OMB’s Reform Plan and the Tradeoffs of Government Reorganization

Abstract

Consistent with a long line of previous administrations, the White House’s Office of Management and Budget published in June an organizational reform plan, offering more than 80 recommendations that detail government-wide and agency-specific organization changes to restructure, consolidate, and eliminate programs or agencies. While the plan’s key goal to make government operations more efficient and responsive is a noble one, academic research and historical experience demonstrates that designing agency operations involves sometimes unavoidable tradeoffs. For example, although streamlining operations can produce real benefits, these may come at the expense of impeding an agency’s ability to formulate clear objectives for its personnel and undermining the measures in place to ensure key services are delivered correctly. Considering these tradeoffs does not guarantee the potential unintended consequences will not surface following the reorganization, but careful planning can better prepare policymakers and agency leadership to be able to manage them if they do as well as reduce the potential that the new problems introduced necessitate a return to the previous structure. As a history of reorganizations in the regulatory context clearly demonstrates, all too often agencies with multiple missions are established to enhance coordination and improve efficiency, subsequently separated to mitigate goal ambiguity and neglect, and later on recombined after synchronization issues once again become evident. Given that reorganizations take time, cost money, and impose disruptions on employees, entering into any restructuring with a more complete understanding of its ramifications is critical to realizing its objectives and promoting its durability.

Keywords: OMB, government, reorganization, agency, reform, regulation

JEL Classification: H11, H83