The causes of the decline and extinction of public organizations: a case study of Fundap

Abstract

This article examines the decline and extinction of the Fundação do Desenvolvimento Administrativo (Fundap), a public organization created to support the modernization of public administration in the State of São Paulo, Brazil. Drawing on a qualitative case study based on document analysis and 33 interviews with key actors, the study identifies a cumulative mechanism of deinstitutionalization that preceded the formal decision to terminate the organization. The findings show that the loss of political-institutional legitimacy, constraints on financial resources, and the erosion of technical and administrative capacity interacted over time, progressively increasing the organization’s vulnerability. By shifting the analytical focus from the termination decision to the organizational trajectory that precedes it, the article contributes to the public administration literature on termination and institutional reorganization. It demonstrates that organizational extinction in the public sector is the culmination of a relational and cumulative process of erosion, rather than merely the outcome of an isolated political decision.