Hollow State

The hollow state is a metaphor used to describe the practice of governments around the world that contract out any and everything to third parties, be they other governments, private firms, or nonprofit agencies. Virtually everything that can be outsourced has been, from health and welfare systems to the interrogation of al Qaeda suspects.

There are two meanings of the term hollow state in the academic literature. In a normative sense, it has been used to describe the intentional destruction of the governing capacity of the state by stripping it of its capacity for action, as in the BP oil spill in the Gulf of Mexico in 2010, when it was clear that the federal government of the United States had no ability to cap the well or clean up the oil spill. That was a job that had been given, as a matter of policy, to the oil companies. In this meaning of the term, the hollow state is a critique of neoliberal policies to make greater use of the market and less of the state.

The hollow state also has a second meaning that is viewed as a matter of public policy. This is when governments have decided to contract with third parties to produce taxpayer-funded goods and services. Under this meaning, the hollow state has been used as the empirical frame to evaluate the effects of government contracting. Under this use of the term, there are four hallmarks of the hollow state:

• 1.
  The number of degrees of separation between a government and the services it funds. This is measured by the number of links between the source of funds and the use of the funds. For example, the federal government pays state governments who in term hire nonprofit agencies or private firms to deliver services to clients. The more links in the funding chain, the more hollow the state.
• 2.
  Services that governments pay third parties for are often jointly produced by a network of providers with a third party acting as a monopsony responsible for arranging the network of providers responsible for delivering a set of services like child welfare or drug prevention.
• 3.
  Although the degree of “hollowness” of a set of services varies, the task does not, which is to arrange contractual networks, not to manage hierarchies. There is no command and control relationship in the hollow state, only contractual stipulations. However, these services are produced in the shadow of hierarchy and law as the state awards the contracts.
• 4.
  Contracts are tendered by thousands of different government agencies to thousands more providers. There is no central record keeping or data files that can be used to measure the performance of third parties or the extent of contracting. It is also very difficult to determine who is accountable for what.

For the past two decades, H. Brinton Milward and Keith G. Provan, at the University of Arizona, with several coauthors, have tried to answer questions related to this practice by conducting a series of studies that were designed to compare the governance and performance of networks of public and nonprofit agencies, as well as of private firms, that deliver taxpayer-funded services to clients. Many of these studies were conducted on mental health systems that used networks of providers to deliver services to the mentally ill. The metaphor of the hollow state was chosen to describe the relationships the research uncovered—a multilevel, [Page 808]multilink relationship between the source of funds and the expenditure of these funds on clients. What this research frequently found was that there was between three and four links in the funding chain between the source and use of government funds, and that government officials, except in a crisis or rebidding of the contract, played a small role in the delivery of mental health services. Thus, the hollow state metaphor became the theoretical frame for a two-decade-long research project to map the contours and measure the dimensions of the contracting out of mental health services.

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