ZEftB-IS-CM^i

SEAB
COMPILATION OF REPORTS PREPARED FOR THE
SECRETARY OF ENERGY ADVISORY BOARD
TASK FORCE ON RADIOACTIVE
WASTE MANAGEMENT

TASK FORCE ON RADIOACTIVE WASTE MANAGEMENT

SECRETARY OF ENERGY ADVISORY BOARD
U.S. DEPARTMENT OF ENERGY
WASHINGTON, DC 20585

NOVEMBER 1993

D.OT9UTION O f T H » DOCUMfNT « l ^ T E D
 DISCLAIMER
This report was prepared as an account of work sponsored
by an agency of the United States Government. Neither
the United States Government nor any agency thereof, nor
any of their employees, make any warranty, express or
implied, or assumes any legal liability or responsibility for
the accuracy, completeness, or usefulness of any
information, apparatus, product, or process disclosed, or
represents that its use would not infringe privately owned
rights. Reference herein to any specific commercial
product, process, or service by trade name, trademark,
manufacturer, or otherwise does not necessarily constitute
or imply its endorsement, recommendation, or favoring by
the United States Government or any agency thereof. The
views and opinions of authors expressed herein do not
necessarily state or reflect those of the United States
Government or any agency thereof.
 DISCLAIMER

Portions of this document may be illegible

in electronic image products. Images are
produced from the best available original
document.
COMPILATION OF REPORTS PREPARED FOR THE
SECRETARY OF ENERGY ADVISORY BOARD
TASK FORCE ON RADIOACTIVE
WASTE MANAGEMENT
 TABLE OF CONTENTS

JACK CITRIN POLITICAL TRUST AND RISKY POLICY 1

CRAIG THOMAS PUBLIC TRUST IN ORGANIZATIONS AND

INSTITUTIONS: A SOCIOLOGICAL PERSPECTIVE 35

NATIONAL RESEARCH COUNCIL WORKSHOP ON ESTABLISHING

INSTITUTIONAL CREDIBILITY:
SUMMARY OF PROCEEDINGS 73

FRANK DOBBIN INSTITUTIONAL LEGITIMACY IN THE PUBLIC

SECTOR: A SYNOPSIS OF RECENT
RESEARCH 89

MARK SUCHMAN ON THE CONTROL OF LEGITIMACY IN

ORGANIZATIONAL LIFE: STRATEGIC
AND INSTITUTIONAL APPROACHES 125

NATIONAL ACADEMY OF RECOVERING PUBLIC TRUST AND

PUBLIC ADMINSTRATION CONFIDENCE IN MANAGING
RADIOACTIVE WASTE: SUMMARY
OF WORKSHOP PROCEEDINGS 183

GEORGE AKIN MANAGEMENT LESSONS LEARNED IN

CLEAN-UP SITUATIONS 221

THOMAS GRUMBLY BUILDING PUBLIC TRUST BY LETTING GO:

THE PROBLEM OF INSTITUTIONAL
CREDIBILITY IN TURNED-OFF AMERICA 233

DAN REICHER GAINING PUBLIC TRUST AND

CONFIDENCE IN THE US HIGH-LEVEL
NUCLEAR WASTE PROGRAM 247

CRAIG THOMAS REORGANIZING PUBLIC ORGANIZATIONS:

ALTERNATIVES, OBJECTIVES, AND EVIDENCE 261

CRAIG THOMAS AM-FM'S CORPORATE SOLUTION FOR

RADIOACTIVE WASTE MANAGEMENT:
APPEALING BUT INAPPROPRIATE? 307
 POLITICAL TRUST AND RISKY POLICY

JACKCITRIN
DEPARTMENT OF POLITICAL SCIENCE
UNIVERSITY OF CALIFORNIA, BERKELEY

WITH THE ASSISTANCE OF CHRISTOPHER MUSTE

Prepared for the U.S. Department of Energy

September, 1991

7r;?^<^77;'r;^TrvT~S-ViT:?^3^^r.;.ir^^.-?-7^ ";-'";:. . .\'^-^.^^9W.??^^a~^i»3>S"':' -r»^^ .:.'*-

- T
 POLITICAL TRUST AND RISKY POLICY 3

The recent collapse of communism dramatically illustrates the importance of

trust for the effectiveness and stability of political regimes. Where trust is absent,
authorities have nothing to fall back on save bribery or coercion in seeking to over-
come opposition to their commands. From a systemic perspective, therefore, the
public's faith in the trustworthiness or legitimacy of government is an important
resource to the extent that this belief encourages voluntary compliance with decisions
with which one disagrees or which call for personal sacrifice.
The conviction that trust is crucial for the government's ability to act seems
increasingly widespread among students of policies concerned with the siting of
potentially dangerous facilities such as nuclear power plants, LNG terminals or
hazardous waste repositories. A proliferation of recent studies (K. D. Pijawka and A.
H. Mushkatel 1991; Barke, Espey and Jenkins-Smith 1991; Stoffle et al. 1990;
Slovic, Layman and Flynn 1991; Dake and Wildavsky 1990, among many others),
claim that trust in the institutions involved in the siting, development and regulation
of these facilities is a critical influence on the public's willingness to accept the
government's decisions. Political trust or confidence, it is argued on the basis of
survey and other data, lead people to discount or accept risk.
The critical evidence for this conclusion derives from surveys in Michigan,
Nevada, Tennessee and elsewhere showing that even after controlling for factors such
as the perceived personal or community costs and benefits of a facility, proximity to
the facility, attitudes toward science and technology, knowledge of the technology
and political ideology, trust, however measured, has an independent statistical effect
on the willingness to accept a hazardous facility (Stoffle et al. 1990; Kunreuther,
Easterling, Desvousges and Slovic, 1990). Since the current process for making
siting decisions involves public participation and includes opportunities for debating,
reviewing, delaying or even defeating official choices, the ability of citizens to
translate mistrusting attitudes into individual or organized protests has obvious
implications for effective policy-making.
The purpose of this report is to review the findings of social science research
about the political trust that bear on the problem of legitimating public policy regard-
ing nuclear power and hazardous waste disposal. In this regard, one can distinguish
general preferences for policies dealing with energy resources, conservation, pollu-
tion and the like and specific siting decisions that directly affect a more restricted
 4 COMPILATION OF REPORTS

segment of the public and often elicit the notorious "not in my backyard" response
among people with divergent policy positions. Political trust may have different
relationships to the two classes of citizen response. For example, Sears, Tyler, Citrin
and Kinder (1978) found that mistrust of government made it more likely that one
would reject official explanations for the energy crisis of 1973 and verbally oppose
the national administration's energy policy without altering the likelihood of behav-
ioral change toward increased energy conservation.
This report covers the following issues: 1. The meanings of political trust, the
sources of trust and recent trends in the public's outlook; 2. Public opinion on
nuclear power and nuclear waste; 3. How processes of decision-making affect public
trust; 4. Directions for possible future research on public opinion.

THE OBJECTS OF POLITICAL TRUST

To clarify the ways in which "trust in institutions" shape attitudes toward
risky policies, one must determine the relevant object or focus of trusting attitudes,
whether trust is a cause or a consequence of perceived risk, and the extent to which
trust as opposed to other factors such as political ideology, cultural attitudes and self-
interest shape public opinion. How to increase the public's trust in institutions and
whether the effort to do so is worthwhile depends in part on the answers to these
questions.
Political trust is a psychological construct referring to feelings of faith or
confidence. Trust, however, always has an object or focus. One does not simply
trust; one trusts someone or something. A useful definition of political trust, there-
fore, must indicate the particular individual, set of individuals, institutions or rules
that elicit faith and confidence. Indeed debate about the significance of expressions of
political trust often centers on disagreement about the object of people's opinions
when they say they trust "government," "the government in general," "the executive
branch," "the political system" and so on (Miller 1974; Citrin 1974; Citrin and Green
1986). What do people have in mind evaluate the government—is it the full set of
elected officials, just the President and his administration or the regime in the broad
sense of the structure of institutions and their governing principles?
For example, it now seems clear (Citrin and Green 1986) that when people
are asked whether they trust "the government in Washington" the modal response is
 POLITICAL TRUST AND RISKY POLICY 5

to think of the President and his administration rather than the political system as a
whole. Even so, an identical response to a verbal representation of political symbols
may have several subjective meanings of quite different political significance. Ex-
pressions of mistrust of "the government" may be a ritualistic complaint about
"dirty" politics and self-serving officials, sentiments that are familiar cliches in the
vocabulary of American politics but that are neither deeply felt nor behaviorally
potent. Alternatively, mistrust may signify a purely partisan reaction to those in
power, an attitude that varies with the election returns, a performance evaluation
based on personal or national conditions in the here or now, or, finally, genuine
alienation from the political system's basic institutional arrangements, processes and
underlying values. These distinctions should be kept in mind in assessing aggregate
levels of trust in institutions in the nuclear power policy domain.
In the complex American political system in which power is widely dispersed,
attitudes of trust or mistrust may be highly differentiated. Surveys therefore ask
people separately about their confidence in different branches of government, about
federal, state and local government and, in the present context, about specific agen-
cies such as the Department of Energy, Nuclear Regulatory Commission and Envi-
ronmental Protection Agency. Several methodological caveats about the results of
such investigations are in order. First, among the general public, the level of knowl-
edge about many specific institutions, including DOE, is bound to be extremely low.
The reliability and validity of expressions of trust or the lack thereof, therefore, is
uncertain. In other words, how does one interpret the answer to "how much trust do
you have in the Department of Energy to manage a nuclear waste facility safely?"
when it is asked in the context of a study that has focussed on the perceived risks
associated with such a facility. Does the respondent have any knowledge or opinion
of DOE independent of the agency's perceived position on the siting decision at
hand? And if not, does the opinion elicited by the survey question constitute anything
other than a response to the policy itself? If not, an element of spuriousness creeps
into the finding that trust in the DOE, NRC or EPA predicts the acceptance of nuclear
power or a waste facility.
The same point applies to the finding reported by Pijawka and Mushkatel
(1991) that trust in the federal government (President, Congress) boosts support for
the siting of the high-level nuclear waste repository in Nevada, whereas trust in the
 6 COMPILATION OF REPORTS

state's governor and legislature increases opposition. Given the facts that the federal
branch has proposed this siting decision and state officials have resisted it, the possi-
bility again arises that trust is the effect rather than the source of policy preferences.
A cross-sectional survey has difficulty in resolving this causal puzzle, but the issue
has substantive significance since prior trust is generally regarded as a resource for
political authorities.
Another methodological problem in assessing public responses in an opinion
survey to a list of specific institutions is that a "halo" effect appears so that reactions
to one object on the list are simply carried over to the next on the list. This measure-
ment error is magnified where there is little knowledge about or experience with a
particular institution.
On the other hand, when reactions to institutions are heavily infused with
partisan or ideological sentiment, trust in one institution may go along with antago-
nism to the other simply because the leaders of these institutions are political oppo-
nents. In the Watergate era, for example, people who expressed confidence in the
Presidency tended to denigrate Congress and vice versa. As the previous reference to
public opinion in Nevada illustrates, evaluations of federal and state or local govern-
ment also can conflict in this way. More generally, surveys indicate that subjective
responses to the different levels of government frequently consider them as foils for
one another. When the federal government is perceived as responsible for failures in
important national policy, the annual surveys of the Advisory Commission on Inter-
governmental Relations suggest, public confidence in state and local government
seems to rise almost reflexively.

THE MEANINGS OF TRUST

To trust is to believe in the competence and integrity of the object of one's
faith, integrity in the sense of commitment to fiduciary responsibility. To be trust-
worthy, therefore, is to be reliable, reliable in doing what is "right," right in the sense
of both technical competence and meeting normative expectations. While the spe-
cific attributes that inspire trust will vary with context and task, meeting normative
expectations in a democracy means that procedures as well as outcomes are impor-
tant.
What underlies perceptions of institutional competence and integrity is an
 POLITICAL TRUST AND RISKY POLICY 7

empirical matter and the answer doubtless varies across institutions. In the domain of
nuclear policy, attention has focussed on the expertise, credibility, compassion,
fairness and accountability of decision-makers. And although the evidence is far
from complete, some results (Stoffle et al. 1990; Rothman and Lichter 1987; Barke,
Espey and Jenkins-Smith 1991) suggest that the public associates these qualities with
particular institutions in a differentiated, if predictable, way.
For example, Stoffle et al.'s Michigan survey concerning the siting and
operation of a low-level radioactive waste storage facility found that on the question
of "technical competence to operate the facility," federal government agencies re-
ceived the widest endorsement, with 43% of the sample judging them "very compe-
tent." State government agencies were next (34% very competent responses),
followed by private management firms (27%) and local government (10%). How-
ever, the pattern was reversed when respondents were asked who would be most
attentive to local residents' interests. Finally, university-based organizations and
environmental interest groups received the highest ratings for competence in conduct-
ing "environmental monitoring."
The Michigan survey also showed that national environmental organizations
and university-based organizations had the greatest credibility as a source of informa-
tion about the waste storage facility. Interestingly, despite being regarded as compe-
tent to manage the facility, federal agencies were not highly trusted as a source of
information. Only media organizations and the Waste Producers' Association had
lower credibility ratings. Rothman and Lichter also found that the public was more
likely to believe university experts than government scientists about nuclear safety,
presumably because the former group was more "neutral." A statewide Tennessee
sample, surveyed in 1986 in the context of the Oak Ridge MRS siting process, indi-
cated higher levels of confidence in the ability of the EPA and DOE as compared to
Congress or local officials to manage low level nuclear waste, high level nuclear
waste or toxic chemical waste. Once more, however, this judgment appears to refer
to technical competence, since the same sample indicated that they were more reas-
sured if the facility's safety were monitored by a local committee rather than federal
officials and that they would prefer the decision regarding the location of a waste
treatment facility to be made by "scientific experts" rather than government officials
at any level. Other surveys also have found that the EPA is perceived as more con-
 8 COMPILATION OF REPORTS

cerned about hazards posed by nuclear waste repositories than either the DOE or
NRC.
The cumulative import of these scattered findings, therefore, is that the DOE
and NRC are viewed by many as having a prior commitment to a pro-nuclear course
of action and that being perceived as parti pris erodes their credibility as fair or
neutral assessors of the risks to public safety. To the extent that trust in government
agencies is task-specific, it may be wise to design a process in which planning,
management and monitoring are assigned to different combinations of authorities and
institutions.
Although the qualities of competence, integrity, compassion and other bases
forjudging political leaders of or institutions are conceptually different, most re-
search finds that positive and negative judgements tend to form distinct and cohesive
clusters. Particularly among those with relatively little interest in or knowledge about
politics, institutions and authorities are evaluated on a single favorable-unfavorable
continuum. For example, leaders tend to be regarded as either smart and honest or
inept and corrupt.
Differentiated images are much more likely to appear when leaders or institu-
tions are evaluated comparatively as in the Stoffle et al. survey summarized above.
We reiterate that most information about the structure of public attitudes toward
government derives from research about the national government and particularly the
Presidency. Research about specific agencies is sparse. One must be cautious in
concluding that there are stable structures of opinion about the DOE or other agencies
involved in nuclear policy.

TRENDS IN POLITICAL TRUST

It is well-known that trust in national government declined from 1964-80,
rebounded between 1980 and 1984 during the so-called Reagan resurgence and has
subsequently slid downward again, although there are no post-Gulf War data yet
available. Table 1 in the attached Appendix tracks this trend using the well-know
"trust in government" questions developed by the University of Michigan's Center
for Political Studies. These questions focus on the trustworthiness, responsiveness
and competence of the "government in Washington" and the shifts in these measures
over time largely reflect national assessments of the performance of the country and
 POLITICAL TRUST AND RISKY POLICY 9

its government in broad domains of policy, primarily with respect to peace, prosper-
ity and domestic tranquillity.
Alternative measures of public confidence conform to this trend. Table 2 in
the Appendix tracks expressions of confidence in the "leaders" or "people running"
various government and social institutions. There is a general decline, with govern-
ment faring worse than social institutions and with movements in the curve that
reflect the impact of short-run events. To cite the Watergate era once more, the
upward tick in confidence in the press and television can be viewed as a positive
reaction to the role of the media in unveiling official malfeasance. Once more, public
reactions of institutional adversaries tend to move in opposing directions.
A loss of confidence in government authorities, however, did not extend to
beliefs about the political regime or community. Pride in the American system of
government, expressions of patriotism and loyalty and a lack of interest in fundamen-
tal institutional change prevailed throughout the contemporary era. Nevertheless, the
decline in public trust in the leadership of major political and social institutions has
had significant consequences for the business of doing government. For individual
citizens, trust, if rationally based on experience, functions to reduce social complex-
ity. Trust makes it possible to take much for granted, to mitigate the need for second
or third opinions. Mutual trust enables people to go about their daily business with-
out having to take into account all possible contingent futures. The absence of trust
motivates the construction of elaborate safeguards. In the case of the medical profes-
sion, for example, the loss of trust is associated with increased litigation, malpractice
insurance, the reluctance of doctors to undertake certain procedures and their overuse
of others.
Without commenting on the rationality of mistrust in the political realm, it is
clear that the proliferating requirements for public hearings and reviews, environmen-
tal impact reports, disclosure of conflict of interest and other auditing procedures
should be seen a partial response to the public's lack of faith that authorities can be
relied on to perform their fiduciary responsibilities.
There is a paucity of evidence concerning the comparative trends in evalua-
tions of different levels of government. The most systematic trend analysis derives
from annual surveys conducted by the Advisory Committee on Intergovernmental
Relations which tend to focus on the efficiency of government and on public attitudes
 10 COMPILATION OF REPORTS

toward taxation. In this regard, there has been a slight shift away from believing in
the ability of the federal as opposed to the state or local governments to "give you the
most for your money?" In 1972, 39% felt this way about the federal government, a
figure that slipped to 24% in 1984, but then rose to 33% by 1989.
Evaluations of the job performance of state or local government, however, are
only weakly related to the measures of generalized trust in the national government
summarized in Table 1. Some additional evidence that judgments about different
levels of government need not go together comes from an ACIR survey indicating
that the federal government is viewed as best able to manage large-scale, expensive
and technically complex tasks, whereas state or local government are perceived as
better-equipped to deal with problems of daily community life and as more respon-
sive to local concerns.
Returning briefly to the trends in trust in national government summarized in
Tables 1 and 2, it should be noted that opinion change tended to occur in an across-
the-board manner. While there were differences in the timing and rate of change in
the aggregate outlook of particular social and political groups, virtually all moved in
the same direction. Consistent with the interpretation that changes in political trust,
we shall see, opinion on nuclear policy is heavily event-driven, what Table 1 and 2
summarize, therefore, are "period effects..
Table 3 provides some empirical evidence of this by comparing the trends in
trust in government among groups with different levels of formal education and
different degrees of political participation. There are differences between these
groups, but these tend to be small and the aggregate change in group opinion is
virtually always unidirectional. Although the data are not included in Table 3, we
can report that there is no consistent statistical relationship between political knowl-
edge and trust in government. The more informed and politically active are as
trusting or cynical of government as their less involved counterparts.

SOURCES OF TRUST
Trust is earned. Even institutions or leaders with an inherited reservoir of
public confidence and goodwill can dissipate them through behavior that violates
public expectations. Failure, actual or perceived, erodes trust. The decline in trust in
government between 1964-80 clearly is a function of a national crisis in race rela-
 POLITICAL TRUST AND RISKY POLICY 11

tions. participation in an unpopular war, recession in 1974-76 and inflation in 1979, a

series of energy shocks, and the breach of public faith by Richard Nixon and his
associates in the Watergate affair. Battered by these events, it is difficult to quarrel
with those who did not perceive their government as likely to do what is right more
than "some of the time." To some degree, therefore, the loss of trust is a response to
perceived performance or directly experienced outcomes.
In this regard, how people learn about events and governmental performance
is significant. In the domain of economic policy, personal experience can be a crite-
rion for judgment. Inflation unemployment and energy shortages are directly experi-
ence in daily life or conversation. An enduring military conflict may be similar in
this regard. Other events and governmental actions are too remote to be learned first-
hand and are experienced only vicariously through the mass media. The content of
media coverage thus becomes critical in shaping public judgments about the trustwor-
thiness of government when the dominant events are remote from civic life. Miller,
Goldenberg and Erbring (1979) found that exposure to news coverage of the
Watergate affair did influence beliefs about the trustworthiness of government, but
that media coverage of the economic problems of 1973-74 had no such independent
impact on public opinion.
The role of the media is bound to be important in policies regarding nuclear
power and hazardous waste. Although dependence on the media for information
about such issues is not complete, personal experience clearly is less available for
judging the trustworthiness of government to manage policy in this domain. More-
over, where siting decisions are involved, the public is being asked to accept a risky
future on the say-so of government authorities whose record they can only judge
secondhand. This explains the significance of "signal events" (Stoffle et al 1990).
Where accurate information, relevant experience and the ability of ordinary citizens
to anticipate future problems all are scarce, risk perceptions are likely to be based on
information about accessible or available events that seem similar or representative.
Agency failures at one project enhance perceptions of risk at another, however objec-
tively different the technology being employed or the agency and decision-making
processes involved.
Vivid media descriptions of toxic spills, fires at chemical plants, nuclear leaks
abroad, not to mention such major disasters as TMI and Chernobyl are likely to have

^rTT^™"??^^^^^ - -v..-" -T\

 12 COMPILATION OF REPORTS

powerful influences on public opinion toward nuclear power and, indirectly, on the
trustworthiness of risk management agencies. However isolated in the statistical
sense, such seeming failures in the record of risk managers have a more potent
impact on public feelings than long incident-free periods. Moreover, like religious
faith, lost political trust is not easily regained once lost.
Jacob (1990) makes the point that the media and environmental groups are
not the only source of negative comments about the nation's nuclear waste disposal
program. Between 1981 and the present the OTA, GAO and National Research
Council all reported on the national disposal policy. All were critical of DOE for
errors in scientific projections and for its secretive internal processes. Jacob explicitly
ties the loss of public confidence to the diffusion of information about the DOE's
mistaken estimates about the difficulty of handling and disposing of nuclear waste, its
reluctance to reveal accidents and its failure to guarantee economic and social well-
being. Among the attentive public, therefore, part of the assault on the perceived
competence and fiduciary responsibility—that is, trustworthiness—of the DOE has
been the government itself. The underlying point, however, is that the public's loss of
trust in the nuclear disposal program should not be regarded as an irrational response
of the unenlightened. When the balance of news is bad and the credibility of safety
managers questioned by legitimate critics, public skepticism is predictable and in
many ways justifiable.

THE IMPORTANCE OF PROCEDURES

If outputs are one generic source of trust in government, procedural justice is
another. Tyler (1990) shows that the individual's compliance with the law is related
not only to whether particular legal outcomes produce net personal benefits, but to
whether the procedures for making a decision are considered fair. Belief in the fair-
ness of an institution's procedures, Tyler shows, not only facilitates acceptance of
painful or costly decisions, but helps sustain faith in the trustworthiness of institutions
and their leaders. These results are based on studies of compliance with police and
judicial decisions, but they have obvious resonance in the current context.
The conflict over siting a nuclear waste depository in Nevada reveals the
significance of procedural equity in gaining public acceptance of official decisions.
In the first postwar phase of nuclear policy, public involvement in decisions was
 POLITICAL TRUST AND RISKY POLICY 13

minimal. Over time, however, court decisions and environmental protection policies
have required public comment and impact statements. These procedures provided
opponents of siting decisions with a forum to air doubts about the credibility of
proposed solutions. The process of decision-making also may be contested on the
grounds of equity or fairness. It is a commonplace that Nevadans regard the National
Waste Policy Act of 1982 as amended for being biased against the state for ending
consideration of alternative sites for the repository.
Tyler and others suggest that openness and fairness endow an institution's
procedures with legitimacy in the public mind. Citizens seek access or the chance to
be heard; they seek to be treated with respect or consideration; they seek to partici-
pate in making decisions that affect them wherever possible; and they seek equality
of treatment. Thus, risk should be shared or allocated on some criterion that does not
single one group out for special treatment, negative or positive. In the Nevada case
quite obviously, those citizens affected most directly by the siting decision believe the
decision-making process failed to meet these criteria for legitimacy.

PUBLIC OPINION ON NUCLEAR POWER

Freudenberg and Rosa (1991) and Gamson and Modigliani (1989) provide
excellent recent summaries of trends in public opinion about nuclear power. Figure 1
tracks trends in public opinion and indicates a large secular decline beginning in the
mid-1970s. There were sharp drops in support following TMI, the release of the
Kemeny Commission report six months later and Chernobyl in reaction to the intense
media spotlight highlighting the dangers of nuclear power, with an incomplete re-
bound once the glare of media coverage faded.
General opposition to nuclear power has grown over the past two decades and
particularly among the younger age groups (Gamson and Modigliani 1989). Antago-
nism to building a nuclear power plant near one's own community has grown even
more substantially. In 1971, only 23% were opposed to such construction; by 1979,
before TMI, the figure was already 45% and a 1986 Gallup poll in the aftermath of
Chernobyl found that 70% opposed a local nuclear power plant. The greater opposi-
tion to a local nuclear power plant than to nuclear power in general is an index of the
"not in my own backyard syndrome." The NIMBY phenomenon consistently appears
in surveys of risk perception. Proximity to the proposed site of a waste repository
 14 COMPILATION OF REPORTS

consistently enhances opposition and belief in the dangers of such facilities.

Gamson and Modigliani emphasize the power of media discourse in shaping
the change in public opinion. They argue that the media treatment of nuclear power
issues shifted from presentations that emphasized pronuclear progress themes to
imagery and discussion that framed nuclear power in ambivalent terms as a "devil's
bargain" or "runaway" force that ultimately cannot be completely controlled or
negatively as a corporate benefit immunized from public accountability. The grow-
ing opposition and ambivalence revealed in survey data thus follows in the wake of
the flow of packaged information provided by the media. For present purposes, it is
worth noting that one element in the changed flow of news about nuclear power
beginning in the late 1970s is the emergence of an enduring concern with the public
accountability or trustworthiness of the industry and its supporters in government.
Gamson and Modigliani's insightful analysis of the interplay between media
discourse and public opinion suggests that current opinion toward the development of
nuclear power will not be reversed without linking this issue to progress and eco-
nomic necessity in the popular mind. The problem of waste disposal then becomes a
necessary part of the "devil's bargain." Taylor (1990) cites some polling data show-
ing that despite their opposition to nuclear power, many among the public are re-
signed that the future will bring a growing reliance on this energy source. In this
regard, nuclear arms agreements and the destruction of nuclear weapons stockpiles
are a novel stimulus that may move public images of the future in unknown direc-
tions.
However that may be, journalistic norms and the sympathy between media
elites and environmentalists (Wildavsky 1991) suggest that there will be ample fuel
for public fears about the hazards of nuclear power and waste disposal. Slovic,
Layman and Flynn (1991) and Erikson (1990) underscore how pervasive and deep-
seated are public fears about nuclear waste and other toxic materials. In the study of
Slovic and his colleagues, negative imagery accompanied by strong emotions domi-
nated public reactions to the proposed underground nuclear waste repository in
Nevada. Erikson regards the sense of dread and vulnerability elicited by toxic mate-
rials as an intense psychological threat which scientific argument is unlikely to
assuage. The defining characteristics of the nuclear and toxic perils is their
invasiveness and the invisible, seemingly unbounded long-run threat they pose. Once
 POLITICAL TRUST AND RISKY POLICY 15

more, new information about the damage caused by radiation as far back as the 1950s
in the United States or Russia functions as a signal that diminishes public trust in
government management of current projects.
This deep-seated sense of dread tends to be ignored by conventional risk
assessment calculations. Yet these sentiments not only are bound to powerfully affect
public opinion on proposed facilities but are difficult change through confident
pronouncements about the low statistical level of risk and the wonders of advanced
technology. However difficult it is to combat such fears, agency leaders are well-
advised to take them seriously. Being treated with contempt or a lack of consider-
ation, it has been showed, diminishes the public's deference to institutional authori-
ties.

POLITICAL TRUST AND NUCLEAR ISSUES

The studies of public opinion cited above repeatedly show that a lack of trust
in the government agencies involved in managing a nuclear waste repository is an
independent influence on oppositional opinions, even after factors such as proximity
to the proposed site, the perceived costs and benefits and political ideology are taken
into account. It should be noted, however, that the estimates of this "effect" of
political trust are modest in magnitude and the statistical models account for a small
portion of the variance in public opinion.
Comparing the trends in trust in the national government and opinion about
nuclear power summarized in Figure 1 indicates a lack of close connection between
the two attitudes. Support for nuclear power continued to decline while trust in
government waxed and waned. The resurgence of political trust during a Reagan
presidency that generally favored the development of nuclear power did nothing to
slow this movement. Table 4 in the Appendix illustrates the point by showing that
politically trusting and cynical respondents did not differ appreciably in their attitudes
toward environmentalists or opinions about government policy with regard to devel-
oping nuclear power. The implication is that high levels of presidential popularity
and a generalized sense of trust in national institutions cannot be easily harnessed to
the goal of boosting support for a waste disposal program and its managers.
In this regard, it is important to point out that the analysis of public attitudes
in this report refers exclusively to the opinions of the general public. While the
 16 COMPILATION OF REPORTS

climate of general opinion sets boundaries to public policy, the views of activist
groups and institutional elites have special significance. These groups both shape
mass opinion and the calculations of proximate decision-makers. A participatory
decision-making process gives intense minorities numerous opportunities for voice
and frequently the ability to dominate a policy domain whatever the preference of the
lukewarm majority.
Future research should examine the levels of trust among critical elites and
the bases of their outlook toward managers of the nuclear safety program. Clearly,
there are fundamentalist environmentalist groups who could never be won over and
whose opposition to technological risk is embedded in their cultural outlook or "way
of life" (Wildavsky and Dake 1989). Similarly, there are groups whose confidence in
the powers of science and technology are unshakable. The experience of countries
such as Japan and France indicate that a vital element in the development of nuclear
is elite consensus that such a program serves the national interest and meets a gener-
ally acceptable threshold of risk. The challenge to policy-makers in the United States
is to evolve a decision-making process that makes such a consensus possible.

THE CANADIAN MODEL

Canada's problem with hazardous waste disposal is directly analogous to that
faced by the United States and its experience in siting waste repositories is worth
reviewing in more detail than is possible here. The Canadian approach differs sub-
stantially from the process mandated by Congress and adopted by the DOE. Canada
requires approval of the local community before the final siting decision is made.
The Canadian system works as follows. The concept of long-term storage
deep in bedrock must be accepted before a site search is initiated. The current ap-
proval process was initiated in 1981. Atomic Energy of Canada Limited (AECL) is
responsible for developing the storage Concept which is being examined by an
official Review Panel with the advice of a Scientific Review Group. In the context of
this review, five public meetings were held in different provinces to inform the public
of the review process and the underlying approach to waste disposal. After Concept
approval by the Review Panel, AECL is to prepare an environmental impact state-
ment which the Review Panel considers before issuing its final recommendations to
the government for approval.
 POLITICAL TRUST AND RISKY POLICY 17

The Canadian approach involves intensive negotiations with local communi-

ties in order to develop a plan for mitigation and compensation and to involve them
in planning a system for monitoring safety. Formally, at least Canada is prepared to
trade-off time and inaction for public participation in and acceptance of siting deci-
sions.
AECL commissions frequent surveys of public opinion on nuclear issue.
These surveys, conducted principally in Ontario, indicate that between 1979 and the
present, public awareness of the Waste Management Program grew. I n 1979,44%
claimed to be aware of the program; in 1988, the figure was 61%. Knowledge of the
review process itself, however, was sparse; in 1988, only 14% claimed to know
anything about it. Nevertheless, in 1988,70% of the Canadian public expressed
confidence that it was technologically feasible to assure safe disposal.
Despite this general sense of trust, seemingly far in excess of the American
experience, Canadians are skeptical of computer models that assess risk and express a
desire for "an absolute guarantee of safety," clearly an impossible standard. Canadi-
ans therefore seek public participation in the siting process and like their American
counterparts place their trust in public interest groups as watchdogs for their safety
concerns. A recent poll found a majority of 52% favoring an initial monitoring
period of longer than forty years and a preference for sealing vaults only after an
extended trial period.
The Canadian data reveals many public misconceptions about nuclear waste
and widespread ignorance about its sources, quantities and toxicity. The evidence
concerning the relationship between knowledge and risk acceptance is mixed, paral-
leling the results of American data concerning the low-level waste repository in
Michigan. In some communities, public education and increased knowledge resulted
in lessening public fears about elements of the AECL disposal program. Access to
information and contact with AECL staff did increase trust in Program managers and
the credibility of their assessments, but this did not have the concomitant effect of
raising acceptance of the controversial aspects of the Program. Greber (1991) con-
cludes that a growth in public acceptance probably must await the successful testing
of a demonstration site.
Canadian and American public opinion converge in many respects. In both
countries, there are strong majorities who consider local veto rights, independent
 18 COMPILATION OF REPORTS

monitoring of the facility, a guarantee of equity in site selection and assured compen-
sation for reduced property values and other impacts as preconditions of accepting a
site near them. On the surface at least, the Canadian government has committed itself
to meeting these concerns and developed a process for waste storage that emphasizes
meaningful consultation.

CONCLUSIONS
The preceding review of public opinion consistently point to these conclu-
sions. First, Americans are becoming more fearful about the health and environmen-
tal hazards posed by technological change. How much of this heightened sensitivity
to risk is due to basic changes in the public's values and cultural outlook, how much
to dramatic events as amplified by media coverage and how much to objective
changes in the nature of the risks themselves is not clear. What does seem apparent is
that risks associated with radioactivity and with toxicity more generally are subjec-
tively experienced as uniquely frightening and repulsive. Under these circumstances,
scientific approaches to risk assessment that stress the low statistical probability of
the worst case scenarios have little impact on public attitudes.
Second, trust in institutions is the end-product of ongoing experience with and
learning about their performance. In the domain of nuclear policy, the Department of
Energy now lacks a reservoir of goodwill among the general public and is viewed
with intense hostility and suspicion in the state where it intends to locate a permanent
underground nuclear waste repository. On that issue, the choice is stark. Either
impose the siting decision on a recalcitrant public or abandon the effort. The legal
and political feasibility of a decision to preempt opposition to the Nevada site must
be weighed, of course. What seems apparent, however, even if successful, such a
preemptive strike is precisely the kind of action that further erodes trust and galva-
nizes opposition in other regions fearful of becoming the next target.
Third, the restoration of public trust is a difficult, long-term process, easily
subject to setbacks due to adverse events and negative publicity. In this regard, public
education carries it own risks. As Slovic, Layman and Flynn acutely note, openly
stating the limits of technical understanding and frankly admitting past errors might
actually cause a deterioration of confidence in the organization's ability to manage
risk even as it earns credit for being truthful.
 POLITICAL TRUST AND RISKY POLICY 19

Fourth, a low level of trust in institutions is to some extent inherent in the

adversarial nature of the American political system. Divided government, a lack of
cultural consensus, a litigious public and a proliferation of interest groups benefitting
from institutional opportunities to make their case are factors that are bound to sow
public skepticism about the credibility of risk management policies. Where elites
are deeply divided, the general public cannot be expected to simply give authorities
the benefit of the doubt.
Although rebuilding public faith in the trustworthiness of federal risk manage-
ment agencies is a formidable task, the problem must be addressed. Indeed, the
survey evidence summarized above provides some clues as to the kinds of structural
changes in decision-making with which the process can begin. The guiding prin-
ciples should be to redefine the process in ways that provide openness, public partici-
pation, local involvement in decision-making and equity.
The policy-making process itself can be decomposed into three phases with
different configurations of decision-makers. Site selection in which outside experts,
local authorities and community residents have an important role that goes beyond
mere consultation; facility management in which federal agencies aggressively
regulate; and safety monitoring in which outside experts and local constituencies have
an authoritative role.
Among the elements of a long-run strategy are:
1. Improved public education. Technological knowledge and accurate infor-
mation about the problem of waste disposal is no guarantee of risk acceptance or trust
in institutions. There are specks of evidence, however, that knowledge may dissipate
the phobic quality of some public fears. An effort therefore should be made to
communicate consensual scientific assessments of risk to the public and the media
institutions that shape opinion. The involvement of "neutral" experts with sound
environmentalist credentials in this process is important. Creating a public forum in
which the assessments of sources with high credibility such university-based experts
and public interest groups, about the necessity for storage repositories can be commu-
nicated is important. One element in the process of public education should be to
increase awareness of the dimensions of the problem and the nature of the risks
associated with the status quo and various alternatives. In the absence of substantial
expert agreement about the nature of the problem and the risks of alternative solu-
 20 COMPILATION OF REPORTS

tions, public doubts will remain intact.

2. Manipulation of costs and benefits. Concentrating on the role of trust in
institutions should not ignore the relevance of other incentives for supporting a
proposed facility. Surveys repeatedly point to public concern about guaranteed
compensation for social and economic losses caused by the construction of a facility,
not to mention insurance against possible accidents. Given the public distrust of the
DOE, a credible system for providing compensation and financing solutions for
environmental and public health problems would have to include outside guarantors.
3. New institutions. A legitimate decision-making process should include a
substantial role for independent technical review bodies composed of members from
a wide range of disciplines, citizen groups and outlooks, including the participation
of all affected parties and of exclusion of groups committed to one or another side of
the issue. Indeed, siting decisions might well be assigned to wholly new institutions
composed of a mixture of civil, economic and governmental figures along the lines of
the National Commission created to recommended the closing of military bases. This
procedure can elevate equity considerations in site selection and reassure the public
through its hearings and reports that a full range of alternative sites and technical
solutions were considered.
4. Continuous monitoring as a priority. An important reason for the loss of
trust in the DOE and its contractors has been revelations of widespread environmen-
tal problems at weapons facilities and efforts to conceal or downplay these problems.
Secretary Watkins himself has called for a new culture of public accountability. One
consistent finding of all research about trust in government is that the public's faith is
earned. Performance matters and public awareness of failures in scientific manage-
ment, breakdowns in equipment, missed deadlines and cost overruns have had a
powerful and cumulative negative impact. Aggressive oversight mechanisms that are
continuous, that include local representatives with shared power and that provide for
independent scrutiny of scientific information by outside researchers are another
element in a strategy for restoring public confidence.
Public opinion toward the nuclear establishment in government, science and
industry has traveled a forty year trajectory from admiration to mistrust. Once
associated with progress and economic gain, these institutions now elicit widespread
fears of disaster and runaway costs. Given the public's perceptions of the risks of
 POLITICAL TRUST AND RISKY POLICY 21

chemicals, it would seem that the lessons to be learned from the controversies sur-
rounding the disposal of nuclear wastes apply to the disposal of toxic materials more
generally. Any facility that produces, transports or disposes of such materials will
face public opposition and assessments of risk that may differ from those of technical
experts. Heightened public awareness of and anxieties regarding toxics can in turn
lead to attempts to use governmental power to regulate these substances.
Building credibility and developing a decision-making process are issues that
face government agencies on an ongoing basis. The first step is to recognize the
existence of the problem. The second is to acknowledge the legitimacy of public
concerns, however much they contradict the views of agency staff and client groups.
The third step is to institute organizational change designed to increase legitimacy,
even at the expense of time, neat structural arrangements and power. Finally, trust is
based on effectiveness; setting reasonable expectations for performance and consis-
tently meeting them builds public confidence.
 22 COMPILATION OF REPORTS

REFERENCES

R. Barke, J. Espey and H. Jenkins-Smith, "The Evolution of Policy Contexts:

Analyzing the Bases for Change in Mass Perceptions of Nuclear Politics," unpub-
lished paper presented at the 1991 Annual Meeting of the American Political Science
Association, Washington D.C.

J. Citrin, "The Political Relevance of Trust in Government," American Politi-

cal Science Review, vol. 68, 1974.

J. Citrin and D.P. Green, "Presidential Leadership and the Resurgence of

Political Trust," British Journal of Political Science, vol. 16, 1986.

K. Dake and A. Wildavsky, "Risk Perception and Political Cultures," unpub-

lished paper presented at the 1990 Annual Meeting of the American Political Science
Association, San Francisco.

K. Erikson, "Toxic Reasoning: Business Faces a New Kind of Fear," Harvard

Business Review, Jan/Feb. 1990.

W Gamson and A. Modigliani, "Media Discourse and Public Opinion on

Nuclear Power: A Constructionist Approach," American Journal of Sociology, vol.
95, 1989.

M. Greber, "Sociological Research for the Canadian Nuclear Fuel Waste

Management Program," unpublished paper, 1991.

G. Jacob, Site Unseen, Pittsburgh, University of Pittsburgh Press, 1990.

H. Kunreuther, D. Easterling, W. Desvousges and P. Slovic, "Public Attitudes

toward Siting a High-Level Nuclear Waste Repository in Nevada," Risk Analysis, vol.
10, 1990.
 POLITICAL TRUST AND RISKY POLICY 23

A. Miller, "Political Issues and Trust in Government," American Political

Science Review, vol. 68, 1974.

A. Miller, E. Goldenberg and L. Erbring, "Type-Set Politics: Impact Newspa-

pers on Public Confidence," American Political Science Review, vol. 73, 1979.

K.D. Pijawka and A. H. Mushkatel, "Public Opposition to the Siting of the

High-level Nuclear Waste Repository: The Importance of Trust," unpubhshed paper
presented at the 1991 Annual Meeting of the American Political Science Association,
Washington D.C.

E. Rosa and W. Freudenberg, "The Historical Development of Public Reac-

tions to Nuclear Power: Implications for Nuclear Waste Policy," R.E. Dunlap and M.
E. Kraft eds. The Public and Nuclear Waste: The Socio-Political Dimensions of
Repository Siting, Durham, Duke University Press, 1991.

S. Rothman and R. Lichter, "Elite Ideology and Risk Perception in Nuclear

Energy Policy," American Political Science Review, vol. 81, 1987.

D. O. Sears, T. Tyler, J. Citrin and D. Kinder, "System Support and Public

Reactions to the Energy Crisis of 1974," American Journal of Political Science,
vol.22, 1978.

P. Slovic, "Perception of Risk," Science, vol. 236, 1987.

P. Slovic, M. Layman and J. Flynn, "Lessons from Yucca Mountain," Envi-

ronment, April 1991.

R. Stoffle et al. Social Assessment of Siting a Low-Level Radioactive Waste

Storage Facility in Michigan, Ann Arbor, Institute for Social Research Publications,
1990.

J. Taylor, "Chernobyl's Impact on U.S. Nuclear Power," Forum, Fall 1990.

 24 COMPILATION OF REPORTS

A. Wildavsky and K. Dake, "Theories of Risk: Who Fears What and Why,"
Daedalus, vol. 119, 1990.
 POLITICAL TRUST AND RISKY POLICY 25

APPENDIX

~'7Tsr&%&\r
26 COMPILATION OF REPORTS
 FIGURE 1

Trends in Political Trust and Support for Nuclear Energy

% Positive Responses
70-. 1968-1990
65-1
Tiust Govt Do Right
60
Govt Run for Ail
55 H
Pro Plant Contrucfn
50 Build More N-Plants

45-j

40

35

30

25 H

20

15 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 T"
1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990

Year
 28 COMPILATION OF REPORTS

TABLE 1

TtEMDS IN TRUST III GOVERMCNT - MES DATA 1958-1990

1958 1964 1966 1968 1970 1972 1974 1976 1978 1980 1962 1984 1966 1968 19S
TRUST GOVERHMEHT TO 00 RIGHT
Hon* OX 3 0 0 1 1 1 4 4 3 1 2 3 3
Sow 25X 23 30 38 46 45 62 65 66 70 64 54 59 56 70
Host 59X 62 50 55 47 49 34 31 27 24 32 41 36 37 25
Always 16X 15 18 8 7 5 3 3 3 2 2 4 3 4 3
Kone/Soae 25X 23 32 38 47 46 63 66 70 74 67 55 61 59 72
Noat/Aluays 75X 77 68 62 53 54 37 34 39 26 34 45 39 41 28

GOVERNMENT RUM FOR ALL

F*u Big Interest* 30X 39 43 55 59 74 73 73 77 68 59 67 75
Benefit of All 70X 62 57 45 41 26 27 27 23 32 41 33 25

GOVERNMENT WASTES MONET

A Lot 46X 45 59 68 67 76 77 79 80 68 66 64 68
Sow 44X 47 36 28 31 22 20 19 18 30 30 34 31
Hot Much 10X 9 5 4 2 1 3 2 2 2 4 2 2
A lot 46X 45 59 68 67 76 77 79 80 68 66 64 68
Sow/Not 54X 55 41 32 33 24 23 21 20 32 34 36 32
Much

60VERHHEHT OFFICIALS KHOU WHAT THEY'RE DOING

Do Know 40X28 39 4 8 4 2 4 8 5 3 5 6 6 5
Don't Know 601 71 61 53 58 52 47 44 35

PEOPLE RUNNING THE GOVERMHEHT CROOKED

A Lot 25X 29 27
27 34
34 38
38 47
47 44
44 42
42 49
49 33 42 50
Not Many 46X52 54 4 5500
5 4 48
8 4 43
3 4 42
2 4 4444 3 43 52 47 41
Hardly Any 28X 20 20
20 16
16 15
15 11
11 13
13 14
14 9
9 15 12 9
A Lot 25X 29 27
27 34
34 38
38 47
47 44
44 42
42 49
49 33 42 50
Not Many/ 75X 71 73
73 66
66 62
62 53
53 56
56 58
58 51
51 67 59 50
Sartily Mtf

Source: National Election Studies; In-person interviews of National Saaples, done biennially.
 POLITICAL TRUST AND RISKY POLICY 29

TABLE 2
TRENDS IN CONFIDENCE IN INSTITUTIONS

"As far as the people running [institution] are concerned, would you
say you have A Great Deal of Confidence, Some Confidence, or Hardly Any
Confidence At All in them?"
1973 1974 1976 1978 1980 1982 1984 1986 1988 1990 1991
Medicine 54% 60 54 46 52 45 52 47 51 46 44
Education 37 49 38 28 30 33 29 28 29 27 41
Military 32 40 39 30 28 31 37 32 34 33 47
Organized
Religion 35 44 31 31 35 32 32 26 20 23 37
Supreme
Court 32 33 35 28 25 31 35 31 35 35 40
Major
Companies 29 31 22 22 27 23 32 26 25 25 36
Press 23 26 28 20 22 18 17 19 18 15 33
Executive
Branch 29 14 14 13 12 19 19 21 16 23 37
Congress 24 17 14 13 9 13 13 17 15 15 34
Organized
Labor 16 18 12 11 15 12 9 8 10 11 28

Source: General Social Survey, National Opinion Research Corporation;

In-person interviews of National Samples, done annually.

"izw&zrrTr'gr' ^*/;&i^^^-i^-vv -" ••-••y.:^.^m^^i- ^:^ r

'w:<v
 30 COMPILATION OF REPORTS

TABLE 3

EDUCATION, PARTICIPATION, AND POLITICAL TRUST

1968 1980 1988 1990

Education:
Less than High School Diploma 37% 12% 15% 15%
High School Diploma 47 13 22 14
Some Post-High School Education 46 12 23 14
College Graduate 51 11 27 13
Graduate Degree 61 13 17 9

Voting Turnout:
Reported Voting 45% 13% 23% 13%
Did Not Vote 42 11 18 14

Source: National Election Studies; In-person interviews.

 POLITICAL TRUST AND RISKY POLICY 31

TABLE 4
ENVIRONMENTALISM AND POLITICAL TRUST

1980 1988 1990

Feeling Thermometer towards Environmentalists
Mean Value (0 - Cool, 100 • Warm)
Respondents with Low Trust 71 76 77
Respondents with Moderate Trust 70 77 80
Respondents with High Trust 76 77 79

Percentage of respondents answering both TRUST GOVERNMENT TO DO RIGHT

and GOVERNMENT RUN FOR FEW in trusting direction:
"Present governmental regulations with regard to pollution and other
environmental problems limit full use of some energy sources. Do you
think the government should relax environmental protection regulations
to increase the use of these energy sources, or should the government
keep environmental protection regulations unchanged even though this
may delay the production of more energy?"
Keep regulations unchanged 13%
Relax regulations, with qualification
(volunteered) 11
Relax regulations 12

"Do you think something can be done to deal successfully with the
energy problem, or do you think we 11 have to continue to live with
1

energy shortages and rising prices because not much can be done about
it?"
Deal successfully with problem 12%
Live with shortages; not much
can be done 14

"Some people say that the nation needs to develop new power sources
from nuclear energy in order to meet our needs for the future. Other
people say that the danger to the environment and the possibility of
accidents are too great. What do you think? Are you in favor of
building more nuclear power plants, would you favor operating only
those that are already built, or would you prefer to see all nuclear
power plants closed down?"
Favor building more plants 13%
Operate only those already built 13
See all plants closed down 9
Source: 1980 National Election Study; In-person interviews.
 32 COMPILATION OF REPORTS

TABLE 4 (continued)
ENVTRONMENTALISM AND POLITICAL TRUST
Percentage of respondents with High Trust on two-item Trust Index

1988 1990
"If you had a say in making up the federal budget this year, for which
of the following programs would you like to see spending increased and
for which would you like to see spending decreased...
Should Federal spending on improving and protecting the environment be
increased, decreased, or kept about the same?"
Increased 21%
Decreased/Kept the same 23

Source: 1988 National Election Study; In-person interviews.

"Should the government force all companies to comply with strict

pollution standards even if it might put some of them out of business?"
Yes, force compliance 13%
Depends (volunteered) 11
No, don't force compliance 17

Source: 1990 National Election Study; In-person interviews.

 PUBLIC TRUST IN ORGANIZATIONS AND
INSTITUTIONS:
A SOCIOLOGICAL PERSPECTIVE

CRAIG THOMAS
INSTITUTE OF GOVERNMENTAL STUDIES
UNIVERSITY OF CALIFORNIA, BERKELEY

Prepared for the U.S. Department of Energy

September, 1991

~%ir; ••'?•!. •"-';&.=%,•.'. -'•• •^•?.:::--'->>-i '•:&M£-mWt- .W-t>w,:h.

,
"^^^Vi-':^."? l-^i'
 PUBLIC TRUST IN INSTITUTIONS AND ORGANIZATIONS 37

Organization theory is virtually devoid of references to specific means

through which organizations can gain public trust. Though implications regarding
public trust can be inferred from the literature on organizations and their environ-
ments, the literature itself does not speak directly to the issue of maintaining or
building such trust. On another front, the infra-organizational literature on trust is
extensive, but it focuses primarily upon the links between employer/employee rela-
tions, job satisfaction, and organizational productivity.
1

Thus, given the current treatment of trust in the organization literature, this
paper reviews instead the extensive sociological literature on trust, including some
recent developments regarding public trust in institutions. The paper begins with a
review of the major conceptions of trust that have been developed in the social
sciences, and then relies upon Zucker's (1986) typology of trust both to characterize
this literature as well as to identify different sources of trust production. The last
section presents means through which trust can be maintained. Since the literature
suggests trust is maintained through means somewhat different from those through
which it is produced, these topics are presented separately. Throughout, parallels are
drawn to organization theory in order to demonstrate the applicability of the socio-
logical literature on trust to the interaction of organizations with their environments.

SOCIOLOGICAL CONCEPTIONS OF TRUST

Trust has been a topic of moral and social philosophy for hundreds of years.
Numerous conceptions have been advanced and refined, the most prominent of which
are outlined below. Despite the breadth and depth of this literature, and the relatively
recent efforts of such authors as Blau (1964), Luhmann (1979), and Zucker (1986) to
grapple with and define the concept in theoretically productive ways, it is surprising
that trust has made so little headway into the literature on organizations and their
environments.
Yet, this also appears to be the case in other fields as well, where the socio-
logical literature on trust is similarly overlooked, even in research using trust as an
important variable. For example, Sissela Bok (1978), in her acclaimed book on the
moral dilemmas of lying, never defines trust, and refers only briefly to some possible
conceptions of trust in a footnote (1978:31). Though the reader can infer from her
2

discussion that trust has something to do with expectations regarding the future
38 COMPILATION OF REPORTS

behavior of others (1978:18-9), she is never explicit on this point and one is thus left
to wonder at her conclusions. If lies indeed erode the general system of trust upon
which institutions and society are founded, how would we recognize the erosion of
trust, and thus prevent institutional collapse?
Reiss (1984) similarly does not define trust, yet argues that governments
select regulatory enforcement models which are based either on trust or surveillance.
Though he tells us that "trust systems are fragile" (1984:27), that "the capacity to
keep secrets is a condition of trust" (1984:29), and that "the development of trust
systems has markedly changed the nature of wrongdoing" (1984:33), Reiss never
explicitly defines trust, and his citations suggest he is generally unaware of the
sociological literature on trust. Because of such oversights, and because researchers
differ in their approaches to trust, considerable effort is devoted below to fleshing out
various conceptions of trust prior to discussing trust production and maintenance.
Sociological definitions of trust generally include some reference to expecta-
tions, particularly expectations that others will behave in a predictable manner not
devoted entirely to self interest (for examples and citations, see Barber, 1983:7;
Zucker, 1986:57-58; Neu, 1991a:186; andNeu, 1991b:244). Violating these expecta-
tions disrupts trust, but does not necessarily generate distrust. As Zucker (1986:59)
argues: "Distrust only emerges when the suspicion arises that the disruption of expec-
tations in one exchange is likely to generalize to other transactions." The conceptions
of trust presented below — trust in a fiduciary relationship, trust as an alternative to
contracts, trust as distinguished from cooperation, and trust as a means for reducing
social complexity — generally include these characteristics. The conceptions are not
mutually exclusive, but are rather intended to capture the various ways in which trust
has been presented in the social sciences. 3

TRUST IN A FIDUCIARY RELATIONSHIP

One long-standing conception of public trust arises from the notion of fidu-
ciary relationships, in which trust is placed in another to act in one's capacity. Silver
(1985:53) traces this conception of trust in social and political theory at least back to
Locke's distinction between political trustees and social contracts.
 PUBLIC TRUST IN INSTITUTIONS AND ORGANIZATIONS 39

Society, [Locke] argued, is constituted by a contract

among persons entering into agreements from which all
parties properly derive benefit. Government, however,
is founded upon trust; the faithful trustee does not
benefit from fulfilling the trust placed in him.... Trust
sustains government, as contract does society.

Barber (1983) relies primarily upon a conception of fiduciary trust, but

4

applies it more broadly to include various familial, charitable, and economic ex-
changes. Though he seeks to delineate fiduciary trust from professional trust — i.e.,
trust in the "technically competent role performance" of experts or professionals
(1983:9) — he presents little theoretical justification for treating them separately.
Indeed, at one point, he implies that trust in technical competence is simply a special
case of fiduciary trust since a fiduciary obligation is placed on the user of special
knowledge (1983:15). Thus, as in all fiduciary relationships, individuals are trusted
(expected) to carry out their duties in regards to others while not taking excessive
personal advantage of their privileged position.
Unfortunately, despite the length of his book, Barber adds little of theoretical
or empirical import to the literature on trust, relying instead on the conceptual work
of his predecessors. Though he provides extensive descriptions of such arenas of
fiduciary trust as the family, private foundations, and government, he does not clearly
establish links between trust production, maintenance, or loss. In this regard, Parsons
(1969) and Bella (1987) provide more extensive analytic treatments of the requisites
for professional trust. More generally, trust production in the broader area of fidu-
ciary relationships will be discussed later in this paper with regard to private markets
(Shapiro, 1987) and fiduciary law (Clark, 1985).
Parsons (1969:127-28) claims there are four conditions upon which the
emergence of trust in relationships between clients and professionals depends.
Though Parsons does not explicitly state that all four conditions are necessary for lay
persons to overcome the "competence gap" and to place their trust in professionals,
his language suggests all four conditions are necessary. "First, it must be believed on
both sides of the gap and, of course, by a sufficient proportion of the participants that
the enterprise in question is in the service of common values." Second, the common
values "must... be translatable into common goals ..." Third, individuals on both
sides of the relationship must be collectively involved; that is, they must not see
40 COMPILATION OF REPORTS

themselves "only" as patients or "only" as doctors. Finally, "there must be some

adequate 'symbolization' of both competence and integrity," since trust relationships
"should not be grossly incompatible with known facts and conditions of feasibility...."
Combined, these conditions of collective solidarity provide "a common interest"
motivating actions that are neither in conflict with personal interests nor fully dictated
by them.
Parsons' analysis of professional trust should thus be viewed within the
framework of his theory of functional differentiation within social structures and the
cultural legitimation of those functions (Parsons, 1967:500-503). Unfortunately,
extracted from this broader theory of social systems, his four requisites for profes-
sional trust are more definitional than causal. In this regard, Bella's (1987) analysis
is more process-oriented. Bella argues that professionals evoke public trust not
through their personal integrity or claims to expertise, but through the integrity of the
social process through which the knowledge base of the profession is itself derived
and applied. Rigorous education and peer reviews, as well as constant conformance
to codes of ethics, are signals to the public that professionals do not define their
responsibilities solely through self-interest or organizational assignments. These
mechanisms will be further discussed in the later sections on trust production and
maintenance.

TRUST AS A N ALTERNATIVE TO CONTRACTS

Numerous authors have argued that trust and contracts are the two basic
means through which all exchanges are facilitated, though they disagree on the
degree to which trust and contracts are alternative or complementary mechanisms for
exchange. In economic analysis, for example, the assumptions underlying the model
of "perfect competition" do not include or require trust because exchange occurs
under conditions of both perfect information and numerous suppliers and demanders.
In this imaginary world, individuals can perfectly specify a contract; and, if one party
breaks the contract, numerous others exist with whom contracts can be made. In this
repeated-game environment, individuals are driven to live up to their contracts
because their reputation is a capital asset. Thus trust is not necessary for exchange.
No market is perfect, however; and in less than perfect markets some amount
of trust must exist prior to contracting (Neu, 1991b:245). While economists have
 PUBLIC TRUST IN INSTITUTIONS AND ORGANIZATIONS 41

focused on the use of implicit or explicit contracts, other social scientists have argued
that contracts themselves are not sufficient for exchange for several reasons. Since it
is prohibitively costly, if not cognitively impossible, for contracts to include specifi-
5

cations of all possible contingencies, most contracts rest on "background" (Garfinkel,

1964) assumptions, in which the parties to a contract trust that each will act according
to expectations that are not covered in the contract itself (Dasgupta, 1988:53). This is
reflected in Macauley's observations that businessmen avoid calling out their lawyers
or reading legalistic contract clauses at one another whenever discrepancies between
contracts and outcomes arise (1963:61), and that they sometimes "welcome a mea-
sure of vagueness in the obligations they assume so that they may negotiate matters in
light of the actual circumstances" (1963:64) and thus maintain long-term business
relationships (1963:63). Legal theory has accordingly begun giving greater weight to
the relational aspects of contracting, discounting the classical notion that written
contracts encompass discrete transactions in which both parties are assumed to have
planned for all contingencies and to have entered into the contract accordingly
(Macneil, 1978).
Cognitive and practical limitations in contractual planning are compounded
by the fact that many exchanges involve asymmetric (or unevenly distributed) infor-
mation, particularly in principal-agent relationships where a principal retains the
expert services of an agent specifically because the principal herself does not possess
such expertise. In such circumstances, the principal may be able to place some
contractual limitations on the agent's performance, but the relationship's asymmetry
further constrains the principal's ability to specify contingencies in a contract and
monitor performance (Shapiro, 1987:633-34; Pratt and Zeckhauser, 1985).
Silver (1985) argues that trust was particularly important prior to the 19th
Century, when monetized markets and third-party enforcement of contracts were
incompletely developed. "Hence the high, indeed hyperbolic, celebration of trust-
worthiness, and the deep concern with treachery and disloyalty ... that characterized
the period" (1985:54). The development of the price system and legal institutions
could not, however, completely replace trust (1985:58), since contracts (Lewis and
Weigert, 1985b) and monetary exchange systems (Frankel, 1977) are only possible in
the presence of common cultural understandings and expectations. Contracts not
only presuppose trust between the contracting individuals and in the legal system
42 COMPILATION OF REPORTS

which backs them, contracts are imperfect substitutes for trust (Neu, 1991a: 190-91).
More generally, contemporary social theorists of trust reject the utilitarian,
atomistic accounts of economic exchange underlying the "hidden hand" theory of
Adam Smith and his contemporary progeny, the institutional economists.
Granovetter (1985), Perrow (1986), and Bradach and Eccles (1989), for example,
argue that economic trade is "embedded" within interpersonal trust relationships, and
thus reject rational choice arguments as being narrowly construed or
"undersocialized" (Granovetter, 1985:487). By ignoring the political, ethical, and
cultural environments within which exchange occurs, atomistic accounts of self-
interested behavior fail to recognize the social factors which constrain and channel
choice.
Institutional incentives to obey contracts, for example, are probably insuffi-
cient for preventing malfeasance since purely self-interested behavior is certainly
capable of discovering ways to evade contractual obligations and regulations
(Granovetter, 1985:489). As will be argued below in the section on trust production,
institutional arrangements can bolster trust by providing common frameworks for
exchange between strangers, but they are not a functional equivalent for interpersonal
trust. Economic analyses of principal-agent relationships also overemphasize the role
of monetary incentives in exchange relationships to the virtual exclusion of socially
mediated rewards (Arrow, 1985:50). Even the economic incentive to protect or build
one's reputation as a capital asset (Dasgupta, 1988:62) does not explain such "eco-
nomic" transactions as tips left in roadside restaurants far from one's home and
acquaintances (Neu, 1991b:246). Thus, some form of generalized social morality, or
trust, must underlie exchange relationships (Granovetter, 1985:490). One prominent
economist, Kenneth Arrow, has even admitted that trust may be a necessary condition
for markets to operate efficiently or perhaps even to operate at all (Arrow,
1974:23,26). Economic analysis, however, can only assume that trust is present or
absent; it can not predict the conditions which create or erode trust, nor can it tell us
the degree to which trust is present.
Bradach and Eccles (1989) argue that trust also permeates authority (or intra-
organizational) exchanges in addition to markets. Trust may thus be an important
factor within government agencies in determining whether delegated responsibilities
will lead to successful policy implementation (March and Olsen, 1989:11,22-23,27).
 PUBLIC TRUST IN INSTITUTIONS AND ORGANIZATIONS 43

Given the presence of trust in both market and hierarchical transactions, Bradach and
Eccles argue that the "markets and hierarchies" dichotomy of transaction cost eco-
nomics is a false dichotomy because price, authority, and trust interweave in various
6

ways to govern transactions (1989:101). Oliver Williamson (1991) has responded to

this critique by reconceptualizing the embeddedness argument in order to make it
more amenable to a transaction-cost framework. Thus, he argues that exchanges
based on interpersonal trust are relatively rare outside of the family; that such trust-
based exchanges can be readily distinguished from those based on calculative behav-
ior; and that exchanges based on calculative behavior are themselves backed up by
various social and legal institutions embedded in trust.
Williamson's approach, however, may lead analysts to excessively cynical
interpretations of specific transactions given the explicit assumption of opportunistic
behavior underlying transaction cost economics (Williamson, 1991:5-6) and the
absence of an operational distinction between trust and calculative behavior. Rather
than providing an operational distinction, Williamson cites three examples of trust
from Coleman's (1990) work on rational choice, arguing that Coleman's descriptive
examples can be interpreted merely as calculative behavior in the face of uncertainty.
In relying on these examples, however, Williamson has placed himself on relatively
firm ground since, as will be discussed in the following section, most sociologists
would agree with him that game-theoretic examples do not capture the notion of
trust.

TRUST VERSUS COOPERATION

Many psychologists (e.g., Deutsch, 1958; 1973) have attempted to use games
in experimental situations to measure and/or establish the antecedents to trust, but
their efforts have generally been held in disdain by sociologists of trust. Lewis and
Weigert (1985a), for example, in reviewing the empirical research on trust generated
by experimental psychologists and political scientists, argue that it relies excessively
upon "methodological approaches that reduce trust to its cognitive content through
psychometric scaling techniques or to its behavioral expressions in laboratory set-
tings" (1985a:967). In other words, they analyze trust as the product of individuals
sequentially reacting to each other's behavioral displays. "From this atomistic per-
spective, trust resides in individuals, focuses on some social object, and is enacted in
44 COMPILATION OF REPORTS

behavior" (1985b:456). Sociologists, however, conceptualize trust "as a reciprocal

orientation and interpretive assumption that is shared, has the social relationship itself
as the object, and is symbolized through intentional action" (1985b:456). Thus,
empirical research conceptualizing trust as a psychological event within the indi-
vidual rather than an intersubjective or systemic social reality is not capturing the
concept itself (1985a:967).
Lewis and Weigert (1985a:975) note, for example, that "prisoner's dilemma"
experiments, as exemplified by the work of Deutsch (1958; 1973), merely identify
the antecedents to cooperative behavior (e.g., the ability to communicate and repeated
trials), but do not establish whether the decision to cooperate is itself based on trust.
7

Moreover, "If, as the sociological conception of trust holds, trust is essentially social
and normative rather than individual and calculative, we would not expect it to
manifest itself strongly in experiments where strangers are brought together to inter-
act in the absence of prior social relationships among them and according to the
norms of the experimental situation" (1985a:976). Experimental games are not, in
fact, structured in ways similar to social interaction. Not only are they time-bound,
but the decision by research subjects to be "in the game" allows them to suspend the
presuppositions and procedures of "serious" life as well as to opt out or "leave the
game" whenever they choose (Garfinkel, 1963:207). Because morality and responsi-
bility is circumscribed in a laboratory setting, caution should be used in claiming that
trust can be measured or equated with cooperative behavior.
Though cooperation can not be equated with trust, it is indicative of the
presence of trust since some degree of trust underlies all human interactions. Despite
one observer's observation that "We don't trust people who are only honest when it
pays to be honest" (Bella, 1987:118), both cooperation and competition require trust,
since competing in a mutually non-destructive way requires trusting our competitors
to comply with at least some basic rules (Gambetta, 1988:215). As Adam Smith once
noted, "if there is any society among robbers and murderers, they must at least...
abstain from robbing and murdering one another" (cited in Gambetta, 1988:214).
Thus, as will become apparent in subsequent sections, trust is not a phenomenon
which either exists or does not exist. Not only are there different types and sources
of trust (Zucker, 1986), but trust also exists between the extremes of blind trust and
the complete absence of trust (Gambetta, 1988:218).
 PUBLIC TRUST IN INSTITUTIONS AND ORGANIZATIONS 45

In his critique of the literature on trust, Williamson argues that social scien-
tists have recently begun to use trust and risk interchangeably, such that trust is a
subclass of risk, and that trust is "warranted when the expected gain from placing
oneself at risk to another is positive, but not otherwise" (1991:20). By reviewing
only the recent literature, however, he presents an uneven depiction of the literature
as a whole, since trust in experimental situations has often been framed in terms of
expected payoffs which are negative (Deutsch, 1958; 1973). In the latter formula-
tion, trust is claimed to exist when individuals follow decision paths which allow
others to inflict greater negative consequences than positive. Given Lewis and
Weigert's (1985a) critique of this latter approach, Williamson's use of positive ex-
pected payoffs as a characterization of the literature on trust takes on the appearance
of a strawman. In other words, Williamson only critiques examples which most
observers would agree are more accurately depicted as calculative behavior; while
implying that examples demonstrating negative payoffs can be explained by such
situational constraints as bounded rationality, coercion, or becoming rattled under
pressure (1991:27).
In sum, although game theorists may speak of trust, they are probably not
studying trust at all. "What they are investigating are the processes by which indi-
viduals come to formulate and act on predictions about the behavior of others"
(Lewis and Weigert, 1985a:976). Trust includes cognitive, emotional, and behavioral
components (Lewis and Weigert, 1985b:464), but such experiments do not distin-
guish the degree to which these components are present at various stages of iterated
games or how these components are interrelated. More generally, it is unknown
whether the players trust each other's motives or believe that their own motives are
trusted by others. Given that traditional game theory does not consider how these
beliefs are acquired, theorists end up "finding" more equilibria — "usually more
uncooperative ones" — than in fact exist in the real world (Gambetta, 1988:217).

TRUST AS A MEANS FOR REDUCING COMPLEXITY

A relatively recent strand of the sociological literature argues that humans
need to trust in order to reduce the complexity of even the most routine decision
making, and that trusting behavior thus permeates social life (Luhmann, 1979; Lewis
and Weigert, 1985a, 1985b). Garfinkel's studies (1963; 1964), while not focused
46 COMPILATION OF REPORTS

specifically on the concept of trust, show the degree to which stable interactions are
based upon things "known in common" and "taken for granted," and which thus
reduce the complexity of social life. Instructing his undergraduates to interact with
friends, family, and strangers in ways which would disrupt normally "unnoticed
background expectancies" (1964:227), Garfinkel sought to demonstrate the ease with
which stable, concerted interactions could be disrupted.
In one experiment, for example, students were instructed to engage unsuspect-
ing friends or strangers in conversation, and to act on the assumption that the other's
motivations were hidden and thus that everything the person said was not to be
trusted. He reports (1964:234) that:

One student spoke for several when she said she was
unable to get any results because so much of her effort
was directed to maintaining an attitude of distrust that
she was unable to follow the conversation. She said
she was unable to imagine how her fellow conversa-
tionalists might be deceiving her because they were
talking about such inconsequential matters.

From these "breaching" experiments, Garfinkel derived his conception of

trust as the belief that others will comply with the expectancies — or rules — of daily
life (1963:190; 1964:234). Thus conceived, pure distrust is impossible to maintain
even over short durations because of the immense complexity it brings to social
interaction. A world of distrust is essentially senseless because events appear "atypi-
cal, causally indeterminate, and arbitrary in occurrence, without a relevant history or
future ... or moral necessity" (1963:189). Since all possible contingencies would
have to be accounted for at every step, and since humans are boundedly rational, pure
distrust is impossible outside of a hermit's existence — even for what are typically
considered to be routine social interactions.
Luhmann (1979) provided a broader theoretical framework for this concep-
tion of trust, arguing that trust is necessary for the reduction of social complexity,
particularly in an increasingly complex modern world. In his oft-cited opening
passage, Luhmann (1979:4) writes:

Trust, in the broadest sense of confidence in one's

8

expectations, is a basic fact of social life. In many

 PUBLIC TRUST IN INSTITUTIONS AND ORGANIZATIONS 47

situations, of course, man can choose in certain respects

whether or not to bestow trust. But a complete absence
of trust would prevent him even from getting up in the
morning. He would be prey to a vague sense of dread,
to paralysing fears. He would not even be capable of
formulating definite distrust and making that a basis for
precautionary measures, since this would presuppose
trust in other directions. Anything and everything
would be possible. Such abrupt confrontation with the
complexity of the world at its most extreme is beyond
human endurance.

Luhmann argues that social complexity is the "fundamental problem"

(1979:5), in the face of which trust increases the possibilities for both experience and
action (1979:8). "To show trust is to anticipate the future" (1979:10). It does not,
however, indicate mastery over future events, since such mastery obviates the need
for trust (1979:15). Ironically, attempts to master future events through the develop-
ment of technology may actually increase the need for trust since technology itself
increases the future's complexity and thus increases uncertainty (1979:15-16).
Trust and distrust are developed through familiarity with the past behavior of
others (1979:19). "Trust... is the generalized expectation that the other will handle
his freedom, his disturbing potential for diverse action, in keeping with his personal-
ity — or, rather, in keeping with the personality which he has presented and made
socially visible" (1979:39). Thus, someone is worthy of trust if they behave consis-
tently rather than erratically. Trust is built up through continual use, experience, and
feedback (1979:50). In other words, trust grows with use; it is not depleted through
use (Gambetta, 1988:234).
Trust does not reside solely within the individual, however: 'Trust occurs
within a framework of interaction which is influenced by both personality and social
system, and cannot be exclusively associated with either" (1979:6). Because every-
one believes that trust is necessary, they come to "trust in trust," the idea that trust is
indispensable and thus that we can assume it is so regarded by others (1979:67). In
other words, we each trust that others trust, and that they act accordingly. It is this
mutual reliance on trust, and not just government regulations, which, for example,
sustains such institutions as the monetary order (Frankel, 1977).
Lewis and Weigert (1985a) expand upon Luhmann's conception, arguing that
"trust is based on a cognitive process which discriminates among persons and institu-
48 COMPILATION OF REPORTS

tions that are trustworthy, distrusted, and unknown" (1985a:970). Interpersonal trust
— as opposed to "system trust," "institutional trust," or "trust in trust" — has a
rational, experiential basis, and is thus not equivalent to hope or blind faith. Because
we can not learn all there is to know about others, we make "cognitive leaps" beyond
what reason and experience alone warrant and trust that others will act as we expect
them to act. Interpersonal trust both depends upon and supplements knowledge. We
can not trust someone about whom we know absolutely nothing; conversely, if we
knew everything about that individual there would be no need to trust them. "Trust
begins where prediction ends" (1985a:976); or, put another way, prediction is based
on evidence, while trust is based on the lack of contrary evidence (Gambetta,
1988:234). Trust also consists of "an emotional bond among all those who partici-
pate in the relationship," which explains why the betrayal of trust "arouses a sense of
emotional outrage in the betrayed" (Lewis and Weigert, 1985a:971). The emotional
content is particularly strong at the interpersonal level, but is present at the institu-
tional level as well.
In sum, since social interaction would be impossible without some degree of
trust, individuals must trust — undertake the risk — that others will act competently
and dutifully (Barber, 1983). For stable, concerted interaction to occur, some trust
must always exist. Thus, the relevant question for any organization interacting with
its environment is not "How can we produce trust?," but rather "How can we produce
more trust or maintain the trust we already have?"

THE PRODUCTION OF TRUST

Zucker (1986) has developed a typology in which each of three types of trust
is identified with (or defined by) different sources of trust production. "Characteris-
tic-based" trust depends upon personal characteristics, such as family background or
ethnicity; while "process-based trust" is produced through repeated exchanges, and
"institutional-based trust" through such formal social structures as professional
certification and regulation. The typology is evolutionary in that we expect to find
institutional-based trust gradually supplanting characteristic-based and process-based
trust as a society becomes increasingly complex and differentiated.
By focusing on trust production, Zucker's relatively simple typology provides
great insight into the various cognitive and emotional levels at which trust operates,
 PUBLIC TRUST IN INSTITUTIONS AND ORGANIZATIONS 49

as well as the respective problems associated with the production of trust. Moreover,
applying the typology to organization theory is a relatively straightforward exercise,
one which provides several hypotheses regarding the production of trust in an
organization's environment. The typology also provides a powerful means — of
which Zucker did not take full advantage — for characterizing the literature on trust.
Characteristic-based trust is produced through personal characteristics such
as race, gender, and family background, which "serve as indicators of membership in
a common cultural system, of shared background expectations" (Zucker, 1986:63).
Given that humans need to trust in order to interact, personal characteristics are a
simple heuristic for deciding whether individuals or groups can be trusted. As such,
"they provide ready-made typifications that, correctly or incorrectly, suggest how
individuals with certain ascribed characteristics will behave in certain situations"
(Neu, 1991a: 187). Characteristic-based trust is most prevalent in small communities
which seldom interact with outsiders, but is also present in complex modern societies
as evidenced by individuals who cross the street in order to avoid strangers who
appear different.
Henslin (1981) is referring to characteristic-based trust in his account of the
decisions made by cab drivers to pick up passengers in various neighborhoods and at
various times of day. Since cabbies do not know anything specific about the prospec-
tive passenger based through past experiences with that person, they must make their
decision to stop based upon what they can infer from the setting, the physical appear-
ance of the person, and the manner in which the person presents herself. Henslin thus
argues that trust consists of an actor offering a definition of herself, and an audience
choosing either to interact with (trust) or not to interact with (distrust) that person
(1981:91).
Because it is relatively difficult to change one's personal characteristics, the
most viable means for building characteristic-based trust is to socialize with persons
possessing similar characteristics. Thus, an organization seeking to produce charac-
teristic-based trust in its environment would place organizational members in bound-
ary-spanning roles according to their personal characteristics, such that they match
9

the characteristics of appropriate individuals in the organization's environment. For

example, a white, Harvard-educated geophysicist interacting with a native-American
community would be an unlikely recipient of characteristic-based trust.
50 COMPILATION OF REPORTS

Process-based trust, like characteristic-based trust, is interpersonal, but is

produced through repeated exchanges rather than through ascribed characteristics,
and is indicated by an individual's reputation or by a firm's brand name (Zucker,
1986:62). The production of process-based trust may be facilitated by the presence
of characteristic-based trust, but is not dependent upon it. Repeated exchanges occur
between individuals occur for both economic and social reasons. Though initial
exchanges are often motivated by self-interest, subsequent exchanges "become
overlaid with social content that carries strong expectations of trust and abstention
from opportunism" (Granovetter, 1985:490). In other words, exchanges are increas-
ingly governed by norms geared to the preservation of the relationship itself
(Macauley, 1963; Macneil, 1978). Trust is similarly extended within political institu-
tions not because of an expectation of positive reciprocal consequences, but rather
because individuals have become socialized into the structure of rules prescribing
appropriate behavior, and thus delegate and carry out their responsibilities accord-
ingly (March and Olsen, 1989:27). Mutual trust is established when at least one
participant in the exchange chooses not to betray the trust placed in him even though
she has a considerable interest in doing so (Luhmann, 1979:42).
Process-based trust is similar to the conception of trust developed by Blau
(1964) and expanded upon by Haas and Deseran (1981). Blau, in differentiating
social exchange from economic exchange, argued that economic exchange rests upon
formalized contracts which stipulate the exact quantities to be exchanged, while
social exchange involves the reciprocity of favors, in which the exact nature and
timing of some future return is "definitely not stipulated in advance" (1964:93).
Unlike economic exchange, failure to discharge social-exchange obligations at some
later date subjects one to group sanctions rather than to legal sanctions.
Blau argued that trust and social exchange are interdependent; not only is trust
essential for social exchange, but exchange obligations promote trust (1964:99; see
also Luhmann, 1979:44). Exchange relations "evolve in a slow process, starting with
minor transactions in which little trust is required because little risk is involved"
(1964:94). Then, "As individuals regularly discharge their obligations, they prove
themselves trustworthy of further credit (1964:98)." In this way, reciprocity of
benefits is a ubiquitous "starting mechanism" for social interaction (1964:92).
In a particularly insightful example, Blau illustrated how process-based trust
 PUBLIC TRUST IN INSTITUTIONS AND ORGANIZATIONS 51

is produced through social — but not through economic — exchange (1964:94):

An individual is obligated to the banker who gives him

a mortgage on his house merely in the technical sense
of owing him money, but he does not feel personally
obligated in the sense of experiencing a debt of grati-
tude to the banker, because all the banker's services, all
costs and risks, are duly taken into account in and fully
repaid by the interest on the loan he receives. A banker
who grants a loan without adequate collateral, however,
does make the recipient personally obligated for this
favorable treatment, precisely because this act of trust
entails a social exchange that is superimposed upon the
strictly economic transaction.

Though Blau argues that "The impersonal economic market is designed to strip
specific commodities of these entangling alliances with other benefits..., and thus to
make possible rational choices between distinct alternatives with a fixed price"
(1964:96), such a dichotomy probably does not exist in modern societies.
Haas and Deseran (1981), while not taking explicit exception to Blau's di-
chotomy, prefer to use the term "symbolic exchange," which they claim captures the
economic value of the goods being exchanged in a trust-producing relationship.

The goods are symbolic in the sense that their principal

utility lies in their capacity to symbolize the nature of
the relationship between the receiver and the giver of
the gifts. They are also symbolic in the sense that their
high cost to the giver serves as a token of the giver's
good faith (1981:3).

While some exchanges, such as a wave or a handshake may have no utilitarian

value, other exchanges, such as an invitation to a dinner party, lie somewhere be-
tween social and economic exchange in that they have both symbolic and utilitarian
value. The utilitarian dimension of the exchange represents its intrinsic or economic
value, while the symbolic or communicative dimension conveys information about
the desire of the giver to enter into a trust-building relationship (1981:4). Creating
and maintaining trust thus require "the presentation of one's self as a trustworthy
person" (1981:4) by using a society's vocabulary of typical gestures through which
others can impute your intentions (1981:5). "The more each is willing to invest
52 COMPILATION OF REPORTS

(relative to his or her wealth, and perhaps to the benefits to be gained from the rela-
tionship), the more trust the other will be inclined to feel" (1981:5). In this way,
"The value of an expensive gift as an indicator of the trustworthiness of the giver is
independent of its utility to the receiver" (1981:5).
Symbolic gifts include offers of food and drink, gifts, and attendance at
formal ceremonies. The utilitarian importance of ceremonial attendance is measure
in the time it requires. Thus, "an important person whose time is known to be valu-
able can express a considerable commitment to a person or a group merely by attend-
ing" (1981:8). Haas and Deseran (1981:8-9) agree with Blau (1964:107-08) that
refusing symbolic (or social) exchanges is a gesture indicating distaste for entering
into a trust-building relationship and may even be interpreted as a sign of distrust
towards the giver. Even if a symbolic or social exchange is accepted, the refusal to
stay indebted may be interpreted as a refusal to enter into a long-term relationship or
even as a sign of mistrust (Luhmann, 1979:44). Thus, unlike economic exchange,
where rapid repayment of debts is expected, eagerness to discharge a social obliga-
tion may be interpreted as ingratitude. "Social bonds are fortified by remaining
obligated to others as well as by trusting them to discharge their obligations for
considerable periods" (Blau, 1964:99).
Though these authors do not discuss exchanges within a political context, we
can imagine some of the impediments to producing process-based trust through
political exchanges. For example, public officials would be in a bind when attempt-
ing to build process-based trust with individuals outside of government through
symbolic or social exchange. Not only do public agencies currently rely upon for-
malized procedures and contracts with highly stipulated terms for interacting with
individuals in their environment, but many types of social exchanges between public
officials and the public are frowned upon in the United States because of the fear that
such exchanges will cement quid pro quos with special-interest groups. Yet, if public
officials refuse such exchanges, they may risk producing distrust since such refusals
may be interpreted by individuals in the organization's environment as an indication
that the official — and, by implication, the agency — does not want to enter into
reciprocal obligations and may thus not be worthy of trust.
Ceremonial attendance, however, may provide unique opportunities for public
officials to build process-based trust, depending upon the rank of the official. High-
 PUBLIC TRUST IN INSTITUTIONS AND ORGANIZATIONS 53

level political appointees, whose time may be greatly valued, could instill a great deal
of public trust with a single exchange; while boundary spanners at lower levels of the
hierarchy may have to rely on repeated exchanges to build a similar amount of trust.
Tenure longevity for boundary spanners at intermediate levels of the hierarchy may
thus be an important requisite for trust production. If so, employee rotation systems
designed to keep civil servants socialized to the agency's mission rather than to their
environment may have a negative impact upon process-based trust.
10

Institutional-based trust "generalizes beyond a given transaction and beyond

specific sets of exchange partners" (Zucker, 1986:63). It thus "depends less on the
specifics of the particular exchange and exchange participants" and more upon
various "institutional practices that... are accepted as 'social facts' and not often
questioned" (Neu, 1991a:188). Zucker (1986) argues that institutional-based trust
has become increasingly important since the 19th Century as immigration and inter-
nal migration pulled apart the insular communities within which characteristic-based
trust predominated. Moreover, the increasingly complex and volatile economy also
struck at process-based trust as exchanges were made at ever greater geographic
distances and as firms formed, merged, and folded with increasing frequency. In this
context, institutional-based trust expanded to provide alternative guarantees for
exchanges. The most important of these new institutions were professional
credentialing, which served as an alternative to personal reputation; financial inter-
mediaries such as banks, brokers, and independent accountants, which bridged distant
exchange partners; and government regulations and laws, which provided a common
framework for exchange, including general expectations and specific rules governing
transactions (Zucker, 1986:55).
Institutional-based trust has not only gradually replaced characteristic- and
process-based trust, it has also complemented those sources of trust production
because they are especially vulnerable to malfeasance. According to Granovetter
(1985:491):

In the business world, certain crimes, such as embez-

zling, are simply impossible for those who have not
built up [personal] relationships of trust that permit the
opportunity to manipulate accounts. The more com-
plete the trust, the greater the potential gain from
malfeasance.

:irt,^--.-v.; •.jy.vf.vy%\&^zz?^^F^s~m?r?rrr; \"~-j&&:;®&x^?v?^Jzr&&"..!XF™^'i '::<••• -

54 COMPILATION OF REPORTS

Institutions decrease the likelihood of such malfeasance. Thus, interpersonal, social

relationships may be a sufficient condition for the production of trust, but they are not
a necessary condition since these sources of trust production may themselves provide
the opportunity and means for their abuse (Shapiro, 1987:624-25).
Zucker identifies two types of institutional-based trust. The first, person- or
firm-specific trust, "rests on membership in a subculture within which carefully
delineated specific expectations are expected to hold ..." (1986:63). As a means of
acquiring trust outside of (or in addition to) interpersonal relationships, individuals
and firms join professional associations and acquire credentials and licenses in order
to signal to others that they intend to abide by certain rules and codes of conduct
(Neu, 1991a: 188). Organizations can also voluntarily adopt various "standard prac-
tices" in order to signal the organization's willingness to conform to expectations in
its environment (Neu, 1991b:249; Zucker, 1986:90-94; Dowling and Pfeffer, 1975).
A second type of institutional-based trust is produced through intermediary
mechanisms such as laws, regulation, and private insurance. In one passage, Zucker
(1986:69) provides a pithy illustration of the social transition from interpersonal trust
(i.e., characteristic- and process-based) to this form of institutional trust:

If you do not trust your neighbor to participate in a

"barn-raising" after your house bums, you have to buy
insurance; if you do not trust immigrants to behave
according to common understandings ..., then you have
to "reform" city governments to give them less power
by formalizing personnel procedures; [and] if you do
not trust corporations to behave "fairly" and ethically,
then you have to formalize interorganizational relations
by enacting anti-trust rules....

Though impersonal trust can be purchased and marketed by individuals, organiza-

tions, and intermediaries (Zucker, 1986:64; Neu, 1991a:188-89; Neu, 1991b:249-52),
personal trust can not be bought directly from the individual in whom it is sought. As
Arrow notes: "If you have to buy it, you already have some doubts about what
you've bought" (1974:23).
Several recent articles (Shapiro, 1987; Bradach and Eccles, 1989; Neu, 1991a;
Neu, 1991b) expand upon and apply Zucker's conception of institutional trust, pro-
 PUBLIC TRUST IN INSTITUTIONS AND ORGANIZATIONS 55

viding insight into the ways in which markets and governments maintain what
Shapiro (1987) terms "the social control of impersonal trust." Working from
Luhmann's argument (1979:52) that individuals in complex societies manage com-
plexity by trusting others possessing specialized knowledge to process information
for them, Shapiro argues that such fiduciary relationships outside the extended family
are becoming increasingly prevalent. "Specialization and differentiation require that
agents be entrusted not only with property for processing, maintenance, investment,
custody, or repair but also with the task of information collection" (1987:626). Since
personalizing these relationships is not always a practical means for ensuring trust,
other forms of social control have arisen to bolster impersonal trust.
Numerous guardians (or trustees) of trust oversee these impersonal fiduciary
relationships. Some agents even set up their own self-regulatory systems, limiting
competition amongst themselves, bestowing credentials, and restricting entrance to
the profession in order to protect their trust capital from eroding through the "abusive
practices of wayward colleagues" (Shapiro, 1987:636). Governments also guard
impersonal trust relationships by regulating private practices and certifying products
before they are marketed (Shapiro, 1987:640). Government regulations also grant
some associations monopoly control over their domains of expertise, thus further
contributing to the production of trust (Neu, 1991a:189).
Personal expectations arising from regulations, however, "appear to be
weaker than those resulting from process-based mechanisms or transactions with a
known intermediary" (Neu, 1991a: 189). Not only are actors in impersonal exchanges
more likely to be motivated by economic than social concerns, and are thus more
likely to breach a trust, but regulations themselves often define the limits of trust by
limiting the financial liability of intermediaries (Neu, 1991a:189-90). In addition,
Shapiro suggests that, even though regulation may be a necessary condition for
impersonal trust, regulation is not a sufficient condition for trust given that regulators
are themselves placed in the role of agents and thus can use their discretionary power
for self-interested purposes. In this respect, self-regulation, "a form of institutional-
ized conflict of interest," may be particularly suspect (1987:645-46). Because trust
between individuals in impersonal markets is dependent upon their trust in the en-
forcement mechanisms (Dasgupta, 1988:50), fiduciary relationships have become
increasingly layered, with numerous "watchers" overseeing various exchange rela-
56 COMPILATION OF REPORTS

tionships in order to assure individual actors that their affairs are being well managed
(Shapiro, 1987:649).
Multiple regulators, however, can not guarantee institutional trust; particularly
if, as Neu (1991a) found in the Canadian securities market, the regulators have
developed a "negotiated domain consensus" and are "loosely coupled." That is, if
11

regulators carve out exclusive territories for themselves and communicate infre-
quently amongst themselves about changes in their practices, opportunistic violations
of trust are likely to occur. Thus, regulatory redundancy and overlap are beneficial
because they decrease the brittleness of the system. 12

In this regard, courts and legal doctrines can be seen as another source of
institutional-based trust. Not only do laws and their enforcement generally constrain
and channel behavior, but laws governing the responsibilities of fiduciaries in princi-
pal-agent relationships are well delineated. Clark (1985) notes several attributes of
corporate fiduciary relationships which are especially circumscribed by law. For
example, while independent contractors usually face relatively fixed obligations
under their contracts and have no duty to disclose various facts and plans affecting
their future requirements, corporate managers are in a "sharply contrasting legal
position" (1985:72). Not only are they confronted by an "affirmative duty to dis-
close" certain kinds of information to other corporate decision makers (1985:72), but
courts interpret their "duty of care" in managing the corporation to be more open-
ended (1985:73). Specific rules also govern self-dealing transactions and insider
trading, thus limiting the corporate manager to specific compensations provided for
in the actual contract (1985:73). Courts even rely on moral rhetoric "to create feel-
ings of guilt for violation of duty and rectitude for fulfillment of duty" (1985:75).
Though courts generally refrain from moral rhetoric, Clark suggests they may resort
to it in the case of fiduciary relationships because the usual market and legal controls
do not provide adequate deterrence since the probability of detection is low
(1985:78).
In sum, the research on institutional-based trust suggests several ways in
which organizations can produce or maintain trust in their environment. For ex-
ample, since impersonal trust is signaled through the possession of academic and
professional credentials, boundary spanners can acquire credentials similar to those of
individuals in the organization's task environment. These credentials will serve as a
13
 PUBLIC TRUST IN INSTITUTIONS AND ORGANIZATIONS 57

signal that the organization's members adhere to the same standards and codes of
conduct as other members in the professional community. There is a cost, however,
to this method of trust production, since members of professional associations may
have goals and loyalties different from those of the organization. Thus, organiza- 14

tional leaders would have to make trade offs between the potential gains in public
trust and increased conflict of interest within the organization.
Another means for producing institutional-based trust is government regula-
tion. It is conceivable that public trust in an organization might be low if the public
perceives that the organization has too much autonomy or that its operations are self-
regulated. This hypothesis suggests that organizations can produce public trust
through calls for increased regulation, assuming of course the public trusts the regula-
tor to carry out its duties. Government agencies can themselves request additional
legislative oversight or new laws mandating other agencies to conduct external
reviews and/or set performance standards. Such intergovernmental regulation is not
unusual, though observers have argued that compliance may be more difficult to
15

achieve than in the private sector because lines of accountability are less clear. 16

Moreover, attempts to achieve trust through procedural constraints may also limit
those agency behaviors considered desirable (Shapiro, 1987:651).

HOW TRUST IS LOST

Since some degree of trust underlies all social interactions, trust can always be
lost as well as gained. Thus, organizations can pursue strategies to maintain public
trust in addition, or as an alternative, to trust production. Trust, however, is not
necessarily produced and lost in similar — but opposite — fashions. Thus, separate
consideration is given in this section to methods for maintaining trust.
One way in which trust can be lost is through the extensive use of contracts
detailing the responsibilities of each party in the event of remote or unlikely contin-
gencies (Macauley, 1963:64). Not only is complete planning cognitively impossible
and prohibitively costly, the use of such contracts implies a lack of trust since their
purpose often is to specify obligations and future returns — and thus to align expecta-
tions — when trust is low. The more contracts are relied upon as a substitute for
trust, the greater the signal of distrust or lack of trust. Neu (1991b:247) refers to this
as the "irony of contracting," in which he suggests the use of contracts may lead to a

lSTi7r^r:7~; •f-Z&K/ ; . ' ~ V 5 . v ; A . - 5 ^ . . ^ = ^ r X ^ ; ^ r ^ " - : v ^ ' > ^ ^ ^

K
,-v»- .-ny- •' ••
58 COMPILATION OF REPORTS

downward spiral characterized by the increasing use of contracts as imperfect alterna-

tives for increasingly less trust. Macauley (1963:65) argues, however, that detailed
contracts may be necessary when exchanges involve complex performances to be
performed over long periods of time, especially if the degree of injury in case of
default is thought to be great. Certain types of organizations may thus find they have
no choice but to rely upon contractual relationships with individuals in their task
environment given the nature of their technology.
Trust can also be lost when role expectations are in flux. Reichman's analysis
(1989) of insider trading in the stock market, which expands upon Shapiro's concep-
tion of layered fiduciary relationships, argues that "changes in the market for finan-
cial information have created increasingly sophisticated webs of entanglements and
obligations, placing many different roles and organizations at risk of abusing their
trust" (1989:185). Rapid structural changes increase the probability of trust viola-
tions because cultural norms and role behaviors are also changing.

When cultural and structural innovations challenge the

... social control frameworks, a great diversity of role
performance is tolerated. It is in the lag or residual of
role sets (a kind of role anomie) that justifications or
rationalizations develop. Role ambiguity helps free
incumbents to believe that rules are bad or that they
don't apply. When "anything goes," it is not so hard to
justify deviant behavior as legitimate, "above," or
"within the law" (Reichman, 1989:187-88).

Reichman's analysis suggests that an organization can maintain trust through

stability. If role changes indeed create opportunities for trust violation by increasing
ambiguity in role performance, then reorganizations may be more likely to produce
distrust than trust. Not only might reorganizations increase opportunities for actual
violations of trust (and thus public expectations of future malfeasance, or distrust),
but organizational changes also may not conform with existing expectations in the
organization's environment, giving rise to bewilderment and unease and thus decreas-
ing current levels of trust.
 PUBLIC TRUST IN INSTITUTIONS AND ORGANIZATIONS 59

Trust can also be lost through lying. In her moral treatise on lying, Bok
(1978) argues that individual lies not only erode trust between the liar and the recipi-
ent of the he, each lie also wears away at the social system of trust which supports the
institutions upon which society is constructed. Her analysis is thus similar to the
"externalities" argument in microeconomics, in that the full social cost of a he is not
borne completely by the liar. Rather than argue that the government should intervene
to regulate lying, however, Bok argues that individuals should consider the moral
implications of lying. As an example, she notes that government officials often lie to
the public to protect the secrecy of their programs, justifying these lies to themselves
by arguing that the benefits of the program to the public outweigh the cost of the lie.
The officials, however, fail to calculate the long-term, aggregate effect on the loss of
public trust in government (1978:27,142). Though Bok's argument is compelling,
she not only fails to define trust (as previously noted), her anecdotal evidence also
falls far short of demonstrating causal linkages between the individual lies of officials
and the erosion of public trust in government.
Finally, trust in professions can be lost through individual incompetence, as
well as through complacency in the social process through which professional trust is
sustained (Bella, 1987). In summing up Eliot Freidson's research on the medical
profession, Barber (1983:144) notes that self regulation through informal peer con-
trols is imperfect, since physicians often do not take action when they witness the
faulty work of colleagues; and, when they do take action, typically resort only to
ostracism, leaving incompetents free to practice elsewhere. Bella argues that public
trust in professions "demands a healthy level of self criticism" (1987:123). Constant
peer review is a necessary means for preventing trustworthy communities from being
"transformed into associations of self-serving functionaries" (1987:123). Moreover,
Bella warns professionals to avoid being captured by the needs and demands of the
organization within which they work since organizational biases may then enter the
self-regulatory process of the profession.
Though professional self-regulation can maintain public trust, self-regulation
may not itself be sufficient. Nevertheless, the research on trust suggests that profes-
sionals can be an important source of public trust for organizations, since professional
credentials signal the willingness of individuals within organizations to conform to
certain expectations. Thus, organizations seeking public trust in their task environ-

7
60 COMPILATION OF REPORTS

ments can hire professionals as a means for producing trust; but this trust can only be
maintained if these individuals remain grounded in the social processes of their
respective professions. Organizations seeking public trust should thus encourage
their members to participate actively in professional communities. "Unfortunately,
too few organizations are able to sustain administrative systems that do not hinder
such professional independence" (Bella, 1987:127).
Public agencies may be particularly at risk of losing public trust if they rely
excessively upon professionals to produce or to justify public policies. Wynne (1987)
argues that the credibility of regulations is undermined by risk analyses which rely
upon "science" for their legitimacy because the scientific process often strips terms
like "hazardous" and "waste" from their social context. Wynne (1987:399) found
that "formal risk analysis, often using elaborate models, is virtually always devel-
oped, used, or demanded when credibility is at stake, and conflicting policy positions
are being advocated. More formal precision, it is assumed, will close the argument."
Paradoxically, increasing the precision of scientific measures undermines the credibil-
ity of regulations since greater laboratory precision increases the gap between experi-
ments and diverse situational realities during implementation (1987:412). Unfortu-
nately, Wynne only briefly discusses trust (e.g., 1987:416,417,435), and does not
define the term. His argument is nevertheless consistent with Bella's discussion of
professional social processes, and thus serves as an example of how organizational
needs can introduce biases into these processes and thus reduce public trust.
Self-serving professionals can also reduce public trust if they come to see
their role not as someone giving advice but as someone with influence over policy.
As March and Olsen (1989:32) argue: "The changed frame of reference tends to
compromise the quality of expert information in the political process and to under-
mine trust not only in the individual expert but in the institution of expertise." To
maintain trust, organizations should thus not only encourage active participation of
their members in professional communities, they should also not compromise this
expertise by using it as a basis for justifying political decisions or by repeatedly
permitting professionals to participate in framing alternatives and making political
decisions.
 PUBLIC TRUST IN INSTITUTIONS AND ORGANIZATIONS 61

CONCLUSION
The means presented in this paper through which an organization can attempt
to produce or maintain public trust are hypothetical and inconclusive. Though theo-
ries of trust constitute a rich and burgeoning literature, this research is not specifically
geared to the production of trust in an organization's environment or to the produc-
tion of public trust by a government agency. Some of this research, however, appears
applicable to organizations and is consistent with theories of organizational behavior.
Given the current state of the organizational literature on trust, the hypotheses de-
rived in this exploratory paper provide a basis for discussing the production and
maintenance of public trust in organizations; but it must be noted that these hypoth-
eses have not been tested, and thus the relative effectiveness of these measures is
unknown.
With these caveats in mind we can deduce several hypotheses from the socio-
logical literature on trust. First, reorganization should not be considered a general
panacea for organizations in which the relative absence of public trust is perceived to
be hampering effective operations. In the short run, reorganizations may actually
produce distrust by increasing opportunities for malfeasance due to role fluctuations;
or, at the least, they may reduce trust by bewildering individuals in the organization's
environment who have come to expect certain organizational behaviors. In the long
run, when role definitions have stabilized and individuals in the environment have
developed new expectations about the organization and new relationships with its
members, reorganizations designed to produce public trust are more likely to have
their intended effect.
Measures short of wholesale reorganization may be more likely to produce
public trust. For example, since individuals in the organization's environment are
limited in their ability to process information regarding the organization, they often
rely on relatively simple heuristics, such as personal characteristics and professional
affiliation, to make judgments about organizational trustworthiness. Thus, by modi-
fying formal and/or informal personnel policies, managers can selectively fill bound-
ary-spanning roles in order to match the personal characteristics of employees with
those of targeted groups in the environment. In addition, managers can encourage
subordinates and peers to participate actively in professional communities as a means
for signalling the organization's willingness to conform to certain institutionalized
62 COMPILATION OF REPORTS

norms. Managers should then refrain from using these professional processes and
worldviews to justify contentious policy positions, and should not encourage profes-
sionals to participate directly in political decisions.
Regulations and enforcement processes also provide signals of organizational
trustworthiness. While organizations may desire autonomy for other reasons, such
autonomy may decrease public trust in their operations. Thus, to increase trust,
organizations should not only submit themselves to the self-regulatory practices of
the professions to which their members belong, they should also cooperate with
government regulators, perhaps even publicly requesting increased oversight of their
operations.
The literature on contracts is relatively ambiguous regarding the production or
loss of trust. While detailed contracts aid in aligning expectations when trust is weak,
such contracts may themselves signal the absence of trust by one or more parties to
the contract. Given that detailed contracts may be necessary when exchanges involve
complex (and possibly hazardous) activities performed over long periods of time,
organizations may have no option but to accept the necessity of explicit, detailed
contracts in certain situations. Organizations can, however, counteract some of the
negative consequences of contracts by shoring up trust through other means. Bound-
ary spanners, for example, can emphasize symbolic or social exchanges as means for
producing process-based trust. While public officials are limited in their ability to
participate in symbolic exchanges which involve gifts, ceremonial attendance at
various social functions is usually feasible and may be a productive means for instill-
ing trust with specific groups in the agency's environment.
In closing, it should be noted that the literature on trust and contracts cited in
this paper focuses on market-based exchanges between individuals or firms, and
refers only rarely to the use of contracts in the public sector. Since political ex-
changes involving trust may be fundamentally different from private exchanges
involving trust, extrapolating from the private sector to the public sector may be a
suspect exercise. March and Olsen (1989), however, have begun to delve into the
relationship between trust and contracting within political institutions, and have
reached conclusions similar to those in this paper. Trust and contracting, they argue,
are alternative means for controlling political leaders, and each strategy is confronted
by unique dilemmas. On the one hand, principal-agent contracts may be particularly
 PUBLIC TRUST IN INSTITUTIONS AND ORGANIZATIONS 63

difficult to design, monitor, and enforce in the public sector (1989:11), and might so
circumscribe behavior as to make effective leadership difficult (1989:34). On the
other hand, building a culture of trust is "severely strained by exploitative political
leaders, and may indeed be impossible to sustain in many heterogeneous societies
with deep, persistent social cleavages and traditions of minimal regulation of con-
flict" (1989:34).
Though pessimistic, their analysis may be illuminating in the context of this
paper. While producing trust in government at a macro level may indeed be extraor-
dinarily difficult in a heterogeneous society such as the United States, individual
public organizations may nevertheless be able to produce trust within their own task
environment. The means presented in this paper for the production of trust by an
organization are relatively modest, but they suggest that trust can be produced or
maintained on the margin if organizational members adhere persistently to them.
64 COMPILATION OF REPORTS

REFERENCES

Arrow, Kenneth J. (1974). The Limits of Organization, New York: W.W.

Norton & Company.

Arrow, Kenneth J. (1985). "The Economics of Agency," in Principals and

Agents: The Structure of Business, John W. Pratt and Richard J. Zeckhauser, editors.
Boston: Harvard Business School Press.

Barber, Bernard (1983). The Logic and Limits of Trust, New Brunswick:
Rutgers University Press.

Bella, David A. (1987). "Engineering and Erosion of Trust," Journal of

Professional Issues in Engineering, 113:117-29.

Blau, Peter (1964). "Social Exchange," in Exchange and Power in Social

Life, New York: John Wiley & Sons.

Bok, Sissela (1978). Lying: Moral Choice in Public and Private Life, New
York: Pantheon Books.

Bonoma, Thomas V. (1976). "Conflict, Cooperation and Trust in Three

Power Systems," Behavioral Science, 21:499-514.

Bradach, Jeffrey L., and Robert G. Eccles (1989). "Price, Authority, and
Trust: From Ideal Types to Plural Forms," Annual Review of Sociology, 15:97-118.

Clark, Robert C. (1985). "Agency Costs versus Fiduciary Duties," in Princi-

pals and Agents: The Structure of Business, John W. Pratt and Richard J. Zeckhauser,
editors. Boston: Harvard Business School Press.

Coleman, James S. (1990). Foundations of Social Theory, Cambridge:

Belknap Press.
 PUBLIC TRUST IN INSTITUTIONS AND ORGANIZATIONS 65

Dasgupta, Partha (1988). "Trust as a Commodity," in Trust: Making and

Breaking Cooperative Relations, Diego Gambetta, editor. New York: Basil
Blackwell.

Deutsch, Morton (1958). "Trust and Suspicion," Journal of Conflict Resolu-

tion, 2:265-79.

Deutsch, Morton (1973). The Resolution of Conflict: Constructive and De-

structive Processes, New Haven: Yale University Press.

Dowling, John, and Jeffrey Pfeffer (1975). "Organizational Legitimacy:

Social Values and Organizational Behavior," Pacific Sociological Review, 18:122:36.

Frankel, S. Herbert (1977). Two Philosophies of Money: The Conflict of Trust

and Authority, New York: St. Martin's Press.

Gambetta, Diego (1988). "Can We Trust Trust?," in Trust: Making and

Breaking Cooperative Relations, Diego Gambetta, editor. New York: Basil
Blackwell.

Garfinkel, Harold (1963). "A Conception of, and Experiments with, 'Trust'
as a Condition of Stable Concerted Actions," in Motivation and Social Interaction, O.
J. Harvey, editor. New York: Ronald Press.

Garfinkel, Harold (1964). "Studies of the Routine Grounds of Everyday

Activities," Social Problems, 11:225-50.

Granovetter, Mark (1985). "Economic Action and Social Structure: The

Problem of Embeddedness," American Journal of Sociology, 91:481-510.

Haas, David E, and Forrest A. Deseran (1981). 'Trust and Symbolic Ex-
change," Social Psychology Quarterly, 44:3-13.
66 COMPILATION OF REPORTS

Henslin, James M. (1981). "What Makes for Trust?," in Down to Earth

Sociology, Third Edition. New York: The Free Press.

Lewis, J. David, and Andrew J. Weigert (1985a). "Trust as a Social Reality,"

Social Forces, 63:967-85.

Lewis, J. David, and Andrew J. Weigert (1985b). "Social Atomism, Holism,

and Trust," Sociological Quarterly, 26:455-71.

Luhmann, Niklas (1979). "Trust," in Trust and Power, New York: John
Wiley & Sons.

Luhmann, Niklas (1988). "Familiarity, Confidence, Trust: Problems and

Alternatives," in Trust: Making and Breaking Cooperative Relations, Diego
Gambetta, editor. New York: Basil Blackwell.

Macaulay, Stewart (1963). "Non-Contractual Relations in Business: A Pre-

liminary Study," American Sociological Review, 28:55-67.

Macneil, Ian R. (1978). "Contracts: Adjustment of Long-Term Economic

Relations under Classical, Neoclassical, and Relational Contract Law," Northwestern
University Law Review, 72:854-905.

March, James G., and Johan P. Olsen (1989). Rediscovering Institutions: The
Organizational Basis of Politics, New York: The Free Press.

Neu, Dean (1991a). "New Stock Issues and the Institutional Production of
Trust," Accounting, Organizations and Society, 16:185-200.

Neu, Dean (1991b). "Trust, Contracting and the Prospectus Process," Ac-
counting, Organizations and Society, 16:243-56.
 PUBLIC TRUST IN INSTITUTIONS AND ORGANIZATIONS 67

Parsons, Talcott (1967). Sociological Theory and Modern Society, New

York: The Free Press.

Parsons, Talcott (1969). "Research with Human Subjects and the 'Profes-
sional Complex'," in Experimentation with Human Subjects, Paul A. Freund, editor.
New York: George Braziller.

Perrow, Charles (1986). Complex Organizations, Third Edition. New York:

Random House.

Pratt, John W., and Richard J. Zeckhauser (1985). "Principals and Agents: An
Overview," in Principals and Agents: The Structure of Business, John W. Pratt and
Richard J. Zeckhauser, editors. Boston: Harvard Business School Press.

Reichman, Nancy (1989). "Breaking Confidences: Organizational Influences

on Insider Trading," Sociological Quarterly, 30:185-204.

Reiss, Albert J. (1984). "Selecting Strategies of Social Control over Organi-

zational Life," in Enforcing Regulation, Keith Hawkins and John M. Thomas, editors.
Boston: Kluwer-Nijhoff.

Shapiro, Susan P. (1987). "The Social Control of Impersonal Trust," Ameri-

can Journal of Sociology, 93:623-58.

Silver, Allan (1985). "'Trust' in Social and Political Theory," in The Chal-
lenge of Social Control: Citizenship and Institution Building in Modern Society,
Gerald D. Suttles and Mayer N. Zald, editors. Norwood, New Jersey: Ablex Publish-
ing Corporation.

Williamson, Oliver E. (1991). "Economics and Organization Theory," unpub-

lished manuscript. Berkeley: Department of Economics.
68 COMPILATION OF REPORTS

Wynne, Brian (1987). Risk Management and Hazardous Waste: Implementa-

tion and the Dialectics of Credibility, Berlin: Springer-Verlag.

Zucker, Lynne G. (1986). "Production of Trust: Institutional Sources of

Economic Structure, 1840-1920," Research in Organizational Behavior, 8:53-111.
 PUBLIC TRUST IN INSTITUTIONS AND ORGANIZATIONS 69

FOOTNOTES

'Intra-organizational trust citations are not included in this paper. Recent

articles, representing several perspectives, include: Dennis M. Daley (1991), "Man-
agement Practices and the Uninvolved Manager: The Effect of Supervisory Attitudes
on Perceptions of Organizational Trust and Change Orientation," Public Personnel
Management, 20:101-12; Joseph P. Cangemi, et al. (1990), "The Development,
Decline and Renewal of Trust in an Organization: Some Observations," Psychology
27:46-53; Denise M. Rousseau (1989), "Psychological and Implied Contracts in
Organizations," Employee Responsibilities and Rights Journal, 2:121-39; and,
Samuel A. Culbert and John J. McDonough (1986), "The Politics of Trust and Orga-
nization Empowerment," Public Administration Quarterly, 10:171-88.

2
Credit goes to Bernard Barber (1983:3) for noticing this discrepancy, as well
as several others not cited in this paper.
3
Just as these conceptions are not mutually exclusive, they are also not en-
tirely inclusive. Numerous social philosophers and social scientists have been ex-
cluded from this review, particularly where their work has been expanded upon or
summarized by others. Thus, for example, the older systems theories of Georg
Simmel and Talcott Parsons have been excluded because they have been refined by
Niklas Luhmann (1979) and others. In other instances, discretion has been used to
exclude research which appeared to add little to the existing literature or which was
not readily applicable to the problem of building public trust in organizations. Thus,
for example, no articles are cited from an entire issue of Humanitas (Volume 9,
November 1973) devoted to the topic of "Social and Interpersonal Trust;" and,
similarly, no papers are cited from a collection on confidence-building measures in
international relations (see From Distrust to Confidence, Wolf Graf von Baudissin,
editor; Baden-Baden: Nomos Verlagsgesellschaft, 1983).

t h o u g h Barber discusses 'Trust in the persistence and fulfillment of the

moral social order..." (1983:10), his presentation of this conception of trust draws
heavily upon Luhmann (1979) and Garfinkel (1963; 1964), whose work is reviewed
later in this paper.

5
On the limits of human rationality in planning, see Herbert A. Simon, Admin-
istrative Behavior: A Study of Decision-Making Processes in Administrative Organi-
zation, Third Edition (New York: The Free Press, 1976).
70 COMPILATION OF REPORTS

institutional economists have recently focused their research on markets and

hierarchies as alternative mechanisms for governing transactions, arguing that each is
efficient under different circumstances. This research is extensively critiqued in
Granovetter (1985) and Bradach and Eccles (1989) for its failure to consider the role
of trust in facilitating transactions and thus the implications for institutional design.
The "markets and hierarchies" approach is exemplified in two books by Oliver
Williamson, Markets and Hierarchies: Analysis and Anti-Trust Implications, (New
York: Free Press, 1975) and The Economic Institutions of Capitalism, (New York:
Free Press, 1985).

7
In citing Deutsch as "the most prominent" of the experimentalists they
negatively characterize, Lewis and Weigert (1985a:975) do him somewhat of an
injustice. At least in his later work, Deutsch was careful to delineate trust from
cooperation, arguing that trust was central to the initiation of cooperation, and that
trust, coordination, and bargaining each play a role in bringing about cooperation
(see, for example, 1973:54-55).

8
Though Luhmann appears to use trust and confidence interchangeably in this
passage, he was careful later to distinguish trust from confidence, arguing that both
imply the potential for disappointed expectations but only trust presupposes a situa-
tion of risk (1988:97). He thus agrees with Deutsch (1958:266) that trust requires the
potential for greater losses than gains (Luhmann, 1988:98); but disagrees with the
game-theoretic approach to trust exemplified by Deutsch (1958; 1973) for its reliance
upon trivial risks as indicators of trust (Luhmann, 1979:45).

'"Boundary spanner" is used in this paper to refer to any member of an orga-

nization who regularly interacts with individuals in the organization's task environ-
ment. For a discussion of various conceptions of organizational boundaries and
boundary spanning roles, see W. Richard Scott, Organizations: Rational, Natural,
and Open Systems, Second Edition (Englewood Cliffs, N.J.: Prentice Hall, 1987),
chapter 8.

See Herbert Kaufman's The Forest Ranger, (Washington: Resources for the
10

Future, 1960) for an analysis of how organizational socialization is produced through

the routine rotation of forest rangers in the decentralized U.S. Forest Service.
 PUBLIC TRUST IN INSTITUTIONS AND ORGANIZATIONS 71

u
A s used by Neu, "negotiated domain consensus" refers to a tacit agreement
reached between institutions regarding the rights and responsibilities of each within
an organizational field (1991a:193). "Loosely coupled" indicates that the institutions
are not formally interlocked, and thus that "a change in operating practice of one of
the institutions does not result in immediate ramifications for the other institutions"
(1991a:194).
12
See Martin Landau, "Redundancy, Rationality, and the Problem of Duplica-
tion and Overlap," Public Administration Review, (July/August, 1969).

On the conformance of boundary spanners with the expectations of their

13

environment, see also W. Richard Scott, Organizations: Rational, Natural, and Open
Systems, Second Edition (Englewood Cliffs, N.J.: Prentice Hall, 1987), pp. 173-75.
14
See, for example, The Politics of Regulation, (New York: Basic Books,
1980), in which James Q. Wilson (1980:374) argues that professionals look to their
colleagues outside of the organization for rewards and esteem, and thus that profes-
sional affiliation may be a source of competing loyalty to the organization.

The Tennessee Valley Authority, for example, must comply with Environ-
I5

mental Protection Agency air pollution requirements.

16
See James Q. Wilson and Patricia Radial, "Can the Government Regu late
Itself?," Public Interest, 46 (Winter, 1977).
 WORKSHOP ON ESTABLISHING
INSTITUTIONAL CREDIBILITY:
SUMMARY OF PROCEEDINGS

COMMISSION ON BEHAVIORAL AND SOCIAL SCIENCES

AND EDUCATION
NATIONAL RESEARCH COUNCIL

Prepared for the U.S. Department of Energy

February, 1992
 WORKSHOP ON ESTABLISHING INSTITUTIONAL CREDIBILITY 75

INTRODUCTION
At the request of the Secretary of Energy Advisory Board (SEAB) Task Force
on Radioactive Waste Management, the National Research Council (NRC) sponsored
a Workshop on Establishing Institutional Credibility. The purpose of the Workshop
was to (1) identify the range of available knowledge regarding the theoretical and
conceptual issues of how institutions establish their credibility and legitimacy with
key constituents, and (2) to help explore and clarify fundamental concepts in man-
agement theory related to these issues. The examination was to include what is
known about how organizations establish, maintain, lose, and regain public trust and
confidence. There was be no attempt to develop consensus on these issues or to
suggest particular courses of action.
The workshop was held on October 24-25, 1991 in Denver, Colorado. The
invited participants included:

Frank Dobbin, Department of Sociology, Princeton University, Princeton,

New Jersey;
Carol Heimer, Department of Sociology, Northwestern University, Evanston,
Illinois
W. Richard Scott, Department of Sociology, Stanford University, Stanford,
California;
Barry Staw, Business School, University of California at Berkeley, Berkeley,
California;
Mark C. Suchman, Department of Sociology, Stanford University, Stanford,
California; and
Craig Thomas, Institute of Governmental Studies, University of California at
Berkeley, Berkeley, California

In addition Task Force members Todd LaPorte, Department of Political

Science, University of California at Berkeley, Berkeley, California and Mayer N.
Zald, Department of Sociology, University of Michigan, Ann Arbor, Michigan as well
as Daniel Metlay from the SEAB staff also participated. Rob Coppock, National
Research Council, Washington, DC was the project director. Finally, observers from
the Department of Energy and its contractors were present as observers.

'~&W"-l/:V > W'-r.^^»^^

; ,;
 76 COMPILATION OF REPORTS

MEANING OF TRUST
Trust has been an issue of interest for hundreds of years. In this century,
psychologists in the late 1940s and early 1950s were quite interested in the role of
trust in communications, particularly as it related to the credibility of the source and
persuadability. During the last 20 years, a large literature on the issues of distributive
justice and equity has developed. In the last 5 years, interesting work on trust can be
found in the literature on procedural justice.
Until relatively recently, the literature on trust has dealt primarily with indi-
vidual trust. It is only in the past decade that the literature has treated trust in organi-
zations. In fact, organizational theory literature has little to say about trust, except on
the intraorganization level (e.g., trust between employer and employee). The social
science literature which is applicable to trust in organizations can be divided into four
categories— trust in a fiduciary relationship, trust as an alternative to contracts, trust
versus cooperation, and trust as a means for reducing complexity.
In a fiduciary relationship, trust is placed in another to act on one's behalf
without taking advantage of his or her position. Bella (1987) has argued that profes-
sional trust (a type of fiduciary relationship) is not so much trust in the personal
integrity of the individual professional as it is trust in the social processes governing
the profession. Rigorous education, peer reviews, and conformance to a code of
ethics, for example, are signs to the public that the profession does not define its
responsibilities solely through self-interest.
A large literature exists on trust and contracts as the two basic means which
facilitate all exchanges. There is a dispute over the extent to which the two comple-
ment each other or are alternatives to each other. If every contingency can be
planned for in the contract, there is no need for trust. Because it is impossible in
most circumstances to specify every contingency, there is, as a backdrop to contracts,
trust that each party will act according to expectations not specified in the contract.
In fact, contracts presuppose trust between the contracting individuals and in the
legal system which backs them up. By contrast, the need to specify contracts may
signal a lack of trust.
In the psychological literature, there have been attempts to study trust
through the use of games in an experimental setting. Sociologists argue that what
game theorists are really studying is cooperation, not trust, although cooperation is
 WORKSHOP ON ESTABLISHING INSTITUTIONAL CREDIBILITY 77

probably indicative of the presence of trust.

A relatively recent approach to trust in the sociological literature argues that
trust is necessary to reduce complexity. Trust is seen as the expectation that others
will comply with the rules of daily life. It is developed through familiarity with the
past behavior of others. Trust differs from confidence, in that trust presupposes a
situation involving some risk. Without trust, even routine interactions would be both
complex and risky. Thus, the relevant question for any organization is not "How can
we produce trust?" but rather "How can we increase trust or maintain the trust we
already have?"
If trust (or distrust) is developed through familiarity with past behavior,
keeping information from people may lead to a lack of trust. Covering up minor
errors undermines trust; if people are exposed to the minor errors and their remedies,
they are likely to have more confidence in the ability of the agency to handle prob-
lems. Suppression of information about small accidents causes expectations to be
falsely raised. Further, the literature on perception and evaluation of risks shows that
people accept risks better when they feel they have some control. Being deprived of
information yields a feeling of lack of control.
In organizational theory literature, a distinction is made between trust and
legitimacy. It is a useful distinction because confidence comes from legitimacy.
Organizations gain legitimacy by being part of a broader institutional structure and
by acting in accordance with a legal framework. Legitimacy exists to the extent that
some higher authority backs one up. Trust is a broader notion which comes into play
when information about the object of trust is lacking. It is conceptually possible to
have trust without legitimacy, and vice versa. The trustworthiness of organizations
may be evaluated on the basis of their processes, their outcomes, or both.
Legitimacy is undermined by the increasing conflictedness of the legal and
political structures. Recently there has been conflict in the public arena about proper
models for decision making, as well as contested bases of authority. This both
decreases the legitimacy of the process and increases maneuverability.

SOURCES OF TRUST
Zucker (1986) identified three different types of trust by how they are pro-
duced. The three types of trust are characteristic-based, process-based, and

":-z?szrn.-r^^^ry^r:;^^:^- ••• "^•''H'T;--;%:^^^.^'^N!a^:v:^^fe^»^^-^-;^^'ve v->s\->isgrr

; , i ,
78 COMPILATION OF REPORTS

institution-based. Characteristic-based trust depends upon the characteristics of the

individual participants. It has to do with congruence of values, that is, this person is
like me and so has my interests at heart. Process-based trust may incorporate charac-
teristics, but is produced through repeated interactions. It frequently involves "sym-
bolic exchanges" rather than economic ones. Institution-based trust is produced
through formal social structures such as professional certification and regulation. As
society becomes more complex, institution-based trust supplants characteristic-based
and process-based trust. Examples are trust in the legal system, trust in professional
standards, or trust in organizational form.
Some of the differences in the types of trust may be due to different enforce-
ment mechanisms as you move from interpersonal situations to formal organizations.
A problem in the institutional setting is that an enforcement mechanism may simply
be another layer of institution in which one must place trust. The literature on
regulation in the public sector shows that people are skeptical of self-regulation,
even though it may produce a better control system than external regulation. The
public also sees a lack of technical professionalism in government. Ahearne, former
chair of the NRC, has complained that the people who have the ultimate
decision-making power in government lack technical understanding. A good ex-
ample of this occurred in the Challenger accident where the best technical advice was
disregarded by the political heads.
Another factor in the interactions between public institutions and the public is
the development of the mediating interest group. A good discussion of this develop-
ment [and their consequences for decision processes and outcomes] can be found in
The Organization State by Laumann and Knoke (1987).

OBJECTS OF TRUST
Organizational planning may be a source of distrust. In planning for a disas-
ter, for example, organizations often use what Lee Clarke (n.d.; 1991) refers to as
fantasy documents in the early stages. These fantasy plans may include incorrect
assumptions, exaggerations of the efficacy of a solution, no or little experiential data
back-up, and assumptions of perfect functioning by social systems and human actors.
While fantasy planning may be necessary early in the process, organizations that
resist modifying these plans to accommodate different assumptions or refuse to
 WORKSHOP ON ESTABLISHING INSTITUTIONAL CREDIBILITY 79

collect additional data, are unlikely to make their plans more realistic over time.
Further, if the early plans contain too much fantasy, the public may dismiss them and
never go back to see that later plans have been made more realistic.
It is important to remember while discussing objects of trust that it is often a
subpart of an organization that is trusted or distrusted, but the reputation of the
subpart tends to generalize to the whole organization. The public thinks of organiza-
tions as consisting of tightly coupled subparts. In reality, most organizations are
much more decentralized and loosely coupled. Therefore, organizations are more
likely than individuals to act in contradictory ways; that is, various parts of an
organization may say and do different, contradictory things. This is seen by the
public as dishonesty, when it is simply routine organizational performance due to
decentralization.
Similarly, on the individual level, the public looks for consistency. There is a
poorer public perception of leaders who are inconsistent than of those who are
consistent, even if the consistency is to an idea that doesn't work. People may also
look for consistency or stability within the organization, e.g., the same spokesperson
or leader over time.
Because of the need for flexibility where new technologies and scientific
uncertainties are concerned, there is danger of appearing inconsistent or contradic-
tory. Focusing on the goal rather than the means of achieving the goal may be one
way to avoid seeming inconsistent.
The public has more confidence if a central person appears to be in charge in
times of danger or adversity. The more dramatic an outcome, the more likely the
outcome will be attributed to the leader of an organization. When the outcome is
negative, this attribution to the leader makes it difficult for that person to correct the
problem. Those who are seen as part of the problem are not trusted to fix it.
There is a literature that shows that people's estimates of probability have a
lot to do with salience and personal control. People overestimate the frequency of
large disasters. They are inherently over-optimistic about their own abilities, so have
more trust in something they feel some control over. Hands on experience leads to a
perception of control. In Sweden, where there is little controversy over nuclear
waste disposal, school children are routinely taken on tours of their nuclear waste
sites. Public tours of Yucca Mountain have been successful in allaying fears. In fact,
80 COMPILATION OF REPORTS

issues of equity, stigma, and taking on other's burdens are more problematic in the
siting process at Yucca Mountain than is risk per se.
When the public is divided into groups who define trust differently, an organi-
zation may have to rely on procedural legitimacy. People recognize that there are a
plurality of interests and points of view. When all sides can come before a neutral
person or body and all opinions are granted an opportunity to be heard, there is a
perception of procedural legitimacy. Trust can be built up in the process, rather than
in specific outcomes.
Organizations also try to tailor their messages to the audience by using differ-
ent language or different explanations. However, this must not involve contradictory
statements, for that will undermine trust. In this age of mass media and information
sharing, contradictory statements are bound to become apparent quickly. In all
cases, the information should be accurate.
Accuracy is not enough, however. Particularly when dealing with communi-
cating information about risks, many things besides magnitude of the risk come into
play. For example, distributional equity, the vividness of examples, and a host of
other affective aspects affect the way people react to risk comparisons.
In organizational systems literature, the older models were vertically inte-
grated organizations. Newer models of organizations, however, involve partnerships
between formerly independent partners yielding a network-like structure. Such
systems, when effective, are often embedded in a larger structure that helps sustain
the network. In the United States, the legal system serves as the model for this larger
structure, in which legitimacy is based on process. The separation of authority in the
US federal system can present procedural problems. There is no collective voice
speaking in the general interest. In fact, American political dialogue privileges
individual interests rather than the general good.
In American political culture, both inclusiveness and fairness contribute to
legitimacy of the process. One's place in society affects how one sees the process.
Groups on the fringe serve a sentry function on low level, long-term risks. Groups
which are more central are more concerned with the prevention of societal
shut-down. One way to deal with this is to have representatives from all different
aspects take part in the decision process, but one can't expect to reach consensus in
that situation.
 WORKSHOP ON ESTABLISHING INSTITUTIONAL CREDIBILITY 81

The analysis of social movements shows that there are parts of social move-
ments who want to get something done. They tend to isolate the fringe. Even among
the fringe, there is a continuum of points of view. Small group dynamics research
tells us that the last thing we want is to have only mainstream thought. Minority
views often represent important aspects of the truth. Interest groups should be
regarded as an important resource rather than obstacles.

RISK
There is a distinction between risk and uncertainty. People's concerns about
things nuclear has more to do with uncertainty than risk. People worry that the
numbers and examples used by experts are fictional because of scientific uncertainty.
Public reaction to ozone loss and global warming has similarities to the threat of
nuclear disaster. They all represent a possibility of fundamentally changing life as
we know it, and people don't know how to talk or think about that.
Public discourse frequently doesn't distinguish between risk and hazard. Risk
is the degree of the hazard times the probability that the hazard will occur. A large
hazard with low probability of occurrence equals a low risk. Using this definition of
risk, and then trying to compare risks ignores the other issues that are important to
people when they think about hazards.
Perceptions change over time. (See for example a book by Weart on nuclear
images.) From the days when there was talk of "atoms for peace" and of nuclear
power producing electricity that was "too cheap to meter," today the word nuclear is
seen so negatively that it was dropped from "nuclear magnetic resonance imaging" to
make this medical procedure sound more acceptable. Perhaps linking "nuclear
waste" with positive ends or images would be helpful. For example, nuclear waste
storage is needed to clean up the mess that exists now. On the other hand, there are
interest groups who are opposed to solving the nuclear waste issue precisely because
it removes one objection to the continuing development of nuclear power. Interest-
ingly, the federal government's position for a number of years was that nuclear waste
was a problem that had to be solved regardless of the future of nuclear power. Re-
cently, Admiral Watkins has begun linking nuclear waste disposal to the future of
nuclear power plants.
Public trust must be seen in the historical context of the flow of issues. There
82 COMPILATION OF REPORTS

is an evolution to how events and issues gain momentum. Timing is very important.
One issue can become connected with other issues simply on the basis of arriving at
the same time, and issues activate organizations. This is best described by the gar-
bage can model of organizational decision making (Cohen, March and Olsen, 1972).
Even though this is a retrospective analysis, one can develop projections based on
things that have happened in the past.
A problem for government agencies is that there are few political ways to
ensure that Congress will keep promises 50 or 60 years in the future, let alone for the
thousands of years a nuclear waste disposal facility will be around. One solution is
to remove the decisions from the political process. Nearly twenty years ago, Alvin
Weinberg argued that we needed a dedicated core of nuclear "priests" to stand guard
over nuclear waste. In fact, we do have institutions that are insulated from the
political process to safeguard certain areas, for example, the Federal Reserve Board
and the Interstate Commerce Commission.
There is a variance in levels of confidence across institutions and over time.
Support for nuclear power in the United States has been steadily declining since the
late 1960s even at times when confidence in the government increased. In reviewing
cross-national data on people's satisfaction with contact with government agencies,
Godsell, Hasenfeld, and Zald found that people were generally satisfied with routine
contacts with "helping" agencies and dissatisfied with routine contact with "punish-
ing" agencies. For example, across countries no one was satisfied with contact with
the police or tax agencies.

TRUST AS A PROCESS
When dealing with maintaining trust over the lifetime of a facility, particu-
larly one as long lived as a nuclear waste repository, it is important to look at trust as
a process. For technical organizations, output is important in establishing trust and
legitimacy. A factor in the output is how stable and known the technology is. The
newer and less certain the technology, the more difficult it is to build trust in the
organization.
For an institutional organization, control and standardization of processes
contributes to trust. An institutional organization is legitimate to the extent to which
it conforms to the accepted framework in the particular society. For example, does
 WORKSHOP ON ESTABLISHING INSTITUTIONAL CREDIBILITY 83

the institution have an appropriate structure and appropriate personnel? Does it

comply with appropriate procedures? Unique organizations have a difficult time
attaining legitimacy. Part of good managerial skill is to know when and in what
ways it is all right to deviate from the norm.

GAINING AND LOSING TRUST

Short-run strategies for gaining trust include such things as filling
boundary-spanning positions (the people who serve as a link between the organiza-
tion and its exchange partners and publics) with people with characteristics that
match the audiences'. For the longer term, reliance on professional norms and
standard procedures is important.
Routinizing the technology may help. For example, one could build a num-
ber of small, low-level underground storage facilities as they have done in Sweden.
Familiarity removes some of the fear. Gaining and maintaining trust is somewhat
different than losing and regaining it. Major mechanisms for dealing with loss of
trust are to establish a review board or to reorganize the institution. If the reputation
of an organization is very poor, it may take a whole new agency to solve the prob-
lem. If loss of trust is due to differences in values (e.g., the interests of the organiza-
tion are different than the interests of those being asked to trust it), it may be very
difficult to gain or regain trust. Shared decision making or incorporating some of the
other's values may help. For example, in Making Bureaucracies Think (1984),
Taylor details how environmental impact statements have changed organizations by
internalizing and institutionalizing environmental concerns. The reporting require-
ments for toxic chemicals have changed production processes in chemical compa-
nies. Psychology literature on small group process shows that having minority input
has an impact. Even after the minority representative is no longer in the group, the
minority interests are taken into account.

INDICATORS
In organizational theory, determining effectiveness requires the development
of criteria (what are the relevant dimensions?), setting standards, selecting indicators,
and performance sampling (Dornbusch and Scott, 1975). Indicators are only one
piece of the evaluation process.
84 COMPILATION OF REPORTS

Some easy indicators of whether an organization is doing a credible job or not

are 1) monitoring complaints, 2) the number of legal suits, 3) monitoring demonstra-
tions and collective disorders, and 4) the number and nature of Congressional hear-
ings. For the Task Force, the issue seems to be not only about storage of nuclear
waste, but about all things nuclear. An indicator of changing attitudes could therefore
be the use of the word "nuclear" in popular press and media. Passive monitoring of
this sort is needed to supplement public opinion poll information. When one talks
with people directly, one not only monitors opinion, one helps to create it.
In many organizational fields, there is widespread reliance on structural
indicators such as capacity for performance or qualifications of personnel. These
may be assessed by certification or accreditation. In looking to organizational litera-
ture, keep in mind that efficiency does not equal trust. Being very efficient but
performing in ways counter to the public interest may be very bad in the public's
view. Indicators have a downside as well. They almost always lead to displacement
of effort in an organization.
In the nuclear waste repository issue, the trouble with technical indicators is
that it will take so long to know whether the technology is working. Probes could be
placed into the repository to monitor chemical processes, but the chemical processes
are so slow that it would take hundreds of years to tell what's happening. Therefore,
other aspects of the total system must be monitored as well (e.g., transport above
ground). It may be more important for purposes of increasing trust to monitor
institutional processes than technical ones.
An advantage of the organizational perspective is that it recasts the public/
private discussion. All organizations, be they public or private, are subject to various
regulations. There are mixtures of partnerships between public agencies and private
subcontractors. In fact, Superfund consists almost entirely of private contractors.
Whether it is an advantage to let the public know the extent of private subcontracting
is not settled. In most instances one would expect a private organization to be seen
as more efficient, but not necessarily more trustworthy. One can look at the public
opinion survey data on attitudes towards business versus government. Most analysts
would agree that you don't subcontract out something that is very important to your
outcome.
When dealing with an institution such as the nuclear waste repository whose
 WORKSHOP ON ESTABLISHING INSTITUTIONAL CREDIBILITY 85

outcomes entail a large risk at sometime in the distant future, trust must be gained
through standard operating procedures to collect and analyze the data as time passes.
The institution can only do the best it knows how today while ensuring a process to
track what's happening so interventions can be taken if something goes wrong and
changes can be made to take advantage of new technical or scientific information.
An analogy can be made to the Egyptian crypts where the wealth was buried and
faith put in a "technical" solution (the pyramid), versus the Catholic church which
relied on institutional processes to retain its wealth and power. Most of the Egyptian
crypts have been plundered; the institutional approach has worked fairly well for the
Catholic church.

-•"Z?x.-*v&&zr. T^^^r-n*^.^?:':..^::*-„-.-.,• rjsrf'?&?n?r,^.—'-Kz$.-w

86 COMPILATION OF REPORTS

REFERENCES

Bella, D. A. 1987. Engineering and erosion of trust. Journal of Professional

Issues in Engineering 113:117-129.

Clarke, L. Undated. Controlling the Uncontrollable: The Organizational

Production of Fantasy Documents. Photocopied book prospectus. Department of
Sociology, Rutgers University, New Brunswick, N.J.

Clarke, L. 1991. Analyzing the Exxon oil Spill: Power, technology, and
institutional analysis. Unpublished manuscript. Department of Sociology, Rutgers
University, New Brunswick, N.J.

Cohen, M. D., J. G. March, and J. P. Olsen. 1972. A garbage can model of

organizational choice. Administrative Science Quarterly 17:1-25.

Dornbusch, S. M., and W. R. Scott. 1975. Evaluation and the Exercise of

Authority. San Francisco, Calif.: Jossey-Bass.

Laumann, E. O., and D. Knoke. 1987. Organizational State: Social Change

in National Policy Domain. Madison: University of Wisconsin Press.

Taylor, S. 1984. Making Bureaucracies Think: The Environmental Impact

Statement of Administrative Reform. Stanford, Calif.: Stanford University Press.

Zucker, L. G. 1986. Production of trust: Institutional sources of economic

structure, 1840-1920. Research in Organizational Behavior 8:53-111.
 INSTITUTIONAL LEGITIMACY
IN THE PUBLIC SECTOR:
A SYNOPSIS OF RECENT RESEARCH

FRANK R. DOBBIN
DEPARTMENT OF SOCIOLOGY
PRINCETON UNIVERSITY

Prepared for the U.S. Department of Energy

December, 1991
 INSTITUTIONAL LEGITIMACY IN THE PUBLIC SECTOR 91

This report examines recent work on the legitimacy of government institu-

tions. Much has been written about how nation-states gain legitimacy, how particular
governing regimes gain legitimacy, and how certain government agencies and poli-
cies gain legitimacy. Common themes run through this literature, but there are
nonetheless important disagreements about how government institutions achieve
legitimacy and what sorts of impediments they face. The aim of this report is not to
adjudicate among theories, but to highlight the insights offered by different social
science approaches to the problem. The focus is on American government institu-
tions.
Max Weber explored the issue of governmental legitimacy in historical con-
text. Early forms of government depended upon either charisma or tradition to gain
legitimate authority, but Weber argued that with the advent of rationality governments
came to depend on rational-legal authority, which is sometimes called bureaucratic
authority. Under systems of rational-legal authority, legitimacy stems from the
existence of a set of value-rational rules governing the accession to power. Those
rules guarantee that the persons best qualified will be placed in positions of authority.
In short, legitimate domination rests "on a belief in the legality of enacted rules and
the right of those elevated to authority under such rules to issue commands" (Weber
1978, p. 215). Legitimacy ultimately rests in the authority of a set of rules which
bind decision-makers (Merquior 1980; Murvar 1985). Neo-Weberian approaches are
covered in the section on culture and legitimacy, below, but it is important to note
that Weber's notions serve as a common starting point for the different approaches
covered below.
Weber is concerned with how legitimate authority is produced. Those who
study legitimacy in modern polities suggest that it can be challenged on the basis of
the process of decision-making, or on the basis of the outcome — the policy or
institution chosen. This distinction will help to organize the discussion that follows.
Most analysts have examined the issue of the legitimacy of government
organizations from a cross-national perspective, and this is the case for methodologi-
cal reasons outlined by Emile Durkheim. To understand the cause of any outcome
(e.g. institutional legitimacy) we must look at several cases which vary both on the
outcome and on the hypothesized cause. It is also important to control for other
possible causal factors, and this is accomplished by choosing cases with different
92 COMPILATION OF REPORTS

outcomes and differences in the hypothesized cause, which are similar on most other
dimensions. Two research strategies are consistent with these methodological im-
peratives. One is to compare several institutions within a single nation, thereby
controlling for most national factors but not for sectoral factors. Another is to com-
pare parallel institutions across similar nations, thereby controlling for sectoral
factors but only controlling partially for national factors. Thus many of the studies
discussed below make comparisons either across institutions or across nations.
Each of the subsequent sections covers a specific research tradition, and
concludes with implications for American governmental institutions in the nuclear
energy sector. A number of the research traditions reviewed here have more to
suggest about the contours of the problem of organizational legitimacy than they have
to suggest in the way of remedies.

CRITICAL THEORY
At the most general level, social scientists interested in institutional
legitimacy have examined the mechanisms that afford legitimacy to modern demo-
cratic states. As noted, Weber's concern with the underlying logics of social systems
led him to treat the issue in broad historical terms. Critical theorists offer another
perspective on how modern states gain sufficient legitimacy to govern societies —
how they sustain adequate allegiance and devotion among citizens. For them, politi-
cal order is not to be taken for granted as the normal state of affairs, but is a problem
to be explained. Critical theorists emphasize contradictions between the economic
and ideal functions of the modern state (Habermas 1975: 1979: Offe 1984; Weiler
1981). Habermas argues that the state must simultaneously serve economic functions
by promoting economic growth and capital accumulation and serve legitimacy func-
tions by promoting social justice and the well-being of the populace. In modern
democratic nations, it is argued, these two roles become increasingly irreconcilable as
business groups concerned with growth press for reduced taxes and state promotion
of industry, and citizen groups concerned with the well-being of the disadvantaged
press for increased public expenditures on social programs and regulation of business
activities. The underlying dilemma here is that failure to achieve the goal of growth
leads to economic stagnation and decline, and failure to achieve social well-being and
distributive justice leads to a loss of legitimacy and, potentially, to political disarray.
 INSTITUTIONAL LEGITIMACY IN THE PUBLIC SECTOR 93

Habermas predicts that given current constraints, this contradiction will increasingly
lead to legitimacy crises for modern states. He finds that when caught between a
rock and a hard place, modern states pursue economic growth at the cost of the public
well-being and social justice, and that this in turn leads to a general crisis of state
legitimacy. In contrast, James O'Connor (1973; 1984) contends that this contradic-
tion leads the state to pursue both goals simultaneously, which results in a fiscal crisis
of the state.
Jurgen Habermas, Claus Offe, and James O'Connor share a conception of
state policy — as driven both by technological changes and by a need to maintain
legitimacy by protecting the public trust — that speaks directly to the issue of the
contradiction between technological progress and the perceived threats to the public
well-being that result from technological advances. Their analyses offer useful
insights for the issue at hand. One corollary of their arguments is that government
institutions that aim to promote growth, but that threaten the well-being of citizens,
will be most likely to pose problems of legitimacy. However the perspective offers
little in the way of pragmatic suggestions. These authors contend that governments
must attempt to steer a middle course between economic and social issues, but are
fundamentally pessimistic about the capacity of states to do so as technological
advances increasingly come into conflict with the issue of public well-being.

INTEREST GROUP APPROACHES

The most prevalent postwar approach to understanding the legitimacy of
modern democratic governments, and the legitimacy of their policy choices, is inter-
est group theory (Truman 1951; Lowi 1969). The basic premises of this approach are
shared by political theorists from the left and the right, however the two approaches
have very different implications for the issue of legitimacy. In brief, interest group
theory depicts policy-making as a process of conflict between competing interest
groups. Among pluralists this approach can be traced back at least to Weber's (1978)
writings from early in this century which noted the rise of competing political groups
based on cleavages other than class. In this tradition, legitimacy in democratic
systems results from participatory decision-making and the free expression of ideas.
Among neo-Marxists the approach can be traced back to the Eighteenth Brumaire
(1963), written over a century ago, in which Marx mapped out the competing elite
94 COMPILATION OF REPORTS

factions that struggled for control of the French state under Louis Philippe. In this
tradition, governments gain legitimacy by representing the interests of the dominant
class as those of society at large. In both versions of the theory, policy decisions are
posited to reflect the relative power of different groups.
Recent developments in political science have, for the most part, remained
faithful to the basic precepts of this approach. Rational choice theory suggests that
interests can be objectively determined, and that behavior can be modelled with the
techniques of micro-economic analysis; however rational choice theorists continue to
believe that policy decisions result from power struggles among groups with different
objective interests (Tsebelis 1990; Elster 1986). The new coalitional approach is
concerned with how different subgroups assemble, fall apart, and reassemble to
create coalitions that back particular policy directions (Gourevitch 1986; Ferguson
1984). Coalitional theorists are more concerned with how winning coalitions emerge
and how interests are aggregated at the subnational level than with conflicts between
groups that have already stated their preferences, however their focus is on the same
interest group processes have concerned political scientists in the past.
We now turn to the liberal and radical variants of interest group theory and
their implications for the legitimacy of government institutions.

PLURALIST THEORY
Pluralist theory is, at once, a social science perspective on modern govern-
ment and a variant of modern political philosophy. Pluralists view the state as an
arena of political conflict among competing interest groups (Beer 1965; Kariel 1961;
LaPolombara 1964; Lowi 1969; Truman 1951). As social scientists, pluralists ana-
lyze decision-making by evaluating the relative power of competing interest groups
with inconsistent policy goals. As political philosophers, pluralists contend that in
large complex societies a process of free interest group formation and conflict, within
the confines of constitutional ground rules, produces democratic governance.
One of the central tenets of pluralist thinking is that under modern democra-
cies, politics "ceases to be an epiphenomenon of socioeconomic life" (Lowi 1969, p.
45). In the United States, more than elsewhere, this has meant that broad class-based
political groups have to some extent been supplanted by narrow interest-based politi-
cal groups. By contrast, in some European polities class is still the basis of political
 INSTITUTIONAL LEGITIMACY IN THE PUBLIC SECTOR 95

affiliation. The growth of narrow interest-based political groups exacerbates political

contentiousness and makes the problem of achieving legitimacy more difficult.
Where politics is organized around large class-based parties, contention tends to
occur at the point of platform-development. By contrast, where politics is organized
around narrow interest-based groups, dedicated to issues such as abortion
(Staggenborg 1991; Luker 1984) and nuclear energy, more of political conflict occurs
in the public view. Moreover where interest-based politics prevails, major political
parties have no capacity to control fringe political groups. Indeed, in the United
States, interest-based political action committees have become vital funding sources
for political candidates and parties (Sabato 1984; Sorauf 1984).
Another relevant insight from pluralist political theory is that the legitimacy
of American governing institutions stems from the commitment, outlined in the
Constitution and Bill of Rights, of the state to protect the rights of individuals and
groups to articulate and pursue their ideas and interests. Policies gain legitimacy
from a process whereby all interests are freely expressed, and then a compromise is
reached among conflicting parties in the decision-making process. Constitutional
safeguards protect against the tyranny of the majority, and against abuses of power by
office-holders.
This political philosophy creates certain intractable problems of governance
(Dogan 1988). To wit, the right to free speech is taken to be inalienable and civil
disobedience is taken to be protected under that right (Bedeau 1969). Sanctions
against it are weak. For normal political decision-making this is not particularly
problematic, but for certain high-salience issues free speech protections enable
minority oppositional groups to thwart the process of policy implementation. For
instance, in the cases of anti-abortion activism and anti-nuclear activism groups have
been able to undermine public policies. The problem here for American policy-
makers is that efforts to restrain civil disobedience are delegitimating. By contrast, in
democratic polities that place relatively more emphasis on effective policy promulga-
tion and relatively less emphasis on free speech, civil disobedience is less of a prob-
lem.
96 COMPILATION OF REPORTS

RADICAL INTEREST GROUP THEORIES

One variant of the interest group approach springs from a tradition which
holds that the ultimate purpose of the state is to foster the legitimacy of, and thereby
sustain, a social system that advantages some citizens and disadvantaged others. At
the core of the Marxist perspective is the notion that the state is an institution of class
coercion, and hence that it is by nature illegitimate. "At a definite stage of economic
development, which necessarily involved the cleavage of society into classes, the
state became a necessity because of this cleavage" (Engels 1942, p. 158). Elites
introduced states as instruments of domination, and thus the history of the state is the
history of class conflict.

The ancient state was, above all, the state of

slave-owners for holding down the slaves, just as
the feudal state was the organ of the nobility for
holding down the peasant serfs and bandsmen, and
the modern representative state is the instrument
for exploiting wage labour by capital. (Engels
1942, p. 157)

The central idea here, that the state poses a potential danger to democracy to
the extent that it sides with one particular interest group, came to shape pluralist
thinking in political science and in political philosophy (Galbraith 1952).
This tradition offers some important insights about the importance of state
autonomy for state legitimacy. .Capture" theories of politics suggest that modern
states are, in effect, instruments of the business community. The structural Marxist
view employs a subtle distinction: it is in the interest of state managers to promote
economic growth, and this just happens to coincide with the interests of the capitalist
class as a whole (Poulantzas 1980, p. 127; Therborn 1970, p. 7).
The rhetoric of capture theories has been adopted by oppositional interest
groups because it resonates with traditional American anti-statist sentiments. One of
the main tools of interest groups that hope to delegitimate policy outcomes is to argue
that "special" interest groups have had undue influence on policy-making, and that
this is evidenced by the outcome itself. Such arguments are difficult to falsify be-
cause they argue backward from outcome to process.
In sum, radical thinkers differ with pluralists because they do not think the
 INSTITUTIONAL LEGITIMACY IN THE PUBLIC SECTOR 97

state is a neutral arbitrator among competing groups that gains legitimacy from its
neutrality. For radical thinkers, the state originated as a means of class domination,
and remains an interested party in the political process. Whereas for pluralists the
state embodies "fundamentally consensually based legitimate domination," for
radicals it embodies "fundamentally coercive domination" (Skocpol 1979, p. 25). To
the extent that oppositional groups embrace this second interpretation, they have
difficulty thinking of any state policy as legitimate.

DECISION-MAKING AND AGENDA-SETTING

Some of the most important studies of process legitimacy have appeared in
the form of critiques of interest group theory. Peter Bachrach and Morton Baratz
(1962) address the issue of political decision making from the perspective of agenda-
setting. They argue that it is not appropriate to take the political decision process at
face value, because an important part of the decision process is obscured. The
policy-making process occurs at three distinct levels. The first, which is most often
studied by policy analysts, is the level at which choices are made from a set of alter-
natives (e.g. the decision to locate a nuclear waste dump in a particular state). The
second is the level at which policy alternatives are generated (e.g. the set of alterna-
tive waste disposal strategies is articulated). The third is the level at which the
political agenda is set in the first place (e.g. the decision to find a policy solution to
the problem of nuclear waste disposal). Steven Lukes' (1974) work on legitimacy
addresses a similar critique to the interest group approach. In essence, these ap-
proaches suggest that the groups with the legitimate authority to influence the agenda,
and the groups with the authority to offer alternatives, exercise power by constraining
the decision process.
In practice, powerful groups confer legitimacy on the policy directions they
favor by shaping the political agenda. They may accomplish this in any policy realm
by defining the political agenda in terms of lower-level technical policy decisions,
rather than higher-level decisions about strategy. The appearance of democratic rule
is sustained, and legitimacy is created, by a process which in principle allows for the
consideration of all policy alternatives but which in practice allows consideration of
only a narrow range of alternatives by excluding most alternatives from the agenda.
Thus, for instance, the agenda-setting approach would suggest that government
98 COMPILATION OF REPORTS

agencies manage to keep the issue of whether to continue to produce nuclear energy
from appearing on the national political agenda, while bringing to the agenda such
technical issues as that of how to dispose of nuclear waste.
Such manipulation of the agenda leads to problems of legitimacy when groups
actively seek goals that call for an altered agenda. It is common for disenfranchised
political groups to challenge lower-level policies when they have no legitimate
authority to place higher-level policies on the political agenda. For instance, anti-
nuclear activists seek to achieve the higher-order goal of closing down nuclear energy
production by fighting lower-level proposals for waste disposal. Their goal, of
course, is to undermine waste disposal decisions as a strategy for preventing the
proliferation of nuclear plants. In fact, their goals vis-a-vis the lower-level issue of
waste disposal are not incompatible with the goals of the Department of Energy: anti-
nuclear activists, too, would like to see the lower-order problem resolved safely.
To a large extent, the strategy of challenging lower-level decision processes to
achieve higher-level goals represent an effort to challenge current agenda-setting
arrangements. Theory would suggest that conflicts over lower-order agenda-setting
can be mitigated by opening the higher-order issue to public debate. In short, by
allowing interest groups to participate in agenda-setting, governments might thwart
the strategy of using lower-order filibustering to affect the higher-order agenda.

NEO-CORPORATISM:
A STRUCTURAL SOLUTION TO INCREASING CONTENTIOUSNESS
In 1974 Philippe Schmitter published a paper titled "Still the Century of
Corporatism?" that outlined a growing trend toward corporatist forms of interest
integration in Western European states. Corporatism refers to political systems that
integrate representatives of business, labor, and other groups into state decision-
making bodies whose scope usually covers wages, labor, industrial, and economic
policies (cf. Almond 1983; Berger 1981; Lehmbruch and Schmitter 1982; Panitch
1986; Wilensky and Turner 1987; Wilson 1983). Analysts of neo-corporatism argue
that governments have adopted neo-corporatist structures in order to confer legiti-
macy on the policy-making process, and on policy outcomes themselves. To some,
the formal incorporation of the main interest groups in public decision-making
processes is simply a means of coopting groups that are prone to dissent. Others are
 INSTITUTIONAL LEGITIMACY IN THE PUBLIC SECTOR 99

less cynical, but agree that these structures serve to dampen conflict by assuring
affected groups a voice in the decision process.
Corporatist structures, in which governmental decision-making bodies include
elected representatives of labor groups, business associations, and other affected
interest groups, have become increasingly common in European democracies during
the post-war period, but have not appeared in the United States. Analysts have
suggested that these structures have not appeared in the United States in part because
labor groups have little political power there, and thus business-labor conflicts sel-
dom result in political stalemate (Almond 1983). If these structures can, as analysts
argue, help to reduce inter-group conflicts, they provide a model for consensus
formation, and the promotion of legitimacy, in a wide number of contentious policy
arenas, including energy policy and environmental policy. In the realm of waste
management, for instance, interested groups might be given voting positions on a
board that makes final waste siting decisions. Evidence from European nations
would suggest that such a strategy could actually overcome stalemate.

INSTITUTIONS AND OUTCOME LEGITIMACY

Institutionalists have a different way of understanding how policy decisions
are made, and how government institutions gain legitimacy. They have focused on
the administrative constraints existing policy instruments place on the adoption of
new policy instruments. Some institutionalists draw on a social learning model to
understand the issue of legitimacy. Policies gain legitimacy when they appear to
serve the functions they are intended to serve. Novel policy strategies seldom gain
legitimacy, because they are frequently undermined by inappropriate administrative
capacities. Thus they generally fail to be carried out in the first place.
Institutional theorists of government make the important point that state
administrative capacities delimit practicable policy alternatives for the future
(Krasner 1984; March and Olsen 1984). By administrative capacities they refer to
the entire state bureaucracy and its organizational resources: expertise, experiences
with past policies, administrative structures, etc. Institutionalists have convincingly
shown that state policies may not change substantially over long periods of time due
to the inertia of state institutions (e.g. Krasner 1978) and the availability of those
institutions to solve new problems (Ikenberry 1988). Douglas Ashford argues: "The

rT^TT^ZW^T •\\#g :• v ^ a v - y ^ v ' ^ y . . . * - ^ ; ^ - ! ...•,-',. ^ ^ ^ ^ y a ^ ^ v w ^ - -,;...-=-.•.. --

TOO COMPILATION OF REPORTS

state is governed more by its previous decisions, its internal organizational and
institutional constraints, and its own agenda, however we suspect these may be
formed, than by external forces" (1977, p. 572). They have also shown that policy
innovations are frequently thwarted by weak or inappropriate administrative capaci-
ties (Skocpol and Finegold 1982; Skowronek 1982).
The institutional paradigm in political theory is broadly organizational in
orientation, emphasizing the administrative resources states possess to carry out new
policies. The modern intellectual roots of this approach may be traced to Selznick's
seminal study of the Tennessee Valley Authority (1949), which suggested that institu-
tions develop inertia of their own and engender constituencies that support their
survival.
Institutional capacities positively shape policy in some very direct ways. At
the most fundamental level, government realms that hold substantial authority and
resources are most likely to tackle new problems. For instance, in the U.S. power
and resources are concentrated in state and local governments, and this may explain
why American states and localities take important policy initiatives. Some of the
more interesting institutional analyses have focused on how public and private sector
organizations often grow up together, and influence the range of practicable policy
alternatives for the future (Zysman 1983). In the nuclear energy sector, for instance,
the decision to locate nuclear energy production in the private sector was in part a
response to earlier decisions to make electricity production part of the private sector.
In turn, new energy policies are, more or less, constrained to maintain nuclear energy
production in the private sector (Campbell 1991).
The issue of state administrative capacities is important because institutional-
ists suggest that novel policy solutions that expand state capacities will fail to gain
legitimacy not for normative reasons, but because they will fail administratively and
thus will not be reinforced in the public mind as effective solutions. For them,
legitimacy is a pragmatic issue. And most agree that in the United States, the admin-
istrative capacities of the central government are uniquely weak.
Most early institutional studies were concerned with how weak state capaci-
ties undermined novel sorts of policy strategies. For instance, Skocpol and Finegold
(1982) describe how America's weak bureaucracy thwarted the promulgation of the
National Industrial Recovery Act in the 1930s. Stephen Skowronek (1982) highlights
 INSTITUTIONAL LEGITIMACY IN THE PUBLIC SECTOR 101

institutional constraints that undermined central policy coordination in three different

American sectors. These works suggest that new state policies that expand the role of
the state in society will frequently fail as a matter of organizational incapacity. They
will, therefore, never have the chance to gain legitimacy. These insights are directly
pertinent to the issue of building new state agencies to serve new, and complex,
functions. They suggest, for instance, that had a federal agency successfully built and
operated nuclear power plants, that agency might now have sufficient legitimacy to
gain the trust of Americans in assuming the task of disposing of nuclear waste. In the
absence of such an agency, it will be difficult to build such legitimacy for a new
agency. More broadly, to the extent that the federal government has had few positive
experiences with administering large-scale programs with complex technologies, the
public bureaucracy has amassed insufficient expertise, and legitimacy in its technical
role, to take charge of future programs. Here the issue is legitimacy in part at the
level of bureaucratic expertise — do we think they can do it?
Comparative analyses support this conclusion. A number of studies have
found that states with past histories of implementing technically complex and inter-
ventionist policies, which have in the process developed administrative expertise, are
most likely to succeed at adopting new interventionist policies (e.g. Zysman 1977;
Zysman 1983; Katzenstein 1984; Katzenstein 1986). These authors tend to concur
that the United States has particularly weak administrative capacities, for identifiable
historical reasons (Skowronek 1982), and that new policies are thus most likely to fail
there. John L. Campbell's (1988; 1991) work on the history of nuclear energy policy
in the United States combines insights from this perspective with interest group
analysis to understand the trajectory of policy.
Under what circumstances can state administrative capacities be enlarged?
From the institutional perspective, the problem of building a new bureaucracy is not
so much one of garnering legitimacy for the unit, as gathering the expertise and
organizational resources that will allow it to succeed. What can cause administrative
capacities to be enlarged, so that states can tackle problems of greater complexity
than they have attempted before? Stephen Krasner (1984) proposes a "punctuated
equilibrium" model of state behavior to understand how state capacities may be
enlarged. He argues that institutional forms appear in response to system crises and
gel until new crises usurp them.
102 COMPILATION OF REPORTS

Institutional change is episodic and dramatic rather than

continuous and incremental... During periods of crisis
politics becomes a struggle over the basic rules of the
game rather than allocation within a given set of rules.
However, once crises are past institutional arrange-
ments tend to rigidity. Institutions reproduce them-
selves and respond more to their own needs than to
those of their domestic society or the international
environment. (Krasner 1984, p. 234)

Krasner argues that particular difficulties in implementing policies tend to

lead to incremental solutions that may not be effective (see also Skowronek 1982),
but that major system crises such as wars and economic depressions may lead to
wide-ranging changes in the administrative capacities of the state. In the case of the
nuclear energy sector, Krasner's thesis would suggest that the state's administrative
capacities and technical expertise in the sector will probably not expand significantly
until the nation faces a larger crisis that causes the federal bureaucracy to expand
more generally. In Krasner's model, only system-level crises elicit significant
changes in state capacities. On a more positive note, most institutionalists believe
that state capacities can be expanded incrementally with some success. This would
suggest that the Department of Energy might expand its legitimacy in the field of
nuclear energy by gradually expanding its role in the operation of nuclear power
plants, perhaps with the longterm aim of taking them over.

SOCIAL LEARNING THEORY AND

THE DEVELOPMENT OF INSTITUTIONAL LEGITIMACY
To explain why certain policies become institutionalized and gain legitimacy,
a number of institutionalists have adopted a "social learning" approach (Heclo 1974;
Etheredge 1985; Hall forthcoming), which suggests that policy-making involves a
process of trial and error, in which policy makers and citizens learn which policies
work and which don't. Policies that coincide with success (the desired outcome) gain
legitimacy, but those that fail to be successfully implemented or that coincide with
failure never achieve legitimacy. Ronald Inglehart has generalized the argument to
suggest that regime legitimacy depends on effectiveness, in terms of economic goal
attainment: "Effectiveness over a long period of time may be the surest way to
produce legitimacy, insofar as it leads to the emergence of a public that has absorbed
 INSTITUTIONAL LEGITIMACY IN THE PUBLIC SECTOR 103

enduring positive orientations toward the regime during early socialization" (1990,
p. 16).
Institutional approaches to politics suggest that policies gain inertia if the
administrative capacities of the state are well suited to them. If the state, for instance,
has had experience in administering similar policies. The social learning camp holds
that, in turn, the policies that are sustained gain legitimacy, which suggests that
policies that gain legitimacy are those that are well suited to the administrative
strengths of the government. For instance, state-run nuclear reactors gained legiti-
macy in France because the state had extensive experience administering complex
public organizations, employed many of the nation's technical experts, and thus
succeeded at building and operating nuclear reactors. By contrast, government
regulation of nuclear reactors in the United States has failed to gain legitimacy in
large measure because the state had little expertise in regulating complex industries,
and has predictably failed to enforce regulations (David et al. 1991). The idea of
state control of vital industries was legitimated by the French experience with nuclear
reactors; whereas the idea of public regulation of complex industries was
delegitimated by the American experience with nuclear regulation. Those experi-
ences have palpable effects on future policy directions. Charles Perrow's (1984)
work on the control of high-risk technologies, including nuclear technology, is di-
rectly pertinent to this process.

PROCESS LEGITIMACY AND INSTITUTIONAL CHARACTERISTICS

Differences in how political institutions allocate legitimate authority over
decisions influence legitimacy processes directly. Alexis de Tocqueville (1945; 1955)
noted important structural differences between democratic states in the nineteenth
century, and related differences in how legitimacy is achieved. Some political struc-
tures contribute to the resolution of controversial policy issues at the national level by
locating legitimate authority over policy choices in the central government; by con-
trast other political structures contribute to the resolution of controversial policy
issues at the local level by locating legitimate authority there.
Political systems that are unitary and parliamentary locate legitimate authority
over policy decisions, by and large, at the center. Party leaders make important
policy choices, and party members vote in accord with those decisions, at both the
 104 COMPILATION OF REPORTS

national and local levels (Ashford 1981; 1982). By contrast, political systems that
are federal (hence decentralized) and presidential locate legitimate decision authority
in individual politicians. Party platforms establish only broad common principles.
One important implication of this research is that under presidential and
federal systems, there is substantial intra-party conflict over decisions and state
officials and federal legislators tend to vote along regional lines as well as party lines.
This is in large part a result of different political realities, for under a federal and
presidential system, politicians are beholden, to a much greater extent, to local inter-
ests. In the United States, governors and members of congress have substantial
autonomy from their parties, yet they are highly dependent on regional groups for
both funding and votes (Shefter 1977). One result of this system is that neither
members of congress nor governors have much to gain by supporting policies that are
vociferously opposed by constituent groups. This is particularly true of high salience
issues, such as nuclear waste disposal siting, that tend to elicit strong negative senti-
ments on one side and indifference on the other. The high-salience issue of abortion,
by contrast, elicits strong sentiments on both sides, and may lead pragmatic politi-
cians to weigh one side against another.
In a political system where legitimate authority over the course of policy is
situated in party leadership, it is much more difficult for political opposition to
policies that have regional implications to thwart policy-making (Crozier 1973). On
the one hand, members of parliament can vote for policies that are not in the interest
of their region with relative impunity. On the other hand, provincial and local gov-
ernments seldom have veto power over policy choices.
In the American context, the federal government has always had full legiti-
mate authority over certain policy realms, notable the mails and the military. This
suggests that one way to expand the legitimate federal authority over nuclear energy
and nuclear waste would be to bring these policy domains under the control of the
Department of Defense. If nuclear waste disposal could be defined as an issue of
national defense, rather than as an issue of local nuisance, then the appropriate level
of decision authority would, more clearly, be the federal government. Paradoxically,
Washington has for many years sought to disentangle the issues of nuclear weapons
and nuclear energy, to garner support for the latter.
 INSTITUTIONAL LEGITIMACY IN THE PUBLIC SECTOR 105

CULTURE, IDEOLOGY, AND LEGITIMACY

In recent years, work on political culture has addressed the issue of legitimacy
directly. The following pages review several of the recent trends.

POLICY PARADIGMS AND INSTITUTIONAL LEGITIMACY

In recent years social scientists have paid more attention to the cultural facet
of modern state institutions, by asking how certain policy strategies gain acceptance.
Much of this work draws on the social constructivist approach developed by Peter
Berger and Thomas Luckmann and on Thomas Kuhn's work on scientific paradigms
(Berger and Luckmann 1965; Kuhn 1970; Jensen 1989; Hall forthcoming; Dobbin
forthcoming). The approach has some broad similarities to the social learning per-
spective outlined above. Public policies carry certain logics of action. To the extent
that public policies appear to achieve their goals, they cause policy-makers and
citizens to believe in those logics. Setting aside the issue of whether public policies
actually have the effects they are intended to have, which is often impossible to
gauge, it is clear that they contribute to collective understandings of how the world
works. As Peter Hall has recently argued, public policies are linked to

an overarching set of ideas that specify how ... prob-

lems ... are to be perceived, which goals might be
attained through policy, and what sorts of techniques
can be used to reach those goals. Ideas about each of
these matters interlock to form something like a coher-
ent whole that might be described as a policy paradigm.
Like a gestalt, it structures the very way in which
policy-makers see the world and their role within it.
(forthcoming 13)

This sort of approach has been popular in Britain, where social scientists have
had difficulty explaining the problems Governments have come up against in their
efforts to replace traditional growth policies, which were clearly not working, with
new policies modelled on those of successful nations. Britain's postwar economic
decline led both Labour and Conservative governments to experiment with interven-
tionist industrial planning schemes, only to see those schemes fail (Wilks 1983; Grant
1982; Curzon Price 1981). Analysts have suggested that these failures are linked to
the difficulties associated with creating legitimacy for policies that are fundamentally
 106 COMPILATION OF REPORTS

at odds with existing social constructions of the role of the state.

The implications of this perspective are similar to those of the social learning
perspective. In nations with market-oriented public policy paradigms, such as the
United States, it may be difficult to garner legitimacy for institutions that involve
state management of industry, or any sort of active federal role. The policy paradigm
approach differs from the social learning approach in that it suggests that legitimacy
is more a matter of cultural scripts for the role of the state, or other institutions, than a
matter of institutional learning. From a pragmatic perspective, the policy paradigm
approach suggests that to achieve legitimacy for their policy programs, they should
model policies on the existing paradigm. Thus, for instance, in the United States the
government should privatize the matter of waste disposal and open up the process to
competitive bidding, just as it has done with nuclear energy production. This would
be, in effect, the most direct route to gaining legitimacy for the agency that governs
the nuclear energy sector. Transforming the policy paradigm to one in which the
state plays a more central role in society would be a much greater task.

THE ROLE OF POLITICAL CULTURE

Recent work on broader political cultures suggest that these paradigms extend
beyond particular policy domains. Social science theories of the role of political
culture in the production of legitimacy have undergone a sort of revolution in the last
two decades. Early works (e.g. Almond and Verba 1963) on political culture sug-
gested that political systems reflect aspects of national character — individual-level
personality traits that are shared by national groups. This perspective suggested that
regimes gained legitimacy by achieving isomorphism with traits of the national
character, thus in nation-states where citizens have authoritarian personality types,
authoritarian regimes gain legitimacy. By contrast, in nation-states where individuals
have anti-authoritarian personalities, regimes must follow suit to gain legitimacy.
That perspective would suggest that we must look at characteristics of individuals to
understand legitimacy processes.
However that perspective has been largely discredited as reductionist and anti-
sociological in the political science and sociological literatures. Students of culture
have suggested, more recently, that a Durkheimian perspective, in which individual
consciousness is the product of social structures, is more appropriate for understand-
 INSTITUTIONAL LEGITIMACY IN THE PUBLIC SECTOR 107

ing the relationship between political culture and institutional legitimacy (Douglas
1986). In contrast to interest group perspectives, this perspective suggests that
institutional legitimacy process may have more to do with shared cultural understand-
ings of the appropriate role of government institutions than with the idiosyncratic
political ideologies of interest groups.
Recent constructivist approaches to political culture have suggested that our
notions of what is politically appropriate are shaped very much by our experiences
with existing political institutions. Moreover to the extent that those experiences are
shared, our notions of what is politically appropriate transcend interest group bound-
aries. In political theory, such insights have been developed in work that examines
the institutional factors that influence the development of new political philosophies
(e.g. Ashcraft 1986). In anthropology, these insights have been furthered by studies
that search for aspects of political culture that are derived from institutional arrange-
ments rather than from group interests (Douglas 1986; Anderson 1983; Geertz 1980).
In sociology, these insights have been developed by those working on the institutional
rules of behavior that transcend nation-states (e.g. Thomas and Meyer 1984). An
important study of nuclear energy policy from this perspective is James Jasper's
Nuclear Politics (1990), which explores the role of cultural meaning in the nuclear
policies of the United States, Sweden, and France.
These studies suggest that modern, rationalized, political cultures carry, at
their cores, certain representations of means-ends relationships in the world, which
act as prescriptions for how to solve certain problems. The nature of those prescrip-
tions varies across nations. Broadly, the representations they carry are demystified,
universalistic, trans-historical, and scientistic (Wuthnow 1987, p. 45). Mary Douglas
(1986) argues that these representations must carry analogies to the natural world, for
instance the social system might be analogous to a human organism with different
functional parts and a central brain, or to the kind of ecological system described by
Darwin. William Sewell Jr. argues that ideology actually consists of these representa-
tions of the world that are shared by contentious interest groups. In contrast to the
usual formulation, in which ideologies are adopted deliberately by individuals who
aim to reform social systems, he insists that ideology should be seen as "anonymous,
collective, and constitutive of social order" (1985, p. 84).
These works point to an important characteristic of American political culture
108 COMPILATION OF REPORTS

and ideology that has posed problems in the past for the legitimacy of activist public
policies. Analysts of American political culture have suggested that in it, the state is
analogous to a referee. The institutionalized role of the state is to oversee relations
between actors in civil society without assuming charge of the nation's course. Thus
the Department of Energy faces not only the usual problem of opposition from
political groups who are ideologically opposed, in the narrow sense, to its goals. It
also faces legitimacy problems from the population at large, because political culture
does not afford a legitimate role for the state as conservator of the public trust. In the
U.S., policies that place the state in the role of referee are much more likely to gain
legitimacy than those that place the state in the role of caretaker of the public trust.
In the construction and operation of nuclear power plants, Congress overcame
this problem by privatizing the process and placing the state in the role, once again,
of referee. Government agencies set standards for plants, and allowed private con-
cerns to bid for construction contracts. The American state has replicated this role in
a number of other sectors that other countries have brought under state control: e.g.
arms production, the construction of space vehicles, air transport, and communica-
tions. The double bind in the case of waste disposal is that American political culture
limits the legitimate role of the state to that of referee among competing interests (or
competing contractors), but Americans are also distinctly suspicious of the reliability
of private sector concerns. The problem of legitimacy is thus exacerbated in sectors
where mistakes are extremely dangerous or costly. In addition, the state's ability to
regulate the private sector is suspect in American political culture: the state is incom-
petent on the one hand and corrupt on the other.
Work on policy paradigms as well as recent constructivist approaches to
political culture suggest that the problem of gaining legitimacy for American state
agencies that seek an active role in the development and implementation of complex,
dangerous, technologies is, at its core, a problem linked to America's overarching
understanding of the role of the state in society. Both of these approaches suggest
that notions of state legitimacy are difficult to alter, and that an approach which
molds new state institutions (e.g. a nuclear waste disposal program) to existing public
policy models is more likely to succeed than one that attempts to reshape political
culture by establishing legitimacy for an alien sort of state institution.
 INSTITUTIONAL LEGITIMACY IN THE PUBLIC SECTOR 109

FEDERALISM AND POLITICAL CULTURE

We have already covered, in a cursory way, characteristics of American state
structure and political ideology that affect the development of institutional legitimacy.
It is clear that American anti-statist notions have undermined the development of
active federal institutions, charged with vital civilian responsibilities, throughout this
century. Instead, legitimate governmental authority in the American context has
been, to a much greater extent, located in local governments.
John Meyer and W. Richard Scott have argued that modern nation-states offer
differing accounts of rationality and authority, and in the process locate legitimate
authority differently. In centralized regimes, legitimate decision authority is located
only in the central government. Local governments retain little or no autonomy, are
not locally elected, and follow the dictates of the central state. At the opposite ex-
treme is the United States, with a regime that was, as Tocqueville suggests, built upon
autonomous self-governing localities. States and the federal government merely
provide a structure within which localities can govern themselves.
While the legitimate authority of even local governments to control civil
society has waned, the early years of the republic were characterized by active local-
ism — state and local governments energetically orchestrating economic growth and
investing in enterprises. As Seymour Martin Lipset argues, "The doctrine of 'laissez
faire' became dominant only after the growth of large corporations and private
investment funds" (1979, p. 52). In the early decades of the nineteenth century state
and local governments invested directly in canals, turnpikes, banks, railroads, and
factories (Hartz 1948; Goodrich 1949; Callender 1902; Handlin and Handlin 1947;
Lipset 1979, p. 114). Here is Andrew Shonfield, "At times the degree of tutelage
which state governments arrogated to themselves in Jacksonian America appears so
extreme that it suggests the direct inspiration of Colbert, rather than anything that
belongs to the Anglo-Saxon tradition" (1965, p. 303). Were those policies an aberra-
tion?
In fact, these policies were not inconsistent with early American political
culture because they did not involve the state in using its powers of coercion against
citizens. In this century the state has, indeed, found it difficult to promulgate activist
policies, but that has largely been because most activist policies engender opposition.
What was unique about early policies to promote growth is that they seldom faced
110 COMPILATION OF REPORTS

opposition. Evidence from this century also suggests that activist government is not
inherently illegitimate in the United States, but coercive government is. Thus the
state has not faced major legitimacy problems in the federal takeover of passenger
railroad transport (Amtrak), or of freight rail service (Conrail), although as other
transport sectors have expressed opposition to federal subsidies, the legitimacy of
these programs has been called into question. Perhaps the best recent example is
NASA, which has no natural opponents, with the exception of interest groups who
would prefer to have NASA's budget put to other uses.
In short, American political thought has always opposed the unnecessary use
of the state's powers of coercion, but has not always opposed state activism if it
treads on no one's toes. One important corollary is that the concentration of authority
must be avoided. As Eugene Rostow argues, American "policy is always to avoid
concentrations of authority ... Capitalism stands with federalism, the separation of
powers, the disestablishment of religion, the antitrust tradition, the autonomy of
educational bodies ... in expressing a deep suspicion of authority" (1959, p. 43).
Meyer and Scott (1983) argue that American political institutions, which came
close to the localistic ideal-type, have become increasingly centralized since World
War n. The rationale for centralization was often that local governments tend to
exercise their authority illegitimately by mistreating minorities and the poor and by
favoring "special interest" groups (1983, p. 205). Consequently, a form of central
federal authority has been legitimized, which consists of procedures and induce-
ments: "hiring, funding, technical procedures, goals, control and inspection systems,
and so on" (1983, p. 208). The growth of procedural controls, however, has not been
accompanied by the growth of substantive powers to dictate to state and local govern-
ments. Local self-rule remains sacrosanct, while the federal government has elabo-
rated the framework within which local decisions can be made.
These arguments highlight the principal difficulty in establishing institutional
legitimacy for federal policies that affect localities directly, and unequally. To attain
legitimacy, policies such as nuclear waste siting decisions must use positive induce-
ments to cause affected state and local governments to favor them, rather than coerce
them to do so. This follows from Meyer and Scott's arguments: to attain legitimacy
new institutions must conform to the accounts offered by existing institutions (i.e.
they must locate sovereignty in local governments).
 INSTITUTIONAL LEGITIMACY IN THE PUBLIC SECTOR 111

Federal decision-makers face a paradox here, however. Weber's notion of

value-rational authority suggests that decisions such as that about nuclear waste siting
must be made on entirely technical grounds to attain legitimacy. However Meyer and
Scott's characterization of American political culture suggests that siting decisions
must be made on political grounds. That is, the waste siting decision must depend on
the ability of the federal government to provide adequate inducements to some
location to accept the waste dump. If inducements could be found that would make
any locality accept the site, the problem of political legitimacy could be overcome
because the most technically sound site could be chosen without opposition. But
because some locations could not be induced to accept the site at any price, the
decision process will inevitably appear to be politicized.
This problem is intractable. However it suggests that decision-makers have
two alternatives. One is to proceed by ranking possible sites, and offer a set of
inducements to each locality, in order of preference, until one is found that will
accept the site. This politicizes the process and will generate legitimacy claims.
Another is to forgo inducements by making the siting decision on purely technical
grounds. This avoids the risk of politicizing the process, but runs the risk of eliciting
legitimacy claims over the authority of the state to dictate to localities.

CONCLUSION
How, in a nation-state where the public does not trust the government to run
the post office or to operate the telephone system, can government institutions gain
sufficient public trust and legitimacy to administer the potentially disastrous nuclear
waste disposal problem? The enormity of the problem is not difficult to comprehend,
however different social science perspectives on governmental legitimacy have very
different implications about the source of the problem, and possible remedies. In
concluding, we review the nature of the problem of governmental legitimacy from
various perspectives, and the strategies for achieving legitimacy that those perspec-
tives would suggest.
For critical theorists, the state achieves legitimacy primarily by promoting
social justice and the well-being of citizens, and secondarily by promoting economic
growth. States risk losing legitimacy to the extent that they appear to favor growth
over the nation's well-being. Conversely, states gain legitimacy to the extent that
112 COMPILATION OF REPORTS

they favor social justice and the well-being of citizens over business interests. From
this perspective, a federal agency that conspicuously acted against business interests
would be advantaged in terms of gaining institutional legitimacy. This might be
achieved, for instance, by taxing utilities at exorbitant rates for the disposal of nuclear
waste, and by refusing to allow utilities to pass the costs along to consumers.
From a variety of non-radical interest group perspectives, including pluralist
theory, rational choice theory, and coalitional theory, government institutions attain
legitimacy by allowing all interested parties to participate in the policy-making
process, and by ensuring that policy outcomes represent the will of the majority.
However, for certain high-salience issues, such as that of nuclear waste disposal,
interest group theorists have suggested that participatory politics may preclude the
promulgation of new policies and the development of legitimacy for those policies.
Agenda theory suggests that this may occur as interest groups displace their higher-
level goals in an issue area by pursuing lower-level goals that can influence the
higher-level goals: e.g. anti-nuclear groups try to preclude the development of a
waste disposal solution to halt the proliferation of nuclear energy plants. This might
suggest a prescription of putting the future of nuclear energy policy up for grabs, in
order to achieve consensus on the issue of nuclear waste disposal and legitimacy for
the decision-making process. Neo-corporatist theory would suggest that for conten-
tious policies, process legitimacy can be achieved by formally incorporating repre-
sentatives of interested groups into the policy-making process. This would involve
establishing a body to decide nuclear waste disposal issues with representatives of
anti-nuclear groups, the nuclear energy industry, the Department of Energy, and
perhaps other groups.
For radical interest group theorists, democratic nation-states are, by definition,
illegitimate because they support the interests of capitalists rather than those of
society at large. For them, democratic states achieve legitimacy by representing the
interests of the nation as a whole to be consistent with the interests of the business
class. To achieve legitimacy in this way, policy-makers might reframe the issue of
waste disposal as an issue of national economic competitiveness or national defense.
This could make nuclear waste disposal a national, rather than industry-based, issue.
Alternatively, this perspective would suggest that if nuclear power plants were na-
tionalized, groups would not see the matter as a struggle between interested business
 INSTITUTIONAL LEGITIMACY IN THE PUBLIC SECTOR 113

groups and consumers with meager political resources.

Institutionalists suggest that it is difficult for governments with weak adminis-
trative capacities, such as the federal government of the United States, to establish
institutional legitimacy for agencies with complex technological tasks. For them,
expanding state administrative capacities will facilitate the process. One approach
would be to incrementally expand the reach and powers of the Department of Energy,
to effect a process of social learning — of positive experience with active govern-
ment. Krasner, by contrast, suggests that only system-level crises can elicit real
changes in administrative capacities; policy-maker should wait for such a crisis and
take advantage of it to expand the administrative capacities of the agency.
Students of state structure suggest that the location of legitimate authority in a
political system is largely a matter of the structure of the state. From their perspec-
tive, it is difficult to establish legitimacy for top-down policies in federal nation-
states, particularly where those policies affect localities differentially. Short of
rewriting the American constitution, one strategy for achieving legitimacy for federal
policies is to situate them in a policy realm that is indisputably part of the federal
role. In the American case, this might mean taking nuclear energy and waste disposal
policy out of the hands of states and localities by locating it in the Department of
Defense. A compromise solution might be to make the Department of Energy fully
responsible for all of the nation's energy production.
The policy paradigm approach, and recent work on political culture, suggest
that to attain legitimacy, new policies must reflect the logic of the existing policy
paradigm. This strategy arguably contributed to the legitimacy of the nuclear energy
production policy of the federal government: in accord with America's traditional
industrial policy paradigm, the sector was privatized and plant construction was
subject to market principles. The federal government's paradigmatic role was that of
regulator. Thus from this perspective, the federal government can best achieve
legitimacy for a nuclear waste disposal program by employing America's regulatory,
market-oriented, policy paradigm. This might mean allowing private firms to prepare
proposals for nuclear waste disposal, and subjecting the process to competitive
bidding. It might mean devising a way to put the Department of Energy in the role of
regulator, rather than administrator, of the waste disposal program.
Finally, recent work on federalism and political culture suggests that the
114 COMPILATION OF REPORTS

federal government faces two, perhaps irreconcilable, issues in the development of

legitimacy for a nuclear waste disposal program. On the one hand, complex techno-
logical decisions must be made on entirely technical grounds to gain legitimacy. On
the other hand, in the American political context it is illegitimate for the federal
government to dictate to localities; Washington is limited to regulating local activity
and providing inducements to local governments. The paradox that arises is that
Washington must provide inducements to convince state and local governments to
accept a nuclear waste dump, however by doing so Washington breaks the rule of
making the siting decision on purely technical grounds. In short, the capacity of state
and local governments to refuse to accept a waste site precludes the Department of
Energy from making the decision on purely technical grounds. Thus policy-makers
are left with two alternatives, both of which risk legitimacy challenges.
This report has surveyed different social science perspectives on the issue of
the legitimacy of government institutions. If the conclusions are inconclusive it is
because no effort has been made to adjudicate between competing perspectives on the
issue of legitimacy. Indeed, these perspectives offer different, complementary,
insights into the dimensions of the process of the development of legitimacy.
 INSTITUTIONAL LEGITIMACY IN THE PUBLIC SECTOR 115

REFERENCES

Almond, Gabriel. 1983. "Corporatism, Pluralism, and Professional Memory."

World Politics :245-260.

Almond, Gabriel, and Sidney Verba. 1963. The Civic Culture: Political
Attitudes and Democracy in Five Nations. Princeton: Princeton University Press.

Anderson, Benedict. 1983. Imagined Communities. London: Verso.

Ashcraft, Richard. 1986. Revolutionary Politics and Locke's Two Treatises of

Government. Princeton: Princeton University Press.

Ashford, Douglas. 1977. "Political Science and Policy Studies: Toward a

Structural Solution." Policy Studies Journal 5: 570-583.

Ashford, Douglas. 1981. Policy and Politics in Britain: The Limits of Consen-
sus. Philadelphia: Temple University Press.

Ashford, Douglas. 1982. Policy and Politics in France: Living with Uncer-
tainty.

Bachrach, Peter, and Morton Baratz. 1962. "The Two Faces of Power."
American Political Science Review 56.

Bedeau, Hugo Adam, ed. 1969. Civil Disobedience: Theory and Practice.
New York: Pegasus.

Beer, Samuel. 1965. British Politics in the Collectivist Age. New

York: Knopf.

Berger, Suzanne (editor). 1981. Organizing Interests in Western Europe.

Cambridge: Cambridge University Press.
116 COMPILATION OF REPORTS

Berger, Peter, and Thomas Luckmann. 1965. The Social Construction of

Reality: A Treatise on the Sociology of Knowledge. Garden City: Doubleday.

Callender. G.S. 1902. "The Early Transportation and Banking Enteprises of

the States in Relation to the Growth of Corporations." Quarterly Journal of Econom-
ics 17:111-162.

Campbell, John L. 1991. "Contradictions of Governance in the Nuclear

Energy Sector." Pp. 108-137 in Governance of the American Economy. Edited by
John L. Campbell, J. Rogers Hollingsworth, and Leon N. Lindberg. New York:
Cambridge University Press.

Campbell, John L. 1988. Collapse of an Industry: Nuclear Power and the

Contradictions of U.S. Policy. Ithaca: Cornell University Press.

Curzon Price, Victoria. 1981. Industrial Policies in the European Community.

London: Macmillan.

David, Paul A., Roland Maude-Griffin, Geoffrey Rothwell, and Roland

Sturm. 1991. "European Nuclear Power Plants and their Less Reliable American
Cousins: International Differences in the Distributions of Reactor Operating Spell
Durations." Center for Economic Policy Research. Stanford University.

Dobbin, Frank. Forthcoming. "The Social Construction of the Great Depres-

sion: Industrial Policy During the 1930s in the United States, Britain, and France."
Theory and Society.

Dogan, Mattei. 1988. Comparing Pluralist Democracies: Strains on Legiti-

macy. Boulder: Westview.

Douglas, Mary. 1986. How Institutions Think. Syracuse, NY: Syracuse Uni-
versity Press.
 INSTITUTIONAL LEGITIMACY IN THE PUBLIC SECTOR 117

Dyson, Kenneth. 1983. 'The Cultural, Ideological and Structural Context."

Pp. 26-66 in Industrial Crisis: A Comparative Study of the State and Industry. Edited
by Kenneth Dyson and Stephen Wilks. Oxford: Martin Robinson.

Elster, Jon. 1986. Rational Choice. Oxford: Basil Blackwell.

Engels, Frederick. 1942. The Origins of the Family, Private Property, and the
State. New York: International.

Etheredge, Lloyd. 1985. Can Governments Learn? New York: Pergamon.

Ferguson, Thomas. 1984. "From Normalcy to New Deal: Industrial Structure,

Party Competition, and American Public Policy in the Great Depression." Interna-
tional Organization 38: 41-94.

Galbraith, John Kenneth. 1952. American Capitalism: The Concept of

Countervailing Power. White Plains, NY: M.E. Sharpe.

Geertz, Clifford. 1980. Negara: The Theatre-State in Nineteenth Century Bali.

Princeton: Princeton University Press.

Goodrich, Carter. 1949. "The Virginia System of Mixed Enterprise: A Study

of State Planning of Internal Improvements." Political Science Quarterly 64:
355-387.

Gourevitch, Peter. 1986. Politics in Hard Times: Comparative Responses to

International Economic Crises. Ithaca, NY: Cornell University Press.

Grant, Wyn. 1982. The Political Economy of Industrial Policy. London,

Butterworths.

Habermas, Jurgen. 1975. Legitimation Crisis. Boston: Beacon.

118 COMPILATION OF REPORTS

Habermas, Jurgen. 1979. "Legitimation Problems of the Modern State." Pp.

178-234 in Communication and the Evolution of Society. Jurgen Habermas (editor).
Boston: Beacon.

Hall, Peter. Forthcoming. "The Movement From Keynesianism to

Monetarism: Institutional Analysis and British Economic Policy in the 1970s." In
Historical Institutionalism in Comparative Politics: State, Society, and Economy.
Edited by Svein Steinmo, Kathleen Thelen, and Frank Longstreth. New York: Cam-
bridge University Press.

Handlin, Oscar and Mary F. Handlin. 1947. Commonwealth: A Study of the

Role of Government in the American Economy: Massachusetts, 1774-1861. Cam-
bridge, MA: Harvard University Press.

Hartz, Louis. 1948. Economic Policy and Democratic Thought: Pennsylvania,

1776-1860. Cambridge: Harvard University Press.

Heclo, Hugh. 1974. Modern Social Politics in Britain and Sweden. New
Haven, CT: Yale University Press.

Dcenberry, G. John. 1988. Reasons of State: Oil Politics and the Capacities of
American Government. Ithaca: Cornell University Press.

Inglehart, Ronald. 1990. Culture Shift in Advanced Industrial Society.

Princeton: Princeton University Press.

Jasper, James. 1990. Nuclear Politics: Energy and the State in the United
States, Sweden, and France. Princeton: Princeton University Press.

Jensen, Jane. 1989. "Paradigms and Political Discourse: Protective Legisla-

tion in France and the United States Before 1914." Canadian Journal of Political
Science 22: 235-258.
 INSTITUTIONAL LEGITIMACY IN THE PUBLIC SECTOR 119

Kariel, Henry S. 1961. The Decline of American Pluralism. Stanford:

Stanford University Press.

Katzenstein, Peter J. 1984. Corporatism and Change: Switzerland, Austria,

and the Politics of Industry. Ithaca, NY: Cornell University Press.

Krasner, Stephen D. 1978. Defending the National Interest: Raw Materials

Investments and U.S. Foreign Policy. Princeton: Princeton University Press.

Krasner, Stephen D. 1984. "Approaches to the State: Alternative Conceptions

and Historical Dynamics." Comparative Politics 17: 223-246.

Kuhn, Thomas. 1970. The Structure of Scientific Revolutions. Chicago: Uni-

versity of Chicago Press.

LaPolombara, Joseph. 1964. Interest Groups in Italian Politics. Princeton:

Princeton University Press.

Lehmbruch, Gerhard, and Philippe C. Schmitter (editors). 1982. Patterns of

Corporatist Policy-Making. London: Sage.

Lipset, Seymour Martin. 1979 [1963]. The First New Nation: The United
States in Historical and Comparative Perspective. Revised Edition. New York:
Norton.

Lowi, Theodore J. 1969. The End of Liberalism: Ideology, Policy and the
Crisis of Public Authority. New York: Norton.

Luker, Kristin. 1984. Abortion and the Politics of Motherhood. Berkeley:

University of California Press.
120 COMPILATION OF REPORTS

Lukes, Steven. 1974. Power: A Radical View. London: Oxford University

Press.

March, James G. and Johan P. Olsen. 1984. "The New Institutionalism:

Organizational Factors in Political Life." American Political Science Review
78:734-749.

Marx, Karl. 1963 (reprint). The Eighteenth Brumaire of Louis Bonaparte.

New York: International Publishers.

Merquior, Jose Guilherme. 1980. Rousseau and Weber: Two Studies in the
Theory of Legitimacy. London: Routledge.

Murvar, Vatro. 1985. Theory of Liberty, Legitimacy, and Power: New Direc-
tions in the Intellectual and Scientific Legacy of Max Weber. London: Routledge.

O'Connor, James. 1973. The Fiscal Crisis of the State. New York: St.
Martin's.

O'Connor, James. 1984. Accumulation Crisis. New York: Basil Blackwell.

Offe, Claus. 1984. Contradictions of the Welfare State. John Keane (editor).
Cambridge: MIT Press.

Panitch, Leo. 1986. Working Class Politics in Crisis. London: Verso.

Perrow, Charles. 1984. Normal Accidents: Living with High-Risk Technolo-

gies. New York: Basic.

Poulantzas, Nicos. 1980. State Power Socialism. London: Verso.

Rostow, Eugene. 1959. Planning for Freedom. New Haven; Yale University
Press.
 INSTITUTIONAL LEGITIMACY IN THE PUBLIC SECTOR 121

Sabato, Larry. 1984. PAC Power: Inside the World of Political Action Com-
mittees. New York: Norton.
Selznick, Philip. 1949. TVA and the Grass Roots. Berkeley: University of
California Press.

Sewell, William H., Jr. 1985. "Ideologies and Social Revolutions: Reflections
on the French Case." Journal of Modern History 57: 57-85.

Shefter, Martin. 1977. "Party and Patronage: Germany, England, and Italy."
Politics and Society 7:403-451.

Shonfield, Alfred. 1965. Modern Capitalism. London: Oxford University

Press.

Skocpol, Theda. 1979. States and Social Revolutions: A Comparative Analysis

of France, Russia, and China. New York: Cambridge University Press.

Skocpol, Theda, and Kenneth Finegold. 1982. "State Capacity and Economic
Intervention in the Early New Deal." Political Science Quarterly 97: 255-278.

Skowronek, Stephen. 1982. Building a New American State: The Expansion

of National Administrative Capacities: 1877-1920. New York: Cambridge University
Press.

Sorauf, Frank J. 1984. What Price PACs?: Report of the Twentieth Century
Fund Task Force on Political Action Committees. New York: The Twentieth Century
Fund.

Staggenborg, Suzanne. 1991. The Pro-Choice Movement: Organization and

Activism in the Abortion Conflict. New York: Oxford University Press.

Therborn, Goran. 1978. What Does the Ruling Class Do When It Rules?.
London: New Left Books.
122 COMPILATION OF REPORTS

Thomas, George M., and John W. Meyer. 1984 "The Expansion of the State."
Annual Review of Sociology 10:461-482.

Tocqueville, Alexis de. 1945 (reprint). Democracy in America. Two Volumes.

Henry Reeve and Phillips Bradley (trans.). New York: Vintage.

Tocqueville, Alexis de. 1955 (reprint). The Old Regime and the French Revo-
lution. Garden City: Doubleday.

Truman, David B. 1951. The Governmental Process: Political Interests and

Public Opinion. New York: Alfred A. Knopf.

Tsebelis, George. 1990. Nested Games: Rational Choice in Comparative

Politics. Berkeley: University of California Press.

Weber, Max. 1978. Economy and Society. Two Volumes. Berkeley: University
of California Press.

Weiler, Hans N. 1981. "Compensatory Legitimation in Educational Policy:

Legalization, Expertise, and Participation in Comparative Perspective." Stanford,
CA: Institute for Research on Educational Finance and Government.

Wilensky, Harold L., and Lowell Turner. 1987. Democratic Corporatism and
Policy Linkages. Berkeley: Institute of International Studies.

Wilks, Stephen. 1983. "Liberal State and Party Competition: Britain." Pp.
128-160 in Industrial Crisis: A Comparative Study of the State and Industry. Ken-
neth Dyson and Stephen Wilks (editors). Oxford: Martin Robinson.

Wilson, Frank L. 1983. "Interest Groups and Politics in Western Europe: The
Neo-Corporatist Approach." Comparative Politics 7: 105-122.
 INSTITUTIONAL LEGITIMACY IN THE PUBLIC SECTOR 123

Wuthnow, Robert. 1987. Meaning and Moral Order: Explorations in Cultural

Analysis. Berkeley: University of California Press.

Zysman, John. 1983. Governments, Markets, and Growth: Financial Systems

and the Politics of Industrial Change. Ithaca, Cornell University Press.
 ON THE CONTROL OF LEGITIMACY
IN ORGANIZATIONAL LIFE:
STRATEGIC AND INSTITUTIONAL APPROACHES

MARK C. SUCHMAN
DEPARTMENT OF SOCIOLOGY
STANFORD UNIVERSITY

Prepared for the U. S. Department of Energy

January, 1992

r^ii*?*-? .^r?-* •:'"-~~~!t$^-T~WVr.'~<\--. - , .

:
'•""»'>."STT""^
 ON THE CONTROL OF LEGITIMACY IN ORGANIZATIONAL LIFE 127

Early theorists tended to view formal organizations as "rational systems"

(Scott 1987:31-50) — social machines designed to efficiently transform inputs of
resources and labor into outputs of goods and services. In addition, this intellectual
tradition tended to depict organizations as tightly-bounded entities clearly demarcated
from their social environments. Resources materialized at factory gates, production
technologies revealed themselves to engineers, and products evaporated off loading
docks, all ex hypothesi. In the 1960s and 1970s, however, this imagery began to
change dramatically. "Open system" theories (Scott 1987:78-92) reconceptualized
organizational boundaries as porous and problematic, arguing that environmental
forces often exert profound impacts on the structure of internal operations and on the
prospects for organizational survival. Institutional and cultural theories expanded this
critique by noting that many of these external forces have little to do with technologi-
cal imperatives and much to do with societal norms, symbols, beliefs and rituals.
As researchers have broadened their theoretical ambit beyond the
organization's technical core (Thompson 1967), new concepts have emerged and old
concepts have been re-tooled in order to address previously-slighted aspects of
organizational life. At the heart of this enterprise lies the concept of "organizational
legitimacy." Drawn from the path-breaking work of Weber (1968) and Parsons
(1960), legitimacy has become the centerpiece of a vastly expanded theoretical
apparatus focussing on the normative and cognitive forces that constrain, structure
and empower organizational actors. Indeed, the concept of legitimacy anchors
sociological treatments of topics ranging from organizational credibility to organiza-
tional autonomy, from strategy to structure, from innovation to conformity.
This paper reviews the most salient elements of this refurbished understanding
of organizational legitimacy. The discussion is divided, broadly, into three parts:
Part I offers a basic theoretical introduction. This introductory section defines legiti-
macy, identifies a number of ambiguities in conventional usages of the concept, and
delineates two divergent veins of scholarship (the "strategic" and the "institutional")
that have contributed to the growing body of relevant theory and research. Part II of
the paper builds on this introduction by examining three main types of organizational
legitimacy: pragmatic legitimacy, moral legitimacy and cognitive legitimacy. Al-
though these three legitimacies co-exist in most real-world settings, each rests on a
distinct behavioral logic, and the three are rarely entirely consistent. Pragmatic,

~..-;:••:r'-r-ry^.r^i,:::. »y:.T>:?J*-i;^^&fr^^
 128 COMPILATION OF REPORTS

moral and cognitive legitimacy are not, of course, equally prevalent in all settings,
and Part II closes by briefly examining the environmental conditions that may bring
one or another of these dynamics to the fore. In Part III, the discussion turns from
the conceptual task of describing legitimacy to the more practical task of addressing
the legitimation challenges inherent in organizational management. Since the prob-
lems of gaining legitimacy, maintaining legitimacy and repairing legitimacy are
somewhat distinct, this section examines each separately and outlines a number of
responses suggested by the existing literature. Practical treatments of legitimation are
sparse and often speculative, however, and the paper ends with a number of caveats
for the would-be social engineer. Although hardly comprehensive, this closing
discussion sketches several types of unintended consequences, inadvertent oversights
and unexpected feedback loops that may plague attempts to manipulate organiza-
tional legitimacy in a narrowly instrumental way.
Having come only recently to a recognition of the importance of symbolic
elements in organizational life (see Scott 1991:165; Pfeffer 1981), organizations
theorists still have a long way to go in unraveling the mechanics of organizational
legitimacy. Nonetheless, the existing literature is substantial, and a number of gen-
eral patterns are beginning to emerge. This paper reviews that literature in the hope
of highlighting those patterns in a meaningful and productive way. Organizational
legitimacy is becoming increasingly well understood, and while this understanding
may not yet support detailed strategic prescriptions, at least it suggests general guide-
lines for action — and approximate boundaries beyond which action may be difficult
if not impossible. For an organization facing a conflicted cultural environment, both
of these pieces of information may well prove crucial. 1

THEORETICAL INTRODUCTION
Within contemporary organizations theory, legitimacy is more often invoked
than described, and more often described than defined (cf. Terreberry 1968:608).
This section addresses these issues in the reverse order. The discussion begins by
defining legitimacy. It then describes several ways in which ambiguities about the
purposes of legitimation may cloud discussions of the mechanics of legitimacy. The
premise here is that the question "what is legitimacy?" often overlaps with the ques-
tion "legitimacy for what?" Finally, the section closes with an examination of two
 ON THE CONTROL OF LEGITIMACY IN ORGANIZATIONAL LIFE 129

distinct rhetorics through which theorists have invoked the concept of legitimacy —
one "strategic," and the other "institutional."

DEFINING LEGITIMACY
Over the years, organizations theorists have offered a number of definitions of
legitimacy, with varying degrees of specificity. Parsons (1960:175) provides a
classic, but somewhat amorphous definition of legitimacy as the "appraisal of action
in terms of shared or common values in the context of the involvement of the action
in the social system." Maurer (1971:361) narrows the definition and gives it a hierar-
chical, pragmatic and explicitly evaluative cast, asserting that: "Legitimation is the
process whereby an organization justifies to a peer or superordinate system its right to
exist, that is to continue to import, transform, and export energy, material or informa-
tion." Pfeffer and his colleagues (Dowling & Pfeffer 1975; Pfeffer 1981; Pfeffer &
Salancik 1978) define legitimacy similarly, but focus on the organizational activities
from which it springs:

Organizations seek to establish congruence between the

social values associated with or implied by their activi-
ties and the norms of acceptable behavior in the larger
social system of which they are a part. Insofar as these
two value systems are congruent, we can speak of
organizational legitimacy. (Dowling & Pfeffer
1975:122)

Meyer and Scott (1983; Scott 1991) also see legitimacy as stemming from a congru-
ence between organizations and their cultural environments; however, these authors
focus more on the cognitive than the evaluative side — organizations are legitimate
when they are understandable, rather than when they are desirable:

Organizational legitimacy refers to the degree of cul-

tural support for an organization — the extent to which
the array of established cultural accounts provide
explanations for its existence. (Meyer & Scott
1983:201, emphasis added; see also DiMaggio &
Powell 1991)

In the discussion that follows, this paper adopts an inclusive, "broad-tenf

 130 COMPILATION OF REPORTS

definition of legitimacy that incorporates both the evaluative and the cognitive di-
mensions of previous treatments, and that adds a more explicit recognition of the role
of the social audience (cf. Perrow 1970; Neilsen & Rao 1988). An organization may
differ dramatically from societal norms yet retain legitimacy because the divergence
goes unnoticed. Thus, we can define legitimacy as a generalized perception or
assumption that the actions of an entity are proper, valid or appropriate within some
socially-constructed system of norms, values, beliefs and definitions. Legitimacy is
"generalized" because it represents an umbrella perception that, to some extent,
transcends specific adverse acts or occurrences; legitimacy is, in this sense, resilient
to particular events, yet dependent on a history of events. Legitimacy is "socially-
constructed" because it represents a congruence between the behaviors of the legiti-
mated entity and the shared (or assumedly shared) beliefs of some social group;
legitimacy is, in this sense, relative to a collective audience, yet independent of
individual observers. Thus, when we say that a certain pattern of behavior (be it an
institution, an organization or a policy initiative) possesses "legitimacy," we are
asserting that some group of social actors accepts and/or supports that pattern as a
whole — despite reservations that any given actor may have about any given behavior.

LEGITIMACY FOR WHAT?

In thinking about organizational legitimacy, it is important to recognize that
organizations may seek legitimacy for a number of reasons, and that conclusions
about the importance, difficulty and effectiveness of legitimation efforts may depend
on the yardsticks by which these activities are measured. Four particularly important
dimensions in this regard are (a) the distinction between pursuing persistence goals
and pursuing credibility goals, (b) the distinction between addressing internal audi-
ences and addressing external audiences, (c) the distinction between seeking passive
support and seeking active support, and (d) the distinction between displaying cultur-
ally-congruent attributes and masking culturally-divergent attributes.

Persistence versus credibility: Legitimacy enhances both the stability and the
comprehensibility of organizational activities. However, organizational behaviors
rarely foster survival and meaning in equal degrees.
Legitimacy leads to persistence because audiences who perceive an organiza-
 ON THE CONTROL OF LEGITIMACY IN ORGANIZATIONAL LIFE 131

tion as "proper, valid or appropriate" are more likely to support that organization by
supplying necessary resources (Parsons 1960). Moreover, to the extent that legiti-
macy reflects embeddedness in a system of institutionalized beliefs and action-scripts
(see Part II, below), organizational activities become almost self-replicating, requir-
ing little investment in mobilizing either support or cooperation:

[When social patterns are institutionally legitimated]

their persistence is not dependent, notably, upon recur-
rent collective mobilization, mobilization repetitively
re-engineered and reactivated in order to secure the
reproduction of a pattern.... Rather, routine reproduc-
tive procedures support and sustain the pattern, further-
ing its reproduction — unless collective action blocks,
or environmental shock disrupts, the reproductive
process. (Jepperson 1991:145)

In essence, legitimacy flips the valence of the "collective action" problem (Olson
1965): Cooperation in support of the institutionalized activity is built into the struc-
ture of everyday life; only opposition poses a prisoner's dilemma (Jepperson
1991:148, 151; cf. Zucker 1988:33 ff.).
At the same time, legitimacy affects not only how people act toward organiza-
tions, but how they understand them, as well. Thus, audiences see the legitimate
organization not only as more worthy, but also as more meaningful, more sensible
and more trustworthy. Part of the cultural congruence captured by the term "legiti-
macy" involves the existence of a credible collective "account" of what the organiza-
tion is up to and why. As Meyer and Rowan (1977:50) put it:

Organizations described in legitimated vocabularies are

assumed to be oriented to collectively defined, and
often collectively mandated, ends....On the other hand,
organizations that omit environmentally legitimated
elements of structure or create unique structures lack
acceptable legitimated accounts of their activities.
Such organizations are more vulnerable to claims that
they are negligent, irrational or unnecessary.

Jepperson (1991:147), too, captures an element of legitimacy-as-credibility when he

defines "institutional legitimation" as "[having] taken for granted rationales."
 132 COMPILATION OF REPORTS

Since the behaviors that enhance persistence are not always identical to the
behaviors that enhance credibility, it is important to keep these two dimensions of
legitimacy conceptually distinct. Nonetheless, it is also important to recognize that
the two are generally mutually-reinforcing. In most organizational settings, "shared
understandings are likely to emerge to rationalize the patterns of behavior that de-
velop, and in the absence of such rationalization and meaning creation, the structured
patterns of behavior are likely to be less stable and persistent." (Pfeffer 1981:14).

Internal versus external audiences: As noted above, legitimacy is always relative

to some audience, and this audience may reside either within or beyond the formal
boundaries of the organization. As Pfeffer observes, legitimacy-management "is
directed both internally, to produce organized collective action, and externally, as part
of a process of legitimating the organization in its larger social context" (Pfeffer
1981:21). With respect to internal legitimacy, Pfeffer (1981:1) suggests that "a
critical administrative activity involves the construction and maintenance of belief
systems which assure continued compliance, commitment, and positive affect on the
part of the participants regardless of how they fare in the contest for resources." In
support of this assertion, one might cite O'Reilly & Caldwell's (1979) demonstration
that job satisfaction often reflects social perceptions rather than objective task quali-
ties, or Zucker's (1977) evidence that legitimated office-holders often enjoy an
enhanced ability to transmit task definitions.
Despite the obvious significance of this kind of internal legitimacy in support-
ing organizational activities, most of the following discussion will center on the
relationship between the organization and various external audiences (including the
populace as a whole). This focus accords with the dominant thrust of the literature to
date, which generally sees internal and external legitimacy as being closely aligned.
As Meyer & Rowan (1977:49) note, "incorporating externally legitimated formal
structures increases the commitment of internal participants and external constitu-
ents." Nonetheless, it would be a mistake to conclude that the legitimation always
works from the outside in. Pfeffer (1981:24), for example, describes the demise of
the UC-Berkeley Criminology School as an example of a situation in which internal
dissensus delegitimated the organization in the eyes of important external audiences.
While internal and external legitimacy often cohere, their demands do not
 ON THE CONTROL OF LEGITIMACY IN ORGANIZATIONAL LIFE 133

necessarily pull in the same direction. This is particularly true when highly-
professionalized organizations face crises of public confidence. Often, the kinds of
outside scrutiny and oversight that might reassure external audiences undercut the
autonomy and decentralized decision-making that form the basis for internal morale.
As Meyer and Rowan (1977:59) note, "Evaluation and inspection are public asser-
tions of societal control which violate the assumption that everyone is acting with
competence and in good faith. Violating this assumption lowers morale and confi-
dence." Admittedly, this trade-off between morale and credibility represents some-
thing of a special case; but it also serve as an important reminder that internal audi-
ences may not always welcome opportunities to improve the organization's external
standing.

Passive versus active support: A third important but under-acknowledged distinc-

tion turns on whether the organization is seeking active support or passive acquies-
cence. If all that an organization needs from a particular audience is for that audience
to leave it unmolested, the threshold of legitimation may be quite low. Simply
comporting with the parameters of some unproblematic category of social activity
(e.g., "doing business") will generally suffice. If, on the other hand, an organization
seeks protracted audience intervention (particularly against another institutionalized
actor with competing cadres), the legitimacy demands may be stringent indeed.
Here, we may see one ramification of the aforementioned definitional distinc-
tion between legitimacy as cognitive taken-for-grantedness and legitimacy as evalua-
tive approval (a distinction developed further in Part n, below). Compare, for ex-
ample, the disparate images of legitimacy in the following quotes (with emphasis
added) from Meyer & Rowan:

The incorporation of institutionalized elements pro-

vides an account...of activities that protects the organi-
zation from having its conduct questioned. The organi-
zation becomes, in a word, legitimate. (1977:50)

[Legitimating] myths present organizations with great

opportunities for expansion. Affixing the right labels to
activities can change them into valuable services and
mobilize the commitments of internal participants and
external constituents. (1977:51)
 134 COMPILATION OF REPORTS

To avoid questioning, an organization need only "make sense"; to mobilize commit-

ments, it must also "have value" — either materially or as a crucial bulwark against
impending non-sense.

Displaying congruence versus masking divergence: This final distinction rarely

appears in the existing literature on legitimacy, yet it represents a crucial differentium
for any legitimacy-enhancement strategy. Illegitimacy can arise either because the
organization's activities, structures or values diverge from those of its audience, or
because the audience mistakenly believes they do. When a congruent organization
confronts misperceptions (or, similarly, ignorance), its primary task is educational.
Essentially, it must find a technique for attracting scrutiny without appearing over-
anxious, opportunistic or self-aggrandizing (see Part III, below). Divergent organiza-
tions face far higher hurdles. For them, the minimum challenge is to distract inquir-
ing audiences from deviant activities without inviting additional attention. This
diversion may only be necessary for a brief time, while the organization brings itself
into alignment with the prevailing order; however, more often than not, the demands
of internal legitimation lock the organization into ongoing organizational deviance
and, hence, into ongoing obfuscation. Sometimes an unfortunate divergent organiza-
tion will find itself in need of active rather than passive support, and when this
happens, legitimation becomes an exercise in either evangelism or fraud — often
among highly skeptical infidels. When considering the legitimation strategies out-
lined in Part III, readers would do well to bear in mind this distinction between
proving that you are good, hiding that you are bad, and pleading the virtue of your
vices.

STRATEGIC AND INSTITUTIONAL APPROACHES TO LEGITIMACY

The recent literature on organizational legitimacy falls fairly neatly into two
distinct camps, one "strategic, the other "institutional." The strategic approach,
associated most notably with the work of Jeffrey Pfeffer and his collaborators
(Pfeffer 1981; Dowling & Pfeffer 1975; Pfeffer & Salancik 1978), begins with the
proposition that "one of the elements of competition and conflict among social
organizations involves the conflict between paradigms, defined as systems of belief
or points of view" (Pfeffer 1981:9). Strategic-legitimacy research adopts a manage-
 ON THE CONTROL OF LEGITIMACY IN ORGANIZATIONAL LIFE 135

rial perspective (Neilsen & Rao 1987) and addresses the techniques by which a focal
organization can manipulate and deploy cultural symbols in order to enhance legiti-
macy and garner societal support. Works in this tradition tend to view legitimacy as
an "operational resource" (Suchman 1988) that organizations extract from their
environments and employ in pursuit of their goals:

Since organizational survival is enhanced by legiti-

macy, legitimacy can be viewed as a resource which a
given focal organization attempts to obtain and which,
occasionally, competing organizations may attempt to
deny." (Dowling & Pfeffer 1975:125; see also Ashforth
& Gibbs 1990:177)

In discussing legitimation, strategy researchers often assume a fairly high

level of managerial control, explicitly contrasting the management of cultural con-
structs ~ where leadership is held to be essential — to the management of "tangible,
real outcomes" such as "sales, profit margins, capital budgets and other allocations"
~ where "leadership does not matter" (Pfeffer 1981:5). As Nielsen & Rao put it:

The implicit message [of the strategy literature] seems

[to be] that organizational leaders have near monopolis-
tic control over the interpretive process and that they
determine the limits to their control." (1987:524)

Interestingly, this sharp distinction between symbolic and substantive activities leads
strategy theorists to predict fairly overt conflicts between managers and constituents
over the form of legitimation activities:

All else equal, managers prefer to offer symbolic

assurances rather than substantive action, since the
former usually preserves flexibility and resources.
Constituents, of course, usually prefer the reverse....
Resource dependence theory would suggest that,
generally, the greater the power, motivation and politi-
cal skill of the constituent, and the more consistent the
constituent's preferences are with those of other key
constituents...the more likely management is to offer a
substantive rather than symbolic response." (Ashforth
& Gibbs 1990:182)
 136 COMPILATION OF REPORTS

In contrast to this strategic tradition, institutional research (Meyer & Rowan

1977; DiMaggio & Powell 1983; Meyer & Scott 1983; Zucker 1987; DiMaggio &
Powell 1991) sees legitimacy not as an operational resource, but as a set of constitu-
tive beliefs (Suchman 1988). Organizations do not simply extract legitimacy from
the environment in a feat of cultural strip-mining. Rather, the institutional environ-
ment constructs and interpenetrates the organization in every aspect. Cultural defini-
tions determine how the organization is built, how it is run and, most importantly,
how it is understood. Legitimation empowers organizations by making them mean-
ingful; access to resources is mostly an epiphenomenon. Thus, to the institutionalist,
"explaining" a popular managerial strategy by showing how it allows organizations to
obtain support from constituents is akin to "explaining" the institution of marriage by
showing how it allows couples to obtain tax breaks from the Internal Revenue Ser-
vice.2

This institutional imagery depicts a strong and constraining symbolic environ-

ment, in which managerial behaviors (including strategy) are constructed by the same
belief systems that determine audience reactions. Indeed, in many institutional
accounts, the constant flow of values and understandings between internal and exter-
nal audiences seems to erase the intervening organizational boundaries. Rather than
examining the strategic legitimation efforts of focal organizations, institutionalists
tend to emphasize the collective "structuration" (DiMaggio & Powell 1983) of entire
"fields" or "sectors" of organizational life — health care, education, publishing,
nuclear power. Further, the distinction between symbolic and substantive outcomes
fades into insignificance when one sees organizations, managers, careers, perfor-
mance measures and audience demands as being both products and producers of
larger, institutionalized cultural matrices.
This paper attempts to steer a middle course between the strategic and the
institutional orientations. On the one hand, like the strategy literature, it addresses
the dilemmas that a focal organization may face in managing its symbolic relation-
ship with demanding constituents. In particular, Part III, below, unabashedly assumes
that organizations can and do formulate strategies for fostering legitimating percep-
tions of propriety, validity and appropriateness. On the other hand, like the institu-
tional literature, this paper sees cultural environments as fundamentally constitutive
of organizational life, and it adopts a fairly skeptical attitude toward the autonomy,
 ON THE CONTROL OF LEGITIMACY IN ORGANIZATIONAL LIFE 137

objectivity and potency of managers. The discussion that follows identifies a number
of types of legitimacy, some more manipulable than others; but it also recognizes that
legitimation is more than mere smoke and mirrors. Organizations obtain legitimacy
when a dominant belief system makes their activities seem plausible and necessary.
Managers can enunciate supportive myths and prescribe congruent rituals; but they
can rarely convince others to believe much more than they believe, themselves.

THREE TYPES OF ORGANIZATIONAL LEGITIMACY

Within the existing literature on organizations, one can discern three broad
types of legitimacy, which might be termed "pragmatic" legitimacy, "moral" legiti-
macy and "cognitive" legitimacy. All three involve generalized perceptions or as-
sumptions that organizational activities are proper, valid or appropriate within some
socially-constructed system of norms, values, beliefs and definitions; however, each
rests on a somewhat different behavioral dynamic. This section will outline each of
these dynamics, in turn, and will identify a number of subtypes within each major
category. Finally, the section will close by briefly examining a typology of organiza-
tional environments that offers predictions about when the various legitimation
dynamics are likely to expand or diminish.

PRAGMATIC LEGITIMACY
The first, and arguably the most simple, type of legitimacy rests on the self-
interested calculations of audiences who are in immediate contact with the focal
organization. Often, this contact takes the form of direct exchange relations; how-
ever, it can also take the form of political, economic or social interdependencies in
which the actions of the organization visibly affect the well-being of the audience.
When such exchanges and interdependencies exist, constituents are likely to scruti-
nize organizational behaviors in order to determine the practical consequences of any
given line of activity. If the constituency deems the consequences to be generally
favorable, it will support the organization; if the consequences appear to be generally
negative, support will give way to opposition. Dowling & Pfeffer (1975:129), for
example, describe how the American Institute for Foreign Study won allies by invit-
ing politicians to award ATFS scholarships and by permitting educators to travel
through Europe at the organization's expense. While cultural notions of appropriate-
 138 COMPILATION OF REPORTS

ness may color whether such exchanges are seen as perquisites or bribes, at the limit,
this kind of dependence legitimacy shades into a somewhat generalized and
culturalized variant of conventional, materialistic power-dependence theory
(Emerson 1962; Pfeffer & Salancik 1978).
A related, but slightly more socially-constructed type of pragmatic legitimacy
might be termed influence legitimacy. Here, constituents support the organization
because they feel that it reflects their interests. Most often, influence legitimacy
arises when the organization makes efforts to incorporate constituents into its deci-
sion-making structures or to adopt their standards of performance. Favorable ex-
changes may win affections, but audience members are even more likely to support
an organization that evinces an ongoing commitment to their interests. In a world of
ambiguous causality, the surest indicator of this kind of commitment is the
organization's willingness to relinquish some measure of decision-making authority
to the affected constituency (see for example, Selznick's classic 1949 study of the
Tennessee Valley Authority's efforts to co-opt local opposition). As Meyer and
Rowan note, being obedient is often easier than producing results:

The use of external assessment criteria — that is, mov-

ing toward the status in society of a subunit rather than
an independent system — can enable an organization to
remain successful by social definition, buffering it from
failure. (1977:49)

Although studies of pragmatic legitimacy have focussed almost exclusively on

dependence and influence effects, a third variant, dispositional legitimacy, also
merits explicit consideration — particularly since it frequently colors judgments of
moral and cognitive legitimacy (see below) as well. As Zucker 1983, has noted, the
modern institutional order increasingly personifies organizations and treats them as
autonomous, coherent and morally-responsible actors (see also Coleman 1974).
Indeed, far from viewing organizations as interwoven patterns of individual behavior
(e.g. Weick 1969; Williamson 1975), popular culture tends to sees them as highly
reified paragons of power, purpose and persistence (Zucker 1987:455). Given this
orientation, it is hardly surprising that audiences often react to organizations as
though they were individuals possessed of goals, tastes, styles and personalities. As
Pfeffer observes:
 ON THE CONTROL OF LEGITIMACY IN ORGANIZATIONAL LIFE 139

People tend to judge a man by his goals, by what he's

trying to do, and not necessarily by what he accom-
plishes or by how well he succeeds." Organizations are
also judged by what they are apparently attempting to
do. (1981:30, quoting George Gallup)

Thus, audiences are likely to accord legitimacy to those organizations that "share our
values" or "have our best interests at heart," or that are "honest," "trustworthy,"
"decent," and "wise." These kinds of dispositional attributions, although sociologi-
cally naive, may prove to be essential in extrapolating positive evaluations of specific
organizational acts into generalized perceptions of legitimacy. As discussed in part
m , below, widespread belief in an organization's good character may also buffer it
from the delegitimating effects of isolated sins, miscues and reversals.

MORAL LEGITIMACY
Moral legitimacy reflects a positive normative evaluation of the organization
and its activities. Thus, for example, Parsons (1960) argues that the values pursued
by an organization must be congruent with societal values in order for the organiza-
tion to exert acknowledged claims on societal resources. Unlike pragmatic legiti-
macy, moral legitimacy is "sociotropic" ~ it rests not on judgments about whether a
given activity benefits the evaluator, but rather on judgments about whether the
activity is "the right thing to do." These judgments, in turn, usually reflect beliefs
about whether the organizational activities in question effectively promote societal
welfare, as defined by the audience's socially-constructed value system. In general,
moral legitimacy takes one of three forms: evaluations of outputs and consequences,
evaluations of techniques and procedures, and evaluations of structures and catego-
ries (cf. Scott & Meyer 1983:135-136). A forth form, evaluations of leaders and
representatives, is rarer, but nonetheless conceptually important.3

Consequential legitimacy: The rationalist mythology of the modern order (Meyer

& Rowan 1977) asserts that organizations should be judged by what they accomplish.
And, indeed, this is sometimes the case. Many industries sell their products in imper-
sonal markets, and here, consumer judgments of quality and value generally deter-
mine the level of societal rewards for organizational activity. Even in sectors lacking
 140 COMPILATION OF REPORTS

market competition, superordinate regulatory audiences may apply consequential

measures of organizational effectiveness. As Scott & Meyer (1983:136) observe:

Outcome indicators focus attention on specific charac-

teristics of materials or objects on which the organiza-
tion has performed some operation." (Scott 1977:75),
for example, measures of patients' mortality or morbid-
ity in health care organizations or measures of students'
information or skills in educational settings.

In thinking about consequential legitimacy, however, one must bear in mind

that "the technical properties of outputs are socially defined and do not exist in some
concrete sense that allows them to be empirically discovered" (Meyer & Rowan
1977:55). Further, the charter of some organizations may center on outputs that are
inherently difficult to meter — either because of ambiguities in their definition, or
because of extreme "lumpiness" in their distribution over time. Thus, for example,
nuclear waste managers may face competing demands for security and efficiency, or
may be asked to minimize the extent of radiation leakage in the remote event of
future seismic activity. Describing such settings, Hinings and Greenwood suggest
that:

What might occur with such organizations is that

particular approaches to understanding performance are
institutionally proscribed, such as attempts to apply
economic criteria to a public social welfare agency.
(1988:56)

Procedural legitimacy: In the absence of clear measures of outcomes, organizations

may also derive moral legitimacy from the adoption of socially-legitimated tech-
niques and procedures (e.g., Scott 1977:82). Although prevailing rational myths
celebrate consequential effectiveness, they also specify relatively extensive webs of
causality, identifying some methodologies as "science" and others as "quackery." As
Meyer and Rowan put it:

Rationalized and impersonal prescriptions..identify

various social purposes as technical ones and specify in
a rulelike way the appropriate means to pursue these
technical purposes rationally.... [These techniques]
must, therefore, be taken for granted as legitimate,
 ON THE CONTROL OF LEGITIMACY IN ORGANIZATIONAL LIFE 141

apart from evaluations of their impact on work out-

comes. (1977:44)

Indeed, even when outcomes are easily measurable, it is still quite common that "the
proper means and procedures are given a positive moral value" (Berger, Berger &
Kellner 1973:53). This is particularly true in professional activities, where cultural
beliefs (a) define outcomes as largely stochastic and (b) exalt procedures as ritual
enactments of central cosmological and political organizing principles (e.g., science,
citizenship, free will).
While procedural legitimacy often reflects relatively localized causal assump-
tions regarding the nature of the task at hand, at least one aspect of procedure is both
sufficiently significant and sufficiently pervasive to merit a brief comment. This is
the issue of "procedural justice." In recent years, organizational and legal researchers
(Lind & Tyler 1988; Tyler 1988), have found substantial evidence that

those affected by the decisions of third parties in both

formal and informal settings react to the procedural
justice of the decision-making process at least as much,
and often more, than they react to the decision itself.
(Tyler 1988:128)

What is more, Tyler and Rasinski (1991) demonstrate that, in the legal arena at least,
procedural justice exerts a direct effect on organizational legitimacy — which, in turn,
leads to heightened support for the focal organization. While a detailed review of this
literature lies beyond the scope of the present paper, the existing research generally
links procedural justice to: (a) the consistency of treatment across time and across
individuals, (b) the quality (accuracy) of decisions, (c) the perceived ability of proce-
dures to suppress decision-maker bias, and (d) the availability of opportunities for
affected parties to be represented in the decision-making process. Interestingly, the
relative importance of these criteria seems to remain fairly constant across social
groups, although it varies somewhat by setting (Tyler 1988). Given the preceding
discussion of dispositional legitimacy, it is also interesting to note that in Tyler's
(1988) data, the importance of consistency and bias measures declines dramatically
after he controls for respondents' perceptions of (a) whether authorities are trying to
be fair (b) whether authorities are honest, and (c) whether authorities are polite and
 142 COMPILATION OF REPORTS

concerned with citizens' rights. Apparently, procedural legitimation operates, at least

in part, by bolstering constituents' sense that the organization has a laudable disposi-
tion, independent of immediate substantive outcomes.

Structural legitimacy: A third type of moral legitimacy might be termed "struc-

tural" (Scott 1977) or "categorical" (Zucker 1986). Here, audiences see the legiti-
mated organization as valuable and worthy of support because its structural character-
istics locate it within a morally-favored taxonomic category. According to Meyer and
Rowan:

By designing a formal structure that adheres to the

prescriptions of myths in the institutional environment,
an organization demonstrates that it is acting on collec-
tively valued purposes in a proper and adequate man-
ner. (1977:319)

As this quote suggests, structures, like procedures, occasionally proxy for less easily
observable targets of evaluation, such as strategies, goals and outcomes. DiMaggio
and Powell (1983:152), for example, note that "structural changes are observable,
whereas changes in policy and strategy are less easily noticed"; similarly, Scott &
Meyer (1983:136) observe that "Structural controls focus on organizational features
or participant characteristics presumed to have an impact on organizational effective-
ness, including administrative [features] that support the direct production activities."
In addition, however, structural features also locate organizations within a
larger institutional ecology (cf. Suchman 1988; Hannan & Freeman 1989), determin-
ing with whom they will compete and from whom they will draw support:

Organizations may compete with respect to what

activities they will perform, and what activities other
organizations will perform. The differentiation of
functions among organizations is open to contest....
Competition over organizational domains can be
resolved...through recourse to social norms and values
that define and delimit legitimate spheres of organiza-
tional activity. (Dowling & Pfeffer 1975:125-6)

The structurally legitimate organization becomes a repository of public

 ON THE CONTROL OF LEGITIMACY IN ORGANIZATIONAL LIFE 143

confidence because it is "the right organization for the job"; often, this sense of
rightness has more to do with identity than with competence. Thus, for example, a
Department of Energy subunit may possess all the "proper" structures for determin-
ing the environmental impact of a nuclear waste repository and yet fail to achieve
structural legitimacy, because it is not perceived as being an "environmental watch-
dog agency."

Personal legitimacy: The fourth and final type of moral legitimacy rests on the
"charisma" of individual organizational leaders or representatives. In general, this
type of legitimation tends to be relatively transitory and idiosyncratic. As Zucker
(1977:86) notes, "acts performed by actors exercising personal influence are low in
obj edification and exteriority, and hence low in institutionalization." Perhaps
because of these instabilities, the sociological understanding of charisma remains
limited, at best. Nonetheless, the literature offers numerous assertions that individual
"moral entrepreneurs" play a substantial role in disrupting old institutions (Weber
1968:245) and in initiating new ones (DiMaggio 1988). Whether true or not, this
perception that charismatic individuals can transcend and reorder institutionalized
routines often allows organizations to dodge potentially stigmatizing events through
skapegoating and executive replacement (see part m, below).

COGNITIVE LEGITIMACY
As noted in the earlier discussion of active versus passive support, legitimacy
may involve either actual approval of an organization, or mere acceptance of the
organization as "necessary" or "inevitable" based on some taken-for-granted
intersubjective account. Jepperson (1991:147) observes that "taken-for-grantedness
is distinct from evaluation: one may subject a pattern to positive, negative, or no
evaluation, and in each case (differently) take it for granted." This suggests a third
general set of legitimacy dynamics based on cognition, rather than interest or evalua-
tion. Two variants are particularly significant: legitimacy based on comprehensibility
and legitimacy based on taken-for-grantedness.
Theorists who focus on the role of comprehensibility in legitimation generally
portray the social world as a potentially chaotic cognitive environment in which
individuals must struggle to organize their experiences into understandable accounts.

™3nro T s»7X~r^V^ '''4'^.y^^

! ! t
—-*-; ^,•a>^iA-'W^».• '^ ^T"^ • " ^ ' ' • ~
l : l
 144 COMPILATION OF REPORTS

In such a setting,

Legitimation concerns the problem of "explaining or

justifying the social order in such a way as to make
institutional arrangements subjectively plausible" — the
problem of motivating actors to enact actions by locat-
ing them "within a comprehensible, meaningful world."
(Scott 1991:169, citing Wuthnow et al. 1984:50)
To the extent that the culture provides a coherent, meaningful explanation for organi-
zational activities, those activities will prove accessible and inviting to potential
supporters. In the absence of such explanations, activity will collapse — not necessar-
ily because of overt hostility (although this is certainly possible, given the
cognitively-threatening nature of the inexplicable), but more often because of re-
peated miscues, oversights and distractions.
Significantly, studies of comprehensibility generally suggest that not all
explanations are equally viable: To provide legitimacy, an account must mesh both
with larger belief systems and with the experienced reality of the audience's daily
life. This is the thrust of Mary Douglas' discussion of "naturalizing analogies,"
which discussion DiMaggio and Powell summarize as follows:

Institutions...begin as conventions, which, because they

are based in coincidence of interest, are vulnerable to
defection, renegotiation, and free riding. To become
institutionalized, a behavioral convention requires a
"parallel cognitive convention to sustain it," an analogy
that obscures its purely human origins....But not all
conventions can sustain naturalizing analogies, only
those that "match a structure of authority or prece-
dence" so that "the social pattern reinforces the logical
patterns and gives it prominence." (1991:24-25; cf.
Geertz 1973)

Science and engineering, of course, provide strong "naturalizing analogies"

for radioactive waste disposal. Daily life, however, offers few experiences that
support the plausibility of engineering projects designed to last for 50 millennia. The
growing dissensus over nuclear energy policy (cf. Gamson & Modigliani 1989) only
exacerbates this legitimation problem. To quote Meyer & Scott (1983:201-202),
"The legitimacy of a given organization is negatively affected by...the diversity or
inconsistency of [external] accounts as to how it is to function."
 ON THE CONTROL OF LEGITIMACY IN ORGANIZATIONAL LIFE 145

In contrast to this image of a social world constantly teetering on the bring of

cognitive chaos, partisans of taken-for-granted legitimacy depict a more sedate world
of definitional coherence and glacial, integrative change (compare Powell 1991 with
Zucker 1983). In this view, institutions not only render disorder manageable, they
actually transform it into a set of intersubjective "givens" that largely submerge the
possibility of dissent. In an archetypical statement of this perspective, Zucker (1983)
identifies institutional legitimacy with cognitive exteriority and objectivity — in other
words, with the removal of an aspect of social structure from the presumed control of
the very actors who initially created it:

explaining change in institutional structures must rest

on the same aspects which predict their stability;
change rests on the integration of the new structure
with the old. Also, institutionalization is fundamentally
a cognitive process. In order for an element of culture
to have both objective and exterior qualities, there must
be cognitive representations so that for things to be
otherwise is literally unthinkable. (1983:25) 4

To the extent that it is attainable, this kind of taken-for-grantedness represents both

the most subtle and, arguably, the most powerful source of legitimacy identified to
date ~ if alternatives become unthinkable, challenges become impossible, and the
legitimated entity becomes unassailable by construction. Unfortunately, this type of
legitimation generally lies beyond the reach of all but the most fortunate organiza-
tional managers: While technologies and policies occasionally attain taken-for-
granted status, pluralist political cultures rarely go so far as to assume that only one
organizational unit can plausibly wield a given technology or pursue a given pro-
gram. Even if it became "literally unthinkable" to dispose of radioactive waste
through a technique other than deep burial, audiences might question whether dis-
posal should be run by the Federal government, and within the Federal government,
by the Department of Energy.

CONDITIONALIZING LEGITIMACY DYNAMICS

Given the diversity of legitimacy dynamics adduced in the organizations
literature, it is hardly surprising that a number of theorists have attempted to delineate
 146 COMPILATION OF REPORTS

the conditions under which one form of legitimacy or another will predominate.
While a truly comprehensive and empirically-validated typology has yet to emerge, at
least one contribution is sufficiently prominent and widely-employed to merit a brief
note. This scheme is Scott and Meyer's (1983) typology of organizational environ-
ments.
Scott and Meyer begin their discussion by advocating a focus on "societal
sectors" — environmental units defined as:

(1) a collection of organizations operating in the same

domain...,(2) together with those organizations that
critically influence the performance of the focal organi-
zations: for example, major suppliers and customers,
owners and regulators, funding sources and competi-
tors. ... For example, the housing sector would consist
of all of the public and private organizational units,
relations, and flows relevant to maintaining and adding
to the supply of housing. Such a definition would
encompass units from many different industries, for
example, components of the construction, finance,
public administration, and insurance industries.
(1983:117, 119)

It is at this sub-societal but supra-industrial level that Scott and Meyer locate many of
the physical technologies, economic exchanges and cultural understandings that
shape organizational behavior. Sectoral structure, therefore, determines both the
nature and the expectations of any given organization's relevant audiences.
Examining this new level of analysis, the authors elaborate on earlier works
that distinguished institutional environments from more conventional technical ones
(e.g., Meyer & Rowan 1977; DiMaggio & Powell 1983). In contrast to prior impli-
cations that technical and institutional elements were somehow contradictory, Scott
and Meyer suggest that these two aspects represent orthogonal dimensions of envi-
ronmental constraint. In strong technical environments,

organizations are rewarded for effective and efficient

control of their production systems.... Organizations
operating in such environments are expected to concen-
trate their energies on controlling and coordinating their
technical processes and are likely to attempt to buffer
or protect these core processes from environmental
disturbances. (1983:123)
 ON THE CONTROL OF LEGITIMACY IN ORGANIZATIONAL LIFE 147

Strong institutional environments, on the other hand, are characterized by

the elaboration of rules and requirements to which

individual organizations must conform if they are to
receive support and legitimacy.... Whatever the source,
organizations are rewarded for conforming to these
rules or beliefs. (1983:123)

Either type of environmental constraint may exist in isolation; but they may also
overlap — as they do in sectors such as utilities, air travel and banking, which "com-
bine complex technical requirements with a strong "public good" component" (Scott
& Meyer 1983:123). Arguably, nuclear waste disposal falls into this "mixed con-
straint" category, although skeptics might question the present relevance of technical
requirements (e.g., zero waste-seepage) that remain untestable for hundreds of years. 5

This typology suggests a number of propositions about the bases of organiza-

tional legitimacy. Firstly, Scott and Meyer are careful to note that a strong environ-
ment is not the same as a hostile environment, and that environmental constraints
offer criteria, not impediments, for legitimacy: "It appears that strong and stable
organizational forms can arise in either technical or institutional environments, but
that one of these two sets of constraints/supports must be present" (1983:124). Sec-
ondly, the authors emphasize that neither type of environment is "irrational":

Both technical and institutional environments give rise

to "rational" organizational forms, but each type is
associated with a different conception of rationality.
Technical environments emphasize a rationality that
incorporates a set of prescriptions for matching means
and ends in ways that are efficacious in producing
outcomes of predictable character. Institutional envi-
ronments embrace a rationality that is suggested by the
cognate term rationale: providing an account that
makes past actions understandable and acceptable to
others...." (1983:124)

Finally, Scott & Meyer outline a number of affinities between specific environment-
types and specific legitimation dynamics (1983:136-137). In brief, the stronger the
technical environment, the greater the need for pragmatic legitimacy and for moral
legitimacy based on consequences and procedures. The stronger the institutional
 148 COMPILATION OF REPORTS

environment, the greater the need for cognitive legitimacy and for moral legitimacy
based on procedures and structures. Presumably, the joint operation of both kinds of
constraints creates sectors in which comprehensibility and dispositional concerns
come to the fore, although Scott and Meyer do not explicitly suggest this. Finally,
one might speculate that the relative weakness of sectors lacking either kind of
constraint reflects a limited failure of cognition and, more importantly, an almost
exclusive reliance on pragmatism.

THE CHALLENGES OF LEGITIMACY-MANAGEMENT

The multiplicity of legitimacy dynamics described above creates considerable
latitude for managers to maneuver strategically within their cultural environments.
Admittedly, no organization can completely satisfy all audiences, and no manager can
completely escape the cognitive bounds of the belief system that renders the organi-
zation plausible to him- or herself, as well as to others. But at the margin, managerial
initiatives can make a substantial difference in the extent to which organizational
activities are perceived as proper, valid and appropriate within any given social
context. This section describes three general challenges of legitimacy-management —
gaining legitimacy, maintaining legitimacy and repairing legitimacy — and suggests a
range of responses to each. Finally, it closes with a brief cautionary examination of
some of the ways in which legitimacy-management may go awry. 6

GAINING LEGITIMACY
The challenge: Upon embarking on a new line of activity, particularly an activity
with few precedents or cognates elsewhere in the social order, organizations often
face the relatively daunting task of winning acceptance either for the propriety of the
activity or for their validity as practitioners. This "liability of newness"
(Stinchcombe 1965; Freeman, Carroll & Hannan 1983) has at least two distinct
aspects. Firstly, when the new operations are technically problematic or involve
poorly institutionalized domains, early entrants must devote a substantial amount of
energy to "sector-building" — to the creation of objectivity and exteriority, a sense
that the sector exists as a social fact independent of its particular occupants. Zucker
(1983:25) suggests that such facticity requires integration with prior taken-for-
granteds; however, sectoral pioneers may also need to disentangle new activities from
 ON THE CONTROL OF LEGITIMACY IN ORGANIZATIONAL LIFE 149

associations with pre-existing orders in which they were marginal, ancillary, or

illegitimate. Thus, for example, government and industry officials in the 1950s
7

actively constructed the concept of "civilian nuclear power," simultaneously linking it

to the inevitable forward march of technology and differentiating it from nuclear
weapons manufacture. Given the low public standing of the nuclear energy sector
today, the institutionalization of radioactive waste management may require a similar
sectoral disjuncture.
The second challenge of legitimacy-building applies, alike, both to new
sectors and to new organizational entrants in old sectors. This is the two-pronged
outreach task of (a) creating new, allegiant constituencies and (b) convincing pre-
existing legitimate entities to lend support. In addressing this hurdle, Ashforth &
Gibbs note that:

The literature suggests that constituents are particularly

likely to scrutinize the organization where: (1) the
organization has incomplete knowledge of cause-effect
relations or technology, or lacks clear output stan-
dards..., (2) the organization's means or ends are dis-
puted by portions of society..., (3) the organization
lacks the support of traditions and norms, and so suffers
the "liability of newness"..., (4) organizational activity
entails substantial risks, and (5) constituents anticipate
a long-term relationship with the organization.
(1990:182)

Significantly, all of these disabilities pertain in the case of nuclear waste manage-
ment: Long-term containment is an untested technology that requires commitment
without practical performance tests; many of the means (e.g., citing decisions, dis-
posal techniques) and some of the ends (e.g., freeing civilian nuclear power from
economic and political impediments) of the waste-disposal program are highly
controversial; the short history of civilian nuclear power offers few precedents for
dealing with radioactive waste; the level of perceived risk is truly phenomenal; and
the anticipated 50,000-year relationship between the organization and its constituents
is about as long as they come.

Strategies for gaining legitimacy: Legitimacy-building is generally a proactive

enterprise, since management has advance knowledge of its operational plans and of

-;;-i<rV#i?-,•'•-:&vi-J?;?,•?,;&/;-.v-v•••teWitt®.;:.±• jt";-. -w-'i^i&^m^^y^^v-;-•,^v,•• * .

 150 COMPILATION OF REPORTS

the potential need for legitimation. Dowling and Pfeffer (1975:127) argue that:

An organization can do three things to become legiti-

mate. First, the organization can adapt its output, goals,
and methods of operation to conform to prevailing
definitions of legitimacy. Second, the organization can
attempt, through communication, to alter the definition
of social legitimacy so that it conforms to the
organization's present practices, output and values.
Finally, the organization can attempt, again through
communication, to become identified with symbols,
values, or institutions which have a strong base of
social legitimacy.

The following discussion examines each of these alternatives (as well as a

number of related options that Dowling and Pfeffer's summary elides). Roughly,
legitimacy-buildmg strategies can be divided into three clusters: (a) efforts to adapt to
the demands of pre-existing institutions, (b) efforts to manipulate pre-existing institu-
tions into more supportive configurations, and (c) efforts to alter the institutional
order by creating new legitimating myths.
Often, managers seeking legitimacy find it easiest to simply position their
organization within the existing institutional terrain. This type of adaptation signals
allegiance to the cultural order and poses few threats to the internal consistency of
pre-existing institutions. Equally importantly, the availability of adaptive responses
allows organizations to garner legitimacy without demanding that managers tran-
scend the prevailing cognitive regime. Thus, the adaptive manager can turn a liabil-
ity into an asset, taking advantage of the fact that he or she is a cultural "insider" by
asking, "What would make this organization look more proper, valid and appropriate
to me?" Some concrete strategies within this general class are as follows:

(1) Conform: One obvious strategy for adapting to a strong institutional environ-
ment is simply to conform to its dictates, whether or not they enhance opera-
tional performance. Meyer and Rowan exemplify the dominant position in
the institutional literature when they suggest that:

In institutionally elaborated environments, sagacious

conformity is required: leadership...requires an under-
standing of changing fashions.... Organizations that
incorporate societally legitimated rationalized elements
 ON THE CONTROL OF LEGITIMACY IN ORGANIZATIONAL LIFE 151

in their formal structures maximize their legitimacy and

increase their resources and survival capabilities....
Organizations which innovate in important structural
ways bear considerable costs in legitimacy. (1977:53,
emphasis in original)

As the preceding quotation suggests, discussions of conformity gener-

ally focus on procedural and structural legitimation within a pre-existing
sector. Even in a new sector without established models, however, pioneers
may imperil their cognitive legitimacy if they fail to conform to prevailing
heuristics. (Thus, for example, an audience that views nuclear weapons,
nuclear power and nuclear waste as a single complex may question plans to
"button-up" a waste repository and leave it unmonitored. ) DiMaggio and
Powell (1983:154) further elaborate this argument by noting that the pursuit
of cognitive legitimacy through mimesis may lead to the counter-intuitive
result that organizations will look more alike in fields where technologies are
uncertain than in fields where means and ends are more clear.

(2) Embrace symbolism: Within the strategy literature, symbolic responses are
commonly put forward as convenient techniques for escaping constituent
demands (e.g., Pfeffer 1981; Ashforth & Gibbs 1990). Institutionalists such
as DiMaggio and Powell, too, observe that in the absence of output con-
straints, "organizations employ ritualized controls of credentials and group
solidarity" (1983:151). At the extreme, several researchers follow Parsons
(1956) in noting that, since organizational goals frequently operate more as
rationalizations for existence than as guidelines for functioning, managers can
strategically revise mission statements to conform with societal expectations
(Pfeffer & Salancik 1978:194; Ashforth & Gibbs 1990:180).
Despite ample evidence of strategic goal revision and other "sym-
bolic" responses (e.g., Zald & Denton 1963; Selznick 1949), the argument
that symbol management frees the organization by bamboozling its audiences
may be somewhat overdrawn. Occasionally, audiences will actually desire a
symbolic response, in order to further their own cultural or political agendas
(cf. Pfeffer 1981:33). More importantly, facile symbolic changes can prove
quite substantive over the long run, as cognitive dissonance and self-selection
effects gradually produce a new generation of organizational members who
adhere to the announced goals, rather than to the hidden agenda.

(3) Select a favorable environment: Often, when organizations enunciate new

goals, they are doing so in order to place themselves in one type of environ-
ment rather than another. Firstly, by instituting markets or by promoting
ambiguous goals, organizations (collectively) can often determine whether the
primary sources of sectoral rationality will be technical or institutional (Meyer
& Rowan 1977:55). Secondly, by seeking out new constituents, organizations
can alter the mix of expectations to which they must respond (Ashforth &
Gibbs 1990:178). Thirdly, by redefining their domains and redesigning their
structures, organizations can choose the institutional norms that will govern
their activities (Zucker 1983:37). As Scott notes:
 152 COMPILATION OF REPORTS

The conception of a differentiated and competitive

institutional environment...supports the view that
organizations are not passive actors being imprinted by
cultural templates. Rather, just as is the case within
their technical environments, organizations may be
expected to exercise "strategic choice" (see Child 1972)
in relating to their institutional environments."
(1991:170)

As a rule of thumb, centralized and consensual sectors ease the task of main-
taining institutional conformity (Scott 1991:170). Fragmented and conflicted
sectors, on the other hand, generally offer the most leeway for efforts to
promote initially heterodox views — at least in part because the high level of
dissensus undercuts the legitimacy of even the most central sectoral actors
(Meyer & Scott 1983:201-202). Beyond this, managers seeking a favorable
environment might do well to consider the Scott & Meyer typology outlined
in Part II, above.

(4) Segregate competing environments: Occasionally, organizations will find

themselves unable to operate in a single, coherent environment. When this
occurs, managers may attempt to control technical-institutional (or inter-
institutional) conflicts by segregating environments and by catering to one at
the expense of the other. Meyer and Rowan (1977: 56-57) identify three such
strategies: (a) protecting and exalting ceremony, while ignoring performance;
(b) treating ceremony cynically, and openly acknowledging that entrenched
rituals serve no technical purpose; (c) promising reform, thereby segregating
today's reality from tomorrow's ideal. Unfortunately, ceremonialism tends to
impede boundary-spanning exchanges, cynicism makes the organization
appear irrational and out of control, and reformism delegitimates the current
structure and undercuts morale.

(5) Integrate competing environments: For some organizations, selecting (or

overtly favoring) a single environment may not be a viable option. In particu-
lar, public-sector organizations commonly operate within a system of checks
and balances that affords even relatively small audiences a "policy veto" over
domain shifts. In these settings, organizations must attempt to demonstrate
"inter-institutional robustness" — that is, they must show that their actions
would be appropriate under any applicable institutional standard.
Once again, three techniques are possible: Firstly, managers can
exercise entrepreneurship. As Powell (1991:197) notes:

Multiple, conflicting constraints provide opportunities

for various kinds of organizational forms to be estab-
lished. These cross-cutting institutional pressures
provide a space for entrepreneurs to construct an
organization out of a diverse set of legitimated prac-
tices.
 ON THE CONTROL OF LEGITIMACY IN ORGANIZATIONAL LIFE 153

Along these lines, Pfeffer (1981:22) offers the example of an academically-

oriented business school that developed the concept of "theory-based profes-
sionalism" to link its research and fund-raising efforts.
Secondly, organizations can decouple the activities required by contra-
dictory environments, assiduously (and sincerely) performing inconsistent
tasks while leaving formal coordinative structures underdeveloped. In Meyer
and Rowan's words:

Delegation, professionalization, goal ambiguity, elimi-

nation of output data, and maintenance of face are all
mechanisms for absorbing uncertainty while preserving
the formal structure of the organization.... Because
integration is avoided, disputes and conflicts are mini-
mized and an organization can mobilize support from a
broader range of external constituents. (1977:58)

In the presence of decoupling, ritual displays of confidence, good faith,

morale and satisfaction are important not only for maintaining legitimacy, but
also for facilitating informal solutions to institutional strains: "Participants not
only commit themselves to supporting an organization's ceremonial facade
but also commit themselves to making things work out backstage" (Meyer &
Rowan 1977:59). Thus, for example, ceremonialized "inspections" of nuclear
waste facilities by busloads of school children may both (a) create less strain
than technical oversight by environmentalists and industry officials, and (b)
bolster operators' commitments to keeping the world safe for future genera-
tions.9

Decoupling manages tensions between audiences well, but it often

does so at the expense of technical control. A third integrative alternative is
the adoption of an institutional/technical matrix structure (Scott 1987:221-
223). While Scott and Meyer hypothesize that "organizations functioning in
sectors that are highly developed both institutionally and technically will
develop more complex and elaborate administrative systems" (1983:126;
similarly, Powell 1991:196), little empirical or theoretical attention has been
devoted to the implications of this alternative. Morrill (1991), however,
reports disconcerting ethnographic evidence of the disruptive internal con-
flicts engendered by more traditional product/function matrices (see also Scott
& Meyer (1983:126).

While cognitive taken-for-grantedness may prevent individuals — managers

included ~ from conceiving of alternatives to prevailing institutional structures, the
potentially dissensual nature of cultural environments often creates identifiable
interstices in which actors can manipulate pre-existing (but not necessarily consistent)
myths. As Hinings and Greenwood observe:
 154 COMPILATION OF REPORTS

One of the dynamics of change is the potential for

strain between institutional definitions at the level of
meaning, and task and environmental
pressures....Domain, organizational form, and perfor-
mance are subject to institutional definition. (1988:56-
57)

Thus, as well as simply adapting to institutional constraints, managers can also pursue
organizational legitimacy by attempting to manipulate elements of the prevailing
order so as to make otherwise marginal organizational activities appear more proper,
valid or appropriate. The four basic strategies within this class center on success,
persistence, embeddedness and isomorphism.

(1) Succeed: Often, organizations can legitimate their activities by demonstrat-

ing a record of technical success (see e.g., Ashforth & Gibbs 1990:178). In
some ways, of course, this merely represents an instance of consequential
legitimacy. However, within the contemporary rationalist order, consequen-
tial legitimacy occupies a privileged position that allows it to have spill-over
effects on other legitimacy dynamics. Thus, for example, several studies have
suggested that as sectors become institutionalized, the structures and proce-
dures of early successful innovators come to be seen as rational, necessary
and proper — regardless of whether these structures actually yield favorable
consequences for later adopters (e.g., Tolbert & Zucker 1983 [civil service
reforms]; Meyer, Stevenson & Webster 1985 [urban finance agencies]; Baron,
Dobbin & Jennings 1986 [personnel units]; Suchman & Eyre 1992 [super-
sonic air forces]). This suggests that if organizations achieve early dramatic
success, their initial consequential legitimacy may translate into more persis-
tent procedural and structural legitimacy. And if no equally-successful com-
peting models exist, this confluence of moral legitimacies may set off an
avalanche of isomorphism (DiMaggio & Powell 1983) that eventually yields
cognitive legitimacy, as well.
In light of the importance of success-claims in institutionalization, it is
perhaps worth re-emphasizing the fact that success is, itself, subject to social
definition. "The criteria for what is a good technical solution are often open
to dispute. Engineers, economists, entrepreneurs, and environmentalists may
all speak with authority, but they will be a most discordant chorus." (Powell
1991:186) This leaves ample room for legitimacy-management through
impression management:

Since assessment is likely to be desired, a [common]

strategy involves the selective release of information
which is a) defined along criteria more favorable to the
organization, b) measured along criteria which are
more readily controlled by the organization, and c)
acceptable to those interested in the organization. One
 ON THE CONTROL OF LEGITIMACY IN ORGANIZATIONAL LIFE 155

example of such a strategy is the release of numerous

indicators of inputs at the same time information about
process and particularly outcomes is not released.
(Pfeffer 1981:30)

Thus, for example, nuclear waste managers might release information on the
volume of waste removed from on-site storage, without mentioning whether
this waste had actually been placed in permanent repositories; or they could
highlight the amount of waste "eliminated from the environment," without
mentioning the fact that the long-term consequences of this disposal effort
would remain unknown for several centuries.

(2) Persist: Closely related to the strategy of consequential success is the strat-
egy of persistence. At the simplest level, persistence may serve as a proxy for
success in settings where consequences are diffuse or hard to measure — "if
it's been around so long, it must be doing some good." Equally importantly,
Zucker notes that persistence may also foster cognitive comprehensibility and
taken-for-grantedness:

The history of transmission provides a basis for assum-

ing that the meaning of the act is part of the
intersubjective common-sense world. As continuity
increases, the acts are increasingly objectified and made
exterior to the particular interaction. (1977:87; see also
Zucker 1983:10, 1988:35)

Jepperson (1991:151) suggests that stable behavioral patterns also become

legitimized by the fact that other practices adapt to them. A persistent govern-
ment agency, for example, may appear competent simply because it interacts
smoothly with the sector that has grown up in its shadow.

(3) Embed: A third way for organizations to legitimate their structures and
practices is by embedding them in networks of other already-legitimate
institutions. In Zucker's words, "legitimacy is contagious. Once one role,
action, structure is legitimated, it can infect other roles, actions, structures.
Hence, highly institutionalized aspects of organizations are simultaneously
legitimate and a source of legitimation" (1988:38)
Many types of embedding are possible; however, the existing literature
highlights three as being of particular importance. First, organizations may
engage in co-optation, both as a means of creating pragmatic legitimacy
(Pfeffer 1981:33, 35) and also as a means of associating themselves with
respected individuals and institutions (Dowling & Pfeffer 1975). Second,
organizations may formalize their operations, codifying informal procedures
(Zucker 1988:35), bringing previously marginal activities under official
control (Zucker 1977:86), and establishing hierarchical linkages with
superordinate environmental units (Scott & Meyer 1983:137). Finally, orga-
nizations may professionalize, thereby linking their activities to external
 156 COMPILATION OF REPORTS

definitions of authority and competence (Scott 1991:175-176).

Compared to co-optation and formalization, professionalization offers
the interesting strategic advantage of allowing the organization to "export"
cognitive and procedural legitimation tasks to an outside entity (the profes-
sion) that specializes in creating consistent symbol systems and
intersubjective cultural understandings (Scott 1991:172; Suchman 1991a).
Before embracing this strategy, however, managers should recognize that
professional allies often come at a substantial cost to hierarchical control:

As a corporate group, professionals in their associations

demand and command discretion and control over
programmatic and instrumental decisions falling within
their claimed sphere of competence.... And, as indi-
vidual practitioners, professionals jealously guard their
discretion over instrumental decisions. (Scott & Meyer
1983:130; see also Scott 1991:172)

In addition, professionalization may entangle the organization in the

profession's disputes with other groups in civil society ~ including, at times,
other more powerful professions (Hinings & Greenwood 1988:67).

(4) Encourage isomorphism: As Pfeffer & Salancik (1978:201) observe, "orga-

nizational legitimacy appears to be especially problematic when organizations
of different distinguishable types compete for the same resources or the same
activities." Thus, organizations may legitimate their activities by encouraging
isomorphism, either through dramatic success and professionalization (see
above), or through direct coercion and the passage of regulatory legislation
(DiMaggio & Powell 1983; Tolbert & Zucker 1983). 10

Significantly, an organization may enhance its legitimacy not only by

encouraging isomorphism among its counterparts, but also by encouraging
isomorphism among its audiences. Zucker (1983; 18), for example, cites
evidence that the pressures of interacting with bureaucracies often routinize
initially-radical social movements (see also Swidler 1979; Rothschild-Whitt
1979). This suggests that the classic co-optation strategy of integrating
external audiences into organizational decision-making may serve not only (a)
to produce pragmatic legitimacy by increasing perceived influence, but also
(b) to produce cognitive legitimacy by making alternatives to organizational
decisions seem less and less plausible (cf. Michels 1949).

A final class of strategies for gaining legitimacy fall under the general head-
ing of "promoting supportive myths." Here, managers go beyond simply manipulat-
ing existing cultural beliefs, to formulate and promulgate new explanations of social
reality (see e.g., Ashforth & Gibbs 1990:178). On the whole, the literature tends to
treat this legitimation strategy in a relatively cursory fashion, frequently noting that
 ON THE CONTROL OF LEGITIMACY IN ORGANIZATIONAL LIFE 157

efforts to change social values are far more difficult and, hence, far rarer than efforts
to change organizational behaviors or to maneuver within the existing belief system
(Ashforth & Gibbs 1990:180; Dowling & Pfeffer 1975:127). Nonetheless, DiMaggio
(1988:11) suggests that "institutionalized myths are in some measure susceptible to
the discretion of any individual participant or organization," and he argues that
"institutionalization projects" are not uncommon.
When the existing literature explicitly addresses the task of altering societal
beliefs, researchers tend to focus on two distinct facets: popularization and coalition-
building. The first of these reflects the basic communicative challenges of spreading
a new cultural formulation. As Hinings and Greenwood (1988:57) observe, "the
extent to which any particular set of prescriptions or proscriptions are institutional-
ized is dependent on the authoritative nature of the mechanisms available to diffuse
ideas concerning current practice." A number of such mechanisms have been identi-
fied. Miles (1981), for example, reports that the tobacco industry has attempted to
foster favorable cultural definitions through lobbying, advertising, event sponsorship,
litigation and scientific research. While some of these activities would be difficult
for a public-sector organization, others (such as creating photo opportunities, staging
press events, providing public testimony and spreading supportive anecdotes) would
not. Along these lines, Pfeffer (1981:23) offers a case study of institutional change
(admittedly, at a sub-organizational level), in which managers promulgated a new
social definition "through continually articulating stories which illustrated its reality
and by a constant repetition of the theme" (see also Nielsen & Rao 1987).
The second facet of institution-building reflects the political challenges of
constructing a winning supra-organizational coalition. According to Dimaggio:

In order to render its public theory plausible...an insti-

tutionalizing organizational form requires the help of
subsidiary actors.... Recruiting or creating an environ-
ment that can enact their claims is the central task that
institutional entrepreneurs face in carrying out a suc-
cessful institutionalization project. (1988:15)

Relatedly, Hinings and Greenwood (1988:63) note that changes in institutional myths
frequently depend on "authoritative organizations whose definitions of what is pre-
scribed and proscribed have a particular power." Such allies are necessary not only
 158 COMPILATION OF REPORTS

in the redefinition of established sectoral understandings, but also in the creation of

new sectors where none have existed before. In this regard, Suchman (1991b) argues
that emergent sectoral structures often reflect the activities of "information intermedi-
aries" — ancillary organizations, such as law firms and management consultants, that
enjoy frequent contact with large numbers of potential participants in a new sector,
and that draw on these contacts to formulate and promulgate "compiled" accounts of
the sector's basic organizational principles.
Despite these points of commonality among reported instances of institutional
entrepreneurship, the literature offers few detailed strategic prescriptions. In large
part, this may reflect the fact that institutionalization projects tend to be under-
determined, with poorly-understood feedback loops and highly chaotic path-depen-
dencies (cf. David 1986). DiMaggio highlights one such feedback pattern when he
notes that:

the success of an institutionalization process creates

new sets of legitimated actors who, in the course of
pursuing distinct interests, tend to delegitimate and
deinstitutionalize aspects of the institutional forms to
which they owe their autonomy and legitimacy.
(1988:13; cf. Singh, Tucker & Meinhard 1991)

Further, the very process of subjecting a sector to public scrutiny generally

creates a distinctive and transitory "spotlight ecology" of unpredictable advocacy
groups and opportunistic political organizations. In this kind of indeterminate milieu,
outcomes will often reflect a "point of critical intervention" (Domhoff 1979) at which
elites can define appropriate models of organizational structure and policy which then
go unquestioned for years to come (see Katz, 1975)" (DiMaggio & Powell
1983:157). Unfortunately, such critical points are difficult to identify a priori, and
social scientists are hard-put to formulate useful intervention strategies without
falling victim to the cardinal methodological sin of sampling on the dependent vari-
able.

MAINTAINING LEGITIMACY
The challenge: In general, the organizations literature tends to depict the task of
maintaining legitimacy as a far easier enterprise than either gaining or repairing
 ON THE CONTROL OF LEGITIMACY IN ORGANIZATIONAL LIFE 159

legitimacy. According to Ashforth & Gibbs:

Once conferred, legitimacy tends to be taken largely for

granted....Reassessments of legitimacy become increas-
ingly perfunctory if not "mindless" (Ashforth & Fried
1988) and legitimation activities become increasingly
routinized. (1990:183)

Similarly, Zucker (1977:105) argues that the institutional order acts as a

homeostatic system, rapidly repairing accidental fluctuations in any single compo-
nent:

Deinstitutionalization is seldom accidental. Once

institutionalized, structure or activity may be main-
tained without further action: institutionalized elements
become embedded in networks, with change in any one
element resisted because of the changes it would entail
for all the interrelated network elements.

Nonetheless, as Zucker herself notes (1988), entropy is a persistent feature of social

life, and few organizations can safely ignore the task of legitimacy maintenance.
Anomalies, miscues, imitation failures, innovations and external shocks all threaten
the legitimacy of even the most secure organization — assuming such misfortunes
arrive in sufficiently rapid succession or are left unaddressed for a sufficiently long
period of time.
Three aspects of legitimacy make its maintenance at least intermittently
problematic: audiences are often multiplex, stability often entails rigidity, and institu-
tionalization often generates its own opposition. The first of these centers on the fact
that legitimacy reflects a relationship with an audience, rather than a possession of
the organization. When the audience is fragmented, satisfying — or even recognizing
~ all factions may prove virtually impossible. Thus,

Legitimacy...is always problematic. Social values and

expectations are often contradictory, evolving and
difficult to operationalize.... What's more, large and
complex organizations are answerable to a number of
diffuse constituents with frequently conflicting expecta-
tions and perceptions. (Ashforth & Gibbs 1990:177)
 160 COMPILATION OF REPORTS

This "multiple-audience problem" is particularly acute in the political climate

of United States, since, as Meyer and Scott note:

Liberal political regimes that encourage a pluralist

approach to decision-making and that emphasize the
separation of powers within nation state structures are
likely to exhibit higher levels of fragmentation of
decision-making within sectors as well as between
sectors. (1983:131)

The second problematic feature of legitimation centers on its potential for

fostering a fragile rigidity. "In certain conditions, high institutionalization can make
a structure more vulnerable to environmental shock (from internal or external envi-
ronments).... It [becomes] a 'house of cards,' in Tocqueville's phrasing" (Jepperson
1991:145). In particular, high levels of mutual adjustment and taken-for-grantedness
may impede organizations in institutionalized sectors from adapting to changed
conditions. Notes Powell:

In the absence of incentives embedded in existing

institutional arrangements, innovation and diversity will
be more likely to come from the periphery of organiza-
tional fields or from outside sources....New social
practices routinely face active resistance and recalci-
trance on the part of those comfortable with the status
quo. (1991:198)

Linking the problem of multiple audiences with the problem of rigidity,

Hannan (1986:89-90) suggests that as organizations become isomorphic and homoge-
neous within a heterogeneous cultural environment, unfilled demands create niches
for "outlaw" entrepreneurs who devise and adopt innovative organizational forms.
Hannan's insight ties in with the third challenge to legitimacy, which is the
tendency for any degree of institutionalization short of total taken-for-grantedness to
generate its own opposition. Both the progress of an institutionalization project and
the incorporation of an individual organization into a pre-existing sector are likely to
attract the attention of new audiences, and often these audiences will prove hostile —
if only because pro-active managers will already have enlisted most of the potentially
supportive audiences during the project's early stages. Some of the new crtitcs may
hope to delegitimate the sector by attacking its least institutionalized element.11
 ON THE CONTROL OF LEGITIMACY IN ORGANIZATIONAL LIFE 161

(Thus, for example, environmentalists may attack nuclear waste disposal plans as a
way of re-emphasizing the hazards of nuclear power.) Somewhat more broadly, other
groups will oppose institutionalization per se, either because they endorse an anti-
bureaucratic ideology or because they operate on the socio-political periphery and
experience the newly-institutionalized organization as an unwanted external con-
straint (Jepperson 1991:146). For the organization seeking to build legitimacy, each
of these hostile responses produces a so-near-but-yet-so-far dynamic, in which every
victory seems to mobilize a new, more radical opponent. Private organizations can
often escape this cycle by segregating confrontational responses to the fringe from
conciliatory responses to the mainstream; however, the aforementioned pluralist
"policy veto" may make such an approach more difficult for governmental actors.

Strategies for maintaining legitimacy: Strategies for maintaining legitimacy fall

into three groups: perceiving, buttressing and stockpiling. The first cluster, percep-
tion techniques, focusses on enhancing the organization's ability to recognize audi-
ence reactions and to foresee challenges. Two main strategies in this group deserve
note:

(1) Incorporate/monitor multiple audiences: Scott and Meyer (1983:133) argue

that "organizations operating in sectors characterized by fragmented or feder-
alized programmatic decision-making...exhibit complex linkages across levels
and elaborated and enlarged administrative components at each level." In
part, this may reflect efforts to build "bridges" (Scott 1987) across which the
organization can learn about constituents' values, beliefs and reactions. Thus,
for example, although much of the strategy literature focuses on how co-
optation provides symbolic reassurances to constituents (Pfeffer 1981:33), the
incorporation of audience representatives may also provide valuable cultural
insights to management. The same is true of professionalization, which
charters a certain organizational members to actively participate in external
normative discourses (DiMaggio & Powell 1983:152). From this point of
view, the risk is not that boundary-spanners will "run wild," but rather that
they will become lap-dogs (cf. Arrow 1974).

(2) Create doubting-thomases: A recurrent danger in institutionalized organiza-

tions is that managers will spend too much time "reading their own P.R." As
Hinings and Greenwood (1988:16) note, "a common theme in the [organiza-
tional] decline literature is that decision-makers often delude themselves into
believing that a problem does not exist or that it is not serious." Thus, most
organizations would do well to charter specific sub-units to question taken-
for-granteds (Mitroff & Kilmann 1984). According to Ashforth and Gibbs,
 162 COMPILATION OF REPORTS

Attempts to anticipate and prevent or forestall chal-

lenges to legitimacy often include...periodic scanning
of internal and external environments and questioning
the working assumptions about those environments,
taking the perspective of constituents when determining
and justifying decisions ("how will it look to them?"),
and establishing crisis management plans to ensure
prompt and coordinated action should a crisis occur.
(1990:183)

In addition to developing early-warning systems to protect against unforeseen

legitimacy challenges, organizations wishing to maintain their legitimacy may also
seek to buttress their place within the institutional structure by guarding against
miscues. Three available strategies are:

(1) Network: "One of the results of more frequent communication intensity is

likely to be the development, through informational social influence, of a
more common set of understandings about the organization and its environ-
ment. These understandings, these shared meanings, provide organizational
participants with a sense of belonging and identity as well as demarcating the
organization from its environment and assisting in the control and commit-
ment of those within the organization." (Pfeffer 1981:13) In other words, the
more tightly interconnected an organization or a sector becomes, the more
likely its institutions and beliefs are to approach the homeostatic ideal (Scott
1987:76-81).

(2) Be subtle: In contrast to the intense political activity surrounding legitimacy-

building, legitimacy-maintenance (particularly the preservation of taken-for-
grantedness) requires a much softer hand. Once an organization has achieved
wide acceptance, value-based evangelism should give way to "cooler" tech-
niques, such as matter-of-fact explanations of "common knowledge" (Pfeffer
1981:15). While the organization may wish to quarantine hold-out opponents
in order to isolate them from public discourse, managers should avoid validat-
ing opposition by overtly treating it as a genuine threat. In particular, raw
coercion rarely represents a productive legitimacy-maintenance strategy, since
it tends to disrupt the exteriority and objectivity of social relations (Zucker
1988:33). As Scott notes:

We would expect structural forms imposed by authority

to meet with less resistance, to occur more rapidly...,
and to be associated with higher levels of compliance
and stability than those imposed by force. The struc-
tural changes should also be less superficial and loosely
coupled to participants' activities than those imposed
by coercive power. (1991:175)
 ON THE CONTROL OF LEGITIMACY IN ORGANIZATIONAL LIFE 163

As well as invoking legitimate authority, organizations may overcome chal-

lenges by manipulating language (Pfeffer 1981:25) and by simply waiting for
demographic processes to replace cohorts of critics with new generations of
believers.

(3) Avoid surprises: "Having adjudged the organization credible, constituents

tend to relax their vigilance and content themselves with evidence of ongoing
performance vis-a-vis their interests and with periodic assurances of 'busi-
ness-as-usual'" (Ashforth & Gibbs 1990:183). Consequently, organizations
should avoid unexpected events that might re-awakening constituent vigi-
lance. Admittedly, there are times (for example, following nuclear accidents)
when renewed scrutiny is probably inevitable. When reversals are predict-
able, however, the organization should disclose them in a timely and low-key
manner, along with more reassuring information; saving bad news too long
virtually invites a delegitimating expose.

A final strategy for maintaining legitimacy is to stockpile goodwill, generally

in the form of dispositional legitimation. A public perception that the organization is
a "responsible citizen" can act as a kind of capital reserve:

This goodwill can serve as a "corporate credit" (Madan

1985) — analogous to an individual's "idiosyncracy
credit" (Hollander 1964) — whereby management can
occasionally deviate from social norms without seri-
ously upsetting the organization's standing....A good
reputation, in short, provides leverage or slack for
defending against challenges to legitimacy." (Ashforth
& Gibbs 1990:189)

In structuring this reserve, managers might want to consider Hambrick and D'Aveni's
(1988) distinction between working capital and potential capital. These authors
report evidence that many failing business firms miss the early signs of trouble
because, although they are highly leveraged, they enjoy ample supplies of working
capital. Similarly, one might argue that organizations in institutionalized sectors
often overlook looming legitimation crises because, although their public acceptance
is low, they enjoy ample support among political and regulatory incumbents. Ulti-
mately, political and regulatory support is probably most stable and useful when
backed by popular goodwill.
 164 COMPILATION OF REPORTS

REPAIRING LEGITIMACY
The challenge: In many ways, the task of repairing legitimacy resembles the task of
gaining legitimacy. Unlike legitimacy-building, however, legitimacy-repair generally
represents a reactive response to an unforeseen crisis of meaning — often precipitated
by a crisis of resources. While the maintenance strategies described above can give
organizations some advance warning of impending challenges, legitimacy crises
usually befall managers who have become enmeshed in their own legitimating myths
and have failed to notice a decline in cultural support — until some cognitively-salient
trip-wire sets off alarms.
Managers who recognize weakness before it comes to the attention of key
constituents may be able to successfully deploy the same strategies that established
the organization's legitimacy in the first place; however, managers who discover
problems only when constituents protest face a much harsher reality. In particular, by
the time reactive managers begin to address a problem, old legitimation strategies and
old legitimacy claims may already have been discredited. Suddenly, the legitimation
successes of the past become impediments to the future:

Since a challenge can only be lodged against some-

thing, there is more apt to be an established organiza-
tional infrastructure — including previously claims to
legitimacy — and this may constrain the ability of
management to respond...to the challenge, at least in
the short run.... Scrutiny makes it difficult to decouple
activities — especially those involving legitimacy — and
to engage in routine impression management or puffery
regarding role performance. (Ashforth & Gibbs
1990:183)

In addition to impairing management's ability to maneuver, an unfolding

legitimacy crisis also may sever managers from previously reliable environmental
allies. Indeed, legitimation crises tend to become self-reinforcing positive-feedback
loops, as social networks recoil to avoid guilt by association. At the most concrete
level, this retraction of support can exacerbate performance failures by disrupting
critical resources flows. Thus, for example, Sutton and Callahan (1987) report that
suppliers often refuse to sell parts to newly-bankrupt organizations, even for cash.
The retraction cascade is at its most threatening, however, when the networks in
 ON THE CONTROL OF LEGITIMACY IN ORGANIZATIONAL LIFE 165

question provide legitimacy rather than material resources. Since legitimation is

frequently highly mutualistic, the risk of negative contagion may drive even long-
standing allies to dissociate themselves from a troubled counterpart and to engage in
ritualistic sniping and ostracism. Interestingly, this dynamic suggests that the most
deeply embedded organizations are also likely to be the most harshly punished. The
wider the range of societal activities implicated in an organization's legitimacy
claims, the greater the pressure to brand wrongdoing as deviant — or even as sacrile-
gious (cf. Ashforth & Gibbs 1990:185). 12

Strategies for repairing legitimacy: As a general matter, most of the legitimacy-

building strategies described above can also serve to re-establish legitimacy following
a crisis ~ provided the organization continues to enjoy some modicum of credibility
and interconnectedness with the relevant audiences. Often, however, the
delegitimated organization must deal with the immediate disruption before initiating
more global legitimation activities. The limited literature on this topic suggests four
broad prescriptions:

(1) Offer normalizing accounts: While legitimacy crises often coalesce around
performance issues, most challenges ultimately rest on failures of meaning:
At the organizational level, constituents begin to suspect that a putatively
laudable actor may actually be a fraud; at the sectoral level, audiences begin
to suspect that putatively desirable outputs are hazards, that putative effica-
cious procedures are tricks, or that putatively genuine structures are fronts.
Consequently, the first task in mending a breech of legitimacy will usually be
to offer a culturally-acceptable "normalizing account" for the threatening
revelation.
At least three types of accounts are possible (cf. Ashforth & Gibbs
1990;180-181). Firstly, managers may deny the disruption by (a) questioning
the veracity of the accusation ("there was no accident"), (b) questioning the
strength of the evidence ("tests for radiation leakage were inconclusive"), or
(c) questioning the disruptiveness of the event ("radiation exposure was
within acceptable limits"). As Ashforth and Gibbs note, unless such denials
are sincere, subsequent public discovery of the dishonesty may severely
deplete the organization's dispositional legitimacy reserve. Thus, rather than
denying the disruption, managers may choose to excuse it by questioning the
organization's agency and, hence, its moral responsibility. Unfortunately, this
tactic -- which often amounts to blaming individual employees or external
authorities — also has a double-edge, "since constituents expect managers to
effectively control their organizations" (Ashforth & Gibbs 1990:181). Fi-
nally, and most productively, managers may justify the disruption, redefining
 166 COMPILATION OF REPORTS

means and/or ends retrospectively, in order to make the disruptive events

appear consonant with prevailing values and beliefs.
Practically speaking, managers often find themselves hard-put to
manipulate the substance of normalizing accounts without appearing disin-
genuous. In such cases, they might do well to devote their energies to ma-
nipulating the form of the account instead: "As the literature on ingratiation
would suggest (Wortman and Linsenmeier 1977), protests of legitimacy are
likely to be more successful if they are indirect and subtle" (Ashforth & Gibbs
1990:187). Often, accounts appear more credible and less self-serving when
couched in the form of "stories, proverbs, tales, and so on" (Nielsen & Rao
1987:528; see also Martin 1982) — and this is presumably true regardless of
whether the accounts involve denials, excuses or justifications.

(2) Restructure: Pfeffer (1981:39) notes that "restructuring can alter the sym-
bolic value given to different aspects of the organization's operation. Through
such symbolic action, it is possible to both motivate and placate various
interests in contact with the organization." While indiscriminate structural
changes may make the organization appear unstable and unreliable (Hannan
& Freeman 1984), narrowly-tailored changes that mesh with normalizing
accounts can serve as effective damage-containment techniques. 13

Two types of restructuring play particularly large roles in this regard.

The first — executive replacement — invokes the symbolism of charismatic
authority and individual disposition (Weber 1968; Gephart 1978) to signify a
desire for change. "It is more difficult to obtain support with the same organi-
zation and individuals that previously failed. A change, particularly at the
top, may convey symbolic reaffirmation of improvement which may generate
new support" (Pfeffer 1981:36). The second major restructuring technique —
the creation of monitors and watchdogs — allows the organization to "post a
bond" against future recidivism. By inviting government regulation, by
chartering ombudspersons and by instituting grievance procedures, managers
offer "symbolic evidence that the demands of various interests are now to be
dealt with within the organization" (Pfeffer 1981:36).
(3) Dissociate: In addition to symbolically excising bad internal elements,
organizations seeking to regain legitimacy may also symbolically distance
themselves (either geographically or politically) from bad external influences.
Thus, for example, a radioactive-waste management unit might bolster its
legitimacy by shifting its organizational locus from the Department of Energy
to the Environmental Protection Agency — or by transferring its headquarters
from Washington DC to Nevada.

(4) Don't panic: While this injunction (Adams 1979:52, 56) may sound face-
tious, it is not. Staw, Sandelands and Dutton (1981) argue that "precipitous
crises lead to a threat-rigidity response that severely impairs decision-making
and promotes [organizational] failure." Ashforth and Gibbs, too, posit that
managerial overreactions frequently induce "downward spirals" that power-
fully magnify initial legitimation difficulties.
While legitimacy-repair may resemble legitimacy-creation, in that
both call for intense activity and dramatic displays of decisiveness, legiti-
 ON THE CONTROL OF LEGITIMACY IN ORGANIZATIONAL LIFE 167

macy-repair also resembles legitimacy-maintenance, in that both require a

light touch and a sensitivity to environmental responses. Panic would not
seem to be the ideal emotional state for achieving this balance. Thus, manag-
ers facing legitimacy crises might do well to contemplate Hambrick and
D'Aveni's (1988:20) finding that even in market-driven sectors organizational
collapse can take ten years or more; presumably in institutional sectors de-
clines occur more slowly still.

TWO CAVEATS IN CLOSING

The preceding discussion identifies a number of risks that attend specific
legitimation strategies. The literature, however, also identifies at least two dangers
that attend legitimacy-management in general. The following paragraphs briefly
examine each. This review is intended primarily to highlight the possibility of dan-
gerous feedback-loops in the dynamics of legitimation. It offers no solutions, and it
makes no pretense of comprehensiveness. It merely sounds a cautionary note in the
hope of encouraging reflection.
The first caveat revolves around what Ashforth and Gibbs identify as a "self-
promoter's paradox" in organizational legitimation. If we take seriously Nielsen and
Rao's (1987) reminder that audiences are active participants in the process of mean-
ing-construction, we must recognize the possibility that audience interpretations will
diverge from organizational expectations. In particular, "the greater the need for
legitimation, the more suspect of legitimation attempt are constituents" (Ashforth &
Gibbs 1990:186). Moreover, "since protests of competence are more likely when
actual competence is problematic or unknown, individuals tend to discount such
protests" (Ashforth & Gibbs 1990:186) — or even to take such protests as signals of a
lack of competence. In other words, the more codified and consistent legitimacy-
management strategies become, the more likely it is that audiences will actually learn
to see such activities as clues that something is amiss.
Ashforth and Gibbs (1990:186-191) identify three clusters of strategies that
they believe may have already gained such inverted meanings: (1) clumsy action, in
which managers act in unethical, heavy-handed or insensitive ways, such as by
attempting to suppress whistle-blowers; (2) nervous action, in which managers act in
dogmatic, intolerant or evasively formalistic ways, such as by following regulations
to the letter while rejecting interpersonally negotiated understandings (cf. Zucker
1988); and (3) overacting action, in which managers act in rhetorical, self-aggrandiz-
 168 COMPILATION OF REPORTS

ing or inflammatory ways, such as by painting everyday interactions as black-and-

white confrontations between Good and Evil. The existence of these cynical arche-
types removes certain mixes of strategy from the legitimation arsenal, impeding the
flexibility of individual legitimacy-seekers and, more importantly, impoverishing the
symbolic repertory of the society as a whole.
A similar societal impoverishment forms the basis for a second caveat, as
well. This second dynamic might be termed the "sector-leader's paradox." Here,
difficulties arise because legitimation is too successful, rather than because it is not
successful enough. The root of the paradox lies in the fact that efforts to legitimate a
sector-leading organization (particularly a government agency) may inadvertantly
remake the entire sector in the leader's image. Sometimes, this process proves
relatively unproblematic or even beneficial, such as when sector members streamline
and coordinate their routine interactions (Suchman 1991b; Powell 1991:194). At
other times, however, leadership effects may foster far less desirable forms of isomor-
phism:

The performance of firms can slip drastically if manag-

ers do not understand the undesirable and manipulative
aspects of strategy. Managers may emulate question-
able practices if their facades or the facades of other
organizations prevent them from pinpointing concealed
deficiencies (Nystrom & Starbuck 1984). Sometimes
managers who wish to appear progressive can espouse
innovations indiscriminately, thereby damaging organi-
zational adaptability (Kimberly 1981). (Neilsen & Rao
1987:531-532)

Occasionally, in fact, sector-leadership may produce outcomes that benefit

neither the leader nor the followers, nor the sector, nor the society as a whole. Thus,
for example, Suchman and Eyre (1992) examine the international military order and
conclude that the sector-defining high-tech mythology of the superpowers has driven
a massive mimetic proliferation of ever-more-deadly weapons to third world states
that neither need such armaments nor possess the political structures to control them.
By analogy, one might ponder with trepidation the possibility that a future U.S.
nuclear-waste policy (say, for example, a decision to employ retrievable disposal
techniques) might inadvertently form the basis for international beliefs about what
 ON THE CONTROL OF LEGITIMACY IN ORGANIZATIONAL LIFE 169

other nations — including third-world nations — must do to be "modern."

A final, particularly significant, example of a leadership effect that ultimately
redounds to everyone's detriment is the isomorphic rigidification of highly institu-
tionalized orders:

To the extent that centralization of power and resources

results in increasing homogenization of structural forms
within an organizational sector (see DiMaggio &
Powell 1983), then one must be concerned with the loss
of this diversity. As Hannan & Freeman (1989:7) point
out, such a reduction may diminish "the capacity of a
society to respond to uncertain future changes." (Scott
& Meyer 1983:140)

Lost diversity may prove particularly regrettable in fields such as nuclear waste
disposal, where the "best" technologies are only barely adequate.

CONCLUSION
This paper has attempted to bring some coherence to a literature on organiza-
tional legitimacy that is, in reality, several distinct literatures — strategic and institu-
tional; pragmatic, moral and cognitive; legitimacy-building, legitimacy-maintaining
and legitimacy-repairing. Until all of these traditions devote serious and sustained
empirical attention to their points of overlap and divergence, any summary is bound
to be partial, any conclusions are bound to be preliminary, and any recommendations
are bound to be tentative. Nonetheless, given the disparate foci of their various
contributors, the multiple legitimacy literatures display remarkable consistency, and
their assertions, remarkable compatibility. In a discipline dominated by theoretical
traditions that disagree even when they focus on a single phenomenon, such unex-
pected congruence is reassuring, to say the least.
 170 COMPILATION OF REPORTS

REFERENCES

Adams, Douglas (1979), The Hitchhikers Guide to the Galaxy. New

YorkrPocket Books.

Arrow, Kenneth J. (1974), The Limits of Organization. New York: W.W.

Norton & Co.

Ashforth, B. E. and Y. Fried (1988), "The Mindlessness of Organizational

Behaviors," Human Relations 41:305-329.

Ashforth, Blake E. and Barrie W. Gibbs (1990), "The Double-Edge of Organi-

zational Legitimation," Organization Science 1:177-194.

Baron, James P, Frank Dobbin and P. Devereaux Jennings (1986), "War and
Peace: The Evolution of Modern Personnel Administration in U.S. Industry," Ameri-
can Journal of Sociology 92:250-283.

Berger, Reter L., Brigitte Berger and Hansfried Kellner (1973), The Homeless
Mind: Modernization and Consciousness. New York: Random House.

Child, John (1972), "Organization Structure, Environment and Performance:

The Role of Strategic Choice," Sociology 6:1-22.

Coleman, James S. (1974), Power and the Structure of Society. New York:
Norton.

David, Paul (1986), "Understanding the Economics of QWERTY: The Neces-

sity of History," pp. 30-49 in W. Parker (ed.), Economic History and the Modern
Historian. London: Blackwell.
 ON THE CONTROL OF LEGITIMACY IN ORGANIZATIONAL LIFE 171

DiMaggio, Paul J. (1988), "Interest and Agency in Institutional Theory," pp.

3-22 in L. G. Zucker (ed.), Institutional Patterns and Organizations. Cambridge,
MA: Ballinger.

DiMaggio, Paul J. and Walter W. Powell (1983), "The Iron Cage Revisited:
Institutional Isomorphism and Collective Rationality in Organizational Fields,"
American Sociological Review 48:147-160.

(1991), "Introduction", pp. 1-38 in P. J. DiMaggio and W. W. Powell

(eds.), The New Institutionalism in Organizational Analysis. Chicago: University of
Chicago Press.

Domhoff, J. William (1979), The Powers That Be: Processes of Ruling Class
Domination in America. New York: Random House.

Dowling, John and Jeffrey Pfeffer (1975), "Organizational Legitimacy: Social

Values and Organizational Behavior," Pacific Sociological Review 18:122-136.

Emerson, Richard M. (1963), "Power-Dependence Relations," American

Sociological Review 27:31-40.

Erikson, Kai T. (1966), Wayward Puritans. New York: Wiley.

Freeman, John H., Glenn R. Carroll and Michael T. Hannan (1983), "The
Liability of Newness: Age Dependence in Organizational Death Rates. American
Sociological Review 48:692-710.

Gamson, William A. and Andre Modigliani (1989), "Media Discourse and

Public Opinion on Nuclear Power: A Constructionist Approach," American Journal
of Sociology 95:1 -37.

Geertz, Clifford (1973), The Interpretation of Cultures. New York: Basic

Books.
 172 COMPILATION OF REPORTS

Gephart, R. P. (1978), "Status Degredation and Organizational Succession: An

Ethnomethodological Approach," Administrative Science Quarterly 23:553-581.

Hannan, Michael T. and John H. Freeman (1984), "Structural Inertia and

Organizational Change," American Sociological Review 49:149-164.
(1989), Organizational Ecology. Cambridge, MA: Harvard Univer-
sity Press.

Hinings, Robert and Royston Greenwood (1988), "The Normative Prescrip-

tion of Organizations," pp. 53-70 in L. G. Zucker (ed.), Institutional Patterns and
Organizations. Cambridge, MA: Ballinger.

Hollander, Edwin P. (1964), Leaders, Groups and Influence. New York:

Oxford University Press.

Jepperson, Ronald L. (1991), "Institutions, Institutional Effects, and Institu-

tionalism," pp. 143-163 in P. J. DiMaggio and W. W. Powell (eds.), The New Institu-
tionalism in Organizational Analysis. Chicago: University of Chicago Press.

Katz, Michael B. (1975), Class, Bureaucracy and Schools: The Illusion of

Educational Change in America. New York: Paeger.

Kimberly, John R. (1981), "Managerial Innovation," pp. 84-104 in P. C.

Nystrom and W. H. Starbuck (eds.) Handbook of Organizational Design. New York:
Oxford University Press.

Kluckhohn, C. and D. Leighton (1947), The Navajo. Cambridge, MA:

Harvard University Press.

Lind, E. A. and Tom R. Tyler (1988), The Social Psychology of Procedural

Justice. New York: Plenum.
 ON THE CONTROL OF LEGITIMACY IN ORGANIZATIONAL LIFE 173

Madan, M. T. (1985), Organizational Legitimacy: Criticality Determinants

and Resource Acquisition," Unpublished manuscript, University of Toronto.

Martin, Joanne (1982), "Stories and Scripts in Organizational Settings," pp.

255-305 in A. H. Hastorf and A. M. Isen (eds.), Cognitive Social Psychology. New
York:Elsevier/North-Holland.

Meyer, John W. and Brian Rowan (1977 [1991]), "Institutionalized Organiza-

tions: Formal Structure as Myth and Ceremony, American Journal of Sociology
83:340-363. (Reprinted as pp. 41-62 in P. J. DiMaggio and W. W. Powell (eds.), The
New Institutionalism in Organizational Analysis. Chicago: University of Chicago
Press.)

Meyer, John W. and W. Richard Scott (1983), "Centralization and the Legiti-
macy Problems of Local Government," pp. 199-215 in J. W. Meyer and W. R. Scott
(eds.), Organizational Environments: Ritual and Rationality. Beverly Hills, CA:
Sage.

Meyer, Marshall, W. Stevenson and S. Webster (1985), Limits to Bureaucratic

Growth. Berlin: Walter de Gruyter.

Michels, Robert (1949 trans.), Political Parties, trans. Eden and Cedar Paul.
Glencoe, IL: Free Press, (orig. pub. 1915)

Mitroff, Ian and R. H. Kilmann (1984), Corporate Tragedies: Product Tam-

pering, Sabotage, and Other Catastrophes, New York: Praeger.

Neilsen, Eric H. and M. V. Hayagreeva Rao (1987), "The Strategy-Legitimacy

Nexus: A Thick Description," Academy of Management Review 12:523-533.

Nystrom, P. C. and W. H. Starbuck (1984), "Organizational Facades," Acad-

emy of Management Review Proceedings 182-184.
 174 COMPILATION OF REPORTS

Olson, Mancur (1965), The Logic of Collective Action. Cambridge, MA:

Harvard University Press.

Parsons, Talcott (1960), Structure and Process in Modern Societies. Glencoe,

JJL: Free Press.

Perrow, Charles (1970), Organizational Analysis: A Sociological View.

Belmont, CA: Wadsworth.

Pfeffer, Jeffrey (1981), "Management as Symbolic action: The Creation and

Maintenance of organizational Paradigms," pp. 1-52 in L. L. Cummings and B. M.
Staw (eds.), Research in Organizational Behavior. Greenwich, CT: JAI Press.

Pfeffer, Jeffrey and Gerald Salancik (1978), The External Control of Organi-
zations: A Resource Dependence Perspective. New York: Harper and Row.

Powell, Walter W. (1991), "Expanding the Scope of Institutional Analysis,"

pp. 183-203 in P. J. DiMaggio and W. W. Powell (eds.), The New Institutionalism in
Organizational Analysis. Chicago: University of Chicago Press.

Rothschild-Whitt, Joyce (1979), "The Collectivist Organization: An Alterna-

tive to Rational Bureaucratic Models," American Sociological Review 44:509-527.

Scott, W. Richard and John W. Meyer (1983 [1991]), "The Organization of

Societal Sectors," pp. 129-153 in J. W. Meyer and W. R. Scott (eds.), Organizational
Environments: Ritual and Rationality. Beverly Hills, CA: Sage. (Reprinted as pp.
108-140 in P. J. DiMaggio and W. W. Powell (eds.), The New Institutionalism in
Organizational Analysis. Chicago: University of Chicago Press.)

Scott, W. Richard (1977), "Effectiveness of Organizational Effectiveness

Studies," pp. 63-95 in P. S. Goodman and J. M. Pennings (eds.) New Perspectives on
Organizational Effectiveness. San Francisco: Jossey-Bass.
 ON THE CONTROL OF LEGITIMACY IN ORGANIZATIONAL LIFE 175

, (1987), Organizations: Rational, Natural and Open Systems, 2nd ed.

Englewood Cliffs, NJ: Prentice Hall.

, (1991), "Unpacking Institutional Arguments," pp. 164-182 in P. J.

DiMaggio and W. W. Powell (eds.), The New Institutionalism in Organizational
Analysis. Chicago: University of Chicago Press.

Selznick, Philip (1949), TVA and the Grass Roots. Berkeley: University of
California Press.

Singh, Jitendra V, David J. Tucker and Agnes G. Meinhard (1991), "Institu-

tional Change and Ecological Dynamics," pp. 390-422 in R J. DiMaggio and W. W.
Powell (eds.), The New Institutionalism in Organizational Analysis. Chicago: Uni-
versity of Chicago Press.

Stinchcombe, Arthur L. (1965), "Social Structure and Organizations," pp.

142-193 in J. G. March (ed.) Handbook of Organizations. Chicago:Rand McNally.

Suchman, Mark C. (1988), "Constructing an Institutional Ecology: Notes on

the Structural Dynamics of Organizational Communities," paper presented to the
annual meeting of the American Sociological Association in Atlanta, Georgia.

, (1991a), "Pros and Cons: Reconciling Competing Paradigms of

Professionalism," paper presented to the Stanford Conference on Organizations at
Asilomar in Pacific Grove, California.

, (1991b), "On the Role of Law Firms in the Structuration of Silicon

Valley," paper presented to the annual meeting of the American Sociological Associa-
tion in Cincinnati, Ohio.

Mark C. Suchman and Dana P. Eyre (1992), "Military Procurement as Ratio-

nal Myth: Notes on the Social Construction of Weapons Proliferation," Sociological
Forum 7:137'-161.
 176 COMPILATION OF REPORTS

Swidler, Ann (1979), Organizations Without Authority: Dilemmas of Social

Control in Free Schools. Cambridge, MA: Harvard University Press.

Terreberry, Shirley (1968), "The Evolution of Organizational Environments,"

Administrative Science Quarterly 12:590-613.

Thompson, James D. (1967), Organizations in Action. New York: McGraw-

Hill.

Tolbert, Pamela S. and Lynne G. Zucker (1983), "Institutional Sources of

Change in the Formal Structure of Organizations: The Diffusion of Civil Service
Reform, 1880-1935" Administrative Science Quarterly 28:22-39.

Tyler, Tom R. (1988), "What is Procedural Justice?: Criteria Used by Citizens

to Assess the Fairness of Legal Procedures," Law and Society Review 22:103-135.

Tyler, Tom R. and Kenneth Rasinski (1991), "Procedural Justice, Institutional

Legitimacy, and the Acceptance of Unpopular U.S. Supreme Court Decisions: A
Reply to Gibson," Law and Society Review 25:621-630.

Weber, Max (1968), Economy and Society. G. Roth and C. Wirth (ed.).

Weick, Karl E (1969), The Social Psychology of Organizing. Reading, MA:

Addison-Wesley.

Williamson, Oliver E. (1975), Markets and Hierarchies: Analysis and Anti-

trust Implications. New York: Free Press.

Wortman and Linsenmeier (1977), [citation missing].

Wuthnow, Robert, J. D. Hunter, A. Bergesen, and E. Kurzweil (1984), Cul-

tural Analysis. Boston: Routledge and Kegan Paul.
 ON THE CONTROL OF LEGITIMACY IN ORGANIZATIONAL LIFE 177

Zald, Mayer N. and Patricia Denton (1963), "From Evangelism to General

Service: The Transformation of the YMCA," Administrative Science Quarterly 8:214-
234.

Zucker, Lynne G. (1977 [1991]), "The Role of Institutionalization in Cultural

Persistence," American Sociological Review 42:726-743. (Reprinted as pp. 83-107
in P. J. DiMaggio and W. W. Powell (eds.), The New Institutionalism in Organiza-
tional Analysis. Chicago: University of Chicago Press.)

, (1983), "Organizations as Institutions," pp. 1-42 in S. B. Bacharach

(ed.) Research in the Sociology of Organizations. Greenwich, CT: JAI Press.

, (1986), "Production of Trust: Institutional Sources of Economic

Structure, 1840-1920," Research in Organizational Behavior 8:53-111.

, (1987), "Institutional Theories of Organizations," Annual Review of

Sociology 13:443-64.

, (1988), "Where Do Institutional Patterns Come From? Organizations

as Actors in Social Systems," pp. 23-52 in L. G. Zucker (ed.) Institutional Patterns
and Organizations. Cambridge, MA: Ballinger.
 178 COMPILATION OF REPORTS

FOOTNOTES

'Before preceding, a word about style may be in order. Most of the following
discussion is couched in abstract and general theoretical terms and is broadly appli-
cable (mutatis mutandis) to a wide range of public, private and voluntary organiza-
tions in a wide range of cultural settings. In keeping with the paper's charter to
inform the U.S. Department of Energy's Task Force on Civilian Radioactive Waste
Management, however, concrete illustrations will generally address the case of an
organization (such as the Department of Energy) engaged in the management and
disposal of high-level radioactive wastes in the United States in the 1990s.

2
A terminological note may be in order: Institutional accounts frequently
employ the terms "legitimacy" and "institutionalization" as approximate synonyms.
When applied to a focal organization, the phrase "institutional isomorphism" (com-
portment with institutionalized models) generally also indicates a state of high
legitimacy.
3
Readers may note that these four types of moral legitimacy roughly parallel
Weber's (1968:215) discussion of legitimate authority. Consequential legitimacy and
procedural legitimacy both reflect legal-rational authority, although the former is
"instrumentally rational" (based on the pursuit of particular goals) and the latter is
"value-rational" (based on the fulfillment of rules of proper behavior) (Weber
1968:24). Categorical legitimacy reflects traditional authority, based on the
longstanding designation of certain types of actors as worthy of exercising certain
types of power. Finally, legitimacy based on individual leaders corresponds to the
Weberian ideal-type of charismatic authority.

Interestingly, in her later work, Zucker claims to "open Pandora's box,

allowing disorganization to emerge as a central principle" (1988:25). While this may
be true, she continues to treat disorder not as a cognitive goad for the meaning-
making activity of institutionalization, but rather as an ongoing entropic tendency, to
which relatively taken-for-granted and persistent institutions must respond.

5
As an aside, it is interesting to note that technological uncertainty and value
ambiguity may give even highly technical, market-driven sectors an institutional,
"public relations" cast (e.g., the publishing industry). Conversely, when organiza-
tions act as "consumers" of their own products, even highly institutional sectors may
take on technical elements. This latter state of affairs explains, for example, why
religious organizations invest in theology as well as in ritual. Of more immediate
relevance, it may also explain why an organization chartered to dispose of nuclear
 ON THE CONTROL OF LEGITIMACY IN ORGANIZATIONAL LIFE 179

waste might exhibit genuine concern not only for whether its procedures were legiti-
mate, but also for whether they were effective.

For an alternative treatment of these topics, readers may wish to peruse

6

Ashforth and Gibbs' recent discussion of "the double-edge of organizational legiti-

mation" (1990).
7
Indeed, when two activities operate on different logics, the friction between
their assumptions may actively delegitimate both — and any organization that at-
tempts to span the divide.
8
This example highlights an important exception to the earlier suggestion that
adaptive managers can "pre-test" their plans by asking, "What would make this
organization look more proper, valid and appropriate to me?" When managers come
from a specialized professional culture (e.g., nuclear engineering), their cognitive
hueristics may contain distinctions (e.g., controlled vs. uncontrolled reactions, or
nuclear fission vs. radioactive decay) that are essentially meaningless to lay audiences
(cf. Kluckhohn & Leighton 1947:197). In these cases, what appears proper within
the specialized culture may appear foolish within the larger political discourse.
9
A strategy of decoupling may serve some legitimation ends better than
others. Scott and Meyer (1983:137) hypothesize that "the exercise of structural
controls is more compatible with [decoupling] than is the exercise of process con-
trols, and the exercise of process controls is more so than the exercise of outcome
controls."
10
For an opposing view on the utility of coercion, see Zucker (1988:33).

"This represents the converse of Meyer and Scott's frequently-cited observa-

tion that "'scrutiny' may well be ritualistic inasmuch as some constituents have a
vested interest in not scrutinizing too closely for fear of raising issues which might
jeopardize the legitimacy of the entire system" (Ashforth & Gibbs 1990:182).
12
Actually, the negative effects of embeddedness are probably cross-level
phenomena: Organizations receive the harshest punishments when their sectors are
deeply embedded; within any given sector, it is the most marginal organizations that
are the most likely to serve as scapegoats (cf. Erikson 1966). In this regard, it may
also be useful to distinguish the decision to label certain entities as deviant from the
decision to punish the entities so labeled. Arguably, highly embedded entities are less
likely to be identified as deviants but, once identified, are more likely to receive
harsh punishment.
 180 COMPILATION OF REPORTS

13
The interaction between restructuring and account-formation deserves to be
highlighted. Often, beseiged managers reflexively attempt to deny, excuse or justify
alleged wrong-doings en toto. Restructuring, however, creates the option of selective
confession: Rather than offering an exculpatory account that may strain audience
credulity, the organization can admit that some limited aspects of its operations were
flawed and can then act decisively (and visibly) to remedy those flaws. Not only do
such selective confessions enhance long-run credibility, but also they generally
resolve the immediate crisis of meaning far more effectively than would an initial
wholesale denial coupled with a subsequent, contradictory restructuring.
RECOVERING PUBLIC TRUST AND CONFIDENCE
IN MANAGING RADIOACTIVE WASTE:
SUMMARY OF WORKSHOP PROCEEDINGS

NATIONAL ACADEMY OF PUBLIC ADMINISTRATION

Prepared for the U.S. Department of Energy

February, 1992
 RECOVERING PUBLIC TRUST AND CONFIDENCE IN MANAGING RADIOACTIVE WASTE 185

PREFACE
The Director of the Task Force on Civilian Radioactive Waste Management of
the Secretary of Energy Advisory Board, United States Department of Energy, asked
the National Academy of Public Administration to convene a group of approximately
one dozen individuals to attend a two-day, "state-of-the-art" workshop concentrating
on the pragmatic issue of how institutions establish their legitimacy and credibility
with significant members of their task environments.
The Academy invited a carefully selected group of managers and other indi-
viduals who been otherwise involved in the matter of institutional legitimacy to
participate in the Workshop. The group represented a diverse set of backgrounds and
organizational settings. The Workshop was held in Alexandria, Virginia, on October
31 and November 1, 1991. (See Appendix A.) Also in attendance as observers were
individuals from the Department of Energy staff members, contractor personnel, and
other interested parties.
Each individual reviewed in advance selected background documents relating
to the issue of the management of nuclear wastes. The Academy asked each of them
to reflect upon their personal experiences in dealing with the management of sub-
stances that offer the potential of harm to the public, and to prepare a brief presenta-
tion describing their experiences and presenting their observations as to the most
effective management practices that exist for dealing with such issues.
The purpose of the Workshop was not to propose priorities and program
directions, but rather was to develop and present the considered views of the attend-
ees on what is known about how organizations establish, maintain, lose, and regain
public trust and confidence. The National Academy of Public Administration has
been pleased to assist in this important effort.

R. Scott Fosler
President
186 COMPILATION OF REPORTS

INTRODUCTION
PROJECT ORIGIN
In 1989, the Secretary of Energy established the Secretary's Advisory Board
to provide him with independent advice on long-range strategic planning issues
affecting the Department. The Board is composed of approximately 30 individuals,
including energy producers, consumers, and policy analysis specialists with knowl-
edge of, and interest in, the broad set of activities for which the Department is re-
sponsible.
The Board conducts a large part of its business through Task Forces. As part
of its program, the Board's Task Force on Civilian Radioactive Waste Management,
which is chaired by Dr. Todd La Porte, University of California (Berkeley), requested
that the National Academy of Public Administration (NAPA) plan and conduct a
workshop on managing radioactive waste. The Workshop was to be designed to
involve experts familiar with "hands-on" management of hazardous waste, radioac-
tive waste, and related challenges involving the need for public trust and confidence.
In parallel, the Task Force requested that the National Academy of Science (NAS)
conduct a similar workshop involving scholars with expertise in research related to
organizational credibility. Representatives from both Workshops will engage in
discussions with the Task Force in a second workshop setting in February, 1992.
In its request to NAPA, the Task Force emphasized that the extraordinary
challenges of developing a national system for managing and disposing of radioactive
wastes were the initial stimuli for the Task Force and for its choice of the conditions
of institutional trust and confidence as a principal problem. In order to strengthen
public trust and confidence, the Department of Energy must attend both to the way
that it deals with individuals and organizations in the outside world and to its internal
policies and processes for meeting its responsibilities in radioactive waste manage-
ment.
In response to a request from NAPA and NAS staff for additional information
on the character of the nation's radioactive waste system, Dr. La Porte conceptualized
and characterized the United States radioactive waste management system for the
information of the participants, a number of whom could not be expected to have
such knowledge given the diverse spheres of expertise represented among the group.
 RECOVERING PUBLIC TRUST AND CONFIDENCE IN MANAGING RADIOACTIVE WASTE 187

THE WORKSHOP APPROACH

The Workshop was chaired by Academy Fellow, Peter L. Szanton. It con-
sisted of individual presentations by the participants based upon their personal experi-
ences followed by discussion and questions. A summary discussion took place on the
second day to capture the general conclusions of the participants and to identify and
consolidate their considered views regarding management practices that facilitate the
establishment, recovery and maintenance of public trust and confidence in institu-
tions.
The presentations were arranged in four groupings in the order shown below,
with the individuals involved in each shown as well:

Perspectives from the Environmental Community

• Dan W. Reicher, Senior Attorney, Natural Resources Defense Council

Management Lessons Learned in Nuclear Power

• Dr. John F. Ahearne, Executive Director, Sigma Xi
• Dr. Yves Kaluzny, Head, Nuclear Service, Ministry of Industry,
General Director of Energy and Raw Material, French Government

Management Lessons Learned in Establishing and Operating Waste Sites

• Don J. Womeldorf, Chief, Environmental Management Branch,
California Department of Health
• Charles W. Taylor, Chairman Emeritus, and Director, Nuclear
Fuels Services, Inc.

Management Lessons Learned in Clean-up Situations

• Maj. Gen. (Ret.) George H. Akin, President, Akin Associates
• Thomas P. Grumbly, President, Clean Sites, Inc.

, > - , * * "'%•_,--.Sfev. <-;W '.;•> i^;,-.:-^ -,. t>,'. s s ^ ; >>'•

188 COMPILATION OF REPORTS

Management Lessons Learned in Transportation

• Leo Tierney, Director, Hazardous Materials Management,
Union Pacific Railroad
• Mark Johnson, Director, Hazardous Materials Services,
Roadway Express, Inc.
Other participants in the Workshop were: Ms. Gail Bingham, Vice President
and Director, RESOLVE, World Wildlife Foundation; Dr. Daniel Metlay, Task Force
Director; Dr. P. Brett Hammond, the Director of Academy Studies for NAPA; and
Robert C. Crawford, the Project Director. Also in attendance were observers from
the Department of Energy, from several of the Department's contractor organizations,
and from other public and private institutions.

NATURE OF THE CHALLENGE

There was a general recognition among the participants that the challenge
involved with the management of radioactive waste is one of the most complex and
difficult issues facing our society. Some of the key characteristics of the waste
management challenge include:

• The substances involved represent a substantial threat to individual

and environmental well-being;
• Low public confidence;
• The public is reluctant to accept risks that are imposed upon them;
• The threat is essentially invisible;
• The signs of errors in management are hard to recognize;
• High level of oversight with intense government and public interest
group involvement;
• There are many different "publics", each with its own special interests
and concerns;
• People who were responsible for the problems may have gone away
long before they surface;
• The consequence of errors is high, and there is a low tolerance for
errors;
• Storage time encompasses generations;
 RECOVERING PUBLIC TRUST AND CONFIDENCE IN MANAGING RADIOACTIVE WASTE 189

• There are complications caused by the perceptions regarding past

activities in both the weapons-related and the civilian programs; and,
• Organizational relationships and apportionments of responsibilities are
complicated and complex.

In addressing the central issue of ways to ensure public trust and confidence,
the participants generally agreed that the basic issue is whether or not the public
believes that the government can and will do what it promises to do. They identified
two fundamental questions facing public managers in any effort to improve public
trust and confidence:

• What needs to be done to heighten capability in an organization to

make change possible?
• What must be done to change organizational and individual behavior
to achieve trust and confidence?

A consistent thread running throughout the workshop discussions was the

recognition by the participants that faith in public and private institutions and large-
scale technologies has been severely strained in recent years. Perhaps the most
visible example of this phenomenon is nuclear energy and radioactive waste manage-
ment.
The Department of Energy has acknowledged that prior governmental actions
in this area have affected its credibility - executive branch officials have told like or
made promises that were impossible to keep. The government has reneged on agree-
ments and its spokespersons have not been credible and/or were not capable of
dealing in an effective way with the concerned public. This is not to imply that the
Department of Energy and its associated contractors as a total system are continuing
along this path with a resulting low level of public confidence. Many individuals in
the management system at all levels have recognized the problems inherent in past
approaches and are endeavoring to improve the way that things are done. But the
department may still not fully accept conflicting views about policies, approaches, or
operations. Unfortunately, structure and tradition do not make such improvements
easy to come by.
190 COMPILATION OF REPORTS

The Department of Energy is perceived by many on the outside as rigid and

reluctant to divulge information. It is often seen as an agency that does not ask
outside experts to perform reviews and appraisals and to make suggestions, and it is
seen as tending not to involve affected outside parties in discussions of the need for a
certain approach or facility, preferring to fall back on "Congress has given us a
mandate", and the like. It is viewed by some as just going through the motions of
public interaction, paying scant attention to inputs from the public and making little
or no change in its preconceived directions based on the outside input. It is seen as
making a decision about what is a proper course of action and then trying to convince
the public that the Department's approach is the correct one.
In the view of a number of Workshop participants, the Department has not
answered some basic questions about radioactive waste and the facilities existing or
proposed to handle it, e.g. Why is this facility needed? Why is this option the one
that must be followed? Why must it be done at the sites currently under review?
Why must radioactive waste be stored underground?
One of the approaches to channeling public concern into constructive modes
is a proactive program of risk communication. While there has been no strong
legitimized statement emanating from the public process that gives the Department of
Energy the right and need to convince the public that it should have, e.g. -nuclear
power, a waste repository, etc., there may well be, in certain circumstances, a legiti-
mate role for government in laying out certain parameters for such activities. As
expressed in the report of a National Academy of Science study of risk communica-
tion:

Governmental attempts to influence citizens' beliefs

and actions can be justified only to the extent that some
legitimate public process has culminated in the decision
that using risk messages to influence behavior serves an
important public purpose. (Committee on Risk Percep-
tion and Communication, Improving Risk Communica-
tion, National Academy Press, 1989, pg. 90.)
 RECOVERING PUBLIC TRUST AND CONFIDENCE IN MANAGING RADIOACTIVE WASTE 191

SUMMARY OF VIEWS OF ACHIEVING PUBLIC TRUST AND

CONFIDENCE
The participants suggested a range of management practices that the Depart-
ment of Energy could initiate or, if in place, reinforce to increase the effectiveness of
its radioactive waste management activities. Most suggestions fell into one of two
categories: 1). Changing Approaches to the Public, or, 2). Enhancement of Organiza-
tional Capability.

OPENNESS
• Continued Secretary-level commitment and constant monitoring is
needed to ensure that the Department and its subsidiary organizations use a more
open approach is used in dealing with public stakeholders in the management of
radioactive waste.

• A clear, simple overall strategy for the program, presented concisely,

is needed for the public, the Congress, and Department staff.

• Appropriate levels of officials need to deal with public groups, in both

one-on-one and public gatherings - Senior level officials need to deal directly with
the public so that they gain first-hand knowledge of public concerns and so that the
public feels that it is dealing with individuals with policy and technical knowledge
and broad perspectives who can commit the Department to positive actions in re-
sponse to public concerns.

• The Department must avoid deciding that a facility is needed and then
to try to make the public agree with that decision. The public will ask, "Why must it
be operated here, now, or at all?" If the Department responds that such a question is
beyond the scope of the discussion, and that they want to talk about operating it, not
why it should be run, the dialogue is lost, and prospects for effective communication
and consensus become blurred.
192 COMPILATION OF REPORTS

• Achieve an understanding with local officials and the public in im-

pacted communities that when problems arise they will be surfaced, addressed and
dealt with in an open and responsive fashion and will be resolved as quickly and
effectively as possible, bringing to bear all available resources of the Department.

• When severe problems are recognized at a given location, experience

in a number of settings indicates that an effective method for dealing with such
situations is to throw the doors open, admit the problem, engage in open decision-
making with all stakeholders involved, and then continued aggressive, strong man-
agement leadership to work through the problem over time.

• Maintain continuing positive and open contact with public officials in

areas impacted by waste management operations.

• Endeavor to do a complete and understandable job of communicating

risk to affected parties in particular and to the nation in general.

• In view of the extraordinarily complex and potentially disastrous

situation faced in some locations, the Department should take exceptional measures
to keep the Office of Management and Budget and the Congress well-informed of the
status of the program and what needs to be done to protect the population and the
environment. This is especially evident given the resource limitations facing govern-
ment at the present time.

PUBLIC PARTICIPATION
• The commitment to more open and complete public participation and
involvement throughout the process needs to be institutionalized so that it is stable
from administration to administration.

• Consider developing a structured partnership approach to general

policy and planning issues and for specific sites. The Department could develop
planning teams involving major stakeholders throughout the deliberation and action
phases of a major activity. The would also monitor activities once in place.
 RECOVERING PUBLIC TRUST AND CONFIDENCE IN MANAGING RADIOACTIVE WASTE 193

• Consider options and approaches for implementing the French ap-

proach of highlighting and maximizing economic incentives and benefits to those
individuals living in close proximity to radioactive waste facilities. This approach
balances risks versus benefits.

• Expand the issues in which the publics affected by waste management

activities can be involved and have some input. This could include conducting
provisions for health screening over time in the communities surrounding a facility.

• Engage with the public and public representatives in joint data-gather-

ing as well as in sharing data with the public after the government has developed it -
for example, in site characterization activities.

• In cases of the sort of Yucca Mountain, in which the Department is

charged with characterization of a site, it should supplement the layers of independent
oversight of the characterization by setting up a small group independent of the
Department with the ability and funds to work. This independent review group
would feed back information to the Department and the scientific community repre-
sentatives working with it.

• Obtain meaningful input from the public before decisions are made
and urge the Congress to do the same before legislation is passed. For example, in
addition to the traditional hearing process, key Congressional committees might be
encouraged to engage key stakeholders as a group in exploratory and planning teams
as it considers its approach to dealing with radioactive waste management issues.

• Design relationships with outside stakeholders in such a way that

incentives for the groups are aligned with their self-interest. Consider their inputs
seriously so they have an impact upon the decision-making process. For example,
offer public interest groups the opportunity to monitor and evaluate implementation.

• Where the Department does not adopt stakeholder recommendations

and/or suggestions, it should clearly communicate the reasons for non-adoption.
194 COMPILATION OF REPORTS

• Find and use additional ways to ensure that all of the most directly
affected publics have access to their own independent sources of technical knowl-
edge, such as structured linkages to universities and non-profit technical institutions.
Respond to such expert inputs and judgments openly, rather than treating them as an
unwanted complication that slows things down.

• Consider forming teams of responsible individuals working in the field

of radioactive waste disposal and of individuals from communities near well-man-
aged radioactive waste management facilities. Dispatch such teams into communi-
ties near, or being considered for, waste facilities to: provide real-life experiences of
how waste management can be properly done; provide access to technical resources;
and demonstrate that solid and concerned people are involved.

• The transportation industry has developed an activity called, Transpor-

tation Community Awareness and Emergency Response (TRANSCAER). This is a
partnership between railroads, trucking companies, the chemical industry and com-
munities. The consortium provides information, experts, and other resources that the
communities can use in planning to minimize problems caused by the transportation
of hazardous materials through the communities. A technique of this sort might be
useful in radioactive waste management.

• An industry consortium, the Hazardous Materials Advisory Council,

advises the Department of Transportation and is composed of trade associations, the
Association of American Railroads, the American Trucking Association, chemical
companies, container manufacturers and others. A similar mechanism might gain
additional meaningful public interest input into planning for the radioactive waste
management program. The mix of such a group should likely be expanded to include
representatives of the environmental public interest groups.
 RECOVERING PUBLIC TRUST AND CONFIDENCE IN MANAGING RADIOACTIVE WASTE 195

BEHAVIOR
• Develop and promulgate a clear, simple overall program strategy. It
should demonstrate that openness is the watchword, provide guidance as to how the
Department plans to proceed to implement the approach, and assign accountability
for making this approach an integral and effective part of the Department's opera-
tions.

• Provide the public with more, and more understandable, information

dealing with both the nature of the need to manage radioactive waste along with the
technical options for doing so, and the implications and risks associated with each.

• Educate Department staff and other stakeholders who will be involved

in the planning process in dispute resolution techniques. Encourage them to partici-
pate in a process of education in this area and apply the lessons learned as they
cooperate with each other in the planning process.

• Radioactive waste management is a complex and sensitive subject. Do

not err on the side of low risks and low dollar costs when planning to deal with it

• Consider uncertainties of policy adjustment and resources. When

promises are made - keep them!

• Indications are that the notification provisions provided for in negoti-

ated agreements dealing with the management of radioactive waste are not always
utilized as required by the agreement. If trust and confidence is to be maintained,
such provisions must be followed to the letter. If true joint planning and stakeholder
participation is in place, the stakeholders will be aware of the need to and the reason
for revisions in milestones and the like well before any official notification is dis-
patched.

• The Department might consider using negotiated rule-making in

selected instances in an endeavor to develop dialogue along constructive as opposed
to adversarial lines.
196 COMPILATION OF REPORTS

• Reopen, reevaluate previous decisions (including those made years

ago such as no reprocessing of fuel from the civilian reactors) to determine their
current efficacy given changes in technology and public attitudes. Make certain that
the basic issue as to whether certain things still need to be done at all is fully ad-
dressed.

ORGANIZATION
It is clear that behavioral change is not sufficient. The Department must have
the necessary capacity to make it effective. This section provides the views of the
Workshop participants concerning ways to enhance the Department's capability to
accommodate the behavioral changes suggested above:

• Keep organization structure simple and responsive.

• Ensure that the assignment of roles among the various responsible

agencies, private companies and the public and related groups are clearly specified
and understood. Identify the significant stakeholders and spell out their roles care-
fully and fully.

• Ensure that technically qualified staff represent the Department in

dealing with public groups as they participate in program planning and implementa-
tion. Mores staff may be needed.

• Provide sufficient authority to project officials to enable them to

handle normal decisions and problems at their level.

• Eliminate differentiation between the management of defense-related

waste and civilian waste.
 RECOVERING PUBLIC TRUST AND CONFIDENCE IN MANAGING RADIOACTIVE WASTE 197

• Establish a new agency or quasi-governmental entity to have as its

sole responsibility the accomplishment of nuclear waste management and clean-up.
Given the negative image that is the heritage of the past nuclear activities in this
country and the overwhelming challenges facing the nation in dealing with the
radioactive waste and clean-up problems, this is worth discussing again with Con-
gress and the Administration.

• Continue to establish signed between the Department and various

states which permit the states to oversee certain Department operations. These have
postive effects in the states that have them.

• Consider having the public health impact assessments for waste sites
performed by health authorities with community involvement rather than by entities
connected with the Department. Implications are that more credence would be given
to such assessments from a detached institution.

PROCESS
• Increase the range of decisions that are subjected to consultation with
all affected parties, and be willing to cancel, modify or replace decisions when
knowledgeable outside sources provide inpute that indicates change is needed.

• Develop heightened openness to change. For example, consider

options that may be counter-intuitive to approaches based upon traditional technical
analysis, especially where public attitude and motivation are concerned. Do not let
the technical solution be the only determinant of policy and actions.

• Make a conscious and continuing general effort to break from tradi-

tional patterns when it is clear that they are no longer workable given changed and
changing circumstances. Build in incentives for employees to stimulate changed
approaches and avoid at all costs falling into the siege mentality that so easily results
from constant attacks from without and frustrations within.
198 COMPILATION OF REPORTS

• Reduce restrictions on information about the program in general and

individual projects in particular.

• Set specific and understandable objectives for project activities with

realistic timetables. Subject objectives to critical, independent review and then move
ahead, indicating the actions for adjustment and modification that were taken based
on the reviews.

• Use the National Environmental Policy Act provisions vigorously and

positively. Do not arbitrarily or frivolously exclude sites just because they pose
problems. Be aggressive in setting and/or accepting strong and reasonable environ-
mental standards and pursue their achievement vigorously.

• In dealing with difficult situations in waste management facilities

issues such as are faced at Hanford, consider the establishment of a "remedy selection
process" approach. This involves organizing a group of outside, concerned stake-
holders is organized to assist with the assessment of options for correction of prob-
lems and utilization goals for portions of the reservation and to help in the implemen-
tation and assessment stages.

• Work to obtain from Congress and utilites the funds needed to satisfy
its advertised clean-up plans. Where Administration decisions provide lower funding
than that required, the Department needs to take the lead in revising its plans and
informing affected parties of the implications of the reduction.

• When special shipping is required, contact carriers and all jurisdictions

through which the shipment is being transported and provide detailed information on
arrangements, risks, etc. Department representatives must accompany such ship-
ments. There must be complete candor if state or local units, such as Governor's
offices and emergency responders, and private sector parties are to be supportive and
prepared to assist in safe passage.
 RECOVERING PUBLIC TRUST AND CONFIDENCE IN MANAGING RADIOACTIVE WASTE 199

• Communicate better with transportation carriers. Carriers lack clarity

about the specific departmental capability to deal with emergency responses to
transportation accidents.

• Provide local emergency responders and carriers with the same level
of information and training about defense-related waste as they have for dealing with
accidentsinvolving civilian radioactive waste.

DEEPER THEMES AND GENERAL CONCLUSIONS

The participants in the Workshop agreed that there are individuals in the
Department of Energy and its associated institutions who are already utilizing tech-
niques designed to improve public trust and confidence. Although the participants
identified numerous problems with the Nation's current approach to the management
of radioactive wastes, and identified management practices that could be applied to
improve the situation, there was consensus among those participants with knowledge
of the Department's activities that clear improvements have been made during the
administration of the present Secretary of Energy.
The Department has adopted a more proactive stance, with more emphasis
upon identifying, surfacing and endeavoring to deal with problems at an early stage.
For example, upon his assumption of the office, Secretary Watkins acknowledged that
there are serious problems in the civilian radioactive waste management program.
He restructured it, stretched out program milestones to be more realistic, obtained a
well-respected program director, began to reach out to the public in a more effective
way, and achieved a fuller and more open airing of technical and institutional con-
cerns. Without question, and with the full recognition that difficult tasks, serious
problems, and unresolved issue remain, the program is generally in better shape now
than previously.
Workshop participants were asked to consider the radioactive waste issues
from internal and external perspectives. They agreed that there was much
interaconnection between these internal elements (such as management control
systems) and external components (such as public education), and that they had to be
considered together. There are, for example, legislative and executive branch re-
quirements designed to enhance the Department of Energy's management efficiency.
200 COMPILATION OF REPORTS

These are important issues, but no amount of effective management alone will
achieve public trust and confidence in this area.
One of the important points that emerged from the Workshop deliberations
was that the Department of Energy cannot expect to do the radioactive waste manage-
ment job alone - and it should not be expected to do so. The Department must work
to mobilize the support of others in the public and private sectors by bringing them in
as fuller partners in the process than has been the case in the past. The potential
partners must respond and contribute in appropriate ways.
One of the foundations for an effective partnership is a consensus on major
issues facing the Department as it moves to meet its responsibilities. The workshop
participants noted the lack of consensus on past or existing issues, such issues as
Yucca Mountain, MRS, and weapons site clean-up. A more comprehensive partner-
ship approach could of assistance to the Department as it moves toward a true na-
tional system for dealing with the radioactive waste problem.
Workshop participants discussed the following approaches to improving
public trust and credibility:

OPENNESS AND MEANINGFUL PARTICIPATION

The prevailing themes running through the Workshop discussions were "open-
ness in the process" and "meaningful participation". "Openness" was seen by the
participants as the key to the achievement and maintenance of the public trust and
confidence that is deemed essential if the radioactive waste management program is
to achieve its goals. "Meaningful participation" was seen as encompassing the
concept of openness, but going beyond dissemination of facts, problems, and ap-
proaches. Participation would provide opportunities for interested parties in the
actual decision-making process. One can have openness without meaningful partici-
pation, but one cannot have meaningful participation without openness.
Participants believed that the lack of openness and meaningful involvement
by the public and its representatives in the past has been a major factor contributing
to the problems that the United States faces in the managing of radioactive wastes.
The participants recognized that in the context of traditional management practices,
the involvement of "outsiders" in the process has often been considered too time
consuming, arduous, not helpful. From the manager's point of view, never/seldom/
 RECOVERING PUBLIC TRUST AND CONFIDENCE IN MANAGING RADIOACTIVE WASTE 201

sometimes works. However, most Workshop participants thought that the character-
istics of radioactive waste management require responsible managers to operate as
openly as possible.
Workshop participants recognized that openness in the management of the
radioactive waste program requires a conscientious effort at all levels of the organiza-
tion to identify all parties with a legitimate interest (the stakeholders) in an activity
and to inform these parties at an early point in the planning and decision-making
processes. This proactive comunication should continue through the implementation
and monitoring phases.
Effective openness gives stakeholders access to all relevant information and
expertise. Openness also means that departmental officials must pay serious attention
to stakeholder views, and be willing to adjust plans and implementing actions based
on their inputs and thus help the nation achieve its goals. At the same time, it must be
recognized that there is not just one "public" out there to be dealt with. There is a
complex of "publics", each with its own needs and concerns. Thus the public must
be carefully considered and various needs and concerns addressed as best they can be
given resources available.
The challenge is to achieve a balance in which both the responsible public
managers and all legitimate interested parties and communities share relevant infor-
mation. While Workshop participants recognize it is not their role to specify to the
Department of Energy precisely what that balance should be, they suggest the Depart-
ment needs to search for a better balance in this regard than has existed in the past or
exists at the present time.
A point made in the Workshop by an number of the participants was that, by
and large, the American public, when it is adequately informed and involved, is quite
understanding of the difficulties faced by government in dealing with severe prob-
lems in the face of constrained resources and other limiting factors. People have
shown that they will work within these constraints if brought along as part of the
team, and if they are honestly and openly dealt with. It is essential, however, that
they have the feeling that the government representatives are trying to do the best job
that they can in the face of difficult constraints over which they often have no con-
trol. One of the examples of such community understanding and cooperation being
mobilized in the face of a perceived severe community threat was discussed in the
202 COMPILATION OF REPORTS

Workshop in the context of the aggressive activities to deal with hazardous materials
clean-up and management at the Aberdeen Proving Grounds.

CHANGE IN THE MANAGEMENT PARADIGM

There was a consensus apparent among the Workshop participants that the
Nation is undergoing a paradigm shift about the nature of the management of public
organizations, particularly those which have a direct impact upon the lives of our
people or of the world in which we live. The change involves a movement away
from detailed pre-planning and analytic comprehensiveness, to participatory planning
and learning and acceptance of the inevitability of some degree of error. It also
brings with it a need to reconsider purely technically based courses of action and to
make better decisions that take into account changing conditions and the needs and
perspectives of those citizens and institutions who are affected by the decisions and
resulting actions.
The Workshop participants believed that the Department of Energy, especially
given the high degree of sensitivity and complexity involved in radioactive waste
management, would be well-advised to work more aggressively to find ways of
sharing responsibility and authority with affected parties to get the job done. At the
same time, all concerned - the people and neighborhoods involved and/or affected,
the technical community, Department management, its contractors and other support-
ing organizations, the Administration, and the Congress, must all recognize that such
a paradigm change requires serious attention and work by all such segments of the
affected institutions if it is to be properly accommodated and turned into an effective
tool for concrete achievement. Movement in this direction may well result in a need
to gain agreement for adjustment of time lines in given situations, because of the time
required to achieve the full benefits that could accrue from such a move.
A staff member of the Office of Technology Assessment (OTA) in the Con-
gress described an interesting approach to satisfying the need to consider the needs
and perspectives of those citizens and instituions who are likely to be affected the
actions of government. The OTA is known for having a well-honed and comprehen-
sive approach to providing for extensive meaningful involvement of the principal
stakeholder groups and individuals in the various studies that it undertakes. Greater
participation of all stakeholders, while possibly requiring longer timelines in the early
 RECOVERING PUBLIC TRUST AND CONFIDENCE IN MANAGING RADIOACTIVE WASTE 203

part of activities, could result in a much less adversarial process than the current
process, with less time being required overall. For example, it would appear that, to
a considerable degree, the heavy use of litigation by public groups may be associated
with the ineffectiveness or unavailability of cooperative means. A move to reduce
the adversarial aspects of policymaking could result in less time being required to get
the job done with far less residual bad feeling among the parties.
Inherent in such a role for stakeholders is the need for them to accept some
responsibility for working constructively to make the process work. In this connec-
tion, a number of the participants made the point strongly that the Department must
ensure that the stakeholders involved as partners in the process are legitimate repre-
sentatives of a key segment of the public, and that individuals with private or hidden
agendas are not enabled to disrupt an essential activity for their own ends.
Openness and meaningful involvement are critical in ensuring public trust and
confidence. However, it must remain clear that the constituted governmental author-
ity will retain the final decision authority for the ultimate course of action.

THE BOTTOM LINE

The Workshop participants recognized the extreme challenge faced by the
Department in dealing with the issue of the management of radioactive waste. The
situation has developed over many years, societal conditions and relevant technolo-
gies are dynamic, the cast of characters has been continually changing, and the nature
of the hazards posed to the population and the environment are substantial.
The specific points and general conclusions presented in this report summa-
rize the ideas that emerged during the Workshop. The participants hope that their
observations — building as they do on the themes of openness, meaningful public
participation, and a fundamental change in traditional management approaches —
will be of assistance to the Department as it moves to dispel public concerns in this
area and to get on with the task of managing the nation's radioactive wastes in a safe,
efficient, and effective manner.
204 COMPILATION OF REPORTS

APPENDIX
 RECOVERING PUBLIC TRUST AND CONFIDENCE IN MANAGING RADIOACTIVE WASTE 205

WORKSHOP PARTICIPANTS

Peter L. Szanton - President, Szanton Associates; Former Associate Direc-

tor, U.S. Office of Management and Budget; Research Director, Commission on the
Organization of the Government for the Conduct of Foreign Policy; Fellow, Institute
of Politics, JFK School of Government, Harvard University; President, New York
City-Rand Institute. (Chairperson).

Dr. John F. Ahearne - Executive Director, Sigma Xi; Vice President and
Senior Fellow, Resources for the Future; Chairman and Commissioner of the Nuclear
Regulatory Commission; White House Energy Office and Deputy Assistant Secretary
of Energy; Deputy and Principal Deputy Assistant Secretary of Defense; Office of the
Secretary of Defense.

Maj. Gen. (Ret.) George H. Akin - President, Akin Associates; Command-

ing General, U.S. Army Test and Evaluation Command and Aberdeen Proving
Ground; Deputy Commanding General, U.S. Army Communications-Electronics
Command; Assistant Chief of Staff for Logistics, C4/J4/G4, Combined Forces Com-
mand/United States Forces Korea/Eighth U.S. Army; District Adviser, Vietnam, and
other key assignments in logistics, operations research analysis, and maintenance at
Ft. Lee, VA, Frankfurt, Germany, Anniston, AL, Chambersburg, PA, and Ft. Hood,
TX.

Gail Bingham - Vice President and Director, RESOLVE, World Wildlife

Federation; Senior Associate at RESOLVE, Center for Environmental Conflict
Resolution (became part of The Conservation Foundation in 1981); planning posi-
tions in India and in local government in Washington State; National Board Member
and former President of the District of Columbia Chapter of the Society of Profes-
sionals in Dispute Resolution; Chair of the Board of Directors of the Western Net-
work in Santa Fe, NM.
206 COMPILATION OF REPORTS

Thomas P. Grumbly - President, Clean Sites, Inc.; Executive Director,

Health Effects Institute; Partner, Temple, Barker and Sloane, Inc. (Consulting); Staff
Director, Investigations and Oversight Subcommittee of the House Committee on
Science and Technology; Associate Administrator, Food Safety and Quality Service,
U.S. Department of Agriculture; Executive Assistant to the Commissioner, Food and
Drug Administration; Examiner, U.S. Office of Management and Budget.

Mark Johnson - Director, Hazardous Materials Services, Roadway Express;

Member, Board of Directors, Hazardous Materials Advisory Council (HMAC); Past
Chairman, HMAC Education and Training Committee; Past Chairman, Hazardous
Materials Committee of the American Trucking Association, Member, Summit
County, Ohio, Emergency Planning Committee.

Dr. Yves Kaluzny - Head, Nuclear Service, Ministry of Industry, General

Direction of Energy and Raw Material; Head, Fuel Cycle Department, Direction for
the Safety of Nuclear Installations, Ministry of Industry and Ministry of Environ-
ment, French Government; Laser Fusion Research; Engineer, LaHAGUE reprocess-
ing plant.

Dan W. Reicher - Senior Attorney, Natural Resources Defense Council;

Adjunct Professor, University of Maryland Law School; Assistant District Attorney,
Environmental Protection Division, Massachusetts Attorney General's Office, Law
Clerk, U.S. District Court, Boston, MA; Staff Member, President's Commission on
the Accident at Three Mile Island; Legal Assistant, U.S. Department of Justice,
Hazardous Waste Section.

Charles W. Taylor - Chairman Emeritus and Director, Nuclear Fuel Ser-

vices, Inc.; Manager, Nuclear Fuel Technology, Manager, Commercial Reprocessing
Plant Design and Construction, Manager, Design and Construction of Reactor Materi-
als Plant, W.R.Grace; Research Technologist and Pilot Plant Operator, National Lead
Company; Research and Development Chemist, Vitro Corporation of America (Man-
hattan Project).
 RECOVERING PUBLIC TRUST AND CONFIDENCE IN MANAGING RADIOACTIVE WASTE 207

Leo Tierney - Director, Hazardous Materials Management, Union Pacific

Railroad; the last thirteen years of his thirty-one years with Union Pacific he has been
responsible for assuring hazardous materials regulatory compliance and for managing
hazardous materials emergency response efforts; prior to this period he served in
various positions in the engineering department; currently, Vice-Chairman of the
Hazardous Materials Advisory Council (a trade organization which represents ship-
pers, carriers, and container manufacturers).

Don J. Womeldorf - Chief, Environmental Management Branch, California

Department of Health Services; also, while with the Department, has had administra-
tive responsibilities in vectorborne human disease management, water management,
radioactive materials management, and other programs relating to protecting human
health through environmental surveillance and control.

DEPARTMENT OF ENERGY REPRESENTATIVE

Dr. Daniel S. Metlay - Director, Task Force on Civilian Radioactive Waste

Management, Department of Energy; Research Scientist, Brookhaven National
Laboratory; has been involved in several studies of nuclear waste management,
including the Nuclear Regulatory Commission's Task Force on Goals and Objectives,
the Office of Science and Technology's Interagency Review Group on alternative
technological strategies, and the Office of Technology Assessment's Report to the
Congress; has conducted research on public attitudes toward technology, on error
correction in Federal bureaucracies, and on the role interest groups play in the regula-
tion of health and environmental risks; was a Professor at Indiana University and the
Massachusetts Institute of Technology.

NAPA STAFF

Dr. P. Brett Hammond - Director of Academy Studies, National Academy of

Public Administration; Associate Executive Director and Acting Executive Director,
Commission on Behavioral and Social Studies and Education, National Academy of
Sciences; Faculty Member, University of California at Los Angeles and Berkeley,
208 COMPILATION OF REPORTS

working in American State, local and national government and bureaucracy policy
analysis, science policy and organization theory; served as Associate Editor of Policy
Sciences and as a consultant to the Office of Technology Assessment.

Robert C. Crawford - Project Director, NAPA/DOE Workshop; Executive

Vice President, CSG Holdings, Inc.; President, CEO Support Services; Director,
Intergovernmental Science Program, National Science Foundation; Assistant Associ-
ate Director for Research Utilization and for Civil Preparedness Planning, Federal
Emergency Management Agency; Deputy Director, State and Local Programs, and
Deputy Director for Federal Coordination, Office of Economic Opportunity; Program
Analyst, Division of Military Application and Executive Assistant to the Manager,
Schenectady Naval Reactors Operations Office, Atomic Energy Commission.

HIGHLIGHTS OF PARTICIPANT PRESENTATIONS

DAN W. REICHER - As a member of the environmental public interest

group community, Mr. Reicher presented views on radioactive waste management
from that perspective. He began by indicating that his organization, and, in fact,
several of the national environmental organizations, have long supported geologic
disposal of nuclear waste, but he indicated that his organization has long opposed the
monitored retrievable storage concept. His organization feels that nuclear power as
an energy source may warrant further study, but that the industry should compete on
a level economic playing field. Mr. Reicher commented that past program implemen-
tation activities and the current program, which provides for the characterization of a
geologic site in only one state, are not likely to cause a large segment of the public to
have trust and confidence in the program.
With regard to the issue of improving public trust and confidence, and after
noting Secretary Watkins' acknowledgement of past problems and his moves to
improve the program, Mr. Reicher advanced five proposals for further improvement:
1). the Department must continue to acknowledge past mistakes as they are noted and
really endeavor to change; 2). public access to information and lines of communica-
tion must be improved; 3). it must be recognized that there are many publics to be
 RECOVERING PUBLIC TRUST AND CONFIDENCE IN MANAGING RADIOACTIVE WASTE 209

dealt with; 4). recognize that merely providing mechanisms for public participation is
necessary by not sufficient; and, 5). standard setting must result in the establishment
of strict standards with tight enforcement.

DR. JOHN F. AHEARNE - Dr. Ahearne began by posing several fundamen-

tal questions that the Department is facing: How does one get Yucca Mountain ap-
proved as a repository? How does one get the public to accept the clean-up programs
at Hanford and Rocky Flats and so forth? How does one get the public to accept
starting up at Rocky Flats and Savannah River? How to improve the public confi-
dence in the Department? He pointed out that these are separable questions, they are
not the same. He mentioned a study which he chaired for the National Academy of
Science which resulted in a book dealing with the communication of risk - and
highlighted the fact that the Department of Energy's programs are almost all on the
wrong side of the factors affecting how risk is perceived and evaluated. They are
unfamiliar, they are not understood, they are not controllable by individuals, and so
forth - it has nothing to do with the Department of Energy. Programs such as the
radioactive waste program fall on the side of the equation that increases public
concern.
A second problem is that there is no readily acceptable need or benefit. What
is the Department's answer to the question of why does it have to be built here? - or
even, why does it have to be built? With regard to a geological repository, there
seems to be no good standing answer to the question of why it needs to be built. Dr.
Ahearne then lists some specific Department problems like lack of credibility based
upon past performance, a feeling of many that the Department is incompetent, and
the weapons program which is an albatross around the neck of any waste manage-
ment program. In the conflict and confusion over risk questions often the communi-
cation process is at fault or at least exacerbates the problem. Risk communication in
the public debate over radioactive waste management is successful to the extent it
raises the level of understanding of relevant issues or actions among the affected and
interested parties. People tend to strongly believe that the costs and benefits are not
equally distributed, they do not agree on which harms are most to be avoided or
which benefits are most worth seeking, and finally, as citizens in a democracy they
really expect to participate in a debate and want their participation to lead to some

;-^,'y^~T^-4'.!'••./>',;• •>•* " . v . ' ' ' « ^ ; - « i ^ i « : :'B#-.V-;.^*i:?>""~ -:*. V-ZI^^^'-V-.T':: >, K- •• • ^ ' 7
210 COMPILATION OF REPORTS

effect. Many times Department staff representatives sent to deal with the public are
not competent, they are restricted in what they can say, they cannot answer questions,
they cannot engage in discussion. The Department in general is rigid and does not
listen - it does not like to do critical reviews and it does not like to have
knowledgable outside experts do critical reviews. It needs to have more dialogue and
openness.

DR. YVES KALUZNY - Representing the French government, Dr. Kaluzny

focused in his presentation on his country's large scale nuclear energy program with
regard to both the power plant and the fuel cycle facilities. He indicated that nuclear
energy now generates about 65,000 megawatts of power (75% of electricity produc-
tion), with five more plants under construction with more planned by the end of the
century. Dr. Kaluzny described the plants involved in the fuel cycle, and indicated
that there are two surface radioactive waste repositories at the present time, with
additional interim storage facilities. The program originated as a military program in
the 1950's - the substantial civilian power activity began in 1974 after the interna-
tional oil crisis. The program is deemed to have succeeded for several reasons - in
particular, the public's confidence in French nuclear technology as it was developed
in the weapons program, the considerable political stability over the period during
which the development was accomplished, and the significant capability of the
country's industrial organizations.
As to the choice of sites, the majority were selected before the Three-Mile
Island accident by a process of pre-selection and then negotiations were begun with
local political leaders. In this process, the leaders were allowed to chose one of the
sites, and explanations were then made to explain the economical advantages that
would inure from the establishment of such a nuclear power plant in their area. In
connection with existing sites, the opposition never stopped any construction, mainly
due to the good confidence and trust that the local people had in the utility company
involved. Recently, development has become more difficult due to the emergence of
the ecological movement. Still, no existing nuclear sites, save for one which became
a symbol for the anti-nuclear movement in France, have been abandoned because of
public protest. Dr. Kaluzny indicated that there is a need for improvement in the
general agreement or consensus about the desirability of nuclear power in France. He
 RECOVERING PUBLIC TRUST AND CONFIDENCE IN MANAGING RADIOACTIVE WASTE 211

advanced certain requirements for public trust and confidence - such as, good com-
munication on what nuclear energy is and why it is needed, good information on
safety considerations, communication before site selection, local committees at each
site with wide representation who are kept fully informed, opening of the facilities
for visits, and use of general access information systems to gain details on nuclear
status in the country. He pointed out that there is no opposition to surface repository
sites in France, but that, while there has been significant movement toward the
identification of a geologic site, there is substantial opposition to this approach.
This activity has resulted finally in a decision to identify two sites which will
be subjected to a 15-year study. At that point there will be a debate and a decision
will be taken on whether or not to have a geologic repository, and which of the two
sites studied, if either, will be designated to serve that purpose. Dr. Kaluzny described
the French reprocessing facilities, the difficulties encountered in siting a new plant
and how they were overcome by strong local involvement, and in particular, by the
positive economic impact on the area. Many jobs have been created, local tax rev-
enues have increased by 12 times in ten years, and grants and loans for economic
development have been awarded. The key is that a true partnership was established
and benefits have been factored in to counterbalance the inherent risks. Plant capac-
ity has been increased, with absolutely no problem of acceptance.

MAJ.GEN.(REX) GEORGE H. AKIN - General Akin described lessons

learned at Aberdeen Proving Ground during his assignment there as Commanding
Officer. While he was dealing with the serious environmental problems that he
encountered upon his arrival at Aberdeen, the General also had to deal with similar
issues and problems at other facilities under his command such as the White Sands
Missile Range, Dugway Proving Grounds, the Cold Regions Test Center in Alaska,
and the Tropic Test Center in Panama. He developed a model for clean-up activities
that was ultimately adopted by the Department of Defense for implementation across
that system.
As General Akin assumed command, there were three senior civilian employ-
ees under indictment for pollution violations, and the installation was not doing at all
well in managing the hazardous materials which were a part of or which emanated
from its activities. Relentless press coverage was occurring, the Federal Bureau of
212 COMPILATION OF REPORTS

Investigation, the Environmental Protection Agency, State and local agencies all were
involved. The organization was in disarray, there was a high level of workforce
distrust, and no single entity was in charge. General Akin opened up the gates to all
parties, calling a meeting to discuss the situation and what was going to be done
about it with all parties affected, the Aberdeen staff, EPA, State agencies, the Balti-
more Sun, etc. These meetings were held every month - a two-hour session, chaired
by the General. The goals of the meetings were twofold: to inform all parties of the
problem and to let them know that they were part of the solution, and, to restore
credibility by demonstrating in the open that the organization was trying to clean up
its act and do what was right.
The staff briefed the General in the open about problems and corrective
actions - no holds barred. Strong management action was taken to specify policy and
operational controls in activities affecting environmental quality, including disciplin-
ary measures for improper actions whenever appropriate. Significant dollar resources
were aggressively sought to assist in the clean-up activities and much of that re-
quested was obtained, some through the Superfund authority. Staff was trained and
motivated to perform properly, close work was done with both Federal and State
environmental protection staff members, and significant efforts were expended in
educating people both about the problems and about what was being done to resolve
them.
General Akin advanced numerous suggestions about how managers can
improve public trust and confidence, among these are: elevate issues to the manage-
ment level where people have the authority and can command the resources to do
something about a bad situation, be open and honest, get all interested parties in-
volved and helping with the solution, prioritize problems in order to make the best
impact with available resources, and get the media on your side. He stressed that
there comes a time when one must make the best decision possible given what is
known at that time - one must bite the bullet, do what needs to be done, and move on.

THOMAS P. GRUMBLY - Mr. Grumbly began by observing that, while

there may be a potential trade-off between the time it takes to get to solutions to
problems and the mobilization of the necessary level of public trust and confidence to
make truly meaningful decisions, his experience is that if more time is spent up-front
 RECOVERING PUBLIC TRUST AND CONFIDENCE IN MANAGING RADIOACTIVE WASTE 213

in the decisionmaking process, much less time is spent at the end fighting problems.
However, to achieve recognition of this is difficult, expecially if a situation is viewed
as a significant emergency that appears to be dealt with immediately.
Mr. Grumbly, while acknowledging the extreme difficulty of the radioactive
waste management problem, expressed his feeling that there are ways to approach it.
He described the American culture as an adversarial one in which we believe that
truth comes out of an adversarial process in which both sides present their best case
and out of that come the best solutions to problems. Accompanying that, he sees a
low level of political participation and education in the society at the moment. Mr.
Grumbly pointed out that when these characteristics are coupled with issues that
involve scientific bases that are not established, large problems are created.
Mr. Grumbly's organization is involved in the clean-up of waste sites. In-
volved in this are: the achievement of agreement among responsible parties as to
what each will have to pay, the oversight of the technical side of clean-up, and die
management of clean-ups on site. In Mr. Grumbly's opinion, it is important in
dealing with the sensitive and complex issues surrounding radioactive waste manage-
ment that managers remain on the lookout for opportunities to address the issues and
problems that are counter-intuitive in the sense that one does not always go with the
best analytical approach. In particular, he feels that the right people have to be
involved from the start if the credibility that is so critical to organizational achieve-
ment is realized. These people have to have a significant degree of independence and
appropropriate incentives.
Mr. Grumbly emphasized that science cannot be imposed on the public - one
must develop a dialogue about what the right answer is and what the uncertainties are
with a view to achieving a gradual convergence of views rather than having one party
dominating the other. He sees a need for the scientific community to be more em-
powered in terms of the influence of their contributions to the process and a need at
the community level to ensure that all stakeholders in the process have the advantage
of the scientfic knowledge that is available. In radioactive waste areas, the Depart-
ment should keep the organization and the process simple and should find a better
way to set objectives that are specific to specific sites. Individuals at the field level
must have the authority to make decisions, the Department must keep its promises,
and continuing oversight of contractors is required.
214 COMPILATION OF REPORTS

DON J. WOMELDORF - Mr. Womeldorf has been involved in the planning

for a low level waste facility for California. He has also been involved in the devel-
opment of the Southwestern Compact with the States of Arizona, and North and
South Dakota. The California Department of Health Services had the lead in adopt-
ing regulations which were compatible with those of the Nuclear Regulatory Com-
mission. It was also instructed to find by a competitive process a private firm whose
job it would be to be a so-called license designee. The designee was to put all the
money up-front, to find a site, to characterize it, and then to apply to the Department
for a license.
If a license is granted, then the license designee will operate the facility under
the regulation of the Department. Mr. Womeldorf laid out in considerable detail the
process that has been gone through to date. Regulations were adopted, a license
designee was selected (US Ecology) in 1985, and in 1986 and 1987 they engaged in a
massive site selection effort. They began with 18 potential sites, finally selecting one
for characterization, submitting a license application in 1989. Review of the applica-
tion has been underway, while, at the same time, an environmental impact statement
is being prepared - a license decision is anticipated imminently.
The Department has a traditional advisory committee that provides overall
policy guidance and direction. It also has ad hoc advisory groups which are de-
scribed by Mr. Womeldorf as being quite important. These groups are set up to deal
with issues as they surface in such areas as liability, desing of trenches, fiscal review,
mixed waste management, etc. Typically, everybody who is affected is included in
the ad hoc groups. They have worked well. The company mounted a public infor-
mation and involvement campaign in the 18 candidate site areas, going out directly to
the citizenry. In addition to producing and disseminating printed information, they
provided money to the League of Women Voters to form and coordinate a citizens
advisory committee, with representatives of diverse interests in the three counties that
were involved. Three rounds of meetings were held in the affected desert communi-
ties, to collect comments, then coming back again to show what they had done based
upon the comments. Credibility was being established, and the meetings concluded
with a third round which ultimately reduced the candidate areas to three. Then, the
League of Women Voters formed local advisory committees in the three finalist areas
and these met frequently to review site characterization data as it was received.
 RECOVERING PUBLIC TRUST AND CONFIDENCE IN MANAGING RADIOACTIVE WASTE 215

Ultimately, the site determined to be the technically best was selected. The
committee for that site remains in place, and it is intended that it will become a
monitoring committee if and when the site becomes operational. In addition to all of
the above three public scoping meetings were held, with extensive public agency and
entity involvement. There were two hearings of a legislative rather than an
adjudicatory nature in 1990 and 1991, and work is still being done as a follow-up to
the latter hearing to consider somewhere in the range of 4,000 comments from 850
commentors.
As to lessons learned, Mr. Womeldorf stressed that public and public agency
involvement is essential, one must remember that whatever you do you will not reach
everyone who is affected, no matter what efforts are made you will not make believ-
ers out of enryone, a good tactic is to get people to visit operating sites, do not shrug
off perception because that is fact to the perceiver, recognize that there are hidden
agendas that you can not directly address and respond to the presented issues so they
will stand up in court, and remember that an agency has responsibilities assigned by
law, these must be satisfied, the work must go on - with as much public involvement
as can be accomplished.

CHARLES W. TAYLOR - Mr. Taylor reflected upon forty years of experi-

ence in the field of nuclear energy, zeroing in especially on his experiences in siting a
facility in the mid-1950's. He indicated that the societal setting at that time was
significantly different than that faced by managers in the radioactive waste manage-
ment area today. After looking at a site which met his company's specification in
terms of proximity to Oak Ridge and transportation, they encountered resistance in
the community for economic competition reasons. The locus of their search for a site
was then changed because they had no wish to be in a community which did not
really want their operation. They exercised one of their back-up options and focused,
and eventually sited their plant in a neighboring state where it remains to this time.
Mr. Taylor's point in terms of lessons learned was that do not put yourself in
an adversarial position from a siting standpoint if it is not absolutely necessary for
you to do so. In the second site, his company reached out to the community, having
local political people coming into the plant before it opened for familiarization. Mr.
Taylor emphasized the need to have good communication between the people who
216 COMPILATION OF REPORTS

are regulating the operation as well as the community itself. He has paid special
attention, as a plant operator to being particularly proactive and responsive to the
individuals regulating his operation, paying special attention to bringing regulators
from the Federal and State governments together to ensure consistency of then-
approaches. The need for communication has increased as more players have entered
into the ballgame and the company has remained proactive in dealing with them.
Mr. Taylor emphasized that solid safety practices and quality control are
essential. The key in this area is top level endorsement and follow-through to see that
high standards in these important functions are maintained at the operational level.
Should accidents occur, facts should not be held back, they should be revealed - the
community will be more understanding than might be expected. Such openness goes
a long way in maintaining organizational credibility. Mr. Taylor pointed out that,
while critical incidents in nuclear facilities are a most serious matter, care must be
taken to keep them in the proper perspective in terms of the real hazard posed. In this
connection, it is important to understand the waste management business from its real
health implications and not from what is perceived by the anti-nuclear community
and by individuals who do not understand the technical aspects.
Mr. Taylor indicated that technology exists for safely storing high level wastes
and made the point that at some future time when political and economic atmospheres
are right it might well be that the considerable valuable material placed in storage
might be recovered. Plans were made to close the fuel cycle through reprocessing
and reclamation at a New York State site in the 1950's, companies joined together to
do the job, the Congress gave a 15-year committment, and the fuel backlog to that
time of some 600 tons of fuel were processed before the plant was shut down. At that
point, the plant was expanded to a capacity of up to two tons per day in anticipation
of increased power reactor activity in the country. The plant did not operate at the
expanded capacity due to Nuclear Regulatory Commission earthquake requirements,
and it was turned over to the Federal government in 1972. Mr. Taylor's company was
cited by President Johnson for excellence in developing a working relationship
between the government and the private sector.
 RECOVERING PUBLIC TRUST AND CONFIDENCE IN MANAGING RADIOACTIVE WASTE 217

LEO TDERNEY - Union Pacific has about 29,000 employees and operates in
19 states and approximately 3,000 political subdivisions, with a resulting strong
grassroots presence in its area of operation. Mr. Tierney described their plant as 100
feet wide and 20,000 miles long. They transport more than 300,000 carloads of
hazardous materials a year - this represents about 8% of their business. State and
local government are a major factor to be taken into account as they perform their
business function, with much oversight involved from that quarter.
The company's public trust and confidence is tested on a daily basis. Union
Pacific has been operating at locations for more than 100 years. While they may
have used state-of-the-art practices in the disposing of wastes during that period of
time, 50 years ago the state-of-the-art was crude to say the least. They have grade
crossing problems, they have problems associated with the construction of new yards
or the expansion of existing yards, and they have problems associated with hazardous
materials transportation. They do have a common carrier obligation to transport
goods at a reasonable rate, and therefore cannot avoid risks by refusing to transport
certain commodities. They have to manage that risk. They have approximately 275
non-accident-related releases of hazardous materials during the course of a year, and
may experience six or so major accidents during a year involving hazardous materi-
als. These incidents with hazardous materials are probably the most frequent test of
their public trust and confidence level.
If such public trust and confidence did not exist, they would quickly lose their
ability to manage the outcome of a hazardous materials incident. Furthermore, there
would be heightened attempts at the Federal, State and local levels to regulate their
operations in an effort to improve hazardous materials transportation safety. One of
the best ways to establish trust and confidence in their activities is through their
emergency response efforts. The railroad has established routine contacts with the
emergency response community throughout their territory by frequent contacts by
their 23 special agents. The special agents are members of the railroad police depart-
ment and are trained in hazardous materials response. They provide training in for
fire fighters in fire stations, state fire schools and at regional conferences. In addition,
they sponsor a hazardous material tank car safety course at Pueblo, Colorado, twice
each year. They have good in-house capability to respond effectively to hazardous
materials emergencies that occur on the railroad through their special agents.
218 COMPILATION OF REPORTS

The railroad must maintain its credibility with the State and local govern-
ments with which it must deal. It maintains a presence in the state houses and con-
tacts local governments frequently. The local manager is the key at the community
level. To ensure public trust and confidence, managers must follow-through on
committments. They must respond positively to regulators and cooperate in ensuring
that standards are met. Mr. Tierney mentioned his involvement over the years with
the Department of Energy and identified several issues which have resulted in some
adversarial relationships. These included: special trains or dedicated trains, and the
training of local responders to handle transportation related emergencies - there is a
program to provide emergency response training on the civilian side, but not on the
defense side.
Mr. Tierney concluded by stressing the key role that the nuclear power indus-
try itself has in the matter of public trust and confidence and raised the issue of
reconsideration President Carter's rule on reprocessing with the thought that such
activity would lessen the pressures to get a geologic repository in place. He also
wonders why the nuclear power industry does not have the responsibility of design-
ing, constructing, owning and operating necessary waste disposal rather than relying
on the government.

MARK JOHNSON - Mr. Johnson's company, Roadway Express, Inc., does

not transport waste materials, including nuclear waste. It does, however, transport
alot of hazardous materials, particularly chemicals. The company has about 650
terminals, and operates in over 20,000 jurisdictions in all 50 states. It also has opera-
tions in Canada, Europe, and in American territories. In a typical day, the company
will pick up and deliver about 60,000 shipments, most of which are less than 1,000
pounds. With an average shipment time of four to five days, they have in transporta-
tion about 300,000 shipments at a given point in time. Public trust and confidence is
a factor in everyday operations in every Roadway facility.
By way of additional perspective on his personal approach to the issue of
public trust and confidence, Mr. Johnson mentioned that he is involved in his home
community in a county planning committee that deals with chemical issues, including
a local Superfund site. He is also Chairman of an enforcement committee that makes
recommendations to a local prosecutor on enforcement actions. Mr. Johnson
 RECOVERING PUBLIC TRUST AND CONFIDENCE IN MANAGING RADIOACTIVE WASTE 219

indicated that the trucking industry in general has a low level of public trust and
confidence. The public does not believe that there is a high level of oversight of the
industry, but, particularly with regard to the larger and more responsible carriers,
there is such high oversight and a high level of enforcement. In terms of the public
view, there is a high consequence of error in terms of disruption of traffic flow in
particular, with an accompanying low tolerance for such error to the perhaps tens of
thousands of individuals delayed by an incident on a beltway in a major metropolitan
area. The industry has had for years a siege mentality stemming initially from the it
is both Federally and State regulated, almost a public utility attitude. Also, the public
perceives the regulators as representing some other interest than the public.
The chemical industry, like the trucking industry does not enjoy a high level
of public trust and confidence, and the two together as they often are in transportation
are a bad combination. Both public and private sector organizations in the country
have very little credibility given past events. The lack of credibility comes more
from not telling the whole truth as opposed to lying. All institutions, and the trucking
industry is doing this, must begin to reach out to the public and make an effort to deal
with people on a local basis to become a part of the community. Confidence must be
gained, or objectives sought will not be achieved, in either the public or private
sectors. Mr. Johnson described the public outreach efforts underway in the trucking
industry, such as America's Road Team which visits communities to show that truck
drivers are real people and to enter into dialogue with the communities. Roadway
does this from its own locations as well.
He also described TRANSCAER, Transportation Community Awareness and
Emergency Response, a planning group which helps communities plan for transporta-
tion emergencies, offering information, resources - it reflects a partnership between
railroads, trucking companies, the chemical industry and the community and it seems
to be working. Mr. Johnson pointed out that matters clearly are the community's
business if they affect the health and safety of the community. Building trust and
confidence is a long process. One must listen to the community, not just interest
groups - there must be willingness to change plans to accommodate the desires and
needs of the community if the just is going to be properly done.Promises must be
kept, even at the cost of missing deadlines. Success in imroving the credibility of the
trucking industry will determine in the long run whether the industry will continue to
be in business and be competitive.
MANAGEMENT LESSONS LEARNED
IN CLEAN-UP SITUATIONS

MAJOR GENERAL (RET.) GEORGE H. AKIN

Prepared for the U.S. Department of Energy

January, 1992
 MANAGEMENT LESSONS LEARNED IN CLEAN-UP SITUATIONS 223

Throughout my 35 year career as an Army Officer I have always believed that

the Army, the Department of Defense and, in fact, all Government Agencies are too
secretive in what they do. I know from my years of military experience that we have
been too prone to classifying too many things "Secret" to "Lock the Gates — Don't
let anybody know," and in fact to adopt an almost "Siege Mentality." Particularly,
when there is a catastrophic incident that invariably occurs with resulting intense
media and public scrutiny. It is unfortunate that we the "Government" have devel-
oped this public image of being less than "Open and Honest" because it has also been
my experience that 90 percent of what the government does is for the public good.
We should be advertising that fact rather than continuing the defensive paranoia that
has developed over the years in almost all government agencies.
This then is the challenge to the Department of Energy; how do we change a
"perceived" bad image? How do we let the American people know the actions that
are being taken in the disposal of hazardous waste are for the public good, that the
environment is not being harmed nor damaged so that our children and grandchil-
dren will enjoy the same or better environmental quality of life that we have en-
joyed. There is of course no easy answer and the "battle" will not be won overnight,
but there are a number of actions that the Department of Energy can take to stop and
even turn around the erosion of public confidence in a government agency that is so
vital to our nation's future.
The actions which will be described and recommended are those which have
been used so successfully at Aberdeen Proving Ground (APG), Maryland, from 1988
to the present. The model which was developed at APG was ultimately adopted by
the Department of Defense for implementation throughout the DOD system. Al-
though the solutions that were used at Aberdeen Proving Ground were developed for
Clean-Up Situations, they were successfully applied in nearly all environmental
actions throughout the Test and Evaluation Command: White Sands Missile Range,
New Mexico, Dugway Proving Ground, Utah, Yuma Proving Ground, Arizona, and
other Test Ranges in Alaska, Indiana, Alabama and Panama.
No one model will fit all the environmental actions that the Department of
Energy must accomplish in order to perform its mission. However, there are what I
consider "Common Sense" rules which were developed during my 38-month tenure
as Commanding General of Aberdeen Proving Ground, which will apply in most
224 COMPILATION OF REPORTS

cases. In actuality, these rules reflect the lessons that I learned in the course of my
military leadership experiences with environmentally related issues throughout my 35
year career.
These rules are as follows:

THE "BOSS" IS RESPONSIBLE

Whatever the size of the organization there is one individual who is respon-
sible for everything that the organization does or does not do. This is a tenet that is
understood by all but in its day-to-day execution there are many organizations where
the BOSS is invisible not only to the outside world but more importantly to his/her
employees as well. This is a situation that is totally unacceptable in today's environ-
mentally aware public, community, state and Federal agencies. If an action or
material is hazardous to the environment, then the leader who is responsible for an
activity in a given community must be highly visible and he or she must be "In
Charge." The public demands it!

THE ORGANIZATION MUST HAVE DEDICATED, TRAINED QUALITY

PEOPLE
Any organization which is dealing with environmentally hazardous material
such as nuclear waste must have exceptional personnel. Management must recog-
nize this "up front" and if the talent is lacking they must take those personnel actions
which are necessary to correct the situation. This is done through the recruiting of
highly skilled and educated people. Their pay grades must be more than competitive
with the marketplace so that they do not leave after receiving expensive training.
There must be a system of rewards and punishments with emphasis on rewards. All
employees wish to be recognized for good work and they must feel wanted and
appreciated. With the sensitivity of environmental actions and the ever present threat
of Federal indictment which was initiated by the Justice Department against three
civilian employees at Aberdeen Proving Ground, many government workers feel
threatened in their jobs and rightly so. When the three senior civilians were subse-
quently found guilty, fined and given community service sentences, a shock wave
was sent through all civil service personnel who work in environmentally sensitive
jobs. What made this incident even more demoralizing was the fact the Army could
 MANAGEMENT LESSONS LEARNED IN CLEAN-UP SITUATIONS 225

not provide legal support for the employees' defense because they were charged with
a felony. Estimates were given that their legal fees ran as high as one hundred
thousand dollars each.
Because of this court case, many top personnel have left these sensitive
positions and others are now looking for assurances from management that they, the
employees, will be legally supported in their job related actions as long as they are
not doing anything criminal.

ALL ELEMENTS OF THE ORGANIZATION ARE COMMITTED AND

INVOLVED IN THE ENVIRONMENTAL MISSION
In too many government organizations only the operational elements are
involved in the day-to-day task of accomplishing the environmental mission. This is
a mistake! Every employee is an environmentalist and all staff elements must be
involved. This includes Personnel, Budget and Resources, Public Affairs, Legal,
Engineering, Logistics, etc. When monthly staff meetings are conducted for the
BOSS on environmental matters he or she must insist that the senior leadership/
management of the organization are in attendance. This would include Directors,
Division and Branch Chiefs and those individuals directly involved. Other desirable
attendees at environmental meetings and briefings will be discussed in subsequent
paragraphs.

ASSIGN RESPONSIBILITIES - SHARE ACCOUNTABILITY

When the three senior civilians at Aberdeen Proving Ground were indicted
and found guilty of knowingly condoning the dumping of hazardous waste illegally,
the rules in the way government employees conduct environmental business changed
dramatically. The defense used in the past, "that I was just following orders," no
longer applies. Additionally, the world and, in particular, the United States, has
become very environmentally conscious over the past several years. There has been
a tremendous proliferation of complex laws and regulations which are being pro-
duced on a almost daily basis at local, state and federal levels. All of this combined
has caused government employees to be very sensitive as to the ground rules under
which they must work. It has required senior level management, the BOSS, to
clearly define in finite terms the job parameters in all areas of environmental re-
226 COMPILATION OF REPORTS

sponsibility for his personnel. Who is accountable and what are they accountable for
must be clearly spelled out. Additionally, employees want to know that senior man-
agement "will be there" if something goes wrong. Will the BOSS take his fair share
of the blame is a frequent question? The smartest thing that the Commander, Presi-
dent, or CEO of an organization can do is follow the advice and practice of President
Harry Truman- "The Buck Stops Here."

ESTABLISH RAPPORT WITH COMMUNITY LEADERS, LOCAL AND

STATE ELECTED OFFICIALS, AND REGULATORS AT ALL LEVELS
No federal agency, Department of Energy, Department of Defense, or others
can succeed without the total involvement of all parties. This is where the BOSS
must be highly visible, take charge, and clearly define what he and his organization
are trying to do - be it cleaning up a hazardous waste site or finding a site for storage
of nuclear waste. This is done through education of the community and regulators,
honesty, openness, and candor. Or stated another way, we "open the doors" and
make all interested parties, local, state, and Federal, a part of the solution and not
part of the problem. We familiarize one and all with our operations. We encourage
open exchange. We seek advice on issues but challenge gray areas. And let there be
no misunderstanding. There are many of these with the huge number of laws and
regulations. Regulators at all levels are finding it extremely difficult to give consis-
tent and good interpretations. It was our experience that each EPA Region translated
and enforced the laws differently, and the same was true from state to state. Not
only on enforcement and translation of the law but also in the interpretation and
writings of consent agreements.

ESTABLISH PRIORITIES
A Federal agency such as Department of Energy has too many requirements
and not enough resources. Priorities must be set with the full understanding and
hopefully concurrence of all parties. This is where rapport and openness with offi-
cials and regulators is so important. They must understand that resources are finite
with infinite requirements. Some actions or events will slip or not be done at all but
if all parties have been kept properly informed and educated as to what you are trying
 MANAGEMENT LESSONS LEARNED IN CLEAN-UP SITUATIONS 227

to accomplish they will understand. They will not like it, but will understand and
instead of hindering the action process may indeed help to expedite it.

AGGRESSIVELY PURSUE RESOURCES

In order to get the mission accomplished, any organization must be
adequately resourced and staffed. With most federal agencies this is never the case.
However, my experience has shown that if you get the community, elected officials
and state and Federal regulators on your side and they are convinced that you are
making an honest and sincere effort to correct a bad situation, they can make things
happen in a positive manner. I have found that the "squeaking wheel" does get the
grease, be it in a State Capital or in Washington. I would emphasize here that it just
does not happen on its own! The pursuit of resources must be carefully planned and
then orchestrated with high level management involvement. This means that the
leader of the organization must lead the charge.

MONTHLY UP-DATES TO THE BOSS

One of the most successful aspects of the Aberdeen Proving Ground model
was the monthly staff up-date to the Commanding General. This was an unrehearsed
two-hour staff briefing which over a 90-day period covered some twenty-one envi-
ronmental elements of which six were core topics and were of such importance that
they were addressed monthly. The briefing covered all the Test and Evaluation
Command with special emphasis on Aberdeen Proving Ground where most of the
environmental damage had been done. The core topics briefed each month were:

• Personnel Status - Financial Status - Hazardous Waste

• Inspections/Incidents - Regulatory Agreements

A guest speaker was invited each month and was given the opportunity to
speak 15-20 minutes on some important environmental subject which would be
educational to the entire group. The salient point on the monthly environmental
up-date was not the information that was provided the Commanding General; what
was more important was that it educated and informed a large number of invitees as
to the progress we were making in cleaning up Aberdeen Proving Ground. The list
228 COMPILATION OF REPORTS

of invitees included: The Maryland Governor, Congressional Representatives, Mary-

land Delegates, Maryland Senators, U.S. Senators, County Executives, County
Council Members, Local Mayors, Maryland Department of Environment, Environ-
mental Protection Agency, County Health Department, The Baltimore Sun newspa-
per, Local Newspaper, the FBI, the Local Tenant Commanders and Heads of other
Federal Agencies. I list these individuals and organizations only to show that initially
they were a large part of the problem as we attempted to clean up some 50 years of
hazardous waste dumping.
Once we established our credibility through openness, honesty, candor, and
trying to do "what was right," they quickly became the biggest part of the solution. I
cannot overemphasize how important this action was in dealing with the states, not
only Maryland, but the others as well. We must remember that most environmental
enforcement comes from the States and they can be as tough or lenient as they wish.
They work with EPA, but our experience found that the States had the ability to
"change the rules" and would do so in your favor if they believed that a honest and
conscientious effort was being made to correct bad situations. This was very impor-
tant because of the tight resources and short t-me frames which always exist. Even
the press was fair. They told many of our horror stories but also told what we were
doing to correct, the problem in an objective and fair manner.

ASK FOR HELP - ELEVATE/ELEVATE/ELEVATE

Any government agency such as Department of Energy must receive a lot of
support and help from every level to accomplish its mission. Therefore there must be
a complete awareness throughout the DOE management structure of what the
field-level problems are. Once these are known, elected officials and Congressional
channels must be used to not only gain support but to get resources. These actions
can be taking place simultaneously at both the national and field levels, but they must
be communicated by senior level management. Our experience indicated that many
government administrators and Congressional staffers are looking for those who "ask
loudest and longest." These requests may not always be through "Channels," but are
equally effective in any event.
 MANAGEMENT LESSONS LEARNED IN CLEAN-UP SITUATIONS 229

COMMUNICATE REGULARLY WITH THE REGULATORS

As we continue to move forward as a nation into more and more environ-
mental awareness and as the laws and regulations become even more complex, we
must work on a daily basis with the State and EPA regulators in order to solve the
day-to-day problems. We must have daily communication at every level, community,
state, and Federal to not only discuss problems but successes as well. All is not doom
and gloom in the environmental business. There are tremendous success stories
which are happening every day and the public wants to hear them. Particularly if
they have a human interest side and good people can be singled out for awards and
favorable publicity. We found that the Regulatory Agencies also wanted a positive
up-beat approach which of course helped in their role as part of the solution.

SUMMARY
As I indicated at the beginning of this paper, there are no real secrets as to the
success of the model environmental program developed at Aberdeen Proving
Ground. Basically, it boiled down to giving a group of talented hard working people
a sense of direction. A plan was developed, goals were set and then continued high
level command/management interest helped to make it happen. A summation of key
points are discussed as follows:

• The Boss must be personally involved.

• The Organization must attract, hire, and retain a qualified staff.
• Involve the entire organization.
• Assign responsibilities.
• Fix accountability.
• The Organization must be "Open and Honest" - and is trying to do
what is right.
• Identify - Document - Prioritize total requirements.
• Involve Regulators, Elected officials and the Community in the
program.
• Make the Organization's needs known - seek assistance
Elevate/Elevate/Elevate.
• Publicize good news items— Sell the Program!
230 COMPILATION OF REPORTS

Bite the Bullet - the BOSS takes the information at hand, makes the
best decision possible, and moves on with getting the job done.
 BUILDING PUBLIC TRUST BY LETTING GO:
THE PROBLEM OF INSTITUTIONAL CREDIBILITY IN
"TURNED-OFF AMERICA"

THOMAS P. GRUMBLY
PRESIDENT
CLEAN SITES, INC.

Prepared for the U.S. Department of Energy

January, 1992

T>! »; ">" ^s^iw

l
*<p* ••'•
 BUILDING PUBLIC TRUST BY LETTING GO 235

At least since the progressive era in the early part of this century, public
bureaucracies have looked at themselves as the embodiment of the "public interest."
Both the Congress and state legislatures have passed a variety of regulatory statutes
giving powers to public agencies to "protect" the American people against innumer-
able harms. The zealousness of this protection has varied according to the politics
and economics of our society, but even in the most conservative Administrations,
there has been no fundamental challenge — despite rhetoric to the contrary — to the
specific role of federal and state bureaucracies in determining what constituted
"public protection" of health and the environment.
Within elites as well as within the populace, this received wisdom is now
under attack. It is no longer certain that public organizations, ranging from the
Environmental Protection Agency, and the Food and Drug Administration to the
Department of Energy are deemed to be operating in anyone's interest other than
their own interest of building appropriations and fiefdoms. The fairness and generali-
zation of this charge can certainly be attacked, but it seems obvious that new institu-
tions, processes and mechanisms will be needed to muster the political support
necessary to tackle large problems such as those facing the Department of Energy's
(DOE) environmental restoration program.
The thrust of this paper is that DOE should embrace ideas that seem to wrest
control of events from its own contractors and staff if it ultimately wishes to develop
public confidence. My thesis is that DOE has more to gain by "casting bread upon
the waters" than by jealously guarding any traditional prerogatives. By demonstrat-
ing its openness to both elite and populist interests, I would argue that DOE can
improve dramatically both the substantive level of scientific input into its decision-
making, as well as the public's confidence in its ultimate decisions.
This argument comes from ten years of experience in: (1) establishing scien-
tific institutions to address the lack of scientific credibility in air quality research in
EPA, and (2) operating a non profit organization that must deal with citizen involve-
ment in hazardous waste decision-making and actual cleanup. Several lessons have
evolved from this experience which buttress the larger argument, and describing
these lessons forms the rest of this paper. The lessons are:
236 COMPILATION OF REPORTS

• Carefully structured non-governmental institutions that are both

neutral and independent can have significantly greater scientific and factual credibil-
ity than their public counterparts;

• The development of clear cleanup objectives in the context of dramati-

cally wider "stakeholder" participation in decision-making can transform the effec-
tiveness of public organizations;

• Important operational management considerations, which are too often

seen as "technical," can be opened to public involvement without degrading the
operational environment; and

• It is difficult, but not impossible, to merge the often competing models

of "expert-elite" decision-making with a more populist approach.

THE ROLE OF INDEPENDENT SCIENCE IN ENVIRONMENTAL

REGULATION
In 1980 an independent scientific institution, the Health Effects Institute,
arose from the ashes of the 1977 Clean Air Act debate. That debate, appropriately
described as "fractious" by former EPA Administrator Doug Costle, highlighted the
lack of trust between government and industry, and between environmentalists and all
others, about the quality of data informing air quality, and particularly mobile source
regulatory decisions. HEI, jointly and equally funded by EPA and the worldwide
automotive industry, now does almost all the automotive health effects research in the
United States, and has become a widely respected scientific institution by all parties.
It is governed by a unique and small Board, headed by former Watergate Special
Prosecutor and American "hero," Archibald Cox.
HEI is certainly not perfect. Its research has been described as too fundamen-
tal by some critics, but there have been several scientific and policy successes that
cannot be ignored. The Department of Energy's scientific problems are almost
1

certainly at least as complex as those facing the biological science community that
investigates the health effects of emissions, and perhaps more. But there are a num-
ber of important items to reflect upon.
 BUILDING PUBLIC TRUST BY LETTING GO 237

First, the placement of science outside the bureaucratic scientific environment

of the federal government almost certainly has increased the numbers of quality
scientists attracted to dealing with difficult environmental problems. The govern-
ment and its contractors are not likely in this area to be able to directly engage the
numbers of scientists as full-time employees necessary to deal with the rather over-
whelming technology problems facing DOE.
Second, by increasing the number of scientists and quality of science, the core
issues of the quality of information that underlie much of the distrust of government
are being dealt with directly. To the extent that people trust anyone in the society,
independent university based scientists still seem to be in the top rung. Not only is
information therefore actually improved through this arrangement, but the perception
of the information base is also likely to be improved.
Third, an emphasis on improved science and agreement on information plays
to a traditional American prejudice. While adversarial behavior seems to be in our
genes, there is, I believe, an underlying premise in our society that we ought to be
able to agree on the facts, even if we can't agree on what to do with those facts.
Fourth, the individuals who developed HEI had an insight that credibility
could rest upon individuals, who could transfer it to an institution. There may not be
many individuals like Archibald Cox in society who are perceived to be relatively
disinterested public servants, and who are not receiving major economic benefits for
their service, but we should try to find the ones that are out there.
Fifth, Americans seem to believe that opinions follow money, i.e anyone can
be bought. In HEI's case, this perception was countered by the joint and equal
government-industry funding. Accordingly, there has never been any accusation of
systematic bias. In DOE's case, the same effect could be generated through capitaliz-
ing an independent organization, that was governed by the kind of distinguished
Board that characterized HEI.
In an area as contentious as nuclear waste siting and restoration, I would not
argue that independent science is sufficient to improve the Department's credibility.
But I would argue that the scientific and technical issues are so important that the
establishment of an independent scientific capability to deal with important technical
issues could improve the quality of debate and clarify the truly technical issues from
those in which the policy content is higher.
238 COMPILATION OF REPORTS

THE IMPORTANCE OF STAKEHOLDER PARTICIPATION IN

DECISION-MAKING
Over the last twenty years, the notion of public participation in decision-
making has gained some currency. Whether through genuine belief, or through being
forced by the political process, public bureaucracies have grown used to the public
meeting process, to elaborate notice and comment rule-making procedures, and even
to "advisory committees", formed by interested and often disgruntled citizens. In
many of its current activities at Hanford and other nuclear waste sites, the Depart-
ment of Energy holds interminable public meetings. In the EPA Superfund program,
public meetings have become a way of life and some sites have even established
more elaborate efforts to "communicate" effectively with the public. In its recent
report on Improving Risk Communications, a panel of the National Research Council
emphasized the necessity of two way communication between regulatory officials
and the public, if substantial understanding of existing risks and the risks of
remediation or siting were to be achieved.
Two significant problems emerge from my experience with much of this
public process. First, much of it is "by the book," and reflects little real commitment
on the part of the technically trained people in regulatory processes to understand and
deal with the important people management dimensions in decision-making. Sec-
ond, and more importantly, practically all existing public participation processes
assume the basic legitimacy of bureaucratic-consultant decision-making. "Stake-
holder" participation, unless done in the context of traditional interest group politics,
is not taken seriously as an intrinsic part of decision-making. In my experience, it
would startle almost every regulatory official to hear an argument that the "emo-
tional" views of the public need to be factored into a decision about how to proceed
with the same degree of seriousness, as the decision about where to place the next
monitoring well. Let me elaborate on each point.
My experience with three Federal health and safety regulatory agencies, the
Environmental Protection Agency, the Food and Drug Administration, and the Food
Safety and Inspection Service of the Department of Agriculture, all lead to the same
conclusions about the development of regulatory policy. An assignment is made to
examine an issue. As an example, it might be an evaluation of an existing National
Ambient Air Quality Standard by the EPA. For the group given the task, the major
 BUILDING PUBLIC TRUST BY LETTING GO 239

steps in developing policy will be pulling together all of the scientific data currently
available, commissioning additional scientific research, and contracting out massive
data gathering efforts to the consultant community. It may take three to five years of
assiduous work to pull together all the data, and to sort through the various technical
options. By the end of this three to five year period, the public officials will know —
not just suspect ~ what they think public policy should be. At some point, relatively
early on in that five year process, the key career officials will believe that they have
crossed the cost-effective line of data gathering, and will make an internal decision.
Additional data will be gathered, but subtly the next batch of data will have a ten-
dency to be directed to support the internal decision. After all, officials will reason,
money is not infinite.
By the time policy is to be made even by their own political overseers, the
career officials already know what they want, and they have a heavy investment in
getting it. The "stakeholders," i.e., citizens or the industry, will really not have
gotten into the process at all. They will have had no ability to shape the questions
that were asked, to satisfy themselves about the competence of contractors, to review
anything other than summaries of data. In short, they have no real way to get into the
game until the career officials in the agency have made a heavy personal investment
in the outcome.
Public comment and public hearings are often necessary at this point, but
public officials dread them, not only because of their inherently repetitious level and
occasional emotional outbursts, but because they really don't want to change their
minds. Increasingly, the public and industry understand this problem. Some people
react with guerrilla theater, others head for their lawyers and Congressmen. In either
case, the fundamental flaw is that ostensibly open participation processes are, in fact,
largely sham exercises that debase the credibility of the regulatory process, rather
than enhance it. Public officials often moan about what else they can be expected to
do. The answer is to devise processes that minimize their own emotional involve-
ment in decisions, prior to hearing about other "stakeholder" views.
The second issue, the actual nature of the decision-making process, flows
from the first, but is more crucial. Our current public involvement processes, at least
in waste cleanup, assume that the public can either comment or sue at the end of the
process if they don't like the outcome. In my view, this conception will lead to
240 COMPILATION OF REPORTS

continued gridlock. It is, I should add, a conception that is embodied in statutes like
Superfund, so this is not a situation in which blame can be easily passed to executive
branch regulatory officials.
In my view, waste siting or cleanup decisions should only be made in situa-
tions in which both the government and "stakeholders" — whether states, industries
or groups of citizens — are faced with the following opportunities and choices:

• Each stakeholder has the right to participate in discussions about what

technical issues are to be researched and debated, before those decisions are made.
These "technical" decisions include issues of existing or alleged health problems.
Some public agency, whether it be the Centers for Disease Control, or a state health
department, should have independent responsibility for commissioning these health
evaluations, rather than the agency responsible for making the ultimate cleanup
decision.

• With respect to non-technical stakeholders, they should have the right,

and financial wherewithal, to hire independent technical counsel of their own choos-
ing. Prior to corning to closure on the issues to be discussed, (i.e., prior to coming to
any planning group that includes the government and all stakeholders) there should
normally be extensive technical seminars, with technical representatives from all
parties as well as disinterested scientific observers. These will serve to vet the kind
of information to be developed and to agree, up front, on all technical information
that is to be reviewed. This kind of process protects everyone, including citizens and
their political representatives, against the presence of technical charlatans, i.e., those
individuals who occasionally masquerade as scientists but who truly have political
agendas.

• Stakeholders, including the government, but with the assistance of

external facilitators, need to come to clearly understand and, if possible, agree on
what remedial objectives are going to be or, what the criteria will be on which the
government will make a siting decision. This key step — setting objectives in a
concrete enough way so that all participants at least understand what the decision
criteria will be — is almost always ignored, because it is very difficult. In many
 BUILDING PUBLIC TRUST BY LETTING GO 241

overtly political processes, it is often useful to avoid explicitness about objectives in

order to submerge conflict. In my experience, this mode of decision deferral, is
precisely the wrong one for dealing with hazardous waste. Time is better spent up
front, before regulatory officials have gotten themselves locked on to a particular
path, to actually debate among stakeholders what is to be achieved.

This discussion suggests that I view regulatory officials as "stakeholders,"

rather than all powerful decision makers who embody the legitimacy of the society.
That is true, but I also do not contend that decisions must be made by consensus. It is
important that people know that decisions will be made, and that they will be made
in an accountable way by public officials, but only after those officials have seriously
involved the technical and non-technical views of everyone who has a stake in the
outcome. Indeed, I would argue that the adoption of a decision process in which
public officials are charged with attempting to develop a consensus, but in which they
must finally and publicly make decisions, will lead to increased legitimacy. But this
will only occur when regulatory official evidence a willingness to see their roles
more broadly.

IMPROVING THE ACTUAL MANAGEMENT OF OPERATIONS

It seems clear to me that we can enhance trust and confidence by improving
the quality of science and expanding rather dramatically, the role of stakeholder
participation — but — there are also important day-to-day management tools that can
reinforce public confidence once a project is underway, or that can undermine the
progress. Particularly in the hazardous or nuclear waste arenas, things will happen in
implementation that bear on the credibility of regulators. Again, my own experience
is that "openness is the best policy," but let me briefly elaborate.
First, it is important that operational management structures at sites be kept
simple. The EPA, for example, has serious problems in deviating from existing plans
at sites, because the site project manager has insufficient authority to deal with
problems that arise. Indeed, the term manager is a misnomer. The people are coordi-
nators, and they have no power to deal efficiently with the contracting, technical, or
legal disputes that arise at sites. As a result, they lose credibility, and those individu-
als with much less to lose at these sites are able to defend bureaucratic prerogatives.
242 COMPILATION OF REPORTS

All the public or industry sees is inaction, or intransigence, when, in fact, the site
manager is simply hemmed in by bureaucratic arrangements that are too cumber-
some. Project managers, therefore, need to have serious authority inside their orga-
nizations to make things happen. If they abuse it, they should be held accountable.
Second, it is absolutely critical that promises made be promises kept. Whether
the promise is made to industry or citizens, the public official can almost guarantee
that unfulfilled promises will cause trouble. In conjunction with this, it is also critical
to ensure that people understand exactly the nature of promises. My experience is
that people hear what they want to hear and that only the presence of experienced
people can ensure complete understanding.
Third, there is a lot to be said for open operational oversight by citizens and
other stakeholders at critical points in process. For example, a major midwest
Superfund site has experienced serious problems in testing for the presence of
radioactive waste. Several batches of samples have been declared invalid; commu-
nity representatives now believe that these mistakes fit into a conspiracy pattern.
Regardless of whether these concerns are right, everyone knew that this radiological
testing was going to be critical. Rather than the choice of contractor being kept
hidden — through arcane and, in this case, stupid, procurement rules, the entire mode
of testing and analysis should have been out in the open, so that mistakes would be
minimized and seen in their proper light. Given the current recurrence of the "para-
noid style" in American politics, scientific processes are simply going to have to
adapt themselves to democratic processes.
Fourth, the role of national environmental organizations can be converted
from gadfly to useful oversight, by including members and scientists, as part of the
evaluation and oversight processes at these sites.

MERGING ELITES WITH POPULISTS: MATCHING SCIENCE WITH

DEMOCRATIC VALUES
It has been too often my experience that health and environmental regulators
view their peer groups as exclusively those technically trained people in the profes-
sions with whom they do business with on a regular basis. I cannot count how many
times I have heard a regulator say, "well, there's no technical reason for doing this
test, but we're doing it to satisfy the citizens, or the politicians." There is a funda-
 BUILDING PUBLIC TRUST BY LETTING GO 243

mental misconception of regulatory decision-making in this kind of statement. It

assumes that more technical data will somehow satisfy objectives that are often of a
fundamentally different nature. This is, of course, false. What is not false, in my
experience, however, is the way in which the well-crafted use of data, if embedded in
a decision-making-making process that reflects the interest of all parties, can make it
possible to get on with business.
Politicians often take it on the chin from scientists and regulators in waste
cleanup, because they are perceived to make ad hoc interventions on behalf of
constituents. What these people often fail to perceive is that citizens and industrial-
ists often have very strong cases about the apparent lack of fairness and probity of
processes that make it difficult for politicians to stay out. If regulators can system-
atically demonstrate that openness, fair play, and a respect for competing views have
been at work in site decisions, they can maximize the possibility of constructive
interaction with elected officials. Now the fact will always remain that some choices
will be made over which there is legitimate argument. No matter how credible an
institution becomes, it is still going to be disagreed with. That is the nature of
America. However, we can change, I believe, the nature of these battles from ones
in which the veracity and credibility of agencies become major issues, into ones in
which issues of substance — like how much protection is enough - predominate.
In my view, however, we will not do so until public agencies like DOE and
EPA relax their grip on decision processes and recognize that other models - apart
from bureaucratic decision-making — can and do represent the public interest. We
could do worse than emulate the New England Town Meeting, in which all can speak
up but must then face their fellow citizens on the street, in putting together new
processes for the 21st century. Rather than dismissing this concept as a relic of the
past in our "mass society," we need to resurrect it and adapt it to the serious environ-
mental questions that face our entire citizenry.

• y<& W M V-'vi^tVi^CH^i, •;\^VZ-<U&i?%i<i-¥X W Hr. ^m*: •:. •

244 COMPILATION OF REPORTS

FOOTNOTES

•For a detailed description of the Institute and its successes, see Harnessing
Science for Environmental Regulation, edited by John D. Graham, 1991, Praeger
Press.
GAINING PUBLIC TRUST AND CONFIDENCE
IN THE
US HIGH-LEVEL NUCLEAR WASTE PROGRAM

DAN W. REICHER
SENIOR ATTORNEY
NATURAL RESOURCES DEFENSE COUNCIL

Prepared for the U.S. Department of Energy

January, 1992
 GAINING PUBLIC TRUST AND CONFIDENCE 249

This paper was prepared at the request of the National Academy of Public
Administration by Dan W. Reicher, a senior attorney with the Natural Resources
Defense Council (NRDC). The paper discusses the problem of gaining public trust
and confidence in the US high-level nuclear waste program.
NRDC is a national environmental organization based in New York with
offices in Washington, San Francisco, Los Angeles and Honolulu. The organization
has a staff of about 150 scientists, attorneys, resource specialists, and support person-
nel. NRDC works in a broad array of environmental and energy issues and has long
been concerned about the issue of nuclear waste
In the early and mid-1970's, NRDC filed several successful suits against the
Atomic Energy Commission and the Energy Research and Development Administra-
tion regarding high-level waste problems at the Savannah River Plant in South
Carolina and the Hanford facility in Washington State. In the late 1970's, the organi-
zation prepared a detailed report under contract to the DOE regarding high-level
waste. In the early 1980's, NRDC filed a successful suit which established that the
Resource Conservation Recovery Act, the federal hazardous waste management law,
applies to the Department of Energy's defense waste including defense high-level
waste.
In 1987, the author led the litigation which overturned the Environmental
Protection Agency's (EPA) high-level waste standards in the First Circuit Court of
Appeals in Boston. Recently, he was appointed to the National Academy of Sciences
Board on Radioactive Waste Management. He has also served as a consultant to the
Sandia National Laboratory on radioactive waste disposal at the Waste Isolation Pilot
Plant in New Mexico and is an adjunct professor of law at the University of Mary-
land Law School where he teaches a course in nuclear regulation.
The paper is divided into two sections. The first section considers whether
the current US. high-level nuclear waste program — as conceived by Congress and
implemented by the Department of Energy (DOE) — is likely to engender public trust
and confidence. The second section discusses some steps that might be taken to
improve public trust and confidence in the current program.
 250 COMPILATION OF REPORTS

WHILE NRDC SUPPORTS GEOLOGIC DISPOSAL OF HIGH-LEVEL

WASTE, WE BELIEVE THE CURRENT PROGRAM IS
FUNDAMENTALLY FLAWED AND IS UNLIKELY TO ENGENDER
SUBSTANTIAL PUBLIC TRUST AND CONFIDENCE.

NRDC has long supported deep geologic disposal of high-level nuclear waste.
Our criticisms have been directed at the approach taken towards and not the concept
which underlies geologic disposal. Unlike some citizen organizations, we are not
convinced that long-term at-reactor storage of spent fuel will provide an acceptable
level of protection of human health and the environment. We also do not support
away-from-reactor storage in a Monitored Retrievable Storage (MRS) facility be-
cause of the likelihood that such a facility could become the de facto permanent
repository. Consequently, we believe that there is a need to make progress in devel-
oping a geologic repository. Unfortunately, we do not believe that the current reposi-
tory program is likely to succeed.
In the 1982 Nuclear Waste Policy Act (NWPA), Congress adopted some
measures that are key to successful development of a nuclear waste repository:
screening multiple potential locations, encouraging regional equity in siting, and
sharing authority among the federal government and potential host states. DOE,
however, initiated a technically flawed and politically motivated program that by
1986 had caused an uproar in numerous states.
In the 1987 amendments to the NWPA, Congress responded to DOE's mis-
guided approach in a heavy-handed and politically expedient manner, eliminating
some of the key equity concepts that were the foundation of the original legislation.
The amendments singled out one state with a four-person Congressional delegation
and no nuclear power plants as the lone potential site for a repository. Proposed
legislation supported by the Administration would further erode the equity consider-
ations in the original law by removing Nevada's authority over site characterization,
allowing co-location of an MRS and repository, and eliminating the cap on the
amount of waste that may be emplaced in a repository.
Congress made a fundamental mistake when it decided to put all our
high-level waste eggs in the Nevada basket. Politics or science or a combination of
both could easily kill the Nevada site, perhaps years from now, at which point we
 GAINING PUBLIC TRUST AND CONFIDENCE 251

would be without any potential alternative sites and even further from solving the
nuclear waste disposal problem. Sooner rather than later we believe Congress must
revisit its decision to tie the entire high-level waste program to a single site.
Progress in permanently disposing of high-level waste will only be accom-
plished when Congress prescribes, and a governmental or perhaps non-governmental
entity implements, a program which emphasizes fairness over expedience and good
science over political considerations. There is no doubt that developing such a
program will be difficult, but we believe Congress was at least headed in the right
direction in the 1982 NWPA.
There is also no doubt that any program, no matter how we developed, will
meet with resistance in potential repository locations. However, if such a program is
soundly and equitably designed, and fairly and carefully implemented, we believe it
might at least be tolerated by a large number of the citizens in the sited state or states.
As observers of the high-level waste program have noted: 1

In making politically difficult siting decisions, political

leaders have always had two options: overpower a
weak constituency by sheer political force, or set up a
more objective selection process that might be per-
ceived as scientifically credible. In the latter case, the
host area, even though opposed, might be willing to
accept its fate.

The same observers quoted the following from a Utah newspaper editorial: 2

Neither Utah nor any other state can properly refuse to

bear the nuclear waste burden once it (the repository
site) has been established to the best of human condi-
tions. However, the honor of making such sacrifice for
time without end must confer on the luckless lamb the
satisfaction of knowing first-hand that the duty couldn't
have been just as well assigned elsewhere.

The NWPA, as amended and implemented, does not meet this standard. As such it is
not likely to instill trust and confidence in the public.
 252 COMPILATION OF REPORTS

SOME SUGGESTIONS FOR IMPROVING PUBLIC TRUST AND

CONFIDENCE
This section discusses some steps that DOE might take to improve public trust
and confidence in the current high level waste program, despite its fundamental
flaws.

DOE MUST ACKNOWLEDGE AND CONFRONT ITS PAST RECORD

DOE must recognize that it will be handicapped in earning the public's trust
and confidence simply because of its track record. Try as it might, DOE cannot
escape completely its spotty record in earlier incarnations of the high-level waste
program, the monumental problems in the nuclear weapons production complex, and
public concern over nuclear testing.
Frequently, Department officials adopt a "that was then, this is now" attitude
and are angered when members of the public point to the Department's past record.
But, just as none of us can escape our past, neither can DOE.
Instead, the Department must acknowledge its record and really endeavor to
change its ways. More particularly, the Office of Civilian Radioactive Waste Man-
agement (OCRWM) must recognize that it cannot avoid being tarred with the same
brush as other US nuclear programs. The repository program is not an isolated
civilian program. It is closely connected to a highly controversial civilian power
program and, despite its name, it became a component of the Department of Energy's
immensely troubled defense nuclear program with President Reagan's 1985 decision
to dispose of civilian and defense waste in the same repository.
Ultimately, if the Department's record presents too much of an obstacle to
ensuring public trust and confidence, the program may have to be reconstituted in a
different agency or even a non-governmental entity.

DOE MUST IMPROVE ACCESS TO INFORMATION

One of the hallmarks of the DOE's nuclear activities has been secrecy — much
of it legitimate, but some of it not. Unfortunately, the tradition of secrecy which
grew out of the Manhattan Project, has found its way to some of the Department's
environmental and safety programs. For example, the public has been denied access
to the probabilistic risk assessments which are used to study the safety of defense
 GAINING PUBLIC TRUST AND CONFIDENCE 253

nuclear reactors. The public has also been denied access to parts of the hazardous
waste permits which DOE submits to the EPA under the Resource Conservation and
Recovery Act. And in a rather ironic situation, NRDC has had to file suit in an
attempt to gain access to data on the nuclear test program, which DOE has already
provided to the Soviet government.
OCRWM itself got into trouble in 1986 and 1987 with claims by members of
the Congress and public that the office had withheld vital pieces of information on
the repository program. The Energy Department must resist the tendency to withhold
information if public trust and confidence is to be enhanced. This will likely require
restructuring the approach to both "restricted data" and Unclassified Controlled
Nuclear Information under the Atomic Energy Act.

DOE MUST IMPROVE COMMUNICATION WITH THE PUBLIC

DOE has an unfortunate history of communicating with the public in a con-
fusing, vague and sometimes misleading manner. Too often the benefits of a project
are hyped and the costs are minimized. Too often risks are presented in inappropriate
context, for example, involuntary risks compared with volunta-vones. Too often
experts are trotted out who are either incomprehensible to the public or are so con-
nected to a program that their opinions are not trusted. And too often language is
manipulated to obscure reality.
For example, at hearings across the country last year regarding the clean-up of
defense nuclear waste, the Department presented a display which tried to put the risks
of radiation into context by comparing them with the risk of being bitten by a tiger.
This would not pass muster at a health physics conference, nor should it with the
public.
Admittedly, the public sometimes has a difficult time distinguishing between
radioactive hazards worth worrying about and those which are not. However, DOE's
traditional approach has done little to improve this situation. DOE must endeavor to
communicate in a more straight-forward and balanced manner if it is to improve
public trust and confidence.
 254 COMPILATION OF REPORTS

DOE MUST RECOGNIZE THAT THERE ARE MANY "PUBLICS"

Too often in the high-level waste program the public has been divided into a
few communities: the states, the tribes, the utilities and an amorphous entity variously
called citizens groups, or the environmental community, or the anti-nuclear lobby or
something else. This tendency to lump instead of split ignores some fundamental
realities. Governors do not always represent the views of their constituents. National
environmental organizations often do not represent the views of local organizations.
Anti-nuclear organizations frequently do not represent the views of environmental
organizations. Taxpayers do not necessarily represent the views of nuclear utility rate
payers. And government experts do not necessarily represent the views of indepen-
dent experts.
The national environmental community, for example, ranges from cautious
market-oriented organizations, like the Nature Conservancy and the Trust for Public
Land to groups at the other end of the spectrum like Greenpeace and Earth First, that
often work outside the system. At the local level, it is even broader. DOE must face
up to the many publics whose trust and confidence it seeks to gain.

DOE MUST PROVIDE MEANINGFUL OPPORTUNITIES

FOR PUBLIC PARTICIPATION
Public participation must be meaningful if the Department has any hope of
instilling trust and confidence. This means DOE must seek input at a point in time
before a decision is made. And it means the Department must actually keep its mind
open on an issue. And it means — and for some officials this is a revolutionary
thought — that DOE might actually change its approach to an issue based on public
input.
Meaningful participation also requires that DOE hearings become two-way
discussions. Too often hearings are one-way lines of communication where members
of the public are given a microphone, and allowed to express their concerns with no
response from the Department. The public is very frustrated with such an approach.
In fact, at one recent DOE hearing in New Mexico on the clean-up of the
defense complex, local citizens became so angered that they actually took over the
hearing, and, with the moderator's permission, actually began to answer questions
 GAINING PUBLIC TRUST AND CONFIDENCE 255

from the audience. Up to that point, the Energy Department had refused to engage in
any sort of dialogue.
The critical point is that where public participation is inadequate the result, in
the case of a large controversial facility like a repository, is not a public that doesn't
participate, but one that participates in a frustrated, angry, and often misinformed
way. Meaningful public participation therefore is critical if DOE seeks to earn public
trust and confidence.

DOE MUST DEAL WITH INDEPENDENT EXPERTS

MORE OPENLY AND FAIRLY
Independent experts, i.e. individuals with expertise in the nuclear area who
are not connected with the government program, often bring different perspectives to
a complex problem and often have the public's trust and confidence. Unfortunately,
DOE has gone out of its way in some situations to ignore or reject or discredit such
experts. This has had serious implications for public trust and confidence. For ex-
ample, several physicists, economists, and others testified at hearings on DOE's
proposal to build a new plutonium production plant in Idaho. They raised many
important points, especially about the need for the facility. Their arguments were
roundly rejected by the DOE and were barely considered in the EIS. But, in January
of last year, they were the very same points made by the Secretary of Energy when he
canceled the plant. DOE must confront independent experts more openly and hon-
estly if it is to improve public trust and confidence in the high-level waste program.

DOE CAN FOSTER PUBLIC TRUST AND CONFIDENCE

THROUGH RIGOROUS STANDARD-SETTING
Studies of siting controversies have shown that members of the public are
more comfortable about a controversial facility if they know that there are strict
standards in place and that they will be rigorously applied. Unfortunately,
3

standard-setting in the area of radioactive waste has not inspired much confidence,
especially with regard to the regulations developed by EPA for high-level and transu-
ranic nuclear waste. NRDC led a coalition of organizations and states which chal-
lenged the adequacy of those standards in the First Circuit Court of Appeals in Bos-
ton, in 1985. We argued, among other things, that the regulations ~ allowed contami-
 256 COMPILATION OF REPORTS

nation of potential drinking water supplies at levels above those set under the Safe
Drinking Water Act. We prevailed in that case in July of 1987.
We thought that in the wake of the litigation interested parties would work
together- to strengthen the standards. But, instead, we have seen just the opposite
with DOE pushing to weaken the standards. Of 18 DOE comments on EPA's second
working draft of the new standards, 12 comments call for weakening the standards;
the other six have no effect either way. We simply have not seen many instances
where DOE has supported strengthening of a nuclear waste standard. This can only
serve to undermine public trust and confidence.
We also urge DOE to support strong application of the nuclear waste stan-
dards. Unfortunately, in legislation recently proposed by the Administration regard-
ing the Waste Isolation Pilot Plant in New Mexico — a DOE geologic repository for
transuranic waste — the Administration has resisted the proposal that EPA, rather than
the Department, certify compliance with the EPA standards.
The bottom line is that if the high-level waste standards end up weaker than
when issued in 1987, and if they are not rigorously applied, public trust and confi-
dence will suffer greatly.

THE ENVIRONMENTAL IMPACT STATEMENT PROCESS

CAN BUILD PUBLIC TRUST AND CONFIDENCE
The Environmental Impact Statement (EIS) process under the National
Environmental Policy Act (NEPA) holds great potential for the sort of informed
decision making and meaningful public participation that can increase confidence in a
controversial program. Unfortunately, DOE's record in implementing NEPA is not a
sterling one. DOE has often avoided looking fully and fairly at impacts and alterna-
tives. It has frequently not provided for meaningful public participation in the EIS
process nor adequately responded to public comments. And all too often EIS's have
been post hoc rationalizations of decisions already made.
For example, in the wake of litigation brought by 21 citizen organizations,
DOE in January, 1990 agreed to prepare two programmatic environmental impact
statements — one on the clean-up and the other on the modernization of the nuclear
weapons complex. Unfortunately, as things stand now, DOE has determined that the
Yucca Mountain issue is not within the scope of either study. This is at odds with
 GAINING PUBLIC TRUST AND CONFIDENCE 257

NEPA and its implementing regulations and is illogical given the critical nature of
geologic disposal to the disposal of defense high-level waste. DOE must attend fully
and fairly to NEPA if it hopes to gain public trust and confidence.

DOE MUST RECOGNIZE THE LEGITIMATE ROLE OF LITIGATION

Secretary Watkins has bemoaned the "litigious mischief that states and
citizen groups engage in regarding the nuclear waste program. We can understand
the Secretary's frustration. However, litigation is the inevitable consequence of a
program with flaws as far-reaching as the current one. Furthermore, litigation often,
is the only means the public has to influence the decision-making process. 4

It must also be noted that litigation can actually result in positive change. In
1984, for example, NRDC won a major piece of htigation which established that the
Energy Department was subject to the Resource Conservation and Recovery Act, the
federal hazardous waste management law. This expanded EPA and state oversight of
the massive waste problems in the defense complex and helped push DOE to finally
confront them. Without such litigation, we think the Department would have dragged
its feet far longer.

DOE MUST RESIST LEGISLATION THAT WILL ERODE

PUBLIC TRUST AND CONFIDENCE
In recent months, DOE has promoted legislation to advance the Yucca Moun-
tain and MRS proposal. This includes removing Nevada's authority over site charac-
terization, allowing colocation of an MRS and repository, and eliminating the cap on
the amount of waste that may be placed in a repository. While these sorts of fixes
might advance the Department's interests in the short term, we believe they can only
end up hurting public trust and confidence in the long run. In attempting to limit
Nevada's authority over 'Yucca Mountain, DOE — with Congress' backing -would
only further poison relations with the state and its citizens and further strengthen their
resolve to prevent the development of the repository.
Adoption of such legislative provisions would also set a tragic precedent for
the difficult task DOE will face over the next decade in siting many other controver-
sial waste treatment and disposal facilities to address the massive quantities of waste
in the DOE nuclear complex. If Congress and the nation are serious about siting
 258 COMPILATION OF REPORTS

these critical facilities we should not sanction the approach in the proposed legislation
where a state's authority is simply withdrawn in order to grease the skids for the
proposed facility. The public will be even less inclined than they are today to con-
sider the siting of a treatment or disposal facility knowing that Congress is willing to
simply cast a state's regulatory authority aside.

CONCLUSION
Although the current US. approach to high-level nuclear waste disposal is
fundamentally flawed, there are, nonetheless, steps DOE could take to improve
public trust and confidence in the program. Whether these steps can overcome the
program's inherent problems is highly uncertain.
 GAINING PUBLIC TRUST AND CONFIDENCE 259

FOOTNOTES

1
Colglazier, E.W. and Langum, R.B., "Policy Conflicts in the Process for
Siting Nuclear Waste Repositories," Annual Review of Energy, 1988, 317, 352.

2
Id.

3
Kunreuther, H. et al., "Public Attitudes Toward Siting a High-Level Nuclear
Waste Repository in Nevada," Risk Analysis, 10, 1990, p. 469.

See L. Taylor, Opening Up: Public Involvement in Environmental, Safety,

4

and Health Issues at the DOE Nuclear Weapons Complex at 79 (May 1991).
 REORGANIZING PUBLIC ORGANIZATIONS:
ALTERNATIVES, OBJECTIVES, AND EVIDENCE

CRAIG THOMAS
INSTITUTE OF GOVERNMENTAL STUDIES
UNIVERSITY OF CALIFORNIA, BERKELEY

Prepared for the U. S. Department of Energy

August, 1992
 REORGANIZING PUBLIC ORGANIZATIONS 263

INTRODUCTION
The process of reorganizing public organizations represents an institutional
design problem in which important trade-offs must be made between such social
values as efficiency, equity, and poUtical accountability. Unfortunately, pre-reorgani-
zation analyses often gloss over these trade-offs, allowing particular values to become
implicitly embedded within the chosen design alternatives. In this literature review
(drawn largely from the fields of political science and public administration), values
will be treated explicitly, and often at length, in order to call out the important issues
at stake in planning any public-sector reorganization. 1

Following this introduction, the main body of the paper is divided into two
parts. The first part focuses on various performance criteria for evaluating alterna-
2

tive organizational forms. The second section fleshes out a wide variety of alterna-
tive organizational forms, discussing the reasons these forms have been pursued as
well as evidence suggesting the intended and unintended consequences which have
followed. Since designing and redesigning public organizations is inherently a
poUtical process in which various actors attempt to influence organizational structure
and procedures in order to affect policy outcomes and power relationships (Arnold
1974; Seidman and Gilmour 1986; Knott and Miller 1987; T. Moe 1989), no attempt
is made in this paper to draw conclusions as to which alternative might be considered
"best" or which performance criteria are "most important." Rather, the paper con-
cludes with a summary table in which the alternatives are compared by the criteria in
light of available evidence. 3

Because the literature on public-sector reorganizations is too extensive to

review completely in this paper, it will be useful at this point to draw some sweeping
generalizations about the literature in order to suggest its character and to justify this
paper's focus on selected pieces. As a whole, the literature is remarkably abstract,
both theoretically (assumption-driven) and ideologically (value-driven). In other
words, authors tend to draw conclusions deductively and/or polemically, rather than
upon the basis of rigorous empirical analysis. Because empirical evidence is rela-
tively scant, we will devote considerable attention throughout this review to fleshing
out the logical foundations upon which arguments have been constructed, and the
values various writers have implicitly or explicitly elevated by recommending one
type of organizational structure over another.
264 COMPILATION OF REPORTS

Remarkably few studies have systematically evaluated the successes, failures,

and unintended consequences of public-sector reorganizations. Lester Salamon
4

(1981b:60) even went so far as to proclaim that "Serious empirical work on the real
effects of reorganization is not only deficient; it is nonexistent." Though perhaps
hyperbolic, Salamon's statement reflects the concern of many academics, including
Harold Seidman (1974:489), whose remarks two decades ago regarding our level of
knowledge still have a strong ring of truth today.

We're dealing here with mythology — we expect that

reorganizations will produce miracles, as a matter of
faith. We've had almost no systematic analysis to
determine what in fact reorganizations achieve. This
was one of my great frustrations when I was respon-
sible for the President's reorganization program. We
never had the time or staff to analyze the results of
reorganizations. At the National Academy of Public
Administration we did do three case studies of reorga-
nizations [Seidman et al. 1971] to see what they accom-
plished in terms of the objective stated by the President.
We found, interestingly enough, that once the reorgani-
zations went through, there ceased to be any interest in
the White House. If there had been some follow-up the
likelihood of achieving the President's objectives might
have been enhanced. There were some changes in a
direction totally different from that desired by the
President.

Seidman's comments are telling. Presidential attempts at comprehensive

reorganization of the Executive Branch are often undertaken as ritual responses to
perceived bureaucratic problems. According to March and Olsen (1983:284-85),
presidents "go through a cycle of enthusiasm and disappointment," in which they
typically enter office with innocent, ignorant, and naive notions about the process of
reorganizing, soon realize they "miscalculated the difficulties of achieving substantial
reform in the national government," and subsequently back off, often trading their
reorganization plans in the process as a bargaining chip with Congress. Vogelsang-
Coombs and Cummins (1982:22) argue similarly that "executive reorganizations are
pervasive rites of presidential politics" which have "expressive and symbolic political
uses, irrespective of whether or not they produce long-term changes in government
performance." Thus, the dearth of evaluations is only surprising if reorganizations
 REORGANIZING PUBLIC ORGANIZATIONS 265

are examined instrumentally rather than symbolically (March and Olsen 1983:
289-91).
Reorganization can be seen as a symbolic form of communication in which
politicians — especially presidents — attempt to assert control over the bureaucracy
by waving the banner of reorganization. The very possibility of reorganization may
then stimulate self-inspection by the agencies themselves (March and Olsen
1983:289). As symbols, reorganizations signal political intentions to those within
public organizations and the government as a whole, and thus may have an effect
independent of implementation, and serve purposes outside of campaign-related
rhetoric (Kaufman 1977:405). Reorganization plans often signal support, or a lack of
support, for particular programs. Though President Carter publicly emphasized
efficiency, simplicity, and reducing the size of government, his first major reorganiza-
tion (creating a new, cabinet-level Department of Energy) signaled his intention to
create a comprehensive energy policy (Kaufman 1977:406).
Symbolism thus has functional purposes which should be considered in
addition to the instrumental purposes given greater attention in the literature and in
this review. Even though large-scale attempts at reorganization, especially compre-
hensive multi-agency reorganizations, typically fail to be implemented, let alone
achieve their primary purposes without substantial side effects, they may still serve
long-term, functional purposes by shaping ideas (March and Olsen 1983), and signal-
ing political intent (Kaufman 1977; Vogelsang-Coombs and Cummins 1982). Reor-
ganization rhetoric may also symbolize and affirm the values which legitimate our
political institutions, even if the institutions themselves are not able to achieve those
values in practice (March and Olsen 1983:292).
The very idea of "reorganization" symbolizes some level of dissatisfaction
with the bureaucracy. Everyone thus supports reorganization in principle, even
though specific attempts to reorganize invariably run up against various interests
(whether in Congress, the public organizations themselves, or in the private sector)
which benefit from the status quo and attempt to impede the effort (Rourke 1957;
Seidman and Gilmour 1986; March and Olsen 1983:290). Unlike organizing a new
program, in which various interests fight for a design beneficial to themselves (T.
Moe 1989), reorganization faces the additional inertial constraints of "entrenched
interests" and organizational routine, and thus requires great effort on the part of
266 COMPILATION OF REPORTS

political leaders and program administrators if they desire to bring about real opera-
tional change rather than simply rearrange organizational charts. As Fesler and Kettl
(1991:99) succinctly note: "Where a program is placed matters, and many in and out
of government care." Thus, reorganization plans which do not consider the political
context of the current organization can expect to confront "unexpected" surprises.
Reorganizations are also initiated for apparently non-functional reasons,
particularly when they come from within public organizations. Public managers
sometimes reorganize as an habitual response to perceived problems rather than as a
direct response to external changes affecting organizational performance (Bozeman
and Straussman 1990:137). For example, some public managers reorganize routinely,
believing the process itself will stimulate people to work harder (Wilson 1989:212),
or simply "because a new executive feels that it is expected of him and because it
gives him a feeling of influencing the organization" (Simon, Smithburg, and Thomp-
son 1950:174). Unfortunately, such untargeted reorganizations, undertaken solely to
loosen up deeply-rooted, informal relationships, may simply provide an opportunity
for new and unanticipated relationships to develop in their stead (Kaufman 1971:
55-6).
Even when reorganizations are initiated for functional reasons, they usually
do not address the most controversial issues or resolve those underlying tensions. At
the federal level, evidence suggests that reorganization plans initiated at the White
House or Cabinet level tend to be "transmitted after the most controversial issues
have been resolved elsewhere," and that the plans themselves do not always relate
specifically to the most controversial issues (Seidman et al. 1971:A-4,5). Mosher
(1967) presents similar evidence at the state level. In summary comments to twelve
case studies, Mosher (1967:501) argues that reorganization efforts are typically just
one step in a progressive series of attempts to resolve underlying tensions, and that
"the majority of reorganization efforts are unsuccessful or only partially successful"
in reducing those tensions.
These prefatory comments are intended to warn the reader against overly
instrumental interpretations of the discussion which follows. Though some have
argued that reorganizations are simply functional responses to social, economic, or
technical changes in society (Grafton 1979), political scientists have increasingly
taken an institutional perspective in which both symbolic politics and self-aggrandiz-
 REORGANIZING PUBLIC ORGANIZATIONS 267

ing turf battles determine the rhetoric of reorganizations. In this perspective, public
organizations are profoundly political bodies, and thus all reorganizations should be
analyzed as occurring within a political system and subject to political maneuvers.
Thus, even if reorganization planners substantially agree on the values they seek to
enshrine by selecting a particular organizational structure, several challenges still
remain. Empirical evidence suggests that relatively few reorganizations successfully
achieve their intended purposes. Political and organizational obstacles to change are
legionary, and thus any attempt to reorganize a public organization should be seen as
just one more step in a long string of efforts to resolve the underlying tensions the
reorganization is intended to resolve.

PERFORMANCE CRITERIA FOR ASSESSING ALTERNATIVE

ORGANIZATIONAL STRUCTURES IN THE PUBLIC SECTOR
The most illuminating discussions of public-sector reorganizations treat
values explicitly (Simon, Smithburg, and Thompson 1950; Kaufman 1956; Salamon
1981b; March and Olsen 1983), focusing on the criteria various actors pursue in
planning and negotiating the redesign of public organizations. Though normative
treatises can also be useful, particularly when authors compare various design theo-
ries on the basis of logical merit and the criteria proffered (White 1989; R. Moe
1987; Knott and Miller 1987), this paper neither constructs nor defends any one
theory. Instead, the focus is on the value trade-offs embedded within various design
alternatives. The order in which the criteria are presented below is not intended to
suggest that some criteria are necessarily more "important" than others, but is instead
indicative of the relative emphasis these criteria receive in the literature.
5

ECONOMY AND EFFICIENCY

The efficiency criterion and its companion, economy (or cost savings), appear
in many guises, and thus should be treated as several related criteria. For example, in
the so-called "administrative science" era of public administration, which reached its
zenith in the 1930s, economy and efficiency were used in the context of "streamlin-
ing" the bureaucracy (i.e., grouping programs with similar functions, reducing orga-
nizational redundancies and overlaps, and clarifying lines of accountability). In this
context, economy was thought to be the result of implementing a grab bag of prin-
268 COMPILATION OF REPORTS

ciples which were neither precisely defined nor logically consistent (Simon 1976;
Kaufman 1977).
According to Meier (1980:398), the logic of classical administrative theory is
"simple and persuasive" on its face:

Organizations with one person in charge, no duplicated

programs, functional organization, limited spans of
control, etc., can accomplish tasks with fewer employ-
ees and at less cost. The logic of classical organization
theory, therefore, implies that executive reorganization
along specified lines can reduce government employ-
ment and expenditures — not necessarily absolutely (so
that a government's total employment will be lower
after a reorganization than before) but rather relatively
(i.e., employment will be lower than it would have been
had the government not reorganized).

However, when Meier tested this relative-cost-savings hypothesis with a longitudinal

analysis of sixteen state government reorganizations, he found only three reorganiza-
tions producing statistically significant long-term declines in employment. More-
over, none of the sixteen reorganizations showed significant short-term declines in
employment, nor did any produce statistically significant short- or long-term reduc-
tions in expenditures. "In short, the conventional wisdom that executive reorganiza-
tion along the principles of classical organization theory introduces economies into
bureaucracy is not supported for major American state government reorganizations
from 1965 to 1975" (Meier 1980:410). Though similar studies have not been con-
6

ducted at the federal level, Salamon (1981b:66) cites estimates which suggest ad-
7

ministrative reorganizations could cut only a fraction of one percent of any given
budget without cutting into the programs themselves. 8

In microeconomic theory, efficiency has several precise definitions, all of

which fit within a well-delineated model of individual behavior. Unlike administra-
tive science, microeconomics suggests efficiency is produced through competitive
markets rather than hierarchical monopolies. In theory, private markets produce
goods and services at the lowest cost (production efficiency), and allocate them to
their most valued uses (allocative efficiency), if individuals and organizations are
self-interested and competition is "perfect." Though perfect competition requires
 REORGANIZING PUBLIC ORGANIZATIONS 269

negligible information costs, easy access into and out of markets, and the presence of
many non-colluding competitors — conditions seldom, if ever, attained in actual
markets — economists argue that it is the incentives, not the pure conditions, which
are important, and thus the closer are markets to "perfect" the stronger are the effi-
ciency-inducing incentives.
"Public choice" theorists therefore conclude that many aspects of governmen-
tal operations can and should be privatized since monopolistic (non-competitive)
bureaucracies, filled with career civil servants (whose jobs are protected), do not face
the proper incentives to promote either production or allocative efficiency, nor the
incentives to take risks and to innovate (engineering or technical efficiency).
Privatization is only appropriate, however, in those cases in which competition exists
in the private sector (or in which the government expects to regulate the programs it
has privatized), and in which more important criteria are not threatened in the pro-
cess. According to Simon, Smithburg, and Thompson (1950:171-72):

Efficiency is a meaningful criterion only when an

organizational choice is to be made in terms of agreed-
upon objectives. When the very point at issue is the
determination of what the organization objectives are to
be, or what relative emphasis is to be placed on differ-
ent objectives, efficiency cannot be the criterion of
choice.

Efficiency is often presented as the primary reason for reorganizations be-

cause it is the "most universally appealing" criterion, and thus "helps mobilize mas-
sive support which it is hoped will overcome anticipated opposition to specific
proposals" (Musicus 1964:108). At the state level, Mosher (1967:514) similarly
found efficiency to be the rallying cry behind most reorganizations, even though the
actual goals of those initiating the reorganizations were more commonly related to
changes in the organization's image, policy, or program. Efficiency can thus be
understood symbolically, as a deeply held and widely shared value (March and Olsen
1983), in addition to its logical relationship to various theories. Economy and effi-
ciency may thus be the most often expected, but least often delivered, objectives of
reorganization (Salamon 1981b:64).
270 COMPILATION OF REPORTS

EFFECTIVENESS
Effectiveness refers to the ability of an organization to "get the job done" —
to carry out its primary mission and to meet its goals. Though program goals are
purportedly the raison d'etre of public organizations, effectiveness is more often
assumed than discussed by reorganization planners and theorists. This is surprising,
and potentially troubling, for at least two reasons. First, even though the evolution of
goals is often a contributing factor to reorganizations, the "real" goals of the actors
involved are not always publicly announced (Mosher 1967:495-97). Thus, it can be
very difficult to evaluate the success of reorganizations since it is not always possible
to know why they were undertaken or precisely what the goals of the organizations
are.
Second, even if goals are known and agreed upon, other criteria sometimes
conflict with effectiveness. For example, if, in the guise of economy or efficiency,
costs are continually cut in an attempt to ferret out "waste" in the form of organiza-
tional slack or redundant systems, program effectiveness at some point will be threat-
ened. Accountability and control may also threaten effectiveness if political superi-
9

ors rely on strict hierarchical rales which do not permit professional expertise to play
a role in technical, legal, or medical decision-making processes. Thus, James Q.
Wilson (1989:11-12) argues that reorganization planners should consider public
organizations from the bottom up, as well as from the top down, since then "we can
assess the extent to which their management systems and administrative arrangements
are well or poorly suited to the tasks the agencies actually perform." Though tasks
vary considerably between public organizations — from high to low technology,
from regulatory to line functions, and from administrative to advisory roles — reor-
ganization theorists seldom attempt to account for this variation.

POLITICAL ACCOUNTABILITY AND CONTROL

Since public organizations exist in order to perform public functions, theorists
generally agree these organizations should be accountable to elected officials, and in
some sense controlled by them. The tougher questions are "Accountable to whom?"
and "How much control?" Some place great value on executive leadership as a
means for coordinating national policy in the fragmented bureaucracy (Emmerich
1971; Szanton 1981; Seidman and Gilmour 1986). These theorists typically favor
 REORGANIZING PUBLIC ORGANIZATIONS 271

hierarchical designs, with clear lines of accountability to the president and relatively
limited decision-making discretion within the organizations themselves. Kaufman
(1956) argues that the continued calls for executive leadership since the 1930s should
be understood in an historical context, as a response to the perceived fragmentation of
the federal bureaucracy which resulted from the increasing use of such alternative
organizational forms as independent commissions and government corporations.
Empowering the executive to lead public organizations through hierarchical designs
is thus valued as a means for overcoming the perceived problems of fragmentation.
According to Kaufman (1956:1063), the charges against fragmentation have been
many:

[Fragmentation] bred chaos; agencies pursued contra-

dictory policies in related fields. It fomented conflict;
agencies engaged in bitter bureaucratic warfare to
establish their spheres of jurisdiction. It opened gaps in
the provision of service or of regulation; clienteles were
sometimes denied benefits or escaped supervision
because they fell between agencies. It was costly;
many agencies maintained overhead organizations that
could have been replaced more cheaply and effectively
by a common organization, and citizens had to make
their own way through bureaucratic labyrinths. And,
most important of all, it led to irresponsibility; no one
quite knew how the pattern of organization and pro-
gram came into existence or what could be done to alter
it, each segment of the fragmented governments be-
came a self-directing unit, the impact of elections on
the conduct of government was minimized, and special
interest groups often succeeded in virtually capturing
control of individual agencies. No one seemed to be
steering the governmental machinery, though everyone
had a hand in it....

Regardless of whether diverse organizational forms and autonomy from executive

control actually produce these popularly hypothesized effects, the evidence that
centralizing authority under the President reverses them is scant, complex, and
contradictory. Moving an independent agency into an executive branch department
may, in fact, "be of little more significance than a change of address" (Rourke
1957:477).
Congressional control and accountability are generally exercised through
272 COMPILATION OF REPORTS

committees, through oversight hearings and the appropriations process. From this
perspective, hierarchical designs may be unnecessary, since Congress has the "power
of the purse." However, the more a public organization relies on funding sources
external to the appropriations process (e.g., user fees or bond sales), the more inde-
pendent it is from congressional control. Government corporations, for example, are
advocated by those seeking autonomy from "micromanagers" in Congress (as well as
in the Executive Office of the President). Congress is seldom looked upon as a
source of coordinated policy, since its program-oriented committee structure breeds
fragmentation, and since the committees are often accused of being allied with
special-interest groups. Congress is also seldom advocated as a source of control,
since "Congress can exercise only a general and intermittent oversight over adminis-
trative agencies, and has had to confine itself to providing general standards guiding
the exercise of administrative discretion and to occasional intervention to correct
abuses or to force specific changes in policy" (Kaufman 1956:1062).

PUBLIC PARTICIPATION IN DECISION-MAKING PROCESSES

Public participation is usually valued as an alternative means of political
control and accountability. Since public organizations are ultimately accountable to
the public, they can either be held accountable to elected representatives or to citizens
directly. In the 19th Century, especially following the so-called Jacksonian Revolu-
tion, citizen involvement in public organizations reached a high point through the use
of long ballots, in which "almost every public official from President down to dog-
catcher came to power via the electoral route" (Kaufman 1956:1059). In the latter
half of the 20th Century, public participation arrived in a different form. Rather than
electing citizens as administrators, systems were set up which permitted, and even
required, citizen input in decision-making processes. According to Kaufman
(1977:394):

Underlying this strategy is the premise that if people

affected by governmental decisions and actions take
part in the formulation of such measures, no interest
will be overlooked or neglected and no significant
consequence unanticipated. Few claims are made for
the efficiency of such procedures, but responsiveness
and, to a lesser extent, effectiveness can allegedly be
 REORGANIZING PUBLIC ORGANIZATIONS 273

improved in this fashion, thus diminishing the feeling

that government is out of control.

Decentralized authority is an indirect means for increasing public participa-

tion at the street level since it is here that organizations interact with clients. Thus,
while centralizing hierarchical structures is thought to increase political control and
accountability (if not economy, efficiency, or effectiveness), decentralization is
believed to increase the opportunities for an organization's clients to influence inter-
nal decision-making processes (Bozeman and Straussman 1990:148; Kaufman
1977:401).

PROFESSIONAL AUTONOMY WITHIN THE ORGANIZATION

Professional autonomy is similar to the notion of "neutral competence."
However, while the core value of neutral competence is the "ability to do the work of
government expertly, and to do it according to explicit, objective standards rather
than to personal or party or other obligations and loyalties" (Kaufman 1956:1060),
professionals maintain loyalties to their various associational codes of ethics and
conduct (Seidman and Gilmour 1986:178-85). Though completely objective
decisionmaking (neutral competence) is unlikely in public organizations, objectivity
can be enhanced by organizational designs which encourage decision-making pro-
cesses incorporating expert opinions and professional standards rather than patronage
appointments and political micromanagement.
Accordingly, those advocating practitioner or professional expertise as the
primary criterion for reorganization opt for relatively flat hierarchical designs and/or
independence from political control and public participation. Interest groups may
still influence policy indirectly, however, if they successfully empower professions
whose worldviews and decision-making processes are sympathetic to their own cause
(T. Moe 1989). In either case, professions often seek to control the internal labor
markets of various public organizations, and such efforts may have important impli-
cations for operations and policy.

SAFETY AND RELIABILITY

Certain programs require safe and/or reliable performance. For example, in
our current culture, it would be difficult to imagine governmental programs regulat-
274 COMPILATION OF REPORTS

ing pharmaceuticals, air traffic, or nuclear power which did not rate safety and
reliability as important, if not paramount, operational criteria. Though governments
can certainly regulate private organizations to ensure safe and reliable delivery of
services, Ronald Moe (1987:457) argues that public concern for safety may be suffi-
cient justification for placing a program in the public (rather than the private) sector,
regardless of whether these concerns are technically merited.
Organizational redundancy — i.e., creating parallel systems and/or units with
overlapping duties — is a standard method for ensuring reliable operations (Landau
1969). If one system fails, back-up systems ensure continued operations; if one
organization or organizational unit is not sufficiently watchful, others with overlap-
ping duties provide additional assurance that specific details are attended to and that
the routines themselves are technically appropriate. Since safety often depends upon
reliable operations, these criteria present challenges to those seeking efficiency by
reducing "wasteful" redundancies and overlaps both within and between public
organizations (Landau 1991). One method for analyzing this trade-off is to recall
that low-cost production (productive efficiency) can only be measured against a given
level of output; thus, if safety and reliability are considered to be integral components
of organizational operations, then redundancy will not only seem appropriate, but
should be treated as a standard "cost of doing business."

EQUITY IN SERVICE DELIVERY AND REGULATORY EFFECT

Equity is typically ignored or glossed over in discussions about reorganiza-
tions, which is somewhat surprising since equity is often touted as a primary justifica-
tion for governmental regulation and service provision. There are, however, no
theoretical or empirical reasons to believe that one type of organizational design is
likely to promote more equitable outcomes than another. Wilson (1989:353) even
goes so far as to argue that "there are no clear theoretical grounds on which to make
predictions about whether government bureaus or private firms will be fairer in
distributing outputs and acquiring inputs." It is possible, for example, that regulated
private markets may actually promote greater equity than public organizations, since
it is sometimes easier for public organizations to regulate private firms than other
public organizations given that unclear lines of authority often link public organiza-
tions (Wilson and Rachal 1977). Moreover, some regulatory agencies and commis-
 REORGANIZING PUBLIC ORGANIZATIONS 275

sions actually benefit specific sectors of the public, despite their purported mandate to
regulate in the public interest, since they are sometimes designed to benefit certain
special interests (T. Moe 1989) or may have come to be "captured" by the special
interests they were originally intended to regulate (Bernstein 1955).

POLITICAL EFFICACY
Thus far, we have discussed criteria which evaluate organizations in terms of
their outputs and/or processes. Political efficacy is a different type of criterion in that
it accounts for the political constraints which reorganizations confront during imple-
mentation. Some plans are likely to encounter more opposition than others, particu-
larly if they attempt to trod over established and powerful interests. In fact, relatively
few reorganization plans are translated into action precisely because of resistance by
bureaucrats and elected officials seeking to protect their turf, and by all those interest
groups which fear they will not benefit from the reorganization (Seidman 1974;
Seidman and Gilmour 1986; Fesler and Kettl 1991:101-2). Reorganizes thus rely on
symbols, such as efficiency, to rally others behind their plans when attempting to
overcome these political constraints (Musicus 1964; Mosher 1967).
Some argue that reorganization plans can only be successful (efficacious) if
they "mirror" the committee structure of Congress (Seidman 1974:489), and thus take
into account the political needs of Congressmen, many of whom have purposely
sought membership on certain committees in order to promote the interests of their
constituents. According to Wilson (1989:268):

Taking a bureau out of one department and putting it

into another often means shifting oversight responsibil-
ity for that bureau from one committee (or subcommit-
tee) to another. A willingness to surrender turf is as
rare among members of Congress as it is among cabinet
secretaries.

Presidents also pursue reorganizations in order to fulfill campaign promises

— promises which may conflict with the re-election needs of Congressmen. Since
presidents are subject to four-year election cycles, we can probably expect they will
be more likely to pursue unpopular policies which disrupt the relationships between
interest groups, Congressional committees, and bureaucrats in their first year in
276 COMPILATION OF REPORTS

office, and to let these efforts languish as their re-election (or "lame duck" status)
approaches.
While this may sound excessively cynical or pessimistic, March and Olsen
(1983) note some positive aspects of these political constraints. The "rhetoric of
realpolitik," as they refer to it, is an empirical and prescriptive counterpoint to the
orthodox rhetoric of public administration which emphasizes efficiency and manage-
rial control. Not only do many actors influence organizational structure, it is good
they do so since "a single individual has neither the cognitive capacity, nor the time
and energy, nor the moral and representational standing assumed by the managerial
perspective" (1983:283). Though largely rejected as an official basis for reorganiza-
tion, awareness of political constraints makes it possible to achieve limited changes in
organizational structure (Arnold 1974; March and Olsen 1983; Seidman and Gilmour
1986).
In this regard, some observers have noted that successful reorganizations
appear more likely in those cases in which the impetus comes from "insiders." Ac-
cording to Tierney (1981), the postal reorganization of 1971, for example, was
relatively successful because it was largely engineered by officials in the old Post
Office Department. Similarly, Mosher (1967:514) concludes from twelve state-level
case studies that reorganizations tend to be more successful if they are directed
towards solving administrative problems rather than making programmatic changes,
and are generated (at least in part) by "insiders" rather than private outside consult-
ants. Politicians, however, may be "loath to seek advice on change from people with
heavy stakes in existing institutions and arrangements" and may want to seek diverse
viewpoints or carefully select reorganization advisers in order to enhance the prestige
and authority of a reorganization plan (Kaufman 1977:412).

PUBLIC TRUST AND CONFIDENCE

Public trust — a complex, multi-faceted concept — has received little atten-
tion in the context of public organizations; and, like equity, has seldom been consid-
ered by reorganization scholars and planners. Some tentative links between public
trust and public-sector reorganizations have been drawn, however, in a previous
paper I prepared for the Secretary of Energy Advisory Board entitled "Public Trust in
Organizations and Institutions" (Thomas 1991). Some of these links are cited below
 REORGANIZING PUBLIC ORGANIZATIONS 277

and in subsequent sections, but readers should consult the previous paper for a fuller
treatment.
Because trust is multi-faceted (with both interpersonal and institutional di-
mensions), it is unlikely any particular reorganization will increase (or decrease)
public trust in a consistent way. The very act of reorganization, for example, is likely
to endanger the existing interpersonal trust-based relationships which have developed
between individuals associated with the public organization, including civil servants,
clients, and various members of the citizenry. If reorganization planners are con-
cerned about retaining the trust of these segments of the community, they should
avoid disrupting existing social relationships — which may prove difficult since most
reorganizations are intended to alter many of the established relationships which have
developed between organization members and individuals in the organization's
environment. Though trust can be instilled through new social exchanges, this may
be a lengthy process.
On an institutional level, reorganizations may produce public trust if they
bring into the organization various institutional processes which themselves are
trusted by the public. Thus, reorganizations which enhance professional decision-
making processes may bolster public trust since many professions are trusted by large
portions of the public. In addition, regulatory oversight may bolster public trust if
the regulatory process is both effective and trusted by the public.

STRUCTURAL ALTERNATIVES FOR PUBLIC-SECTOR

REORGANIZATIONS
The previous section presented various criteria for evaluating alternative
organizational designs. In this section, structural alternatives are discussed in light of
these criteria. These alternatives are broadly construed, and thus should be seen as
categories rather than specific models. They are presented, roughly, from most to
10

least centralized. The final category, however, differs from the others in that it is
composed of alternatives which do not require significant structural changes.
278 COMPILATION OF REPORTS

CENTRALIZE HIERARCHICAL RELATIONSHIPS

WITHIN THE EXECUTIVE BRANCH
The so-called principles of administrative science, particularly as delineated
by Roosevelt's 1937 Committee on Administrative Management (the Brownlow
Committee) and the two Hoover Commissions of 1949 and 1955, have had a pro-
found and long-term impact on politicians and public administrators (Arnold 1974;
March and Olsen 1983; Knott and Miller 1987). Even some academics (Emmerich
1971; Miles 1977) continued to cling to these "management principles" long after
such reorganization efforts proved politically intractable and the logical validity upon
which they rested had been seriously challenged by Herbert Simon (1976) and others.
Though streamlining (reducing "wasteful" organizational overlaps, duplications, and
redundancies) and hierarchical accountability to the President have been relatively
consistent themes since at least the 1930s, they are certainly not the only criteria by
which to assess reorganization strategies which centralize hierarchical relationships
within the Executive Branch, nor is the evidence clear such reorganizations promote
either efficiency, control, or coordination.
Herbert Emmerich (1971:8), who promoted presidential control as a dominant
criteria, defined "reorganization" as any change in the size, distribution, and nature of
executive functions, including changes in staff, financing, and management controls
which "measurably affect the ability of the heads of the executive branch — the
President and his department heads — to supervise and direct the manner in which
the functions are exercised." Emmerich treated the presidency as the "focal point" of
"responsible" administrative management because the President is the only position
capable of overcoming the "centrifugal forces" of specialized interests which operate
directly on agencies and through Congress (1971:10-11). Specialized interests are
"irrational and illogical," he argued, because they impede reform efforts aimed at
unifying the executive branch (1971:16), which ostensibly would benefit the public
interest as defined by the President. Given his emphasis on presidential control, it is
not surprising that Emmerich disparaged such organizational forms as independent
regulatory commissions, government corporations, and contractual relationships
(1971:11), all of which — as will be discussed later — provide fewer means for
presidential control.
Because of his emphasis on presidential authority as a means for coordinating
 REORGANIZING PUBLIC ORGANIZATIONS 279

and directing national policymaking, Emmerich can be seen as a modern-day Hamil-

tonian, and thus his reasoning should be examined in light of James Madison's fear of
concentrating too much power in any one branch of government. In Federalist 10,
Madison argued that the protection of individual liberty from political tyranny should
be considered the most important criteria when designing democratic forms of gov-
ernment. Since overly centralized power may permit a single faction to dominate all
others, power should be distributed widely, as it is in the Constitution, in order that
each center of power can provide checks and balances against the others. Thus,
organizational structures which protect personal liberty necessarily create impedi-
ments to coherent and coordinated national policy (Salamon 1981b:79-80).
In practice, however, reorganizations within the Executive Branch are seldom
conducted in such a sublime philosophical atmosphere. Not only are symbolic
rhetoric (Kaufman 1977; Vogelsang-Coombs and Cummins 1982; March and Olsen
1983, 1989; Knott and Miller 1987) and battles over political turf (Arnold 1974;
Seidman 1974; Seidman and Gilmour 1986) often paramount, but empirical evidence
supporting the claims that formal centralization promotes either presidential control
or bureaucratic efficiency is extraordinarily weak. Mergers are a standard means for
reducing the number of agencies and thus increasing executive control (Musicus
1964:109). The empirical evidence regarding the effects of mergers, however, is
quite complicated. According to Wilson (1989:267-68), the creation of the Depart-
ment of Health, Education, and Welfare, which merged a variety of agencies, "made
little difference: the component bureaus, each with its distinctive culture, professional
outlook, and congressional supporters, continued for the most part to operate inde-
pendently of each other and of HEW's central leadership." Wilson argues that reor-
ganizations which simply move boxes around on the government's formal organiza-
tion chart may have relatively little effect — outside of causing turmoil and confu-
sion — unless they redefine the core tasks of the bureaus. "The 'semi-merger' of the
FBI and DEA [following the drug-control reorganizations of 1968 and 1973] made a
much bigger difference because it altered promotion lines, provided new resources,
and led (after a period of resistance) to redefining somewhat the core tasks of both
the FBI and DEA" (Wilson 1989:267).
The effect of moving organizational boxes on organizational operations may
depend upon the "hospitality" of the host agency or department. Miles (1977:157)
280 COMPILATION OF REPORTS

argues that agencies "should be placed in settings that are most conducive to the
achievement of their central missions." This logic assumes, of course, that reorganiz-
e s want a particular organization to be effective. Conversely, "if a small unit is
located in an organization to which it is only distantly related, or where its contribu-
tion is generally felt to be unimportant by the rest of the organization, it may become
a 'stepchild' and may consequently be neglected by the top executives and others in
the organization unless moved elsewhere" (Simon, Smithburg, and Thompson
1950:169).
Hult (1987:6) provides the most rigorous empirical evidence of the effects of
mergers. She tracked three cases at the state and federal levels, finding great com-
plexity and no clear patterns.

Contrary to expectations of both advocates and oppo-

nents, these reorganizations led to some changes but not
others; nor were all of the shifts necessarily desirable.
Consolidation succeeded in making one of the new
agencies more responsive to elected officials and, in
another case, weakening iron triangle-like ties. It also
fostered a shift in policy direction and some, albeit
limited, improvement in the pursuit of policy goals.
However, in one of the agencies, merger had no identi-
fiable effect whatsoever. And, even in the others,
consolidation was not a quick, easy, or automatic way
of producing desired change. Its consequences de-
pended on a wide range of factors, only some of which
could be manipulated by policymakers or agency
officials.

Hult (1987:9) concluded, however, that mergers which bring together "com-
peting empires" or "interdependent" organizations are more likely to bring about
changes in relationships and performance than mergers of organizations with quite
dissimilar functions. Though Wilson (1989:267) argued that mergers are only suc-
cessful if they redefine the core tasks of the organizations since the tasks themselves
largely determine organizational outcomes, Hult (1987:8-10) suggests that political
control can be strengthened through merger if the existing organizations are either in
competition or interdependent with one another.
Political control may also be strengthened if top managers find strategies
which attract the support of external advocates of one subunit for the work of others,
 REORGANIZING PUBLIC ORGANIZATIONS 281

and in so doing diversify interest group ties and loosen the links forged by old clien-
tele groups. Certain variables, however, appear to be outside the control of
policymakers (Hult 1987:10):

Technical uncertainty and resource scarcity placed

ceilings on performance that were not always expected
or completely understood. Changes in issue salience
and policy context were difficult to anticipate and steer.

While centralization is avowedly pursued as a means for controlling public organiza-

tions and/or reducing costs, the degree to which either objective is achieved through
centralization is relatively unknown. Success appears contingent upon numerous
other factors.

INCORPORATE AN INDEPENDENT ORGANIZATION INTO

AN EXECUTIVE BRANCH DEPARTMENT
The standard justification for incorporating an independent agency or bureau
into an executive branch department is the desire to increase the coherence of presi-
dential programs by increasing executive control over a governmental function
(Emmerich 1971). Even if an independent agency can not be moved into a depart-
ment with a common mission (thus "streamlining" or "rationalizing" the bureau-
cracy), the very act of incorporation may be beneficial if it decreases the likelihood
of capture. Fesler (1974:491) argues that capture is less likely to occur in large
departments because they encompass many bureaus, each representing differing
missions and interests, thus allowing the department administrator to play one set of
interests off another. This is not a neat division, however, since large departments do
not always represent multiple interests. Labor groups, for example, fought to have
OSHA placed within the Department of Labor precisely because they considered the
department to be a safe haven for labor interests (T. Moe 1989). It is also possible
n

for independent agencies and commissions to regulate multiple industries, as is the

case with the EPA. In sum, while avoiding interest-group capture may be an impor-
tant objective of reorganization, it is not necessarily achieved by moving an organiza-
tion into an executive branch department.
Nevertheless, interest groups allied with or receiving benefits from an inde-
282 COMPILATION OF REPORTS

pendent public organization will typically oppose inclusion within a department

because they fear their direct influence in the agency and/or their indirect influence
through Congress will wane as a result. Rourke (1957) found, however, that such
interest-group fears may be misplaced. He concluded his case study of the transfer of
the Bureau of Employment Security from the Federal Security Agency to the Depart-
ment of Labor in Reorganization Plan No. 2 of 1949, by arguing that, "contrary to
their expectations, the influence of groups which aligned themselves in opposition to
the plan has been, if anything, increased rather than diminished" since the Plan's
approval (1957:476). The Secretary of Labor did not come to play an important role
in employment security policy, and thus the effect of the reorganization "proved to be
of little more significance than a change of address" (1957:477). Moreover, the
interest groups continued to muster majorities in Congress in support of their favored
proposals. Therefore, incorporating the Bureau of Employment Security into the
Department of Labor did not increase executive control over the program.
Though operations were unaffected in this case, Rourke (1957:477) argues
agency transfers can have a large effect if the new department is hostile to the
organization's mission. "The Corps of Engineers, for example, if threatened with
transfer to the Department of the Interior, might conceivably face the prospect of
having its conservation functions absorbed by the Bureau of Reclamation" (Rourke
1957:477). Similarly, notes Kaufman (1977:403): "If the Arms Control and Disarma-
ment Agency had been set up in the Department of Defense instead of as an indepen-
dent unit, it seems likely that the advocates of arms limitations would have had less
impact on policy than they did."
Intragovernmental regulation can serve as an alternative means of controlling
independent organizations. The evidence so far, however, suggests it is difficult for
one public organization to exert regulatory control over another when lines of author-
ity between the organizations are not clearly delineated and agreed upon. For ex-
ample, Wilson and Rachal (1977), drawing on the difficulties the EPA faced in
attempting to regulate the Tennessee Valley Authority (TVA), argue that it may be
easier for a government agency to regulate a private firm than another public organi-
zation. Though there appear to be differences in the degree to which different types
12

of public organizations can regulate the activities of others, the evidence at this point
is quite limited, and therefore incorporating an independent agency into an executive
 REORGANIZING PUBLIC ORGANIZATIONS 283

department may provide a stronger means for executive control and program coordi-
nation than intragovernmental regulation.

CREATE AN INDEPENDENT AGENCY OR COMMISSION

Independence from presidential control provides a public organization with a
more autonomous political milieu within which interest groups, pubhc managers, and
professional decision-making processes can achieve greater prominence. While
single-headed organizations responsible directly to the President are generally fa-
vored by those seeking presidentially coordinated national policymaking through
clear lines of authority and minimal duplication of efforts, independent agencies and
multi-headed boards and commissions are advocated by those seeking to remove
"politics" from particular governmental programs (Simon, Smithburg, and Thompson
1950:47-49). These distinctions, however, are quite general; in practice, the debates
are more confusing, and the empirical evidence supporting such propositions is far
from conclusive. For example, though independent status may permit organizations
to develop their own personnel systems, including exemptions from Civil Service
regulations, some executive departments do contain agencies (e.g., the Foreign
Service) with independent personnel systems (Seidman and Gilmour 1986:270).
On one level, the independence debate involves a political battle between
Congress and the President over the lines of accountability and the means of control
and oversight. Placing a program within an agency or department of the Executive
Branch and thus "taking hierarchy as the main basis for organization assumes either
explicitly or implicitly that it is the President who is entitled to determine the
government's programs" (Mansfield 1974:492). Conversely, "Congressional com-
mittees, especially the appropriations committees, sometimes take a very firm posi-
tion on insisting that as far as instructions to agencies are concerned, their marching
orders come from the committee and it is up to the committee, and not the President,
to say how high they should jump" (Mansfield 1974:492). Though independent
agencies and commissions are intended to operate independently of departmental
control, they are still "subject to congressional oversight as well as presidential
direction through established executive branch procedures" (Wise 1989:22).
Since the debate over organizational independence is largely based on rhetoric
rather than empirical evidence, it is useful at this point to review a particular debate
284 COMPILATION OF REPORTS

in order to better understand the various issues which actors believe to be at stake.
Wise (1989:22-23) provides a relatively quick synopsis of the debate over whether
the Federal Aviation Administration (FAA) should be independent, or remain a part,
of the Department of Transportation (DOT). Independence, proponents argue, would
elevate airspace issues by increasing the certainty of funding for that function (since
an independent agency is not subject to departmental budgetary review prior to OMB
review), and by decreasing the layers of decision making necessary for implementing
safety regulations and program initiatives. Moreover, independence would ensure
that such important airspace issues as air traffic control are not subordinated to policy
decisions influenced by non-air-safety factors, such as government fiscal priorities;
and would provide clearer lines of accountability than would inclusion within a
complex set of relationships in an executive branch department.
On the other side, proponents of the current structure (inclusion within DOT)
argue the FAA would benefit from the Department's political clout within the Execu-
tive Branch. Moreover, they argue that DOT often facilitates (rather than delays) the
rule-making process by catching errors prior to OMB review, that airspace policy
should be coordinated with national transportation policies, and that large depart-
ments are better able to weigh the national interest because they do not respond as
readily to specific constituents (e.g., airlines and the aircraft industry). Wise
(1989:23) sums up this debate over the FAA's organizational independence by noting
that economic and managerial issues are not at stake; independence would do "little
of significance on either the economic or managerial dimensions."

CREATE A GOVERNMENT CORPORATION OR ENTERPRISE

Government corporations and enterprises come in many forms, but have some
important common characteristics. For example, they are relatively free from both
political control and bureaucratic constraints on operations. They are also more
responsive to market-like forces than are executive-branch or independent agencies
since they raise much of their revenues independently through user fees and bond
sales rather than through the appropriations process. Thus, supporters argue public
corporations are a more efficient organizational form for those government programs
possessing market-like qualities — i.e., clearly defined outputs which can be priced
and sold in private markets. Though public corporations may not be strictly competi-
 REORGANIZING PUBLIC ORGANIZATIONS 285

tive and profit-driven (Wise 1989:24), they do face different incentives and possess
different powers than other organizational forms. According to Seidman (1952:91):
"This means removal from the necessity of annual appropriations; power to borrow
money; ability to retain earnings as working capital or for reserves; freedom, in the
matter of expenditures, from general governmental regulations and restrictions; and
freedom, in auditing and accounting, from control of regular government accounting
officials." They also provide a politically popular outlet for calls to reduce the size
and influence of government.
Government-sponsored enterprises (GSEs) are "financial institutions char-
tered by the federal government to achieve the public purposes of facilitating the flow
of funds to agriculture, housing, and higher education" (CBO 1991:xvii). There are
currently only five such enterprises, with obligations totaling approximately $1
trillion. GSEs make their investments and loans on the basis of implicit federal
guarantees, and thus the federal government bears much of the risk typically borne by
creditors in private financial markets. GSEs, however, operate like private financial
institutions since the federal government "can allow a GSE's owners and manage-
ment considerable discretion in determining the enterprise's exposure to each type of
risk and the distribution of its overall risk" (CBO 1991:xvii).
Government corporations are more diverse than GSEs. For example, some
corporations are wholly owned by the government, while others have mixed public/
private ownership. They also vary in administrative structure. Not only do their
boards of directors play differing roles, some public corporations have operated
effectively without boards (Seidman 1952:92). In general, boards are thought to be
useful in marshalling political support and shielding the corporation from various
pressures; but they may also be costly to operate, confuse lines of accountability, and
make it more difficult to recruit and hold top officials who may perceive boards as
possessing most of the organization's power (Dean and Seidman 1989:19). Public
corporations also vary in the degree to which they are covered by the Corporation
Control Act and OMB regulatory review (Wise 1989:25-26). In general, these over-
sight mechanisms have increasingly fallen into disuse (R. Moe 1988:48-9).
Seidman and Gilmour (1986:283) argue "the distinguishing attributes of a
U.S. government corporation are not inherent in the corporate form but stem solely
from specific grants of power that have been customarily included in corporate
286 COMPILATION OF REPORTS

charters enacted by the Congress." Similarly, Dean and Seidman (1989:4) argue that
no clear organizational model exists for public corporations:

The Government Corporation Control Act is not a

general incorporation law. There is no comprehensive
federal statute dealing with the powers, organizational
structure and legal status of government corporations.
Corporations possess only those powers which Con-
gress sees fit to include in their individual enabling
acts.

The basic underlying justification, however, is derived from a particular

philosophy of government, a position Seidman (1952:90) succinctly summarizes (but
does not support): "If a service cannot be performed by private enterprise, then
obviously the next best thing is something which looks as nearly as possible like a
private institution and which has as little as possible to do with government." This
philosophical justification may explain why most public corporations have boards of
directors even though there is no clearly discernible instrumental reason why they
should mimic the structure of private corporations.
Though public corporations may respond to a deep-seated distrust of govern-
ment, and are thus seized upon as a panacea for the perceived inefficiencies and
corruption of politicized bureaucracies (Seidman 1952:96), Kaufman (1971:54)
argues that public managers have also participated in the proliferation of public
corporations through their earnest desire to lift political constraints from their activi-
ties and thus to have relatively free reign in deciding how best to meet program
objectives.

Hemmed in by jurisdictional limitations, by elaborate

procedural requirements with regard to finances,
personnel, purchasing, and other housekeeping chores,
and by the hazards and detailed controls of the appro-
priations process, bureaus often cannot accomplish the
missions given them. The corporate form generally
excepts a government agency from many of these
obligations, while leaving it with the powers and the
public-interest perspective that motivate governmental
assumption of the function. For this reason, it is be-
coming an increasingly popular instrument; the layers
 REORGANIZING PUBLIC ORGANIZATIONS 287

of safeguards and commands that contain the discretion

of bureaus have unfitted them for the tasks that now
confront them, forcing the designers of governments to
employ a relatively new device to get out from under.

Indeed, the major impetus behind the postal reorganization of 1971 came
from public managers seeking autonomy from such constraints. According to
Tierney (1981:1):
The architects of the reorganization believed that the
mail delivery system was essentially a business opera-
tion that could be managed more efficiently and effec-
tively if it were converted from an old-line cabinet
agency to a government corporation. The department's
old organizational arrangements appeared to restrict
managerial flexibility, stifle innovation, discourage
cost-consciousness, and cater to the demands of special
interests.

The new Postal Service has "in many ways been remarkably successful," particularly
in modernizing the physical plant, providing new services, decentralizing decision-
making authority, and producing "a more streamlined and effective management
structure" (Tierney 1981:173). Nevertheless, the Postal Service remains a public
organization, not an autonomous corporation, and thus reorganization "did not
13

substantially alter the interests, goals, or demands of the organizations and groups
that compose the postal policy arena" (Tierney 1981:180-81). The organization must
still attempt to satisfy many constituencies by pursuing incompatible objectives.
Moreover, unlike public corporations created from scratch, "the reconstituted Postal
Service inherited an organizational legacy that included outmoded physical plants, an
inflated workforce, rigid standard operating procedures, and a set of established
expectations (both inside and outside the organization) about what the Postal Service
should do and how it should be done" (Tierney 1981:176). These inertial constraints
made it difficult for public managers to meet the high expectations of reformers,
whose enthusiastic rhetoric helped secure passage of the reorganization act (Tierney
1981:175).
Political autonomy for public corporations is typically justified by the indus-
trial or commercial nature of the organization, and thus the benefits which can be
accrued through self-contained financial systems rather than dependence upon annual

yiL'/.i- ••:'•s^:&^"-^-::^}v~M^';r^:> ^•\;v,^jS^^i- j,''- "V .AW^SS-;

J
':<=••.'-•'v-—T-
!
288 COMPILATION OF REPORTS

appropriations. Since public corporations do not perform quasi-judicial or quasi-

legislative functions like some other public organizations (Seidman 1952:93), politi-
cal oversight may be less appropriate. Though public corporations may be relatively
free from political control and accountability (depending upon Congressional desires
to intercede), other forms of external control assume prominence. For example,
public corporations typically must please three important clienteles: "the banking
interests who market their bonds, the buyers of their bonds, and the users of their
facilities and services who furnish the revenues that make their bonds salable"
(Kaufman 1971:73). Moreover, public corporations may be regulated by other public
organizations. Though some argue that intragovernmental regulation may be prob-
lematic if lines of accountability are unclear (Wilson and Rachal 1977; Wise
1989:24), public corporations can be legally designed to be responsive to certain
regulatory bodies. Thus, even though the corporate form may free a program from
certain political constraints, other constraints can be imposed. This is important not
only as a means for providing some coherence to national policy, but also in that
regulatory institutions may be a source of public trust in the organization's operations
(Thomas 1991).
Many of the same debates regarding political independence presented above
in the context of independent agencies and commissions have also been raised regard-
ing public corporations. For example, according to Seidman (1952:94):

Autonomy is two-edged. It means not only freedom

from outside direction and control, but also exclusion
from the "official family" and close working relation-
ships with top policy-making officials. These informal
day-to-day associations afford an official the most
favorable opportunity to influence policy determina-
tions.

Reorganization planners must also decide whether pursuit of coordinated national

policy is more important than financial autonomy, and whether market pressures
should be allowed to have a potentially greater effect on organizational policy than
issues related to the public interest or federal sovereignty (Wise 1989:24). Not
surprisingly, public corporations are repudiated by those advocating presidential
control of public organizations (Emmerich 1971; Seidman 1952:95).
 REORGANIZING PUBLIC ORGANIZATIONS 289

PRIVATIZE (OR DEPRIVATIZE) VARIOUS OPERATIONAL

COMPONENTS THROUGH CONTRACTING
Privatization — "the practice of delegating public duties to private organiza-
tions" (Donahue 1989:3) — has recently garnered a great deal of political cachet.
Broadly construed, the term incorporates a number of differing strategies for financ-
ing and conducting public programs, from liquidating government assets to the use of
contractors, vouchers and tax credits. The following discussion focuses specifically
on the use of contractors, not only because the scope of this literature review is
necessarily limited, but also because contracting is becoming an almost ubiquitous
form of privatization in this country. Moreover, liquidating government assets — an
extreme form of reorganization comparable to ceasing operations altogether and
relying on markets or other levels of government to assume a given function —
would be inappropriate for this discussion since it necessitates reviewing additional
arguments justifying government intervention in general. 14

Contracting has recently received a great deal of academic attention because

of its growing magnitude and the resulting implications for managing public pro-
grams (Salamon 1981a; Donahue 1989; Kettl 1991). Despite the well-known scan-
dals in defense procurement, contracting appears to remain a popular alternative, and
perhaps a politically expedient choice, since privatization may appeal to an underly-
ing antigovernment culture or antibureaucratic bias in the United States (Seidman and
Gilmour 1986:121).
The two standard motivations behind privatization in general, and contracting
specifically, are increased efficiency and reducing the size of government. Though
selling government assets certainly reduces the size of both the federal workforce and
budget, contracting may only reduce the size of the federal workforce. Contracting
does not necessarily reduce the federal budget since contractors can pay higher wages
(including benefits) than public organizations, and since contractors may provide
different levels of service than public organizations would otherwise provide. A
recent study by the General Accounting Office (GAO 1991:65) found that agencies
hiring contractors generally did not know whether contracting had cost more or less
than administering the work in-house since cost comparisons were neither required
nor carried out. "Some agency officials believed contracting for consulting services
cost more, and certain anecdotal evidence supported this belief (GAO 1991:66). 15
290 COMPILATION OF REPORTS

Though contracting may actually raise costs in some circumstances, this does not
necessarily indicate that contracting is less efficient, since contractors may provide a
different level of service.
16

In theory, efficiency in contracting depends upon several conditions. First,

the organization's product must be quantifiable and relatively simple to delineate in a
contract. As a product becomes increasingly intangible and/or complex, contracting
becomes less feasible since it is more difficult to define the product in a contract and
to monitor and evaluate contractor performance. Unfortunately, as Wilson
(1989:348) notes, "the output of government always is complex and often controver-
sial. If an agency has multiple or vague objectives, it is not easy to tell whether those
goals are being attained efficiently, or being attained at all."
Second, the market for private contractors must be sufficiently large in order
to generate competitive bidding between contractors and to act as a performance
incentive after the contract is awarded. If a particular market has relatively few
contractors, collusion or non-competitive understandings between contractors may
arise during the bidding process. The public organization must also rely to a greater
extent on its own oversight mechanisms to ensure that contractual terms are then
fulfilled. Unfortunately, the more an organization relies upon the expertise of con-
tractors rather than public servants, the more difficult it may become for the organi-
zation to evaluate and monitor the performance of its contractors.
Kettl (1991), for example, described the effects of congressionally-mandated
contracting on the Superfund program within the Environmental Protection Agency
(EPA). Since Congress did not want to create a large new bureaucracy when estab-
lishing Superfund, it placed administrative caps on the EPA, forcing the agency to
spend nearly 90 percent of its budget on contractors (1991:7). Thus, while contrac-
tors were developing the cutting-edge expertise for neutralizing hazardous wastes,
Superfund contract managers within the EPA became demoralized by relatively low
pay and prestige, which led to high turnover rates in the program (1991:8-11). With-
out the ability to develop or retain expertise, the agency has been relatively incapable
of monitoring the performance of its contractors, and has even hired contractors to
evaluate the performance of other contractors (1991:12).
Thus, even if markets are relatively competitive, public organizations may
lack the necessary expertise to determine whether they have been sold poor products
 REORGANIZING PUBLIC ORGANIZATIONS 291

and thus to switch suppliers. In other words, without a skilled cadre of technicians
and managers, public organizations may become "captured" by contractors (R. Moe
1987:458). GAO (1991), for example, recently found contractors in several agencies
performing "inherently governmental functions," defined as those "requiring either
the exercise of discretion in applying government authority or the use of value judg-
ment in making decisions for the government" (1991:4). The GAO (1991:6) study
17

concluded that

contracting for governmental functions is largely due to

staff shortages, lack of staff with sufficient expertise,
and the fact that contract money is easier to obtain than
staff. To ensure that the government has the ability to
administer activities that may involve governmental
functions without having to rely on service contractors,
GAO believes Congress should consider providing
agencies with the authority and flexibility to accom-
plish this goal by staffing such functions internally.

Though competition is a necessary condition for achieving greater efficiency

through contracting, competition does not necessarily ensure efficiency, nor is effi-
ciency the only criteria by which to evaluate privatization alternatives. For example,
privatization generally weakens the lines of accountability to political representatives
since "a private entity under contract has only an indirect and tenuous relationship to
elected officials" (R. Moe 1987:457) Contracting also squeezes public managers in
the process since, in relinquishing to various third parties some of their discretion in
spending federal funds and in using federal authority to achieve programmatic ends,
public managers are put in "the uncomfortable position of being held responsible for
programs they do not really control" (Salamon 1981a:260). In light of the loss of
control and accountability which contracting entails, it may not be an appropriate
alternative for politically sensitive programs in which program effectiveness, public
safety, social equity, or public trust are important criteria. In this regard, contracting
may be especially inappropriate for those programs in which efficiency is not re-
garded as the primary value to be obtained.
In deciding which activities should be assigned to the private versus the public
realm, Ronald Moe (1987:456) argues that sovereignty should be the "single most
important" criteria. Since sovereigns possess certain rights and immunities, sover-
292 COMPILATION OF REPORTS

eign powers should not be assigned to the private sector. The U.S. government, for
example, possesses the legitimate right to use coercion in taxing individuals and firms
and in enforcing laws. Sovereigns are also immune from suit without their permis-
sion, and can disavow debts, take private property ("eminent domain"), and create
systems of property rights. Thus, according to Moe (1987:457), any reorganization
which assigns certain functions to the private sector must ask: "Does the performance
of this function necessarily involve the powers properly reserved to the sovereign?"
Wilson (1989:348) extends this argument in a different direction by noting
that all government programs are funded by taxpayer dollars, and there is thus an
implicit, if not explicit, duty to deliver tax-paid services equitably and accountably.
"Government programs, funded by coerced payments (that is, tax revenues), usually
are expected to benefit all people in a given category 'equally' or 'fairly' (though
what constitutes equality or fairness is very much a matter of dispute)." Moreover,
"Some people worry that the private delivery of publicly sanctioned services will
reduce the extent to which government is accountable to the people and thus reduce
the extent to which we are citizens, not merely customers."

REORGANIZATION STRATEGIES NOT SPECIFICALLY TIED

TO ORGANIZATIONAL STRUCTURE
Organizational change can be achieved through means other than major
redesigns of the organization's structure and its relationship to the political environ-
ment. While such alternatives appear less grand, they may also be more feasible
since they generally arouse fewer opponents to change. Moreover, since large-scale
reorganizations often have unpredictable and unintended results (Kaufman 1971:55-
6), marginal changes may be more controllable.
One such alternative is to recruit unorthodox viewpoints and ways of thinking
into the organization (Kaufman 1971:56-7). This may include hiring members from
different professions, geographical areas, or social groups, and placing them in
various advisory or formal roles. While such efforts may have positive effects on
public trust (Thomas 1991), many actors initiating or implementing reorganizations
do not value unorthodox viewpoints. Emmerich (1971:18), for example, argues that
 REORGANIZING PUBLIC ORGANIZATIONS 293

A large part of the separatist tendencies of the bureaus

and administrations may be traced to professional
particularism. The intensely specialized approach of
the professionals in the public service is one of the
strongest of the centrifugal forces that beset administra-
tion.

Thus, diversifying professional viewpoints may also increase the fragmentation

already inherent in our political system.
Various analytic techniques, if institutionalized, may permit increased deci-
sion-making coordination and thus overcome some of the perceived problems of
fragmentation since such techniques require programs to justify their operations and
expenditures on the basis of systematic criteria (Szanton 1981; Aberbach and
Rockman 1988). As with structural changes, however, some critics charge that
analytic techniques do not necessarily alter bureaucratic behavior. For example,
according to Hugh Heclo: 18

Reorganization plans or techniques like management by

objectives and zero-based budgeting are all executive
proclamations that presume rather than create changes
in subordinates' behavior. Instituting new management
techniques and making them part of the bureaucracy's
standard operating procedure lie at the end of state-
craft, not the beginning.

Other modest alternatives address concerns about public grievances. If

desires for reorganization are driven by public dissatisfaction with organizational
encounters, client surveys can suggest where specific problems exist. Some of these
problems may be alleviated simply through the creation of information centers to
guide citizens through complicated institutional processes, or ombudsmen to handle
grievances (Kaufman 1977:415-16).
These marginal organizational changes, as well as others, may be more likely
to engender public trust and confidence than wholesale reorganizations, at least in the
short run (Thomas 1991). Large-scale reorganizations may disrupt established social
relationships between organizational members and individuals in the environment.
Since interpersonal trust is established through repeated social exchanges, large-scale
disruptions of such relationships may decrease trust in the public organization among
294 COMPILATION OF REPORTS

those individuals and groups. At the institutional level, some degree of trust may be
established simply by recruiting or empowering members of trusted professions.
This is not to suggest that large-scale reorganizations are not likely to produce trust in
the long run. Public trust may be augmented, for example, if the reorganization
increases regulatory oversight of the public organization. Decentralizing authority
may also increase public trust if it empowers professions, or compels public officials
to interact to a greater degree with private citizens.

CONCLUSION
This paper emphasized the incompatibility of various values and the necessity
of choosing between them when deciding whether and how to reorganize a public
organization. Since these decisions are profoundly political and should be made by
the political actors involved, it would be inappropriate at this point to suggest that
certain values, and thus particular alternatives, are necessarily "better" than others.
Moreover, even if the actors involved in a specific reorganization were to agree on
value priorities, no evidence exists to suggest that specific organizational designs
would apply in all circumstances. As Herbert Kaufman (1977:402) noted:

Obviously, no reorganization is inherently right or

wrong. No given administrative pattern will invariably
increase efficiency, effectiveness, or responsiveness. In
particular circumstances, identical organizational
arrangements may produce diametrically opposite
effects while radically different arrangements may
produce identical effects.

Despite the large volume of rhetoric surrounding reorganizations in general,

remarkably few empirical studies have charted the intended and unintended effects of
particular reorganizations. Table 1 presents a "quick and dirty" summary of this
evidence and some of the logic behind organizational design theories. Given the
19

remarkable gaps in our knowledge of the effects of reorganization, any future attempt
to reorganize which is driven by instrumental rather than symbolic purposes should
seriously consider whether the benefits desired exceed both the political effort re-
quired as well as the unknown and unintended effects which will surely follow.
Though actors often latch on to reorganization as a panacea for governmental ills, not
 REORGANIZING PUBLIC ORGANIZATIONS 295

all ailments require major surgery. In this vein, efforts short of grandiose reorganiza-
tions may be more likely to achieve certain desired outcomes.

v>>VA\ . ';;'-J ,''''rf'.7«'.-''> o'.'%;>* ti iV 'i'»A.'i' Svi&r

, v , !
>
!
'U.S. '• '" ",;-'-rj'?-.'i5'f'?' -»''*:>'.*v<'iOU- -. -->»'?' "ii'
> - , ,!
 K>
TABLE 1 O
O

O
O

feluat INt
mcuMimottu. »uux«itu Htsux mumum
MitM tit* ticb Ot«*alutl«ul Altirutlv* o* «•«!> Ort«att*tiM*l Tilt. o
DM ratio*! 0 to *, 0 tol«« lowMt «oo * bt|ha*t.
CtCUtUAIIOKM, TUTS
z
o
Ability to Stability rre«tuMtle Internal Imnatty Iron Ability, to ttt- Uee of -n
MCANIZATIOWU, Hliiloa Halouln ud Authority , Aceeaat- ui*o«- n«iibiut* rmittut Political financial M l i t i Coif Tactmicel Traultto*
ALTtXKATIVES Orleatei Credibility Conttnalty (loci, twain*) btllty alvanaae ( I t r i / r i n ) Accooatakllttj Interference Accountablllt* Iflictlvaneel TWtHfflM r^rni 70
m
f r t t n t 0r». -V
Structure O
J»t>-CabiMt
Otflci
MaUlttmlon
la Cabinet Dipt.

Encutlvi Agency
Independent
Federal ConalHlon
CoviroMot*
Controlled Cor*.
KtiKt Coot.-
Frlvati Cor*.
CoVltOMOt*
Chartered Cot*.
Utlllty-Iyo*
rrtvit* Cot*.
Private
Corporation
1 , , ,_

Kim ol Fanal H 5 R T
 REORGANIZING PUBLIC ORGANIZATIONS 297

REFERENCES

Aberbach, Joel D., and Bert A. Rockman (1988). "Political and Bureaucratic
Roles in Public Service Reorganization," in Organizing Governance, Governing
Organizations, Colin Campbell, S.J., and B. Guy Peters, editors. Pittsburgh: Univer-
sity of Pittsburgh Press.

Arnold, Peri E. (1974). "Reorganization and Politics: A Reflection on the

Adequacy of Administrative Theory." Public Administration Review 34:205-11.

Bernstein, Marver (1955). Regulating Business by Independent Commission.

Princeton, N.J.: Princeton University Press.

Bozeman, Barry, and Jeffrey Straussman (1990). "Organization Design and

Reorganization as Strategic Tools," in Public Management Strategies: Guidelines for
Managerial Effectiveness. San Francisco: Jossey-Bass.

Conant, James (1986). "Reorganization and the Bottom Line." Public Ad-
ministration Review 46:48-56.

Congressional Budget Office (1991). Controlling the Risks of Government-

Sponsored Enterprises. Washington, D.C.: CBO.

Dean, Alan L., and Harold Seidman (1989). "Considerations in Establishing

the Patent and Trademark Office as a Government Corporation." Washington: Na-
tional Academy of Public Administration.

Donahue, John D. (1989). The Privatization Decision: Public Ends, Private

Means. New York: Basic Books.

Emmerich, Herbert (1971). Federal Organization and Administrative Man-

agement. University, Alabama: University of Alabama Press.

•.' "•'?>;*€%".?/"> '•: ••Ts~SX i-. ^4o7^^rff/yr^w-I^^CP s< \

;r : ,:
':-^^VP^^^:'^W; '\-^w^^r?^x~7:
i
298 COMPILATION OF REPORTS

Fesler, James (1974). "President Nixon's Proposals for Executive Reorgani-

zation." Remarks edited by Douglas M. Fox. Public Administration Review 34:487-
95.

Fesler, James, and Donald F. Kettl (1991). The Politics of the Administrative
Process. Chatham, NJ: Chatham House.

General Accounting Office (1991). Government Contractors: Are Service

Contractors Performing Inherently Governmental Functions? Washington, D.C.:
GAO.

Grafton, Carl (1979). "The Reorganization of Federal Agencies." Adminis-

tration and Society 10:437-64.

Hult, Karen M. (1987). Agency Merger and Bureaucratic Redesign. Univer-

sity of Pittsburgh Press.

Kaufman, Herbert (1956). "Emerging Conflicts in the Doctrines of Public

Administration." American Political Science Review 50:1057-73.

Kaufman, Herbert (1971). The Limits of Organizational Change. University,

Alabama: University of Alabama Press.

Kaufman, Herbert (1977). "Reflections on Administrative Reorganization,"

in Setting National Priorities: The 1978 Budget, Joseph A. Pechman, editor. Wash-
ington, D.C.: Brookings.

Kettl, Donald F. (1991). "Who's Minding the Store?: The Decline of Compe-
tence in American Administration." Prepared for delivery at the Annual Meeting of
the American Political Science Association, Washington, D.C.

Knott, Jack H., and Gary J. Miller (1987). Reforming Bureaucracy: The
Politics of Institutional Choice. Englewood Cliffs, N.J.: Prentice-Hall.
 REORGANIZING PUBLIC ORGANIZATIONS 299

Landau, Martin (1969). "Redundancy, Rationality, and the Problem of Dupli-

cation and Overlap." Public Administration Review 29:346-58.

Landau, Martin (1991). "On Multiorganizational Systems in Public Adminis-

tration." Journal of Public Administration Research and Theory 1:5-18.

Mansfield, Harvey (1974). "President Nixon's Proposals for Executive

Reorganization." Remarks edited by Douglas M. Fox. Public Administration Review
34:487-95.

March, James G., and Johan P. Olsen (1983). "Organizing Political Life:
What Administrative Reorganization Tells Us About Government." American Politi-
cal Science Review 77:281-96.

Meier, Kenneth J. (1980). "Executive Reorganization of Government: Impact

on Employment and Expenditures." American Journal of Political Science 24:396-
412.

Miles, Rufus E., Jr. (1977). "Considerations for a President Bent on Reorga-
nization." Public Administration Review 37:155-62.

Moe, Ronald C. (1987). "Exploring the Limits of Privatization." Public

Administration Review 47:453-60.

Moe, Ronald C. (1988). "Liabilities of the Quasi Government." Government

Executive 20:47-50.

Moe, Terry (1989). 'The Politics of Bureaucratic Structure," in Can the

Government Govern?, John E. Chubb and Paul E. Peterson, editors. Washington,
D.C.: Brookings.

Mosher, Frederick C. (1967). Governmental Reorganizations: Cases and

Commentary. Indianapolis: Bobbs-Merrill.
300 COMPILATION OF REPORTS

Musicus, Milton (1964). "Reappraising Reorganization." Public Administra-

tion Review 24:107-12.

Paehlke, Robert (1991). Government Regulating Itself: A Canadian-Ameri-

can Comparison." Administration and Society 22:424-50.

Poole, Robert W., and Philip E. Fixler (1987). "Privatization of Public-Sector

Service in Practice: Experience and Potential." Journal of Policy Analysis and
Management 6:612-25.

Rourke, Francis E. (1957). "The Politics of Administrative Organization: A

Case History." Journal of Politics 19:461-78.

Salamon, Lester M. (1981a). "Rethinking Public Management: Third-Party

Government and the Changing Forms of Government Action." Public Policy 29:255-
75.

Salamon, Lester M. (1981b). "The Question of Goals," in Federal Reorgani-

zation: What Have We Learned? Chatham, NJ: Chatham House Publishers.

Seidman, Harold (1952). "The Theory of the Autonomous Government

Corporation: A Critical Appraisal." Public Administration Review 12:89-96.

Seidman, Harold (1974). "President Nixon's Proposals for Executive Reorga-

nization." Remarks edited by Douglas M. Fox. Public Administration Review
34:487-95.

Seidman, Harold, Dominic DelGuidice, and Charles Warren (1971). Reorga-

nization by Presidential Plan: Three Case Studies. Washington, D.C.: National
Academy of Public Administration.
 REORGANIZING PUBLIC ORGANIZATIONS 301

Seidman, Harold, and Robert Gilmour (1986). Politics, Position, and Power:
From the Positive to the Regulatory State, Fourth Edition. New York: Oxford Uni-
versity Press.

Simon, Herbert A. (1976). Administrative Behavior, Third Edition. New

York: The Free Press.

Simon, Herbert A., Donald W. Smithburg, and Victor A. Thompson (1950).

Public Administration. New York: Alfred A. Knopf.

Szanton, Peter (1981). "So You Want to Reorganize the Government?," in

Federal Reorganization: What Have We Learned? Chatham, NJ: Chatham House
Publishers.

Thomas, Craig (1991). "Public Trust in Organizations and Institutions: A

Sociological Perspective." Prepared for the Secretary of Energy Advisory Board,
U.S. Department of Energy.

Tierney, John T. (1981). Postal Reorganization: Managing the Public's

Business. Boston: Auburn House Publishing Company.

Vogelsang-Coombs, Vera, and Marvin Cummins (1982). "Reorganizations

and Reforms: Promises, Promises." Review of Public Personnel Administration 2:21-
34.

White, Louise G. (1989). "Public Management in a Pluralistic Arena." Pub-

lic Administration Review 49:522-32.

Wilson, James Q. (1989). Bureaucracy: What Government Agencies Do and

Why They Do It. New York: Basic Books.

Wilson, James Q., and Patricia Rachal (1977). "Can the Government Regu-
late Itself?" Public Interest 46:3-14.
302 COMPILATION OF REPORTS

Wise, Charles R. (1989). "Whither Federal Organizations: The Air Safety

Challenge and Federal Management's Response." Public Administration Review
49:17-28.
 REORGANIZING PUBLIC ORGANIZATIONS 303

FOOTNOTES

'"Reorganization" will be loosely treated as any overt, planned attempt to

change the structure, and thus the operational characteristics, of a public organization.
2
The terms "values," "criteria," and "objectives" will be used interchangeably
in this paper.
3
The summary table at the end of this analysis can serve as an aid to the reader
in sorting the criteria and alternatives.
4
Rourke (1957), Mosher (1967), Seidman et al. (1971), Meier (1980), Tierney
(1981), Conant (1986), and Hult (1987) are notable exceptions. Each examines —
with varying degrees of rigor — the effectiveness of specific agency reorganizations
at the state and/or federal levels. Their conclusions are interspersed throughout this
review.
5
Public trust and confidence, though seldom discussed in the reorganization
literature, are included in this paper because of the specific concerns being addressed
by the Secretary of Energy Advisory Board, which commissioned this paper.
6
Conant (1986) presents a recent case study from New Jersey in which two
principles of administrative management — grouping like functions and increasing
(rather than decreasing) spans of control — may have produced cost savings on the
order of 2 or 3 percent of the state operating budget. Unfortunately, the results are
confounded by numerous measurement problems, as well as the absence of statistical
controls for effects not related to the reorganization. Moreover, since spans of con-
trol were increased (i.e., the number of managers reduced), it is perhaps not surpris-
ing that costs were reduced. The more difficult question in this case would have been
discovering whether management problems developed as a result, and thus whether
the reorganization was efficient (as opposed to simply economizing).

Seidman and Gilmour (1986:13-4) point out that many reorganization plans
7

themselves are not even accompanied by precise estimates of cost savings.

304 COMPILATION OF REPORTS

8
These studies only attempt to measure cost savings (economy) because
serious methodological difficulties exist when measuring efficiency in the public
sector. As Salamon (1981b:67) notes: "The major stumbling block continues to be
the problem of valuing the outputs of government in the absence of a true market."
While economy simply assesses inputs, efficiency examines the trade-off between
outputs and inputs.
9
See Seidman and Gilmour (1986:17-20) for supporting anecdotes.
10
Seidman and Gilmour (1986:254-57) have developed a much more exten-
sive typology which includes many organizational forms (e.g., foundations, insti-
tutes, and intergovernmental organizations) not considered in this paper.
n
I t would also be difficult to argue that the Bureau of Land Management in
the Department of the Interior is not captured by mining and ranching interests.
12
Paehlke (1991), however, provides contrary evidence, suggesting public
corporations may be no more difficult to regulate than private corporations.
13
Seidman and Gilmour (1986:272) note that the new "Postal Service is
defined by law as 'an independent establishment of the executive branch of the
United States,' but in all other respects it is endowed with the powers and characteris-
tics of a wholly owned government corporation."
14
Many of these arguments are reviewed by Donahue (1989).
15
At the state and local level, however, Poole and Fixler (1987:614-15) pro-
vide a brief review of empirical studies which suggest that "contracting out tends to
be less costly than government provision." These studies tend to focus on services
with relatively clear goals and means, such as garbage collection and public transpor-
tation.

As discussed previously in the section on efficiency, low-cost performance

16

can only be compared relative to a given level of service.

Many of these functions also appear to be dominated by contractors in

17

Superfund (Kettl 1991).

 REORGANIZING PUBLIC ORGANIZATIONS 305

18
As cited in Seidman and Gilmour (1986:88).

Table 1 does not summarize all of the issues, evidence, and speculations
19

presented in this paper. It is intended solely as an aid to the reader, and is not in-
tended to be conclusive.
AM-FM'S CORPORATE SOLUTION FOR RADIO-
ACTIVE WASTE MANAGEMENT:
APPEALING BUT INAPPROPRIATE?

CRAIG THOMAS
INSTITUTE OF GOVERNMENTAL STUDIES
UNIVERSITY OF CALIFORNIA, BERKELEY

Prepared for the U.S. Department of Energy

October 1992
 AM-FM'S CORPORATE SOLUTION FOR RADIOACTIVE WASTE MANAGEMENT 309

INTRODUCTION
The Nuclear Waste Policy Act (NWPA) of 1982 directed the Secretary of
Energy to "undertake a study with respect to alternative approaches to managing the
construction and operation of all civilian radioactive waste management facilities,
including the feasibility of establishing a private corporation for such purposes." To
1

conduct the study, the Secretary created the Advisory Panel on Alternative Means of
Financing and Managing Radioactive Waste Facilities (AM-FM). This paper is an
analytic critique of AM-FM's final report, "Managing Nuclear Waste — A Better
Idea" (December 1984).
Given the length of AM-FM's report, it will not be possible in this paper to
provide a point-by-point analysis. Instead, I will focus on the report's major assump-
tions and conclusions regarding reorganization of the civilian radioactive waste
program. Specifically, I will address two broad questions in this analysis:

• Upon what logical and evidentiary bases did AM-FM recommend a

public corporation as the most appropriate organizational form for the radioactive
waste management program?

• Are AM-FM's assumptions and reasoning consistent with current

theories and empirical evidence in the academic literature on public-sector reorgani-
zation?

The first question focuses on the logical structure of the report, and thus
analyzes the report on its own terms. In this respect, AM-FM's report is essentially a
policy analysis. The early chapters discuss program goals (or objectives), alternative
organizational structures, and criteria (or tests) by which to evaluate those alterna-
tives; subsequent chapters then evaluate the proposed alternatives and present the
Panel's concluding recommendation to transfer the radioactive waste management
program from DOE to a new public corporation. This is a standard format for policy
analyses, and it is also an appropriate format for the report since it allows the reader
to follow AM-FM's argument on a step-by-step basis. However, as will be demon-
strated throughout this paper, the report is not always internally consistent, and
sometimes also neglects to explain how important decisions were reached at various
 310 COMPILATION OF REPORTS

stages in the analysis.

The second question analyzes AM-FM's argument in light of a review of the
academic literature on public-sector reorganization (Thomas 1992) which I conducted
prior to reading and critiquing AM-FM's report. Because my literature review
covered fields of social science research (i.e., political science and public administra-
tion) which the Panel did not review in preparing its report, much of this paper
directly challenges some of the assumptions and theories which underlie the report.
Though readers might question the validity of my challenges given that I have drawn
upon some materials which were unavailable to the Panel in 1984, it should be noted
the report neither cites nor refers to those materials which were available in the early
1980s. Moreover, many of the post-1984 citations to which I refer are simply exten-
sions of previous lines of research.2

In the sections which follow, we will walk through the logical progression of
the report, analyzing AM-FM's assumptions and theories regarding reorganization of
the radioactive waste management program. My synopsis of AM-FM's argument will
necessarily be incomplete, not only because of space limitations, but also because the
report itself does not adequately explain the reasoning behind many of the Panel's
decisions.

PROGRAM OBJECTIVES
AM-FM's argument begins with the assumption that "safe long-term disposal
of high-level radioactive waste" should be the single, overriding objective for all
phases of the radioactive waste program (III-2). Generally speaking, if we accept an
3

objective as overriding, then at least two consequences follow. First, the

organization's structure should be conducive to pursuing a single objective; and,
second, all subgoals should be compatible with the overriding objective.
AM-FM clearly pursues the first consequence, arguing, for example, that
autonomy (both programmatic and funding) is an important structural feature for
promoting mission-oriented behavior. Though autonomy does not necessarily depend
upon organizational independence, it does require that programs housed within larger
entities — as the radioactive waste management program is currently housed within
DOE — should be "relatively independent and insulated from competing pressures
from other parts of the larger entity" (III-2). Thus, AM-FM does not immediately
 AM-FM'S CORPORATE SOLUTION FOR RADIOACTIVE WASTE MANAGEMENT 311

preclude the possibility of retaining the current organizational form or moving the
program to another multi-program department; but the report does suggest quite early
that structural independence may be preferable. On this point, evidence suggests
AM-FM is probably correct in assuming an organization's ability to consistently
pursue an overriding objective would likely be compromised in a multi-purpose
department (Thomas 1992:33-36).
Unfortunately, the report does not first make the case that radioactive waste
disposal need not be coordinated with other federal programs. Coordination is one of
the major reasons for housing a program within a multi-purpose department and
under presidential leadership (Thomas 1992:26,30). Thus, AM-FM's case for organi-
zational autonomy and independence, which it develops throughout the report, would
have been stronger if the Panel had demonstrated that safe long-term disposal should
also override the objectives of all other federal programs (e.g., those comprising
national environmental and energy policies), and that these programs would have
little to gain from organizational interdependence.
In regards to the second consequence of pursuing an overriding objective —
compatibility of subgoals with the primary mission of safe long-term disposal —
AM-FM's argument is much less developed, and thus difficult to analyze and cri-
tique. The primary problem here is that the report never defines "safe disposal," even
in broad terms, and thus the overriding objective is extremely vague. While few
would disagree with the import of AM-FM's overriding objective given the long-term
toxicity of radioactive waste, without upper and/or lower bounds on safety, the
overriding objective assumes the role of a conceptual theme, rather than a clearly
defined (or even broadly bounded) target. Thus, it is difficult to ascertain whether,
and especially to what degree, other programmatic objectives — such as cost-effec-
tiveness or reprocessing — conflict with the overriding objective.
In discussing subgoals, the report usefully distinguishes five phases of the
program — siting, construction, operation, transportation, and monitoring after
closure — arguing program objectives for each phase should differ because of the
differing cluster of activities required by each phase. Unfortunately, the report does
not tell the reader how the Panel derived the "key objectives" for each phase. While
the Panel may have had strong justifications for making such decisions, based either
upon background reports, testimony, and/or internal deliberations, the justifications
312 COMPILATION OF REPORTS

are not presented in the report itself. More specifically, the report does not explain
why some of these objectives change in subtle ways from phase to phase. For ex-
ample, why is "public acceptance" important in the siting phase but not in the next
two phases, construction and operation? Is public acceptance of the project only
important during siting considerations? This appears to be AM-FM's thrust since the
last two phases, transportation and monitoring after closure, simply include "address-
ing public concerns" as an important objective but not "public acceptance."
Moreover, regardless of the validity of the key objectives, the report only
begins to trace out the logical consistency of these subgoals and their relationship to
safe long-term disposal. Efficiency, for example, is cited as a key objective in the
construction and transportation phases (111-7,11), but the report is extremely vague
when addressing potential conflicts between organizational incentives which control
costs (III-7) and those financial incentives which are necessary to achieve technical
excellence (III-6) and thus safe long-term disposal (V-6). Though the report enumer-
ates many such incentives, it does not explore their interdependencies or attempt to
reconcile potential conflicts. We will return to this theme later in the paper since the
4

Panel subsequently ranks cost-effectiveness as one of the five "most important"

criteria for evaluating organizational alternatives (VIII-15).
Even within a given phase of the program, and regardless of the imperatives
of the overriding objective, the report does not adequately identify the interdependent
relationships between the Panel's key objectives. In the siting phase, for example,
AM-FM assumes the key objectives should be (1) achieving technical excellence, (2)
gaining public acceptance, and (3) obtaining construction authorization. Although
the report identifies some important relationships between these objectives, it over-
looks others. Public acceptance, we are told, is in part dependent upon the objectivity
and credibility of technical activities (III-4). Yet the report neglects to reconcile other
aspects of public acceptance — i.e., those based on "issues such as equity and proce-
dural fairness" (111-4) — with the Panel's assertion that "[a] technically sound site is
essential to the safe management of radioactive waste" (III-2). Are procedures which
enhance equity and procedural fairness compatible with those which promote scien-
tific objectivity? Unfortunately, the report only briefly mentions equity and proce-
dural fairness in passing (III-4), and does not further develop these concepts in
5

relation to either public acceptance or organizational credibility.

 AM-FM'S CORPORATE SOLUTION FOR RADIOACTIVE WASTE MANAGEMENT 313

The report's distinction between the five phases is a useful exercise, however,
because it simplifies the analytical problem by ordering objectives temporally. If the
program can indeed be separated into distinct phases, then it is plausible to assume
the "best" organizational alternative might be a set of distinct organizations, each
appropriate for a specific phase or phases. In this regard, AM-FM repeatedly notes
throughout the report that siting and closure — the first and last stages — may in-
volve tasks requiring organizational structures which are incompatible with each
other as well as with the middle three operational phases. Given the extraordinary
timeframe of the program and the range of tasks to be performed, it may in fact be
unrealistic to assume that one type of organizational structure is appropriate for all
five stages. Carried further, it is possible to imagine a series of sets of organizations
(whether longitudinal or contemporaneous), each designed to carry out various
aspects of one or more phases. 6

PROGRAM CHARACTERISTICS
The report next presents a list of "salient characteristics" of radioactive waste
management (IV-1). Since I am relatively unfamiliar with the specifics of the pro-
gram, I will not attempt to examine the adequacy of this list. Instead, I will focus on
its relationship to AM-FM's argument. In this regard, two issues are particularly
troubling. First, the Panel does not methodically link its list of program characteris-
tics to the rest of the argument. Later chapters of the report simply draw upon these
characteristics in a casual fashion. Some characteristics assume prominence; others
are never systematically tied to organizational form. In subsequent sections of this
paper, I will attempt to reconstruct some of these links by culling phrases and ideas
from various chapters in the book.
Second, the list offers a relatively early indication of the Panel's private-sector
orientation, and thus its bias towards market-like alternatives for radioactive waste
management. Though evidence of this bias can be found throughout the report, it is
readily apparent in the discussion of program characteristics, particularly in the
Panel's repeated use of the term "business" (rather than "public program" or "opera-
tion") to characterize radioactive waste management. According to the report: "A
7

primary characteristic of waste management is that it seems to be inherently a mo-

nopoly or a franchised type of business..." (IV-1). Because this term is used so
314 COMPILATION OF REPORTS

frequently to characterize the program, readers are led early in the report to assume
radioactive waste management activities are more like those of a private business
than a government operation, thus implying that alternatives which take advantage of
the program's "business-like" character should be preferred. Indeed, this emphasis
continues in subsequent chapters when the Panel presents and evaluates alternatives.
Corporate alternatives receive significantly greater attention in these later chapters in
terms of the variety of options presented and the level of detail and analysis which
accompanies them. 8

Similarly, the Panel argues the "monopoly nature of the business is...likely to
result in utility-type regulation..." (IV-2). Again, this phrase conjures up images of
private monopolies, though now subject to rate and service regulation. Together,
these assumptions tend to preclude certain organizational options and lead to greater
emphasis on others. For example, though AM-FM later suggests the Federal Energy
Regulatory Commission (FERC) could assume responsibility for regulating the utility
(VI-6) or corporation (VIII-6), another possibility would be to have waste-producer
fees set by a commission organized solely for this task. U.S. Postal Service rates, for
example, are reviewed by the independent Postal Rate Commission. Likewise, the
9

radioactive waste management program — whether an independent public agency or

a private corporation — could have its rates reviewed by a specialized rate commis-
sion, rather than a multi-purpose regulatory commission.
The pro-market, or anti-government, ideological orientation of the Panel is
also apparent in its discussion of political accountability as a program characteristic.
Though Panel fears of "political interference" are more prominent later in the report,
they surface briefly in this chapter when the report argues the program is "subject to a
great deal of political oversight" (IV-5) which "not only limits the organization, but
will consume a great deal of time and attention by senior management officials" (IV-
6). In general, the report stresses the liabilities of political accountability, rather than
the positive aspects of political oversight.
Though perhaps expected given the prevalence of anti-government rhetoric
during the Reagan Administration, this pro-market bias is troubling given the absence
of documentation in the body of the report. With no citations to be found anywhere
in the text, such statements must be read simply as Panel assertions rather than neces-
sary characteristics of the program. The composition of the Panel is probably indica-
 AM-FM'S CORPORATE SOLUTION FOR RADIOACTIVE WASTE MANAGEMENT 315

tive of the source of the report's ideological orientation. Combined, its thirteen
members had only limited experience in federal government; and a majority (seven
of the thirteen) were either corporate executives or attorneys from private law firms
(Appendix A). Many academics and public officials would characterize the program
differently. Yet, the report's bibliography (Appendix G) does not include any cita-
tions from the extensive academic literature on organizational forms or the effective-
ness of reorganization as a strategy for organizational change. Nor is it apparent
from the list of panel briefings and public comments accompanying the report (Ap-
pendix F) that social scientists with expertise in this area (with the possible exception
of representatives from the National Academy of Public Administration) presented
evidence regarding the advantages and disadvantages of various organizational forms.
Instead, AM-FM relied heavily upon numerous background papers produced by
Battelle Memorial Institute (Appendix G), a non-profit research consultant specializ-
ing in the development of new technologies, including radioactive waste manage-
ment.

CRITERIA FOR EVALUATING ALTERNATIVE ORGANIZATIONAL

FORMS
Following its enumeration of program objectives and characteristics, AM-FM
presents thirteen "tests" by which alternative organizational structures for the radioac-
tive waste management program can be evaluated. The report notes the Panel de-
rived these tests from the objectives stated in Chapter IH, as well as from the list of
"salient characteristics of radioactive waste management" developed in Chapter IV
(V-l). Unfortunately, the report does not clearly explicate the connections between
the organizational tests and the program objectives and operational characteristics
which logically preceded them. In general, however, the tests are more clearly tied to
the objectives than they are to the program characteristics.
In the following paragraphs, I attempt to reconstruct these links in order to
better understand why the Panel believed the tests to be important. I have preserved
the order of presentation in the report even though the Panel notes this ordering is not
indicative of the relative importance AM-FM accorded the tests (V-2). The under-
10

lined phrases indicate how the tests are initially worded in the report (V-l). Non-
underlined phrases represent my own reconstruction of AM-FM's argument. With
316 COMPILATION OF REPORTS

these caveats in mind, the following thirteen tests represent AM-FM's view of an
appropriate radioactive waste management organization:

• The organization should be mission-oriented in order to pursue the

overriding objective of safe long-term disposal of radioactive waste (TJI-2).
This means gearing all of the organization's activities toward this end, rather
than allowing resources to shift between a series of relatively unfocused
activities (V-2). Since the "mission orientation" test speaks to the ability of
the organization to pursue the program's overriding objective, it should be
paramount in all phases of the program (ffl-2).

• It should be able to maintain credibility with all stakeholders, includ-

ing "states, tribes, local governments, environmental groups, scientific groups,
nuclear utilities, residents near potential repository sites, and federal agencies
such as the Nuclear Regulatory Commission and the Environmental Protec-
tion Agency" (V-3). Credibility will likely reduce the opposition of these
groups to the organization (V-3), and is thus particularly important in the
siting phase, since organizational credibility enhances public acceptance and
thus facilitates the process leading to construction authorization (ITI-4,5).
Given the veto provisions in NWPA, the organization "must be capable of
accomplishing its mission within a negative and perhaps obstructionist envi-
ronment by spending a substantial part of its time dealing with state, Indian
tribes, and other constituencies to resolve issues and concerns" (IV-6,7).

Credibility is intertwined with several other organizational tests since

the ability to maintain credibility is dependent upon similar factors (V-3).
These factors include: commitment to the overriding mission ("mission
orientation"); technical objectivity ("demonstrating technical excellence");
sharing information and being open to new options ("accessibility" and
"responsiveness"); and sticking to plans ("stability and continuity"). Credibil-
ity is particularly dependent upon stability and continuity (V-3; XII-1).
Though AM-FM enumerates the importance of some of these factors after
 AM-FM'S CORPORATE SOLUTION FOR RADIOACTIVE WASTE MANAGEMENT 317

construction has been authorized, credibility is itself prominent only in the

siting phase.

• It should have stable and continuous processes since stability and

continuity promote "long-term relationships with interested groups" and
assure the maintenance of "careful and consistent technical standards" (V-3). 11

Stability implies that "changes in structure, process, or personnel be carefully

planned, logically defensible, and understandable to outside observers" (V-3).
Thus, stability and continuity are important determinants of the ability of the
organization to achieve at least two of the other tests: credibility and technical
excellence. Stability also permits a consistent management system to evolve
in which long-range planning aids the organization in securing adequate
funding (HI-7) and managing the flow of radioactive waste into the facility
(HI-8). The primary sources of instability and discontinuity are political
appointments and budgetary politics (VTfl-4). 12

• It should have programmatic authority (including funding) so the

organization is "free to choose among alternative approaches and priorities to
meet its goals" (V-4). Though organizational choices could still be reversed
by Congress or the courts if the choices do not clearly relate to the
organization's mandate, the organization should be able to make these choices
"without substantial prior restraint" (V-4). This test is based (at least implic-
itly) on the Panel's belief that the organization should be imbued with techni-
cal excellence, and that technical (rather than political) expertise should be the
logical foundation for carrying out the activities of all phases of the program
(see Chapter EI). Programmatic authority is also necessary in order for the
organization to make and keep commitments, to negotiate solutions to dis-
agreements at the local level, and thus to gain public acceptance (ffl-5). 13

Though funding authority appears somewhat incidental in the report's

description of this test, repeated attention is given throughout the report to
independence from the vicissitudes of the congressional appropriations pro-
cess. Stable financing, for example, is cited by the Panel as a key objective in
the construction phase because of its affect on quality, timeliness, credibility,
318 COMPILATION OF REPORTS

and cost-effectiveness (JJI-6). Long-term financing is also an integral

component of providing continuity after the facility has been closed, a key
objective during the program's final phase (III-11).

• It should be accessible to all stakeholders in order to "maintain cred-

ibility and public confidence, and to facilitate prompt achievement of the
program's goals"
(V-4). Accessibility refers to organizational openness to the comments and
participation of interested groups and individuals, as well as the willingness of
the organization to share information and hold hearings (V-4).

• It should be responsive to stakeholders (presumably for the same

reasons the organization should be accessible to them). Responsiveness
means the organization is not merely accessible, but also considers in good
faith, and evaluates carefully, the comments and suggestions of stakeholders
(V-4). Accessibility and responsiveness both have "a major influence on an
organization's ability to maintain credibility"
(V-l). More broadly, the organization can increase the likelihood of achiev-
ing public acceptance if it actively seeks to interact with outside groups
through both formal and informal channels (III-4). Though public acceptance
is primarily important during the siting phase because it facilitates construc-
tion authorization, AM-FM believes the organization should also address
public concerns during the transportation phase "if it is to accomplish its
mission with minimal interference and delay" (111-10). Finally, the organiza-
tion should be open and responsive to requests for information when the
facility has been closed (EI-12).

• It should have internal flexibility to allocate and reallocate resources,

including the ability to hire and fire. Internal flexibility is the intra-organiza-
tional complement to programmatic and funding authority. Since the organi-
zation is to be given the authority to raise funds and to carry out its programs
independently of political direction, it should then not be burdened with rules
and procedures which inhibit its ability to alter programs, to transfer re-
 AM-FM'S CORPORATE SOLUTION FOR RADIOACTIVE WASTE MANAGEMENT 319

sources, and to hire individuals at competitive wages and to fire those who are
unproductive (V-5). Internal flexibility enables the organization to achieve
technical excellence (ffl-3), which is itself an integral component of maintain-
ing credibility and carrying out organizational objectives. Moreover, internal
flexibility facilitates construction authorization by giving staff members the
"power and ability to interact with regulatory officials about standards and
designs [which] should reduce controversy and speed approval" (III-5).
Presumably, internal flexibility will also allow the organization to respond to
fluctuations in waste volume (PV-2) and to cope with technical and regulatory
uncertainty (IV-4,5).

• It should be politically accountable "to ensure that the organization

complies with the broad objectives of the program and performs its functions
in a manner consistent with legislative, regulatory and procedural standards
governing the program" (V-5). The Panel defines "political accountability"
narrowly, however, arguing that the organization should only be accountable
on "broad issues, such as overall program objectives," and that actions should
be reviewed "after they take place" rather than before (V-6). This type of
pohtical accountability would be sufficient to help build public support "since
it provides a review mechanism for the organization's activities that is acces-
sible to all interested parties" (V-5). AM-FM sought to limit the scope of
political accountability apparently because it was troubled by the complex
web of congressional committees which then had jurisdiction over the pro-
gram, arguing such oversight "not only limits the organization, but will
consume a great deal of time and attention by senior management officials"
(IV-6).

• It should be immune from political interference, since political prefer-

ences "should not affect hiring practices, pre-siting decisions, and day-to-day
activities" (V-6). Though political accountability is important, the organiza-
tion should not have to respond to the demands of newly elected officials;
decisions should be made on technical, rather than political grounds (V-6).
Again, as seen above in the test regarding programmatic and financial au-
320 COMPILATION OF REPORTS

tonomy, AM-FM strongly emphasizes technical decision-making processes,

and seeks to limit the involvement of elected officials.

• It should be financially accountable to either private accounting firms

or public accounting agencies in order "to ensure that funds are spent for
legitimate and intended purposes" (V-6). Presumably, financial accountabil-
ity, along with political accountability, would assure stakeholders the organi-
zation is not abusing the independent authority (both programmatic and
funding) which AM-FM argues should be an integral component of the pro-
gram.

• It should be able to stimulate cost-effectiveness because the radioactive

waste management program will be an expensive undertaking, and should
thus "be able to provide incentives for improved performance" (V-6). Though
the report is unclear as to how or which costs should be contained, it consis-
tently argues cost-effectiveness should be "commensurate" with technical
excellence (V-7) and "subject to the paramount goal of safety" (III-ll). The
goal of competitive procurement, for example, should be to find "the most
cost-effective proposal, not necessarily the cheapest" (111-3). AM-FM thus
appears to be concerned about efficiency (least cost production for a given
quality of output) rather than economy (achieving cost savings regardless of
the output quality). "Cost efficiency" is in fact cited earlier in the report as
15

a key objective for the construction phase (111-7). Efficiency should be

encouraged by creating incentives for innovation and cost control, combined
with external financial monitoring and close oversight of contractors (III-7). 16

• It should demonstrate technical excellence, which is a "fundamental

goal of the organization" (V-6). Technical excellence, "not merely compe-
tence" (V-7), is a necessary condition for achieving the overriding objective
of safe long-term disposal (V-6); and is also a "key objective" in the siting and
construction phases. Technical excellence is interdependent with several other
tests. Failure to achieve technical excellence, for example, could lead to
delays in meeting the overriding objective, as well as "substantial public
 AM-FM'S CORPORATE SOLUTION FOR RADIOACTIVE WASTE MANAGEMENT 321

distrust" (ITI-2). Technical excellence depends upon the ability to recruit

qualified individuals and to conduct tests and construct and operate facilities
according to appropriate technical standards, factors which AM-FM believes
require programmatic and funding authority, as well as internal flexibility,
buttressed by the careful oversight of independent experts (IH-3; V-6,7).

• It should be able to effect a smooth transition in replacing the present

organizational structure in order to avoid delaying the program's schedule,
damaging its integrity, and/or inflating its budget (V-7). Though the report
does not specify the necessary or sufficient conditions for a smooth transition,
it does assert that the longer the program is housed in the current organization,
the more difficult will be the transition to a new organization (VUI-13). As
will be discussed below, the Panel does not address political considerations
regarding organizational change, and thus the feasibility of recommending
various alternatives to the present structure.

These thirteen organizational tests intertwine to produce a complex array of

interdependent demands on the preferred alternative. Though the report does not
explicitly arrange these tests in a hierarchical or causal order, it is certainly possible
to do so based upon the arguments I have reconstructed above. Underlying the tests
is the assumption that technical or professional processes, rather than political con-
cerns, should motivate decisions. In this regard, technical excellence — a necessary
condition for achieving the overriding objective of safe long-term disposal (V-6) — is
enhanced by stability and continuity (and thus immunity from political interference),
internal flexibility, and programmatic and funding authority.
In addition to technical excellence, credibility also plays a pivotal role in the
organizational tests since credibility facilitates construction authorization, and thus
allows the program to proceed to subsequent phases. Credibility is similarly en-
hanced by many of the other tests, including mission orientation, accessibility, re-
sponsiveness, stability and continuity, and immunity from political interference.
Cost-effectiveness is not clearly tied to either of these two sets of logical relation-
ships, but is rather treated as a separate theme which the Panel believes should not
detract from either safe disposal or technical excellence. In sum, though AM-FM

•<^.., r^'; o~r-^>-\^:----'*£G^,^^^

f
322 COMPILATION OF REPORTS

does not methodically link its organizational tests to the program characteristics and
objectives presented earlier, the tests themselves are consistent, and can be reduced to
two major themes: gain construction authorization through credibility, and achieve
safe disposal through technical excellence.
Though AM-FM's list of tests is extensive and consistent, it does not exhaust
all possible criteria by which we could assess organizational performance. As previ-
ously noted, the Panel excluded equity and procedural fairness from consideration,
even though these criteria might be important determinants of public acceptance.
Safety itself is not a test, but is rather an overarching objective which the Panel
believes can be achieved through other tests, such as mission orientation and techni-
cal excellence. Credibility is also not equivalent to public trust and confidence
(Thomas 1991). Since little is known about the links between organizational struc-
ture and such amorphous concepts as equity, safety, and trust (Thomas 1992), it is, on
one hand, expedient to exclude them from the organizational tests. On the other
hand, the Panel never justified excluding equity and procedural fairness from consid-
eration. Moreover, AM-FM does not define some of the concepts it uses — safety
and credibility, for example, are simply defined in terms of their antecedents. Thus,
the report glosses over some important issues, and in so doing appears to exclude
certain criteria from the evaluation process.17

TEN ORGANIZATIONAL ALTERNATIVES

AM-FM presents ten organizational alternatives for the radioactive waste
management program, including the current structure within DOE (circa 1984). As
the report notes, the alternatives "cover the spectrum from a conventional govern-
ment agency to a purely private corporation" (VI-1). This means the alternatives
vary primarily on the public/private dimensions of ownership and control. As we
move down the list, the organizational types evolve from politically centralized
organizations to politically decentralized and ultimately privately owned organiza-
tional forms. The following descriptions are condensed from those given in Chapter
VI of the report:

• The present organizational structure, which includes three primary

components: the DOE Office of Civilian Radioactive Waste Management
 AM-FM'S CORPORATE SOLUTION FOR RADIOACTIVE WASTE MANAGEMENT 323

(OCRWM), several DOE regional operations offices, and a number of con-

tractors. The OCRWM Director reports directly to the Secretary of Energy,
and is appointed by the President. The Operations Offices are independent of
OCRWM, and report directly to the Secretary of Energy. "These offices are
involved in a wide variety of activities, including many that are not related to
radioactive waste" (VI-2). According to the report (VI-2): "OCRWM has
responsibility for overall program planning, financing and execution, while
the Operations Offices manage research and site investigation activities.
Contractors are heavily involved in program activities at both the headquar-
ters and Operations Office levels."

• A sub-cabinet office within an existing cabinet department or federal

executive agency, such as the Bureau of Reclamation within the Department
of Interior or Superfund within the Environmental Protection Agency. "This
organizational alternative is essentially very similar to OCRWM, but is de-
scribed here in generic terms for purpose of comparison" (VI-3). As with the
current structure, the office would have a few senior political appointees and
the remainder of the staff would be career civil servants. Major policy deci-
sions would have to be approved by the cabinet secretary or agency adminis-
trator, and possibly by other officials within the larger organization since the
office would rely on the organization's staff branches for legal, administra-
tive, and financial services.

• An administration responsible to a cabinet department, such as the

Bonneville Power Administration and the Army Corps of Engineers. While
similarly housed within a department, an administration would be more
independent than a typical sub-cabinet agency. Autonomy could be achieved
through reliance on its own staff functions rather than the department's legal,
administrative, and financial staff. Though relatively autonomous, major
policy actions would probably still be cleared with the cabinet secretary or
one of his or her deputies. Financial autonomy from the department (but not
from Congress) would be achieved by giving the administration a separate
section in the federal budget.
324 COMPILATION OF REPORTS

• A federal executive agency, such as the National Aeronautics and

Space Administration (NASA), which is independent of other organizations in
the executive branch and whose administrator reports directly to the Presi-
dent. The agency would have its own staff, would develop its own budget,
and would not have its appropriations channeled through another organiza-
tion. Thus, a federal executive agency would be independent in the same way
a federal commission (below) would be independent. Inexplicably, how-
18

ever, AM-FM chose to attach the term "independent" only to the title of the
commission alternative (below). In theory, they are both examples of inde-
pendent federal organizations.

• An independent federal commission, such as the former Atomic En-

ergy Commission. This alternative differs from the federal executive agency
with regard to political appointees. Rather than having a single administrator
reporting to the President, a commission is headed by five or seven individu-
als who set policies based on majority rule, and who are appointed by the
President to staggered, multi-year terms. The commissioners "sometimes
represent particular constituencies, and may intentionally provide a specified
partisan political balance on the commission"
(VI-4). Though the report also notes that a defining attribute of the commis-
sion form may be the ability to obtain exemptions from civil service provi-
sions, there are no clear theoretical reasons why such exemptions could not
also be obtained for other executive branch alternatives, including indepen-
dent executive agencies and sub-cabinet offices.

• A government-controlled corporation, such as the Tennessee Valley

Authority. As the Panel correctly notes, there is "considerable variation
among the specific characteristics" of government-controlled corporations,
which the federal government generally employs in the case of commercial
interactions with the public where the organization is "usually intended to
break even or make money on some or all of its activities" (VI-4). In the
general model, all stock is either held by the federal government or the corpo-
ration is created without equity. The organization is headed by a board of
 AM-FM'S CORPORATE SOLUTION FOR RADIOACTIVE WASTE MANAGEMENT 325

directors appointed by the president, which in turn selects the executive

officer. According to the report (VI-5): "Presidential influence would be less
than for an executive agency, but Congressional involvement and oversight
would still be significant." The corporation's budget would be independent
19

of other organization's budgets, "would probably be more similar to the

budget of a private firm than that of a public agency," and would follow
private-sector rather than governmental auditing procedures (VI-5). The staff
may or may not be covered by civil service provisions.

• A mixed government-private corporation, such as AMTRAK. A

mixed corporation differs from a wholly-owned corporation in that some of
its stock is held by private individuals or corporations, with the sale of stock
providing the corporation with another source of revenue. The federal gov-
ernment, however, usually maintains majority ownership, and places limita-
tions on who can own stock and how much stock they can hold. Seats on the
board are then "usually apportioned to reflect the ownership shares of the
different groups" and thus "provide another avenue for oversight" (VI-5).
Given that some stock is held privately, OMB and Congress might have less
financial oversight, and "the corporation's employees might not be covered by
civil service provisions, although some sort of labor agreements would prob-
ably be in place" (VI-5).

• A government-chartered private corporation, such as the Communica-

tions Satellite Corporation (COMSAT), which is created by the federal gov-
ernment and then transferred to private ownership, either gradually or imme-
diately. "This approach is often thought of as a way to reduce obstacles to
private activities in a particular field" (VI-6). As with the mixed-ownership
corporation, the government would establish limitations on stock holdings,
with seats on the board apportioned based upon these holdings. While the
government might hold a few seats to make sure the public interest is repre-
sented, the corporation would be "free to set policies as it wishes, without
approval or oversight by the government," as long as those policies con-
formed to the corporation's enabling legislation (VI-6). Though the govern-
326 COMPILATION OF REPORTS

ment-chartered private corporation would maintain its own budget, which

would not be subject to government approval, the federal government might
still collect and funnel revenues to the corporation.

• A utility-type private organization, such as the Ohio Valley Electric

Corporation or Middle South Utilities. With the exception of being regulated,
this alternative would be organizationally unrelated to the federal government.
Instead, it "would be a private entity organized in a fashion similar to a utility,
and in fact might be a consortium of nuclear utilities or other groups" (VI-6).
Congress would presumably give the organization "full authority" over the
program (VI-6). Like the other corporate alternatives, the utility "would
probably have a Board of Directors selected by the stockholders or partici-
pants in the organization" (VI-6). Regardless of whether the utility is for-
profit or not-for-profit, its fee structure would be regulated, and its internal
finances would follow private accounting practices.

• A private corporation, such as Westinghouse Electric Corporation,

which would be free to set prices in "the absence of economic and policy
regulation" (VI-7), and thus would be dissimilar to the utility-type private
alternative. Though the firm would probably be granted a monopoly over
radioactive waste management activities, "it is possible to imagine allowing
several firms to be involved" (VI-7). The corporation's prices would be
regulated by the market, rather than the government, since individual utilities
could choose either to expand on-site storage or switch to a competitor.

Although this list might appear to encompass all potential alternatives, these
ten organizational types are neither mutually exclusive nor completely inclusive. In
other words, the categories both overlap and exclude several feasible types. The U.S.
Postal Service, for example, could be categorized in this typology either as an inde-
pendent agency (albeit multi-headed) or as a government-controlled corporation.
Noting this discrepancy in an appendix to the report, AM-FM simply chose to clas-
sify the Postal Service as a government-controlled corporation, even though it is not
clearly an example of the latter (C-27). Moreover, the first two alternatives, as the
20
 AM-FM'S CORPORATE SOLUTION FOR RADIOACTIVE WASTE MANAGEMENT 327

report itself notes, are "essentially very similar" (VI-3) — the present structure
simply being an example of the sub-cabinet model. Thus, AM-FM actually presents
nine general models rather than ten; only four of which — less than half — represent
non-corporate forms. The Panel could have expanded its range of alternatives, and
21

thus have been more inclusive, if it had offered (and later evaluated) a clearly speci-
fied sub-cabinet alternative to the present structure.
22

As these examples suggest, the Panel's list does not exhaust the number of
potential alternatives. Though AM-FM argued its alternatives represent general
models, and thus each alternative model includes a variety of specific organizational
structures (VI-1), the models are not general enough to include all feasible organiza-
tional structures. Moreover, the report does not justify excluding certain organiza-
tional forms from consideration, noting only that the chosen "alternatives were
derived from literature search, organizational structures used in other countries,
suggestions made at the Panel's public meetings, and research into various existing
organizations" (VI-1). 23

For the purpose of balancing the report's presentation, some additional organi-
zational alternatives could include:24

• A cabinet-level department, such as the Department of Energy, in

which all activities related to radioactive waste management would be housed
under a cabinet secretary. Cabinet departments are sometimes created as
symbolic gestures demonstrating presidential or congressional concern for an
issue (Thomas 1992:4-5). Thus, this alternative might elevate radioactive
waste management in terms of national priorities, and may even increase the
certainty and continuity of congressional appropriations. A cabinet-level
department would also increase political accountability and control, and might
provide a strong means for presidential administrations to coordinate radioac-
tive waste management with related issues (Thomas 1992:14,34). Major
policy decisions would not have to be approved by non-elected officials
outside the organization, since the new department would not be housed
within another organization. This would be the most politically centralized
alternative, and would thus expand the range of alternatives along this
dimension.
328 COMPILATION OF REPORTS

• A centralized sub-cabinet office. As contrasted with OCRWM, this

alternative's regional offices would be centralized under (rather than indepen-
dent of) the director of the sub-cabinet office. Thus, it would be highly
centralized under a hierarchy of political appointees (the Office Director and
Department Secretary), permitting greater coordination within the organiza-
tion (rather than fostering competition among the units). Other elements of
this sub-cabinet alternative might include the use of fewer contractors at the
regional and/or headquarter levels, and the abandonment of activities unre-
lated to radioactive waste management by the regional offices. In other
words, many of the problematic features of the current organization addressed
in AM-FM's report could simply be restructured, without moving the program
to an entirely new organization.

• A sub-cabinet institute, such as the National Cancer Institute (housed

within the Department of Health and Human Services), or the Institute for
Materials Research (housed within the Department of Commerce). Since the
early phases of the radioactive waste management program require basic
scientific research with regard to geologic isolation of radioactive materials, a
logical alternative would be to reorganize at least part of the program into a
research institute to be housed within DOE or another department. This
alternative might lend the program a degree of legitimacy and trust if the
public perceived research was being carried out according to scientific stan-
dards and professional practices (Thomas 1991). 25

• A private institute, such as the Rand Corporation, Brookhaven Labora-

tory, or the Oak Ridge National Laboratory. Private institutes are organized
by the federal government to provide contractual services, often on a non-
profit basis. Since the institute would be privately operated, it might have
greater internal flexibility than a sub-cabinet institute to achieve technical
excellence. On the other hand, monitoring costs might be greater, and a
private institute might be perceived as less credible or less accountable than a
sub-cabinet institute.
 AM-FM'S CORPORATE SOLUTION FOR RADIOACTIVE WASTE MANAGEMENT 329

• A public organization at the state or regional level, such as those

26

specified by NWPA for managing low-level radioactive waste. Essentially,

the federal government would give programmatic authority to a newly created
state agency or regional body, and retain regulative authority. Since the
specified state(s) would have greater control over the organization, this
alternative would be more likely to address the concerns of local stakeholders.
The state or regional organization could also be given financial authority,
perhaps including discretionary control over a specified percentage of the
nuclear waste fund as a means for ameliorating perceived social, economic, or
environmental impacts.

• A multi-organizational system, in which several public and/or private

organizations each carry out specified activities. Generally speaking, all of
the alternatives discussed thus far in this paper would involve several organi-
zations since regulatory authority would be housed in agencies such as the
EPA and the NRC. This alternative, however, would parcel out functional
aspects of the program, clearly specifying their legal relationship to one
another. This might include, for example, a national institute to conduct
scientific research, an operations organization to construct and operate the
facility, an independent rate commission to establish fees, and a regulatory
27

oversight organization charged specifically with overseeing operations.

In sum, AM-FM's list does not exhaust the potential range of alternatives.
Moreover, corporate alternatives comprise half its list. This emphasis creates the
impression that corporations (whether public, private or mixed) represent approxi-
mately half of the available (or feasible) alternatives. However, as my additional list
of alternatives suggests, AM-FM excluded several types of public organizations from
consideration; and it did so without justifying such decisions in the body of the
report.
330 COMPILATION OF REPORTS

AM-FM NARROWS THE ALTERNATIVES FROM TEN MODELS TO

FOUR GROUPS
The Panel's emphasis on corporate alternatives continues in the next chapter
(VII). Here, the original ten alternatives are reduced to four; and, again, this is done
without providing the reader with any explicit theoretical or empirical justification
for grouping the alternatives in this manner. Without even evaluating the original
28

ten alternatives in light of the organizational tests, the Panel simply winnowed con-
sideration to the following four groups:

• The present organization

• An alternative governmental approach
• A public/private entity
• A private corporation

AM-FM also changed its methodology in this chapter. Rather than presenting the
four groups as general models, the report notes the Panel used the groups as organiz-
ing principles, dividing itself into several work groups, each of which then developed
specific models within the four categories (VII-1). Rather than discussing and evalu-
ating the categories themselves, the report presents and evaluates the specific models
developed by the work groups.
Since several alternatives in the original list — i.e., the sub-cabinet office, the
administration responsible to a cabinet department, the government-controlled corpo-
ration, and the utility-type private organization — disappear from consideration, it
would seem as if they are no longer in the running. In addition, the federal execu-
29

tive agency (FEA), though discussed in tandem with the independent federal commis-
sion (EFC) under the group entitled "alternative governmental approach," is given
subordinate treatment. If the Panel had evaluated the categories rather than the
30

models within the categories, then the report might still have included evaluations of
several of its original alternatives. Instead, it appears AM-FM simply winnowed
some alternatives from consideration without evaluating them. Surprisingly, how-
ever, a version of the government-controlled corporation ultimately reappears as AM-
FM's preferred alternative.
Given this evolving methodology and the absence of justifications for exclud-
 AM-FM'S CORPORATE SOLUTION FOR RADIOACTIVE WASTE MANAGEMENT 331

ing and winnowing various alternatives, AM-FM's argument becomes almost inscru-
table at this point in the report. Rather than attempt to guess the Panel's reasoning
behind such decisions, I will simply discuss some of the problems which might arise
in considering the four categories and the specific models the Panel presents within
the categories.
In the first category, the present organization, AM-FM again simply presents
OCRWM, citing the specific structural and operational characteristics of the program
as it existed in 1984. Even though the report notes the existence of "serious ques-
tions" regarding OCRWM's "ability to carry out successfully the formidable tasks
mandated by the Nuclear Waste Policy Act" (VII-3), the Panel chose not to offer a
modified version of OCRWM as one of its final list of alternatives. "Quite simply,
the Panel did not view its charge from the Secretary of Energy as that of assuming the
role of a management consultant" (VII-3). Since the Panel notes the existence of
31

OCRWM's "serious" shortcomings in both this chapter (VII-3) and the conclusion
(XII-1), but does not recommend changes which would mitigate the problems, this
alternative appears to be a strawman. Moreover, in selecting OCRWM specifically,
all other variants of the sub-cabinet model are essentially excluded from consider-
ation. Since the Panel does not offer a sub-cabinet model in the "alternative gov-
32

ernmental approach," OCRWM becomes the only alternative in a cabinet department.

For the "alternative governmental approach," AM-FM offers an independent
federal commission (IFC), and briefly compares it to a federal executive agency
(FEA). Despite the assertion that these two models are "relatively distinct" (VH-6),
the report only distinguishes them on the basis of top management. The IFC would
have five commissioners appointed for seven years to staggered terms, while the FEA
would have a single administrator appointed to a twelve-year term. The report,
however, presents no evidence as to why the Panel prefers IFC over FEA, nor does it
inform the reader as to how the Panel arrived at the number of commissioners, the
length of terms, or any of the other specific details in the models. BFC differs from
the current structure in at least several ways: it would be led by a commission rather
than a single director; it would be independent of a cabinet department; and it would
have three advisory groups, one representing major constituencies and the other two
charged with technical review and cost-effectiveness.
For the "public/private entity," AM-FM presents the "Corporation for Waste
332 COMPILATION OF REPORTS

Management" (CWM), a mixed-ownership, government-chartered corporation, the

equity of which would be apportioned among various stakeholders. In presenting this
model and the two private corporate models in the following category, AM-FM again
demonstrates its bias in favor of corporate alternatives. These three models each
receive approximately five pages of description, while OCRWM and JJFC each re-
ceived approximately two pages. In the case of CWM, the bulk of this description is
devoted to careful delineation of stock ownership and corporate control. Nuclear
utilities would receive the greatest share of stock at 38%, with the federal govern-
ment and all other stakeholders each receiving 31%. The Panel further specifies
breakdowns within these categories, and ties ownership percentages directly to the
appointment of the seventeen board members. The board of directors would select
33

the president and set the fees charged to utilities. It would also be responsible for all
external and internal accountability functions. The corporation would be exempt
from civil service requirements, and the nuclear waste fund would be removed from
the federal budget. As with IFC the Panel does not explicitly justify any of these
specifications.
For a private corporation, AM-FM offers two models rather than one, intro-
ducing them both with great fanfare: "Indeed, it can be strongly argued that a free
enterprise economy generally favors such options and, therefore, that each of the
other three must bear the burden of showing itself superior in order to be selected"
(VU-15). In light of the overriding objective upon which AM-FM's argument is
founded, this is a bold, if not reckless, assertion. A free-enterprise economy is typi-
cally lauded for profit-motivated efficiency, rather than for safety or long-term,
multi-generational considerations. If safe long-term disposal is indeed the overriding
objective, then market-driven alternatives should bear the burden of showing them-
selves superior to public-sector alternatives.
The first of AM-FM's two private models, ANCORP (the American Nuclear
Corporation), would be privately owned and controlled. "A major portion of its
ownership would be in the hands of such nuclear stakeholders as the electric utilities
and the purveyors of nuclear energy equipment and services" (VII-15). The federal
government would organize ANCORP, quickly turn it over, and then regulate it as a
private firm during the construction, operation, and transportation phases. Since
ANCORP would not be a government entity, the Panel decided this alternative would
 AM-FM'S CORPORATE SOLUTION FOR RADIOACTIVE WASTE MANAGEMENT 333

be inappropriate for site selection. Oddly, the Panel recommends OCRWM continue
its site-selection efforts, despite repeated assertions throughout the report of
OCRWM's shortcomings regarding this phase. After OCRWM selects a site,
ANCORP would have the option either to use the repository, reprocess the waste, or
store the waste either at reactor sites or in a monitored retrievable storage (MRS)
facility. ANCORP's revenues would come from fees charged to utilities as well as
from "any economic value from reprocessing" (VII-18). The Panel thus assumes
"Decisions about use or disposal of spent fuel should be made on sound economic
grounds" (VII-16).
The second model, BIDCORP , would differ from ANCORP in the following
34

ways. It would be responsible for all phases, including site selection; it would be
selected on the basis of competitive bidding, rather than being organized by the
government; and site selection would be conducted by a board representing various
constituencies. In most other respects, ANCORP and BIDCORP are similar, and are
presented on a relatively equal footing in the report.

TEST-BY-TEST EVALUATIONS OF THE FOUR GROUPS OF

ALTERNATIVES
The report then devotes two chapters (VIII and DC) to evaluations of the four
groups of alternatives. The potential force of these chapters is diminished, however,
since the Panel has already selected, winnowed, and refined many alternatives. Only
the five finalists — OCRWM, EFC, CWM, ANCORP and BIDCORP — are explicitly
evaluated. Moreover, the report has already "tipped its hand" in many respects,
having begun the evaluation process while presenting the alternatives. For example,
rather than impartial treatments in earlier chapters, we have thus far been told there
are "serious questions" regarding OCRWM's ability to carry out its mandate (VII-3);
and that the public alternatives "must bear the burden" of showing themselves supe-
rior to the private corporate alternatives since a free enterprise economy favors the
latter (VTI-15). Such assertions are indicative of the overall thrust of the report, and
foreshadow the outcome of the evaluation chapters. In short, the report does not
allow the reader to independently evaluate the various alternatives.
AM-FM approached the evaluation process in two ways: a qualitative test-by-
test analysis, and a quantitative matrix analysis. Though the Panel found neither
 TABLE 1
REORGANIZATION STRATEGIES IN THEORY AND PRACTICE

Economy Efficiency Effectiveness Political Public Profes- Safety and Equity Political Public Trust
(cost savings) (achieves Accounta- Participation sional Reliability Efficacy and
organizational bility and in Decision- Autonomy Confidence
goals) Control Making
Processes

Centralize Theory discredited; Theory discredited: Unknown Potentially increased Potentially Potentially Unknown Unknown Popular with Unknown
evidence not evidence not supportive for President decreased decreased President; resisted
Hierarchical
supportive by other actors
Relationships
Within the
Executive Branch

Incorporate an Unknown Unknown Unknown Potentially increased Potentially Potentially Unknown Unknown Resisted by Unknown
Independent for President decreased decreased committees and
affected Interest
Organization into
groups
an Executive
Branch Department

Create an Unknown Unknown Unknown Potentially Potentially Potentially Unknown Unknown Resisted by Unknown
Independent decreased for increased increased President
President
Agency or
Commission

Create a Unknown Relatively strong Relatively strong Depends upon the Unknown Potentially Unknown Unknown Generally popular Unknown
Government evidence in evidence in the case enabling legislation increased option
the case ol 'business- ol 'business-like'
Corporation or
like' operations operations
Enterprise

Privatize Various Evidence mixed Theory and evidence Theory and evidence Requires increased Unknown Unknown May depend on Unknown Generally popular Unknown
strong - but requires strong - but requires monitoring capacity oversight and option
Operational
competition competition and well- in public monitoring capacity
Components and well-specified organizations
specified contracts ol public
Through contracts organizations
Contracting

Pursue Strategies Unknown Unknown Unknown Unknown Unknown Unknown Unknown Unknown Generally elicits Unknown
Not Specifically less resistance
than structural
Tied to
strategies
Organizational
Structure
 TABLE 2
REORGANIZATION STRATEGIES IN THEORY AND PRACTICE

Economy Efficiency Effectiveness Political Public Profes- Safety and Equity Political Public Trust
(cost savings) (achieves Accounta- Participation sional Reliability Efficacy and
organizational bility and in Decision- Autonomy Confidence
goals) Control Making
Processes Co
o
o
Centralize Theoiy discredited; Theory discredited; Unknown Potentially Increased Potentially Potentially Unknown Unknown Popular with Unknown
evidence not evidence not supportive lor President decreased decreased President; resisted
Hierarchical
supportive by other actors
Relationships
Within the
Executive Branch 03

o
Incorporate an Unknown Unknown Unknown Potentially Increased Potentially Potentially Unknown Unknown Resisted by Unknown
lor President decreased decreased committees and
Independent
Organization Into
affected interest o
groups
an Executive
Branch Department 3
Create an Unknown Unknown Unknown Potentially
decreased lor
Potentially
increased
Potentially
increased
Unknown Unknown Resisted by
President
Unknown 5
Independent
President a
Agency or
§
Commission
o
Create a Unknown Relatively strong Relatively strong Depends upon the Unknown Potentially Unknown Unknown Generally popular Unknown
Government evidence In evidence In the case enabling legislation increased option
the case ol 'business- ol 'business-like'
Corporation or like'operations operations
Enterprise Co

Privatize Various
Operational
Evidence mixed Theory and evidence
strong - but requires
competition
Theory and evidence
strong - but requires
competition and weil-
Requires Increased
monitoring capacity
In public
Unknown Unknown May depend on
oversight and
monitoring capacity
Unknown Generally popular
option
Unknown
1
Components andwell-specilied specilied contracts organizations ol public
Through contracts organizations
Contracting

Pursue Strategies Unknown Unknown Unknown Unknown Unknown Unknown Unknown Unknown Generally elicits Unknown j
less resistance
Not Specifically Co
than structural Co
Tied to strategies Ol
Organizational
Structure
336 COMPILATION OF REPORTS

process to be individually conclusive, my critique focuses on the qualitative test-by-

test analysis since this effort generated more information regarding AM-FM's argu-
mentation. In addition, I agree with the Panel's assertion that a quantitative, numeri-
cal approach is inappropriate for analyzing "the complex factors intrinsic to this type
of study" (VIII-14). In the following pages, I walk through AM-FM's test-by-test
evaluation of the five alternatives, comparing the Panel's analysis to what is known in
the academic literature regarding organizational structures and public-sector reorgani-
zation, occasionally expanding AM-FM's analysis in order to include organizational
alternatives which the Panel excluded from its final list.
As aids to the reader in sorting the strengths and weaknesses of the various
alternatives, I have reprinted two tables. The first table served as the Panel's internal
survey instrument for its quantitative matrix analysis (VIII-16). The second table,
from the concluding section of my literature review (Thomas 1992:53), summarizes
some of the principle findings regarding public-sector reorganization. Though AM-
FM and I developed different lists of alternatives and criteria, the concepts underly-
ing our respective lists are similar in many respects. 35

MISSION ORIENTATION
"Mission orientation" is an important organizational test for the Panel because
it reflects on the organization's ability to pursue its overriding objective. AM-FM
asserts that "doubts remain as to OCRWM's ability to operate decisively and to exert
its programmatic integrity within a larger agency which has disparate responsibilities
and priorities" (VIII-2). In other words, if the chosen alternative "is part of a larger
organization with multiple missions, it is conceivable that waste management may
not receive the top-level attention it needs, or that its program requirements may on
occasion be subordinated to other agency objectives" (V-2). As previously noted, this
is probably a fair assumption for any sub-cabinet alternative, including OCRWM.
Some sub-cabinet offices, however, have been known to operate independently
within a larger agency (Thomas 1992:31-32), and the report itself notes the existence
of such exceptions (V-2).
The report also argues OCRWM's field offices detract from single-mission
orientation since each has multiple missions. Moreover, "This deficiency is aggra-
vated by OCRWM's lack of direct authority with regard to waste management per-
 AM-FM'S CORPORATE SOLUTION FOR RADIOACTIVE WASTE MANAGEMENT 337

sonnel within the field organization" (VIII-2). While such assertions are also consis-
tent with the academic literature, it must be remembered these "deficiencies" are
specific to OCRWM and not to a generic sub-cabinet alternative. OCRWM, however,
is the only sub-cabinet alternative now under consideration.
In general, AM-FM is probably on safe grounds asserting that IFC and CWM
would fair best among the five finalists in terms of mission orientation (VIH-2).
Private corporations are typically short-run profit-seekers, rather than long-run
safety-seekers, and thus either ANCORP or BIDCORP may run into "conflict among
its missions of safe, prompt, profitable and cost-effective management" (VIII-2). For
IFC and CWM, mission orientation can be written directly into their enabling legisla-
tion, and organizational independence would probably provide an environment
conducive to pursuing the overriding objective. However, some political scientists
have argued independent commissions fear they will become powerless because of
their organizational autonomy, and thus seek alliances with interest groups to shore
up their standing in Congress and thus guarantee continued appropriations (Bernstein
1955; Rourke 1969). If independent commissions are indeed more likely to be
"captured" by particular interest groups, IFC's mission orientation could be threat-
ened. For somewhat similar reasons, CWM might be vulnerable to "capture" by the
nuclear utility industry because of the strong representation of the industry on
CWM's corporate board.

CREDIBILITY
As the report notes, credibility is "a major difficulty for OCRWM" (VHI-3)
— perhaps even a greater problem today than it was in 1984. AM-FM appears to
assume that any of the other three alternatives will fair better on this test in the short
run because they will be new organizations untainted by past performance. Long-run
success, however, would be "very heavily dependent" on how well they perform
(VHI-3). Yet, little is known about the links between organizational structure and
public or stakeholder perceptions of credibility, trust, and confidence (Thomas 1991).
Though reorganization is often perceived as a panacea for relieving such organiza-
tional problems, there is some reason to believe the very act of reorganizing may
undermine trust among certain stakeholders (Thomas 1992:23-24,50). Thus, while
OCRWM may fair poorly on this test, there is little evidence AM-FM's alternatives
338 COMPILATION OF REPORTS

(or any alternatives for that matter) will fair any better in either the short or the long
run. Credibility problems may simply be inherent in the characteristics of the pro-
gram rather than the organizational structure within which the program is housed.
AM-FM also assumes its four alternatives to OCRWM will be more credible
because major stakeholders will play important advisory roles, either as IFC commis-
sioners and advisory group members, or as corporate board members. In this regard,
AM-FM seems to suggest JJFC may also fair better than the corporate alternatives
because utility and financial interests will not be as strongly represented (Vffi-3).
While this line of argument is intuitively appealing, and probably consistent with a
long stream of academic literature which argues organizations can use their boards to
coopt potentially antagonist sectors of their environment (Scott 1987:187-89), there is
no a priori reason to assume advisory boards could not also be legally attached to
OCRWM or to any other sub-cabinet or cabinet-level alternative. Indeed, in a sepa-
rate section of the report, AM-FM later recommends advisory boards or councils for
any chosen alternative (Chapter X).
On another angle, however, AM-FM suggests private corporations may fair
better in terms of credibility than the public alternatives. "To the degree that the
public and important interest groups perceive that NRC will be better able to regulate
a corporation than it would a government agency such as OCRWM, the overall
credibility of waste management would improve" (VIII-4). In this vein, the report
claims there is "considerable reason" to believe the NRC would be more effective
regulating a private corporation than a public agency (VII-19). Though unsubstanti-
ated in the report, both claims are consistent with the literatures on regulatory com-
pliance (Thomas 1992:32-33) and public trust (Thomas 1991). Public agencies can
indeed be more difficult to regulate than private organizations if lines of authority are
unclear. This problem could be ameliorated, however, if legislation clearly specifies
regulatory relationships between public agencies.
Finally, the report overlooks some factors related to credibility. For example,
academics have hypothesized that private corporations are more credible or trustwor-
thy simply because government is distrusted in the United States (Thomas 1992:38).
The report also does not evaluate the alternatives in light of various factors the Panel
previously deemed important for maintaining credibility, such as procedural fairness,
equity, and stability and continuity. Though AM-FM never pursued fairness and
 AM-FM'S CORPORATE SOLUTION FOR RADIOACTIVE WASTE MANAGEMENT 339

equity, it argued that credibility is particularly dependent upon stability and continu-
ity (V-III; XII-1), and thus should have interwoven its test-by-test evaluations in
order to check for consistency. Though commissions might be more credible than
corporate boards in terms of representing various stakeholders, they may not (as will
be seen below) rank high in terms of stability and continuity.

STABILITY AND CONTINUITY

In the report's original presentation of this test, stability and continuity were
broadly construed (V-3), but in evaluating the four alternatives the Panel focuses
almost solely on the negative effects of "untoward political influence," which it fears
may lead to "drastic change in waste management policies or activities" (Vffl-4).
Political instability appears primarily to be a short-run concern, however, since the
report later acknowledges that "a Federal Government agency is likely to have the
longest stable institutional life of any organization in a position to monitor and
protect repositories over millennia" (IX-1). Following this short-run versus long-run
logic, one might assume the Panel would favor OCRWM and IFC on this test, since
the program's overriding mission is "safe long-term disposal" (III-2). Yet, the report
argues that instability and discontinuity is "a major problem for OCRWM or any
federal entity whose senior staff and their superiors serve at the pleasure of the
President — particularly when OCRWM's mission will span a number of Administra-
tions" (VHI-4). Though this tension is never addressed, the Panel does argue, prob-
ably correctly (Thomas 1992:33-34), that IFC would be relatively insulated from
political influence compared to OCRWM because IFC's commissioners would be
appointed to staggered terms (VIH-4).
In focusing on politics as a source of short-run instability and discontinuity,
the Panel also overlooks instabilities produced through the fluctuations of private
markets and national economies. Once again, the bias of the Panel towards market-
based alternatives is readily apparent. Though the report earlier noted that a primary
characteristic of any radioactive waste management organization is that "it must
operate in a business climate which is largely dependent upon economic trends and
emerging energy policies" (IV-2), the Panel does not follow through in evaluating the
alternatives. In overlooking the effects of markets and economies, a more subtle
point is also missed: presidential policies have a strong effect on waste volume and

•"!••'.'.? iV.V.V —C .'?'*- -..- .<&VJUa^V."

g -
• -"J .'-'W'\"V;.'.' ',< .-J.-^-y. .i ..! ' • . ' v , » ' W , : .
1 1
340 COMPILATION OF REPORTS

market trends. Thus, even allowing for short-run political instabilities, it is possible
that a centralized public organization, which is linked through the President to a
coordinated national policy, might actually be more stable than a market-based
alternative whose investors may be no less transitory and demanding than presidential
administrations.

PROGRAMMATIC AUTHORITY
AM-FM's evaluation of the alternatives is also decidedly one-sided and
incomplete in terms of programmatic authority. In the case of OCRWM, for ex-
ample, the report focuses almost solely on congressional committees as "strong
constraints" while only noting in passing the existence of "other constraints" (VIII-5).
Presumably such constraints include presidential administrations and interest groups,
as well as the Department of Energy itself. Indeed, the Panel appears to recognize
the affects of the latter in noting that "IFC should have a decidedly greater measure
of programmatic authority than OCRWM because it would stand outside of any larger
executive agency" (VIII-5). This comparison is very skimpy, however, since there is
no indication IFC would be subject to less congressional oversight than OCRWM. In
fact, Seidman and Gilmour (1986:280) argue that organizational independence may
actually increase the susceptibility of a program to both congressional and industry
influence. Moreover, IFC would be constrained by its three advisory groups, one of
which represents major stakeholders, since IFC would threaten its credibility if it
ignored these groups.
In comparing IFC to the mixed-ownership corporate model, the report argues:
"The CWM would also have virtually complete programmatic authority" (VIJI-6).
This statement is incongruous, however, since the report never demonstrated "virtu-
ally complete" programmatic authority in the case of IFC. The Panel also attributes
"virtually complete" programmatic authority to its private corporate alternatives,
limited only by government regulations and "the possibility of Congressional asser-
tion of influence" (VJJI-6). While the latter appears to be a fair assessment of the
private models, it is difficult to understand AM-FM's use of the term "virtually
complete programmatic authority" if it applies equally to IFC, CWM, and the private
corporate models.
Moreover, the report further argues CWM "would be subject to relatively few
 AM-FM'S CORPORATE SOLUTION FOR RADIOACTIVE WASTE MANAGEMENT 341

restrictions (e.g., the possibility of Congressional override of increases in the waste

fee), but would essentially be able to direct the program as it sees fit" (VIII-6). Such
a statement is based on the implicit assumption that Congress would be willing to
legislate autonomy for a program it has long sought to oversee. Public corporations,
however, are not created according to a standard model (Seidman and Gilmour
1986:283). In other words, if Congress wishes to create a public corporation, it need
not bestow "virtually complete" programmatic authority; and, similarly, if Congress
wishes to bestow programmatic authority, it need not create a public corporation.
The report also fails to follow through in discussing funding authority.
Though included in the original description of this test, funding authority is barely
broached in evaluating the alternatives, which is surprising since revenue flexibility is
an important attribute of both public and private corporations. AM-FM thus missed
an important opportunity to demonstrate the utility of the corporate form.

ACCESSIBILITY
The report focuses primarily on formal, rather than informal, means for
accessibility. Thus, even though DOE and its predecessors have long had a reputa-
tion for being relatively inaccessible, OCRWM and IFC are given high marks be-
cause AM-FM emphasizes accessibility in terms of public laws and formal roles
rather than organizational culture. The report argues that "all federal agencies" share
a "high degree of accessibility" because they are subject to congressional oversight
and several statutes prompting disclosure of information to the public (VHI-6). In
addition, most government corporations are also subject to disclosure statutes, includ-
ing freedom of information, conflict of interest, and sunshine in government (NAPA
1981). The report neglects, however, to discuss the important role played by organi-
zational culture in facilitating such disclosures and opening the organization to
various stakeholders.
In comparing the alternatives on this test, AM-FM focuses primarily on top
management, arguing IFC outperforms OCRWM on accessibility because its five
commissioners would provide multiple channels of access for various stakeholders.
This assertion is consistent with the academic literature, which argues that single
administrators are more likely to be under the control of the President, and are thus
less likely to provide access to multiple interests (Thomas 1992:26). On the other
342 COMPILATION OF REPORTS

hand, the commission form may be inherently vulnerable to "capture" by specific

stakeholders (Bernstein 1955). It is thus possible a multi-headed, independent com-
mission, such as IFC, could become overly accessible to the utility industry, at the
expense of other stakeholders. Since the mixed corporation and private corporations
have specified board representations, it would be easier to predict in advance the
relative influence of the various stakeholders.

RESPONSIVENESS
AM-FM evaluates responsiveness in much the same way as accessibility —
comparing the alternatives in terms of formal obligations and top management. In
doing so, however, it focuses primarily on responsiveness to Congress and various
regulators, even though the report originally defined this test in terms of responsive-
ness to the comments and concerns of "the public and interested groups" (V-4).
Since responsiveness to Congress is more closely related to political accountability, I
will discuss this aspect of responsiveness in a subsequent section of this paper.
In regards to the report's original definition of responsiveness, AM-FM's
evaluation of the alternatives is quite similar to its evaluation under accessibility,
though IFC's informal advisory groups are also drawn in. Presumably, the advisory
groups would enhance IFC's accessibility as well as its responsiveness, since in both
cases the organization's credibility would be at stake if it ignored these groups.
CWM (the mixed-ownership corporation) appears particularly attractive on this test
because AM-FM designed its board of directors to be responsive to a variety of
stakeholders. Responsiveness to diverse stakeholders, however, is not an attribute of
mixed-corporations per se.
AM-FM is also probably correct in asserting that the corporate alternatives
might be more responsive to regulators than the executive branch alternatives.
Though AM-FM views political accountability as a negative attribute for the program
because of the potential for political interference in day-to-day operations, it views
regulatory responsiveness as a positive attribute. As the report notes: "Protection of
public health and safety is...a preeminent concern of government" (IX-4). In this
vein, the report argues mixed and private corporations are likely to be more respon-
sive to federal regulatory agencies than either OCRWM or IFC (IX-2,4). This is a
subtle point, with some empirical support in the literature (Thomas 1992:32-33); but,
 AM-FM'S CORPORATE SOLUTION FOR RADIOACTIVE WASTE MANAGEMENT 343

since evidence is mixed, regulatory responsiveness should not be weighted heavily in

evaluating the alternatives. Though the Panel later argues that regulatory responsive-
ness is one of the six major advantages of its preferred alternative, a wholly-owned
(rather than mixed-ownership) public corporation (XI-8), this conclusion is inconsis-
tent with the challenges confronted by the EPA in its attempts to regulate the Tennes-
see Valley Authority (TVA) — a wholly-owned public corporation (Wilson and
Rachal 1977).

INTERNAL FLEXIBILITY
AM-FM correctly asserts that OCRWM faces "Serious impediments" to
internal flexibility in the form of civil service constraints, DOE conflict-of-interest
rules, and the need for political clearance on appointed positions (VHI-8). Such
impediments have often been used to justify the creation of public corporations when
internal flexibility is desired (Thomas 1992:38-39). Congress need not create public
corporations to give programs such flexibility, however, since it can simply legislate
exemptions to any of these impediments, as the report itself notes in evaluating the
independent commission alternative (VIII-8). Moreover, it is important to remember
OCRWM plays the role of a strawman in this report, since a generic sub-cabinet
alternative could also be given such exemptions. In a separate section of the report,
the Panel appears to recognize that personnel flexibility and staff incentives are also
available for an OCRWM-like alternative (X-4). This is not pursued in the main
argument of the report, however, and thus leads the reader to believe that corporate-
like alternatives necessarily perform much better in terms of internal flexibility.
Moreover, most public corporations are subject to conflict-of-interest rules (NAPA
1981). In addition, unless exemptions are made, the employees of public corpora-
tions are considered to be employees of the U.S. government and are subject to
applicable regulations and civil service rules. Thus, the public and semi-public
alternatives are not as distinguishable on this test as implied by the report.
Regardless, the private alternatives would almost certainly have greater
internal flexibility than either OCRWM, IFC, or CWM because of their general
autonomy from government control. For example, private corporations would not be
bound by the federal government's procurement procedures, which some have argued
impede government agencies from hiring the most qualified contractors by limiting
344 COMPILATION OF REPORTS

the discretion of public officials (Kelman 1990).

POLITICAL ACCOUNTABILITY
AM-FM correctly asserts that IFC would be less politically accountable than
OCRWM because of the term appointments of its commissioners (VIII-7,8). Not
only are commissioners' jobs protected, commissioners are less likely to be aligned
with the President as a group than would be a single administrator. IFC would also
be organizationally independent of a cabinet department, and thus would not report to
a cabinet secretary — an important fact to which the report's evaluation barely
alludes (VIII-8).
The report also claims IFC would be less politically accountable than
OCRWM because of the "structure of the Waste Fund" (VHI-8; see also VIII-7). This
assertion is inexplicable, however, since the report previously stated that "IFC would
have the same budgetary independence as OCRWM" (VII-6). Independence from the
appropriations process is an important issue for assessing political accountability,
since budgetary control is an important means by which elected officials hold public
organizations accountable for their actions. Unfortunately, the report inconsistently
develops this point.
The corporate alternatives would indeed be less politically accountable than
either OCRWM or IFC, both because of the structure of their boards (which tend to
diffuse lines of responsibility and accountability) and because of their independence
from the appropriations process. (Though most public corporations raise their rev-
enues independently, some depend on Congressional appropriations for a portion of
their operating budget.) Again, however, Congress would have to be willing to
forego some of its control over the program.

IMMUNITY FROM POLITICAL INTERFERENCE

The Panel's ordinal ranking of the alternatives for this test — private corpora-
tions high, OCRWM low — appear to be logically consistent with its rankings for
related tests, such as internal flexibility, programmatic authority, and political ac-
countability. In other words, as immunity from political interference increases,
stability and continuity, programmatic authority, and internal flexibility also tend to
increase, while political accountability decreases. Though logically consistent, these
 AM-FM'S CORPORATE SOLUTION FOR RADIOACTIVE WASTE MANAGEMENT 345

trade-offs nevertheless represent fundamental values in a democracy, and thus the

report should have been more explicit in calling out the trade-offs rather than simply
evaluating the alternatives on a test-by-test basis. Pursuing such an approach forces
the analyst to consider the normative aspects of democratic government, rather than
simply asserting or implying that "political interference" is an undesirable attribute.
37

This approach would also have simplified the Panel's exposition by reducing
several tests to a debate over political control versus organizational independence.
For example, a major theme of AM-FM's report is the perceived need to manage
environmental turbulence (i.e., the potentially disruptive effects which various exter-
nal actors and events may have on the organization). If environmental turbulence
indeed impedes mission orientation, then limiting political accountability and increas-
ing organizational independence may be justified. Though "political interference" is
just one source of turbulence in an organization's environment, AM-FM gives it the
greatest attention because of the Panel's belief that political appointments and budget-
ary politics are the primary sources of instability and discontinuity (VIII-4), which in
turn threaten both technical excellence and credibility (V-ITI). Thus, AM-FM appears
to be building a strong case for organizational independence (as well as program-
matic and funding autonomy), but not necessarily for a particular organizational
form.

FINANCIAL ACCOUNTABILITY
The Panel's comparison of IFC and OCRWM on this test is inconsistent with
previous claims in the report. As discussed above under political accountability, the
report does not clearly establish whether IFC would have greater budgetary au-
tonomy than OCRWM. This section of the report is similarly confusing, since the
Panel asserts that NWPA's provisions "would apply as strongly to IFC" as they do to
OCRWM, which "must obtain triennial authorization from Congress and annual
appropriations in order to spend monies in the [Nuclear Waste] Fund" (VIE-IO). If
we accept this as the definitive statement, then the two alternatives are roughly
equivalent on this test (though IFC might be more accountable since it would also
have a cost-effectiveness advisory board). OCRWM and IFC would thus also be
roughly equivalent in terms of political accountability, inasmuch as financial account-
ability is a means for political accountability and control.
346 COMPILATION OF REPORTS

AM-FM is correct in arguing that the corporations would generally be ac-

countable to their ratepayers (i.e., the nuclear utilities) because of ratepayer represen-
tation on the corporate boards (VIII-10). In addition the corporations would also be
accountable to lenders and stockholders (Thomas 1992:41).

ABILITY TO STIMULATE COST-EFFECTIVENESS

On the issue of cost-effectiveness, AM-FM once again sets up OCRWM as a
strawman, and again its evaluation of the alternatives is both inconsistent and incom-
plete. As previously discussed, the Panel appears to be concerned with production
efficiency (i.e., low-cost production given a specified output), rather than simply
holding down costs. In this vein, its critique of OCRWM begins with the assertion
that cost-effectiveness (or production efficiency) "is difficult to achieve in a mo-
nopoly business, and especially one which, by the nature of its particular mission
[i.e., safe long-term disposal], cannot look forward to any growth or diversity expec-
tations" (VIII-11). The report fails, however, to mention that these assumptions
apply equally to IFC and CWM. Nevertheless, the report then suggests, with
38

almost no empirical or theoretical support, that "CWM would be able to achieve cost-
effectiveness" (VIII-11). These statements are fundamentally incompatible. The
former statement, regarding the inefficiencies of monopolies, is well-supported by
microeconomic theory, though the report itself does not draw upon this theory. The
latter statement, regarding the mixed corporation's cost-effectiveness, is certainly
open to debate.
The report asserts that "the representation of utilities on the CWM Board, the
corporation's goals, the requirement to utilize an independent oversight contractor,
and the flexibility in personnel hiring/firing all suggest that the CWM would be able
to achieve cost-effectiveness" (VIII-11). Yet, some of these features could be in-
cluded in a non-corporate alternative. In addition, the corporation's goals are basi-
cally identical to OCRWM's (with the exception of seeking profits). Moreover,
utility representation on the corporate board (whether mixed or private) may induce
changes in mission, which in turn could threaten mission orientation and the
program's overriding goal. As the report previously argued, cost-effectiveness can
not be at the expense of either technical excellence (V-7) or safety (III-11). Effi-
ciency thus implies low-cost performance given the overriding mission of safe long-
 AM-FM'S CORPORATE SOLUTION FOR RADIOACTIVE WASTE MANAGEMENT 347

term disposal. Utility representatives on the corporate board, however, may have an
incentive to dispose of the waste relatively quickly, particularly given declining on-
site storage capacities at nuclear power plants. Utility representatives may also push
for cost savings at the expense of technical excellence and long-run safety, since the
program is financed through fees charged to these utilities. AM-FM argues differ-
ently, however, in noting that the utility industry's "long-term interest in allaying
public concerns will stimulate strong concern within the corporation for assuring
health and safety" (IX-4). Though "corporations generally have less credibility" in
this area, the Panel presumes the credibility problem "would dissipate through a
combination of effective regulatory oversight and through a history of good perfor-
mance by ANCORP and BIDCORP" (IX-4).
The report's critique of OCRWM continues by noting that (VIIt-11):

...there are many stakeholders to whom the organization

has to be accessible and/or responsive, and there is the
potential for substantial technical changes as site
characterization proceeds and as NRC and EPA proce-
dure evolves. Consequently, maintaining a coherent
project schedule, obviously a key to cost-effectiveness,
cannot be assured, even neglecting the possibility of the
kind of delays brought on by legal challenge.

Again, the report attributes these characteristics only to OCRWM, even though IFC
and CWM would confront them as well.
In short, the report does not treat its alternatives even-handedly. AM-FM's
comparison of the alternatives in terms of cost-effectiveness is particularly inconsis-
tent. Though public corporations might indeed be more efficient than traditional
government organizations in certain situations, AM-FM's discussion is not careful in
this regard, and thus could be dangerously misleading given the nature of the
organization's task. Up to this point in the report, AM-FM's argument has largely
been directed towards making a general case for poHtical and organizational indepen-
dence. With this test, the report takes a much stronger stand on a particular organiza-
tional form; and it is on this point that I believe the Panel's argument is weakest.
Cost-effectiveness has thus far been a subsidiary concern in the report. Yet, as will be
seen, AM-FM ultimately recommends a public corporation over other forms of
348 COMPILATION OF REPORTS

organizational independence, and appears to do so largely based upon this organiza-

tional test.

TECHNICAL EXCELLENCE
The Panel is almost certainly correct in asserting that OCRWM will face
difficulties in recruiting talented individuals because of various personnel con-
straints. Recent experience in Superfund, for example, demonstrates how far
39

technical competence can decline in executive branch organizations (Kettl 1991).

Given such constraints, it is possible the Panel might actually be overestimating the
ability of OCRWM, and IFC, to attract "good talent in the relevant fields" (VIII-12).
Indeed, "technical competence," rather than technical excellence, may be the best to
which OCRWM and IFC could strive (VIII-12), even if their permanent staffs are
supplemented by technical advisory boards (VIII-12; VII-7).
Since the corporate models have greater internal flexibility, they would indeed
find it easier to attract the more qualified employees. But again, this is not due to the
corporate form. Government organizations can be given personnel flexibility as well
as adequate funding if Congress so chooses. Moreover, alternative government
organizations, such as research institutes, may provide a more conducive environment
for achieving technical excellence than corporations because of their reliance on
professional standards; and because, as the report notes, corporations may be subject
to pressures which compromise technical excellence (VIII-12). Utilities, for ex-
ample, which are strongly represented on the corporate boards, might press for rapid
and inexpensive disposal rather than technical excellence. The Panel, however,
appears to brush aside these concerns in the cases of ANCORP and BIDCORR
arguing that "regulatory oversight is apt to be more effective for a private corpora-
tion" than for a public agency (VIII-12). Though evidence exists to support this
contention (Thomas 1992:32-33), public agencies are nevertheless subject to more
congressional oversight than are private corporations, the federal government would
own almost a third of the mixed corporation's stock, and legislation can certainly be
specified which clarifies lines of authority and thus facilitates intragovernmental
regulation.
 AM-FM'S CORPORATE SOLUTION FOR RADIOACTIVE WASTE MANAGEMENT 349

EASE OF TRANSITION
The report correctly notes that any change requiring new legislation will be
difficult, and thus it would "seem much simpler to try, within the latitude permitted
by NWPA, to graft improvements onto the present structure, e.g., those described in
Chapter X" (Vffl-13). The report, however, has so far given little indication the
40

Panel was interested in such marginal changes to OCRWM. Though apparently set
on advocating major changes requiring new legislation, the Panel does not discuss the
political ramifications such recommendations would entail. Indeed, the report
41

generally overlooks the political implications of recommending changes which would

alter the program's relationship to congressional committees, interest groups, and the
President.
Regarding committees, a large body of literature in political science argues
congressmen are unwilling to give up their turf (Thomas 1992:21), particularly when
the activities of their committees directly affects re-election opportunities (Fenno
1973). Though AM-FM regards the complex lines of committee accountability as a
liability for OCRWM (IV-6) because the committees "require extensive servicing and
have the potential to cause schedule delays and increase costs" (X-5), and thus "rec-
ommends that the Congress attempt to simplify its oversight process" (X-5), the
report overlooks the political feasibility of such proposals.
In addition to the committees, the President and a variety of stakeholders are
also likely to fight any changes. Presidential control is likely decreased if the pro-
gram is removed from a cabinet department. Since the President must sign the
authorizing legislation, he would similarly be forfeiting his turf. The literature also
suggests stakeholders benefitting from the present structure will fight any change
(Thomas 1992:21,31). As with the congressional committees, these important politi-
cal considerations are completely overlooked in the report's evaluation of the alterna-
tives regarding ease of transition.
In fact, in evaluating the alternatives on this test, the Panel focuses primarily
on one assumption: if change is desired, it should be made sooner rather than later,
"before the present organization gets further solidified" (VIII-13). Eight years have
passed, however, since AM-FM made this assertion. Since agreements and under-
standings with various constituents have already been made, and technical decisions
are moving forward, the import of this assertion has waned. Political considerations
350 COMPILATION OF REPORTS

regarding ease of transition have accordingly become even more important. The
report also suggests transition could be eased if the alternative (in this case IFC)
involved "merely" the movement of OCRWM staff to a new organization (VIII-13).
Some academics have argued, however, that changes in staff and tasks are at least as
important as changes in structure in bringing about any real change in organizational
operations (Thomas 1992:28).
In sum, the Panel focuses on relatively unimportant factors regarding ease of
transition, while overlooking significant political constraints. The report's
acknowledgement of "intense political concerns surrounding siting" (VIU-14) does
not constitute adequate consideration of these issues. Moreover, if AM-FM had
explored political considerations further, it might have taken to heart its observation
that "NWPA represents a delicate political compromise; a better political balance may
not be achievable" (IX-1).

WEIGHTING THE TESTS

The report provides various hints into the Panel's thinking regarding the
relative weights accorded each organizational test. This is most clear in the Panel's
attempt at quantitative evaluation, when it voted to weight the five "most important"
tests in the following order: stability, credibility, flexibility, immunity from political
interference, and ability to stimulate cost-effectiveness (VIII-15). Though the report
states the Panel did not select its preferred alternative based upon the quantitative
comparison, it is fair to assume the ordinal ranking reflects the Panel's preferences,
particularly since the ranking is reiterated later in the report (XI-8).42

Unfortunately, the Panel does not justify this ranking, particularly since the
ranking appears to be inconsistent with the emphases accorded to various tests earlier
in the report. For example, why is mission orientation not considered to be one of the
five most important tests? This omission is difficult to understand given that AM-
FM's argument begins with the premise that the program has an overriding mission
(III-2), and then finds that the four models differ in terms of mission orientation.
Technical excellence is also excluded, even though it is a necessary condition for
achieving the program's mission (V-6). Moreover, cost-effectiveness, which ap-
peared to be a subsidiary concern earlier in the report, is now one of the five "most
important" organizational tests, even though it may be incompatible with safe long-
 AM-FM'S CORPORATE SOLUTION FOR RADIOACTIVE WASTE MANAGEMENT 351

term disposal. Combined with the Panel's inconsistent evaluations of the alternatives,
these questions raise serious doubts about the logical necessity of the Panel's ultimate
recommendation.
Earlier, I argued that AM-FM's thirteen organizational tests are based on the
underlying assumption that technical objectivity, rather than political concerns,
should motivate decisions. This assumption also appears to undergird the Panel's
ranking of the five "most important" tests, which may explain why the Panel chose
not to include technical excellence as one of the top five. Credibility, for example, is
enhanced by technical objectivity and stability; stability, in turn, is promoted prima-
rily by detaching the program from political control and electoral outcomes; internal
flexibility depends upon reducing political controls; immunity from political interfer-
ence means day-to-day decisions do not depend upon political considerations; and,
cost-effectiveness is assumed to be achievable only in the private or semi-private
sector, where the program's "borrowings and spending would be minimally subject to
political whims and would be quite reliable" (IX-3).
Unfortunately, while pushing for political independence, AM-FM glosses over
important political considerations. For example, the Panel did not include political
relationships within the ease-of-transition test, and did not consider either this test or
political accountability to be one of the five most important tests. Students of politics
would likely disagree with both of these assessments. Not only do political consider-
ations complicate any reorganization effort, especially when it involves a program
with such a high profile, but political accountability has important normative implica-
tions, particularly with regard to whether a particular policy should be a responsibil-
ity of the public sector. The following quote captures both the Panel's brief attention
to the normative debate, as well as its disdain for political accountability and control
(IX-2):

Perhaps the major advantage [of the IFC over other

alternatives] turns on individual judgments about
whether high-level radioactive waste management is
inherently a governmental function. If so, an IFC
appears the best way to perform it and yet minimize the
disadvantages, largely arising from political responsive-
ness, that seem to mark public organizations.
352 COMPILATION OF REPORTS

The question of whether the program is "inherently a governmental function,"

however, is never addressed in the report, despite the fact that several alternatives to
which AM-FM gives considerable attention are either in, or strongly oriented to-
wards, the private sector.

DERIVING A RECOMMENDATION
In light of its preferences, the Panel favored the mixed public/private alterna-
tive (CWM) by majority votes at two separate meetings (IX-5). In an attempt to
reach a consensus, the Panel then used this alternative as a basis for discussion,
reshaping it "in a manner that incorporated the best features of the other three alterna-
tives" (IX-6). This effort led to AM-FM's preferred alternative, known as FEDCORP
(the Federal Corporation for Waste Management), a government-owned corporation
"structured to operate more like a private enterprise than a government agency" (DC-
6).
Perhaps the most important difference between FEDCORP and CWM is that
FEDCORP would be wholly-owned by the federal government (XI-3). This single
attribute has a number of ramifications. Since there would be no equity apportion-
ment, all seven board members would be appointed by the President and confirmed
by the Senate, rather than just five of sixteen in the case of CWM. In addition, the
President, rather than the board members, would appoint the chairman. In terms of
the organizational tests, the report argues these features imply "a substantial measure
of political oversight" (XI-1). Political interference would be avoided, however,
since the seven-year staggered terms "would provide continuity and insulation from
excessive political influence" (XI-3). In these respects, FEDCORP's board would be
much like the commission of an independent federal commission (IFC), though the
report itself does not draw such comparisons. Would FEDCORP's board be more
accessible than IFC's? More responsive? More credible? More likely to promote
cost-effectiveness? Unfortunately, such questions are not addressed.
Neither does the report clearly draw comparisons between FEDCORP and
CWM. Presumably, FEDCORP's board would be more credible than CWM's among
a broader array of stakeholder groups because it would not necessarily be dominated
by utility representatives. Yet, this would mean FEDCORP would also be less cost-
effective than CWM given the Panel's earlier assertion about the role of utility repre-
 AM-FM'S CORPORATE SOLUTION FOR RADIOACTIVE WASTE MANAGEMENT 353

sentation on the board. Thus, the Panel appears to be trading some measure of cost-
effectiveness for credibility and political accountability, since FEDCORP's board is
politically appointed. The latter would be a surprising twist given AM-FM's previ-
ously stated preferences.43

The report, however, does not acknowledge any such trade-off. Despite
having changed both the appointment process and the representation of stakeholders
on the board, AM-FM argues FEDCORP's board "would function as in the private
sector" (XI-3), since it would "essentially comprise a managerial body functioning
like the Board of Directors of a private corporation" (XI-1). In addition,
FEDCORP's board "would essentially be able to direct the program with "free-
enterprise efficiency" because it would have "virtually complete programmatic
authority" (XI-6). Since all seven board members would be politically appointed, the
Panel either is unaware of the degree to which candidates for the board would be
politically screened during the appointment process, or previously overplayed the
disadvantages of political oversight. Regardless, the operations of government
corporations are "profoundly political" because they have direct impacts on large
sectors of the public (Walsh 1978:332). Therefore, the President and Congress can
always find ways to influence the organization's operations to protect their political
interests, particularly on issues which are both salient and conspicuous to the public
(Tierney 1984:87).
FEDCORP also differs from CWM in that the Panel explicitly limits the size
of FEDCORP's staff, recommending it be "certainly no greater in number than the
present OCRWM" (XI-1). Thus, as with the current structure, private contractors
would be used to carry out various functions related to site selection, repository
construction, waste transportation and emplacement. Yet, the report provides neither
justifications for limiting staff size nor for using contractors. At the time AM-FM
was convened, these strategies were politically popular means for reducing the size of
the federal workforce and thus "big government." Regardless of the Panel's ideol-
ogy, however, staff limitations need to be justified in the context of the radioactive
waste management program. Recent research — unavailable to the Panel — suggests
Congressionally mandated caps on staff size and administrative overhead may im-
pede the ability of a public organization to monitor contractors performing highly
technical tasks, and may even force the organization to rely on contractors to carry
354 COMPILATION OF REPORTS

out inherently governmental functions, such as drafting testimony and preparing job
descriptions (Kettl 1991; GAO 1991).
Moreover, it is unclear why AM-FM recommends limiting the size of
FEDCORP's staff when the organization would be exempt from civil service require-
ments, and thus "would be able to offer salaries and benefits commensurate with the
responsibilities of its personnel" (XI-4). AM-FM provides FEDCORP with the
flexibility to hire the most competent individuals, but then constrains staff size.
These attributes are logically incongruous: if the organization can hire the best, why
force it to hire contractors and thus increase monitoring costs? Though the Panel
assumes contracting will continue regardless of the alternative (III-3; V-7), the report
does not address the reasons for, or the necessity of, contracting. One of the standard
justifications for using contractors is increased efficiency. Efficiency in contracting,
however, necessarily depends upon the existence of competition among contractors,
the ability to specify contracts clearly, and the capacity to monitor contractor perfor-
mance. AM-FM, however, recommends capping the size of the staff regardless of
44

whether it is sufficiently large to monitor contractors. This is a dangerous proposi-

tion given the responsibilities of the program and the likelihood that private contrac-
tors may be more concerned about profits than safe long-term disposal. Despite the
report's contention, FEDCORP would not have "a great deal of internal flexibility"
(XI-8).
In addition to the structure of its board and limitations on staff size,
FEDCORP would also differ from CWM in having an Advisory Siting Council which
would make siting recommendations to the board. Since this board-appointed body
would be "composed of representatives of all legitimate stakeholders" (XI-3), it
would presumably substitute for CWM's diverse board representation in terms of
accessibility and responsiveness (XI-6), and "would provide a strong measure of
credibility among states, tribes, and environmental groups, as well as utilities and
ratepayers" (XI-6). The report, however, does not explicitly make such comparisons.
Finally, "FEDCORP would have chartered authority to contract for revenue-
oriented activities other than nuclear waste disposal so long as these activities would
relate to and not hinder the main thrust of the waste management program" (XI-5).
By comparison, CWM's revenues would be "completely derived from the entities
producing the radioactive waste" (VII-10). Reuse of high-level radioactive waste
 AM-FM'S CORPORATE SOLUTION FOR RADIOACTIVE WASTE MANAGEMENT 355

"could dampen the need for increasing nuclear utility generating fees" (XI-5), and
thus FEDCORP would have greater financial autonomy than CWM.

CONCLUSION
This analysis has generally focused on the weaknesses rather than the
strengths of AM-FM's report. I have done so because the weaknesses are consider-
able, and thus undermine the force of the Panel's recommendations. Though the
Panel's general methodology — identifying program characteristics and objectives,
and then evaluating alternatives in light of criteria which reflect the characteristics
and objectives — is appropriate; its execution was flawed in many respects. AM-
FM's ultimate recommendation may be, in several senses, a "better" alternative to the
current organizational structure of the radioactive waste program within the Depart-
ment of Energy, but the report itself is not convincing in this regard and should not be
treated as adequate documentation of the advantages and disadvantages of a public
corporation over other alternatives. 45

Why, for example, should the organization be a public corporation rather than
a commission, particularly given the similarities of FEDCORP to an independent
commission in terms of government ownership, the appointment process, and the
structure of terms? One important distinction between FEDCORP and IFC would be
in terms of staff, since IFC would be subject to civil service constraints which restrict
internal flexibility and inhibit the ability to achieve technical excellence. Yet, inde-
pendent commissions can be exempted from civil service restrictions, and wholly-
46

owned public corporations are often required to conform to them (NAPA 1981). 47

Thus, AM-FM has drawn a distinction between its models, but not between organiza-
tional types. Another important distinction would be funding authority and financial
accountability, since the "preferred alternative" calls for removal of the Nuclear
Waste Fund from the federal budget, and provides FEDCORP with additional means
for raising revenues. These are important considerations, but again it is unclear from
the report why a corporation is necessary to achieve them. Many federal enterprises,
such as the U.S. Postal Service and the Bonneville Power Authority, are unincorpo-
rated. Moreover, the report glosses over some important attributes of public corpora-
tions when comparing the alternatives. For example, government corporations
typically can sue and be sued, though their liability is usually distinct from that of
356 COMPILATION OF REPORTS

their officers and directors. If these attributes are important for the radioactive
waste program, AM-FM has not made this argument in its report.
Since the report does not support its preferred alternative with a strong — or
even a consistent — argument, it is fair to ask what factors might underlie the Panel's
decision. Numerous political scientists have argued Americans harbor an underlying
suspicion or distrust of government. Public corporations may thus represent a middle
ground between public and private alternatives. In other words, if the government
must undertake a certain function, then some might desire that the program look as
much like a private organization as possible (Seidman 1952:90). Unfortunately, as
Annmarie Hauck Walsh (1978:334) has argued, "The idea that government institu-
tions will be better the more they emulate private institutions operating in a free
market is rife with internal contradictions."
Some organization theorists argue that certain organizational forms are mim-
icked simply because they are perceived to be legitimate or to have worked well in
other situations (DiMaggio and Powell 1983). Facing technological or environmental
uncertainty, organization strategists may choose to mimic particular types of struc-
tures in order to bolster public trust, regardless of whether the structure is function-
ally efficient (Zucker 1986). Though AM-FM's entire report is couched as a func-
tional analysis of alternatives based on numerous criteria, it is possible the members
of the Panel were simply copying what they perceived to be legitimate, credible, and/
or trustworthy. 49

In sum, AM-FM's report is inadequate and misleading in several significant

respects. Logically, it is internally inconsistent and self-contradictory on several
occasions, particularly with respect to the potential trade-offs between mission-
orientation and cost-effectiveness. Methodologically, the report is confusing because
it shifts approaches midstream and does not rigorously pursue a given tack. In
addition, alternatives are evaluated in a lop-sided fashion; citations are non-existent;
and the bibliography is narrowly construed. By academic standards, AM-FM has
presented its case for a public corporation poorly. Although elements of the report
might prove useful to individuals thinking about reorganizing the radioactive waste
program, as a package the report is incomplete, inconsistent, and reflects an underly-
ing bias towards a specific class of organizational alternatives.
 AM-FM'S CORPORATE SOLUTION FOR RADIOACTIVE WASTE MANAGEMENT 357

REFERENCES

Advisory Panel on Alternative Means of Financing and Managing Radioactive

Waste Facilities (1984). "Managing Nuclear Waste — A Better Idea," A Report to
the U.S. Secretary of Energy.

Bernstein, Marver H. (1955). Regulating Business by Independent Commis-

sion. Princeton: Princeton University Press.

DiMaggio, Paul J., and Walter W. Powell (1983). "The Iron Cage Revisited:
Institutional Isomorphism and Collective Rationality in Organizational Fields."
American Sociological Review 48:147-60.

Fenno, Richard F., Jr. (1973). Congressmen in Committees. Boston: Little,

Brown and Company.

General Accounting Office (1991). Government Contractors: Are Service

Contractors Performing Inherently Governmental Functions? Washington, D.C.:
GAO.

Kaufman, Herbert (1956). "Emerging Conflicts in the Doctrines of Public

Administration." American Political Science Review 50:1057-73.

Kelman, Steven (1990). Procurement and Public Management: The Fear of

Discretion and the Quality of Government Performance. Washington, D.C. The AEI
Press.

Kettl, Donald F. (1991). "Who's Minding the Store?: The Decline of Compe-
tence in American Administration." Prepared for delivery at the Annual Meeting of
the American Political Science Association, Washington, D.C.

National Academy of Public Administration (1981). Report on Government

Corporations, Volume 1. Washington, D.C.: NAPA.
358 COMPILATION OF REPORTS

Rourke, Francis E. (1969). Bureaucracy, Politics, and Public Policy. Boston:

Little, Brown and Company.

Scott, W. Richard (1987). Organizations: Rational, Natural, and Open

Systems, Second Edition. Englewood Cliffs, NJ: Prentice-Hall.

Seidman, Harold (1952). "The Theory of the Autonomous Government

Corporation: A Critical Appraisal." Public Administration Review 12:89-96.

Seidman, Harold, and Robert Gilmour (1986). Politics, Position, and Power:
From the Positive to the Regulatory State, Fourth Edition. New York: Oxford Uni-
versity Press.

Thomas, Craig (1991). "Public Trust in Organizations and Institutions: A

Sociological Perspective." Prepared for the Secretary of Energy Advisory Board,
U.S. Department of Energy.

Thomas, Craig (1992). "Reorganizing Public Organizations: Alternatives,

Objectives, and Evidence." Prepared for the Secretary of Energy Advisory Board,
U.S. Department of Energy.

Tierney, John (1981). Postal Reorganization: Managing the Publics Busi-

ness. Boston: Auburn House Publishing Company.

Tierney, John (1984). "Government Corporations and Managing the Public's

Business." Political Science Quarterly 99:73-92.

Walsh, Annmarie Hauck (1978). The Public's Business: The Politics and
Practices of Government Corporations. Cambridge, Massachusetts: The MIT Press.

White, Louise G. (1989). "Public Management in a Pluralistic Arena." Pub-

lic Administration Review 49:522-32.
 AM-FM'S CORPORATE SOLUTION FOR RADIOACTIVE WASTE MANAGEMENT 359

Wilson, James Q., and Patricia Rachal (1977). "Can the Government Regu-
late Itself?" Public Interest 46:3-14.

Zucker, Lynne G. (1986). "Production of Trust: Institutional Sources of

Economic Structure, 1840-1920." Research in Organizational Behavior 8:53-111.
360 COMPILATION OF REPORTS

FOOTNOTES

'Nuclear Waste Policy Act, Section 303 (as cited in "Managing Nuclear Waste
—A Better Idea," Advisory Panel on Alternative Means of Financing and Managing
Radioactive Waste Facilities, 1984, p.i).
2
For example, Seidman and Gilmour (1986), a book I repeatedly cite in this
paper, was originally published in 1970, and is now in its fourth edition.
3
When referring to AM-FM's report, I will simply use page numbers.
4
See my preceding paper (Thomas 1992:18-19), for a discussion of some of
the theoretical links between efficiency and safety.
5
Equity and procedural fairness are not even included in the summary table at
the end of Chapter III (III-16) which lists the key objectives and those organizational
factors the Panel believes facilitate their achievement.

Though AM-FM itself later recommends various advisory boards, it does not
recommend or suggest multiple organizations within a given phase.
7
Though the Panel characterizes radioactive waste management as a "busi-
ness," it nevertheless attributes some extraordinary characteristics to the program.
For example, regardless of the chosen alternative, the program will have little control
over its "business volume" (i.e., radioactive waste) because "it must operate in a
business climate which is largely dependent upon economic trends and emerging
energy policies" (IV-2). The organization will also have little control over its annual
costs and revenues (rV-3), and will confront technical and regulatory uncertainties
(rV-4,5), "a great deal of political oversight" (IV-5), and a negative public image (IV-
6,7). Moreover, the organization must manage these difficulties for decades and
possibly centuries, "an exceptional period of time for most business organizations,
and longer than the lifetime of most of our government agencies" (IV-3).

8
Though NWPA directed the Secretary of Energy (and thus AM-FM) to study
a private corporate alternative, this mandate is arguably an insufficient explanation
for the relatively large number of pages the report devotes to laudatory discussion of
public and private corporate alternatives.
 AM-FM'S CORPORATE SOLUTION FOR RADIOACTIVE WASTE MANAGEMENT 361

9
Postal Rate Commission decisions, however, can be modified by unanimous
consent of the U.S. Postal Service board of governors; the board of governors can
also reject a decision, and thus force the Commission to reconsider its decision
(Tierney 1981:109).
10
Since the Panel ranks the tests much later in the report (VIII-15), we will
turn to the rankings later in this paper.
H
Both of these factors are also related to an organization's ability to maintain
public trust and confidence (Thomas 1991). As defined by AM-FM, stability may be
at least as important as credibility in building public trust and confidence.
12
If AM-FM is correct in assuming that political considerations are the pri-
mary source of instability for public organizations, then organizational autonomy
(both programmatic and financial), may be necessary conditions for maintaining and/
or producing public trust.
13
For these reasons, programmatic authority should also be decentralized
within the organization: "Efficiency and credibility would be enhanced if local
officials such as those in field offices of the organization were empowered to negoti-
ate with their local counterparts, rather than requiring all decisions and negotiations
to occur at high levels within the organization" (III-5).

14
To quote the report (III-6): "Lacking such financing stability, the schedule is
likely to slip and incentives to cut corners will appear. This would lessen public
confidence and might threaten the issuance of an operating license. Moreover, delays
would probably increase the ultimate cost of the program."
15
See Thomas (1992:9-12) for a fuller exposition regarding this distinction.
I6
Efficiency in contracting requires more than "close oversight of contrac-
tors," however, since there must also be competition among the contractors as well as
the technical and legal capacity within the organization to specify expected perfor-
mance clearly within each contract (Thomas 1992:44-46).

17
For an alternative list of criteria, see my earlier paper (Thomas 1992).
362 COMPILATION OF REPORTS

According to Seidman and Gilmour (1986:254): "The word independent

18

means only independence from an executive department, and does not imply inde-
pendence from the president or the executive branch. In popular usage the word has
come to have the latter meaning, particularly when applied to the independent regula-
tory commissions."

19
AM-FM does not justify this assertion. In practice, presidential influence
need not be less than with independent agencies. For example, wholly-owned gov-
ernment corporations can be independent of, or housed within, executive departments
(Seidman and Gilmour 1986:256). Some academics have even argued that all gov-
ernment corporations should be housed within existing departments or agencies in
order to maintain executive control (NAPA 1981:iv).

20
Technically, the report is incorrect in citing the U.S. Postal Service as an
example of a government-controlled corporation. Though the Postal Service has
many of the features of a public corporation, it is not in fact incorporated, and has a
board of governors rather than a board of directors. In the report's appendix, AM-
FM is more careful in this regard, noting that the Postal Service has "characteristics
of both a business corporation and a government agency" (C-26); but, "[f]or the
purposes of the analysis, the Postal Service can best be classified as a government-
controlled corporation" (C-27). This classification is somewhat arbitrary. Others
have labelled the Postal Service an "unincorporated enterprise" (NAPA 1981) and an
"independent multi-headed agency" (Seidman and Gilmour 1986:255,272).

21
In making this statement, I assume the utility alternative would be a corpora-
tion because it "would probably have a Board of Directors" (VI-6), though it need
not be incorporated.

Though AM-FM implicitly acknowledges the possibility of such an alterna-

22

tive when discussing the present structure, it does not follow through in the report
when discussing and evaluating the sub-cabinet model.
23
Such passive sentence constructions are used throughout the report in lieu of
specific statements identifying the assumptions, evidence, and logic upon which the
Panel made such decisions.

24
See Seidman and Gilmour (1986:254-57) for a more complete typology of
federal administrative agencies. Chapters 11 and 12 of their book also provide a solid
legal, political, and empirical background to the various organizational types, and
thus would complement AM-FM's discussion in Chapter VI and Appendix C.
 AM-FM'S CORPORATE SOLUTION FOR RADIOACTIVE WASTE MANAGEMENT 363

25
According to Seidman and Gilmour (1986:276): "The title 'institute' has
been used for agencies engaged in research and training, but the name has had no
significance except to provide a better academic standing."

The Panel later suggests a version of this alternative: "... a 'State Waste
26

Authority' that could be established by a host state to carry out these functions as a
prime contractor" (VIII-13).
27
The Panel itself ultimately recommends a rate commission, though much
different than the one I suggest here. While the Panel recommends a "blue ribbon
advisory commission drawn from those constituencies most concerned with avoiding
an increase" in the fee charged to utilities (X-2), I would suggest a commission
similar to the U.S. Postal Rate Commission, a permanent body representing a variety
of stakeholders which would review the program's on-going costs and recommend
fees accordingly. If long-term safety is indeed the overriding objective, then fees
should not be based on stakeholders' preferences for avoiding cost increases.
28
In support of this decision, the report simply states: "Based on preliminary
screening — which took into account the phases, objectives, characteristics and tests
of the waste management program — the Panel grouped the 10 organizational
alternatives...into four categories for a more detailed evaluation" (VII-1). Even
though several chapters had been devoted to delineating those characteristics, objec-
tives, and tests which AM-FM perceived to be important, these factors were not
explicitly called out to justify the Panel's choice of groups.

Surprisingly, the government-controlled (wholly-owned) corporation ulti-

29

mately reappears as AM-FM's preferred alternative.

30
According to the report: "IFC enjoys more Panel support than FEA and,
therefore, will be presented here as the preferred option between these two" (VH-6).
AM-FM's decision to support IFC over FEA is not, however, explicitiy supported.
31
This is a peculiar statement given that the Panel later recommends a list of
"key components" which it believes "should be achieved whether the ultimate radio-
active waste management organizational structure is the Panel's preferred option,
remains as the Office of Civilian Radioactive Waste Management (OCRWM), or is a
third organizational form which Congress might select based on the Panel report and
its own further investigation and deliberations" (X-l).
364 COMPILATION OF REPORTS

From AM-FM's list, these include the sub-cabinet office and the administra-
32

tion responsible to a cabinet office. Other potential cabinet and sub-cabinet alterna-
tives are also excluded from this "group," including the sub-cabinet institute, the
cabinet-level department, and the centralized sub-cabinet alternative.
33
In comparison, the report does not tell us how IFC appointments would be
made.
34
I was unable to locate the full name of the model in the report.

Readers should refer to my literature review (Thomas 1992) for fuller

35

treatments of the alternatives, criteria, and summaries presented in Table 2. Since I

completed the literature review prior to reading AM-FM's report, the lists I developed
reflect general concerns in the literature (as well as some specific concerns of the
SEAB), rather than a direct response to AM-FM's report.

Unfortunately, Kelman (1990) does not discuss the extent to which public
36

corporations are subject to federal procurement procedures.

See Kaufman (1956), White (1989), and Thomas (1992) for broader treat-
37

ments of these themes.

ANCORP and BEDCORP, on the other hand, might face competition and/or
38

could diversify their operations.

The report is somewhat inconsistent, however, in its treatment of OCRWM

39

and IFC. Presumably, IFC would also face the problems enumerated for OCRWM,
especially given it will similarly be subject to civil service constraints (VII-7).

I will not directly address the Panel's specific recommendations in Chapter

40

X because these recommendations reiterate many of the points made elsewhere in the
report and are later incorporated in the Panel's preferred alternative (a modified
version of CWM). I refer the reader instead to my earlier paper for an alternative,
supplemental list of marginal organizational changes (Thomas, 1992:48-50).
 AM-FM'S CORPORATE SOLUTION FOR RADIOACTIVE WASTE MANAGEMENT 365

41
In a concluding paragraph, the report itself suggests that AM-FM gave little
thought to the feasibility of various alternatives: "...it is our principal recommenda-
tion that investigation of the specific steps necessary to implement, for example, a
dedicated federally chartered corporation (the first choice of the Panel voting on
organizational tests), should be undertaken immediately so that Congress can have a
precise understanding of the legislative changes required to bring about such an
organization" (XII-2).

42
The ordinal ranking is slightly modified in its second presentation, however,
with credibility now preceding stability. Though one of these passages is likely the
result of a typographical error, credibility and stability are so tightly intertwined in
AM-FM's argument that it probably matters little which precedes the other in an
ordinal ranking.
43
Since the Panel's "five most important" tests — which included cost-effec-
tiveness but not political accountability — were chosen by vote, the resulting major-
ity (or plurality) may have made concessions to the minority in order to reach a
consensus.

'"See Thomas (1992) for a fuller treatment.

45
The report itself notes this inadequacy following an otherwise glowing
evaluation of AM-FM's preferred alternative: "...the advantages of FEDCORP which
the Panel perceives...remain to be demonstrated in practice, and discussions of the
Panel recognized that these have a potential negative side" (XI-9). The report goes
on to note that the Panel members believe that "organizational forms which better
meet the tests may be desirable, but recognize that there is an intrinsic uncertainty as
to how confident one can be that the organizational form that looks best on paper will
in reality and over time fulfill its promises, and will in fact function as it is designed
to function" (XII-2).
46
For example, the Central Intelligence Agency, the U.S. Information Agency,
and the National Aeronautics and Space Administration are all exempt, at least in
part, from Civil Service restrictions (Seidman and Gilmour 1986:270). More gener-
ally, "There is nothing to prevent the Congress from conferring on a non-corporate
agency some or all of the powers normally granted to a government corporation..."
(Seidman and Gilmour 1986:289).
366 COMPILATION OF REPORTS

NAPA's survey of government corporations found that most wholly-owned

47

public corporations were "subject to civil service pay scales and hiring rules, while
mixed-ownership and private corporations were not" (NAPA 1981:12).
48
For further discussion, see Seidman (1952) and NAPA (1981).
49
The report itself states that "FEDCORP's business orientation, and particu-
larly its combination of a strong CEO and a management Board of Directors would
enhance its credibility among the nuclear electric utilities which would bear the costs
of its activities and require its waste management services" (XI-6). If credibility
among utilities is important, then FEDCORP may indeed be an appropriate alterna-
tive.

*U.S. G.P.O.:1994-300-813:80028