I usually write exclusively on development and developing countries. I recently authored an article on the US federal budget process, however. The Association of Schools of Public Administration referenced it in discussing the debt ceiling debate/debacle.
I think there are some lessons about fitting reform to context in this piece. The lessons speak to the importance of theorizing both the reform and reform context to ensure you have the proper fit for a governance problem. When one theorizes the American context, focused on the logics driving political decisions, I come to wonder if any solution does fit.
Let me get to the blog piece. Apart from some fun figures (see here) I also liked the blog title: "The Budget Deal: A Repeat Phenomenon?" (http://aspanational.wordpress.com/2011/08/04/the-budget-deal-a-repeat-phenomena/).
It could also have been titled, "Governance Gaps in US Federal Budgeting: Gaping and Growing despite Reform." Or it could have kept the original article title, "The illogics of Federal Budgeting and Why Crisis Must Come." (http://onlinelibrary.wiley.com/doi/10.1111/j.1540-6210.2011.02352.x/abstract). All of these titles show how well the story line of US federal budgeting reform relates to the problems of governance gaps in developing countries. Consider some of the observations I think are relevant:
- US budget reforms have been numerous in the past decades, just like they have in developing countries: Federal budgeting reforms since 1912 have included steps to introduce executive budgeting and fiscal rules, PPBS, ZBB and PBB and PART, the formalization of internal audit in agencies, process computerization, adoption of long term planning, and more. One could call the last century 'The period of great budgetary reform in the federal government' (Let's call it 'The Period').
- The US federal budget performance seems to have gotten worse in spite of these reforms, as it has in many developing countries: Interestingly, the country's fiscal sustainability problem has worsened in this 'Period'. Deficits have been more prevalent since these interventions than before. Federal spending has exceeded revenues in 75 percent of the years following the 1921 Act that introduced executive budgeting as a solution to spending problems, for instance, compared with 38 percent of the years between 1792 and 1920. Spending exceeded revenues in 16 of the 20 years after the 1990 Budget Enforcement Act (BEA) introduced measures to control deficits in the late 1990. Deficits exceeded 3 percent of GDP in eight of the twenty years since 1990’s BEA, reaching such levels only 26 times in the prior 198 years (13 of which related to wars).
- Reforms that seem poorly fitted to the US context are constantly proposed, as they are in developing countries: Executive budgeting is an example. How can one have an executive driven budget as the 'solution' in a country where the Constitution gives Congress responsibility for budgeting? How can one think that fiscal rules will work in a country where politics is competitive, flexible and dynamic?
- The country ends up being dependent on short-lived 'deals' as fixes to immediate problems, even though these offer no longer term solution--as one sees in many developing countries: Short term fixes like the recent agreement between President Obama and the Congress are like band aids on a corpse. The agreement between President Clinton and the Republicans was not much better--a bandage, perhaps--and did not ensure the sustainability of budget surplus (a major short run achievement though that was).
- In many ways reforms and agreements are really just signals intended to suggest that those in authority are trying to provide governance solutions--as they are in many developing countries: Beyond the signals, the interventions have limited effect--either holding for short periods only or penetrating the budgeting system superficially. Writing over twenty years ago, Aaron Wildavsky noted that we cannot even imagine what a budget reform would look like that penetrated further, disrupted politics, and forced real change where it is really needed.
These observations could be made about reform in many developing countries. It is often nothing more than a repeated game of signaling an intent to govern better while preserving the status quo. In the United States that status quo is a complex one that I think may prove ungovernable. I say this simply because it is informed by a set of principles or logics that interact in ambiguous ways.
- The first logic is reflected in the doctrine of Separation of Powers. A system of checks and balances allows each branch to restrain abuse by the others. Federal budget preparation and oversight is the responsibility of Congress, for example, but execution rests with the executive. The system purposefully fragments power, which inevitably fragments accountability as well. This makes developing a budget--or a budget reform--problematic. Who is accountable for the overspending? Who is accountable for developing the solution?
- Consider also the principle of limited government. Formalized in the Constitution, it reflects a deep seated American view that government should not encroach significantly in the lives of individuals. Applications in the Articles of Confederation relate directly to budgetary policies, limiting federal government powers of taxation. Many still believe these limits should hold, including civil society groups like the Club for Growth. Such groups see low taxes as appropriate fare, but this is a perspective that clashes with other ideals.
- America is also a nation of people who value assertiveness and competition, for instance, and exhibit what Geert Hofstede calls a 'low uncertainty avoidance'. Put together, these values support aggressive, unfettered budgetary deal-making that are reinforced by regular competitive elections, expectations that representatives will bring home the pork, and the appropriateness of a vast structure of lobbyists set up to press for interests. These elements contribute to a logic of competitive competition that encourages politicians to act as snake-oil salesmen playing high-stakes games of chicken in the budgetary process. Winning is important, reflected in one's ability to get money for one's constituents. This clashes with the idea that government should be limited and constrained.
- Short-termism and a defining belief in the ‘American Dream’ and versions of American Exceptionalism further promote such behavior. These scripts generate expectations of America being ‘better’ than others, which arguably manifests in demands on government and on government expenditure. The demands come from multiple competitive representatives and their constituencies who all wish to be heard and expect to be satisfied with appropriations. Some expect and demand federal assistance in the aftermath of Hurricane Katrina and are willing to sponsor lobbyists to ensure this is forthcoming. Others demand military responses to provocation from Iran, Iraq and Afghanistan. Some work hard to ensure federal efforts are robust in stabilizing unstable financial markets. Additional interests call for support to small business, help for first-time home buyers, and much much more. The scripts suggest that an exceptional country needs exceptional government that can do all these things. And still be limited. Budgets should accommodate it all, but taxes must still be low.
I am not sure how one crafts a governance solution in the face of these different values and logics. I am sure that the task is more complex that introducing a technical fix--like a fiscal rule (the balanced budget amendment, for instance), or mechanisms that strengthen the executive, or performance metrics, or program based budgeting.
Whatever the solution, reformers must have a theory about American government that takes such values into consideration--identifying the hole in which the reform peg must fit.
To be real and accommodate a fit, the debate about reform must involve open political contestation and discussion about the logics driving budgeting--the social and cultural ideas of what American government is, how it gets its money, the social trade-offs of providing or not providing services, and such. I think real crisis may be the only thing that fosters such debate. Until this happens, I fear that the US federal budget process will continue to be ungovernable--and get worse over time. Regardless of who holds the Presidency or what band aid deals they can facilitate.
In many senses, the situation in US federal budgeting may be more complex than that in developing countries! In both, however, we need to ensure that future reforms are better fitted to context--and to do this we need to theorize the reforms and context better.