MANAGING FINANCIAL STRINGENCY IN THE PUBLIC SECTOR

This article contributes to the debate about the most effective ways to manage the effects of financial stringency in the public sector. It tentatively draws ideas for further research from three action research studies conducted longitudinally over several years in different contexts and sectors and at different organization levels within the public sector. Our contribution focuses on the management of the early stages of stringency. We conclude that in stringent times, particularly in the short-term, intra-organizational conflict is likely to increase; organizational climates to become more cautious and reactive; and management to become more centralized, controlling and to take what is termed the efficiency rather than the effectiveness option. To these factors is added the resistance to change inherent in professional bureaucracies. Managers in public sector organizations experiencing harsher environments need to be helped to plan strategically for implementation in the particular context in which they find themselves.     

The Limits of the Economic Analysis of Regulation: An Empirical Case and a Case for Empiricism*

Can the tools of the economic analysis of law be used to identify the optimal level of stringency in regulatory standards? Data on the costs of nursing home regulatory compliance suggest that in this domain such models could only produce wildly false estimates of the optimal level of stringency. Among the reasons for this are that: (a) actual costs of compliance explain only 19 percent of the variance in the subjectively expected costs that should inform rational choices; and (b) while there is a powerful effect of expected cost on compliance disaggregated by standard, this is not a monotonic increasing effect but a parabolic relationship. The reason for the finding that almost half the nursing homes lie on the wrong side of the turning point of this parabola is that these homes tend to be run by managers who are “disengagers” from the regulatory culture. Their behavior is not to be understood in terms of rational game playing but in terms of dropping out of the regulatory game. The disengagers are in the regulatory system but not of it and certainly not economically calculative about it.     

State‐Level Institutional Effects on Legislative Coalition Unity in Brazil

How do subnational factors affect the proclivity of legislators from the same party or coalition to vote together? We estimate the effects of two institutional forces operating at the state level—intralist electoral competition and alliance with governors—on voting unity among coalition cohorts to the Brazilian Chamber of Deputies. Larger cohorts, in which the imperative for legislators to distinguish themselves from the group is stronger, are less unified than smaller cohorts. We find no net effect of alliance with governors on cohort voting unity. Governors are not dominant brokers of legislative coalitions, a result suggesting that the net gubernatorial effect is contingent on factors that shape governors' influence relative to that of national‐level legislative actors.