Innovation without Reputation: How Bureaucrats Saved the Veterans’ Health Care System

The Veterans Health Administration (VA) is among the most unusual and misunderstood institutions in the American welfare state. Unlike most American social services, veterans’ medical care continues to be administered directly by the state, contrary to the “antibureaucratic strategy” of “hidden” or “submerged” state-building that has dominated US social policy for decades. Drawing on extensive archival research, I attempt to make sense of the VA’s unique policy trajectory by exploring two puzzling episodes of institutional change in the delivery of veterans’ health care. Although many bureaucratic models predict large new undertakings initiated by agencies only when they benefit from the advantages of being well-regarded and relatively autonomous, both instances of institutional change occurred at the nadir of the VA’s reputation as a competent, innovative, and politically-powerful agency. To explain these unexpected transformations, I investigate the role of bureaucrats in shaping the development of the American welfare state and develop the concept of collaborative state-building to demonstrate how public-private partnerships may contribute to the expansion of social welfare programs in liberal states. Although public-private partnerships are usually seen as an erosion of state power or a way to hide the state’s role in the provision of social services, the case of the VA suggests that such partnerships may be used to support and expand such programs. I also focus on the VA’s many scandals and show how agency officials used these policy failures to expand the VA.