A Portfolio Theory of Policy Subsystems

Abstract

During the Reagan period4 the resilience and adaptability of domestic policy subsystems were subjected to the most severe test in recent history. Our explanation for the resilience and durability of these subsystems is based on the argument that the key actors in the subsystem adopt strategies that are mutually supportive of each other's needs and provide protection for the entire subsystem during periods of retrenchment. The thesis developed in this article focuses in particular on the role that agencies play in building and maintaining strong subsystem relationships. We argue that agencies pursue two main objectives to help reinforce subsystem relationships: (1) the maximization of the number of congressional districts that are benefited by the portfolio of programs administered by the agency and (2) the minimization of the collective action problems of the interest groups whose members benefit from their programs. Preliminary data relating to these arguments are presented for the 1983-1989 period. We find evidence that agencies that provide financial assistance to a limited number of congressional districts have attempted, with modest success, to increase the number of districts in which they provide assistance. We find strong evidence that agencies have attempted to reduce collective actions of their supporting interest groups by reducing the within-program diversity of the recipients benefiting from the portfolio of programs administered by the agency. We conclude that these strategies were instrumental in helping domestic agencies survive, and in some cases grow, during the 1980s.