Hollow state

A hollow state is a state which is generally considered to have the appearance of a properly functioning democratic nation or state. This state or nation has democratic elections, government laws, rules, regulations and standards. It has an agencies, police, taxation, ministries and a military. What it does not have are the aforementioned acting in the best interest of the public but rather supporting the interests of autocracies, dictators, oligopolies, special interest groups and kleptocracies. Also, the term “hollow state” has been used by Milward and Provan as a metaphor for the use of third parties (private companies) to deliver social services and act in the name of the state.^[1]

History

The "hollow state" is a metaphor for the intense effort the Reagan and Bush administrations made to privatize public services.^[2] Initially, this privatization consisted of extensive contracting with private nonprofit and for-profit agencies to provide public services.^[2] Nowadays the most visible trait of the hollow state in the United States is the contracting of nonprofit organizations to provide government services. The contracting of nonprofit organizations started in the 1960s but there was a major increase in this trend during the Reagan and Bush Administration during the 1980s.^[3]

Purpose

The purpose of this trend was because of the limited budget during the Reagan and Bush Administration.^[2] It was thought to be cheaper if the federal government were to contract public services to nonprofit organizations as opposed to establishing and managing public sector agencies. But even contracting these public services pose problems. It is expected that the agencies that are contracted to nonprofit entities should be financially self-sustained, but over half of their revenue comes from the government. These non-profit agencies receive funding from different levels of government agencies such as city, state, and federal.^[3] The problem with this is that each level has its own rules, regulations, and procedures regarding funding which makes things complicated for the nonprofit organization to efficiently provide its services to the public. Due to their lack of funding, these organizations make the choice to be market oriented which makes them look more of a for-profit organization.^[2] Because of this market oriented choice, the agency’s purpose and/or mission is subject to be changed due to the influence of other entities that has financial ties to the nonprofit. This is known as the process of the state being “hollowed” out.

Original Intention

The contracting out of public services to nonprofit organizations did have good intentions. Because social services were contracted out to nonprofit agencies, they were able to have an influence in public policy because of what that organization represents. These nonprofit organizations may be advocates for education, health, welfare, youth, and many other different issues or a certain population of people. In the past thirty years many nonprofit agencies combined this service role with political activism on behalf of battered women, juvenile delinquents, rape victims, and others.^[2] But because some of the nonprofit agencies need to be market oriented to produce more revenue, they lose their sense of solely serving public services without any biased entity such as third parties or companies.

Infrastructure

The primary purpose of the hollow state is to function as a multi-organizational structure through which policy is designed and executed. By hollow state it is meant to be understood that it's a system consisting of units of government separated from their outputs but still linked by negotiation or contract. However, governance is still retained as the government must still choose what services to outsource, secure funds, determine contract terms and contractors. An example of an institution like a hollow state is the intergovernmental networks, governments working with private organizations, that exist between local governments and regional businesses. Usually this would involve a private development network supported by a public administration like the Chamber of Commerce and several private businesses. There are 2 types of networks that exist in the hollow state: horizontal and vertical. Horizontal networks consist of 3 types, policy making, resource exchange, and project based, all of which are between governments and non-governmental organizations. Vertical networks are the collaborations that occur between federal, state, and local governments.

The purpose of this collaboration is to devise strategy for business retention, expansion, or recruitment. The reason city economics developers reach out to surrounding organizations and become multiple networks is due to the fact economic policy is designed and implemented under ambiguity and uncertainty. As complexities increase, so does the need for more nongovernmental actors to deliver local services hence more actors equates to more hollow. Substituting from a stable, linear government for complex networks may raise questions of allocation deliberations being solely prompted by cost/ efficiency not taking into account taxpayers other values.

Contracting

The Hollow State refers to the extent to which governments are directly involved in providing services.^[4] Advocates of privatization often make the point that government can provide or arrange for citizens to receive a service without the government actually providing it.^[5] Government is able to arrange or provide a service for the public community without actually producing it by contracting out. Contracting out is when government allows a non-government institution to operate under the governments name to provide a public service. A government intent on privatization would decide what it wanted done and then contract with the private sector to provide the good or the service.^[5] The federal government has always relied on state and local governments to distribute and provide services with money funded by the federal level. Contracting out or privatization redirects the funds that used to go to the state and local government to private organizations. Government funding of nonprofit agencies increased during the grant-in-aid explosion of the 1960s and 1970s and continuing during the Reagan and Bush administrations under the banners of privatization, limited budgets, and getting government off the backs of those it regulates.^[5]

References

1. Milward, H. Brinton; Provan, Keith G. (2000-04-01). "Governing the Hollow State". Journal of Public Administration Research and Theory 10 (2): 359–380. ISSN 1053-1858.
2. Ingram, Helen; Smith, Steven (1993). Public Policy for Democracy. Washington, D.C.: The Brookings Institution. pp. 213–235. ISBN 978-0815741534.
3. "Off Campus Database Authentication". www.jstor.org.libproxy.txstate.edu. Retrieved 2015-11-23.
4. Larry, Terry (2005). The Thinning of Administrative Institutions in the Hollow State. Thousand Oaks, California: Sage Publications Inc. pp. 426–444.
5. Frederickson, David; Frederickson, H. (2006). Measuring the Performance of the Hollow State. Washington, D.C.: Georgetown University Press. ISBN 9781589013667.