Association for Public Policy Analysis & Management

This paper articulates a framework for understanding and measuring how public sector organizations maintain mission-relevant technical capacity in an uncertain political climate in the face of social, economic or technical change. We first begin by articulating a framework for the adaptation of the concept of “absorptive capacity” to public sector entities based on the seminal contributions of Cohen and Levinthal [1990] and Zahra and George [2002], which shaped a theory of absorptive capacity in technologically competitive firms. Whereas Cohen and Levinthal [1990] state that absorptive capacity “confers an ability to recognize the value of new information, assimilate it, and apply it to commercial ends,” in our adaptation to public organizations, absorptive capacity confers an ability to apply new information to serve the public interest. Our framework for capacity touches on aspects of the agency’s human capital, political support, resources and resource certainty, organizational culture and other factors and contextualizes them in terms of their potential to enable agencies to achieve a welfare-enhancing public mission. We discuss motivating examples in economic policy-making during the financial crisis, market regulation, congressional policymaking, and international development and discuss potential applications to the regulation of emergent technologies. To develop our theoretical framework, we draw from the extant literature, data collected through qualitative interviews, and analysis of novel database that combines primary and administrative data in order to capture dynamics in technical capacity in agencies over time.