Partial Theoretical Perspectives

There is a paucity of validated theories of intergovernmental relations and intergovernmental management. The vast literature on the US intergovernmental system is descriptively rich but theoretically impoverished. This observation should be relatively unsurprising, given the inherent difficulties of developing a theory covering such a huge and varied constellation of governments and relationships, but it does make for challenges in deriving practically useful points from theoretical contributions.

The most appropriate theoretical perspective in a given case depends on the particular features of programs, relationships, incentives, and objectives. Therefore, insights from the (candidate) theoretical perspectives can be more or less useful in practice, depending on the specifics of the context.

Among the approaches that might seem to offer possibilities is principal-agent theory. Sometimes, especially for understanding the operations of grant-in-aid programs, it might seem feasible to treat grantor governments or agencies (“donors”) as de facto principals, with grantee units (“recipients”) as agents of the former (Pressman, 1975). Certainly this rough approximation can make sense of the relative influence of donors and recipients in different types of grant programs: donor units exercise more leverage when making project grants available than for categorical grant arrangements. The former structure places potential recipients into direct competition with each other for a limited supply of resources. Similarly, recipients have inherently more maneuvering room when dealing with block grants than with narrower types. But principal-agent logic goes only so far. Most fundamental, it ignores the special features of a federal system that render national and state governments formal and constitutional coequals. It also blurs the practical reality that principals in such arrangements usually cannot afford to apply strict sanctions to agents. The latter must continue to operate programs if a policy's purpose is to be furthered. Similarly, it is obvious that any sort of principal-agent approach to understanding intergovernmental relations will fail to capture horizontal ties, collaborative arrangements, and all sorts of networked intergovernmental arrangements in which actors are interdependent but in complex, reciprocal fashion (McGuire, Lee, & Fyall, 2013).

Another theme many researchers have emphasized has been that the explicitly management aspects of intergovernmental relations are central to any understanding of the operations of programs in the US system. Deil Wright (1988) was perhaps the foremost scholar developing and emphasizing this perspective, but it has remained a prominent viewpoint for some time (Conlan & Posner, 2008; O'Toole & Meier, 2011). Furthermore, a number of additional theoretical lines of development are relevant to the management of intergovernmental relations. For instance, theories regarding collaborative governance may have the potential to inform intergovernmental management, particularly the management of horizontal and networked intergovernmental programs (O'Leary & Bingham, 2009). Public choice offers another theoretical perspective that clearly has applicability for some aspects of intergovernmental relations. Public choice can sometimes offer insights into how and why jurisdictions multiply, why there can be resistance to metropolitan consolidation, and why polycentricity can offer advantages. A polycentric system is one “where citizens are able to organize not just one but multiple governing authorities at differing scales” (Ostrom, 2005, p. 283; see also McGinnis & Ostrom, 2012). But to date, public choice has not provided many robust injunctions for public managers interested in more effective practice.

Game theory provides an additional theoretical lens with some applicability in settings where managers interact to coproduce intergovernmental action. It is not a perfect tool, but it offers some significant advantages. It treats all actors analytically as potentially relevant, obviates the need to think hierarchically, considers and is capable of handling repeated interactions, and realistically assumes strategic thinking on the part of decision makers because they take into account what other actors are likely to do as the former make their own choices. This is useful, even if intergovernmental arrangements can overwhelm individual actors' abilities to make sense of the overall pattern. And finally, game theory provides a way to think systematically about patterns of interdependent choice where no one actor can control collective outcomes. Accordingly, this chapter uses a heuristic version of game theory to sort through some broad tendencies and recommendations for effective practice.

Research Findings and Knowledge about Effective Practice

The lack of solid, broadly applicable theory on intergovernmental relations means that there is much less research-based general knowledge available than would be ideal. Indeed, research findings are highly diverse, as are their conclusions. Research tends to be focused on issues or policy sectors (e.g., immigration, programs for health care). The context-specific details matter greatly, but that means there is little in the way of broadly systemic treatments that can be useful for effective practice. The ACIR, formerly responsible for important systemwide analyses (examples include the Advisory Commission on Intergovernmental Relations, 1977, 1984), filled an important role in this regard. A similar point can be made regarding the state-level versions of the ACIR, but these too have been diminishing in number. Nationwide there has been no emergence of a functionally equivalent institution to take on this role, despite frequent exhortations by observers and analysts to do so (Walters, 2005; Kincaid & Stenberg, 2011).

Still, research findings offer general lessons for effective practice. First, it is important for public administrators to analyze carefully the particular features of their programs, relationships, incentives, and objectives and see which general models of potentially effective practice seem to be most applicable. Second, it is helpful to recognize and take into account the multilevel aspect of much intergovernmental relations. Influence over what ultimately happens tends to come from all involved levels. Accordingly, it can be especially useful for analysts and practitioners alike to engage in what Elmore (1985) called “reversible logic”: mapping both forward, from one's own situation, institutional setting, and agenda toward others with whom one is interdependent, and backward, from the involved others and their situations, settings, and likely agendas and sketching the causal paths back toward oneself. Not doing so is a mistake commonly made in the intergovernmental system, perhaps especially by actors at the federal level.

The implication here is to avoid the hubris of assuming that one's own preferences can be enacted or enforced by merely pressing forward with one's own perspective, and instead, to take explicitly and systematically into analytical account the preferences and predicaments of others whose cooperation and perhaps coordination may be necessary for success. Doing so involves explicitly tracing causal paths in all directions, identifying points of leverage that are potentially usable from one's own position in the intergovernmental system and also consequential from the perspective of the others. This approach does not mean neglecting one's own interests, policy commitments, or principles, but rather grounding one's approach in intergovernmental settings to what may actually be possible given that one can seldom act unilaterally.

This injunction is not the same as a general endorsement of incrementalism—small changes and limited moves to be preferred over larger ones—or “muddling through” (Lindblom, 1959). It may be that significant adaptations are possible, even over relatively short time spans, but these need to be premised on taking into account causal paths that can work.

How this might operate for a practicing intergovernmental manager interested in effective practice can be suggested by considering a few situations, ranging widely in terms of likelihood of conflict or cooperation. A version of ideas derived from game theory can be a potentially useful heuristic here (Stoker, 1991; O'Toole, 1995).

First, consider situations in which interdependent intergovernmental actors have quite similar perspectives on the common problem or program, including that it is worthwhile to work cooperatively toward a mostly shared objective. Even here, spontaneous cooperative effort may not emerge. It is also highly unlikely that different governments or parts of governments will have exactly the same view on the matter and are committed to the common cause with identical assessments of the salience of the matter. Still, the situation may be reasonably structured for cooperative effort. Federal and state agencies participating in some grant programs are examples. To the extent that both or all parties can benefit from cooperative effort, what does game theory suggest about assisting effective practice? Public managers in such settings would do well to make clear their own interest in successful cooperative effort, encourage the others to do likewise, and communicate transparently about their own moves. Such signaling can reduce the chances for misunderstandings. Regular interaction can also increase the ease of interdependent effort and reduce uncertainty among the participating actors, whether organizational or individual. Productive cooperative intergovernmental effort should be buffered, if possible, from other potentially disruptive features of the system. Intergovernmental success, in other words, is more likely to the extent that the various actors have an accurate reading of the structure of their own interdependence.

What about situations where things are not so favorably structured? Quite a number of intergovernmental settings are ones in which different parties are neither tightly aligned nor stridently in conflict. An example may be No Child Left Behind, with states and localities as the prime movers in structuring and delivering educational results. Game theory suggests that sometimes different actors can find ways to work out ways of functioning interdependently together despite the continuing presence of at least some conflict.

How can such situations be managed toward success, if success means acceptable outcomes from the perspective of all, or nearly all, of the parties involved? Several possibilities present themselves. First, intergovernmental programs and patterns typically have multiple parts. In grant programs, for instance, there are funding mechanisms attached to regulatory elements, often some explicit discretion placed in the hands of recipients, sometimes encouragement toward innovation, or equity, or responsiveness, or other political values. It may be that one feature of one program poses a sticking point, but one or another intergovernmental actor might be willing to cooperate on it provided another, or the other, party offers flexibility on an entirely different feature or program that may be particularly salient for the first party. Seeking, identifying, and brokering such trade-offs can be an important skill for intergovernmental managers and can expand the set of feasible outcomes.

Some intergovernmental situations involve, or potentially involve, large commitments on the part of one or more of those involved. Especially if the parties have little history of cooperative effort, they may be reluctant to commit to the entire programmatic initiative—for instance, when local governments in a large metropolitan area are being asked to invest in a large-scale program to protect a watershed. If large commitments can be disaggregated into smaller ones, and especially if these can be queued in sequence over a more extended time period, the risks underlying major commitments can be reduced. The intergovernmental actors can phase in their investments of people and resources gradually as they observe and evaluate the evolution of the cooperative effort and the respective contributions and degree of cooperative behavior displayed by the others. Patterns of linked action can be developed gradually, with the trust and increasing effectiveness that can come in successful versions of such multiactor efforts. If the anticipated developments do not ensue or the intergovernmental effort turns out to be more complicated or difficult than anticipated, the parties can reassess their commitments, reconfigure their patterns of interdependence, reschedule the joint effort, or decommit without having to take a huge loss. Lowering the size of commitments early on can increase prospects for later success.

Sometimes in such an effort, the overall chances for successful cooperation can be enhanced by efforts to manage second-order collective action challenges. If the efforts and commitments of each of the intergovernmental parties are not fully transparent and visible to the others involved, all may be reluctant to abide by their parts of the bargain for fear of shirking by others. In this case, it may be worthwhile for the actors to tax themselves—literally, or perhaps in terms of in-kind contributions—to set up a monitoring and perhaps enforcement system to keep track of the various moves taking place among all those involved. This system can cost some additional resources but may also increase the confidence that the parties feel in the collective project or activity, and thus increase their own commitment to the cause.

These steps can be undertaken by or contributed to by public managers in intergovernmental settings and can thus assist in effective practice as long as differences among those involved are not too extreme.

However, sometimes the differences are rather large and cannot easily be bridged. In this case, one obvious consideration is whether such a manager has any options to try to work with one or more alternative parties who may be somewhat more congenial toward the expected results of such interdependent action. In project grant arrangements, for instance, the granting government may be able to select from among prospective recipients those that seem to be strongly committed to the objectives of the program and have the capacity to work toward their achievement.

Of course, it is not always feasible to select among potential partners. For example, if a modification in the structure of the intergovernmental program could render it a less challenging context in which to operate, several kinds of structural alternatives might be considered. Aside from programmatic changes that may have to be enacted through legislation,² managers might consider proposing modifications to the list of stakeholders involved—for instance, inviting or encouraging some organizations favoring the joint activity and its intended outcomes to meet with the representatives of the governments involved, serve on an advisory board for the program, or take over responsibility for some aspects of program implementation. Managers may also be able to suggest regulatory modifications to reduce onerous requirements or streamline intergovernmental program management, or they might be able to set up monitoring processes to limit others' ability to defect from cooperation without being seen to do so.

An important possibility for managers is to try to alter the perspective of one or more other actors whose willing participation in the program is considered necessary. Providing timely and valid information about the program—its advantages, its likely impact on other participants and on clients or others—can sometimes be persuasive. Data from other states or localities or other similar programs may be relevant and can alter perspectives. Good old-fashioned lobbying by stakeholder groups may be influential. This general point about persuasion may strike some as naive about intergovernmental disagreements, but game theory can illustrate the significance of the point: certain game-theoretic games that may seem almost unplayable to acceptable outcomes are structurally, and in terms of actors' preferences, not very different from smoothly cooperative games; small modifications of preferences can produce dramatically different collective results.³

An important possibility is to find ways for intergovernmental managers to encourage the development of norms of trust and cooperation among the relevant parties involved in helping to manage an intergovernmental program. Doing so is not always possible, of course. Earlier experience may have soured at least some of the key actors on trusting certain others. Or, especially in the early stages of intergovernmental effort toward some programmatic objectives, actors may be near-strangers to each other. In addition, and often importantly, political decisions made by actors beyond those involved in managerial responsibilities (e.g., elected officials) can destabilize an intergovernmental setting and interject unanticipated destabilization that can challenge or collapse relationships built on trust. But it is difficult to overestimate how helpful such norms can be; accordingly, when it is feasible, managers should exert effort toward the development and stabilization of such norms.

Norms of trust and cooperation can alter settings of intergovernmental effort in consequential ways. For one thing, to the extent that such norms are in place and actors in different roles and governments receive information from others in the system, they can assume that the information (e.g., about preferences, operations, possible consequences) is valid. Knowing that this is so can help render a complicated and interdependent situation more easily navigated and managed toward productive results. For another, to the extent that norms of trust and cooperation operate within an intergovernmental setting, each party can afford to be more flexible regarding immediate payoffs. That is, if the medium- or longer-term expectation is for the intergovernmental program to be worth the effort, trust allows such actors to exercise patience and await the valued outcome instead of needing results immediately, as would be the case if the actor could not count on others to make good on their commitments beyond the very short term. Trust renders more agreements and more cooperative arrangements possible, even (or especially) among rational actors.

None of the preceding means that intergovernmental management is easy, especially when disagreements across actors are significant. Indeed, in that case, and when uncertainty can be introduced by other parties beyond those involved in managing a program (the “backward induction of uncertainty,” in the language of game theory), it can be exceedingly difficult to develop sustained workable intergovernmental operations. A recent example is the implementation of the Affordable Care Act, famously excoriated by political actors in some states, who have not only declined to participate in some of the program's arrangements, like insurance exchanges, but have actively sought to destabilize and dismantle the developing patterns (Haeder & Weimer, 2013).

In fact, one important feature of the changing US intergovernmental landscape has been the introduction of more destabilizing elements than were visible in the past. While it is still the case that some programs operate with substantive experts in different governments at different levels in the system largely managing and heavily influencing day-to-day operations without much intrusion from others, in numerous sectors of policy, significant destabilization, or at least uncertainty, has made routine intergovernmental operations much more challenging. This is so for many reasons: budgetary stringency and budgetary brinksmanship, increased politicization more broadly, complexity in the system, and uncertainty. Furthermore, a consequence has been to judicialize more decisions with intergovernmental implications, and introducing the judiciary at intermittent points with its concomitant authority to dramatically decide—and alter—intergovernmental understandings adds to the uncertainties, at least prior to definitive determinations. The same is true with the internationalization of numerous policy fields: adding the international level increases the possibility of crafting truly effective policy solutions and implementing them, but at the cost of greater complexity, interdependence, and uncertainty.

In recent years, these features of the system have become more important and frequently occurring, and it has become ever more challenging to manage in many parts of the US intergovernmental system.

Judgments about Effective Practice Grounded in Administrative Experience

Recent administrative experience helps ground effective practice. First, given the complications and challenges of the system, it is clear that effective practice could be greatly enhanced by a new ACIR, or at least an institution with sufficient legitimacy that focuses on the intergovernmental system as a whole—and with sufficient analytical capacity to examine some of the systemic details that can matter so much for performance.

Second, public managers in the system need sufficient support to do their job. This requirement includes not only time and financial resources and political support, but also the capacity to manage effectively. Sufficient managerial capacity is an important but underrecognized requirement for effective practice. US governments and agencies should make every effort to support the capacity of management to knit parts of the system together in patterns of effective practice.

Third, operating managers should know well the parts of the system that are near the operational locus of their jurisdiction and center of regular practice. The system as a whole is almost impossibly complex, but dissecting the most proximate portions and examining the possibilities for effective cooperation is clearly feasible. It can be important for practicing managers to develop the ability to discern the prospects for intergovernmental success on the basis of the features of the proximate networked environment in which they operate.

Managers can, for example, assess whether there are prospects for partnership and cooperation, even close coordination, across intergovernmental counterparts. Alternatively, they may be able to discern the likelihood of considerable competition. They can make such assessments by taking note of the proximate programmatic environment and the structure of interdependence, or potential interdependence, congealed by a program or by efforts to develop and manage a program. Also relevant are the policy instruments being used, or potentially being used, to generate the policy-relevant joint action. They can take into account the likelihood of involvement by overtly political actors, since such involvement could alter the situation toward or away from coordinated and mutually supportive results. The degrees of complexity and interdependence can also be estimated; the relevance of these variables is obviously to determine the extent to which the estimated chances of intergovernmental cooperation can be treated with greater or lesser degrees of confidence.

Finally, and depending on the assessment of the situation, public managers can take one or more courses of action outlined to improve prospects for successful intergovernmental action.