Lane J. 

The public sector

6

THE LOGIC OF PUBLIC SECTOR REFORM

Public sector reforms have been conducted since the mid-1960s, as the mature welfare states have embarked on one set of reform strategies or another. There is now enough experience of public sector reforms to allow for an assessment of what can be accomplished and how. What are the ends and means of public sector reform?

The making and implementation of public sector reforms may target either public resource allocation or public, sector resource redistri­bution. Besides reforming the supply of goods and services, on the one hand, or the transfer programmes of income redistribution, on the other, there is in addition public regulation, which may be the target for reform by means of various deregulatory schemes.

The three main objectives in public sector reform include: (a) efficiency; (b) equality; and (c) savings. Whereas efficiency tends to be the chief goal when reforming the allocative and regulatory branches of government, equality is the goal when changing the redistributive role of government. However, due to the strong intermingling of efficiency and justice considerations in the construction of public programmes, both objectives usually occur to some degree at the same time.

DEMAND FOR AND SUPPLY OF REFORM POLICIES

Public sector reform raises a number of critical questions about the making and implementation of public policy. What are the goals involved? Can the management of reform policies be successful? Do specific strategies result in determinate outcomes? The rationality of public sector reforms is a relevant aspect, because such policies tend to be driven by blue-prints that change from one time to another.

Public sector reform is a political activity. It is in no way different from other kinds of political activity. The battle over the public sector, its reform and future shape, is a fundamentally contested game, in which there is ample scope for the interplay of tactical behaviour and the self-interests of the various actors. Public sector reform has become an issue that is more or less permanently on the agenda. It is demanded that each government examines its own domains, conducting what is sometimes called 'administrative' or 'institutional' policy-making. But can governments deliver new institutions or improved outcomes?

In a society with a huge public sector the demand for and supply of public sector reforms may interact to create a policy sector in itself. The demand for public sector reform could stem from a variety of considerations about the public interest, and the supply of public sector reforms could result from a search for more efficiency in public resource allocation or more justice in income redistribution. Equally, various groups may demand or supply public sector reforms for the sake of their own interests. One may expect opportunistic behaviour in the politics of public sector reform.

The fate of any public policy, including public sector reform policies, depends on its technology and the circumstances under which it is introduced. Public sector reform policies may be highly advanced, but the environment may be such that the impact is nil or even the opposite of that intended. Public sector reform may be orientated towards the solution of specific allocative or redistributive problems or it may take on constitutional questions.

Is public sector reform necessarily tied up with cost reductions? Hardly. Public sector reform could be undertaken for two reasons: either to introduce institutional reform or to implement cut-backs. Cut­back management would, if successful, achieve savings, whereas reforms of the institutions in the various branches of governments are neutral in relation to savings, because they may be undertaken for the purpose of reducing or augmenting the size of public programmes (Table 6.1).

Table 6.1 Ends and means of public sector reform

Public sector reforms have often been focused upon institutional reforms with an intention to increase the resources for various public programmes (type n). As state deficits have soared, the growing fiscal pressure has had the consequence that type in has become much more relevant, with regard both to allocative and redistributive objectives.

Of the twin ultimate objectives of the public sector (Musgrave, 1959) - efficiency in resource allocation and justice in income distribution -the former has been much more visible than the latter as the major rationale of public sector reforms. Yet, one must ask whether many of the public sector reforms really involved a clear conception of efficiency and its requirements.

Although the entitlement programmes tended to expand auto­matically, there exist limits to the ambitions to enhance equality. At the same time, savings in the redistributive state involve tremendous amounts of money, but the impact upon the citizens is tangible. Even when the today's huge transfer programmes are reformed, the changes proposed are often motivated by a concern with the incentive inefficiencies that these programmes may cause. Yet, the policy relevance of savings is of growing significance today.

Two conspicuous types of public sector reforms in welfare states have been decentralization and privatization. The first has introduced changes in the political institutions in the public sector while the second has brought changes in the economic institutions. Both focus on the public sector proper,

Yet, public sector reforms may also be orientated towards the private sector, for instance changing the public regulatory schemes governing various markets. Deregulation has been considered as a vital reform strategy in many market economies with an extensive public sector. In a sense deregulation implies a shrinking public sector, but the chief aim is to enhance competition in the economy. The strategies of decentralization, privatization and deregulation may result in either public sector expansion or public sector retrenchment. Theoretically speaking, we have three instruments and two outcomes (Table 6.2).

Table 6.2 Strategies and outcomes

Type n involves the transfer of tasks from central government to regional and local governments with the intended or unintended outcome of expanding public services. Type IV is a special case when governments transform public enterprises into joint-stock companies where they fully own the equity. It was not until the economic difficulties of the welfare state became apparent that type in became relevant, hiving off central government functions to the private sector proper. Large-scale deregulation reforms were initiated during the 1980s and, surprisingly, the outcomes could involve increased costs (type TV), as was the case in the deregulation of the financial markets in a few countries where, because the state was the lender of last resort, the taxpayer had to cover bank losses due to an unsuccessful deregulation of the financial sector.

Public sector reform may be micro- or macro-orientated. The macro-focus is based upon considerations about the overall size of the public sector, whereas the micro-perspective is concerned with the workings of single programmes. Macro-strategies for public sector reform tend to be political in nature, whereas micro-strategies are derived from tech­nical or administrative deliberations. However, the variation in reform policies cannot be reduced to the simple distinction between a leftist and rightist ideology.

Public sector reform is orientated towards two goals which need not coincide: improved outcomes and cost savings. If the emphasis is upon the former, then the introduction of new programmes, technologies and institutions may be appropriate. However, if the latter is the objective, then simply cut-backs would be the proper tool. Institutional reform is neutral in relation to an increase or a decrease in the public sector.

POLITICAL OR ECONOMIC REFORMS?

Public sector reforms tend to be based on a decentralization approach. Efficiency in public resource allocation is to be enhanced by increasing the functions, powers and resources of governments at lower tiers. It was believed that public programmes would operate more effectively and in a more flexible manner if they were handled by state agencies at the regional or local level - deconcentration - or preferably by the local government system - decentralization.

The basic model that the political reform strategies were aimed at was the highly centralized welfare state run by means of the employment of strong planning systems. The expansion of the public sector underlined uniformity and standardization aiming at equality in public consumption and income distribution.

In several welfare states the decentralization strategy replaced planning with evaluation, line-item budgets with performance budgets, control with management by objectives, detailed rule systems with framework legislation, supervision with discretion. In some the decen­tralization strategy was also attended by a dramatic increase in the local government sector. At the same time the overall public expansion continued at a rapid rate. Whereas national government concentrated upon the large transfer programmes, local governments became responsible for a large number of allocative tasks.

In the mid-1980s it was realized that a political strategy for achieving public sector reform might not be enough. The revelation of how things stood came in the form of productivity data from both the national government and the local government sectors. Efficiency in public resource allocation has two sides, inner efficiency and outer efficiency (Chapter 11). Whereas inner efficiency or productivity can be clearly defined, outer efficiency or effectiveness is a troublesome conception. Not until public sector productivity was measured in the 1970s and 1980s was there a realization of the efficiency difficulties in the public sector.

The productivity problem appeared to be as profound at the national government level as in local government, hi some huge local govern­ment sectors the productivity development may be negative just as is the case with the functions for which national government is respon­sible, such as police and justice. Thus, moving resources downwards in the state does not necessarily improve efficiency. Bringing to light occurrence of Baumol's disease (that public sector growth just reflects a negative productivity trend) or of extensive garbage can processes, these productivity scores aroused intensive debate.

It seemed difficult to avoid the conclusion that budget allocation in a market economy could run into profound efficiency problems. The comparison between budget allocation and market allocation is often to the disadvantage of the former (see the overview of the evidence in Mueller, 1989: Chapter 14).

The revelation of productivity difficulties has encouraged a search for other public sector reforms, namely privatization. Although the conduct of evaluation studies was institutionalized in the budgetary processes at all levels of government and although the budgetary processes have been reformed in order to make evaluation reports an essential part of the decision-making process, evaluation was not considered enough.

'Privatization' has been a key term in Western Europe when macro-reforms were launched in relation to the public sector in the 1980s. Yet, at the micro-level, privatization may mean a variety of things. Several scholars have called attention to the fact that very different reforms are lumped together under this label. The welfare states' versions of privatization comprise a heterogeneous set of strategies (Vickers and Wright, 1988).

Privatization may cover: the sell-off of public ownership to private hands; the transfer of public property from one form into another, such as the creation of a joint-stock company owned by the state or local government; the long-term lease of public infrastructure to private enterprises, including franchising; the employment of decision-making processes like contracting and bidding; the replacement of authority as coordination mechanism with market mechanisms; and the insertion of market incentives into the reward system for public officials. The importance of self-interests has been acknowledged by the recognition of incentive-compatible motivation schemes. Finally, privatization may mean deregulation, or, more specifically, regulatory reform in the legal frameworks that govern different markets.

Thus, privatization could mean altogether different things from one time to another and from one country to another. Governments of alternative political composition have pursued different privatization strategies. Thus, non-socialist governments have displayed a strong interest in privatization as sell-off or hiving off, whereas social demo­cratic governments tend to look into less far-reaching strategies, for example moving public enterprises towards public joint-stock com­panies or generally towards an acceptance of more market incentives.

Various privatization strategies have been tried all over the public sector. They reflect a wish to balance the heavy public sector bias in the welfare state by the insertion of more market-type decision mech­anisms into the public sector. There has been a search for increased competition in supply and greater choice in demand. However, all these reforms have hardly resulted in a smaller public sector overall.

It cannot be denied that some of the privatization strategies have enhanced productivity and efficiency. The crucial question is whether the resources released by means of efficiency improvements were used to stem public sector growth or were simply moved from one pro­gramme to another. The ambition was often to make programme changes without altering the overall size of the public sector.

Whereas mainly national governments have employed market-type decision mechanisms in a cautious manner in order to raise revenues, some regional or local governments have initiated grand-scale public reforms called the introduction of 'internal markets'. Many govern­ments has changed the methods for calculation of service charges, transformed public enterprises into joint-stock companies and deregu­lated markets, often succeeding in increasing economic efficiency. However, the changes involved in the internal market strategy are far broader than the emphasis upon more bidding, contracting and new calculation methods for economically correct charges (see Chapter 8).

CUT-BACK STRATEGIES

Political and economic strategies have been used in relation to the allocative branch of government in order to promote allocative efficiency. Although cut-back policies may be used in relation to the public provision of goods and services, they seem to be more reliable instruments for achieving considerable reductions in the social security programmes. The objective is then hardly efficiency but simply cost reductions due to state financial difficulties.

Cut-back strategies have been initiated within both central and local governments in the welfare states. Especially when the financial problems began to become overwhelming around 1990, there was more talk about straightforward cut-backs than institutional reforms enhancing efficiency. Whether cut-backs can be made in such a way that the same services are provided or that the quality of the services are not impaired is fundamentally contested. Cut-back management is neutral in relation to efficiency and inefficiency in the public sector.

Cut-back strategies reduce the costs for the public sector. If the overall aim is to bring down the size of government, then cut-backs in the redistributive branch of government can be trusted. It may be argued whether transfer payment cuts amount to public sector reforms. This partly reflects the ambiguity of the term public sector reform. Is each and every change of the public sector a reform? It also expresses the difficulty of identifying a measuring rod in relation to social security systems. If the general objective is social justice, would any cut-back always lead to less sodal justice?

Public sector reforms in the redistributive branch of government may reflect changing images of justice. When state income is plenty, equality of results may be preferred to equality of opportunity. However, in times of financial pressure, the egalitarian ambitions may be less strong. In any case, cut-backs in transfer payments may be motivated simply by a lack of resources. What can a welfare state do when deficit spending and the accumulated state budget soars?

A general argument for cut-backs in the sodal security systems advocates that overall economic output will rise if the transfer payments are made less generous. If the state delivers an almost 100 per cent guarantee to the citizen for various kinds of temporary income shortages, can the economy really operate in a normal fashion? Reductions in the redistributive state have one advantage ahead of cut­backs in public consumption, namely even marginal reductions in the social security benefits result in huge savings. Perhaps all welfare states will have to move towards a general level of 70 per cent coverage in the different income maintenance programmes.

FROM EX ANTE TO EX POST GOVERNANCE

Almost all West European countries engage today in public sector reform. Each and every government elaborates upon a so-called administrative policy, that is, a policy that will outline how public sector reforms are to be made and implemented. The most discussed public reform policies include two different approaches: (1) external privatization, or the hiving off of public sector activities to the private sector; (2) internal privatization, or the employment of market-type decision mechanisms within the public sector. These two approaches, although very different in terms of strategy and implications, have the same source, namely the critique of what one may call the ex ante governance framework.

It is claimed that management techniques should replace the traditional tools of government, that is, public administration. Actually, the so-called management approach covers various methods that are not necessarily of equal value or practical relevance (Eliassen and Kooiman, 1993). The same observation may be made with regard to the drive for privatization, which also includes many different elements (Wright, 1994). Whereas privatization focuses upon cutting back the size of the state in favour of the private sector, the management approach looks at the reform of the public sector from within, replacing the tools of traditional public administration with public management or market-like decision mechanisms.

Table 6.3 Ex ante and ex post governance

The attraction of the privatization approach and the management perspective derives from the general phenomenon of state failure. The difficulties that extensive public policy-making and policy implementa­tion give rise to have been experienced in several types of states. The most conspicuous problems have been found in the command economies, which after all relied the most upon the state. However, severe problems have also been experienced in the welfare states and in the countries which practise so-called economic statism. The resurgence of market values is apparent in the 1990s in both rich and poor countries, as well as in advanced economic countries that have practised Keynesian macro-economic policy-making.

Internal privatization or the introduction of the management approach for the governance of the public sector stems from several sources such as the abandonment of the Weberian model of public administration and the rejection of the planning model for policy-making as well as the disbelief in top-down implementation. Actually, a number of trends in both administrative theory and in real life imply a rejection of the general model of public sector governance called Aere the ex ante perspective. Instead the variety of public sector reforms implies a very different governance model, to be named the ex post perspective.

Let us try to pin down in a systematic though perhaps somewhat schematic manner the differences between the ex ante model and the ex post model (Table 6.3). For each recommendation in the ex ante model there is a counter-proposal in the ex post perspective. The two models differ entirely in the way that they structure the work of public sector employees, which has profound implications for public sector reform.

THE EX ANTE APPROACH

The ex ante model of governance of the public sector stems from a number of various sources. First, the classical Weberian model of public administration comes readily to mind. Much of the debate within the science of public administration may be looked upon as a critique of the Weberian model, its theoretical underpinnings as well as its practical relevance. The criticism of the Weberian model developed from a statement of minor inaccuracies, so-called dysfunctions, to a total rejection, as with the public choice school.

Secondly, the ex ante model has a strong footing in planning theory. The planning model in its general form comprised very different kinds of planning, from macro-economic planning to detailed programme plan­ning. Attempts were made to formulate a general planning approach that would comprehensively cover national government planning, regional planning, local government planning and sector planning. Just as is true of the Weberian model, the planning model was tried on a major scale in ongoing public sector operations.

Thirdly, the ex ante model figured prominently in the policy approach, at least until the implementation deficit was discovered and formulated from a theoretical point of view. Implicit in much early policy modelling was a control-steering emphasis that relied heavily upon an ex ante perspective on governance in the public sector. The advantages of the ex post perspective derive from both information and motivation circumstances.

1. Information Whereas the ex ante model rests upon formidable knowledge requirements, the ex post model only requires evaluation. The ex ante model is based upon the concept of the plan in the sense of a true projection about how matters identified as cases will be handled by public employees. Thus, the ex ante model needs predictability, anticipation, rules orientation and formalism so that steering becomes possible. However, the ex ante model only needs to monitor the outputs and outcomes of the public sector, allowing for flexibility, adaptation, unconventionality. Whereas the ex ante model thrives on the unexpected, the ex post model handles uncertainty by camping on the seesaws.

2. Motivation The ex ante model makes heavy assumptions about the willingness and eagerness of public employees not only to follow and implement the plan but also to improve upon it. The ex ante model requires either excessive control of public employees in order to make them adhere to the centrally imposed directives and rules, or it has to believe in the orientation towards vocation among employees. The ex ante model simply neglects all the difficult problems that arise in any principal-agent relationship.

The ex post model handles the principal-agent difficulties in the public sector by simply asking questions relating to efficiency. What is crucial is what is actually accomplished, not whether the plan is followed. The motivation of public employees to fulfil the terms of their contracts with the public principal can be no other than self-interests. Hence there is a large amount of willingness in the ex post framework to allow for the full operation of market-type incentives such as individually bargained salaries and profit-sharing schemes.

The pros of the ex post model in terms of the crucial role of information and motivation in the public sector have had the conse­quence that much of the present public sector transformation agenda involves either the blending of the ex ante approach with elements from the ex post framework or the straightforward substitution of the ex post model for the ex ante model. Yet, in the wake of the victory of the management framework over the traditional public administration framework we must ask: what are the cons of the ex post model, if indeed there are any?

It should be pointed out that the two models of governance outlined above must be regarded as ideal-types. What we often find in reality is various attempts at blending the ex ante and the ex post frameworks. Thus, the efficiency notion was underlined in the Weberian model. The concept of effectiveness played a major role in the planning approach and outcomes figured prominently in the policy framework, at least after the discovery of the implementation gap. Similarly, it seems practically impossible to do away with all elements of the ex ante approach when structuring the public sector along the ex post model. Due process remains a vital aspect of the activities of public employees, as rules and legality still prevail in the public sector, although this has reduced somewhat as changes in framework legislation and block grant principles have increased the decision-making discretion of the public employee. Nevertheless, a fully implemented ex post model of governance has actually been attempted, first and foremost in the United Kingdom and in local governments in the Nordic countries (Maidment and Thompson, 1993).

The weaknesses of the ex ante model cannot be doubted. Its behav­iour assumption about motivation among public employees as well as its predictions about rationality in the public sector are unrealistic, if not simply irrelevant or false. The emphasis of the ex post model upon efficiency has a strong appeal today, but is efficiency the main consideration in the public sector?

The concept of the public sector has clear advantages over the concept of the state. When one refers to the public sector, one is mindful of how diverse and complex a phenomenon the public sector is. Whereas the phrase the public sector immediately carries the connotation that a range of phenomena are covered that in no way operate in the same manner, the state concept still suffers from a unidimensional bias. Typically, when one speaks of the public sector, one wishes to make crucial distinctions between central government and regional or local government, the state bureaucracy proper state enterprises, administrators and professional employees, state author­ities and third-sector bodies.

The public sector differs in shape and size from one country to another. Actually, we have a tremendously rich variation from the minimal state in laissez-faire countries to the maximal state in the former command economies. Yet, taking a closer look at the public sector in any country we will discover at least some elements of three types of states, though these may vary tremendously in size and structure: (a) the guardian state, that is, maintaining law and order; (b) the productive state, that is, responsibility for delivering goods such as infrastructure or welfare services, although not necessarily delivering them itself; (c) the redistributive state, that is, handling transfer payments and social security as, for example, some forms of basic poverty relief programme.

The point to be made here is that the management perspective is more limited in its application than recognized in the present drive for public sector reform. The management model is only relevant for the productive state. When we turn to the guardian state the relevance of the ex ante model becomes evident once more.

The public sector involves four fundamental objectives: (a) account­ability; (b) legality; (c) efficiency; (d) equity. The first two goals stem from the guardian state, the efficiency goal derives from the productive state and, finally, the equity goal is at the basis of the redistributive state. These objectives cannot somehow be reduced to a more compact set nor can one avoid the conflicts that arise between them. The key question in public sector reform is to find the set of institutions that enhance these four objectives in the best manner possible.

The ex ante model and the ex post model offer two distinct sets of mechanisms for deriving public sector institutions. The limits of these two model institutions derive from the fact that whereas the ex ante set can only handle accountability and legality, the ex post set can only take care of efficiency. Neither of them offers any guidelines as to the fourth major objective in the public sector, social justice.

The redistributive state has a logic of its own, as it is not orientated towards the maintenance of legitimate authority or the efficient provision of goods and services. It is preoccupied with the channelling of money from one group of citizens to another. This is not technically difficult to accomplish, if there is an advanced economy in place. The problems arise with regard to how much money should be transferred and between which groups. The ex post model cannot solve the present difficulties in the redistributive state, in particular the severe state deficit problems in some welfare states. The redistributive branch of government probably needs to be reformed, as the pay-as-you-go systems have difficulties in containing costs.

TOWARDS THE EX POST APPROACH

If the ex ante model has severe limitations, then perhaps we must conclude that the management model points to the road ahead under the label of 'public management'? What, more precisely, is distinctive about public management?

External and internal privatization derive their rationale in relation to the public sector from the very same source, namely the failure of the planning model, or centralization. The plan as an instrument to direct activities in the public sector has not met with great success. The critique of the planning model already launched in the inter-war years on the basis of theoretical considerations in the Austrian school has been fully validated in various developments, especially since the mid-1970s. Experiences with the planning model are now mostly negative in all its applications: (a) macro-economic planning; (b) policy sector planning; (c) regional planning; (d) local government planning; (e) separate programme planning. The ex ante perspective with its basis in the planning model cannot solve the allocative problems involved in large-scale public provision of divisible goods and services (McKevitt and Lawton, 1994).

The classical Weberian model of public administration also appears to be less relevant to the concerns of the productive state than ever before. Its main orientation is towards institutions that safeguard legality, not efficiency. Thus, we have: (a) strong division of labour; (b) an elaborate hierarchy of command; (c) clear rules of responsibility; (d) explicit rules for neutral and objective conduct.

The Weberian perspective has a bias for administrative law, the relevance of which for the provision of several divisible goods and services is far from obvious. Are proper procedures that important in the provision of a number of public services such as education, health, social care, infrastructure and housing? That the rules of the guardian state and the redistributive state are truly crucial for the conduct of these public sector operations seems straightforward, but objectives and the attainment of goals are at the heart of the productive state.

What would happen if one were to replace planning with spon­taneity and rules with objectives? This is the route towards the ex post model, which may appear in various types, pure or hybrid versions of the dimensions in Table 6.3. The hard-core ex ante governance model combines extensive planning with detailed rules, but in the various administrative policies in some welfare state countries since the 1960s we observe a movement towards more objectives and indicative planning. The PPB-systems in budgeting and the framework regulation format in legislation are examples of such trends.

Much of the reform efforts with regard to the public sector involved, on the one hand, an emphasis on evaluation and, on the other hand, a preference for decentralization. Combining these two trends we arrive at the local government model, which is responsible for much of the productive state and which has been reorganized from governance in terms of planning and detailed rules to governance by means of evaluation and considerable local and regional discretion. Now, the most radical version of an ex post model is the reform movement towards introducing the result unit that relies upon exchange for its external and internal interactions. We find this radical ex post model when far-reaching public sector reforms are contemplated in some welfare states. It would be the final step replacing authority with bidding and contracting.

DECENTRALIZATION AND EVALUATION

The ex ante model has often been adhered to when states initiate the conduct of their activities, that is, when a country attempts to get its state into place at the time of what is referred to as the introduction of modernized leadership. In contrast, the comprehensive reform proposals in the 1990s are made on the basis of the ex post model.

However, the movement away from the ex ante model towards the ex post model has been a slow one. In the 1960s public sector reforms were initiated that had a clear ex post orientation. Under the influence of new ideas from the USA many West European countries introduced new steering techniques that underlined the evaluation of the actual accomplishments such as the PPBS and zero-based budgeting. After that came social impact analysis and MBO. All of these new steering techniques retained a strong dose of the ex ante model, as they were introduced in order to facilitate control on the basis of steering.

In many countries the strongest institutionalist expression of the trend towards the ex post model was the decentralization reforms. During the 1970s and early 1980s many countries embarked upon a restructuring of the state, devolving powers and competencies to the local and regional levels of government. The only exception was the United Kingdom, which moved in the opposite direction. The decentralization drive involved both the unitary state and the federal state, as it was a response to demands for both increased efficiency and legitimacy.

The decentralization reforms changed the tools of government (Hood, 1983), as complicated legislation was rewritten into the frame­work format at the same time as detailed state grants were replaced by block grants. It bolstered government from below, as powers and competencies were devolved to democratically elected regional or local governments. Legitimacy was a major concern. The ex ante model may justify a highly centralized unitary or federal state, thus causing a democracy deficit. However, the full-scale implementation of the ex post model is motivated chiefly by efficiency.

Evaluation came to the fore at the same time as decentralization was put on the agenda. As a matter of fact, evaluation had been badly neglected in the first versions of the ex ante model, particularly in the top-down implementation approach as well as in all kinds of planning frameworks. The detection of the implementation gap stimulated the launching of a whole new approach to policy-making, that is, the bottom-up implementation approach, which had a distinctive decentralist flavour.

Decentralization is at best only a step in public sector reform. The same problems of information and motivation recur once activities have been devolved to lower tiers of government. How to accomplish productivity and effectiveness within regional and local governments? It is no surprise that the full-scale explorations of the ex post model have been made at the lower levels of government. These ex post model attempts involve the use of competition instead of authority as the mechanism for allocating resources.

Whereas the decentralization trend moved authority downwards in the public sector, the new bidding approach involves exchange as the mechanism for interaction. It amounts to an almost total revolution of the public sector, because exchange has always been the typical medium of interaction in the private sector. How appropriate is exchange for the provision of goods and services? Let us first pin down where it might fit in the public sector.

Simply increasing the awareness of the shape of public sector service may enhance efficiency. Yet, the evaluation and decentralization strategies were not considered enough, as national, local and regional governments turned to internal privatization in the early 1990s.

FROM AUTHORITY TO EXCHANGE

The most recent reform drive in the public sector - internal privatiz­ation - is the most radical step away from the traditional way of structuring the public sector. By emphasizing contracting and bidding on a large scale it replaces authority with exchange, hierarchy with reciprocal interaction as well as subordination with exchange between demand and supply. The typical form of internal privatization is the so-called demand-supply model, or the introduction of internal markets, that is, the administrative structure of government and public bureaux is to be transformed into a system of internal markets.

1 Demand side: the representative body is to present its governing committee with a block grant which the politicians are free to employ in order to purchase services on the basis of short-term contracts from whoever provides such services.

2 Supply side: public employees are to be organized into result units which compete for short-term contracts on the basis of bidding with the politicians. There will be no security of employment as the politicians on the demand side may contract with any partner on the supply side.

The typical feature of the bureau - authority of command on the basis of a long-term contract - will be replaced by competitive bidding and contracting on a short-term basis. Evaluation will enter automatically into the bidding process, as each new round of contracting will consider last year's outcomes in relation to what alternative providers promise. One may ask whether such a replacement of public insti­tutions with private ones is politically feasible given the strong position of public trade unions in several West European countries. Figure 6.1 outlines a model of the internal market institutions.

When public sector reforms target efficiency, they may be either demand-side-oriented or supply-side-oriented. In the former case such reforms strengthen the visibility of the individual willingness to pay. In the latter case it increases cost effectiveness. Much of the public sector reforms display a profound supply-side bias. The decentralization strategies transformed the production technologies in the public sector. The privatization strategies work partly in the same way.

Even in the internal market model the public sector reforms have a profound supply bias. If the willingness to pay for individual public sector programmes could be better revealed, then public sector reforms would be more informed. However, demand-side measures are almost non-existent in much of what is now called administrative policy-making. Perhaps the ingenuity in finding several measures that may help reveal the true willingness to pay for public sector services has not matched the refinement in the techniques for measuring efficiency and productivity. Besides relying almost exclusively on various kinds of taxation, only a few instruments have been considered that may be employed for revealing citizen demand for both public resource allocation and transfer payments: charges, vouchers and individual insurance schemes. They have been little trusted in public sector reform, which reflects the peculiar combination of intensive public sector reform activity and a neglect of citizen preferences.

The decentralization reforms reduced administrative workload to the advantage of the basic service production in various policy sectors. Reducing central government control increased flexibility and adap­tation. The privatization reforms may increase competition, but they have certainly removed outdated regulatory schemes. When certain activities are hived off to independent enterprises, then costs tend to be calculated in a more rational manner, although there is a risk of X-inefficiency and Y-inefficiency if market pressures become too weak.

Figure 6.1 Basic structure of internal market model

The outcomes of the deregulation reforms have been mixed. Whereas they failed miserably in the financial sector, there have been spec­tacular price reductions within the communication sector, especially by the airlines. It remains to be seen whether the deregulation of the electricity sector and telecommunications will be equally beneficial for consumers.

CONCLUSION

Public sector reform may be analysed as a step-wise process of moving from the ex ante perspective to the ex post approach. There is no inherent necessity to move the entire distance, as one may take a few steps and then halt. The most recent attempt is to replace authority and long-term contracting with bidding and short-term contracting. The public sector is to be transformed into a set of internal markets, where politicians contract with service providers. Whereas the earlier steps towards the ex post model appear to be in agreement with findings from organizational research, the substitution of authority with ex­change seems to contradict transaction cost theory. And it does not resolve the perennial problem of grounding the demand for public services in the preferences of the citizens.

The three chief objectives for public sector reform - efficiency, equality and savings - are all strongly connected although they are conceptually distinct. Whereas the first two objectives may require increased public spending, the last goal emphasizes that public spending must decrease. Yet, much of what is going on under the label public sector reform remains first and foremost institutional reform and not cut-back management. This applies more to the allocative branch of government than to the redistributive branch, where savings are now considered most important even though they conflict with equality.

Public sector reforms may involve both institutional reform and cut­back management, but that combination is not necessary. Public sector reforms may result in an increase in public spending. Efficiency-promoting reforms may not be conducive to a total lower cost, as resources gained within one programme are be transferred to another programme. Only cut-back policies reduce the size of the public sector, particularly if done in the social security system. The internal market strategy remains to be examined in Chapter 8. It signals a profound dissatisfaction with the political reforms of the public sector and it forms part of the general drive towards public management which will be discussed in Chapter 7.

Лейн Дж.

Государственный сектор

6

РАЗУМНОСТЬ РЕФОРМЫ ГОСУДАРСТВЕННОГО СЕКТОРА

Реформы Государственного сектора проводятся с середины 1960-х, как сформировавшиеся структурные мероприятия предприняло несколько серий стратегий реформирования. Сейчас имеется достаточно опыта в реформировании государственного сектора, чтобы позволить оценить эффективность того что может быть достигнуто и как. Каковы цели и средства реформирование государственного сектора?

Производство и реализация реформ государственного сектора может предназначаться либо государственному распределению ресурсов, либо государственному, областному перераспределению ресурсов. Кроме того, реформирование программ снабжения товарами и услугами, с одной стороны, или программ перечисления дохода от перераспределения, с другой стороны, в дополнение, существует государственное регулирование, которое может быть целью реформирования посредством различных программ свободных от госконтроля.

Реформирование государственного сектора включает в себя три главных цели: (а) эффективность; (б) равенство; (в) издержки. Тогда как эффективность имеет тенденцию быть главной цель при реформировании распределительной и регулирующей отраслей государства, равенство является целью изменения редистрибутивной роли государства. Однако, вследствие сильного взаимодействия эффективности и правильности суждений в истолковании государственных программ, эти обе цели, как правило, возникают одновременно.

СПРОС И ПРЕДЛОЖЕНИЕ СИСТЕМЫ РЕФОРМИРОВАНИЯ

Реформирование государственного сектора поднимает ряд существенных вопросов о производстве и реализации системы реформирования. Каковы цели? Может ли управление системой реформирования быть успешным? Приводят ли определенные методы к точно установленным результатам? Рациональность реформирования государственного сектора является значимым аспектом, потому что эта система имеет тенденцию вести проекты, которые меняются, время от времени.

Реформирование государственного сектора является политической деятельностью. И никоим образом не отличается от других видов политической деятельности. Борьба за государственный сектор, его реформирование и состояние в будущем, является в своей основе игрой полемик, которая имеет достаточную свободу действий для взаимодействия тактического образа действий и личных интересов различных действующих лиц. Реформирование государственного сектора стало делом, которое по большей или меньшей мере постоянно находится на повестке дня. Требуется, чтобы каждое правительство проверяло свои собственные сферы деятельности, и руководить тем, что подчас называется «административное» и «законодательное» производством. Но могут ли правительства создавать новые институты власти или улучшить результаты?

В обществе с огромным государственным сектором спрос и предложение на реформирование государственного сектора может повлиять на создание политического сектора самого по себе. Спрос на реформирование государственного сектора являться результатом многосторонности суждений по поводу заинтересованности государства, и предложение на реформирование государственного сектора может являться результатом поиска более эффективного государственного распределения ресурсов или более корректного дохода от редистрибуции. В равной степени, различные группы могут иметь спрос и предложение на реформирование государственного сектора ради своих собственных интересов. Можно ожидать меркантильного поведения в политике проведения реформ в государственном секторе.

Судьба любой государственной системы, включая систему реформирования государственного сектора, зависит от техники и обстоятельств при которых она представлена. Система реформирования государственного сектора может делать огромные успехи, но внешние условия могут быть такими, что влияние может равняться нулю или даже быть противоположным ожидаемого. Реформирование государственного сектора может быть ориентировано на решение определенных распределительных или редистрибутивных проблем или он может браться за конституционные вопросы.

Обязательно ли реформирование государственного сектора будет связанно со снижением цен? Маловероятно. Реформирование государственного сектора могло бы быть рассмотрено по двум причинам: либо для того чтобы представить законодательную реформу, либо чтобы осуществить значительное сокращение. Управление по снижению цен, если все проходит успешно, достигнет экономии, тогда как реформирование институтов в различных отраслях государства являются нейтральными по отношению к экономии, потому что они могут рассматриваться в целях сокращения или расширения размеров государственных программ (таб. 6.1).

Таблица 6.1 Цели и средства реформирования государственного сектора

Реформирование государственного сектора чаще всего фокусируется на законодательных реформах с намерением увеличить возможности различных государственных программ (тип n). Когда государственный дефицит повысился, возрастающее финансовое давление имеет последствия этого типа, которое стало намного более существенным, по отношению, как к распределительным, так и к редистрибутивным целям.

Из двух конечных целей государственного сектора (Масгрейв, 1959) – эффективность в распределении ресурсов и правильности в распределении дохода  -  первая является более очевидной, чем вторая в качестве основной причины реформирования государственного сектора. А пока, следует задать вопрос, многие ли реформы государственного сектора действительно касаются понятия эффективности и ее необходимых условий.

Хотя правовые программы стремятся к автоматическому расширению, существуют границы в стремлениях улучшить качество. В то же самое время, издержки в структуре редестрибуции включает в себя огромные суммы денег, но влияние на граждан ощутимы. Даже когда сегодняшние огромные программы по транспортировке реформируются, предлагаемые изменения чаще всего мотивированны беспокойством материальной неэффективности, причиной которой могут являться эти программы. Тем не менее, политика важности экономии, имеет растущее значение сегодня.

Двумя ведущими типами реформирования государственного сектора в структурных мероприятиях были децентрализация и приватизация. Первый включал изменения в политических структурах в государственном секторе, в то время как другой привносил изменения в экономических структурах. Оба фокусировались на собственно государственном секторе.

Сейчас, реформирование государственного сектора может так же быть ориентировано на частный сектор промышленности, например изменения в государственных проектах регулирования контролирующие различные рынки сбыта. Прекращение регулирования считается необходимой стратегией в плане реформ во многих рыночных экономиках с исполнительным государственным сектором. В некотором смысле, прекращение регулирования подразумевает сокращенный государственный сектор, но главной задачей является улучшить конкуренцию в экономике. Стратегия децентрализации, приватизации и прекращения регулирования может стать результатом либо расширения государственного сектора, либо сокращения государственного сектора. Теоретически, мы имеем три инструмента реформирования и два вероятных результата (таб. 6.2).

Таблица 6.2 Стратегии и результаты

Результаты реформирования государственного сектора

Тип n включает в себя перенос задач с центрального управления на региональные и местные управления с ожидаемым или неожидаемым результатом расширения государственных учреждений. Тип IV является особым случаем, когда правительства трансформируют государственные предприятия в акционерные общества, где они полностью владеют собственными средствами. Так было до того момента когда экономические трудности структурных предприятий стали явными этот тип n стал существенным,  отделяя функции центрального управления от собственно частного сектора. Высокая степень реформ по прекращению регулирования были инициированы в 1980-х и, на удивление, результаты могли бы привести к увеличению цен (тип IV), как имело место в нескольких странах после прекращения регулирования финансовых рынков, т.к. страна являлась последним кредитором в критической ситуации, где налогоплательщики должны покрывать банковские убытки вследствие неудачного  прекращения регулирования финансового сектора.

Реформирование государственного сектора может быть микро- и макро-ориентированным. Макроцентр основан по соображениям общего размера государственного сектора, тогда как микро-перспектива касается действий в рамках единой программы. Макро-стратегии реформирования государственного сектора имеют тенденцию быть политическими по сущности, в то время как микро-стратегии получены вследствие технического или административного рассмотрения. Однако, изменение в структуре реформирования не может быть сведено до простого разграничения между левой и правой идеологией.

Реформирование государственного сектора ориентируется на две цели, которые не должны совпадать: улучшенные результатов и снижение себестоимости. Если обратить внимание на первое, то введение новых программ, технологий и учреждений может быть уместным. Однако, если последнее является целью, то значительные сокращения были бы подходящим инструментом. Законодательная реформа является нейтральной относительно спада или прироста в государственном секторе.

ПОЛИТИЧЕСКИЕ ИЛИ ЭКОНОМИЧЕСКИЕ РЕФОРМЫ?

Реформирование государственного сектора имеет тенденцию быть основанными на принципе децентрализации. Эффективность в общественном распределении ресурсов должна быть улучшена увеличением функций, полномочий и ресурсов правительств на нижних уровнях. Считалось, что государственные программы работали бы эффективнее и в более гибкой манере, если бы ими управляли государственные агентства на региональном или местном уровне - деконцентрация - или предпочтительно системой местного управления - децентрализация.

Базовая модель, на которую были нацелены стратегии политического реформирования, была чрезвычайно централизованным структурным объединением, которым управляют посредством применения строгой системы планирования. Расширение государственного сектора подчеркнуло единообразие и стандартизацию, стремящуюся к равенству в сфере общественного потребления и распределении доходов.

В некоторых структурных мероприятиях стратегия децентрализации заменила планирование определением качества, постатейным бюджетом с гибкой производственной сметой, контролем руководства по заданным целям, детализированными системами правил в рамках нормативно-правовой базы, контролем свободы действий. В некоторых стратегия децентрализации сопровождалась существенным увеличением сектора местного управления. В то время всеобщее государственное расширение продолжалось со стремительной интенсивностью. Принимая во внимание, что национальное правительство концентрировалось на больших программах по транспортировке, местное управление приняло на себя ответственность за большое количество распределительных задач.

В середине 1980-х стало ясным, что политическая стратегия по достижению реформирования государственного сектора не могла бы быть достаточной. Раскрытие того, как обстоят дела в принятии данных о производительности, как от национального правительства, так и от секторов местного управления. Эффективности в общественного распределения ресурсов имеет две стороны, внутренняя эффективность и внешняя эффективность (Глава 11). В то время как, внутренняя эффективность или производительность может быть четко определена, внешняя эффективность или результативность является трудным понятием. Не раньше, чем производительность государственного сектора была определена, в 1970-х и 1980-х годах была также определена реализация трудностей связанных с эффективностью в государственном секторе.

Проблема производительности, казалось, была так же глубока на уровне национального управления, как и в управлении на местах, хотя некоторые большие секторы местного управления, рост производительности может быть отрицательным, как в случае с функциями, за которые ответственно национальное правительство, такой как полиция и правосудие. Таким образом, движущие силы вниз в государстве не обязательно улучшают эффективность. Обнаружение распространения болезни Бомола (что рост государственного сектора лишь отражает отрицательную тенденцию производительности) или переработки большого мусорного бака, эти причины производительности вызывают напряженные дебаты.

Казалась сложной попытка избежать заключения, что распределение бюджета в рыночной экономике могло столкнуться с серьезными проблемами, связанным с эффективностью. Сравнение распределения бюджета и рыночного распределения чаще всего выявляет недостатки первого (см. краткий обзор доказательств в Мюллере, 1989: Глава 14).

Раскрытие трудностей связанных с производительностью спровоцировало поиск других реформ государственного сектора, а именно, приватизации. Хотя управление исследованиями аттестации было наделено законным статусом в бюджетных процессах на всех уровнях правления, и хотя бюджетные процессы были реформированы, для того чтобы произвести аттестации основной части процесса принятия решений, определение качества считается недостаточным.

«Приватизация» была ключевым понятием в Западной Европе, когда макро-реформы были начаты в отношении государственного сектора в 1980-х. Все же, на микро-уровне, приватизация может иметь много значений. Несколько ученых обратили внимание на факт, что совсем другие реформы примешиваются под этой маркой. Версии приватизации структурных мероприятий включают в себя неоднородный набор стратегий (Викерс и Райт, 1988).

Приватизация может охватывать