Political Order and Political Decay (81 page)

Many of these problems could be solved if the United States moved to a more unified parliamentary system of government, but so radical a change in the country's institutional structure is inconceivable. Americans regard their Constitution as a quasi-religious document, so getting them to rethink its most basic tenets would be an uphill struggle. I think that any realistic reform program would try to trim veto points or insert parliamentary-style mechanisms to promote stronger hierarchical authority within the existing system of separated powers.

The Madisonian system of checks and balances that makes decision making so hard delayed the onset of the American welfare state and ensured that it never grew to the extent of its European counterparts.
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Many Americans would count this as a blessing; it has liberated the U.S. economy from many of the damaging regulations and disincentives imposed by European social policy. But it also means that reform of the system—cutting it down in size and making it work more effectively—is also much more difficult. The many veto points that throw sand in the gears prevent the shaft from turning forward, but mean it can't turn backward either.

 

35

AUTONOMY AND SUBORDINATION

How private and public sector governance differ; state capacity and bureaucratic autonomy as measures of the quality of government; how good government requires finding the proper balance between expertise and democratic control

An effective modern government finds the appropriate balance between a strong and capable state, and institutions of law and accountability that restrain the state and force it to act in the broad interests of citizens. This is the “getting to Denmark” problem described earlier. Since the beginning of the Third Wave of democratization, however, democratic institutions have spread farther and faster than strong, effective modern states. Many countries therefore face a dual task of state building even as they consolidate their democratic institutions. In the long run, these two processes are complementary and should be mutually supportive. But in the short run, as we have seen, they can run afoul of one another.

How, then, do we get to a productive, administratively capable state? Many international development agencies, recognizing the importance of having such states, have promoted efforts to reform broken public sectors. The expectation is that the best way to strengthen states is to increase transparency and democratic accountability. This theory assumes that if voters have good information about public officials who are corrupt or incompetent, they will use the power of the ballot to throw them out of office. In addition, many reform efforts have sought to decrease the scope of government, in order to reduce opportunities for corruption. They have also tried to increase the number of rules—for example, regarding conflicts of interest—that officials have to follow. By reducing official discretion, it is believed that corruption will be correspondingly reduced.
1

These practical measures for improving performance of the public sector are tied to a larger body of theoretical work formulated largely by economists, who understand the effectiveness of bureaucracies in terms of so-called principal-agent theory. (I've alluded to this theory at numerous points in discussions of specific cases earlier in the two volumes.) The principal is the chief decision maker who gives instructions to the agent, or to a hierarchy of agents, whose function is to carry out the principal's wishes. This framework can be applied to both private- and public-sector organizations: in a private-sector firm, the principal is the owner of the business (or the shareholders in a publicly traded firm), who delegates authority to a board of directors, then to a CEO, and then to the company's administrative hierarchy. In a democracy, the principal is the whole people, who through elections delegate authority to a legislature, president, or other officials, who in turn establish bureaucratic hierarchies to carry out their wishes.

Organizational dysfunction is said to occur because the agents often act self-interestedly, for example, diverting money to their own bank accounts or promoting their careers at the expense of the organization. This is the source of corruption in both private and public organizations. The cure is said to be an alignment of incentives that motivate the agents to properly implement the principal's commands. Principal-agent theory ends up endorsing a version of the transparency and accountability path to good government: principals need to increase the transparency of agent behavior in order to be able to monitor them better, and then to create incentives that allow them to be held strictly accountable to their wishes.
2

In the political sphere, this theory implies that more democracy should lead to less corruption and better government. It certainly seems logical that corrupt or incompetent officials should not be able to hide their actions, and they will have few incentives to change their behavior without some mechanism of accountability. However, there are a number of reasons for thinking that this theory is a very incomplete one.

In the first place, it assumes that ordinary voters, if told about the corrupt or clientelistic distribution of public resources, will inevitably demand programmatic public policies that will distribute goods on an impersonal basis, as democratic theory says they should. This ignores the fact that voters in many societies, particularly poor ones, want the clientelistic distribution of resources because they hope to personally benefit from it. Indeed, citizen demand for payoffs may be what creates the clientelism in the first place.

Moreover, the idea that greater transparency and accountability is a necessary path to better bureaucracy flies in the face of a great deal of history, in which relatively clean, modern bureaucracies have been built under nondemocratic circumstances. We saw this most clearly in the stories of bureaucratic development in Part I of this book. A number of the most successful modern states were created under authoritarian conditions, often by countries facing severe national security threats. This is true of ancient China, Prussia/Germany, modern Japan, and a handful of other countries. By contrast, when democracy is introduced prior to the consolidation of a modern state, it often has the effect of weakening the quality of government. The prime example of this is the United States, which invented clientelistic party government after the opening up of the democratic franchise in the 1820s and was thereafter saddled with a patronage-riddled bureaucracy for much of the next century. This is also the story of Greece and Italy, both of which developed sophisticated clientelistic systems that impeded the growth of modern state administrations. Clientelism remains pervasive among democratic countries in the developing world and undermines the quality of governments from India and Mexico to Kenya and the Philippines.

And finally, the idea that public officials should be constrained by strict rules and stripped of administrative discretion runs contrary to the most common complaint about government, namely, that it is too rule bound, rigid, and lacking in common sense. The modern nightmare is the bureaucrat demanding mountains of paperwork before the smallest decision can be made. Many attempted reforms of the American public sector have involved dismantling rules and granting greater discretion in government decision making. How, then, do we square this with the notion that good government is the product of strict rules?

All of this suggests that state building and democracy building are not the same thing, and in the short run they often exist in a great deal of tension with one another. There may be other routes to good government, and indeed democracy may under certain circumstances be an obstacle rather than an advantage. We need a more sophisticated theory of public administration, one that pays particular attention to the interface among state administration, law, and democratic accountability.

STATE CAPACITY

One of the big problems with the principal-agent framework is that it takes for granted the existence of state capacity. That is, it formulates the problem of managing an organization primarily as one of incentives and will: the principal commands that the agents do certain things, and the agents fail to do so because they are opportunistic or self-interested. But agents can be completely loyal and motivated to do the right thing and yet fail because they simply do not have the knowledge, competence, or technical ability to carry out the principal's wishes.

Modern government, in addition to being very large, is a provider of a wide variety of complex services. The government forecasts the weather, operates aircraft carriers, regulates derivatives, oversees pharmaceutical safety, provides agricultural extension services, manages public health emergencies, judges complex criminal and civil cases, and controls monetary policy. Many of these activities require high levels of professionalism and education: the staff of the U.S. Federal Reserve Board, for example, consists mostly of PhD economists, while the Centers for Disease Control is run by doctors and biomedical researchers.

This need for technocratic competence is the first thing that puts good government on a collision course with democracy. As we saw, one of Andrew Jackson's assertions as president was that there wasn't a single job in the U.S. government that couldn't be performed by an ordinary American, and he went on to staff the bureaucracy with plenty of ordinary Americans who happened to be his political supporters. The populist Jackson was elected in part out of distrust of the Harvard-educated elites represented by his opponent, John Quincy Adams, and that distrust continues down to the present day. Establishment of a merit-based civil service under the Pendleton Act represented an effort to remove bureaucratic recruitment from democratic political contestation and to create expanding islands of autonomous technocratic competence within the government.

Building technocratic capacity in government is not just a matter of sending bureaucrats to a few weekend executive training sessions. It requires huge investments in higher educational systems. The Stein-Hardenberg reforms in Prussia could not have had the positive effect they did without the simultaneous creation of new universities by reformers like Wilhelm von Humboldt, who established the new University of Berlin, while the Northcote-Trevelyan reforms in Britain were accompanied by Benjamin Jowett's shake-up of Oxford and Cambridge. One of the most impressive accomplishments of the Meiji oligarchs in the late nineteenth century was their creation of a network of modern universities in Japan, whose graduates went on to staff the new bureaucracies in Tokyo.

While bureaucratic capacity is built on the human capital of individual bureaucrats, the performance of actual government agencies is critically dependent on the kind of organizational culture, or social capital, they possess. Two organizations with identical staffing and resources will perform at vastly different levels depending on the degree of internal cohesion they enjoy. Part of the reason that the German Wehrmacht proved to be such a formidable fighting machine in World War II was that it was able to foster enormous unit cohesion through the leadership of its noncommissioned officers. As military historian Martin van Creveld has shown, German regiments were recruited from the same region, trained, fought, and died together, and when exhausted were withdrawn in groups. This produced strong unit identification and substantially higher fighting power than the American system that continually formed and re-formed units, and replaced casualties on an individual basis.
3

Civilian organizations do not have the same ability to shape their staff, but they can still benefit from strong cohesion based on shared norms. The modern Forest Service was built around a shared commitment to scientific forestry. The contemporary Japanese and South Korean bureaucracies, like the British one before them, were staffed with graduates from the same elite schools who knew each other from their days as students. They entered public service in classes that were subsequently promoted as a group, and since their ministries did not permit lateral entry of political appointees into the bureaucracy, they developed a strong esprit de corps. But even in the United States with its weak traditions of bureaucratic solidarity, there are pockets of excellence that show astonishing levels of commitment to public service, like the federal prison system described by political scientist John DiIulio.
4
Bureaucratic capacity is therefore something much more than the sum of the capacities of the officials who make up a bureaucracy; it also is a function of the social capital they possess.
5

Finally, state capacity is a function of resources. The best-trained and most enthusiastic officials will not remain committed if they are not paid adequately, or if they find themselves lacking the tools for doing their jobs. This is one of the reasons that poor countries have poorly functioning governments. Melissa Thomas notes that while a rich country like the United States spends approximately $17,000 per year per capita on government services of all sorts, the government of Afghanistan spends only $17 when foreign donor contributions are excluded. Much of the money it does collect is wasted through corruption and fraud. It is therefore not surprising that the central Afghan government is barely sovereign throughout much of its own territory.
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BUREAUCRATIC AUTONOMY

State capacity is by itself an inadequate measure of the quality of government. One of the constant themes throughout this book has been the importance of bureaucratic autonomy for the proper functioning of government. Agents who are not given sufficient leeway to exercise judgment in the crafting and implementation of policies will not perform their jobs well, no matter how capable they are as individuals or as organizations.

In ancient China, the Legalists and Confucians engaged in a long-running debate over what contemporary administrative lawyers would call the issue of “rules versus discretion.”
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The Legalists thought that society needed clear legal rules to govern behavior, to help stabilize expectations, and to leave no uncertainties about the intentions of the state. The Confucians, by contrast, criticized law (or
fa
) on the grounds that no written law could ever be correct in all circumstances. Proper judgment would require knowledge of the circumstances of the specific case: who committed the crime, what his or her motives were, how a given decision would affect the interests of the broader community. The Confucians argued that only a learned sage taking full account of context could arrive at a correct judgment. This view is similar to Aristotle's description of the “great-souled man” in the
Nicomachean Ethics
who is capable of exercising proper moral choice.