Reinventing Government, David Osborne and Ted Gaebler’s influential book, has been widely acclaimed for lighting the way to smarter, leaner government. The New York Times called it one of the best books of 1992. The volume’s dust jacket is decorated with praise from no less than Bill Clinton: “This book should be read by every elected official in America. Those of us who want to revitalize government . . . have to reinvent it. This book gives us the blueprint.” William Weld, the Republican governor of Massachusetts, adds that “David Osborne and Ted Gaebler are truly original thinkers.” Their book, he says, is “required reading in the Weld administration.”

Reinventing Government arrived in April 1992 with a favoring wind at its back. By a host of indicators, citizens’ confidence in the political establishment was steadily dwindling. Party affiliations weakened as restless voters shuttled to and from traditional allegiances. In state capitols and city halls, unfilled public needs and wants overwhelmed public revenues. Even as taxes rose, problems got worse: unhoused derelicts and uneducated youth, unsafe streets and immobilized traffic, undisposed waste and unlivable neighborhoods. The denouement of this stark tale was low voter turnout, ferocious tax rebellions, and term-limitation initiatives.

In an age of political stasis, Osborne and Gaebler offer self-assured answers to the conundrums of governance. “What we are describing,” they write, “is nothing less than a shift in the basic model of governance used in America. This shift is under way all around us, but because we are not looking for it-because we assume that all governments have to be big, centralized, and bureaucratic-we seldom see it. We are blind to the new realities, because they do not fit our preconceptions.... What we need most if this revolution is to succeed ... is a new way of thinking about government-in short, a new paradigm.”

The authors maintain that the realization of this ambitious goal is uncontroversial and within grasp. The central problem of governments today, they write, is “not what they do, but how they operate.” Debates about “what government should do, and for whom” are “secondary today.” Accordingly, Osborne and Gaebler’s book presents a veritable L.L. Bean catalog of several hundred exemplary innovations in public management, most at the state and local level. But contrary to President Clinton’s evaluation, Reinventing Government is anything but a blueprint. Rather, like a merchandise catalogue, it tends to be light on critical analysis and heavy on heightened prose.

The authors describe a series of useful but only marginally significant administrative innovations, many still fragile and insufficiently tested. And they omit or glide past three crucial problems. First, governmental innovations have a high failure rate. Second, while certain innovations multiply almost effortlessly, others, including many of the ones cited in Reinventing Government, remain unreplicated. Third, even successfully imitated innovations, including certain varieties of privatization, typically yield few benefits.

It is my contention that Osborne and Gaebler are mistaken-that the fundamental problem of government is not one of inept administration, but of an overload of policy mandates. A real paradigmatic shift would require far more than a change in methods. The old paradigm, in which every problem is answered with a program, must give way to a recognition that government has vastly overextended itself. What is needed is not managerial reinvention, however ingenious, but sweeping disinvention, however painful.

Failed Innovations

Transience is the inevitable hazard of creative endeavors. As in the process of natural selection, the vast majority of departures from the norm quickly die, either at birth or before attaining reproductive capacity. The mortality rate of private-sector reinventions is woefully high, judging from the lopsided ratio of fallow to productive patents. There is no reason to believe the extinction rate of governmental reinventions is any lower.

What has become of the many innovations introduced or promised during the Great Society’s feverish years? Where now are Model Cities, New Towns, zero-based budgets, the 24-hour tenement-rehabilitation demonstration, citizens’ advice bureaus, the cost-efficient TV-by-satellite classroom? Where now the long procession of experimental nostrums for juvenile delinquency, all duly but prematurely celebrated by their governmental and philanthropic sponsors during those hopeful years before teenage delinquency had degenerated into pre-teen murder?

Nor have Republican reinventions, dating back to the Nixon administration, been any more successful. Housing Secretary George Romney’s salvo of proposed innovations in building technology, dubbed Operation Breakthrough, proved anything but. Where now is the high-rise apartment building assembled top-first from factory-built modules? Where is Market Aggregation, a much-heralded scheme to achieve economics of scale in factory-produced housing by amassing local-area demands into a single big-ticket order? Or the several models for a nationwide building code? Or Turnkey III, the sale of public housing units to their occupants-a reinvention that long antedated Jack Kemp’s parallel thrust under the banner of empowerment?

From others have come equally short-lived inventions: Big Momma (the bonding, in loco parentis, of a grandmotherly neighbor to a teenage mother), “slippery water” (a chemical treatment that doubles the output of fire hoses), low-cost community-owned and -operated house-repair vans manned by ghetto youths to aid elderly homeowners, the Barnes Dance (a choreographed street-crossing to speed traffic without endangering pedestrians), downtown people-movers, and many more.

I do not mean to mock the restless inventors who give life to the new, no matter how fleeting that life. We have no surfeit of such talent. We should certainly let a thousand flowers bloom and nine hundred wither so that we can savor the hardier perennials.

But we should also be wary of public-sector reinventions that are born amidst great fanfare but die with remarkably few obituaries. Albert Shanker, I suspect, would be happy to supply a voluminous catalog of immoderately applauded but eventually sterile sports in public education. School-based management, which propelled Joseph Fernandez to New York, is reliably reported near death in Miami, its place of origin, after a scant three years. Even Head Start, the most celebrated of educational innovations, has attracted a circle of skeptics.

Any contemporary list of public-sector reinventions must be considered provisional. A sampling of the larger foundations’ annual reports from the 1960s, filled with innovations that turned out to be ephemeral, is fair warning of how Reinventing Government might read ten years hence. In short, the book is a directory of extant innovations, many destined to prove no more durable than predecessors.

Osborne and Gaebler are not oblivious to the risk of failure. But they devote a mere four paragraphs to that possibility, tossing in a few examples and attributing them, dismissively, to politics or selfish public-sector unions. They treat the phenomenon of failure as if it were an awkward exception and not the fate of most innovations.

Why Reinventions Don’t Spread

Rapid replication is perhaps the best market test of an innovation’s real worth. This is demonstrated by the spontaneous diffusion, at wildfire velocity, of such creations as 911 emergency service, vanity license plates, zero-coupon municipal bonds, magnet schools, and local community development corporations.

If replication is the rough equivalent of market sales, Reinventing Government largely describes an inventory of unsold merchandise. Sunnyvale’s long-range budgeting protocol and Visalia’s mission-driven budget have traveled no inordinate distance from those small California cities. St. Paul’s profit centers have swept, well, St. Paul; Phoenix’s experiment in competitive garbage collection, hailed since the dawn of the privatization movement, has spawned few imitators.

To be sure, a public innovation can be locally successful and long-lived, while flourishing only in the environs of its birthplace. But a collection of nonreproducing local innovations hardly represents the paradigmatic shift Osborne and Gaebler promise. Yet the authors are silent on the subject of replication, except for a passing note that innovations replicate far more successfully in the private than in the public sector.

The mechanisms of replication are probably the most neglected and least studied aspect of the reinvention theme. This point was wistfully made by Professor Alan Altshuler, director of Harvard University’s Program on Innovations in State and Local Government. His program, funded by the Ford Foundation and highlighted in Reinventing Government, is an annual nationwide competition in which a panel at Harvard’s Kennedy School selects ten reinventions by state and local governments and awards the winners $100,000 each. “The Ford Foundation did not start this program with any focus on diffusing innovations,” Altshuler said at a 1989 conference. “Diffusion is still not a major part of the program. Ford [seems to be] searching for the ten most creative ideas, not the ten best ideas for diffusion.”

Diffusion tends to follow two general paths. One is horizontal or spontaneous: some ideas are so self-evidently beneficial that they are swiftly and enthusiastically imported by vast numbers of jurisdictions. For example, health maintenance organizations, introduced by Kaiser Permanente in California and (in different form) by HIP in New York, became the basis of health-care systems in many other places. The first walk-in clinic opened twenty years ago in Warwick, Rhode Island; without much prompting, four thousand sprang up across the country. Other success stories include hospices for the terminally ill, shared housing for the elderly, and civilian police patrols.

One thing these successfully replicating innovations have in common is their “winner-winner” character. Their benefits come at no great cost to anyone. Because technical innovations are more likely than social ones to embody such qualities, they are more often adopted voluntarily by multitudinous jurisdictions. Examples abound: computerized state lotteries, electronic bracelet monitors for nonviolent prisoners under house arrest, on-line data-retrieval computers in police cars, radar to detect speeding, vandal-proof parking meters, and high-temperature incinerators. In diffusing technical innovations, moreover, the profit motive plays an important role. The manufacturer’s salesmen put on a show-and-tell for government purchasing officials, who adopt the innovation only after its efficacy is demonstrated, sometimes through a free or cut-rate trial.

The second path of diffusing innovations is vertical. A central actor-the federal or state government or the judiciary-seeks, by command, “bribe,” or penalty (often in combination), to plant a given reinvention in a variety of jurisdictions. This occurs most frequently in the social sphere, where a locality might be hostile to an idea (racial integration) or find its adoption too costly without full or partial subsidy (Food Stamps, Chapter I educational aid, Medicaid). Other reinventions (equalization of electoral districts, formulas for preferential minority recruitment, “Robin Hood” redistribution of school aid) are enacted by the judiciary’s imperium.

Private foundations play an important role in social-service innovation, appropriating hundreds of millions of dollars in grants both to spur new models and to replicate existing ones. Foundations have also pioneered the techniques of evaluation, thereby helping develop it into a genuine discipline. At times private philanthropy has stood in the vanguard of government; many of the Great Society’s community action and development programs were large-scale versions of prior foundation initiatives. But more often, foundations work in tandem with public agencies by funding tasks that are difficult for government to carry out, such as objective evaluations, international explorations and exchanges, and baseline studies. Thriving and still-replicating philanthropic innovations include the “I Have a Dream” program (college scholarships as an incentive for inner-city youths to stay in school), community development corporations, and Neighborhood Housing Services.

Neighborhood Housing Services (NHS), an enterprise fostered by national and local foundations to stimulate community reinvestment, is a nice case study of a fast-replicating social innovation. At last count, it had taken root in 240 localities within 42 states and Puerto Pico. It continues to flourish despite upheavals in the local savings-and-loan sector that is intimately linked to the innovation.

NHS began during the late 1960s on Pittsburgh’s North Side, with $500,000 in grants from the Sarah Mellon Scaife Foundation. The Scaife family, unapologetically antistatist, was attracted to the NHS model as an alternative to the seemingly irreversible encroachment of government in local housing and mortgage markets.

NHS seeks to halt the decline of neighborhoods populated by low- and moderate-income homeowners. Mortgage capital for rehabilitating homes in such communities tends to be scarce because making such loans is uneconomical. Even at a time when home mortgages on existing residences were the meat and potatoes of local savings-and-loans, the institutions were loath to bother with what were then $10,000 to $15,000 loans-as much as could be justified by the modest fix-up contracts or the typical borrower’s carrying capacity. Such mortgages are unprofitable unless surcharged with sufficient fees to cover origination and servicing costs. But appropriate surcharges would result in a usurious effective interest rate. A local NHS solves this problem by entering as an intermediary. It shoulders all paperwork, including the applicant’s credit check, and bundles a group of homeowners into a single loan application.

Again, what accounts for NHS’s success in replicating is its winner-winner features. This reinvention proved that many neighborhoods could be rehabilitated without the bureaucratic entanglements and heavy expenses associated with government programs; the latter are best reserved for badly crippled locales lacking a homeownership base. And NHS scored well on the political as well on the social and technocratic scale: in the neighborhoods where it operates, it has done a great deal to cool the conflict over redlining.

In contrast to the NHS experience stands Chicago’s South Shore Bank, another redevelopment effort. In two decades, there has been little movement toward spontaneous adoption of this design in other urban centers, barring a pallid copy in Clinton’s Arkansas. The South Shore model was passed over by multitudes of jurisdictions coping with comparable problems of inner-city reinvestment. This was not for any lack of visibility; from its inception, the institution was assiduously promoted by its philanthropic supporters, to such an extent that the bank’s officers complained of visitor overload.

Candidate Clinton, infatuated with South Shore, promised to create a hundred similar banks across the country. Fulfilling that commitment-the top-down replication of an enterprise unable to gain market share-ould require substantial subsidies. Clinton’s promise was a striking example of the conceit that government possesses sufficient wisdom to choose the right model on which to lay its bets. Since his election, Clinton has acknowledged that many communities prefer alternative reinvestment institutions such as local credit unions or the redevelopment arms of established banks.

Innovation’s Limited Benefits

A cardinal reason why so many public-sector innovations are slow to travel is that prospective adopters have to be persuaded of early and substantial benefits relative to perceived costs. As Altshuler has noted, “What gets diffused isn’t what is most central to the innovators, but what is most central to the adopters.” Because the bottom line for a politician is the next election, a strategy of diffusion “must include providing politicians with opportunities for political benefit.”

Osborne and Gaebler are square on target in their account of bureaucratic inertia and the politician’s electoral calculus. But they are remiss in their inattention to the limited benefits of most innovations, even when political obstacles are overcome. Objectively evaluated, the net gains of innovation are seldom breathtaking.

Not all social innovations lend themselves to unambiguous assessment. How, for example, does one evaluate the success of an educational program designed to increase students’ self-esteem? The best one can do is rely on a jury-like consensus of knowledgeable and (one hopes) impartial observers.

Closer to good social science is the mass-observation evaluation, which provides a sufficiently large body of data to permit observers to factor out the influence of such variables as income, race, sex, IQ, environment, and family structure. The Coleman Report (a 1981 study of nearly sixty thousand students in public, private, and parochial schools) and Michigan’s Panel Survey of Income Dynamics (a longitudinal survey that has tracked five thousand families since 1968) aregood examples. In social-science research, however, even good factor analysis can never perfectly identify and isolate the effects of an experimental reinvention. Subtle, unidentifiable variables-motivation and personal values, for instance-are almost always present, but never reflected in the observed data.

The most rigorous evaluations, mimicking the medical and biological sciences, are controlled experiments. These have two salient features: a clear identification of the tested innovation and random assignment of observed subjects. The latter permits cleaner matches between control and experimental groups and minimizes the intrusion of unintentional bias. But such evaluations are rare because they are difficult to design and hellishly expensive.

Randomized, controlled evaluations have been most prominently applied to reinventions in welfare reform. To date, every such experiment has yielded outcomes much less than revolutionary. Relative net gains, some barely on the threshold of statistical validity, have been clustered in the low single digits. Indeed, some social-welfare reinventions emerged from formal tests with negative outcomes-statistically valid results contrary to the sponsor’s expectations.

The first major controlled tests, high-profile and nervously watched, were the renowned Income Maintenance experiments of the late 1960s to mid-1970s. These tests, intended to measure the efficacy of several varieties of guaranteed income supports, yielded results ranging from inconclusive to negative. A guaranteed income seemed to increase rather than decrease the rate of family dissolution by making it possible for a woman to afford separation or divorce. And even with financial inducements to enter the job market, guaranteed grants seemed to weaken rather than strengthen the will to work, since recipients could afford to stay home.

A later series of more meticulously designed social-welfare experiments produced comparably thin gruel. Supported Work, a highly regarded European innovation to advance the disadvantaged from dependency to jobs, prompted a massive three-year study. At a cost of $82 million, the experimenters sought to induce an underclass population to enter or rejoin the mainstream job market by providing modest cash stipends and a full measure of counseling and social services. In a dozen cities, a sampling of 6,300 disadvantaged males and females was randomly divided into experimental and control groups, with only the former receiving the new benefits. The trial was conducted by the Manpower Demonstration and Research Corporation (MDRC), a premier nonprofit organization that specializes in testing and evaluating social-welfare reinventions. The outcome for men was unrelieved failure. Compared with the control group, the experimental group displayed no measurable increase in job earnings, and an initial mild improvement in addiction and arrest rates dissipated by trial’s end. For women, the outcome was statistically positive but disappointingly small: an average of $82 per month more earned income than the control group.

The current cycle of welfare-to-work experiments, mandated by Senator Daniel Patrick Moynihan’s 1990 legislation, has been warmly praised by Clinton, Osborne, Gaebler, and others. Yet demonstration tests carried out by MDRC and others show that so far, improvements average only $400 per year-a gain somewhat below the cost of the new programs. Whatever else the beneficial outcomes of current social-welfare reinventions, impressive savings in welfare budgets are unlikely to be among them.

Though the disappointing results of innovation are most notable in the social field, the yield of technical reinventions is often similarly unimpressive. A generation ago, factory assembly of complete homes and major modular components, almost always cheaper and of higher quality than on-site construction, was hailed as a panacea for the dismal economics of residential construction. But subsequent experience proved sobering. The final savings to the homebuyer tend to hover around 10 percent, after factoring in costs such as transport, site acquisition and preparation, structure attachment, and on-site installation of finishing components. And the value of this technological reinvention was more than offset by government’s counter-reinventions-a spate of new building regulations, some federal but most state and local. Tougher zoning and land-use ordinances, prohibition of lead paint, and mandated wheelchair access for multifamily homes piled cost upon cost. The economics of new housing remains dismal.

The class of managerial reinventions with the best potential for more than marginal benefits is privatization. Broadly defined, privatization is the deliberate shift of a wide range of public functions and activities from public to private hands. “Government should steer, not row, the boat” is the privatization movement’s rallying cry, echoed by Osborne and Gaebler.

Privatization has long been advocated by conservatives, who call on government to relinquish many of its functions to the private market. But most discussion of privatization today concerns a more modest variety: contract procurement. Public services-waste collection, fire protection, hospital care, or even prisoner custody-can be economically purchased from private firms by competitive bidding in the same way that government buys, rather than produces, such things as automobiles and firearms for its police force. (The practice of mandating by law that private employers or developers provide certain public benefits might be considered a third form of privatization.)

Osborne and Gaebler provide a reasoned, balanced discussion of contracting out. Although this form of privatization has few strong opponents (public employee unions aside), there are plenty of skeptics doubtful about the scope and magnitude of its potential benefits. The authors note that the potential of contracting out derives not from any inherent superiority of private over public production, but from the power of competitive markets. The benefits, therefore, diminish with diminished competition.

If the crux of efficient private procurement is bona fide competition among bona fide firms, pitfalls abound. A contractor may submit a lowball bid that rapidly escalates with every change order and, when rival bidders have dispersed, with subsequent contract renewals. Supposedly competitive firms may collude in such schemes as bid-rigging, rotational bidding, and territorial allocations. And the influence of organized crime, on both contracting firms and trade unions, is notorious in such fields as waste collection and disposal, sewer and highway construction, and the supply of concrete, asphalt, and other road materials.

The relationship between the public and private spheres, even in reasonably competitive markets, inevitably breeds a sleaze factor. This takes the form of outright corruption at times, but of political contributions more often. Candidates’ fund-raising dinners are feasts not only for contractors who provide goods and services, but also for the financial sector’s elite, in hot pursuit of contracts to underwrite state or municipal bonds or to manage government pension funds.

Protecting the government against corruption and favoritism inflicts substantial public costs. To assure the integrity of contracts, public officials must vigilantly monitor every stage of the process from bid to completion. Such intense surveillance imposes budgetary and administrative burdens. A staff of experienced contract managers must be hired, a blizzard of certifying documents completed, approval calendars protracted, and payment schedules guarded (which may mean delayed). The costs of complying with such regulations are inevitably reflected in higher bids. Moreover, because of these bureaucratic burdens, many of the most competent vendors refuse to enter the public market at all, except when driven there by hard times. The steadiest bidders are those most adept at working the system-certainly no warranty of efficiency.

What about the nonprofit sector, which figures prominently in the delivery of social services? New York City’s contracts with nonprofits amount to approximately $3 billion a year, and the state’s almost as much. Such contracts seem a natural arrangement: religious and charitable organizations have a venerable history in the field, social services are rarely amenable to standardized specifications, and such contracts are thought to be too “people- sensitive” to be trusted to profit-seeking private markets.

Presumably, the absence of a profit motive assures dedicated performance and faithful service. But nonprofit status does not always ensure competent or, lamentably, even trustworthy performance. Scarcely a week goes by without media disclosures of malfeasance and illegal diversion of resources at some nonprofit organization. Moreover, the case of incorporating nonprofit agencies makes them tempting vehicles for politicians seeking financial or political enrichment. It is no secret that many contract-supported, community-based organizations are the equivalent of old-style political clubhouses. Today’s “povertician” is yesterday’s ward heeler. Further, many new and small community-based nonprofits, though impeccably honest, are exasperatingly undermanaged and susceptible to premature collapse.

A further problem with privatization, especially in today’s urban milieu, is “creaming.” Private service-providers, gazing at the bottom line, are prone to shun the underclass, abandoning it to the public sector. Bellevue and Kings County hospitals must accept patients that Mt. Sinai and Maimonides gladly avoid. Nonprofit foster homes and housing projects close their doors to depraved juveniles and unassimilable homeless, who are remanded to public care. MDRC’s objective evaluation of tenant-managed public housing found that positive outcomes were largely attributable to rigorous screening and prompt eviction of undesirable families, who were then shifted to less fastidious landlords. Surely Al Shanker is right when he warns that under an unconstrained school voucher, private schools would screen out and expel the worst students, leaving them for the public schools, which would then score poorly in any comparative evaluation.

In sum, while the case for more privatization is solid, mobilizing the private sector to row government’s boats is not the grand solution claimed by uncritical advocates. It must also be noted that governments are already engaged in substantial privatization. Notwithstanding New York’s political culture and powerful public employee unions, for example, upwards of one-quarter of the city’s combined capital and operating budget is contracted out, though not always on a rigorously competitive basis. The Human Resources Administration is virtually all steerer, and so is the Department of Housing Preservation and Development. The municipal hospitals are staffed by contract with private teaching hospitals. Given the practical limitations on carving out additions and the demonstrated fallibility of the contracting process, it is unrealistic to think that privatization could bring about more than modest improvements in the way America’s states and cities are governed.

The Primacy of Policy

Even if the bulk of Osborne and Gaebler’s managerial reforms were more successful and more widely copied, the result would still be undeserving of so ennobling a laurel as “government reinvented.” Genuinely radical transformations in government cannot occur without radical transformations in policy, in the fundamental “what” of government as distinguished from the procedural “how.”

Admire it or not, FDR’s New Deal was such a transformation, as were Lyndon Johnson’s Great Society and the government reforged by Ronald Reagan during his momentous first term. Roosevelt’s claims on history are Social Security, a counter-Depression armory of public works and massive deficits, Lend-Lease, and Yalta-not his introduction of the Office of Management and Budget. Johnson’s legacy is indelibly imprinted with Vietnam, the War on Poverty, and the civil rights revolution, not with his reorganization of the executive agencies. Reagan will be remembered for profoundly reordering the tax code, reining in social and labor excesses, and, above all, bloodlessly vanquishing an evil empire. He is not likely to adorn any pedestal for decisive victories over wasteful public programs; indeed, he ended up with a larger federal establishment than he inherited.

The plight that Osborne and Gaebler describe-of government bloated and overreaching, overprivileged and mistrusted-owes immeasurably more to the sweep of misguided policies than to the creep of misguided management. For example, as Charles Murray argues, genuine welfare reform would require wrenching changes (a paradigmatic shift?) in programs and policies based on hallowed but selfdefeating precepts that perpetuate the cycle of poverty. One such precept is that hunger must never be used as a whip-that the poor, no matter how indolent, ought not to suffer destitution. In reality, if the poor are assured of income support, their will to work or even to enroll for training is sapped. A second precept is that children are better off with their families, even if their parents are woefully irresponsible, so long as the (loose) standards of parental neglect are not inhumanely breached. This means that children will continue to serve as their mothers’ tickets to AFDC. Money that child advocates would spend on children is thus appropriated by adults who may use it in antisocial ways.

Further examples are plentiful here in New York. No earnest application of time clocks and measuring tapes to the city’s garbage pickup routes could even remotely offset the grievous budgetary burdens of a twenty-year retirement policy that factors final-year overtime into an already generous lifetime pension. And no conceivable administrative improvements in New York’s housing programs, including a generous amount of privatization, could possibly be as efficacious as abandoning an exceedingly costly array of housing subsidies, a selfimposed burden that has never solved a sixty-year housing “crisis” aggravated by a strict regime of rent regulation.

I wish not to overstate the case. Rationally ordered public management is a precious jewel. So, too, the mindset that impels some creative official to rejigger his mousetrap to the greater misfortune of the mice. The pursuit of efficient management and innovative techniques must be ubiquitous and insistent. I myself have had a long and rewarding association with two robust institutions lastingly pledged to higher standards of public management. Both are content to toil at small, mundane, but useful tasks in the betterment of government administration and are highly esteemed for their contributions.

But the quest for ironclad efficiency never has been and never can be a transcendent priority of a democratic society, for inefficiency is carved into the granite tablets of federal and state constitutions. No private corporation could conceivably survive the monumental encumbrances to efficiency that are a free society’s burden under current constitutional interpretations. A paralyzing system of checks and balances and exquisitely wrought rules of due process stay the eviction of disruptive tenants who reduce a public housing project to shambles, prohibit the expulsion of unruly students who bring ruin to an already malfunctioning urban school system, and prevent one agency from revealing to others the records of a felonious juvenile or potentially violent mental patient. A universal, tamper-proof ID card would immeasurably strengthen the efficacy of controls over illegal immigration, but is unthinkable in America. The obstacles to the enviable public-management order of a command-and-control regime, even of so benign an autocracy as Singapore, is the cost borne by a society that values freedom far more than efficiency.

Confounding matters further, as James Q. Wilson noted in his 1989 book Bureaucracy, is the endless multiplication of missions. Contract procurement in New York is legally required to favor bidders who are “clean” with respect to South Africa, Northern Ireland, and minority vendors. Bureaucrats are ruled as much by such constraints-what Wilson denotes the “top line”-as a private business is by the bottom line. Important laws are inevitably freighted with disparate goals dear to the hearts of various legislative factions. The administrators of a highway program must carry out policies dealing with environmental protection, historic preservation, minority set-asides, and special features for the handicapped.

It is noteworthy that the Grace Commission, that fearsome scourge of waste in government, gave scant attention to the productivity potential of such managerial reinventions as tidier personnel classifications or speedier management-information flows. Instead, it developed a prodigious agenda of policy reform, tagging billion-dollar items for a gigantic yard sale to the private sector. Despite a rambunctious cross-country barnstorm by Peter Grace, fortified by an expensive media campaign, the report was without material effect. In contrast, the two Hoover Commissions, self-limited to the grayer areas of public management, performed well and true. Many structural elements and administrative procedures in today’s federal apparatus are traceable to their reports. But they accomplished next to nothing in slowing down the exponential growth of government in the era that followed. David McCullough’s marvelous biography of Harry Truman, who appointed the first Hoover Commission, found no space in a thousand-page tome for a single word about its work.

The primacy of policy over administration is also reflected in the academic institutions that study and advise the government. Institutions of public management have given way to institutions of public policy. Such creatures of the Progressive Era as the Maxwell School at Syracuse and the Institute of Public Administration, together with various bureaus of municipal reform and citizens’ budget leagues, sought to bring integrity and efficiency to big-city government. Their object was not to contain government but to cleanse it, to erect lofty bulwarks against corruption and to replace cigar-box accounting with honest ledgers. All that, however, was in an age when the Federal Government was far smaller and municipal governments were little more than civic corporations of watchmen and custodians.

Government has been nationalized, reinvented as juggernaut. Today its watchmen lead an enormous military establishment; its custodians oversee a gigantic welfare state and legions of environmental regulators. Civic leagues and budget monitors, patronizingly designated “goo-goos,” have been subordinated to a proliferation of think tanks. Terrain once inhabited by a lonely Brookings Institution is now densely crowded with policy and research centers, on-campus and freestanding, of every imaginable philosophical persuasion. Their astonishing diversity is unified by a common urge-to influence policy by adding, subtracting, or redirecting public-sector functions. True, many policy organizations find time to deal with government’s administrative inefficiencies. But by and large, that’s not what makes the public’s heart beat. When the habitués of think tanks are called to the MacNeil/Lehrer Newshour, it is not to debate the impact of General Accepted Accounting Principles or the virtues of program-based budgets.

Such matters are not only less interesting but also far less important than the fundamental question of what we expect government to do. In electing to deal with government’s means rather than its ends, Osborne and Gaebler negate both their title and their thesis. The course of contemporary government cannot be reversed, nor can its relentless budget expansions and regulatory intrusions be checked, unless its ambitions are scaled back. Massive government will not be shrunk by marginal reinventions, only by massive disinventions. As James Q. Wilson has written, “You can have less bureaucracy only if you have less government.”


City Journal is a publication of the Manhattan Institute for Policy Research (MI), a leading free-market think tank. Are you interested in supporting the magazine? As a 501(c)(3) nonprofit, donations in support of MI and City Journal are fully tax-deductible as provided by law (EIN #13-2912529).

Further Reading

Up Next