Resistance and civil society
Radicals, socialists, and anarchists have long advocated patterns of rule that do not require the capitalist state. Many of them look toward civil society as a site of free and spontaneous associations of citizens. Civil society offers them a non-statist site at which to reconcile the demands of community and individual freedom—a site they hope might be free of force and compulsion. The spread of the new governance has prompted them to distance their visions from that of the neoliberal rolling back of the state. Hence, the word governance is used by radicals to denote two distinct phenomena. They use it to describe new systems of force and compulsion associated with neoliberalism. And they use it to refer to alternative conceptions of a non-statist democratic order.
There is disagreement among radicals about whether the new governance has led to a decline in the power of the state. Some argue that the state has just altered the way in which it rules its citizens; it makes more use of bribes and incentives, threats to withdraw benefits, and moral exhortation. Others believe that the state has indeed lost power. Either way, radicals distinguish the new governance sharply from their visions of an expansion of democracy. In their view, if the power of the state has declined, the beneficiaries have been corporations; they associate the hollowing out of the state with the growing power of financial and industrial capital. Radical analyses of the new governance explore how globalization—or perhaps the myth of globalization—finds states and international organizations acting to promote the interests of capital.
Radicals typically associate their alternative visions of democratic governance with civil society, social movements, and active citizenship. Those who relate the new governance to globalization and a decline in state power often appeal to parallel shifts within civil society. They appeal to global civil society as a site of popular, democratic resistance to capital. Global civil society typically refers to nongovernmental groups such as Amnesty International, Greenpeace, and the International Labour Organization as well as less formal networks of activists and citizens. Questions can arise, of course, as to whether these groups adequately represent their members, let alone a broader community. However, radicals often respond by emphasizing the democratic potential of civil society and the public sphere. They argue that public debate constitutes one of the main avenues by which citizens can participate in collective decision making. At times, they also place great importance on the potential of public deliberation to generate a rational consensus. No matter what doubts radicals have about contemporary civil society, their visions of democracy emphasize the desirability of transferring power from the state to citizens who would not just elect a government and then act as passive spectators but rather participate continuously in the processes of governance. The association of democratic governance with participatory and deliberative processes in civil society thus arises from radicals seeking to resist state and corporate power.
These radical ideas are not just responses to the new governance; they also help to construct aspects of it. They inspire new organizations and new activities by existing social movements. At times, they influence political agreements—perhaps most notably the international regimes and norms covering human rights and the environment. Hence, social scientists interested in social movements sometimes relate them to new national and transnational forms of resistance to state and corporate power. To some extent, these social scientists again emphasize the rise of networks. However, when social scientists study the impact of neoliberal reforms on the public sector, they focus on the cooperative relations between the state and other institutionalized organizations involved in policy making and the delivery of public services. In contrast, when social scientists study social movements, they focus on the informal links between activists concerned to contest the policies and actions of corporations, states, and international organizations.
The new governance
The interest in governance derives in large part from reforms of the public sector that began in the 1980s, and new governance refers to the apparent spread of markets and networks following upon these reforms. It points to the varied ways in which the informal authority of markets and networks constituted, supplemented, and supplanted the formal authority of governments. Many people adopted a more diverse view of state authority and its relationship to civil society.
Public-sector reform occurred in two principal waves. The first wave consisted of the new public management (NPM), as advocated by neoliberals; these reforms were attempts to increase the role of markets and of corporate management techniques in the public sector. The second wave of reforms consisted of attempts to develop and manage a joined-up series of networks informed by a revived public-sector ethos. They were in part responses to the perceived consequences of the earlier reforms.
Some advocates of NPM implied that it is the single best way for all states at all times. The same can be said of some advocates of partnerships and networks. Studies of both waves of reform can imply, moreover, that change was ubiquitous. It is thus worth emphasizing at the outset both the variety and the limits of public-sector reform. Reforms varied from state to state. NPM is associated primarily with the United Kingdom and the United States as well as a few other states, notably Australia and New Zealand. Although many other developed states introduced similar reforms, they did so only selectively, and, when they did so, they often altered the content and the implementation of the reforms in accord with their institutions and traditions. Typically, developing and transitional states adopted similar reforms only under more or less overt pressure from corporations, other states, and international organizations. Public-sector reform also varied across policy sectors within any given state. For example, even in the United Kingdom and the United States, there were perilously few attempts to introduce performance-related pay or outsourcing into the higher levels of the public service, which are responsible for providing policy advice. While there have been extensive and significant reforms, bureaucratic hierarchies still perform most government functions in most states.
The new public management
The first wave of public-sector reform was the new public management (NPM). It was inspired by ideas associated with neoliberalism and public choice theory. At first, NPM spread in developed, Anglo-Saxon states. Later it spread through much of Europe—though France, Germany, and Spain are often seen as remaining largely untouched by it—and to developing and transitional states. In developed countries the impetus for NPM came from fiscal crises. Talk of the overloaded state grew as oil crises cut state revenues and the expansion of welfare services saw state expenditure increase as a proportion of gross national product. The result was a quest to cut costs. NPM was one proposed solution. In developing and transitional states, the impetus for NPM lay more in external pressures, notably those associated with structural-adjustment programs.
NPM has two main strands: marketization and corporate management. The most extreme form of marketization is privatization. Privatization is the transfer of assets from the state to the private sector. Some states sold various nationalized industries by floating them on the stock exchange. Other state-owned enterprises were sold to their employees through, say, management buyouts. Yet others were sold to individual companies or consortiums. Industries subject to dramatic privatizations included telecommunications, railways, electricity, water, and waste services. Smaller privatizations involved hotels, parking facilities, and convention centres, all of which were as likely to have been sold by local governments as by central states.
Other forms of marketization remain far more common than privatization. These other measures typically introduce incentive structures into public-service provision by means of contracting out, quasi-markets, and consumer choice. Marketization aims to make public services not only more efficient but also more accountable to consumers, who are given greater choice of service provider. Prominent examples of marketization include contracting out, internal markets, management contracts, and market testing. Contracting out (also known as outsourcing) involves the state’s contracting with a private organization, on a competitive basis, to provide a service. The private organization can be for-profit or nonprofit; sometimes it is a company hastily formed by those who previously provided the service as public-sector employees. Internal markets arise when departments are able to purchase support services from several in-house providers or outside suppliers that in turn operate as independent business units in competition with one another. Management contracts involve handing over the operation of a facility—such as an airport or a convention centre— to a private company in accord with specific contractual arrangements. Market testing (also known as managed competition) occurs when the arrangements governing the provision of a service are decided by means of bidding in comparison with private-sector competitors.
Typically, marketization transfers the delivery of services to autonomous or semiautonomous agencies. Proponents of NPM offer various arguments in favour of such agencies. They argue that service providers are then able to concentrate on the efficient delivery of quality services without having to evaluate alternative policies. They argue that policy makers can be more focused and adventurous if they do not have to worry about the existing service providers. And they argue that when the state has a hands-off relationship with a service provider, it has more opportunities to introduce performance incentives.
Corporate management reform involves introducing just such performance incentives. In general, it means applying to the public sector ideas and techniques from private-sector management. The main ideas and techniques involved are management by results, performance measures, value for money, and closeness to the customer—all of which are tied to various budgetary reforms. Although these ideas and techniques are all attempts to promote effective management in the public sector, there is no real agreement on what constitutes effective management. To the contrary, the innocent observer discovers a bewildering number of concepts, each with its own acronym. For example, management by objectives (MBO) emphasizes clearly defined objectives for individual managers, whereas management by results (MBR) emphasizes the use of past results as indicators of future ones, and total quality management (TQM) emphasizes awareness of quality in all organizational processes. Performance measures are concrete attempts to assure effective management by auditing inputs and outputs and relating them to financial budgets. Such measures vary widely because there is disagreement about the goals of performance as well as how to measure results properly. Nonetheless, value for money is promoted mainly through performance measures to influence budgetary decisions.
The success of NPM has been unclear and remains a source of considerable debate. Few people believe that it proved to be the panacea it was supposed to be. Studies suggest that it generated at best about a 3 percent annual saving on running costs, which is modest, especially considering that running costs are typically a relatively small component of total program costs. Even neoliberals often acknowledge that most savings came from privatization, not reforms in public-sector organizations. The success of NPM appears to vary considerably with contextual factors. For example, the reforms were often counterproductive in developing and transitional states because these states lacked the stable framework associated with elder public disciplines such as credible policy, predictable resources, and a public-service ethic. It is interesting that, in this respect, NPM appears to require the existence of aspects of just that kind of public-service bureaucracy that it was meant to supplant.
