New Steering Concepts in Public Management

Chapter 1 Introduction
Sandra Groeneveld, Steven Van de Walle

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CHAPTER 1
INTRODUCTION

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Sandra Groeneveld and Steven Van de Walle

STEERING FOR OUTCOMES: THE ROLE
OF PUBLIC MANAGEMENT
Multifaceted issues such as safety, social inclusion, poverty, mobility, rural
development, city regeneration or labour market integration require integrated approaches in their steering. Governments are looking for instruments
that can address the boundary-spanning nature of many social problems. In
their quest to achieve valued social outcomes, they struggle with their new role,
and the inadequacy of both market working and government-led central
agency. After three decades of New Public Management (NPM)-style
reforms, the strengths and weaknesses of this philosophy have become widely
apparent. Fragmentation is a prominent observation in many evaluations of
the NPM approach. The fragmentation of both policy and implementation
lead to unsatisfactory public outcomes and a heightened experience of a loss
of control on the part of policymakers. Achieving valued and sustainable
outcomes requires collaboration between government departments, private
actors, non-prot organisations, and citizens and requires tools that integrate
the lessons of NPM with the new necessities of coordinated public governance.
The public administration literature has in recent years been concerned with the
whats next? question, and many alternatives to NPM have been proposed.
Many of the next generation of reforms remain to be explored, and
research is hindered by a wide variety of terminology. Furthermore, much of
the literature is descriptive (OFlynn, 2007; Stoker, 2006), and there is an
New Steering Concepts in Public Management
Research in Public Policy Analysis and Management, Volume 21, 18
Copyright r 2011 by Emerald Group Publishing Limited
All rights of reproduction in any form reserved
ISSN: 0732-1317/doi:10.1108/S0732-1317(2011)0000021005

SANDRA GROENEVELD AND STEVEN VAN DE WALLE

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urgent need to integrate terminology and move on to more explanatory

approaches. Just as NPM has at times been hyped as the new solution,
nowadays collaborative models and models of integrated governance are
advanced as magical solutions. In-depth analysis is therefore needed to assess
the value of these new approaches, and the challenges they may pose to
democratic accountability.

AN EMERGING NEED FOR NEW STEERING

MECHANISMS
One of the key recommendations of the NPM movement was to disaggregate
large, multifunctional public bodies and replace them with a series of singlepurpose bodies. This disaggregation extended to hiving off public tasks to the
private and not-for-prot sectors. The philosophy was that the deliberate
fragmentation and distribution of functions would result in clear lines of
control and boundaries and possibly to competition between new entities.
Furthermore, performance would be monitored using specic and detailed
sets of performance indicators and targets (Van Thiel & Leeuw, 2002).
Disaggregation, and a related increase in accountability and control
systems that focused on relatively narrow objectives, has for public services
and public managers narrowed the nature of the work, creating focus at the
expense of coordination (Norman, 2003, p. 200). Disaggregation became
fragmentation to the detriment of institutional development, the development
of strategic capability and expertise, and to institutional memory (Norman,
2003; Pollitt, 2000, 2008). Coordination rapidly came to be seen as the key
issue in making NPM work (Webb, 1991), and the structural disaggregation
of the public sector was seen to lead to decient coordination, duplication and
even waste (Rhodes, 1994). With Schicks 1996 report The spirit of reform
on the public sector reforms in New Zealand, fragmentation of the public
sector came to be seen as a major unintended effect of NPM reforms. It
identied a tendency to focus on the short-term production of outputs and
on annual actions, rather than on the development of long-term strategic
planning (Schick, 1996, p. 8).
The new systems of control, evaluation and incentives tended to
incentivise against collaboration with other departments or services, despite
the big idea being greater collaboration in public services (Norman, 2003).
Disaggregation may have led to the traditional ministry- or departmentbased silos being replaced by new types of silos. The reforms were seen as

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Introduction

having led to the fragmentation of a previously monolithic public sector and

a related loss of strategic capacity at the centre of government (Painter,
2003). Rather than becoming efcient, effective and entrepreneurial, public
sectors under the inuence of NPM risked becoming hollow states (Greve,
2008) or fragmented states (Christensen & Lgreid, 2004), and consequently,
the strategic alignment of government has become one of the key challenges
for the future of the public sector. Furthermore, the reforms were seen
as undermining political control through the strict separation of political
and administrative functions, and the wide-ranging contractualisation and
devolution (Christensen & Lgreid, 2003). By letting the managers manage,
overall political control became difcult. This problem was further complicated by the limited steering capacity in departments (principals) that could
be used to control the agencies (agents) because of the hollowing out of
policy functions through extensive differentiation and short-term employment
contracts.

BEYOND NPM COUNTERING FRAGMENTATION

Addressing social problems requires a multifaceted approach. In designing
and implementing policy to, for example, improve elderly care, support the
sustainability of rural areas, or reduce child poverty, many different policy
actors are needed, and relying on market forces or the third sector is often
insufcient. As emphasised in the previous sections, NPM-style reforms are
seen to have led to fragmentation of the public sector. The call for integrated
services and cross-boundary working reects a problem with coordination
in the public sector. As a result of this fragmentation, plans to satisfy the
public sectors policy ambitions to improve social cohesion are difcult to
design and implement. Faced with the successes and failures of the rst
NPM-style reforms, public sector organisations have started to look further
and have developed new approaches to reform that are intended to counter
this fragmentation and to re-coordinate the public sector (Dahlstrom,
Peters, & Pierre, 2010; Osborne, 2009; Wegrich, 2010). Examples include a
reduction in the number of targets set in the United Kingdom and their
replacement by broad Public Service Agreements (PSAs) (James, 2004), and
the European Unions (EUs) strategy to operate through broad social and
economic objectives (e.g. the Lisbon indicators), rather than through
detailed policy plans, targets and guidelines.
These emerging practices are, depending on the author and their regional
provenance, referred to as either second generation post-NPM reforms

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SANDRA GROENEVELD AND STEVEN VAN DE WALLE

(Christensen & Lgreid, 2007a), or as third-generation reforms (Halligan,

2007). Halligan talks about the third generation when looking at the
Australian and New Zealand situations, with the rst generation consisting of
NPM-style reforms, and the second generation as strengthening of strategic
management and also as a series of reforms that attempted to make NPM
reforms sustainable and remove major dysfunctions (Halligan, 2007). Osborne
does not talk about a new generation of reforms but instead argues that NPM
has only been a brief and transitory phase in governance arrangements
(Osborne, 2006). Some have even declared NPM dead (Dunleavy, Margetts,
Bestow, & Tinkler, 2006).
These third generation reforms in New Zealand followed the initial Schick
report (Schick, 1996) and the later Review of the Centre (Ministerial Advisory
Group, 2001). An assessment of the New Zealand reforms led to the
identication of a number of key concerns for the future, including a greater
need for a focus on outcomes rather than measuring production outputs; and
the need for greater coordination beyond the boundaries of single public
organisations (Norman, 2003, p. 210). As such, integrated service delivery and
tackling fragmentation were identied in the review of the New Zealand
reforms as key challenges (Ministerial Advisory Group, 2001). This report
states clearly that Fragmentation makes coordinated service delivery more
complicated, adds to the costs of doing business, and blurs accountability for
some issues. Structural fragmentation means many small agencies, spreading
leadership talent and other skills more thinly and increasing the risk of weak
capability. Fragmentation means Ministers need to build relationships with
multiple agencies, and at times reconcile conicting agency positions at an
excessively detailed level (Ministerial Advisory Group, 2001). In other words,
it concluded that there was an urgent need to put the public sector back
together again (Gregory, 2003).
These new coordination practices come in various shapes and names, such
as integrated governance, outcome steering, joined up governance (Bogdanor,
2005; Hood, 2005), holistic governance (Leat, Setzler, & Stoker, 2002), new
public governance (Osborne, 2009), and whole of government (OECD, 2005;
Christensen & Lgreid, 2007a). Related philosophies include neo-Weberianism (Pollitt, Bouckaert, Randma-Liiv, & Drechsler, 2009), and public value
(Moore, 1995). Concepts such as the Open Method of Coordination in the
EU and Modernisation in the United Kingdom can also be considered as
belonging to this new generation of governance instruments (Newman, 2002).
This new generation of reforms retains some of the concerns that lead to
the NPM-style reforms, but adds new accents. The philosophy and nature of
these initiatives varies widely, with some models reconrming the role of

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Introduction

politicians and politically appointed ofcials, and others relying on broad

network style governance arrangements (Agranoff & McGuire, 2003). Whole
of government approaches involve horizontal collaboration, a strengthening
of the centre, re-aggregation of public bodies, and new types of performance
management with a central role for outcomes. The most crucial difference
compared to NPM is that they do not just focus on steering, but also on
following through to implementation and delivery. Some of the new and
emerging models for collaboration, cooperation and, eventually, coordination
reafrm the role of government. Others emphasise collaborative networkbased models characterised by pluralism and relational collaboration
replacing contract-based models (Osborne, 2009).

COORDINATING FOR OUTCOMES

A focus on broad social outcomes is increasingly being seen, at least in
the rhetoric if not in practice, as crucial to avoid fragmentation. Making
neighbourhoods safer, improving public health or building affordable housing are examples of such outcomes. More opaque versions of the same trend
are referring to outcomes such as social cohesion, sustainable growth or the
creation of an innovative knowledge society. To achieve such outcomes, a
wide range of policy domains and public and private institutions need
to collaborate. Societal outcomes thus replace outputs as steering tools
(Norman, 2007). Although NPM had always emphasised outcomes and
results, the reality was that it generally led to a strong focus on the outputs of
specic public sector bodies, rather than the overall results of such outputs.
Performance under the new outcome regimes reects a more integrated
approach to social issues. The idea is that by putting forward ambitious
outcome targets, public sector actors and their private and non-prot
counterparts would be motivated to collaborate, and they would jointly be
held responsible for achieving those targets, thereby making short-term
gaming strategies ineffective (Denhardt & Aristigueta, 2008). This new focus
on outcomes is also visible in shifts in terminology. Rather than producing
outputs, public services now have to deliver public value, and these values
are dened collectively (Moore, 1995).
Another key characteristic of the emerging ways of thinking about the
future of governance is the reafrmation of the governments, or the public
sectors, central, or at least coordinating, role in society. Unlike NPM, the
more recent ideas are generally unwilling to view public organisations as
very similar to private ones (Alford & Hughes, 2008). This is most visible in

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SANDRA GROENEVELD AND STEVEN VAN DE WALLE

the regulation agenda, and the associated strong growth of regulatory

bodies and models of enforced self-regulation (Hood, James, & Scott, 2000).
This is also visible in a strengthening of political agency. Aucoin (2006)
showed this for the new public governance in Canada, with stronger political
management, concentrated power at the political centre, a strong role for
ministerial staff, political appointments and the re-emergence of political
appointees. Similar trends of stronger political intervention are also visible
elsewhere (Halligan, 2007). The need for coordination is now often tackled by
creating new high-level coordination units that are often quite close to
government ministers, such as prime ministers units, strategy units and
various task forces.
A second place where this reconrmation of a public role in governing
society is visible has been in the emergence of a new set of literature reevaluating Rechtsstaat principles. This does not only follow discussions on
neo-Weberianism (Pollitt & Bouckaert, 2004; Dunn & Miller, 2007;
Drechsler, 2009; Pollitt et al., 2009), but also increasingly questions as to
whether NPM is really the way to go in, for example, Central and Eastern
European countries where serious efforts are still required if one is to move
from a pre-Weberian model to a Weberian one, especially with regard to
personnel policies, budgeting and so on (Meyer-Sahling, 2009; RandmaLiiv, 2009). Similar concerns have been raised with regard to the export of
public sector reform models to developing countries.

OVERVIEW OF THE BOOK

This book grew out of the 2010 conference of the International Public
Management Network held at Erasmus University Rotterdam. Around
40 scholars met for three days (2830 June 2010) to present and discuss
papers on New Steering Concepts in Public Management: Working towards
Social Integration. The current volume contains chapters based on these
papers and comments, plus a number of specially commissioned pieces. In
line with the general conference theme, conference participants undertook
a eld visit to study innovate steering mechanisms in the host city. Financial
support for the conference came from the Netherlands Ministry of
the Interior and Kingdom Relations, the Netherlands School of Public
Administration, and the Department of Public Administration at Erasmus
University Rotterdam. Some of the research leading to this book received
funding from the European Communitys Seventh Framework Programme
for Socio-economic Sciences & Humanities under Grant Agreement

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Introduction

No. 266887 (Project COCOPS). The Netherlands Institute of Government

provided an editing grant. Finally, thanks go to Giles Stacey for language
editing and Roxanne van Delft for the nal editing of the manuscript.
Part 1 of the book explores new steering concepts and instruments that have
emerged post-NPM. NPM-style reforms have been blamed for the widespread fragmentation of the public sector and policies. Separate agencies,
specic targets et cetera have led to a lack of coordination in the public
sector, making it difcult to deal with multifaceted problems, such as crime,
health, city regeneration and labour market reintegration. In Part 1, we
explore new organisational mechanisms, arrangements and ideas that have
been advanced to deal with this fragmentation. These new coordination
practices come in various shapes and with a range of names, and this third
wave of public sector reform suffers from considerable terminological
confusion. Part 1 of this book looks at various new organisational
arrangements and mechanisms, including whole of government, collaborative
governance, networks and outcome steering. Tom Christensen and Per
Lgreid kick off by outlining the main trend towards whole of government,
its characteristics and the implications for steering relations and especially
political agency. Sandra van Thiel looks at the consequences of hiving off on
steering from the centre, using the empty nest metaphor. In their contribution,
Tamyko Ysa and Marc Esteve focus on one particular organisational steering
arrangement, network portfolios, used by actors to strategically organise
their participation in various networks. Philip Karre, Martijn van der Steen
and Mark van Twist look at ways of involving citizens and civil society into
policy making and delivering services, and how such collaboration provides
direction and steering. The nal chapter in Part 1 by Walter Kickert looks at
steering relations within an organisation, applied to change management
processes.
A key concept in the new steering philosophy is outcomes. Rather than
dening narrow output targets, only to realise that these are ineffective, these
new steering concepts focus on broad social outcomes. But how does one
know what outcomes to focus on, and how can we steer towards these
outcomes? What do we actually know about the effectiveness of these new
steering instruments in achieving the desired outcomes? These questions are
answered in Part 2. Tony Bovaird and Rhodri Davies look at the experiences
of using outcome-based service commissioning and delivery in the United
Kingdom, and Alex Murdock focuses on the related topic of personal budgets
and personalisation in welfare services, where users themselves determine
desirable outcomes. Josie Kelly uses the obesity problem as a case to show
how public interventions are used to steer citizens behaviour. Jiannan Wu,

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SANDRA GROENEVELD AND STEVEN VAN DE WALLE

Yuqian Yang and Liang Ma analyse citizens attitudes towards urban

regeneration projects and Erik-Hans Klijn, Bram Steijn, Jurian Edelenbos and
Brenda Vermeeren study determinants of perceived outcomes in governance
networks in the Netherlands. Joris Voets and Wouter Van Dooren build on
these chapters to develop a framework to assess the performance of networks.
In the nal chapter of the book, Steven Van de Walle and Sandra Groeneveld
reect on the challenges and implications of the new steering concepts and draft
a research agenda for the future, focusing on four main lines of inquiry:
determinants, characteristics and effects of integration; determining outcomes
and values; democracy and power; and the role of government.

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