Valuing the Deep State Part IV: Why Delegation is Necessary

The full compilation of Francis Fukuyama's Valuing the Deep State series can be accessed here. Watch a video version of Part IV here:

Before we can get into an analysis of the pathologies of the deep state, and of the pathologies of the current conservative attack on it, we need to talk a bit more on an abstract level about why delegation is necessary in any hierarchical organization, and why some degree of bureaucratic autonomy is therefore necessary.

In democratic theory, legitimate authority comes from the people, who are sovereign and have the ultimate right to make political decisions. They vote for legislators and, if they have a presidential system, a president with equal democratic legitimacy; these elected officials then go on to empower a bureaucracy to carry out their will.

Those bureaucrats are in theory simply mechanical agents whose only job is to carry out the mandates imposed by their political superiors. The principal-agent theory used by economists maintains that dysfunctions in hierarchical systems like corruption arise when the agents follow their own interests rather than simply carrying out the mandates of their principals.___STEADY_PAYWALL___

Anyone who has studied real-world bureaucracy, however, knows that this is a highly oversimplified view of things. The great Herbert Simon in his classic work on public administration noted that authority in organizations often flows in the opposite direction, from agents to principals because the bureaucratic agents often have greater expertise and knowledge of conditions on the ground than their political principals.

We can illustrate this with regard to military organization, and the war that is currently playing out in Ukraine. The world’s most effective military organizations delegate huge amounts of authority to the lowest possible command levels, because it is those junior officers in contact with the enemy that understand best the threats and opportunities they face. This was true of the German army in World War II, the Israeli Defense Forces, and the contemporary U.S. Army.

The latter in its post-Vietnam reorganization adopted the German practice of Auftragstaktik under the heading of “mission orders” or “commander’s intent,” where senior commanders were taught to delegate authority down the chain of command and avoid micromanagement. (You can read about this in the last study I completed for the Rand Corporation, The ‘Virtual Corporation’ and Army Organization’ written with Abram Shulsky back in 1997). This was codified in FM 100-5, the Army's combined arms manual, and taught in U.S. staff schools. The superiority of this approach was amply demonstrated during the two Gulf Wars, and is the practice that has been taught to the Ukrainians in the period following the annexation of Crimea.  

The Russian military, by contrast, adheres to a rigid hierarchical system in which senior officers fail to delegate authority and are themselves directed from above. There are reports that Vladimir Putin has himself taken to giving operational orders to his own military, much as Saddam Hussein did during the Gulf Wars. This centralized system has led to disastrous results as local Russian officers are unable to respond to rapidly changing developments on the ground.

This military example illustrates a broader truth about all hierarchies: principals mandate broad strategic directions, but the actual work of the organization is often done by lower-level agents acting on their own authority. All organizations in human history have had to balance the need for political control against the requirements of bureaucratic autonomy.

At some point in the late 1990s, it hit me that the central issue in all administrative theory—and therefore in politics itself—was the problem of delegated discretion. I have been thinking about this problem ever since.

The need for delegated authority applies to the U.S. government writ large: bureaucratic autonomy is widespread and necessary for the government to function, given the need for expertise and local knowledge. Thomas Koenig recently wrote in these pages about the Constitution’s non-delegation clause, echoing arguments of many conservative critics of the administrative state. It is a nice vision of an American democracy “of the people, for the people, and by the people” that citizens through their elected representatives should deliberate on policies and retain the broadest possible control over decision-making. But this is a very naïve view of how contemporary American government functions, and runs up against two big obstacles.

The first has to do with expertise. Back in the 1820s, the main functions of American government were collecting customs duties and delivering the mail. Andrew Jackson may have been right at that time that any ordinary American could perform these tasks (though even then, when most citizens had at most an elementary school education, this might have been hard—it’s hard to read a postal address if you’re illiterate). Today the U.S. government does things like model the weather, manage the flow of funds through an incredibly complex financial system, operate national laboratories and fund scientific research, allocate spectrum, send spacecraft to the moon and beyond, and protect the health of its 330 million citizens. These are not functions that ordinary citizens or their elected representatives know terribly much about or have time to deliberate; what they can do is set broad mandates regarding the outcomes that their agencies are expected to achieve. Do we want Congress to be debating how many parts per million of a list of thousands of toxins are acceptable, or what specific changes Boeing must make in its manufacturing process to keep its airliners safe? The United States, like most other advanced countries, has granted substantial autonomy to its central bank, the Federal Reserve, precisely because we do not want elected politicians to be setting interest rates.

The need for bureaucratic expertise can be illustrated by examples from early 20^th century administrative law. Many U.S. states and municipalities sought to regulate electric utilities and railroads that were exercising monopoly power in their jurisdictions. They needed to establish a “reasonable” rate of return that would protect consumers but yet keep the utilities economically viable. But what constituted a “reasonable” rate? Legislatures found they couldn’t set these, nor did the courts have the economic expertise to do so, so the function was necessarily delegated to expert regulatory agencies.

The second big problem with a doctrinaire attachment to non-delegation has to do with the legislative process itself. It is not as if the U.S. Congress is a highly effective deliberative body that is able to come up with wise solutions to pressing national problems. It was always the case that democratic legislatures do not make the best decisions: after the Civil War, many states mandated racial segregation and created a system that could be dismantled only through the exercise of federal power. Congress’ performance has only deteriorated over time: it is captured by powerful interest groups, and increasingly polarized in ways that prevent it from performing its most basic functions like passing budgets under regular order. With the politicization of virtually every issue coming before it, the idea that Congress could issue clear mandates on, for example, how to deal with carbon emissions or regulate large internet platforms is rather fanciful. The default outcome is congressional inaction, which leaves a vacuum to be filled by courts and bureaucracies.

This is not to say that these unelected bodies can legitimately make policy on their own. There are plenty of examples of judicial and bureaucratic overreach, which I will discuss in a subsequent post. It would be very nice if the U.S. Congress stepped up to its responsibilities and issued clear mandates on how the country was to deal with carbon emissions, immigration and asylum policy, digital speech, and any number of other pressing issues. But Congress has never been in the business of issuing clear mandates to its bureaucratic agents, and is unlikely to do so in the near future. Into this breech have stepped bureaucracies and courts to try to sort out the confused or absent mandates set by Congress. The question is therefore not a categorical rejection of delegation, but a proper setting of a balance between legislative control and bureaucratic autonomy.

In the next post, I will explain how political principals have controlled bureaucratic agents in the United States over time, and what the conservative attack on the administrative state portends for the future.

Francis Fukuyama is chairman of the editorial board of American Purpose and Olivier Nomellini Senior Fellow and director of the Ford Dorsey Master’s in International Policy program at Stanford University’s Freeman Spogli Institute for International Studies.

The full compilation of Francis Fukuyama's Valuing the Deep State series can be accessed here.