How important is business experience in the White House?
In this yet not fully developed presidential campaign year, the relevancy of business experience to governance has already come to the forefront. Political science and public administration scholars have debated this question for well more than a century.
Despite recent literature highlighting fundamental differences between government and the private sector, business remains a source of emulation and imitation. Writing in 1887, Woodrow Wilson set forth a politics-administration dichotomy. To him, “the field of administration is a field of business. ... It is a part of political life only as the methods of the counting-house are part of the life of society.”
Wilson’s view was not unique. Progressive reformers of the early 20th century used corporations as their model in restructuring local government. Since 1964, the federal government and many state and local jurisdictions have adopted administrative and budgeting techniques developed in the public sector: Public planning budgeting system, management by objectives, zero-based budgeting, total quality management. These efforts were often short-lived because they did not prove adaptable to the public sector and the political realm.
Scholars such as Aaron Wildavsky were not surprised. Government is not akin to business. Rather, in the words of Graham Allison, “public and private management are at least as different as they are similar, and the differences are more important than the similarities.” The environment that each functions in is fundamentally different.
In the business realm, the CEO ultimately calls the shots. He or she may deal with shareholders and other companies (and governments) but it is a far cry from the president and executive branch. In the U.S. government, the president proposes but Congress (and sometimes the Supreme Court) disposes.
The executive branch depends on the legislative for appropriations and authorization. Unlike a corporation, power is diffused, not concentrated. The president must court legislators of his and the opposing party and attempt to build coalitions.
Interest groups have to be considered and governmental activity is fair game for the media, which is constantly lurking. Unlike politicians, a CEO is not in the public eye and his or her popularity is not evaluated regularly. Few are household words. Paul Appleby noted in 1945 that “government administration differs from all other administrative work to a degree not even faintly realized outside, by virtue of its public nature, the way in which it is subject to public scrutiny and public outcry.”
Private executives have a bottom line on which to judge their corporation's performance. There is no equivalent in the public sector.
How is the performance of the State Department to be calibrated? Proponents assert that environmental protection is necessary to public health, but there is no way to discern how one program contributes to fewer deaths or even sick days. Sometimes, when tasks are clear and cause-and-effect can be established, the public executive may feel things are working. But there is no profit or loss to guide decision-making, and that makes the public executive's task more complex and more opaque.
Given separation of powers, checks and balances and federalism, it is no wonder that persuasion is often cited as the president’s most important power. Private sector management still relies on “command and control.” Command and control are far more tenuous in the public sphere. The power Lyndon Johnson possessed, which reshaped public policy, rarely occurs and is generally short-lived.
Appleby also noted that “men with excellent records in private business will not necessarily make competent government officials.” Key is the fact “that the American system of politics does not generate enough power at any focal point of leadership to provide the condition for an even partially successful divorce of politics from administration,” as Norton Long made clear.
Politics, or the accumulation of power, is essential to American governance. The president presides over a vast array of bureaus with very disparate functions. The bureaus themselves, to ensure their own viability, behave politically, secure allies and lobby legislators. Occasionally, leaks to the media can buttress a position. Rivalries occur in private corporations but are not the daily norm that our governmental system inspires.
Another difference between private and public is timeline. Corporations can justify long periods of research and development to their investors. The public and partisans demand results very quickly. This works as a particular detriment to social programs that may need a long time to achieve results and may need considerable tinkering along the way.
An example is school reform. No one is sure what exactly can turn the key. Program follows program as replacement or accretion. Everyone looks to standardized tests to gauge results even though the population measured changes a great deal during any school year in a central city.
A final difference worth noting is that when a CEO gives an order, it is likely to be carried out. The same is not the case for the public official.
Accountability remains the same question mark it was to Wilson in 1887. It is no wonder that Appleby felt that “only a politician can be president.” The particular fishbowl of national government taxes anyone chosen to lead it. But it would be particularly daunting to someone with just private sector experience.