Modernizing the Public Sector

Scandinavian Perspectives

Irvine Lapsley, Hans Knutsson, Irvine Lapsley, Hans Knutsson

• Publisher: Routledge
• Year: 2016
• ISBN:
  9781317197911
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

As policymakers and scholars evaluate possible ways forward in the reform and renewal of public services by governments caught up in a recessionary environment, this book aims to offer something different – a comprehensive analysis of the development of the 'Scandinavian' way of modernizing public-sector management. No book has yet provided an inside view of the development and character of New Public Management (NPM) in Scandinavia. Although there is a general perception that there is a clear-cut 'Scandinavian' model of public policy and management, this book offers a more nuanced interpretation, illuminating subtle distinctions in political, social and economic context which are significant in identifying receptive contexts for the adoption of modernization policies.

Organized into three main themes in the modernization of the welfare state – management, governance and marketization – the contents revolve around unique empirical accounts, revealing distinctive Scandinavian characteristics of reform initiatives. The received wisdom may be a hesitant follower of the UK and the USA. But this book offers an alternative interpretation, revealing an edginess in certain Scandinavian settings, particularly in Sweden, which is a largely unrecognized.

Without compromising the welfare state, it may be a bold frontrunner in the development of New Public Management.

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Making sense of public-sector reforms

Scandinavian perspectives

Irvine Lapsley

Summary

This chapter examines the emergence of New Public Management (NPM) as the dominant paradigm in government attempts at the modernization of the state over recent decades. This discussion proceeds by considering both past and current practices in the organization and coordination of public services. Despite the preoccupation of contemporary scholars and practitioners with an NPM agenda, this study presents the case for examining the landscape of the public sector as a site for layers of ideas and policies on public administration and management. This perspective argues that the durability of bureaucratic ideas in contemporary society is evidence of this. Policy analysts and scholars should not regard practices and initiatives as straightforward sequential reforms over time. While this book offers insights into NPM-type ideas, such as marketization, in practice it also reveals the deep-seated nature of reform processes and cautious attempts to pigeonhole the nature and dissemination of reform ideas in public services. This phenomenon of the fusion of ideas over time is evident in Scandinavian public administration, notably in Sweden. This chapter also offers a glimpse of what the future holds for public administration in a dynamic, changing world where the Scandinavian practices can resonate with the challenges facing governments internationally.

Public-sector reforms

This chapter discusses the past, present and future of public management. It takes a longitudinal perspective, which is necessary to understand the nature of public-sector reforms and contemporary challenges in making public services efficient and effective. This book examines Scandinavian experiences of public-sector reform. This study reveals the distinctive nature of Scandinavian-style interpretations and implementations of public service reforms, which will be of interest to other mature economies but also to developing countries as an alternative vision of how to deliver public services from the dominant Anglo-Saxon model. These reforms are discussed as management processes, governance systems and marketization. The major results presented in this book are Scandinavian, particularly Swedish, given the willingness of Sweden to embrace public-sector reform. Indeed, Hood (1995) placed Sweden alongside the UK, New Zealand, Australia and Canada as having a high emphasis on NPM, but it was the only country with a political tradition from the left. This view of Sweden as a long-standing, leading-edge reformer of public services was confirmed by Pollitt and Bouckaert (2000). They described Sweden (along with Finland, Canada, the Netherlands and France) as an ‘adventurous moderniser’, a country which saw the need for a significant role for the state in contemporary society, but which also saw the need for fairly fundamental changes in public administration (Pollitt and Bouckaert, 2000, p. 93).

This chapter also uses UK experiences as a reference point in its discussion of public management reforms. There are three reasons for this. First, the UK is widely regarded as a leading-edge country in public-sector reform. Second, there is a closeness between the UK and the northern European countries of Scandinavia, which is partly historical, partly cultural and partly from trading links. Third, the UK is part of the countries which form the dominant Anglo-Saxon nexus of public-sector reformers. This makes the UK a useful reference point in the discussion of the distinctive interpretations of Scandinavian public-sector reforms and practices.

This chapter is organized into four sections: a reflection on reform processes in public management; an overview of public management as administration and its past; an examination of present practices in public management (including New Public Management and New Public Sector Governance) and concludes with comments on the future of public management. A major focus of this chapter is the manifestation of different aspects of the different schools of thought (public administration, New Public Management and New Public Sector Governance) and whether they are distinct and mutually exclusive phenomena or whether they can all coexist simultaneously within the public sector. It is suggested here that the latter circumstance more accurately depicts public-sector reforms, particularly in the Scandinavian context.

Reform processes

This chapter adopts the literature on reform processes as its theoretical lens for the study of modernization initiatives in Scandinavian countries. The discussion of reform processes is examined in three parts. First, there is an examination of the importance of political context. Second, the key characteristics of reform processes are considered. Finally, trajectories of reform are examined.

1 Political context

In his seminal paper of 1991, Hood stated that NPM was a policy which was politically neutral. In his view these policies could not be attributed simply to neo-liberal governments. By politically neutral, Hood meant that governments of different political persuasions were content to adopt NPM-type reforms. At that time, his reference points were Australia and New Zealand, both of which had centre-left governments and both of which were enthusiastic adopters of NPM ideas. However, the political context is very important in setting the conditions for the adoption of NPM. An interesting example is provided by Italy (Arnaboldi et al., 2016). Italy has had a variety of governments which have made moves to adopt NPM policies but which have never secured the political legitimacy to fully adopt them. The Italian government context is shaped by highly politicized processes which may be attributed to pre-modern practices and deep historical roots in the Italian state (Putnam et al., 1993). The above reference point underlines how significant the political context is to secure an active NPM agenda. Within the Scandinavian countries, Sweden offers a fascinating example of a reforming country. Karlsson (2017) reveals the long-standing importance of the Social Democrats, a centre-left party, in the adoption of NPM ideas in Sweden before the expression NPM was coined. This circumstance is taken up further below.

2 Key characteristics of reform processes

Table 1.1 shows the key characteristics of reform processes (adapted from Arnaboldi et al., 2016). It can be seen that this literature is preoccupied by both the simplicity of design and the complexity of implementation. There are both negative and positive influences at work. The motivating factors are positive influences which are most likely to lead to effective implementation. The negative influences identify problematic and perverse outcomes for modernizing reformers.

Motivating factors in public services policy design

1 Private-sector mimicry

Table 1.1 Key characteristics of reform processes

Motivating factors in public services design	Perverse outcomes in policy formation
1 Private-sector mimicry	1 Failure
2 Rationality	2 Forgetfulness
3 Strong beliefs	3 Deception and hypocrisy

The mimicry of private-sector practices is a central feature of the NPM phenomenon (Hood, 1991, 1995). The NPM movement is encapsulated in the public sector embracing ideas of the rational organization (which is perceived to be the case in the private sector) and by the adoption of private-sector practices to improve the efficiency of public administration (Cheung, 2005; Cole and Jones, 2005; Lodge and Gill, 2011; Cristofoli et al., 2011). One feature of this is likely to be mimicry of the private-sector organization as a means of obtaining legitimacy. Brunsson and Sahlin-Andersson (2000) portray this as a desire by modernizers to be considered part of a ‘complete organization’, in which public-sector organizations have all the trappings of the modern private-sector corporation (boards of directors, CEOs and private-sector management techniques and practices).

2 Rationality

As noted above, this reform process is fused with ideas of rationality. The NPM policy development was influenced by ideas of public choice theory (Buchanan, 1986; Hayek, 1960), which are themselves imbued with a strong sense of rationality. This literature criticized public bureaucracies. It favoured markets for the expression of individual preferences. In particular, these reformers and modernizers are receptive to the idea of rationality and the rational organization (Brunsson, 2006, p. 229). This affords opportunities for symbolic phenomena, rituals and ceremonies to assume greater significance in the political context than more instrumental or functional explanations of political acts (March and Olsen, 1983).

3 Strong beliefs

These enactments of reform are influenced by strong beliefs. Policymakers and their advisers are susceptible to the presentation of ideas as being new and novel, where prior experience lacks validity (Brunsson, 2006, p. 229). Where reforms are seen as impractical, in practice advocates can continue to ‘talk’ their ideas rather than to practise reform. These phenomena can then recur, with reforms generating new reforms and even demands for further reforms aimed at the same problem and propagating the same solutions (Brunsson and Olsen, 1993, p. 42). In this way, Brunsson and Olsen regard policymakers as ‘relentless modernizers’.

Perverse outcomes in policy formation

1 Failure

The antecedents of policy formation are important. While there is a general lack of understanding of policy formation, changes in policies and the conditions which constrain or facilitate policy implementation (Capano and Howlett, 2009; Mele and Ongaro, 2014), the context of politicized organizations offers a distinct set of reform experiences. In highly politicized organizations, reform processes exhibit distinct characteristics. In particular, they often fail (Lapsley, 2009), generating a ‘long history of disappointment’ (March and Olsen, 1983, p. 289). There are a number of dimensions to these processes of reform failure. A noticeable feature of this human endeavour is persistence (March and Olsen, 1983, pp. 288–289; Brunsson, 2009, p. 98) – the repetition of similar ideas and relatively similar arguments over long time periods. This persistence may continue in the face of apparent failure, particularly in the domains of ‘strong beliefs and ambiguous experience’ (March and Olsen, 1983, p. 289).

2 Forgetfulness

A further, distinct feature of policy formation is the importance of organizational memory and forgetfulness in the acceptance of reforms (Brunsson and Olsen, 1993). This phenomenon cuts across the entire process of policymaking, with issues for government policymakers, who devise policy and for the public service organizations which are subject to policy change. It has been suggested that our understanding of organizational memory (how and where it works within organizations and in interactions between organizations and public agencies) is a major neglected area of research within public services (Pollitt, 2009). Indeed, Pollitt (2009) argues that hierarchical organizations have greater retention of organizational memory. This may confound the reform of public agencies but it also points to the durability of bureaucracies.

3 Deception and hypocrisy

Reforms may also involve deception and hypocrisy (Brunsson, 1989; Ongaro, 2011). Thus, Brunsson (2009, p. 96) suggests that reforms have to be presented as ‘better’ than the solutions currently in use, whether this can be substantiated or not. Indeed, Brunsson (2009, p. 114) suggests that reforms are described as simple, general, very sensible, as ‘beautiful principles’ but which then change on implementation. Specific adaptions will need greater detail and they may become ‘less beautiful’ and more like the old ones that they are replacing. This phenomenon may occur as modernizers or political reformers articulate visions of reforms which emerge from relatively macro theories of broad political and social trends to translate into a vision of confusion at the micro level (March and Olsen, 1983, p. 292). As part of this process of deception, modernizers or reformers may present ‘reorganizations’ as a tactic for the illusion of progress where none exists (March and Olsen, 1983, p. 290).

The above discussion identifies ambiguity (of purpose and outcomes), complexity (particularly of implementation) and uncertainty (of practical and policy outcomes) alongside a conviction on the part of the modernizers of how public-sector reforms can and should be devised. This certainty in the mind of modernizing reformers reveals a particular mind-set in the design of public-sector reforms. As Figure 1.1 shows, this is the case of reformers starting with a blank sheet of paper. An empty space to fill in their ideas of how public-sector organizations should look and behave. But the reality of the social, economic and organizational space is already occupied by actors, procedures, processes and all manner of administrative machinery. This takes to the actual, possible or widely regarded trajectory for public-sector reforms.

Figure 1.1 Public management reforms as a blank sheet of paper.

3 The reform trajectory

The literature on processes of reform suggests that repetitive patterns of behaviour may occur in the formulation and implementation of reforms. Therefore, this theoretical perspective benefits from a research approach which examines reforms over time.

The NPM had early adopters, notably New Zealand, Australia and the UK. The NPM has met sticking points in countries with legalistic contexts such as those in continental ...