Initial Conditions

As Steven Skowronek (Reference Skowronek1982) writes, claims are first made by administrative reformers that our institutions are not up to handling whatever challenges the nation is currently facing. But to gain traction, administrative reform movements must be framed rhetorically in terms of what Sven Steinmo (Reference Steinmo2010) calls Americans' “self-conception.” As such, the sequencing pattern of path dependency of administrative reforms begins with one dominant “initial condition”: American exceptionalist values.

As articulated by Seymour Martin Lipset (Reference Lipset1996), an approach-avoidance conflict with government has been at the center of Americans' attitudes since the nation's founding. Embraced at least rhetorically are limited government, individualism, community volunteerism, and faith in markets. Consequently, the cultural “default option”—and the easier “sell” politically for reformers—is to look to the best business practices of the day and to community-based partnering solutions. This is the case whether these be the War Industries Board in World War I; the National Industrial Recovery Board in the 1930s; the Planning, Programming, and Budgeting System (PPBS) in the 1960s; management by objectives (MBO) in the 1970s; partnerships and contracting in the 1980s and 1990s; or self-regulation today.

The Compensatory State

The second major and interdependent secular force one identifies, and a direct result of the recurring primacy of American exceptionalist values, is the repeated reliance on what historian Brian Balogh (Reference Balogh2009) calls a “government out of sight.” Alexander Hamilton argued that to gain the fidelity of citizens to the “new” national government, they would have to see, feel, and taste what government is giving them. This would mean the direct delivery of goods, services, and opportunities to citizens by the federal government. Hamilton's opponents largely won out, however. They argued that allegiance was better nurtured at the time by “hiding” the national government's presence and relying instead on state and local governments, the private sector, and civil society.

Instead of a direct tax, for example, the national government relied on import tariffs throughout the nineteenth century, making tax collectors less visible by placing them, in effect, at the nation's borders and coastlines only. Instead of the federal government directly delivering goods and services to citizens, the national government incentivized what 2008 Gaus awardee Don Kettl (Reference Kettl1987) has variously called in the twentieth century “proxy government,” “third-party government,” or the “contract state.” As such, hiding the visible size of the federal government was hardly a twentieth-century phenomenon, as readers might infer from some contemporary scholarship (Light Reference Light1999).

Used as policy tools were federal grants, contracts, and subsidies, plus mandates. As political scientist Kimberly Johnson (Reference Johnson and Durant2012) notes, third parties—states and localities, contractors, and the voluntary sector—delivered the preponderance of what the federal government wanted done in the nineteenth century, providing an administrative foundation for subsequent “new federalisms” in the twentieth century. And as we shall see, they continued to do so even during the rise of the administrative state.

At the same time, rather than take a direct hand in expanding commerce from the Atlantic to the Pacific, the federal government relied on subsidies and land giveaways to industry and corporate interests. In fact, the “fiction” of public–private distinctions in this sense, or of government versus business, was clear from the nation's beginning. “Publicness” (Bozeman Reference Bozeman1987) and “networked governance” (Agranoff and McGuire Reference Agranoff and McGuire2001) go back to the colonial era (Webb Reference Webb2013) and the nation's founding (Wood Reference Wood2009), not to the late twentieth century—albeit on a less complex scale and for services and not just products (Johnston and Romzek Reference Johnston, Romzek and Durant2012).

Created were the roots of what political scientist Marc Allen Eisner (Reference Eisner2000) has called the compensatory state. This is a state that compensates for American's rhetorical antistatism. It does so by relying on third-party providers of goods, services, and opportunity that other national governments usually deliver themselves. In the process, the compensatory state resolves the cognitive dissonance citizens would otherwise feel. Maintained is their “self-conception”—or self-deception, if you will—that they are rugged individualists whose needs are met by private energy, little platoons of volunteers, and limited government.

Granted, some efforts at in-house administrative capacity-building in federal agencies occurred between 1880 and 1920, as Skowronek (Reference Skowronek1982) has shown us. This was especially true for the military as it closed down the last of the Indian wars and fought the Spanish American War and World War I. On the domestic side of such expansion, think of the Army Corps of Engineers and Bureau of Labor Statistics (BLS). Most of the growth, however, continued “out of sight”—for example, the creation of the National Bureau of Economic Research in the 1920s to supplement work done by the BLS rather than expand in-house capacity.

But where this growth in administrative capacity really spiraled was in the private sector. It was prompted during the Gilded Age by the need to administer the explosion of nearly 300 corporate consolidations occurring between 1883 and 1904, with a capitalization value of nearly $7 billion (Sklar Reference Sklar1988). This, in turn, produced the rise of a “professional class” in industry and, subsequently, professional associations representing their interests in political circles. As historian Ellis Hawley writes, this “‘organizational revolution’ shift[ed] [political and administrative expertise,] power and status to … financial institutions, corporate bureaucracies, and functional or occupational organizations” (Reference Hawley1997, 5). Thus, the interaction of American exceptionalist values and its hidden-in-plain-sight strategy meant, as Leonard White (Reference White1958) wrote, that the private sector and not the public sector began acquiring the administrative capacity to run that state!

Put in path-dependency terms, the nation built private sector administrative capacity first and then built government capacity. And even then, it came only in a halting, halfway, and patchworked way during the early Progressive Era (Skowronek Reference Skowronek1982). This helped privilege business and its administrative ideas initially, giving it an advantage that amplified its influence in government over time, as we shall see. That influence, it turn, had the reciprocal effect of reinforcing American exceptionalist faith in markets and limited government. This was true especially when the economy boomed in late nineteenth-century America, as well as after successful mobilization in two world wars that many associated with the private sector.

But Gilded Age greed, the freezing out of small business by corporate expansion, corporate–government repression of labor, and economic devastation in 1893 soon called corporate legitimacy seriously into question. On the defensive, corporations began reconstructing their legitimacy with the public. They did this by further expanding ties with a welcoming government beset by growing social needs, but with little administrative capacity to deal with them. In this instance, government chose to turn to the scientific management “expertise” that business was developing on the shop floor of industry and to expand it to society at large.

In return, as Eisner (Reference Eisner2000, 40) points out, an enduring foundation was laid over the twentieth century for a state–corporate exchange relationship. Private interests—and I would add the voluntary or “settlement” wing of the progressive movement—were able to extract from Washington funding for more research, restrictions on market entry, higher rates of profits, subsidies, and contracts. In exchange, the private and voluntary sectors produced the administrative capacity to hide the visible size of government to meet otherwise unmet needs.

Meanwhile, a Madisonian system purposely fragmented to reflect American exceptionalist values grew more complex and opaque to average citizens during the twentieth century. As Steinmo (Reference Steinmo2010) describes, because of the Madisonian system, the American solution to problem complexity has always been more administrative complexity. This, in turn, affords more particularistic—rather than universalistic—benefits and tax breaks to narrow groups in subsystems, leaving the system even more complex. Replicated repeatedly are administrative coordination problems (think the Patient Protection and Affordable Care Act of 2010, Pub. L. 111–148), as well as public backlash toward the agencies trying (or not!) to put Humpty Dumpty back together again.

The Business–Social Science Nexus

A third set of path-dependent and reciprocal secular forces propelling these trends was the striving for legitimacy and funding by the emerging social science, public administration, and business disciplines in the twentieth century. The animating conjuncture of historical factors that helped them realize that legitimacy was centered on what economic historian Robert Wiebe (Reference Wiebe1967) called a “search for order” amid internal strife and international threat.

Problems were too complex for ordinary citizens to handle, a theme enunciated during this era by, among others, Woodrow Wilson (Reference Wilson1887) in his “The Study of Administration” and Walter Lippmann (Reference Lippmann1922) in Public Opinion. Administrators would make democracy safe for citizens by serving as “bridge builders.” Stressed in the process by mainstream progressives was scientism's promise for eliminating politics and social strife. Indeed, by the late 1930s, the President's Committee on Administrative Management expanded to the world the idea of “bridge builders” in the executive branch saving democracy from itself. If we didn't centralize executive power and diminish the policy-making role of the legislative branch in the United States, democracy was in danger worldwide!

The quest for “objective” solutions was understandable, of course—if naïve. Politics had grown nasty amid labor unrest, spawning cries from socialists and anarchists for a major overhaul of the American political system. The nation, progressives argued, would be rescued from the “moral anarchy” raging around it by placing human affairs where they “never yet have been placed, under the control of trained human reason” (Nelson Reference Nelson1982, 82). Argues Barry Karl (Reference Karl1983), “reform progressivism” morphed into technological progressivism.

However, still needed to realize the progressive dream of bureaucratic administration and rationality was empirically grounded research. Into this chasm stepped the newly established social sciences and their professional associations. This, as the allure of statistical analysis took hold in industry and among politicians as a tool for calming labor–management conflicts. The American Association of Engineers was initially the dominant professional force during the first two decades of the twentieth century. But other new social science associations arose between 1900 and 1920, and they too sought legitimacy as disciplines by forging ties to government.

The APSA, for example, promoted the virtues of social science analysis, joining older associations such as the American Statistical Association, the American Economic Association, and even the American Historical Association. To them, the poverty, disease, unemployment, and social discontent spawned by industrialization and urbanization were not inevitable. They resulted from an ill-managed but improvable corporate capitalism—if only scientism were unleashed. We would then discern an “objective reality” behind the surface “noise” and “emotion” of politics that all would agree on. An epiphany on the road to Damascus through data analysis was imminent!

Was this merely a “cover” narrative to justify parochial interests? Was it a sincere (if naïve) belief that social conflict would end when statistical analysis revealed an “objective” reality? Are we really much different from them in our quest today in some circles for a “design science” (Shangraw and Crow Reference Shangraw and Crow1989) or a “logic of governance” (Lynn, Heinrich, and Hill Reference Lynn, Heinrich and Hill2000)? Are we much different when we seek “best practices” without embracing Selznick's (Reference Selznick1957) insight that a reciprocal relationship exists between administration and agency context?

Regardless, the engineering profession started it off by claiming that the inefficiencies of competition in industry could be eliminated by applying the scientific method to their operations. Moreover, the savings gained would create a rising tide lifting the boats of labor and their employers, thus ending this “irrational” conflict! Think Taylorism, of course—even though you know it actually inflamed labor–management conflict! Thorsten Veblen even spoke of a “directorate of engineers” leading a “revolution” to replace an older political order that “has most significantly fallen short” (Barry Reference Barry1997, 266).

But if the stock of engineering fell after the revolt against Taylorism, the legitimacy of social science methodology and its professionals soared in World War I. So too did faith in the private and voluntary sectors due to their role in war mobilization. As historian Guy Alchon advises us, social scientists working inside and outside federal agencies as part of the compensatory state established their reputation as “disinterested professionals” dedicated to a “public service ideal” (Reference Alchon1985, 10). They also created politically supportive networks with business interests—the seeds of which might best be characterized in Piersonian terms as a de facto or emergent “durable policy coalition.” Combined, these developments meant that the social sciences were now tethered to corporate interests and business-supported philanthropic foundations in arguing for “nonstatist technocratic planning” (Clements Reference Clements2000, 50; also see Barber Reference Barber1985). And when the 1921–1923 economic recession ended, social science and something called the “new associationalism” received the credit—deserved or not.

Interestingly, Herbert Hoover—the “forgotten progressive”—led this movement. He agreed with progressives that the federal government had a role to play in addressing social problems. But he disagreed with their focus on agency experts making public policy. Instead, Hoover saw federal agencies playing a data-collection, analysis, and dissemination role only. They would focus social science methodology on issues and launch the results of these studies with great fanfare in Washington conferences. In this fashion, the private sector, he argued—incorrectly as it turned out—would be “stimulat[ed] … to organize and govern itself” in the public interest (Clements Reference Clements2000, 128; Herring Reference Herring1936). During his eight years as Secretary of Commerce in the 1920s, he put this philosophy into practice, convening more than a thousand such conferences. Wrought overall instead of a public interest, however, were self-regulating economic cartels motivated by self-interest and propelled more by competition than cooperation.

Nor did associationalism go away with FDR's election. His administration adopted several of the associationalist policies of his predecessor (e.g., the National Recovery Administration, which delegated power to business and associations to regulate themselves)—as have all Roosevelt's successors—along with bureaucratic administration (Hart Reference Hart1994). As DiMaggio and Powell argue, “[b]ureaucratization and other forms of [organizational] homogenization emerge[d] … [as part of a] process … effected largely by the state and the professions, which have become the great rationalizers of the second half of the twentieth century” (Reference DiMaggio and Powell1983, 147, emphasis added).

Granted, a visible administrative state grew. But so too did the compensatory state—to mask its visible size. With it came the further promotion of corporate-dominated subsystems. This came partly as a result of the federal government encouraging the establishment of various business associations (e.g., the National Restaurant Association) to make it easier for public agencies to engage a spiraling number of interest groups (Phillips-Fein and Zelizer Reference Phillips-Fein and Zelizer2012).

Importantly, from the perspective of durable policy coalitions, there was a reason this bureaucratic focus endured instead of democratic administration through the ups-and-downs of the business cycle and scandals. Thanks to the sparse and valuable historical scholarship that we do have in our field—for example, by Mordecai Lee (Reference Lee2013a), Hindy Lauer Schachter (Reference Schachter and Durant2012), Camilla Stivers (Reference Stivers2000), Alasdair Roberts (Reference Roberts1994), and David Rosenbloom (Reference Rosenbloom2008)—we know how financial support of the Rockefeller philanthropies for public administration research expanded under the political cover of the politics–administration dichotomy. And we also know, mostly from historians outside our field, how a generation of German-trained economists during the years 1870 to 1890 brought the “social idea” of a more activist and inclusive state and then found their efforts attacked in a pre-tenure era by corporate funders and board members who dominated finances at US universities and cried “socialism.” Writes historian Daniel Rodgers, “[i]n a polity where so much of the infrastructure of public life (libraries, parks, church edifices, and universities) came as gifts from wealthy businessmen,” no less could be expected (Reference Rodgers1998, 104).

The price paid, however, was the marginalization of democratic administration; it was too politically dicey for the nascent New York Bureau of Municipal Research to take on, and it was unacceptable to the Rockefellers. This, after Frederick Cleveland forced William Allen off the board in 1914. Allen was a vocal but abrasive advocate for “efficient citizenship,” democratic administration, and an activist role for public administration in social issues (Lee Reference Lee2013a). For the same reasons, between 1927 and 1936, the Rockefellers' continuing largesse and public administration's quest for legitimacy cemented the demise of democratic administration for that era (Roberts Reference Roberts1994).

Likewise, the founding of the American Society for Public Administration (ASPA) in 1939 was a direct result of leaders such as Louis Brownlow and Luther Gulick wanting to create a research organization that would be more “scientific” than the then-dominant Governmental Research Association (GRA), which was primarily comprised of bureaus of municipal research. The GRA sought Rockefeller money to pay for a secretariat and central office. Brownlow convinced the foundation to refuse. He then used Rockefeller money to undercut GRA by generating a “report” (from Joseph Harris) showing that GRA-style research was not the kind of research that the new public administration needed. GRA collapsed in 1939 when Brownlow, Mosher, and senior federal practitioners (such as Harold Smith and Donald Stone) seceded from GRA to create ASPA (Lee Reference Lee2013b).

Also important in promoting bureaucratic administration during the Great Depression was the Harvard Business School (HBS) (Scott Reference Scott1992). Led by Dean Wallace B. Donham—and comprised of such titans as Chester Barnard (a frequent lecturer), Elton Mayo, and Talcott Parsons—the HBS was in search of its own legitimacy. The idea of teaching management skills was, after all, still novel in the 1930s. Donham and his associates saw ties to government fostered by the social science methods pioneered at HBS as the best strategy for gaining legitimacy. Not surprisingly, however, they argued that only an “elite” network comprised of both business and government experts was capable of dealing with the social unrest unleashed by the Depression—and by modernity itself. Built were enduring ties for HBS with government.

These tectonic undercurrents next got a huge boost from World War II and the Cold War. The conjuncture of the secular trends noted already with wartime contingencies and lack of government administrative capacity spawned the greatest and longest-lasting amplification yet of business associationalism and business techniques to public problems (Sparrow Reference Sparrow1996). Created were a host of new or reorganized government bureaucracies, most especially the Department of Defense. However, as Eisner demonstrates, out of necessity, existing weak “state capacity was expanded by appending the [administrative] capacities of private-sector associations on to the state” (Reference Eisner2000, 12).

With this, of course, came concerns. President Eisenhower famously warned about a military–industrial complex based on the particularistic benefits of the subsystems created. But echoes of the politics–administration dichotomy and the progressive–business–social science “rationality project” continued in the 1960s. In speeches at Yale and a White House Conference on National Economic Issues, President Kennedy evoked the language of bureaucratic rather than democratic administration: “The basic domestic issues of our time … relate not to basic clashes of philosophy or ideology…. The fact of the matter is that most of the problems, or at least many of them, that we now face are technical problems, are administrative problems.”

Then, over ensuing decades, other elements promoted by the business–social science–progressive nexus came directly into government agencies. First came the massive influx of social science-driven and -informed Great Society programs in the 1960s. As noted economist and participant Henry Aaron (Reference Aaron1978) argues, however, these again produced a neo-conservative backlash and ultimately (as in Taylor's time) a questioning of social science methods as tools for designing public policy. Kettl (Reference Kettl, Rosenbloom and McCurdy2006) is correct that the shift from “hard” policy aims (e.g., building infrastructure) to “soft” social policy goals (e.g., ending poverty) where demonstrating short-term benefits was nearly impossible contributed to this backlash (also see Aaron Reference Aaron1978). But Aaron goes further. He writes: “Social scientists, in emulation of physical scientists and mathematicians, seek simplicity and elegance, but whether the problems of social science can be solved elegantly remains unanswered” (156). He continues: “In order to reach [these goals], problems are separated into separate components that can be managed and understood” (156). In turn, “such abstraction produces theory, apparently detached from reality, that often provokes the laymen's scorn” and undermines the legitimacy of the enterprise (156).

Over ensuing decades, these were accompanied by the PPBS, MBO, zero-based budgeting, performance management, outcomes management, reinventing government, and the President's Management Agenda. Interestingly, West (Reference West2011) finds that heirs of this durable policy coalition are now bringing PPBS to the Department of Homeland Security, Department of Defense, and National Oceanic and Atmospheric Administration. Think any of the major IT consulting firms in Washington and their campaigns to bring “enterprise management” to government. Enterprise management means treating policy areas cutting across agencies as a unified “business enterprise” connected by IT—using, of course, the consulting services that these companies provide.

Eisenhower's warning (re)materialized in the 1980s and 1990s with the market-oriented new public management (NPM). Its proponents spoke of assessing citizen satisfaction through surveys that, in my view, reduced citizenship to consumership. The NPM also paid no attention in the United States to its role in agency deliberation. But the successful “selling” of these business-inspired administrative reforms was sprinkled liberally with the language of American exceptionalist values and the reputed virtues of the compensatory state—and its expansion.

This “framing” helped advance politically a persistent drift toward, among other things, public–private hybrid organizations. Think Fannie Mae and Freddie Mac. These were justified as depoliticizing administration—much as the early progressives justified creating independent authorities. Meanwhile, treasury departments in the United States and around the world were literally turned over to Chicago-school economists who argued—at costs for which we are still paying—that regulatory jujitsu was now possible: deregulation of financial markets would actually provide greater “self-regulation” to protect the public interest. Hoover Redux, if you will.

Next came the “Washington consensus” on administrative reform internationally, with its penchant for cutting back the visible size of the public sector as an austerity measure. This decontextualized and dehistoricized “logic of discipline” (Roberts Reference Roberts2011)—with its subsequent citizen backlash internationally—was packaged by international consulting firms as a one-size-fits-all model—reaping huge profits for themselves in return. Along with it came the infusion of the “logic of business,” “professionalism,” and “checkbook” philanthropy into the nonprofit sector of the compensatory state. Although mixed evidence exists, some such as Theda Skocpol (Reference Skocpol2003) see these developments producing a diminution of the mass mobilization and civic education of everyday citizens provided historically by nonprofits.

The Rise of the Procedural Republic

The final interdependent and reciprocal secular trend I want to note briefly before closing is the rise of what political theorist Michael Sandel (Reference Sandel1984) calls the “procedural republic.” Specifically, the otherwise beneficial Administrative Procedure Act and statutes that followed in the wake of the Great Society, the “new social regulation,” and the “rights revolution” produced a judicialization of rulemaking. Here, a striking—yet still preliminary—pattern is emerging in work by Cornelius Kerwin, Susan Yackee, William West, Kay Schlozman, and their various colleagues (Kerwin, Furlong, and West Reference Kerwin, Furlong, West and Durant2012; Schlozman, Verba, and Brady Reference Schlozman, Verba and Brady2012). As Theodore Lowi (Reference Lowi1969) and Gaus awardee Charles Lindblom (Reference Lindblom1977) warned, when business marshals its advantage over other organized groups in legal resources, technical and scientific prowess, and political access, it tends to get a rule closer to its preferences than others do.

In turn, the procedural republic contributed negatively to citizens' sense of political efficacy, as scholars such as Helen Ingram and Steven Smith (Reference Ingram and Smith1993), as well as Joe Soss, Jacob Hacker, and Suzanne Mettler (Reference Soss, Hacker and Mettler2010), have found. The more arcane, administratively complex, and technically and legally driven agency rulemaking becomes, the more marginalized average citizens can feel and the less sense of political self-efficacy they have. Likewise, research finds that citizens receiving services through third-party actors or tax expenditures are less likely to think government is positively affecting their lives—and they have lower trust in government.

All of which makes citizens less mobilizable to support the building of agency capacity. This is, of course, a function of the compensatory state that expanded significantly during the last four decades, with the complicity of that emergent durable policy coalition that I have called here the business–social science nexus. In turn, the existence of this state not only reflects the American exceptionalist values we started with tonight, but also allocates particularistic and hard-to-coordinate benefits and costs that alienate many citizens and diminish their sense of political efficacy.