Two Different Approaches to Government Organizations and Reforms

1
Two Different Approaches to Government
Organizations and Reforms

• Managerial approach focusing on efficiency,
  effectiveness and economy
• Political approach focusing on responsiveness,
  accountability and participation of the public

2
Managerial Approach to Public Organization

• Is there a best way to organize government
  functions?
• By purpose (function), process, clientele or
  material, or place
• inherent conflict between these four principles
• Bureaucracy as the most efficient form of
  organization, and criticism of the bureaucratic
  model

3
Reforms of the bureaucratic model

• Reorganization and rationalization of government
  structures and processes
• decentralization and toward greater flexibility
  in such areas as hiring, rewards and financial
  control
• an emphasis on output rather than process
  control, and on developing more measurable
  targets
• reengineering - an overhaul of the entire
  organizational structure and processes

4
More Radical Departure of the Bureaucratic Model

• Not techniques, but institutional changes
• Break-up of monolithic units and organize public
  services around more manageable products,
  services and customers
• separating core functions from executive
  functions, and creating semi-autonomous agencies
• privatization and creating competition among
  public agencies

5
The Political Approach to Government Organizations

• Normative arguments for a fragmented structure
  the executive branch structure should reflect the
  values, conflicts, and competing forces to be
  found in a pluralistic society. The ideal of a
  neatly symmetrical, frictionless organizational
  structure is a dangerous illusion.
• organizational reality politics is necessarily
  an element in designing government structure

6
Explaining Public Sector Reforms

• Managerial explanation whose interests are best
  served by the reforms?
• Public choice explanation where does the impetus
  come from?
• Heroism changes in the political arena
• the interests of the bureaucrats and reforms

7
Existing Public Choice Theories of Bureaucracy

• The pluralist model (Anthony Downs)
• The New Right Model (William Niskennen)

8
The Pluralist Model

• Motivational Diversity
• The motivations of bureaucrats
• self-interest motives power, money, prestige,
  convenience, and security
• Broader motivations personal loyalty, mission
  commitment, and desires to serve the public
• Types of officials
• climbers and conservers (purely self-interested
  officials)
• zealots, advocates, and statesmen (mixed motive
  officials)

9
Important Observation and Arguments

• Law of Hierarchy coordination of large-scale
  activities without markets requires a
  hierarchical authority structure
• biased behavior
• information distortion
• selective implementation
• selective compliance
• Imperfect control no one can fully control the
  behavior of a large organization

10
Important Observation and Arguments

• Law of diminishing control the larger an
  organization becomes the weaker is the control
  over its action by those at the top
• law of counter-control the greater the effort
  made by a top-level official to control the
  behavior of subordinate officials, the greater
  the effort made by these subordinates to evade or
  counteract such control
• Law of decreasing coordination the larger an
  organization becomes, the poorer is the
  coordination among its actions
• dilemma need for hierarchical control and almost
  impossibility of effective and efficient
  hierarchical control

11
The Pluralist Model and Public Sector Reform

• Suggesting the almost unsurmountable problems
  facing government bureaucracy and the needs to
  stay away as much as possible from this type of
  organization
• need for reforms, but not why the reforms are
  possible or the specific direction of the reforms

12
The New Right Model

• A narrow and simplified conception of what
  bureaucrats want
• Bureaucratic motivations budget maximization and
  bureaucrats as budget maximizers
• Bureaus and Sponsors
• Advantages enjoyed by bureaucrats
• informational power and agenda power
• Budget-max. and oversupply of agency outputs

13
The New Right Model and Public Sector Reforms

• Explaining why and the budgets have been inflated
  and the bureaucracy has grown, but not why and
  how the bureaucracy has shrunk
• why have public sector reforms been possible even
  if some of these reforms appear to work against
  the interests of the bureaucrats?
• An example privatization if the budget-max.
  account of bureaucracies is correct, government
  officials should oppose privatization. Then , how
  is it possible?

14
In Search for a New Model

• Budget-Maximization and changes in public
  organizations in recent years
• rationalization, improvement and strengthening of
  control, and the implementation of the Next Steps
  and similar measures, and privatization in
  Western countries

15
The Next Steps in Britain and Privatization (I)

• Next Steps a development described as the most
  far-reaching since the Northecote-Trevelyan
  reforms in the 19th century
• seeking to eventually transfer most of the
  executive functions of government departments
  that involve in delivering services to the public
  to semi-autonomous agencies. The executive
  functions are viewed as distinct from the
  traditional higher civil service functions of
  policy making and ministerial advice

16
The Next Steps in Britain and Privatization (II)

• The agencies are headed by chief executives,
  often appointed by open competition, on
  fixed-term contract - many of them recruited from
  outside the civil service.
• These agencies are promised day to day freedom
  from ministerial and departmental supervision and
  interference, but they operate within the policy
  and resource frameworks set by departments

17
The Next Steps in Britain and Privatization (III)

• By mid-1994 - 6 years after the launching of the
  program - over 60 of all civil servants were
  working in Next Steps agencies and a further 17
  were in definite or likely candidates for further
  agency status

18
An Example of Next Steps Reform

• Department of Social Security in Britain
• Splitting the DSS into a Headquarters and a group
  of agencies such as Benefit Agency, Child Support
  Agency, War Pensions Agency, Contribution Agency,
  Information Technology Services Agency and
  Resettlement Agency

19
Bureau-Shaping Model of Bureaucracy

• Individual actors pursue their self-interest in
  an institutional environment which determines the
  incentives and constraints which they face.
• Institutional rational choice approach an
  emphasis on institutional environment, which
  determines the incentives and constraints of
  bureaucrats
• Reorganizations are viewed as strategies pursued
  by rational bureaucrats to bring their bureau
  into a form in line with their interests and
  preferences

20
Main Premises of The Bureau-Shaping Model

• main direction of reforms is set by politicians
  but is also influenced by senior bureaucrats an
  exclusive focus on change of political leadership
  is not adequate because it could not explain the
  lack of resistance among the senior bureaucrats
  and could not explain the speed with which reform
  has been implemented
• the preferences of senior bureaucrats,
  institutional environment and political
  constraints

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Key Elements

• Central departments and semi-autonomous agencies
• executive activity implementation of public
  policy and delivering of public services
• policy work setting the aims of executive
  activity, evaluating implementation structure and
  results
• types of budgets and bureaus

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Types of Budgets

• Core element Expenditures spent on the operation
  of the bureaus
• Bureau element money paid out to the private
  sector in the form of grants, contracts with
  private firms and transfer payments
• Program and portfolio elements money supervised
  by the bureau but passed on to other governmental
  bodies for use in implementation

23
Types of Bureaus

• Determined by the relative importance of
  different components of budget
• Regulatory, delivery and servicing bureaus core
  element as the dominant part of budgets
• Transfer and contract bureaus bureau element as
  the dominant part of budgets
• Control bureaus program and portfolio elements
  as the dominant part of budgets

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Preferences Relevant to the Form of Bureaus

• Level of core budgets which is positively related
  to the level of executive activity
• Level of policy work which, by implication, is
  negatively related to the level of executive
  activity
• Both are sought after by bureaucrats but gain in
  one necessarily means loss in the other
• Indifference curve figure

25
Constraints Set by Politicians

• Proportion of executive activity is positively
  related to the size of core budget
• changes of political constraints
• optimum points

26
Bureau-shaping Strategies

• Adding or passing on executive activity (to alter
  core budget) and policy work (to alter the
  proportion of policy work time) to maximize
  utility under constraints set by politicians
• collective action problem
• DSS of Britain as an example