Hollow state

The term Hollow State is used to describe a set of governmental practices in which states contract with third parties (private companies) in order to distribute government services. In a hollow state there are many degrees of separation between the source of taxpayer funds and the final distribution of taxpayer-funded products or services. Services paid for by the state are produced by a vast network of providers and the task of the government is not to manage provision, but to negotiate contracts with providers. There is no "command and control" relationship between government and contractors. Contracts are managed by countless agencies and even more providers, there is no means of central record keeping or data management.^[1][2] A Hollow State has all the standard edifices of governance although most are under the influence of third-party organizations, either for-profit or non-profit entities.^[3][4]

History

• The history of government contracting goes back thousands of years. Mercenary bands were utilized by the ancient Greeks, Persians, and Romans. In the United States the history of government contracting is rooted in the history of English civil service. In the 1600s educated Englishmen could make a career out of negotiating the procurement of goods for local government, especially for the English military. This system was how much of English military procurement was carried out, and was brought to the colonies by English settlers. The English military in the colonies was expected to obtain its own supplies locally. To this end most military outfits employed a commissary general to obtain food and related supplies, and a quartermaster general to obtain supplies for construction, transportation, and weaponry. These officers had the authority to contract with local farmers and merchants. A version of this system was implemented by the Continental Congress during the American Revolution.^[5] This trend continued through the American Civil War and has grown and evolved into the modern system of government procurement. The United States government increasingly implements policy through a complicated network of providers. The system relies on the collaboration of multiple levels of government, for-profit, and non-profit entities.^[6][7][8]
• The history of the word is shorter than the history of the practice. As capitalism emerged as a dominant social force, so did the influence of private contractors on government leaders. Brinton Milward, Director of the School of Government and Public Policy at the University of Arizona, uses the term Hollow State as a metaphor to describe the process and consequences of excessive government contracting. ^[1][9]

Infrastructure

The provisions of many social services occurs within a framework that has been termed the “Hollow State,” an approach to policy implementation that relies upon private or nonprofit organizations to deliver certain public goods, as such, the hollow state is an organizational model to describe a system of third party governance.^[10] The primary purpose of the hollow state is to function as a multi-organizational structure through which policy is designed and executed. By hollow state it is meant to be understood that it's a system consisting of units of government separated from their outputs but still linked by negotiation or contract. When nonprofit organizations receive contracts or grants to deliver public goods or services, the delegating agency assumes a sufficient level of capacity to implement the project or deliver the service. However, if the nonprofit community-based organizations are too limited in capacity to carry out their grants or contracts, then a disconnect occurs in the hollow state.^[10] One of the primary reasons privatization occurs is because of the severe capacity that limitations force the government to contract for services it does not have the ability to provide.^[11] Usually this would involve a private development network supported by a public administration like the Chamber of Commerce and several private businesses. There are 2 types of networks that exist in the hollow state: horizontal and vertical. Horizontal networks consist of 3 types, policy making, resource exchange, and project based, all of which are between governments and non-governmental organizations. Vertical networks are the collaborations that occur between federal, state, and local governments.The purpose of this collaboration is to devise strategy for business retention, expansion, or recruitment. The reason city economics developers reach out to surrounding organizations and become multiple networks is due to the fact economic policy is designed and implemented under ambiguity and uncertainty. As complexities increase grassroots initiatives become more sought after. Most nonprofit organizations are started with passion and enthusiasm for resolving a particular issue. Many of these are the small grassroots or community-based nonprofits that meet important human service needs for a specific geographic area or population.^[12] Furthermore, the need for more nongovernmental actors to deliver local services hence more actors equates to more hollowing of the state. In fact publicly funded social services are an increasingly important component of social provision spending and accounft for approximately one-fifth to today's welfare state expenditures.^[13] Substituting from a stable, linear government for complex networks may raise questions of allocation deliberations being solely prompted by cost/ efficiency not taking into account taxpayers other values.

• The problems of managing non-governmental, contracted organizations are extensive and severe. The number of degrees of separation between the source of funds and the implementation of those funds creates diminishing quality of returns with each new layer. Managers at every level are forced to deal with an uncertain budget cycle, long waits for payment for services rendered, financial crises, billing problems, frequently changing and contradictory rules and much more. Another thing to consider is the existence of the "principle-agent" issue, wherein the "principle" (the person giving the contract) can never have as much information about the requirements of the job than the "agent" (the one being contracted). This information disparity causes the principle to have unrealistic expectations and allows the agent to mislead the principle as to aspects such as cost, time, and human resources.^[11]
• Administrations that already exist within a country moving toward a Hollow State begin to be parsed in seemingly innocent fashion. In the name of "efficiency" government interests are delegated to private contractor, who will then often subcontract to other groups. For example, contractors hired to patch roofs with blue tarp for FEMA after Katrina received payment of "between $149 and $175 per (10ftx10ft square)." This price was comparable to installing entirely new roofs at the time. However; through a long string of subcontractors, the firms performing the final installations of the tarps "earned as little as $2 per 10ftx10ft square.^[14] Taxpayers end up paying exorbitantly as business interests takes complete control over the process of procurement.^[15][16]

Contracting

The Hollow State refers to the extent to which governments are directly involved in providing services.^[4] Contracting out is when government allows a non-government institution to operate under the governments name to provide a public service. Hollowing out of government by allocating services to private organizations has three imperatives: the need to attract investment to compensate for lost revenues and meet the political imperatives set by the country and provincial governments; the need to receive inspection teams from higher levels of government; and "soft centralization" of township bureaus, which are placed under country or provincial government control.^[17] Advocates of privatization often make the point that government can provide or arrange for citizens to receive a service without the government actually providing it.^[5] Government is able to arrange or provide a service for the public community without actually producing it by contracting out. A government intent on privatization would decide what it wanted done and then contract with the private sector to provide the good or the service.^[5] The federal government has always relied on state and local governments to distribute and provide services with money funded by the federal level. However, community-based development organizations have problems with accountability and responsiveness and lose their connections with municipalities. Disparities in fundraising, fiscal and human resource management practices, even skills in building and maintaining partnerships and gaining political support.^[18] Contracting out or privatization also redirects the funds that used to go to the state and local government to private organizations. It can also be said that there is a negative relationship between the neighborhoods where the central offices of those organizations are located,m and neighborhood disadvantage, largely because so many distributive organization headquarters are located in downtown, higher-income are Government funding of nonprofit agencies increased during the grant-in-aid explosion of the 1960s and 1970s and continuing during the Reagan and Bush administrations under the banners of privatization, limited budgets, and getting government off the backs of those it regulates.^[5]

• China is one example of a modern day country that has experienced Hollow State governing, in it's case, in rural areas^[17]
• South Africa has been trending toward a Hollow State for years with moves empowering business over people ^[19][20]
• Zimbabwe is an example of a Hollow State.^[21]
• Not all states who adopts the Hollow State find it successful, more often than not states fail and lose their political goods.^[22]

Criticism

There are several outspoken criticisms of government contracting practices. Critics claim the hollow state can be inefficient, dangerous, and may violate human rights. The hollow state can effectively destroy a society's interests in humanities as money leads to a monopoly and/or oligarchy. A hollow state can be unreliable. When a government sector contracts out, there can be many problems. The hollow state is exemplified by increased reliance on third-party producers, which may result in a lack of oversight expertise in government.^[23] Contracting private organizations for warfare can lead to unethical methods.^[24][25][26]

• The hollow state can effectively destroy a society's interests in humanities as money leads to a monopoly and/or oligarchy^[23]

References

1. Brinton Milward, H. (2012). Hollow state. In H. K. Anheier, & M. Juergensmayer (Eds.). The encyclopedia of global studies (pp. 808–809). London: Sage.
2. Smith, Graeme. “The Hollow State: Rural Governance in China.” The China Quarterly, no. 203 (2010): 601-618. JSTOR.
3. "HOLLOW STATES vs. FAILED STATES - Global Guerrillas". globalguerrillas.typepad.com. Retrieved 2016-11-14.
4. Milward, Brinton (2000). "Covering Hollow State" (PDF). University of Arizona.
5. Keeney, Sandy (Summer 2007). "The Foundations of Government Contracting" (PDF). NOAA.gov. NOAA. Retrieved 2016-11-21.
6. Agranoff, R. (2033). Collaborative Public Management: New Strategies for local governments. Georgetown University Press – via EBSCO. Check date values in: |date= (help)
7. Brinton Milward, H. (2014). The increasingly hollow state: challenges and dilemmas for public administration. Asia Pacific Journal Of Public Administration, 36(1), 70-79. doi:10.1080/23276665.2014.892275-
8. ALONSO, J. M., ANDREWS, R., & HODGKINSON, I. R. (2016). INSTITUTIONAL, IDEOLOGICAL AND POLITICAL INFLUENCES ON LOCAL GOVERNMENT CONTRACTING: EVIDENCE FROM ENGLAND. Public Administration, 94(1), 244-262.-
9. Cohen, L. S. (2010). [A Government Out of Sight]. Social History,35(2), 221-223.
10. Fredricksen, Patricia, and Rosanne London. "Disconnect in the Hollow State: The Pivotal Role of Organizational Capacity in Community-Based Development Organizations." Public Administration Review 60, no. 3 (2000): 230-39. JSTOR 977465.
11. Milward, H. Brinton. "Nonprofit Contracting and the Hollow State." Public Administration Review 54, no. 1 (1994): 73-77.
12. Balance and Competition: Norris- Tirrell, Dorthy. 2014. "The Changing Role of Private, Nonprofit Organizations in the Development and Delivery of Human Services in the United States.” Journal Of Health & Human Services Administration 37, no. 3: 304-326. Academic Search Complete, EBSCOhost (accessed October 21, 2016)
13. Allocation of Funding: Marwell, Nicole P., and Aaron Gullickson. 2013. "Inequality in the Spatial Allocation of Social Services: Government Contracts to Nonprofit Organizations in New York City." Social Service Review 87, no. 2: 319-353. Academic Search Complete, EBSCOhost (accessed October 24, 2016)
14. Freudenburg, William (2009). Catastrophe in the Making. Washington, D.C.: Island Press. p. 136.
15. Terry, L. D. (2005). The Thinning of Administrative Institutions in the Hollow State. Administration & Society, 37(4), 426-444. doi:10.1177/0095399705277136
16. Wang, Tae Kyu (2013). [diginole.lib.fsu.edu/islandora/object/fsu:185185/datastream/PDF/.../citation.pdf "The Impacts of the Hollow State on Organizational Practices and Individual Attitudes in the Federal Government"] Check |url= value (help) (PDF). Florida State University.
17. Smith, G. (2010). The Hollow State: Rural Governance in China. The China Quarterly, (203), 601-618.
18. Fredericksen, Patricia (2000). "Disconnect in the Hollow State: The Pivotal Role of Organizational Capacity in Community Based Development Organizations". American Society for Public Administration. 60: 230–239 – via JSTOR.
19. The hollow state. (2015). Economist, 417(8969), 59-61.
20. "The hollow state". The Economist. 2015-12-19. ISSN 0013-0613. Retrieved 2016-11-14.
21. Edwards, Charlie. "What does a Hollow State look like?". Retrieved 2016-11-14.
22. Robb, John (2009). "Hollow States vs. Failed States". Global Gerrillas.
23. Bryer, T. t.(2008). Warning: The Hollow State Can Be Deadly. Public Administration Review, 68(3), 587-590. doi:10.1111/j.1540-6210.2008.00896.x
24. Bryer, T. A. (2008). Warning: The Hollow State Can Be Deadly. Public Administration Review, (3). 587
25. Delfeld, H. (2014). Human rights and the hollow state. Taylor and Francis. doi:10.4324/9781315887029
26. Curry, W. S. (2010). Government contracting: promises and perils. Boca Raton, Fla.: CRC Press, c2010-