Revival: Quangos: Trends, Causes and Consequences (2001)

Sandra van Thiel

• Publisher: Routledge
• Year: 2017
• Print ISBN:
  9781138728745
• eBook ISBN:
  9781351748933
• Topic: Politics & International Relations
• Subtopic: Politics
• Index: Politics & International Relations

This title was first published in 2001. This sustained and rigorous theoretical treatment of the choices made by politicians regarding quasi-autonomous non-governmental organizations (quangos) makes compelling reading for both practitioners and academics alike.

1 Introduction

In many western states the preference for policy implementation by core government agencies has changed in favour of alternative arrangements such as contracting out, privatization or the creation of quasi-autonomous non-governmental organizations. This study focusses on the proliferation of these so-called quangos (Barker, 1982). LeGrand and Bartlett (1993:7) predict that, from 1990 on, the provision of public goods and services will be very different than in earlier decades. Under the ‘old’ system governments owned, funded and provided public services through government bureaucracy. In the ‘new’ system, although still paying for the services, governments will no longer provide them. Quangos will be charged with this task, operating at arm’s length of the government. Instead of a bureaucracy, we will have a quangocracy. This process is labelled quangocratization,¹ by analogy to bureaucratization (Hood, 1984).

Quangocratization can be viewed as one of the most recent stages of state development in the western world. Modern-day government is characterized by the replacement of the central, hierarchical structure with a complex network of organizations with which governments jointly develop, implement and evaluate policies.

This chapter gives an introduction to quangocratization. First, a theoretical perspective is offered on the rise of this phenomenon. Then, I will go into the definition of quangos. Next, the assumptions underlying politicians’ preference for quangos are analysed. Some previous research findings are presented as well as some theories on quangos. To conclude this chapter, the central research questions are presented, along with the outline of the book.

State Development and Quangocratization

According to North (1981:20–32), no analysis of state development can be meaningful if no attention is paid to the distribution (i.e., the allocation) of property rights (see also Hardin, 1997). Property rights are broadly defined as the right to use assets and resources in any way actors see fit (Eggertson, 1990:33–40). The right to walk about freely, to earn an income, to own a house or land, to be safe from violence in the streets, to get an education, and to speak one’s mind all can be considered examples of the rights individuals have in contemporary western societies.

However, the enforcement of rights is not always easy. Take, for example, the right to safety, for which an army and a police force are necessary. Such provisions are difficult, if not impossible, to establish by an individual alone. Also, rights are often difficult to realise for all individuals at the same time, because advantages to one individual may mean a disadvantage to another. Collective goods, such as national security, will not be optimally provided by the market, due to two properties of these goods (Mueller, 1989:11). First, jointness of supply, which means that production costs are more or less fixed. Addition of one consumer will not lead to additional production costs. And second, non-exclusiveness which means the impossibility to exclude individuals from consumption of the good.

A well-known example to illustrate the properties of collective goods is national defence (see Stiglitz, 1988:75). The cost of defending a country of one million individuals or a country of one million and one are the same (jointness of supply), and when national defence is successful all inhabitants benefit from it (non-exclusiveness). This example also shows why individuals are not easily prepared to invest in collective goods. If you invest, others who do not invest may benefit as well. You can also acquire these goods without investing in them, therefore, individuals are disinclined to invest. This phenomenon is known as the free-rider problem (cf. Hendrikse, 1993:144) or the problem of collective action (see Olson, 1965; Coleman, 1990:937–938; Ostrom & Walker, 1997). However, no investments means no provision of collective goods and no enforcement of citizens’ rights.

One way to solve the problem of collective action is to establish an overarching authority (a ‘ruler’; North, 1981), for example, a sovereign or a group of representatives. Today’s overarching authority is usually referred to as the government. It acts on behalf of all individuals (‘constituents’; North, 1981) and establishes the conditions that enable people to exercise their rights. The following example illustrates this (for more examples see De Swaan, 1989):

In the Netherlands in the nineteenth century, waterworks and sewerage were initially constructed by private entreprises commissioned by prosperous citizens. However, these citizens found out - although the chance of infection with cholera was reduced - that risks of infection still existed, because the poor were not connected to the waterworks and sewerage and kept using non-purified water. Therefore, they supported plans of the city council to oblige every citizen to connect to the waterworks and sewerage. The citizens had discovered that besides one’s own health national health exists as well. And when national health is bad, one’s own health is in danger, in spite of what measures already may have been taken (Ultee, Arts & Flap, 1992:255 [my translation, SvT]).

In the course of time the government’s activities have expanded. Modern welfare states provide goods such as education, social security and national health besides the more traditional goods such as national defence and the tax system (Den Hoed, 1992). These goods are not all purely collective goods as they do not always have the two forementioned characteristics. Therefore, they are usually referred to as impure or quasi-collective goods or publicly provided private goods.

Nowadays, in most western democracies citizens pay taxes and give votes to political parties, in exchange for which elected politicians will pass legislation to implement citizens’ rights. An executive is charged by the politicians with the implementation of policies. Thus a cascade of principals and agents (Moe, 1984:765; Coleman, 1990:146–156; Pratt & Zeckhauser, 1991) is created (see box 1.1). Voters are the principals of politicians (the agent) when they give politicians the right to act on their behalf. Politicians become principals in their turn, when they charge an executive agent with policy implementation.

Box 1.1The political processes in a democracy as a cascade of principals and agents

The relationship of exchange between citizens and politicians, and between politicians and executive agents can be seen as a contractual agreement (North, 1981). The state will seek to maximize the opportunities for citizens to exercise their rights, in exchange for which politicians are given the right to exercise power (e.g. by the use of force). Politicians are also allowed to restrict citizens’ use of rights, for instance by attenuation (to avoid damage to the rights of others) and partitioning of rights (i.e., dividing scarce assets or resources) as long as restrictions agree with social norms (Eggertson, 1990). Politicians can transfer part of their rights to an executive agent.

Such differentiation of rights is typical of the development of western democracies. Max Weber labelled it rationalization of the state (Ultee et al., 1992:241). As a result of this differentiation, most contemporary western states are characterized by a political system - a democracy - in which legislature and the executive are independent powers, charged with tasks by a constitution (Coleman, 1990:374–375).² In most states the executive has developed into a large bureaucracy, which explains why Nonet and Selznick (1978:22) call this stage in the development of western societies the ‘bureaucratic’ stage.

According to Weber, bureaucracy is the most effective, efficient, and rational form of organization (Van Braam, 1969:157–166; Coleman, 1990:422). Bureaucrats are empowered by politicians to implement policies, but have no rights of production. For example, they do not determine the size of production (input, output), budgets or prices, nor are they allowed to retain surpluses. They are expected to be neutral actors, not acting in their own interest but in the general interest of all individuals, implementing policies that support the enforcement of individuals’ rights. This conception of bureaucrats is known as the classical political science perspective (Breton & Wintrobe, 1982:2).

In recent research, however, some scholars - following ideas originated by Niskanen (1975) and Downs (1965) - have emphasized that bureaucrats do have individual interests that shape their behaviour (e.g., Mueller, 1989:250–259; Dunleavy, 1991: 147–173). Following a similar line of reasoning, North (1981) claims that the delegation of power to executive agents will lead to an inefficient distribution of property rights. In the absence of competition, citizens have no substitute supplier of collective goods. Exit (emigration to more efficient states) or voice (threating to oppose the ruling authority) are not realistic options for individual citizens. In democracies, tension between dissatisfied constituents and governments will cause political instability, dilution of authority and political pluralism. To maintain its authority and legitimacy, it is the government that will initiate institutional reform (North, 1981: 28–32).

North’s model can easily be applied to quangocratization. The rapid expansion of the activities and expenditures of government bureaucracy in many western states, especially after the Second World War, raised questions with regard to its legitimacy and effectiveness (see, for example, Schuyt & Van der Veen, 1990). The drawbacks of bureaucracy as an instrument of rational action, such as inflexibility, red tape and logrolling, facilitated the evolution of western states into a new stage: the post-bureaucratic stage, which is characterized by a diffusion of authority (Nonet & Selznick, 1978:22) and dilution of control (North, 1981). In this stage, the implementation of policies is no longer automatically trusted to core government agencies, but other arrangements such as privatization, contracting out and the setting up of quangos become more popular. These changes are part of what has become known as New Public Management (NPM) or the reinvention paradigm (Pollitt, 1999).

“Effectively NPM has become a generic label for a group of policy and administrative solutions emphasizing competition, disaggregation and incentivization” (Dunleavy, 1994:38). In public sector reforms throughout the western world, a preference for market mechanisms is coupled with a shift from input- towards output-driven management, downsizing, a separation of policy and administration, and an emphasis on customer orientation (Pollitt, 1999). New (types of) organizations, such as quangos, are established to which the government transfers part of its right to implement policies and (some of) the accompanying production rights. As a result, the institutional context of central governments has become more and more complex (Leeuw, 1992). Below I will elaborate more on the political motives underlying these reforms.

Quangocratization can thus be considered as one of the most recent stages in the development of western states. An interesting question in this respect is whether quangocratization is the next step in the process of rationalization³ as described by Weber in terms of ongoing specialization and differentiation, or whether it is a form of de-rationalization, considering that it replaces bureaucracy, which, according to Weber, is the most rational form of government organization. I shall return to this question in chapter 6. But the first question to be dealt with is: what is a quango?

Definition of a Quango

In this study, quangos are defined as organizations which, as their main task, are charged with the implementation of one or more public policies, and which are funded publically but operate at arm’s length of the central government, without an immediate hierarchical relationship existing with a minister or a parent department⁴ (Leeuw, 1992). A more precise definition is hard to find, and different researchers and practitioners list different types of organizations as quangos (see, for example, the debate in the United Kingdom between Hogwood [1995] and Hall & Weir [1996] in cha...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• List of Boxes
• List of Figures
• List of Tables
• 1 Introduction
• 2 Trends
• 3 Theory
• 4 Causes
• 5 Consequences
• 6 Conclusion
• Bibliography
• Index