Neustadt, new institutionalism, and presidential decision making: a theory and test.

Author:Dickinson, Matthew J.
 
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Presidency studies have often been maligned during the last three decades, not least by presidency scholars. Compared to subfields such as congressional or elections studies, critics argue, presidency research lacks conceptual parsimony and empirical rigor. Generalizations and prescriptive advice are too often based on limited evidence. Thick description substitutes for theory-driven data gathering. The result is a failure to produce cumulative research findings (Edwards 1981, 146; Edwards, Kessel, and Rockman 1993, 3-7; Heclo 1977, 30; King 1975, 173; King 1993, 388-96; Moe 1993, 376-83; Peterson 1990, ix; Mayer 2001, 1-23).

To redress these shortcomings, some scholars advocate a greater reliance on insights from microeconomics-based organization theory. Whether called the "new economics of organizations," "new institutionalist economics," or simply "rational choice new institutionalism," the overarching goal is the same: to deduce general theories of presidential power from core assumptions about individual behavior within specified institutional contexts (Lewis 2003, 16-18; Mayer 2001, 22-31; Moe 1984; Moe 1987, 237; Moe 1993, 352-56; Moe and Wilson 1994, 1-28; Weko 1995, 155). (1) By shifting the analytic focus from the president to the presidency, these new institutionalists argue, scholars can redress the presidency subfield's traditional research bias toward the "man in office"--a bias many associate most closely with Richard Neustadt's seminal Presidential Power. It is time, they claim, for presidency scholars to move beyond the Neustadt paradigm (Moe 1993, 342-43--see also Howell 2003, 10; Moe and Howell 1999, 850-51; Mayer 2001, 1-23; Ragsdale 2000, 37-43; Tulis 1987, 10-12).

These assessments, I argue, are misleading, because they are predicated on a fundamental misconception: that Presidential Power has little to say about the institutional basis of presidential power. As this article will suggest, however, Neustadt's bargaining paradigm is crucial for understanding the growth of the institutional presidency, and for explaining why some staff organizations are more effective than others. By ignoring the institutional implications of Neustadt's argument (and relegating Presidential Power to the shelf of "classic period" pieces; Skowronek 1987, 430), new institutionalists are jettisoning a conceptual approach that, properly understood, provides the foundation for a more comprehensive, institution-based model of presidential power.

Rather than supersede Neustadt with new institutionalism, then, I offer an alternative theoretical perspective: embedding new institutionalist claims within the larger bargaining framework initially spelled out by Neustadt and subsequently tested through some four decades of empirical work. (2) To illustrate how this might be done, I combine Neustadt's insights on the history of presidential advising with new institutionalist transaction-cost and principal-agent theories to conceptualize and test several hypotheses regarding the relationship between presidential staff and decision making. The findings reaffirm several of Neustadt's suppositions regarding how presidents can most effectively use staff. In so doing, they also cast new light on the relative strengths and weaknesses of the current White House-centered "standard model" of presidential staffing.

The article begins with a brief restatement of Presidential Power's major postulates. My claim is that new institutionalists have largely missed the import of Neustadt's central concern: how can presidents most effectively acquire and utilize information to protect their sources of bargaining power? In the second section, I build on this insight to argue that the growth of the institutional presidency is partly fueled by presidents' search for sources of information by which to reduce bargaining uncertainty. This explanation differs from that offered by many scholars, who typically adopt a demand-side perspective toward staff institutionalization. That is, they explain increasing White House staff specialization and differentiation primarily in terms of a burgeoning presidential workload associated with a growth in leadership responsibilities. To fulfill these demands, they argue, presidents must increase their staff support (Hess with Pfiffner 2002, 203-04; Moe 1985, 244; Ragsdale and Theis 1997). From a demand-side perspective, then, the history of presidential staffing during the last six decades is best understood as an essentially linear trajectory toward a larger, more specialized advisory system with enhanced organizational capability.

But demand-side factors are only part of the story; staff growth is also driven by supply-side factors linked to the presidents' own need to address an increase in bargaining uncertainty in this period (Dickinson 2003, 28-30). By hiring staff with the requisite expertise, presidents can better predict the likely outcome of their bargaining choices on their sources of presidential power. From this conceptual vantage point, the history of presidential staffing does not simply describe a linear expansion in organizational capacity. Instead, it is better understood as a shift in organizational paradigms, reflecting changes in presidents' advisory needs. Specifically, Franklin Roosevelt institutionalized staff within a newly created Executive Office of the Presidency (EOP) to provide him with managerial expertise pertaining to budgeting, personnel, and policy planning. His goal was to reduce uncertainty linked to his policy choices. It was the Bureau of the Budget, and not the White House staff, that formed the core of this new staff system. For the most part, this remained the raison d'etre of presidential staffing through Lyndon Johnson's presidency, although strains in the Roosevelt staff system were evident as early as Dwight Eisenhower's presidency. Beginning with Richard Nixon's presidency, however, the impetus for staff institutionalization shifted significantly toward reducing political uncertainty. At this point the White House Office grew more influential, and the remaining EOP staff agencies were brought more tightly under White House control.

The third section shifts the focus from why presidents institutionalize staff to how advisers are organized. The starting point is Neustadt's warning that merely hiring advisers does not guarantee that they will provide the advice presidents need, when they need it. Because a president's interests often diverge from his aides', the latter must be managed to ensure that their information and expertise address the president's bargaining needs. Using principal-agent theories and Neustadt's historical examples, I argue that presidents who utilize redundant staff structures and organize staff by action-forcing processes rather than functional specialty are likely to be better informed when making decisions. These claims are tested using data drawn from Patrick Haney's study (1997) of presidential crisis management. The results provide support for Neustadt's prescriptions regarding the most effective use of presidential advisers. The article concludes by drawing on these findings to reassess scholars' understanding of the origins and effectiveness of the standard model of White House staffing.

"Presidents and their staffs seek advice; they need it; they deserve the best the rest of us can offer," Neustadt counsels (1990, 293). To date, methodological and conceptual differences have made heeding Neustadt's advice difficult. However, by integrating Neustadt's insights on staffing with new institutionalist theories regarding hierarchy and information, it is possible to construct and evaluate a richer, more conceptually detailed theory of the relationship between presidential power, staff, and decision making. That, in turn, may help alleviate some of the self-flagellating tendencies that often characterize "state of the discipline" assessments of presidency research. More importantly, it should increase the reliability of scholars' prescriptions regarding how best to organize the presidency.

Bargaining, Information, and the Neustadt Paradigm

Through five editions (1960, 1968, 1976, 1980, 1990) spanning some three decades, the arguments in Richard Neustadt's Presidential Power have achieved near-canonical status; its theoretical premises drive most presidency research in some way. Given such notoriety, it is not surprising that Presidential Power has attracted its share of attention (Sperlich 1975; Hart 1977; Greenstein 1982). But new institutionalist critiques differ from the usual fare in one important respect: they seek not to test and refine Neustadt's thesis so much as to suggest its obsolescence. At best, new institutionalists suggest, Neustadt's paradigm has become irrelevant--at worse, it exerts a pernicious effect on presidency research. This is because, as Terry Moe argues, Neustadt's argument is president centered (see also Bond and Fleisher 1990, 29-40; Ragsdale 2000, 33-35); it almost completely ignores the institutional side of presidential power, particularly the development of presidential staff:

By the time Neustadt's book had placed its indelible stamp on the scholarly mind, the personal presidency was already out of date.... The presidency was becoming a large, complex multifaceted institution whose "presidential behavior" could not adequately be understood in personal terms. (Moe 1993, 342) Although defined differently by different scholars, by "institutionalized presidency" most scholars refer to the post-1939 development of the presidential advisory organization (Burke 2003, 402-05; Gilmour 1975; Seligman 1956; Ragsdale and Theis 1997). Two related institutional trends are typically cited: the progressive growth in size, visibility, and power of a functionally specialized and hierarchically arranged White House staff bureaucracy, and the gradual politicization of the non-White House presidential staff agencies...

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