in the global economy: lessons from Europe and North America Ian Roberge Department of Political Science, Glendon College, York University, Toronto, Canada, and David K. Jesuit Department of Political Science, Central Michigan University, Mount Pleasant, Michigan, USA Abstract Purpose The purpose of this paper is to present the main themes in this special issue focusing on the impact of transformations in the global economy on public management. Design/methodology/approach This paper takes the from of a presentation of articles in this special issue. Findings The paper nds that focusing on examples form Europe and North America, public management adaptability varies across states and regions. Capacity is identied as an important indicator of adaptability. Originality/value The paper introduces an issue that highlights concrete examples of adaptability in public management. It opens the door to further research tracing linkages between changes in the global environment and the practice of public management. Keywords Public management, Public sector management, Public sector organizations, Public sector services, Europe, North America, Case studies Paper type General review The relationship between states and markets has always been uneasy. There is no perfect equilibrium, especially since political, economic and social circumstances continually change. The objective of this special issue of the International Journal of Public Sector Management is to provide some insights on public management practices in light of turbulent times in the global economy. The special issue is the result of a conference that was held at Central Michigan University in September 2010 under the title, Making public management work in the global economy: lessons from Europe and North America. The conference brought together US, Canadian and Italian scholars, as well as practitioners from the area, to consider comparatively various ways public management adapts to global/national/and local economic transformations. The conference also focused on governments role in managing various economic challenges. This special issue broaches the topic from two angles. First, the issue considers global, regional and national public management with a particular focus on how governments have responded to the global nancial and economic crisis. Second, local public policy and management considerations are addressed. What emerges is a very The current issue and full text archive of this journal is available at www.emeraldinsight.com/0951-3558.htm Making public management work 421 International Journal of Public Sector Management Vol. 25 No. 6/7, 2012 pp. 421-427 qEmerald Group Publishing Limited 0951-3558 DOI 10.1108/09513551211260702 uneven pattern of public management adaptation that reects just as many concerns about the global economy as it does about national and local circumstances. Put differently, the issue gives hope that public management can adapt to global economic turbulence, with the caveat that public management adaptability is not pre-ordained and varies cross regions, states, and communities. There are many variables to consider in relation to adaptability. Articles highlight one variable in particular, public management and policy capacity. The concept of capacity is at best fuzzy. For our purpose, there are two elements needed to understanding capacity. The rst relates specically to an actors attributes: the ability to integrate existing and new knowledge (to learn); the authority to act based on this knowledge when necessary (make decisions); and, the required resources and/or skills to implement and execute decisions. Second, capacity is usually relational. It depends on how actors relate to others in the policy subsystem (Howlett et al., 2009). When it comes to analyzing the reaction of public management across levels to transformations in the global economy, both components are relevant. Public management practitioners have to be able to assimilate and act on pertinent information. At the same time, there exists interdependence between states and markets such that the relationship is one of mutual adjustments. Many articles, especially those that focus on local public management, highlight a shift towards more networked forms of governance. Articles, thus, illustrate both features of capacity. The global nancial and economic crisis There is an extensive literature already dealing with the global nancial and economic crisis. Howard Davies (2010), former Chair of the Financial Services Authority in Great Britain, provides an excellent summary of all the main explanations of the crisis. What becomes clear as one sifts through this literature is that the crisis is as much one of politics as economics (Friedman, 2009). Articles in this issue do not lay blame for the crisis, nor was that the purpose. Rather, they note the many challenges faced by governments when considering reforms. The key variable is that of capacity; public management must have the ability to learn, to adapt, to adjust, and when appropriate to form networks with relevant partners in responding to transformations in the global economy. Authors also consider, admittedly peripherally, the political nature of the response and its impact on public management. The rst article of this special issue considers cutback management. Reviewing the literature in the eld, Cepiku and Savignon note that governments have, to a certain extent, learned from existing knowledge and past cutback periods. They understand the need to consider long-term planning and to see beyond the crisis. At the same time, there are important challenges, most notably capacity the ability to implement reform and change. The basic question of howto do more with fewer resources remains whole. Cepiku and Savignon further remark on the politicization of decision-making, which further complicates the adoption of best practices. At the time of writing, their analysis seems particularly prescient in light of the US and European debt crisis. Public bureaucracies are, once again, under pressure to reform, which is likely to mean, in some cases, drastic cutbacks. For his part, Costantino analyzes major nancial services sector reform in the European Union (EU). The EUs initial response to the nancial crisis was disorganized, ad hoc, and state-led. The EU, as a whole, did not act cohesively. Nor did IJPSM 25,6/7 422 it have the capacity to manage the crisis; the creation of two new regulatory structures was meant to remedy this shortcoming. But as Costantino indicates, the new macro and micro-prudential regulators are sure to be hampered both by legal and organizational issues. Yamashita (2011), in fact, suggests that governance fragmentation in the nancial services sector remains for now Europes most important challenge. Costantino appears skeptical that the new bodies, as presently constituted, really improve the safety and soundness of the European nancial services sector. Whatever the reason and cause of the global nancial crisis, it is fair to ask how so many people, especially on the regulatory side, just missed the story. Greitens focuses on the performance assessment of US regulatory agencies leading to the nancial crisis. As Greitens notes, the US performance system overly focused on outcomes, as opposed to inputs, which meant that as long as nancial markets were performing strongly, regulatory agencies also seemed to performwell. Regulatory agencies did not, however, keep American nancial markets safe, even if they were deemed to perform better than agencies in other sectors. The article raises serious questions about the political nature of the Program Assessment Rating Tool (PART). Despite the Dodd-Frank Act, and regulatory reform in the United-States, nancial services sector regulators capacity to protect the nancial system from another meltdown is still in contention (Schmidt and Hamilton, 2011). Finally, Williams considers the issue of capacity by focusing specically on policy learning, analyzing the Canadian response to the global nancial crisis. Canada came out of the crisis largely unscathed. Canadian politicians, in particular, have taken credit for the countrys success. In 2009, Euromoney even named Jim Flaherty Finance Minister of the year (Avery, 2009). Canadas principal regulator, the Ofce of the Superintendent of Financial Institutions, has also adopted this approach accepting praise for the countrys performance (Freeland, 2009). Yet, Canada underwent during this period the worst nancial crisis in its history, the asset-backed commercial paper crisis (Chant, 2009). As such, Williams raises important questions about the Canadian regulatory system. Most importantly, the discourse of success, particularly useful from a political perspective, has prevented actors from learning and conducting a fair analysis of the Canadian situation. Meaningful reform is at least debated elsewhere, but it is not even considered in Canada. The country, thus, is vulnerable to another nancial crisis due to its inability to assimilate knowledge, to use it, and to adjust. Public management at the local level Articles focusing on local public management provide compelling, though, contrasting views on the ability of local authorities to adjust to global and national economic transformations. They highlight both success stories as well as stories of management and policy inertia. Here as well, authors raise important questions about the capacity of local public management to bring about substantive change. Conteh may be the most positive about how local organizations can become agents of change. Conteh describes and analyzes the evolution of the Atlantic Canada Opportunities Agency (ACOA) in light of changes in the global economy and new national political imperatives. He notes the multi-layered and complex relationships among federal and provincial governmental organizations, local public authorities and the private sector. Ultimately, though, ACOA, a federally created entity, appears to Making public management work 423 have been fairly successful in working with its various public and private-sector partners and in sustaining local economic development through its ability to navigate institutional boundaries. Canadian public management has fully embraced the concept of networked governance (Aucoin, 2009). Contehs case study provides an interesting example of enhanced capacity through networks. Jesuit and Sych, in turn, consider institutionalized regional policy in Europe paying particular attention to the region of the Marches in Italy and the grand region in Luxemburg. They note four variables that affect cross-border integration: geographic/demographic, economic, political and administrative. Borders, even in Europe, authors note are still relevant and effective cross-border governance remains limited and bounded. Brunet-Jailly also emphasizes the role of networks for local public management. Capacity in this instance literally refers to the functional relations among and between actors. The article considers two North American cross-border regions, Detroit-Windsor and Vancouver-Seattle. Brunet-Jailly notes the level of economic integration in both cases; the integration, he explains, has led to functional, though not necessarily structural integration. Functionalism in international relations and regional studies is traditionally associated with European integration. The logic seems to apply on a smaller scale between the US and Canada. Andersons article involuntarily provides a strong counter-argument to that presented by Brunet-Jailly. Focusing on the Detroit-Windsor cross-border region, Anderson clearly argues that the border acts as a barrier to integration and the development of a coordinated public management and policy approach. The network is institutionally under-developed and inefcient. To employ Jesuit and Sychs variables, the political will and administrative capacity to address on-the-ground issues are not present. The contrasting assessment of Brunet-Jailly and Anderson, in part, has to do with the latters narrower emphasis on the management of the border. The article is particularly useful because it presents the various pieces of an elaborate cross-border puzzle. Where to next? Beyond capacity, there is another subtle theme that emerges from this special double-issue: governments, across borders and levels of authority, have been cautious, if not reluctant, to rethink and to propose new and innovative ways to conduct public affairs. Though the prudence may have to do with capacity asking of public management that it do more with less it can also be interpreted as a lack of imagination. Crises, in theory, provide an opportunity to assess performance and to consider fundamentals anew. Administrative failure relating to Hurricane Katrina in the US, for instance, has led to serious debates about how to respond to natural catastrophes (Public Administration Review, 2007). The on-going nancial and economic crisis that began in 2007 does not appear to have led to a serious reconsideration, especially at the political level, of existing assumptions about state-market relations, and public management practices. There is an extensive literature on the global crisis already reecting the traditional ideological divide (on the right of the political spectrum, the Cato Journal, 2009; on the left of the spectrum, Alternatives E
conomiques, 2010). The
popular press has told the tale of the nancial crisis, and it has been willing to be IJPSM 25,6/7 424 provocative (Lewis, 2010). There has been some street protest, especially in Europe, but its discourse remains fairly supercial. Political, policy and administrative reforms, so far, whether at the global/regional/or national level have been modest and at the margin at best. Global Finance in Crisis edited by Helleiner et al. (2010), for instance, debated the signicance of proposed and adopted nancial services sector regulatory reforms at the global level and the editors are skeptical about their signicance. Admittedly, the crisis is not over and substantive political, economic and social reforms are hard to articulate and even harder to implement. Articles in this issue do not directly enter into this debate. In reading through them, however, there emerges a picture where more of the same should be expected. Cepiku and Savignons discussion of cutback management is reminiscent of the rise of new public management (with some adjustments). Costantino, for his part, highlights the strict limits on the operation of the new EU-wide nancial services sector regulators. Greitens article highlights important problems with the practice of performance measurement. Williams is clear: Canadas so-called success prevents policy learning and leaves the country vulnerable. Conteh is more optimistic, but his article still focuses on the need for local communities to adapt to the global economic imperative. Jesuit and Sych note how the lack of administrative capacity in some European regions is impeding adaptation. Brunet-Jailly presents examples of successful economic integration, but the political infrastructure is clearly lacking. Andersons piece is a story of inertia with only limited progress to be expected in the near future in the management of the Detroit-Windsor border. In all of these cases (non-exhaustive to be sure), there is a lack of political desire to do things differently. The focus remains on efciency, ignoring as such a basic question: how do we do better? Strachans article, the last of this issue, may provide a small part of the answer. Though the article can be said to be most relevant to local public management in the US, it can also be understood more generally as a call for the empowerment of the civil service. Democratic public management requires an engaged public service that reaches out to the citizenry. As Strachan puts it, civil servants must cultivate their own watchdogs. The current public debt crisis in many countries around the world is almost inevitably to lead to cutback management. Moreover, there has been an erosion of trust, exacerbated by the global nancial and economic crises, towards political and economic elites (Roth et al., 2011). Strachans proposed task for administrators is, therefore, clearly not easy. Yet, what is proposed is at the core of the expression public service. In a country like Canada, working under the Westminster model of parliamentary democracy, with its constitutional emphasis on responsible government (Aucoin et al., 2004), it is the accepted convention that the bureaucracy is politically neutral and that it serves the public by responding to its duly elected political master. It is not our intention to question such fundamental principles, which exist in various forms depending on the country. But, even within a tight framework, there remain opportunities for public servants to engage citizens and debate possible futures. Doing so might just help to reenergize democracy. Anote on the article by J. Cherie Strachan: this has been published in an earlier issue of the International Journal of Public Sector Management. The article can be found online in Vol. 25 No. 2 at the following link: www.emeraldinsight.com/tk/watchdogs This should be read in conjunction with the articles included in this special issue. Making public management work 425 Concluding remarks At the time of writing this introduction, the global nancial and economic crisis has morphed into a public debt crisis. In turn, the debt crisis is leading to market volatility with high risk of another worldwide recession. The impact of globalization on the nation-state, public management and public policy is already well-debated (Hay, 2006). The profound adjustments currently taking place in the global economy undoubtedly already affect public management across levels of authority in multiple ways. Articles in this double-issue provide a glimpse of some of the changes under way. The argument to be taken from articles as a whole is not that public management can, or cannot, adapt to global economic transformations. There are clearly circumstances in which adaptation has or can take place, and other circumstances that are more problematic. One of the essential variables for adjustment is that of capacity. Governance through networks, which is an expression of relational capacity, provides an indication of success or failure, particularly at the local level, to adapt. Though this may prove in the end to be overly optimistic, the future may offer a renewed chance for public management. The last article by Strachan offers hope that administrators can be part of the solution in fostering a greater space for public debate a truly more democratic form of public management. Through the current uncertainty for public management, there exists, at the very least, some hope for those working hard to serve their fellow citizens. References Alternatives E
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