EMERGING TRENDS IN PUBLIC MANAGEMENT AND GOVERNANCE
Tony Bovaird and Elke Löffler Bristol Business School University of the West of England, Bristol, UK
[email protected] [email protected]
Introduction This paper sets in context the range of papers presented in this special issue of the Bristol Business School Teaching and Research Review. It highlights some of the key changes to the Public Management agenda in recent years and then demonstrates the emergence of the governance agenda. It shows how the papers in this special issue fit within this framework of emerging issues.
New Public Management – from enfant sauvage to eminence grise The concerns which led to the birth of the New Public Management (NPM) have not disappeared since the term was first invented by Louis Gunn and Christopher Hood in the mid-1980s. However, the role of the NPM in the public sector has altered significantly since that time. The crude approaches to NPM in the late 1980s and early 1990s, centring on wholesale privatisation, internal markets, competitive tendering, organisation-wide performance indicators and ‘performance incentivisation’ were quickly seen to run out of steam, especially where they were most ardently applied – in New Zealand and in Britain (Pollitt and Bouckaert, 2000). Nevertheless, some of the enduring successes of NPM have spread from the ‘AngloSaxon’ heartland of its origins, so that now there are very many variants of performance management, the mixed economy of provision and decentralised managerial structures in many parts of the world, apparently bringing some improvements to the state apparatus and public service systems in those countries.
Emergence of the ‘governance’ wave At the same time, a new concern for governance has arisen in the Western world (Pierre and Peters, 2000). In the private sector, this has been fuelled by concerns with corruption, environmental depredation, abuse of monopoly power, and the salaries paid to executives and board members. In the public domain, it has partly arisen because of the exposure of corruption and unethical practices in the public sector (for example through the work of the Nolan and Neill Committees in the UK) and partly through the realisation of governments that they were in danger of losing their residual legitimacy, as citizens were widely seen to be losing trust in government in general, as well as in their government in particular. We define governance as (following Bovaird and Löffler, 2002): ‘the set of formal and informal rules, structures and processes which define the ways in which individuals and organisations can exercise power over the decisions (by other stakeholders) which affect their welfare and quality of life’. Clearly, from this definition, good governance requires more than good government. Other actors such as business and the media also have leverage to improve the quality
of life and the overall welfare of any group of stakeholders. Indeed, we assume that in general governance involves six groups of stakeholders: i. ii. iii. iv. v. vi.
Citizens (as individuals) Voluntary sector Business Media Higher levels of government/Parliament, including international levels Local authorities
It is also evident that governance goes beyond the management of service delivery. The difference between an NPM and governance approach may be illustrated using the example of clean cities. Whereas NPM-oriented change agents tend to focus their efforts on improving street cleaning and refuse collection services, a local governance approach emphasises the role of citizens in respecting the communal desire that noone should throw litter on the streets in the first place, and that materials should be recycled, not simply thrown away., This involves education (not only in the schools, since ‘litter-bugs’ come in all sizes and ages), advertising campaigns, encouragement of people to show their disgust when dirty behaviour occurs, and the provision of proper waste facilities (including those for dog-waste) which will help to prevent litter and dog-fouling problems occurring in the first place. The following Table (based on Bovaird and Loeffler, 2002), indicates how the narrow interests of NPM (in the left hand column) have not evaporated, but have given rise to a wider set of concerns (in the right hand column).
Figure 1. From NPM … towards governance Government needs to consider not only ...
... but increasingly
Organisational leadership
Leadership of networks
Developing organisations
Developing policy networks, networks of interest, and relevant communities Managing expectations of citizens, companies and other stakeholders so that they become more deeply committed to democratic processes and more engaged in policymaking and services management
Creating a set of values and a sense of direction, which leaves room for individual autonomy and creativity for mid-level managers and employees
Policy and strategy
“Politicking”: balancing strategic interests
Focus on the needs of customers
Activating civil society (through information, consultation and participation) in policies and management Ensuring policy coherence across
Ensuring policy coherence across
organisational departments and services
Separation of politics and administration
Annual plans, concentrating on current expenditure
organisational and sectoral borders and levels of government as well as over time (sustainable development) Public management as a process of interaction between elected officials, politically appointed officials, ad hoc advisors, career civil servants and external stakeholders Long-term plans, incorporating service plans, quality of life plans, community plans, capital budget plans and asset management
People management
Management of the labour market
Increasing labour productivity through downsizing Getting staff to focus on quality of service
Improving staff contributions to all the goals of the organisation Getting staff to focus on quality of life, in terms quality of service outcomes for users and other stakeholders and also quality of working life for fellow staff Motivation by allowing staff to contribute a wider range of their skills and aptitudes to the work of the organisation Recruiting and training staff who are most likely to deliver effective services and to help stakeholders to help themselves Recruiting, training and promoting staff in ways which increase the diversity of the public service in terms of gender, ethnicity, age and disabilities Making better use of staff resources by increasing mobility within the public sector and also between other sectors and other areas
Motivation through more objective evaluation systems and more flexible pay systems Recruiting and retaining qualified staff through competitive hiring processes to minimise the wage bill Recruiting, retaining and promoting staff purely on their ability to meet narrow and mechanistic job specifications Making better use of staff resources within the organisation
Resource management
Resource and knowledge management
Budget formulation as a top-down exercise (with fixed ceilings on total expenditures)
Preparation of budgets with active participation of representatives from all stakeholders
Measurement of unit costs for performance improvement and performance monitoring
Measurement of the money and time costs of the organisation’s activities, as experienced by both the organisation and its stakeholders
Transparent financial reporting
“Fiscal transparency” to communicate with external stakeholders (business, citizens, media, etc.) on the value-for-money of activities
Improving technical efficiency
Improving social efficiency, including equitable distribution of budgets and services
Making ICT available to all staff for efficiency-enhancement purposes Helping staff to improve knowledge base through training, to increase efficiency and effectiveness in the job
Making ICT available to all stakeholders to improve effectiveness Generating and sustaining new knowledge through knowledge management, both for staff and for other stakeholders interacting with the organisation
Processes
Internal and external relationships
Internal improvement processes (Business Process Reengineering)
Managing processes beyond organisational borders, including inter-governmental relations and constraints Joined up processes with external agencies to produce ‘seamless services’ Managing contracts and relationships as partnerships, including those with suppliers and users (“co-production of services”)
Joined up internal processes for efficiency Competing for tendered tasks
Measurement of objective and subjective results
Measurement of multi-dimensional performance
Reporting systems based on needs of public managers and government oversight bodies
Publishing of performance information based on the needs of stakeholders in the community (social, ethical and environmental reporting)
Benchmarking results, internal processes or organisational performance against other local authorities
Involving stakeholder groups in the definition of performance standards and measurement of performance
Use of performance information for control purposes
Encouraging innovation and learning at multiple levels (individual, organisational, networks)
Accountability to funders and service users
Building and maintaining accountable partnerships, with users, communities and other organisations where appropriate (“coproduction of services with users, communities and other stakeholders”)
Values of the organization
Public service values and ethics
Loyalty to the organization, its mission, efficiency and organizational success
Dedication to public service values, including commitment to the welfare of citizens and service users
Elimination of all internal corruption and fraud
Commitment to fairness in dealings with all employees and all those groups in society protected by law
Commitment to exposure of corruption and fraud in all organizations with which the organization has dealings Commitment to equality of treatment of all groups in society, especially the disadvantaged, including pro-active policies to redress inequalities in employment and service usage
Functioning of government at local level
Developing good local governance
Serving the community by producing policies, services and knowledge (“service provider”)
Enabling the community to plan and manage its own affairs (“community developer”)
Improving the internal efficiency of local authorities
Improving the external effectiveness of local authorities
Increasing user satisfaction of local services
Building public trust in local government through transparent processes and accountability and through democratic dialogue
Why the concern with governance now? NPM was born in economic recession. In the early eighties, budget deficits were a major motive for government reforms in many parts of the world – regardless of whether they were imposed by international pressures (e.g. the IMF or World Bank) or by national governments themselves. However, since that time, many national governments have achieved more favourable budget positions. While services still need to be managed in an economic and efficient way, the financial driver for managerial reforms has become weaker. However, other external challenges have emerged to drive reforms, typically in a different direction to the managerial reforms in the 1980s and 1990s. Governments face a number of new challenges at the beginning of the 21st century: •
In the age of globalisation and localisation, governments increasingly have to make pro-active responses to positive economic opportunities as well as to react defensively to negative economic pressures.
•
Demographic changes in all OECD countries have greatly affected governments as employers and service providers. The ageing society implies a higher demand for social services and a lower employment base from which taxes can be generated. At the same time, public agencies have to compete with non-profit and private employers in the market for skilled and motivated labour. This is usually made more difficult by the fact that salary levels in government, particularly at local level, are typically lower than in the private sector. Public agencies are
therefore challenged to find and to afford non-monetary incentives to recruit and sustain high performing employees. •
Furthermore, the public sector has to deal with new sets of expectations from citizens, who in general are better informed and educated than before. At one level this means that citizens expect better quality services, the topic of Loeffler’s paper in this issue. However, it also means that governments need to create possibilities for citizens and other stakeholders to participate effectively in public matters. This is the territory mapped out in the Vigoda and Bovaird papers in this issue.
•
Expectations have also altered amongst staff, partly because they have often felt deprofessionalised in the NPM world of increased managerial accountability, performance measures and targets, and budget management. Finding ways of mapping changes in staff attitudes and views is the subject of the paper by Klages and Loeffler in this issue, while Grisoni studies the ways in which professional managers attempt to come to terms with a managerial rewriting of professional work and the psychological contract with which they are often out of sympathy.
•
The availability of modern ICT offers new approaches to information management, consultation processes and service delivery at national, regional and local levels of government. The potential for application of e-government is huge, particular in customer-facing services, and at local level, given the multiple direct interactions between local authorities and their local stakeholders – some of these opportunities are discussed by Arai in this issue. However, all public agencies are also confronted with the ‘digital divide’ dilemma, having to balance the equity and cost implications of traditional versus electronic service delivery and communication policies.
Of course, the set of challenges described above developed gradually rather than overnight. Also, in many cases, fiscal pressures have persisted and have been mixed with the new demands on governments. Which pressures are dominant and which are less relevant depends essentially on the setting (Bogason, 2000: 21). As local contexts become more differentiated in the future, the variety of approaches to national, regional and local reforms may well be greater than in the NPM era.
Contributions in this issue This issue provides a range of papers which sample the emerging themes in the field, as discussed above. It is not exhaustive – in one issue we could not hope to cover all the key elements in this fast-changing field. However, it gives a good snapshot of the some of the main tensions arising as the old ‘NPM’ paradigm’ slowly gives way, at least in the rhetoric, to the new governance concerns in the public domain. The initial paper by Bovaird maps the rapid changes from a concern with ‘excellent’ organisations in the public sector to a wider concern with effective service systems and successful communities – a change which has been driven by the rhetoric of user and community co-production of policy and services. This work is currently being taken further in a research project at BBS (in partnership with Cardiff Business School, Leeds Metropolitan University Policy Studies, Institute, MORI and NIESR)
commissioned by the Department of Transport, Local Government and the Regions (DTLR) on how the Local Government Modernisation Agenda in the UK might be evaluated in the long-term. The paper by Loeffler shows how the concept of quality management spread quickly from the private to the public sector, but now, as it reaches maturity, has developed new meanings in the public domain. Loeffler argues that improving the quality of services may increase customer satisfaction but not necessarily trust in government, Parliament and the civil service. In order to improve trust in public administration, she suggests that a much wider concept of quality is needed, which encompasses the quality of interaction of networks of public, voluntary, and private organisations providing public services and solving collective problems. This work will be taken further next summer at the NISPACee Annual Conference, at which several BBS faculty will present papers. The following paper by Vigoda provides a case study on how communities can be involved more closely in local public decisions, both by the public sector and by private companies seeking to develop the area. The paper then goes on to propose a framework for monitoring and evaluating more systematically the current wave of reform initiatives in public management and governance in Europe. BBS is collaborating in the early stages of design of this pan-European project. Arai shows some of the difficulties in moving public agencies beyond even the simple building blocks of NPM. His study of the use of email and websites in Japanese local authorities shows how the wider and potentially more powerful uses of the internet are only slow to emerge in the everyday world of bureaucracies – in spite of the rhetoric of e-government now sweeping through OECD countries. Arai is currently discussing with BBS ways of collaborating on similar work in the UK. The paper by Klages and Loeffler flags up some of the problems in bringing staff on board in the ‘modernisation agenda’. Without proper insights into how staff are reacting to the new imperatives, whether from the NPM initiatives or the more recent governance initiatives, public organisations are very often unaware of how empty is the rhetoric of their promised ‘reform programmes’. Klages and Loeffler provide some timely reminders on how feedback from staff can be arranged in order to keep top management in the organisation grounded in what is happening, rather than deluded by what it would like to be happening. This is an area which will partially be covered in the current BBS project for DTLR, evaluating the long-term impacts of the Best Value programme in English local government. Broussine and Fox provide very sobering evidence of the difficulties in the public arena of making real the widespread commitment to ‘diversity and equality’ in public employment. They focus on the high profile issue of the ‘glass ceiling’, looking at the experiences of the small number of women who have broken through to become chief executives in UK local government. Their study reveals a disconcerning picture of institutionalised sexism in these agencies. However, they suggest that there is a window of opportunity for beneficial change, in that the research provides a platform for real dialogue in local government. The major publicity which has attended the publication of this research suggests that there are key players in the system who are
keen to promote this dialogue and not simply to bury its discomfiting results. BBS is pleased to be able to use the platform of this issue to continue this debate. Finally, Grisoni, Ahmad, Miller and Broussine provide an analysis of the ways in which the modernisation agenda has alienated many professional workers in the public sector, even when they are fundamentally in tune with its key themes. They discuss some of the emotional knock-on effects in training programmes, even in small group contexts, which arise from the hostility which many staff feel from the way in which a major government programme (‘Quality Protects’ for children’s services in social care) has been imposed, with a panopoly of controls, audits, inspections and sanctions. The paper reminds us about the potential gains from confronting the deep obstacles which can obstruct learning in management development programmes, especially when they involve committed professionals who see a managerialist agenda as part of their problem. Moreover, it is intended to contribute to the debate on the extent to which the quality management components of the government’s modernisation agenda are anything other than tokenistic. We hope that the papers presented here provide a stimulating challenge to readers of the BBS Teaching and Research Review to take more interest in the emerging issues of public management and governance. Your comments will be welcome – please email
[email protected]. Likewise, your suggestions for future issues on these topics will be welcome.
References Bogason, Peter (2000) Public Policy and Local Governance: Institutions in PostModern Society. Cheltenham: Edward Elgar. (200 + vii pages). Bovaird, T. and Loeffler, E. (2002), “Moving from excellence models of local service delivery to benchmarking of ‘good local governance’”, International Review of Administrative Sciences, March (forthcoming). Pollitt, Christopher and Bouckaert, Geert (2000), Public Management Reforms. Cambridge: Cambridge University Press. Pierre, Jon and B. Guy Peters (2000) Governance, Politics and the State. New York, St. Martin's Press.
