1.2 The machinery of government: policy as rational planning
Much of the policy literature is imbued with a rather mechanical conception of change: ideas about ‘pulling levers’ to make things happen, or about applying different ‘tools’ or ‘instruments’, all conceive the policy system as something like a machine itself. Component parts – the government departments, regulatory bodies, delivery organisations, and even the people who staff them – are viewed as connected though static and predictable mechanisms. The system is seen as non-adaptive and non-learning. That is, to make change happen it is always necessary to apply a new mechanism from above in order to pull the system ‘into line’ – or, in the case of previous failed attempts to do this, to redesign all or part of the system from scratch, based on a new blueprint. In this model, only policy makers are viewed as capable of learning; everyone else has to carry out the policy mechanically. The conception of structure and agency holds that structure is all: people, it is assumed, will act according to new incentives built into the design. All the government (the mechanic) needs to do is restructure the institutions (a merger here, a decentralisation there) or tinker with the incentive structure (altering the funding streams and/or introducing more competition between organisations) and, it is assumed, change will follow.
Susan Barrett (2006) discusses the policy equivalent of this image in her critique of the rational planning, top-down view of the implementation process. But it should also be considered how far such critiques apply to a rather more ‘modern’ version of the policy system: that based on contract. The new public management (NPM) reforms of the 1980s and 1990s in many western countries produced a ‘fragmented’ public sphere. The old departmental hierarchies of the state were slimmed down and the policy and delivery roles of the state itself were increasingly separated. In the UK this led to the creation of a number of different civil service agencies (those covering child support, highways, passports, defence, etc.), while in the USA it reinforced already existing divisions, to the extent that some influential authors called for a transformation of the public sector, with an emphasis on the need to mobilise (or empower) social or community entrepreneurs to take on increased responsibility (Osborne and Gaebler, 1992). The introduction of quasi-markets and competition extended the process of fragmentation, producing what Rod Rhodes (1997) terms a ‘plural polity’ based on a dispersal of state power. Some authors dispute the term ‘fragmentation’ and suggest that these reforms resulted in a modest disaggregation or loosening up of the arrangements for providing public services.
How, then, were the rods, levers and pulleys of the machine to function, given the greater distance between government and those delivering public services? One solution draws on ‘principal-agent theory’. This is based on a clear separation between ‘agents’ (those performing a particular function) and ‘principals’ (the clients who specify the functions to be performed). The relationship between them is the contract. This model underpins the ‘framework agreements’ between ministers and civil service agencies in the UK, as well as the contracting out of services to the commercial sector associated with NPM. Principal-agent theory states that contracting will be successful where there are tight specifications for the outputs to be delivered, where outputs can be easily measured and where inadequate suppliers can be quickly replaced (Donahue, 1989). The rationale here is the competition of the market-place rather than rational planning within hierarchies, but the relationship between principal and agent is nevertheless often viewed in somewhat mechanical terms. Indeed public service organisations acting as clients initially tended to manage their contracts in highly bureaucratic ways, producing overly tight specifications that squeezed the capacity of contractors to innovate, and monitoring outputs with an exaggerated zeal to the extent that damaged the possibility of trust between client and contractor.
The same charges might be laid at the door of governments acting as principals in relationship to other parts of government acting as their agents, delivering public services. Rather than a formal contract, the relationship here is governed by the specification of outputs in the form of performance indicators, achievement against which is then tightly monitored in a climate of low trust between government and public service organisations. Many benefits are claimed for the clear separation between principals and agents, and for the shift to contractual relationships. These include better performance, greater value for money, the tightening of accountability, and the generation of new providers – commercial, voluntary and non-profit organisations – whose involvement opens out the possibility of innovation. But there are also disadvantages, notably the problem of writing precise specifications or targets for complex services where the output depends in part on professional judgement, the tendency for organisations such as schools or hospitals to cream off clients or customers who are likely to enable them to meet their targets more easily, and the unwillingness of managers working to tight targets to undertake work other than that which is actually specified – a problem in areas where needs or conditions are fast-changing. A useful example here is provided by private finance initiatives (PFIs) and instances where contracts have been too rigidly put together. In order to enable the policy system to respond to complexity, uncertainty and rapid change, it becomes necessary to draw on alternative models that transcend some of the dysfunctions of the machine model.
Mechanical instruments based on a clear separation of principals and agents, coupled with tight specifications as to what is to be delivered, might be suited to simple tasks, such as refuse collection or catering. But when attention turns to policy problems such as the fear of crime, social deprivation, run-down communities, social exclusion, or a population without the so-called modern skills deemed necessary for survival in a global economy (all issues high on the policy agenda in many European countries and in the EU itself, in the form of the Lisbon Agenda), the principal-agent metaphor falls short for at least three reasons.
First, the definition and analysis of each of these problems are contested. That is, governments are confronted with a variety of explanations as to why the problem exists and a range of solutions for tackling it are proposed.
Second, such problems have a very weak fit with the classic departmental structures of government. The machinery of government, in other words, is not able to tackle these issues without completely restructuring the machine itself. Attempts have frequently been made to tinker with the machine – so, for example, in the 1960s an Office for Economic Opportunity was set up in the USA to lead the ‘war on poverty’; Australia in the early 1970s saw a short-lived Department of Urban and Regional Development with a strong emphasis on coordination between departments and levels of government; while in the 1990s in the UK a Social Exclusion Unit was established early in the first Blair administration to address what was deemed to be a ‘cross-cutting’ problem that did not fit the remit of any specific department of government. But creating new structures can only ever be a partial solution; even if this locates responsibility for such problems within a new unit, it is unlikely to be successful in providing that unit with the necessary authority and funding.
Third, and most important, governments require the collaboration of networks of actors to address such problems – and, increasingly, the public itself is invited to be part of such networks, since policies are more and more directed towards bringing about change in public attitudes and behaviour.