Thursday, August 28, 2014

On institutions and their sclerosis

There is a long, but interesting article in Foreign Affairs by Francis Fukuyama titled "America in Decay: The Sources of Political Dysfunction". I want to quote some sections:
Institutions are “stable, valued, recurring patterns of behavior,” as Huntington put it, the most important function of which is to facilitate collective action. Without some set of clear and relatively stable rules, human beings would have to renegotiate their interactions at every turn. Such rules are often culturally determined and vary across different societies and eras, but the capacity to create and adhere to them is genetically hard-wired into the human brain. A natural tendency to conformism helps give institutions inertia and is what has allowed human societies to achieve levels of social cooperation unmatched by any other animal species....... 
Institutions are created to meet the demands of specific circumstances, but then circumstances change and institutions fail to adapt. One reason is cognitive: people develop mental models of how the world works and tend to stick to them, even in the face of contradictory evidence. Another reason is group interest: institutions create favored classes of insiders who develop a stake in the status quo and resist pressures to reform........ 
Political decay thus occurs when institutions fail to adapt to changing external circumstances, either out of intellectual rigidities or because of the power of incumbent elites to protect their positions and block change. Decay can afflict any type of political system, authoritarian or democratic.
Of course, some institutions are formal, and indeed some have structures and rules defined by law, not by tradition nor by managerial decisions. I am not sure which are harder to change -- those which are explicit but defined by outside power, or those that are implicit and often unconscious.

Fukuyama goes on to consider the state (as the executive institution in government), the legislature (as the democratic institution in government) and the judiciary (as the institution responsible for assuring the rule of law in government).

The article begins citing the creation of the Forest Service, an agency of the executive branch that represented a pioneering reform of the Progressive Era:
Prior to the passage of the Pendleton Act in 1883, public offices in the United States had been allocated by political parties on the basis of patronage. The Forest Service, in contrast, was the prototype of a new model of merit-based bureaucracy. It was staffed with university-educated agronomists and foresters chosen on the basis of competence and technical expertise, and its defining struggle was the successful effort by its initial leader, Gifford Pinchot, to secure bureaucratic autonomy and escape routine interference by Congress. At the time, the idea that forestry professionals, rather than politicians, should manage public lands and handle the department’s staffing was revolutionary, but it was vindicated by the service’s impressive performance. Several major academic studies have treated its early decades as a classic case of successful public administration.
Institutions change over time. Taking the Forest Service as an example:

  • The real world changes, as the American forests changed over the last 100 years. Over time, while the forest service successfully suppressed fires, dead wood built up in the forests and the composition of the forest changed.
  • Society changes, as the American lumber industry changed over the last 100 years. Lumber production became much less important for the U.S. economy.
  • Our understanding changes. Scientists learned about forest ecology and realized that forests had evolved with occasional forest fires, and that some trees even needed fire for their seed to germinate; thus eliminating forest fires changed the forest ecosystem.
  • There is mission creep. The Forest Service was asked to focus on environmental conservation more than on providing a sustainable resource for the lumber industry; it was called upon to provide employment for demobilized soldiers.
Moreover, institutions don't function in isolation. Changes in other institutions can induce changes in an institution of interest. As the map at the head of this post shows, there were few people in the west at the time that the Forest Service was created (fewer still in Alaska, not shown); the Congress was dominated by representatives of the populous areas in the east. Today the representatives of the western states with extensive forests seem likely to have more power. Fukuyama also suggests that some areas the courts have become responsible for making policy in areas that were once under legislative control. Such changes can change the charter of the Forest Service.

Returning to Fukuyama's own words:

The Forest Service’s performance deteriorated, in short, because it lost the autonomy it had gained under Pinchot. The problem began with the displacement of a single departmental mission by multiple and potentially conflicting ones. In the middle decades of the twentieth century, firefighting began to displace timber exploitation, but then firefighting itself became controversial and was displaced by conservation. None of the old missions was discarded, however, and each attracted outside interest groups that supported different departmental factions: consumers of timber, homeowners, real estate developers, environmentalists, aspiring firefighters, and so forth. Congress, meanwhile, which had been excluded from the micromanagement of land sales under Pinchot, reinserted itself by issuing various legislative mandates, forcing the Forest Service to pursue several different goals, some of them at odds with one another. 
Thus, the small, cohesive agency created by Pinchot and celebrated by scholars slowly evolved into a large, Balkanized one. It became subject to many of the maladies affecting government agencies more generally: its officials came to be more interested in protecting their budgets and jobs than in the efficient performance of their mission. And they clung to old mandates even when both science and the society around them were changing. 
The story of the U.S. Forest Service is not an isolated case but representative of a broader trend of political decay; public administration specialists have documented a steady deterioration in the overall quality of American government for more than a generation. In many ways, the U.S. bureaucracy has moved away from the Weberian ideal of an energetic and efficient organization staffed by people chosen for their ability and technical knowledge. The system as a whole is less merit-based: rather than coming from top schools, 45 percent of recent new hires to the federal service are veterans, as mandated by Congress. And a number of surveys of the federal work force paint a depressing picture. According to the scholar Paul Light, “Federal employees appear to be more motivated by compensation than mission, ensnared in careers that cannot compete with business and nonprofits, troubled by the lack of resources to do their jobs, dissatisfied with the rewards for a job well done and the lack of consequences for a job done poorly, and unwilling to trust their own organizations.”
The scenario appears to be a frightening one in that it may be generalized to many other institutions in many other societies. A new institution is created to solve a specific problem. Over the years, the problem itself changes and new problems are added to the institution's responsibilities. In spite of institutional rigidities, the institution changes; some of the changes are adaptive, some less so. Eventually the institution is seen to be dysfunctional and must be revolutionized or replaced. Or perhaps, if one has confidence on the power to revitalize institutions by revolution or to create new and better institutions, the scenario is optimistic.

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