Nonprofit Institutions And Public Policy Research Paper

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The complexity of advanced industrial systems requires governments to acquire an enormous range of specialized knowledge and administrative expertise with which to order their affairs. Uniformity in demand, however, has not produced uniformity in the character and supply of knowledge for government purposes. There are significant variations, related to diverse cultural traditions in the means of acquiring knowledge and applying methods of expertise. For example, central government bureaucracies in Western Europe and Japan directly provide many more sources and opportunities for the development of policy expertise than they do in the USA, which in modern times has relied heavily on private research organizations operating outside government bureaucracies for functional expertise. As the federal role in economic and social policy expanded in the post-World War II era, increased federal funding did not produce a commensurate increase in the size of government. Instead, it strengthened the complicated network of relationships among the federal government, state and local governments, and private groups, including nonpartisan research institutes (Alchon 1985, Critchlow 1985, Ricci 1993, Smith 1991).

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In this policy system, the federal government operates indirectly, through intermediary organizations in state and local government, and in civil society (Heclo 1980). This reliance on private, nonpartisan research organizations imparts a unique quality to the acquisition and use of knowledge by the administrative state in modern America.

The vast size, complexity, and expense of this system of acquiring knowledge by government in the USA suggests the pluralistic nature of the American polity, deeply rooted in its republican distrust of centralized government. This distrust of centralized government found expression in the nation’s constitution, drafted in Philadelphia in 1787. Its famous beginning ‘We the people’ asserted that the source of its authority rested in the people rather than state or centralized government. This distrust of centralized government found expression in the antistatist Jeffersonian–Jacksonian tradition that emerged early in the nation’s history.

1. Social Investigation In The Nineteenth Century

In the environment of relatively weak centralized government prior to the US Civil War, the craft of social investigation developed within a middle-class subculture of reformers, many of them women, who documented the plight of slaves, the poor, prisoners, and the insane. The affinity of antebellum social reform and feminism became evident in reports issued by American abolitionists who documented the conditions of slave life, as well in reports on the care of prisoners, the indigent, and the insane. In the 1840s, social reformer Dorothea Dix issued a series of groundbreaking reports to state legislatures calling for the humane care of the mentally ill. This tradition of empirical research into social problems conducted by private individuals associated with reform movements was extended late into the nineteenth century (Marshal 1937, Nelson 1992, Leach 1989, Daniels 1968, Dupree 1957).

By the outbreak of the Civil War, state legislatures in the most populous states regularly received detailed narrative and statistical reports on dependency, crime, public health, labor conditions, and economic development. These reports relied more on democratic and humanitarian sentiments associated with moral reform than they did on claims of science and disinterested expertise. Female reformers, as suggested by the role of Dorthea Dix, played an especially important role in this early endeavor to bring social knowledge to state legislatures and the public (Furner and Lacey 1993, Ross 1991).

While the capacity for social knowledge grew on the state level, the role of the federal government’s activities in the pursuit of knowledge remained limited generally to surveying, land exploration, and modest technological development through private contracts. This relative institutional impoverishment reflected a unique antistatist tradition in America, reinforced by sectionalist politics of the period. The major institution in Washington for the gathering and accumulation of scientific and social knowledge remained the Smithsonian Institution, which opened in 1846 at the instigation of the individual for whom it was named. In the decades following the Civil War, the Smithsonian Institution became a center for people such as Francis Walker, John Eaton, John Wesley Powell, and Carroll D. Wright, who took leading roles in establishing a rudimentary infrastructure of social investigation in the nation’s capital. These individuals served as conduits for a transition from moral reform to scientific reform.

2. The Twentieth Century

By the beginning of the twentieth century a large resident class of scientific and professional civil servants had emerged in Washington. In 1904, the US Bureau of Census reported that 3,919 civil servants fell into the classification of ‘professional, technical and scientific’ workers. Within this group, nearly 1,100 people were described as ‘special agents, experts, and commissioners,’ while another 300 or so were designated simply as ‘scientific experts and investigators’ (Lacey 1993, pp. 127–70, Ross 1991, Blumer et al. 1991, Keller 1977, Skowronek 1982, Wilson 1909).

Many of the early organizers in the Smithsonian Institution played a critical role in the establishment of the American Social Science Association (ASSA) in 1865. The ASSA sought to serve as a clearinghouse of social knowledge in order to promote reform in education, public health jurisprudence, finance, and social economy. Directly influenced by the achievements of the Sanitary Commission during the Civil War and modeled on the British National Association for the Promotion of Social Science, the ASSA attracted commercial elite groups interested in promoting sound fiscal and monetary policy; lawyers, doctors, ministers, and teachers who sought professional affirmation; and middle-class reformers who combined humanitarian moral reform with the new scientific spirit. In this way, the ASSA, and other professional organizations that arose during this period, paved the way for a new liberalism, grounded in social empiricism (Haskell 1977, Furner 1975, 1993).

These reformers called for new measures of efficiency and economy in voluntary charity organizations and in public administration. Behind this concern with efficiency and economy lay a deep conviction that the polity was threatened by corruption of partisan political machines serving special economic interests. These political machines, run by local and state political bosses, consistently manipulated the mass of voters to maintain political power in flagrant disregard of any notion of public morality or efficiency and economy in government. Thus progressive reformers called for new social knowledge to help restore political order and representative government to American society. Beneath the catchphrase ‘efficiency and economy’—the rallying cry of reformers—lay strong antimajoritarian values fused with antiparty perspectives (Critchlow 1985, Alchon 1985, Karl 1974).

This movement for efficiency found early expression in late nineteenth-century charity endeavors. Amid concern that relief was being wasted on the undeserving poor, new professionals were brought into charity organization to centralize recipient roles, provide vouchers for relief funds to be distributed to recipients, institute periodic checks on recipients, and implement budget systems within agencies to keep a close watch on funds. Essential to this reform was the use of data gathering through statistical measures and new accounting procedures. Behind this movement lay a sentiment expressed by industrialist Andrew Carnegie, who declared, ‘One of the most serious obstacles to the improvement of our race is indiscriminate charity.’ Carnegie’s infatuation with the new social sciences would lead him to create a number of new nonprofit philanthropic institutions concerned with the gathering of public knowledge (Lagemann 1989).

At the vanguard of this movement for efficiency and economy in government were university trained and highly specialized social scientists. In the latter half of the nineteenth century, the basis of social science research was transformed from deductive reasoning derived from natural law into inductive procedure founded on historical analysis and empirical research. This new methodology allowed social scientists to mask any preoccupation with political matters in the terminology of scholarly objectivity and empirical research. The transformation of political impulses into the quest for public knowledge and administrative solutions reflected the aspirations of a new professional class anxious to gain influence in a highly industrialized society through expertise. They sought reform by placing ‘the best people’—objective-minded experts—in government (Ross 1991, Haskell 1977).

The call for efficiency and economy in government, and the need to develop new public agencies for the gathering of public knowledge essential to restoration of representative government, began on the municipal level first in New York with the creation of a Bureau of Municipal Research in 1905, organized by social scientists and civic-minded philanthropists and businessmen. Municipal research bureaus would be established in several other US cities. Central to these municipal research bureaus was the creation of executive budget systems that allowed a strong executive office, public officials, and the general electorate to track how public funds were spent. Essential to the functioning of an executive budget was the creation of an agency staffed by nonpartisan experts who would prepare and analyze budgetary finances and expenditures (Critchlow 1985, Karl 1974, Smith 1991).

This demand for an executive budget system reached the national level under the administration of William H. Taft in 1910. When Taft assumed office in 1909, the federal budget stood at over a billion dollars and the federal debt had reached disturbing proportions, largely as an aftermath of the ‘Panic of 1907.’ In these circumstances, Taft was able to persuade Congress to appropriate $100,000 for a commission on efficiency and economy in government. To staff the commission, Taft called on the best social scientists in the country. After two years of painstaking work, the Taft Com- mission came out with its report, The Need for a National Budget. Yet, because the proposal was made in an election year, a recalcitrant Congress refused to enact an executive budget system. The failure of the Taft Commission did not dismay reformers, however. In 1915 they created the Institute for Government Research—the predecessor to the Brookings Institution. Only in 1921 during the Harding administration would budget reform be enacted in the Budget and Accounting Act of 1921.

Taft’s successor, Woodrow Wilson reflected in many respects the deep ambivalence that middle-class Americans felt about the state during the early twentieth century. An array of new government agencies was now involved in conservation, consumer protection, corporate regulation, trade practices, and monetary and financial policies. Yet Wilson, in his pioneering essay on public administration warned that the model of Prussian administration should be avoided in America. He declared that European bureaucratic practices would have to be adapted to fit the highly decentralized form of government in the USA. If the European model is to be employed in the USA, he told his fellow reformers, ‘We must Americanize it … We must learn our constitutions by heart and we must get the bureaucratic fever out of its veins’ (quoted in Cuff 1993, p. 390).

Until America’s entry into the war in April 1917, neither the federal government’s defense department nor civilian departments had considered mobilization tasks. As a consequence, private planning proceeded public planning. Financial and manufacturing firms such as J. P. Morgan and Du Pont Corporation, by receiving Allied war orders, were among the first to assess the financial, technical, and labor requirements of munitions production (Brownlee 1993).

War, however, forced the enormous administrative expansion of the federal government in the short period between April 1917 and November 1919. New government agencies appeared in haphazard fashion, drawing corporate and academic personnel into government management. This involvement led many to the belief that the capacity for public knowledge and for effective social action rested in the mobilization of private, public-spirited professional and business groups willing to work in cooperation with a sympathetic state. The war demonstrated for these individuals how to forge a uniquely American combination of state–society relations.

Herbert Hoover sought to put this insight into practice as Secretary of Commerce in the Harding and Coolidge administrations, and later as president, by using the techniques of private–public cooperation he had learned as a wartime administrator. Hoover sought to develop state–voluntary cooperation in the collection of specialized data required for rational decision-making in both the private and public sectors. For Hoover and others concerned with public knowledge, the war revealed just how essential government knowledge was for economic and social planning. Through the development of an administrative state he sought to develop new mechanisms for collecting public knowledge without the coercive element of state power (Hawley 1974).

In keeping with his views about the credibility of privately financed researchers, Hoover arranged for the Rockefeller Foundation, founded in 1913, to fund a comprehensive survey of social changes in American life between 1900 and 1930. The three-year study resulted in the massive 1,600-page Recent Social Trends in the United States: Report of the President’s Research Committee of Social Trends (1933). This study presented the full panoply of available knowledge for public purposes (Karl 1974, Hawley 1974, Alchon 1985).

Although state capacity for gathering public knowledge expanded dramatically during the Great Depression era, World War II, and the postwar period, the federal government continued to rely indirectly on intermediary organizations in state and local government, and in civil society, for the accumulation of knowledge. The commensurate increase in the size of the federal government led to the creation of fluid networks of policy specialists, who operated in and between government and the private sector, identifying policy issues, generating ‘solutions’ to policy problems, and overseeing and evaluating the implementation and administration of policies within their specific areas of competence (Heclo 1980).

3. Role Of The Think Tanks

Essential to these policy networks are private policy research institutes or ‘think tanks,’ a peculiarly American social invention. By the 1990s there were an estimated 1,200 non-government think tanks of various descriptions. World War II and the postwar continuation of a large defense program, as well as expansion of federal social programs, was a watershed in the evolution of the American think tank.

At the end of World War II, Americans made a political decision to have government train, subsidize, and regularly consult a sizable population of civilian experts on such issues as defense, welfare, health, and economic stability. Of the major think tanks, only the Brookings Institution (1916) and the Carnegie Endowment for International Peace (1910) were founded before World War II. The American Enterprise Institute was founded during the war in 1943 (Critchlow 1985, Smith 1991, Lagemann 1989, Dickson 1971).

Although think tanks are ostensibly nonpartisan, in many instances they function as extensions of state power, their influence rising and falling with changes in governments and shifts in the ideological climate of the country. In other cases, think tanks function more independently, questioning and monitoring state strategies and structures. For example, the Rand Corporation of the 1940s and 1950s was designed to strengthen the programs of the US Air Force, whereas the Institute for Policy Studies (IPS) has been a major center of criticism of US foreign policy, domestic social programs, and policies in the areas of civil rights and poverty.

Often the ideological orientation of these think tanks reflected changes in the historical context and political climate, as indicated by the dominant trends in high and popular culture, changes in voting behavior, and shifts in political leadership (Ricci 1993).

The course of the Brookings Institution from the New Deal through the end of the twentieth century reflected these ideological currents. While Brookings studies in the early 1930s criticized New Deal programs, the Brookings Institution under its president Harold Moulton tried to avoid becoming directly involved in partisan politics. By 1937, however, the institution had emerged as a vociferous critic of New Deal fiscal policy.

In response to the new postwar environment and the reluctance of foundations to fund an institution they perceived as ineffective or out of touch, Robert Calkins, former head of the General Education Fund at the Rockefeller Foundation, agreed to head the institution. Calkins reorganized Brookings and recruited social scientists with liberal credentials and government experience. This new group had close ties with government, and unlike the devotees of the earlier nonpartisan ideal, aligned themselves closely with presidential administrations. In 1965, when Calkins retired, Brookings was representative of mainstream Keynesian economic thinking, and its growing influence was reflected in renewed foundation support, especially from the Ford Foundation. Under Calkins’ successor, Kermit Gordon, Brookings’ reputation as a liberal Democratic think tank was well entrenched. As a result, the institution became a major research center and a holding area for policy experts who were temporarily out of office. In these years, the Brookings Institution became a major center for policy innovation in welfare, healthcare, education, housing and taxation policy (Critchlow 1985, Smith 1991).

Divisions over foreign and domestic policy opened cracks in the liberal consensus in the early 1970s, however, leading many observers to see the institution as isolated from large segments of business. In 1976, the board of trustees appointed Bruce MacLaury to head the institution. A former regional Federal Reserve banker and Treasury official, MacLaury successfully courted business support, increased corporate representation on the board of trustees, and moved the institution toward a more moderate ideological stance.

By the 1970s, the Brookings Institution confronted competition from other major policy research institutions, especially the American Enterprise Institute and the Heritage Foundation—both viewed as conservative research institutions close to the Republican Party.

The American Enterprise Institute (AEI), which was founded in 1943 as the American Enterprise Association (AEA), illustrates the experience of a conservatively oriented research institution that expressed deep ambivalence about the post-World War II policy consensus (Critchlow 1985, Smith 1991). The key figure behind the establishment of the AEA was Lewis Brown, chairman of Johns-Manville Corporation. Brown realized that the New Deal had changed the political environment for business and, although he expressed anxiety about the level of government intervention, he accepted much of the New Deal program. From the start, the AEA reflected a conservative bias.

In 1954, A. D. Marshall, head of General Electric, assumed the institution’s presidency and immediately hired William Baroody Sr. and W. Glenn Campbell, both staff economists at the US Chamber of Commerce, to head the research program. Under their guidance, AEA was gradually built into a modern research institute under its new name, the American Enterprise Institute. Principal support came from private foundations and major corporate sponsors. The institution’s reputation was enhanced when the Nixon administration called upon a number of AEI associates to fill government positions. The AEI also emerged as a successful proponent of economic deregulation.

In 1977 Baroody retired and his son, William Baroody Jr., took over the presidency of the institution. To improve its standing in the academic community, the AEI assembled an impressive staff including Melvin Laird, William Simon, Robert Bork, Michael Novak, and Herbert Stein. The tenure of William Baroody Jr., however, ended abruptly in the summer of 1987, when an increasingly restive board of trustees forced his resignation because of cost overruns and declining revenues. Moreover, despite the large number of AEI staffers who held appointments in the Reagan administration (30 left AEI to join the administration in its first two years alone), members of the New Right, suspicious of what they considered the centrist orientation of the institution, voiced bitter criticism of the AEI.

Baroody’s successor, Christopher DeMuth, bolstered the conservative orientation of the institute by bringing on board several former Reagan administration officials with strong rightist reputations.

The founding of the Heritage Foundation in 1973 revealed a new ideological climate in the analysis of public knowledge (Edwards 1997, Peschek 1987). Founded by Edwin Feulner and Paul Weyrich to provide rapid and succinct legislative analysis on issues pending before Congress, the Heritage Foundation sought to promote conservative values and demonstrate the need for a free market and a strong defense. The Heritage Foundation’s articulation of conservative values in social policy, education, and government activities placed it at the forefront of New Right activity. Although sympathetic to the Reagan wing of the Republican Party, Heritage’s commitment to conservative economic theories and social values allowed the institution to be critical of both Republicans and Democrats. The Heritage Foundation remained relatively small in its early years, but the election of Ronald Reagan to the presidency in 1980 enhanced the institution’s prestige. By the mid-1980s the Heritage Foundation had established a solid place in the Washington world of think tanks as a well-organized, efficient, and well-financed research organization that called for the turning over of many government tasks to private enterprise, a strong defense, and a cautious approach to Russia and China.

During these years, myriad other think tanks emerged in Washington representing a range of ideological positions and specialized policy interests, including the left-oriented Institute for Policy Studies (1963) and the libertarian-oriented CATO Institute (1977). Think tanks concerned with national security included the Center for Strategic and International Studies (1962) and the Center for National Security Studies (1962) affiliated with the American Civil Liberties Union (Friedman 1997).

These private institutions served to supplement social research conducted by federal agencies and institutions. By the 1990s the number of personal and committee staff of Congress exceeded 11,000, with a further 20,000 people responding to the information needs of the legislature from the Congressional Budget Office, the Office of Technological Assessment, and the General Accounting Office (Lacey 1993). The executive branch commands far greater numbers. By the 1990s the scale of spending by the federal government for the acquisition and application of public knowledge was massive. Funding is currently routed through an estimated 180 bureaus and agencies. This research includes a mixture of ‘in-house’ research conducted by career civil servants, and a larger body of research conducted by outside parties via grants and contracts on a ‘for profit’ basis and some of it by university-based scholars on a ‘not for profit’ basis. An estimated third of this research activity is supported by the federal government to meet its needs, while the remaining two-thirds is authorized for state and local government, school systems, policy forces, welfare agencies, and industrial and agricultural groups. In addition, a vast array of trade and professional organization and ‘public interest’ groups conduct research in the areas of environmental policy, consumer affairs, civil rights, and foreign policy issues (Critchlow 1985). While the government relied on think tanks for policy innovation, program review, and policy assessment, the federal government relied on nonprofit service providers to implement social programs. In this way, the expansion of the welfare state in the 1960s and 1970s created a seeming paradox that remains apparent in the contemporary regime: the rapid growth of the nonprofit, voluntaristic sector occurred at the same time that federal social policy became increasingly centralized and active. The parallel development of the centralized welfare state and the voluntary sector was no coincidence. The growth of federal social programs mobilized the nonprofit sector, while in turn the nonprofit sector, through policy innovation and program implementation, helped legitimize the modern welfare state.

Thus, as the traditional federal system that had existed since the founding of the nation eroded in the 1960s, when the federal government extended its powers at the expense of state power, the nonprofit sector was called upon to help design, implement, and administer social programs that had once been within the jurisdiction of the public sector (Hall 1992, Kameran and Kahn 1989, Salamon 1992). As a consequence, the nonprofit sector expanded in the 1960s at the very time that the federal government enlarged its powers over the states. The result produced an unusual phenomenon—government centralization produced greater nonprofit sector voluntarism (Critchlow 1999).

4. The ‘Mixed’ Welfare State

Between 1965 and 1980 the American social welfare state underwent a significant transformation, with government spending on social welfare increasing by 263 percent in inflation-adjusted dollars (Gilbert 1983, Critchlow 1999). The expansion of the welfare state promoted the emergence of a government–nonprofit partnership. Increasingly in the 1960s, the federal government generated the funds but then turned over the delivery of services to other public state and local organizations, and private nonprofit organizations. The private, nonprofit sector became a major beneficiary of this system of services. By the 1980s, the federal government alone provided $40 billion in support to the private nonprofit sector, while state and local governments provided additional amounts from their own resources (Salamon 1992).

Federal demand enabled the nonprofit sector to grow by leaps and bounds. In 1940 there were only 12,500 charitable, tax exempt organizations. By 1990, there were over 700,000, with most of this growth taking place after the 1960s (Salamon 1992, Hall 1992, Critchlow 1999). While the federal government centralized social policy through congressional mandates, administrative and legislative regulations, and new funding arrangements, the delivery and implementation of these programs were placed in the hands of state and local governments and nonprofit organizations.

The emergence of the ‘second welfare state’ in the last three decades of the twentieth century—contrary to the concerns of those who feared that government would replace the nonprofit sector altogether—created a vibrant nonprofit sector. Government, in turn, came to rely on this sector to design and implement programs, undertake demonstration projects, contract with other private agencies, and provide outside consultation and independent review agencies and activities.

As this second welfare state emerged, the nonprofit sector was called upon to fulfill a number of distinct functions. Nonprofit organizations served as funding intermediaries distributing funds to other parts of the nonprofit sector, service-providing organizations involved in healthcare, education, counseling, adoption assistance, and political action agencies supporting particular pieces of legislation or candidates for political office (Salamon 1992). By providing public services, these nonprofit organizations developed a symbiotic relationship with the federal government. By 1990, government grants, contracts, and reimbursements accounted for 31 percent of nonprofit service organizations’ income. Just 18 percent of the total income that nonprofit organizations receive comes from private giving (Salamon 1992, Hall 1992).

The proliferation of government and nonprofit institutions involved in public policy marshals expert against expert, testing the credibility of each and enriching the information environment in which policy discourse occurs and decisions are taken. Indeed, on highly technical issues, opposing experts often directly contradict one another. Yet the growth of public and private agencies involved in collecting public knowledge allows for a more democratized policy process— much closer, in a sense, to the Jeffersonian–Jackson vision of an open, competitive democracy.

Still, two qualifications are in order: neither Jefferson nor Jackson envisioned a world of competing experts representing various interests and ideological positions; and secondly, this contemporary world of competing institutional research is not equally open to all comers. Access to financing is one limitation, and access to those in power is another.

The proliferation of expertise and the expansion of government knowledge that has arisen in response to the demand for more policy inquiry have not necessarily improved the information base on which political decisions are made. The emergence of more complicated patterns of political mobilization by a larger and more diverse array of interests and groups has necessarily politicized the nature of policy knowledge and thereby redefined the nonpartisan ideal espoused at the beginning of the twentieth century. Competition for attention to research places heavy demands on the time and attention of legislators and policy-makers who, in a value-laden universe, are left, ultimately, to decide what information counts for them on the basis of their own values. A widespread acceptance of relativism, embodied institutionally in public and private research organizations, has irrevocably altered the process of social investigation and the uses of social knowledge.


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