Collaborative Governance

Private Roles for Public Goals in Turbulent Times

John D. Donahue, Richard J. Zeckhauser

• Publisher: Princeton University Press
• Year: 2011
• ISBN:
  9781400838103
• Topic: Économie
• Subtopic: Finances publiques

How government can forge dynamic public-private partnerships All too often government lacks the skill, the will, and the wallet to meet its missions. Schools fall short of the mark while roads and bridges fall into disrepair. Health care costs too much and delivers too little. Budgets bleed red ink as the cost of services citizens want outstrips the taxes they are willing to pay. Collaborative Governance is the first book to offer solutions by demonstrating how government at every level can engage the private sector to overcome seemingly insurmountable problems and achieve public goals more effectively.John Donahue and Richard Zeckhauser show how the public sector can harness private expertise to bolster productivity, capture information, and augment resources. The authors explain how private engagement in public missions—rightly structured and skillfully managed—is not so much an alternative to government as the way smart government ought to operate. The key is to carefully and strategically grant discretion to private entities, whether for-profit or nonprofit, in ways that simultaneously motivate and empower them to create public value. Drawing on a host of real-world examples-including charter schools, job training, and the resurrection of New York's Central Park—they show how, when, and why collaboration works, and also under what circumstances it doesn't. Collaborative Governance reveals how the collaborative approach can be used to tap the resourcefulness and entrepreneurship of the private sector, and improvise fresh, flexible solutions to today's most pressing public challenges.

PART I

The Promise and Problems of Collaboration

Chapter 1

Private Roles for Public Goals

We live in turbulent times. No doubt it always seems so, but as the twenty-first century hits its stride the gauge of stress and tumult seems well above par. The global economy is wobbling; housing prices have boomed and busted; jobs have evaporated; retirement funds have shriveled; iconic financial institutions stagger from bankruptcy to bailout. And these are just the moment’s problems. Looking ahead—and not all that far ahead—we face massive challenges: finding ways to power the economy without fouling the planet, fulfilling the pledge of affordable health care for all, and securing the future of Social Security. Schools fall far short of what parents expect and students require. Roads, bridges, and levees are crumbling from old age and overuse. Big challenges are standard for this restless country, to be sure, but those today beat the norm by a considerable margin.

No one believes, given the complexity and cost of the tasks we confront, that simply scaling up the standard governmental solutions is the answer. Government too oft en finds that it lacks the skill, the will, and the wallet to figure out a fix and get it done. Corporations—which some hope will be spurred by their sense of social responsibility to save us from the perils that beset us—are often struggling to save themselves, and resist devoting resources to any problem if a profit, direct or indirect, isn’t part of the solution. And private charities have too few resources to take up every burden that government shrugs off. A particularly vivid recent trend was the surge in governmental responsibility for shoring up private institutions. That surge both demonstrates that familiar boundaries between sectors have been much in flux, and masks the less dramatic but more durable trend that is this book’s focus—the escalation of private-sector involvement in undertakings traditionally considered the province of government.

Yet troubled times can also offer opportunity. We have a tough-minded president with big ideas and the courage to surround himself with some of the nation’s best thinkers and doers. The Obama administration came into office with a mandate not only to rescue the country from pressing threats but also to improve the way government works. But such improvement, paradoxically, requires looking beyond the boundaries of the state itself. The magnitude of the problems and the ambition of the goals that mark our era mean that government, on its own, is overmatched.

The Obama administration, its sister administrations at the state and local levels, and governments to follow in the future need what the military calls a “force multiplier,” some systematic way to ramp up the impact of government’s efforts. We believe that collaborative governance—carefully structured arrangements that interweave public and private capabilities on terms of shared discretion—can be that force multiplier.

Agencies at all levels face a range of opportunities to collaborate with private actors to achieve public goals more effectively than government can on its own. When well applied, the collaborative approach can be a powerful lever for creating public value. But it is oft en misunderstood—confused with conventional contracting or charity, or merged with wooly conceptions of public-private partnership—by policy makers and the public alike.

A careful review of the evidence from governments—local, state, and federal—convinces us that the performance of America’s government will oft en hinge on making the best use of collaborative governance. It leverages private expertise, energy, and money by strategically sharing control—over the precise goals to be pursued and the means for pursuing them—between government and private players. That discretion simultaneously motivates private collaborators to enter the public arena and empowers them to play their roles well. The collaborative approach unleashes the unpredictable resourcefulness of an entrepreneurial citizenry to devise fresh and flexible solutions. Done well, collaboration creates synergies between governments and private participants, allowing them together to produce more than the sum of what their separate efforts would yield.

This approach to getting things done is far from new. Those inclined to view public affairs as, until recently, the state’s exclusive domain, might contemplate imperial Roman tax administration, which was delegated to private revenue agents,¹ or the fabled history of the British East India Company, which oft en acted as a diplomatic and commercial extension of the British government. Lewis and Clark’s “Voyage of Discovery,” which opened the American West, was a private expedition operating with a loose, flexible mandate from President Jefferson. But those were simpler times. Government and society today are vastly more complex and the whipsaws of change more rapid and pronounced. And while collaboration between governments and other entities can be found in nations across the globe, it is an approach uniquely suited to the market-friendly, bureaucracy-wary culture of the United States.

We are not claiming to have discovered some new species of organizational interaction, nor do we pretend to any startling degree of conceptual novelty. Most of the ideas in this book (or most modern books, for that matter) would not be big news to Adam Smith, Jeremy Bentham, or John Stuart Mill, and some first-rate twentieth-century work on collective action provides us with both inspiration and some direct antecedents for a portion of what you’ll encounter here.² Our key innovations are, first, to distinguish among frequently confounded forms of public-private interaction; second, to focus with special care on the implications of shared discretion—its rationale, its potential dark side, and the tradecraft required to manage it; and, third, to orient the collaborative approach to some pivotal problems of today and tomorrow.

There is an enormous political science literature on coalitions, social capital, networks, and other relevant concepts.³ The pitfalls of collaboration—from crony capitalism to political machines—are also well documented.⁴ Legal scholars have explored collaboration and related topics at great length, sometimes with impressive insight, and almost always in a language all their own.⁵

There is pertinent wisdom to be harvested in many subfields of economics, including game theory, behavioral economics, institutional economics (especially transactions-cost-based theories of economic structure), and in particular agency theory.⁶ The business literature, which addresses many topics closely related to our study of collaborative governance, including corporate alliances and strategic partnerships—areas of inquiry by economists, business scholars, and organizational experts—turns out to be surprisingly rich in material related to collaborative arrangements. This literature has been especially lively since the late 1980s, in parallel with the ferment of real-world experimentation with new models of interaction among firms.⁷ And in the literature on public management, approaches related to what we term collaborative governance are—a tendency toward terminological untidiness notwithstanding—thoroughly mainstream.⁸

The notion of a collaborative effort between government and the private sector sits uncomfortably in many Americans’ minds. Our conventional conceptual model has government doing public work, business doing private-sector work, and charitable nonprofits filling the gaps, each sector cultivating its own garden. And for many years this conception of divided realms was a reasonably apt description of the real world. Half a century ago, the standard practice was for governmental action to be carried out by public employees, working in public organizations and under the direction of public managers. Private players, when they were involved, acted in limited and subordinate roles. As recently as the mid-1970s, America’s public sector—federal, state, and local combined—devoted about 40 percent of all outlays to government workers. Today that share has slumped to less than 29 percent,⁹ reflecting a shift away from direct production to grants, transfer payments, and contracts. The form and the complexity of interactions with the private sector have also changed. From a short and simple list of the stances a private organization could take in its dealings with government—constituent, contractor, taxpayer, grantee, lobbyist, adviser—the repertoire of potential roles has grown richer, more sophisticated, and, not surprisingly, more confusing. Private roles in producing public value now span a broad spectrum, from suppliers who make a buck meeting the specs of procurement contracts to philanthropists who pursue the common good at their own initiative and on their own terms. The accomplishment of many, and perhaps most, important public missions in the twenty-first century depends on private for-profit and nonprofit organizations.

Yet we—politicians, direct participants, and the public—tend to overlook or misconstrue the nature and implications of the private sector’s involvement in public undertakings. There is no broad-based recognition of how extensive collaboration already is, and even less understanding of how it differs from other forms of private involvement with the public’s work. And it is too oft en viewed through the distorting lens of ideology. Debates over the general propriety of private involvement in public work, though perhaps entertaining, are mostly a waste of time.¹⁰ The conversation becomes meaningful only when it zeroes in on specific goals, specific settings, specific actors. The conditions that make collaborative governance the right answer to big questions must be understood both more broadly (by the public at large) and more deeply (by scholars and practitioners). This will enable us to choose it selectively for the proper public tasks, avoid it when it is not the right approach, and apply it wisely wherever it is used.

A crucial first step is to recognize that many private roles in public missions are not—and should not be—collaborative, by our definition.¹¹ Individual charity, corporate philanthropy, and other forms of voluntarism are related to but distinct from the topic at issue here. In these arrangements discretion is not shared but is monopolized, or nearly so, by the private parties. Within very wide parameters, the choices made by private individuals and institutions are presumptively defined as fulfilling “the public good” for tax purposes. There are limits, to be sure. No corporate tax deductions can be claimed for gift s to political parties, or to the CEO’s shift less cousin. But while shareholders might quibble over grants to the chairman’s alma mater, or the local polo league, and taxpayers may resent individuals’ deductible gift s to arcane artistic collaboratives or exotic religious sects, the government itself has no mechanism to deny such gift s tax-favored status, short of the nuclear option of discrediting the charity itself. The donor has discretion and the government does not, despite the fact that the public sector is a party to the undertaking in that it surrenders revenue it would otherwise have received. No doubt this arrangement promotes occasions of waste or triviality or self-dealing at times, but there are strong reasons for protecting donors’ discretion against governmental second-guessing on the merits of the mission. Few among us, for instance, would want government to be in the position of declaring which religions are acceptable and which are not.¹²

A municipal government contracting with a private waste-management company represents the other end of the spectrum. Discretion rests entirely with the government. The company’s charge—to pick up the garbage and dump it at the landfill—is explicit, complete, and geared to the government’s priorities. If town officials want the garbage to be collected on Fridays instead of Wednesdays, starting with Maple Street instead of Elm, or incinerated instead of buried, government is at liberty to alter the mandate so long as it pays up as promised. Such arrangements are common and, when objectives are readily defined and measured, are likely to be entirely appropriate. In collaborative governance, by contrast, each party helps to determine both the means by which a broadly defined goal is achieved, and the specifics of the goal itself.

Collaboration in the Concrete

Chapters to come brim with specific examples of collaboration, but a few quick previews right up front will help to clarify how collaborative governance differs from other ways of getting collective tasks accomplished.

A Park in Chicago

In the mid-1990s Chicago’s city government regained control of a choice downtown parcel, long lent to the Illinois Central Railroad. The plan was to build a much-needed underground parking lot, topped with turf and perhaps a few benches and statues. In hopes of lightening the burden on the city’s budget, Mayor Richard Daley approached local business leader John Bryan about raising $30 million in private money to help pay for the project. Bryan accepted the mayor’s bid for private involvement and raised it—but with a crucial twist. He called for making the acres above the parking lot a cultural showplace, not just a green space, by letting donors put their stamp on a particular piece of the park in exchange for substantial contributions.

It took more time and money than either Daley or Bryan originally expected, but the basic strategy of sharing discretion to motivate private collaborators worked brilliantly. Chicago’s wealthiest family, the Pritzkers, commissioned a fabulous Frank Gehry open-air concert hall as the park’s centerpiece. Communications giant AT&T led a consortium of donors to provide an elegant plaza surrounding an instantly iconic sculpture by the up-and-coming artist Anish Kapoor. The Crown family hired an edgy Catalan artist to design a fountain for its corner of the park. On occasion the city turned down or insisted on revisions to a private collaborator’s proposal. But Chicago’s public leaders generally gave running room to families, companies, and individuals who wanted to contribute, reasoning that they had every motive to make sure the projects to which their names were attached would find favor with Chicago’s citizens. By the time the undertaking was completed, more than $200 million in private money—its impact intensified by donors’ expertise and influence—had poured into the twenty-four-acre plot, dwarfing the public resources devoted to the project. And from the day it opened in mid-2004, Millennium Park has been wildly popular with Chicagoans and visitors alike, a glittering and happily crowded cultural jewel at the heart of downtown. (Millennium Park is discussed in detail on pages 264–271. Another noteworthy venue of collaborative governance, New York’s Central Park, figures prominently in chapter 7, where we also discuss the remarkable history of the city’s parks system as a whole.)

A School in Massachusetts

On a decommissioned army base forty-five minutes west of Boston, nearly four hundred middle school and high school students absorb an updated model of progressive education at an unusual school. Even the peculiar architecture of the school signals its hybrid status—two story modular buildings bought secondhand from a nearby college are stitched onto an old...