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Book Summary

Osborne, David, and Ted Gaebler. 1992. Reinventing Government: How the Entrepreneurial Spirit Is
Transforming the Public Sector. Reading, MA: Addison-Wesley.

The authors, David Osborne and Ted Gaebler, argue that American governmental bureaucracy, which was
appropriate to the industrial era and times of economic and military crisis during which it was created, is
not the best system of governance for the post-industrial information age.

Since the 1960s, the American public increasingly wants quality and choice of goods and services, and
efficiency of producers. However, quality and choice are not what bureaucratic systems are designed to
provide, nor is efficiency possible in a system of complex rules and drawn-out decision-making.
Moreover, since 1982, reductions in federal funds has made it more difficult for state and local
governments to meet the continued citizen demand for services and increasing expectations for quality.

The authors' prescription is entrepreneurial government, which focuses on results, decentralizes

authority, reduces bureaucracy, and promotes competition both inside and outside government.
Government's clients are redefined as customers who are empowered by being able to choose among
providers of various services, including schools, health plans, and housing options.

The authors discuss the various options for delivering public services, utilizing the public, private, and
nonprofit sectors. And they provide 10 principles, based on numerous case studies, that guide the
fundamental transformation of our industrial era public systems:

Catalytic Government

Community-Owned Government

Competitive Government

Mission-Driven Government

Result-Oriented Government
Customer-Driven Government

Enterprising Government

Anticipatory Government

Decentralized Government

Market-Oriented Government

This book offers a vision and a road map, and it will intrigue and enlighten anyone interested in
government.

Introduction: An American Perestroika

The authors argue the American public sector bureaucracy is no longer an appropriate system of
governance for the post-industrial information age. To meet continued citizen demand for services -- and
increasing expectations of quality, choice, and efficiency -- governments should change the ways they
provide services from the bureaucratic model to a more entrepreneurial one characterized by flexibility
and creativity as well as conscious efforts to improve public sector incentive systems.

Chapter 1: Catalytic Government: Steering Rather Than Rowing

Catalytic governments separate steering, or providing guidance and direction, from rowing, or producing
goods and services. Osborne and Gaebler give numerous examples such as contracts, vouchers, grants,
and tax incentives.

Chapter 2: Community-Owned Government: Empowering Rather Than Serving

Community-owned governments push control of services out of the bureaucracy, into the community.
Examples show how bringing communities into the picture empowers the people who are the intended
recipients of services and results in better performance.

Chapter 3: Competitive Government: Injecting Competition into Service Delivery

Osborne and Gaebler believe that improving both the quality and cost-effectiveness of government
services can be achieved through competition rather than regulation. Introducing competition does not
necessarily mean that a service will be turned over to the private sector, rather the crucial function of
competition is ending government monopolies.
Chapter 4: Mission-Driven Government: Transforming Rule-Driven Organization

Mission-driven governments deregulate internally, eliminating many of their internal rules and radically
simplifying their administrative systems such as budget, personnel, and procurement. They require each
agency to get clear on its mission, then free managers to find the best way to accomplish that mission,
within legal bounds.

Chapter 5: Result-Oriented Government: Funding Outcomes, Not Inputs

Result-oriented governments shift accountability from inputs to outputs, or results. They measure the
performance and reward agencies, so they often exceed their goals.

Chapter 6: Customer-Driven Government: Meeting the Needs of the Customer, Not the Bureaucracy

Customer-driven governments are those that make an effort to perceive the needs of customers and to
give customers a choice of producers. They use surveys and focus groups to listen to their customers,
and put resources in the customers' hands.

Chapter 7: Enterprising Government: Earning Rather Than Spending

Enterprising governments stress earning rather than spending money. They charge user fees and impact
fees, and use incentives such as enterprise funds, shared earnings, and innovation funds to encourage
managers to earn money.

Chapter 8: Anticipatory Government: Prevention Rather Than Cure

Anticipatory governments seek to prevent problems rather than delivering services to correct them.
They redesign budget systems, accounting systems, and reward systems to create the appropriate
incentives.

Chapter 9: Decentralized Government: From Hierarchy to Participation and Teamwork

Decentralized governments transfer decision-making authority to those individuals and organizations at

the bottom of the organizational hierarchy. They restructure organizations and empower employees and
create labor-management partnerships.
Chapter 10: Market-Oriented Government: Leveraging Change through the Market

Market-oriented governments utilize a market mechanism instead of an administrative program to

provide goods and services to the public. They reinvent themselves through the application of market-
oriented incentives.

Chapter 11: Putting It All Together