Public Private partnerships in Urban Regeneration

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May 18, 2007 - Erik-Hans Klijn. Kort, M., E.H. Klijn, (2012), Public ..... outcomes that are relevant for the involved stakeholders (Driesch, 2000; Held, 2006).
PUBLIC PRIVATE PARTNERSHIPS IN URBAN REGENERATION: DEMOCRATIC LEGITIMACY AND ITS RELATION WITH PERFORMANCE AND TRUST

Michiel Kort Erik-Hans Klijn

Kort, M., E.H. Klijn, (2012), Public Private partnerships in Urban Regeneration: democratic legitimacy and its relation with trust and outcomes, Local Government Studies vol 39 (1): 89-106

Abstract Public-private entities set up specifically to manage and implement urban regeneration projects have been observed across several nations. In these Urban Regeneration Partnerships public and private partners often work together within Urban Regeneration Partnerships to improve languishing neighbourhoods. One of the core ideas that drives the establishment of these partnerships is that in order to more effectively tackle the challenging regeneration process, these organizations should function at arm’s length from the political institutions that oversee them. A specific question concerning these partnerships is how representative mechanisms work and how the partnership process is linked to the traditional representative bodies or in other ways are connected to principles of democratic legitimacy (Skelcher et all, 2005; Sorenson and Torfing, 2007. This paper explores the so called democratic legitimacy of Urban Regeneration Companies, as a form of PPP, in more detail. It uses a distinction between three types of democratic legitimacy: accountability, voice, and due deliberation. Using material from a recent survey among managers of Urban Regeneration Companies in The Netherlands this paper examines the impact of these three from of democratic legitimacy on outcomes and trust of these URC's. Results show a fairly strong correlation between some criteria of democratic legitimacy, especially due deliberation on the one hand and performance and trust on the other hand. The paper explores the main finding and reflects on them. Ir. M.B. Kort Prof dr. E.H. Klijn Department of Public Administration Erasmus University Rotterdam P.O. Box 1738 3000 DR Rotterdam, The Netherlands [email protected] [email protected]

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1. Introduction: democratic legitimacy of public private partnerships Public Private Partnerships (PPP) have become a popular policy instrument in many Western European countries. Governments assume that the involvement of private actors in the provision of services, or in the realization of policy goals, will increase quality and give better value for money. A more intense co-production between public and private actors will generate better results. In the discussion about PPPs the word ‘added value‘ is used for that (Osborne, 2000; Ghobadian et all., 2004). Urban regeneration Companies as PPP One of the fields where the idea of PPP has been applied is that of urban regeneration. The field of urban regeneration is an interesting area of study because of its recent experience with such public-private partnerships. There is a variety of forms of urban regeneration partnerships reported in the literature (see for example Pierre 1997, Geddes 2008). In various countries new organizations are created by public and private actors working together to stimulate, guide and implement processes of urban regeneration. These organizations are relatively independent and perform their implementation activities at ‘arms length’ (Van Thiel, 2001; Pollitt et al, 2004) from the political arena. Such companies are often referred to as Urban Regeneration Companies (URCs) and can be found in many countries like the UK and The Netherlands. In the UK for example they were the result of a commission report (Urban Task Force, 1999 ) that looked at the problems in urban regions. The report said: “The pace of regeneration could be increased if responsibility for delivering area programs was placed in the hands of 'arms length' organizations, owned by local partnerships. Urban Regeneration Companies could not only oversee work to completion, but also raise private finance and undertake direct development where necessary (Urban Task Force, 1999). This idea of creating a specific form of public private partnerships aimed mainly at solving problems in urban areas was also suggested in The Netherlands (see VROM, 2002). It fitted in a general discussion on public-private partnerships. But Urban regeneration Companies are also interesting because urban regeneration is always an area where we find complex decision making between a wide variety of actors. In most Urban renewal processes we find networks of actors in which the process takes place (Klijn et all, 2010a). This means that the URC's are always working in a complex environment where other actors try to influence policy and implementation processes around urban restructuring. The concept of PPP concentrates on a specific part of actor interrelations within the whole governance network. Dynamics in the PPP have influence on the dynamics in the whole governance network and vice versa. For example, when a planning vision has been developed in the PPP, stakeholders (NGOs, citizens, etc.) in the wider network may obstruct this vision and this may affect the further decision-making process. Democratic legitimacy and PPP PPP discussions are preoccupied with efficiency (see Skelcher, 2005; Hodge and Greve, 2005). The discussion emphasizes bringing in the market to create more innovation and cost effectiveness and also has a strong focus on the way PPP's are organized. That PPP's are part of a larger network where various stakeholders are involved, is often neglected. 2

This is maybe also the reason why there is not so much attention for the democratic legitimacy of these PPP constructions. This has led several scholars to make critical remarks on PPP's. Some scholars remark that one of the downsides of PPP's is a lack of transparency and public participation (Shaoul, 2003). Skelcher (2005) observes in an overview of PPP's "There is little evidence that democratic considerations have made a significant impact on the governance arrangements for PPP's" (Skelcher, 2005: 364; see also Skelcher et all, 2005). So there are indications that the relation between public private partnerships and democratic legitimacy is understudied and did not get as much attention as aspects like the performance, the organization form and the contractual arrangements of PPP's.

This paper: the influence of democratic legitimacy on outcomes and trust In this paper we explore democratic legitimacy as empirical phenomenon. We try to assess the way in which public private partnerships, in this case Urban regeneration companies, meet various standards of democratic legitimacy and if this has any influence on the performance. In looking at that performance we focus both on the achievement of trust (both between the partners and with the city council as representative body) and on outcomes of the project. So our research question is: Does differences in democratic legitimacy of Urban Regeneration Companies in The Netherlands has significant impact on the outcomes and on trust between partners and is there a difference in that impact between various forms of democratic legitimacy? To answer this question we used a survey set out among URC's in the Netherlands. The article first looks at Urban Regeneration Companies (URC) as a phenomenon (section 2). What are they and why are the becoming popular? After that the paper sets out to develop a typology that can be used to measure democratic legitimacy (section 3). That section ends with some hypotheses on how the various forms of legitimacy will affect outcomes and trust. Section 4 deals with the methodological issues of the research. Section 5 contains the results of the empirical analysis and we finish with some conclusions and reflections.

2. Urban regeneration companies: steering at arm's length from city council Public private partnership (PPP) can be described as a “more or less sustainable cooperation between public and private actors in which joint products and/or services are developed and in which risks, costs and profits are shared” (Klijn and Teisman, 2003: 137 ). Policy makers and researchers assume that a more intensive cooperation between public and private parties will add value by producing better and more efficient policy outcomes (Savas, 2000; Ghobadian et all (2004); Hodge and Greve, 2005). Private parties are involved earlier in the decision making process and are said to contribute more intensively than is the case in more traditional client-supplier or principal-agent relationships. Urban Regeneration Companies as PPP's Urban Regeneration Companies (URC) – in Dutch a Wijkontwikkelingsmaatschappij (WOM) – were seen as a promising public private partnership form to achieve results in Urban regeneration. An URC can be defined as an arm’s length organization owned by local partnerships to lead and co-ordinate redevelopment and new investment in declining 3

urban areas (see for example ODPM, 2004 and VROM 2002). Thus the partners in an URC create an intensified partnership in which they all share some of the risks involved in the venture and manage the partnership jointly. URC’s in different countries show similarities but also differences in the organizational form of the partnership. In the UK URC’s are established by the relevant local authority and the regional development agency, homes and communities agency and the private sector. In the Netherlands important partners include the local authority, housing associations and private parties such as developers and financers.i The organizational arrangements of an URC can take various forms. In the UK the form follows a nationally developed set of guiding principles. Proposals for an URC have to be endorsed by central government. Some examples of these guidelines are that URC’s have a senior level Board and a dedicated executive team. The Board has no public sector majority and is chaired by an independent representative preferably from the private sector. Resources have to be targeted by each of the partners and URCs should have an agreed life span of 10-15 years to ensure the delivery. In The Netherlands such national guidelines are not present which means that in practice we see more variety in the organizational form from tightly organized consortia till more loosely coupled organizations in which the partners are represented. But in all cases the partners share their control over the use of resources and the decisions that have to be made. The URC was expected to create added value and speed up urban regeneration because it bundles the expertise, knowledge and interests of multiple players, and shares the risks and responsibilities between them (VROM 2002). The added value that was foreseen from implementing an URC also included the quicker realization of regeneration objectives, more innovative ideas and better outputs at lower costs. The URC was thought to be more successful at ensuring desired outcomes (VROM 2002, Urban Taskforce 1999) because it would function like a decisive, business- organization. After initial decisionmaking within local representational bodies (a prerequisite in all democratic systems) the URC could focus on the implementation and operate at some distance from local government. URC’s, local governments and democratic legitimacy As we can see an URC is clearly a public private partnership because the essential characteristics of PPP's (see Hodge and Greve, 2005; Klijn and Teisman, 2003) are present:  public and private partners bring in their expertise and resources  there is an explicit organizational form to organize the cooperation process  public and private parties share some risks But a URC is also a specific form of public private partnership. It draws on ideas in the new public management that stress arm’s length form (local) political bodies and separate organisation to implement tasks. It draws on ideas of governance in the sense that it promotes horizontal cooperation between the partners to enhance coordination and learning (see Kort and Klijn, 2009). The idea of arms length of course also raises the question how democratic legitimacy is achieved. After all the idea of PPP certainly partly rest on the idea that these bodies can efficient implement a task without too much interference after 4

political decisions have been made. Since we observed that partnerships also are embedded in a wider network around the policy problem in urban renewal policy the question of democratic legitimacy is certainly important. Democratic legitimacy may come from various sources and not only from the way decisions are connected to official political institutions as we will see in the next section. 3. Democratic legitimacy and PPP: some theoretical observations and assumptions We can measure democratic legitimacy of PPP's with different yardsticks. One of the measurements is the way in which elected bodies control the developments that take place within public private partnerships. But there are also other criteria to measure the democratic legitimacy. Certainly if we consider the PPP to be part of a larger network of actors who have interest in, are affected by or try to influence decision taken by the partnership. Models of democracy: different answers to democracy and its core Various writers have emphasized that very different models of democracy exists which also stress different core elements of democracy. MacPherson (1977) sees four different models of democracy, in the history of political philosophy, that stress different core elements of democracy: - the utopian model in which democracy is the will of the people expressed by them. Democracy is the best way to serve the common purpose (by means of participation of individuals in the government) and the best way to develop individuals. Rousseau with his general will of the people but also Jefferson are examples of this model - the protective model in which democracy is mainly understood as a protection of citizens of their governments. Important are institutional features to protect the freedom of individuals and their freedom against the state. Individual votes in this liberal model are an effective expression of the citizens wishes. James Mill and Jeremy Bentham are the most well known examples of this second model; - developmental model, which stresses participation of citizens as both a good way to organize democracy but also as a way to develop citizens and actively enhance their freedom. John Start Mill is the most well known exponent of this model - competitive model in which democracy is a mechanism of decision-making where political leader compete to gain votes. One of the most prominent authors in this model is of course Schumpeter (1943) who criticized the classical model for holding unrealistic demands on participation and the way citizens are informed. His now famous definition of democracy is “That institutional arrangement for arriving at political decisions in which individuals acquire the power to decide by means of a competitive struggle for the people’s vote (Schumpeter, 1943: 269)”. This idea of competition is taken further later on by the pluralists (Dahl, 1956, Truman, 1956) who see democracy as a plurality of groups struggling to power and Downs (1956) who presents the image of democracy as a marketplace where voters act rational and choose a political leader and a program, and parties and leader try to maximize votes. Legitimacy in this model is connected to the procedure that is followed (the

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voting) and the fact that political office holders are accountable and can be sent away in the next election. If we look at MacPherson’s models we actually see two competing ideas, the idea that democracy is an arrangement to reach (efficient) decisions and protect individual freedom and the idea that democracy embodies normative ideas and rules about how we should organize our society. A society where people take part in decisions by active participation and develop themselves and the society by that. He calls the two competing models protective and developmental democracy. A thought that inspired many writers after him like Paterman (1970) and Held (2000).ii If we look at more recent models of deliberative democracy (see Drysek, 2000; Hirst, 2000; Held, 2006) we see that these models add some characteristics especially the open debate among involved stakeholders about solutions (see also Fisher, 2003). The key to deliberative models of democracy is to quote Held: “the transformation of private preferences via a process of deliberation into positions that can withstand public scrutiny and test” (Held, 2006: 237). Essential to most forms of deliberative democracy is that preferences are not fixed, but can change in a debate. Or as Drysek tells us: “The only condition for authentic deliberation is then the requirement that communication induce reflection upon preferences in non-coercive fashion (Drysek, 2000: 2)”. But then for this deliberation to be successful another kind of core characteristic of democracy is introduced which could be described as openness or at least has to do with a number of rules and practices that all are connected to the process of discussion, information, plurality of values etc. Deliberative models of democracy stress that, besides the fact that officeholders are accountable and can be replaced (the core of the protective models of democracy) and that democracy is about participation in decisions being made (the core of the developmental models of democracy), democratic legitimacy can come from the characteristics of the process (openness, flow of information, etc) Sources of democratic legitimacy If we look at various models of democracy and try to summarize their core and sources of legitimacy we could say that liberal and competitive models of democracy emphasize the accountability of elected officeholders to others. More idealistic models of democracy tend to emphasize the participation side of democracy: decisions are democratic if they have been achieved in processes of active citizens participation. Deliberative models of democracy add to this the importance of deliberation and the rules of open debate (see Drysek, 2000). In a sense they are a radicalization of classical rules also emphasized by most models of democracy like fairness (see also Sorenson and Torfing, 2005). But they are on the other hand also more pragmatic (or at least part of the deliberative models are) in that they are more concerned in achieving practical outcomes that are relevant for the involved stakeholders (Driesch, 2000; Held, 2006) In sum we could say that democratic legitimacy could come from three sources that of course are related, but which receive different emphasis of different models (see also Skelcher and Sullivan, 2007):

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-

-

-

Accountability:. In this first source the formal accountability of office holders (is clear who is accountable) and the procedures to held them accountable (voting to get them in but even more important to get them out of position, and various rules that protect citizens) are stressed. Voice; In this source of legitimacy it is not the passive influence that is important but the positive active way in which citizens can participate in concrete decisions and the processes in which they are achieved. In this source of legitimacy the way citizens are really involved is stressed. Due deliberation; This source of democratic legitimacy is strongly connected to the way the interaction and deliberation process is organized. Democratic legitimacy in this view arises out of good deliberation process, guaranteed by clear and fair procedures and agreement between actors where they share knowledge and explore possible solutions and exchange value judgements.

Democratic legitimacy and PPP: some assumptions How would these three criteria of democratic legitimacy work out in a situation of public private partnerships. We already noticed that public private partnerships actually involve often quite difficult decision-making within networks of actors. As we said the PPP is often part of a larger network of actors that also want to influence the key decisions, especially in urban regeneration projects. We know that networks have a more horizontal character and are difficult to govern by unilateral measures (see Koppenjan and Klijn, 2004). So we can expect tension between unilateral ways of control to secure democratic legitimacy. Accountability, the first criterion of legitimacy can be secured by tight control of representational bodies or political electives over the PPP, like setting strict constraints or imposing content ideas before hand, or by more lighter forms like the sharing of information of the partnership with the city council or city alderman.. Accountability which work by strong constraints and guidance set by the city council will probably enhance the trust of the political actors in the PPP. But given the wide literature on governance networks that stress dependencies and horizontal relation between actors strong constraints and tight control will probably also not enhance the trust of all partners and have thus also negative effect on outcomes. In earlier research done with other survey material (Edelenbos et al, 2010; Klijn et al 2010) we found that trust enhances performances of networks and strong involvement of politicians did not lead to better outcomes. This leads us to the following hypotheses: Hypothesis 1: Accountability achieved by stronger forms of control of representative bodies leads to more trust of these representative bodies only. This form of accountability has no influence on the outcomes Hypothesis 2: Accountability achieved by weaker forms of control (e.g. exchange of information) leads to more trust between all actors involved in the PPP and also leads to better outcomes (because of more trust). If it comes to the effect of voice we expect that if stakeholders are involved more the proposals and implementation will be more acceptable to stakeholders and the general appreciation for the outcomes will rise. This is also what we found in earlier research: that more 7

stakeholder involvement leads to better outcomes (see Edelenbos et all 2010). This leads us to: Hypothesis 3: When the involvement of stakeholders in the policymaking process is larger this will result in more trust between the partners and better outcomes. What is the effect of due deliberation? We suppose that more deliberation and clear and acceptable rules for interaction also facilitate the cooperation process. Basically this works very much like process rules that structure the interaction (Koppenjan and Klijn, 2004) and in that sense facilitate the process. So a higher level of democratic legitimacy in terms of deliberation then should lead to better outcomes. This is formulated in hypothesis 4. Hypothesis 4: a higher level of democratic legitimacy on the dimension of due deliberation leads to more trust between partners and better outcomes.

4. Methodology of the research

To test our hypotheses, we used data from an internet survey conducted between November 2006 and January 2007. Respondents were individuals involved in the Urban Regeneration related partnerships that were existent in The Netherlands at the time. Not surprisingly, it was indeed difficult to determine the exact number of URCs in the Netherlands. Thus a complete listing of all urban regeneration partnerships or Urban Regeneration Companies from which to draw respondents was not available. To acquire a complete list of URC’s in The Netherlands extensive effort has been made and various sources have been used. Information was sought from the Dutch Ministry on Housing (their policy on priority areas for urban regeneration and the regulation on tax relief), knowledge organizations on urban regeneration and individual municipalities in the Netherlands known to be undertaking urban regeneration projects. Not all projects identified were aimed primarily at physical regeneration, or involved partnerships and these were excluded from our final list. This effort left us with 70 projects which made up a fairly complete list of urban regeneration partnerships in The Netherlands that matched the characteristics of a URC. The managers of all participating parties involved in each project were approached to answer the survey questions. Of the 210 individuals approached, 68 responded positively (approximately one third). The variables relevant to our hypotheses are discussed in the following subsections. Outcomes Since outcomes in governance processes like the processes we are studying here are strongly dependent on the process we use both items that are connected to the content and to the process to measure overall outcomes (see also Klijn et all, 2010 for a similar approach). The outcomes that come under the content category focus on the final result and quality of the decided and implemented proposals. Outcomes that fall under the process category focus on the quality of the decision making processes that occurred during the development stage and whether the work of planning and execution progressed smoothly.

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Table 1 lists the survey items that were used to measure the perceived outcomes of the project. Many of the items used are based on earlier research we did (see Klijn et al, 2008, 2010) and are inspired by a wide range of literature on networks and governance processes. Respondents were asked to provide responses to a series of statements on a scale of 1 (low valuation) to 5 (high valuation). As can be seen from the individual items, the satisfaction of the managers was seen as a key outcome indicator. Table 1: Items used to measure process and content- related outcomes Content The proposals are innovative My organization had enough input in the proposals Spatial functions are related in the right way The proposals really tackle the problems in the area The proposals are realistic and financially feasible The proposals are future proof and sustainable

Process The process is managed the right way Management has done a good job concerning conflict regulation The project had made enough progress There has been enough interaction between cooperating parties There has been enough interaction with parties with different opinions The results are supported by the parties involved

The variable outcome was calculated by averaging each respondent’s ratings of all individual statements. The Cronbach α for the collated items was found to be 0,855, which statistically allows us to use “outcomes” as one variable. Trust: general forms of trust and specific forms of trust In this research we used two variables to conceptualize trust. The first is trust between all actors involved in the Urban Regeneration Company. Respondents were asked to rank the degree of trust (see table 2) with a score from 1 (low degree of trust) to 10 (high degree of trust). This is slightly crude measure but earlier research (Klijn et all, 2010a) has shown that there is strong correlation between trust measured in this way and a more sophisticated way of measuring trust (in our case with five distinctive items). The second variable is trust between the Urban Regeneration Company and the representative body of the local authority (the city council). In order to measure this variable respondents were asked to provide a response to the statement displayed in table 2 on a scale of 1 (low valuation) to 5 (high valuation). Table 2: Two variables of trust 1. Trust between the partners in the URC How do you perceive the degree of trust between the partners in the URC?

2. Trust between URC and city council There is a high degree of trust between city council and the URC

Democratic legitimacy: measuring forms of accountability, voice and due deliberation Measuring the three forms of democratic legitimacy is slightly more difficult. Accountability was measured with two variables. The first is the framework and guidelines that city council sets. This is an indicator of accountability by tight control. The second is the way city council is informed by the URC. This is an indicator of a more loosely coupled form of accountability (informing the city council). Table 3 sets out these two variables of ac-

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countability. The items could be answered in a scale from 1 (completely disagree) till 5 (completely agree) Table 3: Two variables of accountability 1. Framework that is set A clear framework was set up by the city council that determined the range of freedom for the URC

2. Information The city council has been informed adequately about the progress of the project

Voice was measured with one variable. This variable was constructed from the answers of respondents on the following question: "which of the actors you interact with are in your opinion the most important actors in managing and directing the project". It was possible for respondents to rank a maximum of five actors only, where rank 1 was the most important and 5 the less important. Voice was constructed in the following way. If citizens and or entrepreneurs were mentioned as top 3 actors the score on Voice was 3, if these actors were mentioned as the 4th or 5th important actor the score was 2 and if these actors were not mentioned at all the score was 1. Due deliberation was measured using the following statement scored by respondents of a five-point scale of 1 (completely disagree) to 5 (completely agree): "the relation between city council, city directorate and the actors in the URC was clear. In this way due deliberation measures whether the procedures are clear. The survey data unfortunately did not allow us to measure he quality of argumentation as well. In the following table the average and standard deviation scores for each variable are summarized. Table 4: Variables summarized Variable Outcomes (content/process) Trust between the partners in the URC Trust between URC and city council Accountability (framework) Accountability (information) Voice Due deliberation

Average 3,87 7,02 3,24 3,50 3,63 2,38 3,52

Standard Deviation ,42 1,28 ,70 1,01 ,62 ,84 ,83

4. The impact of democratic accountability on outcomes and trust in partnerships According to our hypotheses accountability, voice and due deliberation should be related to the different forms of trust and outcomes. The hypotheses are summarized in the box below.

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Hypothesis 1: Accountability achieved by stronger forms of control of representative bodies leads to more trust of these representative bodies only. This form of accountability has no influence on the outcomes Hypothesis 2: Accountability achieved by weaker forms of control (e.g. exchange of information) leads to more trust between all actors involved in the PPP and also leads to better outcomes (because of more trust). Hypothesis 3: When the involvement of stakeholders in the policymaking process is larger this will result in more trust between the partners and better outcomes. Hypothesis 4: a higher level of democratic legitimacy on the dimension of due deliberation leads to more trust between partners and better outcomes.

To test our hypotheses we first performed a correlation analysis between all the variables included in the analysis. The results are displayed in table 4. Table 5: correlations between the variables included in the analysis Perceived

Trust partners

outcomes Perceived

Trust

City

Council -Urc

Accountabil-

Accountabil-

ity (frame)

ity (info)

Voice

Due deliberation

1,00

outcomes Trust partners

,464**

1,00

Trust

,341*

,396**

1,00

,264

,173

,432**

1,00

,175

,453**

,001

-,044

1,00

Voice

,125

,046

,119

-,071

-,029

1,00

Due delibera-

,523**

,497**

,222

,289*

,440**

-,131

City

Council -Urc Accountability (frame) Accountability (info) 1,00

tion

**: Correlation is significant at the 0.01 level (2-tailed) *: Correlation is significant at the 0.05 level (2-tailed)

From this analysis we learn that the three independent variables are correlated. Furthermore we learn that there is also significant correlation between dependent variables: due deliberation and accountability. Looking at the correlation between dependent and independent variables we see significant correlation between the variables of accountability and trust:  A clear framework set by city council is correlated significantly with trust between city council and urban regeneration company.  The way city council is informed is correlated significantly to trust between the partners in the regeneration company Furthermore due deliberation is significantly correlated to perceived outcomes and trust between the partners. The variable voice is not correlated to any other variable (dependent or independent) at all. There is a significant correlation between accountability achieved by strong control and more trust between city council and URC and there is also a relation between trust between city council and the URC and outcomes. Thus accountability by strong control has 11

no significant direct relation on outcomes but does has an indirect relation with outcomes trough the improved relationship city council and URC. We thus have to reject hypothesis 1. At the same time there is a significant correlation of accountability by information on trust between the partners and trust between the partners and perceived outcomes. This means that hypotheses 2 is confirmed by the correlation data. Regarding the third hypothesis voice has no significant correlation to the independent variables. Due deliberation on the contrary is significantly correlated to both outcomes and level of trust between the partners (hypotheses 4 is confirmed). To deepen our analysis we performed regression analysis with perceived outcomes and the two variables of trust as dependent variable and the variables of democratic legitimacy as independent variables. Besides these variables we used three control variables in the regression analysis. The background of the respondent, the size of the project (measured by the total investment in money) and the phase of the project (vision development, plan development, realization and finished/supervision). We look at variables with a significance level of 0,1 or lower. We first look at the regression analysis with perceived outcomes as dependent variable (Table 5). We can see that there actually is only one variable that really has a significant impact and that is due deliberation. None of the two forms of accountability to city councils have an impact on the outcomes and we can also not find a significant correlation between voice and outcomes. Table 6: Model summary of regression analysis (perceived outcomes as dependent var) Model

R

R Square

1

,684a

,468

Adjusted Square ,331

R Std. Error of the Estimate ,37246

a. Predictors: (Constant), accountability (information and framework), voice, due deliberation Unstandardized coeffi- Standardized coefficients cients B Std. Error Beta t 2,495 ,458 5,448 ,323 ,086 ,652 3,767 ,038 ,082 ,070 ,464 (frame,032 ,066 ,078 ,486

Model 1 (Constant) Due deliberation Voice Accountability work) Accountability (infor-,135 ,117 mation) Background of the re,005 ,032 spondent Phase of the project ,142 ,086 Size of the project ,032 ,057 a. Dependent variable: perceived outcomes

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Sig ,000 ,001 ,647 ,631

-,206

-1,148

,261

,024

,155

,878

,266 ,083

1,660 ,562

,109 ,579

If we take trust in partners as dependent variable (table 7) we see that contrary to our expectations after analysing table 4 only size of the project is significantly related to trust between partners (larger projects show less trust) and soft form of accountability almost is significant. But hypotheses 4 in which relation is assumed between due deliberation and trust between partners is not confirmed. Hypotheses 1 no relation between tight forms of accountability and trust between partners is confirmed.

Table 7 Model summary of regression analysis (trust partners as dependent var) Model

R

R Square

1

,655a

,429

Adjusted Square ,262

R Std. Error of the Estimate 1,214

a. Predictors: (Constant), accountability (information and framework), voice, due deliberation Unstandardized coeffi- Standardized coefficients cients B Std. Error Beta T 3,808 1,552 2,453 ,296 ,294 ,199 1,005 -,236 ,291 -,140 -,813 (frame,328 ,229 ,263 1,433

Model 1 (Constant) Due deliberation Voice Accountability work) Accountability (infor,666 mation) Background of the re,006 spondent Phase of the project ,097 Size of the project -,429 a. Dependent variable: trust partners

Sig ,022 ,325 ,424 ,165

,401

,337

1,662

,110

,108

,010

,057

,955

,284 ,198

,059 -,354

,343 -2,170

,735 ,040

If we look at trust of the city councils as perceived by the respondents (table 8), this correlates especially with accountability as setting a framework by the council. This is not very unexpected since setting frame work is a very hard form of accountability to the city council which involves a stronger control by the city council of the partnership. It is likely that respondents perceive more trust from the city council if they can direct the URC more strongly. We also see a significant correlation between background of respondents and trust of the city council

Table 8: Model summary of regression analysis (trust city council and URC as dependent variable) Model

R

R Square

1

,616a

,379

Adjusted Square ,218

R Std. Error of the Estimate ,612

a. Predictors: (Constant), accountability (information and framework), voice, due deliberation

Model 1

Unstandardized coeffi- Standardized coefficients cients B Std. Error Beta t 13

Sig

(Constant) 2,016 ,752 Due deliberation ,040 ,141 Voice ,030 ,135 Accountability (frame,215 ,108 work) Accountability (infor,0,48 ,193 mation) Background of the re-,112 ,053 spondent Phase of the project ,178 ,140 Size of the project -,103 ,093 a. Dependent variable: trust city council and URC

,054 ,037 ,346

2,681 ,287 ,224 1,999

,012 ,776 ,825 ,056

,048

,247

,807

-,360

-2,104

,045

,220 -,178

1,268 -1,107

,216 ,278

5. Conclusions: the stick or using multiple forms of accountability? In this paper we looked at the empirical influence of various forms of democratic accountability on the outcomes and level of trust in Urban regeneration Companies. This is an interesting because several authors question the attention to democratic legitimacy in the PPP discussion. But it is also very interesting to know, apart from the normative question whether democratic legitimacy is present, if democratic legitimacy has any empirical impact on the outcomes of the project and on the level of trust both with all the partners and with the city council. Our findings show that trust in partners has a fairly strong effect on outcomes, which resembles earlier research on trust and outcomes (see Klijn et all, 2010), while trust of the city council has also a positive effect on outcomes but less strong that trust between the partners. But we do not see much influence of the forms of democratic legitimacy on trust between the partners. There is however a significant relation between strong forms of accountability where city councils impose strong conditions on URC's and the level of trust between the URC and the city council. Thus there is more trust when city councils has a more tight control the URC. This is not unreasonable but a bit at odds with the literature on arms length which tells us that we need bodies at some distance of the political institutions because they are more effective. Direct influence of democratic legitimacy forms on outcomes can only be found from due deliberation. In this research we only had limited opportunity to look at due deliberation because we did not have material on the quality of argumentation and only had one indicator of due deliberation (the procedures are clear). The positive effects of this indicator begs for more research to this dimension of democratic legitimacy. Of course it is surprising that voice has no significant impact because in earlier research (Edelenbos et all, 2010) we found a positive impact of stakeholder involvement on outcomes. The reason may be that we are dealing with slightly different projects where the implementation is more dominant but also that we used a slightly different indicator. There is space for improvement here and to come up with better measurements of voice. As last reflection one might conclude that soft forms of democratic legitimacy seems to be slightly more effective to achieve outcomes than hard accountability instruments. Infor14

mation as instrument generates more trust among partners and due deliberation also a weak form of legitimacy has the most impact on outcomes. Strong oversight of the city council with conditions and setting frameworks does create trust with the city council but not with the other partners in the URC. From an effectiveness point of view soft forms of democratic legitimacies seems to be better than hard form in these projects.

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i

Housing associations were established to rebuild and maintain the large amount of new houses after the second world war. These organizations started as semi-public organizations; nowadays they are privatized, but their responsibility for social housing remains. ii

Held tells that his models are inspired by the work of MacPhersen and he also uses the words protective and developmental democracy although he uses the ideas in a different way (see Held, 2006: 6)

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