Competition as Public Policy: a Review of Challenge Funding

Since their introduction in 1984 Challenge funds have been widely adopted by central government. They are now used by twelve government departments to distribute competitively more than £3,250 million of Exchequer funds. The introduction of Challenge funds appears to have been politically driven, usually focusing on the objectives of cost and efficiency rather than quality and equity. They represent a further manifestation of the introduction of competition and 'market style' structures. This paper examines the key features of 41 Challenge funds and their operational characteristics. Numerous benefits, such as cost savings and innovation, arising from the introduction of Challenge funds have been put forward. By reviewing other studies, which have investigated the impact of the introduction of competition in producer and consumer markets, and through comparison with previous schemes it is possible to examine the potential impact of Challenge funds. Administrative and monitoring mechanisms are found to be centralizing control, despite assertions to the contrary. There is a growing concern that the level of information collection required is too arduous and it is used to control and regulate schemes rather than as a method of investigating where operations could be improved. Leverage from Challenge funds has been no more successful than earlier non-competitive initiatives. Competitive bidding could stifle innovation and participatory democracy is not encouraged or facilitated by Challenge funds.     

Adoption of comprehensive risk management in local government

In the aftermath of large company failures in the early 2000s, there emerged a new wave of efforts to enhance risk management (RM) and control in enterprises. The normative RM model has been promoted widely to all organisations, including public sector organisations. Using survey data, this article describes and explains the diffusion and adoption of RM innovation in local government in Finland. Our survey results support the argument that if comprehensive RM is not obligatory, it is not widely used in local government. Our analysis reveals that financial constraints explain to some extent the existence of comprehensive RM in municipalities, while structural factors such as the size of municipalities do not, even though RM is slightly more advanced in larger rather than smaller local governments. Slow adoption indicates that comprehensive RM as a managerial innovation lacks immediate benefit when assessed against the efforts and costs of its introduction and maintenance.     

Losers’ Consent or Non-Voter Consent? Satisfaction with Democracy in East Asia

In recent times non-governmental organisations (NGOs) in Bangladesh have witnessed massive growth in size, budget and scale of operations. They enjoy growing support from international donors and operate outside the direct control of the government. Their handling of the massive funds aside, increasing involvement of NGOs in economic, social and at times political spheres has given rise to widespread concerns about their accountability including their relationships with the government, donors and the community. This article examines and analyses various dimensions of NGO accountability in Bangladesh. Drawing on evidence from the Grameen Bank and the Bangladesh Rural Advancement Committee (BRAC)—two of Bangladesh's largest and the most successful NGOs—the paper argues that NGO accountability in Bangladesh has been more rhetorical than real. It shows that while formal accountability measures are in place, they suffer from a range of inadequacies and shortcomings. Consequently NGO accountability has remained weak and ineffective in relation to major agents such as the government, donors and the clients. The article further shows that some of the recent developments, such as the proliferation of NGO operations, government organisation (GO)–NGO collaboration and the growing involvement of NGOs in commercial activities, have imposed further limitations on their accountability to key stakeholders.     

Management,markets and democracy: Australian local government reform in the 1990s

Australian local government has been subjected to extensive reform during the 1990s. This article considers the three main dimensions of the reforms — changes to management structures, the introduction of competition policy, and municipal consolidation. It reviews the evidence available about the nature of outcomes and examines the impact of the reforms on governance values. It is argued that, so far, economic considerations have been balanced by a commitment to community particpation. Recent political developments, however, may yet prove to be an emerging threat.     

Effects of Governance Practices and Investment Strategies on State and Local Government Pension Fund Financial Performance

Abstract

Recent statistical studies concerning state and local government pension funds’ boards of trustees have focused on two complementary issues. First is the influence governance practices have on administration of fund assets. Second is the impact of investment strategy choices on funds’ total rates of return. Reported results indicate that the primary effects of governance practices on pension outcomes are indirect via asset allocation decisions. This study re-examined these issues using abnormal return as an inherently valued measure of risk adjusted financial performance. An innovation of the investigation is that “process analysis” was used to decompose the direct and indirect effects of governance practices on financial performance. Results suggest that while both types of effects exist, direct impacts dominate relative to mediating processes.     

Financial Discrepancies in Political Party Funding by Indonesian Local Government Authorities

Through different forms of decentralization variables, this study investigates Indonesian local government authorities' 2006 financial accountability reports in terms of local government authorities' contributing funds to political parties. Audit results by the Supreme Audit Body reveal that many articles were violated by these authorities in regard to the distributing, administrating, and reporting of assistance funds from them to political parties. Each rupiah committed by the 221 local government authorities involved in this study violated, on average, 1.8 articles, indicating a low level of compliance.

Critically, the study finds that administrative, fiscal, and political decentralization decreases discrepancies. The less administratively decentralized provincial authorities, where decision making is a level of government farther from the people, are more likely than non-provincial local government authorities to make discrepancies with political party legislation and regulations. Fiscally decentralized local government authorities, who earn a higher fraction of their revenue from local sources, also tend to have fewer discrepanciesFinally, politically decentralized authorities with a higher percentage of elected officials from the decentralized supporting ruling coalition, also have fewer discrepancies.     

CONTRACTORS' EXPERIENCE OF COMPULSORY COMPETITIVE TENDERING: A CASE STUDY OF CONTRACT CLEANERS IN THE NHS

Compulsory competitive tendering (CCT) has been an important instrument of Conservative government economic policy since 1979. Its effectiveness in generating cost-effective services depends on competition to supply the service in question.
The NHS domestic market is large and, prior to the introduction of CCT, promised to be profitable for contractors. Many contract cleaners with office cleaning experience entered. In the event the costs of entry were heavy, and the profit margins of established firms were reduced. When contracts have been awarded to firms, they tended to be to those with a track record. Many firms therefore withdrew; and the few that remained have profit margins in the NHS little different from those found elsewhere. Of more than by firms with a serious interest in entry, probably no more than a handful can have come out of the experience in net profit in the first seven years.
The experience of CCT in the market for NHS domestic services has shown that a degree of competition in the market can be achieved, arguably because of the presence of direct service organizations. Competition for this market, on the other hand, can be limited by the high costs of entry.     

Roadworks Ahead? Addressing Fraud,Corruption and Conflict of Interest in English Local Government

The current localism agenda, and other legislative and organisational changes, will impact on English local government’s capacity and commitment to address fraud, corruption and conflict of interest from both investigative and preventative perspectives. These have been issues for local government since the nineteenth century onwards, often brought to prominence during specific scandals or periods of extensive change. This article summarises the reforms in terms of a ‘low road’ of a control environment and of a ‘high road’ of an ethical governance framework, and their perceived interrelationship, up to the introduction of the Localism agenda. It discusses how far the current changes may change the emphasis between roads in returning to an amended control environment, particularly in terms of the publication of the Fighting Fraud Locally strategy. It concludes with concerns less about the various initiatives promoted by the strategy than the implications of whether councils have the capacity or commitment to continue along the high road of ethical governance.     

Competitive Tendering In Local Government: A Review Of Theory And Evidence

The introduction of compulsory competitive tendering in UK local government reflected conventional public choice theories of bureaucracy. These theories suggest that competition for service contracts will lead to lower expenditure and higher efficiency. Extensions and criticisms of the classical public choice model yield very different conclusions. First, the problems of bureaucratic supply are less severe than originally assumed, and secondly competition may itself generate new problems such as transaction costs, erosion of trust between principals and agents, and rent seeking. The impact of competition on spending and efficiency is therefore indeterminate, and must be established empirically. However, studies which evaluate the effects of competitive tendering in local government are few in number, cover a limited range of services, and are methodologically flawed. Therefore neither the initial imposition of competitive tendering by the Conservatives, nor its planned abolition by Labour, can be traced to a solid foundation of theoretical or empirical support. Theoretical and methodological problems that need to be resolved by further empirical studies are identified.     

THE IMPACT OF OPEN DATA IN THE UK: COMPLEX,UNPREDICTABLE, AND POLITICAL

This article examines the democratic impact of the UK coalition government's Transparency Agenda, focusing on the publication of all local government spending over £500 by councils in England. It looks at whether the new data have driven increased democratic accountability, public participation, and information transmission. The evidence suggests that the local government spending data have driven some accountability. However, rather than forging new ‘performance regimes’, creating ‘armchair auditors’, or bringing mass use and involvement, the publication creates a further element of political disruption. Assessment of the use and impact of the new spending data finds it is more complex, more unpredictable, and more political than the rhetoric around Open Data indicates. The danger is that the gap between aims and impact invites disappointment from supporters.     

Shifts in Governance in a Polycentric Urban Region: The Case of the Dutch Randstad

The Dutch Randstad is governed by a complex, polycentric institutional structure. In the past, many attempts to streamline the formal institutional structure have failed. However, within the basically unchanged formal structure important informal-institutional changes have been realized. They present shifts in governance rather than reorganizations of government. They present a flexible response to the pressures of glocalization, in the sense that they reflect both patterns of administrative down-scaling (localization at the level of specific issues and neighborhoods) and administrative up-scaling (regionalization at the level of the interurban conurbation). The flexible response is developing in practice, without a master plan or a master planner, and in that sense more in line with the underlying polycentric logic of the Dutch Randstad than previous attempts at finding the ultimate institutional fix.     

A replication of “Contracting out: For What? With Whom?”

In the 1980s, governments around the world adopted New Public Management ideas about inserting competition into government as a way to improve the performance of public organizations. In many nations, contracting out was one method of making governments more businesslike. Yet, there have been few studies of how government contracting behaviors have changed since the early 1980s. We replicate Ferris and Graddy's classic 1986 study of local government production and sector choice to assess how public procurement has changed over the past 35 years. Our findings show that today, contracting out is more commonly used across 25 local government service areas. In contrast to the original study, much of the growth has been in government-to-government contracts. For profit firms are also winning more contracts for high transaction cost work, while nonprofits are receiving fewer government contracts in nearly every service area. Our analysis suggests that contracting out remains of the highest importance in 21st-century governance and that additional research is needed on how to manage contracts to achieve the best value.     

Public hospitals as competitors for medicaid revenue: the case study of St. Louis regional medical center

Medicaid revenues may determine whether public hospitals will survive. Public hospitals participate aggressively in the public market competition for their states’ Medicaid dollars. States must decide whether the survival of public hospitals, as providers of last resort to both Medicaid and uninsured patients, is of continuing importance to their Medicaid programs. Cities, if the states were willing, alternatively could voucher uninsured patients and direct Medicaid patients to the private hospitals that would outlive closed public hospitals. In fact, Medicaid's managed care programs already have heightened this competition, by organizing sufficiently large populations of prepaid Medicaid patients to attract networks of private providers to offer discounted prices, in competition with public hospitals for this market.

Although Medicaid has been a comparatively poor payer, nationally, almost half of public hospitals⁷ funding comes from this source of revenue. Urban public hospitals can barely live with Medicaid revenues, but the extent to which they can live without Medicaid revenues is being determined by surprising new turns in market competition for the revenue. A period of expansive and expensive new congressional mandates for the joint federal-state program was followed in the early 1990s by the introduction by the states of Medicaid revenue maximization strategies. The states’ funding levels, the bases for matching federal contributions, were artificially elevated by provider taxes, provider donations, and intergovernmental transfers. The revenue from all these sources was returned to these providers through the Disproportionate Share Hospital subsidy program for Medicaid-dependent hospitals, as soon as the federal revenue match was calculated, based upon the inflated figures. These practices currently are being stymied, and states simultaneously have escalated competitive bidding by private market managed care providers for Medicaid patients. Missouri has been in the forefront of states moving to maximize the federal Medicaid revenue match and to return Disproportionate Share Hospital funds to providers. St. Louis's public hospital, Regional Medical Center, has been weaned off its local government subsidies, as the intergovernmental transfer and DSH enticements compromised the stability of that hospital's revenue picture. Now, unprotected by an integrated healthcare system or other major role in a regional hospital network, this urban public hospital must struggle to survive within its Medicaid managed care competitive market. The question for the state of Missouri is whether perpetuating a future for Regional will ensure its Medicaid patients a traditional caring public medicine alternative as a fallback position, if Medicaid's present foray into the private market goes awry. For Regional and the city of St. Louis, the question is whether they can any longer count upon traditional state Medicaid revenue and financial support.     

Islam,médias,mise en place du Sénat et article 37 de la Constitution: changement de paradigme au Burkina Faso (1991–2014)?

Abstract

In the context of socio-political liberalisation, which has been happening since 1991, together with the competition between the different religions in the public arena in Burkina Faso, the visibility of Islam has increased considerably with the creation of Islamic media and the growing use of the Internet. This article examines the impact of the growing mediatisation of Islam on the agency and the content of the discourse of Muslim elites in Burkina Faso. This has led to the emergence of new, very mediatised religious figures who have gained authority in the public arena. However, the multiplication of the Islamic message is not accompanied by greater politicisation. Their agency resides rather in their relative capacity to invest in the public arena to defend their vision of society governed by Islamic moral norms. The debate surrounding the introduction of the Senate and the revision of Article 37 of the Constitution between 2011 and 2014 has shown the lacklustre agency of the Muslim leaders.     

COMPETITIVE TENDERING IN THE NHS: AN ECONOMIC ANALYSIS' OF THE EARLY IMPLEMENTATION OF HC(83)18

Economic theory identifies circumstances where in-house production can be expected to be more efficient, in terms of the cost of production, than purchase from outside contractors. However, this efficiency advantage can also expect to be dissipated when in-house producers face no competition. The introduction of competitive tendering does not invalidate the case for in-house production; but significant cost savings can still be expected.
An in-depth analysis is made of six contracts put out to tender in the three hotel-type services. Markets for contracts were created, and open competition commonly brought about savings of one-third to two-thirds. Part of the cost saving was often achieved through a rationalization of services. Economic theory does not predict this result; but NHS management used the opportunities to introduce changes. Wage rates were usually cut and earnings fell by still more. Staff resignations and redundancies were common.     

Evaluating the 'New Public Management' Reforms in the UK: A Constitutional Possibility

Far-reaching managerial changes to the public sector in the UK have been occurring in the last few years. Broadly described as the 'new public management' (Hood 1991, 1995) these changes have reached new levels of intensity ever since the Conservative Government came to power in 1979. The article argues that the government should be accountable for these changes but not in a way which simply justifies its actions to the body politic but rather by going beyond this to a complete critical evaluation to assess their merit and worth. It is this exposure which will provide its real accountability. This article addresses the contextual factors surrounding the possibility of conducting such a wide-ranging evaluation. It traces a range of different examples which highlight the resistance of the previous government to an open-ended evaluation tracing the sizeable investment in implementation rather than careful policy experimentation and evaluation that has occurred. Finally, and most importantly the article explores the constitutional position of the Comptroller and Auditor General (C&AG) and the National Audit Office (NAO) who could conduct the wide-ranging evaluation which is deemed necessary. The conclusion of the article is that there is a need for an evaluation and any resistance of the government could be overcome if the C&AG and NAO exercised their constitutional right to conduct an evaluation of the reforms.     

加拿大面对的北极挑战:主权、安全与认同

由于全球暖化对北极地区产生的影响,使得北极资源开采与航运的战略价值再度成为人们关注的亮点。西北航道开通的可能性,以及北极蕴藏的丰富石油、天然气与矿物,让观察家认为加拿大北极主权问题将再度成为争议的核心。美加之间多年来关于西北航道控制权的争议,以及环北极国家之间因大陆架延伸的重叠而发生纠纷,并非一定会导致冲突,相反地,透过协调与外交斡旋或许对各方更有利。加拿大北极主权问题,其实也是认同问题,而加拿大必须展现对北极地区更多的投入意愿。     

Strategic Commissioning in the UK: Service Improvement Cycle or Just Going Round in Circles?

This article explores the drivers of the development of strategic commissioning over the last two decades, its limitations, and the implications of its rapid spread. It suggests that the differences between government departments have allowed scope for local variations, which have been exploited by local government, leaving room for more innovation than would have been possible under an entirely ‘joined-up’ government agenda. The forms taken by this new approach to strategic commissioning were consistent with continual pressure from central government to find ways of promoting externalisation of public services. Although this underlying drive was often resisted, particularly at local level, but always re-emerged. The article ends by exploring the implications of this analysis for public services in the era of fiscal austerity under the new UK Coalition government.     

PRAGMATIC MUNICIPALISM: LOCAL GOVERNMENT SERVICE DELIVERY AFTER THE GREAT RECESSION

Since the Great Recession, some have argued that local governments have become ‘austerity machines’ that cut and privatize services and undermine unions. We conducted a national survey of US municipalities in 2012 to examine how service provision level and delivery methods are related to local stress and capacity, controlling for community need and place characteristics. We find that local governments are balancing the pressures of stress with community needs. They use alternative revenue sources and service delivery methods (privatization and cooperation) to maintain services. Unionization is not a barrier to innovation. Further, we find that ethnically diverse suburbs are providing more services than other suburbs, thus acting more like metro core cities. We find that the Great Recession has not dramatically shifted local government behaviour to a ‘new normal’ of fiscal austerity. Instead, we find municipalities practising ‘pragmatic municipalism’ to maintain their public role.     

Local Government Modernization and the Views of Chief Financial Officers

Since its election in May 1997, the Labour Government in the United Kingdom has emphasized the need for modernization in the improvement of public services. For local government, this emphasis has led to the introduction of a variety of measures intended, primarily, to improve political management and service delivery. Two key policies have been the introduction of Best Value and the Comprehensive Performance Assessment (CPA). CPA is used by the Audit Commission for measuring local authority performance in England and has led to each authority being classified as excellent, good, fair, weak or poor. Each authority's classification has implications, financially and in terms of its freedom to determine priorities and policies. In addition, the structure of local government is being reviewed by central government, alongside discussions as to the merits of establishing regional assemblies. In considering the justification for, and the impact of, changes, it is important to consider the views of local government employees, not least professional groupings and chief officers. This paper reports the findings of a national survey of chief financial officers (CFOs) of the single tier and county council local authorities in England to establish their views on key features of the Government's modernization agenda.