In public administration and political science, crises serve as important (theoretical) explanations for the unsettling of stable policy frameworks and instigators of policy change. But sometimes, not so much the policies become politicized and climb the agenda, but rather the institutional arrangements or organizations that produce or implement a policy. In those cases, “intense criticism erupts on the basic institutional arrangements and orienting assumptions that govern a policy sector. The legitimacy for that sector, that what it stands for and how it functions, is declining rapidly. Think of what currently happens to EU institutions on the verge of Brexit. Though EU policies have never been free of contestation, an institutional crisis occurred when one member decided to leave the basic institutional setting and break with prior international agreements.
A recent publication by Ansell et al (2016) Institutional Crisis and the Policy Agenda, explains how institutional crises come about and how they affect agendasetting processes. The authors illustrate for instance how the perceived state of decomposition of the US Federal Emergency Management Agency was exposed to the core by hurricane Katrina, which became the symbolic incident that laid bare its failing disaster response. The contrast with the previous decade could not be bigger. During the 1990s FEMA’s reputation as an effective agency had been so strong that the designers of the U.S. Department of Homeland Security decided to absorb FEMA in 2002 as part of DHS “to lend prestige to the nascent department” (Roberts, 2006, 57). Yet during Katrina, in a matter of weeks, FEMA transformed ‘from a leading light of public administration into a laggard’ (ibid). State and local authorities had lost so much faith in FEMA after Katrina that they decided to organize their own preparations for future disasters.
An institutional crisis will likely have the following traits (Ansell et al, 2016): 1) Media and public scrutiny on existing institutional arrangements intensifies; 2) Specific organizational failures become epitomized as evidence of a structural deterioration or systemic collapse of governing arrangements; 3) The organization in crisis seems to have lost its basic authority and legitimacy in a short period of time; 4) Parliamentarians and interest groups call for broad-based reform and point at opportunities for significant institutional innovation; and 5) Reform proposals surface, underlining the need to restore authority, trust, and legitimacy.
Not the policy choices are contested, but the agency itself becomes subject of intense debate. A case closer to home would be the institutional crisis of the Dutch Healthcare Authority (NZa) in 2014. NZa, responsible for regulating the accessibility, affordability, and quality of health care in the Netherlands, got caught in a storm. A civil servant employed by the NZa took his own life after filing a critical 600 pages report that became public. The report pertained to severe internal shortcomings in NZa procedures and practices. The NZa, a regulating authority that fines health care and insurance organizations for improper administration and glitches in data security, now suddenly stood accused of breaching confidentiality and integrity rules. The NZa immediately finger pointed at its superior organization, the Ministry of Health, which in turn decided to assign a high profile committee to examine the affair. The Committee concluded that some NZa tasks conflicted and therefore should be transferred to other authorities. Also it strongly criticized NZa’s management and personnel policies leading to the affair. The Dutch Minister of Health adopted the Committee’s advice and during the next year implemented its recommendations and reigned in the NZa.
The fate of organizations threatened by institutional crisis does not always need to be sealed by external interventions though. The authors argue that leaders can prevent such crises by countering processes of institutional erosion, to prevent performance deficits that may in due time trigger a sudden decline of legitimacy. Dynamic conservatism is key: it requires responsiveness to pre-crisis threats through embracing some criticisms and new challenges while aligning them with the organization’s institutional philosophy and policy routines.