CDC Restructuring Shows that Institutions Matter

One of my policy mantras is that institutions matter. That’s why the Centers for Disease Control and Prevention’s (CDC) restructuring announcement is big news. CDC Director Rochelle Walensky admits that the CDC handled its COVID-19 response poorly, and that a major reason why is the agency’s institutional structure. Even with perfect knowledge and the perfect people in charge, the CDC would still have stumbled, because the agency’s complicated structure and vulnerability to mission creep makes it all too easy for it to fail.

As large government agency, the CDC is unlikely to actually make major improvements. Even so, this presents an opportunity to change the CDC’s structure in a way that reins in its mission creep and paternalistic tendencies and forces it to focus on its core mission of disease control. Depending on how the reform goes, it can also provide an example for other agencies to follow, or avoid.

What are institutions? Think of them as the rules of the game. These can be formal, such as an agency’s organization chart, rulemaking procedures, or its mission statement. Institutions can also be informal, such as how closely staffers follow that mission statement, or whether its internal culture rewards flexibility or rigidity.

Institutions shape people’s incentives, which influences how they play the game. For example, pitchers and hitters would use very different strategies if Major League Baseball were to change the strike count for a strikeout from three down to two. Different players would become stars. Different team-building strategies would win championships.

If you want different results, you need different rules. As with baseball, so with government agencies. That is why institutions matter.

When you’re reforming an agency, focus not only on its individual policies, but also on the rulemaking process that generates them. Ask big questions. Is an agency focused on one thing or too many? Is it easy or difficult to walk back mistakes? Is it easy or difficult to make improvements or modernizations? Is an agency bound by preexisting rules or do officials have wide discretion? Should that balance between rules and discretion be changed? How difficult is it for that balance to change with circumstances? How does an agency’s structure shape people’s incentives?

Successful long-run reform is impossible without an institution-level focus. Fortunately, my former colleague Michelle Minton published a paper chock full of institution-level suggestions for remodeling the CDC, as well as the Food and Drug Administration, which has also had quite a run of its own stumbles lately, bungling everything from a baby formula shortage it helped create to issuing counterproductive tobacco and vaping regulations that would encourage black markets.

Some useful institutional ideas for the CDC and other agencies that need reform:

• Focus on one core mission. An agency can do one thing reasonably well or many things poorly. Mission creep is almost inevitable in an era of whole-of-government initiatives, but strong institutional protections against mission creep can help. The CDC should strictly focus on controlling the spread of diseases, such as COVID-19, monkeypox, and many others. It should end its distracting “lifestyle regulations” and nanny-state policies. These not only backfire, but they take away resources and attention from what the agency is supposed to be doing.
• Make it easy to walk back mistakes. The federal rulemaking process generates more than 3,000 new regulations per year, while hardly any are withdrawn. The CDC is no exception to that pattern, and that needs to change. Rules become outdated, may not work as planned, or may divert resources away from an agency’s core mission. The CDC also needs a built-in process for scrapping old or irrelevant rules. Formal options include expiration dates for new regulations and a mandatory annual housecleaning of old rules.
• Improve cost-benefit analysis. Agencies routinely fudge numbers in their favor by lowballing or ignoring costs and making dubious assumptions to inflate benefit estimates. A standardized cost-benefit calculation process from the Office of Management and Budget and required outside scrutiny could help. Just as students should not grade their own tests, agencies should not grade their own rules. Also, the CDC and other agencies should be required to look at rules’ effects after they take effect. Currently, all cost-benefit calculations are predictions made in advance, with no real-world data to draw on. There is little, if any, analysis of rules’ effects after they pass.
• Become more adaptable to change by decentralizing where possible. COVID is a rapidly evolving disease. A single nationwide response to it was always inappropriate. Not only were there strong regional differences in caseloads and deaths during COVID’s peak, but they constantly shifted. The disease itself has evolved to become less intense but more contagious. This requires a different strategy than during the early stages when COVID was more potent. The CDC’s rigid structure means that it is unable to treat different regions differently and is unable to adapt along with the disease itself. That’s not any particular CDC employee’s fault. It’s an institution-level problem. The CDC should be more willing to let state and local agencies take the lead when on-the-ground local knowledge is important. Giving less power to political appointees can help, since they have more incentive to look good than to do good. More congressional oversight, such as requiring votes on new major rules, will also help, since there are congressional representatives from every region of the country.
• Insulate against social desirability bias. Even though youth smoking has been declining on its own for years, and vaping is both safer than smoking and an effective quitting aid, the CDC is spending millions of dollars campaigning against vaping products, because officials seem to believe they need to be seen as doing something about youth smoking. The agency seems to place a premium on perception, much like the Transportation Security Agency (TSA)’s largely ineffectual—and unpopular—security measures. And, much like the TSA’s security theater encourages people to drive instead, which is more dangerous than flying, the CDC’s lifestyle campaigns and product bans create backlash, erode its credibility, and create dangerous black markets.

These suggestions are just a start. Besides Michelle Minton’s paper, Wayne Crews’s recent Abuse of Crisis Prevention Act proposal has useful institutional reforms, as do several papers of mine.