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

21. 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

22. 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

24. 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