Market mechanism and public service delivery - Essay Example

Public service mechanism Market Mechanism and Public Service Delivery Abstract In the last few decades, public administration has witnessed a deep process of reform in order to "make publicly-owned services and enterprises more business - like". For, public administration has increasingly translated into public governance and huge behemoths in the public sector are expected to be run more efficiently at reduced costs. In other words, it is expected that the public administration become competitive in delivering goods and services. Governments are expected to strategise a country's developmental priorities by providing an efficient, responsive and transparent public administration. Countries have now moved to a mix of market-based or competitive governance and civic-based or partnership governance. This has been brought about by the changing role of the state and the growing businesslike and managerial approach to the operations of Public Administration. A new fragmented and complex world of markets and networks has pushed governments to move from a direct delivery of services to a more general coordination and control of government functions. While, there is substantial scope for increase in delivery of public services through the market mechanism, there are several limitations and impediments too. Introduction In a globalised era, public administration, or the delivery of public services considered as universal needs and much needed socio-economic infrastructure to civil society are proving to be a tough and complex task. Since Public Administration includes within its ambit political, economic and social governance, governments across the world are having to function in an environment marked by increased public scrutiny. This has arisen out of increasing democratization and the diffusion of ideas arising from the implosion of information and communication technologies. Text of the article Since the time of Plato, Aristotle and Kautilya, good public managers have been recognized as those with sound judgement, a sense of justice and courage to take action on behalf of the good of society. Traditionally, public administration entities ie government institutions responsible for providing vital services have been state-centric, huge, self sufficient monoliths, hierarchical in their relations and also inclined towards a controlling order. Since early Public service mechanism 2 times, the public administration in countries has been providing services essential to society, some of them considered as fundamental rights of the citizens, like the right to water. In addition, law and order, health, education and building infrastructure viz. roads, transportation including railways and aviation, telecommunication, sewage, energy and a host of other services have come within the ambit of public administration. Publicly owned services and industries are controlled by the central governments. These state-owned enterprises or services do not generate any profit and provide essential services for the entire population. The cost of providing these services is met from taxation money. Local bodies are entrusted with certain civic functions including waste management, maintenance of parks etc. The main advantage in public owned enterprises or services is that jobs for workers in these institutions are secure and unemployment does not rear its head. Key supplies like water, electricity etc can be guaranteed and and some essential services including health, education, housing and transport are ensured for everyone. The benefits accrue to the entire population, rather than benefiting the few who are well heeled. Also, these services are paid for through taxes wherein, the rich have to cough up more, while the poor are taxed lightly and those who are unemployed are also provided for. There is a degree, or, semblance of equity, fairness and justice. The main argument in favour public ownership is that the whole population benefits rather than just those who can afford to pay privately. For example, national health schemes are available to all, free of cost. However, public ownership has its flip side too. Public enterprises are characterised by huge bureaucracies, inflating the workforce and resulting in huge costs. These are further exacerbated by the fact that these state-owned enterprises are monopolistic and function sans competition, with workers being highly demotivated and inefficient. Costs are higher, which means taxes too are higher. Large non-profit making organizations suffer from diseconomies of scale, and there is too much political interference, affecting the efficiency of organizations adversely. When costs are high and there is a high degree of inefficiency, there is a tendency to be not enamoured of the system. In theUnited States,Woodrow Wilson, considered the father of public administration, in an 1887 article titled "The Study of Administration" wrote that "it is the object of administrative study to discover, first what government can properly and successfully do, and secondly, how it can do these proper things with the utmost possible efficiency and at Public service mechanism 3 the least possible cost either of money or of energy." Even in those days, Wilson argued in favour of separating of politics and administration and called for a comparative analysis of political and private organizations. He emphasized upon the need to improve the efficiency of public service institutions by adopting business-like practices and attitudes toward daily operations, as well as improving the effectiveness of public service through management and by training civil servants and merit-based assessment. With an entire range of socio-economic and political services coming within its ambit, public service has come to entail both a public mission as well as running the affairs of various entities in an efficient manner. Consequently, there has been an increased effort to cut down the size of public institutions and improve their efficiency. Also, market competition has been injected into public service delivery, so as to enhance productivity. Since the 1980s, there has been a wave of public sector reforms aimed at modernizing state-owned enterprises. The principal thrust in this wave of reforms has been a far greater market orientation in the public sector that will lead to greater cost-efficiency for governments, without having negative side effects on other objectives and considerations. Good intentions alone are not considered sufficient for effective governance. These days, accountability is measured in terms of outcomes,not just money spent. The result of employing market mechanism for delivery of public services is that it increases productive efficiency by raising the quality of services, while, reducing costs. It is widely felt that market mechanism can imbue welfare by making publicproviders more responsive to consumers' tastes and preferences and consequently, improving resource allocation. And they can also improve budget management efficiency through enhanced awareness of the resource costs of providing services. It is felt that marketmechanisms in areas like education, health care, transport, social protection, and environment can be witnessed increasingly. Arrangements like tendering, outsourcing, user choice and competition, user fees and performance-related funding can help to improve quality of serviceprovision or lower its cost. Market-based mechanisms offer a promising approach for distributed allocation of resources without centralized control. During the 1980s, several governments across the world decided to sell state-owned enterprises partly or wholly to the private sector. This was done in the belief that the added competition, and profit motive, would improve efficiency, and provide a better Public service mechanism 4 value-for-money service for the consumer. Several public services including transport and waste collection were contracted out to private companies, or, simply deregulated. As compared to the 1950s, the '60s, '70s and the '80s and the '90s have witnessed a decline in public administration. While, state and local governments have to keep pace with growing public service demands, public service has been disenfranchised at the national levels. The "free enterprise system" has been the approach emphasized at the national levels. Public Administration is often seen to have few champions and little to champion about. Having government out of our lives has almost become a credo. In Denmark for instance, the government early in the 1990s foresaw that ther state-owned companies would not be able to compete in internationalized and globalized markets on their own. They would have to go into mergers or be bought up eventually. Hence, the Danish government decided to introduce phased privatization. In other words, privatizingpublicassets has been a strategy for the government that would enable an efficient economy without sacrificing any state identity or key part of the economy. Some of the other market mechanisms employed by the Danes have been contracting and introducing consumer choice as well as public-private partnership. However, contracting out work to private parties could boomerang if citizens are not satisfied with the services provided. And as for introducing consumer choice, it is a process that will take its own time to evolve. Typically, when consumers are accustomed to having a reasonably fine public service, making a choice from amongst several service providers, may not always be easy. However, market mechanism while increasing efficiency and reducing costs may not always result in equity, fairness and justice in delivering services, something that is essential in public governance. When profit making becomes part of the public service delivery, it could upset social equilibrium. Corporate scandals like Enron and the more recent banking scam, have resulted in citizens and regulators calling for higher levels of transparency and accountability in all areas of business. And they are urging governments to intervene and uphold the highest standards of governance and accountability. There are warning signs that the overriding emphasis on efficiencyand competitiveness goals and on reduced government intervention is resulting in increased income inequities, and societal attitudes towards the marginalized sections tend to be even more pathetic. Thus, government may be back in our lives to uphold and vouchsafe the values of freedom, justice and equality. More and more citizens are convinced that governments Public service mechanism 5 should become a bigger part of our pursuit for freedom, justice, equality and happiness, since there is growing disenchantment with laissez-faire, ie hands-off government. Public administration in future will be based on projected trends and ideas about how the system and setups will change to meet new challenges. There is growing evidence that Public administration in future will be an amalgam of state ownership as well as market mechanism and will also increasingly engage civil society to improve governance. Public Administration is concerned with the management of public programs, which interact with the residents of the community or region. Those who work in it should share a commitment to offer public service. But, most important of all, an established non-partisan civil service is vital to democracy as it makes peaceful and orderly political succession possible, and thus genuine pluralism. Government is entrusted with public funds and resources, and must adhere to the highest ethical standards of honesty, integrity, propriety andobjectivity.These goals can be achieved only through a combination of individual professionalism, personal standards and a rigorous control framework. Openness and transparency help instil public confidence and trust, and are increasingly considered basic operating requirements for any government.The Internet has fueled the public's thirst for information and provided a means to satisfy it. The information age,globalization, anddecentralization have transformed the notion of governance. In fact, in the age of Information and Communication technologies, e-governance, wherein citizens directly interact with the government has proved a great disseminator of information and e-democracy has enabled citizens to participate actively in governance. A UNDP report says: "people want the state and the public administration to act as a social and economic promoter, capable of ensuring equitable distribution of opportunities, sustainable management of resources and equitable access to opportunities (political, economic, social and cultural). In recent years,publicsector management is increasingly seen as more than just modernizing state institutions and reducing civil service costs. It is also about fostering dynamic partnerships with the civil society and the private sector, to improve the quality of service delivery, enhance social responsibilities and ensure the broad participation of citizens in decision-making and feedback onpublicservice performance." The UNDP report says a rights-based approach needs to be adopted in public administration, wherein, there is participation of all stakeholders in decision-making, accompanied by total transparency, ensuring equity and equality in distribution of resources, empowerment of all sections of society especially those marginalized and finally, accountability of public and private institutions to the public, especially to poor people. References Wilson Woodrow ((June 1887), "The Study of Administration", Political Science Quarterly Greve Carsten (August 2008), "Market-based governance in a historical institutional perspective: The development of the Danish market-based governance policy", paper presented at the NOPSA conference. Retrieved from http://uit.no/getfile.phpPageId=1410&FileId=1420 UNDP report on Public Administration Reform Retrieved from http://www.undp.org/governance/docs/PARPN_English.pdf. Read More