Government Corporations; A Focus of Policy and Administration, II

How to bring managerial independence and public accountability into a working accord, so that neither efficiency nor necessary controls will be neglected, is the fundamental problem arising out of the operation of government corporations. Having dealt with managerial independence in the first instalment of this article, we now are faced with the problem of explaining how such independence can be reconciled with the controls necessary to assure public accountability. Experience everywhere has shown that governments can carry on a business enterprise efficiently only, when it possesses sufficient autonomy and flexibility to call forth managerial skills that are self-reliant and inventive as well as prudent. It has been argued that the corporate device, when faithfully followed, is superior to departmentalism in at least three major respects: it is potentially less subject to injurious political considerations; it is more autonomous in organization and capable of a greater degree of unity in its management, both of which are essential to efficient operation; and it has more flexibility with regard to its financial operations and is designed to stand on its own financial feet, as a business-operated enterprise should. The competent manager of a government corporation must be free within his own sphere, but he must also be externally accountable in important respects as regards both policy and administration, and to both Congress and the President. To effect such an equilibrium is difficult, at best, but it is particularly difficult and uncertain when the political climate is hostile toward the social purposes for which government corporations are created.