Players in the Public Policy Process: Nonprofits as Social Capital and Agents

288 Pages·2005·0.97 MB·English

by  Herrington J. Bryce

Players in the Public Policy Process
Nonprofits as Social Capital and Agents
Herrington J. Bryce
Players in the Public Policy Process
Copyright © Herrington J. Bryce, 2005.
All rights reserved. No part of this book may be used or reproduced in any
manner whatsoever without written permission except in the case of brief
quotations embodied in critical articles or reviews.
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ISBN 1–4039-6829–2 hardback
Library of Congress Cataloging-in-Publication Data
Bryce, Herrington J.
Players in the public policy process : nonprofits as social capital and
agents / Herrington J. Bryce.
p. cm.
Includes bibliographical references and index.
ISBN 1–4039-6829–2
1. Nonprofit organizations. 2. Non-governmental organizations. 3.
Political planning. I. Title.
HD2769.15.B79 2005
320.6—dc22
2004048838
A catalogue record for this book is available from the British Library.
Design by Autobookcomp.
First edition: April 2005
10 9 8 7 6 5 4 3 2 1
Printed in the United States of America.
To Simon J. Bryce and Myra Bryce-Laporte
and their children
and their children’s children
and to those who in partnership gave them life and
character
and to all the people of
LaBoca, Paraiso, and Gamboa
This book systematically develops the perspective of nonprofits or
nongovernmental organizations (NGOs) as social capital assets and
agents of public policy within the principal-agent paradigm and across
public purposes—foreign or domestic, religious or sectarian, in
developed or developing countries. The perspective has universal
applicability and allows us to go beyond assumptions of market or
government failure. Moreover, the perspective reflects the competitive
situation in which nonprofits frequently find themselves when bidding
against firms for government contracts. The analysis identifies five
factors that could offer nonprofits a clear, competitive advantage over
firms and governments in certain contract bidding. The perspective
yields a set of implications for the strategic positioning of nonprofits in
the public policy arena, and yields a new functional classification that
includes nonprofits not merely as service providers but as managers of
significant social risks, as market and transaction regulators, and as
centers of collective action along the full spectrum of public policy
issues.
Nonprofits influence our electoral choices of politicians (policymakers)
and through the latter, nonprofits influence the appointments of those
who design, plan, and administer policy within the public bureaucracy.
Inside and outside the bureaucracy nonprofits influence policy choices,
the protocols, the practices, and the success or failure of policy
implementation. The central contribution of this book is the articulation
of a perspective of how nonprofits play these varied roles as
social capital assets and agents for the public’s purposes and the
subsequent theoretical, practical, and managerial implications of this
functional view.
Insightful, innovative, and well-grounded; strongly recommended.
—Julian Wolpert, Henry G. Bryant Professor of Geography,
Public Affairs, and Urban Planning; Chair, Program in Urban
and Regional Planning, Woodrow Wilson School, Princeton
University
The increasing role of nonprofits as agents of public purpose creates
both opportunities and risks. This book helps us better to understand
the sources of the opportunities and the nature of the risks.
—Steven Kelman, Weatherhead Professor of Public Management,
John F. Kennedy School of Government, Harvard University
Timely, fresh, and innately significant.
—Clarence Stone, author of Regime Politics
This book raises all the important issues that the appraisal of non-
profits’s role in governance should. Serious students of public policy
ought not to ignore this theoretically sophisticated and empirically
informed work.
—Theodore R. Marmor, Professor of Public Policy and Manage-
ment, Yale University School of Management
Contents
Acknowledgments viii
Preface xi
Part I: The Need for a Policy Perspective of Nonprofits
Chapter 1: The Significance of the Principal-Agent
Paradigm 3
Chapter 2: The Policy Significance of Nonprofit Organizations:
Beyond the Limits of Failure 11
Part II: Nonprofits as Social Capital Assets and Agents of
the Public
Chapter 3: The Nonprofits as Social Assets and Agents of Public
Policy 33
Chapter 4: Nonprofits as Agents of Public Policy: A Paradigm of
Principals and Agents 59
Chapter 5: The Choice of Nonprofits as Agents of Public
Policy 81
Part III: Agency Powers, Performance, and Problems
through the Prism of the Principal-Agent Paradigm
Chapter 6: Housing and Community Development: A Case Study
of an Agency Function 121
Chapter 7: The Performance of Agents: Acute Care Hospitals and
Community Benefits 141
Chapter 8: Policy Formulation, Nonprofit Advocacy, and the
Principal-Agent Framework 163
Part IV: Problems of Regulating the Nonprofit Agent and
the Foreseeable Challenges of Management
Chapter 9: Regulating the Finances of the Agent 183
Contents vii
Chapter 10: The Nonprofit as a Self-Regulator 203
Chapter 11: The Implications for Strategic Planning and
Positioning 219
Notes 237
Author Index 263
Subject Index 267
Acknowledgments
A book like this does not come easily or quickly, and I acknowledge the
experiences that shape it. I first met Emile Durkheim, Max Weber, Talcott
Parsons, James Coleman, and Neil Smelser through their writings at the
Maxwell School at Syracuse University through Professors S. M. Miller and
Irwin Deutscher as I pursued a minor in sociology (theory) while getting a
Ph.D. in economics (public finance). My interest in state and local govern-
ments came from professor C. Van Eaton at Minnesota State University. The
blending of interest in these academic streams occurred over decades of both
academic and public policy experiences on the local, state, and national levels.
In this book I draw from actual public policy experiences. I evaluated
community development corporations for the Ford Foundation while a
senior economist at the Urban Institute, and I paid particular attention to
urban economics and local governance at the Joint Center for Political and
Economic Studies. Through the auspices of the Joint Center and the
Academy for State and Local Governments, I completed books on city
planning, city revitalization, cities and firms, and the growth and decline of
small cities, while simultaneously a fellow at the Institute of Politics at
Harvard. And later I accepted faculty positions at the Massachusetts
Institute of Technology and the University of Maryland in planning-related
courses.
As vice president for research and operations at the Academy of State and
Local Governments, I was confronted with policy from the purview of
elected officials whose political careers depended on successful policy
implementation while engulfed in strong, and competing interests. The
Academy was operated on behalf of the National League of Cities, U.S.
Conference of Mayors, the International City Management Association,
Council of State Governments, the National Governors Association, the
National Association of County Officials, and the National Conference of
State Legislators. Part of my responsibilities was to coordinate their views
with the views of private sector representatives such as the U.S. Chamber of
Commerce in a forum, the National Urban Roundtable, which contributed
to the annual report of the Secretary of the Department of Housing and
Urban Development. Frontline exposure was also gained as a member of the
board of directors at the National Council for Urban Economic De-
velopment—an organization of state and local economic development
officials.
I am also grateful for the experience of being on a number of national,
state, and local boards dealing with financing. These boards range from a
budget committee in Montgomery County (Maryland) to the Treasury
Acknowledgments ix
Board of the Commonwealth of Virginia, which determines the terms of and
issues all state-sponsored debt—exposing me to the financing side of policy
and the responsibility of being a signatory trustee for such debt whether in
the form of general obligation or revenue bonds. From the federal financing
perspective, I was fortunate to be commissioned by the U.S. Bureau of
Census (on whose advisory board I served) to analyze the impact of the
decennial undercount on state and local government transfer payments and
to have that exercise culminate in a manuscript introducing an alternative
distribution method that published in the Proceedings of the American
Statistical Associations.
Through Dr. Carole Neves (now Director, Office of Policy Analysis,
Smithsonian Institution) and Scott Fosler of the National Academy of Public
Administration I got to expand my appreciation of policy in the former
communist countries by working with local officials in Russia, Estonia, and
Georgia. It is in these countries that I became appreciative of how much the
nonprofit sector contributes to the quality of life, lower budgetary burdens,
decentralization, and greater local satisfaction in the United States, and that
‘‘the’’ market as we know it in the United States depends upon several
nonprofit organizations for its efficiency and order, which are explored in
this book.
This international experience was preceded by a project, financed by the
Agency for International Development, to head a committee of educational
officials in Panama to design a plan to implement a large-scale educational
reform program and one in Berlin, financed by the German Marshall Fund,
to design a study of cross-national urban development.
The nonprofit strain in this book comes from managerial, editorial, and
advisor experiences, including the advisory boards of Guidestar and the
National Council of Nonprofit Enterprise, being the special editor on
nonprofits for the American Management Association Handbook, and as
the editor and principal writer of Not-for-Profit Financial Strategies, a
newsletter published by Harcourt Brace for CEOs, CPAs, and CFOs of
nonprofit organizations. With respect to specific classes or organization, I
am grateful to Frances Kuecker and the editors of Health Care Management
Review, and Russell Taylor of National Arts Strategies
My interest in the law and contracts and in nonprofits as market
regulators arose in my CLU and ChFC studies through the American
College. But it also comes from having so many lawyers in the immediate
family—Beverly, Marisa, Herrington Simón, and Shauna Bryce and then
Matthew Queler, Henry Morris and Rene Bryce-Laporte—and so many law
books and journals around. I am pleased that the most recent edition of my
book Financial and Strategic Management for Nonprofit Organizations is
listed among the suggested references by the American Bar Association
(Business Law Section) and the American Society of Corporate Secretaries—
the second edition having been recommended by the Journal of Law and
Arts Management. This type of acceptance emboldens and encourages
investigations such as those represented in this book.