Preventive veto and obstructive veto: the imposition of public policy by organizations on the margins of government

This article argues that powerful organizations at the margins of government (i. e,, contractors, franchisers, quangos, state-owned corporations, etc.) which provide vital public services are able to impose public policy on the electorate and elected officials in democratic countries. These organizations' enormous resources, including not only their tangible assets, but also freedom from accountability and dependent clientele, constitute both a source of power and vital vested interests. Illustrating with the example of the Kupat Holim Sick Fund of Israel, it shows how when these interests are significantly jeopardized, the organizations impose veto power: a preventive veto at the policy making stage or an obstructive veto at the policy implementation stage. Both types of veto enable them to appropriate the major instruments of policy making - allocation, regulation, and restructuring - from elected government. This ability undermines the traditional relationship between the electorate and elected and raises questions about the risks to democracy inherent in the proliferation of such bodies on the margins of government.