1. PO 111: INTRODUCTION TO AMERICAN POLITICS Summer I (2014) Claire Leavitt Boston University

2. TABLE OF CONTENTS What is “bureaucracy”? What do government agencies do? –Types of government agencies Problems with bureaucratic organization: –Differing incentives –Muddled hierarchies and “thickening” –Principal agent problem (misaligned incentives) –Overlapping principal-agent relationships Possibilities for reform?

3. WHAT IS BUREAUCRACY? A type of organizational structure –Hierarchical command structure (pyramidal) –Division of labor by comparative advantage –Consistent set of rules that govern action –Advancement according to merit –Impartiality –Overarching collective goal Problems arise not in spite of but because of these structural characteristics

4. WHAT DO GOVERNMENT AGENCIES DO? Public agencies in the modern era are generally bureaucratic Part of the executive branch Responsibility for implementing the law and overseeing a particular policy arena Fifteen governmental departments –All department Secretaries are members of presidential cabinet

5. OTHER TYPES OF GOVERNMENT AGENCIES Independent Executive Agencies –Independent of departmental control for political reasons –Directors appointed by the president and report directly to the president –Examples: CIA; NASA; Peace Corps; EPA

6. OTHER TYPES OF GOVERNMENT AGENCIES Regulatory Commissions –Independent from both Congress and the president –Non-partisan; free from political influence –Directors appointed by the president –Examples: Federal Reserve; FEC; FCC; SEC

7. OTHER TYPES OF GOVERNMENT AGENCIES Public Corporations –Operate like private corporations but with public money and Congressional oversight –Examples: US Postal Service; Amtrak

8. PROBLEMS OF BUREAUCRATIC ORGANIZATION: #1 Institutional incentives in government agencies differ from the private sector –Maximization of efficiency greater in private sector –Differing purposes: profit versus social/policy goals –Congressional constraints on resource redistribution within a department –Innovation not rewarded in public sector due to top-down constraints

9. PROBLEMS OF BUREAUCRATIC ORGANIZATION: #2 Muddled Hierarchies and “Thickening”: –Ideal organizational structure is tightly-packed pyramid –Bureaucracy has been growing and thickening since the 1950s IDEALPRESENTFUTURE  

10. PROBLEMS OF BUREAUCRATIC ORGANIZATION: #2 Why does thickening occur? –Retention of talented employees –Change in the perception and prestige of government work –Politicization: Non-career civil servants appointed to agency positions by the president Jacksonian patronage versus the merit system Return to an era of politicization Lack of clear command structure

11. PROBLEMS OF BUREAUCRATIC ORGANIZATION: #3 The principal-agent problem –Conflict that occurs when the principal and the agent have different incentives, interests and access to information –Principals want their directives carried out faithfully –Agents want to maximize personal benefits within the constraints set by the principal –Principals don’t always know if an agent is carrying out their will

12. PROBLEMS OF BUREAUCRATIC ORGANIZATION: #3 Examples of the principal-agent problem –Truman and MacArthur –The US Constitution Some delegations of authority were necessary for government to work But how do you prevent agents from becoming tyrannical? American people (P)  federal institutions (A) Congress (P)  other branches (A)

13. PROBLEMS OF BUREAUCRATIC ORGANIZATION: #4 Multiple and Overlapping Principal-Agent Relationships –The bureaucracy is an agent to four principals: The American people The president Congress The courts –Each of these principals has more than thirty different agents (all govt. agencies)

14. PROBLEMS OF BUREAUCRATIC ORGANIZATION: #4 Each agent (government agency) also acts as a principal for two of its own agents: –The agency’s different bureaus and employees –Private contractors and non-governmental organizations (outsourcing)

15. PROBLEMS OF BUREAUCRATIC ORGANIZATION: #4 Complicated network of delegable relationships American people Congress Executive branch Federal courts Governmental agencies Bureaus Managers Non-governmental contractors Employees

16. POSSIBLE REFORMS? Reorganization? Decrease politicization? Inspired leadership? Eliminate federal deficit and regulatory red tape? Increased delegation from Congress to agencies; increased bureaucratic autonomy?