The Structure of Policy Change

The Structure of Policy Change

The Structure of Policy Change

Derek A. Epp

The University of Chicago Press

CHICAGO & LONDON

The University of Chicago Press, Chicago 60637

The University of Chicago Press, Ltd., London

© 2018 by The University of Chicago

All rights reserved. No part of this book may be used or reproduced in any manner whatsoever without written permission, except in the case of brief quotations in critical articles and reviews. For more information, contact the University of Chicago Press, 1427 East 60th Street, Chicago, IL 60637.

Published 2018

Printed in the United States of America

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ISBN-13: 978-0-226-52969-1 (cloth)

ISBN-13: 978-0-226-52972-1 (paper)

ISBN-13: 978-0-226-52986-8 (e-book)

DOI: 10.7208/chicago/9780226529868.001.0001

Library of Congress Cataloging-in-Publication Data

Names: Epp, Derek A., author.

Title: The structure of policy change / Derek A. Epp.

Description: Chicago ; London : The University of Chicago Press, 2018. | Includes bibliographical references and index.

Identifiers: lccn 2017047640 | isbn 9780226529691 (cloth : alk. paper) | isbn 9780226529721 (pbk : alk. paper) | isbn 9780226529868 (e-book)

Subjects: lcsh: Policy sciences—United States. | Public administration—United States. | United States—Politics and government.

Classification: lcc h97 .e76 2018 | ddc 320.60973—dc23

lc record available at https://lccn.loc.gov/2017047640

This paper meets the requirements of ansi/niso z39.48-1992 (Permanence of Paper).

For my parents

Contents

Acknowledgments

Part I : Punctuations in Public Policies

ONE / The Rise and Fall of NASA’s Budget and Other Instabilities

TWO / A Macroscopic View of the Policy Process

THREE / Complexity, Capacity, and Collective Decisions

FOUR / Distributional Assessments of Institutional Response

Part II : Issue Complexity and Institutional Capacity

FIVE / Instabilities in Federal Policy Making

SIX / Institutional Capacity in the American States

Part III : Politics and Collective Intelligence

SEVEN / Decision-Making Pathologies

EIGHT / Revisiting the Efficiency of the Private Sector

NINE / Designing Responsive Institutions

Notes

References

Index

Acknowledgments

This book would never have been possible without the guidance of Frank Baumgartner. The best decision I made as a graduate student was asking Frank to be my adviser. I entered graduate school knowing nothing about the profession, but I was tipped off that Frank would be a good choice for adviser by a wall in his office that is covered with teaching accolades. He lived up to his reputation. Long ago, Frank established himself as a terrific political scientist. What makes him a good mentor is that he is a terrific person—thoughtful, generous, and unfailingly supportive. Thank you, Frank.

I was fortunate to have a lot of good mentors early in my career. Thank you, Jim Stimson, Virginia Gray, Tom Carsey, Chris Clark, Mike MacKuen, and Bryan Jones. Together with Frank, you taught me almost everything I know about political science; most important, that it is best practiced as a collective enterprise, in which we work together to think through new ideas.

This book benefited tremendously from three reviewers who read the entire manuscript. Thank you, Chris Wlezien, Chris Koski, and Peter Mortensen. Your reviews were top-notch in every respect: intellectually challenging and critical, but always constructive. Dedicated, thoughtful reviewers are such a luxury, and I am indebted to your insights. Thanks as well to Chuck Myers for your guidance and advice throughout the process.

I would like to thank all the faculty and staff at the Rockefeller Center at Dartmouth College. In particular, thanks to Ron Shaiko for believing in me and hiring me for what is without any doubt the very best postdoc available in the profession. Your pursuit of excellence in pedagogy and your insistence that a successful department makes positive contributions to the local community was inspirational. Thanks to Jane DaSilva for being so kind and supportive. Thanks to Herschel Nachlis, Julie Rose, Sean Westwood, Jeff Friedman, Kathryn Schwartz, and David Cottrell for much-needed distractions from writing.

I thank Greg Wolf, Amanda Grigg, John Lovett, and the rest of my graduate student colleagues. I am proud of what we accomplished together during our time at Chapel Hill. I thank Brian Godfrey, my excellent and very capable research assistant. I thank Erica. Most of all, I would like to thank my wonderful parents.

PART ONE

Punctuations in Public Policies

ONE

The Rise and Fall of NASA’s Budget and Other Instabilities

President Eisenhower was dismissive. Having been briefed on the R-7 Semyorka, the Soviet Union’s powerful new rocket, he was well aware that the USSR was capable of putting a satellite into orbit. In a press conference shortly after Sputnik’s 1957 launch, Eisenhower attempted to reassure the American people, conceding that the Soviets had put one small ball in the air, but quickly adding I wouldn’t believe that at this moment you have to fear the intelligence aspects of this. Later, his chief of staff, Sherman Adams, likened the satellite launch to one shot in an outer-space basketball game. What the Eisenhower administration had underestimated was the deep, almost visceral, reaction Americans had to news of the satellite. It was disconcerting on two levels. First, it appeared inconsistent with the prevailing notion that the Soviet Union was a technological backwater, incapable of matching the United States’ economic or scientific prowess. Second, people were skeptical of Eisenhower’s assurance that they had nothing to fear. Radio stations had broadcast the satellite’s signal as it traveled over America, and it seemed obvious that something that so easily violated transnational boundaries presented security risks. Edward Teller, the famous nuclear arms proponent, warned that America has lost a battle more important and greater than Pearl Harbor. The public seemed inclined to agree with these ominous sentiments.

During the ensuing media frenzy, the Eisenhower administration bowed to public pressure and rethought its initial restraint. It appeared that a major undertaking was needed to reassure the public that America, although second out of the gate, was not going to lose the space race. Change came quickly. Within a year, Eisenhower signed legislation creating the Advanced Research Project Agency and the National Aeronautics and Space Administration (NASA) and passing the National Defense Education Act, which allocated billions of dollars to helping students go to college to get degrees in math and science. By 1961, when President Kennedy gave his famous speech about putting an American on the moon, US outlays toward spaceflight and technology, a budget category that scarcely existed in the early 1950s, had already increased tenfold from 1957 levels. Altogether, from the launch of Sputnik in 1959 to the moon landing in 1969, US spending on spaceflight increased by almost 5,000 percent.

Figure 1.1 illustrates the rapidity of the change by tracking the annual budget authority (the amount of money Congress authorizes government agencies to spend) for spaceflight from the budget category’s introduction in 1949 through 2014. Sputnik’s launch lies at the base of an enormous mountain of new spending, illustrating the urgency with which policy makers reacted to the Soviet satellite. Indeed, the US government pursued a moon mission with an almost single-minded obsession. Even by today’s standards, landing an object on the moon, or even putting something into lunar orbit, is a major technological accomplishment—one that few countries have achieved. In the 1950s, it was a task of unprecedented complexity. Between 1958 and 1965 NASA launched eighteen unmanned lunar missions; the first fifteen failed, many exploding before ever reaching space (Hall 1977). This record of failure is revealing. It shows the tenacity of American society, but it also tells us something about the power of ideas. In this case, the idea that gripped America was the utter necessity of besting the Soviet Union, no matter the stakes, the sacrifices, or the nature of the competition.

Figure 1.1. Annual budget authority for spaceflight

Note: Budget authority is presented in constant 2012 dollars.

Eventually, NASA turned that string of failures into a series of fantastic successes. In 1969, having successfully planned and executed a manned trip to the moon, NASA’s directors had good reason to feel optimistic about America’s future in space. The next step was the Space Transportation System, which would feature a number of reusable space shuttles that could reliably move astronauts in and out of orbit, a series of space stations leading to a lunar base, and eventually a trip to Mars. Few at the time would have guessed that spending on spaceflight had peaked in 1965, four years before Apollo 11 put astronauts on the moon. Much like President Eisenhower, NASA’s directors had seriously misjudged public sentiment. They had hoped that scientific exploration of space was the idea motivating America’s pursuit of the moon. This was partly true, but the overriding idea was one of fear of and competition with the Soviets. With the space race won decisively for America, enthusiasm for costly space adventures rapidly diminished. The price NASA paid for their success was a 50 percent reduction in their operating budget in the early 1970s. Policy makers had envisioned a trip to the moon, NASA had delivered, and that was as far as the vision went. Although reusable space shuttles were developed in the early 1980s, by 2011 the fleet was grounded due to safety concerns and high operating costs. Today, NASA’s capacity to put people in orbit is less than it was in the 1960s, and, ironically, American astronauts currently buy passage to space on board Soyuz, spacecraft developed and operated by NASA’s Russian counterpart.

In retrospect, it has become clear that Eisenhower’s initial restraint was born out of neither ignorance nor false bravado, but rather a careful consideration of the relative military capabilities of the United States and the USSR. In making this assessment, Eisenhower benefited greatly from the information provided by the new U-2 spy planes, which had been flying over the Soviet Union since 1956. Surveillance photos taken by the spy planes made clear that while successful in launching Sputnik, the Soviets were still a long way from developing functional intercontinental ballistic missiles (ICBMs). With the benefit of hindsight, we realize that Sputnik’s launch appears to have been much closer to Adams’s basketball analogy than Teller’s Pearl Harbor. Most of all, Eisenhower wanted to stifle American fears over Soviet Russia—fears that were already greatly heightened in the McCarthy era. Eisenhower knew the United States was technologically and militarily superior to the USSR and wished to avoid a costly and, to his mind, pointless arms race. In this he failed. Robert A. Divine, in his case study of the Sputnik incident, concludes by noting that Dwight Eisenhower had learned how much more important appearances were than reality when it came to space feats (Divine 1993, 205). American concerns about falling behind Soviet missile production (the missile gap) would feature prominently in foreign policy for the next three decades and usher in an unprecedented wave of defense spending.

Eisenhower’s inclination was to act pragmatically, carefully plotting a course of action for his administration based on the best intelligence available at the time. If he had been successful at allaying American fears over Sputnik, it is not difficult to imagine a very different history, perhaps one in which the United States never went to the moon, but also perhaps one that avoided the dramatic proliferation of nuclear arms in the latter half of the twentieth century. In the end, Eisenhower was unable to avoid getting swept up in the red scare that gripped the country. Consequently, the period is characterized by dramatic swings in US spending on spaceflight, as policy makers moved rapidly to counter the perceived Soviet threat, and then, once the American advantage was clear, shifted their attention and budgetary priorities elsewhere.

Sputnik nicely illustrates the two competing forces that operate on the policy-making process. On one hand are the forces of pragmatism, where information is sought out and engaged with, and where there is a tight link between the course of public policy and the size of problems. On the other are tidal waves of popular opinion as attention becomes momentarily fixed on particular fears, perceptions, or ideas, only to drift elsewhere as alarming new discoveries transition into yesterday’s news. These forces are not always in opposition. Public scrutiny can gravitate to issues where the best available information indicates that problems are indeed severe and in need of innovative solutions. Sometimes, however, popular opinion demands a solution to a problem that experts see as relatively trivial. Such was Eisenhower’s confusion when he confided to his science advisory committee, I can’t understand why the American people have got so worked up over this thing. It’s certainly not going to drop on their heads (Divine 1993, 12). Or, conversely, a lack of public enthusiasm can prevent policy action on problems that greatly alarm the experts.

Which of these forces determine the course of public policy in the United States? That is the central question of this book. Do pragmatists usually carry the day, or do policy makers simply ride from one wave of collective enthusiasm to the next? Are the instabilities evident in spending on spaceflight generally characteristic of the policy-making process, or are they the exception? I pursue these questions because they speak directly to the nature of public governance. As scholars, citizens, and practitioners we have good reason to seek their answers. If public governance is an erratic process, rather than a meticulous and deliberate one, then this has important implications for the responsiveness of government to its citizens and to social problems. If policy makers are meticulous planners, then citizens can expect the urgency of problems to factor heavily into the government’s policy response. In this world, the launch of Sputnik, which the Eisenhower administration recognized as a relatively minor concern, should not provoke a tenfold increase in US spending on spaceflight. On the other hand, an erratic policy-making process is one that is subject to the whims of enthusiasm. The size and urgency of problems still matter, but these are far from the most important factors. Instead, it is the prominence of problems—how much attention they can command—that is critical. Even somewhat minor problems could provoke mammoth responses from policy makers, if they receive enough attention. This is an altogether more random and uncertain type of policy making, as it depends more on the fickleness of public perceptions than on concrete, knowable facts.

Policy Instabilities

A growing consensus among political scientists is that public governance adheres much more closely to the erratic-process model than to the meticulous-planner model. Two separate lines of inquiry support this conclusion. First came observational evidence: the recognition that major disruptions of the kind examined above are relatively common within the policy process. For instance, we find that almost every programmatic area of the US federal budget has undergone at least one massive adjustment within the last fifty years, inflection points when government expenditures change dramatically from one year to the next. Spending on spaceflight is in no way unique; almost every policy area has its own Sputnik-type story where waves of enthusiastic support for an idea (or rapid disillusionment with a previously popular status quo) result in massive adjustments. And this instability is not limited to federal budgets. The same erratic-change pattern is evident in other policy activities, such as the number of congressional bills addressing an issue, and at the subnational level.

These disruptions have been documented through a rich case-study tradition within policy scholarship. For example, a classic in the field is Kingdon’s 1984 Agendas, Alternatives, and Public Policies, which, based on extensive fieldwork in Washington, DC, develops his policy windows approach. He explains: Policy windows open infrequently, and do not stay open long. Despite their rarity, the major changes in public policy result from the appearance of these opportunities (Kingdon 1984, 166). Social scientists have long recognized the significance of these brief but dramatic periods of political momentum, and they go by various names in the literature: issue-attention cycles, positive-feedback loops, policy cascades, waves, and slippery slopes (Downs 1972; Arthur 1989; Bikhchandani, Hirshleifer, and Welch 1992; Pierson 2000). During such periods, political change can be explosive following an exponential rate of growth or decay (Casstevens 1980; Baumgartner and Jones 1993).

Furthermore, these punctuations are not simply micro-level phenomena affecting individual policy areas. Occasionally, the entire US federal budget experiences major adjustments. Figure 1.2 tracks US federal spending from 1792 to 2014, with outlays in the top panel and the annual percentage changes in those outlays on the bottom. This reveals five occasions when US spending increased by over a hundred percent from one year to the next. The two most dramatic punctuations coincide with the Civil War and World War I, when the US government ramped up spending by around five hundred percent.

Figure 1.2. Annual outlays by the US federal government

Note: Outlays are presented in constant 2000 dollars. Data are available from the Policy Agendas Project and are constructed from data series made available by the Treasury Department and the Office of Management and Budget.

The evidence for major disruptions in the status quo is very strong, but why does it matter? Policy punctuations are interesting because they seem inconsistent with a government that is meticulously plotting its course, carefully updating public policies in response to incoming information. Instead, they seem to imply a government that is often caught unawares by the severity of issues, or that dramatically overreacts to relatively minor concerns. The fact that punctuations can be observed at every governmental level, from individual budget categories to the entire federal budget in aggregate, suggests that they are fundamental features of the policy-making process rather than rare, idiosyncratic events (or artifacts of looking at relatively small budget categories). So too does the fact that they occur throughout history and are not isolated to any specific time period. Punctuations then are observational evidence that point to policy making as an erratic, disproportionate process in which attention to problems lurches from one temporary equilibrium to the next.

Explaining Punctuations with Theory

The second development in support of the erratic-process model was theoretical. Scholars, starting with Padgett in his seminal 1980 article Bounded Rationality in Budgetary Research, began to link models of government agenda setting with distributions of changes in public policy. Meticulous policy making requires a proportional engagement with society’s various problems. If a problem is gradually growing worse over time, policy makers should respond by gradually increasing the scale and frequency of interventions required to solve it. Likewise, there should be a reduction in