Friday 11 October 2013

Coming back to the office with a hangover… and that’s just the US government – why the “shutdown” is a public management problem - Professor Perri 6

Jessie Owen - License: CC BY 2.0
Suppose you knew that sooner or later you would do something self-destructive. Perhaps you can’t stop yourself binge drinking. Or even self-harming. If you really can’t prevent yourself, maybe you can write a plan for how you’ll cope when you do reach for the bottle or the knife. But what about the morning afterward? Did you remember to include something in your plan about how you’ll manage your recovery?

I’m not sure that the US government has.

Newspapers and Twittersphere are full of comment about which party is to blame for the “partial” shutdown of US federal government, what it’s doing to the US and the world economy and how much worse it would be if the US were to default. There’s plenty of discussion about the plight of the veterans, the homeless, the litigants, citizens who need passports and others who use federal government services. There are stories about the plight of the workers “furloughed” – that’s being “laid off without pay but still technically employed” to you and me. (Oh, and while we’re thinking about being “technically employed”, you try resigning and taking up another job with tax and social security payments when there’s no one left in HR to register your resignation.)

But this is not just a political, an economic, a social policy or a labour relations problem. It is also a public management problem. In particular, restarting government will bring new headaches, on top of the ones caused during the shutdown itself.

Let’s think about the problems to be solved when staff start returning to work. To begin with the easy ones; a great many trucks, fleet cars, laptops and other “mobile assets” will be in the wrong places because they stood still when the government stopped. It will take a few days to get those back to where they should be. If the shutdown goes on so long that Amtrak runs out of money, trains will end up in the wrong places which will take days to resolve. If retained Transportation Security Agents working without pay at airports checking passengers and their baggage stop working, then planes could be in the wrong places when government restarts.

More serious, databases get out of date very quickly. Claimants, litigants and service users move house, change jobs, have children, even die. The longer the shutdown goes on, the worse the problem. Apart from the backlog problem this creates, all sorts of technical problems arise. Different databases find they can’t talk to each other: finding contradictory records, one system might try to correct another and pass on out-of-date information; alerts may not happen; records may get deleted. Not every system will work properly when turned on again. Data systems need constant maintenance if they are not to fall over.

Remember too that the shutdown began when some congressional Republicans held up the budget to wring concessions from Mr Obama’s health insurance programme. Before the shutdown, when “Obamacare” began its implementation, the scheme faced overwhelming demand. On restart day, many of the information systems on which it depends could be deluged.

Things get uglier when managers turn to their contractors. Supposedly, they should have rewritten contracts to limit the taxpayers’ liability. In theory, every department is already supposed to know just which contractors may work off site during the shutdown, what government assets such as data systems they can and can’t use , what cyber-security they are supposed to use,[i] and what these arrangements cost, especially if contractors must “down tools” when government does. But contractors may well be consulting their lawyers if they think the contract gives them a claim against departments for losses from having to stop working or from not being able to do their work properly because their client department is closed. Complicated, protracted negotiations and perhaps expensive settlements loom. Last year when the fear was of the “fiscal cliff”, the White House reassure contractors beforehand that taxpayers would reimburse any costs incurred from layoffs,[ii] but that assurance is much less straightforward to provide for a shutdown.

Did I hear myself say “backlog”? Many federal government services will face those. The longer the shutdown, the longer the backlog when they’re back in the office. The problem could be serious for some federal courts if the shutdown continues after they run out of reserves; civil cases are on hold and many cases are delayed.[iii] With luck, the special measures taken for the administration of passports and for waiving the duties of new foreign employees coming in to the country to go through assorted checks should keep those agencies’ problems within bounds. If the shutdown continues beyond October the Department of Agriculture’s Women, Infants and Children programme, providing help for low income mothers to buy healthy food, is likely to run out of money. All these services had better prepare for queues. The centres for disease control and prevention responsible for vaccination programmes will also find their backlogs building up, as will the inspectorates for seafood and dairy products.

What should you do about a backlog? Well, that’s obvious, surely? Your well-motivated staff work harder and faster than they normally would to get through the work.[iv] But staff returning after their enforced “furlough” are the ones who were not “excepted” from the shutdown. In 1995, the rules were changed so that staff sent home without pay were no longer called “non-essential”. Supposedly, “excepting” them would make them feel more valued than being called unnecessary. But being sent home without pay while your colleagues are told they must stay has the same effect on morale, whatever euphemism is used. If those “not excepted” staff are clearing the backlogs, they might need incentives. And good luck with offering them assurances about their position in future years’ standoffs over the budget.

Backlogs of cases in immigration, passport, courts, and other services raises an ancient public management dilemma. The point of those services is that checking of cases is supposed to be very thorough. Thoroughness ensures that only those entitled to citizenship get the prized document, no villains get into the country and citizens get full justice. Rushing to clear backlogs quickly undermines the quality of the work, or even its purpose. Sod and Murphy’s other law of public administration is that a backlog not dealt quickly with only grows over time. If you doubt that, ask the British passport agency about that problem, or indeed the last refugees from the now defunct Child Support Agency.

The bigger real public management problems from the shutdown could be long term ones. Attracting and retaining staff will only become more difficult if potential employees conclude that the political parties are ready for a shutdown any year they can’t agree on yet another late budget. Solving that problem with higher pay isn’t just expensive. It also signals to people whom we hope are motivated by intrinsic facts about public service, that government can only motivate with cash. That affects work motivation itself. The same process could work even sooner with contractors whether they provide kit or specialist skills. They will demand premium rates to cover themselves for the risk of future shutdowns.[v] The will insist on contract clauses which transfer the risk back to government, just when conventional public management wisdom is that governments should transfer risk to contractors.

But, you might think, if like the thoughtful drinker or self-harmer, US government can plan for the damage it will do when it shuts down, it will plan for all these restart processes? Well, not obviously, no. To its credit, a congress that could not agree a budget or a debt ceiling managed unanimously to pass an emergency law providing that when the shutdown ends, back pay will be indeed be paid. But nothing more. Departmental planning for a shutdown started in 2011.[vi] Probably, managers who could, will have found ways to hoard some funds ready for the shutdown,[vii] but Treasury rules will have prevented many from doing so. 2011 guidance described what plans for a shutdown should include. But none of its bullet points required departments to write restart or recovery plans. Consult those departmental plans.[viii] You will find that most devote pages to lists of “excepted” workers; most set out procedures for shutdown day. During the shutdown, typical departmental or agency plans say that managers have discretion to recall staff to deal with emergencies. And that’s already happened for some workers. Most Department of Defense staff are back at their desks. The inspectors who allow Boeing to deliver new planes to airlines have been recalled. But few plans say anything substantial about what to do in the days, weeks and months after the return to work.

The longer the shutdown, the longer the headaches and the scars will last in management of services, contracts and inspections. US public managers will probably be working through their hangover from this shutdown for months after they return. This will certainly become a case study in public management courses. And, since you asked, the problems in restarting government will show up in the economic numbers for the US, as well as the harm from the shutdown itself.

So if you really can’t stop damaging yourself, make a plan for what you’ll do to recover from your next episode.

Author: Perri 6
Professor in Public Management
School of Business and Management
Director, Master’s programme in Public Administration (MPA)

Thank you to Nick Manning, Tony Bertelli and Brendon Swedlow for their help with this post.

[iv] Meyers RT, 1997 Late appropriations and government shutdowns: frequency, causes, consequences and remedies, Public budgeting and finance, 17, 3, 25-38.
[v] Meyers, op. cit.
[vii] Meyers, op. cit.


  1. Thanks, Perri, for drawing your new blog to my attention: I am sure journalists interested in public management will follow it with attention.
    Can I offer you these observations. a) US government is increasingly esoteric; the outlying case of shutdown makes its peculiarity apparent; interest in the nuts and bolts of coping with such a dramatic event may be limited; during the protracted European fiscal crisis such immediate shutdown has not been likely, even in such countries as Greece and the Republic of Cyprus
    b) what is interesting is whether the active destructiveness (in public administrative terms) of the Tea Party has analogues elsewhere, perhaps in the wish expressed by Oliver Letwin on behalf of the coalition for 'creative destruction' ...taking the form of quango culling or fomenting chaos in the NHS. For the Tea Party, it seems, shut down is both welcome and a means to an an end - the permanent shut down of the federal government. How public administrators could and should cope with anti-state politics is a rich theme...
    c) where we might compare US experience is at the boundary of 'constitutional' and 'public management' matters. Often (for example in academic disciplinary terms) the two are held apart, but they run together. In the US, executive government is explicitly permitted by the legislature (or not in the case of shutdown). At Westminster, we've seen recent moves to extend the capacity of the legislature, through its specialist committees, into responsibility for aspects of executive performance.
    Perhaps you will pick up some of these later
    best wishes
    David Walker

    1. Dear David,

      Thank you for being so prompt in commenting.

      I don’t know that I’d call it esoteric, as you do,. But you’re right that this kind of shutdown is only possible under full separation of powers. In any Westminster system a government that couldn’t get a budget through the legislature at all would fall. But presumably James Madison, one of the founders of the constitution, had just this situation in mind when he insisted on checks and balances that look to many British people to be rather extreme. (Try for a well-known US conservative arguing this. On this issue, he might be right.)

      But this underlines your point that we can’t understand public management issues without understanding the constitutional ones.

      I have colleagues here at SBM who know the Greek case better than I could possibly claim to. But the fate of public management capability in that unhappy country since 2008 has been slow and repeated goring rather than, as in the US shutdown, a single big stoppage which we presume to be temporary and not repeated more than once a year. The problems of morale, backlogs, uncertainty about the position of contracts, challenges in retaining talent, that I discuss for the US are all familiar in Greece. But in Greece they have cumulated steadily rather than built up suddenly. And in Greece, after eight years of misery, citizens expectations of public services have, I would expect, adapted in ways that American citizens’ expectations have not yet adapted to the experience of the shutdown. It also helps that in the US, many services are run by the states not by federal government, and many states are in better shape than Washington’s own domain is. Sudden closure and the sustained erosion are very different dynamics in public management, and they are the results of different constitutional systems too.

      I do wonder about your analogy between Mr Letwin’s ideas and those of, say, Mr Cruz, let alone Mrs Palin. I’m sure that there are Tea Party activists who celebrate the shutdown for its own sake. But most Congressional Republicans seem to have regarded it as a last chance to prevent President Obama’s health insurance programme from getting started in earnest. In fact, the more radical elements are keener on holding out over the debt ceiling than they are over the shutdown. See for an account of why some of them are even prepared to be sanguine about a default. To me, that still seems more likely to result in destruction without any adjectives than in Schumpeter’s “creative” kind.

      By contrast, , Mr Letwin’s aspirations for shaking up established practices seem much milder. I may be too optimistic but I still suspect that Mr Letwin is keener on competition among service providers within a socially pooled finance system than he is on abandoning patients who cannot afford to pay for their own care. But perhaps you could point me his actual remarks?

      Yes, in future posts, we shall certainly look at many of the issues you raise, including how far House of Commons is finally developing any effective capability for understanding processes shaping executive performance. In their new book, “The blunders of our governments” King and Crewe argue that the Commons is no less deficient in these respects than twenty years ago, for all development of the select committees. I do think there has been an improvement. But the Commons still lacks either the understanding or the commitment to reach deep into the executive in the way that legislatures in some other countries can and do. I still like to hope that its inabilities are correctable. I take it from your argument that you fear that they may be constitutionally hardwired?

      Best wishes