Drinking from the Talent Pool: A Resource Endowment Theory of Human Capital and Agency Performance

Abstract

David Switzer is a PhD candidate at Texas A&M University. His work examines how context moderates the effect of organizational structures on performance. He is specifically interested in how factors external to organizations, such as citizen participation and human capital, differentially impact the decision making and performance of private and public organizations. His empirical focus is on environmental policy, investigating how privatization, context, and citizen engagement affect the implementation of environmental policy. Manuel P. Teodoro is associate professor at Texas A&M University. His public administration research emphasizes executive behavior, with attention to professions and career systems as political phenomena. His policy research focuses on environmental policy and the ways in which human capital, management, and political institutions condition the implementation of environmental regulations. He also pursues a line of applied research on utility finance and management and has developed advanced methods for assessing rate equity and affordability.Abstract : This article advances a resource endowment theory of human capital and performance in government organizations. Building on research on human capital and firm location in business economics and task complexity in public management, the authors argue that an agency ' s ability to implement policy is determined both by its scale and by the human capital of the population from which it draws its employees. The authors cast labor as a factor of production in public agencies and argue that access to higher-quality labor improves government effectiveness. The effect of human capital on performance is especially pronounced when agencies are charged with the implementation of technically complex tasks. The empirical subject is U.S. municipal water utilities' compliance with the Safe Drinking Water Act. Comparing records of compliance with more and less complex regulatory requirements provides evidence consistent with the general model. The findings carry important implications for public management and policy design. Practitioner Points• A public agency ' s performance is partly a function of the availability of human capital-that is, educated workers-in the labor market from which it draws workers. • Larger organizations can leverage available human capital more effectively than smaller organizations. • The effect of human capital resource availability on performance depends on the complexity of an agency ' s task: as task complexity increases, so does the importance of human capital for agency performance. • Agencies that operate in isolated or low human capital labor markets face exceptional challenges in executing complex tasks. • Managers of smaller agencies seeking to improve performance should look for opportunities to scale up human capital development through collaboration and/or consolidation.

Polycentricity and the Hollow State: Exploring Shared Personnel as a Source of Connectivity in Fragmented Urban Systems

“…Inadequate organizational and professional capacity to implement new management practices is frequently a barrier to systemic change (Brown, 2008;Farrelly & Brown, 2011;Ferguson et al, 2013;Pahl-Wostl, 2009). This comports with evidence from the public administration literature about how skilled labor-or lack thereof-affects service delivery performance (Teodoro & Switzer, 2016) and the important role that individual managers play in innovation adoption and implementation (Teodoro, 2009b(Teodoro, , 2011. Thus, just as high fiscal capacity districts are expected to be preferred partners, there is good reason to expect they might be willing partners as well.…”

“…Fiscal capacity is very important to water districts because water service provision is highly capital intensive (Mullin, ). Low‐capacity districts face added challenges in accessing credit markets (Hildreth & Miller, ; Simonsen, Robbins, & Helgerson, ), responding to regulatory violations (Scott et al, ), and (perhaps most germane to this analysis) accessing skilled labor (Teodoro & Switzer, ).…”

“…This fragmentation of local governance responsibilities poses an array of regional coordination challenges (Feiock, ), complicating both the production of public goods (Oakerson & Parks, ) and the management of common pool resources (Berry, ) by increasing the number of independent organizations involved. One prominent example of fragmentation and its ensuing challenges is with regional drinking water provision (Kim, Keane, & Bernard, ; Scott, Moldogaziev, & Greer, ; Teodoro & Switzer, ).…”

A review of public water infrastructure financing in the United States

“…However, the ability to respond in less affluent areas where fiscal capacity is lower was limited. Additionally, system size may also affect interest rates such that smaller systems pay an interest rate penalty on their new borrowing (Simonsen, Robbins, & Helgerson, 2001) and they may can lack technical expertise (Scott et al, 2018;Teodoro & Switzer, 2016).…”

U.S. Environmental Policy Implementation on Tribal Lands: Trust, Neglect, and Justice

“…Meanwhile, we expect regulatory compliance (i.e., violations) for tribal facilities to be worse than nontribal facilities for three main reasons. First, the complex regulatory requirements of the major U.S. environmental policies provide a major challenge to small local governments that may lack the human capital and administrative capacity necessary for compliance (Hanford & Sokolow, ; Oxenford & Barrett, ; Teodoro & Switzer, ; Weiland, ). Tribal facilities tend to operate in isolated and relatively resource‐poor communities, and so are expected to struggle with complex regulatory compliance due to capacity constraints just as smaller local governments of all kinds do.…”