementation, p. 45.
318. Theodore H. Poister and Gregory Streib,
“MBO in Municipal Government: Variations
on the Traditional Management Tool,” Public
Administration Review 55 (January/February
1995), pp. 48–56. The quotations are on
p. 55.
319. Aaron Wildavsky and Arthur Hammond,
“Comprehensive Versus Incremental Budgeting
in the Department of Agriculture,” Administrative
Science Quarterly 10 (December 1965), pp. 321–
346.
320. Quoted in Donald F. Haider, “Zero Base: Federal
Style,” Public Administration Review 37 (July/
August 1977), pp. 400–406. The quotation is on
p. 401.
321. Frank D. Draper and Bernard T. Pitsvada,
“ZBB—Looking Back After Ten Years,” Public
Administration Review 41 (January/February
1981), pp. 76–83.
 288 PA R T I I I Public and Nonprofit Management
322. Robert C. Burns and Robert D. Lee, Jr. “The
Ups and Downs of State Budget Process Reform:
Experience of Three Decades,” Public Budgeting
& Finance 24 (September 2004), pp. 1–19.
Figures (p. 4) are for 1975 and 2000, and include
the District of Columbia.
323. Richard C. Kearney, “Sunset: A Survey and
Analysis of the State Experience,” Public Admini-
stration Review 50 (January/February 1990),
pp. 49–57. Figure is for 1976–1981.
324. Perry Moore, “Zero-Base Budgeting in American
Cities,” Public Administration Review 40 (May/
June 1980), pp. 253–258.
325. U.S. General Accounting Office, Streamlining Zero-
Base Budgeting Will Benefit Decision-Making,
PAD 79-74 (Washington, DC: U.S. Government
Printing Office, 1979), and Allen Schick, Zero-
Base 80: The Status of Zero-Base Budgeting in
the States (Washington, DC: National Association
of  State Budget Officers and Urban Institute,
1979).
326. U.S. General Accounting Office, Performance
Budgeting: Past Initiatives Offer Insights for
GPRA Implementation, p. 49.
327. Harry P. Hatry, “The Alphabet Soup App-
roach: You’ll Love It!” Public Manager 21 (Winter
1992–1993), pp. 8–12. The quotation is on
p. 9.
328. Frank D. Draper and Bernard T. Pitsvada,
“ZBB—Looking Back After Ten Years,” Public
Administration Review 41 (January/February
1981), pp. 76–83.
329. Hatry, “The Alphabet Soup Approach,” p. 9.
330. U.S. General Accounting Office, Performance
Budgeting: Past Initiatives Offer Insight for
GPRA Implementation, p. 49.
331. Lewis, “Reflections on Budget Systems,” p. 15.
332. Paul Grastis and Haley Sweetland Eduards, “The
Big Lobotomy,” Washingtonmonthly.com (June,
July, August 2014).
333. Harry Stein and Hilary Gelfond, How Shortsighted
Spending Cuts Increase Waste, Fraud, and Abuse
(Washington, DC: Center for American Progress,
2014).
334. Chuck Marr and Cecile Murray, IRS Funding
Cuts Compromise Taxpayer Service and Weaken
Enforcement (Washington, DC: Center on Budget
and Policy Priorities, 2016).
335. Charles S. Clark, “There’s Now a Less Than
1 Percent Chance Your Tax Returns Will Be
Audited,” Govexec.com (November 4, 2015).
336. Editorial Board, “Congress Should Let the IRS
Do Its Job, Not Tie Its Hands,” Washington Post
(May 1, 2016). Figure is for 2015.
337. Jacob S. Hacker and Paul Pierson, “Don’t Get
Mad at the IRS on Tax Day, Pray for It to Get
More Powerful,” Latimes.com (April 15, 2016).
338. Lisa Rein, “In Dallas, the IRS Says It Can’t Chase
Tax Cheats Who Owe Less than $1 Million,”
Washington Post (April 8, 2015).
339. Hacker and Pierson, “Don’t Get Mad at the IRS
on Tax Day, Pray for It to Get More Powerful.”
340. Katherine Barrett and Richard Greene, The Costs
of Cuts (Washington, DC: IBM Center for the
Business of Government, 2011).
341. U.S. Government Accountability Office, GAO:
Summary of Performance and Financial Infor-
mation Fiscal Year 2016 (Washington, DC: U.S.
Government Publishing Office, 2017).
342. John Hudak and Grace Wallack, Sometimes
Cutting Budgets Raise Deficits: The Curious Case
of Inspectors’ General Return on Investment
(Washington, DC: Brookings, 2015) p. 10. Figure
is for 2010–2014.
343. Kearney & Company and AGA, AGA’s Annual
Inspector General Survey: Effective Oversight
in a Changing Environment (Alexandria, VA:
Authors, 2013). Datum is for 2013.
344. Stein and Gelfond, How Shortsighted Spending
Cuts Increase Waste, Fraud, and Abuse. Figures
are for FY 2011–FY 2014.
345. Barrett and Greene, The Costs of Cuts.
346. Jeffrey L. Brudney, Cynthia J. Bowling, and Deil
S. Wright, Continuity and Change in Public
Administration Across the 50 States: Linking
Practice, Theory, and Research through the
American State Administrators Project, 1964–
2008 (Auburn, AL: Center for Governmental
Services, Auburn University, 2010), p. 21. Figures
are for 1981–1984 and 2001–2004, when states
had to cut budgets by about 5 percent per
annum.
347. National Commission on the Public Service,
Urgent Business for America: Revitalizing
the Federal Government for the 21st Century
(Washington, DC: U.S. Government Printing
Office, 2003), p. 36.
348. Kenneth J. Meier, “Executive Reorganization
of Government: Impact on Employment and
Expenditures,” American Journal of Political
Science 24 (August 1980), pp. 396–412. The quo-
tation is on p. 410.

349. Katherine Barrett and Richard Greene, “Coming
Together, Breaking Apart,” Governing (March
209), pp. 58–59.
350. Brudney, Bowling, and Deil, Continuity and
Change in Public Administration Across the 50
States, p. 21.
351. Ibid.
352. Ibid. “Shifting programs” includes intergovern-
mental agreements.
353. Ibid.
354. The sources for the following list are Frank
Sackton, “Financing Public Programs Under
Fiscal Constraints,” Managing Public Programs:
Balancing Politics, Administration, and Public
Needs, Robert E. Cleary and Nicholas Henry,
eds. (San Francisco: Jossey Bass, 1989), pp.
147–166; Paul C. Nutt and Michael F. Hogan,
“Downsizing Guidelines Found in a Success
Story,” Public Performance & Management
Review 32 (September 2008), pp. 103–131; and
U.S. Government Accountability Office, Declining
Resources: Selected Agencies Took Steps to
Minimize Effects on Mission but Opportunities
Exist for Additional Action, GAO-17-79
(Washington, DC: U.S. Government Publishing
Office, 2016).
355. Nutt and Hogan, “Downsizing Guidelines Found
in a Success Story,” p. 122.
356. Aaron Wildavsky, Speaking Truth to Power
(Boston: Little Brown, 1979), p. 212.
357. U.S. General Accounting Office, Performance
Budgeting: State Experiences and Implications
for the Federal Government, GAO/AFMD-93-
41 (Washington, DC: U.S. Government Printing
Office, 1993), p. 1.
358. Julia E. Melkers and Katherine G. Willoughby,
“Budgeters’ Views of State Performance-
Budgeting Systems: Distinctions across Branches,”
Public Administration Review 61 (January/
February 2001), pp. 54–64. The quotation is on
p. 61. Figure is for 1997.
359. Philip G. Joyce, “The Obama Administration
and PBB: Building on the Legacy of Federal
Performance-Informed Budgeting?” Public
Administration Review 71 (May/June 2011), pp.
356–367. The quotation is on p. 356.
360. Donald F. Kettl, Reinventing Government?
Appraising the National Performance Review
(Washington, DC: Brookings, 1994), p. 43.
361. Philip G. Joyce and Roy T. Meyers, “Budgeting
During the Clinton Presidency,” Public Budgeting
Financing and Budgeting Governments 289
& Finance Review 21 (March 2001), pp. 1–21.
Period is 1992–2000.
362. John B. Gilmour and David E. Lewis, “Assessing
Performance Budgeting at OMB: The Influence of
Politics, Performance, and Program Size,” Journal
of Public Administration Research and Theory 16
(April 2006), pp. 169–186. The quotation is on
p. 169.
363. John B. Gilmour and David E. Lewis, “Does
Performance Budgeting Work? An Examination
of the Office of Management and Budget’s
PART Scores,” Public Administration Review 66
(September/October 2006), pp. 742–752. The
quotation is on p. 750.
364. Partnership for Public Service and Grant Thornton,
Taking Measure: Moving from Process to Practice
in Performance Management (Washington, DC,
and Alexandria, VA: Authors, 2013), p. 7. Figure
is for 2013.
365. Joyce, “The Obama Administration and PBB.”
366. Julia C. Melkers and Katherine G. Willoughby,
Staying the Course: The Use of Performance
Measurement in State Governments (Washington,
DC: IBM Center for the Business of Government,
2004).
367. Julia C. Melkers and Katherine G. Willoughby,
“The State of the States: Performance-
Based Budgeting Requirements in 47 out of 50,”
Public Administration Review 58 (January/
February 1998), pp. 66–75. The datum is on
p.  68. Hawaii’s Executive Budget Act dates to
1970.
368. Elaine S. Povich, “State Budgeting with an Eye on
Results,” Stateline (August 28, 2014). Figure is for
2013.
369. Yilin Hou, Robin S. Lunsford, Katy C. Sides,
and Kelsey A. Jones, “State Performance-Based
Budgeting in Boom and Bust Years: An Analytical
Framework and Survey of the States,” Public
Administration Review 71 (May/June 2011),
pp. 370–388.
370. Ibid., pp. 370, 377.
371. U.S. General Accounting Office, Performance
Budgeting: State Experiences and Implications
for the Federal Government.
372. U.S. Government Accountability Office, Per-
formance Budgeting: States’ Experiences Can
Inform Federal Efforts, p. 9.
373. Yi Lu, Katherine Willoughby, and Sarah Arnett,
“Legislating Results: Examining the Legal Systems
of PBB Systems in the States,” Public Performance
 290 PA R T I I I Public and Nonprofit Management
& Management Review 33 (December 2009),
pp. 266–287. Figures are for 2008.
374. Melkers and Willoughby, “Budgeters’ Views of
State Performance-Budgeting Systems,” p. 61.
Figures are for 1997.
375. Center on the States, Pew Charitable Trusts,
Trade-off Time: How Four States Continue to
Deliver (Washington, DC: Author, 2009), p. 2.
376. Kenneth A. Kiase and Michael J. Dougherty,
“The Impact of Performance Budgeting on State
Budget Outcomes,” Journal of Public Budg-
eting,  Accounting, & Financial Management 20
(Fall  2008), pp. 277–298. The quotation is on
p. 295.
377. Anne Spray Kinney and John Ruggini, “Mea-
suring for a Purpose: Trends in Public-Sector
Measurement and Management Practices,”
Government Finance Review 24 (August 2008),
pp. 14–23. The quotation is on p. 18. Figure (47
percent) is for 2006.
378. Harry P. Hatry, “The Status of Productivity
Measurement in the Public Sector,” Public
Administration Review 38 (January/February
1978), pp. 28–33. Figure is for 1977.
379. Alfred Tat-Kei Ho, “PBB in American Local
Governments: It’s More than a Management
Tool,” Public Administration Review 71 (May/
June 2011), pp. 391–401. Figure is for 2011.
380. Richard C. Kearney, “Reinventing Government
and Battling Budget Crises: Manager and
Municipal Government Actions in 2003,”
Municipal Year Book, 2005 (Washington,
DC: International City/County Management
Association, 2005), p. 27–32. Figure, 29 percent,
is for 2003.
381. Richard C. Kearney, Barry M. Feldman, and
Carmine P. F. Scavo, “Reinventing Government:
City Manager Attitudes and Actions,” Public
Administration Review 60 (November/December
2000), pp. 541–542.
382. Julia Melkers and Katherine Willoughby,
“Models of Performance-Measurements Used in
Local Governments: Understanding Budgeting,
Communication, and Lasting Effects,” Public
Administration Review 65 (March/April 2005),
pp. 180–190. Figure is for 2000.
383. Kinney and Ruggini, “Measuring for a Purpose,”
p. 16. Figure is for 2006.
384. Theodore H. Poister and Gregory Streib,
“Performance Measurement in Municipal Gov-
ernment: Assessing the State of the Practice,”
Public Administration Review 59 (July/August
1999), pp. 325–335.
385. Ho, “PBB in American Local Governments,” pp.
391, 399.
386. Katherine Barrett and Richard Greene, “Did
We Say That? Public-Sector Predictions That
Never Came True,” Governing.com (January
2017).
387. Jared Serbu, “Despite Lower Funding Level,
Two-Year Budget Deal Is ‘Huge’ for Pentagon,”
Federalnewsradio.com (November 16, 2015).
388. Alice M. Rivlin, “Biennial Budgeting: A First Step
Toward Budget Process Reform,” Committee
on the Budget, U.S. House of Representatives
(Washington, DC: U.S. Government Publishing
Office, November 18, 2015).
389. The Volker Alliance, Truth and Integrity in State
Budgeting, p. 7. Figures are for 2015.
390. Jeffrey B. Liebman and Neale Mahoney, Do
Expiring Budgets Lead to Wasteful Year-End
Spending? Evidence from Federal Procurement
(Cambridge, MA: National Bureau of Economic
Research, 2013). Figures are for 2004–2009.
391. Ibid.
392. Ibid.
393. Mark Headd, “Is Government IT Built to Fail?”
Government Technology (June 18, 2014).
394. Simon Calmar Andersen and Peter B. Mortensen,
“Policy Stability and Organizational Performance:
Is There a Relationship?” Journal of Public
Administration Research and Theory 20 (January
2010), pp. 1–22. The quotation is on p. 1.
395. Wildavsky, The Politics of the Budgetary Process,
p. 64.
396. The following discussion of budgetary strategy
is drawn from ibid., pp. 63–127. Wildavsky calls
these “ubiquitous” and “contingent strategies.”
We think that our terms are clearer.
397. Jeffrey McMurray, Associated Press, “Tight
Budgets Heighten Scrutiny of F/A-22 Raptor,”
Savannah Morning News (April 4, 2004).
Representative John Murtha is quoted.
398. James C. Garand, Katherine T. Parkhurst, and
Rusanne Jourdan Seoud, “Bureaucrats, Policy
Attitudes, and Political Behavior: Extension
of the Bureau Voting Model of Government
Growth,” and “Testing the Bureau Voting Model:
A Research Note on Federal and State-Local
Employees,” Journal of Public Administration
Research and Theory 1 (April 1991), pp. 177–212
and pp. 229–233, respectively.

399. Gregory B. Lewis, “In Search of Machiavellian
Milquetoasts: Comparing Attitudes of Bureaucrats
and Ordinary People,” Public Administration
Review 50 (March/April 1990), pp. 220–227. The
quotation is on p. 222.
400. William A. Niskanen, Bureaucracy and Repre-
sentative Government (Chicago: Aldine Atherton,
1971).
401. Julie Dolan, “The Budget-Minimizing Bureaucrat?
Empirical Evidence from the Senior Executive
Service,” Public Administration Review 62
(January/February 2002), pp. 42–50. The quota-
tions are on pp. 45, 42.
402. Jeffrey L. Brudney and Deil S. Wright, “The ‘Revolt
in Dullsville’ Revisited: Lessons for Theory, Prac-
tice, and Research from the American State Admi-
nistrators Project,” Public Administration Review
70 (January/February 2010), pp. 26–37. The quo-
tations are on p. 31. Data are for 1964–2008.
403. Killian and Choudhury, “Continuity and Change
in the Role of City Managers,” p. 13. Figure is for
2010.
404. Philip G. Joyce, “Congressional Budget Reform:
The Unanticipated Implications of Federal Policy
Making,” Public Administration Review 56 (July/
August 1996), pp. 317–325. The quotation is on
p. 319.
405. Allen Schick, “The Majority Rules: Don’t Look
Now, but the Congressional Budget Process Is
Working,” Brookings Review 14 (Winter 1996),
pp. 42–55. The quotation is on p. 43.
406. Partnership for Public Service, Government
Disservice, p. 22, and Committee for a Responsible
Federal Budget, Appropriations Watch, FY 2017
(Washington, DC: Author 2016).
407. Bill Heniff, Jr., The Congressional Budget Process
Timetable (Washington, DC: Congressional
Research Service, 2008), p. CRS-2, for 1974–2008
count. Continuing resolutions continued, FY
2009–FY 2015.
408. Gregory Korte, “Congress Examines Budget
Process,” USA Today (October 4, 2011).
409. U.S. Government Accountability Office, Budget
Issues: Effects of Budget Uncertainty from Con-
tinuing Resolutions on Agency Operations, GAO-
13-464T (Washington, DC: U.S. Government
Printing Office, 2013), and Partnership for Public
Service, Government Disservice, p. 22. Period
analyzed is 1999–2014.
410. U.S. Government Accountability Office, Continuing
Resolutions: Uncertainty Limited Management
Financing and Budgeting Governments 291
Options and Increased Workload in Selected
Agencies, GAO-09-879 (Washington, DC: U.S.
Government Printing Office, 2009). Period ana-
lyzed is 1999–2009.
411. Eric Katz, “Seeing Red,” Government Executive
(November/December 2015), pp. 32–33. The
quotation is on p. 33.
412. Leon Panetta, as quoted in David Ignatius, “Life
in Budget Limbo,” Washington Post (November
1, 2007).
413. CBO blog post, as cited in Charles S. Clark,
“CBO Has Overestimated Revenues Since 1982,”
Govexec.com (November 11, 2015). Figures are
for FY 1982–FY 2016.
414. Joel Achenbach, “Pick a Number, Any Number,”
Washington Post (November 20, 1995).
415. Mark Bloomfield, quoted in Albert B. Crenshaw,
“Putting Their Best Guess Forward,” Washington
Post (May 23, 1993). Emphasis is original.
416. As derived from data in Clinton T. Brass,
Shutdown of the Federal Government: Causes,
Processes, and Effects, RL34680 (Washington,
DC: U.S. Congressional Research Service, 2011),
p. 2. Figure is for FY 1977–FY 2010, plus the
2013 shutdown.
417. Michael Gelman, Shachar Kariv, Matthew
D. Shapiro, et al., How Individuals Smooth
Spending: Evidence from the 2013 Government
Shutdown Using Account Data (Cambridge, MA:
National Bureau of Economic Research, 2015).
418. U.S. Office of Management and Budget,
Impacts and Costs of the October 2013 Federal
Government Shutdown (Washington, DC: U.S.
Government Printing Office, 2013).
419. Marc Labonte, The FY2014 Government
Shutdown: Economic Effects (Washington, DC:
Congressional Research Service, 2015).
420. U.S. National Park Service, Effects of the 2013
Government Shutdown on National Park Service
Visitor Spending in Gateway Communities
(Washington, DC: Author, 2014).
421. Philip Bump, “Let Us Now Pity Congress, Which
Must Go Without Ice Cream in the Shutdown,”
Atlantic Wire (October 4, 2013).
422. Steven Mufson, “‘PADs’ Wise to Ways of Power,”
Washington Post (April 25, 1990).
423. Elaine S. Povich, “States Go Overtime on Budgets,
Hurting Programs,” Stateline (September 24,
2015).
424. Katherine G. Willoughby and Mary A.
Finn, “Organizational Professionalism and
 292 PA R T I I I Public and Nonprofit Management
Technological Sophistication: Budget Offices in
the South,” Public Productivity & Management
Review 18 (Fall 1994), pp. 19–35. The quotation
is on p. 33.
425. Nelson A. Rockefeller Institute of Government
and Pew Center on the States, States’ Revenue
Estimating: Cracks in the Crystal Ball (Albany,
NY, and Washington, DC: Authors, 2011).
426. Robert Rodgers and Philip Joyce, “The Effect of
Underforecasting on the Accuracy of Revenue
Forecasts by State Governments,” Public Admini-
stration Review 56 (January/February 1996),
pp. 48–56. The quotations are on pp. 48–49.
427. Nelson A. Rockefeller Institute of Government
and Pew Center on the States, Managing Volatile
Tax Collections in State Revenue Forecasts
(Albany, NY, and Washington, DC: Authors,
2015).
428. Richard T. Boylan, “Political Distortions in State
Forecasts,” Public Choice 136 (September 2008),
pp. 411–427. The quotation is on p. 426.
429. Elaine S. Povitch, “‘Triggers’ Cut State Taxes;
But Are They Good Policy?” Pewtrusts.org
(November 16, 2015).
430. William R. Voorhees, “More Is Better: Conceptual
Forecasting and State Revenue Forecast Error,”
International Journal of Public Administration 27
(November 2004), pp. 651–671. The quotation is
on p. 651.
431. Glenn Abney and Thomas P. Lauth, “The End of
Executive Dominance in State Appropriations,”
Public Administration Review 58 (September/
October 1998), pp. 388–394.
432. John L. Mikesell, “Revenue Estimation/Scoring by
States: An Overview of Experience and Current
Practices with Particular Attention to the Role of
Dynamic Methods,” Public Budgeting & Finance
32 (Summer 2012), pp. 1–24. Figures are for
2011.
433. Abney and Lauth, “The End of Executive
Dominance in State Appropriations.”
434. As derived from data in ibid. and Glenn Abney and
Thomas P. Lauth, “Perceptions of the Impact of
Governors and Legislatures in the Appropriations
Process,” Western Political Quarterly 40
(Fall 1987), pp. 335–342. Figure is for 1982–
1994.
435. National Commission on the State and Local
Public Service, Hard Truths/Tough Choices: An
Agenda for State and Local Government Reform,
First Report (Albany, NY: Nelson A. Rockefeller
Institute of Government, State University of New
York, 1993), p. 20.
436. Irene S. Rubin, The Politics of Public Budgeting:
Getting and Spending, Borrowing and Balancing,
6th ed. (Washington, DC: CQ Press, 2010), p. 129.
437. Robert D. Lee. Jr., “Educational Characteristics
of Budget Office Personnel and State Budgetary
Processes,” Public Budgeting & Finance 11
(September 1991), pp. 69–79, and as derived
from data in National Association of State
Budget Officers, Budget Processes in the States
(Washington, DC: Author, 2008), p. 15.
438. Robert D. Lee, Jr., Ronald W. Johnson, and
Philip G. Joyce, Public Budgeting Systems, 8th ed.
(Boston: Jones and Bartlett, 2008), p. 55.
439. Burns and Lee, “The Ups and Downs of State
Budget Process Reform,” p. 14. Figures include
the District of Columbia.
440. Robert D. Lee, Jr. and Robert C. Burns, “U.S. State
Budget Directors: Characteristics, Experience,
and Attitudes,” Public Budgeting & Finance 23
(June 2003), pp. 39–52. Figure (p. 42) is for 2000
and includes the District of Columbia.
441. Burns and Lee, “The Ups and Downs of State
Budget Process Reform,” p. 13. Figures are
for 1970–2000 and include the District of
Columbia.
442. James J. Gosling,” The State Budget Office and
Policy Making,” Public Budgeting & Finance 7
(March 1987), pp. 51–65.
443. Ronald W. Schack, “Local Government Revenue
Estimation Practices,” Municipal Year Book, 2000
(Washington, DC: International City/County
Management Association, 2000), pp. 3–7. The
quotation is on p. 3.
444. Howard A. Frank and Yongfeng Zhao, “Deter-
minants of Local Government Revenue Fore-
casting Practice: Empirical Evidence from
Florida,” Journal of Public Budgeting, Accounting,
& Financial Management 21 (Spring 2009), pp.
17–35. The quotation is on p 17.
445. William Barnes and Bonnie Mann, Making Local
Democracy Work: Municipal Officials’ Views
about Public Engagement (Washington, DC:
National League of Cities, 2010), pp. 7–8. Figures
are for 2009.
446. W. Bartley Hildreth, Samuel J. Yeager, Gerald
R. Miller, and Jack Rabin, “Implications of
Successful Career Paths of Top Local Government
Finance Managers,” Public Budgeting & Finance
30 (December 2010), pp. 82–97.

447. David S. T. Matkin, “Before There Was Enron,
There Was Orange County: A Study of Local
Government Financial-Oversight Committees,”
Public Budgeting & Finance 30 (September
2010), pp. 27–50. The quotation is on p. 27.
448. U.S. Advisory Commission on Intergovernmental
Relations, State Laws Governing Local Gov-
ernment Structure and Administration, M-186
(Washington, DC: U.S. Government Printing
Office, 1993), pp. 41–47. Data are for 1990.
449. Rubin, The Politics of Public Budgeting, pp. 130–
138. The quotation is on p. 133.
450. As derived from data in U.S. Bureau of Labor
Statistics, Occupational Employment Statistics
(Washington, DC: U.S. Government Publishing
Office, 2016), Table 13-2031. Figures are for 2015
and include 5,380 budget analysts in colleges, uni-
versities, and professional schools, almost all of
which are publicly supported. The public budget
Financing and Budgeting Governments 293
analysts’ percentage is drawn from the total of
those “industries with the highest concentration
of employment in this occupation.”
451. Dawes, The First Year of the Budget of the United
States, p. ii.
452. Michael A. Miller, “The Public/Private Pay Debate:
What Do the Data Show? Monthly Labor Review
119 (May 1996), pp. 18–29. Refers to state and
local budget officers only. The other profession
is personnel specialists. In 2015, private sector
and federal budget analysts had annual mean
wages of about $80,000. State analysts’ wages
were about $65,000, and local governments paid
approximately $69,000. See U.S. Bureau of Labor
Statistics, Occupational Employment Statistics,
Table 13-2031.
453. Dawes, The First Year of the Budget of the United
States, p. ii.
CHAPTER
Managing Human
Capital in the Public and
Nonprofit Sectors
B eginning in 1955, when public employees
were first recorded by level of government, the
number of employees of the federal civilian, state,
and local governments steadily grew as a percent-
age of the workforce, peaking, in 1975, at 19.2
percent;  by 2013, it had slid to 16 percent. Local
governments  grew the most rapidly, followed by
the states; their combined public employees roughly
tripled. The number of federal civilian employ-
ees remained essentially flat.1 Almost 22 million
people currently work for all American govern-
ments.2 Managing them is a challenge of no modest
dimensions.
Personnel administration, or personnel man-
agement, is the planning and policymaking for, and
managing of, employees, and is limited to “internal”
processes, such as compensation. During the 1980s,
a more modish moniker emerged: human resource
(or resources) management, which expands the field
by including “external” processes, such as profes-
sional development. Currently, human capital man-
agement is in fashion, which views employees as
valuable assets that can be further enriched through
greater investment, and aligns human capital poli-
cies with the organization’s mission. Personnelists,
or professionals and specialists in the field, often
use these terms interchangeably, as do we. (For the
sake of brevity, we shall use “HR” [for “human
resources”], the most commonly used initials that
designate all three titles.) Nevertheless, they do have
differences: each successive title represents a broader
concept that places an increasing emphasis on the
worth of employees.
294
WHO WANTS TO WORK FOR
THE PUBLIC OR NONPROFIT
SECTORS? AND WHO DOESN’T?
Over five consecutive years, the percentage of under-
graduates who planned to work for the federal, state,
or local government “immediately after graduation”
declined by nearly half—from over 10 percent to
more than 5 percent. Just 2 percent planned to
work for the federal government.3 Local govern-
ments, however, exert a particular pull; 82 percent
of women and 74 percent of men who once worked
in local government would “consider returning” to a
local government leadership position.4
Barely half, 52 percent, of students in masters of
public administration (MPA) and similar programs
express interest in being employed by government,5
and, at the twenty top programs, not even half are.
Almost two-thirds of the top twenty programs’ grad-
uates who enter government service switch to other
sectors, and nearly three-quarters of those who leave
government depart for “more challenging work”
(only a fourth leave for better salaries).6
More generally, white people, Republicans, and
those who never served in the military are overrepre-
sented among those Americans who spurn working
for government.7 An astonishing 56 percent of cor-
porate and nonprofit managers are not (21 percent),
or “not at all” (35 percent), interested in working for
the federal government, and only 17 percent express
any interest in doing so. These administrators rank
Washington “lowest [in its] ability to provide a

competitive environment, innovation and creativity,
and attracting the best and brightest, in comparison
with the private and independent sectors.”8
These private- and independent-sector manag-
ers may have a case. Although 90 percent of federal
employees state that they “are constantly looking for
ways to do their jobs better,” just 54 percent (a declin-
ing number) “feel encouraged to come up with new
and better ways of doing things,” compared with 68
percent of corporate employees who say this.9
None of this is good news for governments, but
the real story lies with growing student interest in
working in the independent sector. Almost 22 percent
of undergraduates state that “the nonprofit or teach-
ing fields” are their “ideal career,”10 and certainly
this applies to students of public administration and
policy. Sixty-one percent of the directors of these pro-
grams report that they have seen an increase over the
past year in student interest in working in a nonprofit
organization.11 A plurality, 21 percent, of these stu-
dents state that their “ideal area of work” following
graduation would be the nonprofit sector.12 (MPA
programs have responded to their students’ interest:
fully half of all master’s-level nonprofit management
programs are found within MPA programs.13)
The decision to start careers in the independent
sector, rather than the public one, works out well
for those who make it. “Compared to those working
in the public sector, managers in nonprofits report
greater freedom in deciding how to carry out their
job functions, more control over their work sched-
ules, and greater opportunities for pay increases.”14
THE EVOLUTION OF PUBLIC
HUMAN CAPITAL MANAGEMENT
The evolution of public HR management in the
United States can be roughly divided into six phases.
Depending upon the phase in question, America’s gov-
ernments have been dominated, in successive turns, by
its aristocrats, corrupt officials, ardent reformers, “sci-
entific” managers, dynamic administrators, and timid
clerks. We consider this evolution next.
Government by Gentlemen, 1789–1827
In 1789, the federal government started off with
three departments (State, Treasury, and War), and, by
Managing Human Capital 295
1836, it had five departments and 336 employees.15
During most of this period of very limited govern-
ment indeed, the first half-dozen presidents favored
“government by gentlemen,”16 or those who were
reputed to be persons of character and competence,
qualities that were defined largely by a respected
family background and a high degree of formal edu-
cation. Being a member of the establishment counted
for a lot: over the course of the country’s first forty
years, almost two-thirds of the eighty to a hundred
or so top appointees were drawn from the landed
gentry, merchant, and professional classes.17
Government by Spoilers, 1828–1880
Even as they were being governed by gentlemen,
however, Americans were growing less gentlemanly
in their politics. When independence was declared,
in 1776, over four-fifths of the states required that,
to vote, men must own land or have paid taxes, but,
by 1830, only half of the states retained these stip-
ulations. As a result, far more men could vote, and
many could not be described as gentlemen. When
combined with a populist candidate—in the form
of Andrew Jackson in the election of 1828—voting
turnout more than tripled from the previous election
(16 percent turnout), and surpassed half of all eligi-
ble voters for the first time.18
These fundamental political changes meant only
one thing: spoils. If presidents were to emerge, like
Jackson, from the class that earned its own living,
then politics had to be made to pay.
Contrary to conventional wisdom, however,
Jackson maintained past establishmentarian pat-
terns, dismissing about the same share of political
appointees as had his gentlemanly predecessors.19
John Tyler (1841–1845) was the first president to
implement a comprehensive spoils system, a prac-
tice that reached its apex with the presidency of
Abraham Lincoln (1861–1865), but spoils contin-
ued to mar government for the next several decades.
It is difficult for those of us reared in an environ-
ment of largely honest government to appreciate the
extent—and the brazenness—of the spoils period.
After an election, newspaper advertising typically
swelled with such announcements as, “WANTED —
A GOVERNMENT CLERKSHIP at a salary of not
less that $1000 per annum. Will give $100 to anyone
securing me such a position.” Following the election
 296 PA R T I I I Public and Nonprofit Management
of 1880, newly-elected President James A. Garfield,
according to a government archive, found “hungry
office-seekers lying in wait for him like vultures for
a wounded bison.”20
Government by the Good, 1881–1905
The corrupt excesses of the spoils system eventually
resulted in a reform movement that was determined
to rid government of those bureaucrats who owed
their office to nothing more than party hackwork.
Between 1861 and 1882, sixty-four civil service
reform bills were introduced in Congress, but not
one of them was passed by even one chamber.21
The  assassination of President Garfield by a
deranged office seeker, in 1881, changed Congress’s
collective mind.
The Civil Service Act of 1883 and Its Long-Lasting
Legacies Just two years following Garfield’s assas-
sination, Congress passed the Civil Service Act (also
known as the Pendleton Act, after its legislative
sponsor), which created a bipartisan Civil Service
Commission charged with creating a nonpartisan
federal service. Initially, the legislation’s reach was
modest, covering a fraction more than one out of
every ten federal civilian employees.22 The act’s com-
mitment to neutrality and fairness was strengthened
by subsequent presidential directives that prohib-
ited an employee’s removal for political or religious
reasons (in 1896), and guaranteed due process for
those who had been hired competitively (1897).
Although the Civil Service Act was influenced
by the British public service, the Senate inserted
some major provisos that were uniquely American.
One such clause was that civil service exam-
inations must be “practical in character.” A conse-
quence of such practicality was that it provided the
basis for a future system of position classification,
but, less propitiously, it also reflected a regrettable
anti-intellectualism and anti-professionalism.
In stark contrast to Western Europe, the law laid
no tracks between the civil service and the universi-
ties, and it was only in 1905 that the Civil Service
Commission first observed that “the greatest defect
in the Federal Service is the lack of opportunity for
ambitious, well-educated young men”;23 a serious
effort to correct that deficiency surfaced, eventually,
in the 1930s.
Similarly, the act set up no body of permanent,
high-level, professional public administrators, as is
the norm in Western Europe. The unintended con-
sequence is that Washington now oozes presidential-
ly-appointed political executives, who, as we discuss
later, consistently underperform relative to careerists.
The act gave America one more gift that, like
political executives, keeps on giving. It omitted the
British requirement that an applicant could enter
public service only at the lowest grade, thereby
opening the apertures into which corrupt (if legal)
revolving doors were later installed.
“Goodness” versus “Badness” “Government by
the good”24 led, in 1907, to President Theodore
Roosevelt’s Civil Service Rule I, which prohibited
almost seven out of ten federal workers from par-
ticipating in political campaigns and barred the
solicitation of political contributions from federal
employees. These reforms were strengthened and
broadened by the Political Activities Act, also known
as the Hatch Act, of 1939.
In 1940, the Hatch Act was amended to extend
its coverage to state and local workers whose salaries
are paid entirely or in part with federal funds, and
to prohibit these employees from running for public
office. All the states have enacted their own legis-
lation that restricts, in various ways, their employ-
ees’ political activities, including thirty-six states
that have passed “little Hatch Acts” that reflect the
federal version.25
More recently, Washington has lightly loosened
political restrictions on government workers. The
Hatch Act Reform Amendments of 1993 lifted the
1907 prohibition on federal employees participating
in political campaign, but they still may not be can-
didates in partisan elections or engage in political
activity while on duty. In 2012, Congress passed the
2012 Hatch Act Modernization Act, which contin-
ues the ban on entering elections for those state and
local employees who are paid entirely with federal
grants or loans, but lifted the prohibition from those
who are paid only in part with federal funds. In
2016, the Supreme Court ruled that it is unconstitu-
tional to discharge or demote a (in this case, local)
government employee because he or she supports a
particular political candidate.26
Over time, civil service commissions, which
typically administered these and similar policies,

became associated “with morality, with a con-
notation of ‘goodness’ vs. ‘badness,’ quite apart
from  the  purposes for which people were
employed.”27 To put it crassly but clearly: the
bureaucrats responsible for keeping government
moral and apolitical, and the bureaucrats respon-
sible for getting a job done, became increasingly
distinct entities.
Government by Scientific Managers,
1906–1936
Despite government by the good, good government
remained elusive. In 1912, an analyst decried the
“snail like pace” of government employees, alleging
that they wasted from 40 to 70 percent of their work
time.28
The influential New York Bureau of Municipal
Research (detailed in Chapter 2), a privately-sup-
ported think tank founded in 1906, agreed with this
assessment, and its first forays focused on getting
public “workers to do the work they were hired to
do,” a concentration that quickly incorporated a
“strong link between the bureau and scientific man-
agement.”29 (We reviewed scientific management in
Chapter 3.) Scientific principles of public adminis-
tration were part of an inconsistent but soothing
amalgam of civil-service beliefs that packed merit,
morality, neutrality, and efficiency into one concep-
tual lump.
It was, nonetheless, a likable lump, and it left
legacies. A major one is the position classification
system, first adopted by Chicago in 1912, and which
has been described as “the ascendancy of scientific
management.”30 The council-manager form of local
government emerged as a direct outgrowth of the
period’s precepts; the first government to adopt a
council-manager plan was Sumter, South Carolina,
in 1912, and, by 1930, 418 local governments had
adopted it.31
Certainly government by scientific managers
served to extend the reach and power of the Civil
Service System. Between 1900 and 1930: the propor-
tion of federal civilian employees administered by
the Civil Service Commission shot from 46 percent
to 80 percent;32 the number of states that had merit
systems expanded from two to nine;33 and cities
with civil service commissions nearly quadrupled
from sixty-five to 250.34
Managing Human Capital 297
Government by Policymaking
Administrators, 1937–1954
In 1937, the report of the president’s Committee
on Administrative Management (more commonly
known as the Brownlow Committee, after its chair,
Louis Brownlow) was published, and, for the first
time since its founding, the usefulness and power
of the Civil Service Commission were quietly ques-
tioned. “Personnel was seen as a principal, if not the
major, tool of management,”35 and the committee
recommended that each major agency have its own
personnel manager reporting to its top administra-
tor. The president quickly complied, in 1938, with
Executive Order 7916. The Hoover Commission’s
first report, issued in 1949, also took up this cudgel,
and “little Hoover commissions” in many states did
the same. Today, agency-based HR offices are com-
monplace.
There was more. “Administration” also
expressed the long-denied reality that public admin-
istrators make public policy.
Although the Brownlow Committee bowed
briefly to the belief, still widely held, that politics and
administration were separate entities, it also concen-
trated on those administrative “positions which are
actually policy-determining” (consistency, evidently,
was dismissed as the hobgoblin of small minds).36
When, in 1953, Dwight D. Eisenhower, a
Republican, assumed the presidency after two
decades of Democratic government, he discov-
ered, maddeningly, a huge civilian bureaucracy
that had more than quadrupled in size since the
last Republican administration, and which was
run by entrenched Democratic policymakers, who,
perversely, were protected by civil service regula-
tions  that were based on the premise that politics
should not intrude on administration! Although aca-
demia during this period was barely beginning to rec-
ognize that bureaucrats made public policy, elected
policymakers clearly understood that they did.
Government by Professionals,
1955–Present
By mid-century, another value was entering the
milieu of public HR: professionalism.
The professional period encompasses two dis-
tinct systems of public HR. One is Specialized Public
 298 PA R T I I I Public and Nonprofit Management
Professional Systems, or those public personnel
systems that are geared to the career needs of high-
ly-educated specialists. The other is the Professional
Public Administration System, which reflects the
idea that HR systems should encourage effective
and efficient management by competent generalist
administrators.
These professional systems are two of the five
systems of public human capital management, each
with its own values and mission, which we con-
sider next; the remaining three are the Civil Service,
Collective, and Political Executive systems. We begin
with the Civil Service System.
THE CIVIL SERVICE SYSTEM:
THE MEANING OF MERIT
The civil service has been the historic heart of public
administration. The general Civil Service System, or
merit system (a phrase that emphasizes the values of
public service, in contrast to its bureaucratic struc-
ture), is career personnel who have tenure and who
are administered according to traditional merit prac-
tices.
The Meaning of Merit
Just what are these practices?
The Position Most centrally, the overriding
practice of the merit system is its emphasis on
the position, and the system assumes that govern-
ment  positions can be objectively and correctly
classified.
Fairness as Classification HR managers hold
dear one value that eclipses all others. That value is
equity, or equal work for equal pay.37 Personnelists
identify equal work by the job classification system,
but line administrators have scant interest in equal
work; their priority is paying people for productiv-
ity. Ultimately, the two mindsets collide.
Hiring and Promoting by Score “Merit” in the
merit system is determined by one’s scores on tests,
which, in turn, are the bases for entry and promotion.
Politics, ethnicity, gender, and other non-meritorious
factors are actively suppressed.
A Centralized, Sovereign, and Strong HR Office
The merit principle also demands that human
capital management be sovereign and separate from
the rest of government, and that agencies may select
applicants only from lists that personnel adminis-
trators have pre-approved. (Traditionally, only a
meager three candidates are listed, a practice that
Washington initiated in 1888.) If the civil service
were not independent and powerful, this argument
continues, a more partisan and corrupt government
would be the unacceptable consequence.
Personnel Administrators Rule! Sounds good,
but there were problems. Most notably, a sovereign
civil service grew obsessed with writing and impos-
ing rules on every other agency. By the 1990s, the
federal government’s chief HR bureau, the Office
of Personnel Management (OPM), had filled a stag-
gering 7,000 pages with its regulations,38 a practice
emulated by personnel offices in state and local gov-
ernments as well. These swamps of civil service rules
reflected the disturbing reality that “compliance
with regulations [had become] the central focus of
the personnel system.”39
The Murkiness of Merit The position description
and its classification, equity, testing, and a sover-
eign and strong central personnel office remain the
underlying principles of the Civil Service System.
As we shall see throughout this chapter, however,
“developments since World War II have befogged
the meaning of merit principles and confused the
content of merit systems.”40
The Profession of Public Human
Capital Management
There are more than 60,000 managers and special-
ists in human resources, labor relations, compensa-
tion, benefits, training, and development who work
in government, comprising 16 percent of the total
public human capital workforce in all sectors.41
Over two-fifths of these civil service administra-
tors and professionals are women, more than nine
out of ten are college graduates, and they have long
career histories in their field and in government.42
Public personnel employees appear to have a high
job satisfaction (and with some reason—they are
one of only two categories of public professionals

whose salaries are comparable with those of their
corporate counterparts43), and most perceive their
jobs as being a long-term career.44
What do governments’ human capital manag-
ers do? Their major duties, listed in the order of the
most time that they devote to them, are: recruiting
and hiring; benefits administration; pay administra-
tion; developing HR policy, such as retirement plans;
position classification; training and development;
processing grievances; appraising and measuring
employee performance; brokering conflict; manag-
ing diversity; and collective bargaining, among other
activities.45
HR professionals also may influence dispropor-
tionately the morale of their public agencies. It seems
that if HR workers are happy in their work, then their
agencies’ co-workers are happier than the overall
norm. “Agency morale has a lot to do with satisfac-
tion in the . . . human resources workforces.”46
Recruiting Bureaucrats
Recruiting new talent into the public sector could
stand some improvement. Three-fifths of young
adults report that no one, including government, has
ever asked them if they would consider working in
government.47
Federal Recruiting: Awful Announcements, Corr-
upted Processes Forty-three percent of  federal
workers think that their agencies are able to recruit
people with the right skills, 32 percent think not, and
a suspiciously high 25 percent “neither agree nor
disagree,”48 suggesting, perhaps, that these respond-
ents prefer not to cast themselves as difficult people.
Finding qualified job candidates is the top concern
of federal executives, but 78 percent of federal HR
executives think that programs for acquiring new
talent are inadequate.49 About two-thirds of the
topmost federal bureaucrats, the Senior Executive
Service (SES), believe that recruiting qualified candi-
dates to the SES is “somewhat difficult” (44 percent)
or “very difficult” (24 percent).50
There are some reasons underlying these
numbers. As much as a third of all federal job open-
ings are never publicly announced,51 and a third of
those that are announced “are typically open for less
than two weeks.”52 The feds themselves rate only
2 percent of their job announcements as “good” in
Managing Human Capital 299
terms of quality (53 percent are ranked as “poor”),53
as substantiated by the fact that 44 percent of the
announcements for supervisory positions provide
“no substantive information about the nature
of the position’s supervisory responsibilities.”54
“Consequently,” according to federal personnel spe-
cialists, “many announcements can actually discour-
age potential applicants from applying for Federal
jobs.”55
Even more damaging than the announcement
of recruiting may be the process of recruiting.
A modest 45 percent of “hiring managers” state
that they “actively and personally” participate in
recruitment.”56 Worse, nearly four-fifths of HR
staffers believe that “at least some of the time man-
agement had someone in mind to fill the position
prior to advertising the vacancy.” In fact, two-fifths
of these specialists report that “had been asked to
re-advertise a vacancy because the selecting official
wanted to hire someone who was not on the referral
list,” and that this happened “always, most of the
time, or some of the time”; this manipulative prac-
tice is flatly illegal.57
When federal recruitment is done well, the
results can be dramatic. A year after the Peace Corps
simplified and accelerated its recruitment, applica-
tions soared by more than 70 percent, a two-decades
high.58
Grass-Roots Recruiting Asked “which workforce
issues are important to your organization?” more
than nine out of ten state and local officials replied
that “recruiting and retaining qualified personnel
with needed skills to public service”; the rest stated
that it was “somewhat important.” No other issue
comes close to this top-ranked response.
State and local governments are abandoning
printed media in recruiting and are going full-blast
electronic. Eighty-four percent of these governments
cite “online job advertising” as their “most suc-
cessful” recruitment practice in “reaching qualified
candidates,” followed by “government web sites”
(51 percent) and “social media (28 percent); “state/
local newsletters,” the next highest, attains a wan
17 percent.59 Those states with “more usable Web
sites [receive] significantly more applications per job
opening.”60
The states are introducing major reforms
designed to decentralize and simplify recruiting. A
 300 PA R T I I I Public and Nonprofit Management
plurality of states, twenty-two, have decentralized
recruitment to the agencies, and another eighteen
share this responsibility with the central personnel
bureau.61 Nevertheless, nearly four out of ten state
agency heads think that the complexity of person-
nel procedures is their most serious impediment for
recruiting.62
Local governments have focused on proac-
tive  recruitment. Most solicit applications from
minority and women’s organizations, state and
private employment agencies, unions, profes-
sional  organizations, and use internships as a
recruiting tool.63
Hiring Bureaucrats
Hiring well is one of the public sector’s more vexing
issues.
Federal Hiring: A Study in Mismanagement More
than two decades ago, the chief federal person-
nel administrator characterized the finding of an
entry-level administrative position as “intellectually
confusing, procedurally nightmarish, inaccessible
to students and very difficult to explain.”64 Small
wonder that, despite at least seven major attempts
by federal agencies to reform federal hiring over nine
years,65 a startling 21 percent of federal workers
think that the process by which they themselves
were hired was “unfair”—these are the applicants
who were hired, not rejected!—a percentage that is
at least three times greater than those in businesses
and nonprofit organizations.66
There has been some improvement; the
Competitive Service Act of 2015 eliminated the
strange policy that prohibited an agency from hiring
highly-qualified applicants whom another agency
had declined to hire because it had a surplus of such
applicants. For the most part, however, federal hiring
remains a nightmare. Here is why.
Applicant Pools The hiring challenge starts with
who is available for hire. Even though nearly three-
fourths of federal agencies foresee higher skill and
educational levels being needed for their own work-
forces,67 almost two-fifths of federal managers cite a
“shortage of qualified applicants” as their “primary
obstacle in hiring employees”; no other obstacle
comes remotely close to this one.68
Worse are “mission-critical skills gaps both
within federal agencies and across the federal work-
force . . . [that] impede the government from cost-
effectively . . . achieving results.” There are “nearly
two dozen occupations with significant program-
matic impact” that have skills gaps, including six
occupations, such as cybersecurity, that are govern-
ment-wide.69
Executive Order 13562, issued in 2010, directed
agencies to simplify résumé-format requirements
and recruit on campuses, a pair of directives that
may improve the quality of applicant pools.
The Internship Issue Internships are a favored
way  of getting a job. In the private sector, 50
percent of interns are hired permanently, but in
federal circles, where some 60,000 student employ-
ees toil  annually, just 7 percent are.70 To correct
this  bleak situation, Executive Order 13562, just
noted, ended two internship programs that had
attracted nearly half of new federal employees.
They were replaced by a more “student friendly”
Presidential Management Fellows Program (begun
in 1977) and a new Pathways Program composed
of two new internship programs for high school stu-
dents and recent post-secondary graduates, respec-
tively; all potentially lead to federal careers. Four
years after Pathways became effective, in 2012, all
chief human capital officers surveyed reported using
it in the past year;71 nearly 6 percent of “Pathways
internships” and “Pathways recent graduates” are
hired into permanent positions.72
Federal Fragmentation The federal government
has no standard job application form, and nearly
two-fifths of college students do not understand
those forms that it does have.73 These forms must
be submitted to one of 105 hiring, or appointment,
authorities (down from more than 200 ten years
earlier74), each of which has its own hiring proce-
dures; some are government-wide, others are limited
to single agencies or portions of them. Just twenty
(or 9 percent) of these hiring authorities account for
91 percent of all federal hires. Of the 105 appoint-
ment authorities, two (one of which hires only physi-
cians for Veterans Affairs) account for 38 percent of
all federal hires, and the remaining 103 are each in
the single digits, or fractions of 1 percent,75 or (in the
case of twenty authorities) not used at all.76

Even within federal agencies, fragmentation
flourishes. In one program, the hiring process had
110 steps involving forty-five people.77
Confused Candidates Fifty-seven percent of federal
employees found their hiring process to be “confus-
ing,” about double the percentages in the private and
nonprofit sectors.78 Even when Washington does
find “outstanding candidates, the complexity of the
hiring process often drives all but the most dedicated
away.”79
A Glacial Process Seventy-nine percent of federal
employees describe their hiring process as “slow,” a
proportion that is significantly higher than those of
nonprofit (50 percent) and corporate (42 percent)
workers who say this.80 Almost a third of entry-
level new hires cite “the length of the process” as
the “greatest obstacle” in their federal job search,
far outdistancing all six of the other hurdles.81 A
remarkable four-fifths of SES executives think that
the hiring process for senior executives is too slow
(16 percent thought the process was “about right”).82
Of course, as HR officials themselves admit,
“the longer the process takes, the more applicant
attrition is likely to occur,”83 which may explain
why nearly nine out of ten major agency heads state
that slow hiring is a moderate-to-great problem.84
Executive Order 13562 of 2010, noted earlier,
also directed agencies to address this problem by
requiring that they dramatically shorten hiring
schedules. Still, it takes, on average, 100 days (and
lengthening) to hire a federal employee.85
Restoring Health to Sickly Screening and Selection
When government uses robust selection procedures,
the productivity of its managers and professionals
increases by an impressive 17 percent.86 Regrettably,
for thirty-four years (1981–2015), federal screen-
ing was so sickly that it was thought to be actually
harming the quality of applicant pools.87
Since 1955, Washington had relied principally
on a single “universal” test for entry to most agen-
cies, and it filtered from half to three-fifths of all
applicants.88 In 1981, the judiciary banned it on the
grounds that had an adverse impact on minorities.89
OPM found no replacement until 1990, and then
only because the courts demanded it; the test was
used, tepidly, for four years and was then abandoned
Managing Human Capital 301
because of its unpopularity among the agencies.
Most agencies90 ended up relying on that “least
effective available predictor of job performance,”91
the unassembled examination, which ranks appli-
cants based on their self-reported education and
experience.
In 2002, Congress strengthened these question-
able practices by passing the Chief Human Capital
Officers Act, which allowed agencies to ignore
applicants’ test scores in favor of their own ranking
systems. Solid research shows that when managers
overrule test results and hire according to their own
judgment, their organizations “systematically end up
with worse hires.”92
Executive Order 13562 of 2010, noted earlier,
directed that screening and selection be reformed,
improved, and accelerated. As a result, agencies and
OPM moved toward a greater use of testing; by
2014, competitive examinations were used to hire
23 percent of all federal new hires, far fewer than in
the past, but it was the method most used to hire.93
OPM, in 2015, introduced USA Hire, a digital-
ly-based test that, in many ways, is a return to the
universal entry test that had prevailed from 1955 to
1981. The test is fair to minorities, scoring is instan-
taneous, which should speed hiring, and taking the
test is procedurally simple, which should encourage
more applications; prior to the Peace Corps’ reforms,
mentioned earlier, not even a fourth of its applicants
completed their applications, but after the reforms,
95 percent did.94
Still, a new and needed test will not, by itself,
solve all screening problems. A remarkable 44
percent of supervisors had no say in the new hires
whom they supervise, which may be why only 71
percent of them are “very satisfied” with these
employees, compared with 80 percent who were
involved in their selection.95
Federal Hiring’s Crotchety Consequence Fewer
than a fourth of all new federal hires are hired for
entry-level positions, less than a quarter of whom
are hired immediately after graduation; in fact, the
average age of new federal hires is a mature thirty-
three.96 Hence, we have a really elderly federal civil-
ian workforce.
The proportion of federal workers who are
twenty-nine or younger has been more than halved,
from 15 percent97 to 7 percent, over thirty-one
 302 PA R T I I I Public and Nonprofit Management
years.98 By contrast, 12 percent of local government
employees, 15 percent of state workers, and 24
percent of private-sector employees are under thirty
years of age.99 “The federal government workforce
is older, on average, than any other sector of employ-
ees in the United States,”100 and younger workers are
not staying long in the federal employ. Employees
who are thirty-three or under stay in the federal
government, on average, fewer than four years,101
and nearly 9 percent of all those who leave the gov-
ernment are under thirty, “a significant figure given
their tiny presence in the workforce.”102
These trends have significant portents for pro-
ductivity: after the first five years in a federal agency,
employee engagement in his or her job drops 12
percentage points.103 Just how engaged is the oldest
workforce in America?
Does Washington Hire Well? In spite of itself,
Washington may be hiring fairly well.
Twenty-nine percent of federal executives and
top professionals who were hired from outside the
government think that the quality of federal supervi-
sors is better than in their last place of employment
(just 12 percent believe it is worse), and 21 percent
think that the quality of their co-workers is higher
(10 percent believe otherwise).104
Most of the data support these opinions. Almost
half of all entering federal employees have college
degrees in specifically relevant fields.105 There is
“little difference in the education levels and grade
point averages” among applicants who accept offers
of federal employment and those who take other
options, an indication that Washington competes
successfully in hiring.106
State Hiring State governments share at least one
hiring issue with Washington: “The size of the appli-
cant pool for career professional positions is not
likely to be large [and] the quality of the applicant
pool is not likely to be very strong.”107 Nevertheless,
as we describe later, the education and profession-
alism of state (and local) executives have improved
vastly over the last half century.
A Caveat about Federal and State Hiring Still, a
caveat is in order.
Despite corporate managers’ contempt for
working in the federal government, noted earlier, a
solid majority of upper-level new federal hires (59
percent)108 and a dominating plurality of entry-level
ones (40 percent)109 who were hired from outside
the government (outsiders account for 29 percent of
all new federal hires110) nevertheless are drawn from
the private sector. Overwhelmingly, these sector
switchers cite “job security” as their leading motiva-
tion for making the switch.111
State mid- and upper-level administrators who
were hired from corporations typically supervised
few corporate subordinates, and their switch often
entailed a public-sector promotion.112
Do these patterns imply that the public sector
has a special attraction for managers whose corpo-
rate careers are stuttering, or even stuck, and only
then does government become their belated second
choice? It is an all-the-more intriguing question
when we realize that only 3 percent of upper-level
new federal hires113 and 4 percent of entry-level
ones114 who are hired from outside the government
are drawn from the independent sector—the sector
that, as we observed in Chapter 4, far surpasses the
other two in terms of its employees’ disdain for job
security and their strong need for socially meaning-
ful work.
Classifying Bureaucrats
Position classification is a core tenet of the Civil
Service System. Indeed, employees in the civil service
are also known as “classified” employees.
Classifying Federal Employees Until 1923, when
the Classification Act was enacted, federal supervi-
sors had unlimited autonomy to determine the pay
of workers, and federal employees were growing
increasingly angry about their lack of rigor and,
often, fairness. The act authorized the Civil Service
Commission to group federal positions into rational
classes and pay their occupants accordingly.
A more comprehensive Classification Act was
enacted in 1949. It established the dominant classifi-
cation system, the General Schedule (GS), composed
of fifteen grades for civilian workers, and, within
these grades, there are roughly 420 to 450 occu-
pations, as OPM continuously revises the number.
At the very top are the 8,000 or so members of the
Senior Executive, Senior Professional, and Senior
Foreign services, each with its own classification

system. Blue-collar and Postal Service employees,
and about twenty agencies, also have their own
systems.
Classifying at the Grass Roots All state govern-
ments have position classification systems. Eight
states have decentralized classification from their
central personnel office to the agencies, and another
eight distribute this duty between their HR and line
agencies.115
A dozen states require their cities to adopt clas-
sification plans,116 although almost all local gov-
ernments of any size have them. Most cities and
counties use a single classification system, although,
oddly, the smaller the jurisdiction, the more likely
that there will be multiple systems.117
Rating Bureaucrats
At the federal level, the Civil Service Act of 1883
set the first, if vague, standard for assessing the per-
formance of bureaucrats, stipulating that promotion
should be based on merit, but neglected to estab-
lish a system for assessing merit. An appropriations
act of 1912 directed the Civil Service Commission
to establish a uniform efficiency rating system for
personnel in all agencies, replete with annual formal
performance reviews (a mandate that is still with us),
and the Performance Rating Act of 1950 required
each agency to set up an employee appraisal system.
Beginning in 1995, OPM steadily decentralized
personnel evaluation to the agencies. Today, in the
twenty-four major agencies, 71 percent of perma-
nent non-SES employees are rated under a five-level
system, which OPM had mandated for decades; 13
percent are assessed by a pass/fail method (the least
informative of any assessment method,118 down
from 45 percent of all federal employee evaluations
eight years earlier119); 9 percent are rated in a three-
level scale; and 6 percent in a four-level one.120
In all four rating systems combined, 39 percent
of employees are rated as “Fully Successful,” 33
percent as “Outstanding” (the highest) and 27
percent as “Exceeds Fully Successful.” Three-tenths
of 1 percent are “Minimally Successful,” and one-
tenth of 1 percent are “Unacceptable.”121 Ratings
such as these—i.e., better than 99 percent are “Fully
Successful” or higher—have been the norm for many
years.122
Managing Human Capital 303
The Senior Executive Service fares not much
better. Over four years in the 2010s, “more than
85 percent” of SES careerists “were rated in the top
two of five categories.”123 By 2015, more than 71
percent had received performance bonuses averag-
ing $10,746, and a tad less than 49 percent “received
the highest possible performance rating of ‘outstand-
ing.’”124 In 2016, OPM imposed tighter regulations
regarding SES performance assessments.
All state governments and virtually all local
ones formally rate their bureaucrats. Because these
systems are in flux, we address them later in terms of
performance pay.
Paying Bureaucrats
One of the more significant issues of public pay is
its comparability with private-sector pay. (Whether
public compensation is comparable with that of the
independent sector is much less of an issue because,
as we detailed in Chapter 5, the average nonprofit
compensation is 27 percent less than governments’.)
One must enter prudently this thorny thicket. A
review of this literature revealed that researchers’
“conclusions may be more closely linked to meth-
odology and ideology than is desirable.”125 For
example, the Federal Salary Council, using a contro-
versial methodology, has, for decades, issued annual
reports stating that federal salaries are at least a third
lower than their counterparts’ salaries in business;
the conservative Heritage Foundation has stated that
federal employees earn 22 percent more, on average,
than comparable positions in the private sector
(which has far more part-time employees, which the
Foundation counts); and the Congressional Budget
Office concluded that overall federal pay was 16
percent higher than private-sector pay 2005–2010,
and 17 percent higher 2011–2015, but that feds with
graduate degrees (e.g., public administrators) were
paid less.126 With all this said, however, some find-
ings seem straightforward.
The Federal Experience By the 1980s, federal sal-
aries were falling well behind those in business, and
large numbers of federal executives and professionals
were leaving for the private sector because of it.127 In
1990, Congress addressed these problems by enact-
ing the Federal Employees Pay Comparability Act,
which stated that General Schedule salaries would be
 304 PA R T I I I Public and Nonprofit Management
raised to match salaries for comparable nonfederal
positions (less 5 percent due to superior federal ben-
efits) in five years, beginning in 1994, and that GS
pay would be adjusted to reflect local nonfederal pay
(85 percent of federal employees work in places other
than the District of Columbia128). The act created
a  Federal Salary Council to recommend each year
appropriate salary adjustments to the president.
Over the course of the next twenty-five years,
presidents rejected every salary recommendation
by the Federal Salary Council, and, in 2011, local-
ity pay (which turned out to be unworkable as
designed) was frozen; it was unfrozen in 2015. In
the words of a normally sober-sided analyst, the law
is “anemic,” “egregious,” and a “farce.”129 (Tell us
what you really think.)
About two-thirds of all federal civilian employ-
ees consistently report that they are satisfied with
their pay,130 and with some reason—a large analysis
concluded that, “on average, 44% of federal govern-
ment employees are thriving financially, compared
with 34% of all other workers in the U.S.”131
This is far from the case with federal executives’
compensation, which still is not even “on a par . . .
with counterpart positions in state or local govern-
ment.”132 Consider just two examples: the salaries of
state university presidents and city managers, other
than in the smallest colleges and towns, commonly
match or exceed those of federal cabinet secretaries.
The compensation of chief executive officers (CEOs)
who head large corporations or nonprofit organiza-
tions are many times greater than those of cabinet
secretaries, even though these CEOs are responsible
for far smaller budgets. Google, Inc., for example,
has some 40,000 employees and distributes about
$3 billion a year in grants; its CEO’s annual com-
pensation has topped $100 million, not to mention
nearly $6 billion in stocks. By contrast, the U.S.
Department of Health and Human Services hires
62,000 employees and distributes more than $330
billion in grants and payments; its secretary’s salary
is less than $204,000.
The State and Local Experience In general, state
and local employees are paid well. Their total com-
pensation costs (that is, pay plus benefits) are 51
percent higher than those of private-sector workers;
salaries and wages are 43 percent higher, and ben-
efits are 73 percent higher. These disparities are
attributable to the public sector’s greater proportion
of jobs that require higher levels of education or
physical risk, and heavier unionization.133
When we compare the grass-roots employees
with private employees who are working in the same
jobs, however, then they fare far less well.
State employees are paid, on average, 11 percent
less than their private-sector equivalents, and their
total compensation is nearly 7 percent less. High
unemployment and vibrant public unions associate
most strongly with high state wages. “Surprisingly,”
and “contrary to conventional wisdom,” however,
large state budgets and sufficient finances to offer
competitive wages are “not related” to a state’s
“ability to recruit and retain talented candidates”
and are “not found to influence state public-private
wage gaps.”134
Local government workers are paid, on average,
12 percent less than their corporate counterparts
in the same jobs, and their overall compensation is
more than 7 percent less.135
As in Washington, the higher that one ascends
the hierarchy, the wider the wage gap grows. A
massive analysis of forty-three corporate, state, and
local positions found that “the differences in pay
between the two sectors were most pronounced
in the higher paid professional and administrative
jobs.” Indeed, in 95 percent of these positions, public
pay was lower than private pay, and, in the remain-
ing 5 percent (or two positions), government’s pay
merely “approached” the private sector’s pay for the
same jobs.136
In another unfortunate parallel with the federal
experience, the compensation of state and local
employees, especially administrators and profession-
als, has, since the late 1980s, been steadily declining
relative to their counterparts in the private sector.137
Training Bureaucrats
Training workers to improve their workplace skills
is closely and clearly linked with organizational pro-
ductivity.138 “The most effective private firms” spend
from 3 to 5 percent of their budgets on training.139
The Australian government—often cited as a model
of efficient and effective public administration—
spends an impressive 5 percent of its budget on
training, which Australians cite as being the “most
useful” of their government’s innovations.140

Training heightens nonprofit,141 federal,142
and state and local employees’143 job satisfaction,
engagement, and organizational commitment, and
lowers their inclination to consider quitting their
jobs—not a surprising correlation in light of the
fact that, as government training expenditures
rise, so do promotion rates, and significantly so.144
Evidence also suggests that a greater investment in
training reduces public employees’ discrimination
charges.145
Training Feds Most federal training emerged when
the Government Employees Training Act was enacted
in 1958, and today there are Management Deve-
lopment Centers and a Federal Executive Institute
dedicated to training federal administrators.
Even though “career development and training
was the strongest driver” subject to administrative
control that correlates significantly with increased
employee engagement,146 Washington spends a
modest 1.3 percent of its “personnel budget” on
training,147 and, still worse, federal administrators
are prone to focus on training programs when they
need to cut budgets, and to cut them back more
than other programs.148 (Or, worse, never spending
training funds in the first place; the Department of
Homeland Security spends just 1 percent of its $1.4
billion training budget, a laxity going back many
years.149)The proportion of all federal workers who
say that they need more training to do their jobs rose
from less than a third in the early nineties to almost
half by the end of the decade, and has been stuck
at that level ever since.150 Small wonder that just
53 percent of federal workers express satisfaction
with their training,151 compared with 62 percent of
private-sector workers.152
This need for more training seems to be present
at every level of the federal service, from top, to
middle, to bottom. Nearly two-thirds of the Senior
Executive Service has not received “formal execu-
tive coaching,” a rising proportion,153 even though
those with fewer than ten years of experience
ranked training and development third as “the key
driver of satisfaction and commitment, not pay.”154
More than a third of new supervisors receive no
formal training at all, and, of the 64 percent who
are trained, almost half are trained for just a week
or less.155 The Secret Service’s uniformed officers
received an average of just twenty-five minutes of
Managing Human Capital 305
training over the course of a year;156 these officers,
among other duties, guard the White House and
were doing so when, in 2014, a knife-wielding
intruder ran across the lawn and penetrated deep
into the executive mansion.
A promising innovation is the growing use of
training via computers. Seventy percent of “federal
leaders” (GS 13 and higher) think that “digital tech-
nology has improved access to training relevant to
agency mission.”157
Training at the Grass Roots Nearly three-quarters
of state and local officials report that they receive
“regular training,”158 a proportion that is far higher
than that of the feds. State administrators spend an
average of twenty-five hours a year in “formal class-
room training.”159
It appears that most training for these adminis-
trators is conducted by universities.160 About four-
fifths of these officials have used universities for a
variety of services, and rank them as comparable
to services furnished by the private sector, but they
accord their very highest marks to their training pro-
grams.161
State governments devote, on average, “more
than 1.3 percent” of their annual payrolls to training,
a conservative calculation, with some states spending
“upwards of 5 percent.” Impressively, average state
training expenditures per employee nearly doubled
over just three years.162 “Unfortunately, many states
report that the training budget is the first thing elim-
inated in spending freezes or budget cuts.”163
More than nine-tenths of the states impose train-
ing requirements on municipal and county employ-
ees, focusing on police and fire fighters; only a small
minority of states requires training for “other” local
employees.164
Bolstering Bureaucrats’ Bravery
Whistleblowers, who are found in all sectors,
are a courageous (some would say crazy) class
of employees who “blow the whistle” on their
organizations for engaging in shoddy or corrupt
practices. (Persons who expose governments’ secu-
rity secrets—all national governments have such
secrets, and they have them for the same reason that
middle-aged people wear clothes—do not qualify as
whistleblowers.)
 306 PA R T I I I Public and Nonprofit Management
Encouraging Whistle Blowing The federal, state,
and local governments have enacted laws that
encourage whistle blowing.
Federal Encouragement The most significant legis-
lation that Congress has passed is the 1986 amend-
ments to the False Claims Act of 1863. They permit
the federal government to award whistleblowers
from 15 to 30 percent of any money recovered from
fraudulent practices, with the exception of tax fraud,
that they report in any federally funded contract or
program.
These amendments have been quite effective.
Prior to their passage, only three out of ten federal
workers who observed an illegal or wasteful activity
reported it, but, following their enactment, fully half
did so.165 A decade after their passage, more than
1,100 companies were exposed by whistleblowers
for defrauding the government, compared with just
twenty during the previous decade.166
The Tax Relief and Health Care Act of 2006
extended the False Claims Act’s policies to whis-
tleblowers who report tax fraud involving at least
$2 million. Each year, the Internal Revenue Service
(IRS) receives nearly 500 tips on more than 1,900
alleged tax cheaters that meet this threshold,167
but “about 66 percent” of all claims that had been
submitted three to four years earlier “were still in
process.”168 The IRS states that its lethargy is the
result of its extending greater appeals rights to those
accused,169 but critics charge that enforcement “has
been hampered by excessive secrecy and contin-
uing animosity within the agency’s old guard.”170
Still, nearly $2 billion was collected over four years
because of tax whistleblowers.171
The Fraud Enforcement and Recovery Act of
2009 allows the feds to share pertinent informa-
tion with whistleblowers and state agencies, thereby
raising incentives and lowering barriers for prospec-
tive whistle blowing.
Despite these useful laws, it seems that the most
effective encouragement of whistleblowers occurs
within the agencies. When a new secretary of the
Veterans Affairs Department (VA) was appointed to
turn around the scandal-plagued agency, scandals
that had been exposed in 2014 by a whistleblower in
the first place, the secretary convincingly announced
that he would protect whistleblowers, and then
did so; within a year, VA whistleblower disclosures
soared by 56 percent, and, across the whole of gov-
ernment, by 27 percent, “driven in large part due to
an onslaught of new cases from VA.”172
Grass-Roots’ Encouragement Twenty-nine states
(nineteen of which and the District of Columbia
limit themselves to Medicaid fraud), Chicago,
New York, Philadelphia, and Allegheny County
(in Pennsylvania) have enacted laws that reward
whistleblowers.173
The Whistleblowers The typical whistleblower
in the public and private sectors is a well-educated
family man in his late forties who has been in his
organization about seven years and has a strong
belief in “universal moral codes.”174 It has been
authoritatively estimated that “80 percent of [gov-
ernment] whistleblowers are motivated to improve
the system, not tear it down.”175 A slim 13 percent
of public workers who observe misconduct decline
to report it, compared with 41 percent of nonprofit
employees and 54 percent of private-sector employ-
ees.176
Federal whistleblowers have a stronger public
service motivation (described in Chapter 5), higher
pay, and higher levels of education than those who
do not blow whistles,177 although it appears that
“senior-level [federal] employees . . . are less likely
to think they could report wrongdoing without
reprisal.”178
The Retaliators People exposed by whistleblowers
are more likely to retaliate when they perceive the
whistleblowers to be “strong threats” to their egos
or to “a prosperous system,” and possess high levels
of “Machiavellianism,” among other factors.179
If the organization itself has “high levels of
group cohesiveness,” a “highly unethical climate,”
or there exists a shared perception that unethical
behavior is legitimate, then the probability of retali-
ation also grows.180 The more entrenched the organ-
izational corruption, the more vicious the vengeance
leveled against those who expose it.181
Anecdotal evidence suggests that government
“supervisors who punish whistleblowers for report-
ing wrongdoing rarely are punished themselves.”182
This was the case, for example, when a federal food
services manager blew the whistle on a fly infesta-
tion; his supervisors tried to fire him for eating four

stale sandwiches, and then reassigned him to clean
a morgue for two years (including handling body
parts); there is no record of his supervisors being
disciplined.183
Shielding Whistleblowers Because whistle blowing
can be rough, tough, and perilous, Congress and
state legislatures have taken steps to shield whistle-
blowers from reprisals. Doing so is critically impor-
tant because the more that potential whistleblowers
fear retaliation (which is the single most effective
damper in reporting misconduct184), the more that
misconduct flourishes in the organization.185
Shielding Federal Whistleblowers The Civil Service
Reform Act of 1978 created, for the first time, spe-
cific legal bans on retaliating against federal whistle-
blowers. Because not one case was made to protect
whistleblowers after 1979, a disgusted Congress
passed the stronger Whistleblower Protection Act in
1989.
More recent legislation includes the Notification
and Federal Employee Antidiscrimination and
Retaliation (No FEAR) Act of 2002, which requires
agencies to be more accountable for violations
of whistleblower protection laws. The American
Recovery and Reinvestment Act of 2009 shields
nonfederal employees from retaliation when they
expose wasteful, dangerous, or illegal acts in the
use of economic recovery funds. The Whistleblower
Protection Enhancement Act of 2012, which
passed unanimously in both chambers, significantly
extended a variety of protections to whistleblow-
ers. The National Defense Authorization Act of
2013 shields whistle-blowing subcontractors in the
Defense Department.
There also has been a flurry of recent protections
that are not laws. In 2012, the Justice Department
appointed its first whistleblower ombudsman, who is
charged with protecting and educating whistleblow-
ers government-wide. In 2013, the Whistleblower
Protections Pilot Program was initiated to shield
whistleblowers who worked for federal contractors,
subcontractors, and grantees; an official investiga-
tion of complaints of reprisal by these employers
“did not find that reprisal had occurred in any of
them.”186 In 2014, a Senate Whistleblowers Caucus
was founded to assure that existing protections were
enforced in the agencies.
Managing Human Capital 307
In 2015, the Supreme Court held that “inter-
preting the word ‘law’ to include rules and regula-
tions could defeat the purpose of the whistleblower
statute” because it could permit an agency to insu-
late itself from prosecution for retaliation by simply
writing a rule that prohibits whistleblowing. Hence,
a federal employee could disclose “sensitive” infor-
mation about an agency and be protected if the dis-
closure violated no law, even though it did violate a
regulation.187
In sum, almost any whistleblower may report
his or her concerns directly to an inspector general
or to a congressional committee and be protected
from retribution.
Not Shielding Federal Whistleblowers There is,
however, a notable chink in this shield: the vul-
nerability of whistleblowers in the intelligence
community.
The Intelligence Community Whistleblower
Protection Act of 1998 is so toothless (uniquely, it
contains no ban on reprisals) that the Pentagon’s
acting inspector general testified that the act’s title
is “a misnomer.”188 In 2012, Presidential Policy
Directive 19 shielded whistleblowers who have
access to classified information, provided that
they  exposed only waste, fraud, or abuse. Title VI
of the Intelligence Authorization Act of 2014 appears
to codify the directive, and expands portions of it.
If, however, a whistleblower in the intelligence com-
munity discloses his or her concerns to the media,
he or she is unprotected against retaliation and even
criminal charges. Still lacking, however, is a clear,
secure path for these whistleblowers to contact
Congress directly and confidentially. Even so, there
has been a steady increase in the intelligence com-
munity’s whistle blowing since the reforms were
passed.189
Shielding Whistleblowers at the Grass Roots
Thirty-seven states also have passed an odd
mishmash of laws that protect whistleblowers.
Twenty-one apply these laws to both public- and
private-sector whistleblowers; eight state govern-
ments and the District of Columbia protect only
their own employees; seven cover whistleblowers
who work in any government, but none who are
privately employed; and one, North Dakota, shields
only private-sector employees.190
 308 PA R T I I I Public and Nonprofit Management
The Court Steps In (It) In 2006, in Garcetti v.
Ceballos, the Supreme Court overruled, five-to-four,
the lower court’s decision and held that Richard
Ceballos, a local government whistleblower, was not
protected from being “disciplined” (in reality, retal-
iated against—he had been reassigned, transferred,
and denied a promotion) under the First Amendment
(the Freedom of Speech Clause) on the dubious dis-
tinction that Ceballos had expressed his opinion as
an employee (and a well-informed one), rather than
as a citizen.
In 2014, the Court modestly modified its rather
radical ruling, unanimously holding, in Lane v.
Franks, that public employees are protected from
retaliation when they testify in court about miscon-
duct that they observed in the workplace.
Garcetti had the potential to kill whistle
blowing; Lane may have reduced this prospective
death to a suppurating wound.
Have Legal Protections Helped? Despite
Garcetti, the new laws have protected whistleblow-
ers. Consider their sad lot before these statutes were
enacted. A survey of more whistleblowers than in
“any previous survey” in all sectors (74 percent of
whom worked in governments and 5 percent in the
independent sector), which was conducted just prior
to the passage of the Whistleblower Protection Act,
found that, after whistleblowers blew their whistles,
95 percent of them in all sectors reported some form
of retaliation, ranging from harassment or transfer-
ence (almost a fifth each) to losing their jobs (more
than three-fifths).191
Subsequent legislation seems to have substan-
tially alleviated this suffering. During the first year
in which the Whistleblower Protection Act went into
effect, there were more allegations of reprisals made
by whistleblowers that were upheld by administra-
tive law judges than were upheld in the previous
ten years. Although about a fifth of federal civilian
employees consistently express “fear of reprisal”
should they disclose a “suspected violation of any
law, rule or regulation,”192 few employees who actu-
ally disclose such suspicions perceive subsequent
reprisals. In 1989, the year that the act was passed,
nearly 7 percent of federal whistleblowers who had
disclosed “health/safety danger or unlawful behav-
ior” in their agencies felt that they were retaliated
against.193 That figure has since been more than
halved, and today just 3 percent perceive reprisals,194
an inarguably low proportion when compared with
the private sector, where 15 percent (a rising per-
centage) of workers believe that they were retaliated
against because they had reported misconduct.195
What Happens to Whistleblowers? Here is how
an unusually courageous federal whistleblower suc-
cinctly described his experience after he blew the
whistle: “They shrivel you up.”196
If whistle blowing causes personal pain, however,
it also can bring personal gain. One such boon is
emotional. Over four-fifths of whistleblowers in all
sectors, only 5 percent of whom reported “no retalia-
tion,” say that they would do it again.197 As a govern-
ment whistleblower put it, “Finding honesty within
myself was more powerful than I expected.”198
Another is financial. Washington alone has
awarded more than $2 billion to whistleblowers;
the average award is $1.5 million, with the largest
awards topping $100 million.199
Does Whistle Blowing Work? Whistle blowing
works, but with the stipulation that there are not
many whistleblowers. Blown whistles account for
only a “tiny” 9 percent of all the initial reports
exposing unethical or illegal conduct in public agen-
cies, compared with 35 to 39 percent that result from
“regular controls, accountants, [and] police.”200
Although it is less effective when corruption is
deeply rooted, more than half of all whistle blowing,
regardless of sector, results in an external investiga-
tion. More than three-fifths of whistleblowers saw
evidence of positive change within their organiza-
tions after they blew the whistle.201 Washington has
collected more than $48 billion as the direct result of
blown whistles since 1987.202
Whistle Blowing in the Independent Sector It may
be the case that there are fewer whistles blown in the
nonprofit sector because there may be less miscon-
duct in it than in the other two. At least employ-
ees in all sectors think so: “an amazing” 82 percent
of nonprofit employees think that their employers
have  “strong moral values and principles,” com-
pared with 30 percent of public employees and 60
percent of private ones; comparable findings hold
for additional indicators of organizational ethics
and practices.203

Nevertheless, when a whistle is blown in a
nonprofit, retaliation far exceeds those in the other
sectors. Recall that just 3 percent of federal whistle-
blowers and 15 percent of corporate ones perceive
retaliation, but about two-thirds of nonprofit whis-
tleblowers (a proportion that is roughly compara-
ble to federal retaliation rates, noted earlier, prior
to the passage of the Whistleblower Protection Act
of 1989): lost their jobs or were forced to retire;
received negative job evaluations; or were black-
listed from getting another job in their fields, among
other sanctions. And these were the punishment rates
for those nonprofit whistleblowers who reported
misconduct internally in their organizations; if they
exposed it to external sources, sanctions increased
from two-thirds to about three-quarters to four-
fifths. About a third reported that their retaliators
were punished.204
Securing Bureaucrats’ Jobs
The popular image of the Civil Service System is
one of a job for life; 58 percent of Americans think
that government offers better job security than busi-
ness, compared with 13 percent who say the same
for business versus government, or a factor of better
than four.205 Do, in fact, government employees
actually have more secure jobs than private-sector
employees?
You bet they do.
The median job tenure for workers in all gov-
ernments is 7.7 years, compared with 3.6 years in
the private sector, or less than half as long as gov-
ernmental tenure.206 Over the course of a quarter
century, the median job tenure of public-sector
workers grew from six years to seven, but that of
private-sector employees remained stuck at fewer
than four years.207
Americans commonly assume that the long
tenures that job security brings equate with medio-
cre performance. This is far from the case, at least in
government, for two reasons.
First, multiple studies have found that greater job
security correlates clearly and positively with higher
productivity in governments,208 and, second, even
when there is relatively little job security in the public
sector, there is no “strong evidence” that managers
take advantage of it by dismissing low-performing
employees at a significantly accelerated rate.209
Managing Human Capital 309
Keeping Competent Bureaucrats
Have governments been able to retain their more tal-
ented employees?
Keeping Federal Talent Although about 1 percent
of federal employees claim that they plan to leave the
government within the year, few actually do so.210
Federal employees born after 1980 (who constitute
16 percent of federal civilian employees), however,
seem relatively anxious to leave; their median time
in the federal service is fewer than four years.211
Increasingly, this seems to be the case with
federal executives as well, nearly two-fifths of
whom are approached with more lucrative job
offers outside of government. Although 26 percent
of these officers state that they intend to leave their
agencies within the year, less than 10 percent do
so (still a stiff rate), compared with more than 13
percent of private-sector CEOs who leave their
companies.212
Keeping State and Local Talent In state and local
governments there is a brain drain. States are losing
high-quality male employees and managers, and
local governments are losing high-quality minority
and female employees and clerical workers.
Some good news: Almost a fourth of those
federal, state, and local employees who leave their
governments land jobs in other governments.213
THE SLIPPAGE OF THE CIVIL
SERVICE SYSTEM
It is manifestly apparent that, after decades of dom-
inance, the Civil Service System is in trouble. The
reasons for this may be systemic and structural.
Research consistently finds that the connection
between even a strongly professional personnel
office and the development of organizational talent
to be, at best, obscure.214
A Faltering Federal Civil Service
Here is an insight into Washington’s civil service
problem: more than half of agency-based chief
human capital officers “volunteered” in interviews
that “bold reform of our civil service system is
 310 PA R T I I I Public and Nonprofit Management
necessary.”215 Six years later, that figure had reached
more than three-fifths.216
A Slippage of Centralized Control The first indi-
cation of a deteriorating federal Civil Service System
surfaced in 1994, when the Office of Personnel
Management shocked traditionalists by chucking
the revered, 10,000-page Federal Personnel Manual,
which had been federal civil service policy for
half a century, and replacing it with a web-based
compilation of all personnel rules and laws that
amounted to  a tenth of its former self.217 In 1996,
OPM created in the agencies some 650 delegated
examining units, in which agency personnel perform
all hiring-related tasks but do not technically hire,
although hiring is, in fact, done by the agencies.
During the 1990s, OPM eliminated nearly half of its
employees, “a far greater reduction than that of any
other Federal agency,”218 and, from 1991 to 1998,
personnel professionals in all federal agencies were
cut by a fifth.219
The 2000s saw more change. The Chief Human
Capital Officers Act of 2002 mandated the appoint-
ment of chief human capital officers in all major
agencies, and authorized OPM to grant direct-hire
authority to the agencies, which allows them, in cases
of shortages of qualified applicants or emergencies,
to hire applicants without regard to standing civil
service regulations. Although direct-hire authority
accounts for a modest 2 percent of all hires,220 its
significance in this context is its further undermining
of centralized control.
At the same time, the agencies themselves were
decentralizing their personnel management. A poll of
representative agencies found that all of them were
using “alternative service delivery” (that is, entities
other than the agency, in whole or part) for at least
some of their “human capital activities.”221
OPM: Dissed and Destroyed? By the end of the
2000s, it was clear that OPM had lost it historic grip
on human resources. That iconic symbol of its power,
the General Schedule, which covered 98 percent of
federal civilian employees at its peak, in 1983, and
94 percent as late as 1995, applies to just 78 percent
today.222 (In OPM’s defense, it first called for an over-
haul of the GS in 2002.) About half of all civilian
workers are now exempt from at least some of the
laws that associate with the Civil Service System.223
The core of the General Schedule, the job clas-
sification system, has just six specialists maintaining
its standards (a decrease of 166 percent over a dozen
years), and just 3 percent of HR staffers spend more
than half of their time on classification (73 percent
spend no time on it); about 30 percent of white-collar
job standards have not been updated since 1990.224
The GS’s evisceration was so sudden, so swift, and so
severe that “fragmentation within the civil service”
is now the rule.225
OPM’s marginalization correlates with a shrink-
ing respect of it. Barely half, the lowest ranking out
of eight options, of “seasoned political appointees”
think that managing their relationships with OPM
is important.226 One out of three federal adminis-
trators (the highest negative response in the survey)
complains that OPM accords them little or no help
in recruiting, developing, or utilizing employees.227
Small wonder that, among the twenty-four major
federal agencies, OPM’s “employee engagement”
(i.e., morale) ranks eighteenth.228
Federal Human Capital Management: Dissed and
Destroyed? In fact, there is a shrinking respect
for personnel management in general, even among
HR managers! Although the most recent data show
some improvement over four years, 19 percent of
chief human capital officers do not believe that their
“agency leadership” views their staffs as “trusted
business advisors,” rather than as clerical paper
shufflers.229
The upshot of all this is that federal HR man-
agement (sometimes called the “rule police” or the
“department of no”) itself has been badly compro-
mised. Nearly four-fifths of federal chief operating
officers, who have a uniquely broad perspective
on their agencies’ administration, think that their
agency has made very little or little (18 percent) or
moderate (59 percent) progress over the past two
years in “meeting its top priorities” in HR; these are
the most dismal statistics out of five management
areas plumbed.230
In 2001, the Government Accountability Office
placed “strategic human capital management” on
its government-wide high-risk list of programs that
are unduly vulnerable to fraud, waste, abuse, and
mismanagement, and it remains there today; worse,
the topic is “directly mentioned” in eighteen of the
current list’s thirty-two high-risk areas (“most of the

riskiest issues . . . are rooted in human capital”), and
HR “ranks as one of the areas where the least pro-
gress has been made.”231
Over twenty-five years, the proportion of federal
employees who were covered under personnel
systems other than the General Schedule increased
by more than three-fold, from 6 to 21 percent.232
“The federal government is quickly approaching
the point where ‘standard governmentwide’ human
capital policies and processes are neither standard
nor governmentwide.”233
In reviewing this sad research, one is reminded
of Catbert, the perennially “evil director of human
resources” in the popular comic strip, Dilbert.
Civil Service Slippage at the Grass Roots
For more than thirty years, Congress encour-
aged state and local governments to adopt merit
systems. The 1939 amendments to the Social
Security Act of 1935 mandated that states estab-
lish systems for  their  unemployment-security and
public-assistance employees, or lose their Social
Security funds. All states quickly complied. The
Intergovernmental Personnel Act of 1970 offered
grants to subnational governments to expand and
refine their civil services, but, as Congress grew
disenchanted with merit systems, funding vanished
within a decade.
As in Washington, the Civil Service System’s
grass-roots’ reach peaked in the 1980s, when about
three-fourths of the states had comprehensive merit
systems,234 and 60 percent of all state employees
worked in them.235 Eighty-eight percent of cities
with populations of more than 50,000 had merit
systems,236 and an estimated 95 percent of all mun-
icipal employees worked in them.237
These numbers would soon wither. By the
1990s, literally hundreds of grass-roots’ personnel
reforms were in the offing.238
Civil Service Reform in the States: Radical and
Revolutionary At the end of the first millen-
nium, “the general picture that emerges [in state
governments] is one of administrators trapped by
rigid, slow, and cumbersome systems that are inca-
pable of  meeting government’s human resources
needs.”239 This was especially unfortunate since per-
sonnel is the single largest consumer of revenue in
Managing Human Capital 311
the states; “almost everything a state does is labor
intensive.”240
But change was afoot. In 1996, Georgia initi-
ated civil service reforms that were the most sweep-
ing of any government at the time; other states
followed. Forty-seven states have decentralizaed
hiring, transferring them from personnel bureaus to
the departments.241 Sixteen states have contracted
out at least some of their personnel services to the
private sector.242
There has been a discernible decline in
state-employee job security in thirty-one states,
twenty-eight of which have adopted, in whole or part,
at-will employment—that is, employees serve at the
sufferance of their supervisors sans protection  by
the merit system.243 Arizona, Colorado, Florida,
Georgia, Tennessee, and Texas have, for all intents
and purposes, eliminated their civil services.244
States most likely to implement these reforms
tend to have relatively weak public unions,
Republican-controlled governments, high adminis-
trative245 and legislative professionalism, low unem-
ployment, and plentiful resources.246 “Electorally
dominant majorities” in legislatures prefer reform as
a means of gaining greater control of the bureau-
cracy, whereas “weaker majorities, foreseeing elec-
toral loss,” resist reform as a means of insulating the
bureaucracy.247 The presence of a central oversight
body charged with bringing coherence and con-
sistency to state pay correlates with the successful
implementation of reforms.248
Has the stature of state merit systems been dimin-
ished by these reforms? Yes. In 1983, the heads of per-
sonnel agencies in thirty-nine states reported directly
to the governor,249 but two decades later, this held true
in only twenty states.250 Less than half of those states
with formal cabinets include the HR director in them,
and, increasingly, HR operations are being buried in
administrative services departments.251 Georgia’s per-
sonnel reforms, cited as the “most dramatic reforms”
of any state,252 were hailed by prestigious profession-
als as “likely the best in the country.”253
There are, however, some benefits for civil ser-
vices in reformed states. The more that governments
decentralize human resource activities, the more that
“positive relationships” develop between “senior
line managers” and human capital executives, and
these relationships increase HR’s influence and per-
formance.254
 312 PA R T I I I Public and Nonprofit Management
Civil Service Reform in Communities As with the
states, personnel is localities’ largest single devourer
of dollars, so it follows that civil service reform is
at the heart of local governmental reform; perhaps
70 percent of all local reforms relate to personnel
policies.255
Five percent (precisely the percentage it was
thirty years earlier256) of cities and counties contract
out their “personnel services” to a for-profit corpo-
ration, more than 1 percent are delivered by another
government, and half a percent contract with a
nonprofit organization. Nearly 9 percent of local
governments deliver personnel services via “public
employees in part,” meaning that corporate or non-
profit employees are involved, as well as the govern-
ment’s own employees.257
The Impact of Civil Service Reform
Civil service reform has been remarkably successful.
The states, where reforms have been relatively
radical, provide the best examples of this. Hiring,
promoting, reassigning, and firing have been stream-
lined,258 and, although at-will employees are dis-
missed more expeditiously than are employees who
are protected by civil service regulations, at-will
employment does not associate with greater numbers
of employees being fired.259 State employees who
serve at will are “significantly less negative about
the full range” of civil service reforms than are their
co-workers who are in the civil service,260 but state
personnel managers display, at best, only a rueful
acceptance and some distrust of at-will reform.261
An understandable concern among traditional-
ists was that reform would re-introduce unfettered
patronage to state government, but this has not hap-
pened. “Patronage hiring appears to proceed along
typical levels,”262 and reforms have “not produced
widespread concerns about politicization of an inde-
pendent public service” among those senior state
administrators who are charged with preventing its
politicization.263
A Modest Proposal
We have noted that a sad consequence of public per-
sonnel reform is that HR directors, and the enter-
prise of public human capital in general, often are
sidelined, ignored, or dissed. This seems especially
true at the federal level, where morale in most agen-
cies has been in decline for years, a decline that may
be linked to the corresponding decline of HR man-
agement.264
It is notable, therefore, that just the reverse
is happening in the private sector. “Over the past
15 years . . . [there has been] a dramatic change.
Today . . . HR chiefs report directly to the CEO,” and
experience as a human capital officer increasingly
leads to the CEO’s suite. This is happening because
businesses are recognizing that HR management is
crucial to the health of the company.265
Working on the assumption that the current fate
of public human capital management, at least at the
federal level, is unlikely to improve any time soon,
what, if any, responsibilities make sense for the Civil
Service System to manage? The answer is those
human resource duties that are more efficiently
managed by a central office, notably research, labor
relations, compensation administration, and, most
especially, employee development and training.
The Civil Service System does have a future.
Nevertheless, it is a future that will require some
adaptation.
THE COLLECTIVE SYSTEM:
BLUE-COLLAR BUREAUCRATS
Our second public human capital system is the
Collective System, and it refers primarily to blue-
collar workers and white-collar professionals whose
jobs are administered via agreements between man-
agement and organized workers. The core of the
Collective System is worker solidarity; in a word,
unions.
Efforts to organize public employees first sur-
faced in the 1830s, and with reason: wages and
working conditions typically were abysmal. For
example, in 1907, New York’s health department
condemned 35 percent of the city’s fire stations as
uninhabitable, and fire fighters worked twenty-one
hours a day and had only one day off in eight.266
The Scope of Organized Labor
With the passage, in 1935, of the National Labor
Relations Act (the Wagner Act), which guaranteed
private-sector workers the rights to unionize, bargain

collectively, and strike, unions surged forward. At
its apex, in 1953, organized labor included almost
a third of all nonagricultural employees in the
nation.267
Since then, union membership has shrunk to a
third of its former self, accounting for 11 percent of
all workers,268 a proportion not seen since the Great
Depression of the early 1930s, when Americans were
just looking for work, not justice at work.
Public Employees: Labor’s Life-Blood Union
membership would be far lower were it not for the
public sector. In 1953, 36 percent of private-sector
employees, and 12 percent of public-sector workers,
were organized.269 Since then, private-sector union
membership has shriveled, and stands at less than 7
percent of private-sector employees.270
By contrast, union membership in governments
is five times that of the private sector. Since 1953,
unions’ share of the public workforce has almost
tripled to over 35 percent and now virtually equals
labor’s 1953 slice of private-sector workers.271
Forty-nine percent of all union members work for
governments.272
The Federal Collective System In 1912, with
the passage of the Lloyd-La Follette Act, federal
employees secured the right to organize and to peti-
tion Congress to redress their grievances. In 1978,
Congress made an exception in the form of Public
Law 95-610, which bans unionization of the armed
forces. Twenty-seven percent of all federal civilian
employees273 belong to about 125 unions or similar
organizations in roughly 2,200 bargaining units,
figures that have remained fairly constant over the
years.274
The Grass-Roots Collective System Thirty percent
of state employees and 41 percent of local workers
are members of unions.275 Fire fighters have long led
the list as the most heavily organized public employ-
ees, followed by teachers and police. These and other
grass-roots employees are represented by nearly
34,000 bargaining units.276
Representation versus Membership All public
unions represent slightly more workers than those
who actually are members of them. Unions repre-
sent 39 percent of all public employees; depending
Managing Human Capital 313
on the level of government, representation by unions
is about 3 to 5 percent higher than is membership
in them. Overall, members of public unions earn
somewhat more than do employees represented by
unions; a marginal exception is the federal govern-
ment, where the reverse is true.277
The Third-Sector Collective System Unions are
the least represented in nonprofits; just 6 percent this
workforce is organized, where they concentrate in
colleges and hospitals.278
A Unique Value
The distinctive value of the Collective System is
(you guessed it!) collectivism, a value that places it
at odds with each of the other four human capital
systems.
The other systems contend that the state is sov-
ereign, and therefore its workers may not challenge
it. The Collective System, by contrast, holds that the
state is not sovereign, and that public employees
have the right to collectively challenge it to improve
their working conditions. The Seventh Circuit Court
of Appeals strengthened this position by ruling, in
1968, that regulations prohibiting public employees
from organizing are unconstitutional.279
The other public personnel systems also hold
that the individual worker be judged on the basis
of his or her work’s quality and productivity.
The Collective System argues that the individual
employee should be absorbed in a collective effort to
better the conditions of all workers.
Among the conflicts that result from these fun-
damental differences are disputes over: employee
participation and rights (equal treatment versus
union shop); recruitment (competitive selection
versus union membership); pay (job analysis versus
negotiation); working conditions (determination by
legislatures and management versus negotiation);
and grievances (determination by personnel special-
ists versus union representation to third-party arbi-
trators).
Want to Fire Your Boss?
Collectivism correlates with a unique employee–
employer relationship that is found only in govern-
ment. Union members are bargaining for benefits
 314 PA R T I I I Public and Nonprofit Management
with elected bosses whose jobs they can threaten, or
effectively fire, through elections. As a long-serving
elected official put it, “You learned pretty quickly
that you don’t want to upset these guys.”280
Although the American Federation of State,
County and Municipal Employees (AFSCME) long
has been among the biggest spenders in federal elec-
tions, and often the biggest spender,281 public labor’s
political power can be overstated. Private-sector
unions’ ability to get out the vote long has dwarfed
that of government unions, which chalk up relatively
few electoral wins at the federal and state levels.282
Locally, however, public unions are more suc-
cessful at the ballot box (although it appears that
teachers’ unions are in decline as an electoral force).
Depending on the methodology used, local gov-
ernment employees’ turnout in municipal elections
exceeds general turnout by 4 to 5 percent, or by 11
to 12 percent if they live in the locality for whose
government they work.283 Moreover, local gov-
ernment unions also can “significantly affect the
turnout levels” of sympathetic voters who are not
local government employees.284
Bargaining with Governments
Collective bargaining, or collective negotiations, is a
method in which representatives of employees and
employers jointly make policies about employees’
working terms and conditions.
The number of all workers covered by a collec-
tive bargaining agreement peaked in 1979, and, over
the ensuing thirty-four years declined by 47 percent
to 16 million. Historically, collective bargaining
has largely been the preserve of the private sector
(in 2002, for example, 66 percent of all government
workers had negotiating rights, compared with 78
percent in the private sector285), but, in 2009, this
relationship reversed for the first time, and the public
sector had over 9 percent more workers covered by
negotiated agreements than did the private one. By
2013, the traditional pattern had reestablished itself,
and businesses had nearly 10 percent more workers
who bargained collectively (8.1 million) than did
governments (7.9 million). Of those public employ-
ees who are covered by a negotiated agreement, 59
percent work for a local government, 27 percent for
the states, 8 percent are federal civilian employees,
and 6 percent are Postal Service workers.286
Federal Bargaining Washington bitterly battled
bargaining with unions for the better part of the
twentieth century, but, in 1962, Executive Order
10988 declared peace by stating that certain condi-
tions of employment could be negotiated collectively.
The Federal Service Labor-Management Relations
Reform Statute of 1978 cast into law the right of
federal employees to bargain.
In 1993, Executive Order 12871 significantly
expanded the scope of issues that unions could nego-
tiate and created a National Partnership Council of
union members and management to resolve issues.
In 2001, Executive Order 13203 repealed Executive
Order 12871 and decentralized to the agencies
the authority to adopt a labor-relations strategy
best suited to their needs, tilting federal negotia-
tion policies more in favor of management.287 In
2009, Executive Order 13522 created the National
Council on Federal Labor Management Relations,
which effectively reinstated the disbanded National
Partnership Council, but with three additional union
members, and the president signed a memorandum
that returned to the policies expressed in Executive
Order 12871 of 1993.
Grass-Roots Bargaining Although Congress long
ago addressed collective negotiations for private-
sector and federal workers, it has never done so for
the grass-roots governments, leaving them to their
own devices. In 1958, New York City became the
first major local government to legalize collective
bargaining with unions. In 1959, Wisconsin passed
the first state law allowing public employees (specif-
ically, its municipal workers) to bargain collectively.
Ironically, Wisconsin, in 2011, pioneered a radical
reduction in the number and types of public workers
who could negotiate collectively, withdrawing col-
lective-bargaining rights from essentially all its state
and local employees, save those in public safety posi-
tions, and enacting anti-union right-to-work legisla-
tion; four years later, the state’s union members in all
sectors was down by more than two-fifths, “mostly
teachers [whose union had shrunk by 30 percent]
and other public workers.”288
Currently, thirty-four states and the District of
Columbia require collective bargaining for some
or all public employees. In eleven states, collective
bargaining is permitted, and in five it is prohib-
ited,289 three of which stipulate that meet-and-confer

negotiations be used instead.290Meet-and-confer
negotiations require that both sides must talk with
each other, but management has the final decision.
About a dozen states have passed laws requiring
goldfish-bowl, or sunshine, bargaining, in which
the public is made aware of negotiations as they are
happening.291
Ninety-four percent of all cities engage in collec-
tive bargaining,292 and twenty-eight states authorize
their counties to bargain collectively.293
Mediation, Conciliation, and Arbitration Should
labor and management reach an impasse, mediation,
or the voluntary use of an impartial third party to
resolve differences and suggest compromises, can
be introduced. Conciliation is an option, too, and
it differs from mediation in that the third party may
not suggest solutions to problems.
Should mediation or conciliation fail, arbi-
tration, which is a formal process of hearings and
fact finding, may be brought in. Arbitration may
be voluntary, in which both sides agree beforehand
to accept the arbitrator’s decision, or compulsory,
or binding, in which both sides must, under law,
accept as final the arbitrator’s decision. In 2001, the
Supreme Court ruled that employers may compel
their workers to take job-related disputes to arbi-
tration.294
Twenty-one states and the District of Columbia
require arbitration,295 and public workers favor
it. Nearly a fourth of all their grievances contain a
demand for arbitration,296 and public unions con-
sistently win more arbitrations than private-sector
unions.297 Arbitration, however, does have a singular
public benefit: it seems to be more effective in mini-
mizing strikes by government workers than are prohi-
bitions against striking and penalties for doing so.298
Pay and Public Unions
Public unions long have devoted full-time staffs to
analyzing governments’ budgets with an eye toward
winkling out more money for their members, and
with some success, although “the effects of unions
on compensation are smaller in the public than in
the private sector.”299
Overall, unionized public employees earn
15 percent more pay than workers who are not
union members. The heavily white-collar federal
Managing Human Capital 315
government is an exception, where unionized
employees earn slightly less, on average, than non-
union employees.300
Among state workers, however, “state employee
union density [is] the most consistent and impor-
tant determinant of compensation,”301 and those in
unions are paid 12 percent more, on average, than
those who are not. Organized labor brings home the
bacon for primarily blue-collar local workers, where
union members average 25 percent more than non-
union workers,302 and in some cities they are paid
double their private-sector counterparts.303
The dramatic differences in union and non-
union pay, at least at the grass roots, obscure some
underlying factors that mitigate these disparities.
The wage increases negotiated by public-sector
unions generally have less of a financial impact on
their governments than the increases negotiated by
private-sector unions have on their companies,304
which may explain why, out of twenty-six policy
priorities, city managers rank “staff unions” a lowly
twenty-third.305 Of eleven “spending areas” in 162
large cities, spending for salaries and wages as a
share of general expenditures withered over twenty-
five years, declining from an average of 50 percent
to 43 percent. The cities’ spending per capita on pay
increased by only a fifth, whereas average spending
across the board grew by almost twice that rate;
municipal employee pay is statistically tied with the
long-benighted budgets of local public libraries for
the lowest rate of growth.306
Striking Government
There is scant agreement on whether public employ-
ees have a right to strike, with some arguing that
striking is an act of insurrection, and others contend-
ing that it is a fundamental freedom. The courts have
held that there is no constitutional right of public
workers to strike, but neither has the judiciary pro-
hibited the enactment of laws permitting them to
strike.
Striking Washington The Taft-Hartley Act of 1947
was the first legislation to prohibit strikes by federal
employees. In 1970, more than 210,000 postal
workers violated the law by staging an unprece-
dented walkout; the Labor Department met almost
all their demands, and the strike was over in just
 316 PA R T I I I Public and Nonprofit Management
two weeks. A nonplussed Congress soon divested
itself of its postal problem by passing the Postal
Reorganization Act of 1970, which transformed the
Post Office Department, a federal agency, into the
Postal Service, a federal corporation. More broadly,
Congress reasserted its anti-strike policy with the
Civil Service Reform Act of 1978, which forbids
strikes and slowdowns by federal employees.
In 1981, however, 95 percent of the 13,000
members of the Professional Association of Air
Traffic Controllers (PATCO), possibly justifiably,
probably arrogantly, and certainly foolishly, struck.
President Ronald Reagan promptly decertified
PATCO—that is, the federal government no longer
recognized PATCO as the official representative
of its members—and dismissed more than 11,000
air traffic controllers, breaking their union in the
process. Reagan’s decertification was historic, and
arguably strengthened the hand of all governments
in dealing with unions.
Striking the Grass Roots Thirteen states directly
protect their public employees’ right to strike (eleven
states include teachers307), although all of them
place clear restrictions (most commonly, prohibit-
ing strikes by public safety workers) on that right. A
dozen states cover state and local employees; Rhode
Island’s law applies only to state workers.308
During the 1960s and 1970s, strikes by state
and local workers surged, reflecting unions’ indiffer-
ence toward the taxpayers who paid their members’
wages. When asked where the money for higher
pensions for his members would be coming from,
a union officer replied, revealingly, “That’s the gov-
ernment’s problem. Just because there is a pinch
for money, it’s no excuse to make the employees do
without.”309
Labor’s arrogance attenuated in 1979, when
New Orleans’ police struck just prior to Mardi Gras,
effectively canceling the holiday and costing the city
millions. This stunning gaffe focused the public’s
perception of organized labor’s gluttony, and con-
tributed to a dramatic shrinking of its power. Major
strikes and work stoppages by government workers
toppled from their peak in that year—when there
were 583 of them310—and never recovered. The
number of strikes and stoppages by state and local
employees, which averaged 340 per year during the
1970s,311 averaged six a year during the 1980s and
1990s, fewer than five per year in the 2000s, and
barely four per year, 2010–2015.312
Days of Glory . . . Gone
The glory days of unionized government workers
have been waning since the early eighties. By the
mid-1990s, it was apparent that “public sector
unionism . . . has topped out, both in membership
and market share,” with declines evident in both.313
These declines accelerated in the 2010s. State
governments, mostly in the Midwest and South,
began passing laws designed to rein in public unions,
and these laws correlate positively with falling union
membership.314
These currents are occurring within a larger
culture of growing anti-unionism, but particu-
larly anti-public unionism. Pluralities of Americans
support “changing state laws to limit the bargain-
ing power of state employee unions” (49 percent),
and believe that states in which government workers
belong to unions are generally “more harmful” than
helpful to those states (46 percent).315 Teachers’
unions are the canary in the coal mine in these
trends, with public disapproval of them growing by
29 percent in just four years,316 states increasingly
weakening teachers’ job security,317 and teachers’
union membership shrinking.318
A Threatening Court?
Adding to public labor’s woes about a disaffected
public is the Supreme Court’s apparent backtracking
in its longstanding support of unions, both public
and private. The dominant decisions in the Court’s
backtrack, however, have all focused on public
unions.
In 1977, the Court ruled, in Abood v. Detroit
Board of Education, that employees could not be
forced to join a union that used its dues to advance a
political agenda with which they disagreed because
doing so would violate the First Amendment (the
Freedom of Expression clause). Still, because unions
represented these employees, who benefitted from
the unions’ collective bargaining agreements as
much as union members did, they nevertheless were
required to pay their “fair share” of union dues that
were not spent on political activities; mostly, “fair-
share fees” cover the costs of collective bargaining.

Fair-share fees, or agency fees, or union-security
fees, are union fees paid by employees who are not
members of unions but are represented by them, and
they amount to less than union dues—often, not
much less, and many observers think that the fees
are critical to union finances.
Those twenty-five states that do not require fair-
share payments are right-to-work states; they do not
require workers to join unions in union shops, and
have effectively banned fair-share payments.
The Court reaffirmed its foundational decision
in Abood, and, with it, fair-share payments, in at least
four subsequent decisions over the ensuing forty or
so years. Then, in 2014, the Court held, five-to-four,
in Harris v. Quinn, that home-healthcare workers
were not “full-fledged public employees” because
they could be hired and fired by the people whom
they were assisting—even though most of these
workers are not paid by their patients and are paid
instead by Medicaid, a federal program. Though
narrow in scope, Harris directly threatened unions
in those states that require fair-share payments, and
“suggested that a majority [of the Court] was sick
and tired of this Abood nonsense, and might be
grateful if someone—anyone—would bring them a
case that would drive a stake through its heart.”319
In 2016, the Supreme Court was brought
just such a case: Friedrichs v. California Teachers
Association. To the surprise of many, the Court
deadlocked, four-to-four, effectively letting stand
a lower court ruling that had upheld Abood. The
deadlock was the result of the death of a conserv-
ative justice, in 2016, and the Senate’s odd refusal
to conduct hearings on his replacement until 2017.
Friedrichs is unlikely to be the final word on Abood.
Are Public Unions Good or Bad for the
Public? A Summing Up
Many of us have long heard anecdotal accounts of
the high costs of public unions to governments and
taxpayers, such as California’s prison guards’ union
which lobbied so successfully for more prisons and
stricter sentencing, and, hence, more prisons, more
prisoners—and more guards—that 11 percent of
the state’s budget now goes to the penal system, sur-
passing higher education’s percentage. Or Buffalo,
New York, which has lost half of the population
that it had in 1950, but retains the same number of
Managing Human Capital 317
city employees today that it had then—some seven
decades ago!
But there is some systemic evidence that also
suggests unions undermine governments’ efficiency
and effectiveness. Over eight years, “the price of state
and local public services has increased 41 percent
nationally compared with 27 percent in private ser-
vices,”320 although it is unclear how much of this
disparity is attributable to public unions.
Other data provide clearer linkages. For
example, “there is an association between strong
teachers’ unions and lower student performance,”321
perhaps because unions may protect some teachers’
abuse of their responsibilities; a startling 27 percent
of full-time teachers are “chronically absent,”
defined as missing eleven or more days of regular
classes, with some school districts reporting that
more than 75 percent of their teachers are chroni-
cally absent.322
On the other hand, here is a little-known corre-
lation: the deeper a public employee’s commitment
to his or her union, the greater the employee’s job
satisfaction, the higher his or her public service moti-
vation, and the lower his or her perception of red
tape.323 (Recall from Chapter 4 that a public work-
er’s perception of a lot of red tape associates with
job disengagement and dissatisfaction, risk aversion,
resentment, and alienation.)
When we consider, however, the negatives asso-
ciated with public unions—e.g., costly pensions and
healthcare benefits (noted in Chapter 8), self-serving
political pressure exerted on elected officials, higher
costs for the grass-roots governments, strikes and
slowdowns (considerably fewer than in the 1970s,
but still disruptive), popular disdain of public unions
that arguably affects adversely governments’ pro-
ductivity—then public unions may subtract more
than they add to efficient and effective governance.
THE POLITICAL EXECUTIVE
SYSTEM: POLICYMAKING
AND POLITICS IN PUBLIC
ADMINISTRATION
The Political Executive System fixates on policy—
that is, developing and implementing a policy
agenda for the elected chief executive. Political
executives—“the true nexus between politics and
 318 PA R T I I I Public and Nonprofit Management
administration”324—are those public officials
appointed to an office without tenure, and who have
significant policymaking powers.
Political Executives in Washington
There are some 9,000 federal full- and part-time jobs
whose occupants’ tenure expires with the president’s
term; many are appointments to obscure boards
and commissions.325 About 4,100 of these “politi-
cal” jobs are for executives who are nominated or
appointed by the president, and who serve at the
president’s pleasure;326 these positions have bal-
looned by fourteen-fold since 1960.327 To place this
number in perspective, their counterparts in Britain,
France, and Germany each number about 100.328
Article II, Section 2, of the Constitution requires
that 1,212 of these positions (e.g., cabinet secretar-
ies, ambassadors) be nominated by the president and
confirmed by the Senate,329 up from seventy-one in
1933.330
Baroquely Burdensome: The Appointment Process
“The senior executive hiring process is broken.”331
The time to acquire a Senate confirmation of a
nominee has more than doubled since the 1980s,
when it averaged fewer than four months, to nearly
eleven months in the 2010s.332 “At least half of the
delays appear to involve bureaucratic red tape and
duplication of effort,” and a fourth involve inappro-
priate senatorial interference.333 In 2004, the Senate
rejected reforms proposed by the House.
In 2013, a frustrated Senate finally voted to
effectively confirm presidential nominees by a
simple majority vote, rather than by a two-thirds
vote, which had been its practice for more than 200
years. Still, the process remains remarkably stymied.
In 2015, a fourth (103) of the top 379 Cabinet-level
positions were vacant, and the Senate had confirmed
the lowest number of non-military positions during
the first session of Congress in nearly thirty years.334
Almost a fourth of presidential appointees
describe the appointments process (which demands
that candidates answer as many as 1,000 congres-
sionally-imposed written questions that test “for
almost everything but a candidate’s qualifications
for service”335) as “embarrassing” and a fifth find
it “confusing.”336 Over two-fifths, a growing plu-
rality, of senior executives think that their own
“application process discourages high-quality candi-
dates from applying.”337
“The cascade of failures that have beset the
federal government [is] rooted, first and foremost,
in the appointments process and the vacancies it so
often produces.”338
The Rise of the White House Loyalty Test In the
1960s, the appointment of political executives was “a
highly centralized and personalized process revolv-
ing around the respective department and agency
heads,” and when a rare difference of opinion arose
between the secretary and the White House staff
over a candidate, “the secretary generally won.”339
Beginning in the 1970s, however, the White
House grew increasingly intrusive. As a result, “the
views of politically appointed officials more and
more closely resembled the . . . party and ideology
. . . of the administration they were serving.”340
No one can reasonably dispute the desirability
of a democratically elected chief executive establish-
ing his or her control over the executive branch, and
appointing loyalists can be an important means for
doing so. But appointing loyalists, let alone compe-
tent loyalists, is far more challenging than often is
realized. A former presidential personnel assistant,
who was notorious for his obsession with political
control of the civil service, admitted, “It’s an awfully
difficult job just to handle the presidential appoin-
tees . . .. if you try to do too much, you may be
diluted to the point where you’re not as effective.”341
Politicization’s Presidential Peak Scholars gener-
ally agree that the two administrations of President
George W. Bush (2001–2009) were the culmination
of the “politicized presidency” in recent history, and
they exemplify how political loyalty corrodes profes-
sional competence; a comparison of Bush’s political
appointees versus his professional appointees, using
the Bush administration’s own performance rating
system, found that agency performance suffered,
measurably and deeply, under the political appoin-
tees.342 (We are not suggesting that federal politiciza-
tion evaporated after 2009, as the State Department
would seem to demonstrate on occasion,343 but
politicization clearly was less in the Barack Obama
administration than it was at its peak.)
In the Bush White House, “substantive policy
discussions were rare, and were routinely trumped

by political considerations.” Ultimately, Bush’s
demand for loyalty “constituted a direct challenge
to the possibility of competence” ever encroaching
into his administration.344
Bush’s demand was felt throughout the bureau-
cracy. From 2000 to 2007, federal employees’ per-
ceptions that they had “experienced coercion related
to political activity in the preceding 2 years” nearly
doubled, an unprecedented spurt in its growth rate.
(It rebounded to its 2000 level in 2010.)345
When Hurricane Katrina slammed into the Gulf
Coast, in 2005, the administration’s systemic incom-
petence became painfully and publicly obvious. Its
response amounted to a catastrophic opera buffa
that “crystallized negative perceptions” about a
“bungling administration” that were “far from fully
realized before Katrina hit.”346 In the year follow-
ing Katrina, a Pew survey found that “the term most
frequently associated with the president was ‘incom-
petent.’”347
The Federal Emergency Management Agency
(FEMA) was the chief bureau that dealt with
Katrina’s aftermath. It was headed by a political
appointee with no prior experience in emergency
management (this had been mostly the norm ever
since FEMA’s founding, in 1974348), and, although
Bush brayed that FEMA’s director was “doin’ a
heckuva job” in responding to the crisis, public
outrage forced the director’s resignation two months
following the hurricane. Even in Katrina’s woebe-
gone wake, however, Bush remained determined
to assure a politicized FEMA. In signing the Post-
Katrina Emergency Management Reform Act of
2006, which required that future FEMA directors be
professionally qualified, Bush issued a “signing state-
ment” in which he insisted that he was not legally
bound to appoint qualified directors.
Why destroy an agency whose singular mission
is to save lives that are in imminent danger? “Why,”
asked a former presidential chief of staff, “politicize
FEMA when you’ve got Commerce?”349
By the close of his presidency, public approval
of Bush’s performance was “the lowest in the Gallup
Poll’s history.”350
Fifty Years of Politicization For roughly fifty years
(the following studies cover, altogether, 1964–2016),
presidential appointments commonly (but not
always) tilted toward loyalty and politicization at the
Managing Human Capital 319
expense of experience, professionalism, and compe-
tence. What have been the results?
An Uncaring Elite? Over five decades, the average
percentages of presidential appointees who thought
that “accomplishing important public objectives”
brought them the most satisfaction plummeted
by more than three-fifths, and bottomed out at a
remarkably modest 15 percent.351 Of seventeen
factors affecting these executives’ length of tenure
in office (which, as we detail later, is extraordinarily
brief), the “least important” is “resources,” suggest-
ing little interest among them in actually achieving
anything; in fact, even “a very large increase” in their
budgets would only “moderately” influence them to
extend their service.352
An Avaricious Elite? Fully 30 percent of presiden-
tial appointees state that, once appointed, they earn
“a lot more” money, and only 6 percent earn “a lot
less.”353 When better-paid positions outside of gov-
ernment are offered, these appointees snap them up:
the “primary” determinant of how long they stay in
office is whether or not they are offered larger sala-
ries elsewhere.354
When no outside offers are dangled, some polit-
ical executives, in violation of policy, “burrow in”
to civil-service-protected positions. President Jimmy
Carter initiated, in the 1970s, an ongoing effort to
discourage the practice, but burrowers subsequently
more than tripled in fewer than five decades.355 More
recently, an audit of thirty agencies found that, in
twenty-eight of them, sixty-nine political executives
burrowed in from 2010 through 2015.356
An Inept Elite? Should we be surprised that just
11 percent of political executives themselves think
that their colleagues “represent the best and the
brightest that America has to offer”?357
More than a quarter century ago, only 18
percent of the Senior Executive Service’s retired
careerists believed that political appointees had
“good leadership qualities,” and just 15 percent
thought that they had “good management skills.”
Sixty-three percent of these executives who had been
supervised by “noncareer” political appointees cited
the “politicization” of their agencies as their “reason
for leaving,” compared with just 37 percent of those
who reported to careerist, non-political appointees;
 320 PA R T I I I Public and Nonprofit Management
half of the former group stated that they left because
of their immediate supervisors’ “incompetence”
versus a third of the latter; and 46 percent of those
who reported to political appointees attributed their
departure to their “ethical concerns about practices
at higher agency levels,” compared with 30 percent
of those who reported to careerists.358 (It is of note,
in this last regard, that political appointees receive
half the amount of training in merit system princi-
ples and prohibited personnel practices than do new
federal supervisors;359 in a fifth of agencies, political
appointees receive no training in these areas.360)
Times have not changed much since. Currently,
60 percent of SES members who were in the process
of leaving government (97 percent of whom were
doing so voluntarily) cited the “political environ-
ment” as the reason for their departure, with 42
percent stating that it was a factor to a “great” or
“very great extent,” followed by “senior leadership,”
at 53 percent, and “organizational culture,” at 51
percent.361 Each of these reasons has an obvious,
and negative, linkage with the competence of polit-
ical appointees.
It seems clear that too many political appoin-
tees are in over their heads. After more lucrative job
offers, their main motivation to leave government is
“the difficulty of public administration”—in other
words, they find managing federal agencies to be
just too, too hard.362 Perhaps this is the reason why,
unlike the other 2.1 million federal civilian employ-
ees, the 4,000-odd political executives are not subject
to annual assessments of their performance.
A Failed Elite? Despite monumental presiden-
tial efforts to hire loyalists who will unwaveringly
implement their agendas, political executives are
not much good at it. The “primary result” of a thor-
oughgoing analysis of them is that “ideological allies
rarely make optimal appointees.”363 Fulfilling presi-
dential agendas is done by public administrators, not
by partisan hacks.
The Costs of Incompetent Political Executives
Presidents’ preferences for politicized loyalists over
much of the past five decades have harmed the
federal government’s management capacity in sur-
prisingly systemic ways.
The federal workforce’s “decline in morale
is sharpest where politicization has been most
intense,”364 a demoralization that appears to be
based on fact. The more political executives there
are in a federal agency, the lower employee produc-
tivity: “Each additional political appointee reduces
individual employee performance by .002” on an
eleven-point scale.365 As we detailed in Chapter
7, even inspectors general, who are charged with
increasing efficiency, can be politicized, and, when
they are, productivity suffers.
These realities have not been lost on federal
career executives, who have grown more rule bound,
clerical, and hermitic, communicating less with
“other sectors of government or with other actors in
the political system.”366 These limiting self-percep-
tions are reinforced by a federal culture that stresses
technical skills (14 percent, and growing, of senior
executives report that more than 55 percent of their
work is of “a technical/professional nature”) over
leadership (just 10 percent, and declining, say that
more than 55 percent their work is of “an advisory
nature to top management”).367 The regrettable result
is that federal personnel are promoted to senior posi-
tions “even if they do not have executive ability.”368
We see this possible decline in executive ability
reflected in polls. The percentage of federal chief
human capital officers who think that a presidential
“focus on improving the SES is needed” (67 percent)
is more than triple that of those who think not (19
percent).369 Over five years, from 50 to 54 percent of
federal employees expressed “a high level of respect
for my organization’s senior leaders.”370 A slender
22 percent of them think that “overall,” members of
the SES are “effective leaders most of the time”; 26
percent believe that they are “not effective leaders”
at all, and another 25 percent think that they are
“effective leaders less than half of the time.” More
than three-quarters of federal executives and man-
agers state that “there is a problem with the SES,”
three-fifths believe that the government would be
“better off” or “the same” “without the SES,” and
more than half would refuse a promotion, if offered,
to the SES (27 percent would accept),371 despite the
fact that more than three-fourths agree that “SES
positions in their agencies are viewed as prestig-
ious.”372 According to a member of the SES, joining
it “used to be an honor. Now it’s a joke.”373 The
problem has grown so grave, and so obvious, that,
in 2015, the president announced some needed, but
limited, reforms to the SES.

It has not always been like this. The federal
service historically has boasted smart, visionary,
tenacious, and tough executives, who, against enor-
mous odds, accomplished great things. Those federal
administrative heroes (the noun is no exaggeration)
chronicled in Ken Burns’ documentary, “America’s
Best Idea,” who created the world’s first national
parks system and who often sacrificed their health
and wealth in the effort, exemplify the federal service
at its finest.
Is this selfless, courageous class of federal exec-
utives still with us?
Political Executives at the Grass Roots
In contrast to developments in Washington, in
the political executive systems of state and local
governments politicization is down and profession-
alism is up.
The Passing of Politicization The Supreme
Court has been involving itself in the area of
patronage-based political appointments since 1976,
and the clear drift of judicial opinion is one of reduc-
ing the power of patronage at the grass roots.
In State Governments Perhaps the most important
anti-patronage decision is the Supreme Court’s 1990
ruling in Rutan v. Illinois Republican Party, in which
the Court banned party affiliation as a factor in the
hiring, promoting, or transferring of most of Illinois’
60,000 gubernatorial appointees. (As this large
number suggests, few gubernatorial appointees are
political executives; most are of humbler station.)
The governor of Illinois was shocked, saying the
decision “turns politics on its head.”374
States that traditionally have had a lot of polit-
ical appointees—Illinois, Indiana, Massachusetts,
New York, North Carolina, Pennsylvania, and West
Virginia—have taken steps to reduce the power
of partisan politics in their personnel systems as a
direct consequence of Rutan. “Nobody wants to be
sued. They tend to pay attention to a major decision
like this.”375
In Local Governments What is true for the
states is even more in evidence among local gov-
ernments. Although partisan elections are still
used by more than four-fifths of counties, nearly
Managing Human Capital 321
four-fifths of municipalities’ elections are nonpar-
tisan. Nonpartisan ballots are universal in school
districts, and this seems to be the case in special dis-
tricts as well, although 44 percent of special districts’
boards have no elected members whatsoever, only
appointed ones, a rising trend.376
The number of mayors who hold the exclusive
power to develop municipal budgets sank by 35
percent over fifteen years, and today just 11 percent
retain this authority.377 Mayors who possess the sole
power to appoint department heads declined by 37
percent over ten years, and only 17 percent still have
this capability.378
The Entry of Professionalism As politicization
passes, professionalism enters.
In State Governments In the states, interest in
developing a cadre of professional public exec-
utives  bloomed in the 1960s as part of admin-
istratively-inspired reorganizations that swept
most state governments for three decades.379 Four
states  had executive personnel systems in place
before Washington founded its Senior Executive
Service, in 1978, and at least fourteen states now
have them.380
In 1964, fewer than two-thirds of state agency
heads had a bachelor’s degree (by contrast, nine-
tenths of their federal equivalents had completed
college381). Two decades later, these administrators
had attained educational parity with their federal
counterparts, and today 95 percent have a baccalau-
reate degree or higher.382
Another criterion of professionalism is commit-
ment to a career, and this they have. State agency
heads have worked in their governments for a
median of eighteen years, and thirteen years in their
agencies. Their years in service have grown by a
third over fifty or so years.383
As with federal careerists, senior state career
administrators worry over the quality of their polit-
ical executives. A tiny 4 percent of these officials
agree that “increased numbers of political appoin-
tees enhance [state] government effectiveness,” and
an overwhelming 80 percent disagree (24 percent
“strongly” so) that they do.384
In Local Governments Local governmental inter-
est in developing a deep pool of executive talent
 322 PA R T I I I Public and Nonprofit Management
associates with their dramatically accelerating adop-
tion, beginning immediately after World War II, of
the council-manager plan and similarly professional
forms of government.
Top local administrators are well educated and
experienced. Only 2 percent of city managers lack
a bachelor’s degree; a fifth has only a bachelor’s
degree; and nearly four-fifths hold advanced degrees.
Fifty-one percent hold a master of public adminis-
tration degree.385
As with state agency heads, local chief admin-
istrative officers are in it for the longer haul, and
have worked for local government for an average of
nearly twenty-one years.386
Experience and Sector: Our New
Understanding of Public Executive Quality
Who manages better, political appointees or career
bureaucrats? The federal government offers a unique
insight here because it has a vastly greater propor-
tion of “in-and-outers” than do state and local gov-
ernments, and it has a single system in which each of
its agencies (and, by association, their directors) is
ranked for its comparative performance against all
other agencies.
The Less Experienced Political Executive The
average tenure of Washington’s top political
appointees in their positions is about eighteen
months,387 compared with twice that time—more
than three years—for their careerist counterparts.388
Presidentially-appointed executives, on average,
have more than nine, usually discontinuous, years
of experience in different positions, whereas career
executives average an impressive twenty-six contin-
uous years of federal service, or three times that of
political appointees.389
Turnover and Time Matter Merely the fact that
federal political executives remain so briefly in office
undermines agency achievement. An analysis of
“several hundred public organizations” over nine
years found that high rates of turnover were “nega-
tively related” to their performance.390
When more ambitious missions are undertaken,
brief executive tenures almost guarantee organiza-
tional failure. “The experiences of successful major
change management initiatives in large private and
public sector organizations suggest that it can often
take at least 5 to 7 years before the initiatives are
fully implemented and the related cultures are trans-
formed in a sustainable manner.”391
If public executives were to stay only briefly in
office, Alexander Hamilton wrote, it would “occa-
sion a disgraceful and ruinous mutability in the
administration of government.”392
Arguably, it has.
Sector and Experience Matter A hoary myth, at
least in Washington, is that political executives, with
their lifetimes of cosmopolitan administrative expe-
riences in a rich variety of settings, administer better
than career federal executives. Do they?
No. A seminal analysis of 242 federal bureau
chiefs found that politically-appointed chiefs got
“systematically lower management grades than
bureau chiefs drawn from the civil service.” Why?
Because the career bureau chiefs had twice as much
federal experience, and this is “significantly related
to management performance.”393
Other research finds much the same. The
more years that big-city mayors serve in office,
the more  physically developed their cities and the
more effective their law enforcement and social ser-
vices.394 The longer the tenure of municipal budget
officers, the more efficiently they manage public
funds.395
Experience trumps even that other major
measure of professional capability, education. This is
the case with both federal careerists (political exec-
utives are more highly educated)396 and hands-on
mayors in cities with a “strong-mayor” form of gov-
ernment.397
SPECIALIZED PUBLIC
PROFESSIONAL SYSTEMS: THE
PERSON OVER THE POSITION
A profession is an easily identifiable and special-
ized occupation, normally requiring at least four
years of  college education, which offers a life-
time career  to the persons in it. The emergence of
numerous specialized professions in governments
brought to public human capital management a
new value: the person and the management of his
or her career.

The Scope of Specialized Public
Professional Systems
Beginning around 1955, the proportion of special-
ized professionals working in the public sector grew
dramatically.
More than 56 percent of all public-sector
employees are in “management, professional, and
related” fields, compared with less than 38 percent
in the private sector. Nearly 49 percent of all federal
civilian employees, almost 63 percent of state
workers, and more than 55 percent of local govern-
ment employees work in these occupations. (Recall
from Chapter 4 that public managers account for
just over 8 percent of the category, or more than a
third fewer managers than in the private sector; the
remaining 92 percent are specialized professionals.)
Educators, trainers, and librarians dominate state
and local workers who are in the management, pro-
fessional, and related fields, accounting for nearly 26
percent of these state employees and over 34 percent
of local workers.
The heavy professionalization of the public
sector is reflected in relative education levels. Fifty-
four percent of government employees have a bach-
elor’s or an advanced academic or professional
degree (47 percent of federal workers, 58 percent
of state employees, and 54 percent of local ones),
compared with 35 percent of private-sector workers.
The proportion of government employees who hold
advanced degrees is increasing over time, and at a
faster clip than in the corporate sector.398
The Public Implications of Specialized
Public Professionalism
Professions embody expertise, prestige, autonomy,
dignity, and formal learning, values that often are
incompatible with politics. The historic struggles of
public professions to purge themselves of politics—
for example, the city manager versus party hacks; the
librarian versus ignorant censors; the environmental
scientist versus political ideologues—all reflect this
resistance.
Nor do professionals like bureaucracy, which
they often view as an impediment to the free exercise
of their specializations. Federal employees in some
professions, such as science, express much less satis-
faction with their work than do federal executives,399
Managing Human Capital 323
and, as we described in Chapter 5, professional “spe-
cialists” are “manifestly maladjusted” in their gov-
ernment workplaces.400
Put bluntly, professionals who choose the public
service often must overcome their antipathy for its
two major features: politics and bureaucracy.
To make matters worse, professionals with
different specializations sometimes engage in infight-
ing that inevitably undermines public productivity,
an all-too-common phenomenon, for example,
between city managers and city attorneys, whose
mutual “suspicions and competition” lead to “signif-
icant” downturns in “municipal government effec-
tiveness.”401
The scarcer the professionals available to an
agency—whether federal, state, or local—for hire,
the greater the likelihood that these professionals
will control the agency’s HR system. In Washington,
OPM has “excepted virtually all of the established
and general professional fields, [and] a great many
emergent professions” from its official purview.402
THE PROFESSIONAL PUBLIC
ADMINISTRATION SYSTEM:
EMBRACING THE PROFESSIONS
OF POLITICS AND MANAGEMENT
In stark contrast to Specialized Public Professional
Systems, the Professional Public Administration
System not only tolerates politics (as in public) and
bureaucracy (as in administration), but actually
embraces them. Its central value is high-performance
public and nonprofit organizations.
The Roots of the Professional Public
Administration System
The Professional Public Administration System is the
result of a trio of developments that emerged in the
1970s.
The Model Public Personnel Administration Law
of 1970 In 1970, the now-defunct National Civil
Service League released its sixth and last Model Public
Personnel Administration Law. Like its predecessors,
it was deeply influential among personnelists, but
also radically different from them, reflecting “a sea
change in the views of the cognoscenti about what
 324 PA R T I I I Public and Nonprofit Management
the public service should be.”403 It eschewed tradi-
tional merit principles and instead resurrected the
values of the Brownlow Committee of 1937, urging
that personnel administrators integrate themselves
with, and assist, line managers in managing.
Eight years following the model law’s release,
Washington enacted the first major reform of its per-
sonnel policies in ninety-five years, the Civil Service
Reform Act. By the mid-1970s, close to two-thirds
of all state and local civil services reported that they
were greatly influenced by the model law, and over
half had taken steps to make their personnel direc-
tors more responsive to executive leadership.404
Watergate and the Muffled Mouthpiece for “Merit”
“Watergate,” the most searing political scandal of
the twentieth century, erupted in 1973 and burned
on through most of 1974. Its effects “unquestionably
were to tarnish the reputation of the public service in
general. . . . And the U.S. Civil Service Commission,
which had been set up in part as a watchdog of the
integrity of the civil service system, did not attack, or
growl, or even bark until the affair had ridden most
of its course. . . . Watergate generated doubts in the
nation as a whole . . . about the public service as a
whole.”405
The Civil Service Reform Act of 1978 If federal
human resource administrators were notably
weak-kneed when it came to protecting the merit
principle from presidential corruption, fiercely
frustrated career managers saw them as posi-
tively  untamed in harassing them with the merit
principle.
This widespread resentment resulted in a hugely
ambitious study of federal personnel administra-
tion involving more than 1,500 personnelists who
pushed for reforms that ultimately were codified in
the Civil Service Reform Act of 1978. “Here was
the culminating event of ‘government by managers,’
espoused four decades earlier” by the Brownlow
Committee.406
The act created three new bureaus for federal
human capital management. Their directors and
deputy directors, or board members, are nominated
by the president, confirmed by the Senate, and serve
at the president’s pleasure.
The Civil Service Commission was replaced by
the Office of Personnel Management, which advises
the president on policy and coordinates the gov-
ernment’s personnel programs. OPM also manages
another of the act’s creations, the Senior Executive
Service, which is not protected by civil service reg-
ulations.
The act also created the Federal Labor Relations
Authority, which is charged with developing and
enforcing policies for unions.
A three-member, bipartisan Merit Systems
Protection Board adjudicates employee appeals,
investigates allegations that federal personnel laws
have been violated, and may order agency compli-
ance with its rulings.
Roots, Reforms, and Results The consequence of
these developments has been the gradual emergence
of new thinking about people in the public service,
and this thinking is expressed in the Professional
Public Administration System. Most particularly,
it focuses on loosening rigid position classification
protocols and managing employee performance.
Reforming Classification
The effort to reform position classification consists
of two primary initiatives.
The Attributes of Effective Classification One is
the identification those attributes that an effective
public job classification system should have. These
include the following:407
■ Equity: All employees with comparable
qualifications and responsibilities should be
assigned to the same grade level and be paid
within ranges that are comparable to similar
qualifications and responsibilities in the private
sector.
■ Transparency: The classification system
should be predictable and comprehensible to
management, employees, and taxpayers.
■ Flexibility: The classification system should
allow for adjustments in pay (among other
potential adjustments) within a uniform,
government-wide system so that agency needs
and missions may be fulfilled.
■ Adaptability: Fundamental reviews of
the entire classification system should be
undertaken periodically so that the system’s

adaptability to changing workplace and
workforce characteristics is assured.
■ Simplicity: The classification system should
enable employee mobility among agencies,
maintain a rational number of occupations
and meaningful differences in skills and
performance within those occupations, and be
cost-effective and easily managed.
■ Appropriateness: Positions should be classified
based on mission needs, and employees
should be classified according to their unique
abilities so that those positions may be filled
appropriately.
Broadbanding The second reform initiative is
broadbanding, paybanding, or salary banding, each
of which refers to the reduction of position classifi-
cations into broad clusters of job “families.”
Although the 420 federal occupations have been
grouped into twenty-three “occupational families,”
the grouping “falls short in implementation.”408
Only 14 percent of federal chief human capital
officers think that the General Schedule’s classifica-
tion system should be retained,409 and personnelists
have recommended that the fifteen grades in the GS
be roughly halved in number,410 or even reduced by
two-thirds to five grades.411 Some 250,000 federal
employees are in broadbanding systems.412
Personnelists also have proposed that the thou-
sands of position classifications in state and local
governments be slashed to a few dozen,413 and these
governments have responded.
Each state maintains, on average, some 2,000
position classifications.414 This large number inev-
itably produces oddities. California, for example,
had 3,666 classifications that were explained on
“1,022 pages of teeny-weeny print.”415 The state
had a detailed classification for piano players, even
though the state had hired no pianist to play over
at least the preceding four years; four types of “cus-
todians” and two types of “janitors” (each one of
which required a separate application); and position
descriptions which pertained to an agency that had
been abolished eleven years earlier.416 (California is
actively investigating broadbanding.)
By the mid-1990s, the states were recognizing
the problem, and five times as many states were
cutting their position classifications than were
adding them.417 Today, a dozen states use “a full-scale
Managing Human Capital 325
broadbanding system,” and four use it on “a limited
scale.”418 “About 12 percent of the states” have
adopted broadbanding for at least three-fourths of
their employees, and their average number of “active
job titles” (370) is just a fourth of those in states that
have paybanded less extensively (1,536).419
Unions often resist broadbanding, arguing
that its flexibility opens the civil service to political
patronage and discrimination; they were successful,
in 2016, in derailing it in New Jersey.
Broadbanding is generally thought to be a
necessary first step before additional managerial
reforms can be installed, and this seems to be true in
the states. In those states that have salary banded to
a significant extent, the numbers of employees who
are eligible for inclusion in a half-dozen innovative
“pay strategies” outpace by two to six times those
in states that have not; transfer rates within these
governments are about two-thirds lower, suggest-
ing greater contentment among public employees in
paybanded agencies.420
More than half of cities have consolidated some
position classifications, and, indeed, were the public
sector’s leaders in doing so.421
Managing Public and Nonprofit
Employees’ Performance
While important, reforming classification is far less
critical to the Professional Public Administration
System than performance management, or clearly
expressing what is expected of an employee, and
then reasonably demonstrating whether he or she
has fulfilled expectations.
In governments, regrettably, the “absence of
good performance management practices [consti-
tutes a] critical flaw,” and this is one of the litera-
ture’s “most consistent findings.”422
When performance management is done well,
employees in all sectors exhibit greater job satisfac-
tion, turnover declines, and productivity increases,423
and, in the public sector, programs improve, their
accountability is enhanced, collaboration with
other  agencies increases, and there is greater con-
tinuity during leadership transitions.424 Even when
done well, however, performance management,
while often heralded as unshackling employees
from counterproductive rules (recall the longed-for
“liberation management,” noted in Chapter 7), it
 326 PA R T I I I Public and Nonprofit Management
actually “is likely to . . . increase the total population
of rules,” typically introducing new rules for perfor-
mance measures and targets.425
To be effective in the public and nonprofit
sectors, performance management must overcome
three unique obstacles: appraising performance, dis-
ciplining poor performers, and rewarding good ones.
Performance Management Challenge 1:
Appraising Employees’ Performance
Performance appraisal, also known as performance
assessment or performance rating, is the evaluation
of an employee’s actual achievements and productiv-
ity in his or her job.
Although appraisals of government workers
have a long history (Congress first ordered assess-
ments of federal workers in 1842), they never really
addressed the idea that public administrators should
produce results. Reformers were quite satisfied that
the merit system did nothing more than inhibit
public employees from routinely plundering the
public till. Hence, for many decades, a “productive”
government worker was one who simply did not
commit criminal acts and followed the rules.
Over time, this modest objective was replaced
by efforts to rate individual performance. The
federal government, forty-nine states426 (nearly nine
out of ten state classified employees, on average,
are appraised at least annually427), and over four-
fifths of cities and counties428 (although 22 percent
of top city and county managers report that they
receive no review429) now use performance assess-
ments. They are not cheap; an analysis of the federal
government’s annual performance appraisals of its
2.1 million civilian employees estimated they cost
at least $600 million every year.430 An analysis of
a large company concluded “completing the forms,
holding the meetings, and creating the ratings con-
sumed close to 2 million hours a year.”431
The Pit of Performance Assessment Obtaining
feedback on one’s professional performance has a
clear correlation with greater productivity.432 It is,
therefore, worrisome that dissatisfaction with per-
formance rating is much more pronounced in gov-
ernment (where it has “devolved into an odious
ritual that employees and managers alike would just
as soon avoid”433) than it is in business.434 Even in
business, however, about 5 percent of companies
have abandoned performance reviews.435
Why is this? Rater bias (a sophisticated analysis
found that performance ratings “reveal more about
the rater than they do about the ratee”436), fuzzy per-
formance standards, poorly written job descriptions
(federal job descriptions “typically exceed 1,500
words, and many of them are incomprehensible, at
least to the uninitiated”437), inadequate documenta-
tion and communication, process errors, and little or
no training (fewer than three out of ten new federal
supervisors receive any training about documenting
their employees’ performance, and only a fifth is
trained in “helping all employees improve their per-
formance.”438), are a few of the factors that reduce
both the reliability and the reputation of public and
nonprofit performance rating.439
The most intransigent problem is that the per-
formance of some public and nonprofit employees is
far less subject to assessment than others. Service to
clients, for instance, can be assessed by how many
calls an administrator answers per hour, and how
often his or her answers satisfy callers. But how
does one quantify the performance of the inter-
national staff of the U.S. Treasury, which is sup-
posed to monitor developments in the international
economy, coordinate with other governments, and
push for certain policies? Unsurprisingly, perhaps,
research has found that, when performance apprais-
als are used at lower organizational levels, where job
responsibilities are often clearer and more quantifi-
able, the appraisals are more accurate and useful.440
In addition to the difficulties inherent in assess-
ing individual public performance, there sometimes
seems to be an obsession among some bureaucrats
not to be held accountable for poor performance,
which renders assessment even more problematic.
“Blame avoidance behaviors on the part of public
managers are witnessed even in a regime with few
incentives, no consequences linked to performance,
and limited transparency to citizens”; the lower the
performance, the greater the effort to avoid blame.441
Successful Performance Assessment To success-
fully assess individual performance requires both
personal and organizational approaches.
At the personal level, ongoing “constructive
performance conversations” are the single great-
est factor that can be controlled by management

in increasing a federal employee’s engagement;442
77 percent of state and local employees who are
engaged in their jobs say that they receive the right
amount of communication from their supervisors,
compared with 25 percent of these workers who are
not engaged.443 To accomplish this engaging com-
munication, assessors must be adequately trained in
leading, managing, and communicating, including,
if possible, setting clearly-expressed performance
measures. To mitigate against personal favoritism in
the rating process, establish transparency, account-
ability mechanisms, and “independent reasonable-
ness reviews” by outside agencies, such as human
resource offices.444
Organizationally, performance assessments
should be embedded in a coherent system, based
on consensual values and goals that focus on
improving not only individual performance, but
organizational performance as well. Individual and
organizational objectives should be closely aligned,
and individual competencies, as well as performance,
should be assessed. Although some governments
“still approach performance appraisals as discrete
events, most have implemented systems that encom-
pass sets of activities to assess, develop, and reward
employees.”445
Of greatest importance, performance reviews
should be continuous and treated as a responsibil-
ity that is shared between assessors and those who
are assessed. Annual performance reviews (which
the federal and most state and local governments
require), in this context, should be a summary doc-
ument, created by the manager and the employee.
The Prospects for Performance Appraisal There
is a flickering glimmer of hope on this human
resources horizon.
More than three-fifths, up from about half ten
years earlier, of federal managers use “performance
information” to reward “government employees I
manage or supervise,”446 and the number of federal
workers who think that their performance assess-
ments are “appropriate” or “fair” has risen from 55
percent in 1986447 to 70 percent currently.448
State governments also seem to be making
progress. In 1998, Washington replaced its perfor-
mance rating system (which 93 percent of the state’s
employees loathed) with a system that eliminated
rating scales in favor of greater communication and
Managing Human Capital 327
collaboration; employee satisfaction with it shot to
a “staggering” 97 percent.449
During the 2000s, Georgia completed a sophis-
ticated “ePerformance” system that provided imme-
diate performance feedback to all pertinent parties,
linked pay with performance, reduced job descrip-
tions by nearly four-fifths, and introduced explicit
core competencies for not only employees, but also
for those who assess employees’ performance.450
Performance Management Challenge 2:
Coping with Incompetents
The dark side of performance appraisal is that
it sometimes fails to identify “poor performers,”
or “nonperformers,” as incompetent government
employees are officially described.
The Costs and Challenges of Incompetents Even a
few poor performers can have a disproportionately
negative impact on the productivity of the entire
public workplace,451 leading to increased turnover
and absenteeism.452 Dealing with a poor performer
can cost up to three times the poor performer’s
pay.453
There can be little question that correcting
poor performance is a tough challenge, princi-
pally because incompetent employees are sublimely
unaware that they are incompetent. Their lack of
skills not only leads to their poor performance, but
also renders them “unable to recognize their poor
performances.” They display “dramatic overconfi-
dence” about their abilities despite having received
“substantial” negative feedback. They possess “little
insight into the depth of their deficiencies relative to
their peers. . .. [and] overestimate their performances
even when given strong incentives for accuracy.” Top
performers, by contrast, tend “to underestimate
their performances,”454 a syndrome that can extend
to entire work groups. When incompetents concen-
trate in their own, self-protective groups, they col-
lectively hide their incompetence by underreporting
their failures; competent groups, by contrast, report
their failures fully and honestly.455
Coping with Federal Incompetents “The exact
number of poor performers in the federal govern-
ment is unknown.”456 Federal employees, however,
report that up to a fourth of their co-workers “are
 328 PA R T I I I Public and Nonprofit Management
not up to par,” a figure that is matched by employees
in the private sector,457 but federal supervisors deem
not even 4 percent of their employees to be poor per-
formers.458
Whatever their number, each year only a frac-
tion of 1 percent of federal employees are denied
automatic salary increases, demoted, leave voluntar-
ily for reasons of performance or misconduct, or are
fired.459 Data going back some two decades consist-
ently show that less than one-fourth to less than one-
half of 1 percent of federal employees are dismissed
annually for poor performance,460 and more than
two-fifths of these are fired during the probationary
period, when employees have far fewer job protec-
tions.461 As the civil service itself notes, “removing
or demoting inadequate performers still remains rel-
atively rare in the civil service.”462
And getting rarer. Over five years, the annual
percentage of feds fired for all reasons, including non-
performance, steadily declined, from 0.57 percent to
0.46 percent of the civilian workforce—a significant
drop of 19 percent. By contrast, the private sector
dismisses 3.2 percent, on average, per year, or almost
six times that of Washington.463
A Pernicious Personnel Problem How bad is it?
Pretty bad.
Consider some “inadequate performers” whom
the federal civil service kept. The postal worker who
was reinstated and awarded back pay after being
fired for shooting a colleague in the workplace.464 Or
those employees, some of whom had six-figure sala-
ries and bonuses, who spent up to eight hours a day
in their offices watching pornography because they
were “bored” or had “not enough work to do.”465
(As there are no reports of any of these viewers
being fired, a congressman queried, “How much
porn would it take for an . . . employee to lose their
job?”466 And, presumably, simply not working and
being paid for it is also frowned upon.) Or the part-
timer who broke a secretary’s jaw when she com-
plained about filing delays; the part-timer received
a transfer, a permanent job, and a nearly $4,000
raise. Or the biologist who was let go because it
took him four months to do what his supervisors
could do in two days; he was reinstated because no
one had explained what “too slow” meant. Or the
secretary who was fired for incompetence, but who
was reinstated and transferred because coping with
incompetent bosses had “induced a mental handicap
that had to be tolerated.”467 Or the patent exam-
iner whose work was deemed “unacceptable” (the
lowest-possible rating) three years in a row, falsely
inflated his work hours by at least 40 percent, and
was warned nine times about his lousy performance,
was allowed to resign with “a clean slate [with] no
conduct or performance record.”468
This sad record applies to incompetence—and
corruption—at the top. The most glaring example is
Veterans Affairs. VA executives found guilty of using
their authority for personal gain, falsifying patient
waiting lists (resulting in some veterans’ deaths), and
financial mismanagement (including failure to spend
40 percent of the VA’s multi-billion-dollar budget for
private healthcare, in 2013), a small handful of top
executives were fired, and many of these were subse-
quently reinstated.
Why Do Incompetent Federal Employees Hang
On? Nonperformers are deeply entrenched in their
jobs, and average an astonishing fourteen years in
the federal employ.469
How could this be? There are several reasons.
A Little-Used Probationary Period: One is that
federal supervisors and managers rarely use the
single best opportunity that they have to rid them-
selves of poor performers—new employees’ one-to-
two-year-long probationary periods. Supervisors let
go less than 2 percent of probationary employees,
even though 31 percent of them state that they “do
not expect to retain the probationer,”470 and manag-
ers remove less than one-half of 1 percent of proba-
tionary supervisors.471
An Awful Appeals Process: Another reason is
a tangled appeals process involving no fewer than
five federal agencies, each of which vary in their
authority, procedures, and body of case law, and an
appeal may be brought before one or more of these
bodies.472 Most of these agencies appear to back
line managers; a major one (it receives about 25,000
appeals annually), for example, finds for employees
just 1 percent of the time.473
The more vexing issue is the inordinate time
consumed by the appeals process. Because of a mul-
tiplicity of boards and processes, it is difficult to pin
down just how much time an appeal consumes, but
one appellants’ dismissal process takes a “total esti-
mated time” of 170 to 370 days;474 another takes

nearly a year, on average.475 Consider the case of
the agency driver who was suspended, appealed
to at least three appeals agencies over four years
(for three years he received no pay, and in the fourth
was paid for doing nothing), and (Surprise!) won his
job back.476
Why the appeals process is so convoluted is a
mystery because federal employees have no greater
legal protections than do workers in any other sector,
or even in state and local governments.477
Taking Unsatisfactory Action: Supervisors are
where the rubber meets the road when confront-
ing incompetents. Almost six out of ten federal
supervisors state that they have encountered prob-
lems of employee performance or conduct over
the preceding two years.478 Nearly nine out of ten
supervisors counsel a poorly-performing employee,
spending a remarkable five hours per working week,
on average, doing so,479 a time commitment that
matches that of the private sector.480 (Over half of
supervisors think that their counseling failed.) More
than a fourth take formal action (almost two-thirds
think it failed). And a third give the employee “a less
than satisfactory performance rating”481 (although
not even a third of 1 percent receive an “unaccept-
able” rating482).
Regrettably, supervisors often take “discipli-
nary” action that effectively rewards incompetents
and sanctions productive employees. In a survey of
federal employees, 37 percent (by far the highest out
of six possible responses) reported that their super-
visors gave poor performers “fewer responsibilities,”
and, in 21 percent of the cases, “no action” was
taken. Both actions (or non-actions) result in slack
that must be taken up by those who are performing
well. In 27 percent of the actions, supervisors simply
made their problem someone else’s by transferring
their nonperformers to another agency.483
Or supervisors grant the offender extended
administrative leave (an excused absence without
loss of pay and benefits), such as the disruptive
employee who, after two failed attempts by supervi-
sors to remove him, received 5,881 hours of admin-
istrative leave.484 The three-fifths of federal agencies
that keep track of their administrative leaves placed,
over three years, more than 57,000 employees on
leave for at least a month, including 263 workers
who collected paychecks for one to three years, while
waiting for resolution of alleged misconduct (which
Managing Human Capital 329
is the main reason for granting leaves of a month
or more) and other reasons. Paid leaves spanning
years cost the government an estimated $3.1 billion
in salaries alone, a number that does not include
benefits—pensions, vacations, sick days, etc.—which
also continued and accrued.485 Of course, in all these
instances, the taxpaying public foots the bill.
A Supine System: Consider this: even though the
IRS Restructuring and Reform Act of 1998 stipulates
that IRS employees who are found to be “willfully
tax noncompliant” must be fired, just 39 percent of
these willful employees were terminated, resigned, or
retired over ten years.486 To top things off, over three
years, IRS rehired 323 former employees “despite
substantiated or unresolved prior conduct or per-
formance issues,” nearly a fifth of whom ended up
with “new conduct or performance issues,” including
some who had not paid their taxes.487
The IRS showcases the systemic problems
inherent in dismissing poorly performing federal
employees. For more than thirty years, federal
employees have rated their government’s handling
of poor performers as one of its greatest failures,
and often as its single greatest failure.488 Forty-
five percent disagree,489 and just 28 to 29 percent
agree,490 that “steps are taken” in their workplaces
“to deal with a poor performer who cannot or will
not improve.” “A whopping 78 percent of [federal]
employees say the process for letting someone go is
so cumbersome it discourages firing bad apples.”491
Regrettably, senior executives seem a bit discon-
nected on this score; 68 percent think that steps
are indeed taken to deal with poor performers, in
contrast to all other employees who disagree; this
is the second largest gap between SES members and
employees in the study.492
Forty-two percent of upper-level federal manag-
ers and professionals who were hired from outside
the government state that their agencies are “worse”
than their previous employer in “dealing effectively
with poor performers,” and just 7 percent say that
their agencies handle them “better.”493
More than two-fifths, a rapidly growing plural-
ity, of the Senior Executive Service think that their
agencies fail to deal “effectively with executives who
perform poorly.”494 Of the 76 percent of federal per-
sonnel who think that the SES has “a problem,” 60
percent, by far the highest percentage out of nine
possible responses, believe that problem is that it
 330 PA R T I I I Public and Nonprofit Management
is “too hard to fire poor performers in the SES.”495
Although the president, in 2015, issued an executive
order that improved some aspects of the SES (e.g.,
streamlined hiring, raised pay), it did not address the
performance problem.
Federal supervisors receive little support from
above. Although two-fifths of them state that they
are ignorant of relevant laws,496 only about a fifth of
new supervisors receive training in managing poor
performers.497 A fifth say they dislike confronta-
tion,498 but just 22 percent of new supervisors are
trained in conflict management.499
All this leads to sinking supervisory morale.
The less support that supervisors receive from upper
management in dealing with incompetents, the more
likely that they will give up and leave the agency.500
Congress Intervenes (Temporarily): In the first
week of 2017, a new and conservative Congress
made it easier for Congress to cut the federal
workforce and its pay. It did so by reinstating the
“Holman Rule,” which permits the Committee on
Appropriations in the House of Representatives to
fire workers and lower salaries, without hearings or
due process, simply by inserting such a provision for
specific agencies that are listed in a spending bill.
The rule was first adopted in 1876, dropped between
1895 and 1911, and resurrected until 1983, when it
was again eliminated. The House stipulated that the
rule would be effective only for 2017, although it
could, of course, be extended.
Coping with State Incompetents State administra-
tors seem to be doing a better job of dealing with
incompetents than their federal counterparts. The
rate at which state employees are dismissed, while
still low at less than 2 percent,501 is nonetheless six
times greater than the percentage of federal employ-
ees who are separated for poor performance.502
Twenty-two percent of new hires in state govern-
ments are not retained during the probationary
period, a rate that is more than ten times that of the
federal one.503
Although a third of state agency heads think
that personnel rules make it difficult to discipline
or discharge poor performers,504 they nevertheless
terminate classified workers in a speedy twenty-nine
days, on average, for “performance issues,” and
an even briefer eighteen for “behavioral issues.”505
Even in highly unionized state governments, not
even 5 percent of administrators report that agree-
ments reached with state workers through collective
bargaining is a “serious impediment” to their mana-
gerial authority.506
Coping with Local Incompetents Local managers
have taken some care in laying a groundwork to
deal with nonperformers. Of the more than nine out
of ten cities that have collective bargaining agree-
ments, 91 percent insert a management rights clause
(some  four-fifths of which accord management the
right to take disciplinary action) in at least one of
their contracts.
Urban managers handle employee appeals with
considerable dispatch. In 53 percent of munici-
palities, appeals are resolved, on average, within a
month or less, and, in 91 percent, in three months
or fewer.507
Coping with Nonprofit Incompetents Nonprofit
employees estimate that 19 percent of their col-
leagues are not performing well. Fifty-two percent
perceive that their organization does “very” or
“somewhat” well in disciplining poor performers;
44 percent disagree.508 And some facts back up these
perceptions: although there is some evidence that
nonprofit CEOs do not hire development directors
well (26 percent of whom are “novices”), it is none-
theless notable that, “overall, 25% of executives
reported that their previous development director
was fired,” and 62 percent of them were fired for
“poor performance.”509
These are much more favorable percent-
ages than those of their federal and private-sector
counterparts, and may indicate that independent
organizations respond in more rational ways to
incompetent employees, perhaps because their pres-
ence places them at greater organizational risk; as
we explained in Chapter 4, nonprofit organizations
likely are more vulnerable to “dying” than are public
and private ones.
Some Helpful Hints on Dealing with Incompetents
Not all is lost in the battle against incompetents.
Research has found that, regardless of sector, some
underused techniques can be effective. These include:
■ Confront with clarity, empathy, and privacy.
When supervisors deal with a poor performer

quickly, directly, issue more warnings and
formal sanctions more frequently, fire (when
possible) promptly when warnings fail, and
do so while treating the underperformer with
dignity, their units’ productivity is higher than
those of supervisors who do not.510 Of course,
any conferences with poor performers should
be done in private.
■ Put all the rotten apples in the same barrel.
Not only does isolating them reduce their
ability to infect good apples, but a bunch of
egocentric, energetic, destructive, overbearing
people often can come up with excellent,
creative ideas.511
■ Make accountability human. When radiologists
saw photographs of patients whose X-rays
they were examining, their diagnostic accuracy
quintupled relative to when they did not see
their patients’ photographs.512
■ Let the sunshine in. Employees are less honest
and more selfish when they work in dark
recesses or wear sunglasses in their office.513
Light up the workplace and beware the
employee who sports shades in it.
Performance Management Challenge 3:
Performance and Pay
Our third and final component of performance
management is that of developing and implement-
ing incentives that encourage higher performance by
employees. Performance pay, also known as incentive
pay, performance-related pay, performance-based
pay, pay for performance, pay for contribution, or
pay for competence links pay and other rewards, in
whole or in part, to individual, group, and/or organ-
izational performance.
Although, as we have noted, many Americans
express little interest in working for government,
this alters when performance pay is introduced; 51
percent say that they would be “most interested in
exploring a job in government [because of] oppor-
tunities for growth and advancement based on per-
formance.”514
Despite popular enthusiasm, however, almost
all governments still retain a pair of public-pay
pillars, neither one of which is on speaking terms
with performance. One is the cost-of-living adjust-
ment, which is an automatic annual addition to
Managing Human Capital 331
(and, in theory but not in practice, deduction from)
the salaries of employees that reflect changes in their
purchasing power. The other is the step increase, or
a salary raise that is granted as a public employee
automatically ascends each “step” within each pay
grade; performance need be only satisfactory.
Paying Performers in Washington We noted
earlier that, for decades, more than 99 percent of
federal employees have been rated by their super-
visors as “Fully Successful” or higher, indicating
that the federal government has attempted paying
for performance for some time, but with not much
success.
An Erratic Rush Toward Performance Pay Congress
first addressed performance pay in 1923, when the
Classification Act established a “graphic rating
scale,” which supervisors used to unilaterally rate
employees’ performance and raise, lower, or retain
their pay as they saw fit. It was less than popular, and
the Civil Service Commission replaced the scale in
1935; Congress passed acts to deal with performance
pay in 1954 and 1962, only to be frustrated.
In 1978, Congress passed the Civil Service
Reform Act, which requires that administrators be
paid for performance, but it fails to specify how per-
formance pay should be implemented. Consequently,
Washington has struggled.
Congress mandated, in 1984, a “Performance
Management and Recognition System,” which estab-
lished a commonsensical pay-for-performance plan
to limit the proportions of employees who could be
included in each of the five performance-rating cat-
egories used at the time. The plan was soon derailed
by organized labor and Representatives of districts
close to Washington, where large numbers of federal
employees vote. In 1993, Congress let the sun set on
its failed system.
With the inauguration of George W. Bush, in
2001, performance pay was reenergized. Nevertheless,
all of Bush’s initiatives—performance pay systems in
the departments of Defense and Homeland Security
and a Human Capital Performance Fund—fizzled.
Bush’s successor, confronted by a historically deep
recession, put performance pay on the back burner
in favor of mandating pay caps.
After nearly three decades of federal flounder-
ing, involving a dozen demonstration projects, fewer
 332 PA R T I I I Public and Nonprofit Management
than 43,000 employees (obviously, considerably
less than 1 percent) are covered by formal pay-for-
performance systems.515
Performance Incentives and Promotions Congress
first addressed incentives for performance (that
is, awards for individual productivity that are not
incorporated into base pay) with the Incentive
Awards Act of 1954. Today, 62 percent of full-
time federal civilian employees receive cash merit
bonuses, amounting, on average, to 1.6 percent of
salary, or time-off awards for performance. In some
agencies, 90 percent receive such recognitions.516 (In
the typical workgroup, from only 15 to 20 percent
of workers are considered to be extraordinarily pro-
ductive by their co-workers.517) Seventy-one percent,
and growing, of the Senior Executive Service receives
bonuses for performance.518 In addition, 99.9
percent of federal workers get each and every step
increase that is available to them.519 Apparently, the
federal government has exceptional performers, or is
overly generous in recognizing performance, or just
gives out performance awards willy-nilly.
Promotion is also supposed to be a solid indi-
cator of performance. In 2009, Washington finally
terminated its arbitrary “time-in-grade” rule, first
imposed in 1952, which required employees to spend
at least one year in a grade before they could be pro-
moted, a policy that seemed at odds with promot-
ing (and paying) for performance. As with bonuses,
however, it should give us pause that promotions
are being awarded with record-breaking generos-
ity. In 2014, for the first time in the history of the
General Schedule, more than half of all the employ-
ees covered by it were in the General Schedule’s top
three grades (GS 12 through 15).520 Although it is
encouraging that at least one analysis found that the
major reason for the proportional expansion, from
1977 through 1993, of administrators who occupy
higher positions in the federal hierarchy was their
rise in quality, that finding may now be as inaccurate
as it is dated.521
Some Possible Performance Progress In 2016,
the Pentagon (which accounts for nearly two-fifths of
all non-postal, permanent civilian employees) began
phasing in its new Civilian Personnel Management
System, which weds quality step increases with per-
formance reviews, requires that supervisors hold
at least three documented performance discussions
with each employee per year, establishes deadlines
for improving the performance of underperformers,
and requires disciplinary action if improvement does
not take place.
Over time, Washington seems to have improved
its management of performance pay. Forty-one
percent of federal workers think that “awards in my
work unit depend on how well employees perform
their jobs”522 (34 percent do not think so523), and
this proportion represents more than a doubling
over thirty-three years.524 More than three-fifths
of federal managers, up from about half ten years
earlier, use “performance information” to reward
“employees I manage or supervise.”525
Most of these auguries are welcome. But there
remains some way to go.
Paying Performers at the Grass Roots Paying for
performance seems to be working at the grass roots.
A gratifying 55 percent of state and local officials
“strongly” (19 percent) or “somewhat” (36 percent)
agree that “promotions [and, inferentially, pay] in
my work unit are based on merit.”526
The leading hindrance in improving state agency
performance is that of “adequately rewarding out-
standing employees”; more than half of state agency
managers identify it as a “serious problem.”527
There has been some, if mixed, progress in rec-
tifying this problem. Although the proportion of
state employees who are eligible for cost-of-living
adjustments increased from 48 to 70 percent in just
three years, those who are eligible for step increases
declined from a fourth to a fifth over the same
period.528 “Pay-for-performance salary increases”
expanded their share of pay systems, however, and
“are now the second most available compensation
strategy” in the states, exceeded only by cost-of-
living adjustments.529
Surprisingly, “drastic levels of civil service
reform” in the states (detailed earlier) “signifi-
cantly and positively influenced the effectiveness of
pay-for-performance,” and had little, if any, impact
on how employees perceived the fairness of perfor-
mance appraisal.530
Seven out of every ten local governments have
pay-for-performance plans.531 Close to half of the
largest counties pay for performance “very often”
(36 percent) or “often” (11 percent); only a fourth

never use performance pay.532 Sixty-two percent
of the 78 percent of top city and county managers
whose performance is reviewed report that their pay
is tied to performance.533
Should It Be Done? The Case to Countermand
Performance Pay Most analyses of paying-for-
performance in the public sector conclude that it
“consistently fails to deliver on its promise” of
improving individual and organizational perfor-
mance.534 “Traditional or alternative reward systems
should be used instead of pay-for-performance, which
can be counterproductive”535 as it “almost always
produces hidden costs,” among other deficiencies.536
That may not be the half of it: there is evidence
suggesting that performance pay actually correlates
with lower performance.
One of the “most interesting findings” in
one study “is that the ability to reward a good
manager . . . consistently lowers governmental per-
formance. The reasons for this finding are not alto-
gether clear, but it appears that differential pay for
public managers (and possibly other employees)
creates dissension and takes a heavy toll on gov-
ernmental performance—a finding that is consistent
with the public management literatures on public
service motivation and pay for performance but
which runs counter to conventional wisdom and
management practice.”537
Public employees seem to largely concur. Just
21 percent of federal workers agree that “pay
raises depend on how well employees perform their
jobs,”538 and 52 percent disagree.539 When we dig
a bit deeper, barely 26 percent of federal staffers
agree that “promotions in my work unit are based
on merit,” but a disconnected 47 percent of manag-
ers believe this to be the case—a stark difference of
21 percent, the largest such difference in the analy-
sis.540 When we move a bit further up the scale, 79
percent of SES members think that pay correlates
positively with performance, compared with less
than 30 percent of all other employees, a difference
of 39 percent—again, the largest such difference in
the analysis.541 Performance pay leads to lower job
satisfaction among federal employees,542 and those
few federal workers who favor performance pay
appear to be among the poorer performers. They are
“extrinsically motivated” (recall Chapter 3) and dis-
engaged from their jobs.543 So sheepish have federal
Managing Human Capital 333
administrators grown over performance pay’s diffi-
culties that they even refrain from uttering the term,
“merit pay.”544
State employees also exhibit considerable dis-
satisfaction with performance pay.545
At the local level, there appears to be mixed
support. Among top and upper city administrators,
“performance-related pay is associated with greater
job satisfaction, especially among employees who
possess stronger public service motives. . .. [although
it] may be particularly important to [those same]
employees who have lower levels of public service
motivation.”546
Can It Be Done? When public performance pay
falters, “inept” administrators are often blamed.
But the more culpable causes may well be stubborn,
perhaps immutable, institutional and cultural con-
straints that are unique to the public sector. These
include: squeezed budgets; stiff public resistance to
big bonuses for bureaucrats; and greater transpar-
ency in government547 (where, for example, salaries
usually are public knowledge, which may reduce
performance pay’s impact—one study found that
governmental “monetary incentives tend to have a
larger performance effect when they are secret rather
than disclosed,” and secret compensation is rare in
the public sector). Nonmonetary incentive pay, by
contrast, seems to be “less prone . . . to some of the
motivational drawbacks encountered when using
monetary incentives,” at least for those in the helping
public professions, such as nurses.548
If it is to be done, “the shift to pay for perfor-
mance,” to quote one understated assessment, “is
going to be difficult.”549
It’s All Relative Let us place this bleak portrait
into some perspective.
It is well worth keeping in mind that the private
sector wins no prizes in matching performance with
pay. An analysis of 137 empirical studies found
that more than 40 percent of the performance
pay  rewarded to corporate CEOs is the result of
their companies’ size (the bigger the company, the
bigger the percentage), “while firm performance
accounts  for less than 5%” of their presumed
“performance” pay.550
Similarly, nonprofit CEOs’ compensation is
far more a function of organizational size and the
 334 PA R T I I I Public and Nonprofit Management
amount of readily-available funds (the bigger the
organization and the greater the liquidity, the larger
the compensation) than of executive performance:
“While pay-for-performance is a factor in determin-
ing [these executives’] compensation, it is not prom-
inent.”551 Pay-for-performance works well, however,
for nonprofit fundraisers, where there is “a signifi-
cant and positive relationship between money raised
and compensation.”552
The Prospects of Performance
Management
Considering the looming impediments to imple-
menting effective public and nonprofit performance
management—i.e., inaccurate (or impossible) per-
formance appraisals, limited success in ridding
governments (especially the federal one) of incompe-
tents, and the passel of problems inherent in paying
for public performance—is there light at the end of
this gloomy tunnel?
Well, there are some weak-wattage glows. For
instance, more than nine out of ten top federal per-
sonnel executives think that their agencies do “a
good job of aligning organizational goals to individ-
ual performance” to a “moderate” (44 percent) or
“great or very great extent” (51 percent).553
There are, happily, additional reasons to hope.
Far-Reaching Rulings One is the stance of the
Supreme Court under Chief Justice John Roberts,
beginning with his appointment in 2005. A
review of the Roberts Court’s decisions in gov-
ernment-worker  cases concluded that they “more
narrowly define the constitutional rights of
public employees,” a trend that shows no sign of
abating.554 These decisions could, in theory, apply
to nonprofit employees as well. While we support
broadly defined constitutional rights for all, it is
nonetheless notable that the current Court favors,
in effect, the authority of government supervisors
over employees.
In terms of performance management, the
Court’s most notable—indeed, startlingly radical—
ruling is that of Engquist v. Oregon Department of
Agriculture, in which the Court held that, provided
discrimination played no part in an employee’s dis-
missal, the Constitution’s Fourteenth Amendment
(the Equal Protection Clause) does not prohibit a
state employee from being fired, even for “arbitrary,
vindictive, and malicious reasons,” because the gov-
ernment needs “broad discretion” to make “subjec-
tive” judgments about its workforce, judgments that
are based on factors which are not only difficult to
“quantify,” but even to “articulate.”
Engquist potentially provides the power to
erase a third of public administrators’ performance-
management problems—that of disciplining and
dismissing incompetent employees. The only down-
side is that it also can be used to dismiss excellent
employees.
Lessons Learned We have learned that some
organizational factors encourage, indirectly but
clearly, more effective performance management.
These include: employees who are engaged in their
jobs;555 organizational and managerial flexibility;556
high levels of trust and professionalism in the organ-
ization; and useful performance appraisals.557
More proactively, public and nonprofit
administrators also can act in ways that will result
in better performance management. These include
the following.558
■ Evaluate the effectiveness of the agency’s
current performance appraisal system.
■ Establish a separate budget for the
performance pay system.
■ Involve employees, including union officials, in
building a high performance organization and
in revising the pay system.
■ Assure that there is a “clear separation of
interests,” such as separate career paths,
“between politicians and senior civil
servants.”559
■ Communicate goals clearly.
■ Link individual objectives with organizational
goals.
■ Make sure that rewards are high and clearly
differentiated.
■ Link performance pay with additional
incentives, such as promotion.
■ Select supervisors who are flexible and who
will effectively manage performance.
■ Hold every supervisor accountable for effective
performance management.
■ Arrange so that the system can be reviewed
both internally and externally.

■ Provide supervisors with the training,
resources, and managerial support they need to
improve their employees’ performance.
■ Say “thank you” when it is warranted.
Between the potentially revolutionary Engquist
ruling and the slow but steady learning curve
about how to manage performance, the prospects
for improving at least some public and nonprofit
employees’ performance seem at least possible, and
even cautiously encouraging.
DEFYING DISCRIMINATION: THE
EXTENSION OF CIVIL RIGHTS
AND THE ENTRY OF AFFIRMATIVE
ACTION
A civil right is the assurance that the law is applied
equally to all in the protection of personal liberties
that belong to a person by dint of his or her status
as a resident of a particular society. Affirmative
action is the policy of proactively hiring and pro-
moting qualified members of disadvantaged groups,
and assuring the expansion of government contracts
which are signed with qualified businesses that are
owned by members of disadvantaged groups.
Compared with relatively passive civil rights,
affirmative action is aggressive and demands that
organizations demographically reflect the society
that they are in. Among other objectives, affirmative
action seeks to eliminate “glass ceilings” (organiza-
tion-wide limitations on advancement for certain
groups), “sticky floors” (jobs with limited potential
for promotion), and “glass walls” (fields that employ
few people from disadvantaged groups).
Also in contrast to civil rights, which come with
a logical body of law, affirmative action’s “various
laws and rules grew without a strong governmen-
tal or legal theory binding them coherently together.
Therefore, some of the laws are conflicting and con-
tradictory and exceedingly difficult to interpret.”560
For more than a half century, Washington has
extended civil rights legislation to, and formed and
implemented affirmative action policies for, specific
groups. These groups are, according to the federal
Equal Employment Opportunity Commission
(EEOC), protected classes, which include any person
covered by federal antidiscrimination legislation.
Managing Human Capital 335
We consider next how broadened civil rights
and affirmative action affect only the administration
of public and nonprofit organizations, so we shall
not be addressing some clearly important civil rights
legislation—e.g., the Voting Rights Act—which does
not directly alter organizational behavior.
Civil Rights for Protected Classes
Washington has defied discrimination by extending
civil rights.
Race, Religion, and National Origin In 1941,
President Franklin D. Roosevelt issued Executive
Order 8802, which barred discrimination on the
basis of race, religion, or national origin in industries
with federal contracts
The Elderly In 1967, Congress passed the Age
Discrimination in Employment Act. The act, as
amended in 1974 and 1981, prohibits compulsory
retirement in most jobs for reasons of age, and pro-
tects all workers from age discrimination who are
forty years old or older. It covers some 75 million
Americans, or about half of the nation’s labor pool.
The Disabled In 1990, Congress enacted the
Americans with Disabilities Act, which prohibits
discrimination against the mentally and physically
disabled in employment and accommodations, and
affects about 18 percent of the population. (The
federal government is a leader in this area; more
than 14 percent, and rapidly growing, of its civil-
ian employees are disabled.561) Although the act is
hailed as “one of the most sweeping nondiscrimina-
tion pieces of legislation since the Civil Rights Act of
1964,”562 disabled employees have won less than a
tenth of the suits brought under its auspices.563
Civil Rights for Sexual Minorities
Because Congress has not extended antidiscrimi-
nation legislation to the lesbian, gay, bisexual, or
transsexual (LGBT) community, EEOC does not list
it as a protected class; nevertheless, governments at
all levels have taken steps to shield this group from
discrimination.
These steps seem needed, as there are some
decidedly odd patterns of pay in all sectors in this
 336 PA R T I I I Public and Nonprofit Management
area. Gay men (who earn about 15 percent less than
heterosexual men) may be the victims of negative
discrimination relative to heterosexual men in the
workplace, but lesbian women (who earn from a
fifth to a third more than heterosexual women) may
be the beneficiaries of positive discrimination rela-
tive to heterosexual women.564
From 5 to 8 percent of college-degreed gay men
and lesbians work in federal, state, and local govern-
ments, and 16 percent and 22 percent, respectively,
of these groups work in the independent sector.565
(It follows that LGBT people are more likely than
heterosexuals to hold altruistic work values.566)
Until 1975, federal agencies were required to
consider sexual orientation in assessing an applicant
for employment. Executive Order 13087, issued in
1998, protected federal employees from discrimina-
tion on the basis of their sexual orientation. In 2009,
federal benefits were extended to same-sex partners,
and, in 2013, to same-sex spouses. In 2014, the
president issued an executive order banning federal
contractors from discriminating against their LGBT
employees. In all, “more than 100 executive actions
and regulatory changes” have been issued to improve
the lives of LGBT people.567
These executive actions are doubtless good,
but fall short of legislative actions, which would be
better. “Surprisingly,” in those twenty-one states and
the District of Columbia that had banned same-sex
partners by statute, rather than by executive order,
as was done by sixteen states, gay and lesbian rep-
resentation in state and local governments was “sig-
nificantly higher.”568 In 2013, the Supreme Court
decided two cases that extended same-sex spousal
benefits to workers in all sectors.569
Nearly 3 percent of federal employees self-
identify as LGBT,570 and they appear to be rep-
resented in “the supervisory, managerial, and
executive ranks in the same proportion as they are
in the overall Federal workforce.”571 Extraordinarily
few federal employees—about 1 percent, the lowest
rate of any discrimination category—allege that
they were victims of discrimination because of their
sexual orientation,572 although 3 percent of feds
state that they have witnessed discrimination based
on sexual orientation.573
As in the federal government, “relatively few”
formal sexual-orientation charges of discrimina-
tion followed the introduction of applicable civil
rights policies in the states.574 Transgendered people,
however, may be targets of state discrimination.
“At least” 225 local governments prohibit employ-
ment discrimination on the basis of gender identity,
but three states—Arkansas, North Carolina, and
Tennessee—have enacted laws that overrule their
localities by stating that “sex” must be defined as
that which appears on one’s birth certificate.575
Affirmative Action for Protected Classes
The acknowledged originator and archangel of
affirmative action is President Lyndon Baines
Johnson.
Race, Religion, and National Origin In 1965,
Johnson signed Executive Order 11246, which
directed all organizations that had federal contracts
to take “affirmative action” (marking the debut
of this phrase) to provide equality of opportunity,
irrespective of race, religion, or national origin. The
order remains Washington’s first, and still central,
affirmative action policy.
Women In 1967, Johnson issued Executive Order
11375, which added women to the ranks of those
who are covered by Executive Order 11246.
Vietnam Era Veterans In 1974, Congress enacted
the Vietnam Era Veterans’ Readjustment Assistance
Act, which requires federal contractors to apply
affirmative action in the hiring and advancement of
more than eight million veterans of the Vietnam War.
Minority- and Women-Owned Businesses In 1977,
Congress passed the Public Works Employment Act,
which initiated set-side programs, or policies that
require governments to reserve (or “set aside”) a
portion of their contracts for businesses owned by
minorities or women. These companies typically
account for about a tenth of all federal contract
dollars,576 and uncounted slices of state and local
contracts.
The Supreme Court, in 1980, ruled that set-
asides were constitutional,577 but later partially
backtracked. Adarand Constructors, Inc. v. Peña,
settled in 1996, pertained to the federal government,
holding that, in order to be constitutional, set-asides
must be “narrowly tailored” to accommodate a

“compelling” public interest, and were subject to
“strict scrutiny” by the judiciary.
In response to Adarand, the president suspended
those set-asides that set numerical goals, cutting at
least $1 billion in set-aside contracts.578 A decade fol-
lowing Adarand, applications to a large federal fund
submitted by white-owned organizations were three
times more successful, and were awarded almost four
times more dollars, than were their minority-owned
counterparts.579 Similarly, women-owned businesses
win 21 percent fewer federal contracts than do men-
owned businesses, even though the characteristics of
the businesses owned by both genders are virtually
identical.580
Earlier, the Court had issued a similar decision,
in 1989, that targeted subnational governments. City
of Richmond v. J.A. Croson Co. forced state and
local governments to undertake disparity studies, or
analyses that demonstrate whether or not set-asides
are needed to counter discrimination. “In nearly all
of the disparity studies” in one large sample, “there
was little serious evaluation” and virtually all these
jurisdictions blithely were continuing their set-aside
programs.581 In supposedly complying with Croson,
the grass-roots governments happily talked the talk,
but, in contrast to Washington, discreetly declined to
walk the walk.
Federal Enforcement of Affirmative Action
All three branches of the federal government have
affirmatively enforced affirmative action.
Congressional Enforcement The critical law in
the enforcement of affirmative action is the Equal
Employment Opportunity Act of 1972. The act
established the EEOC, which investigates charges of
employment discrimination in all sectors, and may
fine employers if it finds discrimination.
Executive Enforcement The EEOC is the executive
branch’s chief enforcer, but it is far from the only one.
The Department of Labor’s Order Number 4 of
1971 (now Revised Order Number 4, issued in 1978)
requires federal contractors to establish plans  and
timetables for achieving specific affirmative-action
goals.
For organizations without federal contracts,
regulatory agencies enforce affirmative action, which
Managing Human Capital 337
render federal enforcement virtually universal. In
1990, the Supreme Court upheld that the Federal
Communications Commission may take race into
account in distributing broadcast licenses.582
Judicial Enforcement Perhaps the judiciary’s most
notable innovation in enforcement is that of “dis-
parate impact,” a doctrine first enunciated by the
Supreme Court in 1971, in Griggs v. Duke Power
Company; overturned in 1989 by the Court in
Ward’s Cove Packing Co. v. Antonio; and reinstated
by Congress in the Civil Rights Act of 1991.
Disparate, or adverse, impact holds that employ-
ees who allege discrimination in the workplace do not
have to prove that their employer deliberately tried
to discriminate against them, but only that they have
been disproportionately harmed by workplace pol-
icies. Disparate impact was the judiciary’s basis for
disqualifying, in 1981, the universal test for assessing
federal job applicants that had been used since 1955,
noted earlier. Over the years, the Supreme Court has
cited adverse impact in deciding cases that involved
gender, religion, race, national origin, and age.
In 2009, in Ricci v. DeStefano, the Court held
that governments may not use disparate impact as
a rationale to dismiss valid test results, and thereby
disqualify employees who passed the test from being
promoted, merely because they feared being sued by
protected test-takers who failed the test.
Retaliation Enforcement EEOC also investigates
charges of employer retaliation against those
employees who lodged discrimination complaints,
and it may fine employers for retaliating. In 2008,
the Supreme Court supported these practices in cases
involving racial583 and age584 discrimination.
Complaints of retaliation have more than
doubled over fourteen years, and constitute almost
half of all allegations of discrimination, the largest
category by far,585 perhaps because “it is often easier
for employees to demonstrate that they were retali-
ated against than that they were victims of discrimi-
nation in the first place.”586
Affirmative Action and the Grass-Roots
Governments
Understandably, some state and local governments,
perhaps most, were initially resistant to affirmative
 338 PA R T I I I Public and Nonprofit Management
action, but top local administrators wrung a change
in attitude. By the mid-1970s, more than four-fifths
of all municipal affirmative action plans had been
initiated by city managers, who were “far and away
the principal initiators of affirmative action in their
governments”; about half of them had developed
these plans with no support whatsoever from their
own city councils.587
By the mid-1980s, affirmative action had seeped
into grass-roots bureaucracies, with only 6 percent
of municipal personnel directors opposed to quotas
for minorities and women.588 By the end of the
decade, over two-thirds of cities and counties had
government-wide affirmative action policies, up
from about half fifteen years earlier.589
“Reverse Discrimination” and the Quota
Question
How is success measured in affirmative action? Can
an employer succeed by merely promising (earnestly,
of course) to review the job applications of a few
more people in the protected classes? Or does
success mandate that all fit white men under forty
years of age be fired and replaced by people from the
protected classes?
These queries bring us quickly to the ques-
tion of quotas, or the hiring and promoting of spe-
cific numbers of applicants from protected classes.
Usually, these numbers reflect each protected class’s
percentage in the general population or labor force.
The rub is that qualified applicants who are not
from protected classes might not be hired. When
this occurs, the charge of “reverse discrimination” is
occasionally leveled.
Two Defining Decisions The Supreme Court
first addressed reverse discrimination, in 1978, in
the famous case of Regents of the University of
California v. Bakke, and, in the following year, heard
the “blue-collar Bakke” case, United Steel Workers
v. Weber.
Both cases involved quotas for minorities,
and both Bakke and Weber, who were white men,
alleged  that they had been denied their rights
because of those quotas. In both cases, the Court
held that affirmative action was constitutional and
legal, and that race could be a factor (in Bakke,
race could even be a “plus”) in making decisions
about  college admissions and corporate advance-
ment policies.
Two Definitive Decisions For the next quarter-
century, the judiciary hemmed and hawed, churn-
ing out a series of largely ambivalent rulings that
wobbled either for diversity or ignored it. In 2003,
the Supreme Court decided a pair of cases, both
brought by the University of Michigan, which clar-
ified its views.
In Gratz v. Bollinger and Grutter v. Bollinger,
the Court ruled that attaining diversity is a con-
stitutionally defensible goal, but, to pass constitu-
tional  muster, the diversity-relevant components
of admissions policies should be largely free of
numbers, characterized by vaguely expressed goals,
and imbued with human judgment. The university
subsequently tried many new programs meant to
increase diversity, but, thirteen years later, none
had  “resulted in as many students of color” as
before the rulings.590 The Court, in 2013, upheld
this “strict scrutiny” interpretation of affirma-
tive action in college admissions, but, in 2016, re-
affirmed that considering race in admissions was a
legitimate means of assuring a diverse student body,
which it deemed to be a desirable value in its own
right.591
The “Quota Bill” of 1991 We cannot leave the
subject of quotas without noting that imposing them
can sometimes be perversely counterproductive. In
1991, Congress passed a Civil Rights Act that made
it much more difficult—and costly—for employ-
ers to fire workers in protected classes. Opponents
derided the act as a “quota bill.”
Employers soon circumvented the act by aban-
doning their standard practice of firing an unsatis-
factory employee outright “for cause” (a procedure
that accounts for about a fifth of all workers who
are let go), and relying instead on laying off groups
of workers (including protected workers whom
employers actually wanted to fire for cause) when
business was down. The practice made discrimina-
tion very hard to prove.
African-American men are now fired for cause
much less frequently, but this reduction has been
cancelled out by their far more frequent layoffs; for
white men, the ratio of firings to layoffs has stayed
the same.592

Tests: The Validation Vexation
Quotas are closely related with how applicants
are tested for hiring and promotion; public admin-
istrators consistently identify “test results” as the
single greatest disqualifier of minorities seeking
employment.593
For nearly fifty years, the courts have been inter-
vening in how governments test their job applicants.
The crux of their intervention is test validity, or the
level of confidence that employers can reasonably
have in the power of an examination to predict how
well, or how badly, an applicant will fare in a job.
The courts long have held that such tests must be
valid.
The judiciary has focused on two types of test
validity: the validity of tests in assessing an appli-
cant’s relevant skills and qualifications to succeed in
a specific job (which, as a practical matter, are useful
mostly at the lower levels of organizational hierar-
chies), and their validity in measuring an applicant’s
cognitive ability, or his or her thinking capacity, e.g.,
reasoning and problem-solving abilities.
Validating Tests for Job Skills In 1971, the Supreme
Court ruled in the landmark case, Griggs v. Duke
Power Co., that to hire people on the basis of qual-
ifications which could not be shown to be relevant
to the knowledge and skills that are actually needed
to do the job in question is discriminatory under the
Civil Rights Act of 1964. To their credit, the grass-
roots governments (where the heart of the public
part of this problem lay) acted quickly. Immediately
following Griggs, the proportion of state and local
governments that validated these tests for job rele-
vance burgeoned from 54 percent594 to 87 percent595
in only five years.
Validating Tests for Cognitive Ability Cognitive-
ability tests have the greatest validity for managerial
positions. They have the lowest costs, can be used by
all entry levels, and are “likely the best single predic-
tor of job performance.”596
But there are problems. African-Americans and
Hispanic-Americans usually score lower than whites
on these tests,597 and women score slightly lower
than men.598
Why is this? Researchers and justices attribute
these disparities to cultural bias, or the tendency of
Managing Human Capital 339
test writers to unwittingly slant their tests’ ques-
tions in ways that reflect the majority culture, and
thereby handicap those test takers who were reared
in minority cultures. The Supreme Court ruled, in
1975, that culturally-biased tests are illegal, even
when the employer is not discriminating intention-
ally,599 and added, in 1982, that even when no dis-
crimination is present, the use of culturally-biased
tests is still illegal!600
A Missing and Misperceived “Problem” As a result
of all this, many managers in all sectors perceived
themselves to be perched on the ticklish horns of an
exquisite dilemma. If they used a cognitive-ability
test to hire and promote, they not only lessened the
chances of adding more minorities and women to
their organizations, but also risked a judgment of
adverse impact. If they used other, less predictive and
valid tests, they may add more minorities and women
who might contribute less to their organizations.
These perceptions were and are inaccurate. The
courts have held, quite consistently, that if a public
agency uses a cognitive-ability test that has been
developed and validated, preferably by experts using
professional standards, and if the cutoff scores are
properly set, then the test is legal.601
Skittish Governments These courtly realities took
decades to develop into a solid body of case law,
during which time governments were understanda-
bly skittish.
As we described earlier, the feds were feck-
less. Thirty-four years passed by without a useable
cognitive-ability test before OPM finally announced,
in 2015, USA Hire, the competitive entry examination
that meets the standards of a valid cognitive-ability
test. Developed by personnel psychologists, general
aptitude is once again assessed, but also other attrib-
utes, such the ability to work in teams.
State and local governments were also at sea,
but largely responded better than the feds. In the
1980s, many of these governments introduced race
norming, or adding points to a test score if the test
taker is from a minority group. The logic, which
seemed quite justifiable at the time, was that if the
Supreme Court could declare veterans’ preference, or
the policy of adding points to veterans’ test scores,
to be constitutional, which the Court did in 1979,602
then why not do the same for minorities?
 340 PA R T I I I Public and Nonprofit Management
Congress intervened, and confused the issue. In
1991, it enacted a Civil Rights Act which banned
race norming, but nevertheless still required pref-
erential treatment of applicants from protected
classes.
In 2001, the Seventh Circuit Court of Appeals
reconciled some of the act’s incongruities by ruling
that race norming is illegal, but banding is not.603
Banding is the consolidation of test scores, such
as replacing a specific numeric score (e.g., “90”)
with, say, a letter score (e.g., “A,” which includes the
numeric scores of 90 through 100). Banding solves
a lot of problems because numeric scores can be so
close as to become meaningless. The Supreme Court
once heard a case in which a local agency promoted
a woman over a man, who then sued despite the fact
that his test score was only two points (out of 100)
higher than hers, and the position’s 238 occupants
were entirely male. (The Court ruled in favor of the
woman.)604
The cobwebs of federal, state, and local
cognitive-ability testing have been largely cleared.
Nearly a fifth of all cities and counties use
cognitive-ability tests,605 and 95 percent of large
cities use them in hiring.606
Women’s Work?
Women comprise half of the world’s population, but
contribute just 37 percent to the global gross domes-
tic product (GDP). Should a country simply match
the country that was merely “best in region” in
terms of fairness for women in the workplace, then
the worldwide GDP would increase by a remark-
able 26 percent over ten years.607 The GDP of the
United States could grow by an equally remarkable
25 percent over ten years, if women attained “full
gender equality.”608 It is, therefore, all the more trou-
bling that working women are held back, even in
countries that are relatively enlightened, such as the
United States. Even in the American public work-
place, however, women hoe a rocky row. A national
survey of 1,600 of these employees “from different
levels of the public sector,” found that women are
more likely than men to be single or divorced, have
fewer or no children, and have more onerous house-
hold responsibilities.609
Women who work in government also are paid
less than men, apparently because, in part, women
are granted less authority than their male colleagues,
which, in turn, lowers their pay relative to men.610
The deprivations do not end there. “A primary
factor” in those government pension plans that are
among the most “significantly” underfunded (recall
Chapter 8) is the presence of “more female active
participants in the plan, suggesting another risk to
women’s retirement income.”611
As a consequence of these and other inequities,
most of which occur in all sectors, three policies have
emerged that are designed to curb sexual discrimina-
tion in employment. Each has a special relevance for
women, though none is the sole preserve of women.
The Bona Fide Occupational Qualification Until
the 1960s, there were numerous state protective
labor laws which prohibited women from entering
jobs that were deemed to be too strenuous for them.
Congress eventually intervened. The Equal Pay
Act of 1963 banned several artificial job qualifi-
cations, and the Civil Rights Act of 1964 required
that  employers specify only a “bona fide occu-
pational qualification reasonably necessary” to
accomplish a task.
Both laws were challenged in the courts, but
to little avail. The Supreme Court ruled, in 1968,
that protective labor laws could not be used to deny
women jobs or promotions,612 and the Fifth Circuit
Court of Appeals held, in 1969, that, in judging the
validity of a job qualification, the burden of proof
lies with the employer.613
The Curious Question of Comparable Worth
Comparable worth means that employees in one
position classification should be paid the same as
employees performing comparable tasks in another
classification, even though the tasks themselves may
be quite different. As a practical matter, comparable
worth works to raise the salaries of employees in
position classifications dominated by women.
Comparable worth assumes that the social
value of occupations can be assessed and compared,
and this can be a tricky business. For instance, do
the musicians in a city’s symphony orchestra, when
compared with the plumbers in its municipal water-
works, endure comparable stress, have comparable
responsibilities and importance, and contribute com-
parable levels of knowledge and skills to the city?
In the only major judicial decision on this question,

the Ninth Circuit Court of Appeals ruled, in 1985,
probably not, deciding that Washington State was
not obliged to award back pay to 15,500 employees
in position classifications dominated by women.614
Nevertheless, perhaps because popular opinion
favors comparable worth by as much as three to
one,615 governments have been responsive. Twenty
states have raised pay for women, eight states have
enacted laws establishing the principle of com-
parable worth for all state employees, and only
five states have failed to undertake some sort of
comparable-worth activity.616
Ten percent of cities and 12 percent of counties
have adopted comparable worth.617
Implementing comparable worth is, paradox-
ically, both economical and difficult. In the eight
states that passed comparable worth laws, the aggre-
gate gender pay gap ranged from 14 to 31 percent
in state agencies, but closing these gaps required
relatively modest expenditures that ranged from
1 to 4 percent of total state payrolls. Downsides,
however, were evident: pay compression intensified,
with some employees being paid more than their
own supervisors; state salaries declined relative to
private-sector salaries; and men left their state jobs
at greater rates.618
Today, comparable worth, at least in the states,
essentially has been achieved. In all the states, male
state employees have suffered an “average wage
penalty,” and female workers enjoy an “average
wage premium,” relative to the private sector.619
The New Meaning of Sex at Work Sexual har-
assment is a comment or act by a co-worker in the
workplace, or a workplace environment, that is inter-
preted by a worker to have sexual overtones, and
causes discomfort in, or is offensive to, the worker.
Who Harasses and Where? More than two-fifths
of women and nearly a fifth of men who work in
federal agencies report incidents of “unwanted
sexual attention” that occurred over the preceding
two years. Perspective, of course, is pertinent, and
it appears that sexual harassment in government
does not attain its levels in the private sector. Nearly
two-thirds of women executives in industry report
that they have been sexually harassed—a third more
than in government. Twenty-two percent of federal
workers who have worked outside the government
Managing Human Capital 341
believe that there was more sexual harassment in
their former workplaces, compared with 7 percent
who think there was less.620
Harassing Harassment Most private firms, the
federal government, at least two-thirds of the states
(only eight states clearly fail to address this issue),621
and almost nine out of ten local governments622 have
policies prohibiting sexual harassment.
These policies appear to have had a salutary
effect. Although sexual harassment in the general
population has stayed steady over the years, with
nine-tenths of 1 percent of American adults stating
that they have been sexually harassed (almost evenly
divided between men and women),623 sexual harass-
ment charges (which constitute 11 percent of all dis-
crimination charges received annually) declined by
40 percent over fourteen years in all sectors, even
as the totality of all charges rose by 16 percent.624 It
appears that more public employees than ever—for
example, 93 percent of federal male employees, up
from 35 percent fourteen years earlier—understand
what sexual harassment is.625
The Court Weighs In In 1986, the Supreme Court
heard its first sexual harassment case, and decided
that the Civil Rights Act of 1964 covered sexual
harassment, in effect declaring it to be a form of dis-
crimination.626 Victims of such discrimination, the
Court ruled in 1992, could sue their harassers for
damages.627
In the following year, the justices agreed unani-
mously that women are different from men. The Court
held that sexual remarks that may not be offensive
to men could offend a “reasonable woman,” thereby
creating a “hostile environment” in the workplace.
Such a woman could sue for relief “before the harass-
ing conduct leads to a nervous breakdown.”628
In 1998, the Court decided three cases that did
much to clarify the legalities of sexual harassment.
In one, the justices unanimously found that harass-
ment could occur in same-sex situations.629 In two
overlapping cases, they held that even if an employer
was not aware of a supervisor harassing a subordi-
nate, the employer was still liable for damages if the
subordinate had suffered adverse action, such as a
demotion, but if that subordinate had ignored valid
complaint procedures, then he or she could expect
little judicial protection.630
 342 PA R T I I I Public and Nonprofit Management
What a Strange Trip It’s Been: The
Unique Experiences of Minority
and Women Public Administrators
The work experiences of minority and female public
administrators differ from those of majority and
male public administrators.
Public Administrators of Color: Mixed Perceptions,
Mixed Evidence Minority employees in the federal
government think that their lot is improving. Asian-
Americans display the highest job satisfaction;
whites, blacks, and Hispanics are closely aligned
on this dimension.631 The percentage of African-
American workers who perceive that “they had been
denied a job, promotion or pay increase” because
of their race declined by three-fourths over fifteen
years, and fell by three-fifths for Hispanic employees
over the same period; currently, 9 percent of each
group perceives discrimination.632
In the states, views may differ. African-American
public administrators report “that they experience
career-impeding supervisory behaviors at a greater
rate than their white colleagues.”633
The evidence supporting these perceptions is
mixed. Federal administrators and professionals
of color, for instance, have lower pay grades, “even
after controlling for education, experience, and
other advancement-related factors,” and “receive,
on average, lower performance ratings”; yet they
still have “generally comparable” promotion
rates.634 We take some umbrage with the final point;
as we detail later, their advancement rates clearly
have fared a lot better over the years than being just
“generally comparable” with whites.635 Moreover,
64 percent of federal employees state that the “fear
of being accused of discrimination . . . prevent[s]
the firing of poor performers.”636 Yet, it cannot be
denied that federal managers of color face admin-
istrative challenges that their white counterparts
do not: the higher the proportion of “racial/ethnic
minorities” in an agency’s managerial positions, for
example, the lower all of its employees’ job satis-
faction.637
An examination of more than 248,000 per-
formance appraisals of state employees found “no
support” for the argument that management’s use
of performance-rating instruments resulted in an
adverse impact on minority employees.638
Regardless of how accurate or inaccurate
minorities’ concerns may be, however, their concerns
still matter. When government employees think that
they have been treated unfairly they appeal more
decisions, file more discrimination and safety com-
plaints, and take more sick leave than do workers
who think that they are treated fairly.639 These
and similar behaviors occur in even the Defense
Department when its employees perceive unfair-
ness.640 The Pentagon, of course, is one of the most
“closed-model” public organizations in the real
world, and which, in theory, should have employees
who are indifferent to fairness.
Regrettably, changing minorities’ perceptions
of discrimination for the better is easier said than
done. Even when minority and white employees
have equal levels of understanding about the dynam-
ics of their workplaces, minority anxiety does not
lower, nor does job satisfaction rise; by contrast,
when whites better understand these dynamics, their
anxiety lessens and their satisfaction increases.641
Women Public Administrators: Competent and
Confident. And Better? Men and women are
becoming more accepting of working for women,
but still have some distance to travel. In 1953, 66
percent of Americans said that they would rather
work for a man, and 5 percent preferred working
for a woman. Today, precisely half as many—33
percent—would prefer a male boss (26 percent of
men and 39 percent of women), and four times
as many—20 percent—would rather work for a
female boss (14 percent of men and 25 percent of
women).642
Women in Government Governments hire women
in greater proportions than does the private sector,
and the gap is growing over time. The federal gov-
ernment is a bit of a disappointment in this regard,
however, where the percentage of female employees
matches that of the private sector; both percentages
round out at 42 percent. By contrast, women consti-
tute 58 percent each of the employees in both state
and local governments, or over a fourth more than
in federal agencies and private businesses.643
Women in the federal employ offer “more pos-
itive views about their jobs than men.”644 Thirteen
percent of female federal employees perceive that
“they had been denied a job, promotion or pay

increase” because of their gender, a decline of more
than two-fifths over fifteen years,645 and are only
marginally more likely than men to think that they
were denied a job benefit due to their gender.646
State governments hire women more rapidly
than any other employer. Over thirty-seven years,
the states increased their proportion of female
employees by nearly 14 percent. For the federal gov-
ernment, the figure was almost 11 percent; for local
governments and the private sector, the rounded
figure is 9 percent each.647
Managerial Differences between Women and
Men There is now a large body of research that
compares men and women on characteristics that
are pertinent to organizations in all sectors.
Women most surpass men in their service orien-
tation (of considerable consequence to governments
and nonprofits) and they fall most behind men in
their emotional self-control and self-confidence.648
Women remember better than men,649 and co-
operate more with colleagues than men, who usually
prefer to work alone.650 Women’s cooperative char-
acter works well for organizations because the more
women who are in a group, the more collectively
intelligent the group is, largely because women are
more socially perceptive than men.651 Female leaders
are more participative, democratic, and egalitarian
than their male counterparts, who are more auto-
cratic, directive, and more desirous of personal
power and achievement.652 Women leaders also
have a more transformative leadership style than do
leaders who are men.653
“Benevolent” male managers are viewed more
positively by employees than are benevolent female
managers, and benevolent men induce better per-
formance. “Authoritarian” female managers create
more hostility among subordinates than do author-
itarian male managers, and authoritarian women
lower performance. Hence, “a useful strategy is to
adopt behaviors that are perceived as a positive devi-
ation from their gender role,” such as men behaving
benevolently.654
Gender Similarities and Differences among Public
Administrators Of course, most of these gender dis-
tinctions are also found among public administrators,
but women and men who work in government also
share a number of the same characteristics. Women
Managing Human Capital 343
public administrators have personal values that, as
“numerous studies” suggest, share “a significant sim-
ilarity” with those of their male counterparts;655 are
as committed to the public service as men;656 “have
almost identical responsibilities” as men;657 prioritize
tasks the same as men;658 have political and profes-
sional characteristics that are “indistinguishable”
from men’s;659 and, in marked contrast to the generic
finding in the broader literature, which concludes
that women are less organizationally confident than
men, women are “as confident as men in their ability
to supervise their workforce.”660
Where male and female public administrators
part ways is in the kinds of skills and tasks at which
they are more effective. Women public administra-
tors surpass their male counterparts in listening,
communicating,661 compassion, and their attrac-
tion to policymaking.662 They are less experienced
professionally (they are also younger)663 and spend
less time on “internal management” than men.664
Women are less effective than men in networking
“the external environment” of their agencies,665
an activity that produces more positive organiza-
tional outcomes for men than for women. By con-
trast, “networking with peers is more beneficial for
women” as individuals than for men who work in
government.666
Female Public Administrators Deliver But here
is the bottom line: despite some evidence that men
in the public sector dislike being supervised by
women,667 female public administrators deliver, and
perhaps more so than male ones. The more women
in a nation’s labor force and in its legislature, the
lower the level of corruption; this finding is “large
in magnitude, highly significant and robust.”668 The
more women who work directly with citizens in
an agency, the higher the agency’s performance.669
Women public administrators “consistently get
better performance” than men from the boards and
councils to which they report.670 Women workers
are more likely than men to report problems that
higher management should know about.671 And
federal female administrators “typically” receive
higher performance ratings than men in the same
grades and in the same agencies.672
Should we be surprised that, “most interest-
ingly,” government’s top women executives “rate
themselves as relatively more influential than do
 344 PA R T I I I Public and Nonprofit Management
their male colleagues”?673 Perhaps it is worth noting
in this regard that a high level of testosterone “does
not predict [a person’s] status within the group.”674
Backlash!
Although Americans, regardless of ethnicity, are
growing more accepting of one another,675 there has
been some backlash over affirmative action.
Affirmative Action’s Odder Outcomes No doubt,
some odd interpretations—odd, at least, by tradi-
tional criteria—of how affirmative action should
be applied have fueled some disaffection with it
among whites and minorities alike. Pasadena, for
instance, grants preferences to Armenian-Americans
seeking city contracts; Cincinnati favors citizens of
“Appalachian regional origin”; and Massachusetts
protects Portuguese-Americans.676
Other examples include the apparently unpleas-
ant couple who sued their local chapter of Mothers
Against Drunk Driving on the grounds that they had
been barred from joining due to the chapter’s “per-
sonality bias.” Or the lawyer who won in court the
right of “nerds” to gain entry to a nightclub.677 The
nasty and nerdy are protected classes?
White cynicism also plays a part, as exemplified
by the fifty-three San Francisco police officers who
claimed that they were Native Americans and were
duly hauled before the EEOC, which reclassified
all of them as white. Or Los Angeles, which estab-
lished “ethnic review committees” that investigated
“ethnic discrepancies” among teachers.678 Shades of
the Third Reich, which also investigated ethnic dis-
crepancies.
Affirmative Action as Stigma? These and similar
episodes have, in the view of some, delegitimized
affirmative action. Twenty-seven percent of the public
thinks that affirmative action stigmatizes minorities,
and far more African-Americans (37 percent) than
whites (26 percent) believe this to be true.679
Two extensive experiments support this view.
People were given specially-created files that showed
identical performance levels among women manag-
ers, and were asked to rank them and award salary
increases. When certain managers were identified
as “affirmative action hires,” they were ranked
as less competent and granted smaller increases.
Remarkably, even when a second set of files demon-
strated clearly superior performance by “affirmative
action hires,” they still received lower rankings.680
Public Opinions about Affirmative Action In light
of these downsides in affirmative action, white and
black opinions about it are somewhat surprising.
White support for affirmative action has grown
significantly since the mid-1990s,681 an ironic trend
in light of the proportion of African-Americans who
think that “Washington should make every effort to
improve the social and economic position of blacks”
declined by roughly half from 1970 to 1992, and has
hovered at around two-fifths ever since.682
Still, there is controversy. Eleven percent of
Americans say that they have been hurt, and only
4 percent say that they have been helped, by affirm-
ative action.683 White men have long harbored the
deepest reservations. (Researchers have found that
white males protect their “self-esteem [and] sense
of self-competence” by choosing to believe that
“affirmative action is a quota-based policy.”684)
Although a solid majority of white men currently
support affirmative action,685 17 percent (compared
with 9 percent of white women) say that they have
been hurt by the policy. On this question, political
ideology plays little, if any, part, and the responses
of conservative and liberal white people are virtually
identical.686
A Grass-Roots Rebellion? In 1996, California’s
voters initiated the first state-wide rebellion over
affirmative action, and approved Proposition 209,
which prohibits the state’s government from granting
race- and gender-based preferences in hiring, promot-
ing, contracting, and college admissions. From 1998
through 2012, voters in Arizona, Florida, Michigan,
Nebraska, New Hampshire, Oklahoma, Texas, and
Washington enacted, by solid majorities, clones of
Proposition 209; in 2008, Colorado’s electorate
defeated that state’s version by a hair’s-breadth’s
margin of 1.6 percent.
These referenda have consequences. “Employ-
ment among women and minorities dropped sharply”
following Proposition 209’s passage, suggesting
“that affirmative action programs in California
either had been inefficient . . . or had been effective
while in place but had failed to create lasting change
in employers’ prejudicial attitudes.”687 Following

the passage of anti-affirmative action referenda, top
state universities in California, Florida, Michigan,
and Texas saw “a significant drop in the enrollment
of black and Hispanic students.”688
In 2014, in Schuette v. Coalition to Defend
Affirmative Action, the Supreme Court upheld
Michigan’s referendum to ban affirmative action
in college admissions, effectively upholding similar
bans in the eight other states that had them and
leaving affirmative action’s future to state voters.
Is Affirmative Action a Defensible Policy?
As the backlash indicates, affirmative action is a con-
troversial policy. Why?
Is Affirmative Action Un-American? Affirmative
action is sometimes accused of violating the
American tradition of equality of opportunity by
singling out certain groups for advantageous treat-
ment. But history suggests otherwise. Veterans’ pref-
erence (which, ironically, seems to result in the feds
hiring fewer women689), need-based student loans
and scholarships, and small business set-asides,
enacted by Congress twenty-four years before it
enacted minority business set-asides, are examples of
policies that favor certain groups precisely because
those groups are disadvantaged. Whether affirmative
action is a good or bad policy, it remains a wholly
American one.
The People versus Person Problem A deeper cri-
tique holds that affirmative action perpetrates its
own injustices by granting advantages to already-
advantaged individuals in disadvantaged groups
(e.g., wealthy African-Americans), and denying
advantages to disadvantaged persons who are not
in disadvantaged groups (e.g., impoverished white
men). Would affirmative action’s elimination result
in greater justice?
Our answer is no. The contention that, because
some undeserving people may benefit from affirm-
ative action, we should close it down is a classic
expression of the odd rationale that, because a good
policy is not perfect, we should discard that policy
because it is merely good.
Worse, the argument also assumes that we have
a perfect method for fairly assessing and ranking the
relative merit of every single person in society. No
Managing Human Capital 345
society has that ability. Justice and life cannot be
reasonably separated, and the people-versus-person
argument contends that they can. “The black person
who moves up the line thanks to affirmative action
may not logically ‘deserve’ the place he gets. But, for
the same reason, the white person who loses that
place doesn’t ‘deserve’ it either. . . . The point is that
a pure, discrimination-free society is not merely a
hopeless ideal; it is a logical mirage.”690
Is Diversity Desirable? A cornerstone of affirm-
ative action, and a gigantic judicial justification of
it (though perhaps slightly less gigantic after the
Court’s 2014 decision in Schuette), is that it pro-
motes diversity on campuses and in workplaces. But
is diversity so desirable that it warrants the billions
of dollars spent through affirmative action policies
to achieve it?
Yes. A massive and unique analysis concludes
that groups and governments, schools and cities, col-
leges, companies, and countries, all perform meas-
urably better when they are more diverse, and this
is especially true when it comes to raising organiza-
tional performance. “Ability matters. But—here’s the
catch—so does diversity.” In fact, collective diversity
consistently “trumps” individual ability.691 Indeed,
a group’s intelligence is only moderately associated
with the average intelligence of the people in the
group.692 In every sector, the more diverse organi-
zations make more accurate predictions and solve
problems better.693
In the public sector: greater racial diversity in
elected bodies associates with less division and con-
flict;694 greater gender diversity in the top manage-
ment of municipalities corresponds with “higher
financial performance” (but only if there is also good
cross-functional teamwork);695 agencies in which
their workers most closely resemble the populations
that their agencies serve are perceived by employ-
ees to be more inclusive working environments and
experience lower levels of discrimination;696 leads
to more public accountability, greater popular trust
in government, and readier cooperation and com-
pliance with government;697 “on the whole, studies
show” that greater diversity in governments “leads to
. . . policy outcomes that benefit represented groups,”
whether female, male, black, brown, or white;698 in
fact, “the mere existence of a passively represented
bureaucracy can itself improve outcomes.”699
 346 PA R T I I I Public and Nonprofit Management
Those states with anti-discrimination laws for
gays are far more likely to attract innovative com-
panies and high-tech firms than are states without
them.700 “The leading indicator of a metropolitan
area’s high-technology success is a large gay popu-
lation.”701
Similar success is found in the private sector,
with its uniquely clear metrics of performance: the
more racially and gender-diverse businesses have
significantly, even dramatically, more market share,
customers, sales, and profits.702
Diversity also correlates, strongly and positively,
with personal growth. The more diverse the univer-
sity, the more likely that there will be “widespread
beneficial effects,” including superior retention rates,
grades, and self-confidence among students “irre-
spective of race.”703
So, yes, diverse workplaces and campuses are
desirable, with, as we explain next, a qualification.
Diversity Management: The Crucial Component
Diversity’s benefits do not appear automatically.
Rather, its benefits can be reaped only when diversity
is managed well.
Diversity improves collective performance: only
when “identity diversity,” such as gender or ethni-
city, is “linked with cognitive diversity,” which is a
product of experience and training; only when diver-
sity is “relevant” (“we cannot expect that adding a
poet to a medical research team would enable them
to find a cure for the common cold”); only when the
people in diverse groups “get along” (if they do not,
then “the cognitive differences between them may be
little more than disconnected silos of ideas”);704 and
only when people participate equally in a group’s
conversations.705 “Well-managed identity diversity
does produce benefits.”706
American governments seem to manage diver-
sity reasonably well. Federal employees’ complaints
of discrimination have declined over time, even as
complaints from all other employment categories
have, on average, risen substantially.707 An anal-
ysis of a “very large sample of federal employees”
in sixty-seven agencies found that those workers
in agencies with high levels of racial diversity per-
ceived “lower organizational effectiveness” in their
agencies. “But strikingly, where they perceive that
diversity is effectively managed,” they also think
that their agencies’ “effectiveness is higher,” even
in those agencies with greater racial diversity than
the norm.708 Somewhat surprisingly, older public
administrators manage diversity more skillfully than
younger ones.709
The Effects of the Efforts
What has affirmative action, a public policy for six
decades, achieved?
“The majority of the empirical research demon-
strates the positive impact” of affirmative action “on
educational policies and employment opportunities
for minorities and women.” Affirmative action “is
decidedly less significant when it comes to other
major goals such as hiring, equal pay, and the elimi-
nation of discrimination once minorities and women
are hired.”710
Its impact has been especially salubrious in the
public and nonprofit sectors.
The Federal Record Washington has made signif-
icant progress in providing equal opportunity to its
employees. An analysis of more than 40,000 recom-
mendations made by the Government Accountability
Office over twenty-six years found that 87 percent
of those recommendations that concerned affirma-
tive action were implemented by the agencies, or six
points higher than the average rate of 81 percent.711
An analysis of Senate-confirmed top federal execu-
tives in more than eighty positions over forty-two
years found that President Barack Obama, for
the first time in history, had appointed minorities
and women to more than half (nearly 54 percent)
of those posts; the next highest was less than 38
percent, under President Bill Clinton.712
Federal Employees of Color More than 34 percent
of all federal civilian, non-postal employees are
minorities.713
In 1980, African-Americans comprised 15
percent of all federal employees and 5 percent of
senior and executive positions; by 2013, these per-
centages were 18 and 11 percent, respectively.
In 1980, 4 percent of all federal civilian employ-
ees were Latinas and Latinos, and fewer than fifty
Hispanics were in senior and executive positions;
by 2013, 8 percent of all federal employees were
Hispanic, and 4 percent of senior and executive
administrators were Hispanic.

Federal Women Employees Women have made
steady progress in the federal employ. In 1980,
women comprised 45 percent of all federal employ-
ees and 4 percent of senior and executive positions;
by 2013, these percentages were nearly 44 and 34
percent, respectively.
Education may account for the dramatic
increase of women at the top. Forty-six percent
of female federal administrators have a bachelor’s
degree or higher, compared with 38 percent eight-
een years earlier. Male federal administrators with a
baccalaureate degree actually slipped over the same
period, from 56 to 54 percent.714
These educational trends, among other factors,
are reflected in more equitable pay. Over two decades,
the federal government’s overall gender pay gap
shrank from women earning 30 percent, on average,
less than men to 13 percent less, and, among senior
executives, just 1 percent less. Nationwide, women
earned, on average, 19 percent less.715 Women in the
Senior Executive Service earn salaries that are nearly
$500 higher, on average, than their male counter-
parts.716
With fairer salaries has come greater respect:
Over sixteen years, the proportion of women federal
employees who agreed that “women and men are
respected equally” at work grew by a fourth, and
now stands at two-fifths.717
The Grass-Roots’ Record State and local jurisdic-
tions have made substantial advances in developing
fairer places to work, but the advances are not con-
sistent for all groups.
State and Local Employees of Color Thirty-five
percent of all full-time state and local government
employees (excluding educators) are minorities.718
In 1980, African-Americans comprised 16
percent of all state and local employees and 6
percent of officials and administrators, the top-paid
job category; by 2013, these percentages were 19
and more than 13 percent, respectively. Black people
have made progress in all occupational categories
over thirty-three years, and, in many state govern-
ments, African-Americans “are overrepresented.”719
In 1964, 1 percent of state agency heads were black;
by 2008, 10 percent were.720
In 1980, Hispanics comprised 4 percent of all
state and local employees and 2 percent of officials
Managing Human Capital 347
and administrators; by 2013, these percentages were
11 and 6 percent, respectively. In many state govern-
ments, “Latinos are typically underrepresented,”721
although Hispanics have doubled, at a minimum,
their representation in every occupational category
in state governments. In 1964, less than 1 percent
of Latinas and Latinos were state agency heads; by
2008, nearly 2 percent were.722
At the local level, there is less progress. More
than 93 percent of chief administrative officers, city
and county managers, are whites; less than 3 percent
each are African-American or Hispanic.723
State and Local Women Employees In 1980,
women comprised 41 percent of all state and local
employees (again excluding educators) and 23 percent
of local officials and administrators; by 2013, these
percentages were 46 and 42 percent, respectively.
In state governments, “women are generally
overrepresented” relative to the civilian labor force
within their states,724 and have increased their
representation in every occupational category in
state governments.725 Twenty-nine percent of state
department heads are women, up from just 2 percent
in 1964,726 and women state executives command
salaries that are “similar” to those of men.727
Local governments also have made impres-
sive strides: “Of the three levels of government, the
local level has apparently had the greatest progress
toward gender equity.”728
Unfortunately, this is much less the case in local
executive suites. Despite the fact that nearly three-
fifths of master of public administration degrees
(a credential that many cities and counties require
for their top executives—more than two-fifths of
these executives have the degree729) are awarded
to women, only 20 percent of city and county chief
appointed executives are women, up from 13 percent
thirty-two years earlier.730
Why the Lag in Local Governments? The chief
appointed executives of general-purpose local gov-
ernments are at least twice as white and male as
are their counterparts in the federal and state gov-
ernments. This seems to be much less the case with
special-purpose local governments; more than two
decades ago, a fourth of the executive directors of
public authorities, for example, were women,731 and
their representation is likely higher today.
 348 PA R T I I I Public and Nonprofit Management
The sad situation at the top of municipal and
county bureaucracies is less a function of curmudg-
eonly top local executives (who, recall, were early
and unappreciated champions of affirmative action)
and more a reflection of the city council members
and county commissioners who appoint them.
A Palpably Progressive Public Sector Both min-
orities and women find the public sector welcom-
ing, entering it at a more rapid rate than the private
sector,732 and also are more likely than whites
and men to recommend government as a place to
work.733
Women who work in governments are “decreas-
ing their levels of occupational segregation in civil
service employment and moving toward achieving a
representative bureaucracy. . .. Women appear to be
most successful, both financially and career-wise, in
historically male-dominated fields.”734
A review of analyses of the pay gap in federal,
state, and local governments found a “consensus”
among them to the effect that “the wage gap between
white males and both minorities and women per-
sists, although it is lower in the public sector than in
the private sector.”735
At the federal level, women comprise 34 percent
of the SES, but they account for less than 15 percent
of executives in the private sector.736 “Federal agen-
cies are on a par, or even ahead, of their corporate
counterparts in the initiation of new recruitment,
training, and development” of members of disad-
vantaged groups.737
“In the aggregate, state and local governments
are doing considerably better than the private sector
in living up to the challenge of attaining sexual and
racial-ethnic employment equity,” establishing a
record that is “quite impressive.”738
The Third Sector Record In terms of providing fair
workplaces, the independent sector is best described
as a strangely mixed bag.
Independent Employees of Color Nearly 25
percent of all public-serving nonprofit, full-time
employees are people of color,739 a doubling from
thirty-one years earlier. Thirteen percent of their
board members (a tripling over twenty-five years),740
and 8 percent of their CEOs741 (a quadrupling over
the same period742) are minorities. The larger the
nonprofit’s percentage of minority staffers, the larger
its assets.743
Nonprofit CEOs view fundraising as crucial to
their organizations’ success (and, often, survival), so
it is heartening to learn that “race is generally not
significant (either black or other)” as a variable in
determining the compensation of chief development
officers, professional fundraisers, staffers, and con-
sultants.744
Although it has made progress, the independ-
ent sector in general has not extended workplace
opportunities to people of color to the degree that
the public sector has.
Independent Women Employees This is far from
the case for women. Beginning in the early 1980s,
“the entire foundation field became overwhelm-
ingly  ‘female,’”745 and now fully three-quarters of
all public-serving nonprofit full-time employees,
and 90 percent of nonprofit administrators, are
women.746
Forty-three percent of nonprofit organizations’
board members are women747 (compared with less
than 17 percent on the boards of Fortune 500 com-
panies748) and 52 percent of their CEOs are white
women.749 Women are more likely to be board chairs
or CEOs when the association has a smaller budget,
is relatively new, is in a city other than Washington,
DC, and has a large percentage of women serving on
its board.750
Despite their takeover of the independent sector,
issues for women persist. Women CEOs in the inde-
pendent sector earn from 6 to 23 percent less than
their male counterparts, although this is real pro-
gress from fifteen years earlier, when the gap was 21
to 47 percent less.751
This disparity seeps down through the non-
profit organization. A national study of professional
fundraisers found “a gender-pay gap, even after
controlling for all factors traditionally associated
with pay differentials between males and females,”
notably organizational size and location, and profes-
sional experience and education. Chief development
officers, staffers, and even consultants who were
women had “significantly” lower compensation
than their male counterparts.752 On average, female
fundraisers earn salaries that are a fourth lower
than male fundraisers, and hold a larger number of
lower-paying jobs than men. Moreover, the gender

wage gap for these employees almost doubled over
seventeen years.753
These inequities are self-defeating for not
only the usual reasons, but seem particularly peril-
ous for nonprofits when we realize that, over four
decades, women, both single and married, have
gained “greater influence over charitable decision
making.”754
In sum, the third sector seems to be on a rough
par with the public one in terms of advancing
women up the executive ladder (with the very large
exception of city and county governments, which
fall well behind nonprofits), but it lags far behind
governments in closing the gender wage gap.
A Word on Perspective For purposes of placing all
this in perspective, let us now consider the situation
of minorities and women in the private sector.
The proportion of CEOs of the Fortune 500
companies who are minorities is less than 5 percent
(less than 1 percent are African-American).755 Recall
that their nearest public and nonprofit counterparts
surpass or match this figure: over a sixth of the
federal SES, a tenth of state agency heads, 5 percent
of city managers (which, at least, equals the percent-
age of major corporate CEOs), and 8 percent of non-
profit CEOs are executives of color.
Similarly, just 4 percent of Fortune 500 CEOs
are women,756 compared (as we also noted earlier)
with over a third of federal SES members, almost a
third of state department heads, nearly a fifth of city
managers, and more than half of nonprofit CEOs.
Why are so few corporate CEOs women? Let us
count the ways.
First, women are put off by what they per-
ceive to be overly cutthroat organizations, usually
corporations. “Competitive workplaces” in the
private sector “significantly decrease the propensity
of women to apply for a job compared to that of
men.”757 And, once ambitious women are hired in
the private sector, they soon become disillusioned,
perhaps because they have fewer mentors: “only
10 percent of senior-level women report that four
or more executives have helped them advance com-
pared to 17 percent of senior-level men.”758
Whatever the reason, women’s disillusionment
is real. Forty-three percent of women starting a cor-
porate job aspire to be top executives, compared
with 34 percent of men (entering women and men
Managing Human Capital 349
also have virtually identical levels of confidence in
reaching their goals—27 percent of women and 28
percent of men), but, after two years, just 16 percent
of women, versus 34 percent of men, hope for the
executive suites.759
These perceptions are based on fact. Women’s
odds of advancement at every level in corporate
America are 15 percent lower, on average, than are
those of men (the higher one rises, the lower the pos-
sibility of her advancement further gets), despite the
fact that female senior managers are 20 percent less
likely than men to leave the company. And just 28
percent of senior-level women are “happy with their
careers,” compared with 40 percent of their male
counterparts.760
Why is this? To a statistically significant degree,
women corporate managers “are viewed with sus-
picion and . . . their commitment and competence
are over-tested” when decisions on advancements
are being made.761 Indeed. Fifty-nine percent of men
received “critical feedback” in their corporate per-
formance reviews, but 88 percent of women received
such criticism, and, of the critical reviews received
by men, just a bit more than 2 percent were crit-
icized for personality traits (e.g., “bossy,” “abra-
sive”), but a remarkable 76 percent of the women
were.762 Women in business are more likely than
men to experience retaliation when reporting mis-
conduct.763
Women seem to have gotten the message.
Corporate women managers, in contrast to their
counterparts in government (who, recall, equal
men in their confidence to supervise and believe
that they wield greater influence than men), are less
confrontational than men and prefer avoidance to
argument.764 Not surprising, when we realize that
66 percent of male workers in business say that they
can question management without fear, compared
with just 56 percent of female employees.765
Compared with the private sector, then, minor-
ities and women in the public and nonprofit sectors
not only are doing good, but doing well.
A Demographic Solution?
Is affirmative action responsible for the growing
diversity of American organizations? Possibly not.
“Only a small fraction of the public”—a modest
16 percent—“reports having been directly affected
 350 PA R T I I I Public and Nonprofit Management
by affirmative action programs,” whether for good
or ill.766
Although it seems irrefutable that affirmative
action has played a positive role in expanding diver-
sity, demographic trends may be the core cause.
Most broadly, the population of the United States
will be a “majority minority” nation by 2044, when
white people will make up slightly less than half of
the population.767
This trend will have an impact on the labor
force. In 1950, white men comprised 70 percent of
the civilian workforce.768 Since then, their share has
slipped to 43 percent, and likely will slide further.769
The drainage of white males from the labor pool
reflects America’s dwindling supply of young white
men,770 and minorities and women are replacing
them in jobs they once held.
Between 1980 and 2012, the proportion of
workers in the civilian labor force who were not
white expanded from 13 percent to 20 percent.771
The largest future increases likely will be among
Asian-Americans and Hispanics.772
In 1950, women constituted 30 percent of the
civilian labor force.773 Today, women constitute
47 percent of the labor force, a proportion that is
expected to remain steady for the ensuing decade.774
Demographics dictate diversity.
NOTES
1. Gerald Mayer, Selected Characteristics of Private
and Public Sector Workers (Washington, DC:
U.S. Congressional Research Service, 2014),
p. 2.
2. ProQuest LLC, ProQuest Statistical Abstract of
the United States, 2016, 4th ed. (Bethesda, MD:
Author, 2016), Table 651. Figure is for 2014.
3. Partnership for Public Service and National
Association of Colleges and Employers, College
Students Are Attracted to Federal Service, but
Agencies Need to Capitalize on Their Interest
(Washington, DC: Authors, 2014), p. 2. Figures
are for 2013.
4. Emerging Local Government Leaders, Push/Pull:
Changing Jurisdictions (Washington, DC: Author,
2015). Figures are for 2015.
5. National Association of Schools of Public Affairs
and Administration and George Washington
University, Attitudes Toward Public Service
Careers (Washington, DC: Authors, 1998). Figure
is for 1998.
6. Paul C. Light, The New Public Service
(Washington, DC: Brookings, 1999), pp. 89–90.
7. Gregory B. Lewis and Sue A. Frank, “Who
Wants to Work for the Government?” Public
Administration Review 62 (July/August 2002),
pp. 395–344. Figures are for 1998.
8. Council for Excellence in Government and Gallup
Organization, Within Reach . . . But Out of
Synch: The Possibilities and Challenges of Shaping
Tomorrow’s Government Workforce (Washington,
DC: Authors, 2007), pp. 6, 8. Data are for 2006.
9. Partnership for Public Service, Innovation
(Washington, DC: Author, 2015), pp. 2–3.
10. Partnership for Public Service and National
Association of Colleges and Employers, College
Students Are Attracted to Federal Service, but
Agencies Need to Capitalize on Their Interest,
p. 2. Figure is for 2013.
11. National Association of Schools of Public Affairs
and Administration, Nonprofit Survey Summary
(Washington, DC: Author, 2008). Figure is for
2008.
12. National Association of Schools of Public Affairs
and Administration. Student Survey (Washington,
DC: Author, 2008). Figure is for 2008.
13. As derived from data in Roseanne M. Mirabella,
Nonprofit Management Education (Boston: Seton
Hall University, 2012). Figure is for 2011.
14. Kelly LeRoux and Mary K. Feeney, “Factors
Attracting Individuals to Nonprofit Management
over Public and Private Sector Management,”
Nonprofit Management & Leadership 24 (Fall
2013), pp. 43–62. The quotation is on p. 43.
15. U.S. Office of Personnel Management, Evolution
of Federal White-Collar Pay (Washington, DC:
U.S. Government Printing Office, 2010).
16. Frederick C. Mosher, Democracy and the Public
Service, 2nd ed. (New York: Oxford University
Press, 1982), p. 57.
17. Sidney H. Aronson, Status and Kinship in the
Higher Civil Service (Cambridge: Harvard
University Press, 1964), p. 61.
18. Erik W. Austin, Political Facts of the United States
Since 1789 (New York: Oxford University Press,
1986), pp. 370–376, 328. In 1828, voting hit 52
percent.
19. Mosher, Democracy and the Public Service,
pp.  66–72, and Aronson, Status and Kinship in
the Higher Civil Service, p. 61.

20. The quotations are cited in Ann Gerhart, “A New
Deal,” Washington Post (March 28, 2005).
21. Kenneth D. Ackerman, Dark Horse—The Surprise
Election and Political Murder of James A. Garfield
(New York: Carroll and Graf, 2003), p. 298.
22. Stahl, Public Personnel Administration, p. 42.
23. U.S. Civil Service Commission, Twenty-second
Report (Washington, DC: U.S. Government
Printing Office, 1905), quoted in Mosher,
Democracy and the Public Service, p. 69.
24. Mosher, Democracy and the Public Service, p. 66.
25. James S. Bowman and Jonathan P. West, “State
Government ‘Little Hatch Acts’ in an Era of Civil
Service Reform,” Review of Public Personnel
Administration 29 (March 2009), pp. 20–40.
Figure (p. 22) is for 2007.
26. The case is Heffernan v. City of Paterson.
27. Mosher, Democracy and the Public Service, p. 68.
28. Benjamin F. Welton, “The Problems of Securing
Efficiency in Municipal Labor,” Annals of the
American Academy of Political and Social Science
XLI (May 1912), pp. 103–114. The quotation is
on p. 103.
29. Daniel W. Williams, “Measuring Government in
the Early Twentieth Century,” Public Adminis-
tration Review 63 (November/December 2003),
pp. 643–659. The quotations are on p. 649.
30. Norma M. Riccucci and Katherine C. Naff,
Personnel Management in Government: Politics
and Processes, 6th ed. (Boca Raton, FL: CRC
Press, 2008), p. 175.
31. “Inside the Year Book,” Municipal Year Book,
2006 (Washington, DC: International City/
County Management Association, 2006), p. x.
32. O. Glenn Stahl, Public Personnel Administration,
8th ed. (New York: Harper & Row, 1983), p. 42.
33. Anirudh V. S. Ruhil and Pedro J. Camoes,
“What Lies Beneath: The Political Roots of State
Merit Systems,” Journal of Public Administra-
tion Research and Theory 13 (January 2003),
pp. 27–42. The figures are on p. 30.
34. Riccucci and Naff, Personnel Management in
Government, p. 34.
35. Mosher, Democracy and the Public Service, p. 103.
36. Committee on Administrative Management,
Personnel Administration in the Federal Service
(Washington, DC: U.S. Government Printing
Office, 1937), pp. 7–8.
37. Steven W. Hays and Richard C. Kearney,
“Anticipated Changes in Human Resource
Management: Views from the Field,” Public
Managing Human Capital 351
Administration Review 61 (September/October
2001), pp. 585–597. The datum is on p. 592.
38. James Read, “Looking for Guidance,” Issues of
Merit (Spring 2014), pp. 2–3.
39. Collleen A. Woodard, “Merit by Any Other
Name—Reframing the Civil Service First
Principle,” Public Administration Review 65
(January/February 2005), pp. 100–118. The quo-
tation is on p. 110.
40. Mosher, Democracy and the Public Service,
pp. 217–218.
41. As derived from data in U.S. Bureau of Labor
Statistics, Occupational Employment Statistics
(Washington, DC: U.S. Government Publish-
ing  Office, 2016), Tables 11-3111, 11-3121,
11-3131, 13-1071, 13-1075. Figures are for
2015, and include 1,180 training and devel-
opment managers in colleges, universities, and
professional schools, almost all of which are pub-
licly supported. Public employee percentages are
drawn from the totals of those “industries with
the highest concentration of employment in this
occupation.”
42. Hays and Kearney, “Anticipated Changes in
Human Resource Management.”
43. Michael A. Miller, “The Public/Private Pay
Debate: What Do the Data Show?” Monthly
Labor Review 119 (May 1996), pp. 18–29. Refers
to state and local personnel specialists only. The
other profession is budgeters.
44. Myron D. Fottler and Norman A. Townsend,
“Characteristics of Public and Private Personnel
Directors,” Public Personnel Management 6 (July
1977), pp. 250–258.
45. Hays and Kearney, “Anticipated Changes in
Human Resource Management,” p. 593. Data are
for 1998.
46. Jory Heckman, “IT, HR Worker Satisfaction
Foretells Overall Agency Ratings,” Federalnews
radio.com (July 18, 2016). HR workers surpassed
IT workers on this measure.
47. Council for Excellence in Government, Gallup,
and Accenture, The Appeal of Public Service,
p. 4. Figure is for 2008, and is reasonably con-
sistent over time. See Council for Excellence in
Government and Peter D. Hart Research, Calling
Young People to Government Service, p. 7.
48. U.S. Office of Personnel Management, 2016
Federal Employee Viewpoint Survey (Washington,
DC: U.S. Government Publishing Office, 2016),
Q. 21.
 352 PA R T I I I Public and Nonprofit Management
49. HCMG, Cornerstone, and WBR Digital, Building
a Culture of Excellence and Engagement
(Washington, DC: Authors, 2015).
50. Senior Executives Association, Recruiting
Qualified Senior Leadership: How Are We Doing?
(Washington, DC: Author, 2015), p. 9. Figures are
for 2015.
51. U.S. Office of Personnel Management, as cited in
Paul C. Light, “To Restore and Renew: Now Is
the Time to Rebuild the Federal Public Service”
(Washington, DC: Brookings, 2001).
52. U.S. Merit Systems Protection Board, The Impact
of Recruitment Strategy on Fair and Open
Competition for Federal Jobs (Washington, DC:
U.S. Government Publishing Office, 2015), p. 12.
Figure is for 2011.
53. U.S. Merit Systems Protection Board, Help
Wanted (Washington, DC: U.S. Government
Printing Office, 2003), p. 9.
54. U.S. Merit Systems Protection Board, “Supervisory
Job Announcements: Truth in Advertising,” Issues
of Merit (April 2010), pp. 1, 7. The quotation is
on p. 1. Figure is for 2009.
55. U.S. Merit Systems Protection Board, “Taking
Aim at Federal Hiring,” Issues of Merit (July
2008), p. 3.
56. Eric Katz, “Agencies Show Little Progress in
Improving Federal Hiring Process,” Govexec.com
(January 2, 2015).
57. U.S. Merit Systems Protection Board, The Impact
of Recruitment Strategy on Fair and Open
Competition for Federal Jobs, pp. 16, 34. Figures
are for 2011.
58. T. Rees Shapiro, “Peace Corps Applications
Surge Amid Recent Reforms,” Washington Post
(October 8, 2014). Figure is for 2013–2014.
59. Center for State & Local Government Excellence,
State and Local Government Workforce: 2015
Trends (Washington, DC: Author, 2015), pp. 6, 4.
60. Sally Coleman Selden, Human Capital: Tools and
Strategies for the Public Sector (Washington, DC:
CQ Press, 2009), p. 35.
61. Sally Coleman Selden, Patricia Wallace Ingraham,
and Willow Jacobson, “Human Resource
Practices in State Government: Findings from a
National Survey,” Public Administration Review
61 (September/October 2001), pp. 598–607.
Figures, pp. 600–601, are for 1998.
62. Richard C. Elling, Lyke Thompson, and Valerie
Monet, “The Problematic World of State
Management: The More Things Change the
More  They Remain the Same,” Paper presented
at the Annual Meeting of the Midwest Political
Science Association (Chicago, 2003). Figure is for
2000–2001.
63. Siegrun Fox Freyss, “Continuity and Change in
Local Personnel Policies and Practices,” Municipal
Year Book, 1996 (Washington, DC: International
City/County Management Association, 1996),
pp. 11–17.
64. Constance Horner, director, OPM, as quoted in
Judith Havemann, “New Federal Job Exams Set
for June,” Washington Post (April 22, 1990).
65. Joe Davidson, “Federal Hiring Remains a Work in
Progress after Many Fixes,” Washingtonpost.com
(October 4, 2016). Figure is for 2008–2016.
66. Princeton Survey Research Associates, Final
Topline Report: Health of the Nonprofit, For-
Profit, and Public Service Sectors (Princeton, NJ:
Author, 2002), p. 13. Figures are for 2000–2001.
67. U.S. Merit Systems Protection Board, Evolving
Workforce Demographics: Federal Agency Action
and Reaction (Washington, DC: U.S. Government
Printing Office, 1993), p. 29.
68. U.S. Merit Systems Protection Board, Accom-
plishing Our Mission: Results of the Merit
Principles Survey 2005 (Washington, DC: U.S.
Government Printing Office, 2007), p. 14. Figure,
38 percent, is for 2005.
69. U.S. Government Accountability Office, Federal
Workforce: OPM and Agencies Need to
Strengthen Efforts to Identify and Close Mission-
Critical Skills Gaps, GAO-15-223 (Washington,
DC: U.S. Government Publishing Office, 2015),
Highlights page.
70. Partnership for Public Service, Leaving Talent
on the Table: The Need to Capitalize on High
Performing Student Interns (Washington, DC:
Author, 2009), Executive Summary page. Figures
are for 2007.
71. Federalnewsradio.com, WFED Federal CHCO
Survey 2016 (Washington, DC: Author, 2016),
p. 13.
72. As derived from data in U.S. Government
Accountability Office, Federal Hiring: OPM
Needs to Improve Management and Oversight
of Hiring Authorities, GAO-16-521 (Washington,
DC: U.S. Government Publishing Office, 2016), p.
9. Figure is for 2014.
73. Marilyn Mackes, National Association of Colleges
and Employers, “Keys to Finding Quality Entry-
Level Employees,” Paper presented to the National

Academy of Public Administration (Washington,
DC, 2001). Figure, 37 percent, is for 2001.
74. U.S. Merit Systems Protection Board, Federal
Appointment Authorities: Cutting Through the
Confusion (Washington, DC: U.S Government
Printing Office, 2008), p. i. Figure is for 2005.
75. As derived from data in U.S. Government
Accountability Office, Federal Hiring: OPM
Needs to Improve Management and Oversight of
Hiring Authorities, p. 9. Figures are for 2014.
76. Nicole Ogrysko, “New Proposals Needed to Break
Gov’t Hiring Status Quo, Senate, Agencies, Say,”
Federalnewsradio.com (September 29, 2016).
Figure is for 2014.
77. “The Memo That Roared,” Washington Post
(June 19, 2009).
78. Princeton Survey Research Associates, Final
Topline Report, p. 13. Figures are for 2000–2001.
79. National Commission on the Public Service,
Leadership for America: Rebuilding the Public
Service (Washington, DC: Author, 1989), p. 28.
80. Princeton Survey Research Associates, Final
Topline Report, p. 13. Figures are for 2000–2001.
81. U.S. Merit Systems Protection Board, Attracting
the Next Generation, p. 49. Figure is for 2005.
82. Senior Executives Association, Recruiting
Qualified Senior Leadership, p. 9. Figures are for
2015.
83. U.S. Merit Systems Protection Board, “Taking
Aim at Federal Hiring,” p. 2.
84. U.S. General Accounting Office, Human Capital:
Opportunities to Improve Executive Agencies’
Hiring Processes, p. 3.
85. Davidson, “Federal Hiring Remains a Work in
Progress after Many Fixes.” Figure is for 2015.
86. Frank L. Schmidt, John E. Hunter, Alice  N.
Outerbridge, and M. H. Trattner, “The Econ-
omic Impact of Job Selection Methods on
Size, Productivity and Payroll Costs of the
Federal Work Force: An Empirically Based
Demonstration,”Personnel Psychology 39 (Spring
1986), pp. 1–30.
87. U.S. Merit Systems Protection Board, Fair
and Equitable Treatment: Progress Made and
Challenges Remaining (Washington, DC: U.S.
Government Printing Office, 2009), p. 11.
88. Riccuci and Naff, Personnel Management in
Government, p. 268. Figures are for 1960–1980.
89. The 1981 decision was actually a consent decree
that OPM signed in the case, Luevano v. Campbell.
90. U.S. Merit Systems Protection Board, The Role
Managing Human Capital 353
of Delegated Examining Units: Hiring New
Employees in a Decentralized Civil Service
(Washington, DC: U.S. Government Printing
Office, 1999), p. 5.
91. Partnership for Public Service, Asking the
Wrong Questions: A Look at How the Federal
Government Assesses and Selects Its Workforce
(Washington, DC: Author, 2004), p. 1.
92. Mitchell Hoffman, Lisa B. Kahn, and Danielle Li,
Discretion in Hiring (Cambridge, MA: National
Bureau of Economic Research, 2015), p. 1.
93. As derived from data in U.S. Government
Accountability Office, Federal Hiring: OPM
Needs to Improve Management and Oversight of
Hiring Authorities, p. 9.
94. Shapiro, “Peace Corps Applications Surge Amid
Recent Reforms.” Figure is for 2013–2014.
95. U.S. Merit Systems Protection Board, Federal
Appointment Authorities, p. 29. Figures are for
2005.
96. U.S. Merit Systems Protection Board, Attracting
the Next Generation, pp. 6, 8, 17, 20. Figures are
for 2005.
97. U.S. Merit Systems Protection Board, The Federal
Government: A Model Employer or a Work
in Progress? Perspectives from 25 Years of the
Merit Principles Survey (Washington, DC: U.S.
Government Printing Office, 2008), p. 9.
98. Lisa Rein, “Millennials Exit the Federal Work-
force as Government Jobs Lose Their Allure,”
Washingtonpost.com (December 15, 2014).
Figures are for 1983–2014.
99. As derived from data in Partnership for Public
Service and Booz Allen Hamilton, Unrealized
Vision: Reimagining the Senior Executive Service
(Washington. DC, and Herndon, VA: Authors,
2009), p. 7. Figures are for 2009.
100. As derived from data in Partnership for Public Service
and Booz Allen Hamilton, Unrealized Vision, p. 7.
101. U.S. Office of Personnel Management, Millennials:
Finding Opportunity in Federal Service
(Washington, DC: U.S. Government Printing
Office, 2014). Figure, 3.8 years, is for 2013.
102. Rein, “Millennials Exit the Federal Workforce as
Government Jobs Lose Their Allure.” Figure is for
2013.
103. Andrea Zappone and Matthew Sigafoose, “Enga-
ging the Federal Workforce: How to Do It &
Prove It,” OPM.gov (February 23, 2015).
104. U.S. Merit Systems Protection Board, In Search
of Highly Skilled Workers, p. 33. Figures are for
 354 PA R T I I I Public and Nonprofit Management
2006, and pertain to those hired for grades 12–15
in the General Schedule.
105. Larry M. Lane and James E. Wolf, The Human
Resource Crisis in the Public Sector: Rebuilding
the Capacity to Govern (New York: Quorum
Books, 1990).
106. U.S. General Accounting Office, Federal Re-
cruiting: Comparison of Applicants Who Accepted
or Declined Federal Job Offers, GAO/GGD-
92-61BR (Washington, DC: U.S. Government
Printing Office, 1993), p. 3.
107. James B. Conant and Dennis L. Dresang,
“Retaining and Recruiting Career Professionals,”
Revitalizing State and Local Public Service: Per-
formance, Accountability, and Citizen Confidence,
Frank D. Thompson, ed. (San Francisco: Jossey-
Bass, 1993), pp. 104–140. The quotation is on
p. 127.
108. As derived from data in U.S. Merit Systems
Protection Board, In Search of Highly Skilled
Workers: A Study on the Hiring of Upper Level
Employees from Outside the Federal Government
(Washington, DC: U.S. Government Printing
Office, 2008), p. 13. Figure is for 2006.
109. As derived from data in U.S. Merit Systems
Protection Board, Attracting the Next Generation,
p. 20. Figure is for 2006.
110. U.S. Merit Systems Protection Board, “Who
Gets Selected for Federal Jobs?” Issues of Merit
(August 2001), pp. 1–3. Figure is for 1998–2001.
111. As derived from data in U.S. Merit Systems
Protection Board, In Search of Highly Skilled
Workers, p. 29, and Attracting the Next Gen-
eration: A Look at Federal Entry-Level New Hires
(Washington, DC: U.S. Government Printing
Office, 2008), p. 35. In 2006, 47 percent, a plu-
rality, of upper-level hires and 97 percent of entry-
level ones cited job security as their leading reason
for joining the federal service.
112. Xuhong Su and Barry Bozeman, “Dynamics of
Sector Switching: Hazard Models Predicting
Changes from Private Sector Jobs to Public and
Nonprofit Sector Jobs,” Public Administration
Review 69 (November/December 2009), pp.
1106–1114.
113. U.S. Merit Systems Protection Board, In Search
of  Highly Skilled Workers, p. 13. Figure is for
2006.
114. U.S. Merit Systems Protection Board, Attracting
the Next Generation, p. 20. Figure is for 2006.
115. Selden, Ingraham, and Jacobson, “Human
Resource Practices in State Government,” p. 600.
Figures are for 1998.
116. U.S. Advisory Commission on Intergovernmental
Relations, State Laws Governing Local Gov-
ernment Structure and Administration, M-186
(Washington, DC: U.S. Government Printing
Office, 1993), p. 49. Figure is for 1990.
117. N. Joseph Cayer, “Local Government Person-
nel  Structure and Policies,” Municipal Year
Book, 1991 (Washington, DC: International City/
County Management Association, 1991), pp. 3–13.
118. U.S. General Accounting Office, Posthearing
Questions Related to Pay for Performance, p. 2.
119. U.S. Merit Systems Protection Board, “Performance
Appraisal Systems: Quality vs. Quantity,” Issues of
Merit (September 2006), p. 1. Figure is for 2005.
120. U.S. Government Accountability Office, Federal
Workforce: Distribution of Performance Ratings
Across the Federal Government, 2013, GAO-
16-520R (Washington, DC: U.S. Government
Publishing Office, 2016), p. 6.
121. Ibid.
122. U.S. Office of Personnel Management, The Fact
Book, 1999: Federal Civilian Workforce Statistics
(Washington, DC: U.S. Government Printing
Office, 1999), p. 71.
123. U.S. Government Accountability Office, Results-
Oriented Management: OPM Needs to Do More
to Ensure Meaningful Distinctions Are Made in
SES Ratings and Performance Awards, GAO-
15-189 (Washington, DC: U.S. Government
Publishing Office, 2015) Highlights page. Figure
is for 2010–2013.
124. Nicole Ogrysko, “Half of Senior Executives
Earned Highest Possible Performance Rating
in 2015,” Federalnewsradio.com (November 2,
2016).
125. Miller, “The Public/Private Pay Debate,” p. 19.
126. U.S. Congressional Budget Office, Comparing
the Compensation of Federal and Private-Sector
Employees, 2011 to 2015 (Washington, DC: U.S.
Government Publishing Office, 2017).
127. U.S. Merit Systems Protection Board, Why Are
Employees Leaving the Federal Government?
Results of an Exit Survey (Washington, DC: U.S.
Government Printing Office, 1990).
128. U.S. Bureau of Labor Statistics, “Federal
Government,” Career Guide to Industries, 2010-
2011 Edition (Washington, DC: U.S Government
Printing Office, 2011).
129. Kenneth L. Yoder, “Federal Employee Pay

Comparability,” Armed Forces Comptroller
(March 22, 2002), http://www.allbusiness.com.
130. U.S. Office of Personnel Management, 2016
Federal Employee Viewpoint Survey Results,
Q. 70. Figure is for 2012–2016.
131. Jessica Mangskau and Steve Ander, “U.S. Federal
Employment Related to Higher Financial Well-
Being,” Gallup (March 5, 2015).
132. National Commission on the Public Service,
Urgent Business for America: Revitalizing  the
Federal Government for the 21st Century
(Washington, DC: U.S. Government Printing
Office, 1993), pp. 23–24.
133. Ken McDonnell, “Benefit Cost Comparisons
between State and Local Governments and
Private-Sector Employers,” EBRI Notes 29 (June
2008), pp. 2–6. Figures are for 2007.
134. Jared J. Llorens, “Uncovering the Determinants of
Competitive State Government Wages,” Review
of Public Personnel Administration 28 (December
2008), pp. 308–326. The quotations are on
p. 308.
135. Keith A. Bender and John S. Heywood, Out of
Balance? Comparing Public and Private Sector
Compensation over 20 Years (Washington, DC:
Center for State & Local Government Excellence
and National Institute on Retirement Security,
2010), p. 16. Data are for 2008.
136. As derived from data in Miller, “The Public/
Private Pay Debate,” pp. 23, 22.
137. Bender and Heywood, Out of Balance? pp. 9–14.
138. Patrick L. Owens, Jr., “One More Reason Not
to Cut Your Training Budget: The Relationship
Between Training and Organizational Outcomes,”
Public Personnel Management 35 (Summer 2006),
pp. 163–172.
139. National Commission on the Public Service,
Leadership for America, p. 43.
140. Donald F. Kettl, Reinventing Government?
Appraising the National Performance Review
(Washington, DC: Brookings, 1994), p. 20.
141. Brookings Institution, Winning the Talent War:
Brookings Survey Finds the Nonprofit Sector Has
the Most Dedicated Workforce (Washington, DC:
Author, 2002), p. 2.
142. U.S. Merit Systems Protection Board, The Power
of Federal Employee Engagement (Washington,
DC: U.S. Government Printing Office, 2008),
pp. 27–36.
143. Owens, “One More Reason Not to Cut Your
Training Budget.”
Managing Human Capital 355
144. As derived from data in Selden, Human Capital,
p. 89. Data are for 2003–2006.
145. Charles S. Clark “More Federal Employees View
Lack of Training as Discrimination,” Government
Executive (March 14, 2014).
146. U.S. Government Accountability Office, Federal
Workforce: Preliminary Observations on Strength-
ening Employee Engagement During Challenging
Times, GAO-15-529T (Washington, DC: U.S.
Government Publishing Office, 2015), p. 16.
147. Kettl, Reinventing Government? p. 20. Figure is
for 1992.
148. U.S. General Accounting Office, Training Budgets:
Agency Budget Reductions in Response to the
Balanced Budget Act, GAO-GGD-86-98BR
(Washington, DC: U.S. Government Printing
Office, 1986), p. 2.
149. Charles S. Clark, “DHS Reports Spending Only 1
Percent of Its $1.4B Training Budget,” Govexec.
com (January 27, 2016). Figures are for FY 2014.
150. U.S. Merit Systems Protection Board, Accom-
plishing Our Mission, p. 16. Figures are for 1992–
2005.
151. U.S. Office of Personnel Management, 2016
Federal Employee Viewpoint Survey Results, Q. 68.
152. Partnership for Public Service, Improving the
Employee Experience (Washington, DC: Author,
2015), p. 7. Figure is for 2014.
153. U.S. Office of Personnel Management, Senior
Executive Service Survey Results for Fiscal Year
2011 (Washington, DC: U.S. Government Printing
Office, 2012), p. 133.
154. Partnership for Public Service, Improving Lead-
ership: Perspectives from the Senior Executive
Service (Washington, DC: Author, 2015), p. 4.
Data are for 2013 and 2014.
155. U.S. Merit Systems Protection Board, A Call  to
Action: Improving First-Level Supervision
of Federal Employees (Washington, DC: U.S
Government Printing Office, 2010), p. 34. Data
are for 2009.
156. Eric Katz, “Embattled Secret Service Spent Just 25
Minutes Training the Average Officer in 2013,”
Government Executive (February 12, 2015).
157. National Academy of Public Administration and
ICF International, Federal Leaders Digital Insight
Study (Washington, DC, and Fairfax, VA: Authors
2015), p. 9.
158. “Happy on the Job?” Governing (August 2013),
p. 54. Figure, 74 percent, is for 2013.
159. Pew Center on the States, People Forward: Human
 356 PA R T I I I Public and Nonprofit Management
Capital Trends and Innovations (Washington,
DC: Author, 2009), p. 3. Figure is for 2007.
160. Charles J. Spindler, “University-Based Public
Sector Management Development and Training,”
Public Productivity & Management Review 15
(Summer 1992), pp. 439–448.
161. Joseph W. Whorton, Jr., Frank K. Gibson, and
Delmer D. Dunn, “The Culture of University Public
Service: A National Survey of the Perspectives
of Users and Providers,” Public Administration
Review 46 (January/February 1986), pp. 38–47.
162. Selden, Human Capital, pp. 85, 89. Expenditure is
for 2007. Growth figure is for 2003–2006.
163. Pew Center on the States, People Forward, p. 23.
164. U.S. Advisory Commission on Intergovernmental
Relations, State Laws Governing Local Govern-
ment Structure and Administration, p. 49. Figures
are for 1990.
165. U.S. Merit Systems Protection Board, Whistle-
blowing in the Federal Government: An Update
(Washington, DC: U.S. Government Printing
Office, 1993), p. ii. Figures are for 1983 and
1992.
166. Bloomberg Business News, “Some Criticize
Whistleblowers as Bounty Hunters,” Baltimore
Sun (June 16, 1996).
167. U.S. Internal Revenue Service, Whistleblower
Office, Annual Report to Congress on the Use of
Section 7623 (Washington, DC: Author, 2010).
Figures are for FY 2009.
168. U.S. Government Accountability Office, Tax
Whistleblowers: Incomplete Data Hinders IRS’s
Ability to Manage Claim Processing Time and
Enhance External Communication, GAO-11-
683 (Washington, DC: U.S. Government Printing
Office, 2011), Highlights page. Data are for 2007–
2008, 2011.
169. U.S. Internal Revenue Service, Whistleblower
Office, Annual Report to Congress on the Use of
Section 7623 (Washington, DC: Author, 2010).
Figures are for 2009.
170. Michael Hudson, “IRS Red Tape, Old Guard Slow
Whistleblowing on Corporate Tax Cheats,” i watch
(June 22, 2011), http://www.iwatchnews.org.
171. U.S. Government Accountability Office, IRS
Whistleblower Program: Billions Collected,
but Timeliness and Communication Concerns
May Discourage Whistleblowers, GAO-16-20
(Washington, DC: U.S. Government Publishing
Office, 2015), Highlights page. Data are for
2011–2015.
172. Eric Katz, “Whistleblower Disclosures Sky-
rocketed Last Year, Driven by VA Employees,”
Govexec.com (January 19, 2016). Figures are for
2014–2015.
173. Taxpayers Against Fraud, States with False Claims
Acts (Washington, DC: Author, 2014). Figures are
for 2014.
174. Unpublished study by Karen L. Soeken and
Donald L. Soeken, “A Survey of Whistleblowers:
Their Stressors and Coping Strategies,” 1987,
as reported in Clyde H. Farnsworth, “Survey
of Whistle Blowers Finds Retaliation but Few
Regrets,” New York Times (February 27, 1987).
175. Michael Horowitz, IG, DoJ, as cited in Mieke
Eoyang, “Should Intelligence Whistleblowers Be
Protected?” Nextgov.com (January 25, 2016).
176. Joyce Rothschild, “The Fate of Whistleblowers
in Nonprofit Organizations,” Nonprofit and
Voluntary Sector Quarterly 42 (February 2013),
pp. 886–901. Data are on p. 896.
177. Janet P. Near and Marcia P. Miceli, “Wrongdoing,
Whistle-Blowing, and Retaliation in the U.S.
Government: What Have Researchers Learned
from the Merit Systems Protection Board (MSPB)
Survey Results?” Review of Public Personnel
Administration 28 (September 2008), pp. 263–
281.
178. James Gerard Caillier, “Agency Retaliation
Against Whistle-Blowers,” Public Integrity 15
(Winter 2013), pp. 29–50. The quotation is on
p. 29.
179. John J. Sumanth, David M. Mayer, and Virginia
S. Kay, “Why Good Guys Finish Last: The Role
of Justification Motives, Cognition, and Emotions
in Predicting Retaliation against Whistleblowers,”
Organizational Psychology Review (1, 2011),
pp. 165–184.
180. Ibid., pp. 167–168.
181. Marcia P. Meceli and Janet P. Near, “What Makes
Whistle-Blowers Effective? Three Field Studies,”
Human Relations 55 (April 2002), pp. 455–479.
182. Lisa Rein, “VA’s Own Internal Probe Finds
Impunity of Agency at Scandal-Ridden Hospital,”
Washingtonpost.com (December 16, 2015).
183. Emily Wax-Thibodeaux, “He Blew the Whistle on
the VA—and then Was Almost Sacked for Eating
Stale Sandwiches,” Washington Post (September
21, 2015).
184. Ethics Resource Center, Retaliation: The Cost to
Your Company and Its Employees (Arlington, VA:
Author, 2010), p. 1.

185. Michael Griffin and Tracy Davis, Sourcing
Competitive Advantage from Organizational
Integrity: The Hidden Cost of Misconduct
(Arlington, VA: Corporate Executive Board,
2007).
186. U.S. Government Accountability Office, Contrac-
tor Whistleblower Protections Pilot Program:
Improvements Needed to Ensure Effective Imple-
mentation, GAO-17-227 (Washington, DC: U.S.
Government Publishing Office, 2017), Highlights
page.
187. The case is Department of Homeland Security v.
MacLean.
188. Statement of Mr. Thomas F. Gimble, Acting
Inspector General, Department of Defense, before
the Subcommittee on National Security, Emerging
Threats, and International Relations, House
Committee on Government Reform on National
Security on Whistleblower Protection, April 14,
2006 (Washington, DC: U.S. Government Printing
Office, 2014), p. 8.
189. Office of the Inspector General of the Intelligence
Community, Semiannual Report (Washington,
DC: U.S. Government Publishing Office, 2016).
190. As derived from data in National Conference
of State Legislatures, State Whistleblower Laws
(Washington, DC: Author, 2009). Data are for
2009.
191. Philip H. Jos, Mark E. Tompkins, and Steven W.
Hays, “In Praise of Difficult People: A Portrait of
the Committed Whistleblower,” Public Admini-
stration Review 49 (November/December 1989),
pp. 552–561. Data, pp. 553–554, are for 1987–
1988.
192. U.S. Office of Personnel Management, 2016
Federal Employee Viewpoint Survey, Q. 17.
193. As derived from data in U.S. Merit Systems
Protection Board, Prohibited Personnel Practices:
A Study Retrospective (Washington, DC: U.S.
Government Printing Office, 2010), p. 15.
194. U.S. Merit Systems Protection Board, Prohibited
Personnel Practices: Employee Perceptions
(Washington, DC: U.S. Government Printing
Office, 2011), p. 32. Current figure is for 2010.
195. Ethics Resource Center, Retaliation, p. 5. Figure is
for 2009. In 2007 it was 12 percent.
196. Ernest Fitzgerald, quoted in Mary McGrory,
“The Whistleblower’s Lament,” Washington Post
(September 22, 1996).
197. Jos, Tompkins, and Hays, “In Praise of Difficult
People,” p. 555.
Managing Human Capital 357
198. Quoted in Farnsworth, “Survey of Whistle
Blowers Finds Retaliation but Few Regrets.”
199. Reuters, “Whistleblower Rewards Top $2 Billion”
(January 2, 2008), http://www.reuters.com.
Figures are for 1986–2008.
200. Gjalt de Graaf, “A Report on Reporting: Why
Peers Report Integrity and Law Violations in
Public Organizations,” Public Administration
Review 70 (September/October 2010), pp. 767–
779. The quotations are on pp. 772, 770.
201. Jos, Tompkins, and Hays, “In Praise of Difficult
People,” p. 555.
202. U.S. Department of Justice, Civil Division, Fraud
Statistics – Overview (Washington, DC: U.S.
Government Publishing Office, 2016). Figure is
for FY 1987–FY 2015.
203. Rothschild, “The Fate of Whistleblowers in
Nonprofit Organizations,” p. 892.
204. Ibid., pp. 896–897.
205. Center for State and Local Government Excell-
ence, Security: What Americans Want from a Job
(Washington, DC: Author, 2007), p.  5. Figures
are  for 2007 and apply only to subnational
governments.
206. U.S. Bureau of Labor Statistics, Employee Tenure
in 2016 (Washington, DC: U.S. Government
Publishing Office, 2016).
207. Craig Copeland, “Employee Tenure, 2008,” EBRI.
org Notes 31 (January 2010), pp. 2–12. The quo-
tation is on p. 2. Trend figures are for 1983–2008.
208. R. Paul Battaglio, Jr., “Public Service Reform
and Motivation: Evidence from an Employment
At-Will Environment,” Review of Public Person-
nel Administration 30 (September 2010), pp.
341–363. The author cites eight other studies sup-
porting this finding.
209. Ibid. and Matthew M. Chingos, Ending Teacher
Tenure Would Have Little Impact on Its Own
(Washington, DC: Brookings, 2014).
210. U.S. Office of Personnel Management, Ensuring
the Federal Government Has an Effective Civilian
Workforce, Q. 84. Figure is for 2008, but is quite
steady over time.
211. Emily Kopp, “OPM: Millennial Feds Like Their
Jobs, but Don’t Stay Long,” Federalnewsradio.
com (October 7, 2014).
212. Center for the Study of Democratic Institutions,
Survey on the Future of Government Service
(Nashville, TN: Author, 2015). Figures are for
2014.
213. U.S. Office of Personnel Management, Ensuring
 358 PA R T I I I Public and Nonprofit Management
the Federal Government Has an Effective Civilian
Workforce, Q. 84.
214. Ed Michaels, Helen Hatfield-Jones, and Beth
Axelrod, The War for Talent (Cambridge, MA:
Harvard Business School Press, 2001), and Baruch
Lev, Intangibles: Management, Measurement, and
Reporting (Washington, DC: Brookings, 2001).
215. Partnership for Public Service and Grant Thornton,
Elevating Our Federal Workforce: Chief Human
Capital Officers Offer Advice to President Obama
(Washington, DC, and Alexandria, VA: Authors,
2009), p. ii. Figure is for 2008.
216. Partnership for Public Service and Grant Thornton,
Embracing Change: CHCOs Rising to the
Challenge of an Altered Landscape (Washington,
DC, and Alexandria, VA: Authors, 2014), p.  23.
Figure, 62 percent, is for 2014 and refers to
respondents who thought that reform should have
a high priority to a great or very great extent.
217. Gary S. Marshall, “Whither (or Wither) OPM?”
Public Administration Review 58 (May/June
1998), pp. 280–282.
218. U.S. Office of Personnel Management, Federal
Human Resources Management for the 21st
Century (Washington, DC: U.S. Government
Printing Office, 1997), p. 8.
219. John Crum, “Lessons Learned: Making Strategic
Hiring Decisions,” Issues of Merit (September
2011), pp. 2–3.
220. As derived from data in U.S. Government
Accountability Office, Federal Hiring: OPM
Needs to Improve Management and Oversight of
Hiring Authorities, p. 9. Figure is for 2014.
221. U.S. General Accounting Office, Human Capital:
Selected Agencies’ Use of Alternative Service
Delivery Options for Human Capital Activities,
GAO-04-679 (Washington, DC: U.S. Government
Printing Office, 2004).
222. U.S. Merit Systems Protection Board, The Federal
Government: A Model Employer or a Work in
Progress? p. 9. Current figure is for 2007.
223. U.S. General Accounting Office, Human Capital:
OPM Can Better Assist Agencies in Using
Personnel Flexibilities, GAO-03-428 (Washington,
DC: U.S. Government Printing Office, 2003), p. 7.
Figure is for 2003. The laws in question are “Title
5 laws,” for Title 5 in the U.S. Code, which codi-
fies most federal policies for federal workers.
224. “The Future of Position Classification: Not Only
‘What?’ But ‘Who?’” Issues of Merit (Spring 2015),
p. 7. Figures are for 2001–2013 and 2011, respectively.
225. U.S. Government Accountability Office, Human
Capital: Selected Agencies’ Statutory Authorities
Could Offer Options in Developing a Framework
for Governmentwide Reform, GAO-05-398R
Human Capital Authorities (Washington, DC:
U.S. Government Printing Office, 2005), p. 1.
226. G. Edward DeSeve, Speeding Up the Learning
Curve: Observations from a Survey of Seasoned
Political Appointees (Washington, DC: IBM
Center for the Business of Government, 2009),
p. 6. Figure, 52 percent, is for 2008.
227. U.S. Merit Systems Protection Board, Civil Service
Evaluation: The Evolving Role of the U.S. Office
of Personnel Management (Washington, DC: U.S.
Government Printing Office, 1999), p. 24. Figure
is for 1997.
228. U.S. Merit Systems Protection Board, The Power
of Federal Employee Engagement (Washington,
DC: U.S. Government Printing Office, 2008),
p. 24. Figure is for 2005.
229. Partnership for Public Service and Grant
Thornton, Embracing Change, p. 25. Figure
is  for 2014. The term, “paper shufflers,” is
ours;  the  study uses instead, “transactional
manager.”
230. Partnership for Public Service and Booz Allen
Hamilton, Bridging Mission and Management
(Washington, DC, and McLean, VA: Authors,
2015), p. 15.
231. Donald F. Kettl, Managing Risk, Improving
Results: Lessons for Improving Government
Management from GAO’s High-Risk List
(Washington, DC: IBM Center for the Business of
Government, 2016), pp. 13–14.
232. U.S. Government Accountability Office, Human
Capital: OPM Needs to Improve the Design,
Management, and Oversight of the Federal
Classification System, GAO-14-677 (Washington,
DC: U.S. Government Printing Office, 2014),
Highlights page. Figures are for 1988–2013.
233. U.S. Government Accountability Office, Human
Capital: Selected Agencies’ Statutory Authorities
Could Offer Options in Developing a Framework
for Governmentwide Reform, p. 1.
234. Stahl, Public Personnel Administration, p. 41.
235. Riccucci and Naff, Personnel Management in
Government, p. 34.
236. Ibid. Figure is for the mid-1980s.
237. Andrew W. Boessel, “Local Personnel Manage-
ment,” Municipal Year Book, 1974 (Washington,
DC: International City Management Association,

1974), pp. 92–93. Figure is for 1974, and excludes
education.
238. Steven W. Hays, “Trends and Best Practices in
State and Local Human Resource Management,”
Review of Public Personnel Administration 24
(October 2004), pp. 256–275.
239. Jerrell D. Coggburn, “Personnel Deregulation:
Exploring Differences in the American States,”
Journal of Public Administration Research and
Theory 11 (April 2001), pp. 223–244. The quota-
tion is on p. 227.
240. Katherine Barrett and Richard Greene, “HR
Directors Get a Personnel Downgrade,” Governing
(April 2015), pp. 56–57. The quotation is on p. 57.
241. Selden, Ingraham, and Jacobson, “Human
Resource Practices in State Government,” p. 600.
Figure is for 1998.
242. As derived from data in Keon S. Chi, Kelley A.
Arnold and Heather M. Perkins, “Privatization
in Government: Trends and Issues,” Spectrum 76
(Fall 2003), pp. 12–21. The datum is on p. 16.
Figure is for 2002.
243. Steven W. Hays and Jessica E. Sowa, “A Broader
Look at the ‘Accountability’ Movement: Some
Grim Realities in State Civil Service Systems,”
Review of Public Personnel Administration 26
(June 2006), pp. 102–117.
244. Jonathan Walters, Life after Civil Service Reform:
The Texas, Georgia, and Florida Experiences
(Washington, DC: IBM Endowment for the
Business of Government, 2002), pp. 5, 12, and
Melissa Maynard, “Civil Service Changes Gain a
Foothold,” Stateline (June 12, 2012).
245. Coggburn, “Personnel Deregulation,” p. 241.
246. J. Edward Kellough and Sally Coleman
Selden, “The Reinvention of Public Personnel
Administration: An Analysis of the Diffusion of
Personnel Management Reforms in the States,”
Public Administration Review 63 (March/April
2003), pp. 165–176.
247. Robert J. McGrath, “The Rise and Fall of Radical
Civil Service Reform in the U.S. States,” Public
Administration Review 73 (July/August 2013),
pp. 638–649. The quotations are on p. 647
248. Walters, Life after Civil Service Reform, p. 39.
249. Chi, “Trends in State Civil Service Systems,” p. 406.
250. As derived from data in Book of the States, 2004
(Lexington, KY: Council of State Governments,
2004), pp. 389–482, Table 8.1. Figure is for 2003.
251. Barrett and Greene, “HR Directors Get a
Personnel Downgrade.”
Managing Human Capital 359
252. Robert M. Sanders, “GeorgiaGain or
GeorgiaLoss? The Great Experiment in State Civil
Service Reform,” Public Personnel Management
33 (Summer 2004), pp. 151–164. The quotation
is on p. 151.
253. “Georgia: Grading the States, 2005,” Governing
(February 2005), p. 49.
254. Stephen T. T. Teo and John J. Rodwell, “To Be
Strategic in the New Public Sector, HR Must
Remember Its Operational Activities,” Human
Resource Management 46 (Summer 2007),
pp. 265–284.
255. Sally Coleman Selden, “Human Resource Man-
agement in American Counties, 2002,” Public
Personnel Management 34 (Spring 2005), p. 61.
Figure is for 2002.
256. Harry P. Hatry and Carl F. Valente, “Alternative
Delivery Approaches Involving Increased Use of
the Private Sector,” Municipal Year Book, 1983
(Washington, DC: International City Management
Association, 1983), pp. 199–217. Figure (p. 200)
is for 1982.
257. George C. Homsy and Mildred Warner, “Inter-
municipal Cooperation: The Growing Reform,”
Municipal Year Book, 2014 (Washington, DC:
International City/County Management Asso-
ciation, 2014), pp. 53–65. Figures (p. 57) are for
2012.
258. Walters, Life after Civil Service Reform, pp. 5, 12.
259. Sally Coleman Selden, “The Impact of Discipline
on the Use and Rapidity of Dismissal in State
Governments,” Review of Public Personnel
Administration 26 (June 2006), pp. 335–355.
260. J. Edward Kellough and Lloyd G. Nigro,
“Dramatic Reform in the Public Service: At-Will
Employment and the Creation of a New Public
Workforce,” Journal of Public Administration
Research and Theory 16 (July 2006), pp. 447–466.
The quotation is on p. 447.
261. R. Paul Battaglio, Jr., “Public Service Reform
and Motivation: Evidence from an Employment
At-Will Environment,” Review of Public Per-
sonnel Administration 30 (September 2010),
pp. 341–363. The quotation is on p. 341.
262. Walters, Life after Civil Service Reform, pp. 5, 12.
263. Bowman and West, “State Government ‘Little
Hatch Acts’ in an Era of Civil Service Reform,”
p. 35.
264. Howard Risher, “How HR Departments Can
Assert Their Value,” Government Executive
(January 9, 2015).
 360 PA R T I I I Public and Nonprofit Management
265. “Why Chief Human Resources Officers Make
Great CEOs,” Harvard Business Review 92
(December 2014), pp. 30–34. The quotations are
on p. 30. This is a synopsis of a paper by David
Ulrich and Ellie Filler.
266. Hugh O’Neill, “The Growth of Municipal
Employee Unions,” Unionization of Municipal
Employees, Robert H. Connery and William V.
Farr, eds., Proceedings of the Academy of Political
Science (New York: Academy of Political Science,
December 1970), pp. 1–13.
267. Seymour Martin Lipset and Ivan Katchanovski,
“The Future of Public Sector Unions in the U.S.,”
Journal of Labor Research 22 (Spring 2001),
pp. 229–244.
268. U.S. Bureau of Labor Statistics, Union Members—
2015 (Washington, DC: Author, 2016), Table 3.
269. Lipset and Katchanovski, “The Future of Public
Sector Unions in the U.S.”
270. U.S. Bureau of Labor Statistics, Union Members—
2015, Table 3.
271. Ibid. Figure is for 2015.
272. U.S. Bureau of Labor Statistics, as cited in Terence
P. Jeffrey, “48.9 Percent of Union Members
Worked for Government in 2015,” CNSNews.
com (January 28, 2016).
273. U.S. Bureau of Labor Statistics, Union Members—
2015, Table 3.
274. U.S. Office of Personnel Management, Union
Recognition and Agreements in the Federal
Government (Washington, DC: U.S. Government
Printing Office, 1991), pp. 6–7.
275. U.S. Bureau of Labor Statistics, Union Members—
2015, Table 3.
276. U.S. Bureau of the Census, Statistical Abstract of
the United States, 1986, 106th ed. (Washington,
DC: U.S. Government Printing Office, 1986),
Table 714. Figure is for 1982.
277. U.S. Bureau of Labor Statistics, Union Members—
2015, Tables 3, 4.
278. Rick Cohen,“Unions and the Nonprofit Workforce:
A Few Considerations,” Nonprofitquarterly.org
(August 8, 2013).
279. The case is McLaughlin v. Tilendis.
280. Joe Nation, as quoted in Charles Duhigg, “Public
Unions Take On Bosses to Win Big Pensions,”
New York Times (June 21, 2011).
281. John Micklethwait and Adrian Wooldridge, The
Fourth Revolution: The Global Race to Reinvent
the State (New York: Penguin Press, 2014), p. 115.
282. Alan Greenblatt, “Unions Rethink Strategy After
Election Losses,” Governing.com (November 21,
2014).
283. Yosef Bhatti and Kasper Hansen, “Public Employ-
ees Lining Up at the Polls—The Conditional Effect
of Living and Working in the Same Municipality,”
Public Choice 156 (September 2013), pp. 611–629.
284. J. Ryan Lamare, “Union Influence on Voter Turnout:
Results from Three Los Angeles County Elections,”
Industrial and Labor Relations Review 63 (April
2010), pp. 454–470. The quotation is on p. 454.
285. U.S. General Accounting Office, Collective
Bargaining Rights: Information on the Number of
Workers with and without Collective Bargaining
Rights, GAO-02-835 (Washington, DC: U.S.
Government Printing Office, 2002), p. 6.
286. Mayer, Selected Characteristics of Private and
Public Sector Workers, p. 5. Decline in all workers
with negotiated agreements is for 1979–2013.
287. James R. Thompson, “Federal Labor-Management
Relations Reforms Under Bush: Enlightened
Management or. . .” Review of Public Personnel
Administration 27 (June 2007), pp. 105–124. The
quotation is on p. 105.
288. Dave Umhoefer, “For Unions in Wisconsin, a
Fast and Hard Fall since Act 10,” Jsonline.com
(November 28, 2016). Figures are for 2011–2015.
289. As derived from data in James Joyner, “Collective
Bargaining Rights by State,” Outside the Beltway
(Washington, DC: Outside the Beltway, 2011).
Data are for 2011.
290. David A. Dilts, William J. Walsh, and Constanza
Hagmann, “State Labor-Management Relations
Legislation: Adaptive Modeling,” Journal of
Collective Negotiations in the Public Sector 22
(1, 1993), pp. 79–86. Alabama, Kansas, and West
Virginia have meet-and-confer requirements.
291. Marvin J. Levine, “The Status of State ‘Sunshine
Bargaining’ Laws,” Labor Law Journal 30
(November 1980), p. 713.
292. Robert Hebdon “Labor-Management Relations
in the United States, 1999,” Municipal Year
Book, 2000 (Washington, DC: International City/
County Management Association, 2000), p. 23
293. U.S. Advisory Commission on Intergovernmental
Relations, State Laws Governing Local Govern-
ment and Administration, p. 49. Figure is for 1990.
294. The case is Circuit City Stores, Inc. v. Adams.
295. U.S. General Accounting Office, Collective
Bargaining Rights: Information on the Number of
Workers with and without Collective Bargaining
Rights, p. 10 n.

296. G. W. Bohlander, “Public Sector Grievance
Arbitration: Structure and Administration,”
Journal of Collective Negotiations in the Public
Sector 21 (2, 1992), pp. 271–286.
297. Debra J. Mesch and Olga Shamayera, “Arbitration
in Practice: A Profile of Public Sector Arbitration
Cases,” Public Personnel Management 25 (Spring
1996), pp. 119–136.
298. Dane M. Partridge, “Teacher Strikes and Public
Policy: Does the Law Matter?” Journal of
Collective Negotiations in the Public Sector 25
(1, 1996), pp. 3–21. The quotation is on p. 3.
299. David Lewin, Jeffrey H. Keefe, and Thomas A.
Kochan, “The New Great Debate about Unionism
and Collective Bargaining in U.S. State and Local
Governments,” Industrial & Labor Relations
Review 65 (October 2012), pp. 749–778. The
quotation is on p. 749.
300. As derived from data in U.S. Bureau of Labor
Statistics, Union Members—2015, Table 4.
301. Richard C. Kearney, “The Determinants of State
Employee Compensation,” Review of Public
Personnel Administration 23 (December 2003),
pp. 305–322. The quotation is on p. 305.
302. As derived from data in U.S. Bureau of Labor
Statistics, Union Members—2015, Table 4.
303. Peter Jamison and Catherine Saillant, “Public,
Private Sector Wage Gap Heavily Favors Many
L.A. City Workers,” Los Angeles Times (April 25,
2015).
304. Richard C. Kearney, with David G. Carnevale,
Labor Relations in the Public Sector, 3rd ed. (New
York: Marcel Dekker, 2001).
305. As derived from data in Jerri Killian and Enamul
Choudhury, “Continuity and Change in the Role
of City Managers,” Municipal Year Book, 2010
(Washington, DC: International City/County
Management Association, 2010), pp. 10–18.
Figure (p. 14) is for 2010.
306. Bruce A. Wallin, Budgeting for Basics:
The Changing Landscape of City Finances
(Washington, DC: Brookings, 2005), pp. 8–9.
Figures are for 1977–2000.
307. Melissa Maynard, “Public Strikes Explained:
Why There Aren’t More of Them?” Stateline
(September 25, 2012).
308. Riccucci and Naff, Personnel Management in
Government, p. 509. Figures are for 2000.
309. The “pension specialist” of the AFSCME, quoted
in Sterling Spero and John M. Capozzola, The
Urban Community and Its Unionized Bureaucracy
Managing Human Capital 361
(New York: Dunellen, 1973), p. 218.
310. U.S. Bureau of the Census, Statistical Abstract of
the United States, 1984, 104th ed. (Washington,
DC: U.S. Government Printing Office, 1984),
Table 731.
311. As derived from data in ibid. and U.S. Bureau of the
Census, Statistical Abstract of the United States,
1974, 95th ed., 1977, 98th ed., and 1980, 101st
ed. (Washington, DC: U.S. Government Printing
Office, 1974, 1977, 1980), Tables 596, 684, and
721, respectively. Figure is for 1970–1979.
312. As derived from data in Michael H. Cimini,
“1982–1997 State and Local Government
Work Stoppages and Their Legal Background,”
Compensation and Working Conditions 30 (Fall
1998), pp. 32–38, Table 5, and U.S. Bureau of
Labor Statistics, Major Work Stoppages, http://
www.bls.gov/schedule/archives/all_nr.htm.
313. Leo Troy, “Has Public Sector Unionism Topped
Out? What Is the Clinton Administration Doing
About It?” Government Union Review 17 (Spring
1996), pp. 1–40. The quotations are on p. 1.
314. Maggie Clark, “Union Membership Continues
Steady Decline in 2012,” Stateline (January 24,
2013).
315. Gallup Historical Trends, Labor Unions
(Washington, DC: Author, 2014). Figures are for
2011.
316. Stephanie Simon, “The Fall of Teachers Unions,”
Politico (June 13, 2014). Figures are for 2009–
2013.
317. Stephanie Simon, “California Teachers Lose Big in
Court,” Politico (June 10, 2014).
318. Simon, “The Fall of Teachers Unions.”
319. Jack Grovum, “After Supreme Court Ruling,
Fewer State Workers to Organize,” Stateline (July
4, 2014).
320. Barry Bluestone, “A Future for Public Unions?”
Boston.com (July 18, 2009). Figures are for
2000–2008.
321. Sean Nicholson-Crotty, Jason A. Grissom, and Jill
Nicholson-Crotty, “Governance and the Impact
of Public Employee Unions on Organizational
Performance,” Public Performance & Manage-
ment Review 35 (March 2012), pp. 422–448. The
quotation is on p. 422.
322. U.S. Department of Education, as cited in
Alejandra Matos, “1 in 4 U.S. Teachers Are
Chronically Absent, Missing More than 10 Days
of School,” Washington Post (October 26, 2016).
Data are for 2013–2014 school year.
 362 PA R T I I I Public and Nonprofit Management
323. Randall S. Davis, “Unionization and Work
Attitudes: How Union Commitment Influences
Public Sector Job Satisfaction.” Public Admini-
stration Review 73 (January/February 2013),
pp. 74–84.
324. Frederick C. Mosher, Democracy and the Public
Service (New York: Oxford University Press,
1968), p. 166. This is the first edition of this book.
Unless noted otherwise, all references to this work
are of the second (1982) edition.
325. Committee on Homeland Security and Gov-
ernmental Affairs, U.S. Senate, United States
Government Policy and Supporting Positions
(Plum Book), 2016, (Washington, DC: U.S.
Government Publishing Office, 2016). Figure is
for 2016.
326. Lisa Rein, “The Plum Book Is Here for Those
Angling for Jobs in Trump’s Washington,”
Washington Post (December 4, 2016). Figure is
for 2016.
327. National Commission on the Public Service,
Urgent Business for America, p. 18. In 1960, there
were 286 political executive positions.
328. James P. Pfiffner, “Political Appointees and Career
Executives: The Democracy-Bureaucracy Nexus
in the Third Century,” Public Administration
Review 47 (January/February 1987), pp. 57–65.
329. Committee on Homeland Security and
Governmental Affairs, U.S. Senate, United States
Government Policy and Supporting Positions
(Plum Book), 2016. Figure is for 2016.
330. Pfiffner, “Political Appointees and Career Exe-
cutives,” p. 58.
331. Partnership for Public Service and Booz Allen
Hamilton, Unrealized Vision, p. ii.
332. Darren Samuelsohn, Obama’s Vanishing Adminis-
tration (Washington, DC: Politico, 2016). Figures
are for 2015.
333. Paul C. Light, “Nominate and Wait,” New York
Times (March 24, 2009). Data are for 2009.
334. Darren Samuelsohn, Obama’s Vanishing Admini-
stration (Washington, DC: Politico, 2016). Figures
are for 2015.
335. Paul C. Light, “Recommendations Forestalled
or Forgotten? The National Commission on the
Public Service and Presidential Appointments,”
Public Administration Review 67 (May/June
2007), pp. 404–417. The quotation is on p. 408.
336. Paul C. Light and Virginia L. Thomas, The
Merit and Reputation of an Administration:
Presidential  Appointments on the Appointments
Process (Washington, DC: Brookings and Heritage
Foundation, 2000), p. 10. Figures are averages for
1984–1999.
337. U.S. Office of Personnel Management, Senior
Executive Service Survey Results for Fiscal Year
2011, p. 133.
338. Light, “Recommendations Forestalled or  For-
gotten?” p. 414. Emphasis is original.
339. Dean E. Mann and Jameson W. Doig, The
Assistant Secretaries: Problems and Processes
of Appointment (Washington, DC: Brookings,
1965), pp. 99, 165.
340. Joel D. Aberbach and Bert A. Rockman, “The Past
and Future of Political-Administrative Relations:
Research from Bureaucrats and Politicians to In
the Web of Politics—and Beyond,” International
Journal of Public Administration 29 (12, 2006),
pp. 977–995. The quotation is on p. 988.
341. Fred Malek, presidential personnel assistant in
the Nixon Administration, as quoted in Pfiffner,
“Political Appointees and Career Executives,”
pp. 63–64. Emphasis is original.
342. Nick Gallo and David E. Lewis, “The Con-
sequences of Presidential Patronage for Federal
Agency Performance,” Journal of Public Admini-
stration Research and Theory 22 (2, 2011),
pp. 219–243.
343. American Academy of Diplomacy, American
Diplomacy at Risk (Washington, DC: Author,
2015).
344. Donald P. Moynihan and Alasdair S. Roberts,
“The Triumph of Loyalty Over Competence:
The  Bush Administration and the Exhaustion
of the Politicized Presidency,” Public Admini-
stration Review 70 (July/August 2010), pp. 572–
581. The quotations are on pp. 574, 575. Emphasis
is original.
345. U.S. Merit Systems Protection Board, Prohibited
Personnel Practices: Employee Perceptions
(Washington, DC: U.S. Government Printing
Office, 2011), p. 29.
346. Dan Balz, “Bush’s Hurricane Damage,”
Washington Post (August 28, 2007).
347. Moynihan and Roberts, “The Triumph of Loyalty
Over Competence,” p. 578.
348. Christopher Cooper and Robert Block, Disaster:
Hurricane Katrina and the Failure of Homeland
Security (New York: Times Books, 2006).
349. Leon Panetta is quoted.
350. Moynihan and Roberts, “The Triumph of Loyalty
Over Competence,” p. 578.

351. Light and Thomas, The Merit and Reputation of
an Administration, p. 5. Studies cover 1964–1989
to 1984–1999.
352. B. Dan Wood and Miner P. Marchbanks, III,
“What Determines How Long Political Appointees
Serve?” Journal of Public Administration Research
and Theory 18 (July 2008), pp. 375–396. The
quotations are on pp. 391, 393. Emphasis is orig-
inal. Study covers 1982–2003.
353. Light and Thomas, The Merit and Reputation of
an Administration, p. 6. Figures are averages for
1984–1999.
354. Wood and Marchbanks, “What Determines How
Long Political Appointees Serve?” p. 390.
355. Ibid., p. 35, and Gregg Carlstrom, “Bush Appoin-
tees ‘Burrow In’,” FederalTimes.com (November
30, 2008), FederalTimes.com. Figure is for 1964–
1999, 2001–2008.
356. U.S. Government Accountability Office, Office
of Personnel Management: Actions Are Needed
to Help Ensure the Completeness of Political
Conversion Data and Adherence to Policy, GAO-
16-859 (Washington, DC: U.S. Government
Publishing Office, 2016), Highlights page.
357. Light and Thomas, The Merit and Reputation of
an Administration, p. 9. Figure is an average for
1984–1999.
358. U.S. Merit Systems Protection Board, The Senior
Executive Service: Views of Former Federal
Executives (Washington, DC: U.S. Government
Printing Office, 1989), pp. 20–21. Data are for
1989.
359. U.S. Merit Systems Protection Board, “Everyone
Knows the ABCs: What About the ASPs and
PPPs?” Issues of Merit (Fall 2016), pp. 1, 7.
360. U.S. Merit Systems Protection Board, The
Merit System Principles: Guiding the Fair and
Effective Management of the Federal Workforce
(Washington, DC: U.S. Government Publishing
Office, 2016). Figure is for 2014.
361. U.S. Office of Personnel Management, Senior
Executive Service Exit Survey Results April
2015  (Washington, DC: U.S. Government
Publishing Office, 2015), pp. 5, 9. Figures are for
2014.
362. Wood and Marchbanks, “What Determines How
Long Political Appointees Serve?” p. 390.
363. Anthony Bertelli and Sven E. Feldmann, “Strategic
Appointments,” Journal of Public Administration
Research and Theory 17 (January 2007), pp.
19–38. The quotation is on p. 36.
Managing Human Capital 363
364. Moynihan and Roberts, “The Triumph of Loyalty
Over Competence,” p. 579.
365. Laura Langbein, “Controlling Federal Agencies:
The Contingent Impact of External Controls
on Worker Discretion and Productivity,” Inter-
national Public Management Journal 12 (1,
2009), pp. 82–115. The quotation is on p. 103.
366. Aberbach and Rockman, “The Past and Future of
Political-Administrative Relations,” pp. 987–988.
367. U.S. Office of Personnel Management, Senior
Executive Survey Results for Fiscal Year 2011
(Washington, DC: U.S. Government Printing
Office, 2012), pp. 138–139.
368. Partnership for Public Service and Booz Allen
Hamilton, Unrealized Vision, p. 14.
369. Federalnewsradio.com, WFED Federal CHCO
Survey 2016, p. 8.
370. U.S. Office of Personnel Management, 2016
Federal Employment Viewpoint Survey Results,
Q. 61. Figures are for 2012–2016.
371. Federal News Radio, Senior Executives Asso-
ciation, and Federal Managers Association, Senior
Executive Service (Washington, DC: Authors,
2015). Figures are for 2015.
372. Partnership for Public Service and McKinsey
& Company, A Pivotal Moment for the Senior
Executive Service (Washington, DC: Authors,
2016), p. 8.
373. Quoted in Emily Kopp, “Fixing the SES: ‘This
Used to Be an Honor. Now It’s a Joke,’” Federal
News Radio (February 9, 2015).
374. James R. Thompson, as quoted (p. 58) in Jeffrey
L. Katz, “The Slow Death of Political Patronage,”
Governing (April 1991), pp. 58–62.
375. Stephen Allred, as quoted in ibid., p. 62.
376. U.S. Bureau of the Census, Census of Govern-
ments, 1992, Vol. 1, No. 2 (Washington, DC: U.S.
Government Printing Office, 1995).
377. As derived from data in Tari Renner and Victor
S. DeSantis, “Municipal Form of Government:
Issues and Trends,” Municipal Year Book, 1998
(Washington, DC: International City/County
Management Association, 1998), pp. 30–40,
and Evelina R. Moulder, “Municipal Form of
Government: Trends in Structure, Responsibility,
and Composition,” Municipal Year Book, 2008
(Washington, DC: International City/County
Management Association, 2008), pp. 3–8. Figures
are for 1991 and 2006.
378. As derived from data in Susan A. MacManus and
Charles S. Bullock, III, “The Form, Structure, and
 364 PA R T I I I Public and Nonprofit Management
Composition of America’s Municipalities in the
New Millennium,” Municipal Year Book, 2003
(Washington, DC: International City/County
Management Association, 2003), pp. 3–18.
Figures (p. 13) are for 1991 and 2001.
379. James Conant, “Management Consequences
of the 1960–1990 ‘Modernization’ of State
Government,” Handbook of State Government
Administration, John J. Gargan, ed. (New York:
Marcel Dekker, 2000), pp. 13–32. Twenty-six
states reorganized their governments, 1965–1990.
380. Frank P. Sherwood and Lee J. Breyer, “Executive
Personnel Systems in the States,” Public Admini-
stration Review 47 (September/October 1987),
pp. 410–416. The figure is on p. 411.
381. Mann and Doig, The Assistant Secretaries, p. 120.
In 1964, 90 percent of the assistant secretaries
and deputy agency administrators were college
graduates.
382. Jeffrey L. Brudney, Cynthia J. Bowling, and Deil
S. Wright, Continuity and Change in Public
Administration Across the 50 States: Linking
Practice, Theory, and Research through the
American State Administrators Project, 1964–
2008 (Auburn, AL: Center for Governmental
Services, Auburn University, 2010), p. 11. Current
figures are for 2008.
383. Ibid., p. 13. Current figures are for 2008. Growth
figures are for 1968–2008.
384. Bowman and West, “State Government ‘Little
Hatch Acts’ in an Era of Civil Service Reform,”
p. 24. Figures are for 2007.
385. Killian and Choudhury, “Continuity and Change
in the Role of City Managers,” p. 11. Figure is for
2009.
386. International City/County Management Asso-
ciation, ICMA State of the Profession Survey
2012 Summary (Washington, DC: Author 2014),
p. 3.
387. Patricia W. Ingraham, “Building Bridges or
Burning Them? The President, The Appointees,
and The Bureaucracy,” Public Administration
Review 47 (September/October 1987), pp. 425–
435. The figure is on p. 429.
388. Lewis, Political Appointments, Bureau Chiefs, and
Federal Management Performance, p. 35. Figure is
for 2004.
389. Joseph A. Ferrara and Lynn C. Ross, Getting to
Know You: Rules of Engagement for Political
Appointees and Career Executives (Arlington,
VA: IBM Center for the Business of Government,
2005), p. 9. Figure for political appointees is for
1992, and the authors provide some evidence that
the percentage has not changed much since then.
Figure for careerists is for 2003.
390. Kenneth J. Meier and Alisa Hicklin, “Employee
Turnover and Organizational Performance: Test-
ing a Hypothesis from Classical Public Admini-
stration,” Journal of Public Administration
Research and Theory 18 (October 2008), pp. 573–
590. The quotation is on p. 573.
391. U.S. Government Accountability Office, Federal
Chief Information Officers: Responsibilities,
Reporting Relationships, Tenure, and Challenges,
GAO-04-823 (Washington, DC: U.S. Government
Printing Office, 2004), p. 22. The quotation is a
summary of GAO’s much broader research, U.S.
General Accounting Office, Results-Oriented
Cultures: Implementation Steps to Assist Mergers
and Organizational Transformations, GAO-03-
669 (Washington, DC: U.S. Government Printing
Office, 2003).
392. Alexander Hamilton, The Federalist No. 72.
393. David E. Lewis, Political Appointments, Bureau
Chiefs, and Federal Management Performance
(Princeton, NJ: Princeton University, Woodrow
Wilson School of Public and International Affairs,
2005), pp. 4, 2.
394. Andrew Douglas McNitt, “Tenure in Office of
Big City Mayors,” State and Local Government
Review 42 (Winter 2010), pp. 22–35.
395. Carolyn Cain, Enamul Choudhury, and James C.
Clingermayer, “Turnover, Trust, and Transfers:
An Examination of Local Government Budget
Execution,” International Journal of Public
Administration 27 (August/September 2004),
pp. 557–576.
396. Ferrara and Ross, Getting to Know You, p. 9.
Figure is for 1992, but the authors provide some
evidence that it is still roughly correct.
397. As derived from data (pp. 478–479) in Claudia N.
Avellaneda, “Mayoral Quality and Local Public
Finance,” Public Administration Review 69 (May/
June 2009), pp. 469–486.
398. Mayer, Selected Characteristics of Private and
Public Sector Workers, pp. 16, 11. Figures are for
2013.
399. Franklin P. Kilpatrick, Milton C. Cummings, Jr.,
and M. Kent Jennings, The Image of the Federal
Service (Washington, DC: Brookings, 1964).
400. Dwaine Marvick, Career Perspectives in a
Bureaucratic Setting, University of Michigan

Governmental Studies, No. 27 (Ann Arbor, MI:
University of Michigan Press, 1954), p. 134.
401. Doyle W. Buckwalter and J. Ivan Legler, “City
Managers and City Attorneys: Associates or
Adversaries,” Public Administration Review 47
(September/October 1987), pp. 393–403. The
quotations are on p. 393.
402. Mosher, Democracy and the Public Service,
pp. 136–137, 140–141.
403. Ibid., p. 103.
404. Jean J. Couturier, “The Quiet Revolution in Public
Personnel Laws,” Public Personnel Management 5
(May/June 1976), pp. 150–168.
405. Mosher, Democracy and the Public Service,
pp. 104–105.
406. Ibid., p. 107.
407. The following list is based, loosely, on: U.S.
Government Accountability Office, Human
Capital: OPM Needs to Improve the Design,
Management, and Oversight of the Federal
Classification System, Highlights page.
408. Ibid. Figures are for 2013.
409. Partnership for Public Service and Grant
Thornton, Elevating Our Federal Workforce, p. 3.
Figure is for 2008.
410. National Commission on the Public Service,
Urgent Business for America, p. 27.
411. Partnership for Public Service and Booz Allen
Hamilton, Building the Enterprise: A New
Public Service Framework (Washington, DC, and
Herndon, VA: Authors, 2014).
412. James R. Thompson, “Commentary: Pay-banding:
What Have We Learned,” FederalTimes.com (June
4, 2007). Figure is for 2007.
413. National Commission on the State and Local
Public Service, Hard Truths/Tough Choices, p. 27.
414. Jonathan Walters, “Untangling Albany,”
Governing (December 1998), p. 20.
415. John Ortiz, “California Government Includes
State Pianist Classification,” Sacramento Bee
(January 30, 2015). Position classification figures
are for early 2015. By the end of 2015, the state
had 3,151.
416. Ibid. and John Ortiz, “The State Worker: Job
Titles Reveal California’s Hoarding Disorder”
and “Bureaucrats Take On Bureaucracy,”
Sacramento Bee (October 27 and January 30,
2015, respectively).
417. Keon S. Chi, “Trends in State Civil Service
Systems: Personnel Agencies, Reform Efforts,
Classifications and Workforce Planning,” Book
Managing Human Capital 365
of the States (Lexington, KY: Council of State
Governments, 2004), pp. 405–412. The data are
on p. 410.
418. Cortney Whalen and Mary E. Guy, “Broadbanding
Trends in the States,” Review of Public Personnel
Administration 28 (December 2008), pp. 349–
366. Figures (p. 349) are for 2008.
419. Selden, Human Capital, p. 147. Figures are for
2007.
420. National Academy of Public Administration,
Modernizing Federal Classification: An Oppor-
tunity for Excellence (Washington, DC: Author,
1991), p. 148. Data are for 2007, and refer to
states that have broadbanded at least 75 percent
of their workforces.
421. Jonathan West, “City Personnel Management:
Issues and Reforms,” Public Personnel Manage-
ment 13 (Fall 1984), pp. 317–334. Figure, 56
percent, is for 1983.
422. James L. Perry, Trent A. Engbers, and So Yun Jun,
“Back to the Future? Performance-Related Pay,
Empirical Research, and the Perils of Persistence,”
Public Administration Review 69 (January/
February 2009), p. 45.
423. Robert L. Mathis and John H. Jackson, Human
Resource Management, 12th ed. (Mason, OH:
Thomson South-Western, 2008), pp. 353–354.
424. U.S. General Accounting Office, Managing
for Results: Emerging Benefits from Selected
Agencies’ Use of Performance Agreements, GAO-
01-115 (Washington, DC: U.S. Government
Printing Office, 2000).
425. Mads L. F. Jakobsen and Peter B. Mortensen,
“Rules and the Doctrine of Performance
Management,” Public Administration Review 75
(March/April 2016), pp. 302–321. The quotation
is on p. 302.
426. Selden, Ingraham, and Jacobson, “Human
Resource Practices in State Government,” p. 605.
Rhode Island is the exception.
427. Pew Center on the States, People Forward, p. 5.
Figure, 87 percent, is for thirty responding states
in 2007.
428. Freyss, “Continuity and Change in Local Personnel
Policies and Practices,” p. 15. Figure is for 1995.
429. Ron Carlee, Martha Perego, and Evelina R.
Moulder, “CAO Salary and Compensation:
The Big Picture,” Municipal Year Book, 2013
(Washington, DC: International City/County
Management Association, 2013), pp. 63–71.
Figure is for 2011.
 366 PA R T I I I Public and Nonprofit Management
430. Jeff Neal, “Why Bother with Performance
Reviews?” Federalnewsradio.com (September 23,
2013).
431. Marcus Buckingham and Ashley Goodall,
“Reinventing Performance Management,” hbr.
org [Harvard Business Review] (April, 2015).
Emphasis is original.
432. Alina Tugend, “Uncertainty about Jobs Has a
Ripple Effect,” New York Times (May 16, 2014).
433. Jonathan Walters, “I Have to Talk to You
About Your Job. . .” Governing (March 2001),
pp. 44–45.
434. Hal G. Rainey, Carol Traut, and Barry Blunt,
“Reward Expectancies and Other Work-Related
Attitudes in Public and Private Organizations:
A Review and Extension,” Review of Public
Personnel Administration 5 (July 1986), pp. 50–72.
435. Howard Risher, “As Companies Shed Annual
Reviews, Should Government Follow Suit?”
Govexec.com (July 28, 2015).
436. Buckingham and Goodall, “Reinventing Perfor-
mance Management.”
437. Kellie Lunney, “Held Back,” Government Exe-
cutive (January/February 2015), pp. 16–22. The
quotation is on p. 15.
438. U.S Merit Systems Protection Board, A Call to
Action, pp. 35–36. Data are for 2009.
439. Dennis M. Daley, Performance Appraisal in the
Public Sector (Westport, CN: Quorum, 1992).
440. Perry, Engbers, and Jun, “Back to the Future?”,
pp. 39–51.
441. Etienne Charbonneau and Francois Bellavance,
“Blame Avoidance in Public Reporting,” Public
Performance & Management Review 35 (March
2012), pp. 399–421. The quotation is on p. 399.
442. U.S. Government Accountability Office, Federal
Workforce: Preliminary Observations on Strength-
ening Employee Engagement During Challenging
Times, p. 15.
443. Katherine Barrett and Richard Greene, “What
Employee Surveys Reveal about Working in
Government,” Governing.com (June 9, 2016).
444. U.S. General Accounting Office, Posthearing
Questions Related to Pay for Performance, GAO-
03-793R Pay for Performance (Washington, DC:
U.S. Government Printing Office, 2003), pp. 1–2.
445. Selden, Human Capital, p. 116.
446. U.S. Government Accountability Office, Govern-
ment Performance: Lessons Learned for the
Next Administration on Using Performance
Information to Improve Results, GAO-08-1026T
(Washington, DC: U.S. Government Printing
Office, 2008), p. 6. Figures are for 1997–2007.
447. U.S. Merit Systems Protection Board, The Federal
Government: A Model Employer or a Work in
Progress? p. 33.
448. U.S. Office of Personnel Management, 2016
Federal Employee Viewpoint Survey Results,
Q. 15.
449. Hays, “Trends and Best Practices in State and
Local Human Resource Management,” p. 267.
450. Heather Kerrigan, “Making Performance a
Priority,” Governing (April 2011), pp. 54–55.
451. U.S. Merit Systems Protection Board, The Federal
Workforce for the 21st Century: Results of the
Merit Principles Survey 2000 (Washington, DC:
U.S. Government Printing Office, 2003), p. 24.
452. Partnership for Public Service, Asking the Wrong
Questions, p. 3.
453. Corporate Leadership Council, Literature Review:
Employee Selection Tests, Catalog No. 070-198-
213 (Washington, DC: Author, 1998).
454. Joyce Ehrlinger, Kerri Johnson, Matthew Banner,
et al., “Why the Unskilled Are Unaware: Further
Explorations of (Absent) Self-Insight among the
Incompetent,” Organizational Behavior and
Human Decision Processes, 105 (January 2008),
pp. 98–121. The quotations are on pp. 117–119.
455. Amy C. Edmondson and Anita L. Tucker,
“Why Hospitals Don’t Learn from Failures:
Organizational and Psychological Dynamics that
Inhibit System Change,” California Management
Review 45 (2, 2003), pp. 55–72.
456. U.S. Government Accountability Office, Issues
Related to Poor Performers in the Federal
Workplace, GAO-05-812R Poor Performers in
the Federal Workplace (Washington, DC: U.S.
Government Printing Office, 2005), p. 2.
457. Light, “To Restore and Renew.” Figure is for 2001.
458. U.S. Office of Personnel Management, Poor
Performers in Government: A Quest for the
True Story (Washington, DC: U.S. Government
Printing Office, 1999), p. 6. Figure, 3.7 percent, is
for 1998.
459. U.S. Merit Systems Protection Board, Federal
Supervisors and Poor Performers (Washington,
DC: U.S. Government Printing Office, 1999),
pp. 15–16.
460. As derived from data in ibid., pp. 7, 15; U.S.
Bureau of the Census, Statistical Abstract of the
United States, 1998, 118th ed. (Washington, DC:
U.S. Government Printing Office, 1998), Table

561; U.S. Government Accountability Office,
Federal Workforce: Improved Supervision and
Better Use of Probationary Periods Are Needed
to Address Substandard Employee Performance,
GAO-15-191 (Washington, DC: U.S. Government
Publishing Office, 2015), p. 22; and Andy Medici,
“Federal Employee Firings Hit Record Low in
2014,” FederalTimes.com (February 24, 2015).
Figures are for 1997, 2004–2014.
461. Kevin R. Kosar, “The Common Perception Is
True,” Weeklystandard.com (May 25, 2015).
Figure, 41 percent, is for 2000–2014.
462. U.S. Merit Systems Protection Board, Federal
Supervisors and Poor Performers, p. 8.
463. Andy Medici, “Federal Firings Continue to
Drop: Lower Grades, TSA Fired the Most,”
FederalTimes.com (June 23, 2014). Figures are for
2009–2013.
464. Ricccucci and Naff, Personnel Management in
Government, p. 27.
465. Bonnie Kristian, “Government Employees Say
They’re Only Watching Porn at Work Because
They’re Bored,” The Week (August 1, 2014).
466. Charles S. Clark, “Lawmakers Wonder ‘How
Much Porn’ It Takes to Fire an EPA Employee?”
Government Executive (May 8, 2014).
467. James B. King, then-director of OPM, as cited
in Frank Greve, “Civil Service Can Be a Job for
Life,” Baltimore Sun (November 29, 1993).
468. Katherine McIntire Peters, “What Does It Take
to Get Fired by a Federal Agency?” Govexec.com
(August 26, 2015).
469. U.S. Office of Personnel Management, Poor
Performers in Government, p. 13.
470. U.S. Merit Systems Protection Board, The Pro-
bationary Period: A Critical Assessment Oppor-
tunity (Washington, DC: Author, 2005), pp. 9, 7.
Figures are for 1998–2001.
471. As derived from data in U.S. Merit Systems
Protection Board, Supervisory Probationary
Period: A Missed Opportunity (Washington, DC:
U.S. Government Printing Office, 2011). Figure is
for FY 2007.
472. National Commission on the Public Service,
Urgent Business for America, pp. 40–41.
473. U.S. Merit Systems Protection Board, Annual
Report for FY 2015 (Washington, DC: U.S.
Government Publishing Office, 2016). Findings
figure excludes dismissed appeals.
474. U.S. Government Accountability Office, Federal
Workforce: Improved Supervision and Better Use
Managing Human Capital 367
of Probationary Periods Are Needed to Address
Substandard Employee Performance, p. 15. Refers
to the Chapter 43 process.
475. U.S. Equal Employment Opportunity Commission,
Annual Report on the Federal Workforce Fiscal
Year, 2010 (Washington, DC: U.S. Government
Printing Office, 2011), Figures 7, 12.
476. Lisa Rein, “Fight for Job Leaves Stephen Patrick
Idle and on the Federal Payroll,” Washington Post
(October 9, 2011).
477. U.S. Office of Personnel Management, Poor Perfor-
mers in Government, p. 33.
478. U.S. Merit Systems Protection Board, Federal
Supervisors and Poor Performers (Washington,
DC: U.S. Government Printing Office, 1999),
pp. 13, 17. Figure is for 1996.
479. U.S. General Accounting Office, Performance
Management: How Well Is the Government
Dealing with Poor Performers? GAO/GGD-91-7
(Washington, DC: U.S. Government Printing
Office, 1990), pp. 32–33.
480. The Future Foundation and SHL, Getting the
Edge in the New People Economy (London and
New York: Authors, 2004), p. 31.
481. U.S. Merit Systems Protection Board, Federal
Supervisors and Poor Performers, pp. 19, 13, 17.
Figures are for 1996.
482. U.S. Government Accountability Office, Issues
Related to Poor Performers in the Federal
Workplace, p. 11. Figure is for 2003.
483. Government Business Council, “The People
Problem,” Government Executive (January/
February 2015), pp. 24–25. Figures are for 2014.
484. Katherine McIntire Peters, “Despite Drugs, Sex
with a Minor and More, EPA Employees Still Got
Paid,” Govexec.com (November 11, 2015).
485. U.S. Government Accountability Office, Federal
Paid Administrative Leave: Additional Guidance
Needed to Improve OPM Data, GAO-15-79
(Washington, DC: U.S. Government Publishing
Office, 2015), Highlights page, pp. 25, 30. Figures
are for 2011–2013.
486. Treasury Inspector General for Tax Admini-
stration, Review of the Internal Revenue Service’s
Process to Address Violations of Tax Law by Its
Own Employees (Washington, DC: U.S. Treasury
Department, 2015).
487. Treasury Inspector General for Tax Admini-
stration, Additional Consideration of Prior
Conduct and Performance Issues Is Needed When
Hiring Former Employees (Washington, DC: U.S.
 368 PA R T I I I Public and Nonprofit Management
Treasury Department, 2014), pp. 5–6. Figures are
for 2010–2013.
488. U.S. Merit Systems Protection Board, Federal
Supervisors and Poor Performers, p. 8 (which
cites studies beginning in 1981), and U.S. Office of
Personnel Management, 2014 Federal Employee
Viewpoint Survey, Q. 23.
489. U.S. Office of Personnel Management, 2014
Federal Employee Viewpoint Survey (Washington,
DC: U.S. Government Publishing Office, 2015),
Q. 23.
490. U.S. Office of Personnel Management, 2016
Federal Employee Viewpoint Survey (Washington,
Q. 23. Figures are for 2012–2016.
491. Government Business Council, “The People
Problem,” p. 25. Figure is for 2014.
492. Partnership for Public Service, Improving Leader-
ship, p. 2. Figures are for 2014.
493. U.S. Merit Systems Protection Board, In Search
of Highly Skilled Workers, p. 33. Figures are for
2005.
494. U.S. Office of Personnel Management, Senior
Executive Service Survey Results for Fiscal Year
2011, p. 137.
495. Federal News Radio, Senior Executives
Association, and Federal Managers Association,
Senior Executive Service. Figures are for 2015.
496. U.S. Merit Systems Protection Board, Remov-
ing Poor Performers in the Federal Service
(Washington, DC: U.S. Government Printing
Office, 1995), p. 6. Figure is for 1994.
497. U.S. Merit Systems Protection Board, A Call to
Action, p. 36. Figure is for 2009.
498. U.S. Merit Systems Protection Board, Removing
Poor Performers in the Federal Service, p. 7. Figure
is for 1994.
499. U.S. Merit Systems Protection Board, A Call to
Action, p. 37. Figure is for 2009.
500. Dennis M. Daley, “The Burdens of Dealing with
Poor Performers: Wear and Tear on Supervisory
Organizational Engagement,” Review of Public
Personnel Administration 28 (March 2008),
pp. 44–59.
501. Selden, Human Capital, p. 63. “Involuntary sep-
arations” were 1.76 percent in 2007 and 1.95
percent in 2000.
502. As derived from data in U.S. Merit Systems
Protection Board, Federal Supervisors and Poor
Performers, pp. 7, 15. Figure is for 1997.
503. Selden, Human Capital, p. 51, and U.S. Merit
Systems Protection Board, The Probationary
Period, p. 9. Figures are 22 percent and 1.6
percent, respectively.
504. Elling, Thompson, and Monet, “The Problematic
World of State Management.” Figures are for
2000–2001.
505. Pew Center on the States, People Forward, p. 28.
Figures are for 2007.
506. Elling, Thompson, and Monet, “The Problematic
World of State Management.” Figures are for
2000–2001.
507. As derived from data in Robert Hebdon “Labor-
Management Relations in the United States,
1999,” Municipal Year Book, 2000 (Washington,
DC: International City/County Management
Association, 2000), pp. 22–27.
508. Light, “The Content of Their Character,” p. 15.
Figures are for 2001–2002.
509. Jeanne Bell and Marla Cornelius, Under-
developed:  A National Study of Challenges
Facing Nonprofit Fundraising (San Francisco and
Oakland, CA: Evelyn & Walter Haas, Jr. Fund
and CompassPoint, 2013), p. 6. Figures are for
2013.
510. Charles A. O’Reilly III and Barton A. Weitz,
“Managing Marginal Employees: The Use of
Warnings and Dismissals,” Administrative Science
Quarterly 25 (3, 1980), pp. 467–484.
511. Perry Klebahn, as cited in Huggy Rao and
Robert  I. Sutton, Bad to Great: The Path to
Scaling  Up Excellence (New York: McKinsey.
com, 2014).
512. Srini Tridanadapandi, Senthil Ramamurthy, James
J. Galgano, and James M. Provenzale, “Increasing
Rate of Detection of Wrong-Patient Radio-
graphs: Use of Photographs Obtained at Time of
Radiology,” American Journal of Roentgenology
200 (April 2013), pp. W345–W352.
513. Vanessa K. Bohns, Francesca Gina, and Chen-Bo
Zhong, “Good Lamps Are the Best Police:
Darkness Increases Dishonesty and Self-Interested
Behavior,” Psychological Science 21 (4, 2010),
pp. 311–314.
514. Council for Excellence in Government, Gallup,
and Accenture, The Appeal of Public Service, p. 5.
Figure is for 2008.
515. Selden, Human Capital, p. 141. Figures are for
1980–2007.
516. Christopher Lee and Hall Straus, “Two-Thirds of
Federal Workers Get a Bonus,” Washington Post
(May 17, 2004). Figures are for FY 2002.
517. Howard Risher, Pay for Performance: A Guide for

Federal Managers (Washington, DC: IBM Center
for the Business of Government, 2004), p. 41.
518. Kellie Lunney, “71 Percent of Career Senior
Executives Received Bonuses in Fiscal 2015,”
Govexec.com (November 1, 2016).
519. Editors, “Hold Poor Performers Accountable,
Starting Now,” FederalTimes.com (February 28,
2013).
520. OPM, as cited in Andy Medici, “Pay Freezes
Accelerate GS ‘Grade Creep,’” FederalTimes.com
(July 14, 2014).
521. Gregory B. Lewis, “Grade Creep in the
Federal Service?” American Review of Public
Administration 27 (March 1997), pp. 4–21.
522. U.S. Office of Personnel Management, 2016
Federal Employee Viewpoint Survey, Q. 25.
523. U.S. Office of Personnel Management, 2014
Federal Employee Viewpoint Survey, Q. 25.
524. U.S. Merit Systems Protection Board, The Federal
Government: A Model Employer or a Work in
Progress? p. 30. In 1983, 17 percent agreed with
the statement.
525. U.S. Government Accountability Office, Gov-
ernment Performance: Lessons Learned for the
Administration on Using Performance Infor-
mation to Improve Results, GAO-08-1026T
(Washington, DC: U.S. Government Printing
Office, 2008), p. 6. Figures are for 1997–2007.
526. “Happy on the Job?” p. 54. Figure is for 2013.
527. Richard C. Elling, “Bureaucracy: Maligned Yet
Essential,” Politics in the American States: A
Comparative Analysis, 6th ed., Virginia Gray and
Herbert Jacob, eds. (Washington, DC: CQ Press,
1996), pp. 286–318. The quotations are on p.
292. Figure, 51 percent, is for the “mid-1980s.”
528. Selden, Human Capital, p. 143. Figures are for
2004–2007.
529. Pew Center on the States, People Forward, p. 5.
530. Jungin Kim, “Impact of Performance Appraisal
Justice on the Effectiveness of Pay-for-Perfor-
mance Systems After Civil Service Reform,”
Public Personnel Management 45 (June 2016),
pp. 148–170. The quotation is on p. 148.
531. Freyss, “Continuity and Change in Local
Personnel Policies and Practices,” p. 15. Figure is
for 1995.
532. Selden, “Human Resource Management in
American Counties, 2002,” p. 81. Figures are for
2002.
533. Carlee, Perego, and Moulder, “CAO Salary and
Compensation,” p. 68. Figure is for 2011.
Managing Human Capital 369
534. Perry, Engbers, and Jun, “Back to the Future?”
p. 47.
535. Adrian Ritz, Gene A. Brewer, and Oliver
Neumann, “Public Service Motivation: A
Systematic Literature Review and Outlook,”
Public Administration Review 76 (May/June
2016), pp. 414–426. The quotation is on p. 414.
536. Antoinette Weibel, Katja Rost, and Margit
Osterloh, “Pay for Performance in the Public
Sector—Benefits and (Hidden) Costs,” Journal of
Public Administration Research and Theory 20
(April 2010), pp. 387–412. The quotation is on
p. 387.
537. Gene A. Brewer and Richard M. Walker,
“The Impact of Red Tape on Governmental
Performance: An Empirical Analysis,” Journal of
Public Administration Research and Theory 20
(January 2010), pp. 233–257. The quotation is on
p. 249.
538. U.S. Office of Personnel Management, 2016
Federal Employee Viewpoint Survey, Q. 33.
539. U.S. Office of Personnel Management, 2014
Federal Employee Viewpoint Survey, Q. 33.
540. Partnership for Public Service, Positioned for
Change: Understanding Staff/Manager Alignment
(Washington, DC: Author, 2014), p. 5. Figures are
for 2013.
541. Partnership for Public Service, Improving
Leadership, p. 2. Figures are for 2014.
542. Sungjoo Choi and Andrew B. Whitford. Merit-
based Pay and Employee Satisfaction in Federal
Agencies, Issues in Governance Studies No. 63
(Washington, DC: Brookings, 2013).
543. Seong Soo Oh and Gregory B. Lewis, “Can Perfor-
mance Appraisal Systems Inspire Intrinsically
Motivated Employees?” Review of Public Person-
nel Administration 29 (June 2009), pp. 158–167.
The quotation is on p. 160.
544. Risher, Pay for Performance, pp. 4, 7.
545. Here are a couple of examples among several:
J. Edward Kellough and Lloyd G. Nigro, “Pay
for Performance in Georgia State Govern-
ment:  Employee Perspectives on Georgia Gain
after 5 Years,” Review of Public Personnel
Administration, 22 (June 2002), pp. 146–166,
and  James S. Baldwin, Marc G. Gertz, Sally C.
Gertz, and Russell L. Williams, “Civil Service
Reform in Florida State Government: Employee
Attitudes One Year Later,” Review of Public
Personnel Administration 23 (December 2003),
pp. 286–304.
 370 PA R T I I I Public and Nonprofit Management
546. Edmund Stazyk, “Crowding Out Public Service
Motivation? Comparing Theoretical Expectations
with Empirical Findings on the Influence of
Performance-Related Pay,” Review of Public
Personnel Administration 33 (September 2013),
pp. 252–274.
547. Perry, Engbers, and Jun, “Back to the Future?”
p. 47.
548. Nicola Belle, “Performance-Related Pay and
the Crowding Out of Motivation in the Public
Sector: A Randomized Field Experiment,” Public
Administration Review 75 (March/April 2015),
pp. 230–241. The quotations are on p. 230.
549. Risher, Pay for Performance, p. 10.
550. Henry L. Tosi, Steve Werner, Jeffrey P. Katz,
and Luis R. Gomez-Mejia, “How Much Does
Performance Matter? A Meta-Analysis of CEO
Pay Studies,” Journal of Management 26 (2,
2000), pp. 301–339. The quotation is on p. 301.
551. Elizabeth K. Keating and Peter Frumkin, “The
Price of Doing Good: Executive Compensation in
Nonprofit Organizations,” Policy and Society 29
(3, 2010), pp. 269–282. The quotation is on p. 279.
552. Debra Mesch and Patrick M. Rooney, “Deter-
minants of Compensation: A Study of Pay, Per-
formance, and Gender Differences for Fundraising
Professionals,” Nonprofit Management & Leader-
ship 18 (Summer 2008), pp. 435–463. The quota-
tions are on pp. 441, 458.
553. Partnership for Public Service and Grant
Thornton, Bracing for Change (Washington,
DC, and Alexandria, VA: Authors, 2012), p. 17.
Figures are for 2012.
554. Robert Roberts, “The Supreme Court and the
Continuing Deconstitutionalization of Public
Personnel Management,” Review of Public Person-
nel Administration 29 (March 2009), pp.  3–19.
The quotation is on p. 4.
555. Carol Rusaw, “Professionalism under the
‘Performance-Based Pay’ Reform: A Critical
Assessment and Alternative Development Model,”
Public Personnel Management 38 (Winter 2009),
pp. 35–53.
556. U.S. General Accounting Office, High-Risk Series:
Strategic Human Capital Management, GAO-03-
120 (Washington, DC: U.S. Government Printing
Office, 2003).
557. Perry, Engbers, and Jun, “Back to the Future?”
p. 47.
558. Unless noted otherwise, the following list is based
on: ibid.; Rusaw, “Professionalism under the
‘Performance-Based Pay’ Reform”; U.S. General
Accounting Office, High-Risk Series: Strategic
Human Capital Management; Organisation  for
Economic Co-operation and Development,
Performance-Related Pay Policies for Government
Employees (Paris: Author, 2005); and U.S.
Merit Systems Protection Board, Managing for
Engagement: Communication, Connection, and
Courage (Washington, DC: U.S. Government
Printing Office, 2009), pp. 66–74.
559. Carl Dahlstrom and Victor Lapuente, “Explaining
Cross-Country Differences in Performance-
Related Pay in the Public Sector,” Journal of
Public Administration Research and Theory 20
(July 2010), pp. 577–600. The quotation is on
p. 577.
560. Reginald Wilson, Affirmative Action: Yesterday,
Today, and Beyond (Washington, DC: American
Council on Education, 1995), p. 6.
561. U.S. Office of Personnel Management, Report on
the Employment of Individuals with Disabilities
in the Federal Executive Branch, Fiscal Year 2015
(Washington, DC: U.S. Government Publishing
Office, 2016).
562. Pan S. Kim, “Disability Policy: An Analysis of the
Employment of People with Disabilities in the
American Federal Government,” Public Personnel
Management 25 (Spring 1996), pp. 73–88. The
quotation is on p. 73.
563. American Bar Association, as cited in: Laurie
Asseo, “High Court Limits Disabilities Law,”
Washington Post (June 22, 1999).
564. Dan A. Black, Hoda R. Makar, Seth G. Sanders,
and Lowell J. Taylor, “The Earnings Effects
of Sexual Orientation,” Industrial & Labor
Relations Review 56 (April 2003), pp. 449–470.
565. Gregory B. Lewis and David W. Pitts,
“Representation of Lesbians and Gay Men in
Federal, State, and Local Bureaucracies,” Journal
of Public Administration Research and Theory
21 (January 2011), pp. 159–180. Figures (p. 167)
are for 2000, and refer to percentages of same-
sex partners.
566. Eddy Ng, Linda Schweitzer, and Sean Lyons,
“Anticipated Discrimination and a Career Choice
in Nonprofit,” Review of Public Personnel Admini-
stration 32 (December 2012), pp. 332–352.
567. Benyamin Applebaum and Michael D. Shear,
“Once Skeptical of Executive Power, Obama Has
Come to Embrace It,” New York Times (August
13, 2016). Figure is for 2016.

568. Lewis and Pitts, “Representation of Lesbians
and Gay Men in Federal, State, and Local
Bureaucracies,” p. 169. Figures are for 2000.
569. The cases are United States v. Walden and
Hollingsworth v. Perry.
570. U.S. Office of Personnel Management, 2014
Federal Employee Viewpoint Survey Results, p. 31.
571. U.S. Merit Systems Protection Board, Sexual
Orientation and the Federal Workplace, p. ii.
Datum is for 2010.
572. U.S. Merit Systems Protection Board, “Sexual
Orientation, Workplace Treatment, and the
Limitations of Survey Data,” Issues of Merit
(September 2009), p. 4. Figure is for 2005, 2007.
573. U.S. Merit Systems Protection Board, Sexual
Orientation and the Federal Workplace: Policy and
Perception (Washington, DC: U.S. Government
Printing Office, 2014), p. ii.
574. U.S. General Accounting Office, Sexual Orient-
ation-Based Employment Discrimination: States’
Experience with Statutory Prohibitions, GAO-
02-878R (Washington, DC: U.S. Government
Printing Office, 2002), p. 2.
575. Nicole DuPuis, Trevor Langan, Christina McFarland,
et al., City Rights in an Era of Preemption: A
State-by-State Analysis (Washington, DC: National
League of Cities, 2017), p. 10. Figures are for 2016.
576. As derived from data in U.S. House of
Representatives, Committee on Government
Reform—Minority Staff, Special Investigations
Division, Dollars, Not Sense: Government
Contracting Under the Bush Administration
(Washington, DC: Author, 2006).
577. The case is Fullilove v. Klutznick.
578. Mitchell F. Rice and Maurice Mongkuo, “Did
Adarand Kill Minority Set-Asides?” Public
Administration Review 58 (January/February
1998), p. 85, and Federal Register, cited in Ann
Devroy, “Affirmative Action Rules Are Revised,”
Washington Post (May 23, 1996).
579. U.S. Government Accountability Office, New
Markets Tax Credits: Minority Entities Are Less
Successful in Obtaining Awards Than Non-
Minority Entities, GAO-09-536 (Washington,
DC: U.S. Government Printing Office, 2009),
Highlights page. Data are for 2005–2008.
580. U.S. Department of Commerce analysis, as citied
in Jackie Calmes, “Businesses Owned by Women
Less Likely to Win U.S. Contracts, Study Shows,”
New York Times (February 2, 2016). Figure is for
2014.
Managing Human Capital 371
581. George R. La Noue and John C. Sullivan, “Race
Neutral Programs in Public Contracting,” Public
Administration Review 55 (July/August 1995),
pp. 348–356. The quotation is on p. 354.
582. The case is MetroBroadcasting v. Federal Com-
munications Commission.
583. The case is CBOCS West, Inc. v. Humphries.
584. The case is Gomez-Perez v. Potter.
585. U.S. Equal Employment Opportunity Commission,
Retaliation-Based Charges FY 1997-FY 2013.
586. Linda Greenhouse, “Justices Say Law Bars
Retaliation Over Bias Claims,” New York Times
(May 28, 2008). Datum is for 1993–2008.
587. Robert J. Huntley and Robert J. McDonald,
“Urban Managers: Organizational Preferences,
Managerial Styles, and Social Policy Roles,”
Municipal Year Book, 1975 (Washington, DC:
International City Management Association,
1975), pp. 149–159. Data (for 1974) and quota-
tion (emphasis added) are on p. 157.
588. Lana Stein, “Merit Systems and Political
Influence: The Case of Local Governments,”
Public Administration Review 47 (May/June
1987), pp. 263–271. Data (p. 270) are for 1986.
589. Evelina R. Moulder, “Affirmative Action in
Local Government,” Municipal Year Book 1991
(Washington, DC: International City Management
Association, 1991), pp. 47–52.
590. Robert Barnes, “University of Michigan
Offers to Be Test Case for Race Admissions,”
Washingtonpost.com (December 8, 2015).
591. The cases are known as Fisher v. University of
Texas I (2013) and Fisher v. University of Texas II
(2016).
592. Paul Oyer and Scott Schaefer, “Sorting, Quotas,
and the Civil Rights Act of 1991: Who Hires
When It’s Hard to Fire?” Journal of Law and
Economics 45 (April 2002), pp. 41–68.
593. Moulder, “Affirmative Action in Local Govern-
ment,” p. 51, and Evelina R. Moulder, “Affirmative
Action: The Role Local Governments Are
Playing,” Municipal Year Book 1986 (Washington,
DC: International City Management Association,
1986), pp. 24–28 (the data are on p. 26).
594. Jean Couturier, “Court Attacks on Testing: Death
Knell or Salvation for the Civil Service System,”
Good Government 88 (Winter 1971), pp. 10–12.
595. Couturier, “The Quiet Revolution in Public
Personnel Laws.” Figures are for 1971–1976.
596. Elizabeth L. Schoenfelt and Leslie C. Pedigo,
“A Review of Court Decisions on Cognitive
 372 PA R T I I I Public and Nonprofit Management
Ability Testing, 1992–2004,” Review of Public
Personnel  Administration 25 (September 2005),
pp. 271–287. The quotation is on p. 272.
597. See, for example, James L. Outtz, “The Role of
Cognitive Ability Tests in Employment Selection,”
Human Performance 15 (Spring 2002), pp. 161–
171, and Kevin R. Murphy, “Can Conflicting
Perspectives on the Role of g in Personnel
Selection Be Resolved?” pp. 173–186, in the same
issue.
598. Earl Hunt, “When Should We Shoot the
Messenger? Issues Involving Cognitive Testing,
Public Policy, and the Law,” Psychology, Public
Policy, and Law 2 (September/December1996),
pp. 486–505.
599. The case is Albemarle Paper Co. v. Moody.
600. The case is State of Connecticut, et al. v. Adele.
601. Schoenfelt and Pedigo, “A Review of Court
Decisions on Cognitive Ability Testing, 1992–
2004.”
602. The case is Personnel Administrator v. Feeney.
603. The case is Chicago Firefighters Local 2, et al. v.
City of Chicago, et al.
604. The case is Johnson v. Transportation Agency,
Santa Clara County (1987).
605. “Local Government Recruitment and Select-
ion Practices,” Municipal Year Book, 1986
(Washington, DC: International City Manage-
ment Association, 1986, p. 46. Figure is for 1984–
1985.
606. Stein, “Merit Systems and Political Influence,”
p. 267.
607. Jonathan Woetzel, Anu Madgavkar, Kweilin
Elingrud, et al., The Power of Parity: How
Advancing Women’s Equality Can Add $12
Trillion to Global Growth (New York: McKinsey
Global Institute, 2015). Figure is for 2015–
2025.
608. As derived from data in Kweilin Ellingrud, Anu
Madgavkar, James Manyika, et al., The Power of
Parity: Advancing Women’s Equality in the United
States (New York: McKinsey Global Institute,
2016). Figure is for 2015–2025.
609. Leslie E. Tower and Mohamad G. Alkrady, “The
Social Costs of Career Success for Women,”
Review of Public Personnel Administration 28
(June 2008), pp. 144–165. The quotation is on
p. 144.
610. Mohamad G. Alkadry and Leslie E. Tower,
“Covert Pay Discrimination: How Authority
Predicts Pay Differences between Women and
Men,” Public Administration Review (September/
November 2011), pp. 740–750. The quotation is
on p. 740.
611. Tim V. Eaton and John R. Nofsinger, “Funding
Levels and Gender in Public Pension Plans,”
Public Budgeting & Finance 28 (September 2008),
pp. 108–128. The quotations are on p. 108.
612. The case is Rosenfeld v. Southern Pacific Co.
613. The case is Weeks v. Southern Bell Telephone and
Telegraph Co.
614. The case is American Federation of State, County,
and Municipal Employees (AFSCME) v. State of
Washington.
615. James E. Campbell and Gregory B. Lewis, “Public
Support for Comparable Worth in Georgia,”
Public Administration Review 46 (September/
October 1986), pp. 432–437.
616. Susan E. Gardner and Christopher Daniel, “Imple-
menting Comparable Worth/Pay Equity: Experi-
ences of Cutting-Edge States,” Public Personnel
Management 27 (Winter 1998), pp. 475–489.
617. N. Joseph Cayer, “Local Government Personnel
Structure and Policies,” Municipal Year Book,
1991 (Washington, DC: International City/County
Management Association, 1991), pp. 8–13.
618. Gardner and Daniel, “Implementing Comparable
Worth/Pay Equity,” and U.S. General Accounting
Office, Pay Equity: Washington State’s Efforts
to Address Comparable Worth, GAO/GGO-
92-87BR (Washington, DC: U.S. Government
Printing Office, 1992).
619. Jared J. Llorens, “Uncovering the Determinants of
Competitive State Government Wages.”
620. U.S. Merit Systems Protection Board, Sexual
Harassment in the Federal Workplace: Trends,
Progress, Continuing Challenges (Washington,
DC: U.S. Government Printing Office, 1995),
pp. vii, viii, 20, 19. Figures are for 1994.
621. Cynthia S. Ross and Robert E. England, “State
Governments’ Sexual Harassment Policy
Initiatives,” Public Administration Review 47
(May/June 1987), pp. 259–262. Data (p. 261) are
for 1985.
622. Cayer, “Local Government Personnel Structure
and Policies,” p. 12.
623. As derived from data in ProQuest LLC, ProQuest
Statistical Abstract of the United States, 2016,
Table 343. Figure is for 2006.
624. As derived from data in U.S. Equal Employment
Opportunity Commission, Charge Statistics, FY
1997–FY 2013, and Sexual Harassment Charges:

EEOC and FEPA Combined, FY 1997–FY 2011.
Figures are for 1997–2011.
625. U.S. Merit Systems Protection Board, Sexual
Harassment in the Federal Workplace: Trends,
Progress, Continuing Challenges (Washington,
DC: U.S. Government Printing Office, 1995),
pp. 7, 18.
626. The case is Meritor Savings Bank v. Vinson.
627. The case is Franklin v. Gwinnett County Public
Schools.
628. The case is Harris v. Forklift Systems, Inc.
629. The case is Oncale v. Sundowner Offshore Services.
630. The cases are Faragher v. City of Boca Raton and
Burlington Industries, Inc. v. Ellerth.
631. Partnership for Public Service, Gender Gaps and
Racial/Ethnic Divides (Washington, DC: Author,
2012). Data are for 2011.
632. As derived from data in U.S. Merit Systems
Protection Board, Prohibited Personnel Practices:
A Study Retrospective, p. 8. Figures are for 1992–
2007.
633. Ugorji O. Ugorji, “Career-Impeding Supervisory
Behaviors: Perceptions of African American
and European American Professionals,” Public
Administration Review 57 (May/June 1997),
pp. 250–255. The quotation is on p. 254.
634. U.S. Merit Systems Protection Board, Fair and
Equitable Treatment, p. 60.
635. Government Business Council, “The People
Problem,” p. 25. Figure is for 2014.
636. Government Business Council, “The People
Problem,” p. 25. Figure is for 2014.
637. Sungjoo Choi, “Demographic Diversity of Mana-
gers and Employee Job Satisfaction,” Review of
Public Personnel Administration 33 (September
2013), pp. 275–298.
638. H. E. Hennessey, Jr. and H. John Bernardin, “The
Relationship between Performance Appraisal
Criterion Specificity and Statistical Evidence of
Discrimination,” Human Resource Management
42 (Summer 2003), pp. 143–158. The quotation
is on p. 143.
639. U.S. Merit Systems Protection Board, Fair and
Equitable Treatment, p. 66.
640. Ellen V. Rubin, “The Role of Procedural Justice in
Public Personnel Management: Empirical Results
from the Department of Defense,” Journal of
Public Administration Research and Theory 19
(January 2009), pp. 125–143.
641. Gerald R. Ferris, Dwight D. Fink, Dharm P. S.
Bhawuk, et al., “Reactions of Diverse Groups to
Managing Human Capital 373
Politics in the Workplace,” Journal of Management
22 (Spring 1996), pp. 23–44.
642. Rebecca Riffkin, “Americans Still Prefer a Male
Boss to a Female Boss,” Gallup.com (October 14,
2014). Figures are for 2014.
643. Mayer, Selected Characteristics of Private and
Public Sector Workers, p. 10.
644. Partnership for Public Service, Gender Gaps and
Racial/Ethnic Divides, p. 1. Data are for 2011.
645. As derived from data in U.S. Merit Systems
Protection Board, Prohibited Personnel Practices:
A Study Retrospective, p. 9. Figures are for 1992–
2007.
646. U.S. Merit Systems Protection Board, The Federal
Government: A Model Employer or a Work in
Progress? p. 41.
647. Mayer, Selected Characteristics of Private and
Public Sector Workers, p. 9. Current figures are
for 2013. Growth figures are for 1976–2013.
648. Greg Young, Women, Naturally Better Leaders
for the 21st Century (New York: Routledge,
2016), p. 8.
649. Marion Eals and Irwin Silverman, “The Hunter-
Gatherer Theory of Spatial Sex Differences:
Proximate Factors Mediating the Female
Advantage in Recall of Object Arrays,” Ethology
and Sociobiology 15 (March 1994), pp. 95–105.
650. Peter J. Kuhn and Marie-Claire Villeval, Are
Women More Attracted to Cooperation than
Men? (Cambridge, MA: National Bureau of
Economic Research, 2013).
651. Anita Williams Woolley, Christopher F. Chabris,
Alex Pentland, et al., “Evidence for a Collective
Intelligence Factor in the Performance of Human
Groups,” Science 330 (October 29, 2010),
pp. 686–688.
652. Alice H. Eagly and Blair T. Johnson, “Gender and
Leadership Style: A Meta-Analysis,” Psychological
Bulletin 108 (September 1990), pp. 233–256.
653. Marloes L. Van Engen and Tineke M. Willemsen,
“Sex and Leadership Styles: A Meta-Analysis of
Research Published in the 1990s,” Psychological
Reports 94 (February 2004), pp. 13–18.
654. Ah-Chih Wang, Jack Ting-Ju Chiang, Chou-Yu
Tsai, et al., “Gender Makes the Difference:
The Moderating Role of Leader Gender on the
Relationship between Leadership Styles and
Subordinate Performance,” Organizational
Behavior and Human Decision Processes 122
(July 2013), pp. 101–113. The quotation is on
p. 101.
 374 PA R T I I I Public and Nonprofit Management
655. Richard W. Stackman, Patrick E. Connor, and
Boris W. Becker, “Sectoral Ethos: An Investigation
of Personal Values Systems of Female and Male
Managers in the Public and Private Sectors,”
Journal of Public Administration Research and
Theory 16 (October 2006), pp. 577–590. The
quotation is on p. 589.
656. Leisha DeHart-Davis, Justin Marlowe, and Sanjay
K. Pandey, “Gender Dimensions of Public Service
Motivation,” Public Administration Review 66
(November/December 2006), pp. 873–887.
657. Julie Dolan, “Gender Equity: Illusion or Reality
for Women in the Federal Executive Service?”
Public Administration Review 64 (May/June
2004), pp. 299–306.
658. Dennis M. Daley and Katherine C. Naff, “Gender
Differences and Managerial Competencies,”
Review of Public Personnel Administration 18
(April 1998), pp. 41–56.
659. Dorothy Olsheski and Raphael Caprio, “Com-
paring Personal and Professional Characteristics
of Men and Women State Executives: 1990
and 1993 Results,” Review of Public Personnel
Administration 16 (January 1996), pp. 31–40.
660. Daley and Naff, “Gender Differences and Mana-
gerial Competencies.”
661. Richard A. Fox and Robert A. Schuhmann,“Gender
and Local Government: A Comparison of Women
and Men Managers,” Public Administration
Review 59 (May/June 1999), pp. 231–242.
662. DeHart-Davis, Marlowe, and Pandey, “Gender
Dimensions of Public Service Motivation.”
663. Kenneth J. Meier, Lawrence J. O’Toole, Jr., and
Holly T. Goerdel, “Management Activity and
Program Performance: Gender as Management
Capital,” Public Administration Review 66
(January/February 2006), pp. 24–36.
664. Willow S. Jacobson, Christine Kelleher Palus,
and Cynthia J. Bowling, “A Woman’s Touch?
Gendered Management and Performance in State
Administration,” Journal of Public Administration
Research and Theory 20 (April 2010), pp. 477–
544. The quotation is on p. 477.
665. Meier, O’Toole, and Goerdel, “Management
Activity and Program Performance,” p. 32.
666. Jacobson, Palus, and Bowling, “A Woman’s
Touch?” p. 477.
667. Jason A. Grissom, Jill Nicholson-Crotty, and
Lael Keiser, “Does My Boss’s Gender Matter?
Explaining Job Satisfaction and Employee
Turnover in the Public Sector,” Journal of Public
Administration Research & Theory 22 (October
2012), pp. 649–673.
668. Johann Graf Lambsdorff, “Corruption in
Empirical Research—A Review,” Paper presented
at the International Anti-Corruption Conference
(Durban, South Africa: December 10–15, 1999),
p. 13.
669. Kenneth J. Meier, Sharon H. Mastracci, and
Kristin Wilson, “Emotional Labor in Public
Organizations: An Empirical Examination of
the Link to Performance,” Public Administration
Review 66 (November/December 2006), pp. 899–
909, and Kenneth J. Meier and Jill Nicholson-
Crotty, “Gender, Representative Bureaucracy, and
Law Enforcement: The Case of Sexual Assault,” in
the same issue, pp. 850–860.
670. Meier, O’Toole, and Goerdel, “Management
Activity and Program Performance,” p. 32.
671. Victoria Bishop, Catherine Cassell, and Helge
Hoel, “Preserving Masculinity in Service Work: An
Exploration of the Underreporting of Customer
Anti-Social Behaviour,” Human Relations 62
(January 2009), pp. 5–25.
672. Gregory B. Lewis, “Race, Sex, and Performance
Ratings in the Federal Service,” Public Admini-
stration Review 57 (November/December 1997),
pp. 479–489. The quotation is on p. 479.
673. Dolan, “Gender Equity,” p. 299.
674. Michael J. Zyphur, Jayanth Narayanan, Gerald
Koh, and David Koh, “Testrosterone-Status Mis-
match Lowers Collective Efficacy in Groups:
Evidence from a Slope-as-Predictor Multilevel
Structural Equation Model,” Organizational
Behavior and Human Decision Processes 110
(November 2009), pp. 70–79. The quotation is on
p. 70.
675. David Fasenfest, Jason Booza, and Kurt Metzger,
Living Together: A New Look at Racial  and
Ethnic  Integration in Metropolitan Neighbor-
hoods, 1990–2000 (Washington, DC: Brookings,
2004).
676. Ralph R. Reiland, “Affirmative Action or Equal
Opportunity?” Regulation 18 (Summer 1995),
pp. 12–13.
677. Edward Felsenthal, “Are Civil-Rights Laws Being
Interpreted Too Broadly?” Wall Street Journal
(June 10, 1996).
678. “Disadvantaged Groups, Individual Rights,” The
New Republic (October 15, 1977), p. 7, and Eliot
Marshall, “Race Certification,” in the same issue,
p. 19.

679. Pew Research Center for the People and the
Press, Conflicted Views of Affirmative Action
(Washington, DC: Author, 2003), p. 3.
680. Madeline E. Heilman, Caryn J. Block, and Peter
Stathatos, “The Affirmative-Action Stigma of
Incompetence: Effects of Performance Information
Ambiguity,” Academy of Management Journal 40
(June 1997), pp. 603–625.
681. Pew Research Center for the People and the Press,
Trends in Political Values and Core Attitudes,
1987–2007 (Washington, DC: Author, 2007),
p. 40.
682. American National Election Studies, Guide to
Public Opinion and Electoral Behavior, Table
4B.4.
683. Pew Research Center for the People and the
Press, Conflicted Views of Affirmative Action,
p. 3.
684. Miquel M. Unzueta, Brian Lowery, and Eric D.
Knowles, “How Believing in Affirmative Action
Quotas Protects White Men’s Self-Esteem,”
Organizational Behavior and Human Decision
Processes 105 (January 2008), pp. 1–13. The quo-
tations are on p. 1.
685. Pew Research Center for the People and the Press,
Trends in Political Values and Core Attitudes,
1987–2007, p. 40.
686. Pew Research Center for the People and the
Press,  Conflicted Views of Affirmative Action,
pp. 5, 2, 3.
687. Caitlin Knowles Myers, “A Cure for Discri-
mination? Affirmative Action and the Case of
California’s Proposition 209,” Industrial & Labor
Relations Review 60 (April 2007), pp. 379–396.
The quotation is on p. 379.
688. Adam Liptak, “Supreme Court Upholds
Michigan’s Affirmative Action Ban,” New York
Times (April 22, 2014).
689. “How You Hire and Who You Hire: The
Implications of the Appointing Authority,” Issues
of Merit (Fall 2014), p. 4.
690. Michael Kinsley, “The Spoils of Victimhood,” The
New Yorker (March 27, 1995), pp. 62–69. The
quotation is on p. 67.
691. Scott E. Page, The Difference: How the Power of
Diversity Creates Better Groups, Firms, Schools,
and Societies (Princeton, NJ: Princeton University
Press, 2007), pp. xxiii, 162.
692. Woolley, Chabris, Pentland, et al., “Evidence for a
Collective Intelligence Factor in the Performance
of Human Groups.”
Managing Human Capital 375
693. Page, The Difference, pp. xxiii, 162.
694. Jason A. Grissom, “The Determinants of Conflict
on Governing Boards in Public Organizations:
The Case of California School Boards,” Journal
of Public Administration Research and Theory 20
(July 2010), pp. 601–628. The quotation is on p.
601.
695. Niels Opstrup and Anders R. Villadsen, “The
Right Mix? Gender Diversity in Top Management
Teams and Financial Performance,” Public
Administration Review 75 (March/April 2015),
pp. 291–301.
696. Rhys Andrews and Rachel Ashworth, “Rep-
resentation and Inclusion in Public Organizations:
Evidence from the U.K. Civil Service,” Public
Administration Review 75 (March/April 2015),
pp. 279–288.
697. Norma M. Riccucci and Gregg G. Van Ryzin,
“Representative Bureaucracy: A Lever to Enhance
Social Equity, Coproduction, and Democracy,”
Public Administration Review 77 (January/
February 2017), pp. 21–30.
698. Sally Coleman Selden, “A Solution in Search of a
Problem? Discrimination, Affirmative Action, and
the New Public Service,” Public Administration
Review 66 (November/December 2006), pp. 911–
923. The quotation is on p. 918.
699. Riccucci and Van Ryzin, “Representative
Bureaucracy,” p. 21.
700. Huasheng Gao and Wei Zhang, “Employment
Nondiscrimination Acts and Corporate Inno-
vation,” Management Science (published online
June 15, 2016).
701. Richard Florida and Gary Gates, Technology
and Tolerance: The Importance of Diversity to
High-Technology Growth (Washington, DC:
Brookings.edu, June 1, 2001).
702. Cedric Herring, “Does Diversity Pay? Racial
Composition of Firms and the Business Case
for Diversity,” American Sociological Review 72
(April 2009), pp. 208–224.
703. Mitchell J. Chang and Alexander W. Astin,
“Who Benefits from Racial Diversity in Higher
Education?” Diversity Digest 2 (Winter 1997),
http://www.diversityweb.org/Digest/W97/res
earch.html.
704. Page, The Difference, p. xxiii.
705. Woolley, Chabris, Pentland, et al., “Evidence for a
Collective Intelligence Factor in the Performance
of Human Groups.”
706. Page, The Difference, p. 314.
 376 PA R T I I I Public and Nonprofit Management
707. U.S. Merit Systems Protection Board, Fair and
Equitable Treatment, p. 68. Data are for FY
2005–2008.
708. Sungjoo Choi and Hal G. Rainey, “Managing
Diversity in U.S. Federal Agencies: Effects of
Diversity and Diversity Management on Employee
Perceptions of Organizational Performance,”
Public Administration Review 70 (January/
February 2010), pp. 109–121. The quotations are
on p. 116.
709. Yongbeom Hur, Ruth Ann Strickland, and Dragan
Stefanovic, “Managing Diversity: Does It Matter
to Municipal Governments?” International
Journal of Public Sector Management 23 (5,
2010), pp. 500–515.
710. Selden, “A Solution in Search of a Problem?”
p. 914.
711. Daniel Byler, Steve Berman, Vishwa Kola, and
William D. Eggers, Accountability Quantified:
What 26 Years of GAO Reports Can Teach Us
about Government Management (Washington,
DC: Deloitte, 2015). Figures are for 1983–2008.
712. Anne Joseph O’Connell, as cited in Juliet
Eilperin, “Obama Has Vastly Changed the Face
of the Federal Bureaucracy,” Washington Post
(September 20, 2015). Figures are for 1977–2015.
713. As derived from data in ProQuest LLC, ProQuest
Statistical Abstract of the United States, 2016,
Table 487. Figure is for 2013. The following
figures on federal minority and women employ-
ees are drawn from the following sources: per-
centages for 1980 are derived from data in U.S.
Bureau of the Census, Statistical Abstract of
the United States, 2011, 130th ed. (Washington,
DC: U.S. Government Printing Office, 2011),
Table  499; percentages for all federal employ-
ees in 2013 are from ProQuest LLC, ProQuest
Statistical  Abstract of the United States, 2016,
Table 519; percentages for executive and
senior employees in 2013 are from U.S. Office
of Personnel Management, Senior Executive
Service  Facts & Figures (Washington, DC:
Author, 2015).
714. U.S. Merit Systems Protection Board, Women
in the Federal Government: Ambitions and
Achievements (Washington, DC: U.S. Government
Printing Office, 2011), p. 15. Figures are for
1991–2009.
715. U.S. Office of Personnel Management, Govern-
mentwide Strategy on Advancing Pay Equality in
the Federal Government (Washington, DC: U.S.
Government Printing Office, 2014). Figures are
for 1992–2012.
716. Lisa Rein, “Women Who Want to Get Ahead
Should Look to the Federal Government, Not Cor-
porate America,” Washingtonpost.com (October
25, 2016).
717. U.S. Merit Systems Protection Board, Women in
the Federal Government p. 48. Figures are for
1991–2007.
718. As derived from data in ProQuest LLC, ProQuest
Statistical Abstract of the United States, 2016,
Table 487. Figure is for 2013. Unless noted oth-
erwise, the following figures on state and local
governments’ minority and women employ-
ees are drawn from the following sources: per-
centages  for  1980 are derived from data in
U.S. Bureau  of the Census, Statistical Abstract
of the United States, 1982–1983, 103rd ed.
(Washington, DC: U.S. Government Printing
Office, 1982), Table 504, and percentages for all
subnational employees, officials, and administra-
tors in 2013 are from ProQuest LLC, ProQuest
Statistical  Abstract of the United States, 2016,
Table 487.
719. Jared J. Llorens, Jeffrey B. Wenger, and J. Edward
Kellough, “Choosing Public Sector Employment:
The Impact of Wages on the Representation of
Women and Minorities in State Bureaucracies,”
Journal of Public Administration Research and
Theory 18 (July 2008), pp. 397–413. The quota-
tions are on p. 397.
720. Jeffrey L. Brudney, Cynthia J. Bowling, and Deil
S. Wright, Continuity and Change in Public
Administration Across the 50 States: Linking
Practice, Theory, and Research through the
American State Administrators Project, 1964–
2008 (Auburn, AL: Center for Governmental
Services, Auburn University, 2010), p. 11.
721. Llorens, Wenger, and Kellough, “Choosing Public
Sector Employment,” p. 397.
722. Brudney, Bowling, and Wright, Continuity and
Change in Public Administration Across the 50
States, p. 11.
723. Kimberly L. Nelsen and James H. Svara,
“Upholding and Expanding the Roles of Local
Government Managers,” Municipal Year Book,
2014 (Washington, DC: International City/County
Management Association, 2014), pp. 3–20. Figures
(p. 7) are for 2012.
724. Llorens, Wenger, and Kellough, “Choosing Public
Sector Employment,” p. 397.

725. As derived from data in ProQuest LLC, ProQuest
Statistical Abstract of the United States, 2016,
Table 487. Datum is for 2013.
726. Brudney, Bowling, and Wright, Continuity and
Change in Public Administration Across the 50
States, p. 11. Current figure is for 2008.
727. Olsheski and Caprio, “Comparing Personal and
Professional Characteristics of Men and Women
State Executives.”
728. Gayle A. Lawn-Day and Steven Ballard,
“Speaking Out: Perceptions of Women Managers
in the Public Service,” Review of Public Personnel
Administration 16 (January1996), pp. 41–58. The
quotation is on p. 42.
729. International City/County Management
Association, ICMA State of the Profession Survey
2012 Summary, p. 6.
730. Heidi Voorhees and Rachel Lange-Skaggs,
“Women Leading Government,” PM Magazine
(January/February 2015). MPA figure (59 percent)
is for 2006. CAO figure is for 2012 and 1981.
731. Jerry Mitchell, “Education and Skills for Public
Authority Management,” Public Administration
Review 51 (September/October 1991), pp. 429–
437. Figure (p. 431) is for 1990.
732. Friedman and Di Tomaso, “Myths about
Diversity,” and Audrey J. Cohen, “Predictors
of Public and Private Employment for Business
College Graduates,” Public Personnel Manage-
ment 22 (Spring 1992), pp. 167–186.
733. U.S. Merit Systems Protection Board, The Federal
Government: A Model Employer or a Work in
Progress? pp. 19–20.
734. Bethany G. Sneed, “Glass Walls in Bureaucracies:
Examining the Difference Departmental Function
Can Make,” Public Administration Review 67
(September/October 2007), pp. 880–891. The
quotations are on pp. 888, 880.
735. Selden, “A Solution in Search of a Problem,”
p. 917.
736. U.S. Office of Personnel Management, Women
in Federal Service: A Seat at Every Table
(Washington, DC: U.S. Government Publishing
Office, 2015).
737. Eleanor V. Laudicina, “Managing Workforce
Diversity in Government: An Initial Assessment,”
Public Administration Quarterly 19 (Summer
1995), pp. 170–192.
738. Nelson Dometrius and Lee Sigelman, “Assessing
Progress Toward Affirmative Action Goals in State
and Local Governments: A New Benchmark,”
Managing Human Capital 377
Public Administration Review 44 (May/June
1984), pp. 244–245. Data are for 1980.
739. Council on Foundations, 2014 Grantmakers
Salary and Benefits Report (Arlington, VA:
Author, 2015).
740. Jessica Chao, Julia Parshall, Desiree Amador,
et al., Philanthropy in a Changing Society:
Achieving Effectiveness through Diversity (New
York: Rockefeller Philanthropy Advisors, 2008),
pp. 6, 19. Current data are for 2006. Trend data
are for 1982–2006.
741. Council on Foundations, 2014 Grantmakers
Salary and Benefits Report (Arlington, VA:
Author, 2015).
742. Chao, Parshall, Amador, et al., Philanthropy in a
Changing Society, pp. 6, 19. Datum is for 1982–
2006.
743. Council on Foundations, 2014 Grantmakers
Salary and Benefits Report.
744. Mesch and Rooney, “Determinants of Compen-
sation,” p. 457.
745. Chao, Parshall, Amador, et al., Philanthropy in a
Changing Society, p. 21.
746. Council on Foundations, 2014 Grantmakers
Salary and Benefits Report.
747. Alliance for Board Diversity, as cited in Erin Lamb,
“Women in Power—Or, Not So Much: Gender
in the Nonprofit Sector,” Nonprofitquarterly.org
(January 21, 2015). Figure is for 2013.
748. Alliance for Board Diversity, Missing Pieces:
Women and Minorities on Fortune 500 Boards—
Fact Sheet (Washington, DC: Author, 2014).
Figure is for 2012.
749. Chao, Parshall, Amador, et al., Philanthropy in a
Changing Society, p. 21. Figures are for 2006.
750. Ronald G. Shaiko, “Female Participation in
Association Governance and Political Rep-
resentation: Women as Executive Directors,
Board Members, Lobbyists, and Political Action
Committee Directors,” Nonprofit Management &
Leadership 8 (Winter 1997), pp. 121–139.
751. Chuck McLean, 7 Key Findings from GuideStar’s
2015 Nonprofit Compensation Report
(Washington, DC: GuideStar, 2015). Figures are
for 1998–2013.
752. Mesch and Rooney, “Determinants of Com-
pensation,” pp. 458–459.
753. Susan D. Sampson and Lynda L. Moore, “Is There
a Glass Ceiling for Women in Development?”
Nonprofit Management & Leadership 18 (Spring
2008), pp. 321–339. Gender gap figure is derived
 378 PA R T I I I Public and Nonprofit Management
from data on p. 326 and is for 2005. Gap widen-
ing figure is for 1988–2005.
754. Women’s Philanthropy Institute, Indiana Univer-
sity, Womengive /16 (Bloomington, IN: Author,
2016), p. 3. Datum is for 1970s–2000s.
755. Jillian Berman, “Soon, Not Even 1 Percent of
Fortune 500 Companies Will Have Black CEOs,”
Huff Post (April 2, 2015). Figure is for 2015.
756. Domini, The Benefits of Board Diversity
(Providence, RI: Author, 2015). Figure is for
2013.
757. Jeffrey A. Flory, Andreas Liebbrandt, and John
A. List, Do Competitive Work Places Deter
Female Workers? A Large-Scale Natural Field
Experiment, NBER Working Paper No. 16546
(Cambridge, MA: National Bureau of Economic
Research, 2010), p. 31.
758. Lean In and McKinsey & Company, Women in
the Workplace 2015 (Palo Alto, CA, and New
York: Authors, 2015), p. 18.
759. Julie Coffman and Bill Neuenfeldt, Everyday
Moments of Truth: Frontline Managers Are Key
to Women’s Career Aspirations (New York: Bain.
com, 2015).
760. Lean In and McKinsey & Company, Women in
the Workplace, 2015 (Palo Alto, CA, and New
York: Authors, 2015), pp. 7, 6, 14.
761. Alison M. Konrad and Kathy Cummings, “The
Effects of Gender-Role Congruence and Statistical
Discrimination on Managerial Advancement,”
Human Relations 50 (October 1997), pp. 1305–
1328.
762. Kieran Snyder, “The Abrasiveness Trap: High-
Achieving Men and Women Are Described
Differently in Reviews,” Fortune (August 26,
2014).
763. Ethics & Compliance Initiative, Men, Women and
Ethical Leadership (Arlington, VA: Author, 2016).
764. Rosabeth Moss Kanter, Men and Women of the
Corporation (New York: Basic Books, 1997),
and Joyce K. Fletcher, Disappearing Acts:
Gender, Power, and Relational Practices at Work
(Cambridge, MA: MIT Press, 1999).
765. Ethics & Compliance Initiative, Men, Women and
Ethical Leadership.
766. Pew Research Center for the People and the Press,
Conflicted Views of Affirmative Action, p. 3.
Figure is for 2003.
767. William H. Frey, “New Projections Point to a
Majority Minority Nation in 2044,” Brookings
(December 12, 2014).
768. As derived from data in U.S. Bureau of the Census,
Statistical Abstract of the United States, 1952, 73rd
ed. (Washington, DC: U.S. Government Printing
Office, 1952), Table 208.
769. As derived from data in ProQuest LLC, ProQuest
Statistical Abstract of the United States, 2016,
Table 605. Current figure is for 2012.
770. Judith J. Friedman and Nancy Di Tomaso,
“Myths about Diversity: What Managers Need to
Know About Changes in the U.S. Labor Force,”
California Management Review 38 (Summer
1996), pp. 54–77. The datum is on p. 58.
771. As derived from data in ProQuest LLC, ProQuest
Statistical Abstract of the United States, 2016,
Table 605.
772. U.S. General Accounting Office, The Changing
Workforce: Demographic Issues Facing Emplo-
yers, GAO/T-GGD-92-61 (Washington, DC: U.S.
Government Printing Office, 1992), pp. 1–7.
773. As derived from data in U.S. Bureau of the
Census, Statistical Abstract of the United States,
1952, Table 208.
774. As derived from data in ProQuest LLC, ProQuest
Statistical Abstract of the United States, 2016,
Table 605. Current figure is for 2012.

Implementing Public Policy
In the fourth and final part of Public Administration
and Public Affairs, we explain how to get things
done. Although we touched upon certain aspects
of getting things done in Chapter 4, notably in our
discussion of administration in organizations, in
Part IV we take a broader view.
Implementation is the execution and deliv-
ery of public policies by organizations or arrange-
ments among organizations. It is perhaps the most
“hands-on” facet of public administration, but the
subject of implementation is, surprisingly but justifi-
ably, theoretical and often abstract.
We approach the complicated arena of public
policy execution in slices of narrowing breadth.
That is, we treat first the making of public policy
itself, then the implementation of public policy by
the three sectors, then by only the public sector, and
finally by individual public administrators.
Hence, in the introductory chapter to Part IV,
we explain what is being implemented—that is,
public policy, and how it is made and adjusted.
The following two chapters focus on the insti-
tutions that governments use to implement public
policy. Their use has extended the reach of govern-
ment far beyond its nominal station.
In light of this reach, here are a couple of inter-
esting questions: How is it that the federal civilian
workforce has stayed about the same size, at around
two million employees since 1951, (give or take
as many as 200,000, roughly, above or below that
figure over seven decades),1 but federal spending,
after controlling for inflation, has quintupled since
that year?2 Over twenty-five years, the amount of
expenditures for which each federal employee was
responsible doubled, again controlling for inflation.3
PART
IV
And how is it that the complexity of federal admin-
istration has grown ever more challenging and con-
voluted, as indicated by the fact that the feds must
manage nine times more pages of rules—more than
80,000 pages currently—than there were in 1953?4
The answer to both questions is: Government
by proxy.5 Rather than expand the civil service to
accommodate the explosions in workload and com-
plexity, Washington elected instead to use the private
sector, subnational governments, and the nonprofit
sector to implement its burgeoning programs and
policies. In fact, the federal government spends only
7 percent of its budget on the civilian programs that
federal administrators directly implement,6 and the
number of federal civilian employees is not some
two million, as Washington contends, but in reality
is more than nine times that figure, or 19.5 million!
How is this massive growth in indirect federal
employees possible? Well, we start with the
2.1 million civilian employees that Washington cur-
rently admits to, and then we add what are called
indirect federal employees, or those employees who
work outside the federal government, but who are
paid or mandated by the feds.
Indirect federal employees are difficult to count,
but here are the best and most current estimates:
7.5 million workers in the private sector who work
largely via federal contracts; 7.7 million employees
who work in state and local governments because
federal regulations effectively require their presence
(about 4.7 million employees7) or federal grants
fund them (another three million, a conservative
estimate8); and 2.2 million workers in the non-
profit sector, who are employed for the most part
under federal grants, plus a large dollop of federal
 380 PA R T I V Implementing Public Policy
contracts.9 When we add these 17.4 million indirect
workers to direct federal employees, the count, as
noted, nears 20 million federal employees; about
two out of every five American households have in
them someone who is working for the federal gov-
ernment.10
As a consequence of these facts, “more federal
employees were responsible [over the course of a
quarter century] not for managing programs but
for managing proxies who managed programs on
the government’s behalf.”11 At least one analyst
has argued that indirect federal workers should be
replaced by a million more federal bureaucrats.12
As we also detail in these two chapters, govern-
ment by proxy is not the exclusive preserve of the
federal government; states and localities practice it
with a vengeance as well. As in Washington, these
governments also use the private and independent
sectors to implement their policies. But, largely unlike
Washington, states enter into compacts with other
states to implement region-wide policies, and pay,
or simply order, their local governments to conduct
state policies in which their localities may have little
interest. Again in contrast with Washington, local
governments enter into a vast array of intergovern-
mental arrangements and charter special districts to
implement their programs. The federal, state, and
local governments also create businesses to execute
their policies, and these variations are explained as
well.
Finally, and perhaps of greatest importance, we
focus on the specific area of ethical decision making
by individual public administrators in the formu-
lation and implementation of public policies, and
close our book with some thoughts on the passion
of public administration.
NOTES
1. U.S. Office of Personnel Management, “Executive
Branch Employment Since 1940,” (Washington,
DC: OPM.gov, 2015). Figure is for 1951–2014.
2. John J. DiIulio, Jr., 10 Questions and Answers
about America’s “Big Government,” (Washington,
DC: Brookings.edu, 2017).
3. Donald F. Kettl, “From Intergovernmental to
Intersectoral,” Public Administration Evolving:
From Foundations to the Future, Mary E. Guy and
Marilyn M. Rubin, eds. (New York: Routledge,
2015), pp. 18–36. Data are for 1980–2015.
4. The compendium of federal rules, The Federal
Register, burgeoned from 8,912 pages of rules in
1953 to 80,035 pages in 2015. See U.S. Office of the
Federal Register, Federal Register Pages Published
Annually (Washington, DC: Author, 2016).
5. Donald F. Kettl, Government by Proxy (Washington,
DC: Congressional Quarterly Press), 1988.
6. Ibid.
7. As derived from data in: Paul C. Light, Fact Sheet
on the New True Size of Government (Washington,
DC: Brookings, 2003), p. 4, and U.S. Bureau of the
Census, Statistical Abstract of the United States,
1999, 119th ed. (Washington, DC: U.S. Government
Printing Office, 1999), Table 534. Figures are for
1996–1997.
8. DiIulio, 10 Questions about America’s “Big
Government.”
9. Ibid.
10. Light, Fact Sheet on the New True Size of
Government, p. 3.
11. Kettl, “From Intergovernmental to Intersectoral,”
p. 26.
12. John J. DiIulio, Jr., Bring Back the Bureaucrats
(West Conshohocken, PA: Templeton, 2014).

Understanding
and Improving
Public Policy
P ublic policy is a course of action adopted and
pursued by government. Public policy analysis
is the study of how governmental policies are made
and implemented, and the application of available
knowledge to governmental policies for the purpose
of improving their formulation and implementation.1
PUBLIC POLICY ANALYSIS: A
BRIEF HISTORY
The evolution of public policy analysis has two very
separate tracks. One is practical, the other academic.
Public Policy and the Policymakers
Woodrow Wilson was the first president to hire
social scientists. Herbert Hoover also used them
to conduct the first analyses of national economic
and social trends, but Franklin Delano Roosevelt’s
aggressive expansion of government in the 1930s
resulted in numerous new federal agencies that relied
on social scientists to devise new public policies.
It was President Lyndon Johnson who accorded
(if inadvertently) policy analysis a permanent place
in the federal establishment. Johnson’s attempt,
in 1965, to mandate the Planning-Programming-
Budgeting System government-wide (recall Chapter
8), though largely a failure, ultimately had a lasting
impact on many agencies in that it “diffused among
government practitioners . . . systemic procedures for
rigorously testing policy alternatives.”2 The enact-
ment of the Government Performance and Results
CHAPTER
10
0
Act (GPRA) of 1993, and the Office of Management
and Budget’s far-reaching decision in 1994 to staff
its critical resource management offices with policy
analysts, secured the place of policy analysis in the
federal structure.
Today, “policy analyst” is an official job descrip-
tion in the federal civil service, most state capitals,
and some large local governments. Although the
market for policy analysts is quite a bit smaller than
that for public administrators, policy analysis now
“is one of the established knowledge industries.”3
It is an industry with some impact. Nonpartisan
policy research organizations “—even those in
highly politicized environments—have a significant
impact on policymaking, mainly by providing infor-
mation and analysis to decision-makers but also in
influencing public policy outcomes.”4
Public Policy and the Professoriate
Academia was left in the wake of governments’ pro-
gress in policy analysis.
Origins It was only in 1951 that the first book on
the topic appeared,5 but the field was then left to
systems analysts and their ilk who worked in think
tanks. In 1965, the first academic conference on
policy analysis for social scientists was held,6 and,
in 1971, the Policy Studies Organization, the first of
the public policy associations, was founded; by the
end of the seventies, it boasted some 1,100 members,
almost seven out of ten of whom were political
scientists.7
381
 382 PA R T I V Implementing Public Policy
The emergence of public policy can be under-
stood, in large part, as political science’s effort to fill
the vacuum left by public administration’s depar-
ture, described in Chapter 2. For a half-dozen years
during the 1970s, when public administration’s
exodus was in full flood, the number of independent
schools and departments of public administration,
and the number of public-policy papers presented
at the annual conferences of the American Political
Science Association, each virtually doubled.8
Homes for Public Policy Public policy now has
three homes in universities—its original home of polit-
ical science (where public policy courses seem to have
displaced courses on “the everyday management of
public agencies”9), and newer ones in public adminis-
tration and stand-alone policy programs—plus some
huts in economics, psychology, and sociology.10
Public administration schools and departments
seem to be doing their job: a survey of “senior state
and local public officials” who had an advanced
degree in a “government-related field” (52 percent
had Masters of Public Administration degrees and
15 percent, the next highest, had Masters of Public
Policy) found that 88 percent agreed that their
courses prepared them for a governmental career,
and 91 percent said that they would prefer to hire
someone with a degree similar to theirs.11
Public policy’s newest academic home is free-
standing schools, most of which emerged in the
1980s and thereafter, and which meld the curricula
of political science and public administration.12
Public policy programs have been criticized as
having a “grandiosity” of mission and focusing on
global and national policies at the expense of sub-
national ones.13 Regrettably, the interest that stu-
dents enrolled in these schools have in government
“declines from entry to graduation,” and some of
these students display “a troubling aversion to gov-
ernment, [which] the policy training process . . . may
even confirm.”14
THE INCREMENTALIST
PARADIGM OF PUBLIC
POLICYMAKING
The incrementalist paradigm, favored by political
science, is substantive, descriptive, objective, and
process-focused. It relates to the first part of our
definition of public policy analysis: “the study of
how governmental policies are made and imple-
mented.” The curriculum typically focuses on spe-
cific issues, and courses often are titled “The Politics
of . . .” some substantive area, such as energy or the
environment.
Charles E. Lindblom is, perhaps, the leading
representative of the incrementalist paradigm; it was
he who coined the term disjointed incrementalism as
a description of the policymaking process.15 (Earlier,
he called it “muddling through,”16 a much clearer
and less pompous moniker.) Disjointed refers to the
gap between the assessments of problems and how
governments actually respond to those problems.
Incrementalism means that policymakers imple-
ment—very slowly, very few, and very small—policy
changes.
The incrementalist paradigm is conservative,
gradual, and likely the most politically feasible par-
adigm. It assumes that policymakers lack the brains,
time, and money to fashion systemic and innovative
policies.
The paradigm contains six subsets, or models,
of how policy is made, and we consider each in turn.
The Elite/Mass Model
The elite/mass model, often credited to C. Wright
Mills,17 contends that a powerful policy-making elite,
whose members share common values, governs a
passive, apathetic, and ill-informed mass. Public
policies are designed, above all else, to preserve the
status quo.
Whether the public is apathetic or not, it is clear
that Congress is controlled by policymaking elites. A
three-decades study of “1,779 policy issues” found
the following: When economic “elites” (in this case,
the top tenth of individual income earners) supported
a policy issue, it had a 45 percent chance of passing,
and if they opposed, the chances withered to 18
percent; when lobbyists for big business supported
it, it had a 47 percent chance of passage, and, when
these lobbyists opposed, a 16 percent chance. When
both elites and business supported a policy change,
enactment soared to 60 to 70 percent. If support
from even one of those two interests was lacking,
then the proposed policy was never passed.  The
“average citizens’ influence on policy making . . . is
 Understanding and Improving Public Policy 383

near zero. . .. In the United States . . . the majority revolution in political science, it largely was swept
does not rule.”18 aside in favor of studies that relied more on the
group and systems models.

The Group Model

The group model of policymaking, exemplified by
the work of Arthur F. Bentley,19 views the policy-
making process in hydraulic terms, in which interest
groups pressure one another to gain policies that are
advantageous to them. Although it traditionally is
associated with legislatures, it also works for bureau-
cracies. The group model explains why some groups
“capture” the agencies that ostensibly regulate them,
thereby defining the public’s interest as the group’s
interest.20
The Systems Model
The systems model, shown in Figure 10-1, and fre-
quently attributed to David Easton,21 conceives of
the policy process as being cyclical and unending.
Policy is originated, implemented, adjusted, re-
implemented, re-adjusted, ad infinitum.
The Institutionalist Model
The institutionalist model, personified in the writing
of Carl J. Friedrich,22 focuses on legalities and organ-
ization charts. With the onrush of the behavioral
The Neo-Institutionalist Model
The institutionalist model has experienced a resur-
rection, of a sort, that might best be described as
neo-institutionalism. The neo-institutionalist model,
illustrated in Table 10-1 and created by Theodore
J. Lowi,23 categorizes public policies according
to four policymaking subsystems (or what Lowi
calls  “arenas of power”) that are determined by
whether the probability of government coercion
is remote or immediate, and whether the target of
that coercion is the conduct of individual citizens
or a system.
Each power arena associates with policymaking
variables that are unique to it, but there are some
institutional commonalities: If the possibility of gov-
ernment coercion is remote, then the policy will be
formed primarily in the legislature; if immediate,
then the bureaucracy will dominate policymaking.
In a redistributive power arena, the proba-
bility of government coercion is immediate and
government targets a system. Power is reallocated
throughout the polity on a fundamental scale—so
fundamental, in fact, that redistributive policies
involve “not use of property but property itself, not

Environment: Social and Economic Variables in the Polity

The “black box” (or the

Inputs: demands, “conversion process,” or Outputs: goods, service,
resources, support, “withinputs”): structures, and symbols to public
opposition procedures, policymakers’ and other policymakers
psycho-social framework

Feedback: The Influence of Outputs on the Environment

FIGURE 10-1
The Systems Model of Public Policymaking and Implementation
 384 PA R T I V Implementing Public Policy

TABLE 10-1
The Neo-institutionalist Model of Public Policymaking and Implementation
Target of Government Coercion
Probability of Government Coercion Conduct of Individual Conduct of System
Remote Distributive policy arena, e.g., Constituent policy arena, e.g.,
agricultural subsidies reapportionment of legislature
Policymaking behaviors and Policymaking behaviors and
characteristics: characteristics:
Decentralized Centralized
Disaggregated Systematic
Local National
Partisan/electoral Ideological
Logrolling Partisan/electoral
Legislatively centered Logrolling
Legislatively centered
Immediate Regulative policy arena, e.g., Redistributive policy arena, e.g.,
elimination of fraudulent advertising progressive income tax
Policymaking behaviors and Policymaking behaviors and
characteristics: characteristics:
Decentralized Centralized
Disaggregated Systemic
Local National
Special interests Ideological
Bargaining among groups Special interest
Bureaucratically centered Bargaining among groups
Bureaucratically centered

equal treatment but equal possession, not behav-
ior but being.” These policies tend to be highly
ideological, involving battles between the “haves”
and “have-nots,” are secretive, and have low par-
tisan visibility.24 Examples include Social Security,
Medicare, and Medicaid. Redistributive policies,
which are made mostly by administrators, are also,
ironically, the most difficult to administer of any
policy type.25
The remaining three power arenas are less laden
with drama. In a distributive power arena, coercion
is unlikely and benefits flow directly to each person;
examples include procurement decisions and pork
barrel legislation.
In a regulative power arena, coercion is likely
but, as with distributive policies, benefits are pro-
vided to individuals; for instance, the Federal
Aviation Administration may punish violators of its
safety regulations.
In a constituent power arena, coercion is
improbable and policymakers target a system; creat-
ing a new agency is an example.
The Organized Anarchy Model
The organized anarchy model is illustrated in
Figure 10-2 and was originated by John W. Kingdon.26
Streams of Problems, Politics, and Policies Basic
to the model is the presence of three “streams” that
constitute the policymaking process.
The first of these is the problems stream, which
involves defining a problem, focusing policymakers’
attention on it, and then either resolving the problem
with a new policy or letting it fade away. Problems
typically are defined in terms of values, such as con-
servative or liberal; comparisons, such as the United
States versus Iran; and categories—for example, is
PROBLEM STREAM

1. Getting attention 2. Problem is defined 3. Problem

via: according to: fades

indicators, values,
focusing events, comparisons,
feedback, categories of
budget prioritization policy

WINDOW OPENS
POLITICAL STREAM TO STRUCTURE POLICY IS
DECISION AGENDA; ENACTED
1. Formulation of THREE STREAMS 2. Consensus building 3. Tilt effect
Governmental Agenda by bargaining among
CONVERGE
participants
Major forces include:
national mood
organized interests,
changes in government,
visible cluster of
participants
POLICY STREAM

1. Formulation of 2. Softening-up phase 4. Consensus building

Decision Agenda (e.g., trial by persuasion
(balloons) among participants
Major forces include: 3. Some ideas survive 5. Tilt effect
ideas,
policy entrepreneurs, Criteria for survival
hidden cluster of include:
participants technical feasibility,
value acceptability,
anticipation of
future constraints

FIGURE 10-2
The Organized Anarchy Model of Public Policymaking and Implementation
 386 PA R T I V Implementing Public Policy

public transit for the disabled a “transportation”
problem or a “civil rights” problem? Categorizing
the problem becomes quite significant in how the
problem is resolved.
It is in the political stream that the governmen-
tal agenda—that is, the list of issues to be resolved—
is formed. Actors in this stream comprise its visible
cluster, composed of political executives, legislators,
and lobbyists who negotiate to arrive at a consen-
sus. Eventually, a “bandwagon,” or “tilt,” effect
occurs that is a consequence of an intensifying desire
among the participants to be “dealt in” on the policy
resolution.
It is in the policy stream that the decision
agenda is formulated, or the list of possible policies
that could resolve the issue. The stream’s actors com-
prise its hidden cluster, composed of career admin-
istrators, staffers, and lobbyists (who are powerful
players in both the visible and hidden clusters). Ideas
and the role of the policy entrepreneur, or the person
who holds a deep and abiding commitment to a par-
ticular policy change, are paramount.
Phases If luck is with the policymakers, a tilt effect
will occur in both the political and policy streams,
but for different reasons. In the political stream, the
tilt’s cause is negotiation, and in the policy stream
it is rationality. From there, a “softening-up phase”
occurs in which trial balloons (i.e., proposed policies)
are released concerning solutions to the problem.
These proposals survive according to whether they
are technically feasible, socially acceptable, and are
perceived to be free of future constraints, such as
budget limitations.
Windows A window is the opportunity to change
an agenda or create a policy, and a window typically
is opened by a shift in the national mood. When a
window opens that results in a restructuring of the
governmental agenda, it could be solely the result
of developments in either the problem stream or
the political stream. But for a window to open that
results in a restructuring of the decision agenda
requires the convergence of all three streams. In this
case, the role of the policy entrepreneur is critical.
THE RATIONALIST PARADIGM
OF PUBLIC POLICYMAKING
The rationalist paradigm, favored by public admin-
istration, is theoretical, effectual, prescriptive, and
normative. It relates to the second part of our defi-
nition: “the application of available knowledge to
governmental policies for the purpose of improving
their formulation and implementation.” Courses—
e.g., Intergovernmental Relations, Urban Affairs—
are more systemic.
The rationalist paradigm is illustrated in
Figure 10-3 and is associated with Yehezkel Dror,27
among others. It focuses on the formation of a sys-
temic metapolicy, or a policy for policymaking
procedures that will assure better policies for each
of the full range of issues confronting society. The
muddled, bounded rationality of the incremental-
ist paradigm is eschewed in favor of methodically
assigning relative weights to all social values; listing
all policy alternatives and their consequences; and
selecting the most effective policy to implement.

1. Setting and weighting

of operational goals.

Input: Data in the form

of accurately quantified
social values and the
administrative capacity
to comprehend and
use those data.
Preparation of a full set of
2. Preparation of a full
predictions of costs and
set of alternative policies.
benefits of alternatives.
Comparison of policy
Calculations of effects (using criterion
Policy
expected effects of efficiency) and
Output
of each policy. selection of policy with
highest net expectation.

3. Establishing an inventory
of values and their weights.

FIGURE 10-3
The Rationalist Paradigm of Public Policymaking and Implementation
 Understanding and Improving Public Policy 387

We review the two models of the rationalist
paradigm next, although we should note that the dis-
tinctions between them are not as clear-cut as they
are in the subsets of the incrementalist paradigm.
The Rational Choice Model
In 1963, a modest collection of scholars met to
discuss, in their words, “developments in the ‘no-
name’ fields of public administration.”28 Since then,
names have been acquired, and they include rational
choice, public choice, and political economy, all of
which refer to the identification of the optimal mix
of social values as the basis for selecting a public
policy.
Rational choice basks in the sunbeam of social
engineering. In addressing the issue of energy and
the automobile, for example, a political economist
would favor rigging the sales tax so that gas-
guzzling Bentleys would be taxed at a higher rate
than compact, electrically-powered Volts. In this
way, the general citizenry would be relieved of the
common costs of a buyer’s choice to buy a Bentley,
but the buyer still would have the freedom to buy
one.
Optimality Rational choice is concerned with
Pareto optimality, a concept developed by the econ-
omist, Vilfredo Pareto,29 which is a change in eco-
nomic policy that makes people as best off as they
can be without making anyone worse off.
Figure 10-4 displays how Pareto optimal-
ity works in a total social context, including the
economy. It posits a hypothetical social value
(“X”) relative to the accomplishment of all other
social values. The indifference curve refers to the

Value
X
10
Indicates a higher
return on Value X
at the expense of
lower returns on all Indifference curve
other social values

Point of Pareto optimality, or the

Achievement of Value X

most rational public policy

Value achievement
curve
Indicates a lower
return on Value X
in exchange for
higher returns on
all other social values

1 All other
1 Achievement of all other social values 10 social values

FIGURE 10-4
Pareto Optimality
 388 PA R T I V Implementing Public Policy
combination of values about which society is indif-
ferent (at least up to a point); the value achievement
curve indicates the optimal combination of values
that it is possible for government to encourage. The
point of optimal achievement of Value X and all
other social  values constitutes the point of Pareto
optimality.
Tradeoffs Figure 10-4 also illustrates what the
political economists mean by a tradeoff, or what
value is being exchanged, and at what cost and
benefit, for what other value. In other words, every
time Value X is achieved more fully, all other values
are correspondingly reduced in achievement.
Externalities Executing public policies is a process
that is far from tidy, and policies meant to solve
problems in one social arena can cause problems in
others. This phenomenon is called an externality, or
spillover effect; that is, the impact of a public policy
in one sphere “spills over” into other spheres.
Externalities may be positive or negative,
intended or unintended. For example, a positive,
intended spillover effect of reducing corporate taxes
might be to raise employment levels. A negative,
unintended externality of the same policy might be
to reduce the financial resources available to the
government for welfare programs.
The Public Goods and Services Model
The public goods and services model, diagrammed
in Table 10-2 and exemplified by the work of L. L.
Wade and R. I. Curry, Jr.,30 deals with what kinds
of goods and services are delivered more efficiently
TABLE 10-2
Goods and Services According to the Criteria, of Exclusion and Consumption
Consumption/Use
Exclusion Individual Use
Feasible Private goods and services (a bag of groceries,
a haircut, a meal in a restaurant)
Unfeasible Common-pool goods and services (water in a
public well, fish in the ocean, air to breathe)
by government, and what kinds are delivered
more efficiently by other sectors. The model rests
on two  foundations: exclusion and consumption,
or use.
Exclusion Exclusion refers to the degree of control
that both the buyer and seller have over a particular
commodity. High exclusionary control occurs when
a buyer and seller must agree on a price. Low exclu-
sionary control occurs when price is not an issue.
For example, all ships within sight of a lighthouse
can benefit from its service.
Consumption or Use Consumption, or use, refer to
how goods are consumed and services are used.
Individual consumption, or use, occurs when
goods are consumed or services are used by a single
person and others are denied access to them. A fish
is an example; once it is consumed by one person, it
is gone.
Joint consumption, or use, occurs when goods
are consumed or services are used simultaneously by
many consumers or users without being diminished
in quality or quantity. An example is a television
broadcast; all viewers may “consume,” or use, a tele-
vision program “jointly” without the program being
diminished.
Using the notions of exclusion and consumption,
we can classify goods and services into four kinds of
“pure forms” that can be applied to the sector best
equipped to deliver them more efficiently.31
Private Goods and Services Private goods and
services are pure, individually-consumed goods and
individually-used services for which exclusion is
Joint Use
Toll goods and services (cable television,
telephone service, theaters, libraries, electric
power)
Collective, or public, goods and services (peace
and security, public safety, pollution control,
weather forecasts, public television, radio)

completely feasible. An example is any commodity
in the marketplace. The private sector is the most
efficient provider of private goods and services; gov-
ernment’s role is largely limited to assuring their
safety and honest representation, although govern-
ment’s use of vouchers and subsidies is a case of the
public sector involving itself in the distribution of
private goods and services.
Toll Goods and Services Toll goods and services are
pure, jointly-consumed goods and jointly-used ser-
vices for which exclusion also is completely feasible.
An example is cable television. Like private goods,
toll goods generally are supplied most efficiently by
the private sector, but, unlike private goods, many
toll goods are natural monopolies. Hence, govern-
ment’s role is one of assuring that monopolies are
granted in a controlled way, and regulated so that
suppliers do not exploit their monopolistic privileges
unfairly.
Common-Pool Goods and Services Common-pool
goods and services are pure, individually-con-
sumed goods and individually-used services for
which exclusion is not feasible. Breathable air is a
common-pool good.
Common-pool goods and services bring us to
“the tragedy of the commons.”32 Common-pool
goods can be tragic because they are a “commons”
that “belongs” to everyone, and, consequently,
are easily squandered and possibly exhausted.
Breathable air can be destroyed by polluters (think
Beijing); hence, government’s role is to prevent,
through regulation, this from happening.
Public Goods and Services Public, or collective,
goods and services, are pure, jointly-consumed
goods and jointly-used services for which exclusion
is not feasible. An example is public safety. The mar-
ketplace cannot supply public safety because it is
used simultaneously by many people, and using it
does not diminish its quality or quantity. Here gov-
ernment is the most appropriate provider.
PARADIGMATIC PROBLEMS
The incrementalist and rationalist paradigms have
problems.
Understanding and Improving Public Policy 389
Arguments over Incrementalism
One problem is that, although the two camps concur
that the policymaking process is incremental, they
part company over incrementalism’s desirability.
The incrementalists hold that incremental poli-
cymaking works well because the human element is
central to it. The rationalists’ restrictively linear and
technical myopia leads them to make predictions
and policies that are often wrong.33 By contrast, bar-
gaining among many stakeholders results in better
policy, but, should it not, then at least their poor pol-
icies would be far more limited in their impact than
would the rationalists’ systemic policies.
The rationalists counter that, “like beautifully
muscled illiterates, incrementalists . . . have overde-
veloped powers of political calculation and under-
developed powers of social imagination.”34 Poor
policies are the pernicious products of the deceit
that is inherent in any bargaining-based policy.
Negotiation often requires that rivals hide their real
goals, and, as a result, critical realities may be over-
looked and poor policies may result. Worse, trans-
formational policies (or what politicians sometimes
call “grand bargains”), even when they are clearly
needed, are dismissed by the incrementalists in favor
of tinkering.
Incremental Policymaking? Not So Much
Another issue is that neither paradigm is as grounded
in reality as it might be. Policymaking is not as incre-
mental as both paradigms aver. Although incremen-
talism’s more limited and specific models remain
relevant, incrementalism overall is “a spent intel-
lectual force” that remains, remarkably, “dead yet
flourishing” in academic circles.35 Perhaps incremen-
talism’s intellectual demise is attributable to its real-
world inaccuracies. We consider some of these next.
Does Incrementalism Mean Small Changes?
Adherents of both paradigms contend that incre-
mental policymaking means, in part, that public
policy is the product of small changes. But just what
does “small” policy change actually mean?
Analysts have found, “surprisingly,” that, in the
federal budget, “a low proportion of changes are
small by any logical standard. During most years,
more than one-fifth of budgetary changes are greater
 390 PA R T I V Implementing Public Policy

than 50 percent, and nearly half are more than 10
percent.”36 Another examination concluded that
there are as many big policy changes as small ones in
the formulation of public policy in general.37
Does Incrementalism Mean Slow Policymaking?
Contrary to incrementalism’s contention that the
policy process is slow, the evidence suggests that it
is not slow, and can happen very quickly. The “grad-
ualism model” does not describe change in the policy
agenda “particularly well.” Instead, “a subject rather
suddenly ‘hits,’” and the proportion of policymak-
ers who express interest in a prospective new policy
can  triple from a third to nearly all within a single
year.38
Policymaking Is Rarely Incremental If incremen-
tal policymaking is defined as small policy changes
made slowly, then the empirical evidence demon-
strates that few—fewer than three out of every ten—
changes in public policy are made incrementally.39
A Pair of Pouting Paradigms
So here is what we are left with: two paradigms of
the policy process that have utterly different goals
(understanding the process versus improving it),
and which disagree over whether incremental pol-
icymaking helps or hurts society. Both paradigms
have, at best, only a limited comprehension of how
so-called “incremental” policymaking actually works
in practice.
What is needed is “a third approach,” one that
threads its way between the cynical biases of incre-
mentalism and the utopian longings of rationalism;
one that does not substitute numbers for important
intangibles, but which does use hard analysis to illu-
minate choices.40
Enter strategic planning.
A THIRD APPROACH: THE
STRATEGIC PLANNING PARADIGM
OF PUBLIC AND NONPROFIT
POLICYMAKING
Strategic planning is the identification, prioritization,
and communication of major policy goals by organ-
izations on a continuing basis, and the integration
of those goals into the management, budgeting, and
performance measurement systems of organizations.
Figure 10-5 illustrates the paradigm.

Incrementalist Resources

Traditions, values, and Budgetary, political, managerial, and Agency leadership:

aspirations of agency intellectual resources of agency and abilities and policy
and its personnel its line personnel priorities

PUBLIC AND NONPROFIT STRATEGIC PLANNING

Analyses of long-term Analyses of short-term political Interagency competition:

environmental trends: trends: threats, opportunities, perceptions and
threats and opportunities perceptions, and directions directions

Rationalist Resources

FIGURE 10-5
The Public and Nonprofit Strategic Planning Paradigm

Strategic planning debuted in 1962 as the brain-
child of Alfred Chandler, Jr., who applied it solely to
corporations.41 Since then, it has been adopted by
the public and independent sectors.
Public Strategic Planning
Governments, mostly local ones, began adopting
strategic plans in the 1970s.
Federal Strategic Planning In 1998, the first-ever
federal government-wide strategic plan was released.
It was both a singular achievement and the direct
consequence of the Government Performance and
Results Act of 1993. Thanks to the GPRA, planning
was penetrating the bureaucracy; a decade following
its passage, 70 percent of federal managers consid-
ered “strategic goals to a great or very great extent in
allocating resources,” a rising proportion.42
Over the years, however, the GPRA’s limita-
tions grew more apparent, so, in 2010, Congress
enacted the GPRA Modernization Act, which aligns
the agencies’ strategic plans with presidential terms
and links annual performance goals with strategic
plans. (We described the act’s related requirements
to improve interagency collaboration and perfor-
mance in Chapters 2 and 7, respectively.)
State Strategic Planning In 1970, just a third of
the governors provided written “overall policy guid-
ance” (clearly strategic planning, if not so named) to
their agencies in preparing agency budget requests;43
by the mid-nineties, two-fifths of the states had fully
implemented strategic planning and another two-
fifths had partially done so.44 Its adoption by state
agencies is closely related to a new governor assum-
ing office, sound state finances, substantial state
experience with the private sector, and when similar
agencies in neighboring states have adopted it.45
Local Strategic Planning Sixty-two percent of
cities and counties have strategic plans, and they
gather no dust: fully half have been revised within
the past eighteen months or so, often involving offi-
cials, citizens, businesspeople, and educators, among
others.46 More than a third of cities have completed
a full cycle of at least one strategic plan over the
last five years;47 over four-fifths of cities specifi-
cally budget for their plans’ goals; and, remarkably,
Understanding and Improving Public Policy 391
almost two-thirds wed their administrators’ salary
increases with accomplishing their strategic goals.48
Communities that succeed in their strategic
plans have a “powerful process sponsor” (that is,
one or, typically, more, major figures who endorse
strategic planning); a strong “process champion”
(often a skilled administrator); an agency-wide
expectation of disruptions and delays; and a willing-
ness to be flexible.49 Technical difficulties may loom
even larger than political ones in implementing local
planning.50
Perils, Problems—and Advantages—of Public
Strategic Planning Public strategic planning
differs significantly from its corporate counterpart.
Governments Are Different City managers and
mayors agree that the single greatest obstacle to suc-
cessful strategic planning is the “need to gain greater
control over the external political environment.”51
Research backs up these officials’ perception that
governments’ tumultuous external environment dis-
rupts the sequential, step-by-step planning that we
associate with the private sector in unique ways,
often through arbitrary time constraints, such as
budget and election schedules, that can rush or delay
strategic decisions in ways that they no longer are
strategic.52 Hence, not only is strategic planning used
less in the public sector than in the private one, but
governments also are unable to prepare a plan that
resembles the thick, slick corporate version; indeed,
a “well-crafted” strategic plan in local governments
amounts to a modest five to seven pages.53
The Sky Is Falling: The Henny Penny School of
Public Planning Sadly, some observers belong
to the Henny Penny school of strategic planning,
asserting that, because of these chaotic conditions,
the public-planning sky is falling and it cannot
succeed; the “bold moves” that strategic planning
ostensibly demands of organizations are rendered
“almost completely impossible” in government.54
Well. Let us remind ourselves that bold moves
are not necessarily central to successful strate-
gic planning, which simply charts “a third way.”
Successful agencies use strategic planning as it
should be used, scampering between plodding incre-
mentalism (when they adopt politically prudent
“protective” strategies) and rip-roaring rationalism
 392 PA R T I V Implementing Public Policy
(when “developmental,” or even “transformational,”
strategies are in order).55
Implementing the Strategic Plan: Public Planning’s
Managerial Advantage We discussed in Chapter
2 the highly networked, collaborative, interactive,
cross-functional—and quite effective—governance
(i.e., Paradigm 6) that characterizes public adminis-
tration today. Networked governance also results in
the effective execution of the strategic plan.
A five-year study of 7,600 managers in 262
companies determined that a slender 9 percent could
rely on colleagues in other divisions to implement
the plan, and only half could rely on them even most
of the time; about the same held true for external
actors, such as suppliers. Thirty percent cited failure
to coordinate across units as their “greatest chal-
lenge,” and, although four-fifths of the companies
had cross-functional committees to coordinate plan-
ning activities, just a fifth of their managers thought
that they worked well. “When managers cannot rely
on colleagues in other functions and units [not to
mention external partners], they compensate with a
host of dysfunctional behaviors [e.g., delays, dupli-
cation] that undermine execution.”56
Here is public strategic planning’s underly-
ing managerial advantage: networking is critical
in implementing strategic plans, and frequently-
collaborative governments manage networking far
more effectively than the inherently competitive
private sector.
Strategic Planning Improves Public Productivity
Although it has long been known that “strategic
planning positively influences firm performance”
in  the private sector,57 it only recently has been
determined that there also is a strong and posi-
tive correlation between it and improved public
performance.
Ninety percent of state agency heads cite “clar-
ifying agency priorities” and “management direc-
tions” as strategic planning’s single most useful
feature, followed closely by its utility as a “guide to
policy decisions.”58 A head-snapping 93 percent of
municipal officials think that strategic planning is
worth the time and expense that it entails, and only
2 percent say that it is not.59
Facts support these views. “Logical, clearly
planned strategies” in government “are a useful route
to better performance,”60 and “quantified strategic
priorities lead to better organizational outcomes”
in the public sector—most notably, improved per-
formance.61 In light of these benefits, it is significant
that, in those cities that have completed two or more
strategic plans, an average of three-fifths of their
plans’ goals were fulfilled.62
Even when accounting for variables that admin-
istrators (local administrators, in this study) cannot
control—e.g., city size, location, wealth—strategy
matters. “A low-performing municipality tends to
have a predominantly outward [strategic] orienta-
tion . . . whereas a higher-performing municipality
. . . [has a] both inward and outward orientation.”63
Nonprofit Strategic Planning
“Many nonprofit organizations do not use strategic
planning.”64 Why not?
The Resistant Independent Organization The
reasons are internal and external.
Internally, third-sector administrators resist
strategic planning because it is more difficult than in
public and private organizations to attain agreement
among stakeholders about what, precisely, their
organization’s goals even are. Recall, in this regard,
the lower right quadrant in Chapter 4’s Table 4-1,
which illustrates that some nonprofits succumb to
“inspirational” or “authoritarian” decision making
simply because the unacceptable alternative is
admitting to chaos.
Externally, the “most critical” reason why non-
profit associations plan at all is that their donors
exert “coercive pressure” to force the organization
to “submit a plan of action, leading several authors
to conclude that nonprofits plan when they have to
plan.” This is “one of the strongest research find-
ings” in the field.65
This top-down, donor demand for strategic
planning is known as strategic philanthropy, and it
says a lot that it is a target of nonprofit profession-
als’ steaming ire. To wit: nonprofits “have been trying
to demonstrate the nakedness of this autocratic and
insistent emperor [i.e., strategic philanthropy] for
more than a decade, with its proponents meanwhile
acting as if we [nonprofits] were regressive spoil-
sports. . .. imprisoned by logic frameworks, theories of
change, and elegant PowerPoint decks.”66 O-Kaaaay.

The Symbolic Uses of Nonprofit Planning? Because
most of the independent organizations that have
strategic plans were forced by external powers
to adopt them, their plans “may be largely sym-
bolic . . . and the planning process may be decoupled
from other strategic activities,” such as improving
performance.67
Factors for Nonprofit Strategic Success Those
independent organizations that have successful stra-
tegic plans are: larger; have decentralized manage-
ment and sophisticated executive directors who play
a “critical role” in their plan’s success; are governed
by boards that focus on policy issues rather than
on administration; and feature high levels of trust
and healthy working relationships among directors,
board members, and operational units.68 Nonprofit
organizations that make strategic decisions also are
more likely to use performance measures and have
effective governance, diverse funding sources, and a
highly educated executive director.69
Does Independent Strategic Planning Work? Yes!
Nonprofit organizations that seriously plan stra-
tegically correlate strongly and positively with:
improved performance (just as in public and
private organizations); organizational growth,
both in funding and membership; greater effective-
ness in mission attainment; and improved board
effectiveness.70
Successful Strategic Planning: Executives,
Planners, Continuity, Collaboration, and
Budgets
To succeed, strategic planning in all sectors must
start with the organization’s highest decision makers.
It is not done by planners. “First we ask: who is
leading the planning? If it is a planner . . . we are in
trouble.”71 Why? Because only top officers can link
the three critical components of strategic planning:
goals, actions, and outcomes.
When chief executives are not involved in the
planning process, the usual consequence is all too
well known: irrelevant, unread plans. Planners
are most useful when they provide strategic deci-
sion makers with pertinent information, and then
nag  them to act on that information in a timely
manner.
Understanding and Improving Public Policy 393
In addition, to be successful strategic planning
must be continuous, constant, and collaborative.
Regular meetings of executives and planners must
be held to adjust plans, develop goals and methods
for their attainment, assign specific responsibilities,
assure cross-functional collaboration, and check
off those goals that have been met. Failure to do so
results, again, in dusty, unread, and inevitably dated
plans. As President Dwight D. Eisenhower, a superb
strategic planner, put it: “plans are worthless—but
planning is everything.”72
Finally, force upper and middle managers to
read the plan, at least annually, and then act on it,
by holding budget hearings each year. If their budget
requests are not linked to the plan’s goals, then their
budgets will suffer.
NOTES
1. Our definition is based loosely on Harold D.
Lasswell, A Pre-view of Policy Sciences (New York:
American Elsevier, 1971), pp. 1–2.
2. William N. Dunn, Public Policy Analysis: An
Introduction, 2nd ed. (Englewood Cliffs, NJ:
Prentice-Hall, 1994), p. 49.
3. Ibid., p. 50.
4. John A. Hird, “Policy Analysis for What? The
Effectiveness of Nonpartisan Policy Research
Organizations,” Policy Studies Journal 33
(Spring 2005), pp. 83–105. The quotation is on
p. 83.
5. Daniel Lerner and Harold D. Lasswell, eds., The
Policy Sciences: Recent Developments in Scope and
Method (Stanford, CA: Stanford University Press,
1951).
6. Austin Ranney, “Preface,” Political Science and
Public Policy, Austin Ranney, ed. (Chicago:
Markham, 1968), pp. vii–viii.
7. Susan B. Hansen, “Public Policy Analysis: Some
Recent Developments and Current Problems,”
Political Science: The State of the Discipline,
Ada W. Finifter, ed. (Washington, DC: American
Political Science Association, 1983), pp. 217–246.
8. Nicholas Henry, Public Administration and Public
Affairs, 4th ed. (Englewood Cliffs, NJ: Prentice-
Hall, 1989), p. 291.
9. Howard Risher, “Amid All the Pomp, Where Are
the Public Management Degrees?” Govexec.com
(May 19, 2015).
10. Dunn, Public Policy Analysis, p. 50.
 394 PA R T I V Implementing Public Policy
11. J.B. Wogan, “Want to Govern? Survey Says, Attend
Policy School,” Governing (July 24, 2014).
12. Steven G. Koven, Frank Goetz, and Michael
Brennan, “Profiling Public Affairs Programs: The
View from the Top,” Administration & Society 40
(November 2008), pp. 691–710.
13. James Piereson and Naomi Schaefer Riley, “The
Problem with Public Policy Schools,” Washington
Post (December 6, 2013).
14. Carol Chetkovich, “What’s in a Sector? The
Shifting Career Plans of Public Policy Students,”
Public Administration Review 63 (November/
December 2003), pp. 660–674. The quotations are
on pp. 660, 670–671.
15. Charles E. Lindblom, The Policy Making Process
(Englewood Cliffs, NJ: Prentice-Hall, 1968).
16. Charles E. Lindblom, “The Science of Muddling
Through,” Public Administration Review 19
(Spring 1959), pp. 79–88.
17. C. Wright Mills, The Power Elite (New York:
Oxford University Press, 1956).
18. Martin Gilens and Benjamin I. Page, “Testing
Theories of American Politics: Elites, Interest
Groups, and Average Citizens,” Perspectives on
Politics 12 (3, 2014), pp. 564–581. Data are for
1980–2009. The quotations are on pp. 564, 576.
Emphasis is original.
19. Arthur F. Bentley, The Process of Government
(Bloomington, IN: Principia Press, 1949). First
published in 1908.
20. Louis M. Kohlmeier, The Regulators: Watchdog
Agencies and the Public Interest (New York:
Harper & Row, 1969).
21. David Easton, The Political System (New York:
Knopf, 1953).
22. Carl J. Friedrich, Constitutional Government and
Democracy (Boston, Little, Brown, 1941).
23. Theodore J. Lowi, “Four Systems of Policy, Politics,
and Choice,” Public Administration Review 33
(July/August 1972), pp. 298–310.
24. Theodore J. Lowi, “American Business, Public
Policy, Case-Studies, and Political Theory,” World
Politics 16 (July 1964), pp. 677–693. The quota-
tions are on p. 691.
25. Thomas J. Greitens and M. Ernita Joaquin,
“Policy Typology and Performance Measurement:
Results from the Program Assessment Rating Tool
(PART),” Public Performance & Management
Review 33 (June 2010), pp. 555–570.
26. John W. Kingdon, Agendas, Alternatives, and Public
Policies, 2nd ed. (New York: Longman, 2003).
27. Yehezkel Dror, Public Policy Making Reexamined
(San Francisco: Chandler, 1968), p. 8.
28. Vincent Ostrom “Editorial Comment: Develop-
ments in the No-Name Fields of Public Admin-
stration,” Public Administration Review 24
(January/February 1964), pp. 62–63.
29. Vilfredo Pareto, Cours d’Economie Politique
(Geneva, Switzerland: Droz, 1896).
30. L. L. Wade and R. I. Curry, Jr., A Logic of Public
Policy: Aspects of Political Economy (Belmont, CA:
Wadsworth, 1970).
31. E. S. Savas, Privatizing the Public Sector: How
to Shrink Government (Chatham, NJ: Chatham
House, 1982), p. 33.
32. Garrett Hardin, “The Tragedy of the Commons,”
Science 162 (December 13, 1968), pp. 1243–
1248.
33. William Ascher, “Forecasting Potential of Complex
Models,” Policy Sciences 13 (May 1981), pp. 247–
267.
34. George Keller, Academic Strategy: The Management
Revolution in Higher Education (Baltimore: Johns
Hopkins University Press, 1983), p. 113.
35. Jonathan Bendor, “Incrementalism: Dead yet
Flourishing,” Public Administration Review 75
(March/April 2015), pp. 194–205.
36. Sarah Anderson and Laurel Harbridge, “Incre-
mentalism in Appropriations: Small Aggregation,
Big Changes,” Public Administration Review 70
(May/June 2010), pp. 464–474. The quotation is
on p. 464.
37. Kingdon, Agendas, Alternatives, and Public Poli-
cies, p. 81.
38. Ibid., p. 80.
39. Ibid., p. 82.
40. Amitai Etzioni, “Mixed Scanning: A Third Approach
to Decision Making,” Public Administration Review
27 (December 1967), pp. 385–392.
41. Alfred Chandler, Jr., Strategy and Structure:
Chapters in the History of the Industrial Enterprise
(Cambridge, MA: Massachusetts Institute of
Technology Press, 1962).
42. U.S. General Accounting Office, Results-Oriented
Government: GPRA Has Established a Solid
Foundation for Achieving Greater Results, GAO-
04-38 (Washington, DC: U.S. Government Printing
Office, 2004), p. 43. Figure is for 2003.
43. Robert C. Burns and Robert D. Lee, Jr., “The
Ups and Downs of State Budget Process Reform:
Experience of Three Decades,” Public Budgeting &
Finance 24 (Fall 2004), pp. 1–19.

44. Jeffrey L. Brudney, F. Ted Hebert, and Deil S.
Wright, “Reinventing Government in the American
States: Explaining Administrative Reform,” Public
Administration Review 59 (January/February
1999), pp. 19–30.
45. Frances Stokes Berry, “Innovation in Public Man-
agement: The Adoption of Strategic Planning,”
Public Administration Review 54 (July/August
1994), pp. 322–329. Figures are for 1992.
46. Evelina R. Moulder, “Citizen Engagement: An
Evolving Process,” Municipal Year Book, 2010
(Washington, DC: International City/County
Management Association, 2010), pp. 28–32. Data
(p. 29) are for 2009.
47. Gregory Streib and Theodore H. Poister, “The Use
of Strategic Planning in Municipal Governments,”
Municipal Year Book, 2002 (Washington, DC:
International City/County Management Asso-
ciation, 2002), pp. 18–25.
48. Theodore H. Poister and Gregory Streib,
“Elements of Strategic Planning and Management
in Municipal Government: Status after Two
Decades,” Public Administration Review 65
(January/ February 2005), pp. 45–56.
49. John M. Bryson and William D. Roering, “Initiation
of Strategic Planning by Governments,” Public
Administration Review 48 (November/December
1988), pp. 995–1004.
50. George A. Boyne, Julian S. Gould-Williams,
Jennifer Law, and Richard M. Walker, “Problems
of Rational Planning in Public Organizations: An
Empirical Assessment of the Conventional
Wisdom,” Administration & Society 36 (July
2004), pp. 328–350.
51. Gregory Streib, “Strategic Capacity in Council-
Manager Municipalities: Exploring Limits and
Horizons,” International Journal of Public
Administration 15 (9, 1992), pp. 1737–1755. The
quotation is on p. 1737.
52. Gerald J. Miller, “Unique Public-Sector Strategies,”
Public Productivity & Management Review 13
(Winter 1989), pp. 133–144.
53. International City/County Management Asso-
ciation, “Strategic Planning: A Guide for Public
Managers,” IQ Report 34 (August 2002),
p. 9.
54. Miller, “Unique Public-Sector Strategies,” pp. 137–
138.
55. Barton Weschler and Robert W. Backoff, “Policy-
making and Administration in State Agencies:
Strategic Management Approaches,” Public
Understanding and Improving Public Policy 395
Administration Review 46 (July/August 1986),
pp. 321–327.
56. Donald Sull, Rebecca Homkes, and Charles Sull,
“Why Strategy Execution Unravels—and What to
Do about It,” hbr.org [Harvard Business Review]
(March 2015).
57. C. Chet Miller and Laura B. Cardinal, “Strategic
Planning and Firm Performance: A Synthesis of
More than Two Decades of Research,” Academy
of Management Journal 37 (December 1994),
pp. 1649–1665. The quotation is on p. 1649.
58. Frances Stokes Berry and Barton Weschler, “State
Agencies’ Experience with Strategic Planning:
Findings from a National Survey,” Public Admini-
stration Review 55 (March/April 1995), pp. 159–
168. The quotation is on p. 165. Data are for 1992.
59. Streib and Poister, “The Use of Strategic Planning
in Municipal Governments,” pp. 23–24. Data are
for circa 2001.
60. Richard M. Walker, Rhys Andrews, George A.
Boyne, et al., “Wakeup Call: Strategic Management,
Network Alarms, and Performance,” Public
Administration Review 70 (September/October
2010) pp. 731–741. The quotation is on p. 738.
61. George A. Boyne and Alex A. Chen, “Performance
Targets and Public Service Improvement,” Journal
of Public Administration Research and Theory
17 (July 2007), pp. 455–478. The quotation is on
p. 455.
62. Poister and Streib, “Elements of Strategic Planning
and Management in Municipal Government,” p.
51. Figures are for circa 2001.
63. Hans Knutsson, Ola Mattison, Ulf Ramberg, and
Torbjorn Tagesson, “Do Strategy and Management
Matter in Municipal Organisations?” Financial
Accountability & Management 24 (August 2008),
pp. 295–319. The quotations are on p. 295.
64. Melissa M. Stone, Barbara Bigelow, and William
Crittenden, “Research on Strategic Management
in Nonprofit Organizations: Synthesis, Analysis,
and Future Directions,” Administration & Society
31 (July 1999), pp. 378–423. The quotation is on
p. 383.
65. Ibid, p. 391.
66. Ruth McCambridge, “The Strategic Philan-
thropy Crowd: Qualified Apologies-R-Us,” Non-
profitquarterly.org (April 6, 2016).
67. Stone, Bigelow, and Crittenden, “Research on
Strategic Management in Nonprofit Organi-
zations,” pp. 408–409.
68. Ibid., pp. 406, 408–409.
 396 PA R T I V Implementing Public Policy
69. Kelly LeRoux and Nathaniel S. Wright, “Does
Performance Measurement Improve Strategic
Decision Making? Findings from a National Survey
of Nonprofit Social Service Agencies,” Nonprofit
Leadership & Voluntary Sector Quarterly 39
(August 2010), pp. 571–587.
70. Stone, Bigelow, and Crittenden, “Research on
Strategic Management in Nonprofit Organizations,”
p. 391.
71. Michael Aiken and Jerald Hage, “The Organic
Organization and Innovation,” Sociology 5
(January 1971), pp. 63–82. The quotation is on
p. 80.
72. Quoted in David A. Nichols, “As Israel-Iran
Tensions Mount, a Lesson for Obama from
Eisenhower,” Washington Post (March 7, 2012).

Intersectoral
Administration
G overnments source. Sourcing is the selection of
an entity and a method that public administra-
tors judge to be the most appropriate and efficient
for delivering a public program or service, or imple-
menting a public policy.
Public administrators making sourcing deci-
sions may, in keeping with tradition, insource—
that is, designate their own agency as the entity to
implement their agency’s program. Or, instead, they
might choose to outsource a program—that is, use
an entity other than their own agency.
A major outsourcing method that governments
at all levels use is privatization, or government
selling goods and property to the private and non-
profit sectors, and government buying goods, prop-
erty, and services from those sectors. Most countries
privatize primarily by selling off assets, often state-
owned companies, to the private sector, but the gov-
ernments of the United States (which also sell assets)
prefer purchasing from the private and nonprofit
sectors.
The federal government privatizes primarily by
purchasing goods, property, and services for its own
use, but state and local governments privatize prin-
cipally by contracting with companies and funding
nonprofit organizations to deliver their services
to their jurisdictions’ residents. (All governments
also collaborate with other governments to deliver
services, but that is a topic we have reserved for
Chapter 12.)
We call these incredibly convoluted phenom-
ena intersectoral administration, which is the man-
agement and coordination of the relationships
CHAPTER
11
among governments and for-profit and nonprofit
organizations for the purpose of achieving specific
public policy goals. Figure 11-1 illustrates the major
characteristics of these sectoral configurations, and
arrays them on a public-private continuum.
WHY PRIVATIZE?
Governments’ decision to collaborate with busi-
nesses and nonprofit organizations in implement-
ing public policies stems from several positive
impulses (and a few negative ones). They include
the following:
■ Savings: Savings often can be realized. For
example, civil service rules on pay scales
and benefits may be skirted by using private
contractors who pay only minimum wages and
offer few benefits to their employees.
■ Cost clarification: A particularly important
form of collaboration, contracting out the
delivery of government services to the private
and nonprofit sectors, clarifies the true costs of
public programs by placing those programs in
the competitive marketplace.
■ Fiscal easements: Cumbersome fiscal
procedures can be bypassed and revenues
raised in ways that more constitutional
approaches inhibit.
■ Human capital easements: Governments can
hire people of unusual talent without paying
as much attention to sometimes inconvenient
public personnel policies.
397
 Public Sector Independent Sector Private Sector

Governments and Government Public-Serving Member-Serving Government- Private Corporations

Government Corporations/Public Nonprofit Associations Nonprofit Associations Sponsored
Agencies Authorities and and Organizations and Organizations Enterprises E.g., Union Pacific
Special Districts Railroad
E.g., Governments of E.g., United Way E.g., AFL-CIO E.g., Federal National
the United States E.g., Amtrak Railway Mortgage Association Microsoft, Inc.
Harvard University Republican Party
California State Port Authority of New Federal Home Loan Mom and Pop’s
University York and NewJersey Episcopal Church Medinah Country Mortgage Corporation Grocery
Club
Finance Department
South Florida Federal Home Loan
of the City of
Cleveland Conservancy District Banks

Selected Selected Selected Selected Selected Selected

Characteristics Characteristics Characteristics Characteristics Characteristics Characteristics

Created by society Created by Created by private Created by private Created and regulated Created by private
to formulate, government to citizens to provide and citizens to provide and by the U.S. investors to earn
interpret, and administer a public administer public administer member Government to money for investors
execute public service benefits benefits protect its interests
policies Privately owned and
Publicly owned and Privately owned and Privately owned and Two are publicly controlled
Publicly owned and controlled controlled controlled owned, three are
controlled privately owned Funded by private
Funded by user fees, Funded by earned Funded by earned investors
Funded by taxes taxes, borrowing, income, government income and/or Credit markets and
and other and/or government contracts and grants, membership dues, investors perceive Seek profits
government appropriations, in and/or private in whole or in part implied financial
revenues whole or in part donations, in whole or backing by the U.S. Pay taxes
in part Do not seek profits Government
Do not seek profits Independent or part
of a government Do not seek profits Do not pay taxes Seek profits
Do not pay taxes agency
Do not pay taxes Donations/dues are Do not pay corporate
Do not seek profits not tax deductible income taxes, but
Donations are tax some pay property
Do not pay taxes deductible taxes

Public Private

FIGURE 11-1
Organizations and Characteristics of the Public, Independent, and Private Sectors

■ Experimentation: Using other sectors to
experiment with new policies and procedures
appears to be highly valued among public
administrators, or at least among the more
talented ones. Cities that privatize associate
with “innovative managerial and institutional
strengths.”1
■ Lowered political risk: Government
becomes less visible when public policies are
implemented by organizations other than
government, and avoiding risk, particularly
political risk, is a major motivation to
outsource.2
■ Image enhancement: Privatization can enhance
the image of lean but effective governance.
The personnel working for government can
be expanded through agreements with other
sectors, even though the official size of the civil
service remains the same or decreases.
■ Greater leverage: Public services can be
enhanced by private- and independent-sector
organizations that already may be doing what
the government wishes to do.
■ Economic development: Outsourcing can assist
the economic development of a jurisdiction,
especially local ones, by channeling public
funds, through contracts and subsidies, to
companies and nonprofit organizations, which
then add more people to their payrolls.
■ Emergency management: Government often
collaborates with volunteers and nonprofit
organizations when emergencies occur.
■ Incentive to improve public productivity: The
“threat of privatization,” and the possible loss
of their government jobs, according to a review
of this research, may spur public employees to
raise governmental performance.3
■ Pinstripe patronage: “Pinstripe patronage,”
such as no-bid contracts and revolving doors,
is inherent in collaborative arrangements, and
it can advance public officials’ legitimate and
even inspiring visions of a better future, or, as
we describe later, erode efficient and effective
governance by sustaining conflicts of interest
and graft.4
■ An American orthodoxy: Finally, the belief,
held by many in government and academia
(and, certainly, in business) that businesses
deliver services more efficiently than
Intersectoral Administration 399
governments has made privatization immensely
easier to implement. This is especially the
case when conservatives, who embrace this
orthodoxy far more fervently than liberals, are
in power.5
This orthodoxy has deep roots. The highly influential
municipal research bureaus (mentioned in preced-
ing chapters) of the early twentieth century were
supported by “a small number of wealthy business
people,” and their staffs, unsurprisingly, “gave defer-
ence in their publications to the wonders of business
efficiency, regardless of the accuracy of the claim.”6
The orthodoxy lives on. Here are two examples
drawn from government and academia.
When a Senator questioned an official why the
federal government relied so heavily on contrac-
tors to vet prospective employees (contractors who,
as we discuss later, failed spectacularly in doing
this), the official replied that contractors (on whom
Washington lavished $1 billion annually to conduct
background checks) were cheaper than government
employees. Were there analyses showing this? No.
Then how did he know? He just did. The exasper-
ated Senator stated, “I’m tired of this assumption
that contractors are cheaper. I just think it’s easier”
for the official to make such an assumption.7
When the woefully mismanaged town of Ecorse,
Michigan, was restored to fiscal health in 1990, a
process that was accompanied by contracting out
almost every service in sight to the private sector,
academics concluded that the “Ecorse experiment
shows that . . . privatized services have the power
to weed out incompetence and inefficiency, and the
private sector can respond to changing conditions
much more quickly than can bureaucracies.”8
The belief that business is better is deeply
entrenched in America’s most powerful institutions.
As we shall learn in this chapter, it is a belief that is
often misplaced.
FEDERAL PRIVATIZATION
No governmental level is as deeply entrenched in
privatization as is the national one, an entrenchment
that began in 1789, when Congress directed that the
secretary of the treasury should “provide for con-
tracts which shall be approved by the President” to
build and maintain a lighthouse on Chesapeake Bay.9
 400 PA R T I V Implementing Public Policy
Like all governments, the federal one both sells
to and buys from the private sector. We start with
selling.
Federal Fire Sales
Washington is profoundly into the business of pur-
veying the people’s property. The federal govern-
ment is the biggest electronic vendor in the world,
selling about $3.6 billion of its assets, ranging from
horses to helicopters, over the Internet each year.10
The Pentagon alone sells or donates nearly $3.2
billion annually in unneeded property, excluding real
estate.11
Increasingly, however, Washington also is
ridding itself of real estate, and with good reason.
The federal government is the largest property
owner in the United States, owning nearly 39
million acres, more than 254,000 buildings con-
taining over 2.5 billion square feet, and almost
478,000 “structures” (e.g., airfields, harbors);
annual operating costs for all this top $22 billion.
In addition, the feds spend another $7 billion or so
to lease land, buildings, and structures, for a total
of more than $29 billion per year.12 Although most
of these numbers are in decline, Congress neverthe-
less contends that 7,000 real properties, worth $350
billion, are “unneeded.”13 In 2003, the Government
Accountability Office (GAO) placed federal real
property on its “high-risk” list of areas that are
unduly vulnerable to fraud, waste, abuse, and mis-
management, where it remains.
The Enormity of Acquisitions
Huge as Washington’s selling is, it pales by compari-
son to its buying. Federal purchasing, also known as
procurement or acquisitions, is the federal govern-
ment’s contracting with organizations in the private
and nonprofit sectors to buy goods, property, and
services.
Portentous Purchasing Globally, governments’
spending on procurement amounts to $4.4 trillion
per year—an estimate, but no less staggering for
it.14 The United States government is the largest pur-
chaser in the world.15 Almost 16 million contracts
are let each year by federal agencies.16 Washington’s
contract expenditures, which historically have
hovered in the neighborhood of a half-trillion dollars
annually, account for two-fifths of federal discre-
tionary spending. Four departments, led by Defense
(Washington’s Croesus of contracting, spending 63
percent of all contract dollars), are followed, respec-
tively, by Energy, Health and Human Services, and
Veterans Administration, which, together, account
for another 15 percent of contract spending.17
Perhaps the most significant new wrinkle in
federal purchasing is that Washington is buying
fewer goods and more services. A federal service
contract is a legal agreement for the provision by the
private sector of a wide swath of services, such as
consulting, training, or leasing, to the federal gov-
ernment.
In 1985, service contracts amounted to only
23 percent of all federal contracting dollars.18 Today,
they account for 60 percent.19 Remarkably, even in
the Pentagon, service contracting, at 52 percent of
all Defense contracts, surpasses all other Defense
contracting (i.e., supplies and equipment, including
weapon systems), a “major shift.”20
As an indication of their growing importance,
Congress, in 2003, passed the Services Acquisition
Reform Act, which encourages the use of perfor-
mance-based service contracts. In 2013, the General
Services Administration (GSA) pioneered its revo-
lutionary One Acquisition Solution for Integrated
Services for managing service contracts, which, by
most accounts, has rendered the bid process fairer
and simpler for bidders, and more cost-effective for
government.
Humongous Hiring: “Indirect” Federal Employees
The Congressional Budget Office “is unaware of any
comprehensive information about the size of the
federal government’s contracted workforce,”21 but
as we noted in the introduction to Part IV, there are
an estimated 7.5 million “indirect” federal employees
working in the private sector, or well over three times
the number of federal direct employees, plus mil-
lions more indirect employees in the nonprofit sector
(detailed later in this chapter) and in state and local
governments (discussed in Chapter 12).
Federal Philosophies of Purchasing
On what basis does the federal government ration-
alize its enormous acquisitions? It has done so, over

time, through its development of various philoso-
phies of procurement.
OMB Circular A-76 The first expression of these
philosophies appeared in 1955, when what is now
the Office of Management and Budget (OMB) issued
Bureau of the Budget Bulletin Number 55-4, which
stated straightforwardly that the government would
rely on the private sector for commercial goods and
services so that it would not be competing with busi-
ness.
In 1966, OMB altered this philosophy when
it issued OMB Circular A-76, “Performance of
Commercial Activities,” which reiterated the 1955
bulletin, but added that the government should
perform those functions that “are inherently govern-
mental in nature.”
Here were the makings of a magnificently messy
mire. What functions are governmental, and which
are commercial?
Identifying Inherently Governmental Activities—
Or Not An inherently governmental activity, first
defined in the Federal Activities Inventory Reform
Act of 1998, “is a function that is so intimately
related to the public interest as to mandate perfor-
mance by Government employees. . .. Governmental
functions normally fall into two categories: (1) the
act of governing . . . and (2) monetary transactions
and entitlements.”22
This description may sound crisp, clear,
and concise, but, alas, it is not. Consider war.
Most of us think that war, which constitution-
ally can be  declared only by Congress, is about
as “inherently  governmental” as it gets, but the
Constitution  also empowers Congress to “grant
Letters of Marque and Reprisal”—that is, to
authorize privateers to make war on the nation’s
behalf. Privateering faded following the War of
1812, perhaps because, just as Congress taxes the
fees that it pays its contractors, it taxed the booty
looted by its privateers.23
Today, privateers are back. For example, 53
percent of the Pentagon’s personnel in Afghanistan
and Iraq were not warriors, but contracted workers.24
More than 2,000 of them were killed in the conflicts,
or a quarter of all American deaths,25 and some were
awarded medals ostensibly reserved exclusively for
soldiers.26 It is officially projected that contractors
Intersectoral Administration 401
will continue to constitute a critical component of
any future wars.27
In 2011, the Office of Federal Procurement
Policy issued Policy Letter 11-01, “Performance of
Inherently Governmental and Critical Functions,”
a seventy-five page compendium containing an
expanded, but essentially unchanged, definition of
inherently governmental function and two dozen
illustrative, but not exhaustive, examples of it. It is
not apparent that the letter has significantly clarified
its meaning.
Identifying activities that are “inherently gov-
ernmental,” in sum, “is like trying to nail Jell-O to
the wall; only nailing Jell-O is easier.”28
Identifying Commercial Activities Commercial
activities are those functions that are more appro-
priately conducted by businesses rather than by
government. In 1998, Congress mandated that the
government’s commercial activities be identified
every year by passing the Federal Activities Inventory
Reform Act (the FAIR Act).
More than 700 specific commercial activities
have been unearthed.29 About a fourth of all federal
activities are “competable commercial,” which
potentially could be privatized, and another quarter
are “noncompetable commercial,” or functions that
have been exempted from competition by statute or
other means.30 The remaining half is composed of
governmental activities.
The Costs of Comparing Costs OMB Circular
A-76 and the FAIR Act were the bases of competitive
sourcing, or public-private competitions, which were
cost comparisons that determined whether federal
agencies or private companies would win federal
contracts to conduct Washington’s competable com-
mercial activities. Philosophically, or, perhaps, ide-
ologically, these competitions reflected a view that
business was more cost effective than government.
The Pentagon initiated its own version of com-
petitive sourcing in 1975, it was extended to civil-
ian agencies in 1981, and it was reinvigorated in
the 1990s during the administration of President
Bill Clinton, which conducted a record number
of public-private competitions. President George
W. Bush’s administration revised OMB Circular
A-76, in 2003, to facilitate the competitions, but, in
2007, the Washington Post exposed vile treatment
 402 PA R T I V Implementing Public Policy
of veterans at the recently privatized Walter Reed
Hospital, and, since that year, Congress has prohib-
ited public-private competitions in all federal agen-
cies via its annual appropriations.
Congress’s action reflected problems that
loomed larger than a single hospital. Competitive
sourcing was largely a failure, in part because the
effort “ran aground on shoals of incomplete data,”31
and a pricey one. It cost from $150 million to $300
million annually;32 each cost comparison took an
average of a disruptive four years and three months
to complete;33 and, at the end of the day, “no one . . .
really knew . . . how much on balance it had saved
the American taxpayer.”34 In fact, federal agencies,
not companies, won 91 percent of the public-private
competitions, a rising figure,35 suggesting that the
private sector was, in general, less efficient than the
federal one in conducting federal programs.
Washington’s Buying Bureaucracy
The federal government has developed a host of pro-
cesses and personnel to manage its purchasing.
Procurement’s Policies, Procedures, and
Processes Congress took an interest in privatiza-
tion more than six decades ago, and has, over the
years, enacted legislation that mandated advertised
and data-driven bidding for federal contracts, estab-
lished an appeals system for bidders who fail to win
contracts, and prohibited contract officers from dis-
cussing employment prospects with, and slipping
inside information to, contractors with whom they
are negotiating.
Although Congress has placed the decision to
outsource squarely in the agencies, the Office of
Federal Procurement Policy, created by Congress
in 1974 and plunked into OMB, is responsible for
providing overall direction for government-wide
procurement policies and procedures. GSA assists
agencies in purchasing and related projects with the
goal of assuring that the government gets good value
for the dollar.
Washington’s privatization procedures are
contained in the Federal Acquisition Regulation, a
massive document in excess of 1,800 pages,36 plus
agency supplements amounting to another 2,900
pages. By contrast, the Australian government’s pro-
curement regulations total ninety-three pages.37
Procurement’s Personnel: The Contracting Cadres
The primary purchasing personnel are an “acquisi-
tion workforce” that numbers over 73,000, the core
of which is more than 37,000 contracting officers
who are responsible for managing federal acquisi-
tion policies.38
Congress’s first foray into upgrading the con-
tracting cadres was its creation, in 1976, of the
Federal Acquisition Institute, and, in 2004, GSA
opened its Center for Acquisition Excellence; both
are dedicated to training procurement officers
government-wide.
Agencies, however, prefer to train their own
purchasing staffs. In 1990, Congress established
a separate career path for the Pentagon’s acqui-
sitions specialists, and, in 1991, founded the
Defense Acquisition University. The departments
of Homeland Security, Treasury, and Veterans
Administration operate their own dedicated train-
ing centers, and seventeen major agencies use other
sources to train, including some that rely on the
vendors whom their administrators are expected to
oversee.39
These are, for the most part, constructive
moves, but whether training actually has improved
purchasing is unknown due a lack of data.40 We do
know, however, that little progress has been made in
addressing the skills gap, unstable budgets, and inad-
equate oversight, which have slowed improvement
in acquisitions.41 In fact, every one of seven inde-
pendently-conducted surveys of acquisition officials
taken over twelve years “overwhelmingly identified
general business acumen, risk identification and mit-
igation, negotiating skills and knowledge of buying
complex technology capabilities as significant gaps
in the federal acquisition workforce’s skills. . ..
This is not a failure of the workforce, but of our
collective slowness to recognize the need for major
change in how we train, educate and support that
workforce.”42 Seventy percent of experts in Defense
acquisitions believe that a major problem of military
procurement (“one of the most studied problems
in the history of government”43) is the workforce
itself, a workforce plagued by unclear career paths,
high turnover, and few incentives, among other
difficulties.44
This is regrettable because senior procurement
managers already dwell in “an embedded culture
of uncertainty avoidance” that “invariably” leads

to their failing to use more cost-effective procure-
ment methods.45 According to federal purchasing
executives, more than three-quarters of whom rate
their agencies’ promotion of acquisition innovation
as “fair” (at 53 percent) or “poor” (24 percent), the
two “biggest impediments[s] to being innovative
with acquisitions” are the “risk adverse culture of
program managers” (29 percent) and “contracting
officers” (24 percent).46
Worse, in 2003 Congress required that sixteen
civilian agencies appoint “chief acquisition officers”
charged with enforcing accountability. A decade
later, however, 87 percent were political appointees
rather than careerists, and, for 75 percent, acquisi-
tion was not their primary duty.47 Unfortunately,
these officers have yet to meet expectations.48
The good news is that an estimated two-fifths
of the federal acquisition workforce has fewer
than five years of experience (although, appar-
ently, not great experience), and another two-fifths
are  eligible to retire or will be shortly. These facts
offer  “the opportunity of a lifetime” to emerge
from the “mid-20th century, industrial business
model” currently  used  by procurement specialists
via a “generational shift” that could “fundamen-
tally change the culture and the way in which we
deploy, train and empower the [federal acquisition]
workforce.”49
THE CASE AGAINST FEDERAL
CONTRACTING
Most Americans think that government delivers
public services more efficiently than business. Only
about a sixth of the general public (17 percent) and
college seniors (16 percent) express “the most con-
fidence” in businesses to deliver public services.50
More than nine out of ten citizens, however, “do not
believe that the [federal] government gets best value
from its contractors.”51
In 2008, a weak signal wafted from Congress to
the effect that it might be starting to question con-
tracting out; the Clean Contracting Act of that year
narrowed standards for what could be outsourced.
The case against federal contracting is by no
means universal. Some policies and programs will
always make sense to outsource. But, we suggest,
Washington has gone too far, and, more than
Intersectoral Administration 403
occasionally, its privatization has damaged the
public interest, sometimes deeply.
We build our case on four fundaments: the
growing power of private contractors, consultants,
and lobbyists (the distinctions among them are typ-
ically dim, if not illusory) to shape federal policy;
incompetent contract management; corrupt contract
management; and the burgeoning body of proof that
federal outsourcing is generally less efficient and
effective than insourcing.
The Shadow Government: Contractors,
Consultants, and Lobbyists
By 1961, federal contracting was sufficiently perva-
sive that President Dwight D. Eisenhower, former
Supreme Commander of Allied Forces in World
War II and a pro-industry Republican, in his tele-
vised farewell address to the nation, coined the term,
“military-industrial complex,” warned Americans
of its “grave implications,” and stated that its “total
influence—economic, political, even spiritual—is felt
in every city, every State house, every office of the
Federal government.”52
Shadowy Contractors By any standard, Ike’s state-
ment not only was stunning in its implications for
democratic governance, but also eerily prescient.
Today, the federal government itself describes its
administrative circumstances as “a contractor-
dependent environment.”53 “It is now commonplace
for agencies to use contractors to perform activities
historically performed by government employees,”54
converting “what had once been an ‘arms-length’
relationship” to one that now is “virtually indistin-
guishable.”55
This intimacy has serious portents. As federal
officials note, “the closer that contractor services
come to supporting” government’s core responsibil-
ities, the greater the risk “of influencing the govern-
ment’s control and accountability.”56 Small wonder,
perhaps, that outsourcing “is negatively related to
job satisfaction” among federal employees.57
The Netherworld of Consultants This risk atten-
uates when federal administrators hire contractors
who are private consultants because their “advice”
can mold “basic management decisions” that can
quickly wax into federal policy. Agencies contract
 404 PA R T I V Implementing Public Policy
with at least 52,000 consultants a year,58 although
no one seems to really know how many there are,59
but it is known that, over thirteen years, agency
spending on “Professional, Administrative, and
Management Services” burgeoned by 146 percent
in inflation-adjusted dollars, and now is nearing
$100 billion per year.60 Other sources place the cost
of “service contracts” at more than $320 billion
annually.61
In multiple reports dating from 1961, GAO
has criticized consultants’ “excessive involvement in
agency management” that is “influencing agencies’
control of Federal policies and programs.”62 “We’ve
seen situations where an agency contracts out so
much of its data gathering and policy analysis that it
thinks it has control, but the consultant is, in effect,
making the decision.”63
These are basic issues. They deal with who
makes public policy in an advanced democracy—
representatives of the public interest or of private
interests.
OMB first addressed these concerns in 1980,
and it has consistently demanded that agencies retain
their “inherently governmental decision-making
authority” when contracting with consultants and
other service contractors.64 A decade following the
initial issuance of this policy, however, over a fifth of
federal contracts for consultants’ services appeared
to involve “inherently governmental functions.”65
Lobbyland It is but a short hop from consultants
to lobbyists: both are deeply involved in acquiring
government contracts and other benefits for their
employers, both are highly influential in shaping
government policies and how they are administered,
and both are external to government (although not
always, as illustrated by the registered lobbyist who
“earned” a salary of $143,000 from a federal agency
for a four-hour work week, while simultaneously col-
lecting $1.3 million for his “side-gig” as a lobbyist66).
Americans do not like lobbyists. Seventy-one
percent think that they have “too much power,”
a score that places lobbyists at the top out of ten
dreary possibilities.67 The people have a point, as,
for instance, special interests appear to have unusu-
ally destructive effects on the economy. A study of
lobbyists found that the deeper the influence of inter-
est groups, the steeper the decline in the economy’s
growth rate and the greater the rise in its inflation
rate.68 But, as we shall see in this discussion, it gets
worse.
Lobbyists by the Load Some 28,000 “Government
Relations individuals,” a term that includes lobby-
ists (current, retired, and expired69), political action
committees, and related groups in Washington, are
registered with Congress.70 Of these people and
groups, fewer than 4,500 are “active contract lob-
byists” (that is, lobbyists whose names appear on
more than one annual lobbying report and whose
spending is “non-zero”), an increase of 70 percent
over twelve years.71
Some political scientists think that the number
of Washington lobbyists is much higher than any
of these counts, and is closer to 100,000 because a
number of lobbyists maintain that they are really
just (highly paid) “advisors” to special interests,
which, they argue, means that they are not lobbyists,
and therefore are not required to register as such.72
In addition, any enforcement of lobbyists’ registra-
tion “is all but non-existent.”73
Fixed Fortunes? So there are lots of lobbyists in
Washington. So what? Are they actually effective in
enriching their patrons with taxpayers’ money?
Pretty much. For every dollar that the fifty largest
corporations paid to lobbyists over six years, they
received $130 in tax breaks and more than $4,000
in federal loans, loan guarantees, and bailouts.74 The
200 “most politically active” for-profit corporations,
all of which have political action committees and
contracted lobbyists, disclosed that they had spent
$5.8 billion over six years to influence federal poli-
cies; during this time they were awarded $4.4 trillion
in federal contracts and support (an amount that is
two-thirds of what individual income taxpayers paid
during the period), or $760 from Washington for
each one dollar that they spent there. Although the
200 companies accounted for less than 1 percent of
the 20,500 clients who hired lobbyists during those
six years, their lobbying expenditures constituted “a
whopping 26 percent of the total spent.”75
We are not suggesting that there were not some
legitimate reasons for the feds to channel $4.4 tril-
lion to these 200 firms, but it does seem naïve to
believe that there are no connections among cam-
paign contributions, lobbying expenditures, and
federal allocations.

The Rapidly Rotating Revolving Door Who better
to lobby government than those who know it from
the inside? Thus we arrive at the repellant revolving
door, or the process by which public officials resign
and then work as bag men or women for the same
special interests with which they formerly dealt.
The revolving door is spinning ever faster, and
at the expense of the public.
The Sin of Spin: The Blob Isn’t “sin” a trifle strong
when describing the revolving door?
Hardly. The revolving door fosters an untoward
and indivisible intimacy among consultants, con-
tractors, lobbyists, bureaucrats, and policymakers
that verges on the gluttonous and the carnal.
Consider “The Blob,” which is Washington-
speak for the staffers who work in those agencies
and congressional committees that regulate the
finance industry and “the army of Wall Street repre-
sentatives and lobbyists that continuously surrounds
and permeates them. . .. The Blob moves together.
. . . They dine, drink, and take vacations together. . ..
they frequently intermarry. . .. Ideally, you and your
spouse take turns” working for the finance industry
and its regulators and policymakers.76 Over fifteen
years, at least thirty-seven employees of Goldman-
Sachs, the nation’s largest financial firm, worked
as high federal executives, including two who
were a commissioner or chaired the Securities and
Exchange Commission (SEC), the main regulator
of the finance industry; two presidents of powerful
New York Federal Reserve Bank; and five secretaries
of the treasury.77
Perhaps as a consequence of this intense and
endless interaction among financiers and the feds,
eight years after the beginning of the Great Recession,
the Department of Justice (DOJ) had jailed just one
Wall Street executive (and not a top one) for finan-
cial crimes, a hapless employee of a Swiss bank who
had handled his defense so maladroitly that “pros-
ecutors simply got their man by default.”78 The big
fish, however, such as the chief executive officer
(CEO) of JPMorgan Chase, which was fined more
than $20 billion for financial malfeasance, not only
escape punishment, but are rewarded; its CEO, who
presided over the malfeasance, receives an annual
compensation of $20 million.79 By contrast, during
the Great Depression the head of the New York
Stock Exchange was imprisoned, and, nine years
Intersectoral Administration 405
following the start of the savings-and-loan crisis of
the 1980s, 1,100 financial officials had been prose-
cuted for “major” fraud and 839 convicted.80
In the aftermath of the Great Recession, at
least one federal judge questioned DOJ’s prosecuto-
rial inertia, and the department’s inspector general
wrote that, even though “DOJ and its components
have repeatedly stated publicly that mortgage fraud
is a high priority,” many departmental components
“ranked mortgage fraud as the lowest ranked crim-
inal threat in its lowest crime category. . .. [or as] a
low priority, or not listed as a priority.”81
As these learned views imply, Wall Street, perhaps
because of The Blob, usually wins when challenged
in court. Nineteen major Wall Street firms, amount-
ing to “a Wall Street’s who’s who,” settled, over
fifteen years, “at least” fifty-one fraud cases with the
SEC—settlements in which the firms had promised
to never, ever breach the same anti-corruption laws
again, but did, frequently. These repeat offenders
“often pay a relatively small price” in penalties, and
typically neither admit nor deny guilt in the settle-
ment, a practice that protects them from later law-
suits. In 2011, SEC admitted in court that it had not
brought any contempt charges against any “large
financial firms,” including “chronic violators,” over
the last ten years.82 The statutes of limitations began
to run out in these cases in 2012.
And Wall Street wins in Congress, too. The
Blob assured that Congress’s bailout of the financial
industry, in 2008, worked to the industry’s advan-
tage. The “empirical evidence [shows] that campaign
contributions from the financial services sector influ-
enced legislative voting on the banking bailout.”83
Small wonder, considering that the Securities and
Investment industry consistently contributes more
money to congressional campaigns than does any
other sector.84
The Blob’s manipulation of Congress is long-
standing. In 2003, Congress reduced the personal
income tax on long-term capital gains, a type of
income on which the very wealthy have an almost
exclusive monopoly (and for some it is their only
income), from 20 percent to 15 percent for those
who paid 25 percent or more of their income in
federal taxes. In 2013, Congress retained the 15
percent tax rate, but ruefully raised the rate for
those in the highest tax bracket to 20 percent, which
is almost precisely the same percentage (there is a
 406 PA R T I V Implementing Public Policy
tenth of 1 percent difference) paid by the average
taxpayer.85
Systemic Sins Spin’s sins are not limited to Wall
Street. More than half of all consulting contracts
awarded by the Department of Defense, less than a
fifth of which are openly bid, go to former Pentagon
employees. More than seven out of ten of them
could have been conducted in-house by federal
employees.86
Administrators in the Department of Energy,
which privatizes about 90 percent of its budget and
is second only to Defense in the dollars that it con-
tracts out, “bounce,” in the words of one of its own,
“back and forth between government and industry
just like Ping-Pong balls.”87
Nor is the sin of spin confined to the executive
branch. The evidence strongly suggests that those
members of Congress who voluntarily retire with
the intent of becoming lobbyists harbor “ambitions
that potentially jeopardize the interest of the public.”
They sponsor significantly more bills, and are more
successful in getting their bills passed, during their
final term in office than do voluntarily-retiring
members in their final term who do not intend to
become lobbyists.88 A notoriously effective lobby-
ist stated that he “owned” about 100 members of
Congress, an ownership that he attained by promis-
ing positions in his firm to key congressional staff-
ers, at triple their current salaries, when they were
“ready to retire” from federal service;89 ultimately,
he was among twenty-one people, including White
House officials, congressional staffers, and a con-
gressman who were convicted, jailed, or granted
plea bargains.
Should we be surprised that 58 percent of
Americans think that former members of Congress
should be banned from lobbying, and only 22 percent
believe that they should be permitted to lobby?90
The Scope of Spin Washington’s revolving door
began its rapidly accelerating spin during the 1980s,
and, by the late 1990s, 12 percent of Washington’s
registered lobbyists were former federal officials.91
Today, 44 percent of all registered active lobbyists in
Washington are former government employees, up
from just 18 percent a dozen years earlier; over four-
teen years, the number of these “revolvers” nearly
quadrupled from 482 to 1,846.92
The revolving door seems to concentrate at
the top; in one agency, 56 percent of “former high-
ranking officials” who had departed over four years
were “compensated” by contractors to whom they
had awarded contracts when those officials were
employed by the agency.93
Conversely, almost a third—a plurality—of all
upper-level federal executives and professionals who
are hired from outside the government were working
for a federal contractor when hired.94
When big money is involved, the revolving door
reaches warp speed. Three-fourths of the more than
600 registered lobbyists who represent the oil and
gas industry, for instance, have “revolving-door con-
nections,” including “dozens of former presidential
appointees.”95
The revolving door is hardly the exclusive aper-
ture of the executive branch. In the 1970s, just 3
percent of retiring members of Congress became
lobbyists.96 Times change. Over a dozen years in the
1990s and 2000s, 43 percent of all 198 Senators (50
percent) and Representatives (42 percent) who left
Congress registered as lobbyists.97 Today, more than
420 former members of Congress are registered lob-
byists.98
Parallel patterns pertain for congressional staff-
ers. Over ten years, more than 5,400 congressional
staffers left Congress to become Washington lobby-
ists.99 The propensity of staffers to leave Congress for
lobbying positions doubtless has been encouraged by
relentlessly burgeoning workloads and salaries that
shrank (in constant dollars) over four years by 9 to
20 percent for top staffers100—staffers who appear
to benefit financially more as lobbyists than do those
lobbyists who left less exalted aeries.101 Merely
working in Washington (with its forced intimacy
with living-large lobbyists and their career tempta-
tions) associates with almost twice as many staffers
who are seriously interested in seeking employment
elsewhere (63 percent) relative to those staffers who
are based in districts and states (36 percent).102
Lucre’s Lure Federal officials who leave for the
private sector are lured by greener pastures. Consider
the case of Rahm Emanuel, a former presidential
chief-of-staff who departed the White House to enter
an investment firm as a self-described “relationship
banker.” In fewer than three years, Emanuel left the
firm, carting away $16.2 million in the process.103

Lobbying firms prefer revolvers, such as Emanuel,
and pay handsomely for them. The estimated median
compensation for an active Washington lobbyist
who lists “a government staff position somewhere
in their lobbyist disclosure forms” is $300,000, a
growing amount that is almost three times that of
lobbyists who do not list government experience.104
Over fourteen years, the real pay earned by all
active contract lobbyists nearly doubled to more
than $1.3 billion. “All of that new revenue came in
the form of revenues associated with revolving door
lobbyists.”105 During the same 14 years, from 7 to
10 percent of revolvers earned at least $1 million in
one or more years, compared with just 2 percent of
those without government experience.106
Over the same fourteen years, former members
of Congress who became lobbyists actually earned
less, on average, than did those who once held
non-elective federal offices, such as administra-
tors and staffers, perhaps because former Congress
members had less substantive knowledge than former
bureaucrats.107 Of course, former members still earn
substantially more than when they were in Congress,
and some earn spectacularly more, such as the dozen
former Representatives and Senators whose revenues
increased by an average of 1,452 percent from their
final year’s full congressional salaries to their first
year’s “partial salaries” as lobbyists.108
In the 1960s, just 2 percent of former members
of Congress became lobbyists, perhaps because they
“earned about the same as he had in government.
Today he or she can easily expect to make ten times
as much.”109
In explaining why so many of her colleagues
resist more meaningful lobbying reform, a con-
gresswoman observed that, “It’s because there’s a
lot of money involved.”110 One is reminded by her
observation of a phrase favored by American youth:
“Duh.”
Stockholders’ Delight Certainly Washington’s
revolving-door lobbyists are rolling in dough, but
the real money is made by the special interests that
hire them. When corporate executives are hired by
the Pentagon, their companies’ stock prices rise, on
average, by nearly 1 percent on the day following
the announcement; “effects are larger for top gov-
ernment positions.” Conversely, when businesses hire
Defense officials their stock prices jump higher and
Intersectoral Administration 407
longer; stocks rise by almost 1 percent on the first
day and by over 1 percent on the second.111
Investors obviously understand that there is a
link, and a strong one, between profits and politics,
perhaps because revolvers more than pay for them-
selves. Former federal employees who lobby spend a
fourth of all lobbying expenditures in Washington,
but more than compensate for their spendthrift ways
by raking in two-thirds of all lobbying firms’ fees.112
Slowing the Spin? In 2007, in an effort to slow
the revolving door’s spin, Congress passed the
Honest Leadership and Open Government Act,
which bans high-level administrators from lobbying
their former agencies for two years following retire-
ment. Congress was less forthcoming in slowing its
own revolving door, although the act does apply
the same prohibition on Senators from lobbying
Congress, lesser limitations on staffers, and none
on Representatives. All members and senior staffers,
however, must disclose any current negotiations with
prospective employers. Congress also enacted, in the
Defense Authorization Act of 2008, a similar policy
for retiring senior Defense acquisition officials.
In 2009, the president issued an executive
order that prohibited exiting government executives
from lobbying for foreign governments, a policy re-
inforced by a similar order in 2017.
These and other modest reforms soon were being
grossly violated by former members of Congress
and aides.113 Former senior Defense officials may be
doing the same, but no one knows since no one, in
violation of the law, is tracking their retirement.114
More to the point, the laws fall short of dealing with
the central issue, which is that a large number of
federal officials appear to be advancing their own
future interests at the expense of the public’s present
interest.
Remember The Blob?
A Crisis of Competence
Some federal contracting is a model of compe-
tence.  A comparison of the Defense Department’s
and companies’ costs in buying identical elec-
tronic and engine parts, for example, found that
the Pentagon paid much less than did the business
sector. These savings were credited to the fact that
Defense “was already using commercial practices
 408 PA R T I V Implementing Public Policy
commonly followed by large firms,” including tough
bargaining.115
Regrettably, however, in the dank and darkling
depths of federal contracting, such competence is
not always the case. An example follows.
Snowed About a third of the federal government’s
intelligence professionals who have top secret secu-
rity clearances are employed by private companies
working under federal contracts.116 These contrac-
tors receive 70 percent (or more than $40 billion)
of the classified intelligence budget, and earn almost
twice as much as their federal counterparts.117
No one seems to be particularly well informed
about the contractors who have these clearances; the
secretary of defense, for example, candidly admitted,
“This is a terrible confession. I can’t get a number
on how many contractors work for the Office of the
Secretary of Defense.”118 Neither do the intelligence
agencies have much of a clue of how many contrac-
tors they have and their costs.119
Similarly dire defects are found in highly sen-
sitive information systems. A review of six major
agencies (including the departments of Defense,
Homeland Security, and State) that had outsourced
the control of at least some of their information secu-
rity and computer systems, found that five of them
were “inconsistent in overseeing” their contractors,
including one agency which was unaware that its
contractor failed to even vet its employees.120 In the
department most responsible for domestic safety,
Homeland Security, a third of its roughly 600 major
information systems that are currently in use “reside
in contractor facilities,” and more than four-fifths of
its information resources’ staffers are outside con-
tractors.121
These remarkably reckless practices came home
to roost in 2013, when Edward Snowden, an infra-
structure analyst (also known as a system adminis-
trator) with a top secret clearance at the National
Security Agency’s (NSA) contractor, Booz Allen
Hamilton, violated his oath of office and down-
loaded highly classified documents. (According
to some wags, NSA actually stands for “No Such
Agency,” a nod to its unique sensitivity.) Snowden
later stated that he had planned the theft long before
he was hired.122
Snowden’s motive, he said, was to expose NSA’s
secret and massive spying on Americans, although it
seems that most of what Snowden leaked concerned
NSA’s surveillance of other countries and terrorist
groups.
Of NSA’s estimated 40,000 employees, about
1,000 are, like Snowden, infrastructure analysts,
most of whom work for contractors. Infrastructure
analysts have wide-ranging access to files, but
Snowden also convinced some two dozen colleagues
to illegally give him their passwords. Snowden used
those passwords to steal a stunning 1.5 million docu-
ments. His activities were largely unaudited, if at all,
perhaps because NSA, apparently, had not installed
readily available anti-leak technology in Snowden’s
workplace networks.123
Just before NSA’s secrets began leaking world-
wide, Snowden fled first to China and then to
Russia, which granted him an unending “tempo-
rary asylum.” Over a period of months, Snowden
slipped at least some of the documents to WikiLeaks,
Britain’s Guardian newspaper, and other outlets.
Quite aside from his criminality, “Snowden was,
at best, a marginal hire. . .. There’s little evidence that
he had the ideal technical capability, track record,
or behavioral profile for the work he was hired to
do.”124
So how did he get hired?
Snowden was hired because, beginning in 1996,
some three-quarters of federal background checks
were privatized,125 and they were privatized with
gross incompetence. The largest single vetting firm
was the U.S. Investigations Services (USIS), which
was responsible for as much as 45 percent of all
federal screening126 and 65 percent of all outsourced
vetting.127 USIS was created, in 1996, by simply
spinning off federal screeners, who immediately
incorporated USIS and signed contracts (worth
nearly $3 billion) with their former employer, the
Office of Personnel Management (OPM), to vet can-
didates for federal jobs. The contracts specified that
private vetting firms were to be paid according to
how many background checks, including many for
top secret security clearances, that they conducted,
and  firms were awarded bonuses for exceeding
targets.
It beggars the imagination that a decision
could be made to privatize background checks for
security posts, and then pay the checkers on the
basis of piecework, replete with bonuses for com-
pleting more checks than anticipated. This was a

prescription for quick, inept, incomplete, and fraud-
ulent vetting. USIS, as it turned out, was under inves-
tigation for rushed background checks and fraud (as
were the two other major vetting contractors) as the
result of a whistleblower’s suit filed in 2011. No sur-
prise, that.
Perhaps it goes without saying that USIS vetted
Snowden. A federal investigation found that not only
was Snowden’s vetting incomplete, but that USIS
had not even verified Snowden’s earlier employment
with the Central Intelligence Agency.128
In 2014, OPM did not renew USIS’s contracts
and Congress reinstated OPM as the final check
for security clearances, appropriating $2 billion
to be used mostly for that purpose. In the same
year, the  Justice Department filed a $1 billion suit
against USIS, alleging that the firm had filed at least
665,000 flawed background checks (including a top
secret clearance for an employee who, five months
following Snowden’s defection, murdered twelve
co-workers), or two-fifths of the total, over four
years.
In 2015, USIS (and the other two private vetting
services) declared bankruptcy, but the damage was
done. At the very least, Snowden’s theft and flight
revealed that American intelligence probably could
see and hear every electronic communication any-
where by anyone (Americans’ support for these
activities is low; just 16 percent support government
monitoring of cellphones and emails129), and resulted
in America’s allies, rivals, and enemies searching for
more effective protections.
Other consequences were more damaging.
Because of Snowden, the Washington Post published
details of Washington’s top secret “black budget” for
intelligence. His actions brought about an estimated
“cost to business” of $22 billion to $180 billion;130
a needed review of NSA’s practices; the expenditure
of billions of dollars in reworking intelligence gath-
ering procedures; new processes and protections for
whistleblowers in the intelligence agencies; and the
possible conveyance of highly classified secrets to
China, Russia, and many others.
L’affaire Snowden personifies the perils of
federal privatization. At every failed point (and every
point was a failure)—from outsourcing, to vetting,
to hiring, to managing, to processing, to auditing,
to guarding, to securing—an outside contractor was
critical and pivotal.
Intersectoral Administration 409
A Pervasive Problem The Snowden debacle is an
example of a more systemic incompetence in federal
privatizing. Much of this incompetence (and, as we
shall see, corruption as well), stems from the com-
plexity of federal contracting. The GAO, large plural-
ities of senior federal executives,131 and majorities of
acquisitions officials,132 contractors,133 and Defense
personnel,134 do not believe that the procurement
process serves the best interests of the government.
When GAO created its high-risk list, in 1990,
four areas directly concerned federal contracting;
twenty-five years later, all four were still on it, and
one more had been added! “Ineffective contract
management” is a “root cause” of seventeen agencies
being on the current list.135 Eighty-eight percent of
the thirty-two high-risk areas, which are “represent-
ative of a cross-section of federal programs, includ-
ing giant ones,” on the current list “work through
proxy [or third-party] or hyper-proxy administrative
arrangements”; private contractors are often those
proxies.136
Federal contracting’s main flaws follow.
Time Is Money Federal purchases of less than
$100,000 take an average of three months to com-
plete, compared with one to four weeks in the
private sector.137
A Counterproductive Contracting Culture The
culture of federal contracting emphasizes agencies
keeping the contract at the expense of acquiring their
money’s worth.138 As a former procurement officer
put it, “It doesn’t matter if you screw everything up,
as long as you keep the dollars flowing.”139
A Dearth of Due Diligence Some kinds of federal
contracts require that administrators assess the
past performance of prospective contractors before
awarding them contracts, but, in nearly seven out of
ten of these contracts, contractors’ previous perfor-
mance is never assessed.140
Federal contract administrators also seem to be
rather relaxed in assuring promptness and quality in
their expectations of contractors. “Indefinite delivery/
indefinite quality contracts” accounted “for about a
third” of all contract dollars over five years.141
Ballooning Bid Protests As federal contract
budgets shrink, federal bid protests grow, a trend
 410 PA R T I V Implementing Public Policy
that is time-consuming and costly. Over eight years,
bid protests lodged by those who bid for contracts
unsuccessfully grew by 60 percent to more than
2,600 annually. These appellants, such as the one
who submitted 150 baseless protests in a single year
and was suspended from protesting, are not having
much success; federal officials approve their protests
just 13 percent of the time, down from 21 percent
eight years earlier. Still, protests are expected to con-
tinue rising.142
Expensive Change Orders The Pentagon, that
Croesus of contracting, alters a whopping 63 percent
of weapon systems’ requirements after their devel-
opment has begun, and this dubious practice asso-
ciates with “significant program cost increases.”143
Over the course of a decade, in fact, Defense spent
“at least $46 billion in then-year dollars. . .. [on] at
least a dozen major programs [that] were terminated
without any operational systems being fielded.”144
Rules That Create Costs Procurement regulations
tote up to 12 percent or more in additional contract
costs.145 Until recently, federal purchasers of weapon
systems spent, “on average, over 2 years completing
numerous information requirements,” averaging, in
total, 5,600 staff days to document and sometimes
involving “56 organizations at 8 levels.”146 When
these regulations and procedures are changed, errors
result—not only in the contracts themselves, but
also in the government’s system-wide procurement
database; 20 to 30 percent of the database’s records
contain errors, including improper payments, which
lead to waste.147
In 2015, the Pentagon introduced its Electronic
Coordination Tool to more effectively manage the
mass of procurement procedures, and it seems to be
working; documentation and review now takes two
months, down considerably from two years.148
Federal Fragmentation and Little-Used Leverage
More than 500 federal organizations spend almost
a half-trillion dollars annually in purchases “with
only occasional collaboration across organizational
lines.” Federal acquisition is so fragmented that
87 percent of all federal procurement transactions
amount to less than 10 percent of all procurement
spending (the 87 percent are less than $150,000 per
transaction).149
In 2005, Washington began to decrease fragmen-
tation and increase leverage by introducing strategic
sourcing, which meant the consolidation of similar
purchases within each agency. Over five years, stra-
tegic sourcing saved Washington an average of 25
percent—a satisfyingly greater proportion than
the savings of 10 to 20 percent attained by private
companies using strategic sourcing. Regrettably, less
than 10 percent, on average, of federal purchasing
was strategically sourced during those five years,
compared with up to 90 percent in the private sector.
Had the feds used strategic sourcing to the full extent
possible, their savings would have nearly tripled.150
In 2014, OMB expanded strategic sourcing to
acquisition shared services, or the replacement by a
single organization of several departments’ common
administrative operations for purchasing. The inter-
agency fragmentation of federal purchasing is pricey;
an example: there is a 300 percent range in the price
paid by agencies for the same laptop.151
In 2015, the feds projected that shared services
would bring savings of $1 billion over ten years.
More than 90 percent of procurement officials in
federal agencies and private-sector organizations
report cost reductions attributable to its use.152
But implementing acquisition shared services takes
time—often a lot of time: for instance, “The consol-
idation of [federal] payroll providers—from 26 to
four—took nearly a decade, but [and this is the crit-
ical point] persistence paid off.”153
Each year, more than half of what agencies spend
on all their purchasing is spent in just ten purchasing
categories, such as “Facilities and Construction,” the
largest.154 These ten concentrations of similar goods
or services beg for a purchasing system that capi-
talizes on their natural efficiencies, so, also in 2014,
Washington introduced category management, or
placing a range of comparable products into sep-
arate groups, and then many government agencies
buying these products as one; its scope is the total
procurement spending of the whole organization—
in this case, the federal government.
Developed by the British government in 2005
(where it reduced prices and the number of trans-
actions and reports and improved data accuracy,
among other benefits155), category management is
one of fifteen Cross-Agency Priority Goals required
by the Government Performance and Results Act
Modernization Act of 2010. In 2015, the Strategic

Sourcing Leadership Council, created in 2012 to
implement strategic sourcing in the seven largest
agency purchasers, was charged with managing the
ten largest purchasing categories. Two years follow-
ing its introduction, the White House announced
that category management had saved $2 billion.
Nearly nine in ten federal procurement executives
think that category management will “dramatically
change” purchasing (18 percent), or at least “will be
helpful” (71 percent) in doing so.156
All three of these purchasing innovations have
brought or will bring significant savings. But the
narrow use of strategic sourcing, and the tardy intro-
ductions of acquisition shared services and category
management, are concerning if not depressing.
Insecure Security Contracting Contractors are
used to staff such critical and potentially life-threat-
ening jobs as “border patrol, intelligence gathering,
drone operations, militia training and more. . .. Most
of our diplomatic security is now contracted out. So
is security at many federal buildings.”157
Consider some failings of these practices. An
audit of six American embassies in dangerous
countries found that none had fully met the terms
for screening private security contractors, placing
the embassies in peril. Washington hired a British
security firm to secure the perimeter of its facility
in Benghazi, Libya; the firm then hired local guards,
who vanished when the facility was attacked, in
2012, killing four Americans, including the ambas-
sador.158 “Four to five dozen” newly hired Secret
Service officers were posted in “sensitive positions”
(including “a little more than two dozen” who were
assigned to the White House, where they were privy
to sensitive information) without completing the
required clearance process.159
These patterns indicate that Edward Snowden
is far from unique as an example of badly done
security vetting (in 2016, another NSA-contracted
employee of Booz Allen Hamilton was found to
have in his home sensitive, including top secret,
information spanning twenty years that could fill
200 computers, and was indicted in 2017), but at
least the Snowden episode had some salutary effects.
Shortly after his defection, NSA announced that it
was replacing some 90 percent of its infrastructure
analysts, such as Snowden, with computers. Two
years following Snowden’s flight, federal employees
Intersectoral Administration 411
and contractors with secret and top secret security
clearances had declined by 17 percent.160 In 2015,
all the intelligence agencies adopted a long-in-the-
works, “baked-in” cloud-computing environment,
built from scratch, that not only is expected to
detect future would-be Snowdens very quickly, but
also will lower expenses and improve intelligence.
In 2016, OPM began hiring 400 additional back-
ground checkers, and OPM and OMB set up a new
National Background Investigations Bureau, with
2,500 federal employees, 6,000 contract workers,
and a director appointed by the president.
A Slow Start in Determining Contractors’
Performance The Government Performance and
Results Act of 1993 required agencies to measure
their contractors’ performance through the use of
“performance contracts.” Years after its passage,
however, progress in implementing performance
contracting remained “excruciatingly slow,”161 and
only a slender 11 percent of contracts met perfor-
mance-based criteria nine years later.162
With the passage of the 2013 National Defense
Authorization Act, which mandated the development
of a strategy for reporting contractors’ performance,
marked improvements were evident. In 2013, all
federal agencies fulfilled 32 percent of their contrac-
tor evaluations that were due; by 2014, the figure
was 49 percent, with GSA, which oversees federal
contracting, ranking among the lowest percentages
in both years.163 While this is largely good news, it
is not good news that more than half of required
performance reporting is not being done. “The U.S.
Government—the largest consumer of goods and
services in the world—has not developed an acces-
sible and efficient system for rating and reviewing
government contractors.”164
Costly Cost-Reimbursement Contracts Cost-
reimbursement contracts ask contractors to make a
good-faith effort to meet estimated costs, but stipu-
late that the government will pay any costs exceed-
ing that estimate.
Cost-reimbursement contracts involve “high
risk for the government” because the prospect that
government will pay contractors more than it con-
tracted for is quite possible, and the government
must cover contractors’ expenditures even if they fail
to complete the work. “The complete picture of the
 412 PA R T I V Implementing Public Policy
government’s use [of these contracts] is unclear,” but
it appears that they accounted for at least a fourth
of all federal contracting dollars in 2008,165 and the
dollars expended through them were expanding by
11 percent, on average, per year, from 2000 through
2008.166
The feds do have options that would amelio-
rate the problem. Fixed-cost, or fixed-price, con-
tracts do not reimburse contractors for costs that
surpass  the  agreed-upon cost; encouragingly, the
American Recovery and Reinvestment Act of
2009 authorized their maximum use, and, from
2011 through 2015, agencies used these contracts
to manage an impressive average of 63 percent of
all contract dollars.167 Another superior variant to
cost-reimbursement contracts is time-and-materials
contracts, which the government pays fixed, hourly
rates for all expenses within a pre-established
ceiling.
Porky Profits The contractors for the Pentagon
(which, recall, spends more than six out of ten
contract dollars) accrue “abnormal or excessive
profits. . .. when compared with their industry
peers.” Profits grew even more excessive following
the significant consolidation of the defense indus-
try, in 1992, “due to both the improved bargain-
ing power and increased political influence of the
newly combined firms.” Ironically, excessive profits
increase when corporate governance is poor—spe-
cifically, when the CEO and the board chair are the
same person, a combination long recognized in the
research as producing overly empowered executives
and scant oversight.168
Fat profits might also be a result of some federal
contractors who may have violated the U.S. Service
Contract Act of 1965 and two executive orders
issued in 2014, which assure certain minimal levels
of pay and benefits for low-wage employees working
under federal contracts.169 Nearly two million
private-sector workers working under federal con-
tracts earn less than twelve dollars per hour; if they
worked full time, they would earn $24,000 per year,
which “hovers near the poverty level” for a family
of four.170
In 2015, GSA launched CALC.gov, which
allows contracting officers to see hourly pay rates
for 48,000 labor categories, greatly easing past prac-
tices and a step in the right direction.
Bye-Bye Bidding The Clean Contracting Act of
2008 limited noncompetitive, or sole source, con-
tracts, but there are few signs that it has succeeded in
doing so. According to the most recent official data,
a third or so of contract dollars (31 to 34 percent)
were not awarded competitively over five years.171
The Defense Department, which accounts for more
than three-fifths of federal contract spending, awards
less than half of its contract dollars to firms that are
involved in “a meaningful competition between two
or more vendors.” The Pentagon’s percentage of
competitively-awarded contracts has been declining
for nearly a decade.172
How do agencies circumvent the bid procedure?
Much of this circumvention is legal, if still question-
able. Contracting officers have the power to waive
bidding requirements, and they waive with gusto.
Depending on the study, from about a third to nearly
nine-tenths of all contracts are officially exempted
from “the fair opportunity process,”173 and “in
many cases agencies don’t disclose what they spent
on the sole source contracts.”174
In addition, agencies are not above using
guile. Fully two-thirds of all federal solicitations
for business have already been effectively awarded
without bidding. The administrator in charge of
releasing public notices for bid lists several “scams”
(his word) that agencies use to avoid bids, such as
miscoding a contract in the notice so that poten-
tial bidders can never find it (“That happens pretty
often”); mentioning a particular firm in the ad itself
(“That’s a pretty clear tip off that there’s not going
to be any competition”); and mandating bidding
deadlines so absurdly brief that only pre-selected
bidders can meet them. As one federal contrac-
tor put it, “Anybody who believes you read [these
notices] and get your contracts is out of it. You’d
starve.”175
A cousin of the no-bid contract is the single-bid
contract, which also can be awarded legally. It
appears, however, that “single-bid guidance” is not
followed in awarding two-fifths of them.176
Compounding all this is that the contractors
themselves may not solicit competitive bids from
their subcontractors. (Federal contractors appear
to subcontract about 70 percent of their work.177)
Construction contractors, on whom the feds spend
more than $30 billion a year, hire subcontrac-
tors who “typically perform 60 to 90 percent of

the work,” yet a review found “no evidence” that
bidding by subcontractors had occurred.178
It seems likely that competitive bidding will
remain stuck in its federal swamp for some time, as
the number of potential bidders has declined over
the past several years.179
A Crisis of Corruption
Incompetence and inefficiency in federal contracting
are one thing. Dishonesty and corruption are quite
another, and these are present as well.
Low-Balling and Lying Even when contracts
are let competitively, and even though the Federal
Acquisition Regulation requires officials to do busi-
ness only with “responsible sources” that have a
“satisfactory record of integrity and business ethics,”
subterfuge and deceit remain.
Contractors’ initial estimated costs for hundreds
of major projects built over nine decades in twenty
countries, including the United States, on five con-
tinents were, on average, 28 percent short of their
actual costs!180 This gap remained quite consistent
over time; indeed, the current difference between the
Pentagon’s contractors’ first estimates for weapon
systems and their final costs is a remarkably similar
average of 26 percent—and rising.181 The “over-
whelming statistical significance” of these data is
that “the cost estimates used to decide whether such
projects should be built are highly and systemati-
cally misleading,” and are “best explained by strate-
gic misrepresentation, that is, lying.”182
Regrettably, low-balling and lying are practices
in which the agencies are complicit. According to a
federal cost containment expert, prospective con-
tractors know that if they tell administrators “how
much something is really going to cost, they may
scrub it. And they know that if they [i.e., adminis-
trators] tell the Congress how much it’s really going
to cost, Congress may scrub it. So you start in with
both sides knowing that it is going to cost more.”183
Stiffing the Government Over twenty years
(1995–2015), nearly 2,500 misconduct cases—
involving seventeen types of misconduct, including
those concerning labor, the environment (the two
most common violations), fraud, “defective pricing,”
poor performance, health, taxes, ethics, antitrust,
Intersectoral Administration 413
and human rights, among others—were brought by
the federal government against 206 of its top con-
tractors. Fifty-eight percent of these firms had vio-
lated the law more than once (no misconduct was
proven for 28 percent). The government collected
at least  $92 billion in fines, court judgments, and
settlements (not  counting confidential and similar
settlements).184
An example: The Justice Department’s Operation
Ill Wind of 1986–1988 exposed “America’s biggest
defense scandal.” “No one will ever know how much
the phony contracts and sweetheart deals really cost
taxpayers,” but it is known that they amounted to
billions, and resulted in over ninety convictions for
fraud and bribery (among other crimes) of contrac-
tors, companies, consultants, and federal executives,
including the assistant secretary of the Navy.185
Stiffing the Law Another sort of corruption occurs
when contractors violate federal laws that are unre-
lated to their contractual performance, but still are
awarded new contracts.
Thirteen percent of all federal contract dollars
have gone to companies convicted of labor law
violations,186 and nearly a fifth flow to corpora-
tions that have been convicted of seriously violat-
ing federal health and safety regulations, including
violations that resulted in the deaths of thirty-five
workers in some of those companies over the course
of a single year.187
Of the fifty largest penalties imposed for violat-
ing health and safety laws, 16 percent were levied
against seven federal contractors. Fully half of the
fifty most egregious incidents of wage theft—that is,
companies that had cheated their employees out of
the wages due them—were perpetrated by twenty
companies that held federal contracts.188
Stiffing the Taxpayer A particularly pernicious
form of corruption concerns those companies that
are awarded federal contracts but fail to pay taxes.
Offshore Contractors Some companies pay no
taxes because they are headquartered in tax haven
countries, yet still, inexcusably, receive government
contracts. In just one year, these offshore contrac-
tors received $846 million in federal contracts, yet
cost the treasury an estimated $4 billion in lost tax
revenue.189 “Large tax haven contractors” also are
 414 PA R T I V Implementing Public Policy
“more likely to have a tax cost advantage” in com-
peting for federal contracts “than large domestic
contractors.”190
In the states, the 269 “major” overseas American
corporations for which we have data paid less than
half of the state corporate taxes that would have
been due had they been headquartered domestically.
(They paid in state taxes about 3 percent of their
profits, but we do not know if they received federal
or state grants.)191
In short, taxpayers are stiffed twice—first by
offshore contractors who pay no taxes, and then by
the government that pays some of these contractors
with taxpayers’ money. And, to add insult to injury,
federal contractors who pay their taxes and hire
American workers are at a competitive disadvantage
with those contractors who do not.
Contentedly Corrupt Contractors Other contrac-
tors avoid paying taxes by simply cheating. Some
33,000 contractors with all federal agencies, other
than the Defense Department, owe Washington
more than $3.3 billion in federal taxes.192 When we
throw in the Pentagon, more than 27,000 Defense
contractors owe another $3 billion in federal
taxes.193 Then there are the dumbfounding facts that
almost 700 contractors who are working for the
Internal Revenue Service (IRS) owe as much as $5.4
million in delinquent taxes,194 and that 8,400 federal
employees and contractors (more than half of whom
are employees) who qualify for security clearances
owe some $85 million in unpaid taxes.195
Altogether, these deadbeats account for nearly
two-fifths of all federal contractors.196
The states are not immune; more than 4,600
federal contractors who collected $1.8 billion in
federal contracts in just one year owed their state
governments $17 million in unpaid state taxes.197
In sum, more than 60,000 documented contrac-
tors owe more than $6 billion in unpaid taxes, yet
receive many billions more in federal funds. Criminal
acts abound in all these instances.
Other contented contractors include forty-nine
of the 100 largest federal contractors that receive
federal grants or tax credits, in addition to their top-
of-the-line fees.198
In 2015, an interim rule amending the Federal
Acquisition Regulation was adopted that prohibited,
with some minor exceptions, federal agencies from
contracting with federal tax delinquents. Its efficacy
is yet to be determined.
Why Does Corruption in Contracting Continue?
Corruption in federal contracting continues for a
host of reasons.
Congress Congress prohibits the IRS from dis-
closing to other agencies information about which
contractors do not pay taxes without the consent of
those contractors. Congress could eliminate this pro-
hibition, but as yet has not.
Complexity At least some of the reason why federal
agencies keep contracting with high-flying felons is
practical. Few, if any, other contractors could take
over some of the big, complex projects that these
big, complex companies manage, so firing them may
not be a realistic option.
Politics Politics also plays a part, and a significant
one. Should an agency actually cancel a contract,
it is virtually certain that at least one member of
Congress will intervene. This can be an administra-
tor’s worst nightmare because it “drastically disrupts
the careers of those associated with” the cancella-
tion.199 Hence, federal “contractual relationships
may be more like treaties than contracts in that often
no real separation occurs. . .. Once integrated into
the public sector, firms tend to remain there.”200
Federally Fixed on Felons Do they ever. Over sev-
enteen years, there were 941 instances of miscon-
duct committed by the federal government’s top 100
contractors, which accounted for 55 percent of all
federal contract dollars.201 These big enchiladas are
almost never suspended (a temporary exclusion from
completing work) or debarred (an exclusion of up to
three years), despite long records of serious, includ-
ing criminal, violations. Not one of the twenty-five
major corporations convicted of defrauding the
federal government in the 1980s was banned from
further contract work.202 During the 1990s and
2000s, the top ten federal contractors shelled out
almost $3 billion in fines and penalties for 280
instances of proven or alleged misconduct, but not
one of them was excluded from further work.203
Agencies sign contracts with proven felons
because they often are unaware of their felonies.

Various glitches may conceal from agencies an
astounding 99 percent of the exclusions that other
agencies have levied on their prospective contractors
for past violations.204
In addition, agencies sometimes fail to check
the government’s list of excluded companies;
or the excluded companies change their identi-
ties; or, astonishingly, some agencies continue to
contract with companies that they themselves
excluded! Examples include the German contrac-
tor that the  Army debarred because he tried to
ship nuclear bomb parts to North Korea, but nev-
ertheless needlessly continued its contract with
this “morally bankrupt  individual” (to quote the
Army’s own assessment) to the tune of another
$4 million. Or the corporation that the Navy sus-
pended because one of its employees had sabotaged
repairs on an aircraft carrier that could have caused
massive deaths, yet, “less than a month later, the
Navy improperly awarded the company three new
contracts.”205
Is Business Better?
Federal contracting costs (more than $472 billion in
Fiscal Year 2016206) long have been more than twice
the costs of the federal civilian payroll ($215 billion
in the same year207), even though there is expand-
ing evidence that federal outsourcing is, in general,
far more expensive than federal insourcing. The evi-
dence seems to be slowly dawning on Washington.
A Burgeoning Body of Proof There is a riot of
recent research which concludes that it costs the
feds about twice as much to outsource rather than
insource.208 One extensive empirical study con-
cluded that “when direct [federal] government pro-
grams operated by civil servants . . . and grant- and
contract-based third parties . . . were compared, in
general terms direct government received signifi-
cantly higher overall . . . [performance] scores and,
more specifically, higher scores for . . . management.”
The sole “marked exception to this generalization”
was research and development programs, “which
are mostly third-party based.”209
For example, bringing back into the Pentagon
30,000 outsourced jobs would save an estimated
$44,000 per year for each position.210 Another
agency saved $27 million annually simply by making
Intersectoral Administration 415
200 contractors federal employees, and paying them
the same salaries; the savings were achieved by elim-
inating service fees. Accountants in the private sector
earn, on average, less than $100,000, and lawyers
about $221,000; federal accountants earn $119,000
and lawyers $175,000; but when federal agencies
contract with accountants for services, they bring
home, on average, nearly $300,000, and lawyers
make a whopping $555,0000.211
Perhaps the most comprehensive of these anal-
yses is a study of thirty-five federal occupational
classifications covering more than 550 service activ-
ities. It found that federal employees were less costly
than contractors in thirty-three of the thirty-five
categories. “Fair and reasonable” billing rates (as
required by law) charged by contractors toted up to
“1.83 times more than the government pays federal
employees in total compensation, and more than
2 times the total compensation paid in the private
sector for comparable services.” Only outsourced
groundskeepers provided statistically significant
savings. The same study cited numerous federal
analyses that also concluded that Washington over-
pays its contractors.212
Fed-Up Feds In light of these and other compa-
rable findings, it should not come as a surprise that
a stunning 84 percent of federal managers support
“shrinking the contractor workforce to save money,”
a proportion that no other money-saving method
comes remotely close to nearing.213
The manager-in-chief, President Barack Obama,
fully concurred, and called for far-reaching reform
of “our broken system of government contracting,”
bemoaning contractors who were “paid for services
that were never performed, buildings that were
never completed, companies that skimmed off the
top, [and who] have been allowed to get away with
delay after delay after delay.”214
Success! The Reforms of 2009 and Beyond
In 2009, the president directed OMB to take steps
that would save up to $40 billion, or about 8 percent
at the time, in annual contracting costs, and success-
fully urged Congress to enact three consequential
bills: the Weapon Systems Acquisition Reform Act
(which passed unanimously) beefed up weapons’
cost estimating and testing; the Fraud Enforcement
 416 PA R T I V Implementing Public Policy
and Recovery Act dramatically expanded the risk for
institutional recipients of federal funds that engaged
in mismanagement or fraud; and the American
Recovery and Reinvestment Act directed greater
competition in awarding contracts and strengthened
federal follow-up.
These and other actions (from 2009 through
2015, the White House issued thirteen contractor-
focused executive orders that led to sixteen new
regulations) left the contracting community reeling.
“Government contracting is plainly entering an era
of . . . an unprecedented level of scrutiny” and “sig-
nificantly greater risk for contractors,”215 “many”
of whom went “into shock” when they learned of
these reforms, “and left some acquisitions experts
speechless.”216
In addition, an administrative strengthening
was undertaken, and the number of contracting
officers was expanded, a long-needed reform. In the
late 1990s, each of these officers managed some-
what more, on average, than $11 million in con-
tracts annually, but from 2001 through 2008, their
workload exploded by 76 percent, to an average
amount per officer of well over $19 million in con-
stant dollars. By adding more contract officers, the
average amount managed by them was reduced to
slightly more than $12 million per officer.217
None of this was appreciated by contractors.
In 2015, four associations representing major
federal  contractors co-signed a “polite, yet terse,”
letter to the White House “saying, in so many
words, that they were fed up with executive orders
and presidential memos that target their member
companies.”218
And with reason. Unlike many reform efforts in
the past, those of 2009 and beyond seem to be having
some positive effects. Six years following their intro-
duction, contracting costs (which had more than
doubled, 2001–2009) had declined by $165 billion
in inflation-adjusted dollars (or more than four
times greater than the president’s original goal), a
shrinkage of 27 percent.219 Over seven years, the
number of federal contractors sank by two-fifths,
from “over 160,000”220 to 97,012.221 Over six
years following the introduction of reforms, sus-
pensions of contractors grew by 120 percent, and
debarments increased by a fourth, affecting about
4 percent of contractors.222 And, as detailed earlier,
federal approval of bid protests, while not high,
nevertheless has declined by more than three-fifths
over eight years after the introduction of reforms.
These are very encouraging developments.
Outsourcing’s Unabashed Outcome:
Wealthier Washingtonians
Perhaps the clearest consequence of federal privati-
zation is that it has rendered Washington’s residents
richer. This has occurred for two reasons.
Private-sector employees who are paid through
federal contracts collect 60 percent of all federal
contract dollars, whether for goods or services,223
and the federal contracting dollars that flow to the
Washington, DC, metropolitan area, after controlling
for inflation, septupled over thirty years. These cas-
cades of cash now account for a startling one-third
of the metropolis’s gross regional product,224 and
a stunning 15 percent of all contracting dollars.225
“The move to contract out more and more govern-
ment work proved to be a crucial long-term change”
in the region’s economy.226
The second reason is Washington’s lobby-
ists, whose sole mission is to secure advantages,
certainly including federal contracts, for their
masters. Lobbyists lurk in every one of the capi-
tal’s crannies and corners, and, because the lay of
Washington’s lobbying landscape is lush and loaded
with lagniappe, its legions of lobbyists, and many
other regional residents, prosper profusely. The
dollars that Washington lobbyists spend to get
their way exploded from a self-reported estimate
of $200 million in 1983227 to self-reported annual
spending that has handily exceeded $3 billion since
2008 (between 2000 and 2010, Washington’s lobby-
ing dollars more than doubled).228 Some informed
sources believe that the amount is closer to $9 billion
annually.229
The upshot of these two interrelated trends is
that Washingtonians now enjoy among the highest—
and often the highest—median household income of
any metropolitan area in the world, typically alter-
nating for first place with Bridgeport and Hartford,
Connecticut (favored by hedge fund managers), and
San Jose, California (Silicon Valley).230
So, if asked what has federal privatization
done for you lately, point proudly to wealthier
Washingtonians.

PRIVATIZING IN THE STATES
State governments also procure and privatize.
The States Resistant
Relative to the federal and local governments, the
states privatize with some reluctance. Although state
procurement spending grew by a third, from a fifth of
all state spending to 30 percent over fifteen years,231
almost two-thirds of state administrators report that
their governments’ privatization has stayed the same
(53 percent) or declined (12 percent) over the past
five years.232 State employee associations, such as
unions, and elected officials are the most common-
ly-cited obstacles to state privatization efforts.233
Selling Small A modest 14 percent of state offi-
cials in just nine states report that “asset sales” are
even conducted in their states,234 and only a fraction
of 1 percent of state agencies had actually sold state
goods over the preceding five years.235
That states privatize their assets so modestly
is odd in light of the facts that states have billions
of dollars in assets (roads, parks, etc.) that could be
sold or leased, and Washington has long promoted
their privatization. Executive Order 12803, issued in
1992, terminated longstanding federal requirements
that states and localities that sold or leased projects
which had been built with some federal funds had to
repay those funds, and, in 1996, Congress legislated
that the Federal Aviation Administration encourage
the privatization of subnational airports.
Privatizing Services Two-thirds of the states,236
and three-fifths of all state agencies, contract with
companies to deliver at least one service to their
citizens, and states contract more frequently with
corporations than they contract with independent
organizations and other government agencies to do
so.237 Education and transportation agencies con-
tract with companies the most, where contracting is
growing, and health and social service agencies con-
tract the least, where the practice is in decline.238 As
we noted in Chapter 6, information technology is
also a major and growing area of state privatization.
But even in the privatization of services, states
lag. A slender 5 percent of state agency heads (or pos-
sibly less239) report that they have fully implemented
Intersectoral Administration 417
the privatization of even one major service.240 Fully a
third of the states contract with no one to deliver any
of their services—not corporations, not nonprofit
organizations, not other government agencies.241
The states’ reluctance to privatize services can
bring unforeseen benefits, notably by dampening
the inappropriate influence by outsiders. When state
agencies contract with special interests to deliver ser-
vices, those interests gain a unique leverage in shaping
agency policies. “Contracting opens a pathway for
organized interests to lobby public managers. . .. The
influence of organized interests over state agency
decision making is driven, in part, by whether an
agency contracts out for public service delivery.”242
Motives, Money, and Management
Motivation to privatize, savings (if any) derived
from privatization, and contract management are
interrelated phenomena.
Motives to Privatize Why do states privatize?
Almost two-fifths of state department heads report
that “cost savings” are the primary reason that they
privatize some services, followed, respectively, by a
lack of expertise, more “flexibility and less red tape,”
and speedier implementation.243
Slim Savings The states’ high hopes that privati-
zation will save money are not borne out in prac-
tice. Less than a fourth of state agency heads claim
any savings derived from privatization, and a third
detect no savings.
Those savings do not amount to much. Of the 18
percent of executive- and legislative-branch budget
directors who claim government-wide savings due to
privatization (a figure that is cancelled out by the 18
percent who detect no savings), well over half report
savings of just 1 percent or less.244
Modest Management Although the states began
to appreciate the importance of procurement in the
1990s, the states’ administration of privatization
seems not as strong as it could be. Just five states
have fully adopted the national Model Procurement
Code (twenty states have adopted it in part).245
Forty-one states permit noncompetitive bidding,
possibly indicating that competitive bidding may not
be as robust as it should be.246 For example, over
 418 PA R T I V Implementing Public Policy
four years, Nevada awarded 2,305 noncompetitive
contracts amounting to $1.7 billion and 27 percent
of its contracts, and Mississippi did the same for
“at least” 3,370 contracts worth $6.5 billion; New
Mexico handed out $150 million worth of no-bid
contracts over two years.247
State administrators’ propensity to socialize
with contractors may be a factor in the possible
deterioration of competitive bidding, as such chum-
miness “plays a significant role” in these managers’
positive perception of contractors, outweighing even
state administrators’ past experiences in the private
sector and partaking in activities that are similar to
those of their contractors.248
Once contracts are let, the states often fail to
follow up. The states’ monitoring of their contrac-
tors’ performance has been described by “most” state
managers as “the weakest link in their privatiza-
tion process”249 (though growing, only thirty-seven
states provide training in contract management250),
and “less than one-third” of state procurement
offices “have a consistent way of tracking contract
performance that they share with project adminis-
trators. . .. Contracts . . . are just allowed to drift.”251
When states do assess their contractors, they often
do so incompetently.252
The States’ Slower Revolving Doors
Although there are some instances of the revolving
door in the states, that door appears to revolve far
less rapidly than at the federal level.
Fewer than 15 percent of state agency heads,253
or just a fourth of the comparable percentage for
their closest federal counterparts,254 are hired directly
from corporations. Nor do they quickly skedaddle
back to the private sector. State agency directors have
a median tenure of six years and rising in their present
positions,255 or twice the average tenure of federal
agency heads who are careerists256 and four times
longer than that of federal political appointees.257
Over thirteen years, 24 percent of 291 former
Michigan officials became lobbyists after leaving
state government.258 The nation’s 5,926 insurance
companies (a $1.2 trillion industry with 2.5 million
employees), which are regulated by the states,
happily hired half (fifty-five) of all 109 state insur-
ance commissioners who left office over ten years;
this may explain why the insurance industry is
among the most laxly regulated in the nation (on
average, one state employee oversees fourteen insur-
ance companies and 1,150 agents).259
Thirty-five states have enacted “revolving door
prohibitions” against legislators lobbying state
governments after they have left office,260 and “at
least” thirty-four states have legislated “cooling
off” periods for ex-legislators that last from one to
two years.261 There is little question, however, that
some—how many is unknown—former legislators
lobby their governments following their departure
from public service. It is known, for example, that at
least eight former speakers of Florida’s house of rep-
resentatives became lobbyists following their depar-
ture from state government.262
PRIVATIZING BY LOCAL
GOVERNMENTS
Privatization long has been a staple of local public
administration.
Selling Assets, Buying Goods,
and Privatizing Facilities
Less than a fourth of cities and counties sold any assets
(vacant land is the leader, accounting for 70 percent
of all sales) to anyone over five years—a higher rate
than the states, but far short of federal levels.263
Local purchasing practices are set largely by the
states. Thirty-nine states set purchasing standards for
their local governments, ranging from competitive
bidding requirements to centralized purchasing.264
Almost a third of cities and counties engage in
a privatization practice that is unique to them. They
privatize facilities—that is, they contract with com-
panies to build or buy facilities (most commonly,
transportation-related facilities), which they then
own and operate exclusively for the government,
which pays them for their service. Local adminis-
trators cite savings in capital expenditures as the
leading reason for privatizing facilities, followed by
inexperience in managing them.265
Privatizing Local Services
As with the states, the dominant form of local
privatization is contracting with the private and

independent sectors to deliver services to their
citizens.
City managers rank improving the delivery of
local services third out of twenty-six “influences”
that affect their decision making (only “budgetary
constraints” and “staff input,” respectively, rank
higher),266 and outsourcing has waxed into a major
means of doing so; a commanding four-fifths of local
administrators believe that “privatization will rep-
resent a primary tool to provide local government
services and facilities.”267
City and county employees deliver exclusively
45 percent of their governments’ seventy-six major
services. Support functions, most notably secretarial
services and human resources, are favored.268 The
percentages of services delivered entirely by govern-
ments’ own local employees have ranged from its
present low of 45 percent to 52 percent (in 1982)
over thirty years.269
Service contracting with private for-profit firms
accounts for less than 16 percent of all city and
county services, with vehicle towing (at 69 percent)
handily leading the way, but a majority of local
governments contract out only four services (or 5
percent of the total) to the private sector.270 Over
thirty years, the practice has accounted for 15 to
18 percent of all services delivered, but it is nearly
universal: at least 99 percent of cities and counties
contract out some of their services,271 and, at one
time or another, “contracts have been used for every
service,” from parking to police, that these govern-
ments provide.272
Sixteen percent of municipal and county ser-
vices, on average, are delivered jointly by public
employees and employees in other sectors, mostly
the private one273—a 30 percent decline from thirty
years earlier.274 The leaders here are tree trimming
and planting, and economic development.275
The remaining local services are delivered
by nonprofit organizations, detailed later in this
chapter, and by other governments, considered in
Chapter 12.276
Outsourcing in Extremis
A few local governments reject the very concept of
public employees, choosing instead to outsource
the delivery of their services to companies, non-
profit organizations, and other governments. Sandy
Intersectoral Administration 419
Springs (population, 90,000), Georgia, has only its
law enforcement personnel on its payroll; Centennial
(104,000), Colorado, has fewer than thirty munici-
pal workers;277 and Weston (65,000), Florida, just
nine.278 In 2010, Maywood (30,000), California,
sacked each and every one of its ninety-six employ-
ees,279 and, in 2012, Highland Park, Michigan, out-
sourced all of its schools and the nearly 1,000 pupils
in them.280
Other localities take the opposite route, keeping
their employees and outsourcing only their topmost
position, the town manager. Eight small towns in
North Carolina have done this, contracting with
management firms for full- or part-time town man-
agers, but keeping their public employees on their
payrolls.281
Why Local Governments Privatize Services
There are many motivations that spur localities to
privatize services.
New Services The addition of new services is “the
strongest and most reliable predictor” of privatiza-
tion among counties.282
Saving Money By far the most pervasive internal
incentive is a desire to cut costs, a motivation cited
by a notable 87 percent of city and county man-
agers.283 This percentage is a dramatic upswing in
officials’ views from more than three decades earlier,
when only 43 percent thought this.284
Good Times “There is no evidence that fiscal stress
induces privatization” by local governments,285 and,
in fact, the wealthier the locality, the more likely it
is to outsource.286 Governmental wealth appears to
trump even partisan ideology in the decision to pri-
vatize.287
Contracting among Friends When local govern-
ments partner with outside organizations, “social
factors” are more important to both parties than any
economic benefits that might result from their col-
laborative arrangements, particularly if their admin-
istrators share comparable professional experiences
and have “genuine affection for each other.”288
In fact, when there is high turnover among local
officials, contracting out local services to all three
 420 PA R T I V Implementing Public Policy
sectors abruptly and steeply declines, implying that
there must be an existing foundation of familiarity
between officials and contractors before contracts
will be let.289
Bureaucratic Symbiosis The more top-heavy the
bureaucracy in a school district, the more that its
bureaucrats will contract with outsiders to do their
jobs for them. Conversely, a large number of con-
tracts let by a school district correlates positively with
the addition of more central office administrators in
the future. It is “a process that feeds on itself.”290
When there is a small the number of “admin-
istrative professionals” who process contracts, the
bureaucracy issues even more contracts because
these professionals are more interested in making
“strategic decisions rather than more trivial day-to-
day decisions,” and outsourcing frees them to do just
that.291
Playing Politics An analysis of national surveys
found indications that local “elected officials are
using private contractors to . . . reward electoral
constituencies,”292 such as in Washington, DC,
where a review of more than a thousand of its con-
tracts worth about $10 billion found that more than
300 contractors who had won contracts that had
been approved by the District Council had contrib-
uted more than $5 million in campaign donations
to council members; another fifth of the donations
came from potential contractors seeking Council
approval.293
Cities that are controlled by the Republican
Party contract more with the private sector than
do cities in which the Democrats are in power.294
Conservative, smaller, and prosperous municipalities
contract out more social services, whereas liberal
and larger cities privatize more technical services
and fewer social ones. Contracting out technical
services “is not influenced by economic affluence. . ..
social services are the contemporary ideological bat-
tlefield of privatization.”295
Place and Circumstance Twenty-three percent of
city and county managers worry that fewer compe-
tent competitors in the private sector are bidding
for their contracts,296 a steep decline of more than a
fourth over five years,297 nearly matching its percent-
age of two decades earlier.298
Local administrators’ perceptions about the
quality and quantity of available contractors depend
heavily on place and circumstance. Suburban gov-
ernments contract out more services to the private
sector than do rural and urban governments, mostly
because there are competitors vying for their busi-
ness, which is crucial in enhancing efficiency, and
their residents have at least a middling interest in
services.
Rural governments (and governments with
small populations299) outsource less than suburban
ones, mainly because there is a dearth of alternative
service suppliers, but also because their citizens evi-
dence the least concern with services.
Central cities privatize the least, even though
they are in the most competitive markets and their
residents’ interest in services is highest. But, because
urban governments govern relatively large, often con-
centrated, populations, which yields them uniquely
advantageous “internal economies of scale” that
are denied to smaller jurisdictions, they are unable
to reduce costs through outsourcing to the extent
that suburban and rural governments can, simply
because they already are run more efficiently.300
Why Local Governments Do Not Privatize
Services
Over three-fifths of cities and counties report that
they encounter no obstacles to privatizing, and this
figure rises with every survey.301 Nevertheless, there
are some serious barriers to local privatization.
Public Opposition Thirty-five percent of cities and
counties cite “opposition from citizens” as a hurdle
to be overcome in privatizing services,302 the highest
percentage in twenty years, but not by much.303 In
any event, Americans’ favor government as a pro-
vider of local services. Asked whether companies or
local governments could deliver six local services
“more efficiently,” Americans favored companies for
delivering just one service, and then by the notably
slender margin of 1 percent.304
Employee Opposition The leading impediment
to local outsourcing is local employee opposition,
at 56 percent,305 a record high; during the 1990s
and 2000s, employee resistance was cited by about
30 percent of local officials.306

No doubt, fear over losing their government
jobs accounts for much of local workers’ resistance,
but at least some of this concern is misplaced. A
relatively small number of affected employees, an
estimated 5 to 7 percent,307 lose their jobs to out-
sourcing. Fifty-eight percent of them, however, are
hired by the private sector, and the rest are placed
in other government jobs (24 percent) or retire (7
percent).308
Still, there are clear downsides. Although pay
usually remains about the same in the private sector,
benefits are typically less generous, with half of con-
tractors offering fewer benefits and just 16 percent
providing more.309 Local employees of color appear
to lose their jobs to privatization at a faster rate than
white employees.310
Unions Local employees’ central ally in their
anti-privatization posture is organized labor, no
doubt in part because local privatization associates
with reduced union membership.311
From 1992 to 2007, the proportion of local
officials who cited “restrictive labor contracts” as
an obstacle to privatization grew by a fourth, from
30 percent to 40 percent.312 In 2012, that percent-
age declined for the first time in two decades—to 36
percent.313
When unions win excessive benefits, however,
local governments turn to privatization in an effort
to stem rising labor costs. An analysis of national
polls revealed that, “Contrary to our hypothesis. . .
Unionization may not be the barrier to privatization
it was once thought to be.”314
Pushback Politicos Forty-three percent of local
administrators cite elected officials as a barrier to
contracting out services.315 This proportion has
remained pretty constant at roughly two-fifths
(usually a bit more) over twenty years.316 Politicians’
reluctance to outsource local government jobs doubt-
less is a reflection of the fact that, as we detailed in
Chapter 9, local government workers are unusually
active in local elections.
Managing Privatized Local Services
Do local governments manage privatization cost-
effectively? Yes, they do, at least in comparison with
the federal and state governments. An exception
Intersectoral Administration 421
is school districts, where centralization, cumber-
some procedures, and high risk-aversion have long
guaranteed a “pervasive [procurement] culture of
‘can’t.’”317
It appears that the ability of general-purpose
local governments to manage contracts with the
private sector has been increasingly challenged over
the years, largely due to the growing need to con-
tract for increasingly complex services.318 Still, local
governments remain outsourcing innovators, with
some cities phasing out detailed purchasing require-
ments and instead asking citizens how they would
solve problems and rewarding those with the best
answers; such approaches turn “the old system on
its head.”319
Local Leeriness Local administrators are health-
ily wary of the private sector, and tend to privatize
only those services that have a low risk of failure
and limited prospects for corporate exploitation
(e.g., public works and transportation); high-risk
areas (e.g., health and human services) generally
are kept in-house.320 Most local governments insert
“high-powered” incentives and disincentives in their
long-term contracts with private firms. It is in the
interest of these governments, however, to not be too
heavy-handed, as “rigidly constructed legal agree-
ments” with the private sector can distort incentives
and “do little” to fulfill contracted objectives.321
Competing for Contracts Competitive bidding
seems to be used more frequently by local govern-
ments than by any other governmental level. Thirty-
seven states require their localities to competitively
bid all purchases that exceed a specified amount
(thirty-two), or of a designated type (five).322 Only
18 percent of cities and counties select any contrac-
tors without competitive bidding,323 and even this
low proportion is shrinking over time.324 Cities with
city managers are more likely than are cities without
them to have formal bidding systems.325
That said, there are not many firms competing
for local service contracts; for sixty-seven local ser-
vices (almost all of them), the average number of
alternative providers per service is just two.326
Assessing Contractors’ Performance—and Acting
on Those Assessments Thirty-eight percent of all
cities and counties,327 down from 45 percent five
 422 PA R T I V Implementing Public Policy
years earlier,328 and more than nine-tenths of the
sixty-six largest cities,329 formally evaluate their con-
tractors’ performance in delivering services.
Local governments act on their assessments.
Twenty-two percent of cities and counties that had
privatized at least one service over the last five years
brought those services back in-house for reasons of
poor corporate performance, which is the leading
reason underlying “reverse contracting,” surpassing
even insufficient savings.330 Over five years, the rate
at which local governments engaged in reverse con-
tracting slightly exceeded the rate of new outsourc-
ing.331 Smaller, poorer communities are the most
likely of all local jurisdictions to bring services back
in-house.332
Waterworks are notable in the cities’ reverse
contracting. Over twelve years, thirty-three cities
(with more on the way) brought back their water
systems from the private sector because of undue
costs and questionable management.333
Managed Competition Managed competition
encourages local governmental departments to
compete for service delivery contracts with private
companies, nonprofit organizations, and each other.
Twenty-three percent of all cities and counties use
managed competition,334 a decrease of 13 percent
over ten years.335 Managed competition originated in
Phoenix in the 1970s, and at least half a dozen major
cities now use managed competition; it is saving
them millions.336
The Quality Question Most local administrators
consistently express themselves as quite satisfied with
the quality of privatized services.337 Independent
researchers are less effusive, however, concluding
that “there is no discernible relationship one way or
the other. In other words, as best we know at present,
contracting does not reduce or increase quality, as a
general rule.”338
Still, some contractors deliver higher quality
services than other contractors, and two variables
that associates most positively with high contracting
quality are somewhat surprising.
One is trust. Higher levels of trust between
local officials and contractors “result not only in
lower costs, but also in higher quality of services
and greater responsiveness to the needs of local
government.”339
The other is a lot of contracting. A long-term
analysis of school districts found that “the most
striking results from this study are those involving
the relationship between contracting and service
quality. . .. more contracting is associated with the
improvement of performance, which is measured by
statewide test results.”340
The Firmly Shut Revolving Door
In contrast to the federal and some state govern-
ments, general-purpose local governments appear
to have virtually no revolvers. All city and county
chief administrative officers are hired either from
within their own government (21 percent) or from
another local government (79 percent),341 and they
have spent an average of nearly seven years in their
current positions.342
Revolving doors are more present in special-
purpose local governments, although our knowl-
edge in this area is limited. We know, for example,
that over two years 45 percent of CEOs in 160 large
transit authorities resigned, and that about two-
thirds of them were immediately hired by public
transit businesses.343 But many special-purpose gov-
ernments—housing authorities, waterworks, and
school districts are examples—conduct activities
that are already for-profit or whose personnel have
little to offer special interests that have wish lists
which they want local governments to grant.
WHICH SECTOR DELIVERS
PUBLIC SERVICES BEST?
We are just beginning to learn whether contracting
out services for delivery to the public, a practice that
is almost exclusively the preserve of state and local
governments, actually brings benefits.
Does Government Partnering with the
Private and Nonprofit Sectors Deliver
Services More Effectively and Efficiently?
The correlation between “public-private partner-
ships” and effectiveness “is actually negative and
significant.” Governments’ “partnership with the
voluntary sector appears to have no relationship
with effectiveness, despite this being a common

approach to delivering many local services.”344 In
sum, businesses deliver public services less effec-
tively than government, and governments working
with nonprofits to deliver services have no impact
on effectiveness.
Whether the public, private, or nonprofit sectors
deliver public services more efficiently is a more
nuanced question, but the evidence tilts toward the
conclusion that government delivers services more
efficiently than the other two.
An analysis of essentially all empirical studies
(“mostly from local government”) conducted across
the globe (“mostly U.S. in origin”) of contracting out
services to both the private and public sectors found
that governments’ savings, on average, amounted
from 6 to 12 percent, with the largest savings, 19
to 30 percent, in cleaning, maintenance, and refuse
collection. Savings never exceeded 30 percent,345 a
finding that questions the claims of privatization
zealots, some of whom tout savings of 50 percent.346
But this same analysis also found that, at the
very least, government’s efficiency equals that of
business. “Cost reductions are attained whether
public or private sector organizations win contracts.
This finding, that there was no general tendency for
private provision to be any more cost-effective than
public provision of services under contract, is a sig-
nificant one.”347
It sure is. In fact, this same study cited some
unavoidably limited data which indicated that, when
governments contracted out services to the private
sector, they saved an average of 14 percent, a third
less than when they contracted with other govern-
ments, which saved them an average of 22 percent.348
Other comprehensive and methodical analyses
conclude that government, on average, consistently
delivers public services more efficiently than not only
the private sector,349 but the nonprofit one as well.
Government contracting with the private and inde-
pendent sectors “may not necessarily be a suitable
vehicle for enhancing cost-effectiveness” in provid-
ing public services, as both sectors display “statis-
tically insignificant” relationships with efficiency.350
What seems to consistently enhance efficiency
in providing public services is when governments
contract with other governments to do so, and when
contracting is combined with competition. “Public
versus private matters, but competitive versus non-
competitive usually matters more.”351
Intersectoral Administration 423
Does Government Partnering with the
Private and Nonprofit Sectors Deliver
Services More Equitably?
Equity, in this case, refers to providing personal
attention; raising compassion and trust; and meeting
the special needs of the disadvantaged, excluded,
and underrepresented. As with effectiveness and effi-
ciency, neither the nonprofit nor the private sector
contributes much, if anything, to equitable treat-
ment when partnering with the public sector. There
is an “insignificant” association in public-nonprofit
partnerships, but a “negative and statistically signif-
icant” correlation in public-private partnerships.352
Here is an example of the inequity that fre-
quently accompanies public-private partnerships.
State and local governments increasingly are financ-
ing the privatization of their services with the pension
funds of those public employees who were let go and
privatized, but who had contributed to those funds.
“This pattern is surprisingly pervasive. . .. Displaced
[public] workers not only stop contributing to the
funds, losses that can harm other workers and retir-
ees, but also often must turn to public assistance to
survive, undermining the argument that taxpayers
benefit from these transactions.”353 And, as we noted
earlier, not only do half of the companies that hire
newly-privatized employees offer benefits (certainly
including pensions) that are stingier than those they
had received from their public employers, but cities
and counties are remiss in easing the transition of
their employees to the private sector (even though
doing so is an insignificant expense), with just 30
percent furnishing some public assistance354 and less
than 17 percent conducting programs designed to
smooth their displacement,355 a decline of 16 percent
over ten years.356
PRIVATIZING PUBLIC SERVICE
DELIVERY: LESSONS LEARNED
When all is said and done, what should public
administrators at all governmental levels keep in
mind when contracting out service provision? Here
are eight major lessons learned:357
■ Strong public support and a political champion
probably are prerequisites for privatization.
 424 PA R T I V Implementing Public Policy
■ Select potential candidates for privatization
carefully. Public programs that have a
distinctive business profile, such as lotteries
and airports, are the easiest to contract out
successfully. Those programs that clearly were
established to serve the public interest are
not promising candidates for privatization.
For example, for-profit universities and
privatized prisons, in contrast to their public
counterparts, often founder, sometimes
disastrously.
■ Privatize gradually. Wholesale, rapid
privatization often undermines political
support.
■ Develop an accurate costing system before
contracts are solicited. Define outputs, set
benchmarks, and use activity-based costing,
an accounting technique that covers all the
expenses of providing a service.
■ Inject the maximum amount of competition
possible.
■ Use well-defined contracts that set performance
measures and incorporate evaluation
procedures.
■ Mitigate the impact of privatization on
displaced public employees.
■ Recognize that the weakest links in the
contracting process are those of managing
the contract and achieving accountability,
and these two areas require the greatest
attention.358
THE BUSINESSES OF
GOVERNMENTS
We have been describing how governments contract
with businesses to implement public policies. But
governments also create businesses to implement
their policies. Although there are many distinctions,
titles, and types among them, these quasi-public
enterprises share three characteristics: they have a
unique legal standing that differentiates them from
organizations in any of the three sectors; their
funding often is a blending of public and private
funds; and some are government monopolies while
others compete as businesses in the marketplace.359
In the United States, state-owned enterprises
account for a modest 1 percent of its gross domestic
product (GDP), in contrast to thirteen countries with
market economies similar to that of the United States,
where these enterprises account for an average of 9
percent of GDP.360 This is not to say that American
public enterprises are trivial. Although a definitive
census of public enterprises is nonexistent,361 they
nonetheless are a major means by which American
governments implement public policies.
Enterprising Washington
Washington has both embraced and eschewed
owning businesses, but has left a legacy of some
powerful federal enterprises that have unequaled
power and autonomy.
Origins The first federal enterprise is generally
thought to be the First Bank of the United States,
chartered in 1792, although President Theodore
Roosevelt’s purchase, in 1903, of the Panama
Railroad marks Washington’s involvement with gov-
ernment enterprises as we presently understand them.
With the onslaught of the Great Depression,
Washington took a renewed interest in the govern-
ment enterprise, an interest that redoubled during
World War II. By 1953, Washington was “the largest
electric power producer in the country, the largest
insurer, the largest lender and the largest borrower,
the largest landlord and the largest tenant, the
largest holder of grazing land and timberland, the
largest owner of grain, the largest warehouse opera-
tor, the largest ship owner, and the largest truck fleet
operator.”362
Such public enterprise did not rest easily with
corporate America, which launched a concerted
drive in the 1950s to bar the feds from competing
with business. Through a series of executive orders,
most federal enterprises were reorganized or dis-
mantled. Still, some federal enterprises remain for-
midable, providing electricity and other benefits to
nearly nine million people in the Tennessee Valley,
a contiguous territory that spans seven states, and
transporting all of the nation’s 25 million railroad
travelers.
The Federal Fringe Government Aside from
the fifteen cabinet departments, and an additional
eighty-eight executive agencies and organizations,
there are at least 115 federal “entities” that loosely

cling to the tips of the government’s branches. This
government at the federal fringes is as important as
it is ill understood. Commonly-accepted definitions
of the various categories of these entities are rare, if
nonexistent, and official counts of them frequently
differ widely.
These entities, with the partial exception of
federal corporations (discussed shortly), are specif-
ically exempted from the sixteen major statutes that
address a dozen “key” standards of governance,
accountability, and transparency that apply to line
departments and agencies.363
Services for Federal Workers There is “a large
but unknown number” of nonappropriated fund
instrumentalities that are created and funded not
by Congress, but by agencies, to provide services
to federal personnel; an example is military post
exchanges.364
Research Centers The thirty-nine federally funded
research and development centers are private organi-
zations created by federal agencies to meet long-term
federal research needs. Agencies contract with these
centers to conduct research, and they are awarded
a modest 14 percent of all federal expenditures for
research and development.365
Government Corporations Federal government
corporations are federally-chartered organizations
charged with implementing those public policies
that are “predominantly of a business nature,” and
usually are expected to “produce revenue and are
potentially self-sustaining.”366 Figure 11-1 outlines
some of their characteristics.
There are at least nine differing counts of the
number of federal corporations, ranging from eight-
een to fifty-eight,367 but GAO’s tally of twenty-three
strikes us as a particularly careful one. Eighteen
of these twenty-three, such as the Tennessee Valley
Authority, are “wholly owned” by the federal gov-
ernment, and five, such as the Federal Deposit
Insurance Corporation, have “mixed ownership”
involving the feds and private parties.368
The Government Corporation Control Act of
1945 is the basic policy governing federal corpora-
tions, and, by most accounts, it was conscientiously
followed until the late 1970s, when special interests
eroded oversight. As a consequence, “legislation has
Intersectoral Administration 425
been enacted and executive action has been taken
which . . . conflict with both the letter and spirit” of
the act.369
Government-Sponsored Enterprises A government-
sponsored enterprise (GSE) is a financial intermedi-
ary created by Congress that directs capital to a par-
ticular sector of the economy. Figure 11-1 sketches
its basic features.
Congress created the first GSE in 1916, and
today there are five. These GSEs are charged with
making farming or housing more affordable by
loaning money (and a lot of it: $5.5 trillion, or
nearly a third of GDP370) to financial institutions,
and, should they default, these loans ostensibly are
backed by Washington’s “implicit guarantee” of
payment. This guarantee enables the banks to charge
lower interest rates to farmers and home buyers,
although it burdens taxpayers because it amounts to
a costly public subsidization of GSEs.371
Worse, the guarantee is no longer implicit, but
explicit. In 1987, Congress spent more than $4
billion to bail out an over-extended GSE, the Farm
Credit System, and, in 2008, Washington rescued the
two largest GSEs (they owned more than four-fifths
of all the assets owned by all GSEs combined372),
Fannie Mae and Freddie Mac.
Ultimately, the two GSEs received $400 billion
in bailouts. Short of the Troubled Asset Relief
Program of 2008, which disbursed $700 billion to
multitudes of recipients, it was the largest bailout—
ever.373
Fannie’s and Freddie’s missions are to encourage
home ownership, and they were rescued because, in
light of their holding or guaranteeing nearly half
of all home mortgages in the United States,374 they
were too big to fail.
Both GSEs had long and troubled histories.
Their regulatory body, citing gross mismanagement,
imposed record-breaking fines on Freddie ($125
million in 2003) and Fannie ($400 million in 2004),
and fired their executives. In 2006, the Federal
Election Commission fined Freddie a record sum for
violating election laws. Fannie and Freddie remained
unfazed, however, as their congressional protectors
were substantial; both GSEs had numbered among
the top twenty lobbying spenders in Washington for
years, endlessly pursuing their goal of ever-lighten-
ing their already-featherweight regulation.375
 426 PA R T I V Implementing Public Policy
So, besides rescuing Fannie and Freddie finan-
cially in 2008, Washington took them over. It placed
them into “conservatorships” (where they remain
today), effectively declaring them to be bankrupt;
sacked their top officers; abolished their boards of
directors; convinced Congress to close down and
replace their regulatory agency; ended dividends
to stockholders and stripped them of their right to
govern; demanded (in 2012) that they turn their
profits over to the government, rather than to their
investors (profits returned in 2013); and, mercifully,
banned them from lobbying.
In 2011, a major rating agency lowered Fannie’s
and Freddie’s credit ratings (and those of the remain-
ing three GSEs, in whole or part, as well), and
Washington began the multi-year process of phasing
out both behemoths altogether.
Perhaps it is time to reconsider the value of all
government-sponsored enterprises.
“Other” Finally, there are fifty other federally
established organizations that do “not fit” into any
other category, have “narrowly defined” missions
that “vary substantially,” and include “private, non-
profit organizations, institutes, banks, funds, foun-
dations, and other organizations.”376
State and Local Enterprises and the Public
Authority
State and local enterprises precede their introduc-
tion in federal circles by at least two hundred years,
and continue to be a vibrant part of governing at
the grass roots. These enterprises are owned and
managed by public authorities.
What Are Public Authorities? A public author-
ity is a corporate form of special-purpose govern-
ment (excluding school districts), or part of a public
agency, that is chartered by one or more state or
general-purpose local governments (i.e., municipal-
ities and counties), or by popular vote, to fulfill a
business-oriented public mission.
The rub in this definition is the confounding
presence of special districts, which replicate almost
all the characteristics of public authorities, except
that they are, at least in theory, not corporate, but
governmental, in form, and are charged with non-
commercial public missions. Figure 11-1 lists some
of the characteristics that public authorities and
special districts have in common.
Confusingly, about half of the allegedly more
communal, political, and governmental special dis-
tricts conduct businesslike services, such as water-
works, that are, supposedly, the sole preserve of
the more managerial, technical, and commercial
public authorities. The obverse is equally present.
Disney World, a market-oriented enterprise by any
standard, is not a public authority but it is a special
district—the Reedy Creek Improvement District.
Public authorities and special districts are
blithely unbothered by these definitional debates
and, as a practical matter, define themselves in terms
of whatever works. “While it might not seem right
to equate . . . [public authorities] with special dis-
tricts, there is also nothing exactly wrong with this
equation.”377
Origins In the eighteenth century, and likely earlier,
various kinds of cooperative associations arose in
communities that could reasonably be identified
as prototypical public authorities which dealt with
public health, educational, and even ecclesiastical
affairs.378
In the early 1800s, state governments acceler-
ated their use of public authorities, often chartering
“bodies corporate” to build transportation pro-
jects. Not infrequently, these charters were bought
via bribes to legislators, and the chartered projects
often failed, causing state or local governments to
default; in the 1870s, “approximately one-fourth of
the indebtedness of major local governments was in
default.”379 These scandals persisted well into the
l920s.
Irritated by these practices, Progressive reform-
ers of the early twentieth century inserted in vir-
tually all state constitutions prohibitions against
lending public money, but also shrewdly pushed for
the enactment of the first incorporation laws. These
laws established a system for elected officials to
charter “special municipal corporations”—the fore-
runners of public authorities and special districts—
that were empowered to issue municipal bonds to
private investors to fund public projects.
President Franklin Roosevelt, who saw in public
authorities a means of creating new jobs to battle the
Great Depression, persuaded Congress to pass the
Securities Act of 1933 and the Securities Exchange

Act of 1934, which rendered revenue bonds
(explained in Chapter 8) more marketable. Then
Roosevelt made the grass-roots governments an
offer they could not refuse; he ordered that federal
agencies buy all the revenue bonds that they issued.
In 1934, Roosevelt drafted model legislation for
state and local governments to follow in creating
still more public authorities. By 1948, forty-one of
the forty-eight states had adopted variants of it.
By the end of World War II, state and local
authorities stood at the head of several crossroads.
One option was that, as their federal patron had
intended, they could “self-liquidate,” or close down
after their capital costs were paid off and turn their
functions over to state or local governments. Or,
they could continue charging users for their services,
and the revenues could be deposited in state or local
general funds. Or, public authorities could keep the
fees flowing into their own coffers and use those rev-
enues to finance new projects.
For the most part, they chose the final route,
thereby facilitating their emergence as independ-
ent, special-purpose governments. Even though
Roosevelt’s bureaucracy for financing grass-roots
authorities was dismantled during the 1950s, many
of Roosevelt’s public authorities lived on, thou-
sands more were added, and virtually all continue to
prosper in their mostly monopolistic marketplaces.
A Slippery Slew The Census Bureau has given
us an impressively precise, and big, tally of special
districts—51,146—a number that does not include
those uncounted, but numerous, special districts that
are parts of government departments, and represents
a spurt in growth of 37 percent over five years.380
Many public authorities are folded into this count,
but how many is unknown; five major estimates
range from 5,000 to 18,000,381 with “many schol-
ars . . . [suggesting] that there are between 10,000
to 12,000.”382
What Do Public Authorities Do? Public authori-
ties are responsible for a surprisingly broad array of
public enterprises. Almost half, 45 percent, own and
manage public housing; 18 percent are engaged in
environmental protection; 14 percent are involved
in economic development; 7 percent run public-use
facilities, such as parking garages and zoos; 4
percent deal with transportation; 3 percent manage
Intersectoral Administration 427
healthcare facilities; 2 percent administer ports; and
1 percent each own and operate utilities or finance
educational programs. Five percent operate more
than one enterprise.383
Pervasive Public Authorities The scope of these
state and local governmental businesses is daunting.
Public authorities employ 3 percent of the national
labor force and account for 15 percent of the nation’s
fixed investment.384 They invest more dollars in new
capital facilities than all state and municipal govern-
ments combined.385 The Port Authority of New York
and New Jersey alone has more operating revenues
than all but nine of the nation’s biggest cities.386
Local public authorities own and operate essen-
tially all of the nation’s commercial airports, 85
percent of the country’s municipal water supplies
and wastewater plants, four-fifths of all local public
transportation systems, a fourth of the nation’s elec-
trical plants serving over sixteen million customers,
and 800 natural gas utilities that are bankrolled by
nearly four million customer accounts.387
Creating, Governing, and Administering
Public Authorities
Public authorities operate in an astonishingly uncon-
strained environment. They often have vague geo-
graphic boundaries, and even may lack a specific
constituency.388 In most states, no single department
even maintains an accurate listing of active public
authorities, nor do authorities report their finances to
the federal Securities and Exchange Commission—
which private businesses must do.389
Creating Authorities “Authorities have from their
inception been extremely ‘ad hoc’ in nature—some-
times created by a single municipality, sometimes by
several cities or towns, sometimes created by one
state, sometimes by 2 or more.”390
New York and Pennsylvania developed the two
basic models for creating public authorities. In New
York, public authorities are individually chartered by
the state legislature. In Pennsylvania, however, local
governments can create public authorities through
a number of different devices, and with little or no
interference from the state. More than two-thirds of
the states use the Pennsylvanian approach; in fact,
only Maine and New York actually require that the
 428 PA R T I V Implementing Public Policy
state legislature enact specific legislation to establish
each public authority.391
Governing Authorities State and local authorities
are headed by boards of directors, typically of “three
or more citizens,” who usually serve without com-
pensation. Most are appointed by elected officials,
or by the board itself, and typically may not be fired
except when they break the law.392
Board directors tend to have business or profes-
sional backgrounds, and the lack of interest among
many of them in the affairs of the authorities that
they head has been amply documented, with a signif-
icant number appointing surrogates to attend board
meetings, but who, in fact, rarely attend. Vacancies
on these boards are frequent.393
Although there are some signs that these boards
are trying, tepidly, to engage more citizens,394 public
oversight is minimal. Many board meetings are not
announced; about six citizens, on average, attend
these meetings (not surprising, as authorities “typi-
cally hold their meetings on weekday mornings . . .
and the opportunities for average citizens to speak
are extremely limited”395); and the press does not
regularly attend nearly two-thirds of board meetings
(for over a third of authorities, in fact, the media
never attend meetings).396
Administering Authorities Public authorities are
managed by executive directors, over four-fifths of
whom are appointed by their boards and the remain-
der by elected officials.397
Independently conducted surveys, all taken at
roughly the same time, confirm that these executive
directors, in comparison with city managers (who
are among their closest counterparts), have much
more secure jobs (authority executives boasted
average tenures of eight years, compared with five
for city managers),398 are considerably less educated
(18 percent had not completed college, compared
with 4 percent of city managers),399 and are signif-
icantly less experienced in their professions (only
38 percent of authority executives had previously
worked for an authority, compared with 100 percent
of city managers who had worked for a city).400
“In a fundamental difference . . . authority
executives deal with fewer competing demands and
expectations” than do city managers.401 Majorities
of both authority executives (63 percent) and city
and county managers (58 percent) agree (unusually
so, for they agree on nothing else) that authority
executives are far freer of political pressures than
are city and county managers.402 Small wonder,
perhaps, that not one of the responding senior man-
agers of 217 large special districts expressed an
iota of dissatisfaction with his or her job,403 such
as the executive director of the Los Angeles County
Fair Association, whose annual compensation rose
steadily and dramatically over five years, eventually
topping $1 million, despite steadily and dramati-
cally decreasing revenues.404 (Following unflattering
publicity, the director was let go, and was replaced
by a municipal budget analyst at less than half the
salary.)
The Relatively Unconstrained Power
of Governments at the Fringe: Have They
Used It Well?
Despite attacks from both the left and right, public
enterprises at all governmental levels “have with-
stood such assaults practically unscathed and con-
tinue to claim rights of independent management.”405
Public enterprises and special districts are less
constrained in their actions than any other type of
government. Have they used their independence
well?
Federal Failures? Some major federal enterprises
have failed to meet their missions of becoming finan-
cially self-sustaining. Every year, Congress directly
allocates, on average, more than $60 billion to eight-
een of its twenty-three government corporations, or
nearly four-fifths of them, and more than $4 billion
to seventeen, a third, of its fifty “other” federal enter-
prises.406
Although graft is minimal, it is not unknown,
as attested to by the Postal Service governor who, in
1986, pled guilty of accepting bribes.407
Grass-Roots Faltering? Without question, public
authorities have left large legacies—roads, skyscrap-
ers, power grids, to name a few—that might not
otherwise be present because some lazy, lugubrious
general-purpose governments were not fulfilling
their responsibilities. When these governments do
their jobs, however, special-purpose governments
suffer and the people prosper.

In states with centralized state governments and
local governments that proactively provide services,
there are often fewer special-purpose governments,
and those that exist clearly engage in “less govern-
mental activity.”408 The per capita costs of services
provided by special-purpose governments gener-
ally are higher than the same services provided by
general-purpose governments,409 often because
special-purpose governments are so small geographi-
cally they are unable to achieve economies of scale.410
Authority costs are high, at least in part, because
of incompetent management. Here are some exam-
ples:411
■ The Port Authority of New York and New
Jersey built a $21 million luggage tunnel
without first checking if the airlines wanted it.
They did not. The tunnel remains unused and
boarded up.
■ New York’s Dormitory Authority awarded
millions of dollars in construction contracts to
firms banned by other public agencies because
of the firms’ ties to organized crime and their
long records of violations.
■ In the early 1990s, Washington unilaterally
took over the nation’s worst public housing,
expelling in the process the local housing
authorities that had managed them with
an awesome ineptness. Examples include
the chair of the New York City authority
who redecorated her office in pink at a cost
of $350,000, and the one-fourth of public
housing units in New Orleans that were vacant
because they were unfit for human habitation
(and this was before Hurricane Katrina struck).
More recently, more than 25,000 families
who occupy public housing have incomes
that exceed the income limit for government-
subsidized rentals, including one family with an
annual income of nearly $500,000.412
Corruption is present as well, and authority employ-
ees and officials at all levels have been convicted of
numerous instances of fraud, kickbacks, extortion,
embezzlement, and other crimes that involved mil-
lions of dollars.413
Despite all this—relatively easy and secure jobs,
less education and experience, high costs to custom-
ers, and considerable incompetence and corruption—
it appears that the employees of public authorities
Intersectoral Administration 429
and special districts, at all organizational levels, are,
on average, the highest-paid public employees in the
United States,414 with a number taking home more
than $300,000.415
Has there been a misuse of managerial freedom
by public authorities? Yes; the examples are too
legion to conclude otherwise. Is this misuse endemic?
We do not know.
THE INDEPENDENT SECTOR: BIG,
GROWING, AND INFLUENTIAL
Perhaps no sector in the maze of intersectoral
administration has become more prominent more
quickly than has the independent sector. Technically,
the voluntary sector is part of the private sector (the
organizations comprising it are created by private
interests and are privately owned), but we treat it as
a separate sector, which is not uncommon (one of its
titles, after all, is the “third sector”).
The hybrid sector owns about 5 percent of all net
worth in the private sector; accounts for 5.5 percent
of GDP;416 employs 10.3 percent of the nonfarm
civilian workforce; and its growth in employment,
total annual wages, and number of establishments
significantly outpaces those in the private and public
sectors.417 Nine out of ten American adults belong to
at least one nonprofit association.418
The primary revenue sources of public-benefit
nonprofits are fees (e.g., tuition paid to nonprofit
colleges), at 51 percent, a proportion that has held
remarkably steady over twenty years; government
grants and contracts, at 37 percent and rising
from 31 percent over the same period; and private
giving, at a modest 12 percent and falling from 18
percent.419
Serving Themselves or Serving Others
There are an estimated 2.3 million nonprofit organ-
izations.420 As shown in Figure 11-1, there are two
types.
Member-serving organizations are nonprofit
associations that provide benefits to their members.
There are about 550,000 of them.421
Public-serving, or public-benefit, organizations
are not-for-profit associations that provide ben-
efits to people who are not their members. There
 430 PA R T I V Implementing Public Policy
are nearly 1.1 million of them,422 they employ 90
percent of all full-time employees in the tax-exempt
independent sector, and their revenues account for
about two-thirds of all nonprofit revenue.423 It is on
these nonprofit organizations that our discussion
will center.
The Good that the Third Sector Does
The recipients of services that are provided by
nonprofit organizations are far more satisfied with
those services than are the recipients of services
delivered by governments,424 and faith-based non-
profits (excluding religious congregations) provide
services that are “equivalent or superior [to] com-
parable secular organizations.”425 In addition, we
are discovering that nonprofits bring other ben-
efits: the greater the number of nonprofits per
capita in a community, and the more that they
engage local residents, there is a lower level of local
unemployment.426
A Remarkably Respected Sector
As a consequence of its social contributions, cit-
izens’ confidence in the third sector’s ability to
deliver public policies is high. Even though public
trust in nonprofits has declined worldwide, it has
increased in the United States, and nearly two-thirds
of Americans trust them.427 And with some reason;
although American nonprofits constitute 30 percent
of all corporations, they amount to just 1 percent
of all corporate bankruptcies, indicative, perhaps, of
“their morality rather than their durability.”428
When federal and business managers were
asked to identify which institution—the federal gov-
ernment, state and local governments, businesses, or
nonprofits—would they have “the most confidence
in” to implement four publicly-relevant functions,
nonprofits swept the field, with these managers typi-
cally giving higher ratings to the independent sector
than they gave even to their own sectors.429 Sixteen
percent of top federal executives leave the federal
employ to work in the independent sector, which is
the third ranking destination out of seven.430
A stunning 44 percent, a plurality, of college
seniors cite the nonprofit sector as the institution
in which they have the most confidence to deliver
services,431 and university students in general have
greater trust in nonprofits than in either government
or companies, volunteer for them more frequently,
and are more likely to buy healthcare and education
services from them.432
Governments and the Independent Sector
Until the mid-twentieth century, most nonprofits
existed at the local level and were subject mostly
to local regulations. State governments became
involved with the nonprofit sector as it grew,
and today all states and the federal government
require that nonprofits file annual reports of their
incomes.433 But the public sector’s influence over its
independent counterpart extends far beyond this
modest regulation, and governments can manipu-
late the regulatory environment of the independent
sector in ways that affect nonprofits’ number, size,
diversity, and even the personal characteristics of
their executives.434
Governments play a large and expanding role
in the fiscal health of nonprofits; 56,000 nonprof-
its of all types receive 350,000 grants and contracts
from the federal, state, or local governments, or an
average of six public grants for each nonprofit.435
Which Nonprofits Get Public Money? Half of all
nonprofits have missions of human services436 (i.e.,
health, culture, recreation, post-secondary educa-
tion, and social services437), and it is to these organ-
izations that 70 percent of all the money received
by all nonprofits from all sources flows.438 Giving
to human services nonprofits grows faster, and the
amount that donors give per donor is higher, than all
other categories of nonprofits.439
Human services nonprofits also are the leading
recipients of public dollars, accounting for more than
two-fifths of all governmental spending on human
services.440 Human services nonprofits receive nearly
three-fifths of all the dollars in public grants and
contracts to nonprofits; agencies have some 200,000
grants and contracts with about 30,000 human ser-
vices nonprofits, or an average of seven per non-
profit.441
More than half of governments’ grants and con-
tracts to nonprofits go to the human services subset
of social services,442 i.e., job training, day care, and,
by far the most fiscally dominant category, “indi-
vidual and family services,” or welfare.443 Social

services, with some reason, have been referred to as
the “social services industrial complex.”444
Public Money’s Unique Benefits In light of public
money being the sole source of nonprofit revenue
that is growing, governments wax in nonprofits’
fiscal importance. Organizations in the independ-
ent sector can significantly improve their odds for
attaining government funding by collaborating with
other nonprofits, professionalizing their staffs, and
adopting “standard management strategies” for
achieving their missions.445
A “higher level of government support” for
nonprofits associates, in turn, with more privately-
donated dollars. “A 1 percent increase in government
funding is followed by 0.122 percent of rise in public
support.”446 The obverse, however, is not the case:
there is “no evidence of an effect of private donations
on government grants” to nonprofits.447
The larger the proportion of government funds
relative to charitable donations in a nonprofit’s
budget, the more likely that the organization will be:
larger in membership yet leaner in both its board
size and its administrative staff; use fewer volun-
teers; be less dependent on its own earned income;
be more racially diverse in its volunteers, staff, and
(probably448) its board;449 be more likely to collab-
orate with other organizations;450 be less adminis-
tratively complex,451 and “substantially” likelier to
“embrace participatory governance practices.”452
Governmental funding of nonprofits also associ-
ates with more nonprofits in a jurisdiction, and it
has a greater impact in this regard than does private
funding.453
When nonprofits contract with governments to
deliver services, their boards often experience “very
significant stresses and challenges, some of which
may threaten their capacity to govern . . . effec-
tively.”454 In general, however, government support is
a winning relationship for the independent sector.455
Grants over Contracts Public funding of nonprofits
in the form of grants, rather than contracts, appears
to produce superior results. Contract-based funding
forces nonprofit organizations, in contrast to private
companies, to hire less professional “temporary staff
for core service delivery in government-funded pro-
grams,” which then reduces “the effectiveness of the
services the agency [provides] to the community.”456
Intersectoral Administration 431
Fortunately, governments rely heavily on grants
when dealing with independent organizations.
Forty-three percent of all nonprofits that receive
public grants and contracts receive only grants; 38
percent receive both; and just 19 percent receive
only contracts.457 Federal agencies issue two-and-a-
half times more dollars sent directly to nonprofits as
grants, relative to the dollars paid directly through
contracts.458
The Federal Government and the Independent
Sector According to the Government Account-
ability Office, which ought to know, independent
organizations are “key partners in delivering federal
programs and services.”459
Formidable Federal Funding It appears that federal
funding of the third sector is significant, involving
nearly 700 federal programs.460 Analysts estimate
that Washington transfers, either directly or through
third parties, about the same amount of money to
the independent sector that it contracts out to the
private sector.461
Federal fiscal support of public-benefit non-
profits likely has more than doubled in real buying
power over twenty-four years. The increase is attrib-
utable to the growth in healthcare programs and
some indexed income assistance programs, such as
public housing, and it came at a price: federal spend-
ing on the remaining programs that habitually rely
on nonprofits to deliver publicly-funded services
(notably social services, education, and research,
among others) declined by nearly a fifth over the
same period.462
Washington also supports the third sector indi-
rectly. About 70 percent (or more than 1.6 million)
of America’s roughly 2.3 million nonprofits are
exempt from federal taxes,463 a policy that began in
1894 with the passage of the Wilson-Gorman Tariff
Act, and was later reinforced with the Revenue Acts
of 1909, 1913, and 1917; indeed, Washington now
lists twenty-nine classifications of tax-exempt non-
profits. As a result, the federal government foregoes
“approximately $50 billion” in annual tax revenues.
Public-serving organizations account for about
two-thirds of all federal tax-exempt nonprofits, and
member-serving nonprofits make up the rest.464
As shown in Figure 11-1, public-serving associa-
tions also benefit indirectly from a unique tax policy
 432 PA R T I V Implementing Public Policy
that applies only to them. Under Section 501 (c) (3)
of the U.S. Internal Revenue Code, federal taxpay-
ers who donate to public-serving organizations may
deduct from their taxable income the value of their
donations, and subnational governments have mostly
followed the federal lead in adopting this policy.
Money Mysteries The preceding data are largely
educated estimates. Although a database has been
under development since 2006, it remains the case
that there are no comprehensive statistical data that
track federal support for nonprofit organizations.465
Figure 11-2 illustrates why this is: the bulk of federal
funding ends up in nonprofit coffers only after it has
been handled by many hands.
Some federal funds, such as Medicare’s health
subsidies to the elderly, are transferred to non-
profit organizations because individual recipients
have chosen to use their services; the feds annually
channel perhaps $145 billion to independent organ-
izations in these “fee-for-service payments.”
Some, such as many federal grants to the states,
are passed through the states to nonprofits, or to
local governments that then send them to non-
profits; each year, the emerging sector receives an
estimated $55 billion in this fashion from just two
federal grant programs.
And some, such as research grants to independ-
ent universities, flow directly from federal agencies
to third-sector organizations; Washington annu-
ally disburses $25 billion in grants and $10 billion
in contracts directly to third-sector recipients. In
Federal
government
FIGURE 11-2
Paths of Federal Funds to Nonprofit Organizations
Source: U.S. Government Accountability Office, Nonprofit Sector: Increasing Numbers and Key Role in Delivering
Federal Services, GAO-07-1084T (Washington, DC: U.S. Government Printing Office, 2007), p. 8.
addition, each year the feds provide them with
“approximately $2.5 billion in loan guarantees and
$450 million in loans.”466
Washington and Nonprofit Management Direct
federal grants that include a specific requirement,
such as stipulating that they be matched with private
funds, “are particularly effective at stimulating both
additional fund-raising activity and output” among
nonprofits, whereas grants that are not specific
“appear to significantly reduce both fund-raising
and output.”467
On occasion, Congress improves the manage-
ment of nonprofits, if inadvertently. The Sarbanes-
Oxley Act of 2002, intended to clean up the finance
industry, also affected the independent sector. “About
one in four” nonprofits attributed “better financial
controls and reduced risk of accounting fraud” to
the act.468 On the other hand, as we noted in the
introduction to Part III, Washington (and state gov-
ernments) often fails to deal with obviously fraudu-
lent nonprofits.
State Governments and the Independent Sector
More than seven out of ten state agencies contract
with nonprofit associations to deliver services;469
roughly three-quarters of the funding for this comes
from the federal government in the form of pass-
through grants to the states and their localities.470
Relatively generous state funding correlates pos-
itively with more nonprofits overall, and more of
large size, in the state.471
Individuals
State Nonprofit
government organizations
Local
government

Once acquired, state funding seems to continue
with relative ease, as state administrators rely less
on quantitative measures to determine the perfor-
mance of their nonprofit contractors, at least when
compared with their for-profit counterparts, and
rely more on qualitative judgments.472 Such laxity
is rarely wise, as exemplified by the nonprofit that
contracted with South Carolina to restore wetlands
for a fee of $5 million. Not only did the nonprofit
overspend its contract by $300,000, but it bought
properties that not only were not wetlands, but were
not even close to the area in question; auditors deter-
mined that the entire restoration could have been
done for $743,000.473
This sort of laxity seems likely to continue, as
most of the states’ regulation of their charities (and,
presumably, other public-serving nonprofits) is a hit-
or-miss affair. No state has a single law for oversee-
ing its charities, and states rely instead on a “complex
mix” of laws and procedures. Fifty-nine percent of
the states (including five territories and the District
of Columbia) distribute the oversight of charities
among various agencies. A modest 355 staffers com-
prise the national total of state professionals who
oversee charities, and 31 percent of the state charity
offices have not even one full-time staffer.474
As with Washington, state governments also
heavily subsidize the independent sector through
their tax policies. All states exempt charities—1.5
million of them—from the local property tax,475
saving nonprofits from $17 billion to $32 billion per
year.476 The states’ relief of charities from the state
corporate income tax, levied by forty-five states,
nets the independent sector close to $4 billion per
annum; and two dozen of the forty-five states with a
sales tax do not tax purchases by charitable organi-
zations, and another sixteen provide limited exemp-
tions, totaling about $2.5 billion annually.477 In all,
state charitable tax policies deprive the states from
$23 billion to $38 billion in tax revenue per year.
There are signs that the states’ tax relief pol-
icies are slackening, as subnational governments
increasingly are questioning why “nonprofit” hos-
pitals (one judge ruled that, “for purposes of the
property tax exemption, modern nonprofit hos-
pitals are essentially legal fictions”478), private
colleges, and even professional football teams,
among other organizations, pay no business income
taxes or local property taxes. It is authoritatively
Intersectoral Administration 433
estimated that the property tax exemption for
nonprofits costs cities about 4 to 8 percent in lost
property tax revenue.479 In Syracuse, New York, for
example, 51 percent of all property in the city is tax
exempt because it is owned by nonprofits or govern-
ments.480 Yale University owns “about half” of New
Haven, Connecticut.481
A few nonprofits seem to be getting the message.
“At least 420 nonprofits” provide 218 local govern-
ments in twenty-eight states payment in lieu of taxes
(PILOTs), which are voluntary contributions made
by tax-exempt nonprofits to governments as a sub-
stitute for property taxes. But these payments do not
amount to much: about 1 percent of the receiving
localities’ general revenue, with just ten nonprofits
accounting for most of it.482 From three-quarters to
four-fifths of “PILOT activity” is in the Northeastern
United States; higher education contributes about
two-thirds of PILOT revenue, and hospitals about
a fourth.483
Local Governments and the Independent Sector
Localities and nonprofits evidence an increasing
intimacy, as exemplified by the 373 nonprofits in
Berkshire County, Massachusetts, which account for
nearly half of its regional economy.484
As an indication of these close relations, 63
percent of cities and counties provide links on their
websites to “community organizations” (just 2
percent more, 65 percent, provide links to “other
governments,” which is the highest percentage out of
eleven possibilities), and 53 percent do so for “non-
profits.”485
Cities and counties contract out nearly 10
percent of all their services to independent organiza-
tions,486 the highest percentage in thirty years; previ-
ously, 8 to 9 percent of local services were delivered
by nonprofits.487 Even though these governments are
somewhat leery about contracting with third-sector
associations, and prefer contracting out to them
services that have little likelihood of failing,488 they
are more satisfied with how nonprofit organizations
deliver their services than they are with how for-
profit corporations provide them. Although cities
and counties bring back in-house 24 percent of the
contracts that they have with independent organi-
zations, they reel in 33 percent, or almost two-fifths
more, of the contracts that they sign with private
companies.489
 434 PA R T I V Implementing Public Policy
Like their state counterparts, local administra-
tors favor qualitative measures of their nonprofit
contractors’ performance over quantitative ones,
which they reserve for their business contrac-
tors.490 Unlike their dealings with private compa-
nies, local governments shy away from inserting
formal rewards and penalties into their contracts
with nonprofits, preferring to rectify problems of
productivity through conversation and, less so,
with technical assistance.491 Even though one study
found “no significant differences” between non-
profit and for-profit local contractors in terms of
“performance . . . quality of work, responsiveness
to government requirements, legal compliance,
or customer satisfaction,” local administrators
nevertheless trusted nonprofits more, monitored
them less, granted them greater discretion and con-
tracts of longer duration, and contracted with them
for “services characterized by higher levels of task
uncertainty” (i.e., higher risk) compared with for-
profit contractors.492
But contracts do not tell the whole story, and
it appears that most (52 percent) nonprofits that
collaborate with local agencies do not bother with
contracts at all, but rely instead on informal co-
operative arrangements. Astonishingly, “although
(as expected) local governments are more likely to
provide funding and equipment with formal agree-
ments than without,” a fourth of local public dollars
that flow to the third sector “still are provided
outside the contracting area.”493
That third-sector executives are able to induce
local administrators to furnish on faith a fourth of
their funding of nonprofits is impressive testimony
to their powers of persuasion. It is even more impres-
sive that they do so in light of the fact that “non-
profit executives generally exhibit a stronger current
of negativity toward intersectoral partnership than
do their public sector counterparts” in local govern-
ments.494 Those independent organizations that are
smaller and younger, or which are led by executive
directors who are men, or those who were never
employed by government, or who endured a bad
experience in an earlier collaboration with govern-
ment, are the most resistant to working with local
governments.495
The Flip Side: Nonprofit Support for Public
Agencies It is not well known, but philanthropic
support for public services is growing faster than
that of the independent sector in general. Public uni-
versities, for example, long have had nonprofit foun-
dations dedicated to raising private funds for them,
but newer recipients of nonprofit largesse are emerg-
ing, such as the dramatic “rescue by foundation” of
bankrupt Detroit. The assistance and expertise that
nonprofits provide to governments expands their
capacity to govern.496
A number of federal agencies, including the
Central Intelligence Agency, have “created or spurred
the creation of philanthropic offshoots that serve as
mechanisms for accessing private capital. They func-
tion a little like the private foundation arms of . . .
state universities.”497 Nearly 400 nonprofits provide
advocacy, volunteers, and funds to the 400 national
parks and related federal facilities.498
Not all independent organizations with a federal
purpose are created by federal agencies. A bipartisan
coalition of sixteen nonprofits called “Transitions in
Governance 2016,” for example, used crowdsourc-
ing to identify problems and solutions for the newly
elected administration.
At least nine states have created economic
development nonprofits, although their effectiveness
is increasingly questioned.499 Sixteen states count
funds provided to them by nonprofits toward their
spending levels that are required by the $16.5 billion
federal block grant program, Temporary Assistance
for Needy Families, which assists low-income
families.500
“Roughly half of all state parks . . . now have
an associated nonprofit ‘Friends of the Park’ group.”
Nonprofits that aid public parks were created at an
estimated rate of two per year, on average, from the
1980s to the present, when an estimated average of
twenty each year are being founded. Ninety-seven
percent of these organizations contribute money to
federal, state, and local parks.501
What Works Cities, Code for America, the
Government Performance Lab, the Sunlight
Foundation, the Knight Foundation’s Cities
Challenge, and uncounted but numerous of insti-
tutes of government funded by public universi-
ties, among other nonprofits, offer their services to
improve local governance. Over sixteen years, non-
profits that support local public schools grew by
260 percent and the funds that they raised expanded
by 348 percent, whereas the growth of third-sector

organizations overall grew by 196 percent and their
fundraising by 264 percent—rates that are about a
fourth lower than those of school-supporting non-
profits in both cases.502
Whether nonprofits provide their services to
federal, state, or local governments, these relation-
ships are not without problems, particularly those of
A CASE INDEPENDENT GOVERNANCE:
NEIGHBORHOODS RENASCENT
Neighborhood governance is the participation by
community-based nonprofit organizations in local
governments’ policymaking and administration as they
pertain to their communities.
Neighborhood governance exemplifies governing
by the nonprofit sector, and it takes several forms.
One is neighborhood associations, which are
informal groups of community residents that work with
local governments to improve their communities. They
got their start with the Housing Act of 1949, which
required citizen participation in public hearings dealing
with federal housing projects. During the 1960s and
1970s, Congress or federal agencies inserted no fewer
than another 155 provisos into intergovernmental
grants that mandated citizen participation in local
decision making (U.S. Advisory Commission on
Intergovernmental Relations, 1979, p. 4).
Another form is community development
corporations, or organizations that are chartered
under state law, created and led by the residents of
depressed communities, and link public subsidies with
private investment for the purpose of revitalizing those
communities, particularly housing. They were created
by the Economic Opportunity Act of 1964 and the
Demonstration Cities and Metropolitan Development
Act of 1966. There are more than 240 of them
(NeighborWorks).
When it comes to governing neighborhoods,
however, the home-grown colossus (it was not created
by Congress, as were the other two) are the residential
community associations, community associations,
or common-interest communities, which are
nonprofit organizations of homeowners or long-term
Intersectoral Administration 435
transparency and accountability, as nonprofits rarely,
if ever, are subject to the same, relatively high, audit-
ing standards as are public agencies, and irregulari-
ties, or worse, can be present.503 Nevertheless, “the
data suggest, overall, that philanthropic funding for
public services is neither a temporary nor a short-
term trend.”504
leaseholders that are governed under local real estate
contract laws.
Community associations owe no small debt to
academia, most especially to Professor Charles
Stern Archer, who was central in their creation
at “a time when the greatest minds in public
administration were interested in the modern form
of homeowners associations—when they invented
them in 1928” (McKenzie, p. 543). During the
ensuing years, according to some, they emerged as
“private governments” that are “a cross between local
government and the assistant principal for discipline at
a very strict high school” (White).
These associations have grown from fewer
than a thousand in 1960 to 310,000 today, and
from responsibility for 700,000 housing units and
two million residents in 1970 to 30 million units
and 63 million residents (or over two-fifths of all
Americans) today. Community associations govern 24
percent of all housing, and, since 1980, fully half of
all new housing has been placed under their rule. Their
governing boards control $51 billion in associations’
budgets (Community Associations Institute).
Common-interest communities may be one of three
types. More than half are homeowners’ associations
and other planned communities, composed of owners
of detached houses or townhouses, and are found
mostly in the suburbs. From 45 to 48 percent are
condominium associations, in which residents of
a complex own percentages of its common areas
and own their apartments. And from 3 to 5 percent
are cooperatives, or co-ops, in which a cooperative
(continued)
 436 PA R T I V Implementing Public Policy
(continued)
association owns the building; residents own shares in
the corporation and lease their apartments (Korngold,
p. 17).
Residential community associations impose
mandatory fees on their members (who also pay
their property taxes in full) and directly deliver
an average of ten services—most commonly,
landscaping, garbage collection, water, sewer, and street
lighting and maintenance—that are (with the possible
exception of landscaping) traditional duties of municipal
governments (U.S. Advisory Commission on
Intergovernmental Relations, 1989, p. 13).
Most cities and towns have established formal
relations with their “neighborhood organizations,”
and almost seven out of ten allocate funds to
train them in making decisions for their own
neighborhoods, a growing practice (Kearney, p. 30).
Sixty-three percent of municipal administrators
agree or strongly agree that “partnerships” in their
communities “are developed with neighborhood and
community organizations to involve the public in
appropriate public engagement activities” (Nelson and
Svara, p. 12).
Fifty-six percent of association officers report
that the level of cooperation between them and local
governments is good, and 71 percent state that they
had been treated fairly by local officials (U.S. Advisory
Commission on Intergovernmental Relations, 1989,
p. 20). However, 87 percent, a rising proportion, of
residents would not “want to see more government
control” of their associations (Zogby International and
Community Associations Institute, p. 5).
Seventy percent of residents say that their governing
boards “strive to serve the best interests of the
IMPLEMENTATION BY
INDIVIDUALS: VOLUNTEERS
AND VOUCHERS
Some public policies are implemented directly by
people, and the two most significant methods of
implementation by individuals are volunteers and
vouchers.
community, and 81 percent believe that they get a
“good” or “great” return on their fees (Foundation
for Community Association Research). As we reviewed
in Chapter 1, and discuss further in Chapter 12, these
are far higher positives than citizens grant their
governments along comparable dimensions.
If there is a lesson to be drawn from neighborhood
governments, perhaps it is this: Smaller governing can
be better governance.
Sources: U.S. Advisory Commission on Intergovernmental
Relations, Citizen Participation in the American Federal System,
A-73 (Washington, DC: U.S. Government Printing Office, 1979);
NeighborWorks, NeighborWorks (Washington, DC: Author,
2014); Otis White, “Otis White’s Urban Notebook,” Governing
(February 2006), p. 17; Evan McKenzie, “Present at the Creation:
The Public Administration Profession and Residential Private
Government,” Public Administration Review 71 (July/August
2011), pp. 543–545; Community Associations Institute, Industry
Data (Falls Church, VA: Author, 2011); Gerald Korngold, “Private
Regimes in the Public Sphere,” Land Lines 27 (Winter 2015),
pp. 14–23. Zogby International and Community Associations
Institute, What Do Americans Say about Their Community
Associations? You Might Be Surprised (New York and Falls
Church, VA: Authors, 2009); Foundation for Community
Association Research, Statistical Review 2012 (Falls Church,
VA, 2012); Richard C. Kearney, “Reinventing Government and
Battling Budget Crises: Manager and Municipal Government
Actions in 2003,” Municipal Year Book, 2005 (Washington, DC:
International City/County Management Association, 2005), pp.
27–32; Kimberly L. Nelson and James H. Svara, “Upholding and
Expanding the Roles of Local Government Managers: State of
the Profession 2012,” Municipal Year Book, 2014 (Washington,
DC: International City/County Management Association, 2014),
pp. 3–20; and U.S. Advisory Commission on Intergovernmental
Relations, Residential Community Associations: Private
Governments in the Intergovernmental System? A-112
(Washington, DC: U.S. Government Printing Office, 1989).
Volunteering for Government
A fourth of American adults do volunteer work,
devoting fifty-one median hours to such service per
year.505 Forty-four percent of Utahans volunteer (the
highest rate of any state), and 18 percent of neigh-
boring Nevadans (the lowest).506
Twenty-one percent of America’s nearly 63
million volunteers volunteer for government, or

government-related, programs. More than 14 percent
are involved in “social or community service,” over 5
percent volunteer in “civic and political” programs,
and about 1 percent are in public safety.507 Over a
fourth of Americans report that they have partici-
pated in community crime watches.508
Washington’s Volunteers Congress prohibits
federal agencies from using volunteers except in spe-
cific circumstances, such as during emergencies or to
further students’ educations. This is passing strange
as Congress, beginning in the 1960s, has subsidized
thousands of volunteers to work everywhere else.
Federal agencies are estimated to directly operate
from 20 to 30 percent of all organized volunteer
programs, and from 20 to 30 percent of these pro-
grams are connected with the public sector.509
State Government Volunteers State agencies score
a bit better on the use of volunteers than do the feds,
but not by much. Twelve percent of state administra-
tors in only seven states report that any volunteers
are used in their governments.510 Not even 2 percent
of all state agencies use volunteers, and their use is in
decline. Corrections and transportation agencies use
volunteers the most frequently.511
Local Government Volunteers Although 27
percent of local governments use volunteers to
deliver some sort of service,512 volunteers deliver
an average of barely 5 percent of twenty-seven
municipal and county services, or two-fifths of all
local services.513 This is a decline of nearly two-
fifths from twenty-five years earlier, when volunteers
helped deliver 8 percent of nearly half of all local
services.514 Volunteers are used most frequently in
the operation of cultural and arts programs, services
for the elderly, museums, and fire prevention;515 vol-
unteer fire fighters have declined since 1984, when
there were more than a million of them, to about
788,000 today, although 87 percent of fire depart-
ments are comprised of all or mostly volunteers.516
Governments’ Volunteers: Productive and Occa-
sionally Pricey Volunteers can make possible
governmental accomplishments that would not be
possible without them,517 but they can be costly.
Consider America’s volunteer fire fighters. When the
annual costs of recruiting, training, and managing
Intersectoral Administration 437
them exceed a relatively small sum (less than $1,000
per fire fighter518), then “the use of volunteers should
be reconsidered” because it is more cost-effective to
start adding full-time paid professionals.519
When governments cut services, and hope that
volunteers will fill the vacuum, the results are even
more counterproductive. “Volunteering is likely to
decline when government intervention decreases.”520
Alas, there is no free lunch.
Nonprofits’ Volunteers: Productive and Occasionally
Profitable One hour of a volunteer’s time is worth,
on average, $23.56 to the nonprofit benefiting from
the volunteer’s service.521
When nonprofit organizations are well struc-
tured and mix volunteers with paid employees,
volunteers’ attitudes and commitment to the
organization match those of paid employees.522
(Unbeknownst to their employees, perhaps, non-
profits that include volunteers pay their employees
less, on average, than those that have no volun-
teers.523) In contrast to employees, however, volun-
teers also donate money to the organizations that
they serve,524 not a surprising occurrence, given that
twice as many volunteers donate to charity (nearly
four-fifths—over 79 percent) as do non-volunteers
(two-fifths).525
When nonprofits use volunteers to both provide
services directly to their clients and in program
support roles, they enjoy 50 percent greater total
benefits compared with nonprofits that use only vol-
unteers to directly provide services; net benefits also
accrue at a higher rate, and “challenges” associated
with managing volunteers do not increase.526
Vouching for Citizen Service
Vouchers are coupons with a dollar value that gov-
ernments distribute to citizens needing a service; the
citizen can choose a provider from competing organ-
izations that the government has pre-selected as eli-
gible, and the government reimburses the provider
at a pre-set rate. Federal, state, and local vouchers
are used in “a wide and diverse range of program
areas” (at least ten very broad areas), ranging from
childcare to transportation.527
Washington’s Voluminous Vouchers The Supple-
mental Nutrition Assistance Program (or SNAP,
 438 PA R T I V Implementing Public Policy
formerly the Food Stamp Program), initiated in
1964, and Medicare, started in 1965, are the federal
government’s two principal voucher programs.
Under SNAP, the Agriculture Department issues
to poor people coupons, which they may use to buy
groceries at any store accepting the coupons, and
receive a federal discount in the process. Some 46
million people receive $70 billion in discounted gro-
ceries each year.528
Medicare distribute almost $586 billion in
annual health benefits to nearly 51 million people
who are sixty-five or older.529 The Tax Equity and
Fiscal Responsibility Act of 1982 allows partici-
pants the option of using a voucher that lets them
choose a health maintenance organization from a
pre-approved list.
Lesser-known federal vouchers (which
Washington usually dubs “certificates,” a less polit-
ically loaded term) focus on a variety of domes-
tic programs. The Workforce Investment Act of
1998 introduced vouchers to federal targeted
training programs. Childcare services use vouch-
ers so broadly that they have become the nation’s
“primary method” of financing childcare.530 The
Department of Housing and Urban Development’s
Housing Choice Voucher Program (also known
as “Section 8”), introduced in 1974, accounts for
almost a fourth of the housing units in federally
assisted low-income housing programs,531 and helps
more than two million low-income households pay
rent. Washington’s use of housing vouchers “reflects
a major shift,” rendering vouchers “the centerpiece
of federal low-income housing policy.” Their use
associates with better outcomes for children, fami-
lies leaving and avoiding welfare, workplace success
for breadwinners,532 improved physical and mental
health, significantly reduced homelessness and
overcrowding, and “real, albeit uneven, progress in
helping families move to better neighborhoods than
they might have otherwise.”533
State and Local Vouchers State and local govern-
ments use vouchers, too, but, with the exception of
childcare,534 far from extensively.
Six percent of state administrators in just three
states report that their governments use vouchers.535
Not even 1 percent of all state agencies actually use
vouchers, however, and their use is in decline. Social
service agencies use them the most.536
A modest 3 percent of cities and counties use
vouchers to deliver twenty-two local services (over
a third of all local services), although their use is
increasing. Favored areas are the operation of food
programs and shelters for the homeless.537
Education, or school, vouchers (originated in
Milwaukee in 1990) are coupons issued by gov-
ernments that parents can apply toward the tuition
charged by a private school; their children are not
required to attend the public school assigned to
them. There are thirty-eight private school choice
programs in eighteen states, the District of Columbia,
and a county in Colorado. Although these vouchers
come with a high and controversial profile, their
impact, though slowly expanding, remains limited. A
small fraction of 1 percent of all pupils use vouchers
to attend private schools.538
NOTES
1. Gerald W. Johnson and John G. Heilman,
“Metapolicy Transition and Policy Implementation:
New Federalism and Privatization,” Public Admini-
stration Review 47 (November/December 1987)
pp. 468–478. The quotation is on p. 468.
2. James C. Clingermayer, Richard C. Feiock, and
Christopher Stream, “Governmental Uncertainty
and Leadership Turnover: Influences on
Contracting and Sector Choice for Local Services,”
State and Local Government Review 35 (Fall
2003), pp. 150–160.
3. Byron E. Price, “The Threat of Privatization:
The Impetus Behind Government Performance,”
International Journal of Public Administration 30
(11, 2007), pp. 1141–1155.
4. Martin Tolchin and Susan J. Tolchin, Pinstripe
Patronage: Political Favoritism from the Clubhouse
to the White House and Beyond (Boulder, CO:
Paradigm Publishers, 2010).
5. Roland Zullo, “Does Fiscal Stress Induce
Privatization? Correlates of Private and Inter-
municipal Contracting, 1992–2002,” Governance
22 (July 2009), pp. 459–481.
6. Irene S. Rubin, “Who Invented Budgeting in the
United States?” Public Administration Review 53
(September/October 1993), p. 438–444. The quo-
tation is on p. 443.
7. Senator Claire McCaskill, quoted in David Francis,
“Here’s How Edward Snowden Got ‘Top Secret’
Clearance,” Fiscal Times (June 21, 2013).

8. Robert T. Kleiman and Anandi P. Sahu,
“Privatization as a Viable Alternative for Local
Governments: The Case of a Failed Michigan
Town,” Contracting Out Government Services,
Paul Seidenstat, ed. (Westport, CN: Praeger, 1999),
pp. 151–165. The quotation is on p. 163.
9. Quoted in Norm Ornstein, “Analysis: Government
Privatization Paves the Way for Crony Capitalism,”
Government Executive (June 20, 2013).
10. Graeme Browning, “Dot.gov goes Retail,” Federal
Computer Week (May 28, 2001), pp. 21–27. Figure
is for 2001.
11. U.S. Government Accountability Office, Excess
Personal Property: DOD Should Further Reassess
the Priorities of the Disposal Process, GAO-16-44
(Washington, DC: U.S. Government Publishing
Office, 2016), Highlights page. Figure is for FY
2014.
12. Federal Real Property Council, Federal Real
Property Profile (FRPP) Summary Report FY14
(Washington, DC: U.S. Government Publishing
Office, 2016).
13. U.S. House Oversight panel, cited in Charles S.
Clark, “Lawmaker: VA Alone Is Sitting on $2
Billion in Underused Property,” Government Exe-
cutive (July 30, 2014).
14. U.S. Government Accountability Office, Govern-
ment Procurement: United States Reported
Opening More Opportunities to Foreign Firms
Than Other Countries, but Better Data Are
Needed, GAO-17-168 (Washington, DC: U.S.
Government Publishing Office, 2017), Highlights
page.
15. Charles S. Clark, “Agencies Should Drive Harder
Bargains for Supplies, GAO Says,” Govexec.com
(August 13, 2015).
16. Donald F. Kettl, Managing Risk, Improving Results:
Lessons for Improving Government Management
from GAO’s High-Risk List (Washington, DC:
IBM Center for the Business of Government,
2016), p. 19. Figure is for FY 2015.
17. As derived from data in Bloomberg Government,
BGOV200: Federal Industry Leaders 2016 (New
York: Author, 2016), p. 4. Figures are for FY 2015.
18. U.S. General Accounting Office, Federal Acqui-
sition: Trends, Reforms, and Challenges, GAO-T-
OCG-00-7 (Washington, DC: U.S. Government
Printing Office, 2000), p. 6.
19. NCMA and Bloomberg Government, 2013 Annual
Review of Government Contracting (Ashburn, VA,
and New York: Authors, 2014), p. 7.
Intersectoral Administration 439
20. Zachary S. Huitink and David M. Van Slyke,
Beyond Business as Usual: Improving Defense
Acquisition through Better Buying Power
(Washington, DC: IBM Center for the Business of
Government, 2015), p. 11. Figure is for FY 2013.
21. U.S. Congressional Budget Office, Federal Contracts
and the Contracted Workforce (Washington, DC:
U.S. Government Publishing Office, 2015), p. 1.
22. U.S. Office of Management and Budget, Policy
Letter 92–1: Inherently Governmental Functions
(Washington, DC: Author, September 23, 1992).
23. Alexander Tabbarok, “The Rise, Fall, and Rise
Again of Privateers,” Independent Review 11
(Spring 2007), pp. 565–578.
24. Amber Corrin, “Public vs. Private: A Coalition of
the Willing?” Federal Computer Week (January 10,
2010), p. 36. Figure is for 2010.
25. As derived from data in Steven L. Schooner and
Collin D. Swan, “Contractors and the Ultimate
Sacrifice,” Service Contractor (September 2010),
pp. 16–18. Figures are for 2001–2010.
26. Ariana Eunjung Cha and Renae Merle, “Line
Increasingly Blurred between Soldiers and Civilian
Contractors,” Washington Post (May 13, 2004).
27. U.S. Commission on Wartime Contracting in
Iraq and Afghanistan, Transforming Wartime
Contracting: Controlling Costs, Reducing Risks,
Final Report to Congress (Washington, DC: U.S.
Government Printing Office, 2011).
28. David Isenberg, as quoted in Peter G. Tuttle,
“Don’t Cut Corners While Outsourcing,” Federal
Computer Week (June 28, 2010), p. 15.
29. U.S. Government Accountability Office,
Department of Labor: Better Cost Assessments
and Departmentwide Performance Tracking
Are Needed to Effectively Manage Competitive
Sourcing Program, GAO-09-14 (Washington, DC:
U.S. Government Printing Office, 2008), p. 8.
30. As derived from data in U.S. General Accounting
Office, Competitive Sourcing: Greater Emphasis
Needed on Increasing Efficiency and Improving
Performance, GAO-04-367 (Washington, DC: U.S.
Government Printing Office, 2004), p. 6.
31. Charles S. Clark, “Even CBO Is Stumped on the
Size of the Contractor Workforce,” Government
Executive (March 12, 2015).
32. U.S. Senate, Committee on the Budget, Inefficiency
and Mismanagement: OMB’s Contracting Out
Program (Washington, DC: U.S. Government
Printing Office, 1990), cover letter. Figures are
estimates.
 440 PA R T I V Implementing Public Policy
33. I. Nye Stevens, Contracting Out and Its Impact on
Federal Personnel and Operations, Hearings before
the U.S. House of Representatives, Committee
on Post Office and Civil Services (Washington,
DC: U.S. Government Printing Office, 1990),
p. 108.
34. Donald F. Kettl, Sharing Power: Public Governance
and Private Markets (Washington, DC: Brookings,
1993), pp. 63–64.
35. U.S. Office of Management and Budget, Competitive
Sourcing: Report on Competitive Sourcing Results,
Fiscal Years 2003 and 2004 (Washington, DC: U.S.
Government Printing Office, 2004), p. 8.
36. Clay Johnson and Harper Reed, “Why the Govern-
ment Never Gets Tech Right,” New York Times
(October 24, 2013).
37. Al Gore, From Red Tape to Results: Creating a
Government That Works Better and Costs Less,
Reinventing Federal Procurement (Washington,
DC: U.S. Government Printing Office, 1993), p. 3.
38. Federal Acquisition Institute, FY 2012 Annual
Report on the Federal Acquisition Workforce,
(Washington, DC: U.S. Government Printing
Office, 2013), p. 5.
39. U.S. Government Accountability Office, Acquisition
Workforce: Federal Agencies Obtain Training to
Meet Requirements, but Have Limited Insight
into Costs and Benefits of Training Investment,
GAO-13-231 (Washington, DC: U.S. Government
Printing Office, 2013).
40. Ibid.
41. Professional Development Council and Grant
Thornton, A Closing Window: Are We Missing
an Opportunity for Change? Professional Deve-
lopment Council 2014 Acquisition Policy Survey
(Arlington, VA, and Alexandria, VA: Authors,
2014).
42. Stan Soloway and Phil Kangas, “Fixing Acquisition:
An Opportunity Lost?” Govexec.com (January 30,
2015). Data are for 2002–2014. The latest such
survey at this writing is cited in the preceding
endnote.
43. Jared Serbu, “After Decades of DoD Acquisition
Reform, Congress Has Yet to Tackle Cultural
Issues,” Federalnewsradio.com (October 15, 2014).
44. Permanent Subcommittee on Investigations, U.S.
Senate, Defense Acquisition Reform: Where Do
We Go From Here? (Washington, DC: U.S. Govern-
ment Publishing Office, 2014).
45. Peter E. D. Love, Peter R. Davis, David J. Edwards,
and David Baccarini, “Uncertainty Avoidance:
Public Sector Clients and Procurement Selection,”
International Journal of Public Sector Management
21 (7, 2008), pp. 753–776. The quotation is on
p. 753.
46. Federal News Radio, WFED Federal CAO Survey
2015 (Washington, DC: Author, 2015), pp. 19–20.
47. U.S. Government Accountability Office, Chief
Acquisition Officers: Appointments Generally
Conform to Legislative Requirements, but Agencies
Need to Clearly Define Roles and Responsibilities,
GAO-12-792 (Washington, DC: U.S. Government
Printing Office, 2012).
48. Allan V. Burman, “Six Practical Steps to Improve
Contracting,” The Business of Government (Spring
2009), pp. 62–66.
49. Soloway and Kangas, “Fixing Acquisition.”
50. Brookings Institution, as cited in Partnership for
Public Service, Public Opinion on Public Service
(Washington, DC: Author, 2005), p. 6. Public’s
response is for 1998, and seniors’ is for 2002.
51. Primavera Systems, America, Inc.—Annual Share-
holder Management Report (Crystal City, VA:
Author, 2007), p. 1. Figure, 92 percent, is for
2007.
52. Dwight D. Eisenhower, Farewell Address to the
Nation (Washington, DC: U.S. Government
Printing Office, January 17, 1961), p. 2.
53. U.S. Government Accountability Office, Federal
Acquisition Challenges and Opportunities in the
21st Century, GAO-07-45SP (Washington, DC:
U.S. Government Printing Office, 2006), p. 15.
54. U.S. Government Accountability Office, Sourcing
Policy: Initial Agency Efforts to Balance the
Government to Contractor Mix in the Multisector
Workforce, GAO-10-744T (Washington, DC: U.S.
Government Printing Office, 2010), p. 3.
55. Burman, “Six Practical Steps to Improve Con-
tracting,” p. 65.
56. U.S. Government Accountability Office, Sourcing
Policy: Initial Agency Efforts to Balance the
Government to Contractor Mix in the Multisector
Workforce, p. 3.
57. Kaifeng Yang and Anthony Kassekert, “Linking
Management Reform with Employee Job Satis-
faction: Evidence from Federal Agencies,” Journal
of Public Administration Research and Theory 20
(April 2010), pp. 413–436. The quotation is on
p. 413.
58. OMB, as cited in Frank Greve, “Hired Guns
Running the U.S.,” Philadelphia Inquirer (May 19,
1992). Figure is for 1992.

59. U.S. Government Accountability Office, Veterans
Affairs Consulting, GAO-13-714R (Washington,
DC: U.S. Government Printing Office, 2013).
60. Elmendorf, Federal Contracts and the Contracted
Workforce. Figures are for FY 2012.
61. Project on Government Oversight, Bad Business:
Billions of Taxpayer Dollars Wasted on Hiring
Contractors (Washington, DC: Author, 2011), p. 4.
Figure is for FY 2009.
62. U.S. General Accounting Office, Civil Servants and
Contract Employees: Who Should Do What for the
Federal Government? FPCD-81-43 (Washington,
DC: U.S. Government Printing Office, 1981), p. 6.
63. Al Stapleton of the GAO, as quoted in “Consultants:
New Target for Budget Trimmers,” U.S. News &
World Report (December 1, 1981), p. 40.
64. U.S. Office of Management and Budget, Policy
Letter No. 93-1 (Reissued), Management Oversight
of Service Contracting (Washington, DC: Author,
1994). This directive, issued in 1993, replaced
OMB Circular A-120 of 1980.
65. U.S. General Accounting Office, Government
Contractors: Are Service Contractors Performing
Inherently Governmental Functions? GAO/GGD-
92-11 (Washington, DC: U.S. Government Printing
Office, 1991), p. 5.
66. Eric Katz, “Registered Lobbyist Earned $143K
Federal Salary for 4-Hour Government Work
Week,” Govexec.com (September 10, 2015).
67. Gallup Historical Trends, Labor Unions (New
York: Author, 2014). Figure is for 2011.
68. Daniel Horgos and Klaus Zimmermann, “Interest
Groups and Economic Performance: Some New
Evidence,” Public Choice 138 (March 2009), pp.
301–315.
69. Debra Mayberry, “37,000? 39,402? 11,500? Just
How Many Lobbyists Are There in Washington,
Anyway?” Washington Post (January 29, 2006).
70. Lobbyists.info., Lobyists.info Unveils 90,000
Links from Government Relations Professionals
to Congressional Staff Positions Reaching Back 27
Years (Washington, DC: Author, 2014). Figure is
for 2014.
71. Lee Drutman and Alexander Furnas, How
Revolving Door Lobbyists Are Taking Over K
Street (Washington, DC: Sunlight Foundation,
2014). Figures are for 2000–2012.
72. James Thurber on “K Street,” Sunday Morning,
CBS Television Network (October 7, 2012).
73. Timothy M. LaPira and Herschel F. Thomas
III, “Revolving Door Lobbyists and Interest
Intersectoral Administration 441
Representation,” Interest Groups & Advocacy 3
(1, 2014), pp. 4–29. The quotation is on p. 27.
74. Oxfam, as cited in Nicholas Kristof, “The Real
Welfare Cheats,” New York Times (April 14, 2016).
Figures are for 2008–2014.
75. Bill Allison and Sarah Harkins, Fixed Fortunes:
Biggest Corporate Political Interests Spend
Billions, Get Trillions (Washington, DC: Sunlight
Foundation, 2014), pp. 1–2. Figures are for 2007–
2012.
76. Jeff Connaughton, The Payoff: Why Wall Street
Always Wins (Westport, CT: Prospecta Press,
2012), p. 147.
77. As derived from data in Paula Reid, “Goldman
Sachs’ Revolving Door,” Cbsnews.com (April 10,
2010). Figures are for 1995–2010.
78. Jesse Eisinger, “Why Only One Top Banker Went
to Jail for the Financial Crisis,” New York Times
Magazine (April 30, 2014). Period is for 2007–2015.
79. Jeffrey D. Sachs, “The Impunity Trap,” Project
Syndicate (June 3, 2015). Compensation figure is
for 2013 and 2014.
80. “Two Financial Crises Compared: The Savings and
Loan Debacle and the Mortgage Mess,” New York
Times (April 13, 2011). Figures are for 1983–1992.
81. U.S. Department of Justice, Office of the Inspector
General, Audit Division, Audit of the Department
of Justice’s Efforts to Address Mortgage Fraud
(Washington, DC: Author, 2014), p. i.
82. Edward Wyatt, “Promises Made, and Remade, by
Firms in S.E.C. Fraud Cases,” New York Times
(November 7, 2011). Figures are for 1996–2011.
83. Michael Dorsch, “Bailout for Sale? The Vote to
Save Wall Street,” Public Choice 155 (June 2013),
pp. 211–223. The quotation is on p. 211.
84. Center for Responsive Politics, Overall Spending
Inches Up in 2014: Megadonors Equip Outside
Groups to Capture a Bigger Share of the Pie
(Washington, DC: OpenSecrets.org, 2014).
85. Tax Policy Center, Historical Average Federal
Tax Rates for All Households (Washington, DC:
Author, 2014). Figure, 20.1 percent, is for 2010.
86. U.S. General Accounting Office, DOD Use of
Consultant Service Contracts, 115083 (Washington,
DC: U.S. Government Printing Office, 1981), pp. 5,
10, 4, 3.
87. Newchy Mignone, former contracting officer in
the Energy Department, as quoted in Jonathan
Neumann and Ted Gup, “The Revolving Door:
Industry Plums Await Retired U.S. Officials,”
Washington Post (June 25, 1980).
 442 PA R T I V Implementing Public Policy
88. Adolfo Santos, “Post-Congressional Lobbying
and Legislative Sponsorship: Do Members of
Congress Reward Their Future Employers?”
LBJ Journal of Public Affairs 16 (Fall 2003), pp.
56–64. The quotation is on p. 62. Data are for
1984–1996.
89. Jack Abramoff, appearing on “The Lobbyist’s
Playbook,” 60 Minutes, CBS Television Network
(November 6, 2011).
90. As cited on “K Street.”
91. Elizabeth Brown, More Than 2,000 Spin Through
Revolving Door (Washington, DC: Center for
Public Integrity, 2005), p. 2. Figure is for 1998–
mid-2004.
92. Drutman and Furnas, How Revolving Door
Lobbyists Are Taking Over K Street. Figures are
for 2000–2012 and 1998–2012, respectively.
93. As derived from data in U.S. Government
Accountability Office, Employment Information
on Former High-Ranking Coast Guard Officials’
Employment with Major Contractors, GAO-
13-153R (Washington, DC: U.S. Government
Printing Office, 2013), Highlights page.
94. As derived from data in U.S. Merit Systems
Protection Board, In Search of Highly Skilled
Workers: A Study on the Hiring of Upper
Level Employees from Outside the Federal
Government (Washington, DC: U.S. Government
Printing Office, 2008), p. 13. Upper-level hires
refer to Grades 12–15. Figure, 32 percent, is for
2005.
95. Dan Eggen and Kimberly Kindy, “Three of Every
Four Oil and Gas Lobbyists Worked for Federal
Government,” Washington Post (July 22, 2010).
96. Jill Abramson, “The Business of Persuasion
Thrives in Nation’s Capitol,” New York Times
(September 29, 1998).
97. Public Citizen, Congressional Revolving
Doors: The Journey from Congress to K Street
(Washington, DC: Author, 2005), p. 1. Figures are
for 1992–2004.
98. OpenSecrets.org, as cited in Suzanne Dovi, “It’s
Not Bribery That’s Corrupting Our Democratic
System—It’s a Job Offer,” Savannah Morning
News (February 22, 2015). Figure is for 2015.
99. OpenSecrets.org, as cited in ibid. Figure is for
2004–2014.
100. Charles S. Clark, “Are Underqualified Con-
gressional Staff Impeding Oversight, Wasting
Agencies’ Time?” Govexec.com (March 10,
2016). Figures are for 2009–2013.
101. LaPira and Thomas III, “Revolving Door Lobby-
ists and Interest Representation.”
102. Society for Human Resource Management and
Congressional Management Foundation, Life
in Congress: Job Satisfaction and Engagement
of House and Senate Staff (Alexandria, VA and
Washington, DC: Authors, 2013), pp. 54, 57.
103. Connaughton, The Payoff, p. 39.
104. Lee Drutman and Alexander Furnas, K Street
Pays Top Dollar for Revolving Door Talent
(Washington, DC: Sunlight Foundation, 2014),
p. 1. Data are for 2012.
105. Drutman and Furnas, How Revolving Door
Lobbyists Are Taking Over K Street, p. 1. Figures
are for 1998–2012. Emphasis is original.
106. Lee Drutman and Alexander Furnas, The Rise of
the Million-Dollar Lobbyist (Washington, DC:
Sunlight Foundation, 2014), pp. 2–3. Figures are
for 1998–2012.
107. As derived from data in Drutman and Furnas, K
Street Pays Top Dollar for Revolving Door Talent,
p. 1. Data are for 1998–2012.
108. Lee Fang, “Analysis: When a Congressman
Becomes a Lobbyist, He Gets a 1,452% Raise (on
Average),” RepublicReport.org (Washington, DC:
RepublicReport.org, 2012).
109. Alec MacGillis, “Friends in High Places,” The
New Yorker (November 14, 2016), pp. 36–42.
The quotation is on p. 39.
110. Representative Marcy Kaptur, as quoted in
Gary Lee, “Trade, National Security, and the
Revolving Door,” Washington Post (April 13,
1992).
111. Simon Luechinger and Christoph Moser, The
Value of the Revolving Door: Political Appointees
and the Stock Market (Lucerne, Switzerland:
University of Lucerne, 2012), p. 1.
112. Brown, More Than 2,000 Spin Through Revolving
Door, p. 2. Figures are for 1998–2004. We should
note that former federal officials almost always
are listed in these forms as members of lobbying
teams that typically include lobbyists who did not
serve in the federal government.
113. Eric Lipton and Ben Protess “Law Doesn’t End
Revolving Door on Capitol Hill,” New York
Times (February 1, 2014).
114. Inspector General, U.S. Department of Defense,
Section 847 for Senior Defense Officials
Seeking Employment with Defense Contractors
(Washington, DC: U.S. Government Publishing
Office, 2016).

115. Joseph Besselman, Ashish Arora, and Patrick
Larkey, “Buying in a Businesslike Fashion—And
Paying More,” Public Administration Review 60
(September/October 2000), pp. 421–434. The
quotation is on p. 421.
116. Professional Overseas Contractors, “Security
Clearance 101: Number of Contractors with Top
Secret Clearances,” Your-poc.com (July 6, 2014).
This source counts 483,263 contractors, or 34
percent of the total. Figures are for FY 2012,
except 70 percent, which is for FY 2007. See also
Dana Priest and William M. Arkin, “National
Security, Inc.,” Washington Post (July 20, 2010).
Their estimate is 32 percent, or 265,000 contrac-
tors, in FY 2010.
117. Professional Overseas Contractors, “Security
Clearance 101.” Data are for FY 2012, except for
the 70 percent reference, which is for FY 2007.
118. Robert Gates, quoted in Priest and Arkin,
“National Security, Inc.”
119. U.S. Government Accountability Office, Civilian
Intelligence Community: Additional Actions
Needed to Improve Reporting on and Planning
for the Use of Contract Personnel, GAO-14-24
(Washington, DC: U.S. Government Printing
Office, 2014).
120. U.S. Government Accountability Office, Infor-
mation Security: Agencies Need to Improve
Oversight of Contractor Controls, GAO-14-612
(Washington, DC: U.S. Government Publishing
Office, 2014), Highlights page.
121. Booz Allen Hamilton and Partnership for
Public Service, Cyber In-Security: Strengthening
the Federal Cybersecurity Workforce (Washington,
DC: Authors, 2009), p. 2. Figures are for 2009.
122. Much of the following discussion is drawn
from “The United States of Secrets,” Frontline
(Washington, DC: PBS Television Network, May
14, 21, 2014).
123. Richard Esposito and Matthew Cole, “How
Snowden Did It,” NBC News Investigations
(August 26, 2013).
124. Tom Monahan, “What Edward Snowden Has
Taught Us about Hiring,” Government Executive
(September 5, 2013).
125. Matt Haldane and Mark Hosendall, “Update 2 –
U.S. Contractor that Vetted Snowden Is Under
Investigation,” Reuters.com (June 20, 2013).
126. Chris DiMarco, “Contractor Vetting Organi-
zation USIS Accused of Defrauding the U.S.
Government,” IC (January 23, 2014).
Intersectoral Administration 443
127. Erika Kelton, “Is a Whistleblower Behind Investi-
gation That Vetted Snowden?” Forbes.com (July
15, 2013).
128. U.S. Office of Personnel Management, Office of
Inspector General, Final Audit Report: Office
of the Federal Investigative Services’ Case
Review Process over Background Investigations
(Washington, DC: Author, 2014).
129. Lauren Cassani Davis, “How Do Americans Weigh
Privacy Versus National Security?” Nextgov.com
(February 3, 2016). Figure is for 2016.
130. Jackson Janes and Parke Nicholson, “Beyond
Spring: How to Save the U.S.-German Alliance,”
National Interest (September 5, 2014).
131. U.S. Merit Systems Protection Board, Workforce
Quality and Federal Procurement: An Assessment
(Washington, DC: U.S. Government Printing
Office, 1992), p. 40.
132. U.S. Government Accountability Office,
Acquisition Reform: DOD Should Streamline Its
Decision-Making Process for Weapon Systems to
Reduce Inefficiencies, GAO-15-192 (Washington,
DC: U.S. Government Publishing Office, 2015),
Highlights page.
133. Center for Strategic and International Studies,
Integrating Civilian and Military Technologies: An
Industry Survey (Washington, DC: Author, 1993).
134. Katherine McIntire Peters, “Infographic: What
Defense Personnel Really Think About the
Acquisition Process,” Govexec.com (November
11, 2014).
135. Kettl, Managing Risk, Improving Results, pp. 11,
16. Data are for 1990–2015.
136. John J. DiIulio, Jr., “Against Federal ‘Leviathan by
Proxy’ and for a Bigger, Better, Full-Time Federal
Workforce,” Public Administration Review 76
(July/August 2016), pp. 535–537. The quotation
is on p. 536. “Current list” refers to the 2015–
2016 list.
137. Gore, From Red Tape to Results, pp. 28, 1. Figures
are for the early 1990s.
138. Phillip J. Cooper, “Government Contracts in
Public Administration: The Role and Environment
of the Contracting Officer,” Public Administration
Review 40 (September/October 1980), pp. 459–
468.
139. Quoted in Russell Mitchell, “It Was Mr. Fixit Vs.
The Pentagon—and the Pentagon Won,” Business
Week (December 24, 1990), p. 52.
140. U.S. Government Accountability Office, Federal
Contractors: Better Performance Information
 444 PA R T I V Implementing Public Policy
Needed to Support Agency Contract Award
Decisions, GAO-09-374 (Washington, DC: U.S.
Government Printing Office, 2009), Highlights
page. Figure, 69 percent, is for FY 2007.
141. U.S. Government Accountability Office, Federal
Contracts: Agencies Widely Used Indefinite
Contracts to Provide Flexibility to Meet Mission
Needs, GAO-17-329 (Washington, DC: U.S.
Government Printing Office, 2017), Highlights
page. Data are for 2011–2015.
142. Frank Konkel, “GSA Officials on Increased Bid
Protests: ‘This Is How It’s Going to Be,’” Nextgov.
com (August 2, 2016). Figures are for 2008–
2015.
143. U.S. Government Accountability Office, Defense
Acquisitions: Assessments of Selected Weapon
Programs, GAO-08-467SP (Washington, DC: U.S.
Government Printing Office, 2008), Highlights
page. Figure is for FY 2007.
144. Todd Harrison, Analysis of the FY 2012 Defense
Budget (Washington, DC: Center for Strategic
and Budgetary Assessments, 2014), p. viii. Figures
are for 2001–2011.
145. U.S. Defense Systems Management College,
as cited in Gore, From Red Tape to Results,
p. 80.
146. U.S. Government Accountability Office, Acqui-
sition Reform: DOD Should Streamline Its
Decision-Making Process for Weapon Systems to
Reduce Inefficiencies, GAO-15-192 (Washington,
DC: U.S. Government Publishing Office, 2015),
Highlights page.
147. PotomacWave, Inc., as cited in Charles S. Clark,
“Agencies Rely on Contractor Tool to Spot  Pro-
curement Errors,” Govexec.com (August 24,
2015).
148. Jared Serbu, “Pentagon Says It’s Using Automation
to Speed Up Acquisition Bureaucracy,” Federal-
newsradio.com (June 22, 2015).
149. Partnership for Public Service and Deloitte,
Acquisition Shared Services: Progress, Lessons
and Opportunities (Washington, DC, and Arling-
ton, VA: Authors, 2015), pp. 1, 2. Figures are for
FY 2014.
150. U.S. Government Accountability Office, Federal
Procurement: Smarter Buying Initiatives Can
Achieve, but Improved Oversight and Account-
ability Needed, GAO-17-164 (Washington,
DC:  U.S. Government Publishing Office,
2016), pp. 5, 17, 38. Figures are for FY 2011–FY
2015.
151. David Shields, “Category Management Will
Transform Government’s Buying Behavior,”
About.bgov.com (March 21, 2016).
152. Charles S. Clark, “Shared Services Save Money,
With One Caveat,” Govexec.com (December 18,
2015).
153. Partnership for Public Service and Deloitte,
Helping Government Deliver II (Washington,
DC, and Arlington, VA: Authors, 2015), p. 24.
154. Andy Medici, “Ambitious Plan to Reshape Federal
Contracting Emerges at OFPP,” FederalTimes.
com (March 18, 2015). Figure is for FY 2014.
155. Shields, “Category Management Will Transform
Government’s Buying Behavior.”
156. Federal News Radio, WFED Federal CAO Survey
2015, p. 8.
157. Ann Hagedorn, “A Perilous Dependence on
Contractors,” New York Times (October 2, 2014).
158. Ibid.
159. Carol D. Leonnig, “Secret Service Officers at White
House Lacked Security Clearances, Officials Say,”
Washington Post (June 9, 2015).
160. Eric Katz, “Federal Agencies Continue to Shed
Security Clearance Holders,” Govexec.com (June
30, 2016). Figure is for 2013–2015.
161. Steve Kelman, “The Way to Better Contracts,”
Federal Computer Week (May 10, 2010), p. 16.
162. U.S. General Accounting Office, Contract
Management: Guidance Needed for Using
Performance-Based Service Contracting, GAO-
02-1049 (Washington, DC: U.S. Government
Printing Office, 2002), p. 3. Figure is for 2001.
163. U.S. Government Accountability Office,
Contractor Performance: Actions Taken to
Improve Reporting Past Performance Information,
GAO-14-707 (Washington, DC: U.S. Government
Printing Office, 2014), Highlights page.
164. Senator Tom Carper, quoted in Charles S. Clark,
“Misbehaving Contractors Might Be in Luck At
These Agencies,” Government Executive (August
8, 2013).
165. U.S. Government Accountability Office, Contract
Management: Extent of Federal Spending under
Cost-Reimbursement Contracts Unclear and
Key Controls Not Always Used, GAO-09-921
(Washington, DC: U.S. Government Printing
Office, 2009), Highlights page. Figure, 26 percent,
is for 2008.
166. As derived from data in Light, Creating High
Performance Government, p. 3. Figure is for
2000–2008.

167. U.S. Government Accountability Office,  Con-
tracting Data Analysis: Assessment of
Government-Wide Trends, GAO-17-244SP
(Washington, DC: U.S. Government Publishing
Office, 2017), Highlights page.
168. Chong Wang and Joseph San Miguel, “The
Excessive Profits of Defense Contractors:
Evidence and Determinants,” Journal of Public
Procurement 12 (Fall 2012), pp. 386–406. The
quotations are on p. 386. The authors studied the
128 public firms that received the most contract
dollars in 2008.
169. Kellie Lunney, “Are Low-Wage Federal Contract
Workers Getting Ripped Off?” Government
Executive (April 9, 2015).
170. Amy Traub and Robert Hiltonsmith, Underwriting
Bad Jobs: How Our Tax Dollars Are Funding
Low-Wage Work and Fueling Inequality
(Washington, DC: Demos, 2013), pp. 4–5. Figures
are for 2012.
171. NCMA and Bloomberg Government, Annual
Review of Government Contracting, 2015 Edition
(Ashburn, VA, and New York: Authors, 2016), p.
12. Figures are for FY 2010–FY 2014.
172. Jared Serbu, “DoD Now Awarding More than Half
of Its Contract Spending Without Competitive
Bids,” Federalnewsradio.com (August 22, 2016).
Data are for 2016.
173. As derived from data in U.S. General Accounting
Office, Contract Management: Civilian Agency
Compliance with Revised Task and Delivery
Order Regulations, GAO-03-983 (Washington,
DC: U.S. Government Printing Office, 2003),
pp. 22–24, and U.S. Government Accountability
Office, Contract Management: Guidance Needed
to Promote Competition for Defense Task Orders,
GAO-04-874 (Washington, DC: U.S. Government
Printing Office, 2004), p. 3.
174. Bob Brewin, “How Agencies Bury Noncompetitive
Procurements,” Nextgov (September 25, 2013).
175. John O’Mally, editor of Commerce Business Daily
(replaced in 2002 by the portal, FedBiz Opps) and
Vince Villa, consultant, as quoted in “Most Ads
for Contractors Meaningless,” Washington Post
(June 25, 1980).
176. As derived from data in Inspector General, U.S.
Department of Defense, Improvement Needed
with DoD Single-Bid Program to Increase
Effective Competition for Agencies (Washington,
DC: U.S. Government Printing Office, 2012),
p. i.
Intersectoral Administration 445
177. U.S. Government Accountability Office, Federal
Subcontracting: Further Actions Needed to
Improve Oversight of Pass-through Contracts,
GAO-15-200 (Washington, DC: U.S. Government
Publishing Office, 2014), Highlights page.
178. U.S. Government Accountability Office, Federal
Construction Subcontracting: Insight into
Subcontractor Selectioin Is Limited, but Agencies
Use Oversight Tools to Monitor Performance,
GAO-15-230 (Washington, DC: U.S. Government
Publishing Office, 2015), Highlights page. Figure,
$32 billion, is for FY 2014.
179. Michael Fischetti, “Distinguishing Fact from
Myth with Government Contracting Data,”
Federalnewsradio.com (August 23, 2016).
180. Bent Flyvberg, Mette Skamris Holm, and Soren
Buhl, “Underestimating Costs in Public Works
Projects: Error or Lie?” Journal of the American
Planning Association 68 (Summer 2002), pp.
279–295. Figure is for 1910–1998.
181. U.S. Government Accountability Office, Defense
Acquisitions: Assessments of Selected Weapon
Programs, Highlights page. Figure is for FY 2007.
182. Flyvberg, Skamris Holm, and Buhl, “Under-
estimating Costs in Public Works Projects,” p. 279.
183. Gordon Rule, quoted in William Proxmire, Report
from the Wasteland: America’s Military Industrial
Complex (New York: Praeger, 1970), p. 83.
184. Project on Government Oversight, “Key Trends
in POGO’s Revamped Contractor Misconduct
Database,” Pogo.org (November 12, 2015).
185. Andy Pasztor, When the Pentagon Was for Sale:
Inside America’s Biggest Defense Scandal (New
York: Scribner 1995), p. 38.
186. U.S. General Accounting Office, Worker Pro-
tection: Federal Contractors and Violations
of Federal Labor Law, GAO/HEHS-96-8
(Washington, DC: U.S. Government Printing
Office, 1995), p. 1.
187. U.S. General Accounting Office, Occupational
Safety and Health: Violations of Safety and Health
Regulations by Federal Contractors, GAO/HEHS-
96-157 (Washington, DC: U.S. Government
Printing Office, 1996), p. 3.
188. As derived from data in U.S. Government Ac-
countability Office, Federal Contracting: Assess-
ments and Citations of Federal Labor Law
Violations by Selected Federal Contractors, GAO-
10-1033 (Washington, DC: U.S. Government
Printing Office, 2010), Highlights page. Figures
are for 2005–2009.
 446 PA R T I V Implementing Public Policy
189. Democratic staff, House Ways and Means
Committee, as cited in Jonathan D. Salant,
Associated Press, “Companies Relocate to Escape
Taxes,” Savannah Morning News (May 27, 2003).
Figures are for 2001.
190. U.S. General Accounting Office, International
Taxation: Tax Haven Companies Were More
Likely to Have a Tax Cost Advantage in Federal
Contracting, GAO-04-856 (Washington, DC: U.S.
Government Printing Office, 2004), Highlights
page.
191. Elaine S. Povich, “Tax Inversions Allow Cor-
porations to Avoid State Taxes,” Stateline (July
21, 2014).
192. U.S. Government Accountability Office, Financial
Management: Thousands of Civilian Agency
Contractors Abuse the Federal Tax System with
Little Consequence, GAO-05-637 (Washington,
DC: U.S. Government Printing Office, 2005),
Highlights page. Figures are for 2004.
193. U.S. General Accounting Office, Financial Man-
agement: Some DOD Contractors Abuse the
Federal Tax System with Little Consequence,
GAO-04-95 (Washington, DC: U.S. Government
Printing Office, 2004), p. 13. Figures are for 2002.
194. Charles S. Clark, “IRS Fails to Police Contractors
Who Are Behind on Their Taxes,” Government
Executive (October 23, 2013). Figures are for
2012.
195. U.S. Government Accountability Office, Security
Clearances: Additional Mechanisms May Aid
Federal Tax-Debt Detection, GAO-13-733
(Washington, DC: U.S. Government Printing
Office, 2013).
196. As derived from data in U.S. General Accounting
Office, Financial Management: Some DOD
Contractors Abuse the Federal Tax System with
Little Consequence; U.S. Government Account-
ability Office, Financial Management: Thou-
sands of Civilian Agency Contractors Abuse the
Federal Tax System with Little Consequence,
Highlights page; U.S. Government Accountability
Office, Federal Contractors: Better Performance
Information Needed to Support Agency Contract
Award Decisions, Highlights page. Figure, 38
percent, is for FY 2007.
197. U.S. Government Accountability Office, Financial
Management: State and Federal Governments
Are Not Taking Action to Collect Unpaid Debt
through Reciprocal Agreements, GAO-05-697R
Reciprocal Agreements for Collecting Unpaid
Debt (Washington, DC: U.S. Government Printing
Office, 2005), p. 2. Figures are for 2004.
198. Good Jobs First, Uncle Sam’s Favorite Corpor-
ations: Identifying the Large Corporations that
Dominate Federal Subsidies (Washington, DC:
Author, 2015), p. 3. Figure is for 2014.
199. W. Henry Lambright, Governing Science and
Technology (New York: Oxford University Press,
1976), p. 123.
200. Cooper, “Government Contracts in Public Admin-
istration,” pp. 462–463.
201. Project on Government Oversight, Federal
Contractor Misconduct Database (Washington,
DC: Author, 2015). Figures are for 1995–2011.
202. Richard W. Stevenson, “Many Caught but Few
Are Hurt For Arms Contract Fraud in U.S.”
Washington Post (November 12, 1990). The
period was 1983–1990.
203. Scott Amey, “Suspension and Disbarment: The
Record Shows That the System Is Broken,”
Federal Times (March 21, 2005). Figures are for
1990–2003.
204. U.S. Government Accountability Office, Federal
Procurement: Additional Data Reporting Could
Improve the Suspension and Debarment Process,
GAO-05-479 (Washington, DC: U.S. Government
Printing Office, 2005), pp. 2–3. Figure is for
2003.
205. U.S. Government Accountability Office, Excluded
Parties List System: Suspended and Debarred
Businesses and Individuals Improperly Receive
Federal Funds, GAO-09-174 (Washington,
DC: U.S. Government Printing Office, 2009),
Highlights page.
206. USA Spending.Gov, Overview of Awards by Fiscal
Year (Washington, DC: Author, 2017).
207. U.S. Congressional Budget Office, Comparing
the Compensation of Federal and Private-Sector
Employees, 2011 to 2015 (Washington, DC: U.S.
Government Publishing Office, 2017), p. 1.
208. Senate Select Committee on Intelligence, as cited
in Robert O’Harrow, Jr., “Costs Skyrocket as
DHS Runs Up No-Bid Contracts,” Washington
Post (June 28, 2007); Walter Pincus and Stephen
Barr, “CIA Plans Cutbacks, Limits on Contractor
Staffing,” Washington Post (June 11, 2007); and
Robert O’Harrow, Jr. and Scott Higham, “Changes
Spurred Buying, Abuses,” Washington Post (May
23, 2007). The average annual cost of a federal
contract employee in 2006 was $250,000, com-
pared with $126,500 for a federal civil servant.

209. Melvin J. Dubnick and H. George Frederickson,
Public Accountability: Performance Measurement,
the Extended State, and the Search for Trust
(Washington, DC, and Dayton, OH: National
Academy of Public Administration and Kettering
Foundation, 2011), p. 49. “Scores” refer to PART
scores, explained in Chapter 7.
210. U.S. House Appropriations Committee, as cited in
Corrin, “Public vs. Private,” p. 36.
211. Pratap Chatterjee, Insourcing (Washington, DC:
Center for American Progress, 2012), p. 5.
212. Project on Government Oversight, Bad Business,
pp. 1, 19–28.
213. Kellie Lunney, “Federal Managers Support
Program Cuts, Fewer Contractors,” Government
Executive (November 7, 2011).
214. Barack Obama, Remarks by the President on
Procurement (Washington, DC: The White House,
2009), p. 3.
215. Vinson & Elkins LLP, “Recovery Act Includes
Unprecedented Accountability and Transparency
Provisions,” V&E Litigation Update (Houston,
TX: Author, 2009).
216. John Monroe, “2009 Year in Review,” Federal
Computer Week (December 7, 2010), pp. 20–26.
The quotations are on p. 22.
217. NCMA and Bloomberg Government, Annual
Review of Government Contracting, 2015
Edition, pp. 34–35. Current figure is for FY 2014.
218. Emily Kopp, “Contractors Say They’ve Had
It with White House Executive Orders,”
Federalnewsradio.com (August 11, 2015).
219. NCMA and Bloomberg Government, Annual
Review of Government Contracting, 2015
Edition, p. 5. Figures are for FY 2009–FY 2014.
220. U.S. Government Accountability Office, Federal
Contractors: Better Performance Information
Needed to Support Agency Contract Award
Decisions, Highlights page. Figure is for FY 2007.
221. NCMA and Bloomberg Government, Annual
Review of Government Contracting, 2015
Edition, p. 29. Figure is for FY 2014.
222. As derived from data in Report by Interagency
Suspension and Debarment Committee on Federal
Suspension and Debarment Activities for FY 2012
and 2013 and FY 2015 (Washington, DC: U.S.
Government Printing/Publishing Office, 2014 and
2016), pp. 15–16 and p. 7, respectively. Figures
are for FY 2009–FY 2015.
223. U.S. Office of Management and Budget, as cited
in Louis Peck, “America’s $320 Billion Shadow
Intersectoral Administration 447
Government,” Fiscal Times (September 28, 2011).
Figure is for FY 2010.
224. Annie Gowen, “Government Dollars Fuel Wealth:
D.C. Enclaves Reap Rewards of Contracting
Boom,” Washington Post (August 15, 2011).
Contracting dollars’ growth figure is for 1980–
2010.
225. As derived from data in ibid. and Robert Brodsky,
“Contracting Spending Dips for the First Time in
13 Years,” Government Executive (February 3,
2011).
226. Annie Lowery, “Washington’s Economic Boom,
Financed by You,” New York Times Magazine
(January 10, 2013).
227. Connaughton, The Payoff, p. 112.
228. OpenSecrets.org, Lobbying Database.
229. Thurber on “K Street.”
230. Brookings Institution, Global Metro Monitor
(Washington, DC: Author, 2014).
231. John R. Bartle and Ronnie LaCourse Korosec,
Procurement and Contracting in State
Government, 2000 (Syracuse, NY: Syracuse
University Government Performance Project,
2001), p. iv, and Liz Farmer, “Purchase Power: A
Special Report on State Procurement,” Governing.
com (February 17, 2016). Figures are for 2000–
2015.
232. Keon S. Chi, Kelley A. Arnold, and Heather M.
Perkins, “Privatization in State Government:
Trends and Issues,” Book of the States, 2004
(Lexington, KY: Council of State Governments,
2004), pp. 465–482. Figures (p. 465) are for
2002.
233. Keon S. Chi and Cindy Jasper, Private Practices:
A Review of Privatization in State Government
(Lexington, KY: Council of State Governments,
1998), p. 8. Data are for 1997.
234. Chi, Arnold, and Perkins, “Privatization in State
Government,” pp. 468, 479. Figures are for
2002.
235. Chi and Jasper, Private Practices, p. 14. Figure is
for 1997.
236. As derived from data in Chi, Arnold, and Perkins,
“Privatization in State Government,” p.  479.
Figure is for 2002. Fourteen states did not respond,
and we assume in this calculation that their lack
of response indicates a lack of contracting.
237. As derived from data in Yoo-Sung Choi, Chung-
Lae Cho, Deil S. Wright, and Jeffrey L. Brudney,
“Dimensions of Contracting for Service Delivery
by American State Administrative Agencies:
 448 PA R T I V Implementing Public Policy
Exploring Linkages between and Intergovern-
mental Relations and Intersectoral Admini-
stration,” Public Performance & Management
Review 29 (September 2005), pp. 46–66. Data
(p. 50) are for 1998.
238. Chi and Jasper, Private Practices, p. 14. Data are
for 1997.
239. Ibid.
240. Jeffrey L. Brudney, F. Ted Hebert, and Deil S.
Wright, “Reinventing Government in the American
States: Measuring and Explaining Administrative
Reform,” Public Administration Review 59
(January/February 1999), pp. 19–30. Data (p. 23)
are for 1995.
241. Chi, Arnold, and Perkins, “Privatization in State
Government,” pp. 479, 465. Figure is for 1998–
2002.
242. Christine A. Kelleher and Susan Webb Yackee, “A
Political Consequence of Contracting: Organized
Interests and State Agency Decision Making,”
Journal of Public Administration Research and
Theory 19 (July 2009), pp. 579–602. The quota-
tions are on p. 579.
243. Ibid., p. 467. Figures are for 2002.
244. As derived from data in ibid., pp. 468–469.
Figures are for 2002.
245. National Association of State Procurement Offi-
cials, 2015 Survey of State Procurement Practices
(Lexington, KY: Author, 2015), p. 1.
246. Ibid., p. 5.
247. Kyle Roerink, “Companies, Individuals Make
$1.7 Billion from Nevada No-Bid Contracts,”
Lasvegassun.com (February 26, 2015).
248. Mary K. Feeney and Craig R. Smith, “Social
Embeddedness in Outsourcing: What Shapes
Public Managers’ Perceptions?” Public Perfor-
mance & Management Review 31 (June 2008),
pp. 517–546. The quotation is on p. 541.
249. U.S. General Accounting Office, Privatization:
Lessons Learned by State and Local Governments,
GAO/GGD-97-48 (Washington, DC: U.S. Govern-
ment Printing Office, 1997), p. 6.
250. National Association of State Procurement Offi-
cials, 2015 Survey of State Procurement Practices,
p. 9.
251. Liz Farmer, “Purchase Power: A Special Report
on State Procurement,” Governing.com (February
17, 2016).
252. Jenni Bergal, “Policing Private Contractors
Is Challenge for States,” Stateline (August 5,
2014).
253. Jeffrey L. Brudney, Cynthia J. Bowling, and Deil
S. Wright, Continuity and Change in Public
Administration Across the 50 States: Linking
Practice, Theory, and Research through the
American State Administrators Project, 1964–
2008 (Auburn, AL: Center for Governmental
Services, Auburn University, 2010), pp. 13–14.
Private-sector figure is for 1994–2008; “fewer
than 15 percent” is for the 2000s.
254. As derived from data in U.S. Merit Systems
Protection Board, In Search of Highly Skilled
Workers: A Study on the Hiring of Upper
Level  Employees from Outside the Federal
Government (Washington, DC: U.S. Government
Printing Office, 2008), p. 13. Chapter 9 has
details.
255. Brudney, Bowling, and Wright, Continuity and
Change in Public Administration Across the 50
States, p. 13.
256. David E. Lewis, Political Appointments, Bureau
Chiefs, and Federal Management Performance
(Princeton, NJ: Princeton University, 2005), p. 35.
Chapter 9 has details.
257. Patricia W. Ingraham, “Building Bridges or
Burning Them? The President, The Appointees,
and The Bureaucracy,” Public Administration
Review 47 (September/October 1987), pp. 425–
435. Chapter 9 has details.
258. Caitlin Ginley, Revolving Door Swings Freely in
America’s Statehouses (Washington, DC: Public
Integrity, 2012). Figures are for 1992–2004.
259. Michael J. Mishak, Drinks, Dinners, Junkets
and Jobs: How the Insurance Industry Courts
State Commissioners (Washington, DC: Public
Integrity, 2016). Data are for 2015; 109 commis-
sioners left office, 2000–2010.
260. National Conference of State Legislatures,
Revolving Door Prohibitions Against Legislators
Lobbying State Government After They Leave
Office (Washington, DC: Author, 2012). Figure is
for 2012.
261. National Conference of State Legislatures, Re-
volving Door Prohibitions (Washington, DC:
Author, 2015). Figure is for 2015.
262. Ginley, Revolving Door Swings Freely in America’s
Statehouses.
263. Irwin T. David, “Privatization in America,”
Municipal Year Book, 1988 (Washington, DC:
International City Management Association,
1988), pp. 43–55. Figure, 24 percent (p. 52), is for
1982–1987.

264. U.S. Advisory Commission on Intergovernmental
Relations, State Laws Governing Local Govern-
ment Structure and Administration, M-186
(Washington, DC: U.S. Government Printing
Office, 1993), p. 43. Figure is for 1990.
265. David, “Privatization in America,” p. 50. Figure,
32 percent, is for 1982–1987.
266. Jerri Killian and Enamul Choudhury, “Continuity
and Change in the Role of City Managers,”
Municipal Year Book, 2010 (Washington, DC:
International City/County Management Asso-
ciation, 2010), pp. 10–18. The ranking (p. 13) is
for 2010.
267. David, “Privatization in America,” p. 43. Figure is
for 1987.
268. George C. Homsy and Mildred E. Warner,
“Intermunicipal Cooperation: The Growing
Reform,” Municipal Year Book, 2014
(Washington, DC: International City/County
Management Association, 2014), pp. 53–65 (data
are on pp. 55–57). Current services and percent-
age are for 2012. In 1982, when the first of these
surveys was undertaken, sixty services were ana-
lyzed.
269. Ibid., Mildred Warner and Amir Hefetz, “Co-
operative Competition: Alternative Service
Delivery, 2002–2007,” pp. 11–20 (data are
on p. 10), Mildred Warner and Amir Hefetz,
“Pragmatism over Politics: Alternative Service
Delivery in Local Governments, 1992–
2002,” pp.  8–16 (data are on p. 13), and
as derived from data in Harry  P.  Hatry and
Carl F. Valente, “Alternative Service Delivery
Approaches Involving Increased  Use of the
Private Sector,”  pp.  199–217 (data are  on
pp.  216–217),  Municipal Year Book[s], 2009,
2004, 1983,  respectively (Washington, DC:
International City/County Management
Association, 2009, 2004, 1983). Overall data are
for 1982–2012.
270. Homsy and Warner, “Intermunicipal Coopera-
tion,” pp. 55, 57–58. Figures are for 2012.
271. David, “Privatization in America,” p. 44.
272. Rowan Miranda and Karlyn Andersen, “Alternat-
ive Service Delivery in Local Government, 1982–
1992” Municipal Year Book, 1994 (Washington,
DC: International City/County Management
Association, 1994), pp. 26–35. The quotation is
on p. 28. Emphasis added.
273. Homsy and Warner, “Intermunicipal Coopera-
tion,” p. 55. Figure is for 2012.
Intersectoral Administration 449
274. As derived from data in Hatry and Valente, “Alter-
native Service Delivery Approaches Involving
Increased Use of the Private Sector,” pp. 216–217.
Figure fell from 23 to 16 percent, 1982–2012.
275. Homsy and Warner, “Intermunicipal Coopera-
tion,” pp. 55–56. Data are for 2012.
276. Categories total more than 100 percent because
the “ICMA treats the data on service provision
separately from the data on service delivery.” See
Warner and Hefetz, “Cooperative Competition,”
p. 12.
277. Alan Greenblatt, “Observer,” Governing (February
2006), pp.17–18.
278. Ryan Holeywell, “How Weston, Florida, a City
of 65,000, Gets By on 9 Employees,” Governing.
com (May 14, 2012).
279. David Streitfeld, “A City Outsources Everything,
Sky Does Not Fall,” New York Times (July 19,
2010)
280. Stephanie Banchero and Matthew Dolan,
“Michigan City Outsources All of Its Schools,”
Wall Street Journal (August 2, 2012).
281. Mark D. Bradbury and G. David Waechter,
“Extreme Outsourcing in Local Government: At
the Top and All But the Top,” Review of Public
Personnel Administration 29 (September 2009),
pp. 230–248. Figure is for 2009.
282. Zullo, “Does Fiscal Stress Induce Privatization?”
p. 459.
283. Homsy and Warner, “Intermunicipal Coopera-
tion,” p. 59. Figure is for 2012.
284. Patricia M. Florestano and Stephen B. Gordon,
“A Survey of City and County Use of Private
Contracting,” The Urban Interest 3 (Spring 1981),
pp. 22–29. Figure is for 1980.
285. Zullo, “Does Fiscal Stress Induce Privatization?”
p. 459.
286. To cite just one example of many: Timothy B.
Krebs and John P. Peliserro, “What Influences City
Council Adoption and Support for Reinventing
Government? Environmental or Institutional
Factors?” Public Administration Review 70
(March/April 2010), pp. 258–267.
287. Germa Bel and Xavier Fageda, “Why Do Local
Governments Privatise Public Services? A Survey
of Empirical Studies,” Local Government Studies
33 (August 2007), pp. 517–534.
288. Mary M. Shaw, “Successful Collaboration
between the Nonprofit and Public Sectors,”
Nonprofit Management and Leadership 14 (Fall
2003), pp. 107–120. The quotation is on p. 107.
 450 PA R T I V Implementing Public Policy
289. Clingermayer, Feiock, and Stream, “Governmental
Uncertainty and Leadership Turnover,” p. 156.
290. Laurence J. O’Toole, Jr. and Kenneth J. Meier,
“Parkinson’s Law and the New Public Manage-
ment? Contracting Determinants and Service-
Quality Consequences in Public Education,”
Public Administration Review 64 (May/
June  2004), pp. 342–352. The quotation is on
p. 349.
291. Yosef Bhatti, Asmus Leth Olsen, and Lene
Holm Pedersen, “The Effects of Administrative
Professionals on Contracting Out,” Governance
22 (January 2009), pp. 121-–137. The quotations
are on pp. 121, 125–126.
292. Clingermayer, Feiock, and Stream, “Governmental
Uncertainty and Leadership Turnover,” p. 157.
293. Patrick Madden, The Cost of D.C. Council’s
Power Over Contracts (Washington, DC: Wamu.
org, 2014).
294. Clingermayer, Feiock, and Stream, “Governmental
Uncertainty and Leadership Turnover,” p. 157.
295. Ole Helby Petersen, Kurt Houlberg, and Lasse
Ring Christensen, “Contracting Out Local
Services: A Tale of Technical and Social Services,”
Public Administration Review 75 (July/August
2015), pp. 560–569. The quotation is on p. 560.
296. Homsy and Warner, “Intermunicipal Co-
operation,” p. 60. Figure is for 2012.
297. Warner and Hefetz, “Cooperative Competition,”
p. 17. In 2007, the figure was 31 percent.
298. Miranda and Andersen, “Alternative Service
Delivery in Local Government, 1982–1992,” p.
34. In 1992, the figure was 25 percent.
299. Robert Mohr and Steven C. Deller, “Alternative
Methods of Service Delivery in Small and
Rural  Municipalities,” Public Administration
Review 70 (November/December 2010),
pp. 894–905.
300. Mildred E. Warner and Amir Hefetz, “Service
Characteristics and Contracting: The Importance
of Citizen Interest and Competition,” Municipal
Year Book, 2010 (Washington, DC: International
City/County Management Association, 2010), pp.
19–27. The quotation is on p. 26.
301. Warner and Hefetz, “Cooperative Competition,”
p. 17. Figure, 61 percent, is for 2007. The figure
was 48 percent in 1992. See Warner and Hefetz,
“Pragmatism over Politics,” p. 14. The question
was not asked in 2012.
302. Homsy and Warner, “Intermunicipal Coopera-
tion,” p. 60. Figure is for 2012.
303. Miranda and Andersen, “Alternative Service
Delivery in Local Government, 1982–1992,”
p. 34, and Warner and Hefetz, “Cooperative
Competition,” p. 17.
304. U.S. Advisory Commission on Intergovernmental
Relations, Changing Public Attitudes on
Government and Taxes, 1985, S-14 (Washington,
DC: U.S. Government Printing Office, 1985), pp.
28–29.
305. Homsy and Warner, “Intermunicipal Coopera-
tion,” p. 60. Figure is for 2012.
306. Miranda and Andersen, “Alternative Service
Delivery in Local Government, 1982–1992,”
p. 34, and Warner and Hefetz, “Cooperative
Competition,” p. 17.
307. James D. Ward, “Exploring Unintended Conse-
quences of Privatization, 1979 to 1999,” Paper
presented at the National Conference of the
American Society for Public Administration (San
Diego, 2000), p. 3.
308. Stephen Moore, “How Contracting Out City
Services Impacts Public Employees,” Contracting
Out Government Services, Paul Seidenstat, ed.
(Westport, CN: Praeger, 1999), pp. 211–218. The
data are on p. 214.
309. Ibid., pp. 216, 214.
310. Ward, “Exploring Unintended Consequences of
Privatization, 1979–1999,” p. 6.
311. Timothy Chandler and Peter Ferrille,
“Municipal Unions and Privatization,” Public
Administration  Review 51 (January/February
1991), pp. 15–22.
312. Miranda and Andersen, “Alternative Service
Delivery in Local Government, 1982–1992,”
p.  34, and Warner and Hefetz, “Cooperative
Competition,” p. 17.
313. Homsy and Warner, “Intermunicipal
Cooperation,” p. 60.
314. Clingermayer, Feiock, and Stream, “Governmental
Uncertainty and Leadership Turnover,” p. 156.
315. Homsy and Warner, “Intermunicipal Coopera-
tion,” p. 60. Figure is for 2012.
316. Ibid., Miranda and Andersen, “Alternative
Service Delivery in Local Government,
1982–1992,” p. 34, and Warner and Hefetz,
“Cooperative  Competition,” p. 17. Figure is for
1992–2012.
317. Tricia Maas and Robin Lake, A Blueprint
for Effective and Adaptable School District
Procurement (Seattle, WA: Center on Reinventing
Public Education, 2015), p. 4.

318. M. Ernita Joaquin and Thomas J. Greitens,
“Contract Management Capacity Breakdown?
An Analysis of U.S. Local Governments,” Public
Administration Review 72 (November/December
2012), pp. 807–815. Analysis covered 1997–2007.
319. Christopher Swope, “How Barcelona and Phila-
delphia Are Turning Procurement Upside Down,”
Citiscope.org (July 17, 2014).
320. Trevor L. Brown, “The Dynamics of Government-
to-Government Contracts,” Public Performance
& Management Review 31 (March 2008), pp.
364–386.
321. Janice Johnson Dias and Steven Maynard-Moody,
“For-Profit Welfare: Contracts, Conflicts, and
the Performance Paradox,” Journal of Public
Administration Research and Theory 17 (April
2007), pp. 189–211. The quotations are on
p. 189.
322. U.S. Advisory Commission on Intergovernmental
Relations, State Laws Governing Local Govern-
ment Structure and Administration, p. 43. Figures
are for 1990.
323. Sergio Fernandez and Hal G. Rainey, “Local
Government Contract Management and
Performance Survey: A Report,” Municipal Year
Book, 2005 (Washington, DC: International City/
County Management Association, 2005), pp. 3–4.
Figure is for 2003–2004.
324. David, “Privatization in America,” p. 51. In 1987,
22 percent permitted no-bid contracts.
325. H. George Frederickson, Gary Alan Johnson,
and Curtis Wood, “The Changing Structure of
American Cities: A Study of the Diffusion of
Innovation,” Public Administration Review 64
(May/June 2004), pp. 320–330. Datum is on
p. 324.
326. Amanda M. Girth, Amir Hefetz, Jocelyn M.
Johnston, and Mildred E. Warner, “Outsourcing
Public Service Delivery: Management Responses in
Noncompetitive Markets,” Public Administration
Review 72 (November/December 2012), pp. 887–
900.
327. Homsy and Warner, “Intermunicipal Coopera-
tion,” p. 63. Figure is for 2012.
328. Warner and Hefetz, “Cooperative Competition,”
p. 19. Figure is for 2007.
329. Robert Jay Dilger, Randolph R. Moffett, and Linda
Struyk, “Privatization of Municipal Services in
America’s Largest Cities,” Public Administration
Review 57 (January/February 1997), pp. 21–26.
Figure, 92 percent, is for 1995.
Intersectoral Administration 451
330. Warner and Hefetz, “Cooperative Competition,”
p. 20. Figure is for 2002–2007.
331. Scott Lamothe and Meeyoung Lamothe, “The
Dynamics of Local Service Delivery Arrangements
and the Role of Nonprofits,” International Journal
of Public Administration 29 (10/11, 2006),
pp. 769–797. Data are on p. 790.
332. Pascale Joassart-Marcelli and Juliet Musso,
“Municipal Service Provision Choices within
a Metropolitan Area,” Urban Affairs Review
40 (March 2005), pp. 492–519. Data are on
p. 515.
333. Emanuele Lobina, Troubled Waters: Misleading
Industry PR and the Case for Public Water
(Brighton, UK, and Boston, MA: Public Services
International Research Unit and Corporate
Accountability International, 2014). Figure is for
2003–2014.
334. Homsy and Warner, “Intermunicipal Coopera-
tion,” p. 62. Figure is for 2012.
335. Ibid., and Warner and Hefetz, “Cooperative
Competition,” p. 18. In 2002, the figure was
nearly 26.5 percent.
336. Eric Shnurer, “When Government Competes
Against the Private Sector, Everybody Wins,”
Government Executive (March 11, 2015).
337. To cite two of at least five analyses of the subject:
Dilger, Moffet, and Struyk, “Privatization of
Municipal Services in America’s Largest Cities,”
and David, “Privatization in America.”
338. Graeme A. Hodge, Privatization: An International
Review of Performance (Boulder, CO: Westview,
2000), p. 156.
339. Sergio Fernandez, “Understanding Contracting
Performance,” Administration & Society 41
(March 2009), pp. 67–100. The quotation is on
p. 92.
340. Eunju Rho, “Contracting Revisited: Determinants
and Consequences of Contracting Out for Public
Education Services,” Public Administration
Review 73 (March/April 2013), pp. 327–337. The
quotation is on p. 335.
341. Victor S. DeSantis and Charldean Newell, “Local
Government Managers’ Career Paths,” Municipal
Year Book, 1996 (Washington, DC: International
City/County Management Association, 1996),
pp. 3–10.
342. Jerri Killian and Enamul Choudhury, “Continuity
and Change in the Role of City Managers,”
Municipal Year Book, 2010 Washington,
DC: International City/County Management
 452 PA R T I V Implementing Public Policy
Association, 2010), pp. 10–18. Figure, 6.8 years
(p. 11), is for 2010.
343. Michael Noonchester, “Turnovers in Transit,”
Mass Transit (September/October 1991), pp. 48–
62. Figures are for 1988–1990.
344. Rhys Andrews and Tom Entwistle, “Does Cross-
Sectoral Partnership Deliver? An Empirical
Exploration of Public Service Effectiveness,
Efficiency, and Equity,” Journal of Public Admini-
stration Research and Theory 20 (July 2010),
pp. 679–701. The quotations are on pp. 691, 689.
345. Hodge, Privatization, p. 155.
346. William D. Eggers, Rightsizing the Government:
Lessons from America’s Public Sector Innovators
(Los Angeles: Reason Foundation, 1993).
347. Hodge, Privatization, p. 119.
348. Ibid., p. 99.
349. In the Public Interest, Insourcing (Washington,
DC: Author, 2013).
350. Andrews and Entwistle, “Does Cross-Sectoral
Partnership Deliver?” pp. 691, 689.
351. John D. Donohue, The Privatization Decision:
Public Ends, Private Means (New York: Basic
Books, 1991), p. 131. Emphasis is original.
352. Andrews and Entwistle, “Does Cross-Sectoral
Partnership Deliver?” p. 692.
353. David H. Webber, “Protecting Public Pension
Investments,” Washington Post (November 20,
2014).
354. Moore, “How Contracting Out City Services
Impacts Public Employees,” pp. 216, 214.
355. Homsy and Warner, “Intermunicipal
Cooperation,” p. 62. Figure is for 2012.
356. Ibid., and Warner and Hefetz, “Cooperative
Competition,” p. 18. Figure is for 2002–2012.
357. Unless noted otherwise, this discussion is based
on Paul Seidenstat, “Theory and Practice of
Contracting Out in the United States,” in Con-
tracting Out Government Services, Paul Seidenstat,
ed. (Westport, CN: Praeger, 1999), pp. 3–26.
358. Mark Considine, “The End of the Line? Account-
able Governance in the Age of Networks, Partner-
ships, and Joined-Up Services,” Governance 15
(January 2002), pp. 21–41.
359. Rae Andre, “Assessing the Accountability of
Government-Sponsored Enterprises and Quan-
gos,” Journal of Business Ethics 97 (2, 2010),
pp. 271–289.
360. E. S. Savas, Privatization and Public-Private
Partnerships (New York: Chatham House, 2000),
p. 9.
361. Jerry Mitchell, The American Experiment with
Government Corporations (Armonk, NY: M. E.
Sharpe, 1998), p. 19.
362. Annmarie Hauk Walsh, The Public’s Business:
The Politics and Practices of Government Cor-
porations (Cambridge, MA: MIT Press, 1978),
p. 29.
363. As derived from data in U.S. Government
Accountability Office, Federally Created Entities:
An Overview of Key Attributes, GAO-10-97
(Washington, DC: U.S. Government Printing
Office, 2009), pp. 9, 25, 26, 34. Data are for
2009.
364. Ibid., p. 16.
365. U.S. Government Accountability Office, Federal
Research: Opportunities Exist to Improve the
Management and Oversight of Federally Funded
Research and Development Centers, GAO-09-
15 (Washington, DC: U.S. Government Printing
Office, 2008), Highlights page. Figure, $13 billion,
is for 2006.
366. U.S. Government Accountability Office, Federally
Created Entities: An Overview of Key Attributes,
pp. 13–14.
367. For reasons of space, we shall not list the first
eight of these tallies and their sources, but they
can be found in the tenth edition of this book
(2007), p. 344, Note 205. The ninth count is ibid.
368. U.S. Government Accountability Office, Federally
Created Entities: An Overview of Key Attributes,
pp. 13–16. Figure is for 2009.
369. Harold Siedman, “United States Experience: The
Need to Reassert the Government Corporation
Control Act of 1945,” Public Administration and
Development 18 (August 1998), pp. 295–299.
The quotation is on p. 297.
370. U.S. Federal Housing Finance Agency, About
FHFA. Figures are for 2014 and include Federal
Home Loan Banks.
371. Marvin Phaup, “Federal Use of Implied Guar-
antees: Some Preliminary Lessons from the
Current Financial Distress,” Public Administration
Review 69 (July/August 2009), pp. 651–659.
372. As derived from data in U.S. General Accounting
Office, Government-Sponsored Enterprises: A
Framework for Strengthening GSE Governance
and Oversight, GAO-04-269T (Washington, DC:
U.S Government Printing Office, 2004), p. 4.
Figure, 81 percent, is for 2003.
373. ProPublica, History of U.S. Gov’t Bailouts (New
York: Author, 2009).

374. “How Fannie and Freddie Make Their Money,”
Wall Street Journal (May 3, 2004). Figure, over 47
percent, is for 2003.
375. Tom Raum and Jim Drinkard, Associated Press,
“Fannie Mae, Freddie Mac, Spent Millions on
Lobbying,” USA Today (July 17, 2008). Freddie
was fined $3.8 million.
376. U.S. Government Accountability Office, Federally
Created Entities: An Overview of Key Attributes,
p. 21.
377. Mitchell, The American Experiment with Govern-
ment Corporations, p. 14.
378. Much of the following discussion is drawn from
Walsh, The Public’s Business.
379. U.S. Advisory Commission on Intergovernmental
Relations, Bankruptcies, Defaults, and Other
Local Financial Emergencies, A-99 (Washington,
DC: U.S. Government Printing Office, 1985),
p. 2.
380. Carma Hogue, Government Organization
Summary Report: 2012 (Washington, DC: U.S.
Government Printing Office, 2013).
381. For reasons of space, we shall not list each of
these five tallies and their sources, but they can
be found in the tenth edition of this book (2007),
p. 345, Note 219.
382. Jerry Mitchell, “Education and Skills for Public
Authority Management,” Public Administration
Review 51 (September/October 1991), pp. 429–
437. The quotation is on p. 436.
383. Jerry Mitchell, “The Policy Activities of Public
Authorities,” Policy Studies Journal 18 (Summer
1990), pp. 928–942. Figures are for 1989.
384. Mitchell Denning and David J. Olson, “Public
Enterprise and the Emerging Character of State
Service Provisions,” Paper presented at the
Annual Meeting of the American Political Science
Association (New York: September 3–5, 1981),
pp. 6, 9.
385. Walsh, The Public’s Business, p. 6.
386. Denning and Olson, “Public Enterprise and the
Emerging Character of State Service Provisions,”
pp. 6, 9.
387. Robert W. Poole, Jr., Revitalizing State and Local
Infrastructure: Empowering Cities and States
to Tap Private Capital and Rebuild America,
Policy Study No. 190 (Washington, DC: Reason
Public Policy Institute, 1995), pp. 3–4, and
Denning  and  Olson, “Public Enterprise and the
Emerging Character of State Service Provisions,”
pp. 6, 9.
Intersectoral Administration 453
388. Osborne M. Reynolds, Jr., Local Government
Law, 3rd ed. (St. Paul: West, 2009), p. 39.
389. Walsh, The Public’s Business, p. 289.
390. Reynolds, Local Government Law, p. 39.
391. Walsh, The Public’s Business, p. 6.
392. Jerry Mitchell, “Policy Functions and Issues
for Public Authorities,” Public Authorities and
Public Policy: The Business of Government, Jerry
Mitchell, ed. (Westport, CN: Praeger, 1992),
pp. 1–14. The quotation is on p. 5.
393. Mitchell, The American Experiment with Govern-
ment Corporations, p. 95.
394. Tanya Heikkila and Kimberley Roussin Isett,
“Citizen Involvement and Performance Manage-
ment in Special-Purpose Governments,” Public
Administration Review 67 (March/April 2007),
pp. 238–248.
395. Mitchell, The American Experiment with
Government Corporations, p. 95.
396. Donald T. Wells and Richard Scheff, “Performance
Issues for Public Authorities in Georgia,” in Public
Authorities and Public Policy, pp. 167–176. The
quotation is on p. 172.
397. Mitchell, “Education and Skills for Public
Authority Management,” pp. 429–437.
398. Ibid. and Tari Renner, “Appointed Local Govern-
ment Managers: Stability and Change,” Muni-
cipal Year Book, 1990 (Washington, DC:
International  City Management Association,
1990), pp. 30–35.
399. Mitchell, “Education and Skills for Public
Authority Management,” and Victor S. De Santis
and Charldean Newell, “Local Government
Managers’ Career Paths,” Municipal Year
Book, 1996 (Washington, DC: International
City/County Management Association, 1996),
pp. 3–10.
400. Ibid. (both citations).
401. Mitchell, “Education and Skills for Public
Authority Management,” pp. 434–435.
402. Wells and Scheff, “Performance Issues for Public
Authorities in Georgia,” pp. 174–175.
403. Jonathan P. West and Evan M. Berman,
“Job Satisfaction of Public Managers in
Special Districts,” Review of Public Personnel
Administration 29 (December 2009), pp. 327–
353. Data are for 2008.
404. Paul Pringle and Rong-Gong Lin, II, “More than
$1 Million Paid to Head of L.A. County Fair
Assn. as Financial Losses Mount,” Los Angeles
Times (February 19, 2016).
 454 PA R T I V Implementing Public Policy
405. Walsh, The Public’s Business, p. 4.
406. U.S. Government Accountability Office, Federally
Created Entities: An Overview of Key Attributes,
pp. 39–41. Figures are annual averages for
FY 2005–FY 2008.
407. Mitchell, The American Experiment with
Government Corporations, p. 119.
408. G. Ross Stephens and Nelson Wikstrom, “Trends
in Special Districts,” State and Local Government
Review 30 (Spring 1998), pp. 120–138. The quo-
tation is on p. 133.
409. Kathryn A. Foster, The Political Economy of
Special-Purpose Governments (Washington, DC:
Georgetown University Press, 2007), pp. 219–221.
410. Melissa Maynard, “Cash-Strapped Governments
Turn to Special Districts,” Pewstates.org (October
2013).
411. Unless noted otherwise, the following exam-
ples are drawn from Mitchell, The American
Experiment with Government Corporations,
pp. 96, 107, 116, 108.
412. Office of the Inspector General, U.S. Department
of Housing and Urban Development, Overincome
Families Residing in Public Housing Units
(Washington, DC: Author, 2015). Data are for
2014.
413. Mitchell, The American Experiment with
Government Corporations, pp. 112–127.
414. International Personnel Management Association,
Pay Rates in the Public Service: Survey of 62
Common Job Classes in the Public Sector
(Washington, DC: Author, 1985).
415. Kellie Lunney, “The 10 Public Housing Authority
Officials Paid the Most from Federal Coffers,”
Govexec.com (May 20, 2014).
416. Katie L. Roeger, Amy S. Blackwood, and Sarah
L. Pettijohn, The Nonprofit Almanac 2012
(Washington, DC: Urban Institute Press, 2013).
Figures are for 2010.
417. Erik Friesenhahn, “Nonprofits in America: New
Research on Employment, Wages, and Esta-
blishments,” Monthly Labor Review (February
2016), pp. 1–13. Data are for 2007–2012.
418. American Association of Retired Persons survey,
as cited in: American Society of Association
Executives, Why Are Associations So Important?
http://www.asaenet.org.
419. Lester M. Salamon, The Resilient Sector: The
State of Nonprofit America (Washington, DC:
Brookings, 2003), p. 52. Figures are for 1977–
1997.
420. U.S. Government Accountability Office, Tax-
Exempt Organizations: Better Compliance Indi-
cators and Data, and More Collaboration with
State Regulators Would Strengthen Oversight
of Charitable Organizations, GAO-15-164
(Washington, DC: U.S. Government Publishing
Office, 2015), p. 8. Figures are for 2012.
421. Ibid., p. 9. Estimated figures are for 2012.
422. Ibid. Estimated figures are for 2012.
423. Lester M. Salamon, America’s Nonprofit Sector:
A Primer, 2nd ed. (New York: The Foundation
Center, 1999), pp. 22, 36. Figures are for 1995–
1996 and exclude volunteers.
424. Kanika Kapur and Burton D. Weisbrod, “The
Roles of Government and Nonprofit Suppliers
in Mixed Industries,” Public Finance Review 60
(July/August 2000), pp. 275–308.
425. Wolfgang Bielefeld and William Suhs Cleveland,
“Faith-Based Organizations as Service Providers
and Their Relationship to Government,” Non-
profit and Voluntary Sector Quarterly 42 (April
2013), pp. 468–494. The quotation is on p. 484.
426. National Conference on Citizenship, Civic
Health and Unemployment II: The Case Builds
(Washington, DC: Author, 2012).
427. Edelman, Inc., 2015 Edelman Trust Barometer
(New York: Author, 2015).
428. Woods Bowman, “Chapter 11—Why Not?”
Nonprofitquarterly.org (August 28, 2009).
429. Princeton Survey Research Associates and
Brookings Institution, Health of the Public Service
(Washington, DC: Authors, 2001).
430. U.S. Office of Personnel Management, Senior
Executive Service Exit Survey Results April 2015
(Washington, DC: U.S. Government Publishing
Office, 2015), p. 6. Figures are for 2014.
431. Brookings Institution as cited in ibid. Figures are
for 2002.
432. Fernida Handy, Stephanie Seto, Amanda Wakaruk,
et al., “The Discerning Consumer: Is Nonprofit
Status a Factor?” Nonprofit and Voluntary Sector
Quarterly 39 (October 2010), pp. 866–883.
433. Paul Arnsberger, Melissa Ludlum, Margaret Riley,
and Mark Stanton, “A History of the Tax-Exempt
Sector: An SOI Perspective,” Statistics of Income
Bulletin (Winter 2008), pp. 105–136.
434. Eleanor Brown and Kaitlyn Caughlin, “Donors,
Ideologues, and Bureaucrats: Government
Objectives and the Performance of the Nonprofit
Sector,” Financial Accountability & Management
25 (February 2009), pp. 99–114.

435. Sarah Pettijohn and Elizabeth T. Boris, Nonprofit-
Government Contracts and Grants: Findings
from the 2013 National Survey (Washington, DC:
Urban Institute, 2013). Data are for 2012.
436. As derived from data in Elizabeth T. Boris,
“Introduction: Nonprofit Organizations in
a Democracy—Roles and Responsibilities,”
Nonprofits & Government: Collaboration
& Conflict,  2nd ed., Elizabeth T. Boris and C.
Eugene Steuerle, eds. (Washington, DC: Urban
Institute  Press, 2006), pp. 1–36. Figure (p. 9) is
for 2004, and combines “Health” and “Human
Services.”
437. Salamon, America’s Nonprofit Sector, p. 55.
438. C. Eugene Steuerle and Virginia K. Hodgkinson,
“Meeting Social Needs: Comparing Independent
Sector and Government Resources,” Nonprofits
& Government, pp. 81–106. Figures (p. 87) are
for 2002. As derived from data in Steuerle and
Hodgkinson, “Meeting Social Needs,” p. 101.
Figure is for 2003, and includes “Health,” which
accounted for 57 percent of the total.
439. Giving USA Foundation, Giving USA Philan-
thropy Spotlight: Benchmarking Giving to
Human Services (Chicago: Author, 2016). Data
are for 2005–2015.
440. Lester M. Salamon, “Government and the Volun-
tary Sector in an Era of Retrenchment: The
American Experience,” Journal of Public Policy
6 (January–March 1986), pp. 1–20. Figure, 42
percent (p. 7), is for 1982.
441. Pettijohn and Boris, Nonprofit-Government Con-
tracts, p. 2. Figures are for 2012.
442. Salamon, The Resilient Sector, p. 54. Figures are
for 1997.
443. Salamon, America’s Nonprofit Sector, p. 55.
444. Daniel Stid, “The Social Services Industrial
Complex,” Washington Post (April 25, 2012).
445. David F. Suarez, “Collaboration and Professional-
ization: The Contours of Public Sector Funding
for Nonprofit Organizations,” Journal of
Public Administration Research and Theory 21
(April  2011), pp. 307–326. The quotation is on
p. 307.
446. Greg Chen, “Does Meeting Standards Affect
Charitable Giving? An Empirical Study of
New York Metropolitan Charities,” Nonprofit
Management & Leadership 19 (Spring 2009),
pp. 349–365. The quotations are on p. 360.
447. Garth Heutel, “Crowding Out and Crowding In
of Private Donations and Government Grants,”
Intersectoral Administration 455
Public Finance Review 42 (March 2014), pp. 143–
175. The quotation is on p. 143.
448. In contrast to the analysis cited, another quan-
titative study found that “reliance on govern-
ment funding decreases the likelihood that
nonprofit organizations will develop strong,
representative boards” (p. 468). See Chao Guo,
“When Government Becomes the Principal
Philanthropist: The Effects of Public Funding
on Patterns of Nonprofit Governance,” Public
Administration Review 67 (May/June 2007),
pp. 458–473.
449. Melissa Middleton Stone, Mark A. Hager, and
Jennifer J. Griffin, “Organizational Characteristics
and Funding Environments: A Study of a Popu-
lation of United Way-Affiliated Nonprofits,”
Public Administration Review 61 (May/June
2001), pp. 276–289.
450. Hee Soun Jang and Richard C. Feiock,“Public versus
Private Funding of Nonprofit Organizations,”
Public Performance & Management Review 31
(December 2007), pp. 174–190.
451. Stone, Hager, and Griffin, “Organizational Char-
acteristics and Funding Environments,” pp. 276,
285.
452. Kelly LeRoux, “Paternalistic or Participatory
Governance? Examining Opportunities for
Client Participation in Nonprofit Social Service
Organizations,” Public Administration Review 69
(May/June 2009), pp. 504–517. The quotations
are on pp. 513, 504.
453. Jesse D. Lecy and David M. Van Slyke, “Nonprofit
Sector Growth and Density: Testing Theories
of Government Support,” Journal of Public
Administration Research & Theory 23 (January
2013), pp. 189–214.
454. David G. Renz, “Adding a Few More Pieces to
the Puzzle: Exploring the Practical Implications of
Recent Research on Boards,” Nonprofitquarterly.
org (December 31, 2012).
455. Beth Gazley and Jeffrey L. Brudney, “The
Purpose (and Perils) of Government-Nonprofit
Partnerships,” Nonprofit and Voluntary Sector
Quarterly 36 (September 2007), pp. 389–415.
456. Kunle Akingbola, “Staffing, Retention, and
Government Funding: A Case Study,” Nonprofit
Management & Leadership 14 (Summer 2004),
pp. 453–465. The quotations are on pp. 463,
453.
457. Pettijohn and Boris, Nonprofit-Government Con-
tracts, p. 11. Figures are for 2012.
 456 PA R T I V Implementing Public Policy
458. U.S. Government Accountability Office, Non-
profit Sector: Significant Federal Funds Reach
the Sector through Various Mechanisms, but
More Complete and Reliable Funding Data Are
Needed, GAO-09-193 (Washington, DC: U.S.
Government Printing Office, 2009), p. 3. Figure
is for 2006.
459. Ibid., Highlights page.
460. Ibid.
461. Alan J. Abramson, Lester M. Salamon, and C.
Eugene Steuerle, “Federal Spending and Tax
Policies: Their Implications for the Nonprofit
Sector,” in Nonprofits & Government, pp. 107–
140. These researchers estimate (p. 118) that
Washington directed $317 billion to the nonprofit
sector in FY 2004, when Washington spent more
than $305 billion on private-sector contracts.
See Federal Procurement Data System, Federal
Procurement Report (Washington, DC: Author,
2004).
462. As derived from data in Abramson, Salamon,
and Steuerle, “Federal Spending and Tax
Policies,”  pp.  118, 111, 117, 113. Data are for
1980–2004.
463. U.S. Government Accountability Office, Tax-
Exempt Organizations: Better Compliance Indi-
cators and Data, and More Collaboration with
State Regulators Would Strengthen Oversight of
Charitable Organizations, p. 8. Figures are for
2012.
464. U.S. Government Accountability Office,
Nonprofit Sector: Significant Federal Funds Reach
the Sector through Various Mechanisms, but
More Complete and Reliable Funding Data Are
Needed, Highlights page. Figure is for 2006.
465. The Federal Funding Accountability and
Transparency Act of 2006 requires the collecting
and reporting of data concerning “subawards,” or
those federal expenditures that end up with non-
profits and other recipients after being funneled
through those entities that received federal money
directly.
466. U.S. Government Accountability Office, Non-
profit Sector: Significant Federal Funds Reach
the Sector through Various Mechanisms, but
More Complete and Reliable Funding Data
Are Needed, Highlights page. Figures are for
2006.
467. Jeremy Thornton, “Flypaper Nonprofits,” Public
Finance Review 42 (March 2014), pp. 176–198.
The quotation is on p. 176.
468. Tamara G. Nezhina and Jeffrey L. Brudney,
“Unintended? The Effects of Adoption of the
Sarbanes-Oxley Act on Nonprofit Organizations,”
Nonprofit Management & Leadership 22 (Spring
2012), pp. 321–346. The quotation is on p. 321.
469. Choi, Cho, Wright, and Brudney, “Dimensions
of Contracting for Service Delivery by American
State Administrative Agencies,” p. 50. Figure, 71
percent, is for 1998.
470. Woods Bowman and Marion R. Fremont-Smith,
“Nonprofits and State and Local Government,” in
Nonprofits & Government, pp. 181–218. Figure
(p. 194) is for 2001–2002.
471. William Luksetich, “Government Funding and
Nonprofit Organizations,” Nonprofit and Volun-
tary Sector Quarterly 37 (September 2008),
pp. 434–442.
472. Anna A. Amirkhanyan, “Monitoring across
Sectors: Examining the Effect of Nonprofit and
For-Profit Contractor Ownership on Performance
Monitoring in State and Local Contracts,” Public
Administration Review 70 (September/October
2010), pp. 742–755.
473. Larry Kaplan, “S.C. Watchdog Questions Agency,
Nonprofit Spending on Wetlands,” SavannahNow.
com (April 30, 2015).
474. Cindy M. Lott, Elizabeth T. Boris, Karin Kunstler
Goldman, et al., State Regulation and Enforcement
in the Charitable Sector (Washington, DC: Urban
Institute, 2016).
475. Elaine S. Povitch, “Should Nonprofits Have to
Pay Taxes?” Pewtrusts.org (March 5, 2015).
476. Daphne A. Kenyon and Adam H. Langley, The
Property Tax Exemption for Nonprofits and
Revenue Implications for Cities (Washington, DC:
Urban Institute, 2011), p. 2. Figure is for 2009.
477. Bowman and Fremont-Smith, “Nonprofits and
State and Local Government,” pp. 201–207.
Figures are for 2001–2002.
478. Quoted in Rob Meiskins, “Judge Terms
Modern Nonprofit Hospitals a ‘Legal Fiction,’”
Nonprofitquarterly.org (July 7, 2015).
479. Kenyon and Langley, The Property Tax Exemption
for Nonprofits and Revenue Implications for
Cities, p. 2. Figures are for 2009.
480. Zaid Jilani, “How Parasitic Universities Drain
Towns All Across America,” AlterNet (May 15,
2015).
481. Elaine S. Povich, “Short on Cash, Cities and States
Consider Taxing Nonprofits,” Stateline (October
4, 2016).

482. Adam H. Langley, Daphne A. Kenyon, and Patricia
C. Bailin, Which Nonprofits Make PILOTs and
Which Localities Receive Them? (Cambridge,
MA: Lincoln Institute of Land Policy, 2012).
Figures are for 2000–2011.
483. Daphne A. Kenyon and Adam H. Langley,
“Nonprofit PILOTS,” Land Lines (July 2016),
pp. 5–8.
484. Ruth McCambridge, “A County in Which Half
the Economy Is Nonprofit Driven,” Govexec.com
(July 9, 2015).
485. Donald F. Norris and Christopher Reddick,
“E-Government 2011: Trends and Innovations,”
Municipal Year Book, 2012 (Washington, DC:
International City/County Management Asso-
ciation, 2012) pp. 83–94.
486. Homsy and Warner, “Intermunicipal Coopera-
tion,” p. 55. Figure is for 2012.
487. Warner and Hefetz, “Cooperative Competition,”
p. 14, and as derived from data in Miranda
and Andersen, “Alternative Service Delivery in
Local  Government, 1982–1992,” p. 31, and
Hatry and Valente, “Alternative Service Delivery
Approaches Involving Increased Use of the Private
Sector,” pp.  216–217. Figures are for 1982–
2007.
488. Brown, “The Dynamics of Government-to-
Government Contracts.”
489. Lamothe and Lamothe, “The Dynamics of Local
Service Delivery Arrangements and the Role of
Nonprofits,” p. 791.
490. Amirkhanyan, “Monitoring across Sectors.”
491. Marvel and Marvel, “Shaping the Provision of
Outsourced Public Services,” p. 197.
492. Eva Witesman and Sergio Fernandez,
“Government Contracts With Private Organi-
zations,” Nonprofit and Voluntary Sector Quar-
terly 42 (August 2013), pp. 689–715. The
quotations are on p. 689.
493. Beth Gazley, “Beyond the Contract: The Scope
and Nature of Informal Government-Nonprofit
Partnerships,” Public Administration Review
68 (January/February 2008), pp. 141–154.
The  figure is on p. 144; the quotation is on
p. 146.
494. Gazley and Brudney, “The Purpose (and
Perils  of  Government-Nonprofit Partnerships,”
p. 389.
495. Beth Gazley, “Why Not Partner With Local
Government? Nonprofit Managerial Perceptions
of Collaborative Disadvantage,” Nonprofit and
Intersectoral Administration 457
Voluntary Sector Quarterly 39 (February 2010),
pp. 51–76.
496. Gazley and Brudney, “The Purpose (and Perils) of
Government-Nonprofit Partnerships.”
497. Rick Cohen, “Philanthropy Funding Government
Work? There’s a Foundation for That—Several,
Actually,” Nonprofitquarterly.org (April 13,
2012).
498. Beth Gazley, “How Philanthropy Props Up
Public Services and Why We Should Care,”
Nonprofitquarterly.org (March 27, 2015).
499. Rob Meiksins, “Another Misuse of Nonprofits?
Local and State Agencies ‘Transform,’” Chicago
Tribune (May 1, 2015).
500. U.S. Government Accountability Office, Tem-
porary Assistance for Needy Families: Update on
States Counting Third-Party Expenditures toward
Maintenance of Effort Requirements, GAO-
16-315 (Washington, DC: U.S. Government
Publishing Office, 2016), Highlights page.
501. Gazley, “How Philanthropy Props Up
Public Services and Why We Should Care,”
Nonprofitquarterly.org (March 27, 2015).
502. Ibid. School support growth figures are for 1995–
2010.
503. Rick Cohen, “Public Accountability in the Balance
when Gov’t Agencies Create Nonprofit Wings,”
Nonprofitquarterly.org (March 26, 2015).
504. Gazley, “How Philanthropy Props Up Public
Services and Why We Should Care.”
505. ProQuest LLC, ProQuest Statistical Abstract of
the United States, 2016, Table 598. Figures are for
2014.
506. Thomas Rotolo and John Wilson, “State-Level
Differences in Volunteerism in the United States,”
Nonprofit and Voluntary Sector Quarterly 41
(June 2012), pp. 452–473.
507. ProQuest LLC, ProQuest Statistical Abstract of
the United States, 2016, Table 598. Figures are for
2014.
508. Council for Excellence in Government and Hart-
Teeter Poll, America Unplugged: Citizens and
Their Government (Washington, DC: Authors,
1999), p. 5. In 1999, 27 percent had participated.
509. Rebecca Nesbit and Jeffrey L. Brudney, “Volunteer
Use in Local Government Service Delivery,”
Municipal Year Book, 2013 (Washington, DC:
International City/County Management Asso-
ciation. 2013), pp. 79–88.
510. Chi, Arnold, and Perkins, “Privatization in State
Government,” pp. 468, 479. Figures are for 2002.
 458 PA R T I V Implementing Public Policy
511. Chi and Jasper, Private Practices, p. 14. Data are
for 1997.
512. Nesbit and Brudney, “Volunteer Use in Local
Government Service Delivery,” p. 79. Figure is for
2007.
513. As derived from data in Warner and Hefetz,
“Cooperative Competition,” p. 15. Figures are for
2007. The question was not asked in 2012.
514. As derived from data in Hatry and Valente,
“Alternative Service Delivery Approaches Invo-
lving Increased Use of Private Sector,” pp. 216–
217. Figures are for 1982.
515. Warner and Hefetz, “Cooperative Competition,”
p. 15. Data are for 2007.
516. Jen Fifield, “Volunteer Firehouses Struggle to Find
Recruits,” Stateline (January 11, 2017). Current
figure is for 2014.
517. David Osborne and Ted Gaebler, Reinventing
Government: How the Entrepreneurial Spirit
Is  Transforming the Public Sector (Reading,
MA:  Addison-Wesley, 1992), pp. 68, 75, 196,
340.
518. William D. Duncombe and Jeffrey L. Brudney,
“The Optimal Mix for Volunteers and Paid
Staff in Local Governments: An Application to
Municipal Fire Departments,” Public Finance
Quarterly 23 (July 1995), pp. 356–384.
519. Jeffrey L. Brudney and William D. Duncombe,
“An Economic Evaluation of Paid, Volunteer,
and Mixed Staffing Options for Public Services,”
Public Administration Review 52 (September/
October 1992), pp. 474–481. The quotation is on
p. 474.
520. Koen P. R. Bartels, Guido Cozzi, and Noemi
Mantovan, “‘The Big Society,’ Public Expenditure,
and Volunteering,” Public Administration Review
73 (March/April 2013), pp. 340–351. The quota-
tions are on p. 340.
521. Independent Sector, Independent Sector’s Value of
Volunteer Time (Washington, DC: Author, 2016).
Figure is for 2015.
522. Matthew A. Liao-Troth, “Attitude Differences
Between Paid Workers and Volunteers,” Nonprofit
Management and Leadership 11 (Summer 2001),
pp. 423–442.
523. Astrid Pennerstorfer and Birgit Trukeschitz,
“Voluntary Contribution and Wages in Nonprofit
Organizations,” Nonprofit Management &
Leadership 23 (Winter 2012), pp. 181–191.
524. David M. Van Slyke and Janet L. Johnson,
“Nonprofit Organizational Performance and
Resource Development Strategies: Exploring
the Link between Individual Volunteering and
Giving,” Public Performance & Management
Review 29 (June 2006), pp. 467–496.
525. Corporation for National & Community
Service, Volunteering and Civic Life in America
(Washington, DC: Author, 2015). Figures are for
2013.
526. Bryan Terry, Amy Harder, and Dale Pracht,
“Understanding the Value of Volunteer
Involvement,” Journal of Agricultural Education
52 (2, 2011), pp. 118–127.
527. Paul Posner, Robert Yetvin, Mark Schneiderman,
et al., “A Survey of Voucher Use: Variation and
Common Elements,” Vouchers and the Provision
of Public Services, C. Eugene Steuerle, Van
Doorn Ooms, George Peterson, and Robert D.
Reischauer, eds. (Washington, DC: Brookings,
Committee for Economic Development, and
Urban Institute, 2000), pp. 503–540. The quota-
tion is on p. 504.
528. ProQuest LLC, ProQuest Statistical Abstract of
the United States, 2016, Table 598. Figures are
for 2014.
529. Ibid., Tables 147, 158. Dollar figure is for FY
2013. Enrollee figure is for 2012.
530. U.S. Department of Health and Human Services,
Office of the Inspector General, States’ Child
Care Certificate Systems: An Early Assessment
of Vulnerabilities and Barriers (Washington, DC:
Author, 1998), p. 3.
531. George E. Peterson, “Housing Vouchers: The
U.S. Experience,” Vouchers and the Provision of
Public Services, pp. 139–175.
532. Center on Budget and Policy Priorities,
Introduction to the Housing Voucher Program
(Washington, DC: Author, 2003), p. 2.
533. Elizabeth Kneebone and Natalie Holmes,
“Promise and Pitfalls of Housing Choice Vouchers
Vary across Nation,” Brookings.edu (August 14,
2015).
534. Center on Budget and Policy Priorities,
Introduction to the Housing Voucher Program,
p. 2.
535. Chi, Arnold, and Perkins, “Privatization in State
Government,” pp. 468, 479. Figures are for
2002.
536. Chi and Jasper, Private Practices, p. 14. Data are
for 1997.
537. As derived from data in Elaine Morley,
“Patterns in the Use of Alternative Service

Delivery Approaches,” Municipal Year Book,
1989 (Washington, DC: International City
Management Association, 1989), pp. 33–44,
and Hatry and Valente, “Alternative Delivery
Approaches Involving Increased Use of the Public
Intersectoral Administration 459
Sector,” pp. 216–217. Figures and services (p. 39)
are for 1988. Trend data are for 1982–1988.
538. As derived from data in Alliance for School
Choice, School Choice Facts (Washington, DC:
Author, 2014). Figures are for 2013.
CHAPTER
12
Intergovernmental
Administration
T he administration of a “single” domestic
policy  often involves a pastiche of public
administrators, and this is known as intergovern-
mental relations, or the series of financial, legal,
political, and administrative relationships estab-
lished among all units of government that possess
varying degrees  of authority and jurisdictional
autonomy.  These relationships are called feder-
alism when applied more narrowly to the federal
government’s relations  with state governments,
and the states’ relationships with  each other,
although the terms  often are used  interchange-
ably. Intergovernmental  administration, some-
times called intergovernmental management, is the
management and coordination of the relationships
among governments for the  purpose of achiev-
ing specific policy goals.
SOME SYSTEMIC FINDINGS
ABOUT FEDERALISM
The United States, of course, has a federal system of
governance, which refers to a union of national and
subnational governments, with distinct or shared
responsibilities assigned to each governmental level.
A unitary, or centralized, system concentrates power
in the top tier of governments.
Federal Systems versus Unitary Systems
Nations with federal systems generally are better off
than those with unitary ones.
460
Points Previously Made: Less Corruption, More
Efficiency As we noted in the introduction to Part
III, nations with federal structures correlate robustly
with less political corruption and smaller shadow
economies, and, as we explained in Chapter 7, they
also tax and deliver services more efficiently than
do those with unitary structures. But there are addi-
tional contrasts.
Fiscal Centralization, Federal Systems, and Public
Employees National fiscal decentralization (a
universal condition in federal systems, but which
is essentially absent in centralized ones) associates
with fewer public employees in the national govern-
ment, but also with more employees in subnational
governments and in total. This correlation differs
from the finding that federal systems (not quite the
same thing as fiscal decentralization) equate with
fewer total public workers.1
Fiscal Decentralization and Governmental Growth
The greater the degree of fiscal decentralization in a
country, the smaller the public sector’s share of its
gross domestic product (GDP),2 and the slower that
public expenditures, tax burdens, and governments
grow.3 However, the more that public spending (in
contrast to revenue collecting) is decentralized, the
faster that governments grow.4
From Federal to More Unitary Structures Over
time, federal systems tend to concentrate
greater  power at the top, and this occurs for two
reasons.
 Intergovernmental Administration 461

One is that, as societies develop economically,
“demands for equality of treatment over wider geo-
graphical areas” grow, and economies of scale wax
more appealing. When these demands spill over sub-
national borders, only the national government can
accommodate them efficiently.
This dynamic often is accelerated when major
social disturbances (such as war) break out, and
powers that have “always” been the exclusive pre-
serve of subnational governments are swept away in
favor of nationalizing them.5
Findings from the States and Communities:
Trust and Innovation
The greater the degree of fiscal decentralization in an
American state, the higher the level of public trust
in government (a single standard deviation increase
in either revenue or expenditure decentralization
correlates with a nearly 4 percent increase in trust-
ing residents), and the more local governments in
a state, the higher the level of trust (one standard
deviation in the number of governments correlates
with an almost 2.5 percentage increase in trusting
people).6 This trust is vital to good governance; as
we detailed in Chapters 1 and 11, public trust is crit-
ical in raising governments’ efficiency, effectiveness,
and responsiveness.
At root, intergovernmental relationships asso-
ciate strongly with innovation. More than four-
fifths of all “creativity in government” takes place
in state and local governments.7 State governments
are  notably open to adopting innovative policies
that are originated by other states,8 in contrast to
the federal government, which virtually disdains
state-created innovations.9 (The states, however, have
an indirect but effective impact on Congress; when
many states regulate particular kinds of businesses,
those businesses pressure Congress to pass a national
regulation to reduce regulatory confusion.) Local
governments, both general- and special-purpose, are
quick to create and copy new ways of doing things.10
GOVERNMENTS, THE
CONSTITUTION, AND THE COURTS
Americans are governed by a lot of governments,
and their number grows.
America’s Proliferating Governments
Table 12-1 identifies the 89,055 governments in the
United States by type, and indicates their fluctua-
tions in twenty-year increments since 1942, when
the  first regularly scheduled census of governments
was taken.
Most of the proliferation of cities and towns
occurred in the years following World War II, and
was largely due to unplanned metropolitan growth.
For instance, New Squier, New York, was established
so that a kosher slaughterhouse could be operated,
and Gardena, California, was founded so that its
residents could play poker legally.11
Special-purpose governments evidence the great-
est flux. School districts, as a consequence of the school

TABLE 12-1
Number of Governmental Units, by Type: 1942, 1962, 1982, 2002, and 2012
Type of Government 1942 1962 1982 2002 2012
Total 155,116 91,237 81,831 87,900 89,055
U.S. government 1 1 1 1 1
State governments 48 50 50 50 50
Local governments 155,067 91,186 81,780 87,849 89,004
Counties 3,050 3,043 3,041 3,034 3,031
Municipalities 16,220 18,000 19,076 19,431 19,522
Townships 18,919 17,142 16,734 16,506 16,364
School districts 108,579 34,678 14,851 13,522 12,884
Special districts 8,299 18,323 28,078 35,356 37,203
 462 PA R T I V Implementing Public Policy
consolidation movement, have withered by 88 percent
to less than an eighth of their number seventy years
earlier. (Even so, 46 percent  of school districts still
serve fewer than 1,000 pupils [the national average is
3,659], and a third have only one or two schools.12)
Special districts, largely as a result of popular resist-
ance to consolidating general-purpose local govern-
ments, more than quadrupled over the same period.
The Constitution: The Functions of
Federalism
The Constitution focuses on three facets of federalism.
Separate National and State Identities Most
fundamentally, the Constitution establishes sepa-
rate identities for the nation and the states. For the
nation, perhaps the most significant statement is
in Article VI: “This Constitution and the Laws of
the United States . . . shall be the Supreme Law of
the Land.” The most important clause for the states
is Section 3, Article IV, which stipulates that states
may prohibit the formation of new states, or parts of
new states, within their boundaries.
Distinct National and State Responsibilities Four
portions of the Constitution distinguish national and
state responsibilities. Section 8, Article I delegates
seventeen specific powers to the national govern-
ment, including defense, general welfare, and com-
merce, and leaves the remaining powers to the states.
The Tenth Amendment, which was added hastily in
response to such populist rabble rousers as Patrick
Henry, specifies that these remaining powers are
“reserved to the States . . . or to the people,” thereby
drawing a darker line that the national government
could not, presumably, cross. Section 9, Article I
prohibits the national government from exercising
certain powers, such as taxing state exports, and
its Section 10 forbids the states from undertaking
certain actions, such as coining money.
Integrating Nation and States Finally, the Consti-
tution deals with the integration of the national and
state governments by providing for collaboration
among them in the performance of some vital func-
tions. For example, the federal and state governments
cooperate in amending the Constitution, electing a
president, and, through Congress, enacting laws.
The Courts: Necessary and Proper Implied
Federal Powers
The Constitution’s federal features continue to be
refined by the courts. Without question, the most
influential single case in this process is McCulloch v.
Maryland, which was settled by the Supreme Court
in 1819.
The case involved Maryland’s attempt to tax the
Second Bank of the United States, which was located
in Maryland, but soon waxed into an argument over
whether the United States could even form a bank.
The federal government argued that a national bank
could be established because it was an “implied
power” under the Constitution.
Chief Justice John Marshall and his colleagues
concurred, citing the final sentence of Section 8,
Article I, which accords the federal government the
authority “To make all Laws which shall be nec-
essary and proper for carrying into Execution . . .
all the Powers vested by this Constitution in the
Government of the United States.” Hence, Congress
had the power to do whatever is “necessary and
proper to implement its specified functions.”
THE EVOLUTION OF
INTERGOVERNMENTAL
ADMINISTRATION
America’s governments have gone through five
phases in their administrative relationships. Early
scholars identified the first two of these phases with
lasting metaphors involving pastry, which we, with
admittedly dubious judgment, have extended.
The Layer Cake: Dual Federalism,
1789–1932
The Constitution recognizes only two levels of gov-
ernment: national and state. Hence, the terms, “layer
cake federalism” and “dual federalism,” indicating
that, during the nation’s first 143 years, the federal
and state governments stuck to their very separate
knitting. For example, when Congress, in 1854, did
try (unusually) to transfer funds to the states to help
them treat their indigent insane, the president vetoed
the bill on the logic that to encourage the states to
“become humble suppliants for the bounty of the

Federal Government” would reverse “their true rela-
tion to this Union.”13
In the aftermath of the Civil War, however,
the nation entered a period of dented dual federal-
ism. From 1865 to 1869, the country enacted the
Constitution’s Thirteenth, Fourteenth, and Fifteenth
amendments. These new civil rights policies ren-
dered constitutional federal involvement in previ-
ously sacrosanct state affairs.
The federal judiciary also began to under-
mine state sovereignty. Between 1794 and 1860,
the Supreme Court voided, on average, about one
state law per year. Between 1860 and 1937 (the
year when the Court radically reversed course and
actively sanctioned a dramatic expansion of federal
power), however, the Court overruled an average of
nearly seven per year. Dual federalism, if dinged and
dented, still survived, but at least “the pitiful position
in 1860 of the national government was ended.”14
Still, Washington kept its distance from state
and local governments. Even during the first thirty
or so years of the twentieth century, federal intergov-
ernmental grant programs accounted for less than
one-half of 1 percent of the national economy; their
modest number ranged from five to twelve;15 they
constituted about 3 percent of all federal outlays,16
one-half of 1 percent of the states’ total revenue (that
is, general revenue and other than general revenue,
as described in Chapter 8) and a trace amount of
total revenue in local governments.17
The Marble Cake: Cooperative Federalism,
1933–1958
With the ascension of Franklin Delano Roosevelt
to the presidency, in 1933, layer cake federalism
sagged and whorled into “marble cake federalism,”
marking a radical expansion of Washington’s inter-
governmental power and unprecedented coopera-
tion among all governmental levels.
Federal assistance shot from a fraction of 1
percent of the economy to 3.7 percent in 1934, and
never sank below 2 percent for the remainder of the
decade.18 The number of federal grant programs
more than doubled during the 1930s, and their
funding flexed by a phenomenal factor of fifteen,19
accounting for almost two-fifths of all federal
spending by 1939.20 Within two years (1932–1934),
federal grants exploded from less than 1 percent of
Intergovernmental Administration 463
total state revenue to a head-spinning 27 percent,
and direct federal grants as a percentage of all local
revenue quadrupled from 1 percent in 1934 to 4
percent in 1940.21
During the 1940s, World War II intervened,
followed by a two-term conservative president in
the  1950s. Federal grant dollars slipped signifi-
cantly, rarely exceeding 1 percent of the economy. Even
by the early 1950s, federal intergovernmental grant
programs numbered fewer than forty,22 and through-
out almost all of the fifties, they accounted from 5 to
6 percent of federal outlays.23 On average, about 14
percent of total state revenue, and 1 percent of all local
revenue, were provided by direct federal grants.24
Washington also chose to continue its policy,
begun at the nation’s founding, of not wrapping the
grass-roots governments in red tape; even as late as
1960, it had imposed only two “major” regulations
on state and local governments.25
The Pound Cake: Co-Optative Federalism,
1959–1978
Perhaps “pound cake” best describes federalism
during its co-optative phase, because Washington
was pounding state and local governments with
hundreds of highly specialized grants that came with
strong strings attached. But subnational govern-
ments discovered that, at least fiscally, Washington’s
pound cake was loaded with sugar and that they had
a sweet tooth.
A Flood of Federal Funds Federal sugar was first
savored in 1959, when the number of grants, and
the dollars in them, began their explosive growth
that thundered on throughout the next two decades.
Grants and their dollars peaked in 1978, when 492
grant programs (almost a tripling from 132 pro-
grams in 1960)26 accounted for 3.7 percent of the
economy,27 matching its record proportion of 1934,
and 17 percent of all federal expenditures.28
Between 1959 and 1978, federally-furnished
funding as a portion of state and local budgets
more than doubled, attaining nearly 28 percent
of these governments’ total outlays and an aston-
ishing 47 percent of their own source spending.
By 1978, federal grants accounted for 22 percent
of all state  revenue,29 and, from 1959 to 1978,
direct  federal aid  to local governments more than
 464 PA R T I V Implementing Public Policy
tripled, from 8 to 29 percent, and comprised over 9
percent of all local revenue.30
As an acerbic observer noted during this period,
“If Washington offered grants for cancer implants,
cities would line up to apply.”31
Washington Rules “During the 1960s and 1970s,
state and local governments, for the first time, were
brought under extensive federal regulatory controls.”
Over these two decades, Congress enacted thirty-
four “new laws or major amendments to statutes”
that regulated subnational governments, compared
with no such regulations whatsoever enacted during
the prior two decades, and it passed 157 preemption
statutes (or laws that remove authority from state
or local governments and transfer it to Washington),
compared with the passage of just forty-four such
statutes during the 1940s and 1950s.32 In the 1970s
alone, federal preemptions accounted for almost a
quarter of all preemptions imposed during the entire
twentieth century.33
By the end of the 1970s, state and local gov-
ernments verged on truly becoming “humble suppli-
ants” of a federal satrap.
The Crumble Cake: Competitive
Federalism, 1979–2008
Around 1979, there were signs that the intergovern-
mental cake was beginning to loosen, and deterio-
rate, into a “crumble cake,” marking the debut of
“Competitive,” or “Fend-for-Yourself,” federalism.
“Competitive,” however, no longer referred to sub-
national governments competing among themselves
for federal grants, as it did during Co-Optative
Federalism, but meant instead that all governments,
including the federal one, were competing with each
other for revenue, as indicated by the fact that, in
just three years during the 1980s, state tax collec-
tions rose by one-third.34 Elements of Competitive
Federalism remain today.
Faltering Faith in the Feds Washington, at least
in the popular mind, has lost the intergovernmen-
tal competition that Competitive Federalism intro-
duced. A remarkable 53 percent of the public, an
increase of more than two-fifths over thirteen years,
is convinced that the federal government requires
“very major reform.”35
This trend represents a vast shift in Americans’
governmental thinking. In 1936, 56 percent of
Americans favored the “concentration of power”
in the federal government, and 44 percent preferred
that power concentrate at the state level. Eighty
years later, 37 percent favored the feds on this
dimension, and 55 percent favored the states; this
reversal occurred in the 1970s and 1980s.36 Seventy-
one percent of Americans trust their local govern-
ments, and citizens have expressed greater trust in
local governments than either the federal govern-
ment (which currently garners just 28 percent37) or
state governments (62 percent) since 2000.38
The 1980s: Fractured Federalism After 1978,
federal assistance to states and communities plum-
meted—precipitously. Over the next ten years,
Washington’s intergovernmental aid as a share of
GDP fell by almost half, to 2 percent; federal assis-
tance as a portion of federal outlays declined by
more than a third, to 11 percent; direct federal grants
as a share of total state revenue slipped by nearly a
fourth, to 17 percent, and by a startling two-thirds,
to 3 percent of all local revenue.39
Federal regulation of subnational governments,
however, steamed on. Twenty-seven new or substan-
tially amended regulatory laws were enacted, five
more than in the previous decade; 100 preemption
statutes were passed, a modest nine fewer than in
the seventies; and, for the first time ever, there were
more regulations than grants.40
Worse, federal intergovernmental administration
and policy withered. After the 1970s, “the network
of federal offices and agencies that was established
to improve and rationalize intergovernmental man-
agement” was “diminished, disbanded,” and politi-
cized.41 Fitful, but not unsuccessful, efforts initiated
in the 1930s to form a coherent national policy for
localities dribbled away in the 1980s, and, by the
2000s, “the era of federal urban policy [was], like,
way over.”42
The 1990s and 2000s: Deceptive Federalism
Beginning in 1990, Washington re-infused states
and localities with federal funds. By the mid-2000s,
there were more grant programs than ever—
1,172,43 sponsored by at least twenty-nine agen-
cies,44 accounting for over 3 percent of GDP and
16 percent of all federal outlays.45 Direct federal

grants expanded their 1980s’ share of state and local
budgets, contributing 20 percent of all state revenue
(a record proportion—four-fifths—of all state agen-
cies received  federal assistance46), and 4 percent of
total local revenue.47
All in all, the two decades appeared to be mostly
good grants news for the grass-roots governments.
But appearances can be deceiving.
One deception that emerged during this period
concerned grants for payments for individuals, which
are federal allocations to state governments that
are earmarked for particular federal programs—
typically, welfare programs—that channel federal
funds through state governments to state residents.
In 1987, for the first time, the dollars in these
grants surpassed those in traditional program
grants,48 and, by the end of the 2000s, they accounted
for almost two-thirds of all grant dollars,49 twice
their proportion in 1978, when they amounted to
less than a third.50 (By 2014, payments for individu-
als accounted for 72 percent of all federal grants.51)
Grants for payments for individuals butter no
parsnips for state and local governments. They do
not fund state or local programs; they fund only
federal ones.
The gorilla of grants for payments for indi-
viduals is Medicaid, the healthcare grant for the
poor, accounting for 45 percent of all federal inter-
governmental grant dollars in 2010, up from 30
percent in 1990—a growth of 50 percent over two
decades.52 (By 2015, Medicaid’s share had reached
77 percent.53) From the 1980s through the 2000s,
the dollars in all federal intergovernmental grants
for each and every purpose steadily declined—with
one exception: Medicaid.54 During the 2000s, even
the growth in Medicaid’s funding slowed.
By 2006, the shrinkage in Washington’s inter-
governmental grants no longer could be hidden, and
federal grants, including Medicaid, as measured in
constant dollars, were in overall decline, sinking by 4
percent over three years. Even though direct federal
assistance had grown by more than three-fifths from
2000 to 2008,55 it had shriveled by almost a fourth
as a share of total state revenue and it remained
stuck at precisely the same percentage of all local
revenue.56
Crumbling and Devolution An unheralded charac-
teristic of the aptly named Crumble Cake federalism
Intergovernmental Administration 465
is that Washington favored a power-sharing empha-
sis with the states, and, increasingly, with localities
as well. The possible exception was the administra-
tion of President George W. Bush (2001–2009), who
was accused of “shift-and-shaft” federalism because
of his coercive approach. “By one count, Bush signed
more than two dozen federal laws that preempted
state initiatives, while agencies under his control
blocked states from taking action on the regulation”
of a wide variety of critical areas.57
The Angel Food Cake: Manna-from-Heaven
Federalism, 2009–Present
Beginning in Fiscal Year 2008, Washington sent
more than $3 trillion per year to the states, or the
equivalent of nearly a fifth of the states’ economies.
These expenditures include federal retirement ben-
efits (mostly Social Security payments), nonretire-
ment benefits (or payments to individuals, such as
Medicare for the elderly), grants (largely to state
governments), contracts (essentially to businesses
and nonprofits), and compensation to federal
employees, including the military. Grants, at 18
percent of federal spending in the states, rank third
after the two largest categories, retirement and non-
retirement payments to individuals, which account
for 62 percent.58
Federal grant dollars to state and local govern-
ments, adjusted for inflation, grew by ten-fold over
the last fifty or so years.59 Currently, federal grants
account for 31 percent of state general revenue and
direct federal grants amount to 5 percent of local
general revenue.60
The twenty-three “grant-making” agencies
sponsor “over 1,670 federal grant programs.”61 Of
these, 1,453 are grant programs for subnational gov-
ernments; 13 percent are not currently funded, and
11 percent include loan programs or private entities
(e.g., universities) as well as public ones, leaving a
total of 1,099 active grant programs that are directed
at state and local governments.62
Federal grant dollars constitute 17 percent of
all federal outlays. From 2008 through 2015, grant
dollars ranged from 3.1 percent to 4.1 percent
(in 2010) of GDP, and, from 2009 through 2011,
these expenditures matched or surpassed their twin
apexes as percentages of GDP that were attained in
1934 and 1978.63
 466 PA R T I V Implementing Public Policy
FISCAL FEDERALISM
As the foregoing review implies, money plays an enor-
mous role in the relations between Washington and
the subnational governments. This role is known
as fiscal federalism, or the granting of funds by one
government to other governments for the purpose
of achieving specific policy goals. It would be useful
to re-check Chapter 8’s Figure 8-1, which charts the
rivers and rivulets of intergovernmental revenue.
A World Turned Upside Down: A Century
of Fiscal Change
At the beginning of the twentieth century, local
governments dominated public finance, accounting
for 58 percent of all governmental expenditures.
(When we delete national defense and diplomacy,
localities accounted for an astounding 72 percent
of all governments’ spending.) Washington spent 34
percent of all public outlays, and the states a nominal
8 percent.64 Local governments retained their fiscal
prominence until 1934.65
In 1913, the Constitution’s Sixteenth Amend-
ment, which permits the federal government to
collect taxes on incomes, was ratified, and intergov-
ernmental finance would never be the same. In just
a quarter century, Washington emerged as the coun-
try’s reigning fiscal figure, the states had doubled
their portion of all public outlays, and local govern-
ments’ share had declined by nearly a third.66
Spending by the federal government surpassed
all state and local spending in 1970, a pattern
that has continued unabated ever since.67 Today,
Washington spends 58 percent of all governments’
outlays. After deleting subnational spending from
intergovernmental revenue to avoid double count-
ing, the fifty states spend 24 percent of total gov-
ernmental spending, and the nation’s 89,004 local
governments account for 18 percent.68
It is a world turned upside down.
The Grant-in-Aid: Foundation of Fiscal
Federalism
The foundation of fiscal federalism is the grant-in-
aid, or a conditional monetary gift from one govern-
ment to another that subsidizes an existing program
or encourages new ones.
Governors (and, we may safely assume, mayors
as well) love federal grants. Greater grant funding
associates positively with: higher approval ratings
for the governor; the governor’s party retaining
office, particularly in states that have more compet-
itive elections; and greater gubernatorial success in
dealing with the legislature on budgetary and policy
issues.69
In 2013, the Office of Management and Budget
(OMB), in an attempt to streamline federal grants
procedures, strengthen oversight, and reduce
duplication, consolidated no fewer than eight
OMB circulars that dealt not only with grants
to subnational governments, but all awards to
“nonfederal entities,” including businesses and non-
profits; the policy, Administrative Requirements,
Cost Principles, and Audit Requirements for Federal
Awards, can be  found in Title 2 of the Code of
Federal Regulations. How successful this effort will
be is unknown; simplifying federal aid was tried by
Congress as early as 1974, with the passage of the
Joint Funding Simplification Act, but with notably
limited success.
The Purposes of Federal Grants Over 55 percent
of all federal grant dollars sent to state and local
governments is for healthcare (four years earlier, the
figure was 45 percent); 94 percent of this growing
area is devoted to Medicaid, the costs of which
are shared between Washington and the states; 17
percent is devoted to income security, notably grants
for needy families and nutritional assistance; 11
percent supports transportation projects, two-thirds
of which are funneled to highways; and 10 percent
pertains to education, training, employment, and
social services.70
Types of Federal Grants The most common way
of distinguishing types of federal grants is as block
grants, which permit the recipient considerable
leeway in how they are spent (community develop-
ment grants are an example), and categorical grants,
which are quite restrictive and permit funds to be
used only for narrowly defined uses (e.g., nutrition
for the elderly). “While the distinction between
‘block’ and ‘categorical’ grants is useful, it is impor-
tant to recognize that in practice, the labels represent
the ends of a continuum: in the middle range, the
two types overlap considerably.”71

There are, however, more refined distinctions.
Eighty-six percent (a growing share) of all federal
grant programs are project, or discretionary, grants,
or funds that are distributed at the discretion of
federal administrators. Just 13 percent are formula
grants,72 which are funds distributed by an adminis-
tratively or legislatively prescribed formula, and the
federal government pays without limit (unless one is
contained in the formula) according to the formula.
Though small in share, formula grants disburse a
whopping 85 percent of all grant dollars.73 Finally,
2 percent of all grants are formula/project grants,74
which are funds awarded at the discretion of federal
administrators, but within the bounds of a formula,
such as the total amount of dollars that may be
awarded to a state.
Getting Theirs: Governments Lobbying
Governments
States and localities have organized themselves—
and formidably so—as lobbies to assure that federal
grants continue to flow and that federal policies are
responsive. The same may be said for state grants
and policies when local governments lobby. Of
course, the underwriters of all this intergovernmen-
tal lobbying, whether national or state, are the tax-
payers.
Governments Lobbying Washington The most
powerful of these national lobbies (which also
promote more professional governance) are the “Big
7” public interest groups composed of the Council of
State Governments, the National Conference of State
Legislatures, the National Governors Conference, the
International City/County Management Association,
the National Association of Counties, the National
League of Cities, and the U.S. Conference of Mayors,
but there are many more.
In Congress, states have banded together in
ten regional coalitions representing Appalachia,
the Coast, the Gulf of Mexico, Interstate 69, New
England, the Northeast and Midwest, the Northern
Border, the Sunbelt, the Upper Mississippi River
Basin, and the West. Local interests have formed
caucuses for former mayors, municipal finance,
ports, rural areas, and urban ones.75
The states spend from $7 million to $10
million each year lobbying Congress and federal
Intergovernmental Administration 467
agencies,76 and thirty-four states maintain offices
in Washington77 (Florida’s Victorian mansion in
Washington is referred to as its “embassy”). More
than 1,400 local governments78 spend about $60
million annually to hire Washington lobbyists, a
figure that doubled in less than a decade.79 “Of the
250 top-grossing [lobbying] firms in Washington,
48 have state, local and tribal governments as their
leading source of revenue, far more than any other
sector.”80
More recently, states are taking over their own
lobbying in Washington, eschewing the traditional
contracted lobbyists, who have experienced a “sig-
nificant decline” of about a sixth over just four
years.81 State delegations to Washington are taking
their place, at least in part, because steadily declin-
ing federal discretionary funds has likely made
Washington less relevant to state needs.82
Governments and Agencies Lobbying the State
Capitals The states are not spared. “Legislative
liaisons” for local governments, state agencies, and
other public entities comprise an estimated 25 to
35 percent of all lobbyists in the capitals of “most
states,”83 and they are rapidly growing.84
Higher education appears to lobby state gov-
ernments the most intensively; in Michigan, colleges
and universities accounted for over two-fifths of all
the lobbying dollars spent by government agencies
lobbying, followed by “state departments and agen-
cies” at less than a fourth.85 Forty-three percent, a
plurality, of a large sample of Georgia’s legislators
thought that their state departments’ lobbyists relied
more on information in making their cases than did
private-sector lobbyists; just 15 percent thought
otherwise.86
Federal Grants: Distortions at the Grass
Roots
Over six decades, the federal civilian workforce
remained about the same, but state and local
employees roughly tripled, in part due to a growing
reliance on federal grants.87 Such ratios imply, accu-
rately, that federal grants often distort a broad array
of subnational activities.
Governments and Grants: There Is No Free Lunch
Governmental “gifts” of “free money” cost the
 468 PA R T I V Implementing Public Policy
governments that get them. Beginning in 1911,
Congress required that some of its modest grants
be matched by state or local contributions,88 and
today more than half of all federal grants programs
and, of greater significance, over three-quarters
of grant dollars, involve some form of matching
requirements.89
But the heavier price of grant funds is more
subtle and profound. Almost fifteen percent of all
state and local workers are working for these gov-
ernments solely because federal grants pay the equiv-
alent of their salaries,90 and these federal “grantee
jobs” grew by 18 percent over twelve years.91
Policy Perversities In 1928, when federal grants
to the states did not attain even 1 percent of state
budgets,92 6 percent of state agency heads neverthe-
less reported that “Federal aid led to National inter-
ference in affairs that are the appropriate domain
of the State.”93 In 1974, when federal aid to the
states accounted for 22 percent of state budgets,94
over four-fifths of these executives bemoaned federal
intrusion.95 By the close of the 2000s, when federal
funding had reached new lows, just 38 percent of
state agency heads thought that federal “aid imbal-
ance” was skewing state programs, handily the
lowest percentage ever recorded in all eight surveys
taken over thirty-four years (1974–2008). The
pattern in these “roller coaster” figures is clear: The
more federal funds that states receive, the more likely
that state executives will perceive that they have less
authority to make state policy.96
Similar patterns pertain in local governments.
When federal funds were flush, about two-thirds of
municipal administrators and approximately four-
fifths of county managers would have made different
budgetary—that is, policy—decisions had federal
funds not been present.97 Local governments appear
unable to escape their “consistent dependence” on
grants, even though they have diversified their own
revenue sources and “significantly altered” their
structures for handling grants.98
The Flypaper Effect State and local officials
would be even more irked than they are about grant
money skewing their policies if they knew that, when
grant funds are spent to support a particular policy,
spending for that policy continues at substantially
higher levels and for longer periods of time than
when grant money is not, or never has been, a factor,
because revenue from other sources frequently fills
the void.99 (Simply discontinuing the grant-funded
program when the grant runs out is seldom done.)
Often, these new sources are new taxes; federal and
state “grants indeed result in future state and local
tax increases of roughly 40 cents for every dollar in
grant money received in prior years.”100
This costly cycle is known as the flypaper effect,
because dollars stick where grants land.
In the states, federal policy-specific grants have
“a much stronger effect” on state policies than does
any other financial variable, and funds continue to
stick to a particular policy area “for several years”
after the grant money is gone.101
The same holds true at the local level. Grants to
cities have a “positive flypaper effect” in eight out of
ten policy categories.102
Money’s Managerial Monkey Wrench Just as
federal assistance perverts policies at the grass roots,
it also mangles management.
In State Governments During the 1970s, when
federal assistance attained record shares of state
budgets, governors devoted far more time to
“state-federal” matters than they had during the
1960s,103 and over half of their top administra-
tors contacted federal personnel monthly, weekly,
or even daily.104 Since then, “first and foremost,
the expanded scope of federal aid programs pene-
trated widely and deeply into administrative enti-
ties in state government.”105 In almost every survey
taken over thirty-four years, “roughly half” of state
agency heads report that “federal aid fosters special
‘semi-exempt’ status” from oversight by the gover-
nor, legislature, or both.106
It gets worse. Those state governments that are
the most competitively disadvantaged in winning
federal grants also have the weakest managerial
capacities—they are the “most in need” but are the
“least equipped to capture grants.” As a consequence,
they are trapped in an inequitable and malignant
cycle of ever-diminishing management capacity.107
In Local Governments The same disruptive admin-
istrative patterns that occur in the states are found
in local governments. A decade after Washington’s
intergovernmental aid had peaked, and direct federal

grants as a share of local budgets had been slashed
by two-thirds,108 local officials’ contacts with federal
administrators had fallen off by nearly two-fifths,109
suggesting that intergovernmental funds displace
local executives in favor of federal managers.
Those Rascally Recipients!
At least some of that “creativity in government,”
noted earlier, which flourishes at the grass roots
seems be the wile that these governments devote to
skirting Washington’s wishes over how its grants
are used.
The states withdraw so much of their own
money from programs supported by federal grants
that, on average, a program actually receives only
forty more cents for every federal dollar granted to
it. In other words, states effectively skim the equiv-
alent of 60 percent of federal aid and use it for
purposes other than the feds intended.110 There are
also less visible ramifications. For instance, grants
awarded in non-election years to Republican gov-
ernors are more likely to exert a downward pres-
sure on tax rates than those awarded to Democratic
governors.111
Local governments look for loopholes. In
general, communities favor using federal funds less
for social services and poor people, and more for
construction projects and muzzling taxes.112 The less
specific the grant, the more likely that local govern-
ments will use it for “luxury” services, such as rec-
reational programs, and the less likely that it will be
spent for “normal” services, such as public safety.113
Federal grants clearly meant for anti-poverty pro-
grams have been used (quite legally) by local gov-
ernments to subsidize developers in building luxury
hotels and up-market department stores.114
Fiscal Federalism in the States
Fiscal federalism flourishes within the states, too.
The Purposes of State Grants States concentrate
their grants (including federal pass-through grants)
to local governments on education (67 percent, with
most going to school districts); welfare (11 percent,
almost all of which goes to counties); general
local government support (6 percent); health and
highways (4 percent each); and “miscellaneous”
Intergovernmental Administration 469
assistance (8 percent,115 much of it for corrections
and public housing116).
The Sensitive States? State grants-in-aid have
only rarely accounted for less than 30 percent of
total local revenue since 1970—a tribute to the
states’ constancy of purpose.117 A study of 162 large
cities found that, from 1977 through 2000, federal
aid per capita dropped by almost three-fifths, but
state aid per capita rose by close to half.118 After
2000, however, state support of localities, while still
increasing, dwindled; from 2000 through 2014, state
intergovernmental revenue to general-purpose local
governments and school districts rose by 10 percent,
but localities’ taxes and other own-source revenues
increased by 29 percent, after adjusting for infla-
tion.119 Of course, the federal government, through
its pass-through grants, plays a large fiscal role in the
states’ support, and an estimated two-fifths of all the
intergovernmental revenue that local governments
receive, ostensibly from their state governments, is
actually provided by Washington.120
Intriguingly, the states also are growing more
aware of the financial needs of their more distressed
cities (as noted in Chapter 8, twenty-two states keep
close tabs on their localities’ finances), a remark-
able development because, “at a time when central
cities are more dependent on their states than ever,
there is considerable evidence that their clout in
state legislatures is eroding.”121 State aid to needy
cities is increasingly comparable to federal aid in
that it is targeted toward the most distressed areas
and poorest people, although federal aid seems to
be slightly more focused on meeting the needs of the
most dysfunctional inner cities.122
REGULATORY FEDERALISM
Regulatory federalism is the imposition by govern-
ments of rules and mandates on other governments.
Ruling Robustly
Both the federal and state governments regulate
their subservient governments with relish.
The Feds Regulate Every year: Congress enacts
more than eight statutes, on average, that clearly
encroach on subnational governance;123 federal
 470 PA R T I V Implementing Public Policy
courts average more than 3,500 decisions relating to
over 100 federal laws that affect state and local gov-
ernments;124 and federal agencies issue an average
of about 4,250 “final rules” that apply to state and
local governments, a number that grows by a tenth
each year.125 Nearly three out of ten state and local
workers are employed solely because federal regu-
lations require their presence, a proportion that is
almost twice that of those grass-roots employees
who are effectively funded by federal grants.126
The States Regulate On average, a fifth of the
hundreds of measures introduced each year in
state legislatures directly affect the authority, pro-
cedures,  and finances of local governments,127
with counties bearing the brunt (at least relative
to cities) of state regulation.128 States impose on
their local governments some 4,300 laws that deal
with more than 200 local functions, and these laws
are proliferating.129 Sometimes these regulations
can be miasmic in detail, and legislatures have been
known to legislate the procedures for paving city
sidewalks, the methods for removing local weeds,
and the design of county stationery.130 Not sur-
prisingly, a survey of “well-placed [local] actors
in a position to know” found that, “for the most
part  . . . local jurisdictions, especially cities, have
experienced an erosion of authority at the hands of
state governments.”131
States concentrate on five broad areas of local
affairs: financial management (described in Chapters
1 and 8); human resources management (reviewed
in Chapter 9); changing local boundaries (explained
at the close of this chapter); administrative opera-
tions (focusing primarily on the assurance of trans-
parent governance), and local elections (all states
set voter qualifications and registration procedures,
and forty-six impose campaign finance disclosure
requirements). Only in the area of elections have
state laws governing localities decreased; the great-
est growth in these laws has occurred in human
resources and financial management.132
The Mandates Maw
A mandate is a far-reaching intergovernmental regu-
lation imposed by one government on another gov-
ernment that requires the receiving government to
advance specific goals or meet certain standards.
Federal Mandates “There is no universally
accepted definition of a federal mandate, and
surprisingly little consensus on the matter.”133
Accordingly, just how many federal mandates there
are is unknown, and counts range from thirty-six134
to 439.135
Three of the four kinds of federal mandates are
bound in the federal grants system; should a recipient
government ignore or violate them, it risks losing its
grants. Crosscutting requirements, found in virtually
all federal grant programs, stipulate compliance with
specific federal policies by all governments receiv-
ing federal assistance. Partial preemptions deny, in
limited ways, traditional prerogatives of subnational
jurisdictions because Washington demands that they
adopt federal standards. Crossover sanctions permit
the federal government to punish a state or commu-
nity by reducing or withdrawing federal aid in one
or more programs if its standards are not being sat-
isfied in another program.
A fourth type of federal mandate, direct orders,
are instructions from Washington to subnational
governments that, if not followed, can result in civil
or criminal penalties. Direct orders have little to do
with grants, and involve the constitutionally prob-
lematic prospect of stand-offs between the federal
and state governments.136
All four sorts of federal mandates have prolifer-
ated since 1960, with the greatest growth in crossover
sanctions and direct orders, “the two most openly
coercive” types.137 Federal mandates, however, are
not capricious exercises of power. Many, in fact, are
entirely responsible, such as those mandates that
assure civil rights, and these kinds of mandates are
rarely resisted by the governments on which they are
imposed.138 Indeed, some have been welcomed by
subnational officials as improving intergovernmen-
tal cooperation.139
The Unfunded Federal Mandates Mess An
unfunded mandate is a far-reaching intergovernmen-
tal regulation that does not provide the resources to
implement it.
Most Americans believe that the costs of federal
mandates should be shared among all governmen-
tal levels.140 State and local officials are so upset
by unfunded federal mandates that they declared
a National Unfunded Mandates Day, and the feds
themselves acknowledge that “the nation’s state,

local, and tribal governments urgently need relief
from the burdens of unfunded federal mandates.”141
“Up to 10 percent of a state’s general fund
budget goes to filling in gaps in federal unfunded
mandates,”142 costing all the states, on average,
more than $26 billion (and rising) per year.143 Local
governments, however, appear to bear the brunt of
unfunded federal mandates. Implementing just ten
to twelve of them cost cities and counties 12 percent
of their local tax revenue.144
In 1995, Congress passed the Unfunded
Mandates Reform Act, which bans any unfunded
mandate, whether contained in legislation or in
agency-issued rules, that costs states, localities, or
the private sector $50 million (in 1996 dollars) or
more per year to implement.
The act has not been particularly effective.
Congress has passed perhaps as many as eleven
laws,145 and federal agencies have issued at least
one rule,146 that affect state and local governments
but which violate the act’s unenforceable threshold.
Worse, the law’s procedures are so complex that it
is extremely difficult for administrators to recognize
that they are inadvertently inserting into their new
rules provisos that “nonfederal parties . . . might per-
ceive as unfunded mandates.” In fact, more than half
(sixty-five) of all 113 “final major rules” issued by
federal agencies over two years “had not triggered”
the act.147
State Mandates The states also mandate, and
these mandates matter—more so, apparently, than
federal ones. City managers report that state “man-
dates/policies” influence their decision making nearly
twice as forcefully as federal ones,148 but this influ-
ence appears to be entirely negative. “In none of the
[twelve] policy areas do city managers perceive the
impact of state mandates [imposed over ten years] as
positive; all the mean scores are negative.”149
Wealthy states with intense partisan compe-
tition and excellent public administration,150 and
where local governments dominate state finances
(that is, when they account for more than half of
all state and local tax revenue),151 impose the most
mandates on their local governments.
The Unfunded State Mandates Mess Determining
the fiscal burden of unfunded state mandates on
local governments has been described as a “fool’s
Intergovernmental Administration 471
errand,” but their costs are considerable.152 For
decades, Illinois has imposed, on average, an aston-
ishing eight new unfunded mandates per year on
municipalities and more than six per year on school
districts. Illinois’ unfunded enthusiasms (which are
a “main driver of high . . . local taxes”) have led to
“some of the top local tax rates in the country.”153
The states have tried a variety of methods, some
less cynical than others, to alleviate their impact.
Forty-two states require that each state mandate’s
probable fiscal impact on their local governments be
determined before the legislature imposes them,154
and seventeen legislatures purport to reimburse their
communities for the costs of implementing their
mandates, but these reforms are often bypassed
and have provided scant relief.155 Voters in ten
states, however, have ratified constitutional amend-
ments requiring that any unfunded mandate must
command a “super-majority” vote, ranging from
three-fifths to two-thirds, by state legislators to be
enacted, and this has been “the best anti-mandates
strategy” to date.156
The Wreckage of Regulatory Federalism
Just as intergovernmental regulations are proliferat-
ing, so are their costs, both budgetary and preemp-
tory.
Budgetary Burdens The many estimates of the
growing weight of “federal actions,” notably regula-
tions, on state and local governments range “from 2
to 3 percent” of their annual budgets “to 20 percent
or more,” costs that could become “a serious chal-
lenge to federalism.”157
For local governments, stewing at the bottom
of the federal hierarchy, the regulatory costs foisted
on them by both the federal and state governments
can be crushing. “From a range of studies, it appears
localities dedicate anywhere from 20 percent to 90
percent of their expenditures” to implementing both
federal and state rules and mandates.158
Preempting Power at the Grass Roots Over the
course of the 214 years that had elapsed since 1790,
Congress enacted 520 laws that substituted national
policies for state and local ones, or prohibited states
and communities from exercising powers that had
previously been theirs. Seventy percent of these laws
 472 PA R T I V Implementing Public Policy
were passed after 1960, and “will likely continue to
grow.” This “dangerous trend” has broadened from
a traditional concentration on interstate commerce
to health, banking, civil rights, and the environment,
and “has already caused a significant shift in the
balance of powers and responsibilities that substi-
tutes subnational self-determination with federal
will.”159
Federal Preemption of State and Local Power In
the states, nearly nine out of ten governors think
that Washington has taken over responsibilities that
more appropriately belong to the states;160 seven
out of ten state agency heads believe that “federal
involvement” in their agencies’ policies is moderate
to high;161 and large majorities or pluralities of state
officials report that federal agencies have overridden
state decisions and prevented their states from pur-
suing preferred policies “several times.”162
Perhaps three-quarters of federal intergovern-
mental regulations apply only to local governments
or directly affect local governments through the
states.163 Two-fifths of local officeholders believe
that Washington plays “an inappropriate role” in
their affairs, and half think that the feds microman-
age their “unrealistic” regulations.164
State Preemption of Local Power State regulations
prod similar reactions from local officials.
Sixty-four percent of city managers think that
state laws enacted over ten years are “frequently
intrusive or preemptive of city government powers
or authority,” and more than half report that
“states have frequently encroached into their terrain
through such actions as mandates, cost shifting, and
raids on local government revenues.”165
More than nine out of ten county officeholders
say that the responsibilities of their governments
have increased markedly, but not even a third of
them think that they have been granted adequate
authority by their states to execute their duties.166
Deregulating Regulatory Federalism?
During the 1980s and 1990s, Congress enacted four
laws, and the president issued a couple of executive
orders, that were designed, at least in part, to provide
regulatory relief to the grass-roots governments.
These efforts have had “little effect on agencies’
rulemaking activities.” Of 11,414 final intergovern-
mental rules issued by federal agencies over thirty-
three months, a whopping total of five contained a
legally required assessment of their impact on sub-
national governments.167
In the states, the Great Recession induced many
legislatures to lift regulations on their local govern-
ments and endow them with new powers, particu-
larly revenue raising powers, a trend that has been
hailed as “Fend-for-Yourself Localism.”168 Thirty-
one percent of city managers report “substantial
devolution” of municipal finance (only 19 percent
report “no devolution”) by the states over the
preceding ten years.169
Most local officials report that, when the state
allows them to raise their own revenue, their govern-
ments’ fiscal health improves substantially, and they
are convinced that fiscal autonomy is “the solution
to many of the problems that municipalities face.”170
Unfortunately, 66 percent of city managers state
that they have less authority in financial administra-
tion, and this was the most negative response in the
survey.171
MONEY, MANDATES, AND
WASHINGTON: NOW WHAT?
Nearly three-fifths of Americans believe that
Washington “is interfering too much in state and
local matters,” an increase of almost a fifth over
close to a half-century.172 Are they right?
Probably.
Washington’s Intergovernmental Role:
One Fine Mess after Another
The federal government’s role in intergovernmen-
tal relations is not merely, in Oliver Hardy’s (of
Laurel and Hardy) memorable phrase, “another fine
mess,” but several fine messes. To some degree, this
is understandable. The tenfold increase, adjusted for
inflation, over a half century in federal grant dollars
to subnational governments, cited earlier, created
“greater diversity and complexity in federal grants
management.”173
Another Fine Fiscal Mess That said, federal (and
state and local) management of federal grant dollars

is shaky. In separate audits covering three different
years, a total of nearly $2.8 billion was found lan-
guishing in hundreds of expired—but still open—
federal grants’ accounts that should have been
disbursed to thousands of designated recipients.
Nearly $10 million had lain peacefully unspent for
ten years or more.174 In 2011, in an effort to clean
up unspent dollars, the Office of Management and
Budget replaced two boards with a new Council on
Financial Assistance Reform. Although, three years
later, the number of expired accounts was decreasing,
the undisbursed money in them was increasing.175
Cities in particular have problems spending
federal grants, and it is estimated that cities fail to
spend from 9 to 20 percent of allocated grant money
in any given year. These lapses are attributed to
local “bureaucratic dysfunction or even corruption,”
flawed program design, poorly managed closeouts of
accounts, and a local lack of capacity. But, if Detroit
is any example, these defects can be overcome.
“Once the poster child for ineffective grants man-
agement [in 2013, “every federal grant dollar the
city received—more than $200 million—was poten-
tially at risk of being clawed back” by Washington],
Detroit is now the model for other communities,”
with less than a quarter of a million dollars “at risk”
in 2015; putting zero federal dollars at risk seems
likely in the not-too-distant future. Detroit accom-
plished this turnaround by investing in information
technology and a chief development officer.176
In addition to no payments, improper pay-
ments, explained in Chapter 6, concentrate in the
federal grant system; five of the ten federal programs
that account for 94 percent of all the dollars lost to
improper payments (or $118 billion) are intergovern-
mental grant programs. These five programs alone
are responsible for 38 percent of that $118 billion.177
Another Fine Managerial Mess As the fiscal mess
suggests, there are some serious problems in federal
grants management. For starters: federal officials
themselves admit that “few executive branch agen-
cies regularly conduct in-depth program evaluations
to assess their [grant] programs’ impact.”178
Why is this?
Inconsistent Intergovernmental Policies Perhaps
the overarching problem is that federal intergov-
ernmental policies are fraught with administrative
Intergovernmental Administration 473
inconsistencies. Environmental policy, for instance,
long has been characterized by less money, more
mandates, and more administrative waivers than
education and healthcare policies; these inconsisten-
cies correlate with heavier litigation for environmen-
tal policies than for the other two.179
This manic mix of managerial rigidities and
flexibilities has compounded “local problems such as
fiscal inequities and administrative inefficiencies. . ..
flawed the system of grantee accountability. . ..
limited the imposition of federal sanctions regarding
grant performance and fraud . . . [and] have further
complicated the ability of both states and localities
to adapt to changes in requirements.” These prob-
lems “have plagued federal grant programming for
the last several decades.”180
The Fragmentation of Federal Grants These
inconsistent policies have contributed to the severe
fragmentation of the grants themselves, and only
sporadic efforts have been made to reduce that frag-
mentation.
Three-fourths of all grant programs administer
less than 2 percent of all grant dollars, and a fifth of
all programs are responsible for less than 1 percent of
all dollars. This is intergovernmental fragmentation
of a rare order. To their credit, federal officials have
attempted to address the implications of grants frag-
mentation, but these efforts, extending over eighty
years, have largely come to naught, largely because
of congressional resistance.181 Although “there is no
authoritative, accurate tally of enacted grant program
consolidations. . .. [and] no commonly accepted
definition of what constitutes a grant program con-
solidation,” the Government  Accountability Office
“identified from  a variety of sources” just fifteen
grants that  had been consolidated over thirteen
years.182
Unknown Administrative Costs Even though
there are indications that most, if not all, granting
agencies have “mechanisms in place to capture the
administrative costs charged to their grant pro-
grams,” it appears that the costs “reported to the
federal government understate the actual cost to
administer a grant program.” Or those reports may
bear little relationship with reality because agencies
define these costs differently, so “different programs
may treat similar costs differently,” resulting in “a
 474 PA R T I V Implementing Public Policy
program with high administrative costs [that] may
not be less efficient than a program with low admin-
istrative costs.”
In addition, many grant programs impose caps
on administrative costs; the sole examination of these
caps found that five out of six programs had them,
ranging, remarkably, from 5 to 26 percent of the
grant. Because no one seems to agree on just what
comprises administrative costs in the first place, the
cost caps are largely meaningless and “can make some
programs look more administratively expensive than
others,” but, in actuality, might be less expensive.183
Grants, Taxes, and Corruption Regrettably, the
factors just discussed likely have added to the loss
of billions of grant dollars that are sent to tax cheats
who exploit federal confidentiality policies about
personal tax data.
More than 1,200 income-tax-exempt organiza-
tions that owe Washington around $70 million in
unpaid payroll taxes were awarded $14 billion in
direct federal grants.184 Some 39,000 recipients of
$124 billion in federal grants, or 4 percent of those
recipients who directly received just a fifth of all
federal grant dollars, owe $790 million in federal
taxes.185 More than 27,000 healthcare providers
who collect federal payments from Medicare, the
healthcare program for the elderly, or 6 percent
of all such providers, owe more than $2 billion in
federal back taxes.186
In each of these cases, the tax sums owed were
“understated.” Samplings of these scofflaws deter-
mined that from more than half to over four-fifths
had not disclosed that they owed back taxes when
they applied for their grants, a clear violation of
federal law and an equally clear indicator of their
criminal motivation.
Grants Management: A Renewed Federal Focus In
an effort to improve grants administration, the
Office of Personnel Management created, in 2010, a
new position titled “grants management specialist.”
Two years later, there were 1,414 of these special-
ists working in seventeen of the twenty-two grant-
making agencies surveyed; 52 percent, however,
were in a single department, and “more than half”
of the agencies made only “limited or no use” of
the specialists. Another 5,100-plus employees in
four departments, however, which accounted for
85 percent of all grant dollars and 61 percent of all
grant programs, were “significantly involved in man-
aging grants.”187
Another Fine Judicial Mess Adding to the incon-
sistencies that permeate federal intergovernmental
policies and administration are inconsistencies that
pervade the federal courts.
In policy matters, the judiciary generally shuns
invoking an overarching intergovernmental princi-
ple, and instead tailors its rulings to the policy in
question, typically supporting Washington in educa-
tion and environmental policies, but tilting toward
the states and communities in healthcare.188
Of greater significance, the Supreme Court has
addressed the federal government’s relations with
the states in confusing ways. In 1995, in United
States v. Lopez, the Court, for the first time since
1935, limited six decades of its own constitutional
interpretations, which had uniformly and vastly
extended the reach of the Constitution’s Commerce
Clause, and held that the clause could be invoked
justifiably only when one of three factors was
present: instrumentalities of commerce; use or chan-
nels of commerce; and activities that substantially
affect interstate commerce.
For the next seven years, however, the Court
courted consistency. Lopez was followed by nine
five-to-four rulings, all made by the same five jus-
tices, who displayed a remarkable “determination
to reconfigure the balance between state and federal
authority in favor of the states.”189 In five of these
decisions, the Court ruled that, because the states
have “sovereign immunity” (a phrase not to be
found in the Constitution), states cannot be sued in
federal or state courts, rulings that adversely affected
business owners, state employees, federal agencies,
women, minorities, and the disabled. In 2006, the
Court held that local governments, unlike state gov-
ernments, could be sued.190
From 2003 to 2012, the Court shuffled and
muffled. In three cases, it seemed to reassert some
federal power over the states,191 and in one it favored
state sovereignty.192
In 2012, the Court rendered an important ruling
about federalism in its controversial healthcare
decision that may not be fully appreciated. It held
that the Commerce Clause did not justify penaliz-
ing an inactivity (in this instance, not buying health

insurance), a decision that is expected to markedly
restrain congressional power.193
If there is an iota of judicial consistency in this
fine mess, it may be that “the Court has moved not
so much to grant more power to the states as to
prune back the power of Congress.”194
The Capable States
The states’ competence has increased markedly since
the mid-twentieth century, when the states were con-
demned as “the tawdriest, most incompetent, most
stultifying unit in the nation’s political structure.”195
State governments now boast “progressive adminis-
trative results that border on the revolutionary.”196
State governments are measurably more com-
petent than they were in the early 1980s.197 A peri-
odic  “report card” on state management accords
all the states an average grade of “B minus,”198 a
grade that puts state governments on a par with the
nation’s thirty-five largest and wealthiest cities,199
and is slightly higher than that of forty similar
counties.200
As the states’ capabilities improved, they simul-
taneously assumed greater responsibilities. The
number of different “common administrative agen-
cies” in the states, each with a unique policy mission,
has more than doubled since 1959, and now aver-
ages 111 per state. State governments are the largest
single employer in most states,201 and they “were
a key force in the growth of the national and local
governments” during the final half of the twentieth
century.202
Sorting Out Federalism: Who Should Do
What?
The question of which levels of government should
be responsible for what areas of public policy has
consumed scholars and policymakers since at least
1940.203 Surprisingly, perhaps, the views of experts,
citizens, and public officials are mostly in harmony.
Who Should Do What: Experts’ Views By far the
greatest budgetary burden on the states is healthcare,
described in Chapter 8. It makes sense for the federal
government to relieve the states of this responsibil-
ity, and fully take it over.204 Other areas that ration-
ally should be retained as federal functions include
Intergovernmental Administration 475
welfare for the most impoverished Americans,
research and development, central information gath-
ering, and interstate highways.205
Areas that make sense to share between the
federal and state governments are environmental
and natural resources programs and higher edu-
cation; student grants and loans should be mostly
a federal responsibility, and managing campuses
should be a state one.206
A strong argument can be made for a broad-
based federal tax on consumption and additional
taxes, the proceeds of which should be shared with
the states.207
States should be “clearly in charge” of those
areas that require tailoring and adapting to local
conditions—notably skills training, housing, child-
care, infrastructures, rural services, and economic
development. Whether the states wish to support
these programs is the states’ call: “federal programs
in these areas are devolved to the states or just wither
away.”208
Local governments should have primary respon-
sibility for roads, sanitation, and public safety.209
Authorities disagree about elementary and second-
ary education, with some holding that it should be
a largely local affair,210 and others arguing that it
should be entirely a state responsibility.211
Who Should Do What? Citizens’ Views Citizens
largely concur with the experts. Most Americans
agree that Washington should “take the lead” in
managing healthcare and environmental protection,
and that the states lead in the delivery of education
and economic development. A plurality of people
differ, if marginally, with the experts only in their
belief that the states, rather than Washington, should
manage anti-poverty programs.
“The American public has very reasonable and
consistent ideas about the policy responsibilities of
the national, state, and local governments.”212
Who Is Doing What? Is any of this near-universal
agreement between scholars and citizens reflected in
which governmental levels actually do what?
Happily, yes. Federal, state, and local budgets
largely correspond with public administrationists’
advice and Americans’ preferences about which gov-
ernments should do what across nineteen different
policy areas.
 476 PA R T I V Implementing Public Policy
“Public preferences about the national gov-
ernment’s role in specific policy areas are mir-
rored  very  closely by the national government’s
actual [budgetary] commitment in each of these
areas,” and, for nine of these areas, the percentages
of public opinion and federal spending are almost
identical.
Although state and local spending’s correlations
with the public’s preferences are not quite as crisp
as is federal spending’s, “the distribution of citizen
preferences [still] conforms closely to the relative
efforts of the various governmental levels within the
respective policy areas.”213
A Federal Reset?
Without doubt, Washington continues “to hold
much of the power and significance” that, beginning
in the 1930s, it gained over state and local govern-
ments,214 but a reset may be in the offing.
In 2009, President Barack Obama, “the first
genuine big-city president the country has had for
nearly a century,”215 created an Office of Urban
Affairs and an Office of Intergovernmental Affairs,
and placed both in the White House. He initiated
a concerted and continuing effort to assist them in
their management of federal grants. The president
also lightened the feds’ heavy regulatory hand in
grass-roots’ administration and policymaking, and,
as noted, poured federal money into states and
localities.
Washington accomplished much of this through
the American Recovery and Reinvestment Act of
2009, which not only pumped more than a third of
the new funding (about $800 billion) into federal
grants to, or through, the states, but also established
a Recovery Accountability and Transparency Board
that functioned as central point of contact. The
board and other innovations greatly improved rela-
tions between the federal government and the grass
roots.
FEDERALISM AMONG EQUALS:
THE STATES
If the semi-sovereign states occasionally verge on
being “humble suppliants” of Washington, they can
be Nordic gods when dealing with each other.
Interstate Cooperation
Because the Constitution requires that “full faith and
credit shall be given in each state to the public acts,
records, and judicial proceedings of every state,”
four devices of interstate cooperation have emerged
that are designed to solve their common problems.
Interstate Compacts and Commissions The grand-
daddy of interstate cooperation is the interstate
compact, which is a formal agreement between two
or more states that normally requires congressional
approval. The first interstate compact was the Treaty
of Beaufort, signed by Georgia and South Carolina
to resolve a boundary question; signed in 1787, it is
still in effect.
There are more than 200 interstate compacts in
operation, but only thirty-six were agreed to during
the nation’s first 131 years, so states evidently are
finding them increasingly useful. The typical state
has entered into twenty-five of them, spawning 116
interstate commissions to enforce their provisions in
education, rivers, and energy, among other fields.216
Uniform State Laws Uniform state laws are vir-
tually identical statutes that have been enacted in
two or more states, often in an attempt to preempt
national legislation that could deepen the federal
government’s involvement in state affairs. The
National Conference of Commissioners on Uniform
State Laws, founded in 1892 and funded by the
states, coordinates the process. States that have a
low level of administrative capability favor enacting
uniform laws.217
National and Regional Associations Beginning
in the nineteenth century, state governments,
and passels of their politicians and profession-
als, founded dozens of national organizations to
exchange good-governing ideas among themselves.
Thirty-three states formed three interstate organiza-
tions that promote regional interests. In 1972, the
thirteen-state Southern Growth Policies Board was
founded; in 1976, seven states created the Coalition
of Northeastern Governors; and, in 1977, thirteen
states formed the Western Governors’ Policy Office.
Multistate Legal Actions The newest wrinkle in
interstate cooperation is multistate legal actions,

which refer to states, working through the National
Association of Attorneys General, entering into law-
suits with other states against a common adversary,
such as the tobacco industry. Larger states with a
high level of administrative capacity favor their
use.218 These litigations are increasingly broadly-
based; in more than two-fifths of multistate legal
actions initiated since 2000, more than half of the
states’ attorneys general have been involved.219
Interstate Conflict
Despite these manifold methods of interstate co-
operation, all is not happy in the realm of the
American states. Water wars are rife among many
states. Thirty-nine states impose some sort of sev-
erance tax—that is, a tariff on natural resources
exported to other states. Other exports are tax free,
such as air pollution belching from coal-burning
power plants in the Rust Belt and Appalachia,
causing Northeastern states to file suits and petition
federal agencies for decades.
Kansas and Missouri have long battled with one
another in offering hundreds of millions of dollars in
tax breaks to out-of-state businesses in their effort to
lure them to their respective Kansas Cit(ies), which
are separated by only the states’ line; the “Kansas
City Border War” has not benefitted either city.
Other unwanted exports are more personal.
South Dakota, for example, gave ninety-three people
charged with felonies the choice of facing prosecu-
tion or moving to California; all ninety-three hustled
off to the Golden State. Kentucky established a
program for moving its most impoverished denizens
to wealthier areas—including to wealthier states.
Hawaii, which contracts with private prisons—in
eight other states—to house its excess prisoners,
implemented a pilot program to move its homeless
(at least those who volunteered) to other states. (The
homeless would voluntarily leave Hawaii? Really?)
Perhaps the most egregious example in this
regard occurred in Nevada. Over five years, Nevada’s
primary state psychiatric hospital bused more than
1,500 of its mentally ill patients to every state in the
continental United States, but not to those states’
psychiatric facilities; it just dumped them in bus ter-
minals. More than fifty of these patients were facing
criminal charges in Nevada, and there were dozens
of crimes, including violent ones, attributed to these
Intergovernmental Administration 477
psychotics that occurred in cities where they had
de-bused. Some recipient cities sued, and the hospi-
tal lost its national accreditation.
INTERGOVERNMENTAL
ADMINISTRATION IN THE STATES
The states deal with each other as equals, but their
relationships with their local governments are quite
different.
Creatures of the State
The Supreme Court first addressed the federal place
of local governments in 1845, holding in Maryland
v. Baltimore and Ohio Railroad that “counties are
nothing more than certain portions of the territory
into which the state is divided for more convenient
exercise of the powers of the government,” and, in
1907, the Court ruled in Hunter v. City of Pittsburgh
that a state legislature could decide municipal
boundaries as it saw fit, regardless of the preferences
of affected residents.
Both of these landmark cases cast local govern-
ments as “creatures of the state,” a phrase given to us
in 1868 by Judge John F. Dillon of the Iowa supreme
court, and which is now known as “Dillon’s rule.”
Judge Dillon held that local governments have no
independence beyond what the state grants them,
and no justice has questioned him.
The Insidious Introduction of Home Rule
Despite the powerful presence of Dillon’s rule, local
governments gradually have accreted for themselves
home rule, or all forms of local or regional self-
governance.
Missouri gave home rule its start when, in 1875,
it adopted a constitution that delegated to St. Louis
a power that, until that year, had been the exclusive
prerogative of the state legislature: “the power to
make a charter.” Charters typically permit localities
to choose their own form of government.
Forty-one state constitutions grant home rule to
their local governments. An additional seven states
grant “limited” home rule, which usually means
that home rule is granted by statute, and localities
must apply to the legislature for it, or that some
 478 PA R T I V Implementing Public Policy
types of local governments are excluded from home
rule; Congress authorizes limited home rule for the
District of Columbia.220
California, in 1911, was the first state to grant
home rule to its counties. Thirty-six states offer home
rule to their counties,221 and twenty-three of these
offer the option of charters.222 Seventy-eight percent
of all counties report that “their source of authority
for the structure of government is state law,” and just
9 percent of those counties with a charter option have
charter governments.223 Relative to other governmen-
tal forms, charter-form counties meet the needs of
their residents more directly; offer greater flexibility
to county administrators in selecting revenue sources,
choosing which services to provide, and more ways to
deal with fiscal stress;224 and are more innovative.225
A Steadier Helping Hand
Although, as we noted earlier, local government
managers typically are deeply resentful about what
they perceive as unwarranted state interference, there
are some positives. Besides providing their localities
with steady fiscal support (at least when compared
with federal support), all the states furnish them with
expertise in the form of departments of community
affairs. Thirteen states have enacted laws to control
urban sprawl, which have proven to be modestly
successful,226 and, as we noted in Chapter 8, twenty
states have adopted formal procedures for helping
local governments in fiscal stress (although “local
officials often resent state officials” who infringe
on their finances, no matter how tattered227), and
twenty-nine states do so for school districts.
State and local departments collaborate, too,
particularly when local budgets are small and local
“professional incentives” (most notably, perfor-
mance assessments that stress employees’ inter-
agency collaboration) are prominent.228
“The states have been roundly and soundly
chastised for their neglect of urban distress and
decline. . .. Yet a balanced view . . . shows the states
on record as taking numerous and varied urban-
oriented policy initiatives.”229
A Slow Centralization of State Power
Overall, there has been a steady, if slow, centraliza-
tion of state power. In 1932, no state was categorized
as “centralized,” but today a third—sixteen— are. In
1902, all states were “decentralized,” but, by 1977,
none were. Larger states tend to be more decentral-
ized, and smaller states are more centralized.230
INTERGOVERNMENTAL
ADMINISTRATION AMONG LOCAL
GOVERNMENTS
Local intergovernmental administration is distin-
guished by its uniquely intense collaboration.
Local Collaboration and Service Delivery
In 1954, the newly-founded city of Lakewood,
California, contracted with Los Angeles County
and some special districts to provide a plethora of
public services in the new city. “The City without a
Payroll,” as it became known because it had so few
employees, was the progenitor of the “Lakewood
Plan.” Its impact was profound in California, where
today 80 percent of the state’s newly-incorporated
municipalities adopt the plan,231 but Lakewood’s
influence extended across the nation as well.
Interlocal Service Contracts More than half of
America’s general-purpose,232 and many special-
purpose, local governments enter into interlocal
service contracts, which occur when a local gov-
ernment contracts with and pays one or more other
local governments to deliver services to its residents.
Almost 24 percent of all city and county services,
led by workforce development and job training pro-
grams (nearly two-thirds of them), are delivered “by
another government or entity” (an entity, presum-
ably, such as a public authority), a proportion that
is growing over time;233 thirty years earlier, “other
governments and authorities” delivered 13 percent
of services.234 Their use handily tops every other
form of local government service delivery, each one
of which, with the sole exception of local services
delivered by nonprofits, is in decline (details are in
Chapter 11).
Local officials rely almost exclusively on “infor-
mal discussions” to enforce these arrangements,
but the “perceived effectiveness [of these discus-
sions] diminishes with the length of the contract.”235
Understandably, local administrators prefer “not

to use other governments for services that require
extensive monitoring.”236
Besides interlocal service contracts, there are at
least three additional ways that local governments
collaborate in delivering services.
Joint Service Agreements A joint service agree-
ment is the cooperative delivery by two or more
governments of a local service to the residents of the
participating jurisdictions. More than half of local
governments deliver services jointly, led by libraries
and public safety communication.237
Shared Service Agreements A shared service
agreement is the consolidation of functions (support
services, led by information technology and pur-
chasing, are favored) “from several agencies into
a single, stand-alone entity.” Public administrators
find that their most bountiful benefits are improved
and standardized services and increased collabora-
tion, but not cost savings.238 It appears that the main
barrier to sharing services is some governments’ con-
cerns that the approach could lead to a loss in local
identity.239
Intergovernmental Service Transfers An inter-
governmental service transfer is “the permanent
transfer of total responsibility for the provision of
a service from one governmental unit to another.”
Forty percent of cities and counties have transferred
services, and 34 percent of cities and counties have
received such transfers. Sanitation services are trans-
ferred most frequently.240
A Future of Growth All of these sorts of local col-
laboration in delivering services will likely grow.
At least forty-two state legislatures, an expanding
number, have authorized their local governments
to deliver their services through interlocal service
arrangements.241
Motivations to Collaborate
Local officials cite a host of reasons underlying their
decision to cooperate with other localities in deliv-
ering their services, but, in contrast to their dealings
with the private sector, in which commerce and com-
petition are key, community and collaboration are
crucial when dealing with each other.
Intergovernmental Administration 479
Cost Savings Saving money is the leading reason
why local officials enter into interlocal service
arrangements, with 81 percent citing it.242
Economies of Scale Coming in second to savings
is the similar, “achieving economies of scale,” with 70
percent of cities and counties citing it.243 Economy
of scale has long been a singular prod. More than
thirty years ago, it was the reason “cited almost
overwhelmingly in all service categories by both
cities and counties” to enter into interlocal service
arrangements of all types.244
Opportunities to Collaborate The third-ranking
motivator for working with other governments is
the strengthening of “collaborative intergovernmen-
tal relations,” cited by 62 percent of local manag-
ers,245 a motive that has been strongly cited by local
administrators for more than three decades.246
Greater Local Benefits We observed in Chapter
11 that when local governments contract with the
private and nonprofit sectors to deliver services,
those sectors’ efficiency, effectiveness, and equitable-
ness in providing them are either “statistically insig-
nificant” or “negative and significant.”247
The opposite holds true when local governments
partner with one another to provide services. “Public-
public partnerships outperform their sectoral cousins
across all three dimensions of performance” (i.e., effi-
ciency, effectiveness, and equity), and this is the case
“even when controlling for past performance, service
expenditure, and organizational environments.”248
Local officials apparently understand and appreciate
this reality: not only do they use interlocal agree-
ments more than any other contractual or collabo-
rative system of service provision, but three-fifths of
them believe that interlocal cooperation promotes
“higher quality/more effective service delivery.”249
The Context of Collaboration
In addition to officials’ motivations to collaborate,
local governments face certain contextual conditions
that can increase, or decrease, their propensity to
cooperate with one another.
Public Poverty As we explained in Chapter 11,
those local governments that privatize the most are
 480 PA R T I V Implementing Public Policy
wealthier governments, but the opposite is true for
interlocal service arrangements, which are favored by
poorer governments250 and those that shoulder large
debt.251
Heavy Responsibilities Localities that have
assumed responsibility for delivering new services,252
and which are burdened with many service duties
and employees,253 correlate with a greater willing-
ness to enter into cooperative arrangements.
Restrictive State Policies In those states that have
made municipal annexation more difficult, imposed
local revenue limitations, and curtailed the creation
of new local governments, especially special dis-
tricts, there is a much higher probability that their
local governments will cooperate with each other in
funding and providing local services.254
Professionalism The local manager who is most
likely to collaborate with other governments in
delivering services: networks extensively in regional
associations of governments255 (the smaller the
association, the likelier it is that the manager’s gov-
ernment will participate256); is professionally well
connected; has a master of public administration
degree; shares “a common set of professional norms”
with colleagues in other governments;257 possesses
“specific managerial skills”; and leads a “high-
capacity” agency.258 City managers who harbor
abnormally high levels of professional ambition are
more likely to sell their city’s services to other local
governments, but are much less likely buy services
from other jurisdictions.259
Trust Me Trust plays a part, too, and a large part.
Local administrators simply have greater
confidence in the “faithfulness and honesty”
of their colleagues in other local governments
than they have in  prospective contractors in the
private and nonprofit sectors. This trust intensi-
fies when  those  colleagues have good reputations,
strong community  ties, and excellent performance
records.260
Local governments are much more likely to con-
tract out to other governments those services that
have high risks for “opportunism leading to contract
failure,” and are much less likely to outsource high-
risk services to private or nonprofit organizations,
“suggesting that governments view other govern-
ments as trusted contract vendors.”261
Concerns over Collaboration: Community
Counts
Whereas the leading obstacles for contracting out
services to the private sector is employees’ and pol-
iticians’ opposition, the chief impediment for con-
tracting with other governments is a “concern about
loss of community control,” a worry cited by 69
percent of local officials, followed by the closely
related “lack of a common vision, shared mission,”
at 46 percent, and a “lack of trust,” at 43 percent.
“Internal opposition from elected officials” ranks
fourth, at 38 percent, and “internal opposition
from employees” hobbles in at a distant fifth, at 29
percent.262
Recurring Regionalism
In light of local officials’ commitment to expanding
economies of scale, it is not surprising that there is
a long history of efforts to establish regional gov-
ernance within the states. Most of these early exer-
tions came not from local governments, but from
Washington.
Washington and Regional Governance Congress
entered this thicket in 1933, when it established
the National Planning Board, which, by 1936, had
formed planning agencies in every state except
Delaware. This period of “regional reform and plan-
ning was the most ambitious in U.S. history.”263
Congress disbanded the board in 1943.
Congress re-entered regional planning in 1959,
with an amendment to Section 701 of the Housing
Act of 1954, which channeled, over twenty-three
years, more than $200 million in “701 planning
funds” to state, regional, and local planning agencies.
Of even greater significance, however, was the
issuance of OMB Circular A-95, in 1969, which
established regional Councils of Government within
the states as gatekeepers for federal planning grants.
Between the mid-1960s and mid-1970s, these grants
burgeoned from nine to 160,264 and Councils of
Government rocketed from fewer than fifty in the
mid-1950s to 669 by 1976.265 By the mid-1970s,
federal regulations and legislation had created some

2,000 regional policy and planning bodies,266 includ-
ing not only Councils of Government, but also inter-
governmental groupings that specialized in solid
waste disposal, economic development, air quality,
disaster assistance, ground transportation, airports,
the elderly, crime, or health, among other areas.
The Great Washington Walk-Away In 1982,
Congress abruptly terminated its 701 planning
funds, and President Ronald Reagan’s Executive
Order 12372 eliminated OMB Circular A-95.
Both actions reduced by roughly a fifth the
number of Councils of Government to about
500,267 and those that survived cut their staffs and
the federal grant dollars that they administered by
approximately a third.268 Although Congress still
remains the largest single revenue source for the
typical Council of Government, followed by state
grants and membership dues,269 federal support is
at least a third less than it was before 1982.270 A
decade following the great Washington walk-away,
ten states had discarded intra-state regional plan-
ning altogether.271
The Reduced Role of Councils of Government
Today, most Councils of Government engage in a
“dual planning and service role,” focusing on eco-
nomic development, transportation, solid waste, and
land use. From a third to a half of these councils
directly deliver these and other services to regional
residents.272
Increasingly, Councils of Government are
being challenged by “other entities seeking regional
authority,”273 most forcefully by corporate alliances
with regional agendas that work closely with local
governments.274 Council heads report, tellingly, that
“most key decisions in their regions are made outside
of their councils,”275 and they are “somewhat tenta-
tive about the future of their councils as dominant
regional structures.”276
Consolidating and Centralizing Local
Services
Just as Washington has co-opted state and local
authority, and just as state governments are central-
izing power over their local jurisdictions, larger local
governments are taking over the responsibilities of
smaller ones.
Intergovernmental Administration 481
Fifty-six percent of all intergovernmental service
contracts let by cities are awarded to counties, which
also are the principal providers for more than half of
all services that are delivered through joint service
agreements.277
Of greater significance, larger local governments
are permanently taking over the traditional duties
of smaller ones, and at the request of those govern-
ments. Two-thirds of cities and counties with popu-
lations of at least 250,000 receive intergovernmental
service transfers, compared with less than a fifth of
local jurisdictions with fewer than 10,000 people.278
Fifty-four percent of all intergovernmental service
transfers from cities go to counties, and 14 percent
(the next highest) to regional organizations of gov-
ernments.279 These trends have persisted for at least
five decades.280
PLACE, PEOPLE, AND POWER:
THE PUZZLE OF METROPOLITAN
GOVERNANCE
A vexing question facing urban regions is that of
matching their public’s problems with the appropri-
ate scope, jurisdiction, functions, and even number
of governments that would deal most efficiently and
fairly with those problems. What is the best way, in
other words, of reconciling area with power?
No question is more critical—and wholly
unique—to public administration than is this one.
The City: In Sickness and in Health
The populations of almost all central cities are
shrinking, and this has grave implications for not
only them, but also for their surrounding regions.
Urban Hemorrhaging In just forty years (1950–
1990), the population density of the nation’s 522
largest central cities plummeted, on average, by an
astounding 50 percent.281 These cities lost their citi-
zens almost entirely to their surrounding suburbs. In
1950, slightly less than 70 percent of Americans in
the major metropolises lived in their central cities; by
2010, nearly 68 percent dwelt in their suburbs, and a
plurality of jobs were in the outer suburbs as well.282
When cities are thinly populated relative to their
suburbs, the consequences are not good.
 482 PA R T I V Implementing Public Policy
Urbs, ’Burbs, and Economics Of greatest signif-
icance, any jurisdiction that loses population also
loses wealth. Average per capita income in the
cities, which had been somewhat higher than in the
suburbs, began to decline in 1960, and, by 1990,
had hit 85 percent of what suburbanites earned,
where it has remained ever since.283 Moreover, 74
percent of the nation’s people living in concentrated
areas of poverty—that is, poor people clustered
in very impoverished places—are in the big cities,
although the suburbs’ share is growing over time.284
Increasingly, metropolises are segregated less by
race, and more by income.285
Stanching the Bleeding: Diversity and Elasticity
To stanch urban hemorrhaging, both in population
and in wealth, cities must grow. To grow, cities must
be diverse and elastic.
The fastest-growing cities are those that draw
people from all racial groups,286 so it follows that it
is in the cities’ self-interest to cultivate diversity.
Elasticity is a city’s ability to grow by in-filling
vacant areas with people, or by expanding its
boundaries to include people living in its suburbs, or
both. “The first law of urban dynamics” is that “only
elastic cities grow,” both in population and terri-
tory.287 Inelastic cities lose population. Compared
with elastic cities, inelastic cities are older and
poorer; more racially and economically segregated;
less educated; less prudently managed and fiscally
viable; less able to adjust to economic change; enjoy
faster non-factory (e.g., service jobs) job creation;
and are less effective in advancing the prosperity of
the entire metropolitan area.288
Regrettably, urban elasticity is a rare commod-
ity. Three national surveys of city managers con-
ducted over ten years consistently found that “the
two major economic development barriers” are the
availability of land, followed by its cost. From two-
fifths to more than half cite these impediments to
elasticity.289
The Metropolis: Lots of Little, Layered,
Local Governments
Metropolitan statistical areas are regions with one
or more cities of at least 50,000 people and their
suburbs. (We shall also refer to metropolitan statis-
tical areas as metro areas or metropolises.) Metro
areas cover a fifth of America’s land290 and contain
more than four-fifths of its people.291 Over the past
seven decades, their number nearly tripled to 381.292
About two-fifths of all local governments
(and two-fifths of all municipalities) are found in
metro areas, nearly a quadrupling over fifty years,
and today these areas contain an average of more
than 100 local governments. Allegheny County
(Pittsburgh), Pennsylvania, may hold the record,
with a staggering 323 “governmental units” of all
types.293 These governments govern few citizens—
fewer than 6,000, on average.294
Focusing only on the proliferating number of
little local jurisdictions in metro areas does not do
justice to their confusing and overlapping nature.
More than six out of ten Americans are governed,
and taxed, by two or more layers of the nation’s
38,917 general-purpose local governments. In thirty-
eight states, citizens are governed and taxed by up
to two layers of these governments simultaneously,
and, in ten states, some residents are governed and
taxed by three layers of them!295
These counts do not include America’s 50,088
special-purpose governments, which also tax or
charge fees for services. Residents of metro areas
fall under the jurisdiction of a half-dozen or more
of the country’s 37,204 special districts, a figure that
excludes its 12,884 independent school districts.296
The boundaries of at least two-fifths of special dis-
tricts, and two-thirds of school districts, are not
coterminous with those of general-purpose local
governments, and meander over them or within
them.297
Given the confusing complexities of metro gov-
ernance, it is not surprising that “a great deal of
intellectual energy, spanning several decades, has
gone into efforts to determine the correct pattern
of organization for metropolitan areas.”298 We con-
sider these next.
Ultralocalism: The Quest for Metropolitan
Efficiency
Ultralocalism299 (an admittedly loaded word), or,
more conventionally, governmental fragmentation,
decentralization, or differentiation, is “the number of
governmental units per 10,000 residents in a metro-
politan area.”300 The more governments per 10,000
residents, the more governmentally fragmented the

metropolis. Most metropolitan areas, 89 percent, are
highly fragmented.301
Ultralocalism: The Theory The scholarly niche
known as “metropolitan organization,” or “local
public economies,” is a hands-on variant of public
choice explained in Chapter 10, and celebrates ultra-
localism on the logic that “multinucleated political
systems” provide the most efficient governance for
metro areas.302
Efficiency is achieved in fragmented metropo-
lises because many cheek-by-jowl governments are
collaborating and competing to serve metropolitan
citizens. Collaboration lowers costs by introdu-
cing regional economies of scale. Competition can
produce higher quality services at lower cost because
it allows metropolitans to “vote with their feet” (a
phrase much favored in this literature), moving
easily from one community to another if they are
dissatisfied with local governing, and taking their
tax revenue with them. By contrast, a single, met-
ropolitan-wide government is less efficient, just as a
corporate monopoly is less likely to provide its cus-
tomers with the best goods and services at the best
price in a marketplace that it monopolizes.
Ideas have power. By the 1980s, even long-
standing federal friends of coherent subnational
governance had turned “from being a champion
of strong regional governance to an advocate of
public choice with its tacit acceptance that fragmen-
tation is good,”303 and Washington had abandoned
its “few national inducements to metropolitan
coherence.”304
Issues with Ultralocalism There long has been
a persistent perception among local public admin-
istrators, which is shared by growing numbers of
researchers, that “multinucleated political systems”
do not cut it.
Ultralocalism as Confusion In ultralocalist metrop-
olises, confusion frequently flourishes.
An example: In Louisiana, a speeding motorist
was followed by police from no fewer than seven
cities before he rolled to a stop.
Another: When St. Louis County plainclothes
detectives were conducting a gambling raid, they
were promptly arrested by police from the town of
Wellston, who were staging their own raid.305
Intergovernmental Administration 483
Ultralocalism as Irresponsibility In fragmented
metropolises, buck passing is greatly eased.
An example: “A woman tourist who stopped
overnight at a motel near Miami had to telephone
three police departments to report a suspected
prowler outside her door.” We do not know if any of
these departments responded to her call.
Another: There was a fire in a house fewer
than three blocks from a fire station in Las Vegas,
Nevada, but just beyond the city limits. Las Vegas
fire fighters had been instructed to prevent the
fire from reaching city property, so they carefully
watched the house burn until county fire engines
arrived. Angry neighborhood residents hurled rocks
at the immobile city fire engines, causing substantial
damage.306
Ultralocalism as Dissatisfaction A criticism of
ultralocalism is that it focuses on lowering taxes
and often ignores citizen satisfaction with ser-
vices.307 The ultralocalists may have their reasons
for this narrow focus, as broader research shows
that centralized metro governments correlate more
strongly with higher citizen satisfaction with public
services  than do fragmented metropolises.308 This
holds true for citizens of color as well as white
citizens.309
If the ultralocalists do, in fact, believe that
metro residents move to other towns only because
they are unhappy with local taxes, then their belief
seems, at best, incomplete. Recall from Chapter 8
that citizens display a marked willingness to pay for
local services. (Thirty to 42 percent would pay more
in federal taxes for better services.310) Effective and
well-managed government may matter more than
tax rates.
Ultralocalism as Inequity “In general, the more
highly fragmented a metro area is, the more seg-
regated it is racially and economically.” Highly
fragmented metropolises have far wider income
gaps between inner city and outer suburb and
more concentrated poverty rates, which is “the
single most important indicator of an urban area’s
social health,”  than do more centralized metro
areas.311 Worse, poor communities in highly frag-
mented metropolises receive fewer services that
they need than do poor communities in centralized
metropolises.312
 484 PA R T I V Implementing Public Policy
Ominously, after a decade of dramatic decline
during the 1990s, concentrated areas of poverty
are expanding.313 Ominously? Yes, because concen-
trated poverty comprises a “critical mass” of “social
tinder”314 that can ignite, and ignition is most likely
to crackle in ultralocalist metropolises and inelastic
municipalities.
The three most disastrous urban race riots of
the 1960s—in Los Angeles in 1965 and in Newark
and Detroit in 1967, in which 100 people died—all
occurred in highly fragmented metropolitan areas
and in cities with ratings of “zero elasticity” (Newark
and Detroit) or “low elasticity” (Los Angeles, which
re-exploded in 1992 at a cost of fifty-five lives).
These are the lowest two of the five elasticity rank-
ings. Miami’s wrenching race riot in 1980, in which
eighteen died, Cincinnati’s three-day riot in 2001,
and Baltimore’s riot of 2015 also erupted in cities
with zero elasticity.315 Riots also occurred in racially
troubled Ferguson, Missouri, in 2015; Ferguson is
located in St. Louis County, a metropolis that not
only has zero elasticity, but, with 146 governments
of all types, numbers among the most fragmented
metro areas in the country.316
Inelastic cities and fragmented metro areas asso-
ciate with civic rage.
Gargantua: The Quest for Metropolitan
Efficiency—and Equity
Dissatisfaction with the ultralocalist status quo has
produced an effort to reform fragmented metropol-
itan governance. The movement has been labeled,
memorably, gargantua317 (yet another loaded word),
but the more accepted terms are centralized govern-
ment and centrism, regional government and region-
alism, and metro, or metropolitan, government.
A metropolitan government is a general-purpose
local government with “all of the powers of a muni-
cipality under state law” (especially “key planning
and zoning powers”), which contains within its
limits at least 60 percent of the people living in its
metropolitan area, and most (but ideally all) of the
area’s major cities. A metro government “must exer-
cise exclusive powers within its jurisdiction.”318
The Grails of Gargantua At root, the ultralocalists
are concerned with essentially one value: efficiency
in the delivery of local services.
So, too, are the gargantuans. There is a long
history of practical analyses that promote enhanced
efficiency through local governmental consolida-
tion.319 But, in contrast to the ultralocalists, the
gargantuans also hold that fixating on govern-
mental efficiency when so many metro areas are in
advanced states of decay, division, and degradation
smacks of rearranging the deck chairs on the Titanic.
“Reversing the fragmentation of urban areas is an
essential step in ending severe racial and economic
segregation. . .. Areas characterized by geographi-
cally large, multipowered governments,” by contrast,
“tend to promote more racial and economic inte-
gration and achieve greater social mobility.” Metro
government, by definition, radically reduces, even
eliminates, fragmentation. It recognizes that central
cities and their suburbs are mutually dependent for
success on each other.320
A Little-Known Gargantuan Benefit: Prosperous
Metros An advantage of gargantua not shared by
ultralocalist metropolises is economic. An analysis of
263 metropolitan areas containing at least 500,000
people in twenty-one developed democracies, includ-
ing the United States, found that “for each doubling
in the number of municipalities per 100,000 inhab-
itants within a metropolitan area, labour productiv-
ity in the metropolitan area decreases by 5–6%.” By
contrast, the lower the level of governmental frag-
mentation, the higher the rate of the gross metro-
politan product’s average annual growth per capita;
the economies of the least fragmented metros, on
average, grow about one-and-a-half times greater
over ten years than the most fragmented.321
Full disclosure: a more limited analysis of the
fifty-one largest American cities found that “politi-
cal fragmentation may be inefficient and duplicative,
but it does not appear to damage local economic
growth”; ultralocalist metros, in fact, may “do a
bit better” economically than centralized ones,322
despite, apparently, the study’s own finding that
fragmented metros are inefficient. That said, the
larger global study strikes us as persuasive.
The Efficiency Question
Central to the debate over ultralocalism versus gar-
gantua is the question of efficiency: which form
delivers services more cost-effectively?

Much of the ultralocalist literature agrees
that metropolitan areas with more local govern-
ments offer a greater variety of services and deliv-
ery mechanisms, spend less, and have a lower rate
of expenditure growth than those with fewer local
governments.323
Although this literature implies that these
factors lead to more cost-effective services, it
appears that the main ultralocalist factor associated
with efficiency is that of collaboration among gov-
ernments in delivering services.324 Collaboration, as
we have noted, is one of ultralocalism’s two major
components (the other is competition), and inter-
governmental collaboration is but a messier form of
economy of scale, which is the essence of efficiency
in the gargantuan model. Gargantua is predicated
on the premise that sweeping away slews of stunted
local governments and establishing in their place a
comprehensive regional government “is much better
than trying to get multiple local governments to act
like a metropolitan government.”325 Regional gov-
ernments can deliver economies of scale unilaterally,
and without engaging in endless and inefficient bar-
gaining among localities.
In addition, as we detailed in Chapter 11,
central cities—and their centralized governments—
govern far more people than do suburban and rural
governments, and this reality provides cities with far
greater economies of scale—economies that are the
structural cornerstone of more efficient service deliv-
ery. Introducing a centralized government to deliver
services for even more people increases economies of
scale even further.
There are many data to support this view. A
massive international study of large metropolitan
areas concluded that those with a regional gov-
ernment “strongly negatively correlated with the
development of urban sprawl.” Sprawl, of course, is
antithetical to concentrated populations, which are
crucial to capitalizing on economies of scale in deliv-
ering services cost-effectively. In fact, in those metros
lacking a central government, sprawl grew, and in
those with a central government, sprawl actually
shrank and population density intensified.326
When gaggles of governments dominate, effi-
ciency suffers. Consider Illinois, which has more local
governments than any other state—6,963, accord-
ing to the U.S. Census Bureau, although Illinois
itself identifies 8,480 localities that “collect taxes or
Intergovernmental Administration 485
have some fiscal authority,” and even that number
is known to be incomplete.327 Illinois also has the
second highest effective property tax rate, the fifth
highest combined state and local gas tax rate, and
the eighth highest local tax collections per capita in
the nation. Governmental fragmentation, along with
Illinois’ enthusiasm for imposing unfunded mandates
on its localities, noted earlier, explain why the state
“consistently ranks in the top quartile when it comes
to key local government tax statistics.”328
The obverse of fragmented governance is the
fact that little territorial sprawl and greater popu-
lation density associate positively with more effi-
cient delivery of services.329 An example: Kansas
City, Missouri, with 1,460 people per square mile,
is, according to its own officials, simply unable to
afford the same level of basic services as the city of
St. Louis, Missouri, because St. Louis, which was
designed to be compact (the city, but not, alas, St.
Louis County), has more than three times the popu-
lation per square mile (4,805).330
The road to greater metropolitan efficiency
seems to be less one of enervating and time-
consuming collaboration and competition, as the
ultralocalists contend, and more one of centralized
government and dense population.
Mincing Toward Metro
Only 11 percent of metropolitan areas are served
by regional governments in twenty-one states, and
most of these are medium-sized communities; only
3 percent of the 80 percent of Americans living in
metro areas are served by metro governments.331
Reformers have developed two main approaches
to extend regionalism’s reach.
City-County Consolidation One approach is city-
county consolidation, or the unification of the gov-
ernments of one or more cities with the surrounding
county in which the boundary lines of the jurisdic-
tions involved become coterminous. More than four-
fifths of all metro areas are in a single county,332 so
city-county consolidation would seem to be a prom-
ising route toward metropolitan-wide government.
As a practical matter, however, consolida-
tions have not made much progress. According to
the U.S. Census Bureau, there are only thirty-four
consolidated governments, although the National
 486 PA R T I V Implementing Public Policy
Association of Counties cites forty-two.333 Whatever
the number, it is tiny, toting up to about 1 percent
of all county governments. The first nine city-county
consolidations (1805–1907), and two in 1969 and
1998, were executed by legislative fiats,334 an option
that remains “fully within the legal powers of most
state legislatures, even if at present such sweeping
urban reorganization is beyond legislatures’ desires
and political powers.”335 The remainder—twenty-
seven, by one count—was implemented by popular
referenda, or about a fourth of the 105 such refer-
enda held between 1902 and 2010.336
Although the perfunctory pace of city-county
consolidations is quickening (more than three-
fourths have been achieved since 1947337), citizens
are not enthusiastic about them. Of the 166 consol-
idation attempts (whether by legislative fiat or ref-
erendum) initiated since 1800, only 22 percent have
been successful.338 Why is this?
One reason is state legislative reluctance. Only
fourteen states, a declining number, specifically
authorize their cities and counties to consolidate.339
Another is klutzy consolidation campaigns.
Those that advocate greater governmental efficiency,
even though this is an entirely valid reason to con-
solidate, almost always fail; those campaigns that
offer a vision of greater economic development and
demonstrate that the “existing political structure” is
unable to fulfill it, almost always win.340
Municipal Annexation An incremental approach
usually is more successful in moving toward metro
government, and the paramount piecemeal proce-
dure is municipal annexation, initiated in 1854 by
Philadelphia, in which cities extend their boundaries
to subsume their surrounding territories.
During the nineteenth century, suburbs were
mostly agreeable to annexation by central cities
because it was the cities that could offer a relia-
ble supply of water, but, in the twentieth century,
suburbs built their own water works and, as inner
city crime and poverty grew, suburban resistance to
central city takeovers strengthened.
States allow their municipalities to annex in five
ways. Ten states rely on legislatively-created special
boards, and their use has held steady over time.
The two simplest methods, unilateral annexations
authorized by state legislatures or city councils, have
declined over three decades to six and eight states,
respectively, but the two most problematic proce-
dures, popular referenda (used in twenty states) and
judicial determination (six states), have grown.341
Even though the states have made annexation
more difficult, cities are annexing more than ever.
About nine out of ten central cities that can annex
do so,342 and, each decade, cities annex consid-
erably more land and people than in the previous
decade.343 On average, more than 60,000 municipal
annexations are executed every ten years,344 expand-
ing the boundaries of more than four-fifths of the
522 largest cities by a minimum of 10 percent.345
In Sum For the past half century, fragmentation’s
friends have formed mainstream thinking about
urban administration. Today, this is changing, and
the result is a renewed regionalism that might have
been stillborn without recent research on the rela-
tions between metropolitan efficiency and citizen
equity.
Ideas have power.
NOTES
1. Jorge Martinez-Vazquez and Ming-Hung Yao,
“Fiscal Decentralization and Public Sector
Employment,” Public Finance Review 37
(September 2009), pp. 539–571.
2. Jason Sorens, “The Institutions of Fiscal Feder-
alism,” Publius 41 (March 2011), pp. 207–231.
3. Silika Prohl and Friedrich Schneider, “Does
Decentralization Reduce Government Size? A
Quantitative Study of the Decentralization Hypo-
thesis,” Public Finance Review 37 (November
2009), pp. 639–664.
4. Sorens, “The Institutions of Fiscal Federalism.”
5. Alan T. Peacock and Jack Wiseman, The Growth
of Public Expenditure in the United Kingdom
(Princeton, NJ: Princeton University Press, 1961),
pp. xxi–xxxi. The quotation is on p. xxv.
6. Oguzhan Dincer, “Fiscal Decentralization and
Trust,” Public Finance Review 38 (March 2010),
pp. 178–192.
7. Nandhini Rangarajan, “Evidence of Different
Types of Creativity in Government: A Multimethod
Assessment,” Public Performance & Management
Review 32 (September 2008), pp. 132–163.
8. Jack L. Walker, “The Diffusion of Innovation in
the American States,” American Political Science
Review 63 (September 1969), pp. 880–899.

9. David Lowery, Virginia Gray, and Frank R.
Baumgartner, “Policy Attention in State and
Nation: Is Anyone Listening to the Laboratories
of Democracy?” Publius 41 (March 2011),
pp. 286–310.
10. Richard D. Bingham, “Innovation, Bureaucracy,
and Public Policy: A Study of Innovation Adop-
tion by Local Government,” Western Political
Quarterly 31 (June 1978), pp. 178–205.
11. Henry S. Reuss, Revenue-Sharing: Crutch or
Catalyst for State and Local Governments? (New
York: Praeger, 1970), pp. 53–56.
12. Mike Maciag, “‘Fragmented’ School Districts:
A Complicated and Controversial Issue,”
Governing.com (April 2016). Figures are for the
2013–2014 school year.
13. President Franklin Pierce, quoted in David B.
Walker, The Rebirth of Federalism: Slouching
Toward Washington, 2nd ed. (New York: Chatham
House, 2000), p. 69.
14. As derived from data in ibid., p. 74. The quotation
is on p. 75.
15. U.S. Advisory Commission on Intergovernmental
Relations, The Federal Role in the Federal System:
The Dynamics of Growth, A Crisis of Confidence
and Competence, A-77 (Washington, DC: U.S.
Government Printing Office, 1980), pp. 120–121.
16. Barbara Floersch, “Federal Grantmaking: The
Long View of History,” Grantsmanship Magazine
(Summer 2001), pp. 1–12. Figure (p. 3) is for
1929.
17. As derived from data in American Council on
Intergovernmental Relations, Significant Features
of Fiscal Federalism, 1995, Vol. 2 (Washington,
DC: Author, 1998), p. 52.
18. U.S. Advisory Commission on Intergovernmental
Relations, The Federal Role in the Federal System,
pp. 120–121.
19. Walker, The Rebirth of Federalism, p. 99. Grants
grew from twelve to twenty-six, 1932–1937,
and  their annual number remained in the
mid-twenties until the 1940s. Funding figure is
for 1933–1939.
20. Floersch, “Federal Grantmaking,” pp. 3, 5. Exact
figure is 39 percent.
21. As derived from data in American Council on
Intergovernmental Relations, Significant Features
of Fiscal Federalism, 1995, Vol. 2, p. 52.
22. U.S. Advisory Commission on Intergovernmental
Relations, The Federal Role in the Federal System,
pp. 120, 121.
Intergovernmental Administration 487
23. Ibid., p. 120, and American Council on Inter-
governmental Relations, Significant Features of
Fiscal Federalism, 1995, Vol. 2, p. 38.
24. As derived from data in American Council on
Intergovernmental Relations, Significant Features
of Fiscal Federalism, 1995, Vol. 2, p. 52. Figures
are for 1952 and 1957.
25. Walker, The Rebirth of Federalism, p. 7.
26. Ibid., p. 6.
27. U.S. Advisory Commission on Intergovernmental
Relations, The Federal Role in the Federal System,
p. 120.
28. American Council on Intergovernmental
Relations, Significant Features of Fiscal
Federalism, 1995, Vol. 2, p. 38.
29. As derived from data in ibid., p. 52.
30. As derived from data in ibid. and Walker, The
Rebirth of Federalism, p. 227. Figures are for
1957 and 1977.
31. Norton Long, as quoted in William R. Barnes,
“Beyond Federal Urban Policy,” Urban Affairs
Review 40 (May 2005), pp. 575–589. The quota-
tion is on p. 578.
32. U.S. Advisory Commission on Intergovernmental
Relations, Federal Regulation of State and Local
Governments: The Mixed Record of the 1980s,
A-126 (Washington, DC: U.S. Government
Printing Office, 1993), pp. v, 46, 52.
33. As derived from data in National Academy of
Public Administration, Beyond Preemptions: Inter-
governmental Partnerships to Enhance the New
Economy (Washington, DC: Author, 2006), p. 16.
34. Alan Greenblatt,“The Hand-off,”Governing (April
2011), pp. 24–28. Figure (p. 26) is for 1983–1986.
35. Pew Research Center for the People & the Press,
Distrust, Discontent, Anger and Partisan Rancor:
The People and Their Government (Washington,
DC: Author, 2010), Sections 2 and 1. Figure is for
1997–2010.
36. Gallup, “Majority in U.S. Prefer State Over
Federal Government Power,” Gallup.com (July
11, 2016). Current figure is for 2016.
37. Pew Research, State Governments Viewed
Favorably as Federal Rating Hits New Low
(Washington, DC: Author, 2013). Figure is for
2013.
38. Gallup, Trust in Government (Washington, DC:
Author, 2016). Figures are for 2016.
39. As derived from data in American Council on
Intergovernmental Relations, Significant Features
of Fiscal Federalism, 1995, Vol. 2, pp. 38, 52.
 488 PA R T I V Implementing Public Policy
Figures are for 1978–1988, which, with some
exceptions, continued their decline through 1990.
40. U.S. Advisory Commission on Intergovernmental
Relations, Federal Regulation of State and Local
Governments, pp. 46, 53, 56.
41. Tim Conlan, “From Cooperative to Opportunistic
Federalism: Reflections on the Half-Century Anni-
versary of the Commission on Intergovernmental
Relations,” Public Administration Review 66
(September/October 2006), pp. 663–676. The
quotation is on p. 668.
42. Barnes, “Beyond Federal Urban Policy,” pp. 576,
582, 575.
43. U.S. Government Accountability Office, Federal
Assistance: Illustrative Simulations of Using Stati-
stical Population Estimates for Reallocating Certain
Federal Funding, GAO-06-567 (Washington, DC:
U.S. Government Printing Office, 2006), Highlights
page. Figure is for FY 2004.
44. U.S. General Accounting Office, Electronic
Government: Initiatives Sponsored by the Office
of Management and Budget Have Made Mixed
Progress, GAO-04-561T (Washington, DC: U.S.
Government Printing Office, 2004), p. 7.
45. U.S. Bureau of the Census, Statistical Abstract of
the United States, 2011, 130th ed. (Washington,
DC: U.S. Government Printing Office, 2011),
Table 429. Figures are for 2008.
46. Jeffrey L. Brudney, Cynthia J. Bowling, and Deil
S. Wright, Continuity and Change in Public
Administration Across the 50 States: Linking
Practice, Theory, and Research through the
American State Administrators Project, 1964–
2008 (Auburn, AL: Center for Governmental
Services, Auburn University, 2010), p. 22. Figure,
79 percent, is for 2004.
47. As derived from data in U.S. Bureau of the
Census, “Table 1. Summary of State and Local
Finances by Level of Government: 2006–2007,”
Census of Governments, 2007 (Washington, DC:
U.S. Government Printing Office, 2009). Figures
are for 2006–2007.
48. Donald F. Kettl, “Those Were the Days,” Gover-
ning (October 2011), pp. 18–19.
49. U.S. Bureau of the Census, Statistical Abstract of
the United States, 2011, Table 429. Figure, 66
percent, is for 2009, when entitlement grants’
share of grant dollars peaked.
50. American Council on Intergovernmental Rela-
tions, Significant Features of Fiscal Federalism,
1995, Vol. 2, p. 38.
51. Robert Jay Dilger, Federal Grants to State and
Local Governments: A Historical Perspective
on Contemporary Issues (Washington, DC:
U.S.  Congressional Research Service, 2015),
p. 7.
52. As derived from data in ProQuest LLC, ProQuest
Statistical Abstract of the United States, 2016
(Bethesda, MD: Author, 2016), Table 463.
53. Dilger, Federal Grants to State and Local
Governments, p. 7.
54. Iris J. Lav, “Piling on Problems: How Federal
Policies Affect State Fiscal Conditions,” National
Tax Journal 56 (September 2003), pp. 535–554.
55. As derived from data in U.S. Bureau of the Census,
Statistical Abstract of the United States, 2011,
Table 429. Medicaid figure is for 2005–2008.
56. U.S. Bureau of the Census, “Table 1.
Summary of State and Local Finances by
Level of Government:  2002–2003,” Census
of Governments, 2002 (Washington, DC: U.S.
Government Printing Office, 2004), and U.S.
Bureau of the Census, “Table 1. Summary of State
and Local Finances  by Level of Government:
2006–2007.” In 2002–2003, federal grants
accounted for 26  percent of total state revenue,
falling to 20 percent in 2006–2007. Direct
federal grants contributed 4 percent  of total
local  revenue  in both fiscal years. In 2002–
2003, federal grants accounted for 26 percent
of total  state revenue, falling to 20  percent in
2006–2007. Direct federal grants  contributed
4  percent  of total local revenue in both fiscal
years.
57. Daniel C. Vock, “How Obama Changed the
Relationship Between Washington, the States and
the Cities,” Governing.com (June 2016).
58. As derived from data in Pew Charitable Trusts,
“Federal Spending in the States, 2005 to 2014,”
Pewtrusts.org (March 3, 2016).
59. As derived from data in U.S. Office of Manage-
ment and Budget, “Historical Tables,” Budget of
the United States, Fiscal Year 2017 (Washington,
DC: U.S. Government Publishing Office, 2016),
Table 12.1.
60. As derived from data in Pew Charitable Trusts,
“Federal Spending in the States, 2005 to 2014,”
Pewtrusts.org (March 3, 2016), and U.S. Bureau
of the Census, “State and Local Government
Finances by Level of Government and by
State: 2013,” Census of Governments, 2013
(Washington, DC: Author, 2016). Current figures

are for FY 2014 for states and FY 2013 for
localities.
61. U.S. Government Accountability Office, Federal
Grants: Improvements Needed in Oversight
and Accountability Processes, GAO-11-773T
(Washington, DC: U.S. Government Printing
Office, 2011), p. 3. Figures are for FY 2010.
62. Dilger, Federal Grants to State and Local Govern-
ments, p. 10. Figures are for FY 2014.
63. As derived from data in U.S. Office of Manage-
ment and Budget, “Historical Tables,” Table 12.1.
64. Kenneth N. Vines, “The Federal Setting of State
Politics,” Politics in the American States, 3rd ed.,
Herbert Jacob and Kenneth N. Vines, eds. (Boston:
Little, Brown, 1976), pp. 3–48. Data are on p. 16.
Figures are for 1902. To avoid double counting,
these and the following figures in this section do
not include federal grants, but do include military
and foreign relations spending.
65. Russell L. Hanson, “Intergovernmental Relations,”
Politics in the American States: A Comparative
Analysis, 9th ed., Virginia Gray and Russell L.
Hanson, eds. (Washington, DC: CQ Press, 2008),
pp. 30–60. The datum is on p. 37.
66. Vines, “The Federal Setting of State Politics,”
p. 16. Figures are for 1938.
67. Hanson, “Intergovernmental Relations,” p. 37.
68. As derived from data in ProQuest LLC, Proquest
Statistical Abstract of the United States, 2016,
Tables 480, 481, 482, 492. Figures are for FY
2012. State total deletes “intergovernmental
general expenditure,” and local total deletes
“intergovernmental revenue.”
69. Sean Nicholson-Crotty, Governors, Grants, and
Elections: Fiscal Federalism in the American States
(Baltimore: Johns Hopkins University Press, 2015),
pp. 111–131.
70. As derived from data in ProQuest LLC. ProQuest
Statistical Abstract of the United States, 2016,
Table 463. Figures are for FY 2014.
71. U.S. Government Accountability Office, Grant
Program Consolidations: Lessons Learned and
Implications for Congressional Oversight, GAO-
15-125 (Washington, DC: U.S. Government
Publishing Office, 2014), p. 5.
72. As derived from data in U.S. Government Account-
ability Office, Federal Grants: Improvements
Needed in Oversight and Accountability Pro-
cesses, pp. 3–4. Figures are for 2011.
73. U.S. Government Accountability Office, 2010
Census: Population Measures Are Important
Intergovernmental Administration 489
for Federal Funding Allocations, GAO-08-230T
(Washington, DC: U.S. Government Printing
Office, 2007), Highlights page. Figure is for
2000.
74. As derived from data in U.S. Government Ac-
countability Office, Federal Grants: Improvements
Needed in Oversight and Accountability Pro-
cesses, p. 4. Figure is for 2011.
75. U.S. House of Representatives, Committee on
House Administration, Congressional Member
and Staff Organizations (Washington, DC: U.S.
Government Printing Office, 2013).
76. Phil Kerpen, Taxpayer-Funded Lobbying: Big
Government Growth Machine (Washington, DC:
Americans for Prosperity Foundation, 2007), p. 2.
Figures are for 1998–2006, and do not include
$32 million spent in 2006 by about 300 state uni-
versities.
77. National Association of State Budget Officers,
Budget Processes in the States (Washington, DC:
Author, 2008), p. 3, and Dan Nowicki, “Ducey
to Shutter Arizona’s Washington, DC, Office,”
Azcentral.com (January 3, 2015).
78. Julia DiLaura, Your Tax Dollars at Work—on
K Street (Washington, DC: Center for Public
Integrity, 2006), p. 1. Figure is for 1998–2003.
79. Kerpen, Taxpayer-Funded Lobbying, p. 2. Figures
are for 1998–2006, and do not include $34
million spent by transportation and water author-
ities in 2006.
80. Center for Public Integrity, as cited in Jodi
Rudoren and Aron Pilhofer, “Hiring Federal
Lobbyists, Towns Learn Money Talks,” New York
Times (July 2, 2006). Figures are for 2006.
81. As derived from data in Elaine S. Povitch, “Esche-
wing Lobbyists, States Advocate for Themselves,”
Stateline (July 10, 2014). Figure is for 2010–2013,
and refers to paid lobbyists representing “civil
service and public officials.”
82. Bruce Katz, “How Washington Made Itself Irr-
elevant,” Washington Post (December 4, 2014).
83. Anthony J. Nownes, Clive S. Thomas, and
Ronald  J. Hrebenar, “Interest Groups in the
States,” Politics in the American States: A
Comparative Analysis, 9th ed., Virginia Gray and
Russell L. Hanson, eds. (Washington, DC: CQ
Press, 2008),  pp. 98–128. The quotation is on
p. 111.
84. David Lowery, Virginia Gray, John Cluverius, and
Jeffrey J. Harden, “Explaining the Anomolous
Growth of Public Sector Lobbying in the American
 490 PA R T I V Implementing Public Policy
States, 1997–2007,” Publius 43 (October 2013),
pp. 580–599.
85. Kristen M. Daum, “Michigan Government Spent
$556K to Lobby Itself,” Lansing State Journal
(February 24, 2013). Figures are for 2012.
86. As derived from data in Glenn Abney, “Lobbying
by Insiders: Parallels of State Agencies and Inter-
est Groups,” Public Administration Review 48
(September/October 1988), pp. 911–917. Figures
are for 1987.
87. John D. DiIulio, Jr., “Want Better, Smaller
Government? Hire Another Million Bureaucrats,”
Washington Post (August 29, 2014). Figures are
for 1960–2013.
88. Floersch, “Federal Grantmaking,” p. 2.
89. U.S. Advisory Commission on Intergovernmental
Relations, Federal Grant Profile, 1995: A Report
on ACIR’s Federal Grant Fragmentation Index,
SR-20 (Washington, DC: U.S. Government
Printing Office, 1995), p. 7.
90. As noted in the introduction to Part IV, the con-
servative estimate is 3 million federal grantee jobs
in state and local governments. In 2015, there
were almost 22 million state and local employees.
91. As derived from data in Paul C. Light, Fact
Sheet on the New True Size of Government,
(Washington, DC: Brookings Institution, 2003),
p. 5. Grantee jobs grew by 444,000, 1990–2002.
92. As derived from data in American Council on
Intergovernmental Relations, Significant Features
of Fiscal Federalism, 1995, Vol. 2, p. 52.
93. Chung-Lae Cho and Deil S. Wright, “Perceptions
of Federal Aid Impacts on State Agencies:
Patterns, Trends, and Variations across the 20th
Century,” Publius 37 (Winter 2007), pp. 103–130.
The figure and quotation are on p. 108.
94. As derived from data in American Council on
Intergovernmental Relations, Significant Features
of Fiscal Federalism, 1995, Vol. 2, p. 52.
95. Cho and Wright, “Perceptions of Federal Aid
Impacts on State Agencies,” p. 108.
96. Jeffrey L. Brudney, Cynthia J. Bowling, and Deil
S. Wright, Continuity and Change in Public
Administration Across the 50 States: Linking
Practice, Theory, and Research through the
American State Administrators Project, 1964–
2008 (Auburn, AL: Center for Governmental
Services, Auburn University, 2010), p. 24.
97. Albert J. Richter, “Federal Grants Management:
The City and County View,” Municipal Year
Book, 1977 (Washington, DC: International City
Management Association, 1977), pp. 180–192.
Figures (pp. 183–184) are for 1976.
98. Deborah A. Carroll, Robert J. Eger, III, and Justin
Marlowe, “Managing Local Intergovernmental
Revenues: The Imperative of Diversification,”
International Journal of Public Administration
26 (December 2003), pp. 1495–1519. Refers to
federal and state grants.
99. James R. Hines, Jr. and Richard H. Thaler, “The
Flypaper Effect,” Journal of Economic Perspectives
9 (Winter 1995), pp. 217–226.
100. Russsell Sobel and George Crowley, “Do Inter-
governmental Grants Create Ratchets in State and
Local Taxes?” Public Choice 158 (January 2014),
pp. 176–187. The quotation is on p. 176.
101. Therese A. McCarty and Stephen J. Schmidt,
“Dynamic Patterns in State Government Finance,”
Public Finance Review 29 (July 2001), pp. 208–
222. The quotation is on p. 220.
102. Steven C. Deller and Craig S. Maher, “Categorical
Municipal Expenditures with a Focus on the
Flypaper Effect,” Public Budgeting & Finance
25 (September 2005), pp. 73–90. Refers to state
grants.
103. Dennis O. Grady, “American Governors and
State-Federal Relations: Attitudes and Activities,
1960–1980,” State Government 57 (3, 1984),
pp. 106–112.
104. U.S. Advisory Commission on Intergovernmental
Relations, State Administrators’ Opinions on
Administrative Change, Federal Aid, Federal
Relationships, M-120 (Washington, DC: U.S.
Government Printing Office, 1980), pp. 52, 45.
Figures are for 1978.
105. Cho and Wright, “Perceptions of Federal Aid
Impacts on State Agencies,” p. 109.
106. Brudney, Bowling, and Wright, Continuity and
Change in Public Administration Across the 50
States, pp. 23–24. In seven of the eight surveys,
1974–2004, 45 to 58 percent said this. In 2008,
36 percent said this, which “may reflect the
greater scrutiny agencies typically receive during
economic downturns.”
107. Brian K. Collins, “Redistributive Policy and
Devolution: Is State Administration a Road Block
(Grant) to Equitable Access to Federal Funds?”
Journal of Public Administration Research and
Theory 16 (October 2006), pp. 613–632. The
quotations are on p. 613.
108. As derived from data in American Council on
Intergovernmental Relations, Significant Features

of Fiscal Federalism, 1995, Vol. 2, p. 52. Figure is
for 1978–1988.
109. Robert W. Gage, “Intergovernmental Change:
A Denver Area Perspective,” Intergovernmental
Perspective 14 (Summer 1988), pp. 14–17.
110. U.S. General Accounting Office, Federal Grants:
Design Improvements Could Help Federal Resour-
ces Go Further, GAO/AIMD-97-7 (Washington,
DC: U.S. Government Printing Office, 1996), p. 2.
111. Nicholson-Crotty, Governors, Grants, and Elect-
ions, p. 88.
112. U.S. Government Accountability Office, Comm-
unity Development Block Grants: Program Offers
Recipients Flexibility but Oversight Can Be
Improved, GAO-06-732 (Washington, DC: U.S.
Government Printing Office, 2006).
113. Deller and Maher, “Categorical Municipal Expen-
ditures with a Focus on the Flypaper Effect.”
114. Donald F. Kettl, “Boutiques for the Poor,” Gover-
ning (June 1999), p. 14.
115. As derived from data in Council of State Govern-
ments, Book of the States, 2016 (Lexington, KY:
Author, 2016), Table 2.1. Figures are for FY
2013.
116. Walker, The Rebirth of Federalism, p. 228.
117. As derived from data in American Council on
Intergovernmental Relations, Significant Features
of Fiscal Federalism, 1995, Vol. 2, p. 52, for
1970–1994 data, and U.S. Bureau of the Census,
“Table 1” (2004, 2009, 2011). Summary of State
and Local Finances by Level of Government,”
Census of Governments, 2004, 2009, 2011
(Washington, DC: U.S. Government Printing
Office, 2006, 2011, 2013).
118. Bruce A. Wallin, Budgeting for Basics: The Chan-
ging Landscape of City Finances (Washington,
DC: Brookings, 2005), p. 5. Per capita federal aid
to these cities decreased by 59 percent, and state
aid increased by 46 percent, 1977–2000.
119. Mike Maciag and J. B. Wogan, “With Less State
Aid, Localities Look for Ways to Cope,” Gover-
ning.com (February 2017).
120. As derived from data in Walker, The Rebirth of
Federalism, p. 227, and U.S. Bureau of the Census,
“Table 1” (2009). Figure is for 2006–2007. We
have computed this rough estimate on the assump-
tion that Washington continues to earmark about
one-third of its assistance to the states as pass-
through grants.
121. Hal Wolman, Todd Swanstrom, Margaret Weir,
and Nicholas Lyon, The Calculus of Coalitions:
Intergovernmental Administration 491
Cities and States and the Metropolitan Agenda
(Washington, DC: Brookings, 2004), p. 20.
122. John Yinger, “States to the Rescue? Aid to Central
Cities Under the New Federalism,” Public Budget-
ing & Finance 10 (Summer 1990), pp. 27–44.
123. As derived from data in National Academy of Public
Administration, Beyond Preemptions, p. 16.
124. U.S. Advisory Commission on Intergovernmental
Relations, Federal Court Rulings Involving State,
Local, and Tribal Governments, Calendar Year
1994, M-196 (Washington, DC: U.S. Government
Printing Office, 1995).
125. As derived from data in U.S. General Accounting
Office, Federalism: Comments on S.1214—The
Federalism Accountability Act of 1999, GAO/T-
GGD-99-143 (Washington, DC: U.S. Government
Printing Office, 1999), p. 4. Figures are for 1996–
1998.
126. As derived from data in: Light, Fact Sheet on the
New True Size of Government, p. 4, and U.S.
Bureau of the Census, Statistical Abstract of the
United States, 1999, 119th ed. (Washington, DC:
U.S. Government Printing Office, 1999), Table
534. Figures, 28 and 15 percent, respectively, are
for 1996–1997.
127. David R. Berman, “State-Local Relations:
Authority, Policies, Cooperation,” Municipal
Year Book, 1999 (Washington, DC: International
City/County Management Association, 1999),
pp. 47–61. Data are on p. 50.
128. Joseph Zimmerman, “The Discretionary Author-
ity of Local Governments,” Urban Data Service
Reports 13 (November 1981), pp. 1–13. Datum is
on p. 11.
129. Osbin L. Ervin, “Understanding American Local
Government: Recent Census Bureau and ACIR
Contributions,” Public Administration Review
55 (March/April 1995), pp. 209–212. Figures
(p. 210) are for 1978–1990.
130. Berman, “State-Local Relations: Authority,
Policies, Cooperation,” p. 49.
131. Ann Bowman and Richard Kearney, “Are U.S.
Cities Losing Power and Authority? Perceptions
of Local Government Actors,” Urban Affairs
Review 48 (July 2012), pp. 528–546. The quota-
tion is on p. 528.
132. U.S. Advisory Commission on Intergovernmental
Relations, State Laws Governing Local Govern-
ment and Administration, M-186 (Washington,
DC: U.S. Government Printing Office, 1993),
p. 20.
 492 PA R T I V Implementing Public Policy
133. U.S. Advisory Commission on Intergovernmental
Relations, Federally Induced Costs Affecting State
and Local Governments, M-193 (Washington,
DC: U.S. Government Printing Office, 1994), p. 3.
134. U.S. Advisory Commission on Intergovernmental
Relations, Regulatory Federalism: Policy, Process,
Impact, and Reform, A-95 (Washington, DC: U.S.
Government Printing Office, 1984), Appendix I.
135. U.S. Advisory Commission on Intergovernmental
Relations, Federal Statutory Preemption of State
and Local Authority: History, Inventory, and
Issues, A-121 (Washington, DC: U.S. Government
Printing Office, 1992), p. 9.
136. The typology is described more fully in U.S.
Advisory Commission on Intergovernmental
Relations, Regulatory Federalism, pp. 7–10.
137. Timothy J. Conlan and David R. Beam, “Federal
Mandates: The Record of Reform and Future
Prospects,” Intergovernmental Perspective 18
(Fall 1992), pp. 7–11. The quotation is on p. 8.
138. Janet M. Kelly, “Lessons from the States on
Unfunded Mandates,” National Civic Review 84
(Spring 1995), pp. 133–139.
139. Kiki Caruson and Susan A. MacManus,
“Mandates and Management Challenges in the
Trenches: An Intergovernmental Perspective
on Homeland Security,” Public Administration
Review 66 (July/August 2006), pp. 522–536.
140. U.S. Advisory Commission on Intergovernmental
Relations, Changing Public Attitudes on Gover-
nments and Taxes, 1991, S-20 (Washington, DC:
U.S. Government Printing Office, 1991), p. 10.
141. U.S. Advisory Commission on Intergovernmental
Relations, Federal Mandate Relief for State, Local,
and Tribal Governments, A-129 (Washington,
DC: U.S. Government Printing Office, 1995),
p. 4.
142. Richard T. Moore and Don Balfour, National
Conference of State Legislatures, “Unfunded
Federal Mandates,” Memorandum of November
16, 2010, to Senator Lamar Alexander.
143. National Conference of State Legislatures,
Mandate Monitor (Washington, DC: Author,
November 17, 2010), p. 1.
144. U.S. Conference of Mayors/Price Waterhouse,
Impact of Unfunded Mandates on U.S. Cities: A
314 City Survey (Washington, DC: U.S. Confer-
ence of Mayors, 1993), p. 2, and National Asso-
ciation of Counties/Price Waterhouse, NACo
Unfunded Mandates Survey (Washington, DC:
National Association of Counties, 1993).
145. National Conference of State Legislatures,
Mandate Monitor, p. 1. Figure is for 2010.
146. U.S. Government Accountability Office, Federal
Mandates: Identification Process Is Complex and
Agency Rules Vary, GAO-05-401T (Washington,
DC: U.S. Government Printing Office, 2005),
p. 14. Figure is for 2001–2002.
147. U.S. Government Accountability Office, Federal
Mandates: Few Rules Trigger Unfunded Mandates
Reform Act, GAO-11-385T (Washington,
DC: U.S. Government Printing Office, 2011),
Highlights page. Figures are for 2001–2002.
148. As derived from data in Jerri Killian and Enamul
Choudhury, “Continuity and Change in the Role
of City Managers,” Municipal Year Book, 2010
Washington, DC: International City/County
Management Association, 2010), pp. 10–18.
In 2010, state mandates ranked ninth as an
“influence,” and federal ones ranked sixteenth
(p. 13).
149. Richard C. Kearney, Jodi E. Swicegood, and Ann
O’M. Bowman, “Second-Order Devolution?
What City Managers Have to Say,” Municipal
Year Book, 2011 (Washington, DC: International
City/County Management Association, 2011),
pp. 13–23. Figures are for 2000–2010. The quo-
tation is on p. 17.
150. Rodney E. Hero and Jody L. Fitzpatrick, “State
Mandating of Local Government Activities: An
Exploration,” Paper presented at the Annual
Meeting of the American Political Science Asso-
ciation (Washington, DC, August 28–31, 1986),
p. 18.
151. U.S. Advisory Commission on Intergovernmental
Relations, State Mandating of Local Expenditures,
A-67 (Washington, DC: U.S. Government Printing
Office, 1978), p. 41. Data are for 1976.
152. Janet Kelly, “Unfunded Mandates: The View from
the States,” Public Administration Review 54 (July/
August 1994), pp. 405–408. The quotation is on
p. 405.
153. Task Force on Local Government Consolidation
and Unfunded Mandates, Delivering Efficient,
Effective, and Streamlined Government to Illinois
Taxpayers (Springfield, IL: Author, 2015), pp. 2,
5, 7.
154. U.S. Advisory Commission on Intergovernmental
Relations, Mandates: Cases in State-Local Relat-
ions, M-173 (Washington, DC: U.S. Government
Printing Office, 1990), p. 7.
155. Kelly, “Unfunded Mandates,” pp. 405–406.

156. Linda Wagar, “A Declaration of War,” State
Government News (April 1993), pp. 18–22. The
quotation is on p. 18.
157. U.S. Advisory Commission on Intergovernmental
Relations, Federally Induced Costs Affecting State
and Local Governments, p. 7.
158. David R. Berman, “State-Local Relations: Auth-
ority, Finances, Cooperation,” Municipal Year
Book, 2002 (Washington, DC: International
City/County Management Association, 2002),
pp. 45–61. The quotation is on pp. 49–50.
159. As derived from data in National Academy of
Public Administration, Beyond Preemptions,
p.  16. Data are for 1790–2004. The quotations
are on pp. 1–2.
160. Grady, “American Governors and State-Federal
Relations,” p. 107.
161. U.S. Advisory Commission on Intergovernmental
Relations, State Administrators’ Opinions on
Administrative Change, Federal Aid, Federal
Relationships, p. 52. Figure is for 1978.
162. U.S. Advisory Commission on Intergovernmental
Relations, Federal Statutory Preemption of State
and Local Authority, p. 34. Data are for 1988.
163. Catherine H. Lovell, et al., Federal and State Man-
dating on Local Governments: An Exploration of
Issues and Impacts (Riverside: Graduate School of
Administration, University of California, 1979),
p. 82.
164. U.S. Advisory Commission on Intergovernmental
Relations, Regulatory Federalism, p. 175. Figures
are for 1981.
165. Kearney, Swicegood, and Bowman, “Second-
Order Devolution?” p. 13. Figures are for 2000–
2010.
166. Gregory Streib and William L. Waugh, Jr., “The
Changing Responsibilities of County Govern-
ments: Data from a Survey of County Leaders,”
American Review of Public Administration 21
(June 1991), pp. 139–156. Figures (p. 144), 93
and 31 percent, respectively, are for 1989.
167. U.S. General Accounting Office, Federalism: Com-
ments on S.1214—The Federalism Accountability
Act of 1999, p. 4. Data are for 1996–1998.
“Federalism assessments” are required by the
Unfunded Mandates Reform Act and Executive
Order 12612.
168. Greenblatt, “The Hand-off,” p. 26.
169. Kearney, Swicegood, and Bowman, “Second-
Order Devolution?” pp. 16–17. Figures are for
2000–2010.
Intergovernmental Administration 493
170. Victoria Gordon, “Home Rule and Improved
Fiscal Health: Perception or Reality?” Municipal
Year Book, 2006 (Washington, DC: International
City/County Management Association, 2006),
pp. 33–38. The quotation is on p. 37.
171. Kearney, Swicegood, and Bowman, “Second-
Order Devolution?” pp. 16–17. Figure is for
2000–2010.
172. Pew Research Center for the People & the
Press, Distrust, Discontent, Anger, and Partisan
Rancor,  Section 2. Data are for 1964, when 40
percent thought this, and 2010, when 58 percent
did.
173. U.S. Government Accountability Office, Grant
Program Consolidations: Lessons Learned
and Implications for Congressional Oversight,
pp. 5–6.
174. U.S. Government Accountability Office, Federal
Grants: Improvements Needed in Oversight
and Accountability Processes, pp. 10–11. And
U.S. Government Accountability Office, Grants
Management: Action Needed to Improve the
Timeliness of Grant Closeouts by Federal
Agencies, GAO-12-360, and Grants Management:
Actions Needed to Address Persistent Grant
Closeout Timeliness and Undisbursed Balance
Issues, GAO-16-362 (Washington, DC: U.S.
Government Printing/Publishing Office, 2012
and 2016), Highlights pages. “About $1 billion”
was found in 2006, “more than $794 million”
was found in 2011, and “approximately $994
million” in 2015.
175. U.S. Government Accountability Office, Grants
Management: Actions Needed to Address
Persistent Grant Closeout Timeliness and
Undisbursed Balance Issues, Highlights page.
176. Loren Berlin, “Money on the Table,” Land Lines
29 (Winter 2017), pp. 18–25. The quotations are
on pp. 23–25.
177. U.S. Government Accountability Office, Improper
Payments: Recent Efforts to Address Improper
Payments and Remaining Challenges, GAO-
11-575T (Washington, DC: U.S. Government
Printing Office, 2011), p. 3. Figures are for FY
2010.
178. U.S. Government Accountability Office, Grant
Program Consolidations: Lessons Learned and
Implications for Congressional Oversight, p. 33.
179. William T. Gormley, Jr., “Money and Mandates:
The Politics of Intergovernmental Conflict,”
Publius 36 (Fall 2006), pp. 523–540.
 494 PA R T I V Implementing Public Policy
180. Donna Milam Handley, “Strengthening the
Intergovernmental Grant System: Long-Term
Lessons  for the Federal-Local Relationship,”
Public Administration Review 68 (January/
February 2008), pp. 126–136. The quotation is
on pp. 126–127.
181. As derived from data in U.S. General Accounting
Office, Federal Assistance: Grant System Contin-
ues to Be Highly Fragmented, GAO-03-718T
(Washington, DC: U.S. Government Printing
Office, 2003), pp. 5, 15. Figures are for 2001.
182. U.S. Government Accountability Office, Grant
Program Consolidations: Lessons Learned
and Implications for Congressional Oversight,
Highlights page. Figures are for 1990–2012.
183. U.S. Government Accountability Office, Grants
Management: Programs at HHS and HUD Collect
Administrative Cost Information but Differences
in Cost Caps and Definitions Create Challenges,
GAO-15-118 (Washington, DC: U.S. Government
Publishing Office, 2014), Highlights page.
184. U.S. Government Accountability Office, Tax
Compliance: Thousands of Organizations
Exempt from Federal Income Tax Owe Nearly
$1 Billion in Payroll and Other Taxes, GAO-07-
563 (Washington, DC: U.S. Government Printing
Office, 2007), p. 18. Figure is for FY 2006.
185. U.S. Government Accountability Office, Tax
Compliance: Federal Grant and Direct Assistance
Recipients Who Abuse the Federal Tax System,
GAO-08-31 (Washington, DC: U.S. Government
Printing Office, 2007), Highlights page. Figures
are for FY 2006.
186. As derived from data in U.S. Government Ac-
countability Office, Medicare: Thousands of
Medicare Providers Abuse the Federal Tax System,
GAO-08-618 (Washington, DC: U.S. Government
Printing Office, 2008), Highlights page, p. 19.
Figures are for FY 2006.
187. U.S. Government Accountability Office, Grant
Workforce: Agency Training Practices Should
Inform Future Government-wide Efforts, GAO-
13-591 (Washington, DC: U.S. Government
Printing Office, 2013), Highlights page, pp. 3, 8.
Figures are for FY 2012.
188. Gormley, “Money and Mandates.”
189. Linda Greenhouse, “States Are Given New Legal
Shield by Supreme Court,” New York Times (June
24, 1999).
190. The case is Northern Insurance Company of New
York v. Chatham County.
191. The cases are Nevada v. Hibbs (2003); Tennessee
v. Lane (2004); and Gonzales v. Raich (2005).
192. The case is Gonzales v. Oregon (2006).
193. The case is National Federation of Independent
Businesses v. Sebelius.
194. Dale Krane and Heidi Koenig, “The State of
American Federalism, 2004: Is Federalism Still a
Core Value?” Publius 35 (Winter 2005), pp. 1–40.
The quotation is on p. 1.
195. Robert S. Allen, ed., Our Sovereign State (New
York: Vanguard, 1949), p. vii.
196. Brudney, Bowling, and Wright, Continuity and
Change in Public Administration Across the 50
States, p. 4.
197. Cynthia J. Bowling and Deil S. Wright, “Public
Administration in the Fifty States: A Half-
Century Administrative Revolution,” State and
Local Government Review 30 (Winter 1998),
pp. 52–64.
198. As derived from data in Katherine Barrett
and Richard Greene, “Grading the States: The
Mandate to Measure,” Governing (March 2008),
pp. 24–93. Grade is for 2008.
199. As derived from data in Katherine Barrett
and Richard Greene, “Grading the Cities: A
Management Report Card,” Governing (February
2000), pp. 22–91. Grade, B-, is for 2000.
200. Katherine Barrett, Richard Greene, and Michelle
Mariani, “Grading the Counties: A Management
Report Card,” Governing (February 2002),
pp. 20–89. Grade, C+, is for 2002.
201. Brudney, Bowling, and Wright, Continuity and
Change in Public Administration Across the 50
States, pp. 3, 2. In 1959, there was an average of
fifty-one agencies per state. In 1959, there was an
average of fifty-one agencies per state. Current
figure is for 2008.
202. John Bohte and Kenneth J. Meier, “The Marble
Cake: Introducing Federalism to the Government
Growth Equation,” Publius 30 (Summer 2000),
pp. 35–46. The quotation is on p. 44.
203. U.S. General Accounting Office, Federal
Assistance: Grant System Continues to Be Highly
Fragmental, GAO-03-718T (Washington, DC:
U.S. Government Printing Office, 2003), p. 3.
204. Alice M. Rivlin, “A New Vision of American
Federalism,” Public Administration Review 52
(July/August 1992), pp. 315–320.
205. Paul E. Peterson, “Who Should Do What? Divided
Responsibility in the Federal System,” Brookings
Review 13 (Spring 1995), pp. 6–11.

206. Ibid.
207. Alice M. Rivlin, “Rethinking Federalism for More
Effective Governance,” Publius 42 (July 2012),
pp. 387–400.
208. Rivlin, “A New Vision of American Federalism,”
p. 320.
209. Peterson, “Who Should Do What?”
210. Ibid.
211. Rivlin, “A New Vision of American Federalism.”
212. As derived from data in Saundra K. Schneider,
William G. Jacoby, and Daniel C. Lewis, “Public
Opinion Toward Intergovernmental Policy
Responsibilities,” Publius 41 (Winter 2011),
pp.  1–30. Data and quotation are on pp. 9, 21,
respectively. Data are for 2006.
213. Ibid., pp. 10, 21. Data are for 2006.
214. Sanford F. Schram and Carol S. Weissert, “The
State of American Federalism, 1996–1997,”
Publius 27 (Spring 1997), pp. 1–26. The quota-
tion is on p. 1.
215. Alan Greenblatt, “Obama and the Cities,”
Governing (April 2009), pp. 23–28. The quota-
tion is on p. 24.
216. William Kevin Voit, Interstate Compacts and
Agencies, 1998 (Lexington, KY: Council of State
Governments, 1999).
217. Ann O’M. Bowman, “Horizontal Federalism:
Exploring Interstate Interactions,” Journal of
Public Administration Research and Theory 14
(October 2004), pp. 535–546.
218. Ibid.
219. Alan Greenblatt, “The Story Behind the Prominent
Rise of State AGs,” Governing.com (June 2015).
220. Adam Coester, Dillon’s Rule or Not? (Washington,
DC: National Association of Counties, 2004,
updated 2016). Figures are for 2016; states with
home rule include West Virginia, which has a
pilot home rule program that expires by the end
of 2017.
221. Edgar E. Ramirez de la Cruz, “County Form of
Government: Trends in Structure and Composit-
ion,” Municipal Year Book, 2009 (Washington,
DC: International City/County Management
Association, 2009), pp. 21–27. Figure (p. 21) is
for 2007.
222. As derived from data (p. 611) in Bruce D.
McDonald, “Does the Charter Form Improve the
Fiscal Health of Counties?” Public Administration
Review 75 (July/August 2015), pp. 609–618.
223. Ramirez de la Cruz, “County Form of Govern-
ment,” p. 22. Figures are for 2007.
Intergovernmental Administration 495
224. McDonald, “Does the Charter Form Improve the
Fiscal Health of Counties?”
225. Lawrence L. Martin and Ronald C. Nyhan,
“Determinants of County Charter Home Rule,”
International Journal of Public Administration
17 (May 1994), pp. 955–970.
226. Jerry Anthony, “Do State Growth Management
Regulations Reduce Sprawl?” Urban Affairs
Review 39 (January 2004), pp. 376–397.
227. Pew Charitable Trusts, The State Role in Local
Government Financial Distress (Washington, DC:
Author, 2013), p. 5.
228. Megan Mullin and Dorothy M. Daley,
“Working with the State: Exploring Interagency
Collaboration within a Federalist System,” Journal
of Public Administration Research and Theory 20
(October 2010), pp. 757–778.
229. Deil S. Wright, Understanding Intergovernmental
Relations, 2nd ed. (Monterey, CA: Brooks/Cole,
1982), p. 389.
230. G. Ross Stephens, “State Centralization and the
Erosion of Local Autonomy,” Journal of Politics 36
(February 1974), pp. 44–76, and G. Ross Stephens,
“Patterns of State Centralization/Decentralization
during the Last Half of the Twentieth Century,”
Paper presented at the Annual Meeting of the
Southwestern Political Science Association
(Austin, TX: March 18–21, 1992). Current figure
for centralized states is for 1992.
231. Tad Friend, “Contract City,” The New Yorker
(September 5, 2011), pp. 34–40.
232. Henderson, “Intergovernmental Service Arrange-
ments and the Transfer of Functions,” p. 195.
233. George C. Homsy and Mildred E. Warner, “Inter-
municipal Cooperation: The Growing Reform,”
Municipal Year Book, 2014 (Washington, DC:
International City/County Management Associat-
ion, 2014), pp. 53–65. “Decline” refers to 2002–
2014.
234. As derived from data (p. 31) in Rowan Miranda
and Karlyn Andersen, “Alternative Service Deli-
very in America, 1982–1992,” Municipal Year
Book, 1994 (Washington, DC: International
City/County Management Association, 1994),
pp. 26–35.
235. Mary K. Marvel and Howard P. Marvel,
“Shaping the Provision of Outsourced Public
Services: Incentive Efficacy and Service Delivery,”
Public Performance & Management Review 33
(December 2009), pp. 183–213. The quotations
are on p. 202.
 496 PA R T I V Implementing Public Policy
236. Mary K. Marvel and Howard P. Marvel,
“Government-to-Government Contracting:
Stewardship, Agency, and Substitution,” Inter-
national Public Management Journal 11 (2,
2008), pp. 171–192. The quotation is on p. 171.
237. Henderson, “Intergovernmental Service Arrange-
ments and the Transfer of Functions,” pp. 197–
198. Figure, 55 percent, is for 1983.
238. Timothy J. Burns and Kathryn G. Yeaton, Success
Factors for Implementing Shared Services in
Government (Washington, DC: IBM Center for the
Business of Government, 2008), pp. 6, 16, 18, 34.
239. Feather O’Connor Houstoun, “Shared Services
and the Velveteen Rabbit Factor,” Governing
(September 26, 2012).
240. U.S. Advisory Commission on Intergovernmental
Relations, Intergovernmental Service Arrange-
ments for Delivering Local Public Services: Update
1983, A-103 (Washington, DC: U.S. Government
Printing Office, 1985), pp. 2, 55, 62. Figures are
for 1976–1983, and include some transfers from
and to companies, agencies, and other govern-
ments, such as special districts and states.
241. U.S. Advisory Commission on Intergovernmental
Relations, State Laws Governing Local Govern-
ment Structure and Administration, p. 9. Figure is
for 1990. In 1978, thirty-nine states did so.
242. Homsy and Warner, “Intermunicipal Coopera-
tion,” p. 59. Figure is for 2012.
243. Ibid. Figure is for 2012.
244. Henderson, “Intergovernmental Service Arrange-
ments and the Transfer of Functions,” p. 196.
Figure is for 1983.
245. Homsy and Warner, “Intermunicipal Coopera-
tion,” p. 59. Figure is for 2012.
246. Henderson, “Intergovernmental Service Arrange-
ments and the Transfer of Functions,” p. 196.
Datum is for 1983.
247. Rhys Andrews and Tom Entwistle, “Does Cross-
Sectoral Partnership Deliver? An Empirical Explo-
ration of Public Service Effectiveness, Efficiency,
and Equity,” Journal of Public Administration
Research and Theory 20 (July 2010), pp. 679–701.
248. Ibid., p. 692.
249. Homsy and Warner, “Intermunicipal Coopera-
tion,” p. 59. Figure is for 2012.
250. Pascale Joassart-Marcelli and Juliet Musso,
“Municipal Service Provision Choices within a
Metropolitan Area,” Urban Affairs Review 14
(March 2005), pp. 492–519. The data are on
p. 516.
251. Roland Zullo, “Does Fiscal Stress Induce Privati-
zation? Correlates of Private and Intermunicipal
Contracting, 1992–2002” Governance 22 (July
2009), pp. 459–481.
252. Ibid.
253. James C. Clingermayer, Richard C. Feiock, and
Christopher Stream, “Governmental Uncertainty
and Leadership Turnover: Influences on Con-
tracting and Sector Choices for Local Services,”
State and Local Government Review 35 (Fall
2003), pp. 150–160. The data are on p. 158.
254. Skip Krueger and Ethan M. Bernick, “State Rules
and Local Governance Choices,” Publius 40
(October 2010), pp. 697–718.
255. Kelly LeRoux, Paul W. Brandenburger, and Sanjay
K. Pandey, “Interlocal Service Cooperation in U.S.
Cities: A Social Network Explanation,” Public
Administration Review 70 (March/April 2010),
pp. 268–278.
256. Kelly LeRoux, “Nonprofit Community Con-
ferences: The Role of Alternative Regional Insti-
tutions in Interlocal Service Delivery,” State
and Local Government Review 40 (Fall 2008),
pp. 160–172.
257. LeRoux, Brandenburger, and Pandey, “Interlocal
Service Cooperation in U.S. Cities,” pp. 273, 268.
258. Michael McGuire and Chris Silvia, “The
Effect of Problem Severity, Managerial and
Organizational Capacity, and Agency Structure
on Intergovernmental Collaboration: Evidence
from Local Emergency Management,” Public
Administration Review 70 (March/April 2010),
pp. 279–288. The quotations are on p. 279.
259. Kelley LeRoux and Sanjay K. Pandey, “City
Managers, Career Incentives, and Municipal
Service Decisions: The Effects of Managerial
Progressive Ambition on Interlocal Service
Delivery,” Public Administration Review 71 (July/
August 2011), pp. 627–636.
260. Meeyoung Lamothe and Scott Lamothe, “To
Trust or Not to Trust? What Matters in Local
Government-Vendor Relationships?” Journal of
Public Administration Research & Theory 22
(October 2012), pp. 867–892. The quotation is
on p. 867.
261. Trevor L. Brown, “The Dynamics of Government-
to-Government Contracts,” Public Performance
& Management Review 31 (March 2008),
pp. 364–386. The quotations are on p. 364.
262. Homsy and Warner, “Intermunicipal Coopera-
tion,” p. 60. Data are for 2012.

263. Norman Krumholz, “Regionalism Redux,” Public
Administration Review 57 (January/February
1997), pp. 83–89. The quotation is on p. 83.
264. Allan D. Wallis, “Inventing Regionalism: The First
Two Waves,” National Civic Review 83 (Spring
1994), pp. 168–169. Figures are for 1964–1977.
265. Patricia S. Atkins and Laura Wilson Gentry,
“An Etiquette for the 1990s Regional Council,”
National Civic Review 81 (Fall/Winter 1992),
pp. 466–487.
266. David B. Walker and Albert J. Richter, “Regional-
ism and the Counties,” County Year Book,
1975 (Washington, DC: National Association of
Counties and International City Management
Association, 1975), pp. 14–19.
267. Sherman W. Wyman, “Profiles and Prospects:
Regional Councils and Their Executive Duties,”
Municipal Year Book, 1994 (Washington,
DC: International City/County Management
Association, 1994), p. 53. Figure is for 1990.
268. Richard Hartman, A Report to the Membership
(Washington, DC: National Association of
Regional Councils, 1979), p. 4.
269. Wyman, “Profiles and Prospects,” p. 49. Data are
for 1990.
270. Patricia S. Atkins, “From the Mauling to the
Malling of Regionalism,” Public Administration
Review 53 (November/December 1993),
pp. 583–586. In 1977, federal support accounted
for 75 percent of councils’ budgets, and in 1988,
45 percent.
271. Grigsby, “Regional Governance and Regional
Councils,” p. 55. Figure is for 1992.
272. Wyman, “Profiles and Prospects,” pp. 52–53.
Figures are for 1990.
273. Ibid., p. 56.
274. Allan D. Wallis, “The Third Wave: Trends in
Regional Governance,” National Civic Review 83
(Summer–Fall 1994), pp. 294–298.
275. Neal R. Peirce, with Curtis W. Johnson and John
Stuart Hall, Citistates: How America Can Prosper
in a Competitive World (Santa Ana: CA: Seven
Locks Press, 1993), p. 318. Emphasis is original.
276. Wyman, “Profiles and Prospects,” p. 56.
277. Henderson, “Intergovernmental Service Arrange-
ments and the Transfer of Functions,” pp. 196,
198. Data are for 1983.
278. U.S. Advisory Commission on Intergovernmental
Relations, Intergovernmental Service Arrange-
ments for Delivering Local Public Services, p. 62.
Data are for 1972–1983.
Intergovernmental Administration 497
279. Henderson, “Intergovernmental Service Arrange-
ments and the Transfer of Functions,” p. 202.
Figures are for 1983.
280. U.S. Advisory Commission on Intergovernmental
Relations, Intergovernmental Service Arrange-
ments for Delivering Local Public Services, p. 97,
tracks these trends for 1965–1983, and Joassart-
Marcelli and Musso, “Municipal Service Provision
Choices within a Metropolitan Area,” p. 516, con-
tinues the tracking, at least among local govern-
ments in Southern California, for 1982–1997.
281. David Rusk, Cities Without Suburbs (Washington,
DC: Woodrow Wilson Center Press, 1993), p. 5.
282. David Rusk, Cities Without Suburbs, 4th ed.
(Baltimore: MD: Johns Hopkins University Press,
2013), p. 7.
283. Todd Swanstrom, Colleen Casey, Robert Flack,
and Peter Dreier, Pulling Apart: Economic Segre-
gation among Suburbs and Central Cities in Major
Metropolitan Areas (Washington, DC: Brookings,
2004), p. 4.
284. Elizabeth Kneebone and Natalie Holmes, U.S.
Concentrated Poverty in the Wake of the Great
Recession (Washington, DC: Brookings, 2016).
285. Paul Taylor and Richard Fry, The Rise of
Residential Segregation by Income (Washington,
DC: Pew Research Center, 2012).
286. Brookings Institution, Racial Change in the
Nation’s Largest Cities: Evidence from the 2000
Census (Washington, DC: Author, 2001), p. 4.
287. Rusk, Cities Without Suburbs, p. 10. Emphasis is
original.
288. Rusk, Cities Without Suburbs, 4th ed.
289. Lingwen Zheng and Mildred E. Warner, “Local
Economic Development, 1994–2004: Broadening
Strategies, Increasing Accountability,” Municipal
Year Book, 2010 (Washington, DC: International
City/County Management Association, 2010),
pp. 3–9. The quotation is on p. 7, and the data are
on p. 9.
290. U.S. Bureau of the Census, Statistical Abstract of
the United States, 2001, 120th ed. (Washington,
DC: U.S. Government Printing Office, 2001),
Table 31. Figure is for 1998.
291. As derived from data in U.S. Bureau of the
Census, Statistical Abstract of the United States,
2011, Table 24. Figure, 84 percent, is for 2009.
292. U.S. Advisory Commission on Intergovernmental
Relations, Metropolitan Organization: Compari-
son of the Allegheny and St Louis Case Studies,
SR-15 (Washington, DC: U.S. Government
 498 PA R T I V Implementing Public Policy
Printing Office, 1993), p. 3, and ProQuest LLC,
ProQuest Statistical Abstract of the United States,
2016, Appendix II, p. 921. Current figure is for
2013. In 1942, there were 140.
293. U.S. Advisory Commission on Intergovernmental
Relations, Metropolitan Organization, pp. 3, 7. In
1942, 10 percent of all local governments were
in metropolitan statistical areas, and, in 1992, 39
percent were.
294. As derived from data in U.S. Bureau of the Census,
Statistical Abstract of the United States, 1994,
114th ed. (Washington, DC: U.S. Government
Printing Office, 1994), Tables 462 and 39, and
U.S. Bureau of the Census, 1992 Census of
Governments, Table 26. Figure is for 1992.
295. Donald Boyd, Layering of Local Governments &
City-County Mergers (Albany, NY: Nelson A.
Rockefeller Institute of Government, 2008),
pp.  5–7. Figures are for 2000, except for the
number of general-purpose local governments,
which is for 2007.
296. Osborne M. Reynolds, Jr., Local Government
Law, 3rd ed. (St. Paul, MN: West, 2009), p. 33.
297. As derived from data in U.S. Bureau of the
Census, 2002 Census of Governments, Vol. 1,
No. 1, Government Organization (Washington,
DC: U.S. Government Printing Office, 2002),
Tables 10, 15. Figures are for 2002, and include
dependent school systems. Thirty-seven percent
of special districts and 15 percent of “public
school systems” (or school districts plus depend-
ent school systems) did not respond to this
question.
298. U.S. Advisory Commission on Intergovernmental
Relations, The Organization of Local Public
Economies, A-109 (Washington, DC: U.S.
Government Printing Office, 1987), p. 49.
299. The term is Reuss’s, in Revenue-Sharing.
300. U.S. Advisory Commission on Intergovernmental
Relations, Metropolitan Organization, p. 5.
301. As derived from data in Rusk, Cities Without
Suburbs, 4th ed., pp. 7, 116. Figure is for 2010.
302. Vincent Ostrom, Charles M. Tiebout, and Robert
Warren, “The Organization of Government
in Metropolitan Areas: Theoretical Inquiry,”
American Political Science Review 55 (December
1961), pp. 831–842.
303. J. Eugene Grigsby, III, “Regional Governance and
Regional Councils,” National Civic Review 85
(Spring–Summer 1996), pp. 53–58. The quotation
is on p. 55.
304. Pierce, with Johnson and Hall, Citistates, p. 6.
305. Reuss, Revenue-Sharing, pp. 59–60.
306. Ibid., pp. 58–59. The quotation is on p. 59.
307. Darcy Rollins and Antoniya Owens, Empirical
Evidence of the Effects of Government
Fragmentation (Boston: New England Public
Policy Center, 2006).
308. James A. Christianson and Carolyn E. Sachs,
“The Impact of Government Size and Number
of Administrative Units on the Quality of Public
Services,” Administrative Science Quarterly 25
(March 1980), pp. 89–101.
309. Ruth Hoogland De Hoog, David Lowery, and
William A. Lyons, “Metropolitan Fragmentation
and Suburban Ghettos: Some Empirical
Observations on Institutional Racism,” Journal of
Urban Affairs 13 (October 2008), pp. 479–493.
310. MeriTalk, Uncle Sam at Your Service (Alexandria,
VA: Author, 2011), p. 12. Figures are for 2010–
2011.
311. Rusk, Cities Without Suburbs, pp. 34, 31.
312. Benedict S. Jimenez, “Separate, Unequal, and
Ignored? Interjurisdictional Competition and
the Budgetary Choices of Poor and Affluent
Municipalities,” Public Administration Review 74
(March/April 2014), pp. 246–257.
313. Elizabeth Kneebone and Alan Berube, Reversal of
Fortune: A New Look at Concentrated Poverty in
the 2000s (Washington, DC: Brookings, 2008).
314. Rusk, Cities Without Suburbs, p. 43.
315. Ibid., pp. 56–57.
316. Ibid. and U.S. Advisory Commission on
Intergovernmental Relations, Metropolitan
Organization, p. 7.
317. Robert C. Wood, “The New Metropolises: Green
Belt, Grass Roots versus Gargantua,” American
Political Science Review 52 (March 1958),
pp. 108–122.
318. Rusk, Cities Without Suburbs, p. 89.
319. For a summary of early reports, see Reuss,
Revenue-Sharing, pp. 55–63. For a more current
example, see New York State Commission on
Local Government Efficiency & Competitiveness,
21st Century Local Government (Albany, NY:
Author, 2008).
320. Rusk, Cities Without Suburbs, pp. 85, 34, 40–41.
Emphasis added. See also the three articles by
Mark S. Rosentraub, Timothy D. Mead, and
Arnold Fleischmann in State and Local Gover-
nment Review 32 (Fall 2000) for additional evi-
dence of urban interdependency.

321. As derived from data in Organisation for
Economic Co-operation and Development, The
Metropolitan Century: Understanding Urbani-
sation and Its Consequences (Brussels: OECD
Publishing, 2015), pp. 52, 56. Data are for 2000–
2010.
322. Richard Florida, “Rise of the Fragmented City,”
Citylab.com (April 28, 2015).
323. U.S. Advisory Commission on Intergovernmental
Relations, The Organization of Local Public
Economies and Metropolitan Organization;
Robert Bish and Elinor Ostrom, Local
Government in the United States (San Francisco:
ICS Press, 1988); and Rollins and Owens,
Empirical Evidence of the Effects of Government
Fragmentation. All are literature reviews.
324. See, for example, U.S. Advisory Commission on
Intergovernmental Relations, Intergovernmental
Service Arrangements for Delivering Local Public
Services, p. 93.
325. Rusk, Cities Without Suburbs, pp. 89, 88. Empha-
sis added.
326. Rudiger Ahrend, Catherine Gamper, and
Abel Schumann, “The OECD Metropolitan
Governance Survey: A Quantitative Description of
Governance Structures in Large Urban Agglo-
merations,” OECD Regional Development
Working Papers (Brussels: OECD Publishing,
2014). Data are for 2000–2006.
327. Elaine S. Povitch, “History, Politics and Pride:
Why Small Cities, Counties Rarely Merge,”
Stateline.com (March 10, 2016).
328. Task Force on Local Government Consolidation
and Unfunded Mandates, Delivering Efficient,
Effective, and Streamlined Government to Illinois
Taxpayers, p. 5.
329. U.S. Advisory Commission on Intergovernmental
Relations, Intergovernmental Service Arrange-
ments for Delivering Local Public Services, p. 98.
330. Kevin Klinkenberg, Why I Walk (Gabriola Island,
BC: New Society, 2014), p. 27.
331. Rusk, Cities Without Suburbs, p. 95. Figures are
for 1990. We are using Rusk’s definition of metro
government, and a universe of all 320 metro areas
as of 1990.
Intergovernmental Administration 499
332. Ibid., p. 96.
333. NACo, as cited in Povitch, “History, Politics and
Pride.” Figure is for 2016.
334. Suzanne M. Leland and Kurt Thurmaier, “Lessons
from 35 Years of City-County Consolidation At-
tempts,” Municipal Year Book, 2006 (Washington,
DC: International City/County Management
Association, 2006), pp. 3–10. Consolidated gov-
ernment figure is for 2004.
335. Rusk, Cities Without Suburbs, p. 92.
336. David Rusk, as cited in Kate Linebaugh, “Threats
to Town Hall Stir Voter Backlash,” Wall Street
Journal (June 8, 2011).
337. As derived from data in Rusk, Cities Without
Suburbs, p. 92. Twenty-nine consolidations oc-
curred, 1947–2004.
338. Boyd, Layering of Local Governments & City-
County Mergers, p. 19. Figures are for 1800–
2006.
339. U.S. Advisory Commission on Intergovernmental
Relations, State Laws Governing Local Govern-
ment Structure and Administration, pp. 25–26.
Data are for 1990.
340. Leland and Thurmaier, “Lessons from 35 Years of
City-County Consolidation Attempts,” p. 9.
341. Jamie L. Palmer and Greg Lindsey, “Classifying
State Approaches to Annexation,” State and
Local Government Review 33 (Winter 2001),
pp. 60–73. Data are for “the 1970s”–1997.
342. David Rusk, Annexation and the Fiscal Fate of
Cities (Washington, DC: Brookings, 2006), p. 1.
343. As derived from data in Walker, The Rebirth
of Federalism, p. 292, and Rodger Johnson,
Marc Perry, and Lisa Lollock, “Annexation and
Population Growth in American Cities, 1990–
2000,” Municipal Year Book, 2004 (Washington,
DC: International City/County Management
Association, 2004), pp. 3–7. During the 1990s,
cities annexed 36 percent more land and 62
percent more people than they did, on average, in
each of the preceding two decades.
344. Walker, The Rebirth of Federalism, p. 292. Figure
is for 1970–1989.
345. Rusk, Cities Without Suburbs, p. 10. Figure is for
1950–1990.
CHAPTER
13
Toward a Bureaucratic Ethic
S o long as there were “principles” of public
administration, ethics were irrelevant to its prac-
tice; “science,” on which the field was purportedly
based, is, after all, neither ethical nor unethical. By
the mid-twentieth century, as scholars reconsidered
this paradigm, their views on the legitimacy of ethics
began to alter, and today a concern with ethical
behavior occupies a prominent place in the field.
CODES AND COMMISSIONS: THE
RISE OF PUBLIC SECTOR ETHICS
An underappreciated fact about the development
of  a bureaucratic ethic is that practicing public
administrators, not scholars or elected officials,
introduced it.
Ethics for the Public Professions
What is now the International City/County
Management Association adopted the first code of
ethics for a public profession in 1924. The code
reflected the anti-corruption values of the munici-
pal reform movement of the period, and essentially
held up efficiency as its ethical touchstone. Despite
its initial narrowness, the city managers’ code was
groundbreaking and other public professions fol-
lowed suit. All the associations that represent the
profession’s major specializations now have codes
of, and provide training in, ethics for their members.
The American Society for Public Administration,
which is the most representative association of all
500
the public professions (and, therefore, confronts
knotty problems in writing a uniquely broad ethical
code), rejected attempts to adopt a code of ethics
in 1938 and 1949. It first adopted a code in 1984,
revised it in 1994, and, in 2013, adopted a new code
that reaches out to those in specialized public pro-
fessions.
That critical component of professionalism, the
universities, also have recognized the importance of
public ethics. The field’s national accrediting body
requires graduate education in ethics, and all intro-
ductory public administration textbooks include
a  discussion of ethics.1 (This text, the reader may
have noticed, contains several such discussions
throughout.)
Ethics for Governments
Governments lagged behind the public professions
in recognizing ethics, but, by the mid-twentieth
century, they were catching up. Today, more gov-
ernment workers (47 percent) than either non-
profit employees (44 percent) or businesspeople
(38 percent) report that their organization has a full
ethics and compliance program in place.2
Federal Ethics Congress first imposed a general
code of ethics on federal administrators in 1958,
and, twenty years later, with the passage of the Ethics
in Government Act of 1978, expanded the code and
founded the Office of Government Ethics and the
Office of Independent Counsel, charged with investi-
gating federal officials over ethical concerns. Also in

that year, Congress enacted the Civil Service Reform
Act, which listed for the first time Merit System
Principles and Prohibited Personnel Practices;
several of these principles and practices pertain to
ethical, or unethical, actions. In 1992, the Office
of Government Ethics released the federal govern-
ment’s first comprehensive set of standards of ethical
conduct, composed of some forty pages that focus
mostly on conflicts of financial interest and impar-
tiality. In 2016, the Office of Government Ethics
issued a revised code that required educating new
hires in ethics, providing specific ethics responsibili-
ties for supervisors, and strengthened the ethical role
of inspectors general.
In 2008, Congress, largely as the result of
a lobbying scandal, established an Office of
Congressional Ethics, which has been commended
as “a proven force for good on Capitol Hill.”3
Evidence of this judgment may be found in the
House of Representatives, which, on the very first
day of the new Congress that convened in 2017,
voted to gut the office; angry constituents flooded
representatives with phone calls and emails, causing
a quick reinstatement of the office.
Nearly 9,000 federal employees work, at least
sometimes, in ethics programs.4 In part, this large
number derives from the facts that “Congress has
enacted laws and presidents have issued executive
orders that have produced a deeply layered and
extraordinarily cumbersome regulatory scheme
designed to insure the integrity of federal employ-
ees,” and clarity, simplicity, and straightforwardness
suffer.5
Grass-Roots’ Ethics The first general code of
state ethics was legislated in 1954 by the New York
general assembly, and now forty-seven states have
some form of written ethics code. As ethics codes go,
they are less than satisfactory. In more than half the
states, codes do not address even as many as four
out of six basic areas of ethics legislation, to wit: the
presence of an ethics code (pretty basic, that); man-
datory financial disclosure; and limits on honoraria,
gifts from lobbyists, post-government employment,
and representation of clients before state agencies.6
Forty-one states have established commissions
to oversee ethics issues. Most are largely tooth-
less, vulnerable, reactive, fragmented, symbolic,
and underfunded, and twenty-eight of them, or
Toward a Bureaucratic Ethic 501
68 percent, received grades of “D” or “F” from a
national investigation.7
Weak codes of ethics derive from state policies
that protect state officials from public knowledge.
Disclosure of tax returns is not required for state offi-
cials in any state. “In most states, the personal finan-
cial records of candidates for state office and elected
officials . . . are hidden behind arcane rules and
labyrinthine accessibility”; in nineteen states, finan-
cial disclosure forms completed by legislators are
unavailable online. Three states—Idaho, Michigan,
and Vermont—do not require any financial disclo-
sures from state elected officials.8 And, in those few
states that do require elected officials and candidates
to submit financial disclosure forms to ethics com-
missions, perhaps not even 10 percent of the forms
receive a “substantive review” due to a lack of funds.9
Largely because of the widespread adoption of
the reformist council manager plan, a remarkable 86
percent of cities and counties have codes of ethics,
covering 79 percent of staffers and 83 percent of
elected officials.10 Local elected officials in twenty
states, a growing number, are subject to state-
imposed ethics codes.11
PRACTICING ETHICAL
PUBLIC AND NONPROFIT
ADMINISTRATION
Practicing public and nonprofit ethics have their
own unique challenges.
Ethical Environments
Public administrators toil on slippery ethical slopes.
For nearly two decades, virtually all public admin-
istrators in federal, state, and local governments
have agreed that they “encounter ethical dilemmas
at work,”12 14 percent of whom feel pressured to
compromise their ethics, an increase of two-fifths
from four years earlier,13 compared with 11 percent
of nonprofit employees14 and 10 percent of busi-
nesspeople.15 The longer that one works in the
federal government, the likelier that one will per-
ceive a worsening ethical climate, although promo-
tion to “supervisory status attenuates this negative
effect”16—perhaps because they are now part of
what they had earlier perceived to be the problem.
 502 PA R T I V Implementing Public Policy
Yet, there are also heartening ethical signs. The
proportion of public administrators at all govern-
mental levels who think that their supervisors are
under pressure to compromise their personal stand-
ards has declined by more than two-fifths, from
50 percent to 35 percent, over seventeen years.17
Although declining from 55 percent over five years,
52 percent of federal employees think that “my
organization’s leaders maintain high standards of
honesty and integrity.”18 And all—100 percent—
high-level municipal officials report that their
managers “demonstrate” ethical conduct,19 a most
satisfying number in light of empirical research
which reveals that employees’ views of their leaders’
personal conduct (e.g., strong character, keeping
promises) drives their perceptions of their ethical
leadership, perceptions that can render organiza-
tions more—or less—ethical.20
As with cities, nonprofit organizations exude
“moral leadership,” and their employees “have a
considerably more positive view of their employ-
er’s morality than do employees in the other two
sectors,” as demonstrated by the “amazing 82%” of
these employees who thought that their employer
had “strong moral values and principles,” compared
with 60 percent of private-sector employees and “a
mere 30%” public-sector workers.21
Committing to Ethics
Public administrators are committed to ethics.
Graduates of the top public administration programs
rank “maintaining ethical standards” as the single
most important “skill,” by far, for achieving success,
regardless of where they are employed—govern-
ments, businesses, or nonprofit organizations.22
Skills must be honed. In the case of public-sector
ethics, “ethics training [provided by 54 percent of
local governments23], interaction with ethics offi-
cials, and perceived knowledge about ethics topics
consistently influence perceptions of ethical climate
and advice-seeking behavior in a positive way.”24
More than three-quarters of federal, state, and
local managers believe that “ethical concerns can be
empowering in organizations” (only 7 percent dis-
agree), up from two-thirds a decade earlier.25 City
managers display a solid knowledge of their profes-
sion’s code of ethics,26 and, happily, the number of
city managers with higher ethics (“about one-third,”
who also possess higher levels of education and pro-
fessionalism) is approximately twice that of manag-
ers who register lower ethical levels (17 percent).27
A Higher Ethical Standard Public administra-
tors’ ethical commitment is all the more remarkable
because large majorities see themselves as adher-
ing to a higher ethical standard than just about
anybody else—elected and appointed officials, senior
government managers,28 businesspeople,29 and even
the taxpayers who pay their salaries (public admin-
istrators express much greater umbrage over govern-
mental scandals than does the general public).30
Public administrators do not claim a higher
morality than their nonprofit counterparts, and with
reason; nonprofit employees are significantly less
likely than either public- or private-sector workers
to say that their “job requires violating [their] con-
science.”31
Walking the Ethical Walk More than half of all
public employees, almost exactly the same propor-
tion as in the nonprofit and private sectors, state
that they have observed “misconduct,” ranging from
“Internet abuse” to theft, in their workplaces during
the previous year. What is important in this context
is that government workers are much more likely to
report such misconduct than are their nonprofit and
business counterparts, and their willingness to do
so is steadily growing. Whistle blowing “was by far
more prevalent among public sector employees who
had observed some form of misconduct,” with 87
percent of them blowing the whistle, compared with
59 percent of nonprofit workers and a modest 46 of
for-profit employees.32
Public administrators are not only talking the
ethical talk, but also are walking the ethical walk.
DO MORALS MATTER?
Do ethics matter? Are governments and their bureau-
crats more effective because they are ethical?
Among governments, a low “ethical climate”
associates with greater damage and injury to cit-
izens  and businesses, more complaints from the
public,33 and a tendency to “disregard accountabil-
ity and responsiveness” in governing.34
By contrast, a high ethical climate (that is,
managers who set a good ethical example, and

communicate and enforce high ethical standards)
correlates with fewer employees who take sick leave
and take less of it, workers who are more likely to
think that their departments provide customers with
better value for their money, employees who plan
to keep working in their departments,35 and govern-
ments that experience fewer lawsuits, better bond
ratings, and are more likely to implement state-of-
the-art productivity improvements.36
As these findings suggest, high ethics and high
administrative competence waltz gracefully together.
An empirical analysis of public administrators con-
cluded that “the concepts of virtue and competence
are, in practice, very similar . . . because virtue is
an integral feature of managerial competencies.”37
Public executives who have high ethical standards
also win more “policy debates” with colleagues.38
In short, high ethics associate with better gov-
ernance and more successful public careers.
BUREAUCRACY’S BANE:
DETERMINING THE PUBLIC
INTEREST
Central to a bureaucratic ethic is this singular ques-
tion: How do public administrators determine what
is in “the public interest”? Regrettably, “little of the
literature of public administration reflects on the
nature of the public interest.”39
In the legislature, the public interest is deter-
mined by majority vote. The courts commonly rely
on stare decisis, or judicial precedent, which provides
an evolutionary system of legal principles through
which the public interest is fulfilled. When we
approach government’s executive branch, however,
we find no similarly clear-cut method of determining
the public’s interest, though public administration-
ists have tried, contradictorily, to both rationalize
that such a method is unnecessary and to develop
such a method.
Bureaucratic Accountability: Skirting the
Question
The academic effort to avoid the question of how
public administrators should make decisions that are
in the public interest is called bureaucratic account-
ability, or the study of how various restraints safely
Toward a Bureaucratic Ethic 503
channel bureaucrats into making decisions that are
democratic, ethical, legal, and fair. Hence, not to
worry; nothing more is needed.
Internal Constraints and External Controls Just
what these restraints are depends on the scholar.
Some argue that internal constraints, whether
founded on their professional socialization40 or stem-
ming from their own “moral foundations,”41 inhibit
public administrators from committing unethical
acts. Others contend that external controls—laws,42
courts,43 publicity,44 legislative surveillance,45
bureaucratic decentralization,46 and citizen par-
ticipation in bureaucratic decision making47—assure
ethical behavior. Still others maintain that a combi-
nation of internal and external variables reinforce
one another to the benefit of the public interest.48
What Do Public Administrators Use? How reflec-
tive this literature is of the real bureaucratic world
is, at best, unclear. Some research finds that internal
inhibitors are salient; those agencies in which the
values of efficiency, effectiveness, quality, excellence,
and teamwork are dominant associate with high
ethical expectations and standards.49 Another inves-
tigation concludes the opposite, finding that public
administrators rely heavily on an external control,
the law itself, as their principal guide in dealing with
ethical issues; internal constraints—personal belief
systems and professional values—run a very distant
second.50
A Missed Point The bureaucratic-accountability
writers have usefully listed attitudes and mecha-
nisms that may prevent, correct, or punish public
administrators for making decisions that are not in
the public interest. But they have not recommended
any systematic and proactive practice (and certainly
none with the elegant simplicity and practical utility
of majority vote and judicial precedent) that bureau-
crats actually could use to make such decisions.
Moreover, as the scant empirical evidence on the
topic suggests, there is no systematic practice.
Organizational Humanism: Addressing the
Question, but Irrelevantly So
In contrast to the students of bureaucratic account-
ability, another band of public administrationists
 504 PA R T I V Implementing Public Policy
does posit a systemic ethical framework for bureau-
cratic decision making. These are the organizational
humanists.
“The Ends of Man”: The Ultimate Bureaucratic
Value Organizational humanism is a philoso-
phy of public ethics that is founded on the precept
that personal dignity is “the ultimate value,” and,
therefore, the public interest is to always treat each
person humanely. Organizational humanism, in its
more candid mode, “forwards the proposition that
the ends of man are the ends of man. . . . it is not
willing to compromise its human values on any
grounds.”51
The organizational humanists are attractive
because they make no bones about what they think
is important. The school’s problem lies in its applica-
tion. Devils always lurk in the details.
Applying Organizational Humanism: A Non-
Starter Consider, for example, how organizational
humanism would treat affirmative action. There are
two, value-based positions in this controversy.
One is that government should make special
efforts, including the reduction of entrance and pro-
motion standards, to hire and advance members of
those segments of society that have endured unfair
discrimination through no fault of their own.
The other position is that no “lowering of stand-
ards” should be considered, regardless of the appli-
cant’s past tribulations, because government owes
the best governance possible to all the governed,
deprived people included.
Would the organizational humanists be for or
against affirmative action? Who knows?
Organizational humanism states only that “the
ultimate value” in bureaucratic decision making is
“the ends of man.” Is humanity best served by hiring
a deprived-group member who does not execute his
or her duties satisfactorily, or is it best served by not
hiring that same person? This dilemma can be ren-
dered even more exquisite when an incompetent, or
even just a less competent, deprived-group member
applies to an agency charged with ending discrimi-
nation against deprived groups.
It seems reasonably apparent that organiza-
tional humanism does not offer much of a guide to
the public administrator in formulating a decision
that is in the public interest.
CAN NORMATIVE THEORY HELP?
FOUR PHILOSOPHIES OF THE
PUBLIC INTEREST
So the problem remains: the public administrator
(and, for that matter, the nonprofit administrator)
needs a simple and operational articulation of the
public interest that permits him or her to make a
decision, based on rational thinking, that is in the
public interest.
Should we move beyond the confines of the
scholarly community of public administration in
addressing this issue? Can the world’s great philos-
ophers help?
There are four philosophies of the public inter-
est that are relevant to bureaucratic decision making.
Intuitionism: Morally Muddling Through
One is intuitionism, advocated by Aristotle, among
others, which expounds a plurality of first princi-
ples, all of them, no doubt, admirable. As a prac-
tical matter, however, these principles can conflict
with one another when applied to specific situations,
and intuitionism offers no method, other than one’s
intuition, for choosing which principle should take
precedence.
Intuitionism amounts to morally muddling
through. Would intuitionism help us in resolving our
dilemma of affirmative action? As with organiza-
tional humanism, who knows?
Perfectionism: Promoting Perfect People
Another germane philosophy is perfectionism,
which, in contrast to intuitionism, has no problem of
ambiguity. Perfectionism contends that the sole prin-
ciple in determining the public interest should be the
promotion of excellence in art, science, and culture.
Any misfortune for society’s less abled segments that
results is morally justified because the entire society
is lifted that much nearer to perfection.
Friedrich Nietzsche is exemplary of a perfec-
tionist perspective. As Nietzsche put it so pithily,
the deepest meaning that can be given to the human
experience is “your living for the rarest and most
valuable specimens,”52 and Nietzsche evidently
included himself among those specimens.

Unsurprisingly, perfectionism’s opinion of
affirmative action is clear: To hell with it.
Utilitarianism: The Most Benefits for the
Most People
A third ethical framework for the determination of
the public interest is utilitarianism, represented by
John Stuart Mill, among others. Utilitarianism holds
that if a public policy makes most people better
off, even if some people are left worse off, then the
public interest is served.
Utilitarianism differs from intuitionism in that it
is systematic in its logic, and from perfectionism in
that it is democratic in its values.
An example of a utilitarian policy would be one
that raised everyone’s taxes and sent the resultant
revenues to physicians. Such a policy would make
everyone healthier (that is, better off) by encour-
aging more people to enter the medical profession.
Even though society’s least well off taxpayers would
lose money under this arrangement, the policy
nonetheless would be in the public interest because
everyone’s net balance of health would be enhanced,
including that of the least well off.
Utilitarians would reject affirmative action as a
policy reflective of the public interest because it does
not, in theory, make everyone better off. Under util-
itarianism’s criteria, affirmative action makes only
certain groups better off.
Fairness: A Theory of Justice
Utilitarianism has much going for it, but there
remains the gnawing issue of what to do about the
bottom of society, a stratum that utilitarian policies
slap in the chops.
A Philosophy of Fairness In 1945, Karl Popper
suggested that, “Instead of the greatest happiness
for the greatest number [as the utilitarians advo-
cate], one should demand, more modestly, the least
amount of avoidable suffering for all; and further,
that unavoidable suffering . . . should be distributed
as equally as possible.”53
A generation later, John Rawls extended
Popper’s ideas, contending that the public interest
can be discerned in most situations by applying
two “principles of justice”: (1) that “each person
Toward a Bureaucratic Ethic 505
is to have an equal right to the most extensive
basic liberty compatible with a similar liberty for
others,” and (2) that “social and economic inequal-
ities are  to be arranged so that they are both (a)
reasonably expected to be to everyone’s advan-
tage,  and (b) attached to positions and offices
open  to all.”54  Should these principles come into
conflict,  the second is expected to yield to the
first; thus, just as in organizational humanism, the
dignity of  the individual person is of paramount
importance.
Rawls’s theory of justice goes further, however.
His principles necessarily lead to the conclusion that
inequalities of wealth, authority, and social oppor-
tunity “are just only if they result in compensating
benefits for everyone, and in particular for the least
advantaged members of society. These principles
rule out justifying institutions on the grounds that
the hardships of some are offset by a greater good in
the aggregate. It may be expedient but it is not just
that some should have less in order that others may
prosper.”55
In short, as Rawls observes, his principles in
essence are a rigorous statement of the traditional
Anglo-Saxon concept of fairness.
Applying Fairness: A Real Starter Rawls’s and
Popper’s theories argue for affirmative action
because not hiring society’s most deprived people
would deprive them further. Hiring them, on the
other hand, would facilitate the full realization of
their “basic liberty” without encroaching on the
basic liberty of others, and would help assure that all
offices are open to all and that the privileges innate
to such offices would continue to work toward the
advantage of all in a reasonably equal way.
The Unique Usefulness of Fairness as the Public
Interest When applied with the rigor brought by
Rawls and Popper, fairness offers the public admin-
istrator a workable, rational way for determining the
public interest. So, for that matter, do perfectionism
and utilitarianism (but not organizational human-
ism and intuitionism, which have severe problems of
workability or logic). We think, however, that per-
fectionism and utilitarianism are not appropriate for
American public administrators because the former’s
values are incompatible with the dominant values of
American society, and the latter’s logic permits the
 506 PA R T I V Implementing Public Policy
least advantaged people in society to be disadvan-
taged further. Readers, of course, are free to disagree.
Does Philosophy Matter?
We have reviewed four philosophies of the public
interest. So what? Does the ivory tower matter in the
corridors of power?
We remind those who might sneer, No, in
answering our question that to be both cynical and
unworldly is a particularly unattractive combina-
tion. Philosophy does, in fact, affect bureaucratic
decision making and public policy, and it does so in
deep and meaningful ways.
Aristotle’s intuitionism pervades the public
sector. Its popularity, however, is not due to its intel-
lectual force. Rather, intuitionism is singularly easy
to choose as a theory of the public interest, in part
because most public administrators are unaware
that they are choosing it. Most public adminis-
trators, like most of us, make decisions on the basis
of what seems to be the most nearly right at the
time. This, in essence, is what intuitionism is all
about.
Nietzsche’s perfectionism has been consciously
selected by the National Science Foundation as its
operating philosophy of the public interest. The
Foundation’s mission of financing “pure” scientific
research—that science should be funded for the sake
of science—is a clear expression of the perfectionist
principle.
Utilitarianism is the official, if unacknowl-
edged, premise on which policy choices are made
by the U.S. Army Corps of Engineers, and likely by
many other agencies, too. The Corps has adopted
“benefit/cost analysis” as its method of deciding
which engineering projects are in the best inter-
ests of the nation, and benefits and costs are cast in
terms of dollars saved or lost. Hence, proposed pro-
jects, such as flood control, that protect trailer parks
and poor people, rather than McMansions and rich
people, would not make the cut because manors are
worth more than mobile homes. To protect cheaper
homes at the expense of costlier ones would violate
benefit/cost precepts—and utilitarian precepts as
well.56
Rawls’s and Popper’s theory of justice is widely
implemented; it furnishes the philosophic founda-
tion for the vast majority of American governments
that levy a progressive tax on personal income,
and no government imposes a regressive income
tax, whether personal or corporate. Mainstream
personal income tax codes are purposely designed
to assure that the least well off are not made less
well off, a principle that is central to Rawls’s and
Popper’s theory.
Even in the dank recesses of governmental
bureaucracies, philosophy flourishes.
WHAT IS TO BE DONE?
IMPLEMENTING ETHICAL
PUBLIC ADMINISTRATION
In 1902, the Russian Communist, V. I. Lenin,
demanded, “What is to be done?” about the plight
of the proletariat, and promptly answered his own
question with: Revolution!
Something akin to a revolution may be needed
to cope with government’s most egregious and
destructive form of unethical behavior, corruption, a
suppurating public pustule that inspired the found-
ing of public administration itself. Perhaps it is time
to return to our roots.
An irony in the endless American effort to curtail
corruption is that its locus seems to have shifted over
the course of the twentieth and twenty-first centuries
from state and local governments to the federal one.
The nearly universal professionalizing of state civil
services and the dominance of the council-manager
plan in local governments clearly correlate with the
dramatic decline in corruption in these jurisdictions.
As we reviewed in Chapter 11, however, Washington
appears to be awash in conflicts of interest and spe-
cial-interest influence—corruption that Congress
has legally tolerated.
Nowhere are Washington’s conflicts-of-interest
and special-interest influence more glaringly evident
than in the administration of President Donald
J. Trump. Contrary to past presidents, President
Trump refuses to release his tax returns; he is both
landlord and tenant of a Washington hotel, a hotel
that foreign rulers and diplomats are growing
increasingly fond of inhabiting (some paying five
times more than the normal room rate57) and he
owns more than 400 condos that are on the market
for about $90 million; any would-be presidential
influencer could happily pay considerably more

than top dollar for one or many. There is far more,
none of it good. Unsurprising, perhaps, early in its
presidential term the Trump administration backed
out of its scheduled ethics training for its top execu-
tives, training similar to that which the two previous
administrations had taken.
We are not suggesting that all state and local
governments are angelic; far too many have yet to
ascend to purgatory. But the grass-roots govern-
ments do seem to have cultivated more successfully
than their federal cousin two qualities (detailed in
Chapter 1) that are vital to ethical—and effective—
governing. They are: Public trust in government, and
popular esteem for those who govern.
How can public trust and esteem for gov-
ernment be raised? Aside from legislating ethical
behavior for the current president, increasing public
administrators’ compensation would be a start,
as higher incomes correlate not only with higher
social status for those who earn them, but also with
greater trust in government; recall from Chapters
9 and 12 that state and local public administrators
not only earn more, on average, than their federal
counterparts, but that their governments also are
more trusted than the federal government. The con-
nections among higher public trust, higher public
esteem, and higher public pay are real.
There are additional benefits. In a unique study,
it was determined that “higher wages attract more
able applicants as measured by their IQ, person-
ality, and proclivity towards public sector work
. . . higher wage offers also increased acceptance
rates.”58
As noted in the introduction to Part III,
greater pay also reduces corruptive temptations,59
THE PASSION OF PUBLIC ADMINISTRATION
Although, as we observed at the beginning of this
book, constraint is the dominating characteristic in the
culture immersing America’s public administrators,
they nonetheless make large—sometimes very large—
decisions. Consider the case, and the ethics, of New
York’s Robert Moses, who transitioned from dreamy
idealist to one of the preeminent power brokers of the
twentieth century.
Toward a Bureaucratic Ethic 507
particularly among those public administrators who
are at the forefront of protecting the public inter-
est from the predations of private interests.60 This
problem is especially acute in the federal govern-
ment, where regulation and privatization—two huge
and sprawling areas that are uniquely susceptible
to graft—expanded radically during the twentieth
century and into this one.
The city-state of Singapore exemplifies the
public benefits brought by competitive public sal-
aries. Its government’s ministers (i.e., cabinet-level
executives) are paid more than $1 million, with
comparably competitive salaries down the line.
Prior to 1990, Singapore was “one of the more
corrupt countries on the planet,”61 but now boasts
“one of the world’s least corrupt and most efficient
bureaucracies.”62 With just over five million people,
Singapore has impressively vast financial reserves of
more than $250 billion, a starkly solid sign of good
governance.
Raising public pay is not a cakewalk. After
California mandated that municipal salaries be made
public, in 2010, those city managers whose salaries
had not been disclosed earlier “experienced average
compensation declines of approximately 8 percent”
relative to city managers whose salaries had been
disclosed before the state mandate. The decline was
the result of wage cuts, which had nothing to do with
budgetary stress or whether salaries were out of line,
but was “more consistent with a ‘populist’ response
to perceptions of excessive salaries”; following the
salaries’ public posting, “the city manager quit rate
increased by 75 percent.”63
A whopping 68 percent of Americans believe
that private-sector employees work harder than
Robert Moses is sometimes called “America’s greatest
builder,” and the term is not hyperbolic. He confided
to friends his grand plans to transmogrify New York
as early as 1914, while still in his twenties, and began
his career as a “Goo-Goo,” that dismissive term
used by Tammany Hall politicians to describe “good
government” reformers.
(continued)
508 PA R T I V Implementing Public Policy
(continued)
Throughout his entire career (1924–1968), Moses
never held an elected office. Instead, he secured
appointments to head numerous public authorities,
basking in such modestly-titled positions as
“Coordinator,” or as an authority’s board member—
but often its only member. At his peak, Moses
headed fourteen state and city authorities at the same
time.
Moses added to the city 416 miles of parkways;
15,000 acres through his shoreline projects; and over
a thousand apartment buildings housing more people
than lived in Minneapolis.
In the state, Moses built all but one of its major
expressways; seven of the nine bridges linking
Manhattan with the mainland; a number of huge power
dams; and parks. By the time Moses had finished, New
York owned 45 percent of all the nation’s acreage
devoted to state parks.
Nationally, Moses was instrumental in drafting
the life-changing Interstate Highway Act and the
controversial Urban Renewal program. His interest
in Urban Renewal was understandable: Moses, who
controlled all such projects in New York, spent more
than twice the amount of federal Urban Renewal
dollars than did all other cities combined.
As the urban scholar, Lewis Mumford, one of
Moses’s most tenacious foes, stated, “In the twentieth
century, the influence of Robert Moses on the cities of
America was greater than that of any other person”
(Caro, The Power Broker, p. 12).
Was Moses good or bad for New York—and the
nation?
To his everlasting credit, Moses rammed through
titanic projects that employed thousands, moved
hundreds of thousands, and created greenswards
enjoyed by millions. And “rammed” is the apt verb.
Moses manifested a “savage energy” that would erupt
into a “fury” when his plans were frustrated. He “would
lunge out of his chair and begin, as one aide put it,
‘waving his arms, just wild,’ pick up the old-fashioned
inkwell on his desk and hurl it at aides so hard that
it shattered against a wall; how he would pound his
clenched fists into the walls hard enough to scrape the
skin off them, in a rage beyond the perception of pain”
(Caro, “The City Shaper,” pp. 48–49).
There was, however, a dark side to his genius.
To build, Moses destroyed. His projects, which, with
few exceptions, were built for the middle class and the
wealthy, required razing the homes of a half-million
people, most of them poor. Asked if he had ever
considered altering his projects to save their homes, Moses
retorted, “‘Nah’ . . . I can still hear the scorn in his voice
as he said it . . . scorn for me who had thought it necessary
to ask about them” (Caro, “The City Shaper,” p. 52).
Moses routinely employed deception, slander, libel,
blackmail, and thinly-veiled bribery to achieve his
goals, tactics that resulted in “some of the greatest
scandals of twentieth century New York, scandals
almost incredible . . . for the colossal scale of their
corruption.” Moses boasted (jokingly, one hopes)
that “nothing I have ever done has been tinged with
legality” (Caro, “The City Shaper,” p. 42). Though
personally “money honest” (to employ a term for a
complex reality that only New Yorkers could express
so succinctly), his “Moses men,” his closest allies and
administrators, became multimillionaires.
Being money honest, however, did not mean that
this particular bureaucrat subsisted in a low-profile
life of genteel modesty. Indeed, Moses’s positions
came with a multitude of expensive and enviable perks,
including a yacht, skippered by three captains, for his
personal use, and four dining rooms scattered around
the city, each with its own full-time staff, who served
only Moses and his guests. The secretaries who worked
in his authorities were not only paid more than New
York City’s commissioners, but also were given bigger
cars, driven by chauffeurs who were on call twenty-four/
seven.
Through some adroit, if ethically questionable,
maneuvering by New York’s governor, Moses lost all his
power in 1968. But Moses never gave up. As a labor
leader put it, “They want him to get tired and to go
away and get lost. But I say, ‘Forget it!’ This guy don’t
blow away” (Caro, “The City Shaper,” p. 53).
Robert Moses died in 1981. He was ninety-two, still
a fighter.
Sources: Robert A. Caro, The Power Broker: Robert Moses
and the Fall of New York (New York: Knopf, 1974) and
Robert A. Caro, “The City Shaper,” The New Yorker (January
5, 1998), pp. 42–53.

those in the public sector (just 9 percent think other-
wise),64 and only 13 percent agree that the salaries of
public administrators should be raised “to encour-
age the best people to go into government.”65 Yet,
for the sake of that very citizenry, the challenge must
be faced.
BIG BUREAUCRACY, BIG
DECISIONS
It is fitting to close this book with a thought about
the ultimate duty of the public and nonprofit admin-
istrator. That duty is to make ethical decisions.
Public and nonprofit administrators’ decisions can
be immensely far-reaching, or affect just one person.
But each of them changes people, for good or ill.
We request that, if you enter these fields or are
now in one, you remember to ask yourself how
people will be helped or hurt by your decisions. Few
questions are more important in any context, but in
the contexts of the public and voluntary life of your
nation, none is more important.
NOTES
1. James S. Bowman, Evan M. Berman, and Jonathan
P. West, “The Profession of Public Administration:
An Ethics Edge in Introductory Textbooks?” Public
Administration Review 61 (March/April 2001),
pp. 194–205.
2. Ethics Resource Center, National Nonprofit Ethics
Survey: An Inside View of Nonprofit Sector Ethics
(Arlington, VA: Author, 2008), pp. 22, 2. Figures
are for 2007.
3. The Editors, “Congress’s Unpopular Watchdog,”
New York Times (September 21, 2012).
4. Robert W. Smith, “Corporate Ethics Officers and
Government Ethics Administrators: Comparing
Apples with Oranges or a Lesson to Be Learned?”
Administration & Society 34 (January 2003),
pp. 632–652. The quotation is on p. 639. Figure is
for 1998.
5. National Commission on the Public Service, Urgent
Business for America: Revitalizing the Federal
Government for the 21st Century (Washington,
DC: U.S. Government Printing Office, 2003),
pp. 21–22.
6. Beth A. Rosenson, Shadowlands of Conduct: Ethics
and State Politics (Washington, DC: Georgetown
Toward a Bureaucratic Ethic 509
University Press, 2005), pp. 5, 10–11. Data are for
1996.
7. David Zalubowski, Policing the Politicians: State
Ethics Commissions Lack Muscle (Washington,
DC: Center for Public Integrity, 2013). Figures are
for 2013.
8. Elaine S. Povich, “State Financial Disclosure
Antiquated, Inaccessible,” Stateline (October 27,
2016). Data are for 2016.
9. Robert W. Smith, “Enforcement or Ethical Capacity:
Considering the Role of State Ethics Commissions
at the Millennium,” Public Administration Review
63 (May/June 2003), pp. 283–295.
10. International City/County Management Asso-
ciation, ICMA State of the Profession 2012 Survey
Results (Washington, DC: Author, 2016), Q. 8–9.
11. U.S. Advisory Commission on Intergovernmental
Relations, State Laws Governing Local
Government Structure and Administration, M-186
(Washington, DC: U.S. Government Printing
Office, 1993), p. 33. Figure is for 1990. In 1978,
seventeen states imposed ethics codes.
12. James S. Bowman and Claire Connolly Knox,
“Ethics in Government: No Matter How Long and
Dark the Night,” Public Administration Review 68
(July/August 2008), pp. 627–639. The quotation is
on p. 628. Ninety-seven percent said this in 1989,
1996, and 2006.
13. Ethics Resource Center, National Government
Ethics Survey: An Inside View of Public Sector
Ethics (Arlington, VA: Author, 2008), p. 6. Figure
is for 2007. In 2003, 10 percent of government
workers said this.
14. Ethics Resource Center, National Nonprofit Ethics
Survey, p. 16. Figure is for 2007.
15. Ethics Resource Center, National Business Ethics
Survey: An Inside View of Private Sector Ethics
(Arlington, VA: Author, 2008), p. 16. Figure is for
2007.
16. Eric D. Raile, “Building Ethical Capital: Perceptions
of Ethical Climate in the Public Sector,” Public
Administration Review 73 (March/April 2013),
pp. 253–262. The quotation is on p. 253.
17. Bowman and Knox, “Ethics in Government,”
p. 629. Figures are for 1989–2006.
18. U.S. Office of Personnel Management, 2016 Federal
Employee Viewpoint Survey Results (Washington,
DC: U.S. Government Publishing Office, 2016),
Q. 54. Figures are for 2012–2016.
19. Mary Ann Feldheim and Xiaohu Wang, “Ethics
and Public Trust: Results from a National Survey,”
 510 PA R T I V Implementing Public Policy
Public Integrity 6 (Winter 2003–2004), pp. 63–75.
Figures (p. 70) are for 2000.
20. Ethics Resource Center, Ethical Leadership: Every
Leader Sets a Tone (Arlington, VA: Author, 2014).
21. Joyce Rothschild, “The Fate of Whistleblowers
in Nonprofit Organizations,” Nonprofit and
Voluntary Sector Quarterly 42 (5, 2013), pp. 886–
901. The quotations are on p. 896. Figures are for
2013.
22. Paul C. Light, The New Public Service (Washington,
DC: Brookings, 1999), p. 110.
23. International City/County Management Asso-
ciation, ICMA State of the Profession 2012 Survey
Results, Q. 10.
24. Raile, “Building Ethical Capital,” p. 253.
25. Bowman and Knox, “Ethics in Government,”
p. 628. Figures are for 2006 and 1996.
26. Greg Streib and Mark Rivera, “Assessing the
Ethical Knowledge of City Managers,” Public
Integrity 12 (Winter 2009/2010), pp. 9–23.
27. Evan M. Berman and Jonathan P. West,
“Responsible Risk-Taking,” Public Administration
Review 58 (July/August 1998), pp. 346–352.
28. James S. Bowman and Russell L. Williams, “Ethics
in Government: From a Winter of Despair to a
Spring of Hope,” Public Administration Review 57
(November/December 1997), pp. 517–526.
29. Bowman and Knox, “Ethics in Government,”
p. 629.
30. James S. Bowman, “Ethics in Government: A
National Survey of Public Administrators,” Public
Administration Review 50 (May/June 1990),
pp. 345–353.
31. Philip H. Mirvis and Edward J. Hackett, “Work
and Work Force Characteristics in the Nonprofit
Sector,” Monthly Labor Review 106 (April 1983),
pp. 3–12. The quotation is on p. 10. Data are for
1977.
32. Rothschild, “The Fate of Whistleblowers in
Nonprofit Organizations,” p. 896. Figures are for
2013.
33. Colleen G. Waring and C’Anne Daugherty,
“Auditing Ethics—Make Them an Offer They
Can’t Refuse,” Journal of Government Financial
Management 53 (Spring 2004), pp. 34–40.
34. Berman and West, “Responsible Risk-Taking,”
p. 349.
35. Waring and Daugherty, “Auditing Ethics—Make
Them an Offer They Can’t Refuse.”
36. Berman and West, “Responsible Risk-Taking,”
p. 349.
37. Michael Macaulay and Alan Lawton, “From
Virtue to Competence: Changing the Principles of
Public Service,” Public Administration Review 66
(September/October 2006), pp. 702–710. The quo-
tations are on pp. 701, 709.
38. Jason L. Jenson, “Getting One’s Way in Policy
Debates: Influence Tactics Used in Group Decision-
Making Settings,” Public Administration Review
67 (March/April 2007), pp. 216–227.
39. Eugene D. Dvorin and Robert H. Simmons, From
Amoral to Humane Bureaucracy (San Francisco:
Canfield Press, 1972), p. 61.
40. Carl J. Friedrich and Taylor Cole, Responsible
Bureaucracy (Cambridge, MA: Harvard University
Press, 1949).
41. Kathryn Denhardt, “Unearthing the Moral
Foundations of Public Administration: Honor,
Benevolence, and Justice,” Ethical Frontiers in
Public Management, James S. Bowman, ed. (San
Francisco: Jossey-Bass, 1991), pp. 256–283.
42. John A. Rohr, Ethics for Bureaucrats: An Essay
on Law and Values, 2nd ed. (New York: Marcel
Dekker, 1989).
43. K. C. Davis, Administrative Law (St. Paul: West
Publishing, 1951).
44. Gordon Tullock, The Politics of Bureaucracy
(Washington, DC: Public Affairs Press, 1965).
45. Charles S. Hyneman, Bureaucracy (New York:
Harper & Row, 1950).
46. Dwight Waldo, “Development of a Theory of
Democratic Administration,” American Political
Science Review 46 (March 1952), pp. 81–103.
47. L. Von Mises, Bureaucracy (New Haven, CT: Yale
University Press, 1944).
48. Terry L. Cooper, The Responsible Administrator
(San Francisco: Jossey-Bass, 1990).
49. Donald C. Menzel, “The Ethical Environment of
Local Government Managers,” American Review
of Public Administration 25 (September 1995),
pp. 247–261.
50. Harold F. Gortner, Ethics for Public Managers
(New York: Praeger, 1991).
51. Dvorin and Simmons, From Amoral to Humane
Bureaucracy, p. 61, 60. The authors are explaining
what they call “radical humanism,” which appears
to be a more plainly-spoken version of organiza-
tional humanism.
52. Friedrich Nietzsche, as quoted in J. R. Hollingsdale,
Nietzsche: The Man and His Philosophy (Baton
Rouge: Louisiana State University Press, 1965),
p. 127.

53. Karl Popper, The Open Society and Its Enemies:
Vol. I, The Spell of Plato, 5th ed. (Princeton, NJ:
Princeton University Press, 1966), p. 285. The set
was first published in 1945.
54. John Rawls, A Theory of Justice (Cambridge, MA:
Belknap Press of Harvard University Press, 1971),
p. 60.
55. Ibid., pp. 14–15.
56. Laura Mumford, “Policy Analysis and the U.S.
Army Corps of Engineers.” Paper submitted
to a graduate course in public administration,
December 11, 1984, School of Public Affairs,
Arizona State University, Tempe, Arizona, Nicholas
Henry, instructor.
57. Jonathan O’Connell and Mary Jordan, “For
Foreign Diplomats, Trump Hotel Is Place to Be,”
Washington Post (November 8, 2016).
58. Ernesto Dal Bo, Frederico Finan, and Martin A.
Rossi, Strengthening State Capabilities: The Role
of Financial Incentives in the Call to Public Service
(Stanford, CA: Stanford University, 2013), p. 1.
59. Caroline Van Rijckeghem and Beatrice Weder,
Toward a Bureaucratic Ethic 511
Corruption and the Rate of Temptation:
Do Low  Wages in the Civil Service Cause
Corruption?  (New York: International Monetary
Fund, 1997).
60. Gary S. Becker and George J. Stigler, “Law
Enforcement, Malfeasance, and Compensation of
Enforcers,” Journal of Legal Studies 3 (January
1974), pp. 1–18.
61. Patrick Raden Keefe, “Corruption and Revolt,”
The New Yorker (January 19, 2015), pp. 30–36.
The quotation is on p. 30.
62. James Surowiecki, “The Regulation Crisis,” The
New Yorker (June 14 & 21, 2010), p. 56.
63. Alexandre Mas, Does Transparency Lead to Pay
Compression? (Cambridge, MA: National Bureau
of Economic Research, 2014), p. 1.
64. Rasmussen Poll, 68% Say Private Sector Employees
Work Harder Than Government Workers
(Washington, DC: Author, 2013).
65. Kevin Merida, “Americans Want a Direct Say
in Political Decision-Making, Pollsters Find,”
Washington Post (April 17, 1994).
 512 INDEX
INDEX
access 43
adaptive systems 66–7
Administrative Behavior see Simon,
Herbert
administrative man 115
administrative procedure acts 94
affirmative action 336–7, 344–6
analytics 157–8
Articles of Confederation and Perpetual
Union 10
benchmarking 206–7
Bentley, Arthur F. 383
biennial budget 269
bounded rationality 80
broadbanding 325
budget 258
budgeting-by-objectives 263
budget rollover 270
bullying 64
bureaucracy 95–6
bureaucratic accountability 503
city-county consolidation 485
civil rights 335–6
Civil Service Act of 1883 303
Civil Service Reform Act of 1978 324,
331, 501
civil service system 298; see also merit
system
Classification Act 302
closed model of organizations 56–9;
administrative management 58;
bureaucratic theory 57; characteristics
56; scientific management 57
collective bargaining 314
collective system 312
common-pool good and services 389
comparable worth 340
competitive federalism 464–5
competitive sourcing 401
Congressional Budget and Impoundment
Act of 1974 272–3
constituent power arena 384
co-optative federalism 463
cooperative federalism 463
corruption 3–5, 143–51, 413–4;
evolution of 147–8; independent
sector fraud 146; inhibiting fraud
149–50; national culture 143;
pervasiveness 150–1; political
corruption 144–5
cutback management 265–7
cybercrime 168–71; cyber espionage
170; hacking 169; ransomware 169
cybersecurity 171–4
decision support system 157
deficit 246
Dillon’s rule 477
direct democracy 16
discretionary power 20
disjointed incrementalism 382
distributive power arena 384
diversity management 346
Downs, Anthony 96; see also law of
hierarchy
dual federalism 462–3
Easton, David 383
effectiveness 197
efficiency 197; see also evolution of
public efficiency
e-government 174–7; benefits of 175–6;
federal.gov 174; local.gov 175; and
public fraud 176–7; state.gov 174–5
elite/mass model
enterprise risk management 157
environmental determinism 92
Equal Employment Opportunity Act of
1972 337
Equal Employment Opportunity
Commission (EEOC) 335
Ethics in Government Act 500
evolution of public efficiency 198–201
federal expenditures 233–4
The Federalist Papers 10, 192
federal system of governance 460–1
fiscal federalism 466–9; block grants
466; grants-in-aid 466; lobbying 467;
state grants 469
FOIA Improvement Act 93
Follett, Mary Parker 59
Freedom of Information Act (FOIA) 93
Friedrich, Carl J. 383
general revenue 232, 234, 235, 237
Gilbreath, Frank and Lillian 58
good government 6
Goodnow, Frank J. 36
governance 47
government corporations 425
government inefficiency 193–7;
fundamental reasons 193; political
reasons 193–6
The Government Performance and
Results Act Modernization Act of
2010 47
government-sponsored enterprise 425
governmental fragmentation 482–3
graft see corruption
green tape 99
gross debt 250
group model of policymaking 383
groupthink 81
guerrilla government 89
Gulick, Luther H. 37
Hamilton, Alexander 10–1
Hawthorne experiments 60
Herzberg, Frederick 61
hierarchy 96–7
home rule 477
human capital management 294; see also
personnel administration
human services nonprofits 430
hybrids 122
identity theft 166–7
implementation tactics 84; see also edict;
intervention; participation; persuasion
income taxes 241–2
incompetence 327–31
incrementalist paradigm 382
influences on administrative behavior
117–21; birth order 117; national
culture 119–20; turning points 118
inherently governmental activity 401
inspectors general 214–5
institutionalist model 383
institutionalists 121
insurance trusts 234
intergovernmental relations 460
intergovernmental revenue 234
intergovernmental service transfer 479
interlocal service contracts 478–9
intersectoral administration 397
interstate compact 476
interstate conflict 477

interstate cooperation 476–7
intuitionism 504
iron triangles 196
Jefferson, Thomas 11, 192
joint service agreement 479
knowledge management best practices
166
law of hierarchy 96
leadership 123–32; leadership theory
125–8; in organizations 128–30;
within sectors 124
lessons on administering 91
Lewin, Kurt 65, 125
Lindblom, Charles E. 382
line-item budget 259–60
line-item veto 247
lobbying 403–7
local expenditures 239
Lowi, Theodore J. 383
Madison, James 192
managed competition 422
management 42–3
management information system 157
Marvick, Dwaine 121; see also
institutionalists; specialists
Maslow, A.H. 61
Mayo, Elton 60; see also Roethlisberger,
Fritz J.
McGregor, Douglas 68; see also Theory
X and Theory Y
mechanisms of administrative control 90
member-serving organizations 429
merit system 298; see also civil service
system
metropolitan government 484
metropolitan statistical areas 482
Mills, C. Wright 382
Models of Man see Simon, Herbert
multistate legal actions 476–7
municipal annexation 486
municipal bond 254–5
National Academy of Public
Administration 44
National Association of Schools of
Public Affairs and Administration
(NASPAA) 45; see also Network of
Schools of Public Policy, Affairs, and
Administration
National Labor Relations Act 312
neo-institutionalist model 383
Network of Schools of Public Policy,
Affairs, and Administration
(NASPAA) 45; see also National
Association of Schools of Public
Affairs and Administration
nonprofit sector 55
OMB Circular A-76 401
open government 178
open model of organizations 59–67;
characteristics 59; human relations
60–5; organization development
65–7
organizational culture 126
organizational humanity 504
organizational incivility 63
organizations 56
organized anarchy model 384–6
other than general revenue 234, 236,
239
outsourcing outcomes 416
own source revenue 234
Papers on the Science of Administration
see Gulick, Luther H., Urwick, Lyndall
perfectionism 504
performance appraisal 326
performance audits 208
performance-based budgeting 267–9
performance budget 261
performance management 201–6, 334–5;
benefits 201–2; better performance
management 334–5; federal
performance 202–3; limitations 202;
local performance 204; nonprofit
performance 204; state performance
203–4
performance measures 205, 208–11
performance pay 331
personal power 90
personnel administration 294; see also
human capital management
planning-programming-budgeting
system 261–2
political executive system 317–21
policymaking power 20–1
politicized experts see hybrids
politics/administration dichotomy 36–7,
39–40
Politics and Administration see
Goodnow, Frank J.
Popper, Karl 505
position power 90
power 68–9; see also personal power;
position power
Principles of Public Administration see
Willoughby, W.F.
private goods and services 388–9
private sector 55
INDEX 513
privatization 397, 417–9, 423–4
privatization reasons 397–9
productivity 197
professional public administration
system 323–6
program evaluation 211–9; defining the
problem 216; designing the evaluation
216–7; implementation 217–9;
inspectors general 214–5; selecting
evaluators 215–6; types of analysis
212–3
program/performance budgeting 260–1;
see also performance budget
property tax 243–4
protected classes 335–7
public administration 7
public and nonprofit management 143
public authority 426
public debt 251
public finance 232
public goods and services model 388–9
public human capital management
295–8
public policy 381
public policy analysis 381
public sector 55
public service motivation 113
public-serving organizations 429
quotas 338
rational choice model 387
rational interest 68
rationalist paradigm 386
Rawls, John 505
red tape 96, 97–9
redistributive power arena 383
regulative power arena 384
regulatory federalism 469–72; costs
471–2; mandates 470; state mandates
471; unfunded mandates 470–1
reverse discrimination 338
Roethlisberger, Fritz J. 60
sales tax 242–3
self-actualization 61
sexual harassment 341
shared service agreement 479
Simon, Herbert 40–1, 81, 89, 115
social capital 13
social contract 10
social insurance and retirement receipts
233
specialists 121
specialized public professional system
322–3
state expenditures 236
 514 INDEX

strategic decision making 80 telework 164 volunteering 436–7

strategic measurement 209 test validity 339 vouchers 437–8
strategic philanthropy 392 theory of justice 505–6
strategic planning 390–3 Theory X and Theory Y 68; see also Wagner Act see National Labor
sunshine laws 93 McGregor, Douglas Relations Act
systems model 383 toll goods and services 389 Weber, Max 25, 57, 70
whistleblowers 305–9
Taft-Hartley Act 315 ultralocalism 482–4; see also White, Leonard 36
target base budgeting 264–7 governmental fragmentation Willoughby, W.F. 37
tax and expenditure limitations (TELs) uncertainty avoidance 119 Wilson, Woodrow 35
237, 240 Urwick, Lyndall 37
taxes 232–3, 235, 237–8, 240–6 user fees 234 zero base budgeting 263–4
Taylor, Frederick 58 utilitarianism 505 “zone of privacy” 167