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Does agency competition improve the quality of policy analysis? Evidence from OMB and CBO fiscal projections

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  • George A. Krause

    (University of Pittsburgh)

  • James W. Douglas

    (University of South Carolina)

Abstract

Public management scholars often claim that agency competition provides an effective institutional check on monopoly authority, and hence, leads to improvement of administrative performance in public sector agencies. This logic was central for creating the Congressional Budget Office (CBO) in 1975 to challenge the policy information provided by the Office of Management and Budget (OMB). We challenge this conventional wisdom by demonstrating that CBO has failed to enhance the quality of U.S. fiscal policy analysis on its own terms; nor has it spurred improvements in OMB's performance. Our empirical results indicate that the quality of OMB's fiscal projections has often deteriorated since the establishment of CBO as a rival bureau. We also show that both public and private information is being shared by these agencies to produce a similar caliber of task outputs. The broader implications of our study indicate that although politicians face incentives to employ agency competition in governmental settings, this type of bureaucratic strategy does not necessarily enhance the quality of administrative performance. © 2006 by the Association for Public Policy Analysis and Management

Suggested Citation

  • George A. Krause & James W. Douglas, 2006. "Does agency competition improve the quality of policy analysis? Evidence from OMB and CBO fiscal projections," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 25(1), pages 53-74.
  • Handle: RePEc:wly:jpamgt:v:25:y:2006:i:1:p:53-74
    DOI: 10.1002/pam.20156
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    References listed on IDEAS

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    1. Michael M. Ting, 2003. "A Strategic Theory of Bureaucratic Redundancy," American Journal of Political Science, John Wiley & Sons, vol. 47(2), pages 274-292, April.
    2. Krishna, Vijay, 2001. "Asymmetric Information and Legislative Rules: Some Amendments," American Political Science Review, Cambridge University Press, vol. 95(2), pages 435-452, June.
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    Cited by:

    1. George A. Krause, 2006. "Beyond the Norm," Rationality and Society, , vol. 18(2), pages 157-191, May.
    2. H. Christiaan Schakel & Patrick Jeurissen & Sherry Glied, 2017. "The influence of fiscal rules on healthcare policy in the United States and the Netherlands," International Journal of Health Planning and Management, Wiley Blackwell, vol. 32(4), pages 595-607, October.
    3. Aidan R. Vining, 2016. "What Is Public Agency Strategic Analysis (PASA) and How Does It Differ from Public Policy Analysis and Firm Strategy Analysis?," Administrative Sciences, MDPI, vol. 6(4), pages 1-31, December.
    4. Tereza Capelos & Colin Provost & Maria Parouti & Julie Barnett & Jonathan Chenoweth & Chris Fife‐Schaw & Tanika Kelay, 2016. "Ingredients of institutional reputations and citizen engagement with regulators," Regulation & Governance, John Wiley & Sons, vol. 10(4), pages 350-367, December.

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