Implementing the Contract State

The term 'contract state' can capture three different types of contractual arrangements:
*employment contracts
*intra public sector service contracts (often used in the health and education fields)
*public-private service contracts or outsourcing.
Victoria, since the election of the Kennett government in 1992, has engaged in all three, but in particular, public sector change has been characterised by significant outsourcing. This article outlines the extent of outsourcing in Victorian state and local government, the managerial challenges of a contract state, and the need for continuous reflection on, and improvement of, the reform process.     

An evaluation of the outsourcing IS/ICT activities in Turkish ministerial computer departments

Outsourcing an IS/ICT function has become fashionable in public administration reform. Through this modality, many organisations are cutting staff costs and increasing efficiency. Financial benefits can be great, public organisations can in fact expand IT usage and hence avoid obsolescence. Despite the benefits of outsourcing IT, there are risks involved. Public organisations need to weigh the benefits, risks and costs involved before making decisions to outsource. Recently, Turkish public organisations have been increasingly outsourcing functions such as facilities maintenance, catering, security and IS/ICT activities. This article, based on a field study, undertakes an evaluation of the experience of Chief Information Officers (CIO's) in outsourcing of IS/ICT activities in ministerial computer departments. The findings provide important lessons for outsourcing in Turkey and elsewhere. Copyright © 2008 John Wiley & Sons, Ltd.     

Whole‐of‐Government Approaches to Outsourcing and Market Testing by the Commonwealth Government

This article traces the development of approaches to outsourcing by successive Australian governments from 1995. The analysis focuses on strategies initially adopted for the outsourcing of government information technology (IT) services and, subsequently, includes the market testing approach adopted for the outsourcing of both IT and corporate services. The framework for analysis has been based on theories of privatisation developed by Feigenbaum, Henig and Hamnett (1999). This framework offers insights into the goals and strategies employed by commonwealth government that underpin their approaches to sourcing of services for their public sector. The article concludes by discussing some of the unresolved issues associated with the failure of government to formally evaluate the impact of their outsourcing policies.     

中国地方政府公共服务合同外包的发展现状——基于二手数据的分析

近年来,合同外包日益成为地方政府提供公共服务的重要机制。本文基于二手数据,在对地方政府公共服务合同外包发展状况(2000~2009)的概括性分析中发现,2000年以来,地方政府公共服务合同外包发展迅猛,其应用的广泛性和深入性均前所未有,并且逐步迈入法制化轨道。由于影响合同外包成效的因素相当复杂,政府显然缺乏相关操作经验,无论是在合同外包的决策当中还是在实施当中,"审慎"是最明智的策略。     

Reconsidering the Revolution? Australian Public Sector Administration in 2000

While the year 2000 was memorable for public administration in Australia it was notable mainly for the unexpected. Success occurred where risk and failure were predicted. Failure emerged where success had been talked-up. Notable examples include the so-called Y2K problem, management of the Olympic Games, the introduction of the GST, and the outsourcing of government services (especially Information Technology (IT)). Also memorable were important shifts in the policy fields of defence and welfare. The Howard government ended the year in decision-making and largese mode—setting the agenda for the following election year. The events of 2000 invite reconsideration of the merits of the traditional bureaucratic model and those of the emerging post bureaucratic models of service provision.     

Bureaucratic Inefficiency: Failure to Capture the Efficiencies of Outsourcing

This paper analyzes the political economy ofoutsourcing by 16 federal bureaus during 1981-96. Inan era of restricted budgets and budget balancing, thepaper questions why federal bureaus did not exploitfully the efficiencies of outsourcing. It proves thatfederal bureaus can achieve technical and costefficiency through outsourcing when contracts can benearly fully specified. Federal bureaus outsource byobtaining inputs to their production processes throughcontracts with competitive market producing units. Econometric results substantiate the hypothesis that``institutions matter,'' and reveal that bureausachieve varying levels of technical efficiency throughdifferent levels of outsourcing.     

South Australia: Caution and Consistency

During the 1990s public service industrial relations in South Australia have followed the state's long‐standing practice of being moderate and careful. From 1993 onwards, processes of corporatisation and privatisation that had commenced under the Bannon Labor government were continued and extended under the new Liberal government, in part as a response to financial pressures arising from the State Bank collapse, and in part as a reflection of the same trends that were widespread elsewhere. Where possible the government avoided direct confrontation with unions. There were various contests where the parties explored options in the changing environment, but the most prominent trend was that government policies of financial restraint and outsourcing tended to reduce most unions' bargaining power. Those policies were initially conjoined with agency‐specific enterprise bargaining, but the resulting variations in outcomes finally led to a Wages Parity Agreement to restore consistency.     

Outsourcing Myths and Workers’ Compensation Claims Administration

The outsourcing of claims administration is a feature of some Australian workers’ compensation jurisdictions. While the benefits of outsourcing in this area of public administration have often been asserted there has been a lack of research into these claims. In this article the South Australian workers’ compensation scheme is used as a case study to address whether the supposed benefits of outsourcing are soundly based. A number of other issues associated with the outsourced claims management environment are also considered as they have had an important bearing on the scheme's performance. The main finding to emerge is that outsourcing has failed to meet financial and other key objectives. Outsourcing has also created new tensions that have added to the complexities of scheme management. In light of these findings, there is a strong case that the scheme's business model should be recalibrated to facilitate a return to in‐sourced claims management.     

THE IMPLICATIONS OF HIGH LEVELS OF PUBLIC SECTOR DEBT FOR ECONOMIC POLICY-MAKING: THE CASE OF SOUTH AUSTRALIA

Abstract: The relatively small and open South Australian economy has been facing the difficulties associated with the structural adjustment of its industry for over 15 years. In addition, the South Australian public sector has been contending with financial difficulties largely as a result of a reduction in grants from the commonwealth before the failure of the State Bank of South Australia. This paper reviews the growth and current level of government indebtedness in South Australia and discusses which group(s) is likely to bear the main burden of such debt. The main consequences of high levels of state public sector debt, including budgetary inflexibility, are also examined. The paper suggests that it will be necessary for relative wages and prices to adjust more freely if the negative impacts of an inevitable state government budgetary consolidation are to be minimised. If wages and prices are not free to adjust then unemployment will continue to take the brunt of the adjustment process. In addition, out-migration of businesses and people from South Australia will accelerate, leading to a further erosion of the taxation base. The State Bank indemnity arrangements and consequent levels of public sector debt incurred will require the state government to reduce the level and quality of services provided by the state public sector, sell state public sector assets and further improve efficiency and effectiveness. However, there are a number of important arguments why taxation should be an important means by which the South Australian government moves to retire public sector debt as soon as practicable. Not the least important of these arguments is the need to ensure accountability by elected representatives of government for their expenditure decisions.     

Outsourcing: Uncovering the Complexity of the Decision

ABSTRACT

Outsourcing is a phenomenon that, on the surface, is used to reduce costs and enable an organization to focus on its core competencies. In researching into outsourcing and whether this assumption holds true, this article focuses on public health organizations where outsourcing has been applied to both clinical and non-clinical services. In the cases observed, public sector managers assumed contracting would lower production costs for peripheral services whose outcomes could be easily measured and monitored. Clinical services were not usually outsourced because these core services were more difficult to measure. In implementing contracts for non-core services, decision makers' political and ideological objectives overshadowed management imperatives that are necessary for effective contract design and implementation, leading to poor service outcomes and little cost savings. Choosing the “right” services to contract does guarantee good outcomes such as lower costs and improved labor flexibility, but it is necessary to understand that optimum outcomes are only achievable if the service is clearly non-core, has measurable outcomes, and has low transaction frequency. It is also clear that outsourcing will not remove management problems; it simply adds another layer of complexity on top of managing staff who still provide the service.     

PROGRAM BUDGETING REFORMS IN SOUTH AUSTRALIA

Abstract: This study describes and assesses the recent progress (1975–83) in implementing program budgeting in South Australia. It outlines (1) the leadership of South Australia in this field in Australia, (2) the ways in which administrators adapted program budgeting for successful implementation, (3) the changing emphases which occurred in the reform process, involving parliamentarians, central control departments of government, and responses in ordinary departments, and (4) the relationships of the reforms to political change where that change was reflective of different government attitudes to social reform and to the economic management of stagflation. The study also evaluates what more needs to be done, especially in the more difficult analytical components of program budgeting. In appreciation that program budgeting is of recent origin in Australian public administration, the writing is deliberately structured to explain the essential nature of program budgeting, using the relevant general principles to assess the progress of implementation in South Australia.     

Searching for contracting patterns over time: Do prime contractor and subcontractor relations follow similar patterns for professional services provision?

This paper compares over a 12‐year period (1) patterns of contracting between a state transportation agency and its prime contractors providing engineering design services with (2) patterns between these prime contractors and their subcontractors. We find evidence of different contracting patterns at each level that emerge over time and coexist in the same contracting context. While patterns at the agency–prime level are characterized by repeated contracts, patterns at the prime–sub level indicate fewer repeats and more contractor turnover. Implications for outsourcing practice and theory are discussed. © 2011 by the Association for Public Policy Analysis and Management.     

The Impact of Organizational Context and Information Technology on Employee Knowledge-Sharing Capabilities

Sharing knowledge and information is an important factor in the discourses on electronic government, national security, and human capital management in public administration. This article analyzes the impact of organizational context and IT on employees' perceptions of knowledge-sharing capabilities in five public sector and five private sector organizations in South Korea. Social networks, centralization, performance-based reward systems, employee usage of IT applications, and user-friendly IT systems were found to significantly affect employee knowledge-sharing capabilities in the organizations studied. For public sector employees, social networks, performance-based reward systems, and employee usage of IT applications are all positively associated with high levels of employee knowledge-sharing capabilities. Lessons and implications for knowledge-sharing capabilities and management leadership in the public sector are presented.     

公共服务外包决策的影响因素研究

目前,公共服务外包已成为市场化改革的重要制度安排。国内外针对公共服务外包的研究已经很多,但是国内大多数的研究为定性的分析探讨,少有通过实证分析探讨影响公共服务外包决策因素的研究。在对相关文献梳理的基础上,对公共服务外包的概念从宏观和微观两个角度进行了区别,根据文献的理论支撑和实地走访调研,本研究创新性地构建了公共服务外包决策影响因素概念模型,并作出了针对性的理论假设。针对假设,运用结构方程验证了服务特性、环境因素以及政府能力对公共服务外包决策的影响作用。研究发现,任务复杂性及市场成熟性对公共服务外包决策有显著影响;政治因素对公共服务外包决策都有显著影响,财政资源与外包决策的关系不显著;政府间的竞争和领导支持与政府的外包管理能力之间存在正相关关系,同时,政府外包管理能力越强,越可能做出外包决策。     

Middle power identities of Australia and South Korea: comparing the Kevin Rudd/Julia Gillard and Lee Myung-bak administrations

This paper explores the middle power identities of Australia and South Korea during the Kevin Rudd/Julia Gillard (2007–2013) and Lee Myung-bak (2008–2013) administrations. Considering the problems in the existing position, behaviour, impact and identity-based definitions of middle powers, examining how self-identified middle powers have constructed such an identity would offer useful insights into the middle power concept. Relying on a framework that captures an identity's content and contestation, this paper argues that while Australia and South Korea have assumed a middle power identity, their visualisations of this identity are slightly different. Australia has understood its middle power identity in both economic and security terms, whereas South Korea appears to have connected such an identity more with the economic dimension. These differences affect how they envision their respective middle power roles in international affairs.     

Promoting Data Protection Standards through Contracts: The Case of the Data Security Council of India

Data protection has emerged as a major corporate and government concern worldwide. The focus is on secure handling of data so as to ensure privacy of customer data and security of corporate data. Privacy and security laws in countries are not harmonized; compliance regulations are different too. As the global hub of outsourcing, India is faced with a challenge of demonstrating compliance with varying compliance regulations in countries. The Data Security Council of India (DSCI) considers the Best Practices Approach as a practical and realistic way to enhance adherence to data security and privacy standards, and to enable a service provider to demonstrate compliance. Getting these standards recognized through contracts can promote data protection. An industry association can act as a third party self‐regulatory organization to promote these standards and enforce them among its members through certification or privacy seals, thereby helping implement data protection in international data flows.     

Unequal Voices: ‘Strategic’ Consultation in South Australia

In 2006, the South Australian government undertook the largest consultation ever to take place in the state. Over 1600 South Australians were involved with the consultation on the revision of South Australia's Strategic Plan (SASP). This ‘big‐picture’ consultation was a significant attempt to connect with, and gain feedback from, the South Australian ‘community’ on the Rann government's vision for the state. This article is the first formal evaluation of the 2006 consultation on the SASP. To critically evaluate the consultation process, this article uses Pratchett's framework which examines participative processes through the two principles of responsiveness and representativeness. The article concludes that the state government's rhetoric about the success of the consultation obscures a number of deficiencies and tensions that underpinned the consultation process. This critique of the South Australian consultation provides some key insights for the current trend for strategic planning at the state level in Australia.     

Reexamining the Relationship Between Fiscal Stress and Outsourcing

The determinants of outsourcing in local government are widely studied from a variety of frameworks. One concept consistently used to explain local government outsourcing is fiscal condition, with many noting that outsourcing is more likely when a local government’s fiscal condition declines into fiscal stress. Despite the ubiquity of this expectation in the outsourcing literature, several articles reviewed suggest that the findings for this relationship remain uncertain. As a result, the research presented in this article sought to examine and extend what is known about the relationship between fiscal stress and outsourcing in U.S. municipalities. The research includes previous measures of fiscal stress and adds new measures. In addition, it tries to overcome the limited theoretical testing of the relationship between fiscal stress and outsourcing by examining both direct and indirect effects of fiscal stress on outsourcing. It finds that municipalities in the United States that are experiencing fiscal stress are more likely to engage in outsourcing, particularly municipalities that are experiencing fiscal stress and have a positive evaluation of the external market to provide services.     

Jobactive and young job seekers: Strengths,limitations, and suggested improvements to current practices

This paper explores the efficacy of current employment services in Australia, jobactive, from the perspectives of young job seekers and their employment officers. As high youth unemployment rates and the efficacy of jobactive employment services are currently areas of priority for the Australian Government, the study offers a timely contribution to the social policy and youth employment literature by exploring the tensions experienced by young job seekers while registered with a jobactive provider, and employment officers when assisting young people to find sustainable employment. The study analyses data from 46 interviews with young job seekers and their employment officers in an outer western Melbourne region. The findings reveal particular concerns about appropriate and adequate service provision for marginalized young job seekers that are similar to those in evaluations of previous marketwise employment service contracts, Job Network and Job Services Australia. Suggestions for tailored employment assistance for young job seekers to gain sustainable employment are offered for future consideration.