Strategies for Public Management Reform: Volume 13

So much has been written about public management and administrative reform in the past decade that in developing the approach for this book we wondered whether there was anything new to say. As is the case for most professionals working in our field, we recognize that the topic of New Public Management has been worked over very thoroughly. New public management is no longer “new” and, therefore, we believe in the future it is better to use the words public management change or innovation when speaking and writing about emerging initiatives in the public sector. And, as most in our field also understand, the topics receiving significant attention at present are networking and a set of issues related to what is termed “governance.” Research on networking has been on-going since at least the 1970s. Many issues related to networks and networking remain unresolved so that continued dialogue in this area is constructive. Renewed attention to governance (versus government) appears to have emerged in the public management dialogue and literature in the past five years or so.

This book is organized into five sections. The first four sections are devoted to investigation of the seven different strategies to achieve public management reform delineated in this book. The seven strategies are: (1) increased accountability; (2) decentralization and delegation of authority and responsibility for decision making and management; (3) application of information technology to improve management and responsiveness of governments to citizens; (4) developing and improving management control systems in the public sector; (5) measures to reduce corruption in government, business and society; (6) development and use of performance indicators in public organizations; and (7) integration of performance measurement and management in public organizations. The chapters in each of the five sections address the need for and application of strategy, impediments to implementation, and use cases to support their analysis and conclusions.

Everyone wants accountability in education. President Bill Clinton wanted accountability in education. In his 1999 State of the Union address, the President announced “…a plan that for the first time holds states and school districts accountable for progress and rewards them for results.” Through his proposed Education Accountability Act, President Clinton sought to insist, “…all states and school districts must turn around their worst-performing schools, or shut them down” (1999, pp. 202–203).

On-going change in relation to the management of public services has led to the development of many initiatives in the control of day-to-day resources as the New Public Management¹ (Hood, 1991, 1995) continues its reforms. In this context debates about control of capital expenditure have taken a less visible role despite some earlier and influential comment on the area (Perrin, 1978 for example). Perhaps as the flow of ideas for reform in the management of day-to-day activity have waned, recent attention has turned more systematically to the efficient use of capital resources or infrastructure. This has been accompanied by recognition of the poor state of some of the public sector infrastructure. This chapter is concerned with the implications of the changing approaches to the provision of infrastructure is the U.K. National Health Service (NHS). Its particular focus in the Private Finance Initiative (PFI) and the contractual implications this brings into infrastructure development.

This chapter explores the potential for the application of stakeholder theory to resolve some paradoxes and dilemmas of NPM where partnership and alliances are concerned. It is argued that stakeholder theory should be further developed and adapted to meet the needs of public sector managers seeking for a “rosetta stone” to negotiate the increasingly complex world which they inhabit. The work will endeavor to bring a practical as well as a theoretical perspective as it draws upon a recent project examining a three way partnership between a third sector organization, local government and the National Health Service in Scotland. The research project utilized both in depth interviews and focus groups with service users and staff. The concept of “public sector bargains” Hood (2000) has some relevance and application to such partnership activity.

This study focuses on a particular type of public organization characterized by weak boundaries and strong informal relationships, elements that have assisted in driving the reform of an entire national public management system. The case is the Public Healthcare System of the Southern Italy in the period beginning in the early 1990s through the beginning of the new millennium, with particular emphasis on the Sicilian region, selected since it represents an extreme case of informal networks that affect organizational boundaries and governance functions.

The emergence of electronic government is reaching considerable proportions in the developed world. It would appear that this new reform is consigning everything that went before it to the wastepaper basket of oblivion. This, however, primarily applies to the intensity of the discussions of and the publications about the issue. The concrete results of virtually all empirical studies available on the net show that practical development lags distinctly behind the possibilities of e-government that are being discussed and proclaimed. Kinder (2002) surveys “tele-democracy” (the term he uses for e-government, K. S.) in 31 European cities covering 14 states and shows that progressive city administrations in Europe are early adopters of tele-democracy with a diffusion rate of 72%. He admits, however, that the selection of the cities that were examined displays a considerable bias: it was conducted on the basis of assumed best practice. Moon (2002) looked into the rhetoric and reality of e-government at the municipal level in the United States and concludes that e-government has been adopted by many municipal governments, but remains at an early stage and has not yielded many of the expected outcomes that the rhetoric of e-government has promised.

Why reform government? The answer to this question varies relative to context and timing. Sometimes reform is stimulated by a shortage of financial resources. Sometimes it is brought on by a change in political power. At other times it may be forced by citizen demand. And, at times it results as a response to corruption and scandal. Moreover, in many cases, more than one of these aspects work together to push forward government reform. This is also why reformers adopt various strategies ranging from institutional reorganization, rationalization of administrative procedures, introduction of new managerial techniques, and more recently, implementation of e-government.

One of the most familiar nostrums of the public management reform literature is that public managers must be risk takers (e.g. Gore, 1993). As is so often the case with prescriptions for public management reform, there is much more advice about risk-taking, its merits and demerits, than there is research on its the incidence, causes and effects of public management risk-taking. Only a handful of studies have actually provided systematic evidence about public agencies’ risk-taking (e.g. Bellante & Link, 1981; Berman & West, 1998; Bozeman & Kingsley, 1998) and some of these studies point to the complexities of conceptualizing and measuring public management risk.

This chapter is intended to address efforts to improve management control systems and processes, including budgeting, accounting and reporting, within the context of a responsibility framework in government. The theory of management control is explored and then management control reform in the U.S. federal government is assessed in terms of progress towards meeting the objectives of the theoretical model. Then, the U.S. experience is compared with the efforts to reform management control in Italian local governments.

The presence of political corruption possibly predates the historical record. For years, it was viewed as an artifact of political development, a common malignancy that nations would naturally reject as a function of their respective national maturations; this was one of the underlying theses of the American progressive movement. However, this cleansing has been neither as straightforward nor as natural as its proponents would argue. An anti-corruption coalition established in the 1990 under the umbrella of Transparency International (TI) has brought a new light on the world of political corruption. TI annually publishes a Corruption Perception Index that in 2001 ranked over 90 nations in terms of their perceived political corruptions. Peter Eigen, the TI Chairman, observed that “There is no end in sight to the misuse of power by those in public office – and corruption levels are perceived to be as high as ever in both the developed and developing nations” (Transparency International Press Release, 2001).¹

Corruption is a phenomenon that is ubiquitous, but the extent and the form differ across countries. According to Transparency International, the Corruption Perception Index (CPI) in year 2001 varied from 0.4 to 9.9 (10 is completely corruption free). The average score for the 91 countries surveyed was 4.76 (with a standard deviation of 2.39). Why is there so much cross-country difference? Why are some countries virtually corruption free, but are others fraught with corruption?

The primary aim of this chapter is to offer an overview of corruption and state capture in Albanian public administration and to describe the solutions adopted to fight corruption by the government since 1998. Conflict of interest is a new aspect of concern in the policy agendas. OECD countries have recently adopted some guidelines for managing the phenomenon, which will be then transferred to eastern European countries. Given this novelty, this chapter does not deal directly with conflict of interest situations. Corruption is rarely treated as a management problem, in part because for obvious reasons as data are scarce and also because the literature is thin and tentative, with few theoretical frameworks. Also rare is analysis of how corruption has been or might be reduced. The state of research on corruption is such that there is little inductive theory or statistical evidence about the kinds of policies that work under particular conditions.

International experience in combating corruption allows to relatively easily identify its causes and single out the societies with high levels of corruption in their bureaucracies and private sectors. It is much more difficult to prescribe effective remedies and even more problematic to get new approaches applied in an appropriate and sustained fashion. This is particularly true with respect to the post-communist countries that embarked on the road of transition to a new economic and political reality over a decade ago. Making significant advances along this road has turned out to be much more difficult than expected at the beginning and has revealed risks and obstacles not anticipated. The article explores to what extent the task of containing corruption was on the agenda of public management reforms in these countries, the impact of these reforms on the level of corruption, if any, and seeks to identify more effective approaches for combating corruption in transitional states.

This chapter presents a conceptual framework and methodological guide for researching the process of public management policy change in the Latin America region. It provides an explicit the methodological approach for case study research on this topic. The focus on the Latin America region is due to the sponsorship of the Inter-American Development Bank, which desired an explicit methodological guide for conducting research on public sector management reform. While the chapter is specifically geared to this purpose, it also exhibits a distinctive general approach to a large class of case study research designs. This class includes instrumental case study research about processes, incorporating variants that are rich in narrative, explicit in their explanatory framework, and comparative (Barzelay, 2002).

Performance measurement is a technique that has evolved in the European area only in recent times. Demands made on available information have changed primarily in line with the efforts to instill more management into the public sector (Buschor & Schedler, 1994). Whereas traditional administration has focused primarily on the financing of tasks, the question of efficient and effective performance has assumed more importance today. Performance measurement systems are a response to new requirements of decision making bodies.

The purpose of this chapter is to provide an overview of the empirical results of NPM evaluations in Switzerland. A number of evaluation studies are available to perform this task. Second, we compare the results of NPM reforms in Switzerland with those from abroad. For the purposes of the comparison we use the Pollitt and Bouckaert (2000) overview of the results of NPM projects in ten countries. We devote the third part of the chapter to methodological considerations for evaluation of public management reform.

Many Australasian-Anglo-American jurisdictions including Queensland, other Australian states, the Australian Commonwealth, central government in Britain, the U.S., Canada and New Zealand (Department of Finance and Administration, 2000; NZ Treasury/State Services Commission, 2002; Queensland Treasury, 1997; Treasury Board of Canada, 2000), are presently debating over “managing for outcomes.” Throughout this chapter, the acronym MFO is used to stand for this whole movement even though it implies greater coherence than exists. There is a definite movement in this direction in Australasian public services with the emergence of widespread rethinking about its purposes and characteristics. It is driven in some jurisdictions by ministers wanting to know about actual policy outcomes and less about the shiny-chrome management systems behind them and, in other jurisdictions, by senior managers in central agencies and some line agencies who are rediscovering the real purposes constituting public management. There is also some back-pedaling in relation to some aspects of the economic reform agenda that was applied too hard during the late 1980s and 1990s in this part of the world. There are also some that claim that MFO is a logical extension of the first stage of reform undertaken during the 1980s and 1990s – one in which outputs rather than outcomes was the primary focus.

This concluding chapter attempts to capture and extend the lessons rendered in the previous chapters in this book. In overview we may observe that over the past three decades, criticisms about government performance have surfaced across the world from all points of the political spectrum. Critics have alleged that governments are inefficient, ineffective, too large, too costly, overly bureaucratic, overburdened by unnecessary rules, unresponsive to public wants and needs, secretive, undemocratic, invasive into the private rights of citizens, self-serving, and failing in the provision of either the quantity or quality of services deserved by the taxpaying public (see, for example, Barzelay & Armajani, 1992; Jones & Thompson, 1999; Osborne & Gaebler, 1993). Fiscal stress has also plagued many governments and has increased the cry for less costly or less expansive government, for greater efficiency, and for increased responsiveness. High profile members of the business community, financial institutions, the media, management consultants, academic scholars and the general public all have pressured politicians and public managers to reform. So, too have many supranational organizations, including OECD, the World Bank, the European Commission. Accompanying the demand and many of the recommendations for change has been support for the application of market-based logic and private sector management methods to government (see, for example, Harr & Godfrey, 1991; Jones & Thompson, 1999; Milgrom & Roberts, 1992; Moe, 1984; Olson et al., 1998). Application of market-driven solutions and business techniques to the public sector has undoubtedly been encouraged by the growing ranks of public sector managers and analysts educated in business schools and public management programs (Pusey, 1991).