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The transformation of the public sector involves less government (or less rowing) but more
governance (or more steering). (Rhodes, 1996: 655)

In public administration, the governace debate is about changes that have taken place in the public
sektor since the 1980s. from a model based on weberian principles of hierarchy, neutrality, and career
civil servants, public sektor reforms introduces other models of governing: those of markets and
networks. The (intended or unintended) outcomes of these reforms have been to reduce the direct
hands on control service delivery and instead to increase steering through policy networks

This chapter looks at how governance emerged as a central concept in public administration
and discusses the questions raised by governance theory. It starts by sketching the traditional model
of public administration and its basic assumption. It then goes on to disscuss the deficiencies and the
critique of this model, the wave of public sector reform of the 1980s and 1990s, the results and
consequences of the reforms, and how governance emerged as a part of that debate. The final section
will discuss question of and the government is the principle of separation of powers and (in some
system) parliamentarianism. The executive power is the highest administrative autirithy. It prepares
policies and iroduces them to the parliament for decision. The organizing principle between the
government (the executive) and the administrative apparatus is one of hierarchical authorithy and
rules of competence as outlined above. There is a clear distinction between politics and
administration. The politicians are supposed to set policy goals, and the administration are supposed
to find the means by which these goals can be reached. The basic organizing principle between the
administrative apparatus and the sovereign people is the acceptance of undeniable human rights, the
principle of the rule of law, and the states monopoly of the means of coercion. This description of the
parliamentary chain of governance is very general, but it has, nonetheless, long been the dominant
perception of the role of the public bureaucracy in a representative democracy. Ddemocratic
governanceraised in relation to the new steering challenges

The traditional model of the public sector

Max weber was one of the first acholars to systematically aketch the principlea pf a modern
bureaucracy. Modern public servants, according to weber, ahould be career bureaucrats, recruited
on the basis of ability rather than ascription. In what, weber called a bureaucractic state, 'public
moneys and equipment are divorced from the private property of the official' (weber,1978; 957).
Modern bureaucracy is characterized by general rules, and it is decisive that the 'freely creative
administration would not constitute a realm of free,arbitrary action and discretion of personally
motivated favor and valuation. Thus, in an ideal bureaucracy, public and private interests are
completely separated.

These basic assumptions still roughly characterize the way we think about modern western
states and how the operate. We conceive of the bureaucracy as neutral implementer of laws
decided by parliament and policy decisions taken by the government. The normative assumption is
predominantly one of a liberal democracy. The descriptions of model the vary according to country.
For instance, the british westminster model is characterized by a stronger executive than the
scandinavian parliamentarian systems. However, Johan p. Olsen's description of what he calls 'the
parliamentary governance chain' basically holds for most western democracies.

The basis for all political authority according to this model is the sovereign people, yet power is
excercised by the people in an indirect way through elected representatives. The basic organizing
principle for connecting the people, or the electorate, to its representatives is the principle of plurality:
of free association and speech, with regular free and fair elections based on one person, one vote, and
the secret ballot. The legislative assembly defines the common interest of the nation, and it oversees
the government's implementation of its decisions. The organizing principle between the assembly
representatiom in various committees. Formal rules for bargaining with and consulting interest
organizations were established in many countries (olsen). These rules have been named as a certain
form governance: that of corporatism. Corporatism is an institutional arrangement for linking the
organized interest of civil society with the decisional structures of the state. It is defined as:

A system of interest representatiom in which constituent unita are organized into a limited number of
singular, compulsory, noncompetitive, hierarchically ordered and functionally diferentiated
categories, recognized or licensed by the state and granted a deliberate representional monopoly
within their respective categories in exchange for observing certain controls on their selection of
leaders and articulation of demands and supports (schmitter)

A typical example is that of workers unions and employers organizations gaining access to the
ministry of labour to represent their members in matters such as labour and social policy.
Corporatism can thus be seen as an alternative form of interest representation that constitutes a
rupture of the parliamentary governance chain (corporatism would have implied an arrow from the
sovereign people directly to the administrative apparatus). In corporatist structures accountability is,
in a sense, privatized, because it is directed at particular interest organizations (Day and Klein,1987)

A third challenge to the model arose with increasing internationalization of the economy
and with the integration process of the european community, which meant that national
governments could sometimes be bypassed and resources could be obtained elsewhere. For
example, municipal or regional governmenta can apply tp the european union's regional funds for
funding of agricultural projects and the like. Such access to funding, bypassing the central
government, provides a rupture of the governance chain of the traditional model.

A fourth challenge to the traditional model came from economist, who used assumptions of the
utility-maximizing induvidual to analyse the behaviour of public bureaucrats. These political economist
criticized the assumption that the

Challenges to the tradisional model

The traditional model was never a picture of how bureaucracy worked in real life, but rather an
ideal-type model, describing how a representative democracy ideally would look. However, many of
its assumptions were soon questioned in light of rapid socio-economic changes.

Already in the 1970s there was concern that the structure of the public sector was out of
line with the many new tasks the state had begun to perform after the second world war
(olsen,1978). From a mainly regulatory state, preserving lawa and order and providing basic
infrastructure, the state expanded to deliver more services in education, health, pension
peogrammes, unemployment scheme, and other schemes leading to increased public budgets and
increasing levels of public taxation. These expanding tasks were generally seen as legitimate, but the
organization of the public sector came under increasing criti. It was argued that the hierarchic
structures functioned in a rigid manner because of standard operating procedures and
bureaucractic rules, and therefore they were not appropriate for the type of servicetasks in which
reponsiveness and efficiency towards clients were important. For example, caring for children pr the
elderly requires a different behaviour from implementing tax legislation or regulating labour policy.
'Street-level bureaucrats' facing citizens daily often have to make hard choices that influence who
gets what fr government (Lipsky, 1980). Service workers are accountable not only to their superiors
in the administrative hierarchy, but also to their clients, or to their own group of professionals peers
(Day and Klein, 1987). Therefore the central assumption in the traditional model that a hierarchy
involves direct control, with the public employee being accountable only to their superior, is

Another challenge to the traditional model was the observation that, in many countries,
interest aggregation did not follow the pluralist prescription entailed in the model. Instead of being
vested in a plurality of induviduals, interest were represented by powerful organizations that gained
direct access to the state administration and permanent conservative governments that were
determined to change the public bureaucracy and remove what they saw as obstacles to efficient
service delivery. NPM was first introduced by the thatcher government in britain, but also in the united
states under Reagen, and countries like australia and New Zealand followed suit (Pierre and Peters,
2000). NPM principles were also applied in many third world countries as a condition for loans set by
the international financial institutions. What were these reforms about and what were their
concequences? Many different types of reform measures have been grouped under the label of NPM,
and there is no agreement as to which exact measures belong here, but a tentative offer is made in
the following section