HARRIS SCHOOL WORKING PAPER S E R I E S 08.

04

NEW PUBLIC MANAGEMENT COMES TO AMERICA

Laurence Lynn

New Public Management Comes to America

By Laurence E. Lynn, Jr.

Sydney Stein, Jr. Professor of Public Management Emeritus The University of Chicago

REVISED DRAFT 10 January 2006

Prepared for Presentation at the International Conference on Public Management in North America, El Colegio de Mexico, Mexico City, 27-28 October 2005.

New Public Management Comes to America

Laurence E. Lynn, Jr. Sydney Stein, Jr. Professor of Public Management Emeritus The University of Chicago

Introduction
The United States has had an ambiguous relationship to the New Public Management (NPM) as a global public sector reform movement. Many of the themes, concepts, and tools of governance associated with NPMs managerial ideologybusiness-like management, competitive tendering, incentives, agencification, devolution, performance measurement and management, subsidiarityhave long been staples of U.S. federal, state and local public management. Most of the elements of NPM have been road-tested in America. Yet public management reform in the U.S. in the NPM era that was underway in the 1980s has been decidedly heterodox, a manifestation of what Paul Light (1997) has termed the variously-themed tides of reform that ebb and flow through American public administration. Beginning in 2001, with the administration of George W. Bush, a new tide of reform has surged in, displacing the Clinton administrations emphasis on reinventing government.1 The Bush reforms have attracted surprisingly little attention compared to the swarms of public management experts who examined the Clinton initiatives from their outset.2 Whereas Lyndon Johnson sought to use systematic analysis to strengthen executive control over policy and budget priorities, Richard Nixon sought to create a centralized administrative presidency, Jimmy Carter attempted to enhance executive control over the assignment and remuneration of senior civil servants, Ronald Reagan proclaimed a war on waste and inefficiency and Bill Clinton promised to let managers manage toward a government that works better and costs less, George W. Bush has undertaken virtually all of these things to at least some degreeand more. Despite their apparent breadth, however, Bush reforms have reflected more of the essential spirit of New Public Management than those of any other recent American president.3

New Public Management in the United States

New Public Managementmore generally known as managerialismhas been defined so often by so many observers that it has become conceptually incoherent. Properly understood, NPMs focal emphasis is on reducing or eliminating structural distinctions between the public and private sectors so that the behavior of public managers resembles that of managers in entrepreneurial, profit-driven, investor-owned firms. Getting very far with such an agenda is impeded in the United States by its Constitutional separation of powers, which ensures legislative and judicial interference in any executive effort to insulate public management from Maidsonian politics.4 Nonetheless, Americans embrace the ideology, if not the reality, that, as Woodrow Wilson once put it, the field of [public] administration is a field of business. . . . [A]dministration lies outside the proper sphere of politics (Wilson 1997[1887], 20). Managerialism as an ideology of reform is, therefore, much older in America than it is virtually 1

everywhere else and especially in nations with strong socialist, statist or civil law traditions. Efforts to improve employee performance and productivity, for example, originated in the nineteenth century and were strengthened by the scientific management movement of the early twentieth century (Heinrich 2003). The theme of government as a field of business prevailed in coherent form from the late nineteenth century until the Great Depression augured new roles and powers for executive government. But the pendulum swung back after World War II as Congress reasserted its prerogatives under Article I of the Constitution (Rosenbloom 2000). Privatization received presidential endorsement by Harry Truman in 1950 (Segal 2004),5 and the 1950s featured performance budgeting and productivity improvement (Downs and Larkey 1986). Even the fiscally and politically liberal 1960s and early 1970s saw the emergence of additional NPM-style reforms: deinstitutionalization, cost-effectiveness analysis and program budgeting, New Federalism and devolution, services integration and the creation of a Senior Executive Service within the American federal civil service system. As president in the 1980s, Ronald Reagan mobilized the business community to help him mount a war on waste and big government.6 Public management reform in America is never a coherent phenomenon, however, because it cannot be. Whereas NPM in Europe has been the province primarily of executive elites, all three branches of American government compete for control of discretion exercised by unelected bureaucrats. The value of pursuing managerial reforms to actors in the political branches is substantially determined by their political and ideological benefits (Robinson 2004). Electoral politics, executive ambitions and judicial review ensure that there will be continuous, usually disjointed changes in administrative structures, practices and values. Efforts at more comprehensive or more focused reforms, especially those proposed by elected executives, are disfigured by political partisanship.7 As a result, the institutions of public management are typically poorly designed owing to political expediency (Moe 1990). Beginning in the 1990s, public management reforms in an NPM spirit were initiated more often by the U.S. Congress than by the executive branch. The 1990 Chief Financial Officers (CFO) Act and the 1993 Government Performance and Results Act (GPRA),8 for example, mandated agencies to have an overall financial management system and a system of strategic planning, annual performance plans and annual performance reports. In most agencies these processes have not been clearly linked to each other, to the budget process or to day-to-day work (IBM 2002). The Clinton administration pursued budget and performance integration, notably following November 1997, when Vice President Gore presented reinvention marching orders to the second-term Cabinet with the themes improved service delivery, use of partnerships and community-based strategies to solve problems in lieu of big government and techniques for improving performance in a time of diminishing resources, including the use of performance-based organizations (Aberbach 2005). The Clinton-era approach to reinvention was notably diffuse, however. For example, the Clinton administrations approach to performance management emphasized three vague themes: expect excellence, establish accountability and take timely action (IWGPM 2000), and its primary NPM initiativeperformance-based organizations (PBOs)was stymied by political opponents (Graham and Roberts 2004), who invoked Constitutional objections. 2

The Management Agenda of George W. Bush

As a presidential candidate, George W. Bush said that [g]overnment should be citizen-centered, results-oriented and, wherever possible, market-based (Gruber 2004). Once in office, the Bush administration promulgated, in August 2001, the Presidents Management Agenda (PMA), featuring five specific, business-like initiatives: strategic management of human capital, competitive sourcing,9 improved financial performance, expanded electronic government and, the holy grail, budget and performance integration. The federal budgeting process was henceforth to focus on what the government intended to achieve, not on what the government intended to spend (McNab and Melese 2003). As did his predecessor, Bush directed each agency to appoint a chief operating officer at the deputy secretary level, who was to be responsible for implementing the administrations management goals, developing strategic plans and improving general agency performance (Peckenpaugh 2001).10 Each of the five goals in the Presidents Management Agenda also has an owner, a designated official in OMB or the Office of Personnel Management (OPM) who oversees its implementation. Progress in achieving these goals is reported quarterly in the so-called stop light scorecard.11 To assist agencies in carrying out his management agenda, Bush reinstated the Presidents Management Council (PMC), comprising the departmental and agency chief operating officersgenerally the deputy secretary or deputy administratorwith agency-wide authority on behalf of the secretary or agency head.12 PMC members organized themselves into three committees to drive agencies implementation of the PMA. The first committee was to address the first two initiatives: strategic management of human capital and competitive sourcing. The second committee was to focus on expanding electronic government. The third committee was to address the initiatives to improve financial performance and budget and performance integration. The administration had even greater ambitions, however. In October 2001, Bush transmitted to Congress the Freedom to Manage Act of 2001. If enactedno action was in fact ever takenit would have established expedited procedures under which the congress could, at the administrations initiative, act quickly and decisively to remove structural barriers to efficient management imposed by law. Also included in that initiative was the Managerial Flexibility Act of 2001, which would have enabled the government to recruit and retain people with needed skills, increase the flexibility of federal property management and allow agencies to budget for results. With respect to personnel, it would have created a permanent, government-wide authority for voluntary separation incentives, broadened criteria for authorizing voluntary early retirement, increased recruitment and retention incentives, strengthened results-based performance and compensation for senior executives, made it easier to create and extend to other federal organizations personnel management demonstration projects and provided new hiring flexibilities. A number of other PMA-inspired initiatives have required no authorization by Congress and thus 3

have moved forward. In February 203, the Bush administration announced in its proposed fiscal year 2004 budget a new method for evaluating the performance of federal programs called the Program Assessment Rating Tool (PART).13 PART is represented as an effort to get agencies to report consistently on their programmatic goals and results in order to facilitate funding decisions and the integration of budget and performance information, one of five initiatives of the PMA (Norcross 2005). As will be discussed below, PART has drawn more professional attention than any other aspect of the PMA. As part of the E-government initiative, dubbed eRulemaking, in January 2003 the administration launched a website, www.regulations.gov, This website is intended to make the federal rulemaking process more accessible and to enable citizens and small businesses to quickly access and comment on hundreds of open proposed rules from all federal agencies. This website is the first step in an initiative that will build an integrated and cost-effective regulatory docket and management system to ensure efficiency, economies of scale, and increased accountability to the public in the Federal rulemaking process.14 Other initiatives with similar formats and goals are GovBenefits.gov and Grants.gov. Reforming the Civil Service Among the most consequential of the Bush administrations proposed management reforms are those directed at the transformation of the federal civil service into a performance-oriented, entrepreneurial workforce that emulates the functioning of private labor markets, allocating people to jobs at market-clearing wages. The Bush administration is making a determined effort to redefine what Christopher Hood (2002) has called the public service bargain between the federal government and its employees by seeking to replace secure, adequately-remunerated jobs affording stability in both professional and personal lives with jobs whose short-term security and remuneration depend on measured performance. The administration noted in its 2004 budget that 40 percent of federal workers and 71 percent of senior executives would be eligible for retirement by 2006, thus creating both the necessity and the opportunity to restructure the federal workforce. The general idea is to create a performance culture, recognize rather than suppress individual differences in competence and capability, establish accountability, eliminate the Washington mentality and, not incidentally, dramatically reduce the power of public employee unions. New personnel regulations at the Departments of Homeland Security and of Defense are harbingers of the administrations intentions. In the 2004 National Defense Authorization Act (PL 108-136), Congress authorized the Department of Defense to develop a new personnel system, endorsing Secretary of Defense Donald Rumsfelds argument that national security managers need more control over how workers are paid, promoted, deployed and disciplined to better fight the war on terror. The result is the National Security Personnel System (NSPS), which covers the more than 700,000 civilian employees of DoD. The final regulations governing administration of NSPS were published on November 1, 2005.15 4

The NSPS features a performance management system, including pay for performance and changes in procedures for staffing and workforce resizing, pay rates and systems, job classification, labor-management relations, and discipline, adverse actions and employee appeals, although merit system principles and other features of the existing civil service system in some form will remain in force.16 According to one assessment (Barr 2005), [t]he linchpin of the new system is more rigorous evaluation of employees by their managers, feedback on how to improve their performance and using employee job ratings to determine pay raises. Officials contend that the NSPS should increase accountability and make it more difficult for senior managers to avert their gaze when they see supervisors and employees who are not pulling their share of the load. In January 2005, the Bush administration unveiled a new personnel system for the Department of Homeland Security (DHS), having obtained the authority to do so in the 2002 act creating DHS.17 The system is intended to be a model for the rest of the federal government. The Defense and Homeland Security personnel overhauls are designed to scrap the General Schedule (GS) system, implement performance pay, limit union bargaining power and streamline the appeals process. With DoD and DHS personnel reforms well underway, officials at the US OPM developed legislation in 2005the Working for America Act of 200518which would extend similar changes to the rest of the federal workforce. The act would extend civil service reform to all federal employees by 2010 without, however, altering provisions concerning due process, protection against favoritism in hiring and compensation, whistleblower protections and anti-discrimination laws, veterans preferences in hiring and collective bargaining.19 The emphasis will be on performance management and on Results-Driven, Market-Based Compensation. The administration proposes to replace the 15 GS grades with broad pay bands, with salaries set according to occupation and local and national labor market rates and job performance ratings influential in determining pay raises, thereby eliminating across-the-board, performance-unrelated pay increases. In the meantime, the Bush administration has reformed the pay and incentives of the Senior Executive Service (SES), comprising some 6,300 of the 1.8 million civil servants. A system of six pay levels, infrequent bonuses, reputedly inflated performance ratings and salary caps on pay and bonuses was replaced in 2003 by a law which eliminated the levels, raised the pay caps and made pay raises contingent on agencies making meaningful distinctions in performance among their executives (Kamensky 2005, 7). The process of certifying the new agency SES performance management systems by the OPM was well underway in the Fall of 2005. The Bush administration is also urging the adoption of category rating to fill open civil service positions. Rather than relying on traditional resume qualifications, category rating groups individuals with similar levels of job-related competencies and is designed to differentiate between the quality of candidates relative to the job in terms of increasing levels of difficulty or complexity. 5

Opposition Many federal agencies and their stakeholders have greeted Bush administration initiatives, especially those associated with the personnel system, with reluctance and apprehension fueled by the unqualified opposition of federal employee unions. All of the major unions, including the American Federation of Government Employees and the National Treasury Employees Union, have mounted extensive campaigns to fight and challenge the initiatives at every turn (Segal 2004).20 On the day, August 15, 2005, that the new DHS workplace rules were to go into effect, a federal district judge ruled in a lawsuit brought by employee unions that the DHS plan does not lead to enforceable contracts and thus fails to comply with the direction of Congress to ensure employee collective bargaining rights and blocked implementation of the new collective bargaining and employee appeal rules.21 The Department of Defense, whose NSPS is clearly modeled on the DHS personnel system, declared that it intended to proceed with implementation of its reforms anyway. Ten federal labor unions have filed suit alleging that DoD failed to abide by the statutory requirements to include employee representatives in the development of DoDs new labor relations system authorized as part of NSPS. If employees do not in the end accept new performance measures and standards as fair, DoD will be subject to grievances and lawsuits from workers who object to job ratings that they believe have unfairly depressed their pay. National Treasury Employee Union president Colleen Kelley said that the system fails to ensure a fair and objective compensation system and goes well beyond establishing a so-called pay-for-performance system to stripping collective bargaining rights and employee appeal rights (quoted by Rutzick 2005). Some conservative interests, such as the Reason Foundation, believe the Bush administration has not gone nearly far enough in its NPM agenda. It cites as an example business process outsourcing (BPO), arguing, for example, that federally-provided human resource services should be outsourced just as maintaining websites, billing and collection and trust fund and administrative accounting have been. Besides, most private companies outsource such services. Fiscal conservatives complain of the absence of budgetary discipline and the proliferation of earmarked expenditures which have not been subject to normal review processes. As already noted, only a few Bush administration measures requiring legislative authorization have actually received it. Some of the more comprehensive legislative proposals are unlikely to be reported out of committee due to the second-term preoccupation of both Congress and the administration with other priorities. As with the Clinton administration reforms, the Bush administrations management agenda will succeed to the extent that executive initiatives not requiring Congressional authorization and surviving legal challenges become institutionalized. As discussed further below, such institutionalization may already be occurring. Accomplishments As with the Clinton administration, the Bush administration has produced a steady flow of 6

self-serving claims concerning the success of the Presidents Management Agenda.22 An April 2005 report (EOP 2005) claimed that: [t]he government is eliminating $50 billion we overepay each year; reducing by $6 billion per year what we pay for commercial services; disposing of $15 billion in unneeded government real property and redirecting funds to higher priority asset management uses; using technology to cut costs; holding agencies accountable for program performance to get more out of every dollar we spend; and strengthening financial disciplines so as to provide managers with the timely and accurate financial information they need to make smarter cost decisions. With similar enthusiasm, the PMC issued a report in July 2005 with the Gore-esque title Giving the American People More for their Money (PMC 2005). We are making a difference, a big difference, the PMC proclaims. According to the report, the PMA is projected to save taxpayers between $50 and $100 billion each year by improving government performance and efficiency. A scorecard comparison shows the number of red light results declining dramatically between 2001 and 2005, the number of green light results growing impressively. The value of the report lies not in such easily-manipulated claims, however, but in dozens of boxed examples of specific ways in which agencies have changed their management practices. The director of OPM issued a report on the Strategic Management of Human Capital as of the third quarter of fiscal year 2005 (USOPM 2005). Of the 22 agencies that had a red status score in fiscal year 2001, only one agency still held the red status score as of the third quarter of fiscal year 2005. The number of green agencies increased from zero to eleven. This report, too, is flush with success anecdotes.

Such claims of success should be evaluated in the context of the steadily growing number of independent assessments of the Presidents Management Agenda. One result of particular interest, from the Bush administration no less, is that the percentage of employees who strongly agree that they are held accountable for performance actually declined from 2002 to 2004 (a result that may, however, be strongly influenced by the very low level of agreement by employees of the Department of Homeland Security) (USOPM 2005a). Outside the federal government, the Performance Institutes Center for Government Performance Management, the Mercatus Center at George Mason University, the Reason Foundation, the GAO, Citizens Against Government Waste and the IBM Center for Excellence in Government, among others, provide continuing surveillance and evaluation of public management reforms, and academic interest in the Bush administration reforms is slowly growing. The Program Assessment Rating Tool (PART) has drawn a significant amount of critical attention. A senior OMB official announced early in the Bush administrations first term that the chief management priority is to link the performance goals of federal programs to agency 7

budgets (Lunnie 2001). Linking administration efforts to the well-established GPRA process, this official said that I believe we [the Bush administration] are doing our part to make GPRA implementation a success. He continued: First and most critically is the Presidents very clear signal that he wants his administration and our government to be results-oriented. The GAO later concluded, however, that the impact of the PART process is more in management than in budgeting (i.e., in budget and performance integration), in program design, assessment and management, not in funding. The January 2004 GAO report stated (USGAOI 20904, I): PART is not well integrated with GPRAthe current statutory framework for strategic planning and reporting. By using the PART process to review and sometimes replace GPRA goals and measures, OMB is substituting its judgment for a wide range of stakeholder interests. The PART/GPRA tension was further highlighted by challenges in defining a unit of analysis useful for both program-level budget analysis and agency planning purposes. Although PART can stimulate discussion on program-specific measurement issues, I cannot substitute for GPRAs focus on thematic goals and department- and government-wide crosscutting comparisons. Moreover, PART does not currently evaluate similar programs together to facilitate trade-offs or make relative comparisons.23 A study conducted at the Mercatus Center (Norcross 2005) noted that the Presidents proposed fiscal year 2006 budget included a Major Savings and Reforms report that used PART scores to make termination and funding decisions. This document was used as a source of descriptive evidence concerning how PART was used by the administration in preparing its fiscal year 2006 budget. The administration recommended 154 programs for termination or reduction guided by three principles: (1) does the program meet the nations priorities? (2) does the program meet the presidents principles for appropriate use of taxpayer resources? (3) does the program produce the results intended? According to the study, of these 154 programs, 99 were recommended for termination for a reduction of $8.8 billion in spending. Of these 99 recommended terminations, 32 programs underwent a PART review at least once, representing about $6 billion of the savings. Sixteen of these programs received a rating of results not demonstrated, six were rated adequate, and ten were rated ineffective. Of the 55 programs recommended for reductions in spending, 22 underwent a PART review at least once. Eight were rated adequate, four were rated moderately effective, nine were rated results not demonstrated and one was rated ineffective. A little over one third (or 4) of the programs recommended for either termination or reduction had been submitted to a PART review, representing about $10 billion in savings or 0.4 percent of the proposed $2.57 trillion budget. Within these 54 programs, PART appears to have been used in combination with other administration criteria such as meeting the nations priorities and an assessment of whether the program is an appropriate use of taxpayer funds. That is, PART is not the only factor that is used to make funding decisions by the Bush administration, although it has advanced the use of performance information by linking program performance to the presidents budgetary proposals. Eileen Norcross, the studys author, 8

concluded: These findings show that while only a small part of overall total outlays, 6%, or $154 billion are rated results not demonstrated, this represents, in some cases, a large percentage of individual agency appropriations. This indicates that a large portion of some agency activities and budgets are unable to show measurable results according to OMBs rating process. However, over the three year period that PART has been in place, there has been measurable progress by agencies to move from as results not demonstrated rating. This may indicate that agencies are responding to their assessments by improving their measurements and data, or that budget examiners are more experienced, or that a better set of programs is being evaluated each year (Norcross 2005, 1).24 A number of investigators have undertaken statistical analyses of PARTs effects on budgetary decisions. The GAO undertook a regression analysis in 2004 using the first year of PART data in order to discover to what extent such data had influenced the presidents fiscal year 2004 budgetary proposal (USGAO 2004). By separating mandatory and discretionary programs, GAO sought to determine if PART scores influenced proposed funding changes between fiscal years 2003 and 2004. The study found that PART scores have a positive and statistically significant effect on discretionary program funding levels in the presidents programs (Norcross 2005, 3; USGAO 2004, 42). A forthcoming regression analysis of PART by John Gilmour and David Lewis to be published in the Public Administration Review (Gilmour and Lewis 2006) found that PART scores (for fiscal years 2004 and 2005) are positively correlated with the presidents recommendations (Norcross 2005, 3). According to a study by Robert Olsen and Dan Levy, the effect of the PART on the allocation of federal resources is positive and nontrivial in size. The estimated effect of a one standard deviation increase in the PART score on the Presidents proposed funding is 9 percentage points. The effect for small programsthose with relatively low funding levelsis particularly large, about 20 percentage points. However, most federal funds are spent on large programs, for which the estimated PART effects are smaller. If programs are weighted by their size, the average effect falls to about 3 percentage points (Olsen and Levy 2004, abstract). An interesting study by David Lewis based on PART scores found that programs administered by appointees [especially Senate-confirmed appointees] get systematically lower management grades than careerists even when controlling for differences among programs, substantial variation in management environment and the policy content of programs themselves, thus confirming the underlying logic for the creation of the merit systems that the Bush administration is trying to dismantle (Lewis 2005, 19).25 9

U.S. Comptroller General David Walker has cautioned that in a political process performance information is likely to be one, but not the only, factor in budgetary decision making.26 In other words, performance information can change the terms of debate but it will not necessarily determine the ultimate decision (Walker 2005, 1). He urged: continuing to build on the legacy of GPRA by improving the reliability and credibility of performance information and increasing program evaluation capacity; encouraging demand for that information by garnering stakeholder buy-inparticularly from Congresson what to measure and how to present this information, since only then will it be linked to the congressional authorization, appropriations and oversight process; and developing a comprehensive, crosscutting approach to assessing the performance of all programsincluding tax expendituresrelevant to common goals.

Big Government Conservatism

Though the Bush management agenda has been implemented with considerable consistency and evident determination, the administrations overall disposition toward New Public Management as a management ideology is ambiguous. These initiatives must be viewed in the context of the Bush administrations larger purposes. With the Republican Party in control of both houses of Congress and of the White House, the Bush administration has been making a concerted effort to extend its dominance over the other branches of government on behalf of a conservative policy agenda. The list of these efforts is a long one: curtailing filibusters of the appointment of judges; discarding the seniority system and limiting the independence and prerogatives of Congressional committee chairs; asserting commander-in-chief prerogatives in detaining enemy combatants and in gathering intelligence with respect to the war on terror; expanding the withholding of executive branch information from Congress, the media, and other groups; barring Democrats from legislative drafting and House-Senate reconciliation conference deliberations; punishing executive branch dissenters and whistle-blowers; exerting tighter control over the 3,000 or so political appointees to executive and regulatory agencies; intensifying the review of regulations, including those of independent regulatory agencies; and aggressively undertaking new regulatory initiatives in lieu of lawmaking.27 All of these measures are oriented primarily toward corporate and business industry interests. Whereas Richard Nixon failed in his efforts to create a centralized, administrative presidencythese efforts, along with his entire presidency, were casualties of the Watergate scandalthe Bush administration has used every lever of executive authority to consolidate its grip on policy making and execution within both the executive and legislative branches. To the extent that he is winning confirmation of his conservative appointees to the U.S. Supreme Court ands to appellate and district courts, Bush is achieving considerable ideological control over the judicial branch as well. 10

The larger picture emerging from the Bush administration has been termed big government conservatism to highlight its departure from the small government fiscal conservatism of former president Reagan and of the Gingrich Contract with America of 1994. Reagan once vetoed a highway and mass transit bill that offended him because of its 152 earmarks for the pork-barrel projects of legislators who circumvented the usual scrutiny of the budget process, which violated his conservative principles. In August 2005, Bush signed without apparent qualm a transportation bill containing 6,371 such earmarks with a cumulative price tag of $24 billion, ignoring his own pledge to oppose wasteful spending bills.28 The director of the domestic policy council in Bushs first term said that [w]e have moved from devolution, which was just pushing back as much power as possible to the states, back to where government is limited but active (VandeHei 2005). He might have added and more expensive. Whereas the centrist Clinton administration took pride in having made substantial reductions in the federal civilian workforce,29 the size of government has begun growing again. Staffing at federal regulatory agencies, for example, is expected to reach an all-time high in 2006. The number of federal employees responsible for regulating private sector activities is over four times what it was in 1960,30 and the budget for regulatory activity has increased 46 percent since 2000. The Bush administration is promoting federal regulatory solutions in lieu of adjudication in state courts in banking, insurance, and telecommunications to satisfy a business clientele wary of state court rulings that favor consumer interests. It has successfully sought the overhaul of class action lawsuits, moving them to the federal level, and seeks similar solutions in medical malpractice and insurance regulation. Ironically, the administration is opposed by Democrats who now favor the state adjudication and regulation of which they were once thoroughly distrustful. Apart from the growth in the size and reach of government, the other notable aspect of public management during the Bush administration is the extent of apparent mismanagement of policies, departments and agencies. Evidence of mismanagement is provided by numerous institutions dedicated to ensuring the transparency of public management operations, prominently including the GAO, the powers of oversight and investigation of the committees of the Congress, the Defense Contract Audit Agency and the departmental inspectors general.31 Attention has been focused in particular on management problems within the intelligence community and the Central Intelligence Agency, the management of reconstruction activities in Iraq, management problems within the Federal Bureau of Investigation, the National Aeronautics and Space Administration and the Department of Homeland Security and, most recently, the management of the response to emergencies by the Federal Emergency Management Agency (FEMA). The dissonance between the orderly pursuit of managerial improvements under the Presidents Management Agenda and the lackadaisical attitude toward strategic management is evident in the case of FEMA. Its most recent PART assessment rated FEMA Response as adequate, although there were hints at response time, jurisdiction and other problems.32 In particular, the assessment noted that
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[r]esponse takes an all-hazards approach to readiness for response activities. This approach allows program managers to anticipate and prepare for various types of hazards and response needs. Because every response effort is unique to the situation, geography and population affected, this flexibility allows for a m ore robust capability and a more efficient approach to response planning. Rather than reinventing response plans for each event, the program is able to utilize standard pre-designed strictures such as the National Response Plan and the Federal Response Plan. The flexibility and standardization inherent in these established regimes prevent major flaws from occurring in Response efforts. In some cases the Response program may face the legal issue of not being able to fully use its assets due to the lack of a Disaster Declaration under the Stafford Act. When put to the test by Hurricane Katrina, FEMAs response was anything but adequate. (NASAs Space Shuttle Program also received a satisfactory assessment prior to the Columbia space shuttle disaster.) In general, its internal contradictions notwithstanding, the Bush administration seems determined to control from the center the structures and processes of government in order to ensure reliable agents for its conservative policies (Moe 1985, Aberbach 2005). The official in charge of public management said that the Bush management agenda will be the most lasting of any management initiative any administration has teed up (Barr 2004, B2). Whereas Clinton created a new entity (the National Partnership for Reinventing Government) to pursue his management agenda, the Bush administration has coopted existing organizations, primarily OMB and OPM, and a management emphasis rather than a program or policy emphasis. This approach seems to have pervaded federal agencies and to have successfully created new habits of operational management.33 While most proposals that require legislative authorization or judicial approval have not progressed far, the Bush administration approach to public management reform is the dominant strain of reform thinking in the United States at the moment, and in any event the authority of the presidency is being wielded aggressively in order to penetrate into the pores of government. It is an approach that suits the conservative temper of the times. Therein lies the significance of the Bush administrations version of New Public Management. Larger management failures notwithstanding, to the extent that administration officials succeed in altering the fundamental personnel, budgeting and program evaluation practices of public agencies, they will have put their imprint on American public management to an extent that has eluded previous presidents, including Reagan. As noted earlier, the wholesale adoption of the Presidents Management Agenda in all its moving parts is doomed by the American separation of powers. Incremental changes can, however, cumulate to an important legacy. George W. Bush may well deserve to be known as the Margaret Thatcher of American public management.

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References
Aberbach, Joel D. 2005. The Political Significance of the George W. Bush Administration. Social Policy & Administration 39:130-49. Barr, Stephen. 2004. On third Anniversary of Bush Management Agenda, Agencies Showcase Results. The Washington Post, August 10. --------. 2005. Concerns and Questions Increase as National Security Personnel System Nears. The Washington Post, July 26. Downs, George W. and Patrick D. Larkey. 1986. The Search for Government Efficiency: From Hubris to Helplessness. New York: Random House. Executive Office of the President (EOP). 2005. Reducing Costs and Gaining Efficiencies in the Federal Government. Online Available http://whitehouse.gov/results/agenda2005-cost-mgt-report.pdf. Gilmour, John, and David E. Lewis. 2006. Does Performance Budgeting Work? An Examination of OMBs PART Scores. Public Administration Review forthcoming. Graham, Andrew, and Alasdair Roberts. 2004. The Agency Concept in North America: Failure, Adaptation and Incremental Change. In Christopher Pollitt and Colin Talbot, eds., Unbundled Government: A Critical Analysis of the Global Trend to Agencies, Quangos and Contractualisation. 140-63. London and New York: Routledge. Gruber, Amelia. 2004. President & CEO. Government Executive 36:12:36 7 pp. Heinrich, Carolyn J. 2003. Measuring Public Sector Performance and Effectiveness. In Jon Pierre and B. Guy Peters, eds., Handbook of Public Administration. 25-37. London: Sage. Hood, Christopher. 2002. Control, Bargains, and Cheating: The Politics of Public-Service Reform. Journal of Public Administration Research and Theory 12:309-32. IBM Business Consulting Services. 2002. Addressing the Presidents Management Agenda Through Budget and Performance. Online Available http://www-03.ibm.com/industries/government/doc/content/bin/GW510-9131-00f.pdf. Interagency Work Group on Public Management (IWGPM). 2000. Report to the Presidents Management Council on Managing Performance in the Government. Online Available http://www.opm/gov/perform/articles/2000/pmcrpt.htm. Kamensky, John. 2005. Making Meaningful Distinctions: A New Performance-Based Pay
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System for Federal Executives. PA Times 28:2:7. Lewis, David E. 2005. Political Appointments, Bureau Chiefs, and Federal Management Performance. Unpublished manuscript. Online Available http://www.wws.princeton.edu/research/papers/09_05_dl.pdf Light, Paul C. The Tides of Reform: Making Government Work 1945-1995. New Haven, CT: Yale University Press. Lunnie, Kellie. 2001. OMB Deputy Says Performance-Based Budgeting is Top Priority. Online Available GovExec.Com: http://www.govexec.com/dailyfed/0601/062001m2.htm. March, James G., and Johann P. Olsen. 1983. Organizing Political Life: What Administrative Reform Tells Us About Government. American Political Science Review 77:281-96. McNab, Robert M., and Francolis Melese. 2003. Implementing the GPRA: Examining the Prospects for Performance Budgeting in the Federal Government. Public Budgeting & Finance 23:73-95. Moe, Terry M. 1985. The Politicized Presidency. In John E. Chubb and Paul E. Peterson, eds., The New Direction in American Politics. Washington, DC: 235-71. The Brookings Institution. --------. 1990. The Politics of Structural Choice: Toward a Theory of Public Bureaucracy. In Oliver E. Williamson, ed., Organizational Theory: From Chester Barnard to the Present and Beyond. 116-153. New York: Oxford. Nathan, Richard. 2005. There will always be a New Federalism. Paper for a Federalism Workshop, American Enterprise Institute, Washington, DC. Online Available at: http://www.rockinst.org/publications/federalism/AEI_Nathan_Nov_14.pdf. Norcross, Eileen C. 2005. An Analysis of the Office of Management and Budgets Program Assessment Rating Tool (PART) Washington, DC: The Mercatus Center. Online Available http://www.mercatus.org/governmentaccountability/subcategory.php/290.html. --------2005b. Testimony. Before the Subcommittee on Federal Financial Management, Government Information and International Security of the Senate, Subcommittee on Homeland Security and Government Affairs, June 14. Online Available http://www.mercatus.org/pdf/materials/1245.pdf. Olsen, Robert, and Dan Levy. 2004. Program Performance and the Presidents Budget: Do OMBs PART Scores Really Matter? Online Available
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http://www.appam.org/conferences/fall/atlanta2004/sessions/downloads/4301.pdf. Peckenpaugh, Jason. 2001. Bush Unveils Plan for Federal Management Reform. Online GovExec.Com, July 12. Http://www.govexec.com/dailyfed/070001/071201p1.htm. Presidents Management Council (PMC). 2005. Giving the American People More for their Money. Online Available http://www.whitehouse.gov/results/agenda/2005_results_report.pdf. Robinson, Scott E. 2004. The President as Reformer: When Do Presidents Initiate Administrative Reform Through Legislation? Political Studies Quarterly 34:793-803. Rosenbloom, David H. 2000. Building a Legislative-Centered Public Administration: Congress and the Administrative State, 1946-1999. Tuscaloosa, AL: University of Alabama Press. Rutzick, Karen. 2005. OMB Not Deterred by DHS Personnel Reform Setback. Online Available GovExec.Com http://www.govexec.com/daily/fed/0805/081705r1.htm. Segal, Geoffrey F. 2004. Realizing the Presidents Management Agenda. The Reason Foundation. Online Available http://www.reason.org/commentaries/segal_O20040724.shtml. U.S. Government Accountability Office (USGAO). 2004. Observations on OMBs Use of the Program Assessment Rating Tool for the Fiscal Year 2004 budget. GAO-04-174. U.S. Office of Personnel Management (USOPM). 2005. A Message from the Director: Strategic Management of Human Capital, Third quarter FY2005 Update. July 7. Online Available http://www.whitehouse.gov/results/agenda/fy05q3-hc.pdf. --------. 2005a. What Do Federal Employees Say? Results from the 2004 Federal Human Capital Survey. Washington, DC: USOPM, May. Online Available http://www.fhcs2004.opm.gov/FHCS_2004_Report.pdf. VandeHei, Jim. 2005. Blueprint Calls for bigger, More Powerful G]overnment; Some Conservatives Express Concern at Agenda. The Washington Post, February 9, p. A1. Walker, David M. 2005. Testimony: 21st Century Challenges: Performance Budgeting Could Help Promote Necessary Reexamination. GAO-05-709T. Washington, DC: USGAO. Wilson, Woodrow. 1997[1887]. The Study of Administration. In Jay M. Shafritz and Albert C. Hyde, eds., Classics of Public Administration, Fourth Edition. 14-26. Thomson Wadsworth.
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Endnotes
1. On January 19, 2001, the day before George W. Bushs inauguration, the official reinvention website maintained by the Clinton administration was shut down. The reinvention movement lives on, however, in a series of UN- and host-country-sponsored Global Forums on Reinventing Government, the most recent of which was held in South Korea in May 2005. 2. A former U.S. Office of Management and Budget official explained (in a private conversation) that the creators of President Bushs Management Agenda (discussed more fully below) deliberately sought a low political profile for Bush administration management reforms in order to avoid the distractions of partisan criticism. 3. One would have to go back to the early twentieth century administrations of Theodore Roosevelt and William Howard Taft to find a similar spirit of businesslike reform. 4. For an insightful analysis of how Constitutional principles obstructed the Clinton Administrations initiative to create Performance Based Organizations, see Graham and Roberts (2004). 5. On January 15, 1955, President Dwight Eisenhower issued Bureau of the Budget (now the Office of Management and Budget) Bulletin 55-4 to declare that the federal government should rely on the private sector for goods and services. It is the policy of the Government of the United States to rely on commercial sources to supply the products and services the government needs. The government shall not start or carry on any activity to provide a commercial product or service if the product or service can be procured more economically from a commercial source. 6. Indeed Reaganism, concerned with waste, fraud and abuse, was arguably more influential in Europe than Thatcherism, concerned with structural reforms, was in America. 7. James March and Johan Olsen (1983) identified 12 such reform initiatives during the twentieth century until 1983. Light (1997) identified the post-World War II tides of reform, including both piecemeal and more extensive reform enactments. 8. For more on GPRA, see McNab and Melese (2003). 9. In 2001, Bush said that there were more than 850,000 federal jobs that could be performed by the private sector (Segal 2005). 10. But these officials need a say in the development of the management agenda according to Paul Light. Are the officers to be given any authority, for example, to reject or resist the arbitrary outsourcing targerts being pressed by the Office of Management and Budget? Light asked. 11. The URL is: htp://www.whitehouse.gov/results/agenda/scorecard.html.
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12. For further information on the PMC, see: http://www.whitehouse.gov/results/agenda/presmgmtcouncil.html. A PMC was created on October 1, 1993 by the Clinton administration and, in various forms, it has existed since the Reagan administration (Peckenpaugh 2001). (Said Light, [w]eve had various forms of the Presidents Management Council now going back to the first Regan administration, none of which has made the slightest difference in improving actual performance [quoted by Peckenpaugh 2001]. See, for example, William J. Clinton, Memorandum for heads of Executive Departments and Agencies, Subject: Implementing Management Reform in the Executive Branch, October 1, 2001, at: http://govinfo.library.unt.edu/npr/library/direct/memos/2552.html, and Presidents Management Council, Interagency Work Group on Performance Management, Report to the Presidents Management Couoncil on Management Performance in the Government, February 2000, at: http://www.opm.gov/perform/wppdf/pmcrpt.pdf. 13. Descriptions and information on PART are at: htp://www.omb.gov/part. 14. See U.S. Office of Management and Budget, Memorandum for the Presidents Management Council, March 1, 2004, Subject: Regulations.Gov at: http://www.whitehouse.gov/omb/inforeg/memo_pmc_egov.pdf. 15. The regulations are at: http://www.cpms.osd.mil/nsps/pdf/FinalNSPSFederalRegisterNotice.pdf. For an analysis of the process of designing the NSPS, see U.S. Governmental Accountability Office (USGAO), DODs National Security Personnel System Faces Implementation Challenges (GAO-05-730, July 2005). 16. Official information on the NSPS is available at: http://www.cpms.osd.mil/nsps/. 17. The Bush administration had been reluctant to create a new, sprawling bureaucracy. The price of overcoming this reluctance was Congressional acquiescence in authorizing a personnel system for the department that, for the most part, was outside the traditional civil service framework. The text of the Homeland Security Act of 2002 is at: http://news.findlaw.com/hdocs/docs/terrorism/hsa2002.pdf. 18. The text of the draft legislation is at: http://www.fsa.usda.gov/dam/bud/WFAA%202005/Working%20for%20America%20Act%2020 05-draft.pdf. 19. The Bush administrations comparative summary of the WFAA, DHS and current law is at: http://www.whitehouse.gov/results/agenda/comparison-of-draft-bill.pdf. 20. Other unions representing federal employees include, for example, the AFL-CIOs International Association of Machinists and Aerospace Workers and International Federation of Professional & Technical Engineers. Bush administration reforms are also opposed by the American Federation of State, County and Municipal Employees, the largest public employee
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and health care worker union in the U.S. 21. The ruling in the lawsuit is at: http://cbpunion.org/DHSRegulations/courts.decision.pdf. 22. For official reports and other news of the Presidents Management Agenda, consult: http://www.whitehouse.gov/results/ and http://www.whitehouse.gov/omb/. 23. GPRA is unique among performance budgeting efforts in that it is a legislative and not an executive initiative. However, Congress has not paid much attention to the information in agency reports, though it equires them to be produced (Norcross 2005b, 9). 24. According to another Mercatus Center study (at: http://www.mercatus.org/article.php/1130.html), federal agencies are not producing the transparent performance reports that are mandated by law and intended to describe the public benefits they provide to Americans. Only 11 percent of the federal budget is covered by good reporting, and two-thirds is in agencies whose reporting is unsatisfactory, said Jerry Ellig, a senior research fellow at Mercatus. Its disappointing that some of the agencies with the biggest budgets have consistently failed to produce transparent reports that assess the public benefits they produce and show how their leaders are using this information to improve performance in the future, he added.
25. Other findings from this study suggest that insulation from political presidential control may enhance program performance, that political conflict might undermine the technical rationality of program design and that policy preferences might contaminate evaluations of program performance.

In October 2005, the GAO published two additional reports on PART: Performance Budgeting: PART Focuses Attention on Program Performance, but More Can Be Done to Engage Congress GAO-06-28 and Program Evaluation: OMB's PART Reviews Increased Agencies' Attention to Improving Evidence of Program Results GAO-06-67.
26.

27. Richard Nathan (2005) makes the interesting argument that, by cooling off on the Reagan administrations aggressive devolutionary and deregulatory brand of new federalism, which was carried forward in the mid-1990s under the Speaker Newt Gingrichs Devolution Revolution, the Bush administration has sought to limit the power of, for example, state attorneys general who might frustrate administration initiatives at the state level. 28. See Big Government Conservatives, Washington Post, August 15, 2005, p. A14. 29. The OPM reported a reduction in the federal civilian workforce (excluding the U.S. Postal Service) of 427,000 from 1993 to the end of 2000. See: http//www.opm/feddata/html/dec00fac.asp. 30. Go to: http://www.mercatus.org/regulatorystudies/article.php/1246.html.
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31. The IGs comprise the Presidents Council on Integrity and Efficiency (and the associated Executive Council on Integrity and Efficiency); see: http://www.ignet.gov/. They jointly publish the Journal of Public Inquiry. 32. Go to: http://www.whitehouse.gov/omb/budget/fy2006/pma/homeland.pdf. 33. Bush administration chief of staff Andrew Card, for example, issued a directive at the beginning of Bushs second term that Cabinet secretaries spend as many as four hours a week working at the Eisenhower Executive Office building next to the white House as a means of ensuring tighter control over and better communications with cabinet departments in the execution of presidential priorities and enforcing loyalty. In the second term he also appointed more of his trusted aides to cabinet posts.

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