13.1: Bureaucracy

13.1.1: Bureaucracy

Bureaucracy may be defined as a form of government: government by many bureaus, administrators, and petty officials.

Learning Objective

Define bureaucracies and their distinctive features

Key Points

A bureaucracy is a group of specifically non-elected officials within a government or other institution that implements the rules, laws, ideas, and functions of their institution through “a system of administration marked by officials, red tape, and proliferation”.
As the most efficient and rational way of organizing, bureaucratization for Weber was the key part of the rational-legal authority, and furthermore, he saw it as the key process in the ongoing rationalization of the Western society.
Weber also saw it as a threat to individual freedoms, in which increasing rationalization of human life could trap individuals in the iron cage of bureaucratic, rule-based, rational control. To counteract this bureaucratic possibility, the system needs entrepreneurs and politicians.

Key Terms

bureaucratization: The formation of, or the conversion of something into, a bureaucracy.
counteract: To act in opposition to; to hinder, defeat, or frustrate, by contrary agency or influence; as, to counteract the effect of medicines; to counteract good advice.

Example

An example of bureaucracy is what is called a civil service job, which can be in a governmental service agency such as the Department of Labor or the Department of Defense.

Background

A bureaucracy is a group of specifically non-elected officials within a government or other institution that implements the rules, laws, ideas, and functions of their institution through “a system of administration marked by officials, red tape, and proliferation. ” In other words, a government administration should carry out the decisions of the legislature or democratically elected representation of a state.

Bureaucracy may also be defined as a form of government: government by many bureaus, administrators, and petty officials. A government is defined as the political direction and control exercised over the actions of its citizens. On the other hand, democracy is defined as: government by the people. In other words, supreme power is vested in the people and exercised directly by them or by their elected agents under a free electoral system and not by non-elected bureaucrats.

Weberian bureaucracy

Weberian bureaucracy has its origin in the works by Max Weber (1864-1920), a notable German sociologist, political economist, and administrative scholar who contributed to the study of bureaucracy and administrative discourses and literatures during the late 1800s and early 1900s. Max Weber belongs to the Scientific School of Thought, who discussed such topics as specialization of job-scope, merit system, uniform principles, structure, and hierarchy.

Weber described many ideal types of public administration and government in his magnum opus Economy and Society (1922). His critical study of the bureaucratization of society became one of the most enduring parts of his work. It was Weber who began the studies of bureaucracy and whose works led to the popularization of this term. Many aspects of modern public administration go back to him, and a classic, hierarchically organized civil service of the Continental type is called Weberian civil service. As the most efficient and rational way of organizing, bureaucratization for Weber was the key part of the rational-legal authority, and furthermore, he saw it as the key process in the ongoing rationalization of the Western society.

Weber’s ideal bureaucracy is characterized by hierarchical organization, delineated lines of authority in a fixed area of activity, action taken on the basis of and recorded in written rules, bureaucratic officials with expert training, rules implemented by neutral officials, and career advancement depends on technical qualifications judged by an organization, not individuals.The decisive reason for the advancement of bureaucratic organization has always been its purely technical superiority over any other form of organization.

While recognizing bureaucracy as the most efficient form of organization, and even indispensable for the modern state, Weber also saw it as a threat to individual freedoms. In his view, ongoing bureaucratization could lead to a polar night of icy darkness, in which individuals are trapped in an iron cage of bureaucratic, rule-based, rational control. To counteract this bureaucratic possibility, the system needs entrepreneurs and politicians.

The Cabinet and the Bureaucracy

The Cabinet of the United States is composed of the most senior appointed officers of the executive branch of the federal government of the United States, who are generally the heads of the federal executive departments. All Cabinet members are nominated by the president and then presented to the Senate for confirmation or rejection by a simple majority. If they are approved, they are sworn in and then begin their duties. Aside from the Attorney General, and the Postmaster General when it was a Cabinet office, they all receive the title of Secretary. Members of the Cabinet serve at the pleasure of the President, which means that the President may dismiss them or reappoint them (to other posts) at will.

U.S. Department of Labor headquarters

The Frances Perkins Building located at 200 Constitution Avenue, N.W., in the Capitol Hill neighborhood of Washington, D.C. Built in 1975, the modernist office building serves as headquarters of the United States Department of Labor.

13.1.2: Size of the Federal Bureaucracy

The size of federal bureaucracy has been steady despite the government’s claims of cutting the role of government.

Learning Objective

Illustrate the factors that affect the size of bureaucracies

Key Points

Political officials often pledge to shrink the size of federal bureaucracy while at the same time promising to enhance its efficiency. The number of civilian federal employees, at least, has not increased since the 1960s.
There are 16.2 million state and local government workers, meaning federal government does not need to hire approximately 4.05 million workers to carry out its policies.
From the 1960s to the 1990s, the number of senior executives and political appointees in federal bureaucracy quintupled.
The average number of layers between president and street-level bureaucrats swelled from 17 in 1960 to 32 in 1992.
To manage the growing federal bureaucracy, Presidents have gradually surrounded themselves with many layers of staff, who were eventually organized into the Executive Office of the President of the United States.

Key Term

mandate: An official or authoritative command; a judicial precept.

Example

The fact that the Defense Department contracted out for military interrogators and security officers in war zones did not become public knowledge until the Abu Ghraib prison abuse scandal broke in April 2004. The federal government directly supports 5.6 million jobs through contracts and 2.4 million jobs through grants.

Background

Political officials often pledge to shrink the size of the federal bureaucracy while at the same time enhancing its efficiency. By one measure, they have succeeded: the number of civilian federal employees has not increased since the 1960s. How can politicians proclaim that the era of big government is over while providing the increase in government services that people expect? They have accomplished this by vastly expanding the number of workers owing jobs to federal money. Over 16 million full-time workers now administer federal policy, including 1.9 million federal civilian workers, 1.5 million uniformed military personnel, and 850,000 postal workers.

State and local government workers are subject to federal mandates. On average, they devote one-fourth of their work to carrying out federal directives. With 16.2 million state and local government workers, the federal government does not need to hire approximately 4.05 million workers to carry out its policies. The government also contracts with private companies to provide goods and services. The fact that the Defense Department contracted out for military interrogators and security officers in war zones did not become public knowledge until the Abu Ghraib prison abuse scandal broke in April 2004. The federal government directly supports 5.6 million jobs through contracts and 2.4 million jobs through grants.

A worker makes final checks

This is an example of R&D in action.

The Thickening of Government

The reliance on mandates and contracts have resulted in fewer civil servants directly interacting with the public as much as street-level bureaucrats. Instead, federal employees have become professionals and managers. From the 1960s to the 1990s, even as the size of civil service stayed constant, the number of senior executives and political appointees quintupled. This proliferation of managers creates thickening government. The number of layers between the president and street-level bureaucrats swelled from 17 in 1960 to 32 in 1992. New administrative titles like “assistant,” “associate” and “deputy” were created to streamline and and supervise state and local workers as well as other bureacrats. As a result, much of federal bureaucracy now consists of “managers managing managers. “

The Congress and President of the United States delegate specific authority to government agencies to regulate the complex facets of the modern American federal state. The majority of the independent agencies of the United States government are also classified as executive agencies. To manage the growing federal bureaucracy, Presidents have gradually surrounded themselves with many layers of staff, who were eventually organized into the Executive Office of the President of the United States. Within the Executive Office, the President’s innermost layer of aides (and their assistants) are located in the White House Office.

Throughout the 20th century, presidents have changed the size of bureaucracies at the federal level. Starting with the Reagan administration, conservatives have sought to downsize bureaucracies in pursuit of the “small government” tenet of the conservative movement. Small government is government which minimizes its own activities, particularly bureaucratic “red tape. ” Red tape is excessive regulation or rigid conformity to formal rules that is considered redundant or bureaucratic and hinders or prevents action or decision-making. It is usually applied to governments, corporations, and other large organizations. The “cutting of red tape” is a popular electoral and policy promise. In the United States, a number of committees have discussed and debated Red Tape Reduction Acts. The reduction in red tape, essentially means the reduction of petty government (and occasionally business) bureaucracy. Such processes are often very slow as it usually means a government employee who was fulfilling that petty function either loses some of their administrative power (and any indirect benefits that it may bestow) or a lower level office worker loses their job. Though the functions performed by that office worker are at that point deemed unproductive, government job losses are often resisted by unions hence red tape continues to keep that unproductive worker in a job.

13.1.3: The Growth of Bureaucracy

As modernity came into place in the Western hemisphere, the growth of bureaucratization came into place.

Learning Objective

Identify the causes for the growth of bureaucracies over time

Key Points

As Weber understood, particularly during the industrial revolution of the late 19th century, society was being driven by the passage of rational ideas into culture that in turn transformed society into an increasingly bureaucratic entity.
Bureaucracy is a complex means of managing life in social institutions that includes rules and regulations, patterns and procedures that both are designed to simplify the functioning of complex organizations.
Weber did believe bureaucracy was the most rational form of institutional governance, but because Weber viewed rationalization as the driving force of society, he believed bureaucracy would increase until it ruled society. Society, for Weber, would become almost synonymous with bureaucracy.

Key Term

rational: Healthy or balanced intellectually; exhibiting the ability to think with reason.

Background

Weber listed several preconditions for the emergence of the bureaucracy: The growth in space and population being administered, the growth in complexity of the administrative tasks being carried out and the existence of a monetary economy – these resulted in a need for a more efficient administrative system. Development of communication and transportation technologies made more efficient administration possible (and popularly requested) and democratization and rationalization of culture resulted in demands that the new system treat everybody equally.

The growth of bureaucratization developed due to the rapid industrialization that United States was facing during the 19^th century. As Weber understood, particularly during the industrial revolution of the late 19th century, society was being driven by the passage of rational ideas into culture that in turn transformed society into an increasingly bureaucratic entity.

Black Student Welders Work in a Machine Shop Course Taught at The Chicago Opportunities Industrialization Center

Black Student Welders Work in a machine shop course taught at the Chicago opportunities industrialization center at a former grade school in the heart of the Cabrini-Green Housing Project on Chicago’s near north side.

The Growth of Bureaucratization

Bureaucracy is a type of organizational or institutional management that is, as Weber understood it, rooted in legal-rational authority. Bureaucracy is a complex means of managing life in social institutions that includes rules and regulations, patterns and procedures that both are designed to simplify the functioning of complex organizations. An example of bureaucracy would be the forms used to pay one’s income taxes – they require specific information and procedures to fill them out. Included in that form, however, are countless rules and laws the dictate what can and can’t be tied into one’s taxes. Thus, bureaucracy simplifies the process of paying one’s taxes by putting the process into a formulaic structure, but simultaneously complicates it by adding rules and regulations that govern the procedure. Weber did believe bureaucracy was the most rational form of institutional governance, but because Weber viewed rationalization as the driving force of society, he believed bureaucracy would increase until it ruled society. Society, for Weber, would become almost synonymous with bureaucracy.

Governing Bureaucratic Institutions

As society became more populated and industrialized, department and federal agencies develop to regulate the flow and integration of people of growing cities. For example, one well-known bureaucratic agency in which people deal with regularly is the Department of Motor Vehicles. This is the agency, which issues driver’s licenses and registration. In some states, the function is handled by an actual Department of Motor Vehicles (or similar agency with a different name), while in other states it is handled by subdivisions of the state’s transportation department. In Hawaii, this function is done at the county level. Some other agencies you may be familiar with include Fish & Game, Forestry, or Transportation.

13.1.4: The Cost of Maintaining the Government

The cost of maintaining the United States government is a lengthy budgetary process, requiring approval from many governmental committees.

Learning Objective

Identify the institutions and offices responsible for maintaining the federal government

Key Points

The Office of Management and Budget (OMB) is a cabinet-level office, the largest within the Executive Office of the President of the United States (EOP).
The OMB ensures that agency reports, rules, testimony and proposed legislation are consistent with the President’s Budget and with Administration Policies.
CBO computes a current law baseline budget projection that is intended to estimate what federal spending and revenues would be in the absence of new legislation for the current fiscal year, as well as for the coming 10 fiscal years.
The budget resolution serves as a blueprint for the actual appropriation process and provides Congress with some control over the appropriations process.
Authorizations for many programs have long lapsed, yet still receive appropriated amounts. Other programs that are authorized receive no funds at all. In addition, policy language, that is, legislative text changing permanent law, is included in appropriation measures.

Key Terms

jurisdiction: the power, right, or authority to interpret and apply the law
appropriation: Public funds set aside for a specific purpose.

The Cost of Maintaining the Government

Background

The Office of Management and Budget (OMB) is a cabinet-level office, the largest within the Executive Office of the President of the United States (EOP). The current OMB Acting Director is Jeffrey Zients.

U.S. Office of Management and Budget Seal

The Office of Management and Budget plays a key role in preparing the president’s budget request to Congress.

The Budget and Accounting Act of 1921, which was signed into law by President Warren G. Harding, established The Bureau of the Budget, OMB’s predecessor, as a part of the Department of the Treasury. As such, it was moved to the EOP in 1939, and then reorganized into OMB in 1970 during the Nixon administration.

The first OMB included Roy Ash (Head), Paul O’Neill (Assistant Director), Fred Malek (Deputy Director) and Frank Zarb (Associate Director) and two dozen others. In the 1990s, OMB was reorganized to remove the distinction between management and budgetary staff by combining those dual roles within the Resource Management Offices.

The OMB’s predominant mission is to assist the President in overseeing the preparation of the federal budget and to supervise its administration in Executive Branch agencies. The OMB ensures that agency reports, rules, testimony and proposed legislation are consistent with the President’s Budget and with Administration Policies.

In addition, the OMB oversees and coordinates the Administration’s procurement, financial management, information and regulatory policies. In each of these areas, the OMB’s role is to help improve administrative management; to develop better performance measures and coordinating mechanisms, and to reduce any unnecessary burdens on the public.

United States’ Budget Process

Each year in March, the Congressional Budget Office (CBO) publishes an analysis of the President’s budget proposals. (The CBO budget report and other publications can be found at the CBO’s website. )

CBO computes a current law baseline budget projection that is intended to estimate what federal spending and revenues would be in the absence of new legislation for the current fiscal year and for the coming 10 fiscal years. However, the CBO also computes a current-policy baseline, which makes assumptions about, for instance, votes on tax cut sunset provisions. The current CBO 10 year budget baseline projection grows from $3.7 trillion in 2011 to $5.7 trillion in 2021.

The Houseand Senate Budget Committees begin consideration of the President’s budget proposals in February and March. Other committees with budgetary responsibilities submit requests and estimates to the Budget committees during this time. The Budget committees each submit a budget resolution by April 1. The House and Senate each consider those budget resolutions and are expected to pass them, possibly with amendments, by April 15. Budget resolutions specify funding levels for appropriations committees and subcommittees.

Appropriations Committees, starting with allocations in the budget resolution, put together appropriations bills, which may be considered in the House after May 15. Once appropriations committees pass their bills, the House and Senate consider them. A conference committee is typically required to resolve differences between House and Senate bills. Once a conference bill has passed both chambers of Congress, it is sent to the President, who may sign the bill or veto. If he signs, the bill becomes law. Otherwise, Congress must pass another bill to avoid a shutdown of at least part of the federal government.

In recent years, Congress has not passed all of the appropriations bills before the start of the fiscal year. Congress has then enacted continuing resolutions that provide for the temporary funding of government operations.

Budget Resolution

The next step is the drafting of a budget resolution. The United States House Committee on the Budget and the United States Senate Committee on the Budget are responsible for drafting budget resolutions. Following the traditional calendar, by early April both committees finalize their drafts and submit it to their respective floors for consideration and adoption.

A budget resolution, which is one form of a concurrent resolution, binds Congress, but is not a law, and so does not require the President’s signature. The budget resolution serves as a blueprint for the actual appropriation process and provides Congress with some control over the appropriations process.

In general, an Authorizing Committee, through enactment of legislation, must authorize funds for Federal Government programs. Then, through subsequent acts by Congress, the Appropriations Committee of the House then appropriates budget authority. In principle, committees with jurisdiction to authorize programs make policy decisions, while the Appropriations Committees decide on funding levels, limited to a program’s authorized funding level, though the amount may be any amount less than the limit.

In practice, the separation between policy-making and funding, and the division between appropriations and authorization activities are imperfect. Authorizations for many programs have long lapsed, yet still receive appropriated amounts. Other programs that are authorized receive no funds at all. In addition, policy language, that is, legislative text changing permanent law, is included in appropriation measures.

13.1.5: Public and Private Bureaucracies

Public and private bureaucracies both influence each other in terms of laws and regulations because they are mutually dependent.

Learning Objective

Discuss the interaction between public and private bureaucracies

Key Points

In the United States during the 1930’s, the typical company laws (e.g. in Delaware) did not clearly mandate such rights. Berle argued that the unaccountable company directors were likely to funnel the fruits of enterprise profits into their own pockets as well as manage in their own interests.
In The New Industrial State, Galbraith argued that a private-bureaucracy, a techno-structure of experts who manipulated marketing and public relations channels, planned economic decisions.
Private bureaucracies still have to comply with public regulations imposed by the government. In addition, private enterprises continue to influence governmental structures. Therefore, the relationship is reciprocal.

Key Term

monetary policy: The process by which the government, central bank, or monetary authority manages the supply of money or trading in foreign exchange markets.

Background

The Great Depression was a time of significant upheaval in the United States. One of the most original contributions to understanding what had gone wrong came from a Harvard University lawyer, named Adolf Berle (1895–1971). Berle, who like John Maynard Keynes had resigned from his diplomatic job at the Paris Peace Conference of 1919, was deeply disillusioned by the Versailles Treaty. In his book with Gardiner C. Means, The Modern Corporation and Private Property (1932), he detailed the evolution in the contemporary economy of big business. Berle argued that the individuals who controlled big firms should be held accountable. Directors of companies are held accountable by the shareholders of companies. At times, they are not held accountable because of rules found in company law statutes. This might include the right to elect and fire the management, requirements for regular general meetings, accounting standards, and so on.

In the United States during the 1930’s, the typical company laws (e.g. in Delaware) did not clearly mandate such rights. Berle argued that the unaccountable directors of companies were therefore apt to funnel the fruits of enterprise profits into their own pockets, as well as manage in their own interests. They were able to do this because the majority of shareholders in big public companies were single individuals, with scant means of communication. Quite simply, they divided and conquered. Berle served in President Franklin Delano Roosevelt’s administration through the depression. He was also a key member of the so-called “Brain trust” that developed many of the New Deal policies. In 1967, Berle and Means issued a revised edition of their work, in which the preface added a new dimension. It was not only the separation of company directors from the owners as shareholders at stake. They posed the question of what the corporate structure was really meant to achieve.

Adolf Augustus Berle

Adolf Berle, in The Modern Corporation and Private Property, argued that the separation of control of companies from the investors who were meant to own them endangered the American economy and led to a unequal distribution of wealth.

The Interaction with Public and Private Bureaucracies

After World War II, John Kenneth Galbraith (1908–2006) became one of the standard bearers for pro-active government and liberal-democrat politics. In The Affluent Society (1958), Galbraith urged voters reaching a certain material wealth begin to vote against the common good. He argued that the “conventional wisdom” of the conservative consensus was not enough to solve the problems of social inequality. In an age of big business, he argued, that it is unrealistic to think of markets of the classical kind. They set prices and use advertising to create artificial demand for their own products, which distorts people’s real preferences. Consumer preferences actually come to reflect those of corporations—a “dependence effect”—and the economy as a whole is geared towards irrational goals.

In The New Industrial State, Galbraith argued that a private-bureaucracy, a techno-structure of experts who manipulated marketing and public relations channels, planned economic decisions. This hierarchy is self-serving, profits are no longer the prime motivator, and even managers are not in control. Since they are the new planners, corporations detest risk. They require steady economy and stable markets. They recruit governments to serve their interests with fiscaland monetary policy. An example would be adhering to monetarist policies that enrich moneylenders in the city through increases in interest rates. While the goals of an affluent society and complicit government serve the irrational techno-structure, public space is simultaneously impoverished. Galbraith paints the picture of stepping from penthouse villas onto unpaved streets, from landscaped gardens to unkempt public parks. In Economics and the Public Purpose (1973) Galbraith advocates a “new socialism” as the solution. He promotes nationalizing military production and public services such as health care as well as introducing disciplined salary and price controls to reduce inequality.

Today, the formation of private bureaucracies within the private corporate entities has created their own regulations and practices. Its organizational structure can be compared to that of a public bureaucracy. However, private bureaucracies still have to comply with public regulations imposed by the government. In addition, private enterprises continue to influence governmental structures. Therefore, the relationship is reciprocal.

13.1.6: Models of Bureaucracy

Bureaucracies have different type of models, depending upon their governmental organizational structure.

Learning Objective

Compare and contrast the different types of authority according to Max Weber and how these relate to bureaucracy

Key Points

Through rationalization, Weber understood the individual cost-benefit calculation and the wider, bureaucratic structure of organizations, which in general was the opposite of understanding reality through mystery and magic (disenchantment).
As the most efficient and rational way of organizing, Weber viewed bureaucratization as the key part of the rational-legal authority.
The Weberian characteristics of bureaucracy are clear, defined roles and responsibilities, a hierarchical structure and respect for merit.
The acquisition model of bureaucracy can incite succession of roles and power between different bureaucratic departments. Monopolistic bureaucracies do not provide room for competition within each bureaucratic department.

Key Term

acquisition: The act or process of acquiring.

Example

The Department of Defense has historically competed to seek more funding than other federal departments. This is what’s called an acquisition model of bureaucracy.

Background

Many scholars have described rationalization and the question of individual freedom as the main theme of Weber’s work. Through rationalization, Weber understood the individual cost-benefit calculation and the wider, bureaucratic structure of organizations, which generally was the opposite of understanding reality through mystery and magic (disenchantment). The fate of our time is characterized by rationalization, intellectualization and, above all, the “disenchantment of the world. “

What Weber depicted was not only the secularization of Western culture, but also the development of modern societies from the viewpoint of rationalization. New structures of society were marked by two intermeshing systems that had taken shape around the organizational cores of capitalist enterprise and bureaucratic state apparatus. Weber understood this process as the institutionalization of purposive-rational economic and administrative action. To the degree that everyday life was affected by cultural and societal rationalization, traditional forms of life differentiated primarily according to one’s trade were dissolved.

Models of Bureaucracy

Many aspects of modern public administration go back to Weber. Weberian civil service is hierarchically organized and viewed as the most efficient and rational way of organizing. Bureaucratization for Weber was the key part of the rational-legal authority. He saw it as the key process in the ongoing rationalization of Western society.

Weberian characteristics of bureaucracy are clear, defined roles and responsibilities, a hierarchical structure and respect for merit. The acquisition model of bureaucracy, meanwhile, can incite succession of roles and power between different bureaucratic departments. At the same time, monopolistic bureaucracy does not provide room for competition within each bureaucratic department.

Weberian Bureaucracy

Weber described many ideal types of public administration and government in his masterpiece Economy and Society (1922). His critical study of the bureaucratisation of society became one of the most enduring parts of his work. It was Weber who began the studies of bureaucracy and whose works led to the popularisation of this term. Many aspects of modern public administration go back to him and a classic, hierarchically organised civil service of the Continental type is called “Weberian civil service”. [98] As the most efficient and rational way of organising, bureaucratisation for Weber was the key part of the rational-legal authority and furthermore, he saw it as the key process in the ongoing rationalisation of the Western society.

Weber listed several preconditions for the emergence of the bureaucracy: The growth in space and population being administered, the growth in complexity of the administrative tasks being carried out and the existence of a monetary economy – these resulted in a need for a more efficient administrative system. [99] Development of communication and transportation technologies made more efficient administration possible (and popularly requested) and democratisation and rationalisation of culture resulted in demands that the new system treat everybody equally.

Weber’s ideal bureaucracy is characterised by hierarchical organisation, by delineated lines of authority in a fixed area of activity, by action taken (and recorded) on the basis of written rules, by bureaucratic officials needing expert training, by rules being implemented neutrally and by career advancement depending on technical qualifications judged by organisations, not by individuals

United States Defense Attaché System Seal

The Department of Defense is allocated the highest level of budgetary resources among all Federal agencies, amounting to more than one half of the annual Federal discretionary budget.

13.2: The Organization of Bureaucracy

13.2.1: Cabinet Departments

The cabinet is the collection of top-ranking advisors in the executive branch of government, particularly executive department secretaries.

Learning Objective

Describe the constitutional origin of the Cabinet and the shape of its growth Washington’s presidency

Key Points

Cabinet members are appointed by the president and serve as the president’s primary advisors.
Cabinet members carry out numerous domestic and foreign affairs.
George Washington established the first cabinet by appointing four departmental leaders as his main advisors.

Key Terms

executive department: An executive organ that serves at the disposal of the president and normally acts as an advisory body to the presidency.
Cabinet: A governmental group composed of the most senior appointed officers of the executive branch of the federal government of the United States who are generally the heads of the federal executive departments.
line of succession: An ordered sequence of named people who would succeed to a particular office upon the death, resignation, or removal of the current occupant.

Example

The attorney general is an example of a cabinet member, and oversees the executive Department of Justice.

The Cabinet of the United States consists of the highest-ranking appointed officers in the executive branch of the federal government: the secretaries of each of the 15 executive departments. These Cabinet members preside over bureaucratic operations and serve as advisors to the president. All secretaries are directly accountable to the president, and they do not have the power to enforce any policy recommendations outside of their department.

The president nominates secretaries to their offices, and the Senate votes to confirm them. Secretaries are not subject to elections or term limits, but most turnover when a new political party wins the presidency.

Structure of the Cabinet Departments

Each of the Cabinet departments is organized with a similar hierarchical structure. At the top of each department is the secretary (in the Department of Justice, the highest office is called the “attorney general,” but the role is parallel to that of the secretary of state, defense, etc.).

Beneath the secretary, each executive department has a deputy secretary. The deputy secretary advises and assists the secretary, and fills the Office of Secretary if it becomes vacant. The deputy secretary is nominated by the president, just as the secretary is.

Below the level of deputy secretary, departmental organization varies. Most departments have several under secretaries, who preside over specific branches of the organization rather than being accountable for the functioning of the entire department, as the secretary and deputy secretary are. Under secretaries are appointed by the president, but range in prestige depending on the size of the department they are employed in and the breadth of affairs they oversee.

Finally, each department has its own staff. Departmental staffs are not appointed by the president, but instead are hired by internal supervisors (such as under secretaries). Staff qualifications and duties range widely by department. For example, national park service employees are considered staff of the Department of the Interior, but some may work on policy in Washington, while others tend to conservation in Yellowstone. Likewise, military staff includes soldiers on active duty who are not administrative employees but are nonetheless under the purview of the Department of Defense.

Taken as a group, the executive departments employ over 4 million people and have an operating budget of over $2.3 trillion.

History of the Cabinet

The first president of the United States, George Washington, established the tradition of having a cabinet of advisors. The U.S. Constitution specifically calls for the creation of executive departments, but it only addresses the leaders of executive departments to specify that as unelected officials they must answer to the president and do not have the power to enforce their recommendations. George Washington thus began the practice of having a formal cabinet of advisors when he appointed Secretary of State Thomas Jefferson, Secretary of the Treasury Alexander Hamilton, Secretary of War Henry Knox, and Attorney General Edmund Randolph.

The three oldest executive departments are the Department of State, the Department of War, and the Treasury, all of which were established in 1789. The Department of War has since been subsumed by the Department of Defense, and many other executive departments have been formed.

The Line of Succession

The secretaries are formally in the line of presidential succession, after the vice president, speaker of the house, and president pro tempore of the Senate. In other words, if the president, vice president, speaker, and president pro temopre were all incapacitated by death, resignation, or impeachment, the Cabinet members would ascend to the Office of President in a predetermined order. The order of the departments, and the roles of the secretaries of each department, is as follows:

State: The Secretary of State oversees international relations.
Treasury: The Secretary of the Treasury is concerned with financial and monetary issues.
Defense: The Secretary of Defense supervises national defense and the armed forces.
Justice: The Attorney General is responsible for law enforcement.
Interior: The Secretary of the Interior oversees federal land and natural resource use.
Agriculture: The Secretary of Agriculture advises policy on food, farming, and agricultural trade.
Commerce: The Secretary of Commerce is concerned with economic growth.
Labor: The Secretary of Labor is responsible for occupational safety and workplace regulation.
Health and Human Services: The Secretary of Health and Human Services is charged with ensuring the health and well being of Americans.
Housing and Urban Development: The Secretary of Housing and Urban Development administers affordable housing and city planning.
Transportation: The Secretary of Transportation oversees transportation infrastructure and policies.
Energy: The Secretary of Energy is responsible for research into energy sources and the handling of nuclear material.
Education: The Secretary of Education oversees public schools.
Veterans Affairs: The Secretary of Veterans Affairs coordinates programs and benefits for veterans
Homeland Security: The Secretary of Homeland Security is responsible for domestic security measures

In addition to the secretaries of the established executive departments, there are some cabinet-level officers who are the heads of independent executive agencies. These agencies do not answer to the president directly and, therefore, there are no executive departments strictly speaking. Still, their heads are considered high ranking advisors to the president. These cabinet-level officers include the vice president, the chief of staff, the director of the Office of Management and Budget, the administrator of the Environmental Protection Agency, the trade representative, the ambassador to the United Nations, the chairman of the Council of Economic Advisors, and the administrator of the Small Business Administration.

Department of Justice Seal

The attorney general is the head of the Department of Justice, and is a prominent cabinet member.

13.2.2: Independent Agencies

Independent executive agencies operate as regulatory and service agencies to oversee federal government functions.

Learning Objective

Differentiate between executive agencies and executive departments

Key Points

Executive agencies operate as services and/or regulatory agencies and are distinct because they exist independently from other executive departments.
In executive agencies, the president can terminate people’s positions only if there is proof of removal according to statutory provisions.
Most executive agencies need to have bipartisan membership and presidents cannot just remove and rehire for positions.

Key Terms

executive department: An executive organ that serves at the disposal of the president and normally acts as an advisory body to the presidency.
executive agency: A permanent or semi-permanent organization in the machinery of government that is responsible for the oversight and administration of specific functions.
enabling act: A piece of legislation by which a legislative body grants an entity which depends on it for authorization or legitimacy the power to take certain actions.

Example

The Federal Communication Commission (FCC) is an example of an executive agency, and acts as an outpost of the executive government to regulate communications technology and media in the U.S.

In the United States federal government, Congress and the President have the ability to delegate authority to independent executive agencies, sometimes called federal agencies or administrative agencies. These agencies are distinct from executive departments because they have some degree of independence from the President. In executive departments, department heads are nominated by the President and confirmed by Congress, and can be removed from their posts for political reasons. Department heads, who comprise the Cabinet, therefore often turn over when a new president is elected. For example, the Secretary of State is a high status position that a high ranking diplomat in the leading political party usually fills. Unlike in executive departments, the leaders of agencies can only be removed from office for corruption charges under statutory provisions. Even though the president appoints them, agency leadership is non-partisan, or independent from Presidential politics and election turn over.

The leaders of agencies often participate as members of commissions, boards, or councils with internal structures resembling tripartite government. That is, a single agency may “legislate” by producing regulations; “adjudicate” by resolving disputes between parties; and “enforce” by penalizing regulation violations. To illustrate this point, consider one independent agency — the Federal Communication Commission (FCC). The FCC oversees media in the United States. One notorious function of the FCC is to regulate decency on television. To carry out this function, the FCC sets regulations defining what television programming is decent and what is indecent; if a station is accused of violating these regulations, the complaint is brought to the FCC; if the FCC finds that the programming was a violation of regulations regarding decency, it may fine the station.

Other independent executive agencies include the CIA (Central Intelligence Agency), the NASA (National Aeronautics and Space Administration) and the EPA (Environmental Protection Agency). The CIA helps gather intelligence and provides national security assessments to policymakers in the United States. It acts as the primary human intelligence provider for the federal government. The National Aeronautics and Space Administration NASA, is a government agency responsible for the civilian space program as well as aeronautics and aerospace research. The EPA was created for the purpose of protecting human health and the environment by writing and enforcing regulations based on laws passed by Congress. EPA enforcement powers include fines, sanctions, and other measures.

The U.S. Constitution does not explicitly reference federal agencies. Instead, these agencies are generally justified by acts of Congress designed to manage delineated government functions, such as the maintenance of infrastructure and regulation of commerce. Congress passes statutes called enabling acts that define the scope of agencies’ authority. Once created, agencies are considered part of the executive branch of government and are partly regulated by government parties. However, executive agencies have to remain nonpartisan.

Federal Communications Commission

The Federal Communications Commission (FCC) is one of many independent executive agencies.

13.2.3: Regulatory Commissions

Independent regulatory agencies create and enforce regulations to protect the public at large.

Learning Objective

Use the work of the FDA as an example to describe the activity and mission of regulatory agencies more broadly

Key Points

Independent regulatory agencies are situated in the executive branch of the government but are not directly under the control of the President.
Regulatory agencies conduct investigations and audits to ensure that industries and organizations do not pose threats to public safety or well-being.
Regulatory agencies are intended to be transparent, such that they are accountable to public oversight and legal review.

Key Terms

regulatory agency: A public authority or government agency responsible for exercising autonomous authority over some area of human activity in a regulatory or supervisory capacity.
Food and Drug Administration: An agency of the United States Department of Health and Human Services, one of the United States federal executive departments, responsible for protecting and promoting public health.

Example

The Food and Drug Administration (FDA) is an independent regulatory agency intended to promote public health by overseeing food and drug safety.

A regulatory agency is a body in the U.S. government with the authority to exercise authority over some area of human activity in a supervisory capacity. An independent regulatory agency is separate from the other branches of the federal government. These agencies are within the purview of the executive branch of government, but are internally regulated rather than subject to the direct control of the President.

Regulatory agencies exist to supervise the administrative functions of organizations for the benefit of the public at large. To carry out this function, regulatory agencies are composed of experts in a specific policy area of administrative law, such as tax or health codes. Agencies may carry out investigations or audits to determine if organizations are adhering to federal regulations.

To better understand how independent regulatory agencies function, let us consider the U.S. Food and Drug Administration (FDA). The FDA’s mission is to promote public health by regulating the production, distribution, and consumption of food and drugs. When a pharmaceutical company produces a new drug, the manufacturers must submit it to the FDA for approval. The FDA employs experts in pharmaceuticals and drug safety, who evaluate the potential benefits and consequences of the drug. Following reports on the safety of the drug, the FDA determines whether it can be distributed, to whom it can be distributed, and under what conditions it can be safely consumed. The FDA thus uses internal expertise to regulate the pharmaceutical industry.

Regulatory agencies are authorized to produce and enforce regulations by Congress, and are subject to Congressional and legal review as they carry out their functions. Congress may determine that regulatory agencies are obsolete, for example, and may therefore discontinue funding them. Similarly, Congress may choose to expand the authority of a regulatory agency in response to a perceived threat to public safety. Additionally, regulatory agencies are designed to be transparent, such that their decisions and activities are able to be evaluated by the public and by legal review boards.

Food and Drug Administration Regulations

The FDA sets regulations governing which drugs can be distributed over the counter and which require a prescription based on an expert evaluation of the drug’s effects.

13.2.4: Government Corporations

Government corporations are revenue generating enterprises that are legally distinct from but operated by the federal government.

Learning Objective

Differentiate between a government-owned corporation, a government-sponsored enterprise, and organizations chartered by the government that provide public services

Key Points

In many cases, the government owns a controlling share of a corporation’s stock but does not directly operate the corporation.
Government-sponsored enterprises are financial services corporations that the government backs in order to provide low cost loans for economic development.
Government-acquired corporations are those companies that come under government control as a result of unpaid debts or unfulfilled contracts, which are usually returned to private sector control after a time.

Key Terms

government corporation: a legal entity created by a government to undertake commercial activities on behalf of an owner government
government-sponsored enterprise: A group of financial services corporations created by Congress that are structured and regulated by the US government to enhance the availability and reduce the cost of credit to targeted borrowing sectors.
government-owned corporation: A legal entity created by a government to undertake commercial activities on behalf of an owner government; their legal status varies from being a part of government to being a private enterprise in which the government holds a majority of stock.

Example

Fannie Mae and Freddie Mac are examples of government-sponsored enterprises that provide loans for mortgages and real estate investment.

A government-owned corporation, also known as a state-owned company, state enterprise, publicly owned corporation, or commercial government agency, is a legal entity created by a government to undertake commercial activities on behalf of the government. In some cases, government-owned corporations are considered part of the government, and are directly controlled by it. In other instances, government-owned corporations are similar to private enterprises except that the government is the majority stockholder. Government-owned agencies sometimes have public policy functions, but unlike other executive agencies, are primarily intended to bring in revenue.

In the United States, there is a specific subset of government-owned corporations known as government-sponsored enterprises (GSEs). GSEs are financial services corporations created by Congress to increase the availability of low cost credit to particular borrowing sectors. The first GSE in the United States was the Farm Credit System in 1916, which made loans available for agricultural expansion and development. Currently, the largest segment of GSEs operates in the mortgage borrowing segment. Fannie Mae, Freddie Mac, and the twelve Federal Home Loan Banks operate as independent corporations and provide loans for mortgages and real estate development. However, the government possesses sufficient stock to claim 79.9% ownership of the corporations, should it choose to do so.

In addition to the financial sector GSEs, the U.S. government has chartered corporations that are legally distinct from the government (unlike federal agencies) but that provide public services. These chartered corporations sometimes receive money from the federal government, but are largely responsible for generating their own revenue. Corporations in this category include the Corporation for Public Broadcasting, the National Fish and Wildlife Foundation, The National Park Foundation, and many others.

Lastly, the government sometimes controls government acquired corporations–corporations that were not chartered or created by the government, but which it comes to possess and operate. These corporations are usually controlled by the government only temporarily, often as the result of government seizure due to unpaid debts. For example, a delinquent taxpayer’s property may be repossessed by the government. Government acquired corporations are generally sold at auction or returned to the original controller once debts are repaid.

13.3: Functions of Bureaucracy

13.3.1: Promoting Public Welfare and Income Redistribution

Social welfare programs seek to provide basic social protections for all Americans.

Learning Objective

Identify key legislative milestones designed to promote public welfare

Key Points

President Roosevelt implemented public welfare programs, such as Social Security, to mitigate the devastating effects of the Great Depression.
President Johnson continued the effort to promote public welfare in the 1960s by implementing programs such as Medicaid and Medicare.
Contemporary politicians commit themselves to promoting the public welfare through the passage of laws such as the Affordable Care Act.

Key Terms

Great Society: A set of domestic programs in the United States announced by President Lyndon B. Johnson at Ohio University and subsequently promoted by him and fellow Democrats in Congress in the 1960s. Two main goals of the Great Society social reforms were the elimination of poverty and racial injustice. New major spending programs that addressed education, medical care, urban problems, and transportation were launched during this period
New Deal: The New Deal was a series of economic programs enacted in the United States between 1933 and 1936. They involved presidential executive orders or laws passed by Congress during the first term of President Franklin D. Roosevelt. The programs were in response to the Great Depression, and focused on what historians call the “3 Rs”: Relief, Recovery, and Reform.
Affordable Care Act: A law promoted by President Obama and passed by Congress in 2010 to improve access to health care for Americans.

The American government is charged with keeping Americans safe and promoting their wellbeing. Americans vote for candidates whom they believe have their best interests in mind; American political candidates (and the bureaucracy they marshall) seek to implement policies that will support the welfare of the American public. This is primarily achieved through social service programing.

The United States has a long political history of seeking to implement policy to promote public welfare. One of the most well-known initiatives to improve public welfare in times of need was President Franklin D. Roosevelt’s response to the Great Depression. Following the stock market crash of 1929, President Roosevelt invested unprecedented governmental funds into the expansion of the executive bureaucracy in order to employ Americans and mitigate the extreme financial decline of the era. President Roosevelt’s program was called the New Deal and is partially credited with lifting America out of the Great Depression. Under the auspices of the New Deal, President Roosevelt implemented programs that have lasted to the present day, such as Social Security . Thirty years later, President Lyndon B. Johnson assisted with the implementation of his Great Society initiative. President Johnson’s programs weren’t in response to economic decline, but rather solely sought to improve the welfare of the American public. President Johnson sought to improve racial and economic equality. He did so through the establishment of programs such as Medicare and Medicaid– federal programs that exist to the present day that ensure certain levels of health care coverage for America’s poor and elderly.The Great Society initiative further established educational programs such as the National Endowment for the Arts and generally deployed the executive bureaucracy to better welfare programs for the American public at large.

More Security for the American Family

This image from the 1930s depicts a poster promoting the new Social Security program. Social Security exists to this day as a federal program to promote public welfare.

Current American politicians also attempt to ensure that programs exist to promote public welfare. Given downturn in the American economy since 2008, many public welfare programs have been cut due to lack of public resources. However, the federal government has, in some areas, reorganized funding to promote programs for public wellbeing. The gesture to improving the wellbeing of the public writ large is represented by President Obama’s 2010 law to increase public access to health insurance. This law is called the Affordable Care Act, but is more commonly known as Obamacare. Liberals and conservatives are divided on the merits of the law, but regardless of one’s political assessment of the law, it speaks to the government’s attempts to improve the wellbeing of the public.

13.3.2: Providing National Security

National security is the protection of the state through a variety of means that include military might, economic power, and diplomacy.

Learning Objective

Name the government departments and agencies responsible for national defense

Key Points

Specific measures taken to ensure national security include using diplomacy to rally allies, using economic power to facilitate cooperation, maintaining effective armed forces, and using intelligence and counterintelligence services to detect and defeat internal and external threats.
Within the United States, there are a variety of governmental departments and agencies responsible for developing policies to ensure national security.
These organizations include the Department of Defense, the Department of Homeland Security, the Central Intelligence Agency, and the White House National Security Council.

Key Terms

counterintelligence: counterespionage
infrastructure: The basic facilities, services and installations needed for the functioning of a community or society
espionage: The act or process of learning secret information through clandestine means.

Example

These organizations include the Department of Defense, the Department of Homeland Security, the Central Intelligence Agency, and the White House National Security Council.

Providing National Security

National security, a concept which developed mainly in the United States after World War II, is the protection of the state and its citizens through a variety of means, including military might, economic power, diplomacy, and power projection.

Specific measures taken to ensure national security include:

using diplomacy to rally allies and isolate threats;
marshaling economic power to facilitate or compel cooperation;
maintaining effective armed forces;
implementing civil defense and emergency preparedness measures (including anti-terrorism legislation);
ensuring the resilience and redundancy of critical infrastructure; using intelligence services to detect and defeat or avoid threats and espionage, and to protect classified information;
using counterintelligence services or secret police to protect the nation from internal threats.

There are a variety of governmental departments and agencies within the United States that are responsible for developing policies to ensure national security. The Department of Defense is responsible for coordinating and supervising all agencies and functions of the government concerned directly with the U.S. Armed Forces. The Department—headed by the Secretary of Defense—has three subordinate military departments: the Department of the Army, the Department of the Navy, and the Department of the Air Force. The Department of Homeland Security, established after the September 11, 2001 attacks, is responsible for working within the civilian sphere to protect the country from and respond to terrorist attacks, man-made accidents, and natural disasters.

The Central Intelligence Agency is part of the Executive Office of the President of the United States. It is responsible for providing national security intelligence assessments, performed by non-military commissioned civilian intelligence agents, to senior U.S. policymakers. The White House National Security Council is the principal forum used by the President for considering national security and foreign policy matters with his senior national security advisers, and Cabinet officials.

the Central Intelligence Agency

the Central Intelligence Agency, responsible for providing national security intelligence assessments

13.3.3: Maintaining a Strong Economy

Within the United States, there are numerous government departments and agencies responsible for maintaining a strong economy.

Learning Objective

Differentiate between the various departments and agencies responsible for the health of the economy

Key Points

The Department of Commerce is the Cabinet department of the U.S. government concerned with promoting economic growth.
The Federal Reserve is the central banking system of the United States, conducting the nation’s monetary policy, supervising and regulating banking institutions, maintaining the stability of the financial system, and providing financial services to U.S. and global institutions.
The Federal Trade Commission promotes consumer protection and the elimination and prevention of anti-competitive business practices, such as coercive monopoly.

Key Terms

monopoly: An exclusive control over the trade or production of a commodity or service through exclusive possession.
currency: Money or other items used to facilitate transactions.

Within the United States, there are numerous government departments and agencies responsible for maintaining a strong economy.

The Department of Commerce is the Cabinet department of the U.S. government concerned with promoting economic growth. Among its tasks are gathering economic and demographic data for business and government decision-making, issuing patents and trademarks, and helping to set industrial standards. Organizations within the Department of Commerce include the Census Bureau, the Bureau of Economic Analysis, and the International Trade Administration.

The Department of the Treasury is an executive department and the treasury of the U.S. government. It prints and mints all paper currency and coins in circulation through the Bureau of Engraving and Printing and the United States Mint. The Department also collects all federal taxes through the Internal Revenue Service and manages U.S. government debt instruments. The Federal Reserve is the central banking system of the United States, which conducts the nation’s monetary policy, supervises and regulates banking institutions, maintains the stability of the financial system, and provides financial services to depository institutions, the U.S. government, and foreign official institutions.

the Federal Reserve

The seal of the Federal Reserve.

The Office of the United States Trade Representative is the government agency responsible for developing and recommending U.S. trade policy to the President, conducting trade negotiations at bilateral and multilateral levels, and coordinating trade policy within the government through the interagency Trade Policy Staff Committee (TPSC) and Trade Policy Review Group (TPRG). The Federal Trade Commission promotes consumer protection and the elimination and prevention of anti-competitive business practices, such as coercive monopoly.The Small Business Administration provides support to entrepreneurs and small businesses by providing loans, contracts, and counseling.

13.3.4: Making Policy

The actual development and implementation of policies are under the purview of different bureaucratic institutions.

Learning Objective

Differentiate between cabinet departments, independent executive agencies, government corporation, and regulatory agencies in making policy

Key Points

Fifteen agencies are designated by law as cabinet departments, which are major administrative units responsible for specified areas of government operations.
The remaining government organizations within the executive branch outside of the presidency are independent executive agencies, such as NASA, the EPA, and the SSA.
Some agencies, such as the U.S. Postal Service and the national rail passenger system, Amtrak, are government corporations, which charge fees for services too far-reaching or too unprofitable for private corporations to handle.
Another type of bureaucratic institution is a regulatory commission, an agency charged with writing rules and arbitrating disputes in a specific part of the economy.

Key Terms

regulatory: Of or pertaining to regulation.
bureaucratic: Of or pertaining to bureaucracy or the actions of bureaucrats.

Making Policy

The executive and legislative branches of the United States pass and enforce laws. However, the actual development and implementation of policies are under the purview of different bureaucratic institutions mainly comprised cabinet departments, independent executive agencies, government corporations, and regulatory agencies.

Fifteen agencies are designated by law as cabinet departments, which are major administrative units responsible for specified areas of government operations. Examples of cabinet departments include the Department of Defense, State, and Justice. Each department controls a detailed budget appropriated by Congress and has a designated staff. Each is headed by a department secretary appointed by the President and confirmed by the Senate. Many departments subsume distinct offices directed by an assistant secretary. For instance, the Interior Department includes the National Park Service, the Bureau of Indian Affairs, and the U.S. Geological Survey.

The remaining government organizations within the executive branch outside of the presidency are independent executive agencies. The best known include the National Aeronautics and Space Administration (NASA), the Environmental Protection Agency (EPA), and the Social Security Administration (SSA). Apart from a smaller jurisdiction, such agencies resemble cabinet departments. Their heads are confirmed by Congress, though they are appointed by and report directly to the President.

NASA

NASA is an example of an independent executive agency

Some agencies, such as the U.S. Postal Service and Amtrak (the national rail passenger system) are government corporations. They charge fees for services too far-reaching or too unprofitable for private corporations to handle. Ideally, they bring in enough funds to be self-sustaining. To help them make ends meet, Congress may give government corporations a legal monopoly over given services, provide subsidies, or both. Government corporations are more autonomous in policymaking than most agencies. For instance, the Postal Rate Commission sets rates for postage on the basis of revenues and expenditures.

Another type of bureaucratic institution is a regulatory commission, an agency charged with writing rules and arbitrating disputes in a specific part of the economy. Chairs and members of regulatory commissions are named by the president and confirmed by the Senate to terms of fixed length from which they cannot be summarily dismissed. Probably the most prominent regulatory commission currently in the news is the Federal Reserve Board.

13.3.5: Making Agencies Accountable

The institution responsible for ensuring that government agencies are held accountable is the Government Accountability Office (GAO).

Learning Objective

Describe the role the GAO plays in holding government agencies accountable

Key Points

The GAO is the audit, evaluation, and investigative arm of the United States Congress and conducts financial and performance audits.
Over the years, GAO has been referred to as “The Congressional Watchdog” and “The Taxpayers’ Best Friend” for its frequent audits and investigative reports that have uncovered waste and inefficiency in government.
The GAO also establishes standards for audits of government organizations, programs, activities, and functions, and of government assistance received by contractors, nonprofit organizations, and other nongovernmental organizations.
The GAO is headed by the Comptroller General of the United States, a professional and non-partisan position in the U.S. government.

Key Term

audit: An independent review and examination of records and activities to assess the adequacy of system controls, to ensure compliance with established policies and operational procedures, and to recommend necessary changes in controls, policies, or procedures

The Government Accountability Office (GAO) is the audit, evaluation, and investigative arm of the United States Congress. It is responsible for ensuring that government agencies are held accountable. The GAO’s auditors conduct not only financial audits, but also engage in a wide assortment of performance audits.

The Government Accountability Office

The GAO is the audit, evaluation, and investigative arm of the United States Congress.

Over the years, GAO has been referred to as “The Congressional Watchdog” and “The Taxpayers’ Best Friend” for its frequent audits and investigative reports that have uncovered waste and inefficiency in government. The news, media, and television often draw attention to GAO’s work by covering stories on the findings, conclusions, and recommendations in GAO reports. In addition, members of Congress frequently cite GAO’s work in statements to the press, congressional hearings, and floor debates on proposed legislation.

The GAO also establishes standards for audits of government organizations, programs, activities, and functions, and of government assistance received by contractors, nonprofit organizations, and other nongovernmental organizations. These standards, often referred to as Generally Accepted Government Auditing Standards (GAGAS), must be followed by auditors and audit organizations when required by law, regulation, agreement, contract, or policy. These standards pertain to auditors’ professional qualifications, the quality of audit effort, and the characteristics of professional and meaningful audit reports.

The GAO is headed by the Comptroller General of the United States, a professional and non-partisan position in the U.S. government. The Comptroller General is appointed by the President, with the advice and consent of the Senate, for a 15-year, non-renewable term. Since 1921, there have been only seven Comptrollers General, and no formal attempt has ever been made to remove a Comptroller General.

13.4: Bureaucratic Reform

13.4.1: Bureaucratic Reform

Bureaucratic reform in the U.S. was a major issue in the late 19th century and the early 20th century.

Learning Objective

Describe the key moments in the history of bureaucratic reform, including the Tenure of Office Acts, the Pendleton Act, the Hatch Acts, and the Civil Service Reform Acts.

Key Points

The five important civil service reforms were the two Tenure of Office Acts of 1820 and 1867, the Pendleton Act of 1883, the Hatch Acts (1939 and 1940) and the CSRA of 1978.
The Civil Service Reform Act (the Pendleton Act) is an 1883 federal law that established the United States Civil Service Commission, placing most federal employees on the merit system and marking the end of the so-called “spoils system”.
The CSRA was an attempt to reconcile the need for improved performance within bureaucratic organizations with the need for protection of employees.

Key Terms

patronage: granting favours, giving contracts or making appointments to office in return for political support
spoils system: The systematic replacement of office holders every time the government changed party hands.
merit: Something deserving good recognition.
merit system: the process of promoting and hiring government employees based on their ability to perform a job, rather than on their political connections

Bureaucratic reform in the United States was a major issue in the late nineteenth century at the national level and in the early twentieth century at the state level. Proponents denounced the distribution of office by the winners of elections to their supporters as corrupt and inefficient. They demanded nonpartisan scientific methods and credentials be used to select civil servants. The five important civil service reforms were the two Tenure of Office Acts of 1820 and 1867, the Pendleton Act of 1883, the Hatch Acts (1939 and 1940), and the Civil Service Reform Act (CSRA) of 1978.

In 1801, President Thomas Jefferson, alarmed that Federalists dominated the civil service and the army, identified the party affiliation of office holders, and systematically appointed Republicans. President Andrew Jackson in 1829 began the systematic rotation of office holders after four years, replacing them with his own partisans. By the 1830s, the “spoils system” referred to the systematic replacement of office holders every time the government changed party hands.

The Civil Service Reform Act (the Pendleton Act) is an 1883 federal law that established the United States Civil Service Commission. It eventually placed most federal employees on the merit system and marked the end of the so-called “spoils system. ” Drafted during the Chester A. Arthur administration, the Pendleton Act served as a response to President James Garfield’s assassination by a disappointed office seeker.

Chester A. Arthur

The Pendleton Act was passed under Chester A. Arthur’s administration.

The new law prohibited mandatory campaign contributions, or “assessments,” which amounted to 50-75% of party financing during the Gilded Age. Second, the Pendleton Act required entrance exams for aspiring bureaucrats. One result of this reform was more expertise and less politics among members of the civil service. An unintended result was political parties’ increasing reliance on funding from business, since they could no longer depend on patronage hopefuls.

The CSRA became law in 1978. Civil service laws have consistently protected federal employees from political influence, and critics of the system complained that it was impossible for managers to improve performance and implement changes recommended by political leaders. The CSRA was an attempt to reconcile the need for improved performance with the need for protection of employees.

13.4.2: Termination

Bureaucratic reform includes the history of civil service reform and efforts to curb or eliminate excessive bureaucratic red tape.

Learning Objective

Describe the efforts undertaken to reform the civil service

Key Points

A bureaucracy is a group of specifically non-elected officials within a government or other institution that implements the rules, laws, ideas, and functions of their institution. A bureaucrat is a member of a bureaucracy and can comprise the administration of any organization of any size.
Civil service reform is a deliberate action to improve the efficiency, effectiveness, professionalism, representation and democratic character of a bureaucracy, with a view to promoting better delivery of public goods and services, with increased accountability.
Red tape is excessive regulation or rigid conformity to formal rules that is considered redundant or bureaucratic and hinders or prevents action or decision-making.
The “cutting of red tape” is a popular electoral and policy promise. In the United States, a number of committees have discussed and debated Red Tape Reduction Acts.

Key Terms

civil service reform: Civil service reform is a deliberate action to improve the efficiency, effectiveness, professionalism, representation and democratic character of a bureaucracy, with a view to promoting better delivery of public goods and services, with increased accountability.
bureaucracy: Structure and regulations in place to control activity. Usually in large organizations and government operations.
red tape: A derisive term for regulations or bureaucratic procedures that are considered excessive or excessively time- and effort-consuming.

Example

The Pendleton Civil Service Reform of United States is a federal law established in 1883 that stipulated that government jobs should be awarded on the basis of merit. The act provided selection of government employees competitive exams, rather than ties to politicians or political affiliation. It also made it illegal to fire or demote government employees for political reasons and prohibits soliciting campaign donations on Federal government property.

Introduction

A bureaucracy is a group of specifically non-elected officials within a government or other institution that implements the rules, laws, ideas, and functions of their institution. In other words, a government administrative unit that carries out the decisions of the legislature or democratically-elected representation of a state. Bureaucracy may also be defined as a form of government: “government by many bureaus, administrators, and petty officials. A government is defined as: “the political direction and control exercised over the actions of the members, citizens, or inhabitants of communities, societies, and states; direction of the affairs of a state, community, etc.” On the other hand democracy is defined as: “government by the people; a form of government in which the supreme power is vested in the people and exercised directly by them or by their elected agents under a free electoral system”, thus not by non-elected bureaucrats.

A bureaucrat is a member of a bureaucracy and can comprise the administration of any organization of any size, though the term usually connotes someone within an institution of government. Bureaucrat jobs were often “desk jobs” (the French for “desk” being bureau, though bureau can also be translated as “office”), though the modern bureaucrat may be found “in the field” as well as in an office.

Civil Service Reform

A civil servant is a person in the public sector employed for a government department or agency. The term explicitly excludes the armed services, although civilian officials can work at “Defence Ministry” headquarters. Civil service reform is a deliberate action to improve the efficiency, effectiveness, professionalism, representation and democratic character of a bureaucracy, with a view to promoting better delivery of public goods and services, with increased accountability. Such actions can include data gathering and analysis, organizational restructuring, improving human resource management and training, enhancing pay and benefits while assuring sustainability under overall fiscal constraints, and strengthening measures for public participation, transparency, and combating corruption. Important differences between developing countries and developed countries require that civil service and other reforms first rolled out in developed countries be carefully adapted to local conditions in developing countries.

The Problem of Bureaucratic Red Tape

Red tape is excessive regulation or rigid conformity to formal rules that is considered redundant or bureaucratic and hinders or prevents action or decision-making . It is usually applied to governments, corporations and other large organizations.Red tape generally includes filling out paperwork, obtaining licenses, having multiple people or committees approve a decision and various low-level rules that make conducting one’s affairs slower, more difficult, or both. Red tape can also include “filing and certification requirements, reporting, investigation, inspection and enforcement practices, and procedures. ” The “cutting of red tape” is a popular electoral and policy promise. In the United States, a number of committees have discussed and debated Red Tape Reduction Acts.

Bureaucratic Red Tape

Bundle of U.S. pension documents from 1906 bound in red tape.

Examples of Bureaucratic Reform in the United States

The Pendleton Civil Service Reform of United States is a federal law established in 1883 that stipulated that government jobs should be awarded on the basis of merit. The act provided selection of government employees competitive exams, rather than ties to politicians or political affiliation. It also made it illegal to fire or demote government employees for political reasons and prohibits soliciting campaign donations on Federal government property. To enforce the merit system and the judicial system, the law also created the United States Civil Service Commission. A crucial result was the shift of the parties to reliance on funding from business, since they could no longer depend on patronage hopefuls.

The Paperwork Reduction Act of 1980 is a United States federal law enacted in 1980 that gave authority over the collection of certain information to the Office of Management and Budget (OMB). Within the OMB, the Office of Information and Regulatory Affairs (OIRA) was established with specific authority to regulate matters regarding federal information and to establish information policies. These information policies were intended to reduce the total amount of paperwork handled by the United States government and the general public. A byproduct is that it has become harder to track internal transfers to tax havens in Consolidated Corporate Income Tax returns.

13.4.3: Devolution

Devolution is the statutory granting of powers from central government to government at a regional, local, or state level.

Learning Objective

Describe the relationship between a central government and a subordinate entity in possession of certain “devolved” powers

Key Points

Devolution differs from federalism in that the devolved powers of the subnational authority may be temporary and ultimately reside in central government.
In the United States, the District of Columbia is a devolved government. The District is separate from any state and has its own elected government.
Local governments like municipalities, counties, parishes, boroughs and school districts are devolved. They are established and regulated by the constitutions or laws of the state in which they reside.

Key Term

statutory: Of, relating to, enacted or regulated by a statute.

Devolution is the statutory granting of powers from central government to government at a regional, local, or state level. The power to make legislation relevant to the area may also be granted. Devolution differs from federalism in that the devolved powers of the subnational authority may be temporary and ultimately reside in central government. Legislation creating devolved parliaments or assemblies can be repealed or amended by central government in the same way as any statute. Federal systems differ in that state or provincial government is guaranteed in the constitution.

The District of Columbia in the Unites States offers an illustration of devolved government. The District is separate from any state and has its own elected government, which operates much like other state with its own laws and court system. However, the broad range of powers reserved for the 50 states cannot be voided by any act of U.S. federal government. The District of Columbia is constitutionally under the control of the United States Congress, which created the current District government. Any law passed by District legislature can be nullified by Congressional action. Indeed, the District government itself could be significantly altered by a simple majority vote in Congress.

District of Colmbia

The District of Columbia is an example of devolved government.

In the United States, local governments are subdivisions of states, while the federal government, state governments and federally recognized American Indian tribal nations are recognized by the United States Constitution. Theoretically, a state could abolish all local governments within its borders.

Local governmental entities like municipalities, counties, parishes, boroughs and school districts are devolved. This is because they are established and regulated by the constitutions or laws of the state in which they reside. In most cases, U.S. state legislatures have the power to change laws that affect local government. The governor of some states may also have power over local government affairs.

13.4.4: Privatization

Privatization is the process of transferring ownership of a business from the public sector to the private sector.

Learning Objective

Differentiate between two different senses of privatization

Key Points

Privatization can also mean government outsourcing of services or functions to private firms, e.g. revenue collection, law enforcement, and prison management.
Privatization has also been used to describe two unrelated transactions: the buying of all outstanding shares of a publicly traded company by a single entity, making the company private, or the demutualization of a mutual organization or cooperative to form a joint stock company.
Outsourcing is the contracting out of a business process, which an organization may have previously performed internally or has a new need for, to an independent organization from which the process is purchased back as a service.
Though the practice of purchasing a business function—instead of providing it internally—is a common feature of any modern economy, the term outsourcing became popular in America near the turn of the 21st century.

Key Terms

outsourcing: The transfer of a business function to an external service provider
privatization: The transfer of a company or organization from government to private ownership and control.

Example

Privatization of government functions is evidenced in the administration of transportation, such as the 2008 sale of the proceeds from Chicago parking meters for 75 years.

Introduction

Privatization can have several meanings. Primarily, it is the process of transferring ownership of a business, enterprise, agency, public service, or public property from the public sector (a government) to the private sector, either to a business that operates for a profit or to a non-profit organization. The term can also mean government outsourcing of services or functions to private firms, e.g. revenue collection, law enforcement, and prison management. Privatization has also been used to describe two unrelated transactions. The first is the buying of all outstanding shares of a publicly traded company by a single entity, making the company private. This is often described as private equity. The second is a demutualization of a mutual organization or cooperative to form a joint stock company.

Outsourcing is the contracting out of a business process, which an organization may have previously performed internally or has a new need for, to an independent organization from which the process is purchased back as a service. Though the practice of purchasing a business function—instead of providing it internally—is a common feature of any modern economy, the term outsourcing became popular in America near the turn of the 21^st century. An outsourcing deal may also involve transfer of the employees and assets involved to the outsourcing business partner. The definition of outsourcing includes both foreign or domestic contracting, which may include offshoring, described as “a company taking a function out of their business and relocating it to another country.”

Some privatization transactions can be interpreted as a form of a secured loan and are criticized as a “particularly noxious form of governmental debt. ” In this interpretation, the upfront payment from the privatization sale corresponds to the principal amount of the loan, while the proceeds from the underlying asset correspond to secured interest payments – the transaction can be considered substantively the same as a secured loan, though it is structured as a sale. This interpretation is particularly argued to apply to recent municipal transactions in the United States, particularly for fixed term, such as the 2008 sale of the proceeds from Chicago parking meters for 75 years. It is argued that this is motivated by “politicians’ desires to borrow money surreptitiously,” due to legal restrictions on and political resistance to alternative sources of revenue, namely raising taxes or issuing debt.

Outsourcing in the United States

“Outsourcing” became a popular political issue in the United States, having been confounded with offshoring, during the 2004 U.S. presidential election. The political debate centered on outsourcing’s consequences for the domestic U.S. workforce. Democratic U.S. presidential candidate John Kerry criticized U.S. firms that outsource jobs abroad or that incorporate overseas in tax havens to avoid paying their “fair share” of U.S. taxes during his 2004 campaign, calling such firms “Benedict Arnold corporations. “

Criticism of outsourcing, from the perspective of U.S. citizens, generally revolves around the costs associated with transferring control of the labor process to an external entity in another country. A Zogby International poll conducted in August 2004 found that 71% of American voters believed that “outsourcing jobs overseas” hurt the economy while another 62% believed that the U.S. government should impose some legislative action against companies that transfer domestic jobs overseas, possibly in the form of increased taxes on companies that outsource.

Union busting is one possible cause of outsourcing . As unions are disadvantaged by union busting legislation, workers lose bargaining power and it becomes easier for corporations to fire them and ship their job overseas. Another given rationale is the high corporate income tax rate in the U.S. relative to other OECD nations, and the uncommonness of taxing revenues earned outside of U.S. jurisdiction. However, outsourcing is not solely a U.S. phenomenon as corporations in various nations with low tax rates outsource as well, which means that high taxation can only partially, if at all, explain US outsourcing. For example, the amount of corporate outsourcing in 1950 would be considerably lower than today, yet the tax rate was actually higher in 1950.

Union Busting

Pinkerton guards escort strikebreakers in Buchtel, Ohio, 1884.

It is argued that lowering the corporate income tax and ending the double-taxation of foreign-derived revenue (taxed once in the nation where the revenue was raised, and once from the U.S.) will alleviate corporate outsourcing and make the U.S. more attractive to foreign companies. However, while the US has a high official tax rate, the actual taxes paid by US corporations may be considerably lower due to the use of tax loopholes, tax havens, and “gaming the system. ” Rather than avoiding taxes, outsourcing may be mostly driven by the desire to lower labor costs (see standpoint of labor above). Sarbanes-Oxley has also been cited as a factor for corporate flight from U.S. jurisdiction.

13.4.5: Sunshine Laws

The Sunshine Laws enforce the principle of liberal democracy that governments are typically bound by a duty to publish and promote openness.

Learning Objective

Summarize the obligations that the Freedom of Information Act places on executive branch government agencies

Key Points

They establish a right-to-know legal process by which requests may be made for government-held information to be received freely or at minimal cost, barring standard exceptions.
In the United States the Freedom of Information Act was signed into law by President Lyndon B. Johnson on July 4, 1966. It went into effect the following year.
The Freedom of Information Act (FOIA) is a federal freedom of information law that allows for the full or partial disclosure of previously unreleased information and documents controlled by the United States government.
The Act applies only to federal agencies. However, all of the states, as well as the District of Columbia and some territories, have enacted similar statutes to require disclosures by agencies of the state and of local governments, although some are significantly broader than others.
The Electronic Freedom of Information Act Amendments of 1996 (E-FOIA) stated that all agencies are required by statute to make certain types of records, created by the agency on or after November 1, 1996, available electronically.
A major issue in released documentation is government “redaction” of certain passages deemed applicable to the Exemption section of the FOIA. The extensive practice by the FBI has been considered highly controversial, given that it prevents further research and inquiry.

Key Term

redaction: The process of editing or censoring.

Introduction

Freedom of information laws by country detail legislation that gives access by the general public to data held by national governments. They establish a “right-to-know” legal process by which requests may be made for government-held information, to be received freely or at minimal cost, barring standard exceptions. Also variously referred to as open records, or sunshine laws in the United States, governments are also typically bound by a duty to publish and promote openness. In many countries there are constitutional guarantees for the right of access to information, but usually these are unused if specific support legislation does not exist.

Freedom of Information Act

In the United States the Freedom of Information Act was signed into law by President Lyndon B. Johnson on July 4, 1966 and went into effect the following year. In essence, The Freedom of Information Act (FOIA) is a federal freedom of information law that allows for the full or partial disclosure of previously unreleased information and documents controlled by the United States government. The Act defines agency records subject to disclosure, outlines mandatory disclosure procedures and grants nine exemptions to the statute.

The act explicitly applies only to executive branch government agencies. These agencies are under several mandates to comply with public solicitation of information. Along with making public and accessible all bureaucratic and technical procedures for applying for documents from that agency, agencies are also subject to penalties for hindering the process of a petition for information. If “agency personnel acted arbitrarily or capriciously with respect to the withholding, [a] Special Counsel shall promptly initiate a proceeding to determine whether disciplinary action is warranted against the officer or employee who was primarily responsible for the withholding.” In this way, there is recourse for one seeking information to go to a federal court if suspicion of illegal tampering or delayed sending of records exists. However, there are nine exemptions, ranging from a withholding “specifically authorized under criteria established by an Executive order to be kept secret in the interest of national defense or foreign policy” and “trade secrets” to “clearly unwarranted invasion of personal privacy.”

The Electronic Freedom of Information Act Amendments were signed by President Bill Clinton on October 2, 1996. The Electronic Freedom of Information Act Amendments of 1996 (E-FOIA) stated that all agencies are required by statute to make certain types of records, created by the agency on or after November 1, 1996, available electronically. Agencies must also provide electronic reading rooms for citizens to use to have access to records. Given the large volume of records and limited resources, the amendment also extended the agencies’ required response time to FOIA requests. Formerly, the response time was ten days and the amendment extended it to twenty days.

Notable Cases

A major issue in released documentation is government “redaction” of certain passages deemed applicable to the Exemption section of the FOIA . Federal Bureau of Investigation (FBI) officers in charge of responding to FOIA requests have prevented further research by using extensive use of redaction of documents in print or electronic form. This has also brought into question just how one can verify that they have been given complete records in response to a request.

FBI Redaction

In the early 1970s, the US government conducted surveillance on ex-Beatle John Lennon. This is a letter from FBI director J. Edgar Hoover to the Attorney General. After a 25-year Freedom of Information Act Request battle initiated by historian Jon Wiener, the files were released. Here is one page from the file. This first release received by Wiener had some information missing — it had been blacked out presumably with magic marker — or what is termed “redacted”. A subsequent version was released which showed almost all of the previously blacked-out text.

This trend of unwillingness to release records was especially evident in the process of making public the FBI files on J. Edgar Hoover . Of the 164 files and about eighteen thousand pages collected by the FBI, two-thirds were withheld from Athan G. Theoharis and plaintiff, most notably one entire folder entitled the “White House Security Survey. “

J. Edgar Hoover

John Edgar Hoover (January 1, 1895 – May 2, 1972) was the first Director of the Federal Bureau of Investigation (FBI) of the United States. Appointed director of the Bureau of Investigation—predecessor to the FBI—in 1924, he was instrumental in founding the FBI in 1935, where he remained director until his death in 1972 at age 77. Hoover is credited with building the FBI into a large and efficient crime-fighting agency, and with instituting a number of modernizations to police technology, such as a centralized fingerprint file and forensic laboratories.

In the case of Scott Armstrong, v. Executive Office of the President, et al., the White House used the PROFS computer communications software. With encryption designed for secure messaging, PROFS notes concerning the Iran-Contra affair (arms-for-hostages) under the Reagan Administration were insulated. However, they were also backed up and transferred to paper memos. The National Security Council, on the eve of President George H.W. Bush’s inauguration, planned to destroy these records.

13.4.6: Sunset Laws

A sunset provision is a measure within a statute that provides that a law shall cease to be in effect after a specific date.

Learning Objective

Describe sunset clauses and several prominent examples of their use

Key Points

In American federal law parlance, legislation that is meant to renew an expired mandate is known as a reauthorization act or extension act. Reauthorizations of controversial laws or agencies may be preceded by extensive political wrangling before final votes.
The Sedition Act of 1798 was a political tool used by John Adams and the Federalist Party to suppress opposition. It contained a sunset provision ensuring that the law would cease at the end of Adams’ term so it could not be used against the Federalists.
Several surveillance portions of the USA Patriot Act were set to originally expire on December 31, 2005. These were later renewed but expired again on March 10, 2006, and was renewed once more in 2010.
The Congressional Budget Act governs the role of Congress in the budget process. Among other provisions, it affects Senate rules of debate during the budget reconciliation, not least by preventing the use of the filibuster against the budget resolutions.
In the Economic Growth and Tax Relief Reconciliation Act of 2001 the US Congress enacted a phase-out of the federal estate tax over the following 10 years, so that the tax would be completely repealed in 2010.

Key Terms

mandate: An official or authoritative command; a judicial precept.
warrant: Authorization or certification; sanction, as given by a superior.
sedition: the organized incitement of rebellion or civil disorder against authority or the state

Sunset Laws

A sunset provision or clause in public policy is a measure within a statute, regulation, or other law that provides for the law to cease to have effect after a specific date, unless further legislative action is taken to extend the law. Most laws do not have sunset clauses and therefore remain in force indefinitely.

In American federal law parlance, legislation that is meant to renew an expired mandate is known as a reauthorization act or extension act. Extensive political wrangling before final votes may precede reauthorizations of controversial laws or agencies.

The Sedition Act of 1798 was a political tool used by John Adams and the Federalist Party to suppress opposition that contained a sunset provision. The authors ensured the act would terminate at the end of Adams’s term (the date the law would cease) so that Democratic Republicans against the Federalist Party could not use it.

John Adams

John Adams and his Federalist Party used a sunset provision in the Sedition Act of 1798 to ensure that the Sedition Act would cease once Adams was out of office.

Several surveillance portions of the USA Patriot Act were originally set to expire on December 31, 2005. These were later renewed, but expired again on March 10, 2006, and was renewed once more in 2010. The Patriot Act is a sunset law on wiretapping for terrorism cases, wiretapping for computer fraud and abuse, sharing of wiretap and foreign intelligence information, warranted seizure of voicemail messages, computer trespasser communications, nationwide service or warrants for electronic evidence, and privacy violation of civil liability.

The Congressional Budget Act governs the role of Congress in the budget process. Among other provisions, it affects Senate rules of debate during the budget reconciliation, not least by preventing the use of the filibuster against the budget resolutions. The Byrd rule was adopted in 1985 and amended in 1990 to modify the Budget Act and is contained in section 313. The rule allows Senators to raise a point of order against any provision held to be extraneous, where extraneous is defined according to one of several criteria. The definition of extraneous includes provisions that are outside the jurisdiction of the committee or that do not affect revenues or outlays.

In the Economic Growth and Tax Relief Reconciliation Act of 2001, the US Congress enacted a phase-out of the federal estate tax over the following 10 years, so that the tax would be completely repealed in 2010. However, while a majority of the Senate favored the repeal, there was not a three-fifths supermajority in favor. Therefore, a sunset provision in the Act reinstated the tax to its original levels on January 1, 2011 in order to comply with the Byrd Rule. As of April 2011, Republicans in Congress have tried to repeal the sunset provision, but their efforts have been unsuccessful. Uncertainty over the prolonged existence of the sunset provision has made estate planning more complicated.

13.4.7: Incentives for Efficiency and Productivity

Efficiency is the extent to which effort is used for a task and productivity is the measure of the efficiency of production.

Learning Objective

Summarize the Efficiency Movement and the institutions it, in part, bequeathed

Key Points

The Efficiency Movement played a central role in the Progressive Era (1890-1932) in the United States.
The result was strong support for building research universities and schools of business and engineering, municipal research agencies, as well as reform of hospitals and medical schools and the practice of farming.
At the national level, productivity growth raises living standards because more real income improves people’s ability to purchase goods and services, enjoy leisure, improve housing and education and contribute to social environment programs.

Key Terms

operationalization: The act or process of operationalizing.
manifold: Exhibited at diverse times or in various ways.

Efficiency describes the extent to which time or effort is well used for the intended task or purpose for relaying the capability of a specific application of effort to produce a specific outcome effectively with a minimum amount or quantity of waste, expense or unnecessary effort.

The Efficiency Movement was a major movement in the United States, Britain and other industrial nations in the early 20^th century that sought to identify and eliminate waste in all areas of the economy and society and to develop and implement best practices. The concept covered mechanical, economic, social and personal improvement. The quest for efficiency promised effective, dynamic management rewarded by growth.

The movement played a central role in the Progressive Era in the US, where it flourished 1890-1932. Adherents argued that all aspects of the economy, society and government were riddled with waste and inefficiency. Everything would be better if experts identified the problems and fixed them. The result was strong support for building research universities and schools of business and engineering, municipal research agencies, as well as reform of hospitals and medical schools and the practice of farming. Perhaps the best known leaders were engineers Frederick Taylor (1856–1915, ), who used a stopwatch to identify the smallest inefficiencies, and Frank Gilbreth (1868–1924) who proclaimed there was always one best way to fix a problem.

Frederick Winslow Taylor

Frederick Winslow Taylor, a mechanical engineer by training, is often credited with inventing scientific management and improving industrial efficiency.

Productivity is a measure of the efficiency of production. Productivity is a ratio of production output to what is required to produce it. The measure of productivity is defined as a total output per one unit of a total input. In order to obtain a measurable form of productivity, operationalization of the concept is necessary. A production model is a numerical expression of the production process that is based on production data.

The benefits of high productivity are manifold. At the national level, productivity growth raises living standards because more real income improves people’s ability to purchase goods and services, enjoy leisure, improve housing and education and contribute to social and environmental programs. Productivity growth is important to the firm because more real income means that the firm can meet its obligations to customers, suppliers, workers, shareholders and governments and still remain competitive or even improve its competitiveness in the market place.

13.4.8: Protecting Whistleblowers

There exist several U.S. laws protecting whistleblowers, people who inform authorities of alleged dishonest or illegal activities.

Learning Objective

Describe whistleblowers and the protections afforded them under various laws

Key Points

Alleged misconduct may be classified as a violation of a law, rule, regulation or a direct threat to public interest in the realms of fraud, health/safety violations and corruption.
The 1863 United States False Claim Act encourages whistleblowers by promising them a percentage of damages won by the government. It also protects them from wrongful dismissal.
Investigation of retaliation against whistleblowers falls under the jurisdiction of the Office of the Whistleblower Protection Program (OWPP) of the Department of Labor’s Occupational Safety and Health Administration (OSHA).
Whistleblowers frequently face reprisal at the hands of the accused organization, related organizations, or under law.

Key Term

qui tam: A writ whereby a private individual who assists a prosecution can receive all or part of any penalty imposed.

A whistleblower is a person who tells the public or someone in authority about alleged dishonest or illegal activities occurring in a government department, private company or organization. The misconduct may be classified as a violation of a law, rule, regulation or a direct threat to public interest in the realms of fraud, health/safety violations and corruption. Whistleblowers may make their allegations internally or externally to regulators, law enforcement agencies or the media.

One of the first laws that protected whistleblowers was the 1863 United States False Claim Act, which tried to combat fraud by suppliers of the United States government during the Civil War. The act promises whistleblowers a percentage of damages won by the government and protects them from wrongful dismissal.

The Lloyd-La Follette Act of 1912 guaranteed the right of federal employees to furnish information to Congress. The first US environmental law to include employee protection was the Clean Water Act of 1972. Similar protections were included in subsequent federal environmental laws including the Safe Drinking water Act (1974), Energy Reorganization Act of 1974, and the Clean Air Act (1990) . In passing the 2002 Sarbanes-Oxley Act, the Senate Judiciary Committee found that whistleblower protections were dependent on the vagaries of varying state statutes.

Clean Air Act

The signing of the Clean Air Act, the first U.S. environmental law offering employee protection as a result of whistleblower action.

Whistleblowers frequently face reprisal at the hands of the accused organization, related organizations, or under law. Investigation of retaliation against whistleblowers falls under jurisdiction of the Office of the Whistleblower Protection Program (OWPP) of the Department of Labor’s Occupational Safety and Health Administration (OSHA). The patchwork of laws means that victims of retaliation must determine the deadlines and means for making proper complaints.

Those who report a false claim against the federal government and as a result suffer adverse employment actions may have up to six years to file a civil suit for remedies under the US False Claims Act. Under a qui tam provision, the original source for the report may be entitled to a percentage of what the government recovers from the offenders. The original source must be the first to file a federal civil complaint for recovery of the funds fraudulently obtained, while also avoiding publicizing the fraud claim until the Justice Department decides whether to prosecute the claim.

Federal employees could benefit from the Whistleblower Protection Act as well as the No-Fear Act, which made individual agencies directly responsible for the economic sanctions of unlawful retaliation.