Ebook: Innovations in Public Governance

Public governance is one of the most important hot topics in the world of public administration. It depicts the profound changes both in government and public services caused by both external pressures and internal tensions. Administrative and bureaucratic hierarchies are being transformed into complex settings of public governance. Our question in this book is how these governance processes and structures should be changed in order to achieve better results from social, political and economic points of view. This is where ‘innovations’, another buzzword of our time, comes into the picture. We provide a contextual view for innovations in public governance in which the main purpose is to introduce innovations which make a real difference in public governance.

February 12, 2011, in Tampere, Finland and Glasgow, Scotland, UK

Editors

Ari-Veikko, Anttiroiko Stephen J. Bailey, Pekka Valkama

In this book we discuss innovations in public governance. Public governance is about coordination and the use of various forms of institutional arrangements in the policy-making and related processes to pursue collective interest. As this book provides highlights from two continents and various societal contexts, we pay special attention to contextual differences and global interactions. The approach applied in this book can thus be called contextual in the sense that innovations in public governance are discussed in their societal and political contexts.

The current push for innovation in governance repeats a familiar historical pattern as societies grapple with fast changing circumstances. It begins with administrative reforms to improve the performance of public authorities, moves invariably on to changes in public policy that take into account the benefits to the ruled as well as the rulers in pursuit of good governance, then involves the more difficult task of wider institutional reform, and finally requires institutional innovation to complete the cycle of modernization. This is the continuing struggle to overcome the dysfunctions of bureaucratization and to inject creativity into the ever-increasing complex process of conducting the public's business. The imperative arises from the gap between results obtained and rising expectations. While the process is somewhat consistent, the substance changes radically over time as public leaders try to catch up with advances in other fields of knowledge despite lagging outcomes as people resist change. Hence in governance, reforms and overhauls often disappoint as traditional arrangements persist beyond their time.

During the 1980s and 1990s reforms within the English public sector sought to increase value for money by increasing the scope for competition in the provision of public services in order to reduce their costs and by setting targets for service delivery. During the 2000s attention focused on giving service users increased scope for choice of both service provider and service form so as to increase further the value of public services. Increasing the scope for user choice of the form of service received is also intended to lead to the co-design and co-production of services, this implying a quite radical change in the nature of the welfare state and its system of governance. This paper assesses the rationale for these reforms and critically appraises their effectiveness.

This chapter provides a UK case study of public service reform to illustrate how a microfoundational base premised on instrumental rationality – in particular a principal-agent framework – can extensively influence policy towards innovation in the governance of public services. It also provides evidence of the failure of the New Labour Government's reform program in the context of relatively benign conditions and argues that the failure was to a substantial degree because of the inadequacies of the microfoundations that guided the reform program. The chapter concludes by discussing the circumstances when microfoundations are most likely to impact on policymaking. It argues for a greater awareness by policymakers of their microfoundational assumptions and for the advantage of developing policy in a manner that gives due recognition to the plurality of microfoundations commonly used in the social sciences.

Governments are frequently involved in processes of administrative and policy reform. The reforms associated with the New Public Management (NPM) have been one of the largest and most sustained periods of reform, rivaling in magnitude if not in speed, those occurring during World War II in the history of the public sector. The emphasis on autonomous organizations and autonomous managers during the past several decades has created a number of benefits for the public sector and for citizens. However, the creation of high levels of autonomy created significant problems in the levels of coordination within the public service, with the paradoxical outcome that even if the performance of individual programs was being improved, the overall performance of government may have been decreased. There have been a variety of responses to the problems created by such reforms. The reaction to the continuing issues of policy coordination, as well as the increased demands for performance resulting from NPM. require governments to develop mechanisms for producing better coordinated and more effective governance schemes. These responses range from returning to well-worn paths for producing more effective integration of policy to more innovative solutions.

In 2006, Massachusetts signed a landmark health care reform bill aiming to make it the first US state to achieve universal health care coverage. A second bill followed in 2008 that sought to curb rising health care costs and improve quality of care. Key elements of the reforms included the creation of two new insurance programs: Commonwealth Care, offering subsidized coverage via private health plans to lowincome individuals; and Commonwealth Choice, offering unsubsidized private coverage to individuals and small businesses. A new independent state agency known as the Commonwealth Connector Authority was developed to oversee both insurance programs. Employers with 11 or more employees were required to offer to pay a “fair and reasonable” portion of their workers' health insurance premiums, or pay a per employee fee. Among the most controversial aspects of the reform was the introduction of an individual insurance mandate, requiring all adults to obtain health insurance or pay a fine via their state income taxes. Some aspects of these reforms, including a major role for the private sector and emphasis on performance measurement, embody principles of the governance and New Managerialism or New Public Management (NPM) theories that have gained popularity in recent decades. With regard to results of the reform, by 2009, more than 97% of Massachusetts residents were believed to have health insurance, the highest proportion of insured individuals in any US state. Although still in its early stages, the Massachusetts plan was commonly cited as a possible starting point for broader, national health care reform efforts.

In Europe the paradigms of local governance have changed from the old public administration to New Public Management and public governance. The innovation policy of the 21^st century entails broadening the concept of innovation from the private sector to public service innovation together with service users. User-centricity means that the development of services is based on the needs of citizens and the focus is on users rather than on production. In theory, citizens have two channels for participation in public service reform: the traditional way to participate in decision-making on services through user democracy and a new, more innovative way to participate as users in service provision. Two Finnish case studies are used to illustrate how municipalities are implementing user-driven innovation policy. The first case study describes participation in decision-making, the second user-driven innovation in service provision. These cases show that service users are better prepared for the shift towards user-centricity than service providers

This chapter explores how direct citizen participation can feature throughout the varied stages of the public policy cascade. It discusses a range of democratic innovations for public participation, focusing on three aspects of the policy process: public opinion formation, decision-making, and implementation. The case studies indicate how public participation can operate at multiple geographical scales – ranging from the neighborhood level all the way up to the transnational – and illustrate how participation at different levels might be linked up. The examples explore ways that citizens might craft their own rules for participation; monitor those rules and the policies they help generate; and cooperatively implement their own local policies. They also suggest ways in which the role of experts and officials might be transformed into one of largely supporting and facilitating public participation. To conclude, the authors discuss a few ways in which innovative practices might contribute to a more effective policy process.

Why does e-government look as it looks? Many e-government studies lack explanatory power, because they are under-theorized. In this chapter a theoretical framework is provided which focus on the interactions between actors that shape the content of e-government. This framework is based on open systems innovation theory, the co-evolutionary social and political shaping of technology and the governance capacities that ICT provides in terms of the intelligent state and the intelligent society.

This chapter provides an analysis and examples of how the emergence of citizen-centric e-governance has transformed public service delivery. There is a discussion of what e-governance is and the most important models that explain its development. The important role that citizens play in e-governance is examined. E-governance and its impact on organizational change and development are highlighted, with a particular focus on its ability to transform government and public service delivery. Finally, there is a discussion of some of the emerging technologies that can potentially create more citizen-centric government. The overall conclusion of this chapter is that Information and Communication Technologies (ICT) have the potential to transform government, but the evidence suggests a more incremental path than what some of the earlier scholars had envisioned.