Metapolicy Transition and Policy Implementation: New Federalism and Privatization

Abstract

Mandated local implementation of national policy poses a complex issue. What happens to the decisionmaking and implementation processes at the local level of government when broad change in policy direction occurs at the national level? The importance of this question depends on the extent to which local government officials are responsible for implementing policy which the national government has helped to form in some substantial way. Local governments in the United States have acquired many such responsibilities as a result of the categorical and block grants of the 1960s, revenue sharing of the 1970s and 1980s, and, more recently, President Reagan's New Federalism. However, the national policies in each of these periods differ substantially in the specific roles expected of local governments. In the first periods, local governments addressed local problems, in part, through the administration and implementation of national programs with national funding. The most recent iteration of federalism-New Federalism-calls for local governments to address local problems with their own resources. This latter expectation has created complex problems of local administration. In this article we consider the specific problems of policy implementation in the substantive area of clean water and wastewater treatment. The problem is on its face not unusual: How do municipal officials make decisions about financing mandated and needed facilities? In the clean water policy context, however, this problem is of particular interest because it flows from radical changes in national policy which have maintained or tightened clean water standards while reducing national resources available to cities to meet those standards. Practical as well as theoretical issues arise in such a setting. In this article these issues are addressed using the results of a survey' of 16 municipalities across the United States which have considered privatization2 of wastewater treatment works (WTWs) as one way of implementing clean water policy in a period of reductions in resources. In a comprehensive sense, privatization means the participation of the private sector in the production and/or delivery of public services. Within the comprehensive definition, however, there are old and new forms of privatization. Old privatization, long in use, involves contractual relationships between a government and a private sector entity as a basis for service * This article considers the issue of mandated local government implementation of national policy in the context of broad policy changes and reduction or elimination of available national resources. Specifically, the article addresses this issue using the results of a survey of 16 municipalities across the United States which have privatized or have considered the privatization of wastewater treatment works as one way of implementing national clean water policy. The policy requires compliance with national standards by 1988 with or without nationalfunding. The conclusion is that privatization evolved in the absence of coherent national policy as a viable option for those municipalities which needed increased water treatment capability due to population or industrial expansion and had the innovative managerial and institutional strengths to overcome resistance to the attendant political and economic risks.