EFFICIENCY AND EFFECTIVENESS: PROBLEMS OF ASSESSMENT

Abstract: The paper focuses on the Coombs Commission's recommendations on efficiency and effectiveness in the Commonwealth Public Service. The recommendations involve the allocation of organizational responsibility for efficiency and effectiveness to the Department of Prime Minister and Cabinet, the Public Service Board, Treasury and the Auditor-General and individual responsibility to the departmental manager through the establishment of a "Forward Estimating Budgetary" process. However the Commission has given little guidance in the matter of the technological tools which must be developed in order to secure its implementation.
The Commonwealth Public Service Board has developed over the last two years a program of Staff Utilization Reviews (S. U. Rs) as one of its management improvement programs. The paper canvases the technological aspects of efficiency and effectiveness drawing upon the development and operational experience of the S.U.R. program. It concludes that much resource-intensive work must be done before the Commission's recommendations can be implemented but Australian and overseas experience confirms the potential fruitfulness of that work.     

THE INDUSTRIES ASSISTANCE COMMISSION AND THE MAKING OF PRIMARY INDUSTRY POLICY

Abstract: The Industries Assistance Commission has been a new ingredient to the policymaking process for Australian primary industry. The traditional process contained a number of features — close association with the Country Party, Federal/State bargaining, a powerful Department of Primary Industry and myriad non-departmental authorities — which together led to policies which were ad hoc , complicated and often based on social rather than economic criteria. The Whitlam government, with the support of the Liberal Party, but against the opposition of the Country Party, included the examination of assistance to primary industry within the scope of the IAC. Advising on primary industry was a special challenge for the IAC. The Commission devoted considerable energies to expanding its own resources into this field and establishing working relations with other institutions working in this area. Since 1974 about a sixth of the IAC's resources have been devoted to inquiries into primary industries, though the workload has decreased in recent years. The consequence of the IAC's entry into the field has meant primarily that other actors in the process, such as State departments and industry organisations have had to supplement their own resources by the employment of professional agricultural economists to write their submissions. The style of debate has been indelibly altered. This, rather than the direct impact of the IAC's recommendations on assistance to primary industries, stands as the new institution's greatest achievement.     

The President's Commission to Study Capital Budgeting: An Interim Review

The President's Commission to Study Capital Budgeting is slated to complete its report by year-end 1998. Even though it would be premature to try to anticipate the Commission's recommendations, it is already clear that the Commission will contribute significantly to the capital budgeting debate by casting the concept of capital budgeting broadly, as a systematic decision process, rather than merely a budget accounting or scoring convention or a government financing alternative to the balanced budget rule. This article summarizes some of the analytical accomplishments of the Commission at the mid-point of its expected life.     

Competitive Tendering and Contracting in the Australian Public Sector

The Hilmer reforms, and recent reports from the Industry Commission, advocate a significant shift toward competitive tendering for Australian public services. This article discusses the policy debate in the light of recent developments in the economic theory of contracts.
It will be argued that, although more intense competition can, on some occasions, generate apparent efficiency gains, it can also generate efficiency losses. Following Stigler, it will be argued that the general tendency for competition to generate cost reductions may be explained in terms of increased work intensity, and does not therefore involve a net social welfare gain. Such issues will be examined in relation to the Industry Commission (1995b) draft report on Competitive Tendering and Contracting by Public Sector Agencies, with particular attention to the issue of net social welfare benefits of contracting out. It is suggested that the Industry Commission estimates of efficiency gains available through contracting out are based on an incomplete sample, ignore the social transfer implied in reducing costs and are unlikely to hold for many sections of the public sector.     

Equality and Human Rights Commission: A Decade in the Making

This article traces the origins of the Commission over the decade before it opened its doors in October 2007, and the contentious debates and political trade-offs which led to its emergence in its current form; a history which throws light on the challenges it now faces. Inclusion of human rights in a 'single equality body', concessions on disability, the promise of a single Equality Act and the Commission's third arm, community relations, were major fault lines in debates complicated by devolution and fragmentation of responsibility in Whitehall but strengthened by an unusual degree of engagement with external stakeholders and by the scrutiny of the Joint Committee on Human Rights in Parliament. The outcome extends beyond establishment of a Commission with a powerful mandate. A process that began with separate equality interests competing to ensure their constituency did not lose out, fostered enthusiasm for collaboration to achieve the vision of society the Commission is tasked, by S3 Equality Act 2006, to deliver.'     

THE INTER-STATE COMMISSION*

Abstract: The Inter-State Commission (ISC), although required by Australia's Constitution, has been in existence from 1913 to 1920 only. In 1975 the Labor government introduced a bill to set up the Commission. The bill was passed in a heavily amended form, but the legislation was not proclaimed by the incoming coalition government. A brief history of the "first" ISC raises the question of whether the High Court would ever have accepted the regulatory powers that the Labor government wished to invest in the late Commission. The ISC envisaged by the Labor government's bill would have had strong powers of regulation, arbitration and investigation over interstate and overseas transport. The Senate left it with weakened investigative powers only. Our Federal system encourages many government practices which are not in the interests of the community as a whole. However, while the ISC's role in curbing these practices would have been beneficial, the States have shown themselves too powerful politically to accept such policing, even if the High Court had allowed the ISC to do so. The ISC as conceived by Labor's bill would not have been politically viable, but the ISC as provided for in the Act would be worth setting up, as it would have several advantages over existing investigative mechanisms. It would have more experience and competence than ad hoc inquiries, and its continued existence would make it difficult to shelve its reports. Its statutory basis, broader terms of reference and its ability to force organizations to divulge information would all serve to make it a better investigative body than the Bureau of Transport Economics.     

COMPETITIVE MARKETS AND THE PROVISION OF PUBLIC SERVICES

Abstract: There is no universal panacea to improve the efficiency of public enterprises. However there is a worldwide trend at present to place more emphasis on markets than on centrally devised planning. The ownership of public enterprises is examined and it is argued that the performance of public enterprises is related to placing them in a more competitive environment. The importance of industry structure to competition is then discussed. The next sections turn to more practical matters. The first notes the present federal reforms of public enterprises and notes some similarities with the reforms set out in British White Papers in the 1950s and 1960s; and these reforms did not work in the sense of providing greater efficiency. Finally by way of example the deregulation of the NSW egg industry is examined; and the role of the government as a shareholder is discussed in the context of Australian Airlines. The paper concludes with a short summary.     

Competition policy and institutional politics in the European Community: State aid control and small business promotion

Abstract. The article examines EC competition policy from a political science perspective, analyzing the political and institutional considerations which inform the development of the Commission's controlling capacities in competition. It concentrates on policy towards small businesses in manufacturing. We argue that the Commission's general capacities in the formation and the administration of competition policy have been growing in both the merger-controlling aspects and in the control of state subsidization. Against this background, the handling of state aid to small businesses presents us with a paradox: the more developed the enforcement system in competition, the less the Commission applied it to national subsidization of small-scale production. The role of EC competition policy and particularly the subtle handling of state subsidies should be analyzed as part of the developing system of Community policy vis-à-vis small business, encompassing measures at the EC and national levels. Community policy has emerged as a result of an accommodation between different EC institutional and domestic political objectives, and to some extent this accommodation has been achieved at the expense of policy content. The article traces the development of Community policy in this area from the early 1970s to the adoption of the first-ever detailed policy guidelines in 1992, and suggests an analytical scheme for explaining the emergence of small business promotion as an issue in EC institutional politics.     

THE SOUTH AUSTRALIAN GOVERNMENT AND THE INDUSTRIES ASSISTANCE COMMISSION

Abstract: One frequent source of inter-governmental conflict within a federation is the different economies of the constituent units, and State governments in Australia have increasingly become aware of the regional consequences of Federal policies in areas such as tariffs. This is of particular concern to South Australia which, compared to other States, has a greater than average reliance on manufacturing industry, especially those industries which depend on a relatively high level of tariff protection. The industrialization of South Australia from the 1930s onward was based on a complex interaction between government and business, and thus in the 1960s when the revitalized Tariff Board and later the Industries Assistance Commission showed that they were committed to lowering the level of tariff protection, the new Premier's Department became the focus of the government's interest in tariff matters. From January 1974, following the creation of the IAC, to 1976 was the high point in the State's involvement in the making of Australian tariff policy, both in terms of the number of inquiries calling for submissions and in the capacity of the government to participate. The staffing and organization of individual departments concerned with tariffs were strengthened, and an interdepartmental Industry Inquiries Screening Committee was established to coordinate government submissions. Since the 1976 Inquiry into Shipbuilding, the government's involvement with the IAC has tapered off, partly as a result of the feeling that the greatest gains are won at the “political” rather than at the “administrative” level Although it is difficult to assess the success or otherwise of the South Australian government's venture into the making of tariff policy, a number of consequences for the State may be identified. The regional point of view was at least placed before the IAC; the State public service was strengthened; the already close relationship between business and government became even more intimate (despite differences in ideology); and some of the crude protectionist views held in the early 1970s have been replaced by a commitment to a long-term reconstruction of industry.     

Beyond the Blame Game: Political Strategies for State Funding Reform

There is growing concern that intergovernmental financial relations in the Australian federation are becoming increasingly acrimonious and dysfunctional. This paper argues that it is necessary to analyse State funding as a whole, including the critical relationship between State‐level taxation and its reform and the broader Commonwealth Grants Commission regime, if we are to establish a system of State funding which is financially sustainable, promotes economic efficiency and is broadly congruent with established norms of Australian federalism. Above all, based on international experience, we argue Commonwealth leadership is required to achieve this goal. We conclude with a case study concerning resource taxation which demonstrates how the Commonwealth could provide leadership using a ‘bundled’ approach to policy reform. It is argued that such an approach has the potential to alleviate wider intergovernmental conflicts which currently afflict Australian federalism.     

Sustainability and the world's leading ocean cruising companies

The aim of this research note paper is to offer an exploratory review of the extent to which the leading ocean cruise companies are publicly addressing and reporting on their sustainability strategies and achievements and to offer some reflections on sustainability within the cruise industry. The paper begins with an outline of cruising and the cruising industry and a short commentary on the sustainability challenges the industry faces. The information on which the paper is based is drawn from the leading cruise companies' corporate web sites. The findings of the paper reveal a marked variation in the extent to which the leading cruise companies publicly report on their sustainability strategies and achievements. While the two leading cruise companies, namely the Carnival Corporation and Royal Caribbean Cruises, published extensive sustainability reports which covered a number of environmental social and economic issues, the other leading cruise companies published very limited information on sustainability. More critically the authors argued that the cruise companies' commitments to sustainability are driven by the search for efficiency gains and are couched within existing business models centred on continuing growth than on maintaining the viability of natural ecosystems and communities. As such the leading UK retailers are, at best, currently pursuing a ‘weak’ rather than a ‘strong’ model of sustainability. The paper provides an accessible exploratory review of sustainability reporting in the cruise industry, and it will interest professional working in the cruise industry and more generally in the hospitality industry as well as academics and students interested in public relations, business studies and hospitality management. © 2016 John Wiley & Sons, Ltd.     

Regulatory change and environmental protection in the British and German chemical industries

Abstract. Business interest associations in the European chemical industry have traditionally been well organized and enjoyed a harmonious relationship with governments of various complexions. This very favourable balance for the industry has been disturbed by the salience of the environmental issue. This has led to a certain deregulation, or breakdown of existing regulatory mechanisms. Increasing concentration on the European Community level as the locus of environmental policymaking has led to a dual response on the part of business interest associations, reflecting an older contrast between national styles of government/business relations. The British chemical industry has preferred the national route, is much more hostile to environmental regulation than its German counterpart, and often finds itself isolated, depending on the Department of Trade and Industry to ensure that its viewpoint is articulated by the British Government in EC negotiations. The German industry still clings to self-regulation, but, given the high level of environmental consciousness in the Federal Republic, has developed a reluctant preference for action at the European level. This has been manifested both in the Europeanisation of its links with the German Economics Ministry and in its support for the European Council of Chemical Manufacturers Associations; the latter is well placed to exert influence on both the EC Commission and the European Parliament.     

Integration in small steps: The European commission and member‐state aid to industry

Member states of the European Union traditionally have used a variety of aids to industry to develop national champions, rescue major enterprises in financial trouble, and to make industry more competitive internationally. Yet making the single European market operational and sustaining cohesion across member states with different abilities to aid their industrial enterprises requires that the European Commission monitor state aid closely. Most accounts of this tension point to the weak record of the Commission in rejecting aid packages proposed by member states. This article argues that the rate of rejection of aids by the Commission is a highly misleading indicator of the Commission's influence in this policy area. In fact, the Commission has developed substantial capacities to regulate state aid relative to the constraints within which it operates.     

Wholesaling in Electricity: Inching Along

This article discusses the incremental but increasingly assertive efforts by federal policy makers toward encouraging deregulation of the electric utility industry. Focusing on the efforts of the Federal Energy Regulatory Commission (FERC), we conclude that the federal government is involved in a sort of two‐sided experiment. On the one hand, efforts to deregulate the electric power industry attempt to establish a competitive market pose the question: Can government provide rational guidance in the formation of markets in a complex industry? On the other hand, it asks whether the democratic process can permit agencies such as FERC to impose and implement an economically rational design on a self‐interested pubic that is mostly interested in cheap, reliable power. In a sense, FERC is auditioning for a new role for regulatory agencies—as designers and overseers of markets. This is a dramatic shift from the traditional role of “regulator as policeman.” Whether regulators are up to the task remains to be seen.     

FIFTY YEARS OF THE COMMONWEALTH GRANTS COMMISSION*

Abstract: The Commonwealth Grants Commission was established in 1933 to inquire into the payment of special grants to the States. It has retained this function to the present day, and has also conducted inquiries into grants to local government, the distribution of general revenue assistance to the States, and the financial position of the Territories. Although special grants had been paid for over twenty years before the establishment of the Commission, the principle upon which grants should be based had not been determined. The first members of the Commission, after debating the merits of grants based on financial need and grants based on disabilities due to federation, adopted in their third report the principle of fiscal equalization which the Commission still follows. Under this principle grants are assessed that enable each State to provide a standard level of service to its residents so long as it levies taxes at standard rates. The Commission operates as a semi-judicial body, receiving written submissions and conducting public hearings at which witnesses from the States and the Commonwealth Treasury are examined on oath. It also conducts an extensive analysis of State government finances and other information in arriving at its conclusions. Over the years many distinguished Australians have served on the Commission, and their work has contributed to the high reputation enjoyed by the Commission in carrying out its task of maintaining a balance in the fiscal position of the States.     

Blair's Commission for Africa: Problems and Prospects for UK Policy

This article examines the recommendations contained within the Commission for Africa's report Our Common Interest , and asks what they might mean for the UK's Africa policies. After discussing the choice of the Commissioners and summarising the main recommendations made in their report, the article identifies some of the central problems raised but not resolved by the Commission in the relation to issues of security, political economy and governance. The article concludes that the Commission's report raised the profile of an important set of issues but neither resolved them conceptually nor set out a persuasive plan to implement its numerous recommendations. In particular, the Commission did not convincingly explain how neo-patrimonial regimes in Africa could be reformed to ensure that they pursue genuinely national development policies instead of the current strategies that benefit their supporters and weaken their political opponents.     

ACTU View of the Industry Commission Report on Competitive Tendering and Contracting

This report presents a critique of the Industry Commission's final report entitled Competitive Tendering and Contracting by Public Sector Agencies (1996). From a trade union perspective, the authors raise many concerns about the methodology, ideology and findings of the Industry Commission report.     

THE TRIUMPH OF ECONOMIC RATIONALISM: THE TREASURY AND THE MARKET ECONOMY

The 1980s have seen the triumph of economic rationalism. Greater efficiency has become a sacred goal. Increased competition and the unlocking of market forces, we are told, are the key means to obtain it. Proponents of economic rationalism insist that the public sector is riddled with inefficiencies. The private sector, by contrast, is self-evidently superior. To the extent that the private sector often operates less than optimally, a major reason is the plethora of perverse governmental regulations which hamper its efficiency. Despite the problems, the public sector needs to model itself wherever possible on the private. And where public sector activities can be or are being done in the private sector, then the public sector should surrender such activities. The inevitable result will be an increase in net economic welfare: the economy will become more dynamic and scarce resources will be allocated more efficiently. Such is the rhetoric of the economic rationalists.     

Environmental performance and policy regimes: Explaining variations in 18 OECD-countries

Although we are witnessing an increasing interest in the comparative study of environmental pollution in the social sciences, there is sharp disagreement over how the state of the environment and the changes in recent decades should be assessed. Furthermore, the debate on environmental policy has no conceptual focus on societal development. Therefore, the article presents, on the one hand, an index of environmental pollution that integrates the levels of pollution in 1990 and their changes in the 1980s, and, on the other hand, an index that incorporates the ideological aspects of social development. Using this distinction it is possible to identify different paths of societal development in 18 OECD countries. The final part of the article explores various structural, economic, institutional and political characteristics which may be used to explain the different outcomes. The results show that institutional factors are important for a successful environmental performance. However, when it comes to change in policy regime the degree of mobilization of ecological movements and parties is essential.     

Unintended consequences: social policy,state institutions and the ‘stalling’ of the Malaysian industrialization project

Abstract

This paper examines the relation of particular forms of social and labour market policy to economic development. Taking the history of Malaysian industrialization as its empirical case, the paper assesses the unintended consequences of redistribution policy, on the one hand, and migration policy, on the other, for the limited upgrading of the country's electronics industry. It argues that, while the former has been central to social harmony in Malaysia's multi-racial society, it has contributed to the underdevelopment of small and medium-sized firms capable of linking with the TNCs on the basis of knowledge-intensive and higher value-added operations. Migration policy, on the other hand, has allowed manufacturers to have continued access to supplies of low-cost, lower-skilled labour that have released the pressures that would otherwise have been there for technological and skill upgrading in the electronics industry. Only in Penang, where regional state institutions have intervened to encourage SME upgrading, has the national picture been moderated. Malaysia's industrialization project emerged at time when export competition in manufactured commodities was less intense than it is now. Largely as a result of federal government priorities and for other reasons explored in the paper, advantage was not taken of this ‘window of opportunity’. As a consequence, the country's industrialization project – exemplified by its electronics industry – is now ‘stalling’ in the sense that it remains locked into low- to medium-technology operations. With the rise of China as a manufacturing exporter, this is a dangerous situation for a country's principal industry to be in.