The Politics of Quasi-Government: Hybrid Organizations and the Dynamics of Bureaucratic Control (Theories of Institutional Design)

Promising increased efficiency and superior service, the quasi-government has grown as governmental functions have been delegated to new entities combining characteristics of public- and private-sector organizations. Jonathan Koppell argues that control of public policy is sacrificed when public policy is carried out by such hybrid organizations. Although they may be designed to limit the loss of public control, Koppell suggests that quasi-government should be limited to tasks that are not of critical importance to policy-makers. Cover......Page 1 Half-title......Page 3 Series-title......Page 4 Title......Page 5 Copyright......Page 6 Dedication......Page 7 Contents......Page 9 Figures......Page 11 Tables......Page 12 Acknowledgments......Page 13 Acronyms......Page 15 1 Introduction......Page 17 Why are hybrids of interest?......Page 19 The strange world of the federal quasi-government......Page 20 In search of an analytic framework......Page 24 Hybrid literature......Page 28 2 Building a better model of bureaucratic control......Page 37 Can Principal A secure Preference P from Agent X?......Page 38 Research design......Page 42 Cases......Page 44 Measurement and interpretation......Page 48 3 Administration by regulation......Page 53 Administrative control tools......Page 54 Regulatory control tools......Page 58 Administration by regulation......Page 61 Having the right tools: explaining the control challenge for hybrid organizations......Page 62 Financing home loans with regulations......Page 63 Likelihood of preference satisfaction is lower for Fannie Mae and Freddie Mac......Page 66 Regulating the wild world of venture capital......Page 71 Effective regulation is key......Page 82 Conclusion......Page 84 4 Principal’s preference, organizational structure and the likelihood of control......Page 86 Positive versus negative control......Page 87 Mission-versus non-mission-related preferences......Page 88 Export promotion: implementing administration policy......Page 91 Housing: the challenges of GSE regulation......Page 97 International market development......Page 101 Summary......Page 104 Different control tools......Page 105 Ceding control to the market......Page 107 Competing considerations......Page 108 Implications......Page 110 5 Hybrid organizations and the alignment of interests: the case of Fannie Mae and Freddie Mac......Page 113 The private Fannie Mae and Freddie Mac: GSEs as interest groups......Page 114 The public Fannie Mae and Freddie Mac: GSEs as powerful bureaucracies......Page 117 The best of both worlds: more powerful than agency or private company......Page 118 The alignment of interests around GSEs......Page 119 The alignment of interests around Fannie Mae and Freddie Mac......Page 120 Alignment in action: redesigning a regulatory framework......Page 123 Organizational structure as feedback loop......Page 135 Hybrid organizations: out-of-control or self-control?......Page 136 Tools of congressional control......Page 138 Oversight......Page 139 Hybrids are more difficult to control than agencies......Page 141 Uncertainty in evaluating costs and benefits......Page 144 Off-budget status......Page 148 Use of agents......Page 150 Conflict among goals......Page 151 Hybrids and the politics of oversight......Page 155 Conclusion......Page 156 7 Regulating hybrids: structure and control......Page 158 The Wilson and Rachal argument......Page 160 Applying the argument to hybrid organizations......Page 162 Hybrids do not seem easier to regulate......Page 163 Structural variation in hybrid regulators......Page 164 Concentration of regulatory authority......Page 165 Structure of regulatory agency leadership......Page 170 Scope of regulating agency authority......Page 174 Conclusion......Page 177 8 Conclusion......Page 180 Summary of findings......Page 181 Implications......Page 184 Building a better theory of bureaucratic control......Page 185 Understanding the realities of quasi-government......Page 188 Reinventing accountability in the reinvention era......Page 190 Transparency......Page 192 Controllability......Page 193 Responsibility......Page 195 Responsiveness......Page 196 Accountability in the reinvention era......Page 197 The promise of quasi-government......Page 199 Housing......Page 202 Fannie Mae and Freddie Mac......Page 203 Other housing organizations......Page 207 Department of Commerce......Page 209 Export-Import Bank of the United States......Page 210 Overseas Private Investment Corporation......Page 212 Other export promotion organizations......Page 215 United States Agency for International Development......Page 216 Enterprise Funds......Page 217 OPIC investment funds......Page 220 Interview subjects......Page 225 References......Page 230 Index......Page 251 Cover 1 Half-title 3 Series-title 4 Title 5 Copyright 6 Dedication 7 Contents 9 Figures 11 Tables 12 Acknowledgments 13 Acronyms 15 1 Introduction 17 Why are hybrids of interest? 19 Learning from hybrids 20 The strange world of the federal quasi-government 20 In search of an analytic framework 24 Hybrid literature 28 2 Building a better model of bureaucratic control 37 Can Principal A secure Preference P from Agent X? 38 A study of hybrid organizations in action 42 Research design 42 Cases 44 Measurement and interpretation 48 3 Administration by regulation 53 The tools of bureaucratic control 54 Administrative control tools 54 Regulatory control tools 58 Administration by regulation 61 Having the right tools: explaining the control challenge for hybrid organizations 62 Financing home loans with regulations 63 Likelihood of preference satisfaction is lower for Fannie Mae and Freddie Mac 66 Regulating the wild world of venture capital 71 The limits of regulatory control 82 Regulatory control tools are more difficult to wield effectively 82 Effective regulation is key 82 Conclusion 84 4 Principal’s preference, organizational structure and the likelihood of control 86 Differentiating types of preferences 87 Positive versus negative control 87 Mission-versus non-mission-related preferences 88 Negative, non-mission preferences are most likely to be satisfied 91 Export promotion: implementing administration policy 91 Housing: the challenges of GSE regulation 97 International market development 101 Summary 104 Preference type and the dynamics of bureaucratic control 105 Different control tools 105 Ceding control to the market 107 Competing considerations 108 Implications 110 5 Hybrid organizations and the alignment of interests: the case of Fannie Mae and Freddie Mac 113 Hybrid characteristics and GSE influence 114 The private Fannie Mae and Freddie Mac: GSEs as interest groups 114 The public Fannie Mae and Freddie Mac: GSEs as powerful bureaucracies 117 The best of both worlds: more powerful than agency or private company 118 The alignment of interests around GSEs 119 The alignment of interests around Fannie Mae and Freddie Mac 120 Alignment in action: redesigning a regulatory framework 123 Implications 135 Organizational structure as feedback loop 135 Hybrid organizations: out-of-control or self-control? 136 6 The limits of congressional control: agent structure as constraint 138 Tools of congressional control 138 Legislation 139 Oversight 139 Hybrids are more difficult to control than agencies 141 Challenges posed by hybrid structure 144 Uncertainty in evaluating costs and benefits 144 Off-budget status 148 Use of agents 150 Conflict among goals 151 Hybrids and the politics of oversight 155 Conclusion 156 7 Regulating hybrids: structure and control 158 Can government regulate itself? 160 The Wilson and Rachal argument 160 Applying the argument to hybrid organizations 162 Hybrids do not seem easier to regulate 163 Structural variation in hybrid regulators 164 Concentration of regulatory authority 165 Structure of regulatory agency leadership 170 Scope of regulating agency authority 174 Conclusion 177 8 Conclusion 180 Summary of findings 181 Implications 184 Building a better theory of bureaucratic control 185 Understanding the realities of quasi-government 188 Reinventing accountability in the reinvention era 190 Transparency 192 Liability 193 Controllability 193 Responsibility 195 Responsiveness 196 Accountability in the reinvention era 197 The promise of quasi-government 199 Appendix Background of organizations studied 202 Housing 202 Department of housing and urban development 203 Fannie Mae and Freddie Mac 203 Other housing organizations 207 Export promotion 209 Department of Commerce 209 Export-Import Bank of the United States 210 Overseas Private Investment Corporation 212 Other export promotion organizations 215 International market development 216 United States Agency for International Development 216 Enterprise Funds 217 OPIC investment funds 220 Interview subjects 225 References 230 Index 251 Hybrid organizations, governmental entities that mix characteristics of private and public sector organizations, are increasingly popular mechanisms for implementing public policy. Koppell assesses the performance of the growing quasi-government in terms of accountability and control. Comparing hybrids to traditional government agencies in three policy domains - export promotion, housing and international development - Koppell argues that hybrid organizations are more difficult to control largely due to the fact that hybrids behave like regulated organizations rather than extensions of administrative agencies. Providing a rich conception of the bureaucratic control problem, Koppell also argues that hybrid organizations are intrinsically less responsive to the political preferences of their political masters and suggests that as policy tools they are inappropriate for some tasks. This book provides a timely study of an important administrative and political phenomenon. "Hybrid organizations, governmental entitites that mix characteristics of private and public sector organizations, are increasingly popular mechanisms for implementing public policy. Koppell assesses the performance of the growing quasi-government in terms of accountability and control. Comparing hybrids to traditional government, agencies in three policy domains - export promotion, housing and international development - Koppell argues that hybrid organizations are more difficult to control, largely due to the fact that hybrids behave like regulated organizations rather than extensions of administrative agencies. Providing a rich conception of the bureaucratic control problem, Koppell also argues that hybrid organizations are intrinsically less responsive to the political preferences of their political masters and suggest that as policy tools they are innapproriate for some tasks."--BOOK JACKET 1. Introduction -- 2. Building A Better Model Of Bureaucratic Control -- 3. Administration By Regulation -- 4. Principal's Preference, Organizational Structure And The Likelihood Of Control -- 5. Hybrid Organizations And The Alignment Of Interests -- 6. The Limits Of Congressional Control: Agent Structure As Constraint -- 7. Regulating Hybrids: Structure And Control -- 8. Conclusion -- App. Background Of Organizations Studied. Jonathan G.s. Koppell. Includes Bibliographical References (p. 214-234) And Index. In the aftermath of the attacks on the World Trade Center and the Pentagon, attention was focused on the failings of the private firms charged with securing America's aviation system.