The Next Steps Programme - Case Study Example

The concept of instrumental rationality has emerged and has been developed as a tool of analysis and construction material of theoretical paradigms. It is a derivative of economics. Homo economicus or the rational man is the self-interest maximizer. His decisions are based on calculations aimed at maximizing his self interest. This economic conceptualization of human rationality metamorphosed in to forming the epistemological basis of socio-political analysis and gave birth to new schools of thoughts. The argument was based on the assumption that a rational man’s decision making in all spheres is based on instrumental rationality. His rational behaviour in market is akin to his behaviour elsewhere. The application of instrumental rationality and its bounded form,(Simon.1957a) set the trend of analyzing public policy through economic lens and crystallized new paradigms which are the object of analysis of this paper. Having defined instrumental rationality we will now shift the focus to the rise of public choice theory which forms the core theme of our argument. Public Choice theory is study of politics based on economic principles and percepts. It signifies a paradigm shift from normative to positivist. It was an ideological laden view of democratic politics. ( Starr.1988). It tended to apply the logic of economics in politics, the self-interest maximizers, the rational man, the homo-economicus would have similar behavioural patterns even in government,(Politicians, bureaucracy, interest groups and voters) the logic of the argument dictated so. This application was developed in to defining the concepts of ‘free riders phenomenon’, ‘prisoner’s dilemma’ and ‘rent seeking’. The core argument of the thesis, relevant to this paper, is that bureaucrats as self-interest maximizers tend to serve their self interest than the public interest. (Tullock.Buchanan.1962). The public choice theory goes on to state that just as ‘market failure’ there also is the ‘state failure’. The arguments rests on the premise that in analyzing public policy, choices and decisions should also take in to account the deficiencies of state and those who manage it (Hill.2005). The theory further goes on to argue that market mechanisms and systems are better equipped or are better suited to solve, resolve and conduct public policy decision making and possess core institutional competency for allocation of resources as they are based on the quintessential market value of efficiency. The bureaucrats since they are self-interested, behave like profit maximizing firm managers. The vital question in this argument is that bureaucrats do not essentially seek profit in monetary terms, so what do they maximize? How is their self interest translated in to concrete gains? The answer by the public choice argument is that bureaucrats realize their self interest by maximizing the budgets and size of their bureaus. Therefore bureaucrats are budget maximizers. The budget and size maximizing translates in to multiple benefits, like; larger salaries, perquisites, patronage, power and reputation of senior bureaucrats. (Niskanen.1971.1973.1978) Senior Civil Servants commonly regard the comparative budget increases across the department as indicating winners and losers in the ecological competition for resources (Aberbach, Putnam, and Rockman.1981). This instinctive behaviour of bureaucrats results in ‘X-ineffeciency’ and ‘Allocative inefficiency’, which results in government failure due to oversupply of agency or a bureau output and creates wastage of resources. The private sector could deliver the same with more efficiency and much less resource input. (Niskanen.1971.1973.1978). It is beyond the scope of this paper to examine that How public choice argument and rationality crept on the agenda (Agenda setting in UK needs separate discussion) of the New Right, government of Margaret Thatcher and subsequent conservative governments (1979-1997), however the need for reforming of bureaucracy and public sector at that point in time, can be examined briefly. Although the free market ideological underpinnings of conservative’s cannot be underemphasized but it can be argued that the UK economy was a serious issue when the conservatives came to power in 1979. The conservative economic and monetary policy was focused on organizing ‘getting and spending of money’ (Pliatzky.1982). The Conservative economic agenda thus was about reducing taxation and public sector borrowing (Talbot.2001). The post war Keynesian welfare state was becoming all the more expensive to run. The deficit needed to be reduced. The burden of public sector spending needed to be checked, halted and if possible reversed. The cost reduction of public spending necessitated a roll back of state. The academic debate of public choice through osmosis became the primary academic influence of agenda setting of conservative government. The first step in this direction was Privatization. The Public sector employment was reduced in the conservative years by 32 %( ibid). The rolling back of state frontiers besides privatization also translated in to introducing a series of reforms of public sector; Next Steps is a part of this series. Our argument has arrived at a point when a need has arisen to examine the organizational matrix of bureaucracy particularly in UK, before proceeding to further examine the Next Steps reform. Max Weber (1864-1920) attributed rational-legality as a ‘higher’ source of authority than charismatic or traditional authority. He considered this instrumental (legal) rationality, essentially a product of capitalistic organization, with its inherent ability to disseminate rationality across the interface of state and society managed by the state’s instrument; bureaucracy. (Weber.1947). In other words Weberian bureaucracy derived its legitimacy and strength from the rationality expressed in form of laws and legal frameworks of modern capitalist state. Bureaucrats were the sentinels of the legal state. Weber saw Bureaucracy as a logical consequence of the development of modern state. ‘Weberian bureaucracy is or was rule bound, hierarchical, impersonal, qualified and with tenure security’ (ibid, pp.329-41). This definition essentially highlights a singular feature of bureaucracy that is its relative organizational autonomy vis-à-vis the other actors politicians, interest groups, voters etc. In order to examine UK’s Civil Service certain structural peculiarities have to be taken in to account. UK’s Constitution, being unwritten, has not granted its civil service the ‘Weberian autonomy’. Much of the UK’s civil service ‘has no basis in law’ and its structure and functional definition can be changed through executive decisions. ‘These changes can be reported to parliament as fait-accompli. Certain agencies and departments and tiers of local government authorities do have a legal basis; like, former Greater London Council(GLC), NHS , Inland Revenue and Her Majesty’s Customs and Excise Service, but these legal basis owe their legality to acts of parliament rather than the constitution’ (Talbot.1997). Thus it is relatively easy to make a structural change to UK’s civil service in response to economic pressures, academic trends and political agenda. Thus Next Steps reforms which changed the texture of civil service and created executive agencies was based on a “ two paragraph statement to Parliament by the Prime Minister, which did not even formally endorse the report(Ibbs Report) on which it was based and was not debated or voted on”(ibid). The 90 days of brainstorming of a small team diagnosed seven ills of civil service (Civilservice.gov.uk) 1. 95% of civil service was engaged in service delivery both primary and secondary (‘street level bureaucrats’ using Lipsky’s term (Lipsky.1980)). They welcomed management changes.(ibid) 2. Senior management was dominated by policy staff with no experience of service delivery.(ibid) 3. Senior civil servants are prone to Ministerial and Parliamentary pressures.(ibid) 4. “Ministers are overloaded and inexperienced in management”.(ibid) 5. Departmental delivery focus is on activities not results.(ibid) 6. There is little outside pressure both horizontal and vertical to improve performance.(ibid) 7. Civil Service is an unmanageable mammoth organization.(ibid) The team of policy doctors recommended that agencies to be set up within the directional policy and resource framework of departments. A permanent secretary may be appointed as change manager, to oversee, organize and ensure the reforms. The responsibilities of key figures; The Secretary of State, Permanent Secretary and Chief Executive may be clearly and formally delineated. The Vehicle Inspectorate of the Department of Transport was the pioneer agency and was born on 1st August 1988. By March 1997 there were 130 agencies employing 313,323, working on next steps line (ibid). These executive agencies were to enter in to quasi-contracts for the services rendered, like the private sector practice. These contracts were performance oriented. The Chief Executive of the agency was accountable for the performance of his/her agency within the resource and policy framework (Talbot.1997). Performance based management became the core guiding principle of the management policy of these agencies. The services were also contracted out to private sector to enhance performance. It was an attempt to infuse efficiency in the hitherto ‘cumbersome’ bureaucratic way of working. The emphasis was on cost cutting, straightforward managerialism, more control and increased autonomy. It also entailed downsizing also called rightsizing, decentralization; a more decentralized, flexible and networked form. It signified a split and de-linking between ‘policy and operations or purchasers and providers’. It also meant adherence to quality and excellence and ‘freeing up entrepreneurial spirit’. It also aimed at increased orientation towards public service and transformation of citizens in to customers (Ferlie et al.1996, Hood.1990, Politt.1990). The results of these reforms have been termed ‘ambiguous’ (Talbot 1997). There were perceptible improvements in management, efficiency and customer orientation (ibid), but the expected revolutionary behavioural change was not observable even after so many years (Talbot.2001). It is recognized that to evaluate the effects of these broad spectrum of reforms requires more research (Pollitt.1995). However certain studies show that even HR managers felt themselves that there has been relatively little change in practice and the interface of management and staff was still dominated by similar behavioural patterns.(Talbot.1997). Let us now examine the collateral and unintended effects of next steps reforms. As pointed out earlier in the paper that UK civil service was relatively less autonomous, vis-à-vis other actors and functioned under Ministerial oversight and Parliamentary scrutiny. However the prevalence of operational autonomy of pre-next steps civil service was more informal (Parsons.1995). The next steps reforms granted Weberian autonomy to the civil service but at the same time it severed the organizational linkages, diminishing the spirit-de-corps of the centralized civil service; the old boys network. This autonomy was however complemented or rather neutralized with the growth of more regulation within the government. The new external control mechanisms of ‘audit inspections, standard setting and periodic reviews’, were institutionalized (Hood et all.1999). The change at the service delivery levels may have improved sporadically but at the structural level little observable change has been felt. The issue of reduced public accountability through direct ministerial oversight also seeks attention. The next steps reforms traced back to their origins in instrumental rationality and public choice theory have been an attempt to reinvent the civil service; at least they were visualized to be so. It is the argument of this paper that these reforms may be viewed more as continuity rather than a dramatic revolutionary change. The change in UK’s civil service through next steps can be termed as incremental rather than a total restructuring. References & Bibliography: 1. Simon H.A. (1957a) , Models of Man: Social and Rational, John Wiley,New York 2. Aberbach, J.D., Putnam, R.D. and Rockman, B.A. (1981), Bureaucrats and Politicians in Western Democracies( Cambridge, Mass.:Harvard University Press) 3. Starr P. (1988):, "The Meaning of Privatization," Yale Law and Policy Review 6 6-41. 4. Buchanan,J, Tullock G.,(1962), Calculus of Consent: Logical Foundations of Constitutional Democracy, University of Michigan Press. 5. Hill,M. J.(2005), The Public Policy Process, Pearsons Education ltd. Essex England. 6. Niskanen,W.A.(1973), Bureaucracy: Servants or Master (London: Institute of Economic Affairs) 7. Niskanen,W.A.(1978), ‘Competition among Government Bureaues’, in Buchanan,J.M.(ed)(1978) pp. 161-70. 8. Niskanen,W.A. (1971) Bureaucracy and Representative Government (Chicago: Aldine-Atherton) 9. Pilatzky,L. (1982), Getting and Spending, Blackwell, London. 10. Talbot, C. (2001), UK public service and management (1997-2000): Evolution or Revolution, The International Journal of Public Sector Management, Vol.4, 2001, pp.281-303.MCB University Press. 11. Weber, M.(1947), The Theory of Social and Economic Organization, trans. A.M. Henderson and T. Parsons.Glencoe Ill.:Free Press. 12. Talbot, C. (1997), UK Civil service personnel reforms: devolution, decentralization and delusion, Public Policy and Administration ,Vol. 12. No.4 13. Lipsky M. (1980), Street Level Bureaucracy, New York: Russell Sage. 14. Ferlie,E.,Pettigrew A.(1996), The New Public Administration in Action, Oxford University Press,Oxford. 15. Politt,C.(1995), “ Justification by works or by faith? Evaluating the New Public Management”, Evaluation, Vol.1, No.2 16. Parsons, W.(1995), Public Policy: An Introduction to Theory and Practice of Policy Analysis, Edward Elgar. Massachusetts, USA. 17. Hood, C. and James, O. (1999), Regulations Inside Government, Oxford University Press, Buckingham. Read More