The End of the End of Government

As services are increasingly outsourced to non-profits, John D. Donahue writes, government's role becomes even more important.
by | May 30, 2007
 

My brainy colleague Elaine Kamarck recently published a book called The End of Government. She doesn't really mean it -- as her sneaky subtitle, "As We Know It," makes clear -- but some people sure do. Skepticism about the public sector in today's America is subtler and more sophisticated than its 1980s counterpart. Some of it comes from those who consider themselves firm believers in social solidarity and the common good. Contemporary anti-government sentiment tends to be more sorrowful than angry, less belligerent and more regretful than prior versions, and, in that sense, more worrisome.

One school of thought wants to maintain our ambition for shared endeavors but assign the work to non-profits. Transferring government's portfolio to civil society, after all, would merely intensify a longstanding pattern. As observers from de Tocqueville onward have noted, Americans possess an uncanny cultural knack for organizing themselves to pursue the public good without waiting around for formal authority. Our dense networks of civic institutions are priceless national assets. It is quite plausible that our culture could better survive the crumbling into utter dysfunction of formal government than it could the collapse of the non-profit sector.

An either-or choice between government and civil society is not the option before us, however. Both sectors will endure. The question is how much farther we can go in our reliance on non-profits to compensate for an enfeebled state. And there are reasons to suspect we have pushed this margin about as far as we prudently can, and perhaps farther.

It is not at all clear that the non-profit sector is either more efficient than government or more broadly accountable than business. Some non-profits are superlative, others are dreadful, and (absent far more scrutiny than currently prevails) the balance is mostly a mystery. The capacity of the voluntary sector, moreover, is not infinitely elastic. Confident predictions that civil society will step forward when government steps back are often disappointed -- not least because many non-profits turn out to be essentially conduits for government funds.

And there can be quite basic objections to anointing non-profits as the stewards of public missions. When goals are set and progress gauged without any nexus to electoral democracy, public value becomes whatever people with resources declare it to be. The boundaries of commonwealth are defined more by the "one dollar, one vote" rubric of the market than by the "one man, one vote" rubric of democracy. For some tasks, this is fine. For others -- my list includes primary education, basic research and many social services; your list may be different -- it is deeply problematic.

Another variant of governance without government, more recently come into vogue, envisions a transformative expansion of civic activism among for-profits. In this scenario, corporations come to recognize that any apparent conflict between private profitability and the public good is a mirage, since profitability ultimately depends on image and reputation.

By forswearing the bad (pollution, labor exploitation, the sale of unsafe or unhealthy products) and embracing the good (nurturing workers, supporting communities, adopting sustainable technologies), corporations may miss opportunities to maximize short-run profits, but will solidify public support and thus ratchet up their long-term revenues. Social responsibility will also pay off on the human-resources front. People want to be proud of their employer, not embarrassed to admit who signs their paycheck, so solid corporate citizens should have an edge in attracting and retaining talented employees. And many investors, both institutional and individual, will purge irresponsible firms from their portfolios and steer their capital to good actors.

The social contract thus can be negotiated and enforced more and more through markets (for products, capital, and labor) and less and less through the ballot box. As the scenario unfolds, distinctions between the public and private sectors will dissolve.

This prospect, too, attracts many adherents. Courses on corporate social responsibility and "social enterprise" proliferate at business schools. Groups from local chambers of commerce to the World Economic Forum take it as axiomatic that corporations can and should fill in for government's disabilities.

To some degree, this is both healthy and consistent with the facts. America's private sector is robust, creative, equipped to tackle a wide range of tasks. Many public missions can only be pursued -- efficiently, or at all -- in collaboration with private actors. But today's enthusiasm for replacing government with socially responsible corporations tends to be undiscriminating and ultimately reckless.

Sometimes "corporate social responsibility" is simple hokum, the cynical invocation of conventional pieties meant to camouflage garden-variety avarice. More often it is sincere but incoherent, a sophisticated form of wishful thinking. There is no necessary alignment between the public consequences of a company's actions and the profitability boost from a good image. As flawed as the ballot box can be as a device for defining the public interest, it outshines most comparable corporate approaches.

And introducing social objectives that might, in the misty long run, align with shareholder interests threatens to muddy private-sector accountability. A lofty mission can all too easily be invoked to excuse sub-par performance. Corporate social responsibility can thus become both irresponsible and anti-social.

Sure, there's been change in how public work gets done, and there will be more in the years ahead. Different kinds of interaction between formal government and the whole spectrum of private players are becoming more important, and that's mostly a good thing. But the change is evolutionary and incremental, rather than some sudden transformation. Government, not too far removed from the way we know it, is here to stay. So let's keep working to make it better.

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