John Donahue on Public Sector Reform

Interviewed by Doug Gavel on November 14, 2008

Government work is often maligned for its bureaucratic inefficiencies, but it can be argued that the role of the public sector in affecting the lives of its citizens is more important that ever before. John Donahue, Raymond Vernon lecturer in public policy, focuses his research on public sector reform and with the distribution of public responsibilities across levels of government and sectors of the economy. He is author or editor of several books, including “The Warping of Government Work” (Harvard University Press, 2008).

Q: What have been the most successful public sector reform efforts in recent years?

Donahue:In recent years, you’d probably have to look overseas for successful reform efforts. I think that former Prime Minister Tony Blair’s government in Britain, despite some of its more recent failings, was a spectacular success in public sector reform in its early years, really restructuring the British civil service, getting the whole government focused on performance in some very creative ways.

In the US, the Federal Emergency Management Agency (FEMA) is actually a great test case of public sector reform because it’s gone from basket case to poster child back to basket case again in recent administrations. In the George H.W. Bush administration – partly because there hadn’t been a large scale disaster – FEMA was left untended and that showed when hurricane Andrew hit Florida in 1992.

During the Clinton administration, James Lee Witt turned the agency around. He incorporated some modern management principals, but more importantly he just paid attention to the agency for four years and made it work, and that paid off. When floods hit the Midwest in 1993, FEMA performed magnificently and the payoff was political as well as substantive.

The subsequent history of FEMA under the second president Bush is well known. The point is that, in contrast to conventional wisdom, heads up management has political payoff.

Q: What have been some of the least successful public sector reform efforts?

Donahue:One worth noting was the Clinton administration’s health care reform effort which in retrospect violated just about every precept of sound public sector reform. It was too complex; it was too hurried; and it was too little attuned to the details of the public’s hopes and fears.

Another reform that’s worth mentioning is the Bush administration’s performance assessment tool, which was well-intentioned but became unduly politicized – to some extent in reality, to large extent to the eyes of the people who were part of the system. It became seen as a pretext for advancing the administration’s political preferences rather than as a management tool, which is what it needed to be.

Q: You are co-author of a new article in Washington Monthly that elaborates on data culled from the most recent Office of Personnel Management federal government employee survey. Please discuss the most salient findings.

Donahue:One thing we discovered is that insiders know what’s happening in their agencies. If you ask them – which the office of personnel management does – you can find out a lot. It turns out that if you track what people inside federal agencies think about the capability of their agency, this becomes an early warning system about which agencies are up to their challenge and which aren’t. The president-elect very shortly is going to own this government; his agenda and his reputation are hostage to federal agencies’ capacity to perform. We worry that some agencies are able to perform and some are not. We are shortly going to be able to see which are and which aren’t up to delivering on their missions.

Q: How should the Obama Administration interpret the findings, and how would you advise the administration to address the problems facing the public sector workforce?

Donahue:We have a number of recommendations. The first is to focus on the taste and talent for actual management when hiring people for senior political appointees. There’s always a temptation to hire cronies or people who helped you on your campaign, or people who serve as inspiring symbols – all understandable, all worthwhile criteria. We urge the president to focus first and foremost on the capacity to manage.

Secondly, we think it’s important to fix the federal workforce. Administration after administration has let fester some longstanding problems in the federal workforce and we think that attention must be paid now, when it’s early enough to make a difference in the Obama administration.

There is a long list of reforms that have been identified by other administrations, but not implemented. So the Obama administration is actually in a pretty good place to identify and pick from those neglected lists of reforms, those that it wants to run with, those that it’s going to invest some capital in, and move forward with it.

Some of our choices are to narrow the compensation gap between the public and private sectors; make federal pay more performance-based and more flexible; to ease hiring procedures; and in particular to open the door to lateral-entry for baby boomers who are ready for a stint in federal service and hungry for a job with some meaning . It’s incredibly hard to come into federal service from comparably senior jobs in the private sector; it should be made easier. There are things to be done and it’s not like nobody knows what to do to fix the workforce. It’s a question of taking it seriously enough and early enough to make a difference in the administration.

Q: What lessons should we take from other countries in tackling these challenges?

Donahue:It’s always a challenge to translate lessons from one culture to another, from one political setting to another. The good news is that some of the most interesting reforms have been in the English-speaking world – the UK, Singapore, Australia, New Zealand – a lot of countries are a bit ahead of us on finding ways to get the best talent into public service and deploy it most effectively.

One lesson is that reform has got to be a long, sustained effort. This isn’t something that you can just change one law or one regulation and it’s fixed. It’s got to be something that a leadership team is committed to for the long-term. I think another is that the economic, political, and cultural efforts all have to be in sync. Of course you have to get the incentives right for public service, but beyond that, I think you have to restore the status and prestige of public service if you’re actually going to make a difference in hiring and retention.

Finally, I think all of the successful reforms have focused more on the economic details of compensation and benefits and the cultural aspect and less on reorganization. There’s always a temptation to reorganize, to try to find the big one time fix that will make the rest of it easy. It’s got to be a long-term effort to which an administration is committed at the start and throughout.

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