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Around the globe, red tape, budget cuts, and falling public trust eroded civil servants’ engagement with their work. Issues of low morale and disengagement not only cost governments billions in lost productivity and higher operational costs, but also provoked questions of how to build more effective public-service organisations, particularly as governments were setting up new agencies to tackle complex problems.

The United States Attorney’s Office for the Southern District of New York (SDNY) was one public organisation to have seemingly escaped the trends of disengagement. With its reputation for excellence and independence, the SDNY attracted top-tier talent despite relatively low pay, and earnt enduring adoration from its strong alumni network. Its high-calibre employees, who adhered to a deeply shared mission of ‘doing the right thing’, delivered long hours and achieved high success rates in trial. Many SDNY employees went on to secure elite positions in private firms before returning to the public sector. 

Drawing on the observations and insights of several former SDNY prosecutors, this background note explores the maverick practices and norms contributing to the SDNY’s apparent success as a public-service organisation.

Co-authored by Radhika Kak.

Facing imminent collapse during the height of the financial crisis of 2008-09, investment bank Merrill Lynch received a second lease on life as it was acquired by Bank of America. The deal was reportedly encouraged by the US Treasury which sought to avoid major contagion of failing banks. Later it emerged that Bank of America had failed to disclose to its shareholders in advance of their approval vote of the $50 billion purchase that $5.8 billion was being earmarked for Merrill Lynch executive compensation.

In the wake of public outrage of bank bailouts and bank executive pay the US Securities and Exchange Commission (SEC) brought a formal complaint against Bank of America together with a pre-negotiated $33 million settlement agreement to the court of US federal judge Jed Rakoff for final approval. The US Supreme Court discouraged judges from second-guessing the executive branch of government in granting such approvals but Rakoff questioned whether the settlement amount was proportionate to the scale of the misrepresentation. Moreover, he considered whether justice was being served as Bank of America shareholders, who were the victims of the misrepresentation, were being asked to bear the settlement cost, over the managers who had overseen the acquisition. Rakoff pondered whether to reject the settlement agreement.

In 2011, Essex County Council’s (ECC) children’s social care service was in serious need of reform, having received multiple ‘inadequate’ ratings from Ofsted, the UK regulator. To improve its effectiveness, ECC hoped to introduce new preventative measures to keep children out of care and at home with their families when it was safe to do so. But amid public-funding cutbacks, ECC had severely limited resources to trial new approaches.

In light of these constraints, ECC was considering an alternative funding model called a social impact bond (SIB): private investors would fund a new intervention upfront, and ECC would repay the investors (plus a return) only if the intervention achieved specified, pre-agreed social outcomes. Specifically, a proposal from a social investment organisation suggested that a SIB could fund Multisystemic Therapy (MST), a licensed, evidence-based programme designed in the US to help at-risk youth remain at home with their families. The ECC had to assess the mixed evidence available on the effectiveness of MST, and consider the trade-offs of using a SIB, which had not yet been used in children’s social care nor at the local-authority level.