Reform, American Style

Reinventing government from the bottom up is excruciatingly hard. But in the long run, it may be the best way.
by | June 2000
 

Not long ago, a government minister in Mongolia explained to me his country's efforts to develop a tourist industry. Mongolia, he said, needs visitors to bring in hard currency. Asian tourists love coming to a place where the air is clear and the stars sparkling, and Mongolia has that. At the same time, though, it possesses a second asset of a very different sort: vast, largely untapped mineral resources. The trick, the minister said, was to grow the mining industry without interfering with tourism--and reforming government to manage such trade-offs effectively.

I returned home, odd as it may seem, to find precisely the same issues facing Wisconsin. At the headwaters of the Wolf River, in the sparsely populated northeast corner of the state, Exxon has discovered one of the nation's largest zinc and copper deposits. Developing it would be an economic boon to the area and to the entire state. If done carelessly, however, it could destroy a place of great natural beauty. Somehow, the state and local entities involved have to figure out how to organize themselves in a way that makes intelligent choices possible.

When policy makers in Wisconsin and Mongolia are struggling with the same issues, something fundamental is going on. In a world where citizens are less forgiving and tax dollars less plentiful than in the past, governments are up against sensitive questions of compromise, balance and organization. In order to handle them, they have launched aggressive management reforms. Whether labeled "reinvention" or known by some other name, these reforms have become a truly global revolution.

In quite a few countries, this process of change has been largely top-down. In New Zealand and the United Kingdom, for example, complex economic problems have prodded their national governments to unleash massive changes, from performance accounting to widespread privatization. American reforms, by contrast, have mostly bubbled up from the bottom, with states and cities leading the way.

Reorganizing government from the bottom up is not only different from much of the global experience, it's probably more difficult. The New Zealand and British reforms, for example, were built on establishing clear central policy goals and devising systems to hold managers clearly responsible for achieving them. Where the powers of governance are divided among so many entities, as in this country, it is a challenge even to establish common goals, let alone impose accountability throughout the system.

After visits to the United States, reformers from New Zealand usually head home shaking their heads and wondering how we manage to get anything done. They are amused by our separation of powers, especially the ability of Congress to frame great issues while providing little clear guidance. They marvel at the political strength of federalism, but gasp at its administrative complexity. Then they happily return home to a homogeneous population, a unicameral parliament and a centralized system, and they wonder how much of what they have accomplished would have been possible in the American environment.

The fact is, though, the complexity of American government reform sometimes masks the reality of how much has been achieved here. In programs ranging from welfare, Medicare and Medicaid to housing and environmental policy, old-fashioned government bureaucracy has yielded gradually over the past decade or so to a much more market-based approach. Without ever explicitly intending to, America has reinvented governance through a broad combination of partnerships among government agencies, among levels of government, and between governmental and non-governmental institutions.

And now an increasing number of reformers from around the world are concluding that the American approach might make some sense after all. New Zealand, widely regarded as the most sophisticated reinvention center in the world, is starting to question some of the assumptions with which it began. The chief architect of the New Zealand reforms, Graham Scott, predicts that "over time, the rest of us will look more and more like the United States."

What Scott means is that the reinventing nations have now moved through the first round of improvement--trimming back what governments do--and are entering a second phase, which focuses on figuring out how to do it better. In this new phase, he concludes, the world will be looking to the American experience of "marginal adjustments rather than sudden and radical change." Scott is taken with the American strategy of partnerships that span an entire governmental system. Other reformers seem to agree, and the more they have to grapple with problems that ignore traditional program boundaries, the more sense the bottom-up American approach seems to make to them.

If Scott is right, it may eventually turn out that American states and localities, without really knowing it, have charted a course for the rest of the world to follow. In that case, Mongolia and Wisconsin will be more in sync than either of them ever imagined.

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