4: Into the sunset
Time limits on government agencies
The problem: agencies just hang around
"Nothing is more permanent than a temporary government programme," said the economist Milton Friedman.
Parliaments cannot always attend to the fine detail of government, so they set up executive agencies and advisory panels to run things for them. The trouble is that these bodies can then be hard to get rid of: they expand their empires, and demand new funds for new functions, but never admit that their job has become unnecessary and that they should be abolished. So how to control the bureaucratic empires?
The idea: sunset laws
One suggestion is sunset legislation. The idea is to impose a limit on the life of executive and advisory bodies, after which their work and necessity is reviewed and legislators have to make a positive decision if they wish to retain them.
Examples: sunset in the West
In the United States, concern about official bodies in the late 1970s led to the introduction of sunset laws, which would automatically terminate the life of a body unless legislative action were taken to extend it.
Colorado was the first US state to investigate the possibility of using this kind of legislation to control its public bodies. The Colorado Act of 1976 provided for the automatic extinction of thirteen regulatory and licensing agencies in 1977 unless their continued existence could be justified. These sorts of bodies were considered to be the most difficult to rein in; yet as a result of the Act, two disappeared as their functions were transferred to their sponsoring departments, two were amalgamated, one was abolished, one had its functions broadened and another had its membership increased.
From this very modest beginning, sunset legislation caught on in the United States, and within two years, no fewer than 26 other states had enacted sunset legislation. The approach has varied from one state to another, but in a number of cases substantial gains had been achieved. Arkansas brought 285 state agencies under sunset legislation between 1979 and 1983. The legislature of West Virginia may have overdone things by passing a bill providing for the abolition of all state government in 1983, which the Governor stepped in to veto.
Nevertheless, by 1999,the state of Texas had eliminated 23 agencies, at an estimated saving of $630 million. Texas's Sunset Advisory Commission, an independent body of ten members, reviews 20 or more agencies each year. The process begins with a self-evaluation report by the agencies under review, and includes an independent review and public hearings before the Commission makes its recommendations to the legislature. If the legislature does not act to continue the agency, it automatically terminates or 'sunsets'.
In 1999 the House of Representatives passed a very limited sunset measure on juvenile programmes, but generally there are no sunset laws on federal government agencies. Proposals to apply sunset laws to all federal agencies are attracting co-sponsors on Capitol Hill, but the dynamics of the vested interests involved makes the success of such measures, or the possibility of sustaining them over the long term, highly unlikely.
Other countries have adopted sunset laws too. In the United Kingdom in 2001, for example, the passage through Parliament of a controversial anti-terrorism measure was eased when the government announced that the new powers it gave to the police and other agencies would be subject to a sunset limitation and review.
Effects: that sinking feeling
Historically, sunset laws have cleared out a good deal of agency deadwood over the last quarter century. However, they have been equally valuable as a means of making important policy changes: when state legislatures agree to the renewal of an agency's lease on life, they often also suggest amendments to update what it does and how it works. Since the alternative is termination, such amendments have a better than average chance of being adopted.
Good sunset reviews are therefore useful to other initiatives to modernize government, such as performance-based management, improved output measurement, and results-oriented budgeting. They can provide the scrutiny necessary to redesign the incentives operating within agencies so that they become more cost-effective, focused, and accountable. And they sharpen the wider public debate about the goals, costs, and benefits of government functions.
For further information:
- For Congressman Kevin Brady's proposal to introduce sunsetting for federal agencies see www.house.gov/brady. Information on the Texas Sunset Advisory Commission can be found at www.sunset.state.tx.usa.
- Holland, Sir Philip (1994) The Hunting oƒ the Quango, London: Adam Smith Institute.