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This paper provides an overview of B. Guy Peters American Public Policy: Promise and Performance. The purpose of Peters's books is to provide the student of government with a quick introduction to some of the dynamics and processes involved in American public policy. As the title suggests, Peters finds a fundamental dichotomy between two aspects of American policy: what is promised and what is delivered. What is promised tends to be almost visionary as American lawmakers, statesmen and ordinary citizens increasingly want more from their government. At the same time, however, the complexity of the problems, the intricacies of the processes involved, and the multitude of players so alter what is finally achieved that it often bears no resemblance to, and may even contradict, what is promised. Peters's book, then, is of fundamental use to anyone wishing to enter the American governmental system or to work with that government.
Due to the size of Peters's work, I will not attempt to summarize all of his ideas. Instead, I will concentrate on giving a general overview of the work and explore specific issues that I find of interest.
The first portion of the book defines the nature of public policy in a specifically American context. Peters defines public policy, not by its intentions, but by its effect. Thus, to Peters, if a fine law is written, but never implemented, it's not really public policy. This is part of his reason for defining American government as "ideologically conservative" and "operationally liberal." This amounts to a statement that the effects of most of the "checks and balances" in the American system limit the power of politicians to directly accomplish new policy objectives, while other incentives encourage the bureaucrats to, through the back door, accomplish many of those same policy objectives.
Peters explores the structure of policy making in American government in chapter two. Again, Peters stresses the differences between rhetoric and reality. Government has grown in size, complexity, and confusion. Federalism, for example, envisioned by the founding fathers as a "marble cake" of different governmental bodies performing different functions, has become "picket fence" Federalism in which several governmental bodies, Federal, state, and local, all become involved in delivering a certain policy outcome. This is further complicated by the fact that often non-governmental bodies, such as contractors, end up delivering the policy outcomes designed by government.
An interesting development of the growing governmental complexity and confusion are the "iron triangles," "sloppy hexagons," and "issue networks." Triangles, hexagons, or networks all form around a particular issue or interest. They represent a convergence of governmental and other groups around a central target, the economic clout that the government will use to deliver a given policy outcome. All of these forces may have a common interest, in the case of an iron triangle, conflicting interests, in the hexagon, or a variety of interests, as in the issue network, but do not necessarily represent the interests of the larger society. Hence, the reality of American government may be that a small group of society is effectively running a program that effects the much larger society. The classic example, a triangle in this instance, is the military-industrial-complex.
The second section of the book follows the process in which an idea passes from the public discussion stage to implementation and evaluation. The third chapter examines the way in which a something becomes a policy. First, something must become an "issue," a complex process that may involve the public, a few powerful individuals, or an interest. Peters contends that on a given issue whether it becomes a policy consideration may depend on a powerful elite, a convergence of interest groups, or a veritable iron triangle. Items that end up on the policy-making agenda may have only the slightest relationship to the public's original intentions.
Chapter four, legitimization, explains the process under which an item on the agenda becomes legitimate policy. While the legislature, theoretically, handles this job, the pressures involved in creating coalitions necessary to pass legislation generally make policy that is relatively broad and evenly spread in its effects. The bureaucracy, through passing regulations, or "secondary legislation," performs the bulk of effective law-making. The courts, through the powers of the Federal and state Constitutions, can become involved in enacting what amounts to legislation. Finally, the people themselves can become a party to this process through referendums and ballot initiatives. Though each of these processes is seemingly confined to one group, in fact, the litigious nature of American society often forces these groups to collide and overlap. The most interesting fact, here, is that non-elected bureaucracy tends to make the bulk of policy decisions because they have the fewest effective checks on their behavior other than the innate risk-aversion of their agency cultures.
The problems of implementation are illustrated in chapter five and, as Peters points out, the wonder isn't that policies are implemented poorly; the wonder is they are implemented at all. He then proceeds to cite the large number of points at which a policy directive may fail. First, the law may be vaguely worded. Then, the initiative may involve a number of departments. A given department, moreover, may be "captured" by the interest it is supposed to regulate or simply have no SOP ("standard operating procedure") to cover the new event.
Peters emphasizes, again, the dominant roles of agencies and bureaus in carrying out policy objectives. Like any organization, a bureau or agency has certain ways of handling its responsibilities that have become routine. When a new policy objective becomes part of an agency's responsibilities, the organization usually tries to implement it in an old way. Hence the Social Security Administration began, when given responsibility for Medicare, by examining claims for its services. The Department of Defense, when it won the battle to retain its DoDDs school system, continued to use a governmental performance appraisal system, not one used in other school systems, and a GS rating system. Thus policy changes do not tend to be revolutionary as much as evolutionary.
The process of governmental budgeting form the focus of chapter six. This process, especially at the Federal level, is, indeed, extremely complicated. The budget must pass through several executive departments, two Congresses, and a Presidential signature, for passage. The difficulty of bringing any rationality to amending this process has encouraged a very conservative approach to government, called "incrementalism," in which an agency increases its past year's request incrementally. Some more interesting approaches remain, but the problem with these is that they require someone to "wield the ax" and generally take more time to accomplish. Further, none of these new budgeting techniques or initiatives (such as Gramm-Rudman) have had much of an impact on the process.
Peters' s account of the Federal Budget process points out the extreme complexity and the difficulty of obtaining a balanced budget. Since agencies and their personnel have a vested interest in their own survival and politicians little to gain from their elimination, the inertia encourages incremental increases. Second, the declaration of so many programs as "off-budget" limits the power of the government to get control over its own finances. In this light, the efforts of the Bush and Reagan presidencies to bring outsiders, from business, to look at the government's budget make perfect sense and suggests, again, that a more radical approach must be taken, such as Japan's "scrap and build" philosophy, if a balanced budget is a serious policy goal.
Chapter seven looks at the difficult question of public policy evaluation. This asks such questions as "who's evaluating the program" and "whom is it supposed to help." As Peters shows, evaluating a program is extremely difficult and, often as not, a function of the perceptions of the evaluator as much as the program. Further, the actual outcome of a program may take years to be apparent. This increases the tendency among politicians to favor programs with an immediate outcome that can be publicized instead of long range policies.
The second portion of the book features substantive policy issues, and I will comment on some of these. Chapter eight deals with making economic policy, the American government's attempt to regulate and improve the economy. The goals of the American government's economic policy, as defined by law, include: economic growth, full employment, stable prices, and a positive balance of payments from international trade. Since World War II, America has enjoyed relatively full employment and stable prices. It has not done as well at sustaining economic growth (though growth has kept pace with the rate of population increase), and has failed, since 1986, at obtaining a favorable balance of trade. Peters explores the key governmental means of achieving these goals: fiscal policy and monetary policy. It is instructive that the independent Fed has been able to maintain a strong, relatively stable dollar, and keep inflation to acceptable levels, while fiscal policy, controlled by more political elements, has failed to keep the kind of relatively balanced budget necessary to applying Keynsian economics. Finally, Peters explores the tax policy of the United States.
Tax policy is an area that could be used, more effectively than government spending, to promote economic growth. In Japan, for example, savings are not taxed, while property is highly taxed, the reason why the Japanese have the highest savings rate of industrialized countries and the lowest percentage of property owners. On the other hand, government in the United States has taxed savings. If the government were to reverse its policies, this could result in the higher savings rate advocated by many economists.
The whole issue of health care reform is covered in chapter nine. Peters recounts the current problems with the health care problem, including the 40% uninsured, the gaps in available public and private costs. What Peters doesn't consider adequately, however, is the issue of why health care costs are rising in the first place: a collusion of interests. Employees in the seventies and eighties, especially Unionized employees, looked to raising health care benefits as a means of circumventing taxes on higher pay. Since they largely represented an aging, less healthy, group of employees, this strategy seemed to work. Hospitals and doctors, sensing higher profits, had an incentive to increase costs, and insurance companies, another winner, found ample justification to raise rates. The sufferers, of course, were the non-Union workers, younger workers, and the uninsured who had to pay the higher taxes their more fortunate elders did not have to pay. Prices for medical service rose, even as those who would have to pay the actual costs, the uninsured, were losing their ability to pay. To solve this problem, then, takes not more government intervention, but less. Every dollar paid out in health care benefits should be taxed as income. This would give employees an incentive to shop for the cheapest quality system available, and market pressure would bring prices down both for health care and health insurance.
Chapter ten, on income maintenance, deals with the problems of programs that are designed to help workers maintain their standard of living in the face of unemployment, retirement, loss of an earning member of the family, etc. The most interesting of these that Peters mentions is social security. As Peters correctly points out, while Social Security is sold to the public as an insurance, in fact, it represents a generational transfer. The funds spent on supporting the elderly do not have a direct relationship to their past contributions but to the current contributions of workers and the cost of living.
I agree with Peters's characterization of the Social Security system completely, but I would go a step further. One way in which the government can overcome the coming "retirement crisis" is to directly tie contributions to benefits. Workers could actually choose the amount they wish to have withdrawn. This gives the workers an incentive, not only to work, but also to save money on their own since most intelligent (and especially young) workers will not count on Social Security guaranteeing a happy retirement. Again, the increase in savings would generate the kind of investment money necessary for sustained economic growth.
Chapter eleven, educational policy, concerns the role of the Federal and State government in education. Peters documents the history of that role and some of the challenges faced by public education. What Peters does not document, however, is probably the greatest danger facing public education: the under-funding caused by an aging population. As voters in local property tax districts (East of the Mississippi) and state tax districts (West of the Mississippi) have increasingly aging populations, voting to increase money spent on schools will become unpopular and unsuccessful. As schools deteriorate, then, there will be flight to private schools, further lessening the tax base of the public schools. Eventually, then, there will be, in fact, a two-tier educational system. Richer students will attend private schools at which higher standards and a discrimination against poorly behaved students achieve better results. The public schools, in contrast, will be stuck with the remainder of the student population.
Chapter twelve, energy and the environment, looks at the issues involving energy and the environment. Peters links these two issues because, often, the attainment of energy to sustain growth creates outputs that harm the environment. Unlike some of the other issues in this book, both of these issues are perceived as relatively "new." The energy issue shows, again, our government's failure to address reality. While America's energy usage has grown, it has not developed comparable commitments to producing energy. There are sources available, such as nuclear energy, or even solar energy, but the government has never come up with a national energy policy that can withstand the pressure of interest groups. This may be contrasted with Japan's controversial decision to finance the development of fast breeder reactors, despite public opposition, to solve its energy problems.
Peters explores the future of defense in chapter thirteen. Peters goes to great length to document the history of nuclear power, different options, etc., but the real problem with the chapter is that it doesn't discuss the most important aspect of the current situation: the draw-downs. While jobs of any type, including military, continue to be scarce, keeping the quality of the military may prove comparatively simple. How can the defense industry, on the other hand, be scaled down when its real "mission" is disappearing. Considering that the Department of Defense is a classic "captured" bureau empowered to control a large part of Federal spending, this suggests that numerous "defense emergencies" may arise in order to justify "feeding" the industry.
The last portion of the book deals with the problems of policy analysis, which seeks to determine if a governmental policy should be undertaken. Peters presents two different positions. The first is cost-benefit analysis. Cost-benefit analysis attempts to analyze public policy by comparing its costs and its benefits and its cost and benefits to that of other competing policy options. This is a strategy with many faults, as Peters shows, stemming, in part from its essentially economic nature. Again, this is a strategy generally better suited to a business that has goals that are clearly economic than to a government whose goals are complex and often contradictory.
Peters concludes, finally, with an attempt at an ethical analysis of public policy. As might be expected, this discusses the difficulty of establishing any ethical standards. Peters concludes with an analysis of Rawls' Justice as Fairness. Interestingly, like Henry, this is the only framework of ethics that Peters examines seriously. I find it surprising that in two required reading texts for governmental administration, the chapter on ethics is the shortest and only examines one system, especially in light of the fact that 25% of our population is now employed by the government. This suggests to me a need for additional theorizing and consideration in this area.
In conclusion, Peters book effectively introduces the problems of government in an American setting. It does this in a very practical fashion by portraying policy as it actually exists and including some of the key issues that will be on the "American agenda" into the foreseeable future. Further, it suggests some key areas for further research and shows how far American public policy's "promise" may vary from its "performance."
Peters, B. Guy Peters. American Public Policy: Promise and Performance, Third Edition. Chatham House Publications: Chatham, New Jersey, 1993.
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