Academic journal article Public Administration Quarterly

Fiscal Dependence and Bureaucratic Responsiveness in State Environmental Regulation

Academic journal article Public Administration Quarterly

Fiscal Dependence and Bureaucratic Responsiveness in State Environmental Regulation

Article excerpt

Governments at all levels are experimenting with new means of financing public agencies. Revolving funds, dedicated funds, public enterprises, and various public/private partnership arrangements have become increasingly prominent as political officials explore options apart from traditional reliance on general fund financing (Axelrod 1989). The revenue shortfalls that have afflicted many government budgets since the financial crisis of 2008 have accelerated this trend. Advocates of these flexible arrangements cite the revenue stability they afford agencies, the increased flexibility they provide public managers, and the elimination of perverse incentives to spend balances at the end of the year (Barzelay 1992; Osborne and Gaebler 1993, Franklin and Douglas 2003).

Yet these practices have faced criticism. Some observers have argued that the loss of transparency and budget capacity that accompanies these changes may cause a reduction in the accountability of public agencies (Tyer 1989; Rubin 1988; Walsh 1978; Moe 2001). Traditional democratic theory holds popular control of policy administration to be a central component of democratic governance (Aberbach and Rockman 1988; West 1995). Control of agency budgets by elected political officials is commonly viewed as an important means of ensuring agency responsiveness to democratic mandates. Increased reliance on funding mechanisms outside political officials' direct control may therefore result in a significant diminution of the capacity of political institutions to influence agency actions.

The relationship between the dependence of administrative agencies on particular funding sources and their degree of responsiveness to external actors, however, is somewhat murky. Little systematic attention has been given to the subject. This study seeks to inform our understanding of this relationship through an empirical examination of state environmental regulation. Drawing on data from a unique survey of clean air administrators, the analyses assess whether reliance on the state general fund makes these agencies more responsive to elected officials, whether reliance on federal grants makes them more responsive to the federal Environmental Protection Agency (EPA), and whether reliance on revenue gained through agency enforcement actions increases agency autonomy. Multivariate analyses suggest that agency reliance on different sources of funding is uniformly associated with differences in perceived influence over environmental regulatory enforcement, raising provocative questions about the implications of moving away from the regular appropriations process for the democratic accountability of bureaucratic agencies.

LITERATURE

At least two distinct theoretical traditions suggest that agencies are responsive to external actors who control the resources necessary for the agency's survival. Resource dependence theory, rooted in organizational sociology, argues that agencies enact exchanges with their external environments in order to secure the political support necessary for survival and growth. These exchanges are crucial, for "one of the relatively distinctive features of public organizations is the greater degree to which external actors are directly involved in setting goals, allocating resources, and granting or withholding legitimacy" (Wamsley and Zald 1973, p. 21). These relationships open the organization to influence by external actors (Emerson 1962; Blau 1964). It follows naturally that agencies who receive the bulk of their funding from the regular appropriations process should be more open to influence from elected political officials than those who receive large segments of their funding from sources less subject to direct political control (Pfeffer and Salancik 2003; Provan, Beyer, and Kruytbosch 1980). While this core theoretical insight has been around for about 35 years, subsequent literature employing the resource dependence framework has made little attempt to subject it to a direct empirical test. …

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