Reputation and Accountability

Citation

Gailmard, Lindsey A. (2024) Reputation and Accountability. Dissertation (Ph.D.), California Institute of Technology. doi:10.7907/68tp-4t84. https://resolver.caltech.edu/CaltechTHESIS:08042023-224053566

Abstract

In this thesis, I explore how accountability relationships affect policymaking in two institutional contexts: internal executive branch operations and electoral contests. The overarching insight is that the potential for removal creates reputation concerns to demonstrate skill that, in turn, affect policymaking. For political appointees serving at the pleasure of the president, this means a reputation for management skill or technocratic policy expertise, whereas for elected representatives, this means maintaining a reputation for competent leadership with voters. The main result is that oversight creates both pathological policymaking incentives for accountable officials, but also potentially unintuitive selection by a principal—either the president or voters.

In Chapters 1 and 2, I explore political appointees’ dual roles as agents of the president and managers of the bureaucracy. This view of appointee-careerist relations complicates standard notions of presidential control and bureaucratic power, by recognizing that appointees are reliant on presidential support to maintain their position within an administration. To cultivate a good reputation with the president, appointees may cede control to the bureaucracy. However, to understand how control is transferred to the bureaucracy, I argue that we must fully account for appointees’ strategic roles in the administrative presidency—and that, to do so, requires differentiating between types of appointments.

Presidential appointments that require Senate confirmation (PAS) and noncareer members of the Senior Executive Service (SES-NA) occupy positions that require direct oversight and management of subordinate career civil servants. As managers, these appointees must rely on the expertise, pragmatic or otherwise, and efforts of bureaucrats to implement the president’s policies. I argue that presidents select these appointees primarily on the basis of their management skills. In contrast, Schedule C appointees occupy confidential or policymaking roles and serve directly under a political appointee. These appointees may substitute for the expertise of career bureaucrats. I argue that presidents select these appointees on the basis of policy expertise.

However, central to my argument is the idea that the president may still be uncertain of an appointee’s management skill or policy expertise—despite appointing him or her in the first place. This means there is scope for the president to learn about an appointee’s ability based on how they perform or behave on the job. It is this residual uncertainty about an appointee’s capabilities, along with the president’s formal removal power, that create reputation concerns for appointees: appointees care about maintaining their position and to do so they must preserve their reputation with the president.

I argue that these reputation concerns shape how appointees manage interactions with the bureaucracy. Appointees in managerial roles may make more policy concessions to the bureaucracy than the president would like in order to ensure bureaucratic cooperation and avoid revealing managerial weaknesses. Instead, appointees in positions of policymaking authority may fail to empower or involve bureaucrats in policymaking. Both of these actions undermine the president’s policy goals by either creating policies that increasingly reflect the views of the bureaucracy or by failing to create policies that reflect bureaucratic expertise. This suggests limitations of political control over the bureaucracy that cannot be alleviated through the exercise of formal administrative powers, namely appointment and removal powers.

Ultimately, the agency issues I explore in this context follow from a fundamental and immutable constraint on presidential control: the president simply cannot unilaterally manage the executive branch. The demands of the presidency are too great for the president to preside over all operations. This means delegation is necessary—and, even when the president delegates to advisors of “her own choosing,” some loss of control is inevitable.

In Chapter 3, I explore how majority selection operates in an environment in which politicians prefer to pursue particularistic policies. If special interest coalitions are sufficiently strong, a majority may expect that political expertise will be used to select policies that generate rents for narrow constituencies at the expense of its own welfare. I develop a model in which a majority prefers to elect the less competent politician in order to undermine the incumbent’s ability to pursue the special interest agenda and derive the implications for accountability in this setting. The results demonstrate that the majority’s attempts to reassert control over policy through its retention decisions impede social welfare maximizing reform and distort aggregate welfare by either encouraging (i) inefficient policy selection or (ii) inefficient candidate selection. Even if politicians choose policies that maximize social welfare doing so may only worsen aggregate welfare by providing voters with more information about candidate competence, which enables the majority to better select inept politicians.

Thesis Files