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OCR for page 254
10
Changing Conceptions
of the Governmental Role:
Their Meaning for Urban Policy
Ted Koldene
A discussion in the mid-1980s about the future of
urban policy ought to be set in the context of the re-
thinking now under way in this country about the scope
of the public sector and the role of governmental action.
It is possible, of course, that assumptions from the
recent past will hold, indefinitely or at least through
the 1980s and l990s, and that the discussion about a
national urban policy can be picked up where it was left
in the late 1970s. But, as this paper will argue, there
are reasons to believe the earlier assumptions will not
hold . . . and that the country is, in fact, in a tran-
sition to a new set of ideas about the nature of public
issues and about the process of social action.
THE OLD ORDER AND THE REALIST CRITIQUE, AFTER 1880
In the effort to understand the way in which the
ideas about government and private institutions are be-
ginning to change in this country, it is probably an
error to look back only to the 1930s. Fifty years ago
the transition from one idea-system to another was in
midstream. To find its beginnings we really need to
look back 100 years, to the period beginning about 1880.
After the Revolution the forces interested in a
stronger central authority established a new set of in-
stitutions of governance, roughly in the period between
the Philadelphia Convention of 1787 and the end of the
initial Supreme Court tests of the new Constitution,
about 1820. After that, the ideas of Jacksonian democ-
racy eroded the initial structure of the Hamiltonian
state. So, after the Civil War, this country's
254
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255
industrial revolution occurred in a period in which the
dominant ideas favored a limited national government and
a free and unrestricted scope for private enterprise.
By the 1870s the rise of a business civilization was
creating a set of important social problems. A Realist
critique. of business activity--in the journals and in
the political speeches of the time--was raising a demand
for reform. But the failure of the Granger cases estab-
lished the weakness of state action against industries--
banking, railroads, steel, and oil--increasingly na-
tional in scope. Reform was blocked by the power of the
old order; by a Steel chain of ideas. about the role of
government and the limits of social action (Goldman,
1952).
The struggle to find a new idea-system that would
open the way to the needed reform took about 30 years.
The breakthrough came with the publication in 1909 of
Herbert Croly's The Promise of American Life. Here was
.
the conception of The Hamiltonian state used for Jef-
fersonian ends, of the national state stripped away
from the control of the rich and powerful, made truly
democratic, and used in the interests of the common
people. Theodore Roosevelt invited Croly out for a
talk, bought the idea, and in the summer of 1910 took it
to the country, beginning with the address to the Grand
Army of the Republic at Osawatomie, Ransas (Roosevelt,
1910). It was the Anew Nationalism. speech. The HI
stand for the Square Deal. speech. The ~T regard the
executive as the steward of the public welfare. speech.
It was the great modern American political speech.
The Republican party at that moment had the future in
its hands--abd it rejected Roosevelt in 1912. But the
idea of the powerful national government survived. It
was adopted by Woodrow Wilson as The New Freedom.:
revived by Franklin Roosevelt as The New Deal. and
continued by Harry Truman as The Fair Deal,. by John F.
Kennedy as The New Frontiers; and by Lyndon Johnson as
The Great Society..
-
THE HOLD ORDER. AND THE REALIST CRITIQUE, AFTER 1970
Today that idea of the powerful national government
is itself the subject of a realist critique. The poli-
cies and the institutions that it put in place, and that
were the reforms of the past 75 years, have in time run
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256
through their own life-cycles and have become now the
target of a new effort at reform. Programs and projects
are under criticism for their effects; and Good inten-
tions~ is no longer an effective defense.
Policies and institutions, vital when they were new,
have settled into maturity. There is a new set of prob-
lems, now, having to do not so much with growth as with
change. Attitudes and values have shifted. There is a
reduced confidence that issues are best handled as na-
tional problems, by political decisions, in the adminis-
trative and regulatory programs of the public sector, or
through the professional service institutions that gov-
ernment finances.
No new idea-system has yet emerged to take the place
of the New Nationalism, however. So the problems, and
the question of how to respond to the problems, continue
to be debated within this traditional paradigm. The
question What shall we dorm continues to be the ques-
tion What will (or should) government do?. And What
should the President proposed
But in recent years government has been constrained
in its financing. Its response has oscillated between
cutting programs or benefits and raising taxes or
charges; year by year giving the public less for more.
Everyone is aware that another possibility exists to
make some kind of fundamental change in the way things
are done. But (certainly not in the context of the 1984
presidential campaign) no one has been able to find the
way from The idea of new ideas. to the new ideas them-
selves. The studies under way are not so much efforts
to design new approaches as they are efforts to measure
the present distress. Within the public sector the im-
pulse is still toward refinancing, not toward system
change. We continue, as Everett Carl Ladd has said,
in-between idea systems. (Ladd and Lipset, 1981).
In this crisis the private sector is ambivalent;
caught in a dilemma of its own making. Business corpo-
rations, like the private and community foundations,
have made a strong commitment to help in the solution of
major social problems. But both have drawn back from
the strategy of refinancing: Businesses and foundations
are emphatic that the private sector cannot close the
gap, and the arithmetic is Inarguable.
Neither business nor philanthropy has developed an
alternative strategy for maintaining and improving pro-
grams and benefits--for solving major social problems--
in this period of fiscal constraint. No strategy, that
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257
is, that looks toward major system change.
For the moment most of the effort is nonstrategic--
much activity with public-private partnerships, on par-
ticular problems in particular places. These are well
motivated and useful in themselves, but essentially epi-
sodic, changing nothing fundamental.
The question of a strategy will return, especially as
the desire reappears for an effort to restore the ear-
lier level of public-sector spending. If the private
sector ends up caught between its commitment to social
needs, on the one hand, and an opposition to higher lev-
els of spending (public or private) on the other, it may
then move--as it is moving now with respect to the prob-
lem of health care and health-care costs--toward a
strategy of major institutional restructuring.
PRAGMATI C RESPONSES
We are therefore in a period of transition. The idea
about social action embodied in the New Nationalism re-
mains the dominant idea. It has been damaged by the
critique to which it has been subjected. But it remains
the framework for thinking and talking about the need
for action in our society since no other idea has
emerged to replace it (Kuhn, 1962).
Other types of action are, however, emerging, so far
without a theory to explain them: local action rather
than national action; private rather than governmental;
nonprofessional rather than professional; pro-competi-
tive rather than regulatory. In August 1982, for exam-
ple, the mayor of Seattle in a talk to the National Con-
ference on Government spoke in the conventional terms
about government having folly two choices:. to cut pro-
grams or, if that is resisted, to raise taxes. That
same day, however, the Seattle newspapers reported the
mayor had accepted a proposal to improve the refuse-col-
lection system that would double the number of collec-
tion districts in order to reduce the size of each dis-
trict, in order to increase the competition among haul-
ers for the work, and in order to lower the bid price to
the city. In particular terms it was an action easy to
describe and easy to explain. What word was there to
describe it as a general strategy?
There are similar, and much larger actions, being
taken all through the system; again, as practical re-
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258
sponses to particular problems. There is as yet no
general theory. For example:
· Aggregate energy use in the United States was at
about the same level in 1982 as in 1972. Changes in the
way we operate our industrial system, transportation
system, space-heating system, and the like have broken
what was once thought to be an unvarying relationship
between GNP and energy consumption. A very large task
was accomplished, through a very large number of indi-
vidually small (and largely private) decisions, influ-
enced in some respects by government.
o The health care system is gradually beginning to
of the message business.
_
change, not through public regulation so much as through
the decisions of those who pay the costs to look for new
and more economical ways of curing illness and of main-
taining health.
· The delivery system. has been radically trans-
formed. The Postal Service now handles about 20 percent
_ A private system, United Par-
cel Service, now handles more than half the parcel busi-
ness. Taken off its political appropriation in 1970 and
required thereafter to earn its revenues, the Postal
Service has been transformed into an increasingly ag-
gressive and service-oriented competitor; now (for bet-
ter or for worse) a major advertising medium.
· The reality of service, revenues, and costs in the
suburbs is beginning to work a major change in the tran-
sit systems of major urban regions. The conventional
vehicle--the large bus with full-time driver, on regular
routes and schedules, owned and operated by a regional
public agency--has been giving way to a more diversified
system, with smaller vehicles and part-time drivers, on
flexible routes and schedules, often organized by subur-
ban municipalities and owned by private operators, and
simply coordinated by regional transportation-planning
bodies.
CEANGING IDEAS
The reappraisal of the traditional system of decision
making and service delivery and the thinking about new
arrangements for the organization, financing, and deliv-
ery of services are being driven by a set of different
ideas, converging at about the same point in time. In
desperate brevity, these may be identified:
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259
1. The idea of decentralization, Revolution, and the
sharing of power. The basic wisdom that in a period of
change and uncertainty there is safety in a relatively
larger number of relatively smaller decisions. The im-
pact of quality circles and worker participation in the
business management literature. The particular applica-
tion of this to neighborhoods.
2. A powerful strain of antiprofessionalism, which
now perceives ~services. as a way to disable citizens in
order to manufacture an ever-expanding stream of jobs
and income for those trained and certified to practice.
A considerable cynicism about those proposing to do good
for others, for pay A growing interest in self-help
and mutual-help.
3. A growing interest in conservation and prevention;
perhaps rising out of the environmental movement and its
sense of a limit on resources. An interest strate-
gically in reducing the demand for services; visible
now, for example, in the effort to reduce the use of
medical services through life-style change.
4. A ~massive. decline in public confidence in insti-
tutions. A growing opposition to ~megastructures.
whether in government, business, religion, or other
fields. A renewed sense of the importance of family and
neighborhood and other Mediating structures..
5. A concept of Regulatory failure.--paralleling if
not replacing the sense of Market failure. that in ear-
lier years drove the expansion of public-sector regula-
tion and administration. Ralph Nader and Common Cause
helped build this attitude; but the concern about the
possibility of the Hamiltonian state falling again under
the control of the Hamiltonian interests was a theme
throughout the reform movement that followed the
Osawatomie speech (Goldman, 1952).
.
.
. . .
6. An awareness of the need for greater productivity,
enforced by the revival of competition within the domes-
tic economy and the pressure of foreign suppliers; rais-
ing questions about the need for improvements also in
the services produced by the public sector.
7. A new set of questions about equity as those who
genuinely cannot afford to pay see the services impor-
tant to their welfare cut back, and begin to ask why
money is spent to provide those services free to others
who can afford to pay. Public managers, anxious to
maintain their revenues, may also come to see low-price
policies (as in transit or in public universities) as
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260
unnecessary subsidies to middle-income persons, and sup-
port a policy of pricing the service more fully.
8. An understanding of the revival of capacity in
political institutions, especially at the state level
and including the reform of state legislatures stimu-
lated by the Ford Foundation and Carnegie Corporation
from the 1960s on. Meanwhile, a shift in the business
community toward a preference for issue-management at
the national level.
9. An appreciation of the way that even large, ma-
ture, bureaucratic institutions can be fundamentally
changed by the forces set loose by technological and
business innovations: the way UPS changed the Postal
Service; the way the communications satellite broke up
the broadcasting industry; the way the certificate of
deposit and the money-market fund altered the savings
and loans industry; the way the health maintenance or-
ganization has induced doctors to reduce their use of
hospitals. Next: The way the computer and laser/
video-disk changed education?
10. A growing interest, as a result, in the potential
of competitive, market, or Choice strategies for stim-
ulating change in public-service institutions, when
change has proved difficult or impossible through the
process of public administration and political voting.
11. The idea--embedded in the Boulder decision (Com-
munity Communication Company, Inc. v. City of Boulder,
102 S.Ct. 842 (1982))--that municipal governments may
not grant monopolies and suppress competition without
fear of prosecution under the antitrust laws, simply
because they are municipal governments in possession of
a home rule charter or because general state law autho-
rizes them (for example) to Regulate taxi service..
The Supreme Court decision has been praised by people
who would like to break into what had been ~closed. mar-
kets for cable television, transportation, refuse col-
lection, and other city services. It has sent a chill
through city governments and city officials, both ex-
posed now to prosecution, and led them both to their
state capitols and to Congress for laws reestablishing
their immunity.
12. A recognition that some time in the 1970s, with
the tax-protest referendums in the states and the elec-
tion of conservative national governments both in Amer-
ica and in Europe, something fundamental changed and
that the traditional American liberal idea must find
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261
some new and creative response (Kahn, 1981).
More and more efforts are now under way to arrange
these ideas into some kind of general theory, and strat-
egy, that is effective and acceptable as a basis for
action on the problems now facing the country.
One such effort was undertaken in Congress, which
began work on the problem of the deficit while the spot
light of political attention was focused on the presi-
dential campaign. Awe are trying to continue the tradi-
tional commitment of the (Democratic) party to fairness
and equity,. said Christopher J. Matthews, an aide to
Speaker Thomas P. O'Neill. Cat the same time, we're
acknowledging and dealing with the fiscal crisis in the
country (New York Times, 1984).
The Horizons report of the International City Manage-
ment Association (1978) was a fairly early effort to
come to grips with changing resources and a need to
change the definition of public action. The initiative
in 1982 by Peter Peterson, chairman of Lehman Brothers,
for a means-testing of the entitlement programs had some
limited success and surfaced an issue and a policy re-
sponse that remains on the table for discussion.
Research institutes, such as SRI International and
the Rand Corporation, have been exploring the potential
for ~nonservice. alternatives and benefit-based finan-
cing.. With support from the Department of Housing and
Urban Development, the International City Management
Association has just completed a major survey and analy-
sis of alternative approaches to service delivery in
American cities and counties (Valente and Manchester,
1984).
There has been a large, if still somewhat aimless,
movement by business into public-private partner-
ships.. The formation of the Independent sector. re-
flects a new aggressiveness by nonprofit organizations
that operate social programs as well as by those that
are involved in philanthropy.
The books are beyond counting: Samuel Brittan's The
Role and Limits of Government (1983), most recently.
-
Alan Pifer, formerly of the Carnegie Corporation, is at
work on a study of future directions of federal social
policy for the National Conference of Social Welfare.
The Organisation for Economic Co-operation and Develop-
ment held a conference in 1982 on The Welfare State in
Crisis, and the Ford Foundation is now beginning its
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262
own rethinking of this same now-popular subject.
CHANGING POLI TI CS
Much of the current rethinking had begun before the
turndown of federal assistance began, in the middle of
the Carter administration (Shannon, 1982). But it was
considerably accelerated by the recession that began
that year and then by the election of a Republican na-
tional administration in 1980 . . _
the policy direction taken by the new Reagan administra-
tion.
Through what it has done and what it has not done,
the Reagan administration has provided the opportunity
and the incentive for this reappraisal to develop. How-
ever limited in their own success, these efforts--to
eliminate the program ~dwarfs,. to shift urban policy
from (as has been said) a focus on places to a focus on
people, to block-grant the programs and to shift respon-
sibility back to states and localities, to restrain the
growth of domestic program spending, and to stimulate
the private sector to take a greater initiative--have
encouraged the rethinking now under way.
The Policy of the current administration to cut back
. and, of course, by
-
the domestic programs of the national government (Office
of Management and Budget, 1984) has brought more sharply
into focus certain advantages of a strategy that relies
on a Revolution of the responsibility for action--
downward, from the national government, and outward,
from government to private institutions. These seem
most critical:
o The public use of the private interest. . . . a
strategy of levering change through the operation of
markets . . . is more effective for distributing the
hardship associated with change than is the process of
political voting (Schultze 1976).
Live rule against doing direct harm..
There is an effec-
The ~harm. that
is usually associated with change is politically tolera-
ble if it is a second-order consequence . . . a result
of forces at work, even if those forces were themselves
set in motion by political action.
· The decentralization imposed simply by the absence
of national action has placed responsibility in institu-
tions that have both a greater capacity to deal with the
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263
problem of change and a tighter discipline in the use of
resources. It is the state legislatures that create and
re-create the systems of urban governmental organization
and finance, and that make the rules that govern the
major ~life-support. systems of the urban regions. And
the requirements in their constitutions for a balanced
biennial budget gives them an incentive for economy and
for innovation not present in a Congress always tempted
by the discretion it has to continue the deficit.
· This de facto decentralization also moves the deci-
sion making away from the national capital, where action
especially of the sort that would ado direct harm. tends
to be constrained by the short-term considerations en-
forced by the intense media coverage and by the power of
the organized interest groups.
· A Revolution of responsibility will also permit the
national government to concentrate its attention on
those central questions that can be settled only at the
national level foreign affairs and defense; the man-
agement of the economy; the protection of civil and
human rights; the making of basic social policy. It ~
not necessarily true that a growing complexity requires
a greater concentration of authority at the center: It
may be quite the opposite.
A POSSIBLE STRATEGY
All of the above represent the pieces that may some
day be assembled into a new ~construct. for public ac-
tion; one that will make it possible for this country to
continue its progress toward fairness and equity while
opening the way for the reform that is needed in the
institutions of government and in our (in the broadest
sense) public service systems.
At the moment, however, the discussion is stalled.
The presidential campaign failed to clarify the issues;
its preoccupation with power and personality and fi-
nances being perhaps as much the responsibility of the
journalists as of the candidates. Probably, clarifica-
tion will have to come from others, on the outside, with
respect to all three major questions: What do we mean
when we talk about government Doing something? What
should be the role of the private sector? To what ex-
tent can the urban problem be effectively handled by
institutions below the national level?
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264
What Government Does
In the discussion about what government does, and
should do, few things are as confusing as the term ~pro-
viding.~ Clearly, two very different ideas are in-
volved. One has to do with the policy decision that a
benefit or service will be made available, to whom and
at what level. The other is the actual arrangement for
its organization and delivery. The first is truly the
provision. The second is the production.
If a government decides that a service should be pro-
vided it may then also decide to produce that service
itself. But, equally, it may not. It may arrange to
have that service produced by others. This can be done,
of course, through contracting, whereby government it-
self pays for the service it has decided to provide. It
occurs, as well, when government decides to provide a
service simply by requiring it (as city governments com-
monly provide us with clean restaurants by requiring
their owners to keep them clean and by closing those
that are not, the public paying only for the cost of the
inspection).
So: The national government provides eligible veter-
ans with hospital and medical care and produces those
services through its Veterans Administration medical
centers. It has at times provided veterans also with a
college education, but bought those educational services
from a wide variety of other producers--colleges and
universities, public and private, which it does not it-
self own.
Put another way: The essential function of govern-
ment is to Make a market. for some service or public
action, sometimes through a financial commitment and
sometimes through regulation. Much of the confusion in
our discussion about the public sector, and many of our
practical problems, grow out of the tendency to think
that the government that has thus Made the markets must
then also serve--or, even worse, monopolize--that market.
When a governmental body is both provider and produc-
er its elected officials are in a dual role--responsible
both for policymaking and for administration; monopoly
seller to themselves as monopoly buyer; required to
identify with two groups of constituents--their voters
and their employees. The conflict between these roles
was perfectly reflected in the comment of a county com-
missioner in the Twin Cities area during the recession
in 1981. She was explaining the county board's inabil-
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266
decision of the user of the service, providing the re-
cipient either with money or with a promise-to-pay which
he or she can then take to the supplier of choice. Here
the vendor-selection decision becomes a private and non-
political decision.
In one form or another this strategy of introducing
competition--of seeing itself increasingly as a strong
and skillful buyer--is now in front of every govern-
mental body in every urban region. It is enormously
complex, and intensely controversial. But the contro-
versy itself is an indication that ideas are changing.
So it is essential to have the idea discussed and, as
the discussion proceeds, to avoid several serious mis-
conceptions.
The first misconception has to do with equity. It is
important to understand that the strategy of competition
among producers retains, rather than sacrifices, the
essential social-policy role of government. A service
does not become a private service when the governmental
body decides to have it produced by a private organiza-
tion, when a county board, for example, contracts for
the management or operation of the county hospital, or
even when it sells the hospital and buys care in the
community hospital system. That service is ~privatized.
when the county abandons its commitment to the medically
indigent and turns them back on their own resources.
The equity issue, in other words, occurs fundamentally
in the question of what is provided.
(There Is a strategy of privatization, in which gov-
ernment withdraws as--in our terms--the provider and
turns back to citizens both the decision whether some-
thing shall be done and, if done, the responsibility for
paying for it. What seems under way at the moment is a
kind of creeping privatization, as fees and charges are
gradually introduced for a variety of services on the
principle, discussed earlier, of seeking payment from
those who can afford it and reserving the limited public
support for those who genuinely cannot. It is interest-
ing that several programs are arriving at the same point
from the other direction as public support--for example,
for winter residential heating or for electric power--is
introduced into utility services that were traditionally
decided on and paid for privately.)
The second misconception has to do with the purpose
of contracting. It is not to substitute an ~efficient.
private organization for an ~inefficient. public bu-
reau. The former is not inherently more efficient than
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267
the latter, and neither is likely to be efficient if
allowed to become the sole source of supply. Nor is the
idea necessarily to contract out. A public body may use
another governmental body to produce a service. The
existence of two levels of front-line local government--
municipalities and counties--in a good many metropolitan
regions offers considerable potential for this arrange-
ment. Or it may establish a contract relationship with
a group of its own employees organized on the model of
an enterprise. Such an arrangement was proposed this
year to the city of Saint Paul and Mayor George Latimer
by the Rand Corporation and is now being implemented.
Some public school principals and some school teachers,
similarly, have expressed an interest in having a con-
tract relationship with their school district or
school.
The third misconception has to do with the standard
of comparison, which should be the same for the service
produced by the governmental body directly and for the
service secured from others. The problems that can
arise with the contract operation can arise equally
within the public bureau, from the problem of corruption
to the problem of service ~creaming.. All of the ap-
proaches, including the public-bureau approach, should
be equal ~alternatives..
Finally, the change must be given time to work. It
took several decades to accomplish the transition into
the larger role for the government laid out in the pro-
grams of the New Nationalism. It will take several
decades to make the transition to a competitive public
sector.
Competition, and the principle of choice from which
it emerges, is central in the new kind of public sector
now being debated. Somehow, if it is really to change,
the public sector must find a way to create the dynam-
ics--the incentives and the opportunities--that will
stimulate innovative people to try out the ideas they
have for doing things differently and better. This is
the point of a more open, less monopolistic system.
The American public wants the public sector changed.
The best readings from the surveys of opinion show that
the public does not want to retreat from the commitment
to the high-service state (Ladd and Lipset, 1981 Ladd
and Wilson, 1981). But it does want the government to
perform more effectively.
The problem lies--in the terms we have used here--
partly in the provision of benefits and services (the
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268
means-testing of Social Security and other programs, for
example), but largely in the effectiveness and efficien-
cy of their production.
struction and revitalization of the old public-service
organizations comparable to the reconstruction and re-
vitalization being forced on many of the major privately
owned systems: the effort, frequently by government
through statute or through the courts, to open up the
railroad industry, the trucking industry, the airline
industry, the banking industry, the communications in-
dustry, the health care industry to the forces of compe-
tition, as a way of stimulating innovation and restoring
productivity. One of the interesting and important
questions today is why a private sector that is being
subjected to these pro-competitive policies by govern-
ment is itself, with respect to the public sector and
public services, so essentially protectionist.
The need is for some recon-
What the Private Sector Does
Institutions seldom change fundamentally in the
absence of pressure from the outside. And as we have
seen, there is little disposition currently within the
public sector to change. The variables are money and
program: more of one, more of the other; less of one,
less of the other. The way of doing things does not
change.
So the question is: What is the pressure from the
outside. that might now stimulate such change? A will-
ingness (if it can be created) on the part of elected
officials to move to a competitive strategy on the buyer
side of the public-service market will be a necessary
condition for this change. But even this will will not
itself create the change. For that to occur, there must
also be a diverse set of competent vendors eager to ven-
ture into the public-service markete
And where are these to come from? Probably they will
in most cases have to come from the private sector.
Only a few business firms are at the moment showing much
eagerness to venture into the public-service market, or
even to involve themselves deeply in the question (and
the controversy) about institutional change in the pub-
lic sector. But more may do so.
A private-sector strategy would have two dimensions
to it. One would involve the major private institutions
in a policy role, in the discussion about the future of
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269
the public sector. Business leaders (whom John Gardner
calls The great signal-givers.) would be giving signals
that the need is for Spending smarter and that a com-
petitive challenge to the existing way of doing things
must be the strategy for change. Foundations would be
financing fewer projects that curse the darkness and
more that attempt to light a candle.
The other dimension would involve an operational
role. Business firms and nonprofit organizations, large
and small, would be organizing new ventures into the
public-service field, initially not so much because
these could be commercially viable as because they would
provide the needed leverage for change.
Some thinking of this sort has begun. Perhaps the
best example is in a memorandum and proposal to the
management of General Hills, Inc., from its former
direc- tor of strategic planning, Verne Johnson. In
summary, this was his analysis:
· The discontent with government performance is now
at a serious level. Elected officials, unsurprisingly,
have been responsive to this public mood. Public man-
agers are dismayed and demoralized by this change, hope
the mood is temporary, and are attempting essentially to
Pride out. the storm. Their reluctance to change the
nature of their operation in basic ways ensures that
lower levels of spending _ translate into reductions in
the level of service.
· The private sector has for years been accustomed to
delegating the initiative and the financing responsi-
bility for social problems to government. It is con-
cerned about the social programs, but uncertain that it
wants to see its own role enlarged and unclear about how
it might be effective.
· Private roles as well as governmental roles will
therefore have to change. Private institutions will
have to become more active and more effective in public
policy issues. Giving must increase: The average of
less than 1 percent of earnings for the major firms is
indefensible. Substantial efforts must be made by busi-
ness to strengthen the capacity of the nonprofit organi-
zations that are major producers of public services for
the public sector. This can perhaps be done through
private-private partnerships that blend the corpora-
tions' strengths in capital and management with the
strengths of the nonprofit organizations in commitment
and in knowledge of the service field.
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· This involvement will demand a new rationale. The
expectation of future profits is one possible ratio-
nale. Another, perhaps more practical, is for the busi-
ness firm to broaden the definition of philanthropy be-
yond the writing of checks, to include a businesslike
venture undertaken with a less-than-competitive return
on investment.
Johnson's proposal was accepted. General Mills did
organize (jointly with a major operating foundation in
the Twin Cities area) a venture into the design and
development of alternative systems for the long-term
care of the frail elderly, which is now under way.
What The City. Means
Urban policies and urban programs need to be founded
on some situation of strength. Too often, in the recent
past, the municipal city has not been an adequate base
of political, intellectual, or financial strength. Nor,
for different reasons, have the states been. Most of-
ten, in recent years, the national government has tried
to be that base of strength. Now, it is less able and
less inclined to provide that support.
Taken as a whole, however, the urban region is itself
a center of the resources needed for successful policies
and programs. Much of the country's political and
intellectual leadership, and much of the financial
strength, is precisely in these regions, where 75
percent of the population lives.
We have not built on this foundation during the
period when Turban policy. was assumed to mean the
Turban policy of the national government.. We can move
to this base represented by the strength of the urban
region, however, and probably will, as the federal
government withdraws.
There is, of course, a dimension of Turban policy.
that must deal with the relations between and among the
major urban regions. This intermetropolitan dimension
will have to be the responsibility of the national gov-
ernment. But many if not most of the issues of urban
policy do arise on the intrametropolitan dimension with-
in particular urban regions. If most of these issues
could be handled effectively at that level, the national
government would be in a better position to deal with
urban-policy issues at the national scale.
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Institutions for Issue-resolving
Most metropolitan areas are not now well organized
for intrametropolitan cooperation. Most consist of a
combination of county and municipal governments that are
usually overlapping, legally and politically independent
of each other, frequently competing; they make deci-
sions, run programs, and build projects without much
coordination among themselves or by any governmental
organization with jurisdiction over the region as a
whole.
In the 1960s and 1970s the national government in-
duced the creation of a parastructure of planning coor-
dination through requirements attached to the grants-in-
aid going to urban local governments (Executive Order
A-95). The theory was that the executive agencies of
the national government would not approve requests for
projects found by these review agencies to be inconsis-
tent with their area-wide plans.
In practice, few proj-
ects were ever found to be inconsistent with area-wide
plans--not surprisingly, since the area-wide agencies
were usually required to be composed of the local gov-
ernments submitting requests. In 1981 the executive
order was withdrawn. Most of the review agencies have
been cut back.
Some have disappeared. Most have
changed their function, becoming service agencies for
the local governments.
The initial effort to coordinate the intrametropoli-
tan dimension of urban policy was founded on an essen-
tially municipal definition of the ~city.. This ~munic-
ipal. definition was politically realistic--and ineffec-
tive.
A new effort to assert the real and legitimate inter-
est of the national government in the effective gover-
nance of the urban regions should rest instead on a
metropolitan definition of The city.. And the strategy
for bringing into being the governmental structure or
process needed to set and to implement an urban policy
within a metropolitan region should be a strategy that
moves through the powers of state lawmaking. It is the
states, after all, that have the power to create real
urban governmental structure; and of the 50 largest
metropolitan areas, in which more than half the American
population lives, all but 8 are wholly or substantially
within the borders, and therefore within the political
jurisdiction, of a single state.
For the federal government this will be an exercise
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in diplomacy, extending what states are already doing.
And in this effort it should seek the support of the
private sector. Private institutions are more likely
than the localities to understand--as did the organizers
of the Town Meeting for Tomorrow in Hartford, Connecti-
cut, in 1964 (and the Kellogg Company executives in
Battle Creek, Michigan, in 1982)--that the competition
most critical for their success is competition among the
metropolitan regions, not between the municipalities
within a region.
Institutions for Issue-raising
The effort to strengthen the system of governance at
the state and local level should recognize that the gov-
ernmental institutions for issue-resolving will be only
as effective as the institutions in an urban region that
perform the function of issue-raising. Because these
will in most cases be nongovernmental (the newspapers,
local magazines, radio and television stations, research
and policy studies organizations, advocacy groups, dis-
cussion clubs), their creation and sustenance will de-
pend on the understanding and support they can secure
from the private sector. Many will be new and nonprofit
organizations, often citizen based and specializing in
the effort to understand the problems and opportunities
of the region and to suggest what should be done about
them. It is dangerous work--raising the questions that
local policymakers would prefer not to see raised. It
can seldom be done by business firms (especially by
chief executives) or by foundations directly.
PROSPECTS
We do seem to be going through a basic change in the
conceptions of government, of the private sector, and of
the process of social action that took form about 1910.
The rethinking that produced that conception called the
New Nationalism took perhaps 30 years. If we set the
beginning of the current rethinking in the 1960s, we
would seem to be, as of 1984, just past half-way along.
Clearly no new conception has crystallized yet. Much
of the activity is still a tearing down of the structure
of preexisting ideas. Some of the materials of what may
be the new structure are appearing, but they have yet to
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be assembled.
So, of course, there is no new ~osawatomie speech.
yet being given. Perhaps it is a comment on the strength
of the traditional ideas that we tend still to look to
politics for this speech . . . for this leadership. If
the need is now for a reconstruction of the institutions
of the public sector, perhaps the initiative will come
not from a political figure but from someone or from
some organization somewhere in the private sector. Per-
haps our tendency still to look to the candidates for
president is itself a symptom of how little our rethink-
'~y ~~ come co grips warn One possibility that for the
adaptation now required in our institutions the key con-
cepts will have to be something other than governmental,
national, and executive e
Our system of political reporting still focuses
heavily on, and reinforces, precisely those three con-
cepts. But it is beginning to adapt. For some years
now Neal Peirce has been covering state and local--and
private--issues and actions successfully on a national
basis (though his column does not appear in the leading
Washington newspaper). National newspapers, and the
emergence of new satellite-based national ~networks. of
television programming, are gradually forcing local
newspapers and local broadcast stations away from the
coverage of national and international affairs, where
they are now at a marked disadvantage, and toward the
coverage of their own communities in which they retain a
competitive advantage.
One possibility, frequently raised, is that a revival
of economic growth will relieve the pressures on govern-
ment revenue and will permit a refunding of the tradi-
tional system of benefits and services.
(Or that, even
without a growth in the underlying economy, a shift to a
sales or value-added tax at the national level might so
increase government revenue as to permit a restoration
of earlier levels of spending.) Would this not erode
the interest in change and in fact make the ~adaptation.
unnecessary?
It might. Certainly a flow of new revenue would re-
move some of the pressure on elected officials to think
about new and different ways of doing things. The ques-
tion is whether this increase in revenue for domestic
(and urban) programs is really likely, either from eco-
nomic growth or from a shift to a consumption-based tax,
given international competition and the obligations of
the national government in other areas, which are forc-
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ing policymakers in Washington toward a three-part
strategy for coping with the projected deficit: cuts in
defense spending, cuts in domestic spending, and tax
increases.
Even if it did, however, two problems would remain.
One is the reality of change, even (or especially) in a
growing economy, and the question whether change can
best and most easily be made through a process of polit-
ical-governmental decision. This is the essence of the
debate about an industrial policy. The other is the
question of effectiveness and of values: The avail-
ability of more money for medical services is likely to
intensify, not to diminish, the questions about change
in that system; and additional revenues that improve
neither the relationship between teachers and adminis-
trators nor the relationship between teachers and stu-
dents may not diminish, either, the questions about
change in education.
What is probably needed next, more than anything, is
a broad discussion throughout the country that looks
directly at the possibility that we are indeed moving to
a new and different conception of governance; that
sharpens the fundamental issues involved; and that fo-
cuses on the incentives and opportunities that need to
be opened up to speed the introduction of the new and
different ways of doing things, whatever these may be.
In such a disciplined process of thinking-through
this problem, in the public sector and in the private,
it ought to be possible to address constructively and
creatively questions both about what government can and
should provide and about what government can and should
produce, and to do this in a way that reconciles the
need both for equity and for effectiveness and effi-
ciency in the system.
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1983 The Role and Limits of Government: Essays in
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Bureau of the Census
1984 Population of the Largest Metropolitan Areas.
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Minneapolis: University of
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Goldman, Eric F.
1952 Rendezvous With Destiny, A History of Modern
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Kahn, Alfred
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Representative terms from entire chapter:
national government
