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Banishing Bureaucracy: The Five Strategies for Reinventing Government.

by David Osborne and Peter Plastrik Addison-Wesley, $25

In 1992, David Osborne and Ted Gaebler wrote a book called Reinventing Government, which pushed the usually-dull subject of bureaucratic reform high on the popular agenda. Politicians took an active interest in making government leaner, more innovative, and customer-friendly. Osborne's new book, co-authored with Peter Plastrik, develops similar themes. It argues that governments should abandon nonessential functions, and a find non-bureaucratic ways of fulfilling the remaining functions. The authors draw heavily on the experience of the United Kingdom and New Zealand, which have aggressively applied the principles of reinvention.

It's tough to criticize any book that aims at improving the way government works. No one can deny that government needs to be made more flexible and service-oriented. There are, however, three serious weaknesses with Banishing Bureaucracy that must be addressed if the reinvention movement is to survive in the long run.

The first problem is overselling what reinvention can actually accomplish. Osborne and Plastrik make dramatic claims about the capacity of reinvention to make government "work better and cost less" Unfortunately, there isn't always solid evidence to support those claims. Too often, the authors rely on what elected officials say their policies have accomplished. Those officials have an obvious incentive to put their reforms in the best possible light.

For example, Osborne and Plastrik endorse a British reform called the Competing for Quality Initiative (CQI), which dramatically expanded contracting out. They repeat the government's assertion that CQI reduced the cost of some activities by 21 percent. However, an internal evaluation concluded that the government's claim was misleading, because it excluded the cost of administering the contracting-out program. The Economist reported last June that the actual savings may only be a third of what the government said.

The authors also say that reinvention has allowed the British government to reduce its civil service by one-third since 1979 "with few layoffs," However, most of this reduction came from privatization of government-owned industries, rather than downsizing of government departments. It also doesn't account for the thousands of layoffs made by the new owners of those industries. Furthermore, the government's statistics don't include part-time employees--who have tripled in number since 1979.

The authors also make overstated claims about the impact of Britain's "Next Steps Initiative" (NSI), under which most of the British civil service has been transformed into a set of special quasi-independent service agencies. They say these new agencies have reduced their budgets substantially without eroding service quality. In 1994-95, for example, the agencies are said to have decreased operating costs by about five percent. Again, the authors rely on an exaggerated statistic: in fact, a 1996 report shows that agency spending has generally increased over time. In 1994-95, total agency spending actually grew by about 4 percent.

Why should we care whether Osborne and Plastrik get these facts right? Because reform debates in the U.S. can be influenced by our understanding of what has worked elsewhere. Osborne recently argued that the Clinton administration should adopt a version of the Next Steps Initiative, under which most of the bureaucracy would be turned into a series of relatively independent "performance-based organizations." (The administration is working on a similar, smaller-scale proposal.) Osborne said his proposal would save $24 billion by 2004--enough to pay for a battery of new education and training programs. Osborne based this estimate on his understanding of what the British had accomplished.

A second difficulty with Banishing Bureaucracy is its unrelenting emphasis on efficiency. Of course, it's important to root out government waste and find cheaper ways of doing business. But there are often contending values at stake, and elected officials may reasonably decide that a little inefficiency has to be tolerated for a larger good.

For example, Osborne and Plastrik chastise former Canadian Prime Minister Brian Mulroney for his indifference to reinvention, and his willingness to cave in to "special interests" who opposed privatization and contracting-out. Is this fair, given that Mulroney was struggling to manage a constitutional crisis that threatened to break up the country, and that privatization might have alienated allies in the constitutional struggle? Maybe another key value--keeping the country together--had to trump operational efficiency, at least in the short term.

Here's another illustration. Many rules that govern the use of human resources in government are adopted to ensure fair treatment of workers and to provide equal opportunities for certain kinds of workers. Will proposals to eliminate "red tape" within government agencies, or to expand contracting-out, jeopardize these goals? Osborne and Plastrik never really address the question. Government agencies, they say, do not exist to serve their employees. This is true, of course. But government agencies may have an obligation to treat workers fairly and equitably. Will this obligation be jeopardized by aggressive reinvention?

A third problem with the book is the authors' distaste for everyday politics. Politics, the authors imply, messes up good government. It subverts "rational analysis," and allows narrow interests to undermine the public interest. Much of Banishing Bureaucracy aims at finding ways of getting politics out of government.

One way to do this is to remove much of the operations of government from day-to-day control of elected officials. This is one of the main reasons why Osborne and Plastrik are advocates of Britain's Next Steps Initiative, and similar reforms undertaken in New Zealand. In both countries, large parts of the bureaucracy have been set up as agencies that work at arm's-length from elected officials. Each agency negotiates an annual agreement that specifies exactly what it will produce. Otherwise, elected officials are supposed to leave the agencies alone.

There are two difficulties with reforms such as these. The first is that they may erode popular control over the bureaucracy. The British reform is not, as the authors suggest, "widely viewed as a resounding success." Many observers complain that it has eroded legislative control over agencies. The complaint may be exaggerated, but it deserves to be taken seriously.

Another difficulty is that reforms aimed at setting up arm's-length relationships don't work as flawlessly as Osborne and Plastrik suggest. The process of negotiating annual agreements is time-consuming. It has proved difficult to craft agreements that cover all the dimensions of behavior that elected officials care about. Elected officials and agencies also resist demands to make performance data public. Major's government, for example, delayed releasing performance data for 1996, because of concern among ministers about a proposal to publicly identify low-performing agencies.

Another way to minimize the influence of politics is to bulldoze through it. Osborne and Plastrik call on elected officials to have the "courage" to deal firmly with opponents of reinvention. Again, they use Britain's Conservative government, and New Zealand's Labour government as models. Both parties implemented radical reforms despite "howls of protest" against them.

It's a mistake to hold up these two governments as models for American politicians. One of the unfortunate features of parliamentary systems like those in Britain and New Zealand is that prime ministers can win strong legislative majorities without having the support of a majority of voters. In fact, the governments praised in this book fought six general elections, and never won an electoral majority in any of them. These governments weren't just fighting "special interests": they were fighting much of the voting public. New Zealanders got so frustrated that they overhauled their electoral system in 1993.

The basic message of Banishing Bureaucracy is a sound one. No one can deny that governments need to focus more on essential functions, put more emphasis on results, and look for innovative ways of getting work done. But over-simplifying the argument for reform--overstating benefits, minimizing problems, and overlooking tradeoffs--creates fertile ground for skepticism and disillusionment. If the reinvention movement is to thrive, we need a more candid appraisal of its potential and its limitations.

ALASDAIR ROBERTS is a visiting associate professor at the University of Southern California Washington Center.
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Author:Roberts, Alasdair
Publication:Washington Monthly
Article Type:Book Review
Date:May 1, 1997
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