Budgets for US state agencies do not remain constant, with cuts occurring often due to external factors like changing economic conditions or policy priorities. In new research, Sanghee Park and Jiaqi Liang examine how state environmental agencies change how they implement policy and what they prioritise when their resources are constrained. They find that when facing budget cuts, agencies prioritize regulatory effectiveness to mitigate environmental risks, and that this can affect their commitment to environmental justice.

During times of constrained budgets, government agencies often face the challenge of making tough decisions on what to cut, where to cut, and how to cut while still aiming to uphold the core values of public service – efficiency, economy, effectiveness, and equity. As the fourth pillar of public administration, the pursuit of social equity has become increasingly crucial in government interactions with socially vulnerable populations or those in greater need within and across various policy areas.

However, balancing the goal of equity with other well-established values can be challenging for the government to manage given the often competing areas for which they are accountable. It is not always clear-cut how governments should respond to resource cutbacks and prioritize goals and what impacts this might have on policy implementation. Just as resource expansion does not always lead to performance improvement due to crowding and wasted resources, resource contraction can have both positive and negative effects, and act as a moderating force with inconsistent effects over time.

Using the block-group level data on the Clean Air Act (CAA) from 2012 to 2019, our new research explores the connection between resource availability and changes in state environmental agencies and their goal commitment in policy implementation. Contemporarily, environmental policy implementation has been closely tied to concerns for environmental justice, as minorities and low-income populations are more susceptible to inequity in regulatory enforcement. Our research looks at how resource cutbacks affect state agencies’ enforcement activities for achieving regulatory effectiveness and social equity, which are the two pivotal but potentially conflicting goals in environmental policy.

Compared to spending cutbacks, staffing cutbacks have a greater impact. 

Over the past several decades, the US Environmental Protection Agency (EPA) and state environmental agencies have experienced declining financial and human resources. State agencies’ regulatory enforcement activities, such as compliance inspections and punitive actions against violations, show a downward trend between 2012 and 2019 (Figure 1). Our research shows that resource cutbacks may prompt goal tradeoffs depending on the types of resources and policy implementation outputs. Cutbacks in spending (budgets) and staffing (personnel) have differential effects on state agencies’ policy implementation. When comparing spending and staffing cutbacks, we note that staff reductions result in a more substantial decline in regulatory enforcement activities than budget cuts. This difference may stem from the less elastic and more specific nature of human resources, making them harder to replace due to their implicit knowledge, functional expertise, and institutional memory.

Figure 1 – Changes in compliance inspections (mean) and punitive actions (mean) by year

(a) Compliance inspections	(b) Punitive actions

State agencies under cutbacks prioritize regulatory effectiveness over social equity. 

The three-way interaction among resource changes, socially vulnerable populations, and high-priority environmental violations shows that state environmental agencies facing resource cutbacks prioritize regulatory effectiveness over environmental justice. They allocate their resources towards communities exposed to higher levels of regulatory violations rather than those with larger minority and low-income populations. This suggests that when resources are more scarce, state agencies prioritize mitigating environmental risks and harms in a cost-effective way, aligning with their core organizational mission as part of the regulatory policy regime.

“20130618-RD-LSC-0143” (Public Domain) by USDAgov

Figure 2 shows the marginal effect of social vulnerability (panel a) and regulatory violation (panel b) on compliance inspections. The conditional values of low or high social vulnerability and regulatory violation are plus or minus the standard deviation of the mean value. The changes from zero to the left on the x-axis suggest an increasing rate of resource reduction.

Figure 2 – Adjusted predictions of compliance inspections by %ΔSpending

(a)  Percentage change in spending – Social vulnerability.	(b) Percentage change in spending – Regulatory violation.

Commitments to environmental justice depend on the severity of policy problems. 

The level of compliance inspections remained constant for more vulnerable communities despite prolonged resource contraction and reduced implementation. This implies that when faced with spending cuts, state environmental agencies adhere to equity-conscious policy implementation practices to some extent. In these socially vulnerable communities, spending cuts have a less severe impact on compliance inspections, whereas those facing more imminent environmental harms receive more inspections. In other words, the necessity and urgency to achieve regulatory effectiveness influences the commitment to environmental justice.

At the same time, as spending cutbacks intensify, environmental agencies respond to higher pressure for regulatory effectiveness (i.e., more violations) by increasing inspections while decreasing them when such pressure is lower. However, these moderative effects were limited or not observed for staffing cutbacks and when it comes to punitive actions as responses to violations and noncompliance in the neighborhoods.

Cutbacks, fluctuating resources and policy implementation trade-offs 

Like any organization, governments rely on various sets of resources to function and achieve their goals. The fluctuation of governmental resources, whether in expansion or contraction, is influenced by both factors from within the organization and external circumstances such as elections, recessions, administrative reforms, and other events that can modify policy priorities. Our research enhances our understanding of the nuanced dynamics involved in the relationship between resources and policy implementation and provides a foundation for further exploration into the complexities of managing cutbacks, negotiating goal tradeoffs, and addressing equity considerations within various policy domains.

As revealed by our findings, government agencies can skillfully juggle the pursuit of different policy goals, yet it remains uncertain whether and to what extent or for how long such efforts to manage multiple expectations will be sustained in the face of worsening or unpredictable resource availability in the public sector. Our research indicates that public managers face diminished flexibility in identifying and using alternative resources and struggle to maintain their managerial autonomy and adaptability, especially during prolonged periods of cutbacks. Another critical insights from our research is the importance of a strategic approach when implementing staffing cuts. It emphasizes the need for long-term administrative measures to effectively navigate and alleviate challenges arising from what can be difficult environments. 

• This article is based on the paper, ‘The effectiveness-equity tradeoff when resources decline: Evidence from environmental policy implementation in the U.S. states’, in Public Administration Review.
• Please read our comments policy before commenting.
• Note: This article gives the views of the author, and not the position of USAPP – American Politics and Policy, nor of the London School of Economics. 
• Shortened URL for this post: https://wp.me/p3I2YF-dO8