A contractual framework for new public management theory

This paper evaluates the potential for institutional economics to help us frame choices for the design of institutional arrangements aimed at improving public sector performance, and the lessons it offers for the development of a new public management theory. It defines the key elements of transaction cost and principal agency theory and their application to the public sector. Local government contracting, fiscal decentralization, and performance budgeting, applications that share problems resulting from divergent objectives, information costs associated with policy making and implementation, and risks to public sector accountability, are analyzed. This analysis demonstrates that institutional economics can illuminate how public management can effectively utilize private sector solutions by providing the theoretical underpinnings for government reform initiatives.     

Purchasing Policy Advice: The Limits to Contracting Out

Throughout the OECD, governments have been contracting out an increasing range of goods and services. Against this background, this article outlines the case for, and assesses the merits of, placing the purchase of governmental policy advice on a more competitive basis. Two options are given particular attention: first, the creation of an internal market for policy advice within the public sector under which departments and other government agencies would tender to supply specific policy outputs; and second, a more radical option under which public and private sector organizations would compete for the contracts to supply governmental policy advice. Drawing on the insights of the new institutional economics, it is argued that neither option is likely to enhance the efficiency or effectiveness with which policy advice is produced, whether under conditions of short-term or long-term contracting. This is due to the likelihood of: only partial contestability (due, among other things, to asset specificity in the form of transaction-specific expertise and trust); a greater risk of opportunistic behavior by the suppliers of advice (and also, under some conditions, by the purchasers); higher agency costs and transaction costs; and greater problems with respect to horizontal and vertical policy coordination. Such considerations suggest that the widespread reliance of governments on relatively permanent advisory institutions and in-house expertise can be explained and justified on the same theoretical grounds that have prompted the contracting out of other publicly-funded goods and services.     

The present and future of public sector extension in Africa: contracting out or contracting in?

Public sector extension has come under increasing pressure to downsize and reform. Contracting out—the use of public sector funds to contract non‐governmental and private service providers—is often held up as a potential tool in reform efforts. Much has been written about the possible advantages of contracting out of agricultural extension and it is being encouraged and promoted by numerous international organizations. However, a look at field experience in Africa shows that contracting out is relatively infrequent, especially compared with the reverse—contracting in—where private sector and non‐governmental organizations finance public sector extension delivery. Case studies from Uganda and Mozambique indicate that on the ground attempts to come up with solutions to providing services to farmers are resulting in innovative contracting approaches and combined public and private institutional arrangements. Contracting in and public–private coalition approaches, in contrast to purely public sector extension (characterized by ineffectiveness and inefficiencies) and purely private for profit extension (which may ignore public goods and concerns), may help achieve extension services which are both demand led and which internalize public concerns such as environmental protection, food security and socio‐economic equity. These coalition approaches can be improved and facilitated. They deserve greater analysis and may contribute to a better understanding of extension contracting and the roles of private and public organizations. Copyright © 2000 John Wiley & Sons, Ltd.     

物业税税制改革的财政公共管理体制困境探析——地方政府“逆向软预算约束”的分析框架

运用社会学和经济学的分析方法,探索了制约我国物业税税制改革的财政公共管理体制中的约束机制,得出结论如下:不规范的财政分权改革的直接后果造成了地方政府预算软约束和"逆向软预算约束",而分税制改革给地方政府收入结构带来的"驱赶效应"以及地方政府事实上具有获取体制外资源的强大能力在很大程度上又强化了地方政府的"逆向软预算约束"机制.在上述财政管理体制环境中进行物业税改革自然步履维艰,因为地方政府"逆向软预算约束"机制是制约物业税税制改革的直接原因;不彻底的财政分权体制缺陷是制约物业税税制改革的根本原因;社会约束不力以及相关制度设计缺陷是制约物业税税制改革的外在原因;税制设计严重老化是制约物业税税制发展的内在原因.     

State and Local Government Procurement and the Winter Commission

The Winter Commission proposed a state and local government procurement reform agenda that placed public managers at the core of a depoliticized, deregulated, and more pragmatic public sector contracting process. Drawing on the literature and data from several state and local government surveys, this article shows that between 1992 and 2003, state and local governments’ contracting practices moved in directions consistent with the commission’s reform agenda. By 2003, state and local governments had decentralized and deregulated their contracting processes, were contracting more effectively and in circumstances in which it is more likely to be successful, and had adopted several innovative technologies and management practices.     

A Political Perspective on Contracting Out: The Politics of Good Times. Experiences from Danish Local Governments

Privatization has been on the political agenda for the last two decades. The literature points to two major explanations of privatization. One explanation is political-ideological, considering privatization to be a Liberal-Conservative strategy. Economic crisis or fiscal stress is the other main explanation of privatization. The two theses are investigated by evaluating the determinants of contracting out in Danish local governments. The analysis shows that fiscal stress is strongly, but inversely related to contracting out, while Liberal-Conservative political leadership is not associated with higher levels of contracting out than Social Democratic governance. Thus, the richer a local government becomes, the more it contracts out. Although party politics is not decisive for contracting out, the motivation seems to be political rather than economical. Specifically, it is argued that in a strongly decentralized public sector with influential public employees, contracting out is possible in good times when revenue and public expenditure are easier to increase, which reduces public employee resistance to contracting out.     

PUBLIC POLICY AS THE CONTINUATION OF MORAL PHILOSOPHY BY OTHER MEANS

The paper suggests that the oldest and newest glsubfieldslg of political science—political philosophy and public policy analysis–share important features lacking in those areas of the discipline that have modeled themselves after the natural sciences. Both are incompatible with the belief social sciences can be "value-free" and both are legitimate academic pur- suits that aspire to systematic and rigorous analysis of significant questions or problems. Fundamental considerations link the two enterprises. (1) Public policy analysis as currently practiced i s based largely on economics which i s the instantiation of a particular moral philosophy. (2) Logical problems in the basic assumptions of applied economics and policy analysis require the kind of fundamental reexamination to which moral philosophy can contribute.
The second section uses three health policy examples–tax expenditures that promote the purchase of health insurance, euthanasia, and long-term institutional care for the elderly–to show how moral philosophy can help in policy analysis.
The third section, an examination of Graham Allison's three epistemological models for understanding public policy, demonstrates that work in public policy also should stimulate philosophical inquiry.     

Documenting Disparity in Minority Contracting: Legal Requirements and Recommendations for Policy Makers

The challenge of advancing policy goals and public administration is compounded when legal compliance rests on data and complex analysis. This is true of disparity studies that support local government‐sponsored minority contracting programs. How can local governments prepare to work with such programs in this complex environment? The authors analyze several court cases challenging minority contracting programs and illustrate the difficulty of administering public programs at the juncture of public policy goals, subtle changes in law, and demands for quality statistical analysis. Many public agencies, especially at the local level, are not prepared to address the data requirements demanded by these programs. To help with this challenge, the authors develop a set of guiding principles to help practitioners satisfy the legal requirements and meet the policy goals of minority contracting and similar programs. This includes a new emphasis on continuous gathering of valid, local‐level data.     

A Critical Evaluation of Virtual Local Government in Australia

The vigorous debate surrounding local government amalgamation in Australia remains unresolved. In an attempt to break the current stalemate Percy Allan (2001) has proposed a model of 'virtual local government' that seeks to combine the service appropriateness and effectiveness purportedly associated with demographically small councils with the service efficiency of large municipalities. This paper attempts to place his model in the context of the literature on the theory of public sector policy reform. It then goes on to examine virtual local government in the light of new institutional economics, public choice theory and the characteristics of Australian local government.     

Contracting Capacity and Perceived Contracting Performance: Nonlinear Effects and the Role of Time

Contracting out has become a popular strategy in public service delivery, but it remains uncertain whether and how government can ensure contracting performance. As a result, a growing literature emphasizes the importance of governments' contracting capacities. Yet very few studies have empirically assessed how contracting capacities relate to contracting performance. This article identifies four types of contracting capacities in terms of agenda setting, contract formulation, contract implementation, and contract evaluation, relating them to three performance dimensions including cost, efficiency, and quality. Drawing from a manager survey from Taiwan, the article shows that the relationships between the capacities and the performance indicators are not always straightforward or linear, and the relationships are complicated by the role of time. The results suggest that contracting capacities have both benefits and costs, and the solutions rooted in the economics theory should not be taken beyond their appropriate boundaries.     

Privatization and cost reduction

In this paper several examples of government contracts with private firms are examined to see how experience conforms to a principal-agent model of cost minimization via competitive bidding and how important are the many qualifications to the model. Fifteen cases of local government contracting are examined.The course of private contracting is not always smooth — as judged by the many contract disruptions observed and by the number of cities that believe they are no longer saving money by contracting and those which have resumed public production. It also seems to be the case, however, that competition generally reduces initial costs, that in many cases cost savings persist, that it is possible to stimulte competition, and that providing for continual interaction, as contrasted with simply monitoring performance, can prevent disruption.     

China’s evolution toward an authoritarian market economy—a?predator–prey evolutionary model with?intelligent design

The following study, integrating public choice theory and evolutionary game theory, develops a predator–prey model with intelligent design to explain the “evolutionary-institutional perspective” that is a well-accepted premise in transitional economics. In the model, growth-oriented central government leaders are intelligent designers of institutional change, provincial and local officials are potential predators, and private firms are potential prey. The model finds that reductions in discriminatory policies are the major institutional contributors to China’s market miracle, whereas improvements in the rule of law and in the protection of private property rights are not needed for short-run economic growth.     

Historical perspective and better regulatory governance: An agenda for institutional reform

Compared to economics, sociology, political science, and law, the discipline of history has had a limited role in the wide‐ranging efforts to reconsider strategies of regulatory governance, especially inside regulatory institutions. This article explores how more sustained historical perspective might improve regulatory decisionmaking. We first survey how a set of American regulatory agencies currently rely on historical research and analysis, whether for the purposes of public relations or as a means of supporting policymaking. We then consider how regulatory agencies might draw on history more self‐consciously, more strategically, and to greater effect. Three areas stand out in this regard – the use of history to improve understanding of institutional culture; reliance on historical analysis to test the empirical plausibility of conceptual models that make assumptions about the likelihood of potential economic outcomes; and integration of historical research methods into program and policy evaluation.     

公共科技政策分析的理论进路：评述与比较

公共科技政策分析是一个颇具多样性的领域。新古典经济学、演化经济学、科学技术与社会研究、政策科学4种理论进路各有特点。新古典经济学的政策分析非常清晰,可提供直接的政策工具;演化经济学给予科技发展一种系统的理解,可得到科技发展的结构性制度安排;STS以宽阔的视野,在政策导向、科技行为的规范、政策对科技的建构等方面具有丰富的思想和措施含义;政策科学的分析关注政策系统,为改进政策过程提供认识基础。基于对4种理论进路共性与差异的比较,提出了一个公共科技政策分析的整合的概念框架。     

Outsourcing Public Service Delivery: Management Responses in Noncompetitive Markets

Capturing the benefits of competition is a key argument for outsourcing public services, yet public service markets often lack sufficient competition. The authors use survey and interview data from U.S. local governments to explore the responses of public managers to noncompetitive markets. This research indicates that competition is weak in most local government markets (fewer than two alternative providers on average across 67 services measured), and that the relationship between competition and contracting choice varies by service type. Public managers respond to suboptimal market competition by intervening with strategies designed to create, sustain, and enhance provider markets. In monopoly service markets, managers are more likely to use intergovernmental contracting, while for‐profit contracting is more common in more competitive service markets. The strategies that public managers employ to build and sustain competition for contracts often require tangible investments of administrative resources that add to the transaction costs of contracting in noncompetitive markets.     

Adam Smith or Machiavelli? Political incentives for contracting out local public services

Why do some local governments deliver public services directly while others rely on providers from the private sector? Previous literature on local contracting out and on the privatization of state-owned enterprises have offered two competing interpretations on why center-right governments rely more on private providers. Some maintain that center-right politicians contract out more because, like Adam Smith, they believe in market competition. Others claim that center-right politicians use privatization in a Machiavellian fashion; it is used as a strategy to retain power, by ??purchasing?? the electoral support of certain constituencies. Using a unique dataset, which includes the political attitudes of over 8,000 Swedish local politicians from 290 municipalities for a period of 10 years, this paper tests these ideological predictions together with additional political economy factors which have been overlooked in previous studies, such as the number of veto players. Results first indicate support for the Machiavellian interpretation, as contracting out increases with electoral competition. Second, irrespective of ideological concerns, municipalities with more veto players in the coalition government contract out fewer services.     

Understanding micro-processes of institutionalization: stewardship contracting and national forest management

This paper examines micro-processes of institutionalization, using the case of stewardship contracting within the US Forest Service. Our basic premise is that, until a new policy becomes an everyday practice among local actors, it will not become institutionalized at the macro-scale. We find that micro-processes of institutionalization are driven by a mixture of large-scale institutional dynamics and how frontline decision-makers understand and interpret these dynamics, given the local social and ecological context in which they operate. For example, this paper suggests that a new policy may become institutionalized when it is understood to solve problems that old institutions at once create and demand to be solved. Agency actors cannot be conceptualized as untethered from the institutions in which they operate. Yet, within larger institutional dynamics, field personnel make key choices about whether to adopt a new policy, making them important players in the micro-processes of policy institutionalization. The interplay of actors and institutions turns agencies, such as the Forest Service, into complex systems that cannot be understood as artifacts of their own history or as a sum of the decisions of individual actors. This dynamic also implies that macro-level institutional change will be uneven, incomplete, and gradual, mirroring uneven, contingent micro-level processes.     

WHAT SHAPES CITIZENS' EVALUATIONS OF THEIR PUBLIC OFFICIALS' ACCOUNTABILITY? EVIDENCE FROM LOCAL ETHIOPIA

In this article, we study which institutional factors shape citizens' views of the local accountability of their public officials. Our departing assumption is that evaluations of local accountability reflect not only citizens' poltical attitudes and beliefs but also whether local institutions contribute to an environment of mutual trust, accountability and ultimately democratic legitimacy. Combining public opinion data from a large‐N citizen survey (N = 10 651) with contextual information for 63 local governments in Ethiopia, we look at access to information, participatory planning and the publicness of basic services as potential predictors of citizens' evaluations of local public officials. Our findings suggest that local context matters. Jurisdictions that provide access to information on political decision making are perceived to have more accountable officials. Moreover, when local governments provide public fora that facilitate citizens' stakes in local planning processes, it positively affects citizens' evaluations of the accountability of their officials. Our study adds to the empirical literatrure by showing that establishing local institutions that can foster citizen–government relations at the local level through inclusive processes is crucial for improving public perceptions of accountability. Copyright © 2013 John Wiley & Sons, Ltd.     

Resilience in Public Administration: The Work of Elinor and Vincent Ostrom from a Public Administration Perspective

This essay examines the remarkable careers of Elinor and Vincent Ostrom, exploring polycentricity and human management of common property resources from the “no‐name fields” of public administration in the late 1950s, through the metropolitan public service industries and public choice approach to democratic administration in the 1960s and 1970s and the institutional analysis of common pool resource management of the 1980s and 1990s. It continues with the diagnosis of the self‐governing capabilities of socio‐ecological systems in the 2000s. Many continuities underlie focal shifts in attention. Their work will be related to developments in the public administration field along with illustrations of their pioneer example for public administration on research as a collaborative enterprise. The 2009 Nobel Laureate in economics, Elinor Ostrom has been working from an academic background and intellectual tradition that, particularly through her long‐term collaboration with Vincent Ostrom, is strongly rooted in the classical and prevailing institutional concerns that may be seen as core to public administration as an academic field of education and research.

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The state of training in public policy management in Ghana

This paper discusses the relevance and state of training in public policy management in Ghana. The author argues that the lack of an institutional base for policy analysis is evident in the abdication and paralysis of policy-making, as well as the inability of the management development institutions to institutionalize training programmes in public policy management. Recognizing politicians and bureaucrats as complementary actors in the policy process, it is argued that organizing training programmes for them could contribute to improved policy-making. The content, methodology, duration, target group and impact of current training programmes in public policy management are analysed. Although the dearth of relevant local reading material on policy issue is identified as a problem in the teaching of public policy in Ghana, reference is made to some available publications on local public policy issues which could supplement Western-biased reading materials. Other problems discussed are the heterogeneous background of course participants and the non-involvement of faculty members in policy making. The paper concludes with recommendations on policy preview workshops; seminars for politicians and senior bureaucrats; development of policy analysts; and complementarity among the local management development institutions.