The Human Side of Public-Private Partnerships: From New Deal Regulation to Administrative Law Management

Abstract

During the New Deal era, Congress created a then-unprecedented program of economic and regulatory reforms. Responding to massive market failures, monopolistic industries badly in need of oversight, and fledgling industries trying to take hold, Congress enacted a plethora of new statutes, created independent agencies, and imbued these agencies with the power to shape and enforce pragmatic industrial policies.Times have changed. Many if not most of the monopolistic and fledgling domestic industries of the early twentieth century have evolved into complex, decentralized enterprises, often multinational in scope. Most New Deal agencies continue to perform some regulatory functions, but market approaches to regulation have replaced many traditional command-and-control formulations. Very much of a piece with the turn to the market for regulatory approaches and techniques has been the widespread use of private actors to carry out governmental functions. Agencies form contracts with private parties; while the agencies specify terms at the outset and maintain degrees of supervisory authority, as a practical matter it is private contractors who deliver many of the services traditionally reserved to government.Though government-by-contract has become the new normal, the Administrative Procedure Act (APA), Congress’s basic roadmap for rulemaking and adjudication in the administrative state, remains troublingly detached from these ubiquitous partnerships. So too are many of the “mini-APAs” and other procedural statutes crafted by state assemblies to control agency practice. For state and federal entities contemplating outsourcing ventures, these laws offer few parameters — and they may be viewed by some as a carte blanche to contract, even where contracting implicates significant human rights concerns.This Article proposes a practical response to the outsourcing revolution: a new statutory framework derived from the elements of contract and directed toward public-private partnerships and contemporary delegations. If successful, our proposal would address the democracy deficit that inheres in the shadowy outsourcing processes that are all too common today; it would invite public stakeholders into the contracting process; and it would offer an essential safeguard to ensure that human rights are respected and preserved in this era of new governance.