We take issue with the notion that the transfer of sovereignty to nongovernmental agents is merely a management problem, because legal restrictions on the use and reach of public authority are fundamental to the United States? political and constitutional order. Explicit legal standards of right and wrong are a defining feature of American government (Frederickson 1993, 248; see also Rohr 1998). Substituting new forms of collaboration and management for hierarchical, bureaucratic chains of command cannot and should not mean abandoning traditional commitments to the public values of liberty, equality, and fairness.
Public Ethics, Legal Accountability, and the New Governance
Department of Political Science
University of Massachusetts, Amherst
School for Public and Environmental Affairs
Indiana University Purdue University, Indianapolis
“State Action” in a Changing State
The “Public Function” Criterion
The principle at stake is simple: when government acts, mechanisms must be in place that allow us to hold government constitutionally, fiscally, and ethically accountable for that action, and it should not matter whether that action is taken by a public employee or a contractor. If we cannot identify which actions are attributable to government, we cannot enforce that principle. Instead, we create areas of ambiguity within which unethical behavior—real or perceived—can further erode the public’s trust in its governing institutions. That is precisely what occurred in the so-called “Indianapolis Experiment.”
The Indianapolis Experiment: A Cautionary Tale
Indianapolis is certainly not the only city to experience irregularities of this sort, and not all of the problems of the Goldsmith Administration can be attributed to privatization initiatives. However, its failure to recognize the importance of the public-private distinction, and to address the vital issues of legal and constitutional accountability that depend upon that distinction, was a substantial contributor to its problems. The Administration apparently believed that once a contract had been executed with a private proxy to deliver a service on behalf of the City government, the service became “private” for most, if not all, legal purposes. By contrast, the public and the media took the view that if municipal government was paying for the service with tax dollars and choosing the provider, the service should be subject to the same rules that govern other public actions. This disconnect became increasingly obvious, as the Administration and its critics essentially talked past each other.
Conclusion
A solution to this dilemma is beyond the scope of this chapter, but we can report that scholars are actively puzzling over ways to overcome the privatization-legal accountability impasse. Noting that an agency relationship is created whenever the government authorizes a private entity to act on its behalf, Sheila Kennedy (2001) has suggested that the laws of agency and partnership should apply, either directly or by analogy, and either prospectively (in contract negotiations) or retrospectively (in judicial review). Under the laws of agency, when government cloaks a contractor with real or apparent authority to act on its behalf, the ensuing action is deemed governmental. Widely utilized jury instructions, for example, define and “agent” as “a person who at a give time is authorized to act for or in place of another person,” and specify that the conduct of the agent need not be expressly authorized by the principal for it to be “within the scope” of the agent’s authority. If the conduct is “incidental to, customarily connected with, or reasonably necessary for” the performance of an authorized act, it has occurred within the scope of authority and, if wrongful, can give rise to liability.
In a similar vein, Gillian Metzger (2003, 1456) urges us to rethink state action in private delegation terms. Under such an approach, the key question would not be whether private entities wield government power, but rather, whether grants of government power to nominally private entities are adequately structured to preserve legal accountability. As in Kennedy’s formulation, the central criterion for singling out particular private delegations for enhanced judicial scrutiny would be whether they authorize private entities to act on the government’s behalf—that is, whether they meet the legal requirements of agency.
Finally, a more holistic approach has been proposed by Jody Freeman (2003), who somewhat counterintuitively suggests that privatization can serve as a means of “publicization,” or mechanism for expanding government’s reach into realms traditionally thought private. Her point is not that we should use public law to force time-consuming and expensive standards and processes upon private entities (which contribute to some of the very problems of governance that efficiency-minded privatization advocates seek to solve). Rather, she argues, we might more creatively use vehicles such as conditional government spending, regulation, tort liability, and contract negotiation to motivate private actors to commit themselves to democratic norms of accountability, due process, and equality.
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Cases Cited
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