OECD - Government of The Future.-Organization For Economic Cooperation & Development (Aug. 2001) PDF

GOVERNANCE
Government of the Future

WHAT KEEPS GOVERNMENTS AWAKE AT NIGHT?
• How can governments best prepare themselves for current and future reform
challenges?
• How can a public sector develop a culture responsive to change?
• What types of leaders are needed?
• How can governments better communicate with citizens?
• How can governments avoid "reform fatigue"?
In the face of challenges and opportunities posed by globalisation, rapidly

evolving technologies, changing demographics, rising citizen expectations, and
competition from the private sector, governments need to continue to explore and
exploit new ways of working. This book (based on the proceedings of the OECD
Symposium “Government of the Future: Getting from Here to There”) looks at the
way public administrations have been reformed over the last two decades and
draws lessons for a new generation of reform.
«
Government
of the Future
GOVERNANCE

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Government
of the Future
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT

ORGANISATION FOR ECONOMIC CO-OPERATION
AND DEVELOPMENT
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Publié en français sous le titre :

CONSTRUIRE AUJOURD’HUI L’ADMINISTRATION DE DEMAIN
© OECD 2000
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Foreword
This book is based on the OECD Symposium, “Government of the Future:

Getting from Here to There” held in Paris on 14-15 September 1999. The Sympo-
sium included expert presentations as well as country case studies, prepared by
members of the OECD Country Experts Group for the Project on Strategic Review
and Reform.
The report was written by Edwin Lau of the OECD Public Management Ser-
vice. The author would like to thank Jeannette Schollum and Kirsi Kuuttiniemi who
prepared and organised the Symposium. Many thanks also to the Symposium
speakers, the participating OECD country delegates and the members of the
experts group who assisted in its preparation.
The book is published on the responsibility of the Secretary-General of
the OECD.
© OECD 2000
Table of Contents
Overview ...................................................................................................................................... 11
Why public management reform? ..................................................................................... 11
Lessons learned from public management reform ......................................................... 13
How to keep public management reform sustainable ................................................... 14
Where do we go from here? ............................................................................................... 15
I. Why Public Management Reform? .................................................................................. 17

Government needs to keep up with society.................................................................... 17
Societies are more diverse, complex and fragmented................................................... 18
Media and education drive perceptions of government quality,
accountability and trust ................................................................................................. 20
Economic pressures reduce resources while increasing demands .............................. 20
Technological advances create new opportunities and expectations.......................... 21
Re-establish trust in government...................................................................................... 23
Lost opportunity becomes a liability................................................................................ 24
Simply providing more of the same services is not enough.......................................... 26
Meeting the public’s needs requires a pro-active approach......................................... 26
Communication helps to spread reform values .............................................................. 27
Providing accountability through results helps to earn public trust ............................ 28
Government’s role is changing under new pressures..................................................... 29
Government no longer has a monopoly on services: innovate or perish .................... 30
Government needs to co-ordinate policymaking among different players................. 32
Government needs to co-ordinate with sub-national and extra-national
organisations ................................................................................................................... 35
Collapse of ideology creates opportunities for reform, but eliminates
stock answers .................................................................................................................. 36
II. Lessons Learned from Public Management Reform.................................................... 39

Establish the conditions for reform................................................................................... 39
Determine a reform agenda that meets citizens’ needs ................................................ 39
Crises offer opportunities for reform, but strategic reform brings lasting change ...... 40
Develop capacity for reform............................................................................................... 47
Establish mechanisms to ensure coherence of reform policy ....................................... 51
Build support for reform ..................................................................................................... 52
Communicate to build constituencies for reform............................................................ 55 5
© OECD 2000
Communicate to increase stakeholders ownership in the reform process ................. 56

Learn the language of reform to connect with citizens .................................................. 58
Create a change culture by changing behaviour............................................................. 60
Build incentives into reform .............................................................................................. 61
Ensure accountability within the public service ............................................................. 62
III. How to Keep Public Management Reform Sustainable ............................................. 65

Work to avoid reform fatigue ............................................................................................. 65
Create ownership of reform to create support for reform.............................................. 66
Implementation also needs to be strategic..................................................................... 68
Learn from past reform efforts........................................................................................... 70
How to keep agencies from backsliding? ........................................................................ 73
Making change part of “business as usual” is an alternative to continuous reform ...... 74
Stay the path by fostering champions of reform............................................................. 74
Bridge the gap between developing and implementing reform.................................. 76
Commit to identifying and developing future leaders .................................................. 78
Develop leadership attributes.......................................................................................... 79
Learn by doing .................................................................................................................... 80
Create incentives for leadership....................................................................................... 82
Better feedback makes better leaders ............................................................................ 84
IV. Where Do We Go from Here?........................................................................................... 87
V. Symposium Papers ............................................................................................................ 89

A Changing Canon of Government: from Custody to Service
Roberto Carneiro Professor, Catholic University of Portugal ........................................................ 91
Prologue ............................................................................................................................... 91
The quest for New Government........................................................................................ 93
Learning to operate far from equilibrium ........................................................................ 103
Bridging the trust gap – operating near equilibrium...................................................... 107
The DNA of Governments: People and Values ............................................................... 115
Notes .................................................................................................................................... 120
Annex. Some queries affecting the shape of future governments............................... 121
Opportunity, Strategy, and Tactics in Reforming Public Management
Allen Schick, Visiting Fellow at The Brookings Institution, Washington
and Professor, University of Maryland....................................................................................... 123
The roads not taken............................................................................................................ 126
Contemporary reform is more likely to be comprehensive than piecemeal .............. 126
Contemporary reform is not confined to particular administrative processes ........... 127
Contemporary reform seeks to devolve rather than concentrate managerial
authority .......................................................................................................................... 127
Contemporary reform relies on incentives, not just formal rules,
6 to change behavior ........................................................................................................ 128
© OECD 2000
Table of Contents
Contemporary reform is concentrated on operations and service delivery................ 129

Opportunity.......................................................................................................................... 129
Strategy ................................................................................................................................. 133
Tactics.................................................................................................................................... 142
The Path Ahead.................................................................................................................... 144
The Next Generation........................................................................................................... 147
Reconceiving the Center: Leadership, Strategic Review and Coherence
in Public Sector Reform
Evert A. Lindquist, Director, School of Public Administration, University of Victoria,
British Columbia ...................................................................................................................... 149
Introduction.......................................................................................................................... 149
Public Sector Reform: Pressures, Strategies, and Constraints....................................... 152
The question of Leadership and public sector reform................................................... 155
Moving Beyond Transactions: Mechanisms for Strategic Review.................................. 157
Different systems, different challenges for strategic review.......................................... 161
Managing Strategic Review and Public Sector Reform: Some Suggestions ................. 172
Concluding remarks: learning and coherence across jurisdictions ............................... 178
Notes..................................................................................................................................... 180
Annex. A Perspective on Central Agencies from Canada .............................................. 182
Why is it so Difficult to Reform Public Administration?
François Dupuy, Assiliate Professor, INSEAD ........................................................................... 185
Introduction.......................................................................................................................... 185
Reforming public organisations: what is an organisation? ............................................. 185
Public administrations are bureaucratic organisations: an operational definition
which gives a better understanding of the difficulties in bringing about change.. 185
New constraints or “opportunities for change”................................................................ 185
Paths...................................................................................................................................... 186
Introduction.......................................................................................................................... 186
Reforming public organisations: what is an organisation? ............................................. 187
which gives a better understanding of the difficulties of bringing about change.. 188
New constraints and major difficulties ............................................................................. 191
Paths...................................................................................................................................... 193
Bibliography ......................................................................................................................... 196
Evaluation as Usable Knowledge for Public Management Reforms
Jean-Claude Thoenig, Director of Research at the Centre National de la Recherche Scientifique
(CNRS), (Groupe d’analyse des politiques publiques)
and Professor at INSEAD (Institution européenne d’administration des affaires) .......................... 197
A seeming paradox.............................................................................................................. 197
Learning from good practices ............................................................................................ 198
Reasonable optimism for the future ................................................................................. 206
Bibliography ......................................................................................................................... 210 7
© OECD 2000
Public Sector Reform Requires Leadership

Jo Brosnahan, Chief Executive Officer Auckland Regional Council .............................................. 211
Introduction ......................................................................................................................... 211
Why do we need leadership?............................................................................................ 212
A leader in action – A case study of Harry Nurkin .......................................................... 214
The emotional and spiritual dimension of leadership .................................................. 216
The importance of values................................................................................................... 218
What do good leaders do?................................................................................................. 218
What is a leader and how is a leader involved with leadership? ................................. 221
Leadership and the situation ............................................................................................ 223
What is the difference between leadership and management?................................... 223
Are there differences in leadership between the sectors? ........................................... 225
Nurturing future leaders..................................................................................................... 226
Leadership in the reformed public sector....................................................................... 229
Creating the environment for leadership ........................................................................ 231
Recommendations to encourage leadership in the public sector ............................... 232
Bibliography ........................................................................................................................ 237
Beyond Training: Developing and Nurturing Leaders for the Public Sector
Kevin Bacon, PricewaterhouseCoopers LLP ............................................................................... 243
Introduction ......................................................................................................................... 243
What attributes are we seeking in future leaders? ......................................................... 244
Leadership development within the constraints of the current system...................... 244
Conclusion............................................................................................................................ 248
Annex. Results of the 1999 Government Leadership Survey ....................................... 250
Bibliography ........................................................................................................................ 251
List of Boxes
1. Democratisation demands greater participation (The Netherlands)........................... 19

2. Economic crisis can call attention to the need for reform (Finland) ............................ 22
3. Addressing economic competitiveness through reform (Canada) ............................... 22
4. Technological changes can stimulate reform (Norway).................................................. 23
5. Technology can make services more convenient and accessible (Portugal) .............. 24
6. The customer is king (United States) ............................................................................... 26
7. Giving citizens a voice (Canada) ....................................................................................... 27
8. Improving services through citizen feedback (Portugal) ............................................... 29
9. Introducing competition to improve quality (United Kingdom) .................................. 31
10. Redefining government roles and functions (New Zealand)......................................... 32
11. Shifting influence of different interest groups (New Zealand)...................................... 33
12. Finding the balance between participation and action (The Netherlands)................ 34
13. International pressures for reform (Finland) ................................................................... 35
14. Consulting local partners (Germany)................................................................................ 36
8 15. Identifying citizens’ needs through consultation (United Kingdom) ........................... 41
© OECD 2000
Table of Contents
16. Menu of Instruments for Strategic Review ....................................................................... 43

17. Depending on consensus to set the scope of reform (Norway) .................................... 46
18. Setting systems in place for more systematic and comprehensive review
(Canada) .......................................................................................................................... 47
19. Structure can determine the approach to reform (Norway)........................................... 48
20. Centralised capacity can provide leadership for reform (New Zealand) ..................... 50
21. Drawing on administrative networks to develop reform plans (Ireland) ..................... 51
22. Political support is a condition for successful reform (United Kingdom) .................... 55
23. Does the public know that reform was successful? (New Zealand) .............................. 58
24. Changing behaviour ............................................................................................................ 63
25. Introducing incentives for change through competition (New Zealand)...................... 63
26. Recognising successes (United States) ............................................................................ 68
27. Sequencing reforms to build momentum (Australia) ..................................................... 69
28. Preventing backsliding through political accountability (Canada) ............................... 73
29. Training as a tool for leadership development (Germany)............................................ 79
30. Taking responsibility for change (New Zealand) ............................................................. 83
List of Charts
1. The Many Facets of Public Sector Reform........................................................................ 153

2. Streams of Influence on Public Sector Reform ................................................................ 154
3. Sources of Leadership on Public Sector Reform ............................................................. 158
4. Menu of Instruments for Strategic Review ....................................................................... 160
5. Responsibility for Coordinating Horizontal Issues.......................................................... 162
6. Domains of Administrative Responsibilities ................................................................... 166
© OECD 2000
Overview
The OECD Symposium, “Government of the Future: Getting from Here to

There” was held on 14-15 September 1999. For the Symposium, the Public
Management Service (PUMA) of the OECD brought together 80 high-level
reformers from OECD countries to look at the future shape of government reform.
There is not one correct approach to reform. Reform efforts in the 29 OECD
countries range from fundamental review of the role of government to small,
incremental changes in public processes. The Symposium sought to look at some
of the new challenges governments face and to provoke countries to re-examine
the goals and strategies of reform to achieve stronger links between reform
activities and outcomes. Both presenters and participants at the Symposium drew
on a rich set of experiences from a wide variety of contexts and administrative
structures, and attempted to take into account these differences while identifying
common elements of reform.
In order to stimulate frank discussion, PUMA used 9 country case studies
(Canada, Finland, Germany, Ireland, Netherlands, New Zealand, Norway, Portugal,
United Kingdom,) and presentations by academics and practitioners who have
been working on public reform. These documents are available on PUMA’s website
(http://www.oecd.org/puma/). The following report provides a synthesis of the reform
experiences shared by Symposium delegates and their responses to the
Symposium presentations. It is followed by the presentations that were the basis
of much of the discussion.
Why public management reform?
Government needs to keep up with society

The purpose of reform is to make government more responsive to society’s
needs. People want government that does more and costs less. Much of current
public reform is an effort to meet society’s needs by providing better, faster and more
services from government.
But does the public just want more of the same services? The public’s needs
are rapidly changing as societies become more diverse, complex and fragmented. 11
© OECD 2000
Technological advances and more knowledgeable citizenry create new opportuni-

ties and expectations. The pace of change is faster than ever so that governments
cannot rely on one fixed set of solutions, but instead need to learn to listen to
ever-changing demands and innovate to find solutions. As old industries and
social trends fade and new ones take their place, governments need to be ready
to take on new roles in response to changing needs.
Re-establish trust in government
In the face of a changing society, however, many governments seem to keep

doing things the same old way. The belief that government is out of touch with
people’s needs has decreased the public’s trust in government. In order to keep
up with expectations, government should take a pro-active approach to problem
solving by anticipating the public’s desires and making changes in how it does
business in order to meet those desires. Government needs to re-earn the
public’s trust by providing more choice, democracy and transparency. The public
service also needs to work with the political sphere to reappraise the types of
services it provides and how it provides them.
Government also needs to communicate its messages to citizens. An increas-
ingly fragmented and diverse society means that government is looking for new
ways to connect with citizens. Government needs to make the most of opportuni-
ties to communicate one-on-one with its constituents through new technologies
and new forums of communication (Internet, cable television, etc.) and to create a
new connection with the public that fits its changing role.
Government’s role is changing under new pressures
As society changes, government’s role in society is also changing. People are

relating to government in different ways. Government has become just one player
among many seeking to represent and serve the public. The loss of the government
monopoly on services means that the public sector faces greater competition.
Government is also exposed to a much greater array of outside forces.
Greater economic inter-dependence, the opening up of societies and the growing importance
of international structures and agreements mean that the outside forces impacting
society are more complex, multi-sourced and multi-dimensional than ever before.
These changes strike at the very heart of the identity of the nation-state, and
governments should adapt their reform efforts to this changing world. In order to
understand and serve the public, national governments need to act as better
mediators, co-ordinators, policy-makers and regulators, in concert with other centres of
power, including international and sub-national levels of government, the media,
12 industry and non-profit groups.
© OECD 2000
Overview
Lessons learned from public management reform
Establish the conditions for reform

Determining the shape of reform depends on government’s ability to
anticipate the public’s needs. Currently, most public reform is not developed in
anticipation of needs, but rather in response to crises that arise when those needs
are unmet (as well as in response to unforeseeable developments). The challenge
to government is to move away from opportunistic reform towards more strategic
reform. Strategic reform involves developing a clear vision, building a constituency,
planning tactics to achieve outcomes and communicating the vision and anticipated
outcomes to stakeholders and the public at large.
A common vision serves to unify political leaders, senior officials, front-line
workers and the general public. It also provides a guideline for choosing goals, for
developing strategies to achieve those goals and for measuring results. In order to
articulate a common vision, government should learn to consult with stakeholders
and bring together their many, varied visions.
The task of consultation is not an easy one. Government needs to gain
support for reform from other centres of power – especially political leaders – and
to work with them to identify a public agenda out of diverse interests. It also
needs to educate its citizens about the stakes of reform. The public is interested
in the results of reform, not necessarily in the process. Gaining public support for
reform means not only choosing an agenda that the public cares about, but also
earning the public’s trust that government actions will lead to positive results.
Each country has a different institutional model for providing the capacity to
drive reform. The more decentralised the system, the more important it is to have
both formal and informal channels of communication in order to maintain coherence
in the reform process.
Communicate to build constituencies for reform

Communication is the means by which government helps stakeholders feel
ownership in the reform process. In order to gain the public’s trust, government
should learn to communicate the need for reform, the process of reform and reform
successes. Communicating this message is the responsibility of both government
officials and political leaders.
Communicating the need for reform involves transmitting the values and goals that
underlie the reform vision and identifying and addressing the public’s fears. A
compelling statement of values creates an emotional connection with the public
by reflecting its own desires, and helps government workers overcome bureau-
cratic self-interest in order to change behaviour. Communicating the process of reform 13
© OECD 2000
helps government workers understand their role in reform and maintain the
coherence of reform efforts. It also provides a timeline for achieving results.
Communicating reform successes serves to build public confidence and to maintain
the momentum of reform efforts by bolstering political and public support.
The key to successful communication is to use simple, everyday language that

focuses on results in the form of improved service outcomes. Government should avoid
reform “buzzwords” or jargon that lack both content and meaning for the public
and confuse the relationship between actions and outcomes. The reform message
should be honest, pointing out the potential costs and inconveniences of reform,
and should not overpromise outcomes.
Create a change culture by changing behaviour
Reform should seek long-term change in government’s behaviour by changing

organisational culture. Incentives need to be built into reform efforts so that govern-
ment workers are rewarded for actions and outcomes that are consistent with
reform goals. Government should foster co-operation rather than co-ordination by
reducing the segmentation of tasks and putting the emphasis on global performance.
In response to demands for service and greater responsiveness, governments

are evolving away from purely hierarchical systems towards a more “webbed” model
in which different parts of government take responsibility for meeting particular
aspects of citizens’ needs with an accompanying increase in independence and
flexibility. Reform efforts need to keep in mind that structural changes are geared
at changing bureaucratic behaviour and are not ends in and of themselves.
Structural changes should foster leadership, innovation, flexibility and accountability
for results.
How to keep public management reform sustainable
Work to avoid reform fatigue
Reform fatigue is the condition in which public servants become cynical and
tired of reform, and, over time, it plagues even the most successful reform efforts.
Governments can work to avoid reform fatigue by gaining stakeholder buy-in
through feedback and consultation to create a sense of ownership in reform
efforts. Rewarding innovative and responsive behaviour and communicating
successful outcomes help to create a system of incentives that reward change.
Instead of continuous reform, governments need to evolve organisations that can
14 adapt to change.
© OECD 2000
Overview
Stay the path by fostering champions of reform

Leaders within government are key to bridging the gap between the develop-
ment and the implementation of reform. OECD countries have used leaders at
many different levels of government as drivers of reform. The public sector
presents unique challenges for leadership. Changing missions and hazy vision
confuse expectations for reform and for leaders. Public scrutiny and risk averse
organisations limit leaders’ freedom. They are asked to continue reform during
changes in the political environment.
On the other hand, public sector reform is allowing new, more flexible leaders
to emerge. Organisations need to focus explicitly on leadership development by identi-
fying and training leaders. Government needs to provide incentives for leadership
by encouraging innovation and rewarding successes and by giving potential leaders the
opportunity to develop leadership skills on the job. Leaders should be held account-
able for outcomes, but also be allowed to make mistakes.
Where do we go from here?

As society continues to change rapidly, the solutions of the past are no longer
sufficient. Not only is there no “one-size-fits-all” solution across countries, but
countries should also learn to use reform to create institutions that can constantly
adapt to changes in their own societies and to changing outside forces. The
Symposium raised many important reform questions. These questions are useful
both for practitioners to consider when engaging in reform and for further research
and reflection on how to better meet coming challenges through public reform.
PUMA remains committed to using its unique perspective to provoke practi-
tioners to identify future challenges to government, while focusing on solutions
that are grounded in practitioners’ needs. PUMA will continue to try to provide
opportunities for practitioners to develop a “bigger picture” that will allow OECD
Member and non-member countries better prepare governments of the future.
15
© OECD 2000
I. Why Public Management Reform?
Delegates who participated in the Symposium are responding to a broad

variety of reform challenges in their countries, ranging from fundamental reviews
of the role of government to more incremental public management reforms. All
these initiatives share the common goal of making government more responsive
to citizens’ needs. In order to be more responsive, reform should not simply seek
to provide more of the same services, but instead attempt to redirect the func-
tions of government in response to social changes, the proliferation of influencing
forces outside of government, as well as the changing role of government itself.
Government needs to keep up with society
Governments of the future face a number of challenges. If they are to keep up

with changing societies, they will have to learn how to understand the needs of
increasingly diverse and fragmented constituencies, and come up with appropri-
ate plans of action in response to those needs. In order to do so, they need to
learn to innovate, take risks and be willing to change internal work cultures. While
new technologies may help them meet some of citizens growing expectations, it is
up to governments to exploit those technologies and reinvent themselves to
achieve real improvements in service.
Reform is one way for governments to refocus attention on citizens’ needs.
Most OECD governments have recognised that they need to chart a new path for
governance, guided by citizen preferences rather than old ideologies. While always
trying to improve services, they have discovered that they need to find new ways to
connect with constituencies in order to show them that government does, in fact,
effectively provide many services that the public takes for granted. Governments
are searching for new ways to educate citizens about reform values and to show
them how public service reforms are trying to better meet their expectations.
Professor Roberto Carneiro of the Catholic University of Portugal opened the
Symposium with a discussion of some of the new challenges that governments are
facing. For additional discussion on future challenges to government, see his
paper, “A Changing Canon of Government: from Custody to Service” in part five of this
book (page 91). 17
© OECD 2000
Societies are more diverse, complex and fragmented

Societies are more diverse and mobile. Migration, economic and social
divergences and changes in family and social structure have all contributed to the
increasing diversity of society. In addition, the continued expansion of democratic
values in OECD countries has made it easier for individuals and interest groups to
speak out, organise and make their interests known. One of the consequences of
increased diversity for public policymaking is that governments are finding it
increasingly difficult to operate by consensus.
Globalisation of the economy and Internet have made goods and services
more mobile. The continued evolution of industrial economies into information-
based economies means that natural resources are less important while knowl-
edge is more important. Knowledge, by its nature, is difficult to control, but the
increasing volume of available information means that it is even more important
to manage and organise information to make it useful. Government needs to
adapt to the new overall availability of knowledge while ensuring that critical
knowledge, which can provide businesses with a competitive advantage, remains
available to all and is not hoarded by a few.
People are also increasingly mobile, and bring with them new ways of doing
things, new expectations and new needs. Governments can no longer easily
control resources, labour and capital flowing within and across their borders. As a
result, geography matters less. Nations can no longer afford to be insular because
their authority is no longer consolidated over a fixed population and a fixed set of
resources. The greater pace of change means that government has to keep up with
society rather than supervising a stable public interest.
Societies are more complex and fragmented. Increased diversity and mobil-
ity have resulted in more fragmented societies. Many traditional social structures
are breaking down, in some cases to be replaced by new structures. Many OECD
countries, for example, have experienced growing secularisation. At the Sympo-
sium, delegates were asked to think about what national identity meant in an
“explosion of cultural freedoms”. One consequence of these changes I that society is
less predictable.
Professor Schick of the University of Maryland pointed out that the liberation
of individuals dries up the “collective glue” that builds confidence in government.
As social connections become “more temporary, flexible and fluid” identities in the
future will increasingly be defined more by shifting partnering and networks of common
interests. Government can help rebuild societal cohesion by identifying the new ways in
which people are coming together and responding to new coalitions of interest.
People are more individualistic, yet many are also finding expression of their
opinions through interest groups. While interest groups are nothing new, the
18 proliferation and shifting authority of interest groups is pushing government to
© OECD 2000
Why Public Management Reform?
broaden access to the policymaking process to include new partners and participants. The
increasingly publicised role of Non Governmental Organisations (NGOs) presents
a challenge for governments to open decision-making processes while continuing
to ensure accountability.
While on the whole, delegates felt that diversity was something to be valued,
they listed numerous challenges for government stemming from increasingly
diverse societies. For example, some countries spoke of the issue of intergenera-
tional change. Young people do not identify with government in the same way as
previous generations (if at all). Their interests – as well as those of other groups in
society – are not as easily knowable. This may partly be because they are not well
represented by any of the traditional sources of information about citizen prefer-
ences (i.e., mainstream media, interest groups, polls). It may also be, however, that
the sheer number of different constituencies makes it difficult to ensure that all
are represented.
Box 1. Democratisation demands greater participation
Public decisions in the Netherlands have traditionally been prepared in close

co-operation between governmental officials and the leaders of the different
denominational communities. The decisions made were negotiated with the elite
of social communities through a network of more than 130 “advisory councils” and
generally accepted by the population. This consensus-seeking type of decision-
making still characterises Dutch “governmental” culture. In the course of time,
however, a great deal of actual decision-making power had shifted to this
“advisory structure”, the result of which was decreased transparency of responsi-
bilities for decisions. A reform of the “advisory structure” took place between 1994
and 1996 which abolished almost all advisory councils and regulated the legal
conditions for installing new “advisory councils”, of which there are now twenty.
The Netherlands, along with many other countries, have seen a democratisa-
tion movement which demands changes in the traditional decision-making
structures and procedures to allow more input on public decisions by citizens.
Before decisions are made about reforms that concern those parts of the public
service with direct contacts with individual citizens or social groups – for example
when the Registry Office is reorganised – marketing-like investigations are nowa-
days made to find out what is in the best interests of clients. Effected citizens or
groups are consulted in advance through public hearings or surveys. Reforms are
accompanied by extensive communication plans (announcements in papers and
public buildings, sometimes even on the streets, direct mailing, etc.). When
citizens or groups do not agree with reforms in which they have a direct interest,
they have a legal right of appeal.
The Netherlands
19
© OECD 2000
Media and education drive perceptions of government quality, accountability

and trust
The media is increasingly fragmented. The media plays a key role in helping
government understand the concerns of citizens as well as the actions and posi-
tions of other players in the policymaking process. The media also shapes the
public’s perception of government by its choice of issues to cover and the per-
spective that it has on those issues. Given this vital role, government cannot
afford to ignore media portrayals of public sector activities. According to Professor
Carneiro, one of the key functions of centres of government is to provide an “intel-
ligent interface” between government activity and media agents.
Government is more dependent on the media than ever for insight into citi-
zen preferences. Countries that have had more frequent election cycles and
increased use of referendums have found that political decisions are often
co-ordinated in anticipation of media responses. As voters become more sophisti-
cated, they are increasingly willing to cross party lines, making governments even
more sensitive to public opinion, and therefore to media portrayals.
The nature of media is also changing. One of the consequences of technolo-
gical advances and the proliferation of choices is that traditional media sources
have less control over what news items viewers focus on or the perspective that
they have on a given issue. Increased competition from more and more sources of
information makes media representations more volatile as they become more
fragmented. The media faces a growing temptation to sensationalise in order to
attract market share, further distorting the public’s view of government.
Education holds the potential to improve civic participation. Education has
become more important in the information-based economy, and it plays an
important role in shaping people’s perceptions of government and preparing
them to participate in the policymaking process.
The trend towards higher overall levels of education for all members of soci-
ety means that not only are citizens better equipped to participate in governance,
but that they also expect more from government. Professor Carneiro observed,
“educated citizens make educated choices”. Countries spoke of the notion of
“emancipated citizenry” who do not need government to take care of them, but who
have specific expectations of government. The challenge for government is to live
up to their expectations, not to be the caretaker of their problems.
Economic pressures reduce resources while increasing demands
Government’s many constituencies each have a different set of demands from

the public sector. Government is expected to play a role in food safety, consumer
20 protection, promoting competition, reducing health care costs and protecting the
© OECD 2000
environment, among many other responsibilities. And the list grows as technology
expands the realm of the possible, raising new questions for government in ethics
and health and safety.
Yet, just at the time when they are asked to do more, all governments today
face budget constraints. Citizens call for balanced budgets, not trusting govern-
ments to limit spending on their own. Regional economic integration reduces
government’s latitude in using fiscal and monetary policy to manage the economy,
often requiring decreased public spending. The private market is increasingly
influential through its responses to public actions. Financial constraints are forcing
governments to rationalise their expenditures, beginning with internal efficiency
factors such as costs, productivity and quality.
People want government that does more and costs less. Many delegates
mentioned the difficulty of conducting reform under tight budgetary constraints,
and warned against using reform as simply an excuse to cut spending. When
reform is just another “budget cutting exercise” without any underlying values, it
loses its ability to generate real improvements in services. Budget crises, however,
can also be an opportunity to initiate reform. They can lead to a general consen-
sus that there is a problem which needs to be solved, which in turn provides a
mandate for government to come up with solutions.
Technological advances create new opportunities and expectations

Advances in information and communication technology are reshaping the
economy and driving social changes. Technological advances represent an oppor-
tunity for government to improve services and to better meet the needs of
diverse constituents. They also have the potential, however, to create new
problems or to exacerbate old problems such as increasing inequality in the form
of a “digital divide” where those without computer access or skills – often the
poorest – are further marginalised as more services and opportunities become
available on-line and/or require technical skills. Governments need to learn to
harness improvements in information and communications technology for:
• Better services. Increased channels of communication between citizens
and government should allow government to better assess citizens’ needs
and to better respond to those needs. The ability to network computers
and merge electronic files provides an opportunity to integrate services
and provide a single point of contact for services (one-stop shopping),
simplifying citizens’ contacts with government.
• Faster services. Technology provides the potential to increase the internal
efficiency of government, making it more efficient and responsive. Technol-
ogy should also improve the delivery of services. On-line and automated
phone systems can minimise wait time, offer more flexible hours and more
rapid response time. 21
© OECD 2000
Box 2. Economic crisis can call attention to the need for reform
Economic and budgetary crises have pressed many OECD countries into
recognising the need for reform. In 1991, the economic situation in Finland
worsened very quickly. The economy experienced an extremely severe recession,
which brought about a large deficit in public sector finances. Although expendi-
ture programmes were tightened, weakening employment developments, the rise
of the public debt and the management of the banking crisis led to rapidly
increasing total central government expenditure. At the same time, central
government revenue declined because of the deep recession. Under these
circumstances, the budget deficit became very large and central government
indebtedness increased exceptionally sharply.
At the beginning of the 1990s, all economic forecast institutes were aware of
the rapidly worsening situation of the Finnish economy. However, they were not
able to forecast the depth of the recession. In 1990, the State Economic Research
Institute reported that OECD countries had begun to reduce their public expendi-
ture. The Research Institute was concerned that there was no change in sight in
the continuous growth of Finnish public income transfers such as child, study and
housing benefits.
While initial reactions to government reforms were harsh – particularly on the
part of labour unions – the recession at the beginning of the 1990s slowly began to
change political attitudes in Finland regarding the roles and functions of the state.
The public discussion of public expenditure cuts and the future of social policies
preceding the 1995 Parliamentary elections was quite open and honest compared
to the situation before the previous elections. The reforms in public management,
the future role of the state, and reduction of expenses were the main themes of
the election campaigns of all political parties. Today, the basic framework for the
discussion of the roles and functions of the state has been the balance of the state
budget in the long run.
Finland
Box 3. Addressing economic competitiveness through reform
Reform in Canada was driven, in large part, by a recognition in the mid-1990s of

an urgent need to address fiscal challenges stemming from uninterrupted increases
in public debt and the share of tax dollars going to service the debt. Related factors
for change included a high share of foreign borrowing relative to other countries and
low fiscal credibility reflected in high risk premiums in Canada’s interest rates that
left Canada vulnerable to international financial turbulence.
Canada
22
© OECD 2000
• More services. Technology allows government to inexpensively tailor

services to individual needs. Advances in government’s capacity to deliver
electronic services should also give governments more room to innovate
and provide more services to match new needs.
• Increased democracy. Increased connectivity creates a potential for greater
transparency in government and increased citizen participation in the
policymaking process. This “membership in the business of government”
decreases the barriers between government and citizens. Technology also
breaks the government’s monopoly on information, giving citizens access to
alternative sources of information. And it provides interest groups with a
low-cost way of organising and disseminating information.
Professor Carneiro observed that societies are facing cycles of change at
every-increasing speeds: “A new technological paradigm enhances mobility,
networks, speed and connectivity”. The periods of stability interspersing these
cycles of change are also becoming correspondingly shorter, giving governments
less and less time to react. As technological innovations are occurring in both the
private and the public sectors, citizen expectations for public sector services will continue to
increase whether or not the government takes advantage of opportunities to
improve services. Government needs to find relevant applications of technology
in order to meet the growing demands for faster and more efficient service.
Re-establish trust in government
Delegates attending the Symposium were united in the concern that overall
trust in government has declined in their respective countries and that reform of
government should include re-establishment of that trust as one of its major goals.
Box 4. Technological changes can stimulate reform
Reforms in Norway have been based on the premise that social development
is primarily driven by technological innovation and international economic
competition. This is particularly the case for postal and telecommunications
services. These services require high responsiveness to the market and to new
technologies which, in turn, necessitate a rapid pace of change. One example is
the resolution adopted by the European Union and the World Trade Organisation
on telecommunications liberalisation which necessitated Norwegian reforms of
the telecommunications sector. The final deadline for opening the fixed telecom-
munications market to competition was 1 January 1998.
Norway
23
© OECD 2000
Box 5. Technology can make services more convenient and accessible
Portugal has created a stand-alone database (INFOCID: the Inter-departmental

System for Citizen’s Information) which is directly accessible to citizens 24 hours a day
through kiosks which provides up-to-date, organised and reliable information on
rights and duties, administrative procedures and formalities and their location
and accessibility. Kiosks are located in public building, accessible to the street,
and provide colour menus to choose texts, high-resolution images, graphics,
sounds and sometimes short filmed scenes. Electronic touch screens activate
menus. 200 kiosks are to be installed by the end of 1999, and 1 000 more are
planned by the year 2002.
One of the key arguments behind INFOCID is that there is generally a
mismatch between the way public administration is organised in terms of its
institutions, and the problems faced by citizens. The administrative organisation
forces the involvement of many units when dealing with a single and one-
dimensional problem, causing confusion for the citizen, and turning rather simple
issues into complex ones. The purpose of INFOCID is to provide the public with
clear and organised information on the rights and duties of citizens, as well as on
the procedures and formalities with which they must comply in relation to
government services.
Portugal
When government succeeds in anticipating citizens’ needs, it earns currency in the

form of trust. The price of failure is a loss of legitimacy.
Government can better anticipate citizens’ evolving and multiple needs by
pro-actively involving them in the policymaking process in order to develop
solutions to issues as they first appear and not when they become pressing
problems. The conditions for trust in government include a well-educated citizenry,
transparent processes and accountability. Government needs to establish a “level
playing field” so that citizens can see that their interests are being treated fairly
even if every little demand is not met. Citizens, for their part, need to learn to
value fairness in government over special favours for well-connected groups.
Transparency in government helps to assure citizens that they are being treated
fairly. Accountability helps ensure that government failures are corrected and that
public services meet expectations.
Lost opportunity becomes a liability

Government has more opportunities now than ever to build a trust relationship
24 with citizens. Technological improvements provide an opportunity for governments
© OECD 2000
to better understand and serve citizens and educational opportunities give

governments the chance to strengthen civic participation, but citizen expectations
will increase regardless of whether or not government seizes those opportunities.
Loss of trust increases the cost of governance. Trust in government is

difficult to measure, but the costs to society are clear in its absence. A lack of trust
in government increases the cost of public transactions and of policymaking by
requiring increased consultation, verification and mediation. One delegate gave
an example of the added cost of conducting elections when there is a lack of trust
in government institutions.
While consultation is something that governments should already be doing

under regular circumstances, it is more difficult and costly when used in an
attempt to regain rather than maintain trust. In addition to increased cynicism,
decreased legitimacy resulting from lack of trust can hobble a government’s ability
to make needed changes, thereby further reinforcing the lack of trust.
Loss of trust pushes governments out of equilibrium. Although they are

being asked to adapt to new circumstances, governments tend to be resistant to
change. Their preference will usually be to attempt to improve services without
fundamentally changing the way they do business. This will work for a while, allow-
ing governments to operate in near equilibrium with societal needs. How long a
state of near equilibrium can last depends both on the level of change in society
and on the amount of trust that societies have in their governments.
Ultimately, however, current models of governance will begin to grow out of

synch with the actual needs of society, resulting in a decline in trust and in
systems that are out of equilibrium. Professor Carneiro borrowed from biological
theory to present a “punctuated equilibrium” model in which stable governments try
to maintain stability in the face of changing societies until the resulting disequilib-
rium forces a major policy leap that brings government more in line with society’s
structure and needs. This shift can be wrenching.
Trust is a condition for reform. Delegates noted that the need to restore
trust in government was both a goal and condition for successful reform. Trust in govern-
ment strengthens legitimacy and allows governments to further reinvent them-
selves through reform in order to better meet the public’s needs.
Trust is especially important to help maintain citizen support in the midst of

painful reforms. If citizens trust government to deliver promised outcomes then
they are better able to withstand the short-term costs often associated with
reform. This sentiment rang particularly true with Central European members of
the OECD. One delegate declared, “you need to strengthen the traditional values
of the public administration because you need stability in order to have change”. 25
© OECD 2000
Simply providing more of the same services is not enough
Developing citizen trust in government involves more than simply delivering

more and faster services. The content of services matters as well. Increasing obsolete
services sends a message that government is just interested in business as usual
and not in serving citizens. Governments need to re-evaluate whether or not
services are meeting citizens’ needs, then they need to adjust services to match
those needs and finally they need to make sure that citizens are aware of the
services that they are getting. Said Professor Schick, “the drainage of trust is more
due to rising expectations than declining performance”.
Box 6. The customer is king
A study by the Council for Excellence in Government in the United States

found that young people’s lack of trust in government did not increase with
improved performance. Instead, their perception of government was based on the
feeling that government was not in touch with their needs. In order for govern-
ment to better connect with citizens, it needs to find out what their needs are and
adjust services to meet those needs.
United States
Meeting the public’s needs requires a pro-active approach
In order to keep up with change, government needs to learn how to better

predict the public’s concerns through consultation with citizens and social groups
and improving interaction with the media. Technology also offers potential for
increasing citizen input into public policymaking.
An adaptive path (reacting to issues only when they become problems) is too
little, too late. By the time government reacts to a problem, its range of options is
already very limited. Delegates spoke of determining the will of the “silent majority”
through statistics and surveys, but even polling is limited in its effectiveness for
predicting problems. By the time an issue has consolidated into a readily identifi-
able problem by a large portion of the population, it is probably too late to prevent,
thereby limiting government to a set of reactive rather than pro-active options.
A pro-active approach requires that government anticipate citizen concerns.
Delegates recognised that accomplishing this task is not easy. It requires
26 increased risk-taking and increasing citizens’ participation in the policymaking
© OECD 2000
Box 7. Giving citizens a voice
In the Fifth Annual Report to the Prime Minister on the Public Service of Canada
(April 1998), the Clerk of the Privy Council identified citizen engagement as “the
next big challenge” the Canadian government must address. The report identifies
the need “to explore ways to give citizens a greater voice in developing govern-
ment policy and to give a fuller, richer meaning to the relationship between
government and citizens”.
The government has already explored ways to involve citizens. Numerous
consultative exercises are already underway, including the National Forum on
Climate Change and Agriculture Canada’s Rural Dialogue. Government departments
and their policy teams are going to be called upon to explore new and different
ways for citizens to have a say in the policies that will affect them most so that
they may be partners in shaping Canada’s future.
Canada
process. Part of the solution is for governments to involve citizens early on in the
elaboration of public policy problems. Introducing increased citizen choice,
however, is most effective when citizens have a strong sense of the common
values that drive democratic participation.
Communication helps to spread reform values
Trust in government is also based on a common set of civic values such as

commitment to social pluralism, belief in the integrity of government and democracy. These
values help increase the frequency and quality of citizen participation and help to
guard against cynicism and withdrawal from the civic community. Government can
also more easily communicate a message of reform to citizens who have a good
understanding of these underlying values.
Education lays an important foundation for trust in government. Professor
Carneiro pointed out, “education stands out as the most powerful lever to elevate
the quality of democratic life”. Using education to increase civic competence
better prepares individuals for active citizenry thereby promoting interest and
support for government reform. Sharing civic values increases social cohesion and
openness and therefore democracy.
Shared values such as democracy and equal treatment under the law also
help shape citizen’s desires. Without these values, citizens are more likely to
focus only on short-sighted services based on narrow interests. Professor Carneiro 27
© OECD 2000
warned that simply pandering for votes by trying to be all things to all people is
actually a danger to democracy. Diverse societies mean that not everyone will be
satisfied all of the time. Government needs to demonstrate that it is making a
good faith effort to represent the needs of as many different citizens as possible.
Educated citizens expect government to treat their own interests fairly in the
context of competing interests and limited resources. In other words, you win
some and you lose some, but what counts is how you play the game.
Providing accountability through results helps to earn public trust
Accountability is another prerequisite for citizen trust in government. One

delegate remarked, “when public managers aren’t held accountable for failure, it
erodes public confidence”. Delegates were quick to emphasise, however, that
accountability, as such, is an abstract concept for most citizens. While internal
accountability within government continues to play an extremely important part in
successful reform, external accountability to citizens is more likely to take the form of
improved responsiveness and transparency.
Citizens respond to real service improvements. This means that citizens

expect a response to their complaints and follow through to find solutions.
Citizens who have the impression that their complaints are lost in the monolith of
government feel helpless and mistrustful of government. Countries have also tried
to increase accountability by reporting programme results, but such reports tend
to interest only a small part of the population. On the other hand, accountability
can also be increased by increasing citizens’ overall competency and interest in
public affairs. Professor Lindquist of the University of Victoria noted that “business
planning and performance management regimes can be used, not only for internal
purposes, but also as a means for cultivating a broader constituency for the
information it produces”.
Increasing transparency of government processes helps to show citizens

that they are being treated fairly. Professor Carneiro said, “the modern public
service – once an impenetrable black box – is more and more required to render
public accounts to the general public”. One country has even created a “bureau of
visibility” to make government texts more available to the general public. Trans-
parency can reassure the public that unpopular government policies are the result
of larger constraints faced by government and not arbitrary actions on the part of
government bureaucrats. Even if most citizens do not closely monitor government
activities, some citizens, as well as some interest groups, will take advantage of
government transparency, and their more informed views also have an impact on
28 the broader public’s trust in government.
© OECD 2000
The media plays an important role in ensuring transparency and accounta-

bility. Media can communicate changes in the quality of government services as
well as explain the internal workings of government. As mentioned earlier, techno-
logical advances also offer an important opportunity to increase government
transparency, but only if government learns to take advantage of these new
opportunities and keeps up with an ever-changing set of tools.
Box 8. Improving services through citizen feedback
Portugal has set up a Citizen-Administration Forum which plans and recommends

reforms to improve citizen services and which receives and directs suggestions
and complaints presented by citizens to the competent services. The Forum is
presided over by the Secretary of State for Public Administration and includes
representatives from different organisations such as unions, non-governmental
organisations, the General Council of the Bar, the Engineering Council, the
Medical Association and consumers’ associations. The Forum also includes the
chairmen of the most important economic confederations and associations and
managers of Public Administration organisations which are most closely serve
citizens.
Portugal also provides a Complaints Book in every Central Administration
service, in which citizens may register complaints concerning services provided
and suggest measures for improvement. The citizen retains the original copy. One
of the two copies is forwarded to the respective Minister and the other to the
Secretary of State for Public Administration who uses a database to keep track of
the handling of the complaint. A wide-ranging marketing campaign directed at the
general public has increased public usage of this system, with complaints prima-
rily coming in the areas of health and justice.
Portugal
Government’s role is changing under new pressures

The traditional notion of the nation-state is that of a single authority with clear
responsibility for a population within a well-defined territory and with relatively
fixed resources. Government no longer has this monopoly on authority. At the
international level, governments give up some of their authority voluntarily in
exchange for greater security, co-operation and economies of scale. Additional
authority is shared more gradually as cost constraints and public inefficiencies
lead to a demand for more competition and as technology and social changes give
individual groups more of a share in the policymaking process. Government often 29
© OECD 2000
finds that giving up some of its responsibilities may lead to new efficiencies and
better representation, but new relationships demand new sets of rules. Yet govern-
ment continues to do many things under the old set of rules.
Governments are finding that they have to adapt to their own changing role in
which they now need to share their authority. In an ever-expanding universe of
partners, government need to learn how to consult, co-ordinate, cajole and
compete with other centres of power in order to meet citizens’ expectations.
Government no longer has a monopoly on services: innovate or perish

Government is now just one of many players. Globalisation opens society up
to more influences and new models of government. Democratisation exposes citi-
zens to a wider variety of possibilities. Technology gives groups new ways to orga-
nise and to reach out to constituents. In some cases, government no longer has a
monopoly on a service due to privatisation or de-regulation (i.e., postal service,
utilities). Government finds that if it does not do a good enough job, others can
step in. Placing citizens first, means that the top priority is how to get the job
done. As one delegate observed, “if you focus on outcomes, government is only
one partner amongst several. If you focus on inputs, then you are saying to the
public and society, ‘we are the sole agents’”.
In other cases, private groups are stepping in to provide services that were
once seen exclusively as public goods. Voluntary, religious and care-providing
organisations oftentimes provide alternative services that compete with govern-
ment (i.e., schools, social services). These organisations gain public legitimacy
through the services they provide. They also tend to have the public’s trust
because people feel that they have a choice in whether or not to support these
organisations. Government can help increase trust and social cohesion by partner-
ing with voluntary institutions. These partnerships also serve to strengthen
confidence in government by demonstrating that government will place public
support behind activities that have popular support and therefore reflect citizen
preferences.
Introducing choice to the public helps to build trust. Citizens expect more
choice and greater responsiveness from government, and giving citizens more
choice is an important step towards building trust. One delegate observed, “a
trusted government is expected to offer multiple alternatives”. Government can
offer citizens choice in many forms. Some OECD countries have chosen to open up
some government services to market competition. Other countries have focused
on making internal markets between government entities more competitive in
order to provide better services.
Choice is a difficult subject for governments to introduce because it opens
the way for citizens to select service providers other than the state, resulting in a
30 re-evaluation of the role of the state. In many OECD countries, questioning the role of
© OECD 2000
government in certain sectors is so sensitive that it is politically unfeasible. In

these cases, countries focused on management improvements without looking at
whether or not government should be providing the service in the first place.
Several delegates felt that their countries’ reform efforts were fundamentally
limited until this constraint could be breached. Other countries have decided to
pro-actively re-examine the role of the state to identify those areas where state
intervention is essential. Still other countries have determined that national
interest, public values and civic culture mandate the public provision of certain
services whether or not they are warranted from a strict market competitiveness
perspective.
Even after re-evaluating public services, many services clearly remain the
responsibility of government. While public goods are, by definition, a government
monopoly, they also need to be held to quality standards. Government’s public
goods monopoly should be regulated by the stakeholders in society. In other
words, they should be subject to the accountability of the political marketplace.
Accountability in this sense means that public dissatisfaction with government
performance should lead to changes in the types of goods delivered and how
government delivers those goods.
A new role for government: regulating services that it no longer provides.
Regulatory partners tend to advocate greater de-regulation, but, at the same time,
the public continues to hold government responsible for new areas. Government
Box 9. Introducing competition to improve quality
The United Kingdom launched the Competing for Quality programme in 1991
to try to introduce more competition and choices of provider into government
work and to achieve the best combination of cost and quality. The programme
used a range of efficiency techniques, including market testing and contracting
out. It asked of each activity, whether or not government needed to remain
responsible for it, and if so, whether the activity would be managed more cost
effectively by the private sector or by the public sector.
A 1996 review of the Competing for Quality programme found that contracting
out accounted for most of the expected savings. Government functions which
were contracted through privatisation have tended to be in non-core business
activities. Only one-third of the decrease in Civil Service numbers is attributable
directly to privatisation and associated initiatives. The remainder of the reduction
is due to improvements in efficiency, the greater use of technology and, in some
cases, the transfer of functions within the public sector.
United Kingdom
31
© OECD 2000
Box 10. Redefining government roles and functions
The principles underlying the New Zealand model of state sector reform are
as follows:
• the state should do and/or fund only those things relating to exercise of its
constitutional and coercive powers and/or those things where it has a
comparative advantage (the redefined role of the state);
• every state agency should have unambiguous and transparent purposes
with significant functional conflicts exposed and eliminated so far as practi-
cable (clarification of agency purposes);
• fully commercial functions that remain the responsibility of the state should
operate in private sector and competitively neutral forms under the gover-
nance of boards of directors, paying tax and dividends (corporatisation);
• advisory functions relating to the full range of the government’s interests
and responsibilities, support for the administration of government and
regulatory and service-delivery functions relating to the state’s constitu-
tional and coercive powers, should be performed by departments of the
public service, and by the police and defence forces, directly responsible
to Ministers (definition of the core state); and
• non-commercial and non-departmental functions should be performed,
where appropriate, by agencies operating under appointed or elected
boards, or by statutory officers or by competitively neutral private and
voluntary sector suppliers (the non-core state).
New Zealand
needs to continue to guard against market failures (i.e., antitrust, externalities).

Instead of acting as the sole dispenser of public goods, however, government
needs to learn how to become a strategic regulator that acts on behalf of many
different interests. Delegates saw a trend from simple deregulation to improving
regulatory quality and monitoring the impacts of regulations.
Government needs to co-ordinate policymaking among different players

Not only does government face competition in the provision of services, but
it is no longer the only player in the policymaking process. Policymaking is
influenced by a wide variety of players ranging from interest and lobby groups to
think tanks and other policy entrepreneurs. As discussed earlier, increased partici-
pation by these groups reinforces the democratic process and helps government
to better anticipate citizen desires, but it also requires government to set up rules
32 for participation and to enforce those rules.
© OECD 2000
Government has new policymaking partners. In many OECD countries,

policy is not only influenced by traditional partners such as labour unions, but
also by lobbies, NGOs and interest groups representing various economic, social
or political interests. Some OECD countries have organised interest groups into
expert committees or advisory councils. These organisations tend to cover
economic issues, but can also provide advice on social and other issues.
Interest groups form a network in which government is just another, albeit a

powerful, player. While their influence varies from country to country, the Internet
gives them new ways to organise and to reach out to people. These lobbies can be
powerful advocates – as well as a strong source of resistance – for reform of
government. Working with policymaking partners helps to increase legitimacy for
government policies, but can also increase the costs of consultation and arbitra-
tion. Governments should think carefully about what role they wants these groups
to play in strategic reform.
Despite the new forums for the expression of public opinion, government
maintains a unique mandate. For example, some NGOs have claimed to better
represent citizens’ collective will than do many governments and, indeed, by
focusing on select, “hot” issues, they are better equipped to mobilise groups of
citizens around specific policy questions – often across national borders. But
NGOs usually do not represent all citizens, nor do they automatically meet the
Box 11. Shifting influence of different interest groups
New Zealand’s reform agenda challenged the traditional access of many

interest groups to the policymaking process, especially that of unions. Unions
were weakened by labour market reforms, such as the end of compulsory union-
ism and the Employment Contracts Act 1991. In contrast, many other traditional
organisations, including employers’ groups, farmers and the business community,
which had previously advocated interventionist policies, have become increas-
ingly supportive of reform. Groups such as the Business Roundtable, the Top Tier
Group, Chambers of Commerce and the Institute of Directors have publicly
advocated reform.
Academics, community and professional groups (such as New Zealand
Council of Christian Social Services, the Coalition of Public Health, the Unem-
ployed Workers’ Rights Centre), have also been involved in reform, consistently
providing a critique of both the impact of the reforms and the methods of
implementation.
New Zealand
33
© OECD 2000
Box 12. Finding the balance between participation and action
The Netherlands has been experimenting with forms of interactive gover-

nance in which governmental decisions are made not only after consultation of
those concerned and interested, but in co-operation with them. This is especially
true at the local level where municipalities are closest to the public. But national
forms of interactive decision-making are also being sought, if only to find enough
support for far-reaching governmental action.
Increased citizen input has not only meant new procedures for public
comment and participation, but also an increase in possibilities for “legal
resistance” against governmental decisions. Many specific laws offer the possibil-
ity to lodge an appeal against decisions and acts of public authorities. While more
democratic, there is fear that the cumulative effect of the proliferation of outside
influences on policymaking (both positive and negative) may overly limit the
decisiveness of government. The Netherlands is looking at ways to better stream-
line these processes for influencing decisions and appealing against them, while
at the same time, interactive governance is being further developed in an effort to
increase public support in a pro-active phase of policy formation.
The Netherlands
standards of accountability, democracy, education and transparency that are

necessary in order to represent more than a small subgroup of the population.
Democratic governments, on the other hand, must balance the interests of all
of their citizens. They can better understand the views of some groups of
citizens by listening to NGOs. But these views complement, rather than replace,
governments’ understanding of citizens’ needs in the context of representative
democracies.
Outside policy analysis provides alternative solutions. Think tanks can
process issues in parallel with government, thereby offering competing solutions
to policy problems. They provide independent policy evaluation, survey research,
strategic advice, forecasting and can shape political thought and action by ques-
tioning assumptions, offering new data and analysis and sponsoring policy
debates. They can also provide continuity over partisan politics. Universities also
represent a valuable source of policy analysis, though some delegates noted that
their work can sometimes be ex post and therefore not as useful for the develop-
ment of policy. These alternative sources of policy analysis often seek to influence
government, but they can also be a valuable resource for new solutions to public
34 problems.
© OECD 2000
Government needs to co-ordinate with sub-national and extra-national

organisations
International considerations increasingly affect national decisions.

Increased globalisation has led governments to realise that they cannot always
tackle problems on their own. Bi-lateral and multi-lateral trade, security, environ-
mental and social agreements all represent ways in which governments have
sought to solve global problems. These agreements provide a way for govern-
ments to influence policy beyond their national borders, but they also create
domestic policy constraints. Governments are trying to balance national and
international interests.
International organisations are also playing an increasingly important role.

Countries in the European Union have surrendered national sovereignty in a num-
ber of policy areas in order to allow the steady integration of the European Union.
Countries will increasingly have to consider supranational authority in local law-
making as well as the implications of local decisions on international agreements.
Membership in international bodies stimulates comparison with other countries
which can create pressures to improve national performance, while membership
requirements can be a powerful motivator for reform in non-member countries
seeking to join.
Sub-national considerations cannot be ignored. Governments in many

OECD countries have tried to better meet citizen’s needs by bringing decision-
making structures closer to citizens. This often means decentralisation or de-
concentration of authority, both to the State/regional/provincial level and to the
Box 13. International pressures for reform
International organisations and international agreements are forcing many

countries to adopt reforms in a growing number of areas. This has been particu-
larly clear in the case of entry into the European Union. Finland, for example,
became a full member of the European Union in 1995. The Treaty of Maastricht,
which the government accepted in joining the EU, includes regulations for the
Economic and Monetary Union (EMU). In order to fulfil the convergence criteria of
the EMU, the Finnish government had to reduce its general fiscal deficit and start
structural economic reforms in Finland. Through these reforms, the conditions
were created for increased competitiveness of the Finnish economy in open inter-
national markets.
Finland
35
© OECD 2000
Box 14. Consulting local partners
Germany has involved a number of experts and local partners in the develop-
ment of its reform program through the creation of several national advisory
bodies on reform. Some examples:
• The Lean State Advisory Council is an independent and non-administrative
body consisting of politicians, scientists and representatives of the Federal
Länder and local authorities, industry and trade unions. The Council,
created in July 1995, concluded its work in September 1997 and handed its
final report over to the Federal chancellor. It made many recommendations
on how to modernise the federal administration.
• The Independent Federal Commission to Simplify Law and Administration consists of
key figures from politics, science, industry, law and the top local associa-
tions as well as from six Länder governments, two of which are new Federal
Länder (since 1991). The Commission was formed by the federal govern-
ment in 1983 and has presented a number of surveys and recommenda-
tions to simplify the bureaucracy and to deregulate.
• The Independent Committee of Experts on the Simplification and Expenditure of
Planning and Approval Procedures (the Schlicter Commission). This Commission was
formed in early 1994 and submitted its final report at the end of 1994 with
approximately 100 simplification and expedition proposals.
Germany
local/communal level. These structural changes place the focus on a whole new set
of actors with whom national governments need to co-ordinate. Local structures
may often have a better sense of their citizen’s preferences, but they are also in
competition with each other for the allocation of scarce resources. National
governments therefore need to take on the added responsibility of mediating
local demands as well as negotiating levels of governmental authority.
Collapse of ideology creates opportunities for reform, but eliminates stock

answers
Several Symposium presenters argued that ideology no longer has a place in

shaping government reform. Instead, better governance is a goal shared across the
ideological spectrum. Professor Carneiro reasoned that as ideologies count less,
governments are going to have to work harder to come up with answers to today’s
problems. The collapse of ideology no longer allows governments to use stock
ideological responses to society’s problems. Instead, governments should learn to
36 manage flows of present and past perceptions.
© OECD 2000
Contemporary public reform is more likely to be driven by ideas, often

borrowed from private sector management literature. In OECD countries, several
political schools of thought such as Tony Blair’s “New Labour”, Bill Clinton’s the
“Third Way” and Gerhard Schroeder’s “New Centre” are attempting to balance
traditional ideologies with a more pragmatic perspective that focuses on eco-
nomic performance.
37
© OECD 2000
II. Lessons Learned from Public Management Reform
Perhaps the most challenging part of the discussion at the Symposium was
when delegates discussed how to learn from current reform practices to address
both current and future reform challenges. Presenters laid out several ideals for
developing and structuring public reform, but acknowledged that it was difficult to
put these principles into actual practices.
Quite often, presenters raised more questions than offered answers. In part,
this was because, as Professor Schick put it, “reform solutions will have to come
from the realm of practice, not the realm of ideas”. This approach is also due to
the fact, however, that there is no single set of solutions. The Symposium sought
to identify the most important considerations to take into account when under-
taking reform. Countries can only seek to ask the right questions and come up with
their own responses that best meet their specific needs.
Delegates did agreed, however, on many of the necessary components for
successful reform, including the conditions that need to be established at the
outset of reform. In doing so, they laid out a set of principles against which
individual countries can measure their own reform efforts.
Establish the conditions for reform
Delegates identified the first step of developing reform as identifying the reform
agenda. Much of the success of reform lies in the design and preparation of reform.
The reform agenda and vision lay a foundation for all other subsequent activities,
while the process of developing the reform agenda is critical to building support
for reform at all stages.
Determine a reform agenda that meets citizens’ needs
Most OECD governments have tried to reform themselves to provide better

services in an attempt to regain the public’s trust. Improving services depends on
changing behaviour – how governments do business – in order to put citizens first.
The desired outcomes therefore depend on the public interest as defined by the
needs of citizens. The first goal of reform should be how to serve citizens better. 39
© OECD 2000
Listen to citizens. As discussed earlier, policy decisions are the result of a

complex interaction between policy ideas, citizen preferences and many different
pressures both inside and outside government. When some of these interests
intersect, they can provide a powerful mandate for change. When government
seeks to reform without consulting citizens, however, it loses an important
opportunity both to educate citizens and to build support for reform. The stakes
are the responsiveness and acceptability of the reform programme as well as the
legitimacy of a government’s mandate to undertake reform.
Top-down reform efforts run the risk of creating “one size fits all” rules which
focus on inputs rather than results. Consultation of citizens reminds government
that better identifying and meeting citizens’ needs is the primary focus of reform
and helps it to refocus on this objective. One delegate emphasised the need to
“build the public into the public policy-making process by listening to them as
citizens, clients and customers”. This “bottom up” approach can be used not only
to define the reform agenda, but also to prioritise and sequence reform. The chal-
lenge, however, lies in translating many diverse interests into a coherent agenda.
Develop a clear vision of reform. A clear vision of reform provides guidance
throughout the reform process and helps public servants to better understand
their role in the reform process. Not all change is comfortable, but it can be made
more acceptable if the reform goals are clear and accepted in advance. Delegates
stated that before starting out, would-be reformers should ask themselves the
question, “Why am I doing this?”.
The answer to this question is often unclear, however, because public
agencies are asked to meet a multitude of different goals, representing the
interests of different constituencies. Said one delegate, “public agencies must
serve all people – they are citizens, not only customers”. Thus setting goals is not
simply a matter of choosing goals, but also of prioritising competing goals.
A common vision serves to unify political leaders, senior officials, front-line
workers and the general public. It also provides a guideline for choosing goals, for
developing strategies to achieve those goals and for measuring results. In order to
articulate a common vision, government should consult with stakeholders and
bring together their many, varied visions. Professor Lindquist suggested one
common vision that could be shared across different parts of government: “that
governments actively seek ways to best use tax dollars and public resources, no
matter the political historical or administrative context”.
Crises offer opportunities for reform, but strategic reform brings lasting change
Determining the path to achieving desired outcomes may be an even more
difficult task than determining the goals themselves. Professor Schick of the
40 University of Maryland challenged Symposium delegates to develop a strategic
© OECD 2000
Lessons Learned from Public Management Reform
Box 15. Identifying citizens’ needs through consultation
In order to understand citizens’ needs better and to gauge the effectiveness

of public management reforms, the Service First Unit in the United Kingdom’s
Cabinet Office commissioned the creation of a People’s Panel. The Panel consists
of 5 000 members of the public randomly selected from across the UK, designed
to be a representative cross-section of the population (by age, background,
region etc.). Panel members are being consulted about how public services are
delivered and how that delivery can be improved from the user’s point of view,
rather than that of the system. The panel was set up by MORI, a market research
company and Birmingham University’s School of Public Policy, and the results are
being published.
The panel provides a database of individuals that can be used for a wide
range of research and consultation, both quantitative and qualitative. It will
enable the government to track attitudes and opinions over time, look at the
reasons for change, and research the views of both users and non-users of parti-
cular services. Areas of work will include:
• The impact and perception of various government reform initiatives.
• People’s views on information provided by public services, including
whether such information is easily available and useful and how complaints
are handled.
• Use of the panel by other parts of government to consult on issues such as
service delivery, proposals for new initiatives, or innovations and service
improvements.
• Generating new ideas or recommendations about public service issues
using deliberative methods, including seeing how views and attitudes
change as a result of more detailed information and discussion with others.
United Kingdom
approach to reform. For Professor Schick, strategic reform involves assessing the state
of society and taking advantage of favourable circumstances to effect change. He
defined strategies as “policies and actions that set goals for government and for
the tasks to be undertaken in implementing wanted changes”.
The public may provide the interests and concerns that form a basis for the
construction of the reform agenda, but it needs government to shape these
general concerns into an achievable reform plan and to articulate and implement
that plan. Government alone has the global perspective and the analytical
resources to do the strategic planning necessary for internal reform, although,
increasingly, this process of policy development also includes many other players. 41
© OECD 2000
Government should not think that the critical duty of strategic planning
makes the reform agenda any less the property of citizens. This erroneous belief
eventually leads reform planners to make decisions that are increasingly out of
touch with the public. Government should remember that it is acting on a
mandate – represented by public opinion in diverse forms – which needs to be
concretised into a plan of action in order to achieve the service outcomes desired
by the public.
A strategic approach helps government to anticipate issues and challenges, to
improve capabilities and expertise needed to respond, to make better use of
scarce resources and to identify political windows of opportunity to develop and
implement reform. Most importantly, strategic reform helps government to move
towards desired outcomes rather than simply responding to events. One country
delegate stated, “the challenge lies precisely in clarifying what we want the role of
the government to be, so that we ourselves can plot a course of action and not end
up in a situation where the government merely drifts along, accepting changes
forced on it by its environment, both national and international”.
Professor Lindquist identified an array of mechanisms available to govern-
ments seeking to undertake strategic review (see Box 16). These mechanisms
range from relying on political leaders to develop a reform strategy (i.e., cabinet
committees or portfolio reviews by ministers) to purely administrative approaches
(i.e., central bureaux or departmental reviews) to hybrid reviews, coupling govern-
ment workers with former officials or consultants and, finally, to purely outside
review in the form of consultants or outside commissions.
The goal of strategic review is to identify the reform plan that is best suited to
changing a government’s institutions and culture. While recognising that a multi-
tude of different strategies exist depending on each country’s system and values,
Professor Schick identified four major strategies: 1) Market-driven reforms that rely on
competition; 2) Managerial reforms that rely on the professionalism and public
service ethics of managers; 3) Programme review which relies on analysis and evalua-
tion; and 4) Incremental deregulation which relies on on-going review. These strategic
models are more fully discussed in Professor Schick’s paper, “Opportunity, Strategy,
and Tactics in Reforming Public Management” in part five of this book (page 123).
Countries are likely to use not one, but different combinations of these strate-
gies in their reform programmes. Professor Schick pointed out that identifying
elements of these strategies within hybrid reform programmes can help to raise
key questions about whether reform efforts are meeting the underlying objectives:
• Market strategy: has government established true conditions for competition?
• Managerial strategy: has government established adequate accountability

42 mechanisms?
© OECD 2000
Box 16. Menu of Instruments for Strategic Review
• Cabinet committees. A committee of ministers is appointed to oversee the reviews,

or perhaps to review the plans from other actors, and then to put together a
blueprint for reform.
• Central bureaux. Depending on the confidence that political leaders have in
central agencies, and depending on their capacities, the government may rely
on central bureaux to undertake the needed reviews and to develop the
blueprint. The cabinet would still endorse and modify the blueprint.
• Portfolio reviews. Some governments rely on ministers (and perhaps a junior
minister) in charge of portfolios, consisting of several departments and agencies
to undertake reviews and propose the blueprint. Such change would require
endorsement from cabinet.
• Deputy minister committees. Another approach is to rely on groups of deputy
ministers or secretaries to undertake reviews and propose blueprints. They
would have to be supported by small secretariats.
• Department reviews. Often used in combination with ministerial review commit-
tees, and usually with the assistance of a small central secretariat. The onus for
undertaking reviews and developing alternative blueprints would fall to specific
departments or agencies, and could proceed as part of regular business
planning cycles.
• Hybrid teams (with departments). This approach is best illustrated by the
“scrutinies” employed by the British government, which involves establishing
review teams which match central resources with those of the department or
agency under review, and work for concerted periods of time.
• Hybrid teams (with the private sector). This approach matches public sector officials
(from the center and the relevant department or agencies) with participants
from the private sector, so as to question the premises and needs of programs
and delivery systems. Such teams can be used selectively or as part of a
comprehensive review process.
• Hybrid teams (with former officials). This approach would match key central officials
with experienced former public servants, who would be knowledgeable of the
programs and structures in question, but who would no longer have a vested
interest in the outcomes.
• Consultants. The government would contract out the responsibility for reviewing
programs and structures, and for developing alternative models for reform. The
proposed plans would be vetted by political and administrative leaders.
• Commissions. Governments can appoint independent commissions to review
government priorities and administrative operations, and to develop blueprints
for reform. They can be comprised of individuals from public sector and private
sector representatives, and even academics, and supported by research staff.
43
© OECD 2000
• Programme strategy: does government have the political will and strength
to allocate resources and take other actions on the basis of a fundamental
review of programmes?
• Incremental strategy: can government sustain interest and support for reform
over an extended period?
Balance strategy and opportunities. In their discussions on building support

for reform, delegates returned again and again to the opportunities created for
reform by crisis situations. Financial or economic crises or a government’s inability
to respond quickly and effectively to an external crisis can dramatically mobilise
public opinion in favour of government reform.
Crises provide the most visible sign of a need for reform, but Professor Schick
pointed out that, in fact, most reform has risen from decline rather than crises. In
other words, government realises that a progressive erosion in confidence cannot
be sustained and that something must be done to regain public support. This reali-
sation that societies are operating out of equilibrium represents, in itself, a major push
for governments to attempt to change their behaviour. But without a major event
around which to mobilise public opinion, governments need to take a strategic
approach to reform. That is, they need to begin consulting citizens, develop a plan,
build support for it and look for opportunities to put the plan into action.
Opportunity is still critical to the success of reform. Professor Schick

observed, “without favourable conditions, strategy becomes visionary, lofty ideas
that have little prospect of being implemented. Indeed, without the right opportu-
nity, strategy can end up as a substitute for action”. Strategy, however, provides a
guiding hand for reform. “Opportunity without strategy is likely to exhaust itself in
faddism, drifting from one fashionable innovation to the next, without leaving a
lasting imprint.” A strategic approach is needed to overcome the inertia of large
systems. In order to make reform work, Professor Schick recommended finding an
equilibrium between strategy and opportunity.
Plan tactics to achieve outcomes. Even the most logical and well thought out
reform plans will not deliver results if they are not well implemented. Thus,
countries engaged in strategic reform also need to determine in advance tactics to
implement reform. Professor Schick defined tactics as “the methods used to
mobilise support for and overcome obstacles to reform”.
Tactical decisions include the pace and scope of reform. A government may
choose to test pilot reforms and wait for evaluation results before deciding on how
to proceed with further implementation efforts, or it can mandate comprehensive
implementation across government. Governments can also choose to stagger the
44 implementation schedule across agencies or give each agency the opportunity to
© OECD 2000
decide on its own pace and scope of reform. Governments may opt for decentra-
lised reform in order to increase agency buy-in of the reform plan, but they do so
at the risk of giving agencies the ability to stop or water-down unpopular reforms.
In cases where governments decide to give agencies greater flexibility to
implement, the level of government oversight becomes especially important. The
location and structure of oversight efforts can play an important role in demon-
strating the importance of reform and setting incentives for quality implementa-
tion. Oversight has often been the responsibility of the central agency or the
finance department. Control over agencies’ finances, in conjunction with clear out-
come expectations and criteria for measuring performance, provides an additional
incentive to implement quality reform that meets planned objectives.
Finally, the sequencing of reform is an important tactical decision, both in
terms of the sector of government undergoing reform and the overall scope of
reform. This is especially true in countries where there is strong resistance to
reform. Successive reforms should build on one another in order to build support
for reform, build reform experience and skills and create a culture of reform within
government. In this way, each reform project prepares the way for the next stage
of reform.
As with all strategies, there is not one single prescription for which tactics to
use. Professor Schick advised that government provide reform efforts with suffi-
cient institutional resources and political support, maintain a clear vision of reform
goals and keep an open mind on how to obtain those goals.
Comprehensive or incremental reform? Professor Schick noted that reform
today is more likely to be comprehensive than piecemeal. Comprehensive reform
does not mean dictating every single bit of reform. Instead it involves applying a
coherent, integrated set of principles consistently to all government activities.
A comprehensive approach to reform has a higher potential for changing
entrenched behaviour than does incremental reform, which only addresses some
levels and activities of government and not others. Comprehensive reform also
shows a strong government commitment to reform. Finally, it is much more likely
to be coherent. An incremental approach runs the risk of becoming fragmented as
each part of government does its own thing, or does nothing at all. Professor
Lindquist pointed out that the choice between comprehensive and incremental
reform is circumstantial, depending on factors such as the capacity of the centre of
government to lead reform and/or its desire to do so.
Most delegates acknowledged, in principle, the benefits of a comprehensive
approach. Many felt however, that they simply did not have the societal consensus
or the political support to engage in large-scale reform. Some delegates pointed
out that sometimes reforms that start out narrow can become more comprehen-
sive over time by making corrections along the way and by developing linkages 45
© OECD 2000
between different functions. Professor Lindquist pointed out that the choice
between comprehensive and incremental reform is circumstantial, depending on
factors such as the capacity of the centre of government to lead reform and/or its
desire to do so.
More fundamentally, however, delegates struggled with how to realise
comprehensive reform, and in most of their discussions returned to the more
familiar and better-understood examples of opportunistic reform. Crises can
mobilise the public, providing opportunities for ad hoc reform. They can therefore
be useful in launching reform within a certain sector. Delegates found that
comprehensive reform, while an important ideal, was extremely difficult to
achieve because of the front-end commitment needed to develop support across
different sectors of government and because of the difficulty, in this information
age, to get the public to focus on a long-term effort with diffuse rewards.
Good government needs to develop the capacity to learn. Government is
not infallible and taking a comprehensive approach to reform does not mean that
everything will be predictable. Since it seeks to encompass all aspects of reform,
Professor Lindquist pointed out, comprehensive reform can “increase the likeli-
hood of unanticipated consequences and the prospect that the initiative will not
meet all expectations”.
Governments need to develop the capacity to learn from their reform experi-
ences and to use the information to adjust reform efforts along the way. Said
Professor Schick, “the best strategy may be to set course at the start, forthrightly
monitor progress, be honest about what has worked and what has not and make
numerous midcourse corrections”.
Box 17. Depending on consensus to set the scope of reform
Norway has not had large and comprehensive administrative policy changes,
in part because the majority of the population accepts a large public sector,
bureaucratic organisation, well-organised professional expertise and a corporatist
network with a strong union participation. Norwegian reform has been mostly
characterised by a desire to avoid confrontation. There is no political basis for a
drastic change of course. A set of nucleus values restrict the latitude for change.
Reform is not merely an apolitical struggle to achieve greater cost-efficiency, but
is subject to a political rationale. The reforms were very largely a test area for how
far consensus would stretch in administration policy change.
Norway
46
© OECD 2000
Box 18. Setting systems in place for more systematic

and comprehensive review
Program review and the fundamental re-examination of the role of the federal
government was the cornerstone of Canadian reforms in the late 1990s. The
challenge, however, was to build a new system of expenditure management to
ensure that this review was not a one-off effort. In order to meet this challenge, an
Expenditure Management System (EMS) was implemented alongside program
review to ensure that the scrutiny of roles, programs and priorities in program
review became a regular part of departmental expenditure culture. All policy
reserves were eliminated, ensuring an on-going review of lower and higher priori-
ties. Outside of emergencies, initiatives funded between budgets had to come
from reallocation within sponsoring Ministries.
Recent adjustments to the EMS have turned it into a framework for cabinet
priority-setting, in function of the government’s overall agenda. In the future, there
is a need to better integrate financial and non-financial information to foster a
better understanding of past performance and to support planning for the future.
Canada
Develop capacity for reform

Professor Lindquist of the University of Victoria took on the issue of how to
maintain capacity and coherence for reform in the midst of the restructuring of
public administrations. His paper, “Reconceiving the Center: Leadership, Strategic Review,
and Coherence in Public Sector Reform” is available in part five of this book (page 149).
Ensure structural capacity. Structural changes are often the most visible part
of reform, and it is for this reason that countries sometimes mistake restructuring
as a solution rather than as a means to an end. Reform failures can occur when
structural changes are divorced from other elements of reform because govern-
ment workers do not benefit from the shared vision or understanding of the goals
of reform that should underlie structural changes. Institutional reform needs to
focus on changing employee behaviour by addressing the culture and incentives of an
institution as well as its structure.
Many structural changes – especially decentralisation and deconcentration –
have been undertaken with the goal of making organisations more responsive to
society’s needs. Ms. Brosnahan of the Auckland Regional Council characterised the
20th Century organisational paradigm as being stable, rigid, process-driven,
vertically-integrated, consensual, hierarchical and based on size and scale. In 47
© OECD 2000
comparison, the 21st Century paradigm is more likely to be characterised by

organisations that are continuously changing, flexible, results-driven and virtually
integrated. Governments should change structures to meet society’s changing
needs, but only after careful consideration of what those needs are and in the
context of a strategic plan to reform all the elements of an institution.
Structure can also shape an institution’s approach to reform. One delegate
found that in his country’s experience, sector-based central government has
mainly led to sector-oriented reforms leaving structured pluralism instead of
uniformity and universality. Reform efforts should take into account organisational
features in order to compensate for structural weaknesses such as lack of hori-
zontal co-ordination.
Delegates did not feel that one type of structure was necessarily better than
another since structures should ultimately adapt to the unique needs and
concerns of each country. They focused, instead, on the need to identify where
analytical capacity for generating reform lay in their respective countries in order
to make sure that necessary resources were available to allow strategic planning.
Develop analytical capacity. Delegates noted that in most cases, senior
managers were so busy with everyday operational concerns that it was difficult to
find the time to step back and think about reform issues. While they agreed that
Box 19. Structure can determine the approach to reform
Norwegian central government up to the 1970s was marked by strong

centralisation, standardisation and management by rules. Today, there has been a
certain degree of decentralisation, increased flexibility and a larger element of
management-by-objectives in recent years, but the underlying administrative
apparatus remains intact. The resulting organisational framework is more
complex, and the national administration policy now has several focal points. It
does not have its foundation in a single agency, but is associated with several
administrative units that, in turn, have close connections to various parts of the
political leadership.
Administration policy has been largely a by-product of processes and actions
in many institutional arenas rather than the result of a homogenous and united
strategy. The reform programmes have emerged as a collection of partly indepen-
dent ideas simultaneous to specific reforms carried out on the basis of ministerial
and sector initiative. Reform has tended to be based on compromise leading to
incremental results. Reform activities have been characterised by an apolitical
rhetoric.
Norway
48
© OECD 2000
reform needed to fit into an overall strategy, it is important that agencies have the
capacity not only to develop the reform strategy and plan, but also the capacity to
implement it.
Professor Lindquist described this problem as a transactional challenge: organi-
sations are constantly subject to the daily operational demands of running a
system, while, at the same time, they are asked to respond to political demands
coming from above. Professor Lindquist observed, “attending to administrative
and political demands requires attention to transactions that can crowd-out
strategic review”.
Delegates recognised the difficulty of “creating space for reform” and saw it as
a problem for themselves in their own work. The transactional challenge tends to
crowd out not only the functions of planning and developing reform, but also the
functions of review and evaluation that allow governments to learn from and to
improve reform efforts. Given the lack of analytical resources that are often
devoted to developing reform, Professor Lindquist suggested adapting existing
allocation and policy processes (such as budget review) to more reflective and
forward-looking strategic review. This instrument has already been adapted in
several OECD countries.
Where’s the capacity? The many, varied contexts and expectations faced by
governments in OECD countries have resulted in a complex range of organisa-
tional structures for governments. Professor Lindquist presented a model in which
to think about the structural capacity of government. One set of administrative
structures represents governments where reform has been instigated from the
centre. Such systems tend to concentrate more capacity in the central agency to
develop reform centrally and to disseminate policies to agencies. The other set
includes governments with smaller centres of government. These structures
consist of agencies that have much more administrative autonomy. The role of the
centre is to facilitate transactions and to broker agreements between agencies.
Much of the decision-making capacity tends to rest with the various agencies.
Governments with strong analytical capacity focused at the centre may find it
easier to develop comprehensive reform plans and to mobilise government-wide
change. On the other hand, diffusing capacity throughout a network of agencies
can result in reform plans that incorporate increased responsiveness and flexibil-
ity in serving the public (though this is not always the case). Regardless of where
analytical capacity lies, all governments are faced with the challenge of improving
co-ordination and communication in order to build coherence and to allow
government to learn from reform experiences.
In order to determine the size and role of the centre, Professor Lindquist
suggested that countries evaluate the capacity of their central agencies and focus
on their strategic functions. If innovation is taking place in the agencies and the 49
© OECD 2000
centre is left playing “catch up” rather than initiating reforms, it no longer makes
sense for the centre to limit the activities of its network of agencies. Professor
Schick also suggested a de-coupled model of government organisations in which
core departments retain policymaking and performance oversight functions. While
still unproven, such a model may challenge governments to think about what are
their core competencies.
Resource constraints are forcing centres of government to become more stra-
tegic, focusing on identifying and implementing government priorities, ensuring
that departments and agencies have credible business plans and can be held to
account, encouraging learning about best practices and undertaking strategic
reviews. Strategic reviews are driven by the centre but undertaken collaboratively
with agencies. In this way, the centre benefits from agency expertise while
securing their support.
Professor Lindquist observed that the competing needs for coherence of
reform efforts (which benefit from a strong centre) and for flexibility and respon-
siveness (which tend to benefit from more diffuse decision-making) could be
causing the models for the distribution and co-ordination of some administrative
and analytic responsibilities to converge. The possibility of convergence high-
lights the shared concerns that governments are trying to address even as they
come up with different approaches.
Box 20. Centralised capacity can provide leadership for reform
In New Zealand, the Treasury was a key driver of the reform process and
provided the intellectual leadership in the form of its briefings to the incoming
government in both 1984 Economic Management and 1987 Government Management.
The Treasury had a strong institutional capacity to take the lead role in the reform
process, due to 1) its role as the government’s principal financial and economic
adviser, giving it considerable influence over virtually all areas of domestic policy
and 2) recruitment and staff development policies within the Treasury which
meant that there was a large staff of skilled economists and policy analysts with a
good understanding of developments in economic and administrative theory.
Some felt, however, that the Treasury’s dominance in the provision of policy
advice needed a balancing force. In 1989, the Department of the Prime Minister
and Cabinet was reconstituted, in part, out of concerns for the policy dominance
of the Treasury and to ensure contestable policy advice within government.
Overall, central agencies have worked closely with each other and with line-
departments in support of reform.
New Zealand
50
© OECD 2000
Box 21. Drawing on administrative networks to develop reform plans
In Ireland, networks of senior managers from across the civil service played a
key role in fostering reform. This involvement was based on the previous experi-
ences in Ireland which showed that centrally devised and driven programmes can
meet with strong opposition, primarily because a view of reform was being
imposed. The new approach to reform is characterised by extensive consultation
with and involvement of management across the public service.
Networks of senior managers were organised and supported by the Depart-
ment of Finance in order to provide forums to discuss common issues and
problems and promote solutions. It was through these networks that the need for,
and the approach to, a modernisation plan were articulated, leading to discussion
papers and proposals which, in turn, were endorsed by Secretaries General. The
development of initiatives was undertaken by six interdepartmental Working
Groups that involved civil servants at all levels as well as private sector people.
The final proposals by the Co-ordinating Group of Secretaries General were
developed by teams commissioned from within the Department of Finance to
prepare papers on a series of public service management issues. These teams
were supplemented by civil servants from other Departments. The Group also
invited submissions from the public, including the trade unions.
Ireland
Establish mechanisms to ensure coherence of reform policy

Delegates agreed that maintaining policy coherence was an increasingly
important element to successful reform. In order to initiate government-wide
changes, governments need to ensure horizontal coherence across sectors of
government. Delegates warned against the dangers of “stovepiping” in which
agencies develop policies in parallel processes and reform goals without the
benefit of shared information. The dangers of stovepiping include the duplication
of effort and resources needed across agencies of government and strategic
decisions that maintain the interests of individual agencies rather than improve
global public outcomes.
The increasingly complicated nature of government not only increases the
need for coherence of reform efforts, it creates new needs for mechanisms to
ensure coherence. A decentralised organisation may have the flexibility to be
more responsive, but how does government ensure coherence between reform
approaches in its component agencies? Vertical coherence between levels of
government has always been important to ensure that agencies implement reform
according to plan. The need to spread a sense of ownership in reform by 51
© OECD 2000
consulting different parts of government increases the importance of vertical

coherence because it requires that information travel up and down as well as
between the different nodes of a “webbed” government. Government agencies
should not interpret increased autonomy as a sign that they do not have to
co-ordinate with each other.
Coherence is not only important for changing organisational culture across
government, it is also an important feature for governments that seek to learn from
their reform experiences. Professor Lindquist argued that, in order to learn from
reform, governments needed to develop system-wide overviews, reports on
progress and strategic sensibilities that transcend the activities of any one agency.
In order to build coherence, Professor Lindquist suggested developing ad hoc
and permanent co-ordinating mechanisms such as committees or task forces that
span various agencies to help break sectoral thinking. This need for co-ordination,
however, should be balanced against the potential costs of adding unnecessary
layers of government. Co-ordinating committees and other mechanisms them-
selves need to be regularly reviewed to make sure that they are meeting
government needs.
The need for strong co-ordination mechanisms is dependent on the structure
and needs of a particular government. One delegate noted that, coming from a
small country, his government has not needed to organise reform around any
particular department. Instead, entrepreneurial individuals throughout govern-
ment work on reform: “It is a movement rather than an initiative”. Increasing
diversity, however, means that governments will be able to rely less and less on
informal communication networks and “naturally-occurring” shared cultural values.
Instead, governments should learn how to establish inclusive networks of commu-
nication and to pro-actively spread reform values in the interest of maintaining
coherence.
Build support for reform

Delegates were in agreement that successful reform requires a broad range of
support both inside and outside of government. Through the process of trying to
understand the public’s concerns, reformers help to build a constituency for
reform. Delegates felt that support from the general public in the form of positive
public opinion could be just as important as political support. While it is difficult
to mobilise, a groundswell of public support for reform is likely to translate
directly into a political mandate for politicians to support reform.
Does government just listen or does it influence public opinion? Delegates
tended to have different opinions about government’s role in shaping the reform
agenda. Several delegates noted that while the public tended, in general, to be
52 disinterested in the process of reform, government need not be a passive player:
© OECD 2000
“government can shape and reshape public opinion”. These delegates argued
that rather than rely on a crisis or general public dissatisfaction to create pressure
for change, government has a responsibility to mobilise public support for
preventative reform.
On the other hand, another country delegate noted that in his country’s
experience, “the deepest and most successful reforms are silent”. In this case, the
desire for silence is driven by the potential price of failure in terms of withdrawal
of public support, especially in countries with a tradition of the public taking to
the streets in response to reforms that they feel are not in their interest. In such
cases, reform is conducted instead under an indirect mandate from the public
through support by elected officials. Under this approach, political commitment,
and therefore communication with the political arena, becomes the more
important factor in providing pressure for reform.
Another delegate also countered, “one does not create a demand for reform,
one responds to it”. His concern was that government sometimes tries to ram
through reforms whether or not they are relevant to people’s actual needs and
concerns. This point highlights one of the challenges for government raised in the
previous section – the need for an informed public – as well as government’s respon-
sibility to educate its citizens. It also raises the importance of public feedback on
the quality and relevance of reform.
Educate the public about preventative reform. People are in school longer
and are returning for training at later stages of life. This represents an opportunity to
better prepare people for active participation in civic society. The complexity and diversity
of today’s society makes this role even more important. Schools need to become
places where people learn to work together despite their differences. Failure to
prepare citizens can result in increased cynicism, reduced trust in government and
ignorance about the challenge and constraints that governments face.
Improving the quality of citizen participation requires that government first
pose the question to the public of whether or not there is a problem that needs to
be addressed. Before it can make any demands, the public needs to realise first
that there is a need for reform. The public needs to internalise the cost of not doing
reform as well as the costs of government activities.
Crisis makes it easy to build constituencies for reform. But in the absence of
crisis, reformers have to work much harder to give the public the tools to decide
whether or not there is a need for reform and to understand the policy options
that they can choose from to realise reform.
Gain political commitment. Delegates were unanimous in recognising the
need for political support in securing real reform. They observed that the political
sphere has a complementary role to play with regards to the administrative
sphere of government. Politicians are needed to support changes in vision rather 53
© OECD 2000
than the nuts and bolts details of reform. Delegates also emphasised the need for
a clear distinction between the political and administrative spheres, recognising
that the stakes are often different: electoral success may not be the most
important result of reform.
Political leadership serves a number of purposes in reform. It helps to
promote inter-ministerial co-ordination, ensure balance and fairness and stay the course
over a number of years. Most importantly, however, political support is necessary
for re-examining the role of government. Without it, administrative supporters of reform
lack the mandate to go beyond simply improving efficiency. Professor Lindquist
stated, “the more significant the reforms envisaged by administrative leaders, the
more likely they will have policy and political implications, and therefore require
the support of political leaders if they are to succeed”.
While implementation is less of a political issue, political support remains
necessary through this stage of reform. Political support can take the form of an
oversight role. This helps improve accountability and maintains pressure for reform.
Political support is also necessary to ensure that reforms are not undone by
subsequent policies.
Political interest in reform, however, tends to be sporadic. Asking themselves
the question, “and when will we have that support from the political level?”,
delegates responded, “when there is something to win from a political point of
view”. While reform does not generally tend to be an attention-grabber at the
political level, reformers should remind politicians that there are political stakes to
reform. Stakes include potential budgetary savings assumed from reforms, the
ability to show an “outsider’s” willingness to take on problems inside government
and the reputation of agency heads responsible for reform, who may or may not
be political appointees.
In addition, Professor Schick noted that elections or changes in government
often provide an opportunity to initiate reform. The long-term nature of public
reform, however, means that reform efforts need to survive across changes in
governments in order to have enduring impact. Reform efforts also need to be
perceived as non-partisan in order to result in improvements that affect all of
government. It was important for delegates that political support be across party
lines, both in order to ensure continuity and to ensure legislative support for reform.
Public reform tends to provide diffuse and long-term benefits, but can also
cause immediate pain, especially when there are reductions in the civil service.
For this reason, delegates did not feel that reform should be initiated in the
period leading up to an election when candidates are sensitive to criticism and
lack the energy to begin ambitious new projects. Beginning new reforms at such a
period can lead to wasted energy and disillusionment with those who are charged
54 with leading the reform, sounding a death knell for additional reform efforts.
© OECD 2000
Box 22. Political support is a condition for successful reform
The United Kingdom implemented significant changes in the management

and structure of the Civil Service through the 1970s based on the recommenda-
tions of the Fulton Report of 1968. These changes, however, did not take root,
until the late 1980s with the Next Steps programme which is considered by many
to be the most significant change in the structure of the Civil Service since reforms
of the 19th century.
The key differences between the two reform efforts appears to be political
leadership and the appointment of a senior and dedicated civil servant to lead
the project, supported by a small team. The Cabinet Office and the Treasury have
taken the lead for reform through these teams which co-ordinate and drive
through the reform programme. Power rarely springs from the groups themselves,
however. Their authority comes from the extent to which they have the ear of the
Prime Minister or other key Ministers.
United Kingdom
Administrative reform or legislative mandate? Delegates gave mixed advice

about whether to implement reform through administrative actions or legislative
mandate. The former provides more flexibility, but the latter provides a stronger
mandate and guarantees a measure of political support by giving the legislature
partial ownership of the reform plan. In addition, a legislative mandate carries
with it a greater level of political accountability as legislators have to explain to
their electorates the reform plans that they support.
The answer depends on reformers’ perceptions of the need for political
support to back reform efforts, especially in the face of extreme reluctance. A
legislative mandate, if attainable, provides governments with a much stronger
bargaining position (“we must enforce the law”). It is, however, also a question of
timing. Developing legislative support for a reform programme can take much
more time, and may result in a loss of momentum for reform before the final policy
can be agreed upon.
Communicate to build constituencies for reform

In order for reform to flourish, delegates were adamant about the need for
securing a broad coalition of reform constituencies. Communication is one of the
most important tools in this effort. By identifying and reaching out to the stake-
holders of reform, government acknowledges that it is not the sole player, nor the
sole beneficiary, of public reform. 55
© OECD 2000
Communicate to increase stakeholders ownership in the reform process

“You can’t communicate enough. Anyone who has lived through reform realises that you
can’t do it enough or well enough. Communicate, communicate, communicate. It is the key”
(Symposium delegate).
Communication as a tool for change. Delegates recognised that, more and
more, communication is vital to the success of reform efforts and that it is no
longer the sole responsibility of political leaders. Instead, public servants should
also become expert communicators in explaining the merits of public reform. Effective
communication means not only conveying information, but actually connecting
with people so that they feel ownership of reform efforts. In the reform context,
communication serves many purposes, including:
• Building constituencies for reform.
• Co-ordinating reform efforts within government.
• Maintaining momentum of reform efforts.
Towards these ends, successful communication involves communicating the
need for reform, the process of reform and reform successes. Recognising the need for reform
helps to create and mobilise constituencies. Communicating the process of reform
is a task of internal communication within government that is critical to the overall
coherence of reform efforts. Finally, publicising reform successes helps maintain
the momentum that has been created, links actions to results and shares infor-
mation between different parts of government about what works.
Communicate up, down and all around. Delegates acknowledged that suc-
cessful reform requires conveying a message of reform to the major stakeholders
of reform: to the general public, but also to public officials and government
workers. Politicians may often need to be persuaded to uphold their commitment
to reform, especially if it is unlikely to bring them any political glory. For their part,
government workers bear the brunt of implementing public reform. They need to
believe in reform if they are to overcome their own bureaucratic self-interest in
favour of longer-term opportunities. The message of reform, while always consis-
tent, should therefore be tailored to each of these groups in terms of approach, level of
detail and specific benefits.
In addition, communication within the bureaucracy is needed in order to
allow the horizontal communication of lessons learned. As agencies are encouraged to
develop their own innovative practices, it is vital that there be channels for them
to share these with other parts of government. Communication also reflects the
increasingly “webbed” nature of government. In a webbed system, communication
occurs in all directions, not just up and down.
Secure commitment from politicians. Delegates agreed that support from
the political level is one of the keys to any reform effort even though most of the
56 details of reform continue to be carried out in the public service. It is therefore
© OECD 2000
quite easy for the political level to become out of touch with the need for reform
and the details of current reform efforts. Communicating reform to politicians
requires a thorough knowledge of reform activities as well as access to the political level.
Delegates pointed to the importance of placing change agents just below the
political strata where they will be able to communicate the need for change up to
the political strata while still taking an active role in the process of reform.
Help public servants weather change. Public servants play a key role in
implementing reform but, all too often, they are asked to carry out changes
without any adequate explanation of what these changes are expected to do or of
their own role in overall reform. Delegates emphasised the need to communicate
the vision, the rationale and the validation for reform to the bureaucracy.
Several delegates spoke about the need to communicate directly with government
workers. Rather than just communicating through mass e-mail messages, those
leading reform should make direct contact with public service workers, including
more frequent meetings and individual contact. Visibility and personal contact are
keys to communicating the reform message, not just the reform process.
As government develops into increasingly complicated networks, improving
both formal and informal channels of communication are vital to maintaining
coherence of reform activities. Delegates emphasised that efficient distribution of
reform information is insufficient. Successful communication occurs once govern-
ment workers understand the assumptions that underlie reform.
“Internal communication has not been done as well as it needed to be done. The breakdown
was that the communication was task-oriented to receive inputs from departments regarding
reform, but there was no validation of assumptions to create understanding within the
bureaucracy” (Symposium delegate).
Catch the public’s attention. Delegates were divided on the public’s relation-
ship to reform, and therefore the way in which government should communicate
those reforms. Many delegates recognised the need to communicate to the
public, but also acknowledged that the public service is not yet accustomed to
this role, having mostly left it up to politicians.
As discussed earlier, an important role for communication efforts is to educate
citizens about the need for reform and the values underlying reform. A second
dimension of public support for reform is based on the public’s knowledge of govern-
ment successes. Communication provides the bridge between complicated, detailed
reform initiatives and everyday results that have relevance for people’s lives.
Many delegates noted the media’s failure to provide balanced coverage of
government performance by focusing only on government failures. Delegates felt
that the media sometimes approaches the “frontier of impunity” since there are
no checks and balances on what type of stories they write and whether or not their
accounts are one-sided. Some delegates proposed working around the media’s 57
© OECD 2000
Box 23. Does the public know that reform was successful?
While reforms in New Zealand have been seen as a success by policy elites
and overseas commentators, they have coincided with a general decline in public
confidence in the government. This may have been due to several factors:
1) increased transparency also increased public’s expectations, 2) speed and
scope of reform process were unpopular with the public and 3) lack of communi-
cation meant that the public did not understand reform efforts.
New Zealand
traditional disinterest in “success stories”, by co-operating with the local press to

highlight local reforms, especially when these reforms were being raised as a
national example.
Delegates also noted that the increasing fragmentation of the media has
opened the way for government to communicate directly with its citizens through
such means as the Internet or cable television. Said one delegate, “the new media
is a one-to-one relationship”. This represents a challenge for governments to
provide quality information, to harness new technologies and to adapt to new
ways of communication in its search to connect with their citizens.
Learn the language of reform to connect with citizens
Communication, not propaganda. The goal of communicating with the public is

to build support for reform. The language of reform should not only inform citizens
about the need for reform, it needs to convince them that government has a plan to
address this need at an acceptable cost. One delegate noted, “building a constitu-
ency means actually developing a capability to communicate and making them [the
public] feel that they bear the costs and if the change occurs, they will benefit”.
Reform is not about selling the public something unpalatable with no
mention of the pitfalls or costs. Towards this end, the language of reform should
include clarity about goals, about what is meant by reform or modernisation,
about who is going to be affected by reform and in what way.
Connect on an emotional level. Words are the way in which governments
communicate both the need for reform and reform successes to the general public,
and so the language of reform plays a vital role in shaping how reform is viewed. As
noted in the previous section, communication means connecting with citizens, not
simply conveying information. The public will not buy into reform unless they can
58 understand it personally, in terms of both concrete outcomes and values.
© OECD 2000
Delegates highlighted the need to convey a message of reform to citizens that

had relevance for their everyday lives. Any discussion about reform should be
able to answer the public’s question, “what does this do for me?”.
“We’re always talking about efficiency, productivity, restructuring and accountability. And to
the ordinary citizen this means little. What the citizens want to hear is honesty, service…
You have to communicate with people at an emotion level – the issues that are confronting
them as ordinary citizens” (Symposium delegate).
Much of the language currently used to describe reform either focuses on
changing processes and structures (i.e. decentralisation, devolution) or on abstract
ideas such as efficiency that are oriented towards business practices, not people.
Connecting with citizens means tapping into a common set of shared values such as
hard work, getting your money’s worth and honesty, while at the same time
demonstrating outcomes for citizens in terms of improved services. While the
notion of efficiency is important for shaping reform, this type of abstract value
needs to be presented in language that has meaning for the general public. Rather
than simply saying that a reform makes processing passport applications more
efficient, governments need to show how reforms are expected to cut the
customer’s waiting time by empowering customer service agents to look for
problems with the application at the time it is filed.
A successful demonstration of how a reform plan supports the public’s
consensus values can help build citizen support for reform, especially when tied
to reform outcomes.
No more buzzwords. Delegates warned against the use of jargon in describ-
ing reform. Clear, everyday language is the most effective way to communicate a
message of reform to the public.
Many of the concepts that organise public reform today owe a clear debt to
the private sector. In many cases, using private sector concepts helped to break
out of the public sector mentality. The private sector paradigm also has its limits,
however, and delegates questioned the use of language and concepts that were
imported wholesale without much questioning as to how they applied to public
sector goals. These buzzwords such as “change management” lose much of their
meaning when taken out of context. One delegate observed, “change manage-
ment has become some kind of esoteric entity by itself, regardless of whether
every word of change was good or bad or whoever’s interests it was in”.
Buzzwords can be used to hide a lack of clear thinking since they do not
require a clear statement of goals and objectives. Buzzwords often become an end
unto themselves instead of describing the processes that are meant to improve
government services and responsiveness. It is these latter outcomes that are
government’s key message to the public. 59
© OECD 2000
Which comes first: words or actions? Most delegates felt that, while it was
important to be conscious of language, words describing change flowed out of
reform efforts rather than vice versa. That is, reform rhetoric is meaningless without action.
The sequencing of reform and communication is important in conveying a
message of reform. The public should be able to see signs of change accompany-
ing a discussion of reform. Public trust erodes when public discourse is inconsis-
tent with government actions. A flashy slogan accompanied by business-as-usual
government practices only contributes to the public’s growing sense of cynicism
about the government’s willingness to seek actual change.
Changing language requires that governments first change the way in which
they think. A common vocabulary of reform is only useful if it actually reflects
common reform strategies across government. This necessitates a clear vision of the
goals of reform that can be articulated into a message to citizens and public
service employees.
For government workers, the language of change needs to be accompanied by
real incentives for change. If rhetoric precedes action, then government needs to
show a clear roadmap for both workers and the general public about when changes
will begin, when they are expected to end and what are the anticipated outcomes.
Don’t overpromise. Delegates were concerned about the credibility gap that
was created when a government’s rhetoric exceeds its actual ability to deliver and
shape change. This means that government, itself, needs to be realistic about its
expectations and honest in conveying these expectations to the public. Over time,
small, realistic goals, successfully accomplished, will do more to build government
credibility than big “pie-in-the-sky” promises. One delegate emphasised, “trust in
government fails because government overpromises and underdelivers”.
Create a change culture by changing behaviour

“Reform will not be successful unless people are convinced that there is a serious reason for it:
personal, professional, for the country, or the people they work with. We need to touch a deep
value if people are to sustain themselves through a time of change. This requires a suspension
of their own self-mechanisms for self-protection” (Symposium delegate).
Professor Dupuy of the European Institute of Business Administration
(INSEAD) addressed the issue of incentives within the public service in his paper
“Why is it so Difficult to Reform Public Administration?” in part five of this book
(page 185). He began with the assertion that organisations are run according to a
set of rational strategies. Over time, however, operating methods have tended to
give priority to protecting the members of the organisation. Thus workers tend to
give priority to their own problems over those of the public. The principle of
equality, for example, is interpreted to mean that all workers should be treated
equally regardless of their actual performance. Putting workers’ interests first
60 usually comes at the cost of quality services to citizens.
© OECD 2000
Build incentives into reform

Delegates noted that government employees are one of the most important
stakeholders of reform. If government employees perceive that reform is about
cost-cutting, and therefore, downsizing, they are unlikely to co-operate. Institu-
tional change is more about changing the culture of organisations than it is about
changing organisational structures. The latter is merely a means to an end.
Changing organisational culture begins with developing an internal constituency
for reform through motivation, morale boosting, development and the creation of
incentives for change. These changes require the management of groups and
objectives and not just individuals and outputs.
Co-operation instead of co-ordination. Professor Dupuy challenged dele-
gates to reform worker behaviour in ways that foster co-operation instead of
co-ordination. He explained that co-ordination implies the sequencing of discrete
tasks, whereas co-operation requires that individuals within government work together towards a
common objective. In order for co-operation to work, an organisation has to learn how
to move away from putting its own interests first to putting the interests of the
public first.
The notion of co-ordination rests on a legalistic view of the workplace in which
each individual has strictly defined tasks for which he or she is accountable.
Workers are required only to focus on their individual tasks within their allotted
time. This also serves to insulate them from conflicts with their colleagues
because they do not have to work together. This type of thinking discourages
initiative and global thinking and absolves individuals of the responsibility for the
final outcome. Structuring the workplace in this way also leads to the multipli-
cation of the resources required to perform the same task since each person
accumulates the equipment and materials necessary to do his or her activity inde-
pendently. Putting into practice the notion that workers should co-ordinate rather
than co-operate, can help government achieve two of the outcomes demanded by
the public: 1) provide quicker, more efficient services and 2) provide those
services using fewer resources.
Increasing co-operation, however, is not a simple solution. co-operation
requires individuals to share responsibility for the accomplishment of a task,
meaning that individual contributions are more difficult to measure. Increasing co-
operation means increasing opportunities for conflict and potentially decreasing
individual accountability. Under this model, individuals and organisations need to
learn how to accept fuzziness, redundancy, dependence and conflict. Professor
Dupuy summarised this as a transition from legalism to management because the
shift will require stronger, more skilled management.
In addition to improved management, increasing co-operation tends to
require new ways of recognising achievement. Providing group recognition can 61
© OECD 2000
increase co-operation and help workers feel collective ownership by encouraging

teamwork. This approach requires that groups be self-regulating so that individual
members within a team “pull their own weight”.
Change incentives for bureaucracies. An important factor in persuading
public servants to embrace change is to build incentives into reform so that it is in
their interest to do so. Government workers need to learn that by better serving
the public, they are also serving their own interests in the long run. While learning
reform values helps in this process, public servants need to come to this realisa-
tion on their own. As one delegate pointed out, “you can’t impose change”.
Professor Dupuy spoke about introducing “levers” for changing individuals’
behaviour. These include changing human resource management systems to put
people into new contexts. Delegates agreed that human resource policy was a
potentially useful tool for changing incentives, but also noted the barriers in many
countries to changing human resource policy. Some delegates were reluctant to
touch employment tenure which they saw as one of the few material advantages to
working in the public sector.
Delegates struggled with how to build incentives into the workplace. Some
pointed out that performance pay initiatives have had mixed results. They noted
also that without clear tasks to evaluate, too much discretion in evaluating
difficult-to-measure performance could lead to arbitrary rewards at best and
preferential treatment at worst. They were intrigued, however, by the notion of
giving bonuses for team accomplishment and performance.
Delegates pointed to a number of examples of initiatives to recognise good
work including awards, but also non-monetary recognition such as visits by
political leaders and giving additional responsibility and freedom to high
performing individuals. Switching to a more performance-oriented approach,
however, increases responsibilities for managers to justify their performance
evaluations by linking individual output to overall outcomes.
Ensure accountability within the public service

One delegate observed, “you can’t fire the team but you can fire the coach – it
has to be top leadership who is the problem or the solution”. Accountability at
this level means, therefore, a focus on the outcomes of the entire organisation
rather than on particular outputs or processes.
Delegates tried to come up with ways to measure many of the complicated
qualities that public administrations need today. They posed questions such as,
“how do you evaluate the internalisation of values?”, “how do you bring together
the evaluation of the individual and evaluation of global outcomes?”. This is
especially true in a context where individual’s contributions are no longer easily
62 measured, such as the case where co-operation is increased.
© OECD 2000
Box 24. Changing behaviour
Reform is about changing people’s behaviour, not simply about reorganising

structures. The process of change begins by sharing a personal vision of reform.
Unless people know the values underlying reform, the goals they are working
towards and their role in this change, they have no incentive to let go of the status
quo. Symposium delegates identified the following keys to achieving employee
buy-in:
• Communicate expectations: let staff know 1) the common values which
underlie the reform; and 2) the expected outcomes and timelines; and
3) their role in these changes. A personal commitment to reform on the part
of staff is a key to successful implementation.
• Accentuate the positive: focus on the opportunities that reform will bring.
This does not mean ignoring the cost of change, but employees need to
know what the benefits are if they are to bear the costs.
• Build leadership for change: identify change agents who are credible and
who can inspire employees to share their vision for change.
• Reward change: build-in incentives for behavioural changes. This can
include non-monetary incentives including public recognition of successes
and increasing both freedom and responsibilities for those who show that
they share in the vision for reform.
• Create opportunities: offer employees the training and help that they need
in order to be able to fit into the new vision.
Box 25. Introducing incentives for change through competition
New Zealand has created competition in internal markets for government

services in order to increase incentives for change. Reforms include performance
agreements for department heads, fixed-term contracts for senior and middle
managers, purchase agreements for ministers to contract for services at agreed
prices from departments, and contracts by which departments purchase services
from other government entities.
New Zealand
63
© OECD 2000
One delegate stressed that moving from inputs to outputs was not enough.
Global outcomes are too abstract. Instead, senior managers still need to be held
accountable for both outputs and outcomes as outputs are more concrete and meaningful
in the short-term to the public and for managers themselves. Links, however, are
needed that explicitly connect outputs with outcomes. One delegate suggested,
“put in place measurement and evaluation systems to assess and measure the
impact of the outputs on the desired political outcomes or objectives”.
64
© OECD 2000
III. How to Keep Public Management
Reform Sustainable
Having discussed why reform is needed and how to go about it, delegates
tackled one of the most difficult reform questions: how to achieve lasting change.
There is no fixed recipe for success. As noted in the last section, the success of
reform depends on whether or not government succeeds in changing its
behaviour, which ultimately depends on the people who make up government.
Successful reform depends on putting the right incentives in place and also on a
supportive political environment. Making it last depends on good leadership to
manage change.
In order to change the behaviour of public servants, Symposium delegates
stressed that reformers should first make sure that public servants feel ownership
in reform efforts. Very often, government focuses only on the public as the “client”
of reform. Public servants, however, also need to feel that their views are valued,
especially since they are the ones who are being asked to change how they work.
Delegates spoke of the need to develop an internal constituency for reform. While
reform should focus on serving the public better, government should not forget
that government workers are also stakeholders of reform. The success of reform
depends on these people.
Work to avoid reform fatigue

“Reform fatigue” was one of the biggest concerns for delegates at the Sympo-
sium. Once the reform plan is articulated and implementation has begun, how can
governments keep public servants from becoming cynical and tired of reform?
Reform fatigue can set in under many different circumstances: too much reform
and government workers feel overwhelmed and unstable; too little reform over a
long period of time and reform efforts loose momentum.
As discussed in the last section, much of the success of reform depends on
government’s ability to change incentives and behaviour. Much of the long-term
success of reform will therefore depend on the clarity of goals and planning at the
outset of reform and how this message is communicated. Even under the best
reform programme, however, workers will eventually begin to feel reform fatigue. 65
© OECD 2000
Changing organisational behaviour takes time and change can be tiring. Even
those with the best attitude can feel overwhelmed by successive reform efforts.
Government can actively fight reform fatigue by giving public servants a stake in reform,
by developing a capacity to learn and build on previous reforms and by providing
encouragement along the way.
Create ownership of reform to create support for reform

“Sometimes it seems like it’s all the birds sitting in a tree and you clap your hands and that’s
a big reform as all the birds are scared up into the air and a minute later they are down on
the tree so every bird is sitting somewhere else. But to the people looking at the tree nothing
has changed all the birds are back in the trees” (Symposium delegate).
If there is no change in underlying values, then structural changes can lead to a
brief fluttering of activity that eventually settles back into business-as-usual. Rather
than putting their efforts into making reform successful, some government workers
may put their efforts into circumventing changes in rules and structures in order to
maintain familiar procedures, while maintaining a façade of reform. Overcoming
such a situation was one of the key goals of the discussion on sustaining reform.
Reinforce reform values with consistent actions. As discussed earlier,
teaching reform values is critical to building a constituency for reform within the
public sector. Shared values are a necessary condition for reform because they
provide a common understanding of the goals and approaches of reform. But in
order for these values to grow and take root, they need to be reinforced by
consistent actions. Professor Dupuy spoke of the tendency for bureaucratic behav-
iours to take over and promote self-interested actions while maintaining the
reform rhetoric. Delegates stressed that it is important for managers to send the
right signals: who they appoint and promote sends a very important message to
workers about whether or not management behaviour has actually changed in line
with reform rhetoric.
Maintain avenues for feedback and consultation. If government workers feel
that reform goes against their personal interests, they have no incentive to
co-operate in changing their behaviour. Timing is essential. Consulting workers
after reform plans are already made and put in place can actually increase
tensions if reformers are not ready to go back and make changes in response to
workers’ comments and concerns. Delegates recommended involving public
servants early on in the reform process to prevent a later, more adversarial
relationship and maintaining mechanisms for consultation in order to keep them
involved in the reform process.
One delegate admitted that reform efforts in his country had focused on
efficiently transmitting reform information to workers, but had neglected to
66 include any mechanisms for workers to respond as to how they felt about reform.
© OECD 2000
How to Keep Public Management Reform Sustainable
Delegates saw continuous feedback and evaluation as one of the keys to building and
maintaining a climate of change. Feedback and consultation show workers that
their concerns are heard, help to build a sense of ownership and can improve
reform design by highlighting field practices and considerations that reform
designers may not know about.
Consultation alone, however, is insufficient. Government employees know
that they are being heard when their concerns are actually addressed. This does
not always mean that reform planners must do exactly what government employ-
ees want, but responding to workers’ concerns sends a message that they are
valued partners. It also provides an educational opportunity to show civil servants
how their concerns are addressed by the reform plan.
Draw attention to gains and successes. Reform can be a very long-term ven-
ture, so focusing on the ultimate outcome alone may be insufficient to motivate
many government workers. While reform should always be outcome-focused,
workers also need incremental goals that are concrete and achievable in order to show
that they are on the right track and to build worker morale. In order to create
reference points for workers to help cope with the uncertainty of reform, reformers
should build output goals into their reform plans and show explicit links with how
outputs lead to outcomes.
Delegates were very clear about the need to encourage workers by celebrating
success. Rewards do not necessarily have to be monetary, but should provide
recognition of the effort that workers are making to adapt to changes and help to
maintain momentum by showing that progress is being made. Political and/or media
recognition are good examples (i.e., recognition ceremonies, photo opportunities,
newsletter articles, certificates and awards) of ways to recognise and celebrate
success.
It is also important to remember that the public too, can experience reform
fatigue and therefore need to hear about reform successes. While the public is
seldom exposed to the internal reform of government, it does see the short-term
costs that are sometimes imposed by reform such as confusion about who to go to
for services when administrations are restructured. Delegates recommended
improving both internal and external communications to focus attention on reform
successes in order to build support and to encourage and recognise government
workers.
Delegates pointed to examples in their countries in which workers willingly
embraced change as a challenge despite decreased resources because they were
also provided with increased independence and technical support. Giving
workers increased independence in certain areas of reform helps to build a sense
of ownership in the reform process and objectives. And demonstrating trust in
workers gives them a shared sense of responsibility for the success of reform. 67
© OECD 2000
Box 26. Recognising successes
In the United States, the Vice President’s National Partnership for Rein-
venting Government (NPR) has created a “Hammer Award” for teams of federal
employees who create an innovative and unique process or programme to make
government work better and achieve results. The reward focuses attention on
those who have shown significant impacts on customer service, bottom-line
results, streamlining government, saving money and exemplary achievements in
government problem-solving. The title of the reward refers to the stereotype of
government inefficiency symbolised by a $400 hammer. Fittingly, the award
consists of a framed $6.00 hammer, a ribbon and a note from the Vice President.
More than 1,200 Hammer Awards have been presented to teams comprised of
federal employees, state and local employees and citizens.
United States
Trust, however, needs to be accompanied by the right tools to succeed. Training

helps workers understand what is expected of them and helps build the capacity
to participate fully in reform as opposed to simply following orders.
Implementation also needs to be strategic
“Breathing space” provides room for implementation. Reform efforts are often
characterised by a period of innovation and change followed by a period of consoli-
dation during which new rules and expectations are transmitted. This period is
essential for public workers to learn the new rules, receive training and get accus-
tomed to new procedures and structures. However, such breathing periods should
be seen as an implementation phase of reform and not as an opportunity to rest
from making reform changes or to relapse to pre-reform behaviour.
Professor Lindquist noted that unless reformers work to consolidate reform

changes in the post-implementation period, “transactional and political demands
begin to re-assert themselves”, causing an institution to slide back towards
previous practices. In order to maintain the structure and discipline of the initial
reform period, Professor Lindquist suggested creating an implementation
secretariat that would develop a timetable and ensure that departments and
agencies met budgetary and other targets. This serves not only to sustain reform
68 efforts, but also reinforces the coherence of comprehensive reform.
© OECD 2000
Create momentum for reform. One of the risks of reform fatigue is not so
much that workers turn against reform, but rather that they lose the belief that
reform will make a difference. Especially when reform is crisis-driven, reform risks
losing its purpose once the crisis passes. Loss of momentum makes it easier for
organisations to slide back into old, familiar ways of doing things. Even reform
success is no guarantee against loss of momentum. New government systems are
only sustainable if there is a strategic will to maintain them. Once a near equilib-
rium state is achieved, government needs to work on how to maintain this state by
building trust within public administrations.
Reform should not be seen as an activity separable from workers’ everyday
operational responsibilities. If it separated, then it can be set aside and relegated
to a list of low-priority activities. There will always be more pressing operational
responsibilities that take attention away from long-term reform. Instead, reform
needs to be built into the incentive structure so that the incentive to innovate
comes from inside the agency rather than from above.
A consistent reform message helps prevent fatigue. One delegate com-
mented, “what creates reform fatigue is that you change it and then change it back,
change it and change it back – and people get tired of it”. Having a clear vision of
reform helps to maintain consistency. Another delegate added, “governments
which rush from one partly-implemented innovation to the next suffer from reform
Box 27. Sequencing reforms to build momentum
Recent reform of the public sector labour market in Australia led to some
unexpected managerial reforms in the Treasury. After the Australian government
passed a law applying private sector labour laws to the public sector, public
employees had to negotiate their own pay based on performance. Previously
there had been little movement between departments; now it was possible to
negotiate a higher salary by changing departments. As a result, the labour market
for policy advisors became very competitive. The senior management in the Trea-
sury realised that it needed to pay quality people a competitive market rate in
order to retain them. In order to make room in budgets to attract quality people,
departments could no longer afford to keep poor performers. This led to the cre-
ation of a performance management system. The staff agreed to these changes,
provided that upward appraisal of managers was also included. The resulting per-
formance management system, including appraisal of superiors, has changed the
behaviour of managers substantially, placing sharp focus on management and
leadership potential within the Treasury.
Australia
69
© OECD 2000
fatigue and confusion”. Where possible, reform efforts should fit into a compre-
hensive plan. If not, reformers need to show how current reforms fit with past
efforts, if only to show that they have learned from past mistakes.
Learn from past reform efforts

Government workers need to understand how successive stages of reform fit
together in order to avoid the feeling that they are being constantly buffeted by
new reform proposals. Reform efforts need to show continuity. While stylistic
elements may change, the values and logic that underlie reform efforts should
stay the same, even as governments fine-tune the mechanisms of reform based on
what they learn through feedback and evaluation.
Even when reforms do not achieve results as expected, government needs to
demonstrate the ability to learn from past experiences. Seeing reform mistakes
repeated over and over increases cynicism in everyone involved. A government
that is capable of learning demonstrates that it is actually interested in reform to
improve the effectiveness of government, not just to score political points by
showing that it is engaged in reform. Professor Lindquist suggested making an
explicit effort to learn from reform experiences through the use of roundtables,
contracting for written accounts of the reform process or sponsoring evaluations.
The success of reform often cannot be measured by anecdotal experiences.
Government can build support for reform by showing its impact through feedback
and evaluation and to increase the body of knowledge about what works in reform.
Professor Jean-Claude Thoenig of the European Institute of Business Administra-
tion (INSEAD) addressed the issue of using evaluation to improve reform by
looking at good evaluation practices in several member countries. His paper,
“Evaluation as Usable Knowledge for Public Management Reforms” is available in part five
of this book (page 197).
Evaluation can be used to improve reform plans. Given the relative lack of
data on the success of public reform, evaluation provides a valuable resource for
learning about reform. Not only does evaluation hold the potential for helping to
increase government efficiency, it can also increase accountability and give
visibility to governments’ own criteria for measuring reform success. Evaluation helps
to put the focus back on the goals of reform. As one delegate stated, “what gets measured,
gets managed”. In addition, evaluation adds to the total knowledge base of what
works and helps to support the notion that reforms are rational. As part of an
organic learning process, it can help governments improve their reform efforts.
Professor Thoenig cautioned, however, to not expect too much from evalua-
tion. It is a valuable tool with specific uses and limitations. Most evaluations have
tended to focus on management and efficiency rather than on effectiveness. This is
because it is much more difficult to evaluate the overall external effectiveness of
70 reform. Most evaluation is instead designed to provide policymakers with
© OECD 2000
information on what is working and what is not. Evaluation practices should build on
this role of adding value by seeking to respond to unanswered reform questions.
Successful evaluation is flexible and incremental, filling gaps in knowledge whenever
opportunities present themselves.
Professor Thoenig observed that evaluation is not used as often as it could
be: “Governments publicly affirm the need for evaluation, but fail to practice what
they preach.” He went on to list many of the reasons why governments are
reluctant to use evaluation. Some policymakers may see evaluation as a challenge
to their authority from outside experts or else as a tool for a separate political
agenda. Evaluators too, hold a certain responsibility for the limited use of reform.
Some seek to define the goals and content of reform, rather than recognising that
this is the proper role of policymakers. Others focus on conducting evaluations
that are methodologically perfect rather than on producing results that are timely
and useful.
While some countries are more likely to use evaluations than others,
Professor Thoenig emphasised that countries do not necessarily need a “culture of
evaluation” in order to make use of evaluation. Instead, policymakers have to learn
that evaluation is just another tool for improving reform. Thus placing reform in its
proper context (and proper usage) can increase its use by offering information that
is applicable in answering current problems.
In order to increase the use of evaluation, Professor Thoenig addressed the
issue of how to make evaluation more credible for potential users. He presented
three conditions for evaluation to be credible and acceptable: 1) it should be
sponsored by credible persons with both practical experience in evaluation and
direct access to policymakers; 2) it should answer a need or concrete problem;
and 3) it should be well-timed in relation to reform.
Evaluation requires access in order to make an impact. Since evaluation results
are in competition with other decision-making inputs such as media reports and
political considerations, evaluators should catch policymakers’ attention by
providing useful data and by presenting results in understandable language.
Professor Thoenig found that evaluation is often used at the initiative of senior
officials. Once they have found that evaluation can be of use in solving reform
problems, they are likely to use it again.
Secondly, evaluation should have a purpose. People using evaluation should
keep in mind that it is a means to an end and not an end unto itself. A pragmatic
approach addressing specific needs and opportunities for action, however, first requires
policymakers to decide what they want to know. In order for an evaluation to respond
to a specific problem, the problem should be clearly-defined and the activity
measured should be limited in scope. The goal of evaluation should be to provide
usable knowledge based on empirical data. 71
© OECD 2000
Finally, evaluation needs to be timely. Given that there is little performance

data on public reform, evaluation should use the best data available. Evaluation is
becoming more systematic, but also more informal. It is better to respond quickly
to a small, but well-defined issue and see it have an impact on the programme
being evaluated, than to try to tackle a much larger issue and become mired in
methodological or data difficulties.
It is important to recognise the limits of evaluation. For Professor Thoenig, the
primary task of evaluation is to provide an objective description of an activity. While
there is a debate over whether or not evaluations should make judgements,
evaluators should remember that evaluation results are competing with other
inputs and are not the sole basis for decision-making. Responsibility for final
judgement rests with policymakers. Therefore while evaluators may reach conclu-
sions on the basis of their evaluation alone, they should avoid second-guessing
policymakers’ decisions, especially when evaluating on-going reforms.
Professor Thoenig warned delegates to avoid the temptation of creating a
negative bias by focusing only on mistakes and shortcomings without an equivalent
review of successes. Evaluations with negative bias are not useful for measuring
the value of a programme, nor do they provide the necessary information for
improving it.
The increase in public sector reforms seems to be leading to a growth in the
use of evaluation. Professor Thoenig pointed in particular to the successful use of
a decentralised and participatory approach to evaluation in which agencies are encour-
aged to collect and share information, while a central unit serves to ensure
accountability, encourage sharing of information and monitor the “big picture”.
Build on past reforms. Lasting and sustainable reform needs to build on
previous reforms. Encouraging innovation, however, is often misinterpreted as
meaning that governments need to break with the past. Innovation involves
finding new ways to solve both new and existing problems and can be aided by
identifying and amplifying good working practices. Building on past reforms is
undoubtedly easier when initial reforms are developed comprehensively, but
when this is not the case, evaluation helps to fit ad hoc reform efforts into a more
systematic set of reform criteria. Reforms need to openly acknowledge both the
good and bad aspects of past reform. Wholesale rejection of the past only serves
to aggravate the lack of knowledge about which reform practices work and which
do not.
Professor Thoenig pointed to the use of ex post evaluations to build up the base
of information about which reform activities work. While this type of evaluation
tends to be expensive and time-consuming, it can yield valuable results. While
ex post results are seldom used to improve the activity that they evaluated, they
72 can be used to provide a base of information on which to build future reforms.
© OECD 2000
Finally, building institutional memory is yet another important way to benefit

from past reform experiences. Reformers should think explicitly about past reform
experiences and improve internal communications so that one part of government
can learn from the experiences of another. Institutional memory is also reinforced
by human resource policies that create incentives for good people to stay in
government. Properly exploited, institutional memory can relieve reformers both
of the necessity of “reinventing the wheel” and repeating past mistakes.
How to keep agencies from backsliding?

Delegates recognised that in the long-run, deeply-rooted behavioural changes
are the only way to fight the institutional tendency to revert to old methods. Even
when behaviour change is achieved, however, outside pressures can conspire to
chip away at reform accomplishments. According to Professor Schick, “the main risk
is not that governments will throw their management innovations overboard and
re-install discarded practices, but that in piecemeal fashion they will impose rules
and procedures in response to particular problems”.
Government faces many diverse pressures for special treatment of certain
groups or programmes, whether from the legislature or from managers them-
selves. Professor Schick observed, “each re-installed rule or requirement may be
justified in its own right, but the cumulative impact may be to reintroduce
compliance-centred management”.
Professor Schick acknowledged that government can periodically review the
rules and purge those that do not fit into the reform vision, but it is better to
prevent this trend by institutionalising principles of managerial discretion and accountability
in order to prevent backsliding behaviour.
Box 28. Preventing backsliding through political accountability
In Canada, the Prime Minister personally made a commitment that every

reform would go forward. This ensured that there was never a reopening of
previous decisions which proved to be of fundamental importance for moving
forward with reform.
In addition, the Minister designated as President of the Treasury Board is
accountable to his/her colleagues and the public for public management and
public service renewal. The division of interest and accountability between the
Canadian public service and elected officials is most clearly laid out in the report
to the DM Task Force on Values and Ethics, which describes the challenges in
public management versus public policy, and the integration of the two.
Canada
73
© OECD 2000
Making change part of “business as usual” is an alternative to continuous reform

Constant reform that is “top down” tends to be a source of reform fatigue
because workers are told what to do and think rather than participating in the
process of coming up with improvements themselves. By the time government
has centrally developed and diffused a response, society has moved on, leaving
behind outdated policies.
In response to the question, “when is reform finished and when does govern-
ment begin?” one delegate responded, “the answer may be that we never finish
changing, or else we need to create a government that is capable of responding to
change”. When government finally achieves this level of responsiveness, change
becomes part of the daily culture, rather than an unknown entity to be feared.
Instead of constantly chasing the moving target of society’s ever-changing needs,
reform developers should aim at allowing individual workers to take the initiative
in responding to the constant change that confronts them daily.
Delegates advised against making a myth out of reform: “when government
comes in, it tends to say this is the reform… modesty is needed”. Unmet expecta-
tions are yet another source of reform fatigue. Government should aim for a
continuous programme of improvement and not necessarily continuous reform.
One delegate noted, “innovation is an obligation, but reform is not an obligation
or necessity unless there is a positive outcome at the end of the road”.
Stay the path by fostering champions of reform

“Successful reform does not just happen by itself; it depends on leaders who exploit openings
and give impetus and direction to change. Strong leaders do not just read’ opportunities; they
make them – by molding public opinion, bringing new blood with new ideas and initiative
into government, reaching beyond safe and traditional constituencies to build coalitions in
support of change, and by taking political and managerial risks that broaden the possibility of
change” (Allen Schick).
Leadership plays an important role in the implementation of reform because
it involves two of the most important aspects of reform: change and people. While
leadership and management skills are both important for any organisation, the
need for leadership is determined, in part, by the amount of change an organisa-
tion expects or wants to undergo. Leadership is an important tool for promoting and
managing change. It is therefore increasingly important for countries undergoing
public sector reform.
Leadership is manifested in relations between people. Good leaders inspire
people. The previous section shows that changing organisations is really about
changing people’s behaviour, so organisations undergoing reform need leadership.
Leaders, spread throughout an organisation, can help to diffuse and maintain the
74 reform values that are necessary for successful public sector reform.
© OECD 2000
Leadership, however, is difficult to define and means different things in dif-

ferent countries. Delegates discussed both the role and function of leaders, as
well as how to foster leadership in government. In order to understand better the
task of developing leadership, two practitioners – Mr. Kevin Bacon of Pricewater-
houseCoopers LLP and Ms. Jo Brosnahan of the Auckland Regional Council –
shared their experiences in developing leadership within government. For
additional discussion on leadership qualities and building leadership, see their
papers, “Beyond Training: Developing and Nurturing Leaders for the Public Sector” (Bacon)
and “Public Sector Reform Requires Leadership” (Brosnahan) in part five of this book
(page 243 and page 211).
Who needs leadership? Most delegates agreed that leadership was impor-
tant for reforming government, but not everyone seemed to be talking about the
same thing. While all of the delegates believed that the head of a government
agency should exercise strong leadership, there was less consensus over the role
of leadership in the rest of the civil service for initiating and guiding reforms. This
is because the need for leadership depends on the make-up of the society, the
structure of the organisation and the type of reform.
A homogenous society is more likely to have a common understanding of

reform values. It is more likely to reach a consensus about whether or not reform is
needed and what types of reform to undertake. Moreover, as long it is in a stable
equilibrium, it is unlikely to need sweeping reforms. Once a reform plan is
designed in a homogenous society, it is more likely to be implemented smoothly
because the authority of the reformers is less likely to be questioned and because
workers already share a common understanding with reformers, or at least trust
them to make changes in their interest.
As discussed at the beginning of this paper, however, most OECD countries

are finding that their societies are no longer homogenous and stable – if they ever
were. Societies are increasingly out of equilibrium and require major reform even
as their governments are losing the trust needed to implement those reforms.
Increased diversity means that leaders will increasingly be needed to transmit
reform values, mediate differences and create coalitions in support of reform.
Likewise, government that is hierarchical and rules-based will have less need
for many leaders at different levels than government that is less hierarchical. In
the former case, leadership is concentrated at the top: the most important thing is
for public servants to follow the rules and focus on providing services as efficiently
and consistently as possible. The latter case, however, is more likely to need
leaders throughout government in order to encourage groups of people within
government and help them internalise reform values. Many OECD countries are
changing the structures of their governments in response to societal changes. The 75
© OECD 2000
more a government is decentralised and “webbed”, the more it will need a broad
network of leaders to implement reform throughout government.
Finally, the need for leadership depends on the level of reform. Countries
that have chosen a path of incremental reform will be less likely to need to mobil-
ise many leaders at once to help guide major changes. The deeper and more
widespread the reform, however, the more need there is for leaders. The more
radical the reform in terms of changes to the organisation’s role and individuals’
functions, the more leaders are needed at all levels to help ease the discomfort
and resistance that can accompany major change.
What makes a leader? Leadership means different things to different
people. Ms. Brosnahan pointed out that, for many, the image of a leader is that of
a wise, paternalistic figure who makes all of the decisions and single-handedly
steers an organisation. This image of leadership is based on the historical needs
and characteristics of societies and the governments that serve them. Societies,
however, are becoming more diverse and organisations are becoming correspond-
ingly more flexible. New situations call for new types of leaders.
So while public leadership clearly includes the heads of government
agencies, the vision of leadership discussed in the Symposium tended to be
broader, including leaders as change agents dispersed throughout an organisation to
further the process of reform. Instead of being all-powerful authorities, what
makes these leaders effective is their ability to persuade people and to focus their efforts
on a common cause. As one delegate noted, “be sceptical about leadership. It’s a
matter of having many leaders instead of just a few”.
Delegates also made the distinction between leadership and leaders – leaders
being individuals that exercise leadership. A delegate emphasised that organisa-
tions should try to create opportunities for leadership instead of creating leaders per se
since picking out certain people for leadership roles took responsibility for
personal initiative away from others around them. While the heads of agencies
should clearly be leaders, others within an organisation can sometimes be leaders
and sometimes followers, depending on the issue and the context. Under this
perspective, individuals should learn to exercise situational leadership, in which they
help their colleagues make transitions in the areas where their particular skills,
training and experiences have best prepared them.
Bridge the gap between developing and implementing reform
Change agents transmit reform values and strategies. Governments that are
seeking to serve diverse societies are finding that leadership is a vital part of
reform. Change agents, acting on behalf of reformers, are needed to help their
76 colleagues understand the strategy and values underlying reform efforts. While
© OECD 2000
leadership is situational, Ms. Brosnahan came across many common elements of

leadership during the course of interviews with leaders across the United States:
• leaders are committed to a mission; leaders must be able to strategize;
• leaders are keepers of values for an organisation.
• leaders must be catalysts for change.
• leaders lead by example; and
• leaders accept personal responsibility.
In short, leaders need the same skills that are needed for the development of
reform. According to Ms. Brosnahan, leaders need to be true believers in reform. By
understanding the process in which the need for reform is articulated and a reform
plan is developed, they can better spread the vision of reform developers
throughout an organisation. In this way, leaders serve as a bridge between reform
development and implementation.
“Walk the talk.” Exercising leadership means not only communicating reform
values, but also leading by example. Leaders inspire. They can energise an
organisation by demonstrating their commitment to change. Leaders are more
effective if they personify and epitomise the reform values that they advocate.
One delegate said, “find the people who embody the values of the organisational
model that you want to sustain”. Another delegate added, “leadership is one of
the keys to cultural change. [We have to] lift the culture ourselves – change
ourselves. You’re just not talking about it, you’re actually doing it. Change the talk
and then walk the talk.” Leaders should act consistently with the reform message that
they are spreading.
Reform leaders also increase their effectiveness when they demonstrate that
they know their organisations. A leader’s task is to shepherd her/his organisation
through a period of change. In order to do this, leaders need both an understand-
ing of where the organisation is headed and of the needs of those who make up
the organisation. Leaders who have done, or are sharing in the work of those
around them will not only have a better understanding of the fears and concerns
of their colleagues, but they will also have greater credibility when asking others to
take part in reform.
Where to place leaders? Delegates agreed that the placement of leaders
within an organisation is important for their eventual success. In many cases, the
head of an agency holds the main responsibility for conducting reform and is
accountable for its success. She/he can delegate additional leadership responsi-
bility to a network of people within the organisation. Delegates recognised,
however, that not all heads of organisations are willing to embrace change. Said
one delegate, “those who are at the top of organisations have got there on the
basis of the old systems that they succeeded at and are familiar and comfortable 77
© OECD 2000
with”. In such cases, delegates felt that placing change agents just below the top
leadership gave them more of an ability to “stir things up” and advocate change as
they had less vested in the status quo.
Change agents may also be needed below political chief executives because
they have both the communication skills to work with the political level and
because they can provide continuity to reform efforts. Political leaders do not
always have the same time horizon as administrative leaders. Effective reform needs
to be able to survive political changes.
The relationship between political and administrative roles is essential.
Ms. Brosnahan emphasised the need for a clear separation of these roles, but also
a clear partnership. Professor Lindquist also pointed out the benefits for initiating
change when political and administrative leaders reinforce one another in support
of common reform goals. While separately they may be able to initiate incre-
mental reform, a partnership is necessary for comprehensive reform.
Finally, organisations seeking to develop leadership should make sure that
their structures foster leadership. Just as non-hierarchic structures need more
leaders and therefore create pressure to develop leadership, traditional hierar-
chical organisations do not tend to provide good conditions for developing lead-
ership throughout the organisation. Leadership requires free-flowing information,
individual responsibility and clear accountability. Hierarchical organisations tend
to appoint a few, select leaders rather than giving many people the independence
and flexibility to innovate and exercise leadership at many levels.
Commit to identifying and developing future leaders

Identify leaders. The first step in developing leadership is to identify potential
leaders. Ms. Brosnahan named several management experts who have sought to
identify and categorise the personal competencies involved in leadership.
Organisations can better identify individuals with potential skills and develop those
skills if they improve how they identify and measure leadership competencies. Leadership
development also means ensuring a stream of potential leaders. This involves
working with universities and other sectors to recruit “the best and the brightest”.
One way to identify leaders is for organisations to do succession planning in
order to identify those who may be able to take leadership roles in the future.
This exercise not only forces leaders to think about who on their staff has leader-
ship potential, but also what characteristics are needed to do a good job in their
current position.
Encourage mentoring and training. According to Mr. Bacon and Ms. Brosnahan,
leadership development should be mainly “on the job”, not limited to training situa-
tions. Leadership development can take place through rotational assignments,
78 including younger staff in special project task forces and other developmental
© OECD 2000
Box 29. Training as a tool for leadership development
Recognising that a co-operative leadership style is the basis for increasing

co-operation between staff, the German Federal Academy for Public Administration
has developed an in-service training programme which focuses on the develop-
ment of specific leadership qualities. Courses are offered to introduce modern
methods of co-operation and leadership and the use of staff talks as a leadership
instrument for increasing effectiveness. All ministries today guarantee that in
principle at least one per cent of working hours in each authority is planned for further
training, with a goal for staff to receive a total of about 15 days of further training over
a period of three years.
Germany
assignments. Ms. Brosnahan also recommended a formal system of mentoring in

order to make sure that all leaders share in the responsibility of developing a new
generation of leaders.
While most interpersonal skills are developed on the job, training can give
developing leaders the basic tools and insights that they need to develop their
capabilities in these areas. Leadership training can be done in-house, but univer-
sities and leadership institutions are also important resources. Ms. Brosnahan
noted that leadership training should also encompass the roles and skills of the
follower, reflecting the increasingly inter-dependent nature of the government
workplace.
Develop leadership attributes
Management and communications skills and business savvy are all part of the
repertoire of skills that leaders need. The presenters at the Symposium, however,
focused delegates’ attention on the human interpersonal skills that are less easy
to define or to measure, but that are just as critical for successful leadership.
Value emotional intelligence. Mr. Bacon began his presentation by explain-
ing that a survey of the US Senior Executive Service revealed that, among top
leaders, “softer” attributes such as flexibility, vision and customer orientation were more
valued than “hard” attributes such as technical expertise or management of
information technology. Leadership is first and foremost about people. A leader
inspires others, while lending support and encouragement to make changes that
are sometimes uncomfortable. 79
© OECD 2000
Mr. Bacon pointed out that while technical skill is the usual basis for success
early in a public sector career, it alone is insufficient for success in leading change.
Ms. Brosnahan echoed this point in her presentation: “One needs to look for
competencies well beyond those traditionally sought.” The presenters warned
delegates not to confuse technical or management skills with leadership. Instead interper-
sonal skills should be developed and valued equally with technical competency.
Both presenters placed strong emphasis on leaders’ emotional intelligence. In
addition to good management skills, a leader should show that she/he cares about
workers and can connect with them at an emotional level. A good leader is a good
listener. Leaders create opportunities for change when they use emotional intelli-
gence in performing such management tasks as giving and receiving constructive
feedback on performance, conflict resolution, forming and working in teams and
using different management styles to meet the needs of different staff.
Emphasise values. The Symposium emphasised the role of leaders as keepers
of values. “Values”, said Ms. Brosnahan, “affect perceptions of situations and they
affect the solutions generated. They also affect interpersonal relations with indi-
viduals and groups, the perception of success, the perception of right and wrong
and the impact of organisational pressures and goals.” Leaders can help others to
embrace change by grounding them first in reform values such as honesty, fairness
and integrity.
Leaders should also have an understanding of the values of the surrounding
community. Ms. Brosnahan noted that the relevant communities could be defined
at many levels, depending on the range of the reform and those affected. When
change threatens a sense of community, leaders can help redefine community by
identifying those values that people hold in common and using them to generate
a shared sense of purpose.
Learn by doing
Symposium delegates agreed that “soft” attributes are more likely to be
developed “on the job” rather than in a classroom. Developing core leadership
skills requires regular interaction with people in a work environment. In the office,
there will be very few textbook cases of how to motivate people to undertake
reform. Yet many top leaders are continually confronted with the transactional
challenge: finding that all of their time is taken up by operations and that they do
not have time left to help develop leadership.
Administrations seeking to develop leadership capacity should require top
officials to think explicitly about how to develop leadership and set time aside for
identifying and developing leaders. According to Mr. Bacon, one of the best
practices in the most successful private businesses is for senior executives to
80 spend up to 25 per cent of their time developing leaders: “Extensive involvement
© OECD 2000
of senior executives can send a powerful signal to the organisation about what
qualities are desired in its leaders and the importance of developing those
qualities within its staff.”
Given the enormous demands of work, Ms. Brosnahan suggested that, in
some cases, a chief executive could hand over day-to-day management responsi-
bilities to a manager in order to be free to focus on the strategic role of leading
change, including leadership development.
Practice job enlargement. Mr. Bacon emphasised giving promising young
leaders the opportunity to do work beyond their job description: “In recruiting,
developing and nurturing future leaders, the public sector should consciously
attempt to give promising staff opportunities to test and develop leadership skills
by working on the most complex and important public sector problems.” This
approach not only gets the job done (solving the problem), but also develops
leadership skills and increases young people’s commitment to public service as a
fulfilling career choice.
Leadership development is a constant process of trial and error during which
individuals gradually develop leadership instincts. Mr. Bacon warned against the
temptation to always turn to proven performers to take up leadership challenges,
thereby missing the opportunity to stretch less experienced staff beyond their
area of current competence.
According to Mr. Bacon, the restructuring of government means that “whole
new approaches need to be developed for managing core business processes,
interacting with customers and other stakeholders and demonstrating how govern-
ment functions create value for the public”. This task is also an opportunity to
develop leadership at all levels of government.
Encouraging staff mobility. Staff mobility helps individuals broaden their
understanding of the mission, processes, issues and stakeholders. Mobility
provides a breadth of experience that can help test for and build flexibility and adapt-
ability to new circumstances, ability to manage diverse staffs and respond to new
customer groups. It helps individuals understand strategic issues, the range of
possible visions and the value of building networks and alliances.
Ms. Brosnahan observed that it is especially important to encourage move-
ment between sectors. As noted earlier, government is just one player working
with many others including the private sector, local government, the non-profit
sector and international organisations. Government leaders increasingly need to
understand these other sectors and how they interact with government. Time
spent outside of government is also useful for young leaders to learn how other
sectors deal with change. Ms. Brosnahan recommended fellowships to allow young
leaders to work in political environments to better understand the political
process, to build networks and to increase leadership skills. 81
© OECD 2000
Delegates agreed that it was not always easy to create leadership opportuni-
ties. Traditional leaders tend to want to keep their best staff rather than risk losing
them by allowing them to experience other options. However, workers are more
likely to come back to an organisation if they feel that it is consciously seeking to
help them develop and expand their capacities, including leadership skills.
Increasing mobility is part of the overall change in the government workplace that
is necessary to keep good staff and to develop leaders. Mr. Bacon identified a
number of ways to increase staff mobility:
• use lateral transfers within large agencies or between agencies;
• consciously choose staff to participate on special projects and task forces;
and
• rotate key managerial assignments to promising staff.
Create incentives for leadership

Build on the ethos of public service. The major competitive advantage of the
public sector is that it offers the opportunity for senior officials to do challenging
work with social significance. Delegates tended to agree that most senior officials in
government are in the public service for reasons other than compensation. In fact,
the notion of public service attracts many people to government work at all levels.
As discussed earlier, however, government should think explicitly about how to
create additional incentives for leadership.
For promising, but less experienced leaders, government can provide incen-
tives to exercise leadership in the form of opportunities to build leadership skills
and to receive recognition for their work. Leadership practices, such as risk-taking,
innovation, fostering collaboration and strengthening others should be rewarded
over safe practices that fail to extend beyond the individual’s job description. An
organisation that values seniority over ability can be hindered in its efforts to
foster strong leadership.
Leadership opportunities in themselves can be a strong incentive for public
servants to participate in reform. Many current reform changes are removing some
of the impediments to fostering leadership in the public sector. Problems such as
changing mission and hazy vision result in confused expectations, making leader-
ship difficult. Organisations should learn to be less risk-adverse in order to
provide opportunities for change agents the freedom to operate.
Tie incentives to performance. In some cases, however, top leaders may need
additional incentives beyond the knowledge of a job well done in the public
service. This is especially true when government is trying to lure leaders away from
the private sector. As the role of government evolves, the public sector is not the
only place where individuals can do public service; the private sector also hosts
82 numerous challenges for good leaders and usually for much better compensation.
© OECD 2000
Box 30. Taking responsibility for change
New Zealand led its reform efforts with a fundamental transformation of the
culture of the Public Service by establishing a new generation of senior officials who
supported reform and who could provide the necessary leadership. The new sys-
tem of public management shifted the responsibility for management on to depart-
mental heads; therefore success or failure depended largely on their response.
Some senior officials, however, were resistant to change or did not have the
skills to take on new responsibilities. Particularly during the initial stages of
reform, it was often necessary to remove, or override the top layers of manage-
ment from state sector organisations and departments, and to replace them with
people who had the skills required to implement and manage change. In some
instances people were appointed specifically to implement change.
New Zealand
Ms. Brosnahan urged the review of compensation for chief executives. In some
cases where a task is particularly demanding, “the broader intangible rewards of
being involved with the public sector are not necessarily sufficient to offset the
higher salaries offered in the private sector”. Increased compensation, however,
should be tied to performance, with a focus on long-term strategic change. While
the leader should be held accountable for overall outcomes, his/her impact on the
organisations’ overall performance can also be measured in terms of specified
outputs which link back to the desired outcomes.
Leaders from the inside or outside? Delegates seemed to have two major
perspectives on the development of leaders. On one hand, leaders within govern-
ment tend to have more credibility because they know the organisation and
understand the political and institutional contexts. Since leadership is also about
change, however, other delegates were worried that those who knew the organisa-
tion too well would be too reluctant to bring about real change and instead seek
to protect the status quo. From this perspective, bringing in new people from
outside an organisation is a way to signal change.
Leaders at top levels – such as heads of agencies – will continue to be
recruited from other sectors, especially when they have proved their ability to
turn an organisation around. But the private and non-profit sectors should not be
the only places that teach people to live with change. The goal of government
should be to develop leaders internally that are used to continuous change just as it
seeks to develop organisations with the same capacity. This is the best prepara-
tion for leaders to assume top positions within government. 83
© OECD 2000
Mr. Bacon told delegates that the public sector needs to begin by recognising
that there is a public leadership shortage and that it is unlikely for leadership skills to
be bought on the external labour market. This is especially true for the level of
leadership that operates below the top level. Knowing that they have to create
their own leaders provides the incentive for senior officials to invest in leadership
development.
Better feedback makes better leaders

Make leaders self-aware. Accountability of leaders is just as important as for
other public servants, if not more so. Rather than focusing on individual outputs,
the measure of leadership should be primarily seen in terms of final outcomes.
Since they are encouraged to take greater risks and to innovate to find solutions,
leaders should be allowed to make mistakes. They should also be encouraged,
however, to learn from their mistakes. Leaders need constant feedback in order to
figure out whether or not they are on the right track.
Mr. Bacon discussed the findings of business research that showed that
successful leaders tend to be more “self-aware” – that is, they think consciously
about the impacts of their actions and act strategically. One tool for cultivating
self-awareness is 360-degree feedback which involves structured collection of
input from subordinates, peers and superiors. This feedback helps the individual
gain a better perspective on communication, leadership and management styles.
The questions can be tailored to the specific leadership competencies and values
of each agency.
This system is likely to be perceived as initially threatening to traditional
notions of the relationship between superiors and subordinates. In order for it to
work, the top officials of each agency should support it and participate in it
themselves. This approach also provides hard data on whether or not managers
actually practice the values and principles of vision and strategy statements.
Make organisations more self-aware. Finally, organisations themselves need
to be aware and accountable for leadership development. Mr. Bacon recom-
mended to Symposium delegates the four following performance measures to
see if their organisation is doing enough to develop leadership:
• Monitor the number and location of staff currently on rotational or other
developmental assignments.
• Require senior officials and managers to name their replacements in
advance in case they retire or leave (even if unofficial, this exercise forces
discussion about leadership capacity within the organisation).
• Review the aggregate results of 360-degree feedback surveys to identify
84 leadership competencies that are lacking within the organisation.
© OECD 2000
• Monitor the amount of time senior officials devote to developing future

leaders and their impact in exposing younger staff to new responsibilities.
Developing leadership capacity is a key component in creating administra-
tions that can continuously adapt to changes in society. Governments are seeking
to move beyond reform by giving the different parts of the administration the
tools to innovate and act independently to achieve a coherent set of goals.
Reaching this objective will ultimately permit governments to respond to any
challenges that the future may bring.
85
© OECD 2000
IV. Where Do We Go from Here?
“You need to plan for the future. Government needs to be a leader and it’s up to the public
sector to engage and facilitate that process. We certainly have a commitment and a need to
be forward looking and not just respond to past needs. A danger is that public sector reforms
can keep looking in a rear vision mirror for needs and not enough to the future”
(Symposium delegate).
The Symposium, “Government of the Future: Getting From Here to There”
sought to lay out the future challenges that today’s governments are already
starting to face and the shape that governments might take in order to effectively
respond to those challenges. With the help of presenters and delegates, the
Symposium mapped out a wide array of demographic, institutional, economic and
technological changes. These changes are not only creating new challenges for
government, but they are also influencing the tools that governments have at their
disposal, their partners in public service and citizens’ own expectations.
The Symposium helped to clarify many of government’s upcoming challenges.
The need to re-establish trust in government, to re-think the role of government,
to move towards more strategic policymaking and to better consult citizens are all
examples of how governments are looking towards the future to define a new
reform agenda. Finding the right response for each country, however, is a more
difficult task.
The Symposium also looked at countries’ current reform efforts and drew
some valuable lessons. It demonstrated that governments have already gone a
long way in improving services, increasing accountability and transparency and
improving internal management. Delegates shared from their rich experience how
they have made government work more efficiently and how they have, in many
cases, overcome the fear of the unknown in establishing performance-based
cultures in their national administrations.
PUMA recognises, however, that all of this is required and much more. In
order for governments to successfully navigate the changing terrain of society,
they will have to figure out not only how to improve their own performance, but
also how to anticipate new challenges and how to work with other public actors in
new networks and partnerships. 87
© OECD 2000
PUMA recognises the difficulty of looking beyond today’s challenges. It is no

longer simply a question of adapting current methods of problem-solving to
tomorrow’s issues. Said Professor Schick, “it is useful to distinguish between those
reforms that lie within the current interests of national government and those that
might emerge in the future. There is a high probability that just about all reformist
governments will tackle the current issues, but a significantly lower probability
that they will deal with potential future issues.”
In order to respond to future challenges, countries will need to think about
the future shape and perimeter of government. The perimeter of government is
getting blurred and expanding, with many solutions coming from outside of
government. Government needs to understand the ever-increasing number of
interactions at its boundaries. Now more than ever before, government will have
to work with academics, non-governmental organisations, the voluntary sector and
for-profit contractors in order to find and implement solutions to new public
problems. Furthermore, in the context of increasingly decentralised government,
governments need to rethink the roles and relation between centres of govern-
ment and government agencies that are evolving to meet new challenges.
Today’s practitioners are feeling more overburdened than ever with the
demand that they solve today’s problems while keeping an eye on the future.
PUMA’s overarching perspective on governance activities in all OECD countries
gives it a unique comparative advantage in analysing diverse approaches to
governance. And PUMA’s international character allows it to share a global
viewpoint with countries as they consider the new public challenges facing them
as a result of continued globalisation.
PUMA remains committed to using its perspective to provoke practitioners to
identify future challenges to government, while focusing on solutions that are
grounded in practitioners’ needs. The Symposium has identified the need for a
space in which practitioners can look beyond their everyday concerns to focus on
a broader view, while bringing with them their vast experience. PUMA will
continue to try to provide such venues in order to help OECD Member and non-
member countries better prepare governments of the future.
88
© OECD 2000
V. SYMPOSIUM PAPERS
A Changing Canon of Government:
from Custody to Service
Roberto Carneiro Professor,
Catholic University of Portugal
Prologue
The starting point of this paper is similar to the running of an external audit.
We shall endeavour to take an outside and dispassionate look at the present
forms of government: structures, shape, democratic arrangements, challenges and
shortcomings. In doing so, our hope is to raise some difficult issues; and perhaps
our common imagination can be put to work in questioning our existing institu-
tions and in searching for alternative designs.
The essence of our approach is narrative. That is to say, strictly paradigmatic
modes of thinking will be avoided. Likewise, a holistic approach is used through-
out the essay; minute details of the clockwork of government are outside the
scope of this paper.
Our journey will lead US to scan two favourite domains of the social psycho-
logist: the landscape of action and the landscape of consciousness in the public
sphere. Speech, agent, intention, goal, reform, shall be preceded by knowing,
thinking, feeling, understanding, comprehending the complex flow of action, and
acting appropriately within it.
Our ultimate goal is not to unravel the riddles of democratic governance. In
spite of this, the present inquiry is not destitute of intent. Advancing democratic
ideals of government and bolstering democratic practice are two underpinning
assumptions of the entire exercise.
By revisiting some long-standing foundations of government, we shall be
acknowledging a number of weaknesses that impair democratic institutions. In
doing so, we shall also be expressing our deep faith in human ingenuity to perfect
social institutions and to rehabilitate the place of public purpose in a market-
driven age.
The underlying driver of social advancement is a discourse of civility: raising
civic competence and improving our common capacity to conduct joint delibera-
tion. Citizens are the generators of common wealth: deliberating together and 91
© OECD 2000
carrying forward social enterprise. Education stands out as the most powerful
lever to elevate the quality of democratic life. For centuries teaching in our
schools has been held ransom to the manufacture of workers needed to sustain
economic growth; equity (promoting social mobility) and democracy (preparing for
active citizenry) have been relegated to a lower priority. It is time to nurture a
democracy-friendly school set out to reverse the receding trend of community life
in a society of individuals.
Because societies are ever more complex the analytical tools currently used
to tackle problems of governance are outmoded. We shall have to turn to the
knowledge of complexity. Under this assumption, a line is drawn between systems
operating “near equilibrium” and those operating “far from equilibrium”. While
the former configurations tend to seek custodian modes of protecting the prevail-
ing interest, the latter will take the shape of service-driven governments commit-
ted to fostering risk on the path to innovation; realising the public interest
identifies with serving the claim for societal change. Good governance demands
the ability to perform in environments both “far and near equilibrium”.
Governance in the 21st century is a demanding challenge. Whatever the
perspective, it is hard to believe that improved government performance in the
next century will be compatible with government models of the 19th century.
“Government as usual”, it is widely thought, falls short for responding to new
challenges. Two devastating world wars in the current century and a proliferation
of ethnic conflicts in its last quarter, broadening gaps across different measures of
equity, pandemic threats coupled with increased human mobility, environmental
decay, are but a few indicators of the need for improving global governance on
our planet.
The present paper is structured in four parts:
• Part one presents the arguments upholding the quest for new forms of
government.
• Part two deals with governance under unstable conditions: i.e. operating far
from equilibrium.
• Part three elaborates on the central issue of trust as a key to sustainable
governance in “near equilibrium operating environments”.
• Finally, part four takes up what we consider to be the DNA of government.
This is not about theoretical designs, nor hints to reform legislation; nor is it
about empirical models, or even elementary building blocks as a recipe to
re-organise future governments. It will simply refer to the importance of
people and values when rethinking fundamental government architectures.
In referring to people, we shall endorse the broadest understanding of a
vast constituency of government: from legislators to policy-makers, from
senior executives to managers in public organisations, embracing leaders
92 and followers committed to the advancement of the public service at large.
© OECD 2000
Symposium Papers
Each part is divided into thematic sections, each with a standard presenta-
tion. After briefly setting out the context, a set of open questions follows; the
section is then completed by a number of paragraphs on “key elements” to further
the inquiry into the questions.
The more alluring, and perhaps compelling, theoretical questions are
presented in an Annex. They provided the conceptual framework and mental
artefacts for the development of the paper.
I am indebted to PUMA for having set the challenge to collect and present a
number of personal ideas. Also, for providing me with valuable support and
access to state of the art literature. PUMA’s commitment to improved governance
is well worth our joint efforts.
The quest for New Government
The limits of past configurations
Context
There is growing discomfort with existing arrangements of government.

Citizens demand greater democracy and transparency. Communities seek more
autonomy. Business leaders point an accusing finger at the lazy pace of
governments. Interest groups are prodigious in showing displeasure with the way
governments resolve their disputes and issues. The media are eager to report
dissent and nurture mistrust. Lack of effective governance ranks high on the list of
major societal concerns.
The modern State stems from the “hegelian ambition” of creating one prime
agent of history – impersonal, objective and rational – that is the entrusted
guardian of cultural conformity and homogeneity, The traditional modus operandi of
the nation State remains anchored to paradigms of territorial integrity, as a single
source of authority. The Nation-State is in charge of a specific territory, catering for
a population living within it and managing a local and relatively static endowment
of natural resources.
A new technological paradigm enhances mobility, networks, speed and
connectivity, while social order has become based on multi-cultural diversity and
the triumph of difference. The Nation-State is unable to cope with the complexi-
ties of a multi-polar society, while the surge of globalisation during recent decades
has increased citizen expectations for more governments to take a pro-active
approach. Public policy-making does not escape the demands for wider choice
and greater responsiveness. 93
© OECD 2000
Questions
1. In a world of relentless change, are the limits to the existing shapes of
government recognised within the systems of power?
2. What are the “internal” drivers of change? Are there already signs of future
trends?
3. What are the key external factors influencing the momentum for change in
OECD governments?
4. In a period when changes are big and imperative (economy, life-styles, val-
ues, cultural intercourse, spread of democracy, technology), can govern-
ments afford to proceed with incremental change only?
Key elements
The following are among the leading environmental factors explaining why
and how governments change:
1. Media imposition.
2. Fiscal pressure and sustainability.
3. Weight and interplay of lobbies.
4. Networking sources of authority.
5. Static vs. dynamic forces.
These externally driven factors are affecting the way governments respond to
challenges and the pace at which they struggle to remain “modern”.
Media
The role of the media can be in two directions. Downstream, to illustrate the
major preoccupation of contemporary government in performing to the expecta-
tions of Homo Mediaticus (the on-line citizen, a compulsive emitter and receiver
of messages). Indeed, a key function of centres of government is to provide an
intelligent interface between government activity and media agents. Upstream
channels comprise the wealth of public opinion that the media voices and
amplifies in the exercise of societal pressure on government institutions. In the
modern democratic ethos the media is increasingly taking on a watchdog or
appraisal role vis-à-vis the Administrations. While the “old media” – based on
notions of editorial preferences, broadcasting and programming – tended to
establish a balance between down and upstream approaches, the new media –
much more prone to instancy, disintermediation, webcasting and interactivity –
set a more unstable platform for political action and transmission to large constitu-
encies. Thus, it is increasingly true that political choices are tailored to anticipate
media reactions and timings. Moreover, new centrist governments are set to
remain pragmatically attuned to media preferences in a move that is linked with
94 the proliferation of electoral cycles and with the rise of pragmatic politics.
© OECD 2000
Symposium Papers
Fiscal pressure and sustainability

Times are rough for fiscal policies. Mistrust of government and a greater
consciousness of the value of intergenerational sustainability have led to mount-
ing demands for balanced budgets. With the growth in the size of government,
servicing the national debt – a result of accumulated deficits – has been the
category of government spending that has most increased in the last three
decades in OECD countries. By the same token, regional economic integration
seriously curbs the use of expansionist public spending in times of economic
downturn. Thus, in times of economic squeeze, governments have been required
to display unprecedented creativity in developing organisational solutions that
are both economic and focused on improving performance. There will be continu-
ing pressures to curb public spending on social services such as education and
health; a general “time squeeze” on voluntary care activities could dangerously
compound the fiscal squeeze on public goods in periods of hardship. The obliga-
tion to produce more and better outcomes with fewer resources is an opportunity
to spark innovation and ingenuity in the public sector.
Lobbies
The rise of organised civil society goes hand-in-hand with the emergence of
strong lobbies. The effectiveness of a particular lobby group can currently be
measured by the visibility of its interest in the shape and denomination of
government departments. In a democracy of opinion, strong lobbies can stall or
drive sectoral policies, especially if governments are weak or thinly supported by
legislatures. These very same lobbies can act as major initiators of government
re-engineering. Social negotiation is often heralded as a modern version of demo-
cratic rule. Much too often, it has proved to be a beacon of government-lobby
transactions determining structural options for the design of government to meet
the competing claims among the most strident voices in society.
Networking authority
The Nation-State was a unique form of governance for exercising power over
the last 200 years. The basic assumption was that of a custodian State: in charge of a
specific territory, catering for the population living within it and managing a local and
relatively static endowment of natural resources. Since then the world has under-
gone dramatic changes: geography and territories matter less, population and
knowledge are mobile, natural resources are less important as a source of economic
power. Rather than managing stocks, public bodies are faced with the need to
manage flows (knowledge, people, capital, cross-border companies). Authority in
modern societies is diffuse and spread “inwards”: through local actors, pressure
groups and responses to greater self-government. The sovereignty of a State is also
increasingly intertwined “outwards” with supra-national sovereignties. 95
© OECD 2000
Static vs. dynamic forces

Regulation is achieved through broad partnerships. These partnerships no
longer rely on achieving a stable public interest; partners are increasingly vocal in
advocating greater de-regulation, capable of accelerating change in service-driven
delocalised economies. In fast-changing operating environments it is important
that government does not stifle enterprise, strangle innovation, curb dissent,
divert talent from commerce or industry, chase away investors. The “homeostatic
state” – striving to live with little or no change at all – is the first and foremost
enemy of a dynamic society.
The formation of a new public and policy agenda
Context
Comprehensive forces interact to produce a latent new public agenda. This
reflects the turbulent and complex interactions that take place in contemporary
societies. Hence, the ultimate features of a self-organising public system will
depend on the interpretative filters, which translate pressing public agendas into
new policy responses.
A configuration of government that is “highly responsive” will prefer
predictive strategies – governing by anticipation on the edge of borderline risk-
taking and of change management. A “slow” public sector will choose an adaptive
path – governing by polling and reacting to new agenda outbursts – or simply not
recognise the need for change. Nevertheless, it becomes a matter of time and of
mounting opportunity costs. Delaying fundamental change (“zero policy making”),
in a world caught by the speed at which big mutations take place, is synonymous
with missing the right moment in history and having to eventually face more costly
alternatives.
One piece of evidence of overdue change, linked to failure to address
rigidities in the arena of public sector governance, is the fact that many OECD
countries, particularly in Europe, have reached a total government expenditure
figure close to 50 per cent of GDP. The entitlement net is being stretched to the
extreme: citizenship has often come to mean eligibility for social services and
welfare benefits.
The sheer limits to an extended configuration of government approaches
from the past are now overwhelming…
Questions
1. Is it possible to monitor the key factors influencing the formation of a new
96 public agenda in open and plural societies?
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2. How would we rank the key sources of public agendas: societal and
economic change, environmental issues and shared sovereignty?
3. To what extent do media express preferences in triggering the symbolic
demands and mutual reinforcements originating from various sources?
How legitimate is it for governments to “follow the media” when these
indications covertly alter the electoral platforms on which government was
chosen?
4. How do we see the future role of knowledge and lobbies in influencing
tomorrow’s public sphere?
5. How is democratic governance challenged by the new policy agendas?
Key elements
Public agendas are constantly expanding and changing. In open societies the
interplay of interest groups in the determination of public priorities is constantly
at work. Also, policy agendas are unpredictable; unforeseen events test the ability
of centres of government to manage crisis.
Public issues can take a long time to find their way onto public agendas and
even longer to find a place on policy agendas, except where governments are
acting strategically, and in anticipation. Environmental protection and urban
exclusion are two examples of this progression. An unpredictable policy agenda is
one which continually has to confront crises management.
Newly emerging major trends in public agendas can already be detected and
include the following:
• Societal Change
– City self-government (once the cradle of democratic institutions).
– Tribalism, extremism, heterogeneity, ethnic bigotry.
– Digital exclusion (haves and have-nots in the digital world).
– Demographic change and the failure of social security systems.
– Third sector rise, voluntary organisations and NGOs.
– “New business” commands.
• Shared Sovereignty
– Global and regional governance (global finance, crime, economy, ideas,
civil society).
– Supranational clustering and regulation – the rise of cross-border
communities.
– Rise of an international civil society (global networks of non-governmental
organisations). 97
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– Subnational autonomy – the rise of intra-border communities.

– Standardisation of policy (branding in government).
– New rules, extended multilateral agreements.
• Environmental Issues
– Common goals.
– Multilateral regulation.
– Food supply panics.
– Climatic changes unleashed by uncontrolled pollution.
– Threats originating from two ends: aggressions from the consumption pat-
terns of the rich; pressures from the narrow choices left to the poor peo-
ple.
– Depleted stocks, less biodiversity, fewer forests.
The following are among the most critical public issues that will probably
require increasing attention:
• Setting standards and controlling for quality.
• Regulation and arbitration of conflicting forces.
• Franchising of government models.
• Balanced distribution of services.
• Managing multicultural relations.
• Building cultural identity and the pursuit of national cohesion.
• Catering for environmental quality.
• Dealing with growing inequalities and gaps in dual societies.
• Tackling citizens as receivers and donors.
Some – though not all – items on the public agenda will be able to integrate
future policy agendas. The point at which political and electoral preferences inter-
sect will lay the ground for public action.
Certain issues can give rise to serious problems with democratic governance.
This is the case with global concerns that transcend the scope of any single
government, such as:
• Globalisation of crime.
• Control of extremist groups.
• Protection of privacy.
• Rise of tribalism and the spread of predatory identities.
• Immediacy and good timing in policy management.
98 • Disintermediation or reintermediation in the political framework.
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Setting the Agenda for “New Government”
Market
Societal
Change Policy
Technology
Environment New New New

Issues Agenda Agenda Government
Knowledge
Shared Lobbies
Sovereignty
Education
The determinants of “New” Government
Context
“New” government is not solely a product of new demands. More responsive
government could be achieved by improving interfaces with customers without
endeavouring to re-shape the core of government. Equally important are the
factors in society that generally affect the shape of supply as well as the evolution
of organisations: this section of the paper will attempt to deal with some of the
overriding issues in a supply-side approach to “new” government.
Deciding to change the course of governance by strategic choice or as a result
of political anticipation takes boldness. To increase the likelihood of success,
there needs to be a timely assessment of demands combined with a clear-headed
evaluation of supply-side factors. Both sides need to act in partnership to bolster
a proper re-design in the blueprint of government. Without anticipation, structural
change occurs only after severe economic pressures or because of social decay
(growing disaffection with established values). In the latter case, the scope to
innovate is severely reduced and the “renewed” government tends to replicate
the mental artefacts that underlie “old government”.
In summary, new government is sustainable only when it is the consequence
of a strategic will to address the issues related to the business of public policy
making and delivery. Furthermore, the effectiveness of a new formula for protect-
ing public interest is always the realisation of a dream, a leap forward in the
historical drive to add meaning and purpose to collective life. “New government”
is held accountable to history. 99
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Questions
1. Why are government models so much slower to be challengeed than their
corporate counterparts?
2. Are there prevailing constituent values determining a preference for
conservation in the public sphere, unlike the case with competitive busi-
ness environments? What is the balance sheet of change and conservation
values in contemporary government?
3. Are democratic governments held hostage to change-averse majorities? Or
is this a matter of inadequate interpretation by power brokers who become
“dormant” once in office? Or are competing parties, once in power, locked
into logic of expanding and preserving government to accommodate
campaign promises and the requirements of slow-changing bureaucracies?
4. How can the longer-term interests of society be weighted against short-
termism in the assessment of government performance, and made
accountable across electoral cycles?
Key elements
Four sets of factors explain the mood to change the internal structures of
government: market, technology, knowledge and education. The mix of these
factors provides the fundamental directions for modern government thinking.
Three directions that set the agenda for the re-engineering of government can be
detected:
• Targeting policies and groups.
• Pooling learning cultures.
• Webbing and networking styles.
These directions will be further explored in the following sections of the
paper.
“It’s the market”

Competition is the key driver of business performance and change. It is a key
variable in explaining innovation in corporate models: remaining competitive in
the market is also the fundamental force that leads to the dismantling of “old and
under-performing” systems, in a process not unlike evolution in biology. Rightly
so, benchmarking – an eloquent remnant of industrial spying at its best – has
turned into a fashionable activity of management gurus. Similarly, governments
are no longer immune to competition. Comparisons between structures and
performance ratings are becoming frequent; and performance measurement is
likely to advance and be refined in the near future. Likewise, government overall
100 ratings and appraisals of specific public policies are strongly evident in the
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general assessments of national competitiveness currently produced by the most

prestigious analysts. That said, it is fair to comment that the delivery of public
goods will not necessarily submit to a market epiphany that is increasingly
heralded for private goods. But the logic that public goods need to be provided
by a supra-market entity does not mean that the provider, i.e. government, should
be allowed to continue to provide services without first having to ensure that
those services are of a high quality. Nor does this mean that government should
continue to provide services without questioning whether government still must
be the prime provider. Government provision and delivery of pure public goods
is, by definition, a monopoly. However it should not be an unregulated monopoly,
but rather a monopoly regulated by stakeholders in society. There is much to
observe and learn from the corporate sector, without losing sight of the appro-
priate balance to be struck in the theories of government. Ignoring business
imperatives with potential to improve the performance of the State can be a costly
mistake. One particular business trend that merits consideration in today’s turbu-
lent economies is the rise of the “Big Company” as a response to uncertainty and
to falling margins – a consequence of global competition. Dreaming big (“too big
to fail”) is producing a wave of mergers and acquisitions without precedent in
recent history. By definition, the State does not globalise. But this does not mean
that a sizeable transfer of competencies from the national sphere to supranational
levels of government is not taking place. “New forms of government” must remain
attentive to this re-distribution of tasks and responsibilities between the different
tiers of administration. A parity of governance standards – corporate and public –
determines the future of our societies.
Technology
It is commonplace to affirm that technology has driven most societal changes

that occurred in the course of the last two centuries. With the advent of new ICT
(information and communication technologies), the technological change became
inescapable; the plummeting cost of ICT is fuelling prosperity in high-income
economies. The world is becoming divided in two halves: analog and digital. The
impact of digital networks pervades all aspects of the human life, from entertain-
ment to work, and worship to learning. Even governments cannot escape the trend
to “log on”, in other words to join the “connectivity” membership. Technology can
open fast tracks to government. Knowledge-based Internet governance is able to
accommodate diverse national needs. Electronic government, direct policy
consultation, electronic town meetings, digital citizens, internet procurement of
public goods, paperless bureaucracies, virtual classrooms, multimedia public
boutiques, are but a few of the emerging responses. Most impacts tend to be
appraised from the customer’s viewpoint, that is to say, by assessing interfaces
between government and citizen. Although not explored further in this report, 101
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much more can be said about the potential influence of new technologies on two
other fronts: improving the internal efficiency of public organisations and their
communication flows; enriching the pool of intangible assets currently available in
public office (knowledge of citizens’ preferences, accessing world-wide data
bases, cross-referencing public policies). Hence, technology can be extremely
effective in assisting the race for differentiation. One problem is that globalisation
is intrinsically authoritarian: it imposes the will of the stronger on the weaker.
However, nano and microtechnologies can help reverse that tide, and support
small communities to regain autonomy; a technology-driven generation can aspire
to distinct destinies in a networked world.
The knowledge age
The rise of power based on expert knowledge is driving the information

society and the new economy. Thus, it comes as no surprise that knowledge
shapes both social policy and the institutions of everyday life. The claim on expert
knowledge carries high value and so does the capacity to utilise problem-solving
knowledge and skills. Rationality believes that professional knowledge and
balanced ideas can change the way in which the world is governed. By the same
token, knowledge-based economies are believed to be more sustainable than
others based on traditional ways of producing goods and services; this contro-
versial belief explains why global trends pay scant attention to the place and role
of “native knowledge” (that which springs from local cultures and tacit – not
codified – modes of knowing). The knowledgeable government relies to a high
degree on expert advice and technical judgement to carry out its duties. Knowing
to know and to live in harmony with current knowledge is not a simple task,
whether in humans or in organisations. A wise government – successful in putting
human and social knowledge to work in the pursuit of happiness – is bound to a
number of duties: managing conflict and contrasting views; valuing contacts with
difference; integrating knowledge and skills into biological patterns of behaviour;
knowing in advance and discerning before others; stimulating cosmopolitism as
opposed to narrow parochialism; building social capital and cohesion in society. A
policy inquiry into the realm of new knowledge will focus on knowing what and
why (the traditional modes of realising knowledge). But it will equally contem-
plate two further dimensions of knowledge: the problem-solving and reasoned
experimentation dimension (knowing how); and that pertaining to the social
dimensions of knowledge acquisition (knowing who).
People, education and values
The tiniest company learns to understand how customers’ taste changes.

102 Moreover, its longevity is contingent on its capability to recognise early signs of
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change and to provide added value in satisfying new needs of customers. Going
still further, successful innovators can themselves create new needs that greatly
increase customer wellbeing. Governments will also have to learn to operate on a
similar logic. People and societies change a lot, at an ever quicker pace. The
formidable rate at which access to education has been democratised during the
present century is the driving spin. Educated citizens make educated choices. The
demands on quality are commensurate with the educational attainment levels of
the population. The same applies to needs to participate, self-determination and
community responsibility. For an open society, active citizenry is a powerful deto-
nator of change. The values and attitudes on which a secondary educated society
rest differ substantially from those of an illiterate constituency (or holders of only
basic education levels). Government policies and actions are held more account-
able to the different constituencies: it is not sufficient to do “right”, it becomes
necessary to explain clearly and fully why and how the government is doing “right”
and at what cost.
Learning to operate far from equilibrium

Theories of complex systems provide US with a powerful tool for interpreting
change. In this light, government change is better understood in terms of
“punctuated equilibrium”, i.e. long periods of policy stability which are inter-
spersed with short spasms of instability and major policy leaps. In other words,
this is a typically biological behaviour; one that explains evolutionary paths with
alternating phases of incremental and radical change, i.e. the opposite to a purely
mechanical continuity.
This chapter looks at the features of a government operating far from equilib-
rium. This is a case – lower in probability but highest in change potential – where
governments face sharp alternative paths and stark choices (“bifurcations”), and
when a choice determines a significantly different future from that of the past.
Learning to operate “far from equilibrium” demands higher-order crisis
management skills; that is to say the capability to turn threats into opportunities,
by taking advantage of imbalances to overthrow paralysing inertia. These same
skills are important for avoiding excessive erosion of the social fabric when disrup-
tive patterns of daily life prevail.
Managing flows – faster, smaller, integer
Context
The Nation-State flourished under the covenant of administering and
expanding a territory and controlling for space. Within those defined territorial
boundaries the industrial State was expected to: ensure territorial integrity; 103
© OECD 2000
protect its “nationals”; manage the endowment of natural resources. Year after
year, the assets manager-State would diligently replicate its mandate. But in
recent decades, mobility is redefining the rules of the game.
People travel, companies delocalise in search of cheaper production factors
and higher productivity levels. Capital circulates throughout the planet “in real
time”, information is unbounded by time or space. Innovation creatively destroys
and re-deploys competitive advantages. Knowledge is increasingly open and
international, rather than being subjected to the former notions of proprietary
ownership. However, critical knowledge to business competitiveness and to the
maintenance of strategic power in the world remains very much concealed. To this
end, governments play a pivotal role in ensuring the free flow of public knowledge
and combating monopolies of weightless goods with a high knowledge content.
The new State is part of a wide constellation of players. Spatial strategy is giving
way to strategic time management and public policy is seen as one enabler of
development among several others. Governments are no longer regarded as the
guardians of stable assets. Their main function is turning to the timely manage-
ment of flows; their role is increasingly perceived as akin to that of strategic
regulators – acting on behalf of the community – of a multitude of agents, rather
than sole and monopolistic dispensers of public goods.
The exact scope and boundaries of strategic regulation are unclear. Further
research is necessary to resolve conflicting views on security and risk, building a
general theory on regulation. Even the marketplace model accepts that govern-
ments may set up the basic rules of property and contract; moreover, it tends to
postulate government protection against market failures, namely preventing
monopolies and monopolistic practices, especially when current technology
developments are so easily prone to establishing market dominance by a single
player. The role of public authority in ensuring anti-trust action is expected to
grow. This is especially true insofar as democratic societies are expected to
respond for the woefully uninformed and to cater for those utterly disempowered
by market forces.
Questions
1. How would a flow-managing government differ fundamentally from an asset

managing government?
2. Are flows always unpredictable and volatile, or can we foresee situations of
“steady-state flows”, close to equilibrium?
3. Is there an “exceptionality” surrounding unregulated flows of bits and
bytes in a de-materialised world? Are cyberspace flows to remain a new
104 territory of customary or unwritten law?
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4. Do fiscal constraints impose limits on the management of flows? What

remedies can help overcome these constraints?
5. How could conflicting flows be reconciled in public policies: employment
vs. equality, universality vs. quality, competitiveness vs. equity, market vs.
distribution?
6. How can flow management be reconciled with democratic change to the
“flowkeeper”?
Key elements
The contemporary State plays a leading part in ensuring “strategic order”, or
in sparking “controlled disorder” in a society. In favouring policies of innovation it
can inspire risk and change. By signalling a preference for stability, governments
can seriously deter a healthy propensity for change.
The fabric of OECD societies denotes high levels of saturation running along-
side the currently high indicators of affluence. The lesson is that societies
swamped in material goods still put a high premium on governments that mediate
between reality and dream, that propose to bridge the present and future, and
that can offer the quantum of visionary leadership to allow people to “fly”. The
difference, in terms of past challenges, is not merely at the level of intensity; it is
also in kind. Governments are no longer “interpreters of an ideology”; they have
become “architects and designers of futures”.
It is in this capacity that governments can tip the balance in societies, produc-
ing the discomforts of thinking beyond the strict boundaries of daily satisfaction.
Concentrating on flows is about reaching into the future as a place of hope; it
puts a claim on the public commitment to seek to promote, as a central cultural
and democratic goal, reflective and deliberative debate about possible courses
of action.
A strategic government identifies the clear cut-off point between regulating
more of the past and formatting a diverse future. In times of uncertainty and risk,
public policies need to close the gap between the “excluded” and the
“established” in society. These policies would set in motion the desire for a
different set of concerns in society.
The learned government – smarter, sooner, and closer
Context
Learning is the much-sought attribute of adaptive and strategic organisations.
This is the imprint that separates winners and losers in the knowledge race. Our
current management lexicon overflows with hyphenised applications: life-long
learning strategies, learning organisations, learning companies, learning societies,
learning cultures, learning individuals… 105
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Participation in a knowledge-driven society is premised on commitment to

learning. This is particularly true when speaking of a “far from equilibrium” govern-
ment destined to cope with uncertainty, threat, change and risk.
The learned government commits to free itself from pressures pushing for
conformity; it cultivates innovation and creativity to the extent that the societal
fabric is in need of renewal. The real recipe for effective knowledge relies on
meta-learning, that is to say the ability of “knowing to know”. Likewise, continual
learning is a primary consequence of “reflectivity”, or the ability to reflect upon
and learn from one’s practical experience.
While the learned government will have to strengthen core learning skills at
the centre of government, it will also strive to organise itself to welcome learning
flows via strong communication strategies.
Questions
1. How can “reflectivity” and strategic thinking best be organised at the
centre of a risk-taking government?
2. If hierarchy is the recognised paradigm of the former industrial State, what
would be a web-inspired paradigm for a State open to disequilibrium?
3. Is the “communicating State” an integral part of a learned government?
4. In this case, is communication for reciprocal learning (State and civil
society) a worthy enterprise? Is this two-way communication a product of
pure intellect? Or is it destined to incorporate a much higher share of
emotions in policymaking?
Key elements
The priorities for a learned government could be approached from a host of
angles. The paper has already alluded to several:
• Skilled people.
• Knowledge infrastructures.
• Nurturing learning cultures.
• Welcoming difference and plural views.
• Networking and fostering open partnerships.
• Favouring adaptive designs of government and a biological behaviour.
• Developing strategic functions at the centre of government.
• Catering for the exact quantum of emotions in policy.
Each and every one of these factors is worthy of attention. The paper as a
106 whole deals with some critical dimensions of the factors listed above.
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This section looks briefly at two aspects of the emerging learned government.
One concerns the relevance of think-tanks as a means of enhancing the quality of
core government activities. The other concerns the transition from vertical govern-
ments to a web-design more in line with current demands of public policy in
unstable environments.
Think-tank
These agencies are tasked with influencing the policy agenda through the
publication of research and policy advocacy. They can affect multiple targets:
independent policy evaluation; forecasting and futures studies; shaping the
culture and context of political thought and action; survey research; strategic
advice; and so forth. Avowedly independent think-tanks have the further advan-
tage of having strategic continuity over and above the contingencies of partisan
politics. These centres of strategic intelligence have the possibility of processing
issues in parallel, a pattern not dissimilar to that displayed by biological organisa-
tions which, in everyday complex situations would usually avoid a purely serial
form of behaviour.
Webbed government
A hierarchical design of government, based on vertically organised sectors of
responsibility, has gradually evolved to hybrid arrangements combining sectoral
departments and target departments. The latter would be typically represented
by city ministers or youth ministers, interacting with line ministers via a matrix of
interrelations. The foreseeable next stage in the evolution of public sector archi-
tectures would take the shape of concentric clusters of responsibilities gravitating
around the centre of government. A web configuration of government is particu-
larly apt at generating knowledge networks and integrating local, regional and
global primary sources of learning.
Bridging the trust gap ↔ operating near equilibrium

Evolving systems under natural circumstances will tend to reach a stable
state. This state is characterised by an optimal energy level in relation to the tasks
undertaken by the system. The point of equilibrium identifies somewhat with
stability in energy conservation. It is important to realise that if systems undergo a
minor shift away from their equilibrium, all factors will act together in order to
retrieve the initial equilibrium. This is done by absorbing shock waves or mini-
mising the disturbance.
Democratic systems aim at finding a balanced combination of stability and
change. While democratic rule provides for a term of office – coinciding with the
period of an elected legislature – more frequent subjection of government to the 107
© OECD 2000
popular verdict provides the opportunity for voters to confirm or to reverse

governing majorities. Hence, rotation in the exercise of power is a measure of
democratic health.
Nevertheless, governing by democratic consent is only a first step towards
equilibrium. It is a necessary, but not sufficient, condition. Achieving equilibrium
as a political goal is a complex blend of governing by consent and governing with
trust. Winning and maintaining popular trust is a precondition of governance
under stability. When mistrust grows and dissatisfaction spreads, the system
moves away from equilibrium, setting the scene for democratic alternative to take
place; the new order – generator of a new “normality” – drives the system forward
to a different point of equilibrium.
In Government we trust
Context
The nature of the relationship between government and governed is under-

going substantial change. The era of submission is giving way to a totally different
equation: taxpayers and managers, stakeholders and representatives.
A symptom of this new configuration is the revolt by taxpayers against public
overspending. Seldom in history have societies acquired such a widespread
appreciation of the benefits of a balanced budget; or, to express it differently, the
falling levels of trust in government resulted in relentless pressure on spending
patterns to move closer to equilibrium.
Media and education are the two key drivers that build credibility or step up
mistrust in government. Each one, in its own powerful way, can tip the balance to
produce disequilibrium and dissent or, conversely, broaden the foundations of
trust on which governing by consent can expect to outlive electoral cycles.
Both are powerful generators of societal values. Ultimately, the measure of
trust is deeply rooted in the structure of prevalent values and the way in which
government interprets them to oversee and ensure the public interest.
In formal democracies – social and electoral – preferences are the outcome of
the perceived convergence between realising values and delivering public goods.
This basic verification constitutes the very essence of democracy: the will of the
people made sovereign. Yet when the two primary drivers of social representa-
tions – media and education – favour immediate goals and selfish/material values,
shortsighted choices will prevail. In other words, near-equilibrium forms of govern-
ment will pay off in the voting preferences of the electorate. These ultra-stable
108 majorities can be harmful to the pursuit of the long-term goals in society.
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Gaining trust in a tussle for votes may lead governments to behave as mere
brokers among interests. This is a danger to democracy: that ultimately deal
making takes over the entire sphere of government. Governing stays afloat by a
constant display of goodwill in trying to satisfy as many interest blocs as possible.
Cultivating near-equilibrium policies is, under these populist circumstances, a
bad service to the pressing challenges of charting new courses into the future.
In the worst case, trust is measured against the ability to respond to basic
entitlement aspirations. A protective constituency is then an easy prey to the
demagoguery arsenal so often displayed for ballot purposes.
Questions
1. Can public policy properly address the combined needs for trust building
and for necessary change in society?
2. How is trust construed in plurilingual, multi-ethnic, multi-faith and multi-
cultural contexts?
3. Is the establishment of a new social contract essential to the making of
trustworthy government? What is the degree of centrality occupied by
entitlement programmes in a new social contract?
4. Can the corporate world provide inspiration for a future model of trust
between public managers and stakeholders?
5. In what ways do the media and higher levels of education affect the inter-
face between governments and citizens?
Key elements
In this section we will look at a qualitative model of trust operating in a near-
equilibrium form of government, emphasising the interplay between four (2 × 2)
key features:
} }
Quality Choice
MEDIA EDUCATION
Accountability Controls
The quality of government is very much a subjective matter. Hence, media

plays a central role in communicating quality gains or losses in public life. These
perceptions are examined against social representations of standards and
expectations; and opinion makers compete to have their view prevail. Media
instancy – a common attribute of the one to many paradigm characteristic of the old
media, as much as in the many to many paradigm present in the new media – adds to the
volatility of quality assessments. In any event, the quality expected of government
is continuously rising in contemporary societies, making this the single most impor-
tant factor that determines the level of trust between governments and people. 109
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Accountability is another vital element; without proper accountability trust

remains a far-fetched goal. Electoral campaigns are, in essence, a clash of percep-
tions regarding the balance sheet of government. Some – those in government –
will use the media to transmit measures of good accountability – how previous
commitments have been honoured; others will underscore how unaccountable
government has been during its term in office. Beyond the skirmishes that are
typical of political battlefields, accountable practices are increasingly sought as a
regular feature of progressive administrations. The modern public service – once
an impenetrable black box – is more and more required to render public accounts
to the general public (as citizen, client and customer). Likewise, participatory
principles in relation to managing public entities is becoming an integral part of
advanced citizenry.
Choice is not only a measure of good governance but also of democratic
allegiance. An educated society is also that which is prepared to exercise its right
to make educated choices. Thus, a trusted government is expected to offer
multiple alternatives for the realisation of the freedom of choice. Widening choice
in society is also coincidental with the road to human development, interpreted
as a prime goal of modern economies. Even interventionist-inclined governments
in modern democracies are relying on market-type mechanisms and contractual
arrangements to deliver public goods which were, until recently, considered a
public monopoly. On the contrary, a totalitarian rule that overrides the rights and
principles of citizens is conducive to serfdom and is hardly compatible with a
highly educated citizenry. High degrees of trust under a totalitarian rule are
normally a product of manipulated fanaticism and ignorance – seldom a measure
of educated choice.
The nature of societal controls over government varies according to constitu-
tional and cultural traditions. The more advanced is the educational level of a
community, the higher are the demands for the control of public entities and more
vigorous the claims on self-government. This leads to two-fold developments: a
readiness to accept local responsibility for the management of devolved public
services, i.e. education, health, social services, employment agencies, etc.; and
rising claims for a stronger voice in appraising public services and participation in
the formulation of public policy. Allowing for the balanced participation of stake-
holders is becoming a major element of trust in government. Likewise, the passing
over of the “bâton of responsibility” to an adult civil society is inextricably
associated with the maturity of democracy. This is particularly relevant in a highly
educated environment with a diminishing marginal tolerance for mismanagement.
A composite index of trust would seek to equate T (trust) as a dependent
variable of four key parameters. Expressed mathematically it looks like this:
110 T = m (q2 • a) * W + e (c1 • c2) * C
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m = media algorithm
e = education algorithm
q = quality
a = accountability
c1 = choice
c2 = control
W = welfare compounding factor (wellbeing)
C = culture compounding factor (civil society awareness)
W and C are the filters running through the remaining terms of the equation.
High-case welfare cycles, permitting the spread of solid economic outcomes, will
influence the perceptions of quality and accountability in government practices. A
single partial derivative approach to seek the maximisation of T on q (considered
to be the most influent independent variable) would show how sensitive trust is
on the reciprocal effects of m and W. Ceteris paribus, a strong civil society tradition,
is more prone in the exercise of citizens’ choice and controls, as a fundamental
shift in the axis of power. Weak communitarian habits would be expected to gener-
ate a lower propensity in exercising rights and duties, after controlling for all other
variables.
A further scanning of business models provides for some interesting bench-
marks to rethink the trust contract in the public sector. Policy research on the
profile of a new social contract can be extremely relevant for this purpose. Some
salient features of a trustworthy government, determined to move closer to
constituents’ demands, would include (taken in a purely random order):
• From monopolistic to competitive provision.
• Ensuring quality of customer services.
• Clarifying the decision loci.
• Developing public service contracts and managing principal-agent
relationships.
• Enhancing public and client controls.
• Rendering quarterly accounts.
• Holding public accountability meetings (on the Internet?).
• Responding to taxpayers’ committees.
• Conducting public hearings.
• Improving stakeholder and citizen interfaces.
A trustworthy government must not lose sight of voluntary and care-providing
organisations. Indeed, the rise of the third sector is a discernible trend in high
social capital communities committed to rebalance society between a neo-liberal
market theology and outright state interventionism. Horizontal trust – woven 111
© OECD 2000
through bottom-up partnerships – is very often a good proxy for vertical confi-
dence in public institutions that learn how to partner with civil society agents; it is
also an effective means to overcome the market’s paucity in rewards and incen-
tives for altruism, reciprocity and care (non-tradeable activities).
Effective governance and legitimacy
Context
In a future-oriented stance, effective governance and legitimacy are two
overarching issues in a stable system of public office. In the aftermath of turning
points and anxiety that accompany periods of turbulent – and often randomly
engineered – change, the structure of social claims will migrate to nurture effective
governance.
Governance is extensively used to address a host of comprehensive issues in
modern public management.
The World Bank defines governance as encompassing:
• The form of political regime.
• The process by which authority is exercised and the management of a
country’s economic and social resources for development.
• The capacity of government to design, formulate and implement policies,
and discharge functions.
The Commission on Global Governance has defined the term as: “The sum of
the many ways individuals and institutions, public and private, manage their
common affairs. It is a continuing process through which conflicting or diverse
interests may be accommodated and co-operative action may be taken. It
includes formal institutions and regimes empowered to enforce compliance, as
well as informal arrangements that people and institutions either have agreed to
or perceive to be in their interest.”
In the OECD context, governance is defined in terms of relationships, and
thus includes more than public administration and the institutions, methods and
instruments of governing. It also encompasses the set of relationships between
governments and citizens, acting as both individuals and as part of or through
institutions, e.g. political parties, productive enterprises, special interest groups,
and the media.1
More recently, PUMA has considered new directions to promote good gover-
nance in support of countries’ economic and social goals. In reassessing the
approaches to governance, PUMA addresses it as a “broadly inclusive term refer-
ring to the role and capacities of the State, or public authorities, to influence,
enable or undertake action to promote those public purposes where the market
112 and civil society alone do not address them adequately”.2
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Symposium Papers
The United Nations Human Development Report 1999 analyses governance from a
slightly different but equally vibrant angle: “It means the framework of rules,
institutions and established practices that set limits and give incentives for the
behaviour of individuals, organisations and firms. Without strong governance, the
dangers of global conflicts could be a reality of the 21st century – trade wars
promoting national and corporate interests, uncontrolled financial volatility
setting off civil conflicts, untamed global crime infecting safe neighbourhoods and
criminalising politics, business and the police.”
In this paper we will not undertake an analysis of the comprehensive issues of
effective governance. They are best dealt with in various PUMA publications.
The present section will simply tackle some problems of legitimate gover-
nance and the relation between measurement and policy effectiveness in a demo-
cratic frame of accountability.
Questions
1. Is the effectiveness of government likely to become objective and measur-
able as a tool of enhanced democratic control?
2. How does democratic effectiveness depend on the accurate determination
of what people expect of governance? Will high-quality political polling,
sophisticated deliberative polling3 and comprehensive survey research
gradually pre-empt popular ballots?
3. Is legitimate governance akin to inclusive democracy? How is civil society
to be empowered in order to guarantee higher standards of legitimacy
controls?
4. Can consensus-building practices be harmful to effectiveness? What is the
quantum of political conflict and adversarial confrontation that is deemed
essential to safeguard democracy?
Key elements
Social measurement has prompted major attitudinal changes in sectoral
policies. This is the case with education, where the availability of standardised
tests and international benchmarks is changing public perceptions and putting
increased pressure on policies. Globalisation opens up opportunities for compar-
ing outcomes and ranking quality indicators in all areas of the public service.
Till today, a breach of electoral promises is still very much a matter of subjec-
tive dispute. Incumbents and challengers involved in the tight dispute of voters’
favours will produce ardent arguments to prove the opposite. Public opinion is
often dismayed at the lack of rigour in policy appraisal and reporting. The opacity
of budgetary discussions offers a perfect example of policy deliberations that
remain beyond the reach of the average normal citizen. 113
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Regulatory agencies are currently regarded as independent boards assigned

the responsibility for ensuring fair competition and protecting the public interest,
in its broadest sense. One can expect that these higher authorities will gradually
engage in systematic measurement of policy outcomes in their respective fields of
competence and regular reporting to the public opinion: setting standards,
designing indicators, measuring performance and progress, informing the public,
reporting to the legislature, are ways of enhancing transparency and achieving
better control for the efficiency and effectiveness of government. This extended
role would carry a high potential to reduce subjectivity in the appraisal of core
policies.
Indeed, the scarcity of objective knowledge bases on the conduct of policy
aims is a constraint in the present systems of policy assessment. However,
unlimited control in the use of so-called “positive” knowledge can be detrimental
to democracy. Improved knowledge and social measurement must serve, as a
priority, to improve the exercise of controls by democratically elected bodies,
such as legislatures, and ultimately by the power of popular suffrage. This
precaution is a condition for the legitimacy of office as well as an assurance that
the error-correcting mechanisms in democracy will be enforced.
These considerations highlight the delicate combination of stability and
change in effective governance. Centres of government and cabinet are expected
to provide consistent responses by:
• Addressing change management functions.
• Rewarding vision and risk.
• Giving incentives to experimentation, trial and error (policy and social
constructivism).
• Understanding the benefits of conflicting ideas and of adversarial debate in
democracy.
• Pooling wholesale knowledge to address complexity (self-regulation, self-
organisation, feedback loops, meta-cognition).
• Encouraging objective measurement of policy aims and targets.
• Supporting programmes that enhance the moral and civic competence of
citizens and the quality of “civil talk”.
The value of social capital is indisputable. Legitimate governance and account-
able effectiveness are not merely a one-way track to go down. It is becoming critical
to rise up above individual self-interest to nurture the kind of public-spiritedness
that is needed for democracy to flourish and social choice to serve the larger good.
After all, citizenship is akin to a morality of care. Democracy and market economy
make up the fabric of OECD countries. Confounding even the direst predictions by
114 prophets of doom, both systems survived and were established firmly during the
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20th century. They constitute a valuable legacy for the peoples of the 21st century.
These two components – democracy and market economies – must continue to be
developed harmoniously; especially because they provide the best means for
muddling through unforeseeable and unforeseen problems, and for generating
creative responses to the constant rise in complexity.
The turn of the century coincides with major interrogations on the nature of
this dialogue. As we have seen before, globalisation is a market invention,
assisted with the appropriate technologies; not a political move. Can democracy
curtail the intrinsic authoritarianism of international capitalism? What are the
shields for legitimate governments in the less mature economies to resist the
power of alien centres of decision? Can the ownership of transnational firms and
their profits be distributed according to democratic standards of equity? Is
concentration of the market forces in the hands of few global players likely to tip
off governments from their equilibrium point? Or should we expect a wilful shift of
national and supranational public policies towards unstable territory, i.e. new
regulation, in response to new corporate power?
• Tough questions that pose difficult choices.
• These present great challenges to the best people in office and to the
display of talent by those in the public service.
The DNA of Governments: People and Values
Context
Organisations, as living beings, have a genetic code. From a behaviouristic

viewpoint, governments are far from being minutely designed pieces of
machinery, a sort of deus ex-machina churning out public goods. Quite the contrary,
public systems are a unique blend of culture, power play, beliefs, history and
drama mirroring the soul of the people. Each public administration is the product
of a particular history, a peculiar manifestation of identity. Organisational repli-
cation, involving some sort of “genetic” engineering – even cloning – can be
researched, but the range of outcomes takes time to emerge, processes require
the use of sensitive knowledge, and methods of investigation need to be flexible.
Managing organisations is about managing people. Changing public organisa-
tions is about attempting to change people in those organisations, in a way that is
beyond ethical reproach.
Dis-investing in people is the surest route to failure, and a form of political
abdication. A decline in the standards of the human element will inevitably lead
to a decaying public system. 115
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We now return to mainstream public management concerns. Following a “big

picture” analysis, the focus on basics: public sector institutions must perform and
proper human resource management is instrumental in achieving this objective.
The single most important message is that the future of government is closely tied
to having a professional civil service, recruited at the higher end of available intel-
ligence and committed to serving the public cause. The pursuit of public purpose
within stimulating working environments should offer creative, satisfying profes-
sional lives, reasons to embrace risk and change.
A mark of excellence in “the managerial state” then becomes the ability to

lead people, to summon the best minds for the public work, and to instil a feeling
of pride in serving the collective cause. These ingredients provide the “operating
system” of governments.
Questions
1. Have total quality management concepts prompted effective public

management reform? Were they successful in advancing empowerment
and motivation in public environments?
2. Is there a competencies development ladder for professionals in the

public service and do these include priorities for equiping the human
infrastructures of government?
3. How can learning cultures be adopted under stringent budgetary

conditions, especially where tradition is powerful and un-learning is slow?
4. If people and values matter, how would key policy challenges facing future
governments be reflected in (or be trickled down into) management
priorities?
Key elements
Public systems across OECD countries vary greatly reflecting different DNAs
and evolutionary paths.
However, there is a discernible core of strategic, managerial and executive

competencies, the absence of which would damage the delivery capacity of public
administrations.
The triangle below provides a plausible base for considering the core of
competencies and roles, relevant to a public management system that is aware of
116 the need to develop its human resources.
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Symposium Papers
prospective Strategic
learning
social
co-networking
normative Managerial
adaptive
organisational
methodological Executive
technical
Strategic roles
These are the functions that are usually performed by national governments,
by central policy units and by co-ordinating agencies. A typically functional
approach would include the tasks of strategic planning, policy design, law making,
social negotiation, regulation (where multiple delivery systems are allowed to
operate), finance (with a particular emphasis on equity issues), evaluation, super-
vision and monitoring. The core capacities to carry out this set of functions would
encompass prospective and learning skills, social co-operative knowledge and
networking capacities.
Managerial roles
This tier encompasses the principles of good management, whereby respon-

sibility cascades down through the different levels of responsibility: setting
objectives, establishing accountabilities, organising activities, processing informa-
tion, managing diverse portfolios of service providers, motivating staff, monitoring
and reporting performance and developing people. Sound management
principles should translate into a host of clear tasks such as managing information
systems, efficiency + effectiveness + equity controls, accountability systems,
appraising outcomes and producing performance indicators, contracting out
services, managing partnerships, resorting whenever appropriate to market-type
mechanisms, corporatising or franchising activities, running staff development
programmes. Among the core capacities required, one could underscore social
co-operative competencies, networking capacities, normative thinking, adaptive
design competencies, organisational competencies. 117
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Executive roles
These are the tasks that are typically performed at delivery junctures,
front-line institutions or bureaucracies. These might include: controlling inputs,
monitoring spending, setting and ensuring compliance to norms, finance-budget-
personnel-facilities management, relation to local clients and stakeholders,
simple needs assessment and data collection, day-to-day running of institutions,
monitoring and reporting results – outputs. At this level, the key capacities would
touch on organisational, methodological and technical-occupational competen-
cies.
A multiskilled and versatile public force is expected to range through the
entire competencies ladder. Obviously, the optimal mix has to be customised to
each situation. The skilling and re-skilling momentum is contingent on the display
of learning cultures; and the effectiveness of learning cultures depends on the
amount of active knowledge that is carried forward by public institutions. The
necessary un-learning is able to discard no longer useful, inert knowledge; learn-
ing processes will lead to pooling of critical knowledge needed for competencies
required for problem solving.
People in public organisations carry values; and values provide the intangibles
that can make a sizeable difference in determining the future of government.
Again, a robust public policy will cater for priorities in shaping values and in
committing the public servants. The following bullet points attempt to provide
some possible foundations for that policy. In the absence of a mandate to deal in
detail with the issue, a tentative list of priorities is offered for discussion, covering
three groups of requirements and related training areas: nurturing constituent
values; adjusting to a changing environment; making public service work.
Nurturing constituent values

• Democracy – allegiance to pluralist practices (putting everyday democracy
into practice).
• Integrity – making ethics accountable.
• Diversity – commitment to social pluralism and multicultural wealth.
Adjusting to a changing environment

• Life-long learning contracts – basis of a new deal for the civil service where
“tenure of learning” replaces tenure of seniority.
• Training without frontiers – encouraging a rich supply of training and
personal development opportunities and nurturing possible “university for
118 government” concepts.
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• Getting to the forefront of technological advancement – competencies

development on the information society frontier.
• Rewarding risk and innovation – allowing the emergence of a knowledge
and ideas culture that feels comfortable operating “far from equilibrium”.
Making the public service work

• Quality management for knowledge workers – motivation, empowerment,
commitment, shared vision and culture.
• Targeting excellence – putting a premium on service to the client.
• Awareness-building vis-à-vis trust-boosting policies:
– relate work performance appraisal to perceived quality to the citizen;
– increase personal accountability and reporting to stakeholders.
• Contracting out – developing criteria and accountability measures to
improve agency effectiveness and concession systems.
Service-driven values differ significantly from those of custodian-led govern-
ments. While the former tends to underscore a forward-looking commitment, the
latter accentuates the need for conservation; the former emphasises the contribu-
tion of people to innovative organisation of resources, in contrast with ceremonial
functionaries eager to display authority and hierarchy.
Until recently, the prudent state provided an optimal design for custody and
protection. But where do we go from now?
OECD countries are at a fundamental crossroads in shaping their future
governments.
OECD countries are in a position to once again provide world leadership in
rethinking the rules and institutions for stronger governance.
Like never before, leadership today needs to identify with “generativity”: the
work of bringing forth and nurturing new possibilities for our common future.
After all, the determination to engage in improving global governance is a
good measure of our collective hope.
119
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Notes
1. Definitions taken from the Ministerial Symposium on the Future of Public Services,
PUMA, OECD, March 1996.
2. Taken from “Directions for the Future PUMA Mandate”, draft document, 9 June 1999.
3. The use of random samples of citizens to conduct policy discussions and deliberations
as a surrogate to the calling of universal meetings.
120
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Symposium Papers
Annex
Some queries affecting the shape of future governments
The Learning Government
Can we think of the State as a “thinking machine”? If so, how should it be equipped to
respond to the challenges of an Information Society and to the growth of knowledge? What
is the “knowledge infrastructure” required for quality public policy making in the future?
Whose, what kind, when and how is knowledge best used in the policy process (Bobrow,
Dyzek)? Are the current technical tools for policy decision and follow-up implementation
commensurate with a better-educated citizenry? How can national governments cope with
the ever-increasing complexity in our societies? How can public institutions acquire critical
“biological” behaviours? Can “social engineering” provide a solid answer to public knowl-
edge constructivism through trial and error experimentation (C. Lindblom, K. Popper,
Henschel)? Are there ways to seek a better balance between policy rationality and political
instinct as necessary ingredients of administrative “satisficing” (H. Simon’s bounded
rationality)? How are self-regulation, feedback and metacognition present in the cybernetics
of a learning government (K. Deutsch)?
From the Nation-State to the State of Nations
Is monocultural identity a pre-requisite of the stable State? Can a modern State fully
operate under plurilingual, multi-ethnic, manifaiths and multi-cultural context? How can
democratic institutions avoid the “essentialization” of identity or the emergence of cultural
supremacy? Can public policy properly address the need for increased social capital and
trust building in increasingly diverse societies? What remedies can democratic governments
resort to in order to curb predatory identities? Is the development of societal consciousness
through active community involvement a necessary compromise between former state
domination and latter market individualism (A. Etzioni)? Are there discernible limits to
technocratic managerialism (Y. Dror)?
Seeking governance in a galaxy of powers
Governments are just one in a multiplicity of sources of authority; how is governance

ensured when authority is widely spread throughout several sources of subnational and
supranational powers? Is there a need for a new social contract? In a broad partnership
approach for sustainable governance, what are the criteria for membership? Can neo-
corporatism manage adversarial conflict and actively dissipate primary tensions on the rise
in a democracy of interests (Jessop, P. Schmitter)? Is networked governance a new paradigm
serving a multipolar society? 121
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On democracy and instancy

Is there a need to re-invent democracy in an era where direct decisions through
electronic referenda are increasingly under demand? Can we foresee the death of political
intermediation in democracy? What would be the right balance between protracted democ-
racy and direct or un-representative democracy? How can long-term goals and sustainable
strategies be pursued in an environment of democratic turbulence and frequent electoral
cycles? What new interface buffers can be foreseen to allow a better dialogue between
political pressures to “deliver now” and the professional need to take the longer view? Can
digital government improve its “speaking terms” with civil society? Can rational policy-
making be derived from intersubjective communication (Habermas)?
People and values matter when seeking good governance

Can rational choices be made on the basis of a multi-valued society? Is proper consid-
eration given to the key mental artefacts constituting the subjective world of the policymaker
(Vickers: “interpretative screens” of an appreciative system)? How can reality judgements
combine with value judgements to produce consistent action judgements? Is there an
inventory of best practices to decode elite behaviour in the public sphere (actors, demands,
expectations, values, interests)? How can governments improve their perceptions of the role
of actors, arenas, strategies and interactions in decision processes (H. Lasswell)? Are the
motivations of public officials properly incorporated into good governance practices – climb-
ers, conservers, zealots, advocates and statesmen (Downs)? How is ethics being considered
when building governance infrastructures? What critical skills – hard and soft – are required
to improve the human infrastructures serving governments? What training strategies can best
compound codified with tacit knowledge in public organisations?
122
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Opportunity, Strategy, and Tactics in Reforming
Public Management
Allen Schick
Visiting Fellow at The Brookings Institution, Washington
and Professor, University of Maryland
Every successful public management reform is an amalgam of opportunity,

strategy, and tactics. Opportunities are country-specific conditions that facilitate
some reforms and retard others; strategies ate policies and actions that set goals
for government and for the tasks to be undertaken in implementing wanted
change, tactics are the methods used to mobilize support for and overcome
obstacles to reform.
Although opportunity is rooted in local conditions, when similar reforms occur
in many countries, it is likely that common change-generating conditions also spill
over national boundaries. Management reform may become ripe because of
elections and changes in government, shifts in public sentiment, a budget crisis or
program failure, the drive of politicians or managers to be innovators, and the seep-
age of new ideas into the conventional wisdom on how public organisations should
be run. Reforms that appear in many countries may flow from a worldwide slowdown
in economic growth or from broad, cross-national attrition in confidence in govern-
ment. Opportunity both facilitates and constrains; it opens up some possibilities
and shuts off others. But opportunity is not just there for the plucking; it must be
detected and exploited. And constraints are not ironclad bars to innovation; they
can be surmounted or evaded by willful politicians and managers.
Strategy is the deliberate effort to create a future that is materially different
from what would ensue if prevailing conditions were allowed to run their course. It
requires verve and vision, the drive to set into motion change-driven processes, to
establish objectives and priorities, to tear down old institutions and practices and to
make way for new ones, to take the risks that accompany change, and to have confi-
dence in what government should become and the steps required to achieve that
vision. Strategy does not necessarily mean making big plans, for it also can entail
embedding a culture of ongoing, incremental change in public institutions. In fact,
strategy often involves choices between these two approaches, or some variant of 123
© OECD 2000
them. Strategy also entails implementing actions and the commitment to give the
change process essential support and resources.
There sometimes is tension between opportunity and strategy, for the more
one is beholden to the former, the less attention one might give to the latter. Often
opportunistic reformers, by contrast, have a tendency to leap to the untried and
risky. Despite the current affectation of labelling just about every government plan
or reform as strategic, genuine strategic change is rare because it is difficult to pull
off. The temper of much contemporary management reform is reflected in Ireland’s
contribution to this project. Referring to the government’s strategic management
initiative (SMI), the Irish paper observes that the focus “is essentially on manage-
ment issues and challenges rather than on the role and function of government and
whether these should be radically changed. As a result, the primary thrust…
remains on service delivery and better management of all aspects of administration;
in short on delivering better government”. But the paper also acknowledges that
reform of the magnitude being pursued may be expected “to lead to a process of
questioning the role and functions of Government”.
Does Ireland’s SMI rise to the level of being regarded as truly strategic? Is its
strategic management initiative an effort to transform public administration or to
make spotty improvements? Is it animated by an overriding conviction that big
changes are imperative, that even if the task is hard and must be pursued piece-
meal rather than all-at-once, it should be undertaken? Similar questions can be
asked of the German, Dutch, and Norwegian reforms, and perhaps of initiatives in
other participating countries as well. Does it matter whether reform is purposely
strategic or merely opportunistic? Perhaps not, for some strategies fail and some
opportunities blossom into much bolder innovations than were contemplated at
the outset. Britain’s management reform started modestly, with efficiency reviews
and a financial management initiative, but they grew into a fundamental restruc-
turing of public institutions and the opening up of public services to market
competition and greater citizen/customer influence.
While it is likely that a well-developed strategy will produce different
outcomes than would a reform born solely of opportunism, confining strategic
thinking to the launch stage may condemn the enterprise to failure. It is a mistake
to define goals and paths at the outset and to then follow the script regardless of
what ensues. On the basis of almost 40 year observing government reforms in
many venues, this writer would argue that the failure to systematically evaluate
what has been accomplished is one of the greatest threats to durable innovation
in public management. Over the years, in many countries, management reforms
have tended to live an examined life. They typically begin with much fanfare, but
after a decent interval, most just fade away or are displaced by the next wave of
reform. There are notable exceptions to this generalization, however. In countries
124 that have advanced the farthest in rebuilding public management, the early
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innovations have been rigorously assessed and recalibrated. New Zealand is a

case in point. It is often said of that country’s far-reaching reforms that they were
propelled by a coherent, integrated set of principles. True enough, but a large
number of the practices that now distinguish New Zealand’s public management
were not in the first tranche of state sector reforms. Purchase agreements came
later, as did strategic and key result areas, departmental forecast reports, strategic
plans, and efforts to assess the government’s interest as owner of state entities.
The constant in New Zealand’s reform has been the purpose of change, not the
toolkit of management practices. In New Zealand and elsewhere, the best strategy
may be to set course at the start, forthrightly monitor progress, be honest about
what has worked and what has not, and make numerous midcourse corrections.
Doing all this requires effective leadership. Successful reform does not just
happen by itself; it depends on leaders who exploit openings and give impetus
and direction to change. Strong leaders do not just “read” opportunities; they
make them – by molding public opinion, bringing new blood with new ideas and
initiative into government, reaching beyond safe and traditional constituencies to
build coalitions in support of change, and by taking political and managerial risks
that broaden the possibility of change. Strategic reform requires this and more:
leaders who venture beyond today’s opportunities and constraints and boldly
envision a different future, who then mobilize the political and institutional
resources of government to produce transformative improvement in the structure
and performance of public organisations, and who bolster support for their
strategy by elevating public expectations concerning the results that government
delivers.
Strategy without opportunity cannot advance the cause of reform very far. With-
out favorable conditions, strategy becomes visionary, lofty ideas that have little
prospect of being implemented. Indeed, without the right opportunity, strategy can
end up as a substitute for action, fostering the impression that big changes are
underway even though no implementing steps have been taken. On the other hand,
opportunity without strategy is likely to exhaust itself in faddism, drifting from one
fashionable innovation to the next, without leaving a lasting imprint.
Tactics blend together opportunity and strategy to enhance the odds that
intended changes will be successfully implemented. It entails judgements on the
pace and sequence of innovation, the organs that should be entrusted with the
task, the sectors on which reform is to be concentrated, the political cast given the
reforms, the extent to which the government associates or distances itself from the
changes, decisions on whether to proceed by administrative fiat or through legis-
lative authorization, and many other implementation decisions. A good tactician
considers how strategy can best be executed in the light of available opportu-
nities. Tactical skill requires institutional memory, a keen sense of timing, and
hard-nosed decisions on the approach to be taken. 125
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Although management reform must be a blend of opportunity and strategy,

the proportions matter. During the post-war period, management reform was
predominantly opportunistic; during the past two decades it has become increas-
ingly strategic. There is a synoptic ambition in contemporary reform that was
absent in earlier waves of innovation. Today’s reforms are bolder, more uprooting,
more goal-driven, and more animated by the conviction that management has to
be transformed and improved in order to strengthen democratic governance. The
shift in orientation has been due to many factors, the most prominent include
declining confidence in government, upheavals in management theory and busi-
ness practices, revolutionary developments in information technology, pressure to
devolve resources and responsibility from central organs to local governments
and field units, efforts to slow or reverse the enlargement of government, and
most important of all, in an age in which citizens expect more from government
but think less of it, business-as-usual management is not good enough.
The roads not taken

Whether opportunistic or strategic, there are significant differences between
today’s reforms and those tried in earlier times. The generalizations set forth in
this and other sections do not fit all the countries participating in the strategic
reform project. Some countries have been more opportunistic, others more
strategic. Nevertheless, the paths they have taken are different from the ones
favored in previous reforms.
Contemporary reform is more likely to be comprehensive than piecemeal

It is not confined to a few institutions or a single process. The aim is to uproot
entrenched management practices and behavior, not just to upgrade the civil
service system or budget procedures. Even when implementation is spread over
an extended period, as has been the case with the United Kingdom’s Next Steps
Initiative, the comprehensive reach of the reform agenda is manifest at the outset.
In striving to restructure public management, some governments have
resolved to reform all major sectors and administrative units. Others, however,
have opted to pilot test their reforms before deciding on full implementation.
Germany, for example, tested flexible budgetary management arrangements
before it enacted legislation that authorized the new practices. Similarly, Sweden
conducted a closely-monitored test of three-year budgetary procedures before
launching comprehensive management reform.
Often, however, pilot testing slams the door on further innovation, for it
conveys the message that the government is not really committed to reform or is
uncertain about the direction it should take. The key to successful pilot tests that
promote innovation, is for the government to establish a strong commitment to
reform in advance by specifying the steps it will take when the tests have been
126 completed to revamp management systems and practices.
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Contemporary reform is not confined to particular administrative processes

For generations, management reform has been compartmentalized along the
main lines of public administration. One set of reforms has sought to rationalize
budget decision-making, another has targeted civil service practices, still others
have sought to improve public procurement, cash management, accounting
systems, or other parts of the machinery of government. In this way, activities that
should have been linked were cordoned off into separate specializations.
Accounting reform proceeded on one track, budget innovation on a second,
advances in auditing on a third. One group of reforms aimed at raising produc-
tivity, a second experimented with performance budgeting, a third introduced
performance audits. The obvious interdependence of these isolated reforms were
neglected because the principal aim was to improve a particular process, not to
lift managerial capacity.
Not surprisingly, reforms that concentrate on particular tasks rather than on
managerial systems and behavior rarely make much headway. Budget reform is a
case in point, for it has been premised on the mistaken notion that the process by
which funds are allocated can be revamped without taking account of the informa-
tion generated by the accounting system, the demands made by auditors, the
incentives provided by civil service rules and other administrative procedures,
the embedded habits and norms or budget makers, the interface between manag-
ers and politicians, and numerous other managerial considerations. In much
contemporary reform, by contrast, budgeting is regarded as part of a grid of inter-
connected practices and processes. Budgeting cannot be reshaped without also
restructuring the management framework within which financial resources are
spent and activities carried out. The same can be said for reforming the civil
service and other basic management systems.
Contemporary reform seeks to devolve rather than concentrate managerial

authority
Reforming public management impels governments to assess and modify exist-
ing organisational structures. The assessment might lead to the establishment of
new entities, a redefinition of organisational boundaries and responsibilities, or the
elimination of some units. But there is a marked difference between the restructur-
ing favored in the not-so-distant past and some contemporary realignments. Once,
reformers sought functional integration by consolidating related programs and activ-
ities in the same department. All educational activities were grouped in a depart-
ment of education, transportation services in another department, the provision of
health care in a third, and so on. This made for a small number of big departments,
as well as for the concentration of managerial resources and authority at the center
of each department. Inasmuch as there is no perfect functional alignment, the quest
for integration led to frequent reorganisation. 127
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This type of re organisation still occurs, as in Australia’s consolidation of its

departments into broad portfolios during the 1980s. But the main thrust these
days is in the opposite direction – breaking up functionally-integrated, multi-
purpose departments into a number of service-delivery entities, each with a
clearly defined mission, operating independence, and performance targets. There
are two main reasons for decoupling services and operations. On the one hand,
large departments that are structured as holding companies for loosely related
activities tend to be top-heavy, slow-moving and inefficient entities that have high
operating costs, quash innovation, and give managers muddled messages as to
the performance expected of them. On the other hand, in functionally integrated
departments, service providers “capture” policy makers, feeding them advice that
blunts innovation and weakens accountability.
In the decoupled model, core departments retain important functions in
policy-making and advice, setting standards and targets, and overseeing the
performance of operating agencies. This form of organisation is still quite new, and
not enough experience has accumulated to assess its long-term effectiveness.
Already, however, concern has been voiced that departments may have been
weakened to the extent that they cannot carry out essential coordinating func-
tions. It may be that in the enthusiasm to liberate operating managers, inadequate
attention has been given to the resources and authority needed at the center of
government and in departmental headquarters to rationalize programs and
policies that cut across agencies and to maintain strict accountability.
Contemporary reform relies on incentives, not just formal rules,

to change behavior
In traditional administrative reform, it is often assumed that changing formal

rules suffices to alter the actions and performance of managers. This presumption
is rooted in the command and control model of public administration, in which
central authorities promulgate and enforce rules and subordinates comply. But a
succession of failed reforms and new theories and evidence in business manage-
ment, institutional economics, organisational theory, and related fields have
driven home the message that informal rules and managerial incentives must be
changed in order for a high-performance managerial ethic to take hold. Changing
the formalities does not make much of a difference if the self-interested behavior
of managers sabotages organisational objectives.
Many governments have concluded that the best way to motivate managers
to improve performance is to set clear and reachable performance targets, give
managers sufficient flexibility so that they can improve operations, and hold them
personally and organisationally responsible. This orientation dominates the
128 strategic reform agenda.
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Contemporary reform is concentrated on operations and service delivery
In line with the emphasis on modifying incentives and behavior, the focus has
shifted in many countries from strengthening policy making to upgrading line
operations, the delivery of services, the productivity of the public service, and the
responsiveness of government to the interests of citizen/customers. Top-down
reform inevitably leads to “one size fits all” rules which circumscribe operating
discretion and deter field managers from tailoring their services to suit local
conditions. In top-down reform, the relationship between the center and operat-
ing units is hierarchical, the former make policy, set the rules, issue orders, and
demand compliance; the latter are supposed to carry into effect the policies
handed down to them, and produce the information demanded by superiors.
Top-down administrative structures have serious shortcomings: they demand
compliance and uniformity when flexibility and diversity are called for; they stress
inputs and neglect results; and they spur managers, who have a job to get done, to
evade or subvert the rules. Beneath the veneer of rule-based public administra-
tion an informal managerial ethic flourishes, softening the rules and loosening the
rigidities. Entrepreneurial managers devise means of outwitting the controls while
paying lip service to them. They manage to travel even when the travel budget is
depleted, fill positions when a hiring freeze is in place, procure IT without going
through central procurement, and so on. The problem with this behavior is that
many managers spend more time evading onerous controls than driving their
organisations to higher performance.
Opportunity
The fact that many countries have similar reform objectives suggests that the
opportunities are not entirely dependent on local situations. Some opportunistic
conditions cross country boundaries, others do not. This sections considers both
types of opportunity.
Timing
Opportunities come and go. For some reforms, the right time has arrived, for
others it has already passed. During the 1990s, Canada appears to have had signifi-
cant success in rigorously reviewing its programs, but it made little headway when it
undertook to rationalize its programs through the public expenditure management
system (PEMS) during the 1980s. Of course, there are material differences between
the current and the previous approach, but they do not fully explain why one
innovation has promoted the realignment of government program expenditures
while the other one had little to show for the substantial investment made in it. 129
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Innovations yield different outcomes, depending on when they are tried. The
saying, “an idea whose time has come”, applies as much to government reform as
to other innovations. Two decades ago, Canada invested heavily in building evalu-
ation capacity in the Comptroller General’s office. It is generally thought that the
impact on program and budget decisions was modest. About a decade later,
Australia launched an ambitious evaluation strategy that has made a measurable
difference in the reallocation of resources. Arguably, Canada learned from its
earlier PEMS experience and has undertaken program review in a more effective
manner, and Australia learned from Canada’s failure to implant an evaluation
culture. But this cannot be the sole explanation of the earlier failures and later
successes. Just about every country that tried to build a formal program analysis
and review system in the 1960-1990 period failed. The Netherlands made little
progress with a reconsideration effort that involved the Cabinet in selecting
programs for reexamination; Sweden had little results from program budgeting,
the United Kingdom installed and then discarded a program analysis and review
system, the United States adopted an ambitious planning-programming-
budgeting system, and other countries also introduced similar innovations. In my
view, the earlier reforms may have been premature: voters and politicians were
not yet convinced of the compelling need to halt the growth in government
spending and to reallocate resources from lower to higher priorities. Although
program reallocation still is difficult, the political mood of the 1990s has been
much more hospitable to efforts to rearrange government programs and expendi-
tures than it was during the postwar growth spurt.
Government
Elections and changes in government open or narrow opportunities for

management reform. In fact, major changes in government organisation or
programs often are launched by new governments shortly after taking office. The
British reforms were initiated shortly after Margaret Thatcher became Prime
Minister in 1979; they were extended (by means of the Citizens Charter) a decade
later by John Major shortly after he became Prime Minister, and redirected by
Tony Blair after his election in 1997. Australia, New Zealand, and Canada also
adopted reform agendas shortly after new governments were inaugurated. Several
factors explain the impulse to innovate at this stage in the political cycle: 1) A new
government is more inclined to change course than one which has held power for
an extended period; it also has the energy and fresh ideas to break new ground;
2) When the old government is defeated at the polls, the election may be
regarded by the successor government as a mandate for change; 3) In coalition
governments (such as the Netherlands) the process of forming the government
often entails negotiations among the coalition partners as to the policy changes
130 and reforms to be undertaken. There definitely has been a trend to more detailed
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coalition agreements which spell out what the government will do during its
tenure; 4) An incoming government may confront a crisis that requires immediate
attention and makes big changes politically attractive.
One election does not make for lasting reform. Basic reforms that uproot
established practice must have staying power beyond a single election, and
preferably beyond a single government. The countries that have made the most
headway in restructuring public management are those in which the reform
process has been carried forward and deepened by successive government.
Moreover, reforms are most likely to endure when they survive a change in
government from one party (or coalition) to another.
In most of the countries participating in the project, basic reforms started by
one government have been continued by the next. A shift in political orientation
from left to right, or in the opposite direction, has not interrupted the reform
process. Perhaps the most interesting case of reform surviving political change has
occurred in the United Kingdom, but the same pattern is found in other countries
as well. The Thatcher-Major management reforms would be of little current
interest if they had not been continued and extended by the Blair Government.
Political orientation has not been a reliable indicator of the pace or direction
of reform. New Zealand’s Labour Government introduced market-oriented reforms
following its election victory in 1984. In some countries, a center-right government
has promoted management change; in others, a social democratic government has
taken the initiative. Regardless of their political affiliation, ministers and senior
civil servants have supported the drive for management improvement. Their
leadership has spelled the difference between reform that is stillborn and reform
that transforms the public sector.
Ideas
When leaders innovate, they often are propelled by powerful ideas that give
them confidence that what they are doing is the right thing. Significantly, however,
ideology does not play a role in contemporary reform. Today’s political leaders are
looking for ideas and practices that promise to improve the services government
is providing, not to redefine the role and purpose of government. They do not
have to be avant-garde to innovate; they can draw from a body of developing and
accepted ideas concerning the organisation and operation of the public sector,
including the following:
• Performance improves when managers are told what is expected of them,
and results are measured against these expectations.
• Performance improves when managers are given flexibility in using
resources to carry out assigned responsibilities. 131
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• Performance improves when operational authority is devolved from central

agencies and departmental headquarters to operating levels and units.
• Performance improves when government decisions and controls focus on

outputs and outcomes rather than on inputs and procedures.
• Performance improves when managers are held accountable for their use of
resources and the results they produce.
Not all reform ideas are as widely accepted as those listed above. Some still
are contested or untested. These include propositions that performance improves
when a) citizen-customers have choice in selecting the supplier, b) government
services are out-sourced, c) public organisations are run along business lines, or
d) when service delivery is separated from policy making. Although not all
contemporary management ideas have been widely applied, this writer agrees
with the observation of B. Guy Peters that “contemporary reforms are driven by
ideas… This characteristic distinguishes the current round if reform from some of
the tireless tinkering that has tended to characterize administrative reforms”. As
we shall see, ideas in currency have provided the strategic underpinning for
transforming public management in industrial democracies.
Innovators
Ideas rarely sell themselves; they need promoters with sufficient authority to
persuade leaders to risk new approaches. In the past, the reform agenda in many
countries was set by special commissions or task forces established to study
particular issues or problems. Typically, the commission would produce a well
publicized report containing a number of recommendations and then turn the
implementing job to existing government organs. Some countries still draw
innovative guidance from ad hoc entities, but the more likely source these days is
from within government itself. The papers prepared for this project confirm that
the senior civil service has been a fertile sources of reform ideas. The Irish
contribution to the project describes the role of the senior civil service in the
reform process.
In every country, the innovators have come from political echelons or the top
ranks of the public service, not from operating levels. Strategic reform has not
bubbled up from below, nor should it be expected to. The broad scope of reform
requires perspectives, and power that are held either in central agencies or
departmental headquarters. Top-down, reform, however, runs into problems if it is
perceived by subordinate units as just the latest exercise in administrative
132 centralization.
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Crisis
In public management, as in other endeavors, crisis can be a spur for change.

When leaders become convinced that the course the country is on is unsustain-
able, they may embrace remedies that would not be tried in normal times. At
least two of the countries participating in the study (Finland and New Zealand)
went through a serious economic crisis that called into question established
policies and practices; at least one (Norway) has not experienced any significant
crisis. Most of the countries have been impelled by a progressive erosion in
confidence that the course they were on – progressive enlargement in the relative
size of government, steadily rising tax burdens, stagnant or declining productivity
in public institutions, and (in a few countries) a perceived decline in the public
service performance – could be sustained. In other words, decline rather than
crisis has been the number one motivating factor.
Strategy
The country papers indicate that there are many paths to management
reform, that different governments have pursued similar objectives in different
ways. This is not surprising, for management reform must comport with a country’s
political administrative values and traditions. In fact, one can discern as many
strategies as there are participating countries, for even countries proceeding along
the same general path combine elements of various strategies in different ways.
Without claiming to be comprehensive, this section discusses four strategies:
market-driven reforms that rely on competition, prices, and contracts; managerial
reforms that rely on the professionalism, skill, and public service ethic of manag-
ers; program review which relies on policy analysis and evaluation to reallocate
resources and redesign programs; and incremental deregulation that relies on
ongoing review of rules and practices to streamline management and remove
wasteful controls. The four approaches have some important common elements.
All strive to make public services more efficient and responsive; all seek to
strengthen accountability for results and resources; all encourage greater variety
and flexibility in the provision of services. But even when they share objectives,
the four strategies proceed differently. A market strategy would lead government
to divest certain tasks or activities; it would favor the most efficient (or least
expensive) supplier, even if the outcome was a truncated, weakened civil service.
A managerial strategy, by contrast, would seek to strengthen public service norms
by giving rank and file civil servants a greater voice in running operations and in
accommodating variations in local conditions. A program strategy seeks to opti-
mize social outcomes by shifting resources from lower to higher priority programs.
An incremental strategy looks for opportunities to deregulate and ease manage-
ment rules. 133
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Underlying the various strategies are different conceptions of the future role
of the state. The market strategy draws a sharp distinction between the state as
policy maker and the state as service provider. It has a strong preference for living
off the delivery of services to non-governmental entities or to operationally-
independent agencies. The managerial model allows a broader role for govern-
ment in providing public services but wants these activities to be less hobbled by
bureaucratic rules and more sensitive to the wants of recipients. The program
strategy envisions a state whose primary responsibility is producing desired social
outcomes within severe resource constraints. The incremental model seeks a state
which continues to function along familiar line, but is less burdened by old rules
and requirements.
Each country participating in the strategic reform project can be slotted into
one or more of these categories. Some classifications are straightforward. The
main thrust of New Zealand’s reforms has been to establish market-like arrange-
ments and incentives within government. Canada has pursued a program-oriented
strategy, and has made considerable progress in aligning public expenditures and
program results. Germany has maintained an incremental approach for an
extended period, making frequent adjustments in rules and operations to
improve management. Ireland and several other countries have emphasized
managerial reforms.
These classifications conceal an important feature of reform: most countries
pursue more than one strategy. Each country’s hybrid is distinctive. The
United Kingdom, for example, has both market and managerial innovations;
Canada uses both program and managerial strategies. In every country, however,
one strategy usually is paramount. A country seeking to enhance public perfor-
mance may turn to markets for some purposes and to public managers for others;
it may also review program commitments in the light of political demands and
resource constraints.
If the applications are hybrids, why be concerned with defining and classify-
ing strategies? Why not consider each country’s bundle of innovations on its own
terms without fitting it into preset categories? The answer is that each strategy
raises particular questions which should be addressed in assessing the prospects
for success. In the market strategy, one must ascertain whether true conditions for
competition have been established. Just labeling something a market or a
contract, or assuming that the means of providing a service is contestable does
not make it so. In the managerial strategy, the key issue is whether adequate
accountability mechanisms are established. In the program strategy, the key issue
is whether government has the political will and strength to allocate resources and
take other actions on the basis of a fundamental review of programs. And, finally,
in the incremental approach, the overriding question is whether government can
134 sustain interest and support for reform over an extended period. If these key
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questions are not addressed in a forthright manner, reforms that showed much
promise at launch may fade away, leaving few traces that they were ever tried. This
was the fate of many past management reforms; thinking strategically can help
avert a similar fate for current and future reforms.
The Market Strategy
“If there is a single alternative to the traditional model of public administra-

tion favored by contemporary politicians, academics, and probably the public”,
Peters writes with some overstatement, “it must be the market model”. Market-
type arrangements have penetrated core public services in some OECD countries,
but not in most, and not everywhere in the same manner. Political culture has a
role in shaping both receptivity to market-oriented solutions and the type of
solution adopted. A fair assessment of management reform would conclude that
marketization has been much more widely applied in state enterprises and
business-type activities than in basic public functions. For example, education
still is publicly financed and provided in virtually all countries, and the use of
market-type devices such as vouchers or alternative schools still is quite limited,
though more extensive than a decade ago. In the core public sector, it has proven
exceedingly difficult to establish true markets in contrast to simulated ones.
In this writer’s view, the main contemporary influence of business practices on
government management innovation has not been in generating competition but
in changing the concept of public organisations. For decades, the vertical integra-
tion of firms (internalizing the production of components) was paralleled in the
public sector by the functional integration of departments (combining in the same
entity the various programs contributing to the same objective). Vertically
integrated firms were as layered, hierarchical, and bureaucratized as big govern-
ment departments. In both, command and control systems ran from the top to the
bottom and uniformity and compliance were enforced by central controllers who
wrote the rules and monitored the actions of subordinates. Nowadays, however,
vertical integration is widely regarded as rigid and inefficient, and many large
firms have been reorganized into semi-autonomous business units which out-
source much of their production. A number of governments have followed suit,
breaking up integrated departments into small units and contracting out some
functions.
Although the market strategy affects the form of government organisations,
its principal objective is to create markets within government. This model is
predicated on the expectation that consumer choice and competition will drive
service providers to be more efficient and responsive. But competition and
choice operate in two distinct domains: one is in the relationship between
customers and suppliers, the other is in the relationship between government 135
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entities purchasing and providing services. The two types of markets – one
external, the other internal – give rise to different issues. External markets, such
as are created when government operations are privatized or contracted out, or
when citizens are given the option of selecting their providers raise questions
concerning the adequacy of information available to consumers, the differential
impact of choice on the affluent and the poor, and the transaction costs of
empowering consumers to select providers. Deeper concerns pertain to whether
marketizing public responsibilities might crowd out important social values such
as equality and uniformity in the provision of services, a public service ethic,
and the sense of citizenship that one develops through government-provided
education and other basic services.
Internal markets raise more complex questions, though ones not likely to
receive as much attention because they involve transactions within government.
These internal transactions may include the purchase of services by government
or ministers from departments, purchases by departments from line or field units,
and purchases by departments from autonomous agencies. Even when the
trappings of markets, such as contracts and prices, are introduced, the fact
remains that relationships within government are not truly arms length. And
because they are not, the gains from competition may be illusory rather than real.
New Zealand, which has advanced much further than any other country in
establishing internal markets relies on a network of contracts to formalise relations
between in-house purchasers and providers. It has performance agreements for
department heads, fixed-term contracts for senior and middle managers, purchase
agreements for ministers to contract for services at agreed prices from depart-
ments, and contracts by which departments purchase services from other govern-
ment entities. A number of structural and operational changes have been made to
institutionalize the contractual relationship, including: a) Ministers have a free
choice to purchase services from departmental or other sources; b) the outputs to
be produced are specified in advance; and c) fulfillment of the terms of the
contracts if monitored through reports and audits.
There is no doubt that New Zealand has been extraordinarily creative in
building contracts into government. No other country has extended contractual
relationships into so many areas of public management and program operations.
But as creative as New Zealand’s internal markets are, they may be weak substi-
tutes for genuine markets. Real markets have actual rather than just potential
contestability; real markets specify the unit cost of outputs, not just total costs;
real markets allow redress if the contract has been breached. Several questions
need to be considered in appraising the robustness of internal markets. To what
extent do ministers actually purchase services from the outside sources rather
than from government entities? Have ministers cancelled contracts because they
136 were dissatisfied with internal suppliers? Is the amount paid by the government
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adjusted if the volume or quality of outputs varies from the contracted terms?
What recourse does the government have if internal suppliers fail to fulfill the
terms of their agreements? Do government departments have the requisite skills
to negotiate contracts and monitor compliance? What are the transactions costs of
maintaining an extensive network of contracts? What evidence is there that organi-
sational perfor mance has been improved? The answers to these questions should
shed light on the suitability of a market strategy in other countries.
Managerial Strategy
This strategy is predicated on the presumptions that “letting managers

manage” by liberating them from ex ante controls on inputs and operating
procedures maintained by central controllers (especially with regard to human
and financial resources) boosts organisational performance. The driving assump-
tion is that public managers want to do a good job, they are committed to the
prudent and efficient use of public money, they care about the quality of services
and whether recipients are benefiting, and they have a strong public service ethic.
But, the argument runs, they have been held back from doing their best by rigid
rules which enforce uniformity and retard managerial initiative. Take away these
assumptions and “letting managers manage” injects a dangerous permissiveness,
an “anything goes” mindset into the conduct of public business. Worse yet, it gives
opportunistic managers license to pursue their self interest at the expense of the
government or citizens.
The management strategy sweeps away practices that once were regarded as
bulwarks of rule-based public administration. At one time, standardizing rules and
procedures was regarded as a signal advance in government. All agencies were
required to budget the same way, all had to abide by the same rules in hiring and
paying civil servants, all were subject to the same procedures for buying goods
and services, arranging accommodations and travel, and so on. The bulging rule
books were regarded as prima facie evidence of sound administrative practices; line
item budgets dictated the number and cost of the myriad things purchased by
spending units. Just about everything that cost money had its own rules and
enforcement procedures. The fact that the rules circumscribed administrative
discretion was regarded as a virtue, for civil servants could not be trusted to do
the right thing on their own. They had to be monitored and controlled. Upholding
the legality and propriety of administrative actions through central control, was
the foremost objective of public administration.
The managerial ethic argues, however, that whatever laudable purposes the
control regime may have served in the past, it has become counter productive. The
controls impel managers to care more about inputs than outputs, more about
procedures than results, more about complying with the rules than on improving 137
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performance. A managerial strategy strips away most centrally-enforced controls.

One approach is to selectively discards rules and procedures that appear to be the
latest useful or most onerous; another is to broad-band various administrative rules
(for example, reducing the number of civil service or budget classification). The
fullest expression of managerialism is to give managers global budgets, with discre-
tion to use the resources as they deem appropriate. In this arrangement, managers
have a fixed budget for operating (or running) costs, they must keep within that
budget, but they have freedom to decide how much to spend on salaries, travel,
and other expenses. They may still be required to comply with some residual rules
concerning, for example, fair employment practices and competitive tendering of
contracts. But most operating decisions are left to the discretion of managers. They
no longer need advance approval from central controllers.
Most of the countries in the study have elements of a managerial strategy in

their administrative reforms. This includes the United Kingdom, Germany,
Finland, Ireland, and the Netherlands. Some of these have taken bold steps to
devolve managerial discretion to the operating levels which provide direct service
to the public; others still retain significant managerial authority in departmental
headquarters.
In explaining the broad of appeal of managerialism, one is struck by a seem-

ing anomaly. The present age is one in which trust and confidence in government
is at a low level in many OECD countries. Yet the managerial strategy depends on
entrusting managers with greater discretion, on trusting them to be prudent,
efficient, and responsive in carrying out their responsibilities. What is the
rationale for broadening managerial freedom at a time when there appears to be
little confidence that managers will act in the public interest? Some governments
feel that declining (or stagnant) operating budgets and a sense that the old
controls do not work give them no choice but to loosen constraints on managerial
discretion. Others believe that improved performance will come with managerial
freedom and will boost confidence in government. Whether because of the first
motive or the second, today’s governments take the position that the easing of
controls must be accompanied by a strengthened accountability framework for
managers. A vital part of the managerial strategy is the ex ante specification of
performance targets or expectations and the ex post review of actual performance.
“Letting managers manage” must be linked to “making managers manage”.
The jury is out on whether investing in managerial performance will be repaid

with higher trust and confidence in government. This writer is of the view that the
low esteem of government has less to do with objective performance than with
rising demands on government. It may be that when citizens want and get more
from government, they nevertheless remain dissatisfied that they are not getting
138 enough.
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Like the other strategies discussed in this paper, the managerial strategy
opens the door to difficult questions as to whether the reforms have, or are likely
to, yield the expected results. One area of concern is the link between “letting”
and “making” managers manage. It is much easier to fulfill the first part of the
bargain than the second. It is much easier to remove controls than to enforce
accountability. In fact, accountability frameworks – the specification of targets,
reporting on results, and audit of performance – still are relatively undeveloped in
a number of the countries pursuing a managerial strategy.
The managerial strategy relies extensively on performance measurement.
While considerable advance has been made in defining various types of
measures, there is at best sketchy evidence that the behavior and performance of
managers has been significantly influenced by the new information. It is one thing
to measure performance, quite another to manage on that basis. Moreover, most
governments relying on a management strategy have had more success in measur-
ing outputs than outcomes, and they have tended to devise measures that put
their performance in a favorable light. They generally have shied away from
measures that challenge them to overhaul operations or to significantly raise their
level of performance.
The managerial strategy relies on the assumption that civil servants are
committed to the public’s interest rather than their own. But are they always?
What safeguards are there when self-interest takes over, when government
employees behave opportunistically, exploiting their discretion to do as they
please?
These concerns do not call the managerial strategy into question. Rather they
indicate the need for careful assessment of what has been accomplished under
the new regime, how managers have actually behaved, and the effectiveness of
the accountability mechanisms put in place.
Program Strategy
This strategy is built on the idea that the most urgent task in reforming the
modern state is ensuring that public resources are effectively allocated to achieve
the fundamental objectives of government. From this perspective, the two
previously-discussed strategies – turning various tasks and responsibilities over
to market-like institutions, and entrusting managers with operating discretion and
holding them accountable for results – apply mostly to the operational work of
government. The program strategy urges that defining objectives and establishing
policy should be accorded higher priority.
This is an old issue that will not be settled in the current round of reform. The
issue is contested on many fronts: outputs versus outcomes, efficiency versus
effectiveness, doing the right thing versus doing things right, centralization versus 139
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devolution, top-down versus bottom-up reform, and so on. In the past, the
emphasis was on strengthening policy capacity at the center of government or in
headquarters; today, most countries are focusing on operational matters.
Can the two approaches be melded together? Yes, but they rarely are. For
most governments it is hard enough pursuing the limited reforms that one or
another of the strategies dictates. Canada is one of the few, however, that has
taken an eclectic approach, combining a substantial commitment to program
review along with a wide range of management initiatives affecting service deliv-
ery, citizen participation, deregulation, the civil service, financial management,
and a number of other administrative practices. But program review has been the
centerpiece of the Canadian reforms. It was launched in 1994, at a time when the
country faced serious financial and budgetary pressures. In the words of one of the
Canadian papers prepared for this project, “program review addressed not only
pragmatic questions of program design and delivery, but more fundamentally,
fundamental questions of the role of the federal government, which anchored the
ensuing changes to programs”. Although program review has not formally covered
transfers to individuals or other levels of government, these have been separately
reviewed in a parallel exercise.
Canada’s program reviews assessed each ongoing program in terms of six
questions: does it serve the public interest; is there a necessary and legitimate
role for government; is the current role of the federal government appropriate;
should the program be carried out, in whole or in part, by the private or voluntary
sector; if the program is continued, in what ways can it be improved; and is the
program affordable within the fiscal parameters of the government.
Canadian officials strongly believe that the reviews have made a significant
contribution to the country’s successful fiscal consolidation. When the reviews
were initiated, the federal government seemed hopelessly mired in oversize
budget deficits; barely four years later, the government reported that it had
balanced the budget. Although the bulk of the reviews were concentrated in the
first years, the government has taken steps to institutionalize the process and link
it to expenditure decisions. Toward this end, it has established an expenditure
management system to feed the results of reviews into budget actions. Learning
from the unsuccessful program expenditure and management system tried more
than a decade earlier, the government has built strong reallocation requirements
into the new system with few exceptions, program initiatives have to be funded
through savings in existing programs.
Some reform-minded countries initially focused on service delivery and
operational efficiency and over time broadened their perspective to review
program effectiveness and outcomes. Thus, a decade after launching the Next
140 Steps initiative, the United Kingdom undertook a series of fundamental reviews.
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Canada, however, has moved in the opposite direction. After consolidating its
fiscal position through program reviews and other policy changes, it set into
motion more than half a dozen initiatives aimed at strengthening managerial
capacity.
In considering the program strategy, one must be mindful of past efforts to
link strategic objectives to budget allocations. These efforts include Canada’s
PEMS system mentioned earlier, PPBS in the United States, and the reconsidera-
tion program in the Netherlands. None was successful, though each had a tempo-
rary impact on budgetary procedures and decisions. Truly fundamental program
review requires an enormous amount of time and information, fuels conflict, and
often produces relatively modest reallocation. It has been difficult to integrate
in-depth reviews with the ongoing routines and procedures of budgeting.
Why should the results be more favorable this time? Perhaps because
countries have learned from past failures, perhaps because there now is a stronger
commitment to contain the cost of government by weeding out ineffective and low
priority programs. In looking back at the PEMS failure, the Canadian Government
perceived that while the allocations to envelopes (sectors) were supposed to be
ceilings, they often were regarded as floors, adding to pressure on public expen-
diture. This time, therefore, the program review progress is much more explicit in
demanding reallocations within fixed budgets. Moreover, contemporary program
review does wrestle with fundamental questions that were slighted in earlier
periods. These pertain to the role and functions of government, its relationship
with the private and voluntary sectors, and the future affordability of commit-
ments undertaken when public resources seemed to be more abundant and
confidence in public institutions was higher. The times may be ripe for a strategic
realignment of government objectives and programs. If they are not, the program
strategy will not make much of a difference; if they are, the results will be different
this time.
Incremental Strategy
Mounting any of the strategies discussed thus far entails a substantial
commitment of political and organisational resources, and (in some cases) a leap
of faith that the innovations will bring promised improvements. Understandably,
therefore, some countries have taken a cautious approach, moving incrementally
as opportunities become available. The obvious advantage of this approach is
that particular reforms can be adopted when they seem the right thing to do, and
the reform process can be fine tuned as circumstances and opportunities change.
German reform seems to fit this model. Whether because its federal makeup
inhibits leapfrogging innovation, or because the government has been preoccu-
pied with unification, the country has adopted a series of measures aiming to 141
© OECD 2000
streamline the state and reduce costs. There have been doses of privatization and
deregulation, new requirements that proposed legislation show projected costs,
reductions in the number of federal ministries and in other federal entities, new
management instruments focused on measuring costs and performance, and some
efforts to decentralize responsibility for resources. These and other initiatives
have been packaged into an “action program” to increase the effectiveness and
economic viability of the Federal administration. The aim of the reforms is to
reduce the size of the state by identifying tasks which can be transferred to
subordinate authorities or the private sector, or abolished altogether.
The German contribution to the project notes that comprehensive reform of

administrative apparatus was attempted in the 1970s, but many of the proposals
made at the time were not implemented. The current modernization program, by
contrast, emphasizes constant improvement. It “is carried forward in small steps
(mosaic theory) and is not based on a holistic approach. Accordingly the ministries
follow different concepts for their modernization measures… If one tried to reform
all elements of public administration which require change, it would be too time-
consuming and demanding… A step-by-step approach is therefore necessary”.
Incremental reform has several potential drawbacks. One is that the many
small steps might not add up to significant change; another is that reform will be
directionless, propelled by expediency rather than by strategy; a third is that gov-
ernment may lose interest in the endeavor along the way. Incremental reformers
who take one step at a time and allow the last step to determine the direction of
the next one, can produce a lot of motion that signifies little. It is important, there-
fore, that incrementalists clarify at the outset the aims of their reforms. It is also
important that the reforms show sufficient progress to sustain support an interest
in government, and that they build on one another. The fact that Germany had the
same government for an extended period may explain the staying power of its
reforms. In some countries, the government of the day has lurched from one
reform agenda to the next, without integrating the various initiatives into a
coherent strategy.
Tactics
No strategy is self implementing. As it embarks on a course to transform

public management, a government faces myriad decisions on how the reforms
should be carried out, by whom, and when. It also must take steps to build
support for, and interest in, the reforms. These and related tactical considerations
often dominate the reform agenda; in some cases, they spell the difference
between robust and tepid progress. This section briefly discusses a few of the
142 many tactical issues that a government faces in implementing a reform strategy.
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The pace and scope of reform are common tactical issues. One option
mentioned earlier is to test pilot all or some elements and defer decisions on
full implementation until the results have been evaluated. At the other extreme,
the government may mandate comprehensive implementation by all depart-
ments and agencies. Still other options are to implement reforms according to a
staggered schedule (some agencies or elements the first years, other the
second, etc.) or to allow each department to decide the extent and timing of its
participation.
There appears to be less test piloting in the strategic reforms covered in this
project than in past waves of reform. However, some governments have given
departments discretion on restructuring their management practices. The
rationale for this permissiveness is that management reform cannot succeed
unless operating departments welcome the changes and have a say in how they
are implemented. If reforms are forced on departments, if they are committed to
the prescribed changes or if they feel that the changes do not meet their needs,
only meager improvement will be forthcoming.
Even when departments are entrusted with wide discretion in implementing

recommended reforms, the government may consider assigning oversight respon-
sibility to an existing central agency or an ad hoc entity established to fill this role.
The finance department is the obvious candidate for this role, but not always the
most appropriate. Its control of the purse strings can get in the way of encouraging
managers to improve performance. But if the role is entrusted to a rival unit, the
finance department may try to undermine the reforms.
In developing a reform program, the government may proceed by administra-

tive fiat or it may seek legislative authorization. Most governments have taken the
first course, preferring the flexibility that administrative action gives them. A few,
most notably New Zealand, have embedded their main reforms in law. But even
countries that have taken the second course have found it necessary to make
adjustments outside the ambit of the legislation. They have had to experiment
and adapt in order for the reforms to be sustained.
Many tactics are country-specific and generalizations about the most effective
approach are questionable. What works in one country might not in another.
Perhaps the best advice one can offer on tactics is for the government to invest
reform with sufficient institutional resources and political support, to have a firm
idea of where it is heading, and to keep an open mind on how it should get there.
If the current wave of reforms has stayed around much longer than previous ones,
it is because governments have been adaptable and tactics have been molded
to needs. 143
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The Path Ahead
Strategic reform takes time. Most of the countries participating in the project
have been at it for a decade; the British Government is completing its second
decade and much additional work and innovation lie ahead. In fact, there is no
real end to the task of improving public management. As new problems arise and
as novel ideas displace old ones, governments redefine their expectations.
Successful reforms open up fresh opportunities, failed reforms impel governments
to go back to their drawing boards and try again.
Regardless of the progress made thus far, all reforming countries face the task
of institutionalizing the changes they have made and preparing for the next gener-
ation of management innovations. All have to guard against lapsing back to their
old ways, while building in capacity for continuing improvement. Most still have to
work out an acceptable balance among the various strategies. All have to recon-
sider the role of central agencies and their relationship with operating units, and
all have to strengthen the means of maintaining managerial accountability.
Beyond the current agenda lies a melange of issues and possibilities pertain-
ing to the future configuration of public management. The leading questions here
deal with the impact of emerging information technology on the delivery of public
services, the potential for changing relations between citizens and state, the
future makeup and role of the civil service, the boundaries of the market and
public organisations, and the extension of the logic and instruments of perfor-
mance management into core areas of governmental service. Although the distinc-
tion between current issues and the future agenda is somewhat arbitrary, it is
useful to distinguish between those reforms that lie within the current interests of
national government and those that might emerge in the future. There is a high
probability that just about all reformist governments will tackle the current issues,
but a significantly lower probability that they will deal with potential future issues.
Reversion to control and compliance public management
No matter how much progress a government had made in dismantling

traditional control mechanisms, it must be vigilant against retrograde reforms that
restore the old order. The main risk is not that governments will throw their
management innovations overboard and re-install discarded practices, but that in
piecemeal fashion they will impose rules and procedures in response to particular
problems. Relapse might be due to an actual or perceived abuse of managerial
discretion, parliamentary demands for information and controls, or the unease of
risk-averse public managers with performance-based systems. Each re-installed
rule or requirement may be justified in its own right, but the cumulative impact
144 may be to reintroduce compliance-centered management.
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It is not easy to guard against a return to the old ways. There are two main
approaches for dealing with this tendency. One is to concede that there is a
natural inclination to add controls, and to periodically review the rules and purge
those which are deemed redundant or inapt; the other is to institutionalize the
precepts of managerial discretion and accountability in law and behavior so as to
discourage inroads. The first path bows to the inevitability of recentralization, the
second seeks to thwart it.
Continuous Improvement
Improving public management should not be a one-shot affair, done once and
for all. Lasting and sustainable progress requires that each reform build on the
last, that governments learn from experience, that they search for opportunities to
raise expectations and performance. But it is not easy to build this capacity into
public institutions, many of which go through bursts of innovation and change,
followed by pause and consolidation. This cyclical patter enables government to
transmit new rules and expectations down the ranks, instruct employees in
innovative practices, acquire needed information, and test new procedures and
requirements. Governments which rush from one partly-implemented innovation
to the next suffer form “reform fatigue” and confusion. In some such countries, this
writer has encountered senior managers pleading for breathing space to assimi-
late the last reform before the next one is urgently thrust upon them. Matters are
made worse when each round of reform promises the same things but has distinc-
tive nomenclature and procedures.
In markets, competition forces change. In governments, the prod often is a
performance measurement system that periodically raises the targets to impel
monitored organisations to do better. Using performance measures as an engine
of change requires that the targets: a) be few in number, so that they send strong
signals as to what is expected and provide a clear basis for assessing progress;
b) challenge agencies to make changes in programs or operations that will enable
them to meet targets; c) are jointly selected by each agency and the central
authority responsible for overall government performance; d) are monitored and
audited to ascertain whether the targets have been met; e) are part of a larger
managerial framework that encourages agencies to improve performance. This is
not a full itemization of the characteristics of a performance measurement system,
but each item above is especially relevant to the task of driving organisations to
continuous improvement.
Balancing the Reform Strategies

This paper has noted that some countries have focused on operational
management and others on program effectiveness. Ideally, the two strategies 145
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should go hand in hand, for programs depend on well-run organisations to achieve

their objectives, and operations produce public good only to the extent they
serve governmental objectives. The longer a country stays at the task of reforming
public institutions, the greater the likelihood that having started with one of these
strategies, it will gravitate to the other. Combining the two is not simple because
they require different types of information and have different uses and perspec-
tives, and engage different parts and levels of government. Assuming that a
government intends to proceed on both fronts, it has to decide whether to
combine the two strategies in a unified reform, or to separate them. To this writer’s
knowledge, Australia is the country that has grappled most with this question.
Beginning in the 1980s and continuing into the present decade, it has sought to
integrate a financial management improvement program with program budgeting.
The combined FMIP/PB initiative has made significant headway in realigning
programs and in improving management, but the relationship between the two
parts of the reform package has not always been easy.
The Role of Central Agencies

One of the tensions between program and managerial strategies has to do
with the changing role of central agencies, particularly those dealing with financial
and human resources. These agencies once served as the central command and
control posts of government, but this role is not compatible with the new manage-
rial ethic. Some central agencies have retooled themselves to the drive for
devolution and flexible management. But driving reform from the center in the
name of decentralization sometimes gives the wrong message to departments on
the receiving end. Rather than hearing that they are to be freed up to run their
own operations, they fear that the new performance regime is a ploy to get them
to supply information to be used against them by central controllers.
Central agencies are in a quandary. If they allow each department or agency
to pursue reform its own way, they risk getting very different managerial arrange-
ments than the ones they wanted. If they intervene to dictate how departments
and agencies should run their affairs, they risk being accused of violating the
precepts of managerialism. Moreover, having divested many of the controls that
was, for generations, the source of their power over operating departments,
central agencies may be too weak to compel compliance with their views as to how
government should be managed.
The evolving role of central agencies differ from country to country. In some,
the finance ministry (or a similar organisation) has unrivaled authority over
management matters; in others, the government has established a separate
agency to oversee the reform drive. In some, the finance ministry has a firm sense
of its role and relationship to operating units; in others, the finance ministry is
146 going through an identity crisis seeking to carve out a niche that enables it to
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retain considerable administrative authority within the managerial framework. In

all, the finance ministry (and other central agencies) face the task of prodding
agencies to get on with the business of reform.
Strengthening Managerial Accountability

It was noted earlier that more progress has been made in devolving manage-
rial authority than in enforcing managerial accountability. Dismantling old controls
has proved easier than establishing new performance-based accountability. There
is significant risk, therefore, that managerial flexibility will be discredited by
misbehaving officials who take the new freedom as license to breach the public
trust. Some abuses may be real, others only perceived; either way, they may
impel governments to take rein in public managers by reinserting centrally-
enforced rules and standards. The indiscretions need not be major to spur this
reversal; even minor lapses can impel ministers and parliamentarians to demand
more control.
What should be done? Some, or all, of the following depending on the quality
of accountability systems already in place: 1) Train managers and civil servants in
their responsibilities under newly-devolved arrangements. Do not take for
granted that they know what is permitted and what is not; 2) Review rules pertain-
ing to employment, finance, contracting, and other managerial actions to deter-
mine whether there are gaps that have to be closed; 3) Indoctrinate managers in
the principle that they are personally and professionally responsible for good
conduct in their organisations; 4) Assess financial reporting systems, the quality of
financial statements, and audit practices, and take appropriate steps to elevate
standards to acceptable levels; 5) In countries which rely extensively on out-
sourcing, develop a corps of public servants who are skilled negotiators of
contracts with private parties and overseers of compliance. These skills are much
more highly developed in business firms than in government departments;
6) Improve performance reporting systems, including the audit of reported results.
The Next Generation

The current wave of management reforms will not be the last. Developments,
already underway, will expand the envelope for novel, as yet untried, manage-
ment arrangements. These including the diffusion of information technology that
facilitates interactive communication within government and between government
and citizens; rising expectations concerning the volume and quality of public
services; the weakening of civil service norms and increased reliance on tempo-
rary, part-time, and nonpublic employees; further encroachment of markets and
competition onto the provision of public services; and adoption of practices that
make performance measurement more a reality than a slogan. 147
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These changes are both independent of one another and interconnected.

Establishing remote, interactive communication between government and citizens
covering a wide array of services and relationships may proceed on its own, but
once it is in place, it opens the door to reconfiguring the civil service, bringing the
market-type mechanisms into core public services, and taking performance-based
management seriously. Alternately, while the development of new technologies
might speed up communication and enable remote interaction with citizens, it
may do little to change the way governments might retain career-based civil
service system, or that might rely on the overall labor market to obtain workers as
needed.
In a leap of vision, one can foresee government of the future organized along
very different lines than it is currently. A futuristic public service would work out of
homes or out of communications hubs; it would consist of workers hired by
business firms under contract with government; citizens would have broad choices
in the public services they purchase; government departments would shrink to
core political-policy functions; governments would adopt variable budgets, in
which the volume of resources were linked to the volume of outputs and other
measures of performance.
In the medium to long term, the direction taken by government will closely
track the direction taken by business organisations. If the “virtual” firm becomes
the model of business organisations, it also will become, with some lag, the model
of government organisation.
In other words, if one were able to foresee how the market sector will evolve,
one would be able to foretell how the public sector will change. Lacking such
foresight, this writer urges governments to attend to the near-term agenda and
defer visionary plans until the future has arrived.
148
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Reconceiving the Center: Leadership, Strategic Review
and Coherence in Public Sector Reform
Evert A. Lindquist
Director, School of Public Administration
University of Victoria, British Columbia
Introduction
Consensus on reform
After two decades of reform, the challenge of reforming the public sector
remains on the agenda of most, if not all, governments of OECD Member countries
at the close of the 1990s. However, the precise nature of the challenge is beguiling.
On the one hand, there seems to be consensus on the desirable directions for
reform. Most governments embrace the rhetoric of “managerialism” and the “new
public management”. In other words, few governments disagree about the need to
increase efficiency and to reduce deficits and debt, to improve service delivery
(by adopting technology and relying on more autonomous agencies or non-state
entities), to increase political control over bureaucracies and programs, to
improve accountability, and to focus core public servants on policy development
and performance management. The state of discourse is such that Fukuyama’s
“end-of-history” thesis, which argued that, notwithstanding great diversity in
governance practice, there no longer existed serious ideological rivals to the
tenets of liberal democracy, could easily be applied to the debate on public
sector reform.1
Challenges remain
Despite the rhetorical consensus, the same governments have displayed
varying degrees of commitment and urgency in adopting these reforms. They
continue to play “catch up” with the significant and rapid changes wrought by
technological innovation, freer trading regimes, and unceasing demands for
alternative governance regimes. They remain besieged by conflicting claims from
interest groups, and policy making seems more about contending with crises and
managing communications, than making progress on fundamental problems. And, 149
© OECD 2000
finally, they have yet to fully restore the confidence of citizens in political and
administrative leaders, and public institutions more generally. Indeed, one senses
that leaders and scholars alike are taking stock, well aware of the gap between the
prevailing consensus on reform and the diversity in the experiences of every
jurisdiction.
Unease at the center
Not surprisingly, there is palpable unease among the leaders of institutions

responsible for corporate issues in public sector bureaucracies, for they must
anticipate these pressures and move these systems in new directions. They know
that change and reform will continue to preoccupy their governments, yet remain
unsure of what shape the next wave of reform will take. It is for these reasons that
a discussion on “strategic review and public sector reform” with political and
administrative leaders from across the OECD is so timely. Never has the need for
strategic review been greater; leaders need to develop focus and convey coher-
ence during a time of rapid change and many possibilities, not only for the sake of
the public sector but also for civil society. They must also wisely deploy limited
resources and energies, and one way to do this is to learn as much as possible
from the experience of other governments with review and reform, while control-
ling for context when drawing these lessons. While central institutions of govern-
ment will have a critical role in review and reform, little is known about how they
have been affected by the changes noted above,2 nor what sort of capacities they
will need to undertake reviews and reform in the next decade and beyond.
Despite the daunting nature of this topic, and the diversity of governance
traditions and experience with reform embraced by the OECD, the goal of this
paper is to provide a foundation for a wide-ranging, but disciplined, discussion of
these matters.
Overview and genesis
A draft of this paper was first presented at a two-day roundtable of the PUMA
group of country experts from several OECD countries, who also presented
accounts of developments in their jurisdictions. It was informed by my observa-
tions of the Treasury Board of Canada Secretariat (see Annex) and some ideas I
had developed about ways to depict how central agencies exercised their
responsibilities during a time of change.3 My goal was to introduce a conceptual
framework to assist practitioners to assess and compare the experience of their
respective jurisdictions, and to guide further empirical study.4 I sought to acknowl-
edge that reform had proceeded in different ways in each country – incremental,
selective, and comprehensive – even though all jurisdictions were wrestling with
150 similar challenges. I argued that governments sponsor different programs of
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reform due to different degrees of engagement on the part of political and admin-
istrative leaders, in part driven by distinctive institutional contexts and the fact
that public sector reform is only one item on fluid political agendas. I suggested
that leaders in all countries shared the challenge of rising above the day-to-day
transactional demands of their governance systems to identify new strategic
directions and offer coherence to constituencies inside and outside government.
To do so, leaders can choose from an impressive menu of mechanisms for strategic
review. Finally, I explored how the management imperatives would shift as gov-
ernments moved from the phases of review, implementation, and consolidation.
Anglo-American bias?
I believe that the country experts found those ideas useful, but there was an
interesting reaction to the conceptual framework I introduced, which was intended
to capture the subtle ways in which central institutions have evolved and now influ-
ence public services. This is an important matter because, in many ways, central
agencies were not just the instigators of reform but also the targets of managerialist
and new public management (NPM) movements. The framework depicted central
agencies as “baskets” of smaller bureaux with specific responsibilities and with vary-
ing degrees of reliance on administrative networks across the public service. At one
level, this formulation was found attractive because of its emphasis on horizontal
governance, collaboration, and learning. But several experts were perplexed and
questioned the assumption that central institutions played a significant role in
strategic review and reform. This led the country experts to more carefully explore
how review and reform was handled in each jurisdiction, and by whom. We realised
that the discourse on reform reflects an Anglo-American bias and that some gover-
nance systems distribute the responsibility for corporate administrative policies
and reforms in very different ways, which serves not only to condition and constrain
the scope for review and reform, but also creates different challenges for imparting
coherence on public sector reform.
Final structure of paper

This led to a revision and elaboration of this discussion paper which includes:
i) a distinction between Type I and Type II governance systems; ii) some explora-
tion of the extent to which there appears to be convergence between these
systems due to external pressures on governments; and iii) consideration of how
challenges for strategic review might differ at different stages of the reform cycle
(developing blueprints, implementation, and consolidation). Accordingly, the
structure of this paper is as follows:
• Public Sector Reform: Pressures, Strategies, and Constraints.
• The Question of Leadership and Public Sector Reform. 151
© OECD 2000
• Moving Beyond Transactions: Mechanisms for Strategic Review.

• Different Systems, Different Challenges for Strategic Review.
• Managing Strategic Review and Public Sector Reform: Some Suggestions.
• Concluding Remarks: Learning and Coherence Across Jurisdictions.
Public Sector Reform: Pressures, Strategies, and Constraints

One cannot have a productive and nuanced discussion of how the center has
changed, and what new roles and directions leaders might adopt, without
recognising that each jurisdiction has unique experience with public sector reform,
different configurations of central institutions in government, and different
traditions of political and administrative leadership. Moreover, strategies for
review and imparting coherence vary by the breadth and depth of public sector
reform initiatives. We begin by reviewing pressures for reform, as well as the range
of initiatives that can be launched by governments.
Diverse reforms
During the 1980s and the early 1990s, governments and central agencies in
the OECD countries initiated public sector reforms of considerably different scope
and complexity, notwithstanding the ubiquitous rhetoric of managerialism and the
new public management (NPM). The timing and pace of reform differed in every
jurisdiction, and, as Chart 1 demonstrates, the term “public sector reform” can
embrace diverse activities. This list is undoubtedly incomplete; it may not draw
attention to more specific innovations in each category. Moreover, entire books
could be written on how particular initiatives were launched in different countries
by one or more levels of government, on how these reforms intersected with
(i.e., complemented or contradicted) each other, or on how well the reforms met
expectations.
Common challenges
The diverse experience with public sector reform should not obscure the fact
that most OECD countries have been contending with similar pressures to reform
and sometimes restructure the public services that deliver them. These pressures
are well known and include the changing demographic profiles that have affected
the underpinnings of welfare policies and programs, the problem of mounting
debt and deficits that have squeezed government budgets, and the possibilities
afforded by new information technologies and freer trade regimes. These latter
developments have transformed the international political economy, forcing
governments to contend with the rapid movement of capital, harmonise policy
152 and trade regimes, deal with citizens and groups with better access to information,
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Chart 1. The Many Facets of Public Sector Reform
• Reducing administrative overhead, delayering, co-location of offices and

sharing of common services, reducing red-tape and outdated rules, and reduc-
ing reliance on paper-based processes.
• Using information technology to improve financial systems, purchasing and
payment systems, service delivery to clients and citizens, facilitating communi-
cations inside and outside the bureaucracy, etc.
• Adoption of deficit and debt reduction strategies, attempts to overhaul tax
systems in response to international pressures and taxpayer fatigue, and
reviews of previously untouchable policy and programs.
• Increased focus on improving program operations and service delivery by
creating autonomous agencies such as special operating agencies, executive
agencies, and state-owned enterprises.
• Greater reliance on better financial practices, such as cost recovery, user fees,
removing subsidies, greater fungibility in budget categories, allowing for carry-
overs, and adoption of accrual accounting.
• The adoption of strategic planning, business planning, performance manage-
ment regimes, and more transparent reporting to the public.
• Greater reliance on alternatives to direct delivery of services by permanent
public servants in the form of contracting out, devolution, partnership arrange-
ments (with non-profit, for-profit, and other government organisations), privati-
sation, and autonomous agencies.
• Shifting human resource management and compensation systems: appoint-
ments to level and more lateral appointments, granting greater latitude to
operating departments in hiring and promotion, greater use of limited term
contracts, and adoption of performance pay regimes.
• Service quality precepts such as service standards, performance measures,
re-engineering of forms and processes, a customer focus, single-window
delivery of services, shifting of resources to front-line staff and regional
operations; and
• Horizontal perspective on governance, policy and operations that recognises
the interdependencies of programs for achieving objectives, and at the admin-
istrative level, there have been attempts to reduce unnecessary overlap and
duplication of effort.
and adopt new policy and administrative arrangements with supranational,

sub-national, and non-state institutions. More generally, governments must
respond more quickly to these challenges. 153
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Chart 2. Streams of Influence on Public Sector Reform
Internal and External Latest Intellectual

Intergovernmental Theories on Policy
Negotiations and Management
Changing Evolving Government

Patterns in Public
Budget Agendas and Changing
Realities Sector Reform
Citizen Demands
Structural, Procedural, and Cultural

Features of Each Governance System
Reform as confluence
How these assorted pressures coalesce into specific programs for public
sector reform in each country depends greatly on how they get funnelled through
domestic politics and institutions, which create and constrain opportunities to
review and debate alternatives. A useful way to think about this is to identify sev-
eral “streams” of pressures for change (see Chart 2). These streams include evolv-
ing budget realities, the arrival of new governments (whether majority or coalition)
seeking to implement agendas but also responding to emerging citizen demands
during mandates, ongoing demands from sub-national and supranational govern-
ments and institutions for new arrangements, and finally, the steady flow of ideas
from experts about how government ought to be managed.5 In his work on agenda
setting and policy development, John Kingdon argues that policy decisions,
though not entirely random, are often the result of a confluence of events from two
or more streams which create “windows” of opportunity. Likewise, for public sector
reform, we can hypothesise that, while streams of ideas are ever present, reform
will be contingent on the impact of other influences such as government ideology,
intergovernmental negotiations, trade regimes, and deficit reduction strategies.
Scope of reform
Reforms, then, may not emerge to the same extent or time due to different
154 events in otherwise similar countries, even if general pressures are common.
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Moreover, countries with different political and administrative systems may

“structure” the opportunities for new ideas and debate on public sector reform in
different ways, because of different institutional processes and sources of power,
and because of different political and administrative cultures. In short, we should
anticipate that there could be considerable variation in the scope of reform, and it
is useful to presume three levels of reform:
• Comprehensive. This is a “big-bang” approach to public sector reform, which
spans many facets of management and would affect most, if not all, depart-
ments and agencies.
• Selective. Such reform can be significant, but tends to only focus on one or
two policy domains, certain clusters of departments and agencies, and
certain central bureaux.
• Ad hoc. Such reform deals with particular programs or a department, or
perhaps with only one or two central bureaux. However, many ad hoc reforms
can proceed simultaneously.
It is crucial to understand that, with certain exceptions, it is difficult to make
normative arguments about which path towards reform is optimal – that depends
on the circumstances in each jurisdiction. An important set of empirical questions
has to do with whether the center actively leads or resists reform, has the appro-
priate capacities to initiate and implement reform, or is itself affected by the
broader reform initiatives. We might expect that, as reform initiatives become
more comprehensive, the answers to these questions should vary.
Future pressures on government
All jurisdictions and their centers of government will continue to be under

considerable pressure to reform how public services are delivered. Their govern-
ments must find ways to better serve citizens and communities increasingly aware
of new technological and governance possibilities and practice in other jurisdic-
tions, to ensure that its many components are better co-ordinated, to improve the
accountability of government and other providers of public services, and to do all
of this more quickly. An important ingredient of a responsive government rests
with its leadership. But, as is discussed below, the locus for leadership for reform
in governance systems itself can be quite variable.
The question of Leadership and public sector reform
It is often taken as self-evident that government leaders or the “centers of

government” are responsible for public sector reform, but ascertaining just who
these actors are or should be, requires some nuance. Indeed, different political 155
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and administrative systems as well as different situational contexts may well

produce very different advocates and opportunities for reform. And, as I discuss
later in this paper, central leaders must assume new roles, adopt more of a
learning and facilitation posture, and develop and convey coherent images of
myriad reforms in complex governance systems.
What constitutes the center?

It is useful to begin by distinguishing governments and their political leaders
from central agencies and their administrative leaders. In some cases, public
sector reform is promoted by reformist political leaders who persuade, cajole, or
force administrative leaders to rethink structures, public policies, and programs.
In other cases, whatever the rhetoric of political leaders, once elected they may
evince little direct interest in reform (that is, it will not be a high political or policy
priority) and defer to the judgement and energies of administrative leaders. There
are limits, though: the more significant the reforms envisaged by administrative
leaders, the more likely they will have policy and political implications, and there-
fore require the support of political leaders if they are to succeed.
Reinforcing leadership
A potent combination occurs when the government and administrative
leaders agree on the need for reform and introduce a concerted program of
restructuring, and this assessment is bolstered with support from all political
parties. It is under these circumstances that public sector reform can be compre-
hensive in nature, though this need not be the case – selective reforms could be
initiated over time. Indeed, while a strategy of comprehensive reform does
convey commitment from the center of government, it can also increase the likeli-
hood of unanticipated consequences and the prospect that the initiative will not
meet all expectations.
Disinterest and risk

A worrisome situation can emerge when neither political leaders or adminis-
trative leaders take an interest in public sector reform, particularly when
pressures for change and restructuring mount. This situation revolves around an
interesting paradox: when out of power, politicians inevitably point to inefficient
or misguided administration; once in power, ministers are wary of investing
precious political capital on public sector reform, and act as if it is difficult to
engage the media and the public on these matters. Thus, political interest in
public sector reform is likely to be episodic or, even if leaders are convinced of
the need for such reform and prepared to invest valuable personal time in
156 advancing the cause, their support will be muted in the public domain. Otherwise,
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rare opportunities to seize windows of opportunity may pass, and instruments for
change, such as altering patterns in recruitment, may not be utilised to full poten-
tial. If allowed to fester, one scenario might see external agents such as financial
markets and the International Monetary Fund calling for reform programs that are
sudden and dramatic, perhaps risking public backlash.
Leadership from below
There is another possible manner in which reform may occur, however it may
not be due to political and administrative leadership at the center. Rather, reform
– particularly if selective or ad hoc – may occur in a bottom-up manner, with the
political or administrative leaders of departments and agencies using their auton-
omy and recruitment opportunities to significantly change management and
culture. Such reform, even if not directed from the center, could eventually have
system-wide effects. However, its diffuse nature may lead to little recognition of
progress, nor produce a system-wide view of emerging competencies or potential
to undertake further reform.
Constraints on administrative leadership
Chart 3 summarises these possibilities, showing that along the political

dimension, public sector reform can range from being a collective priority of a
government, to that of individual ministers, or not loom as a priority at all. Along
the administrative dimension, public sector reform can be led from the center or
by senior managers in departments/agencies. The less interest evinced by politi-
cal leaders, the more constrained the scope for action of administrative leaders,
whether at the center or not, particularly if legislation and resources are required
to move forward with new initiatives.
Moving Beyond Transactions: Mechanisms for Strategic Review
Governments and their leaders in OECD countries have unique challenges

and traditions, but they will confront common pressures and continue to grapple
with public sector reform for the foreseeable future. It is for this reason that they
need to anticipate issues and challenges, to improve capabilities for growing
towards the information and expertise necessary to redress problems, to use
scarce resources wisely, to take advantage of political windows of opportunity
when they open, and to develop and impart new understandings of how the
public sector works. This places new demands on government leaders to create
the capacities and time to be more strategic at the political or administrative
levels when it comes to public sector reform. 157
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Chart 3. Sources of Leadership on Public Sector Reform
Administrative Leadership
Central Department Low
Priority Priority Priority
Collective
Ministerial
Priority
Individual
Political Ministerial
Leadership Priority
Low
Priority
Transactional challenges
All public service systems – and particularly central agencies and the upper
echelons of ministries – must contend with two distinct streams of “transactions”
or short-term pressures that work against strategic reform. They are:
• Bureaucratic transactions. These demands come from “below”, deriving from
the need to maintain and cope with large-scale bureaucratic systems. They
include preparing briefing notes and memoranda for ministers and cabinet
decision-making, filing quarterly and annual reports (including budgets and
performance reports), responding to auditors-general and appearing in
front of legislative committees, and monitoring and regulating departments
and agencies because they are mandated to do so due to past government
decisions. Even if governments are persuaded that reform is necessary, the
center must simultaneously continue to meet the steady-state transactional
demands of the system.
• Political transactions. Another stream of demands come from “above”, in
response to ministers, opposition politicians, interest groups, citizens, and
the media. Once in power, governments seek to implement their policy
programs, and so public servants must assist them in this enterprise,
regardless of their strategic importance. A daily fact of political life is that
outside groups and journalists strive to scrutinise the activities of govern-
ment and draw public attention to political problems of all kinds. There is
considerable and sustained pressure on public sector bureaucracies to
brief ministers and respond, either with new policy or media strategies, as
158 quickly as possible.
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Transactional imperatives
Attending to administrative and political demands requires attention to

transactions that can crowd-out strategic review and repositioning of governments
and their bureaucratic systems. Administrative and political transactions may be
bothersome, and not deal with the big issues and pressures, but if central bureaux
and ministries fail to meet these challenges, their credibility will quickly decline
with political leaders and the public. On the other hand, we also know that the
long-term consequences of not dealing with reform can be quite significant.
Striking a balance
The “transactional challenge” confronts all government systems, but political

and administrative leaders must find ways to surmount or side-step these
pressures in order to initiate desired reforms. Moreover, even if political or admin-
istrative leaders are interested in investigating the need and possibilities for
reform, they may not have staff with the right skills and perspectives to support
the needed review and planning for reform. How, then, can governments mobilise
the expertise and capacities for public sector reform, and do so without compro-
mising its ability to handle its transactions?
Instruments for review
As Chart 4 indicates, there is no shortage of means available for conducting

strategic review. They differ primarily with respect to who takes on primary respon-
sibility, and the amount of time available for the review. Thus, strategic reviews
can be led by ministers or their most senior public servants, presumably sup-
ported by more junior officials. Such reviews can focus on a single department or
portfolio, or can involve several or perhaps all departments and agencies.
Strategic reviews may be led by central authorities, or they may be the responsi-
bility of particular departments and agencies.
Creating space for review
One drawback of such engagement is the many other demands on leaders; it

is unlikely that they can devote significant attention for extended periods of time
on review. Unless it is an episodic moment for public sector reform, with signifi-
cant political implications, reviews will likely be constrained with respect to
substance. Such pressures imply that ways must be found to best use the incredi-
bly scarce resource of ministerial and deputy ministerial time. One possibility, for
example, is to adapt existing allocative and policy processes (i.e., budget and
priority-setting processes), which may focus on the shorter term, for the purposes
of reflective and more forward-looking strategic review. 159
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Chart 4. Menu of Instruments for Strategic Review
• Cabinet committees. A committee of ministers is appointed to oversee the reviews,

or perhaps to review the plans from other actors, and then to put together a
blueprint for reform.
• Central bureaux. Depending on the confidence that political leaders have in
central agencies, and depending on their capacities, the government may rely
on central bureaux to undertake the needed reviews and to develop the
blueprint. The cabinet would still endorse and modify the blueprint.
• Portfolio reviews. Some governments rely on ministers (and perhaps a junior
minister) in charge of portfolios, consisting of several departments and agencies
to undertake reviews and propose the blueprint. Such change would require
endorsement from cabinet.
• Deputy minister committees. Another approach is to rely on groups of deputy
ministers or secretaries to undertake reviews and propose blueprints. They
would have to be supported by small secretariats.
• Department reviews. Often used in combination with ministerial review commit-
tees, and usually with the assistance of a small central secretariat. The onus for
undertaking reviews and developing alternative blueprints would fall to specific
departments or agencies, and could proceed as part of regular business
planning cycles.
• Hybrid teams (with departments). This approach is best illustrated by the
“scrutinies” employed by the British government, which involves establishing
review teams which match central resources with those of the department or
agency under review, and work for concerted periods of time.
• Hybrid teams (with the private sector). This approach matches public sector officials
(from the center and the relevant department or agencies) with participants
from the private sector, so as to question the premises and needs of programs
and delivery systems. Such teams can be used selectively or as part of a
comprehensive review process.
• Hybrid teams (with former officials). This approach would match key central officials
with experienced former public servants, who would be knowledgeable of the
programs and structures in question, but who would no longer have a vested
interest in the outcomes.
• Consultants. The government would contract out the responsibility for reviewing
programs and structures, and for developing alternative models for reform. The
proposed plans would be vetted by political and administrative leaders.
• Commissions. Governments can appoint independent commissions to review
government priorities and administrative operations, and to develop blueprints
for reform. They can be comprised of individuals from public sector and private
sector representatives, and even academics, and supported by research staff.
160
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External reviews
At times, governments may fully contract-out the responsibility for review to

consultants or commissions. However, given the challenges peculiar to managing
government systems, it is unlikely that such contracts or mandates would be
granted without assurance that participants were familiar with the workings of
public bureaucracies. Otherwise, governments can – depending on precisely who
sponsors the review – mix “local” expertise with “outside” expertise, whether the
latter includes experts from other parts of the public service, the private sector,
non-profit sector, universities, or former officials by means of “hybrid teams”. If
more thorough work is required over a longer time frame, then leaders can rely on
expertise from inside or outside the government, although external reviews can
adhere to strict timetables.
Cultivating new values
Finally, reform occurs by means of gradual cultural change, by the adoption or

insinuation of new values inside government. This may be achieved by altering
patterns in recruitment and promotion,6 and by introducing new programs in
training and development. Rather than announce reform initiatives, a disposition
towards reform and review can be insinuated into the minds and work of political
and administrative leaders. This would be manifested in a willingness to ask
questions about performance and to consider new ideas. Effecting cultural change
is a long-term strategy, one that needs to be sustained and supported by political
and administrative leadership alike.
Different systems, different challenges for strategic review
The foregoing constitutes a lengthy and flexible menu, one from which strate-
gies can emerge in many variations and combinations. However, the “fit” of one or
more of these instruments and the very demands for strategic review and public
sector reform may vary considerably among the OECD countries. Chart 5 is a parsi-
monious attempt to capture the possibilities. One dimension indicates there can
be variance in the dominance of the central institutions of government over
departments and agencies. The other dimension shows that the responsibility for
co-ordination across departments and agencies may reside at the center or be
distributed among departments and agencies, the latter leading more to a regime
of mutual adjustment.
Two models
Although the chart suggests many possibilities, to sharpen our analysis it

helps to identify two models that reflect distinct traditions of governance among 161
© OECD 2000
Chart 5. Responsibility for Coordinating Horizontal Issues
Locus of Coordination
Central Department
institutions and agencies
High Type I
Capacity Systems
e?
Capacity ?
enc
for g
er
Coordination onv ?
C
Low
Capacity
Type II
Systems
the OECD countries. One model consists of strong centers of government that
centralise co-ordinating and administrative policy functions at the center. This will
be designated as Type I systems, which have as exemplars the governments of the
United Kingdom, New Zealand, Australia, and Canada. Standing in direct contrast
are Type II systems, which have relatively small central institutions, and distribute
far more authority for policy and administrative development and co-ordination to
departments and agencies. Here the exemplars might be countries such as
Germany, Norway, and the Netherlands.
Important questions
With these models in mind, we can better explore some of the challenges of
strategic review. How might each type deal with a more rapidly changing environ-
ment, the possibilities presented by emerging information technologies, and the
increasing demands to more effectively co-ordinate policy and administrative
activities across the system? More importantly, are there opportunities for these
systems and their centers to become more anticipatory and to increase the
possibilities of strategic review? How can the right capacities be developed? And,
later, I ask, is there any convergence across the system types?
Type I Systems: Reforming From the Center?

There has emerged a substantial comparative literature on public sector
reform, program review and processes, and, to a lesser extent, central agencies.
However, the emphasis has been on Westminster systems such as New Zealand,
162 Australia, the United Kingdom, and Canada. In varying degrees, and at different
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times, the actions of these governments have been held out as models for each
other, as well as for other countries.
The center as catalyst

Over the last decade, considerable attention focussed on how their govern-
ments initiated reforms under the precepts of “managerialism” and the “new
public management”.7 Scholars and practitioners alike have explored and
debated several important matters: designing new portfolios and department or
agency structures, downsizing the core public service, introducing alternative
human resource regimes, separating operational from policy functions, relying
more on contracting-out and partnership arrangements, adopting customer-
oriented and technology-based delivery systems, and improving accountability
and reporting. In Type I systems, public sector reforms have been instigated from
the center, with varying degrees of engagement from political leadership.
The center as culprit

Little is known, however, about the extent to which central institutions have
been transformed as a consequence of reform. This is ironic, because managerial-
ist and new public management approaches were reactions to the perception that
centrally-controlled and rule-bound systems had not only stifled innovation by
departments, agencies and front-line workers, but had also made governance
costly and unresponsive. Central agencies had set the rules, guided and moni-
tored the system, provided the incentives and sanctions for departments and
agencies, and advised political leaders about how the public sector should be
managed. If governments were said to have failed or lurched out of control during
the 1980s and early 1990s, then central agencies were heavily implicated, either
for failing to anticipate difficulties, develop sufficient reforms, or persuade govern-
ments that more decisive action was warranted. Moreover, there were complaints
about competition and overlap among central agencies, which did not necessarily
improve policy development or respond to the demands of operating depart-
ments and agencies.
Central reform strategies

For many, then, a key element of the “object” of public sector reform should
have been the central institutions of government. To be sure, there were bound to
be different judgements on whether political leadership or central agencies were
responsible for perceived failings, and concomitantly, parallel views on whether
reforming the center or the larger public sector ought to be a high reform priority.
Consider these possibilities:
• Reform the center first. Sustainable and significant reform cannot proceed
unless significant changes were made in the disposition, policies, 163
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processes, structure and competencies of central agencies. Otherwise, the

controlling tendencies of central agencies would re-assert themselves in
the longer term, thus undermining the underlying logic of managerialist
and NPM reforms.
• Reforming the center can wait. Central agencies may require significant reform,
but building pressures and limited windows of opportunity to initiate
reform may cause governments to assign higher priority to broader reforms
of the public service, particularly if reform is comprehensive. Continuity at
the center will be needed for leadership and for back-up; significant central
agency reform should be left until after system reforms take root.8
• Reform proceeds in tandem. System-wide reform does proceed, but along with
reform of some central functions and structures. This strategy leaves open
the matter of which specific central functions and structures should be
reformed, and at what pace. It also suggests that reform might occur in more
subtle ways, including altering the culture of central agencies, as well as
processes and reporting, as opposed to wholesale restructuring and
reorganisation.
The preceding options presume that government leaders were deliberately

strategic, making conscious decisions to proceed along one of these paths. But
governments may have drifted into certain patterns of reform, or developed an
“emergent” strategic perspective along the way.9 However, regardless of the
amount of intentionality of governments, it is useful to identify patterns because
we can better surmise what strategies – deliberate or emergent – worked best and
under what circumstances.
Centers have changed
Determining which strategies were adopted in Type I systems requires sub-

stantial and sustained study, but following a decade of public sector restructuring,
we can surmise that the centers of government were not unaffected. This should
be the case, regardless of the relative engagement political and administrative
leadership, and the precise commitment to reform. Using traditional approaches,
we might seek to document structural changes (such as the elimination, consolida-
tion or proliferation of central agencies), determine if budget and human resource
allocations of central agencies increased or decreased relative to the public
service, or assess the reputations of their political and administrative leaders. The
question is, can such indicators capture the more subtle and perhaps important
ways in which the centers of government may have evolved, and can they permit
164 useful comparisons across jurisdictions?
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Centers are opaque
While traditional approaches remain essential points of departure, there is

much they do not capture. For example, the central institutions of government
inevitably look powerful, proximate and concentrated from a distance in most
systems (as is usually implied by the phrase “the center”). However, practitioners
know this image is more complicated and confusing if one works in the center or,
alternatively, for parts of departments or agencies that deal regularly with the
center. Central institutions are difficult to fathom, for three reasons. First, they
have broad spans of responsibilities and reach that make it difficult to generalise
about practices and effectiveness across functions. Second, the responsibility for
developing, implementing, and monitoring administrative policies is shared
between the center and those they regulate, namely, departments and agencies
(i.e., the human resource function). Finally, it is difficult to develop benchmarks for
understanding the effectiveness of the center within a jurisdiction, because the
tasks and size of central agencies vary across jurisdictions. In short, unless our
concepts and data-gathering strategies acknowledge and model these realities,
our understanding of the center may be out of step with how they operate.
Analyzing the Center in Type I Systems: An Alternative Approach
Elsewhere I have suggested that it may be more fruitful to identify the

domains of responsibility held at the center,10 as well as more specific administra-
tive policy regimes in each. The list provided in Chart 6 is not exhaustive, but
should suffice to make the point. Each administrative policy domain is usually the
responsibility of specific central bureaux (i.e., units within larger central agencies),
which stand at the nodes of networks of interested or affected departments and
agencies across a public service, which may include officials in other central
bureaux.
Central bureaux and administrative networks
This approach draws on the literature on policy networks and communities to

understand how specific central agency bureaux relate to actors within and
outside the center. It suggests that influence may obtain more from information,
consultation, best practices, idea sharing, and pockets of expertise not at the
center, than from formal approvals, pre-transaction clearances, and limits dictated
by central bureaux. It also anticipates that departments may possess greater
competency and capacity than central bureaux, particularly if they are on the cut-
ting edge of utilising information technology. This suggests that the center may
often be in “catch-up” mode with other parts of the public service, and its policies
simply ordaining practices already in place. On the other hand, some departments 165
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Chart 6. Domains of Administrative Responsibilities
• Priority-setting (implementing priorities, dealing with emergencies, allocating

reserves).
• Budget-making (expenditure analysis, estimates production, reserve management).
• Management innovation (alternative delivery mechanisms, departmental assess-
ments, service quality).
• Human resource management (collective bargaining, benefits administration, classi-
fication, redeployment, training).
• Administrative policies (purchasing, freedom-of-information and privacy, informa-
tion technology, real property).
• Affirmative action (women, minorities, disabled, aboriginals, and sometimes
official languages).
• Financial management (audit, evaluation, financial control systems, budgetary
flexibilities).
• Legal services (legal advice, contract management, defending against claims, etc.).
may be laggards, and require central support. This suggests that observers should
determine the general status of bureaux at the center, and assess their relative
capacities in comparison to the departments and agencies in its network.11
Central agencies as “organisational baskets”

This way of looking at central agencies is striking for several reasons. First,
each network represents different spheres of substantive and administrative
policy, and each has its own communities-of-practice in the public service across
central bureaux, departments and agencies. Rather than take an organisation-
based view of central agencies and their influence, it suggests that we adopt a
more functionally-based and knowledge-based view of specific clusters of tasks,
and then explore how central bureaux relate to those its seeks to influence,
regulate or control across a public service. Second, it suggests that we should pay
relatively less attention to the number and size of central agencies, and instead
see institutional structures (i.e., such as a cabinet office or management board) as
organisational “baskets” for housing central bureaux and their responsibilities.
Closer scrutiny of specific bureaux and their networks is warranted in order to
determine how each is managed, how they respond to evolving demands, and
how they identify and adopt best practices. In short, this approach places less
166 emphasis on formal structure, and more emphasis on capacities and learning.
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Integration challenges
While this framework challenges US to focus on the extent of “differentiation”
across and within central institutions, it should also draw attention to the
challenge of “integration”. It permits a more systematic response to a common
criticism of central institutions, namely, that they fail to co-ordinate the policies
and reporting requirements of many small central bureaux for departments and
agencies, often encapsulated in the phrase “one hand does not know what the
other is doing”. As I have argued elsewhere:12
“The tolerance for ‘unintegrated’ regulation and management initiatives by
central agencies is now very low because steady diets of repetitive budgeting
and decremental resource reductions have proven to be a costly and not very
effective way to manage change, because future reform of the public service
is more likely to be fundamental than incremental, and because central
agencies themselves are increasingly targets for resource reductions. The
upshot is that governments and central agencies must delineate new integra-
tive processes, structures and administrative policy regimes. This will raise
issues about accountability and about what constitutes the essential roles of
central agencies.”
These issues are also in keeping with the recent interest in horizontal gover-
nance and with the challenge of providing “single-window service” from the center
for operating departments and agencies, or at the very least, more co-ordinated
and congruent policies. How and whether the demands for better integration and
co-ordination can be handled through modified or new processes and policies, or
by new structures (such as co-ordinating bureaux or committees), will vary accord-
ing to the challenge at hand.
Increasingly strategic centers

Let me assert that in Type I systems, central institutions have evolved, in vary-
ing degrees, due to the adoption of broader managerialist and NPM reforms, or
more pragmatically, reduced resources. The resulting view is that the center should
be more strategic and avoid “micro-managing” the affairs of departments and agen-
cies. The primary responsibilities of the center should involve identifying and
implementing government priorities, ensuring that departments and agencies have
credible business plans and can be held to account, encouraging learning about
best practices throughout the public service, and undertaking strategic reviews.
Strategic review, in the newer mode of thinking, is to be driven from the center but
undertaken in a collaborative manner with departments and agencies. There are two
reasons for this posture. First, the center can benefit from the expertise of depart-
ments and agencies, and avoid “ivory-tower” planning. Second, the center can
secure “buy-in” from departments and agencies with more inclusive processes,
since it too has suffered from downward pressures on budgets. 167
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Accounting for “mixed signals”

This framework may also have practical implications for the political and
administrative leaders of central institutions. The invocation of managerialist and
NPM principles has led to confusion and frustration in public service systems,
because although the center undertook to give departments and agencies more
flexibility, it also reserved the right to interfere and regulate their activities. A
common complaint of departments and agencies is that the center sends “mixed
signals”. The traditional language and concepts employed to capture the work of
central institutions does not clarify how central affairs are now conducted because
there are, in fact, different functions with different imperatives. A framework that
acknowledges there are different imperatives attached to each function, and
different roles and accountabilities for the center, may serve to reduce tensions,
rebuild trust, and better align the expectations of the center as well as other parts
of the public service, including elected representatives and auditors general.
Type II Systems: The Challenges of Co-ordination and Coherence
While much of the rhetoric attached to managerialism and the NPM has been
embraced by governments and academics throughout OECD countries, there has
been considerable wariness outside Type I systems about the wisdom of adopting
the full program of reforms. At root are concerns about their efficacy and fit with
the political and administrative contexts of different jurisdictions.
A second look
Although the conceptual framework introduced above can be viewed as a
reaction to traditional views on how the center should work in Type I systems, it
too requires considerable adaptation for Type II systems. Indeed, not only is this a
corrective to the tendency to hold out Type I systems as exemplars; one can also
be provocative and cast recent developments in strategic review and public
sector reform in those systems as highly constrained attempts to move the centers
of Type I systems towards the practices of Type II systems.
Smaller centers
Type II systems do not have centers as substantial as those in Type I systems,
either in terms of the clout of the Prime Minister’s office, or the number and size of
central agencies. The offices supporting Prime Ministers and cabinets are often
relatively small, and focussed primarily on facilitating transactions and brokering,
as opposed to launching major system initiatives. Authority for policy develop-
ment and horizontal administrative matters rests with departments and agencies,
168 including many of the responsibilities outlined in Chart 6. One reason for this is
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that Type II countries such as Germany, Sweden, Norway and the Netherlands
have strong administrative law traditions that lead to administrative autonomy.
They also typically have electoral systems that lead to coalition governments
which serve to reinforce administrative autonomy; the appointment of ministers to
specific departments and portfolios are part of negotiated deals, and therefore
are seen as the “property”, however temporary, of one party.
Distributed corporate responsibilities

For critics of overly strong centers in Type I systems, the Type II model must
seem like the archetype their reforms seek to achieve. In Type II systems, depart-
ments and agencies need not fear the intrusions of strong central agencies or of
central agencies resistant to reforms; even the ability of Prime Ministers to
“micro-manage” is circumscribed. However, this does not mean there are fewer
administrative policies or co-ordinating mechanisms; rather, many of the central
authorities of Type I systems are distributed to departments and agencies. We can
say, then, more precisely that many departments and agencies are responsible for
“corporate administrative” policies.
Leading from Type II centers

While Type II systems may provide an interesting model for some critics of
Type I systems, Type II systems are not as conducive to concerted pushes by the
center for strategic reviews and public sector reform, even if reform may be
warranted in the eyes of several constituencies inside and outside government.
The combination of administrative autonomy and coalitional politics may mitigate
against central initiatives. However, Type II systems are not impervious to budget
pressures, new technological opportunities, and demands from citizens, interest
groups, and other governments for better policies and administrative regimes.
Like Type I systems, their political and administrative leaders must respond to
new needs and demands, better co-ordinate policies and programs, and do so
more quickly and cheaply. If they seek to launch system-wide public sector
reforms, they must rely more on consensus and collaboration, and perhaps
informal channels. Moreover, given that many corporate authorities are distrib-
uted to departments and agencies, it follows that the challenge of reducing
overlap and better aligning administrative policies must be achieved through
mutual adjustment rather than central fiat.
Alternative reform paths

This does not mean, however, that Type II systems smother review and
reform; rather, political and administrative leaders respond to pressures and
problems in other ways. For example, external pressures to co-ordinate or 169
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harmonise policies or services are more likely to be addressed through accommo-

dation between two or more departments and agencies, than from pressure from
central institutions, as would be the case in Type I systems. We would also predict
that strategic review and reform are far more likely to be initiated within the
domains of departments and agencies, because their political and administrative
leaders have the autonomy to proceed with reforms. Accordingly, these leaders
will rely more heavily on a subset of mechanisms in Chart 4 – such as portfolio
reviews and, more locally, initiated department reviews, hybrid teams, and
commissions – to lay the groundwork for reform.
Increasing demands for co-ordination
Globalisation, budgetary pressures and technological innovation have led to

policy and administrative issues that require mutual adjustment, and even
consensus, among relatively autonomous departments and agencies.13 Depart-
ments and agencies may find themselves dealing more regularly with new clients,
and therefore with other departments and agencies. Without better co-ordination,
opportunities for providing better decisions, improved service, increased
efficiency, and quicker adjustment may be lost. At the very least, dealing with such
challenges requires developing greater degrees of trust across departments and
agencies as well as means for ensuring co-ordination, which could occur on an
ad hoc basis with committees or task forces. The challenges may, however, be such
that they require a more permanent set of co-ordinating mechanisms, such as
standing committees across the public service and permanent secretariats
spanning departments and agencies (what might be recognised as mini-central
agencies or ministries of state in Type I systems). The need for improving
co-ordination, however, should be balanced against the potential costs of such
co-ordination; in addition to the touted benefits of co-ordination, mechanisms
should also be evaluated with respect to how well they minimise the complexity
and bureaucracy for co-ordination. Policy challenges will constantly shift, and
there should be regular review of the performance of co-ordinating mechanisms.
Coherence and learning?
I have argued that strategic review and reform in Type II systems tends not to
be comprehensive or get initiated with dramatic central flourish in the manner of
Type I systems. However, this does not mean that review and reform do not occur
in Type II systems; indeed, these activities could well be more pervasive than in
Type I systems, since administrative autonomy ought to be more conducive to
local initiatives in response to local challenges. This poses a problem for political
and administrative leaders, whether or not they are located at the center: they
170 must find ways to develop new corporate policies, promote learning across the
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system, and ensure accountability and improve credibility to citizens and legisla-
tors. To do so requires developing system-wide overviews, reports on progress,
and strategic sensibilities that transcend the activities of any one portfolio,
department or agency. Whether the less substantial Type II centers, or the depart-
ments and agencies with distributed corporate responsibilities, can provide such
strategic coherence, is an interesting question.
Common horizontal challenges

The framework outlined above should prove useful for thinking about
strategic review, reform, and the role of the center in Type II systems, albeit with
one or two important modifications. The very reality of distributed central authori-
ties and a greater degree of administrative autonomy means that departments
and agencies have long worked in horizontal ways to achieve their objectives. It
would provide the basis for comparing how different administrative networks
function, and how well the bureaux responsible for designing, monitoring, and
enforcing policies do their work. At the same time, it suggests two questions: To
what extent do the myriad corporate bureaux throughout the system worry about
integration and the cumulative impact of those policies on specific departments
and agencies? To what extent do they strive to convey the extent of reform to
outside constituencies?
Taking a step back: convergence in Type I and Type II systems?

I have argued that, when thinking about review and reform across jurisdic-
tions, it is important to be aware of different governance contexts. However, all
governments are contending with better informed citizens and interest groups,
more complicated issues and forces that cause policy development to transcend
conventional boundaries, and higher standards on the part of citizens for respond-
ing quickly and fairly.
Projecting coherent images

One outcome is that all governments must find new ways to review priorities
and practices, to co-ordinate practices and reform, and to project coherent images
to external constituencies. A shared value across jurisdictions should be that
governments actively seek ways to best use tax dollars and public resources, no
matter the political, historical or administrative context.
Limits to the convergence thesis

An implication of this analysis is that the convergence in rhetoric on reform
(i.e., the end of ideology on public sector reform) could be matched by a 171
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convergence in the practices of Type I and Type II systems. Type I systems are
seeking to reduce the amount of interference from the center and give depart-
ments and agencies more latitude (see Annex for a general discussion of the
Canadian case), while Type II systems are seeking to improve co-ordination across
departmental and agency boundaries. These tendencies are unlikely to override
the more fundamental differences in governance systems, which shape the possi-
bilities not only for the nature of strategic review and public sector reform, but
also the scope and locus of leadership on these matters. However, convergence
may well be occurring in certain functional domains (i.e., human resources or
information technology, etc.), which suggests the need for more systematic
research and closer discussion across jurisdictions. This is why Chart 5 depicts
these matters as open empirical questions.
Making better comparisons

It is for this reason the framework should prove useful for comprehending and
learning from the experience of each system. It draws attention to the distribution
and co-ordination of different administrative responsibilities, and more accurately
describes how governments work. When combined with an “outside-looking-in”
perspective on government – that is, a view of government from the perspectives
of clients, citizens or communities – political and administrative leaders should
have a good set of tools for evaluating options for strategic reviews, mechanisms
for co-ordination, and strategies for imparting coherence related to public sector
reform.
Managing Strategic Review and Public Sector Reform: Some Suggestions

Another way to approach the question of strategic review and reform is to
consider the challenges for leaders posed by different stages of review and
reform. Although a more elaborate framework could be developed, below I
consider the phases of review and planning, implementation, and consolidation.
Many of the suggestions for improving review and reform should be equally
relevant for Type I and Type II systems, but if this appears not to be so, the
different pressures will be noted.
Conditions for undertaking reviews and developing blueprints

It is impossible to expect certainty when the political and economic environ-
ments of governments can change quickly. However, strategic reviews should be
launched with a keen sense of the possibilities for their success, and of the likely
support from political and administrative leaders, not only for the reviews them-
selves, but also the reforms they may produce. This is a matter of ensuring that
172 scarce resources are allocated wisely, but also entails minimising the risk of
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political surprise and of disappointment to public servants and constituencies

interested in reform. The extent of such support will condition the scope for
reform and constrain the capacity available to design and implement reforms.
Extent of engagement
Several factors influence the extent of political interest in administrative
reform, and thus the choice of review mechanisms. First, the political culture of
different jurisdictions may create different expectations about the degree of
engagement required of political leaders on public sector reform issues. Second,
the smaller the jurisdiction, the more likely political leaders will be engaged on
such issues, since administrative matters are far more comprehensible. Third, the
larger the scope of the review and envisioned reforms, the greater the implica-
tions for political agendas, so the more attentive political leaders will be. Finally, if
the bureaux directed to undertake or oversee the reviews have significant slack
resources and the confidence of political leaders, there will be less need to turn to
external review mechanisms.
Management considerations
There is not the space to review the advantages and disadvantages of each
instrument identified in Chart 4, particularly since they can be used in combina-
tion, but there are general management issues that should be acknowledged.
First, the more comprehensive the review (or, in other words, the larger the
number of teams or committees involved in the process), the more likely that
precious political moments to move public sector reform forward may be missed.
Second, as noted earlier, there is a clear trade-off between having ministers and
senior officials involved in review and planning, and turning to “off-line” alterna-
tives that protect those responsible for review from transactional pressures of
regular jobs – a middle course is to support “on-line” leaders with dedicated staff
support. Even if a fully independent review is thought desirable, it is difficult to
imagine the review team or commission working in isolation from the corporate
bureaux or departments responsible for the area under review – they will need
access to information if the review is to reach its full potential.
Risks of external review

First, not only may external or more independent reviews take longer to
produce conclusions, but it may take longer to secure support for the recommen-
dations from administrative leaders. As a result, key opportunities to advance the
agenda may be lost. Second, outside advisors are more likely to underestimate
political and bureaucratic realities, and the recommended options will likely enter
the public domain before political leaders are prepared to take firm positions, 173
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which may lead to premature rejection of proposed reforms. In short, it is not

surprising that, given more fluid political environments, governments are less
inclined to turn to independent commissions or committees to conduct reviews
than they were two or more decades earlier.
Public engagement
Many governments have learned that for public sector reform initiatives to be
successful, the measures and the process must be seen to be fair and consistent
to insiders and outsiders alike – this extends to the review process as well. For
example, governments found it easier to proceed with deficit reduction during the
late 1980s and the early 1990s, when their publics generally supported the
strategies and perceived that certain groups or sectors did not bear more than a
fair share of the burden. Conversely, middle level public servants are more likely
to embrace with greater enthusiasm reviews and reforms when political and senior
administrative leaders recognise their contributions and acknowledge previous
reviews and “reform announcements,” even if they promise to create uncertainty
about their positions. Thus, the interplay between the government’s broader
posture and more specific reviews matters greatly; it means that departments and
agencies, too, will take the reviews and targets more seriously.
Implementing reform
Once a blueprint is approved by the government, then implementation
planning begins. By blueprint, I mean a plan of action, but one which may not
necessarily involve tightly choreographed, immediate, and well-thought-out
series of reforms. Indeed, the blueprint for some governments may be to initiate
and implement a series of seemingly unrelated initiatives over the course of a
mandate, whereas others may launch several initiatives under one banner at once,
without working out all the details nor anticipating interaction effects across the
initiatives – the timing and rationale, from a political perspective, may be
propitious. In these latter cases, the blueprints will undoubtedly be modified over
a mandate.
Supporting selective reform

The more selective the reforms envisaged in a blueprint, the more likely that
corporate bureaux will be able to use existing resources and administrative policy
networks to assist with implementation. Moreover, even if such reform represents
a significant departure from past practice, the system should be capable of divert-
ing sufficient resources to assist properly with implementation and adjustment,
without affecting its ability to handle transactions and political demands. To the
174 extent that selective reform and transition involves innovation, it would be easier
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for other corporate bureaux to monitor and learn from the experience. For these
reasons, selective reform strategies seem attractive. On the other hand, selective
reforms share with ad hoc reforms the lack of an overarching framework or vision
that conveys to public servants and citizens alike how a government and its public
service have evolved.
Supporting comprehensive reform

As blueprints for reform become more comprehensive and ambitious, there
will be greater need for alternative structures and processes to assist with imple-
mentation. In Type I and II systems alike, it will be crucial early on to determine
whether or not to use existing decision-making forums, processes and timetable
to handle implementation. For example, regular priority-setting exercises for
approving ministerial initiatives, or annual budget development and supply
processes, could be modified to handle a larger and more episodic challenge.
This presumes that the corporate bureaux administering those processes have
sufficient slack resources and talent to take up the new challenge.
Another possibility, though, is for the government to establish independent
structures to guide, at the least, the first phase of implementation. As reforms
become more comprehensive and dramatic, there will be more substantial
co-ordination challenges: more corporate bureaux must be co-ordinated, more
negotiations must take place at the center and among affected departments and
agencies, and there is greater risk that timetables will slip. Several possibilities
exist for handling these challenges:
• Create an implementation secretariat. Such a secretariat would develop a timeta-
ble and ensure that departments and agencies met budgetary and other
targets, that they responded to spirit of the reforms, and depending on the
size of the secretariat, support departments and agencies with more
detailed planning assistance. The secretariat could have a short or more
lengthy existence.
• Provide arbitration assistance. If reform involves negotiations among depart-
ments and agencies, central bureaux may want to assist with dedicated
“tables”, otherwise they will be left to “fight it out” which might favour larger
or better-positioned departments. Arbitration services could be provided
by creating temporary units staffed by officials on secondment.
• Develop single windows. Departments and agencies may have to deal with
representatives from several corporate bureaux, whether permanent or
temporary. There are two options here: one is to create “virtual” teams
across the bureaux to deal with each department, so they can easily tap into
pertinent expertise. Another approach would be to create temporary
“off-line” teams so that their staff are fully dedicated to assisting the
department or agency with the transition.14 175
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• Flexibility and firmness. The center should resist the temptation to rely on a
“one-size-fits-all” approach to implementation, except where deadlines are
concerned. Unless central bureaux have been extremely thorough, flexibil-
ity on reporting formats and process is wise. “Pre-consultation” on some of
these matters could save considerable time, acrimony, and energy.
These devices and strategies could be used in isolation or in combination.
However, it should be easier to adopt these devices and strategies in Type I
systems, which have strong centers and recourse to fiat in this regard, as opposed
to Type II systems, which would probably have to negotiate the creation of such
arrangements among departments and agencies. In both cases, though, such orga-
nising involves the system modifying itself on a temporary basis, and sometimes
significantly so, in order to move in new directions. It also implies there may be
considerable merit in ensuring that the system has slack resources to deploy
under such circumstances.
Risks of comprehensive reform

Comprehensive initiatives necessarily embrace more departments and
agencies, thereby ensuring more diversity in the policy and management
challenges, all of which cannot be fully anticipated. Even if supplemented, the
bureaux driving the reforms will have limited resources for monitoring and manag-
ing the implementation – there are bound to be reforms that do not achieve
desired results nor will all transitions in departments and agencies be smooth.15
Moreover, as the political capital to be gained from ministers openly advocating
the reforms begins to wane, corporate bureaux will find it more difficult to sustain
the momentum behind a comprehensive push for reform.
Consolidating reform
Once reforms are implemented, and the transition is over, transactional and
political demands begin to re-assert themselves for corporate bureaux. The
co-ordinating devices and drive to achieve results will wither or disappear, as staff
recruited to fill the associated roles either return to former positions or take up
new opportunities. Unless new issues emerge, corporate bureaux inside and
outside the center return to their envelope of responsibilities and administrative
networks. If this scenario unfolds, however, an important strategic opportunity will
have been lost.
Looking back
It is precisely at this juncture that the instigators of reform should arrange for
participants to assess their recent experiences, from the beginning of the review
process through to the implementation of the chosen reforms. This could be
176 achieved by means of roundtables, contracting for written accounts of the process,
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or sponsoring evaluations. One goal should be to learn about how participants

might better approach similar problems in the future. Another goal should be to
ensure that this learning – about innovations and mistakes alike – is diffused
beyond those directly involved, so that others in the system can approach their
reform efforts with a broad knowledge base. One of the risks attached to systems
that rely on incremental or ad hoc reforms is that they are less likely to develop and
communicate a coherent picture of progress and accomplishments to constituen-
cies inside and outside government.
Nurturing institutional memory

Retrospection further develops institutional memory, which may be at risk in
systems with rapid turnover in positions or significant retirements. The ability to
undertake reassessment is the natural domain of strong centers in Type I systems,
since they are likely to have initiated the reforms, and include institutions
devoted to executive development and grooming future prospects. But such a
role could also be performed by a bureau in the centers of Type II systems; it
would be a non-threatening activity to the rest of the system, and arguably the
political and administrative center should have a strong understanding and view
on the status of reform.
Looking forward
Such reflection need not only be retrospective; it can provide opportunities
for managers and staff alike to be prospective – to identify emerging pressures
and needs, to propose new strategic priorities and expectations for performance,
and to consider what kinds of skills will be required to meet the implied
demands. It can also provide an opportunity to determine if recent, innovative
practices of corporate bureaux to handle the pressures of review and reform ought
to be diffused more widely or perhaps rectified by structural or process change for
more routine matters. Finally, even if recent reform was little more than a series of
ad hoc initiatives, political and administrative leaders could still create opportuni-
ties to take stock and identify the directions in which the system has drifted,
which should lead to greater strategic awareness.
Broadening reform constituencies

Consolidation may also involve expanding the constituency for monitoring
reform. In recent years, as governments have contracted-out the responsibility for
delivering services, or relied more heavily on autonomous entities, corporate and
policy bureaux have sought to delineate performance expectations into their
reporting systems, thereby establishing a foundation for better accountability and
learning. However, if bureaux must reduce their own costs and resource effort,
their traditional monitoring and policy capacities will diminish. They will need to 177
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find alternative ways to monitor departments, agencies and other service

providers, particularly if the goal is to increase the level of accountability. It is in this
connection that business planning and performance management regimes can be
used, not only for internal purposes, but also as a means for cultivating a broader
constituency for the information it produces, including legislators, journalists,
academics, interest groups, and citizens. Such an outward focus may be awkward
for political leaders directly accountable for the performance of departments and
agencies, but should present less of a problem in systems where departments
and agencies have more autonomy from governments.
Concluding remarks: learning and coherence across jurisdictions

This paper has examined strategic review and public sector reform from many
vantage points. We began by considering what public sector reform entails and
acknowledged, first, that it can encompass many different types of initiatives and
be of considerably different scope, and, second, that it will always be only one of
many problems and priorities of political and administrative leaders. Second, we
teased out the notion that the impetus for review and reform can vary consider-
ably with respect to whether political leaders are directly engaged (though full
engagement may have some downsides), and whether initiatives emanate from
within or outside central institutions. Third, it was argued that political and admin-
istrative leaders are consumed with the short-term transactions demanded by
governance, and strategic review can be seen as a means for looking beyond those
transactions to identify opportunities for reform – to this end we identified a menu
of review mechanisms. Fourth, we illustrated the importance of institutional
context by delineating Type I and Type II systems, and considered how each
empowers and constrains different actors with respect to review and reform.
Finally, we addressed several management issues associated with strategic review
and reform from a cyclical perspective, and emphasised the need for coherence.
This paper could only touch on the many facets of strategic review and public
sector reform, thereby pointing to its complexities. Even though the principles are
similar in different countries, reform means different things in different jurisdic-
tions. This explains the uneasy reaction of some jurisdictions to the more radical
models of reform presented by New Zealand and the United Kingdom during the
past two decades, which have dominated discourse about reform. It points to the
importance of having forums like those organised by the PUMA group at the
OECD, which can ensure that a diverse range of models is represented around the
table. However, without directly culling out these complexities and attempting to
carefully situate analysis and discussion about diverse experiences, practitioners
and academics alike are bound to miss important subtleties and forsake opportu-
nities for learning. Along with the exchange of practices and ideas should come
178 efforts to develop robust, yet contextual, comparative renderings of discussions.
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This paper is a case in point. It sought to introduce a new conceptual frame-

work for understanding the role of central bureaux. Motivated by the Canadian
experience, I argued that the center had changed significantly, but that it has been
due less to an innovative strategic vision, and more as a result of reforms
elsewhere in the public service and expenditure reductions. However, the frame-
work – though arguably a relevant improvement for understanding how centers
worked – reflected a pronounced contextual bias, which greatly limited its appli-
cation to other systems. Comparative discussion laid bare these biases and led to
revision in the approach. The attempt to apply the framework to Type II systems
also served to highlight limits on the arguments of those who seek to diminish the
center in Type I systems, because the systems with less substantial centers reflect
significantly different governance arrangements.
Such discussions, as well as this paper, should be seen as preliminary efforts
to comprehend and learn about complex phenomena. Further efforts to probe the
processes of review and reform could be rooted in three strategies. First, round-
tables with diverse representation could focus on a handful of specific areas of
administrative policy, as outlined in Chart 6, thereby allowing for the exchange of
more detailed information despite the diversity in governance systems. Second,
roundtables could explore the recent experiences of governments that have
utilised specific instruments for strategic review, and also perhaps identify three
or four policy sectors (i.e., health, youth unemployment, etc.) that could be used
as case studies across jurisdictions. Finally, there is great need for more system-
atic empirical studies of central and corporate bureaux alike. They should include
studies that better document their size and scope of responsibilities, and others
that provide more nuanced accounts of how they relate to departments and
agencies, perhaps by means of case studies of the management of certain admin-
istrative policy areas.
179
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Notes
1. See Francis Fukuyama, The End of History and the Last Man (New York: Free Press, 1992).
2. A review of the literature shows that it is difficult to understand central agencies as
other than important actors, but most accounts focus on how reforms affected the
public service and larger public sector, and whether they met expectations. See, for
example, Donald J. Savoie, Reagan, Thatcher, Mulroney: In Search of a New Bureaucracy
(Toronto: University of Toronto Press, 1994); Peter Aucoin, The New Public Management:
Canada in Comparative Perspective (Montreal: Institute for Research on Public Policy, 1995);
and Jonathan Boston, John Martin, June Pallot, and Pat Walsh, Public Management: The
New Zealand Model (Auckland: Oxford University Press, 1996). There has been far less
interest in determining how central agencies were affected by these reforms.
3. I was the 1992-94 Visiting Fellow at the Treasury Board of Canada and currently sit on
the Secretary’s Academic Advisory Panel. I have written several studies on the Treasury
Board and its initiatives, including “On the Cutting Edge: Program Review, Government
Restructuring, and the Treasury Board of Canada” in Gene Swimmer (ed.), How Ottawa
Spends 1996-97: Life Under the Knife (Ottawa: Carleton University Press, 1996), pp. 205-252;
“Business Planning Comes to Ottawa: Critical Issues and Future Directions” in
Peter Aucoin and Donald Savoie (eds.), Managing Strategic Change: Learning from Program
Review (Ottawa: Canadian Center for Management Development), pp. 143-168; and
“Expenditure Management in the Millenium: Vision and Strategy for Integrated
Business Planning”, a discussion paper for the Treasury Board of Canada Secretariat,
February 19, 1998.
4. Professor Donald Savoie (University of Moncton) and I recently secured a three-year
grant from the Social Sciences and Humanities Research Council of Canada to under-
take a study on “Central Agencies in Transition: A Comparative Study”.
5. Adapted from Evert A. Lindquist, “Administrative reform as decentralization: Who is
spreading what around to whom and why?”, Canadian Public Administration, Vol. 37, No. 3
(Fall 1994), p. 425.
6. See Evert A. Lindquist and James A. Desveaux, Recruitment and Policy Capacity in Govern-
ment (Ottawa: Public Management Research Center and Public Policy Forum, 1998).
7. See, for example, Donald J. Savoie, “What is wrong with the new public management”, Cana-
dian Public Administration, Vol. 38, No. 1 (Spring 1995), pp. 112-121; and Christopher Pollitt,
“Management Techniques for the Public Sector: Pulpit and Practice” in B. Guy Peters and
Donald J. Savoie (eds.), Governance in a Changing Environment (Montreal and Kingston:
McGill-Queen’s University Press, 1995), pp. 203-238.
8. Critics would say such thinking is yet another example of where the center initiates
180 reforms in such a way that it would not apply to its own operations.
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9. Henry Mintzberg and Jan Jorgensen, “Emergent strategy for public policy”, Canadian
Public Administration, Vol. 30, No. 2 (Summer 1987), pp. 214-229.
10. See Evert A. Lindquist, “New Agendas for Research on Policy Communities: Policy
Analysis, Administration, and Governance” in Laurent Dobuzinskis, Michael Howlett,
and David Laycock (eds.), Policy Studies in Canada: The State of the Art (Toronto: University
of Toronto Press, 1996), pp. 219-241.
11. Each central bureau will have different tasks and authorities, and a unique basis for
interacting with departments – and therefore the character of the network should
change accordingly. For example, in the area of human resources, central bureaux
usually delegate many tasks to officials in operating departments, monitor their activi-
ties, and help to organize councils across the system. In contrast, estimates divisions
monitor and liaise with departments on a bilateral basis, and do not ordinarily facilitate
the exchange of ideas and practices across programs and departments.
12. Lindquist, “New Agendas for Research on Policy Communities”, op. cit.
13. Analogous concerns have emerged in the literature on policy networks, where academ-
ics have identified instances where autonomous policy networks have converged due
to globalization, freer trade, and technological innovation. See George Hoberg and
Edward Morawski, “Policy Change Through Sector Intersection: Forest and Aboriginal
Policy in Clayoquot Sound”, Canadian Public Administration, Vol. 40, No. 3 (Fall 1997),
pp. 387-414, and Matthew Zafonte and Paul Sabatier, “Shared Beliefs and Functional
Interdependence as Determinants of Ally Networks in Overlapping Subsystems: An
Analysis of San Francisco Bay-Delta Water Policy”, University of California, Davis:
Unpublished Manuscript, 1997.
14. On this option, see E.A. Lindquist, “On the Cutting Edge”, op. cit.
15. Restructuring central agencies should not occur in parallel with restructuring opera-
tional departments and portfolios. Indeed, such restructuring should either take place
well before or well after operational restructuring so the full energies of central agen-
cies are focussed on managing the restructuring for the rest of the public service.
181
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Annex
A Perspective on Central Agencies from Canada
Central agencies have changed significantly, but that has been due less to bold, innova-
tive strategic vision for central agencies, and more as a result of reforms to the rest of the
public service and to steady pressure to reduce the budgets of central bureaux. The number
of central agencies has not appreciably changed, nor has the size of the center declined
relative to other parts of the public service. Central bureaux have not been relieved of non-
strategic statutory responsibilities, but the pressure to downsize and manage public sector
restructuring has led to the adoption of more efficient and smarter ways to handle traditional
tasks (such as electronic mail and new financial, human resource and real property informa-
tion systems), and liberated scarce human resources to deal with newer tasks, such as public
sector reform initiatives.
Central bureaux are now less involved in micro-managing departments and agencies,
partly due to much higher thresholds for pre-clearance of transactions, and partly due to
business planning regimes that place greater emphasis on strategic issues. One conse-
quence, however, is that central bureaux acquire less data and intelligence on the operations
of departments and agencies from smaller transactions. The multi-year expenditure limits
imposed on departments and agencies as a result of deficit reduction strategies has not,
ironically, increased control by the center; if departments and agencies meet their budgets,
central bureaux have little leverage over their activities.
With less information and resources at their disposal, the most senior as well as mid-
ranking staff at the center have learned that co-operation, persuasion and tapping into
administrative networks are critical and productive strategies when launching new initia-
tives. Indeed, they see themselves more as catalysts and information nodes, and less as
planners or gate-keepers. Central bureaux are more likely to cast themselves as learning
institutions, and as investors in knowledge, particularly of pertinent practices across the
system and in other jurisdictions. They also initiate consultations to anticipate problems and
develop better solutions. Central officials have greater enthusiasm for more transparent
government, and advocate for improved performance management regimes. More informa-
tion about the programs the government administers have been posted onto web sites.
However, there is palpable unease in central bureaux about whether anyone – legislators,
journalists, academics, interest groups, and officials at the center – will monitor and properly
evaluate the activities and performance of departments and agencies.
Notwithstanding these developments, colleagues in departments and agencies remain
greatly frustrated. They complain about never-ending streams of management and other
initiatives from the center, that many activities of central bureaux continue to be uncoordi-
nated, and that the center is uniformed about cumulative impacts of its own on the programs
182 managed by departments and agencies. They believe that transactions and reporting
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requests are, if anything, increasing, but that their value-added is depressingly low. Aside
from facilitating transactions at the center, officials inside and outside the center alike worry
about whether central bureaux can meaningfully assist them in dealing with their challenges.
Central officials have new ways of understanding their roles and tasks, and have adopted
new strategies. The Treasury Board of Canada, for example, has conveyed itself as a
“management board” emphasising the themes of horizontal management, service quality,
performance management, and comptrollership. However, many colleagues in other depart-
ments and agencies have yet to be persuaded that the touted new image has moved from
vision to reality. In part, this is because many of the traditional roles – such as gate-keepers,
controllers, and micro-managers – persist. In part, this is because it is difficult to convey the
subtle ways in which central bureaux influence the government, as well as the work of depart-
ments and agencies. Notwithstanding the great emphasis on leadership, co-ordination, and
facilitation, central bureaux need up-to-date information on practice in various domains and
must demonstrate control. The basis for respect remains competence and integrity, and all
that has changed during the last decade is that such respect must be secured in somewhat
different ways.
183
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Why is it so Difficult to Reform Public Administration?
François Dupuy
Assiliate Professor, INSEAD
Introduction
• The reform of public administrations is on the agenda to varying degrees in
different OECD countries.
• But, whatever the strategy chosen, such reform is lengthy, difficult and
chaotic: why?
Reforming public organisations: what is an organisation?

• From structures to working methods.
• From working methods to “players”’ strategies.
• Consequence: to change an organisation is to modify profoundly the basic
working methods.

which gives a better understanding of the difficulties in bringing about change
• Consequences of bureaucratic operating methods:
– Poor service.
– Excessive cost of poor service.
New constraints or “opportunities for change”

• Competition in the allocation of resources and new fiscal policies.
• Penalties imposed by the political world, influences on the public sector
and customisation of service.
• Major difficulties.
• Doing better with less, or the inverse of the concept of more resources in
exchange for greater co-operation. 185
© OECD 2000
• The inverse of the relationship between the administration and the citizen,
or the end of the protection function.
• Intellectual revolution.
Paths
• Training and recruitment (the end of internal stagnation).
• Levers, or new human resource management policies.
• Structures.
Introduction
It is not surprising that the reform of the State (public administrations) has
been on the agenda to differing degrees and at various times in the different
countries of the OECD. In fact, the profound changes observed throughout the
world concern all organisations, whether public or private. Under the impact of
globalisation, which is reflected every day in increasing pressure on the part of the
client or the user or the shareholder to reduce costs and increase quality, we are
witnessing a revolution in organisations.
This is reflected not only in the well-known “restructurings”, which are
applauded loudly by the world’s major stock markets. It brings radical changes in
the sphere of work even in developed countries. On the one hand, the actual ways
of working are being rapidly redefined with regard to working and non-working
hours, and their sequencing and also with regard to relationships with others. On
the other hand, the relationship with enterprises is being transformed and made
more precarious, consigning to the oblivion of history the well-known loyalty/
protection bargain, which characterised employment relationships from the begin-
ning of the century to the mid-1980s (Castel 1995).
As regards public administration, the surprising nature of the situation finds
its roots in two aspects:
• The extent to which different countries are committed to reform varies
dramatically. This ranges from a strong and sometimes rigid commitment
(United Kingdom) to a situation in which the word “prudence” is a euphe-
mism (France), to countries like Sweden and Germany whose strategies
favour tests and experiments followed by their general implementation.
Similarly, there are great differences between countries who emphasise
management more than process (Ireland and, to a certain extent, the
United States) and those countries who do the opposite.
• But above all, whatever the strategic choices made, no country can say that
this is a simple task easily accomplished, even if the “players” themselves
186 have an understanding of the need and a clear strategy exists. In general,
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Symposium Papers
when difficulties, conflicts and tough negotiations arise, they are not caused
by an abstract resistance to change, but rather by the effects of such
changes: if these effects are not properly understood outside the techno-
cratic or ideological sphere, the transformation of our public administra-
tions risks high costs in human and financial terms, especially in countries
reluctant to reform.
Reforming public organisations: what is an organisation?

Transforming an organisation assumes that there is firstly agreement on the
organisation’s objective and on what an organisation is. The very strong juridical
(France) or legalistic (United States) cultures which characterise some countries
have led to confusion which, even though long denounced (Waterman, Peters,
Philips 1980), nonetheless continues to obscure the debate and complicate the
task in hand: it involves equating organisation with structure, organigrams and sets
of rules and procedures.
Equating an organisation with a structure is logical, especially in the adminis-
trative world, which is characterised by legalism, by the Weberian tradition as
regards the concept of the State, and by the absence of a management culture.
The consequence of this misunderstanding is to equate reform with a change in
structures and to transform a policy of change into a more or less successful
reconstruction of administrative mechanisms: consolidating here, reshaping there,
splitting elsewhere in the hope of achieving the ideal structure.
But the reality is different and, furthermore, by carefully observing what has
happened in the private sector, public reformers can see that the attention
focused on structures is on a downward trend, in contrast to the focus on working
methods. This means, in simple terms, the way in which people work, interact,
co-operate, make decisions, resolve their problems: the organisation thus
becomes an embodiment of all the recurring practices of the “players” in a given
field, sometimes called the “culture”, which we shall define here as the strategies
developed every day by the different parties involved (March and Simon 1958,
Crozier and Friedberg 1977).
The purpose of this paper is not to examine a definition of rational strategies,
in the sociological meaning of the term. It is simply to indicate that, as soon as it is
understood that this concept implies that, in an organisation, the “players” do
what they do because they are intelligent, one can then understand why it is
notoriously more difficult to change working methods than structures and why,
consequently, changes in structure are more about symbolic politics than about
real reform.
This understanding of the organisation as a set of rational strategies, and that
change offers the possibility for evolving these strategies, leads to a two-sided 187
© OECD 2000
question: what are the major characteristics of public administrations as organisa-

tions, in particular those which seem to be the most difficult to reform, and what
levers can be pulled to produce real change, as defined above?

which gives a better understanding of the difficulties of bringing about change
We shall need to look generally at the dominant characteristics of public

administrations, bearing in mind that there are often great differences from
country to country. However, it should be remembered that, today, what defines
the operation of administrations is neither principally nor fundamentally the set of
rules which prevail, but the way in which they have been applied over the course
of time. Whatever the country, this has always tended to give priority to protecting the
members of the organisation over any other possible objective as regards quality or
cost reduction.
From this point of view, we should say that public organisations are almost
inherently bureaucratic in nature, and this constitutes the major difficulty for mak-
ing real change. There is therefore a need to clarify this term and to provide a
practical and operational definition rather than a theoretical or an ideological one.
Bureaucratic is not used here in the polemical sense of an organisation that
produces lots of paper and is slow, cumbersome and unresponsive. It implies a far
more fundamental phenomenon which lies at the heart of the difficulty in
changing administrative worlds: a bureaucracy is an organisation whose main
feature is the inward-looking nature of all the criteria it uses. Or, put more simply, it is an
entity which, in all its actions, gives priority to its own problems, whether technical
or human, in relation to those of its surroundings. This form of organisation stems
from a moment in history characterised by the scarcity of products, whether goods
or services (Reich 1993, Rifkin 1996). It corresponded with the transition to a new
age of human existence, expressed on the economic level by the availability of a
huge number of goods and services to which consumers might legitimately aspire,
and on the political level by the implementation of a rule of law which set down
rules and procedures and their application. This is why, according to both
Max Weber and Henri Mintzberg, the term “bureaucracy” expresses a collective
order, a legitimate domination based on a set of procedures, a professional
organisation based on process.
The integrity of this mode of operation must guarantee equality for everyone
before the law – to those governed by the bureaucracy and to its own members.
The application of the principle of equality has gradually excluded differentiation,
judgement and evaluation. In administrative language, this can be summed up by
188 the term “arbitrary”.
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Symposium Papers
However, over time, the values of these working methods have been
questioned, and understandably so in the late 1970s when there was a scarcity of
resources available to states both to feed the operation of these organisations
and to supplement the resources distributed to society. The two dominant
features of these organisations stood out sharply. They distributed low-quality
services at very high cost, a fact that is closely linked to the inward-looking nature
of the bureaucracies. In order to understand this, it is necessary to clarify the two
constraints to which the administrative worlds traditionally give priority when
developing their working methods.
Firstly, the strict observance of the sequence and specialisation of tasks. In a

purely Taylorian concept, service production is broken down into “sequential
actions”, and the organisation reproduces this sequence. The advantages and
disadvantages of this approach are obvious. Advantages for the members of the
organisation: they need not co-operate. They simply pass on files, once they have
completed their part at their own pace, thus avoiding any situation of dependence
on others. But in organisations, co-operation is in no way spontaneous, precisely
because it induces dependence. It is difficult, and, quite understandably, the
“players” protect themselves against it as far as possible. It needs to be under-
stood that the segmented approach of bureaucratic organisations provides formi-
dable protection for its members, not only with respect to the public (nobody is
responsible for the “end product”), but also with respect to their own colleagues
with whom they can have more solidarity, mainly because the organisation of work
reduces the opportunities for inter-individual conflicts to zero.
It is vital to understand this function of bureaucratic protection. It has built up

over time and only slowly adapted its initial rules. Similarly, it is reflected in many
more countries than one might think, in personnel management methods which
have gradually reduced involvement of the hierarchy as regards officials’ remuner-
ation or career development, further strengthening their real autonomy.
There are advantages for officials, but disadvantages, even major ones, for
those being governed, both individually and collectively. First of all, because this
working method considerably reduces the quality of services. It produces slowness
and lack of responsibility. The “client” has to follow a set sequence of steps, and go
through the “bureaucratic steps” imposed by an organisation, which are based on its
own requirements and not those of the person being served. It should be reiterated
that this is linked to the bureaucratic work style and not with the public nature of the organisa-
tion. Recent examples, in the United Kingdom in particular, have shown that the
privatisation of a state service is no guarantee of greater efficiency. There can still be
lengthy delays, as there are in the French finance administration, for example, for
taxpayers claiming reimbursement of VAT credits. 189
© OECD 2000
As well as the low quality produced, there are also excessive costs generated
by this type of organisation: the protection from others characterised by non-
cooperation always implies additional resources. Not depending on other
“players”, to be autonomous, assumes having the means for such non-
dependence, therefore multiplying equipment, offices, computers, photocopiers,
in short, everything making for a self-sufficient life. It is little understood why, in
the motor vehicle industry for example, after endless work in transforming these
organisations and introducing increasing co-operation (transversality, projects,
etc.), production costs were drastically reduced. Another way of expressing the
same idea would be to say that the reduction of hospital costs in some countries
(Belgium or France for example) would be far more effective if they were based on
a fundamental transformation of hospital doctors’ methods of working together,
and thus on a refocusing of the hospital around the patient, rather than being
based on a model prescribed by the medical profession of strictly financial and
bureaucratic control.
These ideas are little understood today, either by the officials themselves or
by political authorities. In many countries, the equation remains the same. If there
is a desire for a better quality of public service, including para-public, it will have
to be accepted that more resources will have to be devoted to them. This concept
is infinite and generates a vicious circle found in the most liberal OECD countries
and also in those undertaking the least reform. Since public expenditure has to be
reduced, staff cuts are made mechanically and frequently without discrimination.
These cuts are made without affecting the working methods, i.e. without using any
of the “key levers” which might cause the “players” to work in a different way,
namely to co-operate more. The result is a deterioration in the services provided,
which increases both the dissatisfaction of the public and the frustration of
officials who feel that they are having to make do with fewer resources available to
them. It is true that, in an administration which does not understand the organisa-
tional dimension of quality and of cost reduction, one always has to rely on
individuals’ good will and devotion to duty. So, by pointing out the dissatisfaction
of the public, officials will exert pressure to obtain additional resources – enabling
them to continue with their segmented work with no co-operation. This lack of
understanding of the problem is today causing paralysis in some countries (such
as France). In other countries (such as Australia), solutions are being sought by the
creation of “service delivery entities” and by the introduction of a managerial
concept into their operation; we shall come back to this.
One can, therefore, sum up the essence of these bureaucracies in five points
which are at the core of the difficulties in making changes mentioned earlier:
• Compartmentalisation and verticality, founded on a technical logic of specialisa-

190 tion and tasks.
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Symposium Papers
• “Transparency”, perceived as an element of integrity, implying an awareness

of who does what, and the need to differentiate tasks. This concept results
in the establishment of internal monopolies which behave, within organisa-
tions, like market monopolies. They make the rest of the organisation, and
eventually the community, pay the price of their monopolistic situation.
• Non-cooperation, which solves the individual problem of the difficulty in facing
others, but at the same time dramatically increases the overall operating
costs. “Co-ordinated” responses themselves generate extra costs and
additional delays by multiplying meetings and mediation functions.
• The inward-looking nature of the personnel management criteria, which implies that
the criteria are defined with respect to the constraints of the organisation’s
members themselves and with respect to the missions which the
organisation is supposed to fulfil – in other words, the lack of performance
and its assessment in the management of officials’ careers.
• Finally, externalisation phenomena, which include and make possible the first
four points by imposing the cost (not just financial) on the environment,
i.e. actually on the community.
New constraints and major difficulties
Today, it is the excessive cost of poor service which makes reform essential, insofar as
competition for the allocation of state resources is becoming more intense, while
new fiscal policies (if any) are increasing the scarcity of such resources. The fiscal
policies are gradually leading to the idea that what has been possible in the busi-
ness sector, i.e. doing better with less, should also be possible in the public sector. Add
to this what may be called a “capillarity effect” : this means that the “client/user”
cannot tolerate indefinitely a widening of the gap between the products/services
offered by an increasing proportion of suppliers and the products/services for which
the state is responsible. Customised service, immediate availability and fair prices
are today at the heart of client/taxpayer expectations. If the gap between what is
provided by the private and public sectors were to widen even more, the political
marketplace would then penalise the administrative world.
The enforced privatisation of a number of public services in Anglo-Saxon
countries was a consequence of this type of penalty, but taking a step back, it
resembles similar attempts that Gaullist reformism sought to impose on France in
the 1960s by creating specialised quangos to handle the most crucial problems of
modernising the country (employment, or town and country planning).
But, if we look in parallel at the dominant characteristics of public bureaucra-
cies identified above and the new pressures just referred to, we can identify the
basic difficulties that real changes in the world of administration come up against. 191
© OECD 2000
These difficulties are, first of all, intellectual, and therefore relate to a large
extent to the training given to public officials; this is true in countries as appar-
ently different as France and the United States. The organisation around a task, as
initially set out by Taylor, is perceived by its supporters as scientific in nature and
thus as the only possible one. The question asked of the reformer becomes “is it
feasible to do it differently, and how?”. This leads to an acceptance of fuzziness,
redundancy and conflict which are the opposite of traditional administrative
cultures. From this point of view, it is definitely a transition from legalism to
management, and some countries are well aware of this, making it the main thrust of
their reform strategies (Ireland, Netherlands, New Zealand, Sweden).
But the difficulties are also practical and often more mundane: this means
overthrowing the habit of not necessarily doing better but always with more (resources). The link
between quality and abundance of resources is at the heart of the problems in the
public sector. This is called “the comfort link”, since it allows more to be promised,
while putting the extra cost on the community. Today, as we have said, we have to
do better with less, and it is only a radical change (thus costly in human terms) in
the working methods, and not in the structures, which will enable this apparent
contradiction to be resolved. This makes it clear that officials’ resistance is not a
matter of abstract and theoretical resistance to change. This is one of the signs,
more accentuated in the public sector than elsewhere, for reasons already given,
of resistance to the fundamental transformation of work functions in our devel-
oped societies. Traditionally, such work always had two functions: one of produc-
tion (making goods and services available to those who want them) and one of
protection (protecting workers from life’s risks through salaries and social systems
– affiliation, as Robert Castel would say – but also protecting them with respect to
others, their equals, by making non-cooperation possible). Today, under the pres-
sure of the factors already mentioned, the protective function of work is becoming
blurred compared with the productive function, and instability is gaining ground.
In the case of public officials, it is not the instability of the labour market, but of
the actual working conditions, with the emergence of simultaneity, co-operation and
conflict situations. This cannot happen without clashes and, also, it is understandable
that, if no alternative is put forward (a “new deal” for those whose implicit
agreement with their State/employer would be destroyed) it will be all the more
difficult for them to accept any reform strategy at all.
Finally, we must not overlook the everyday “emotional difficulty”, arising from
the change in the face-to-face contact between officials and those being adminis-
tered, who now become clients. In the traditional system referred to, which was set
up during a period of scarcity of resources, officials were able to impose their
concepts, their timescales and their constraints on those being administered, who
had no option but to accept them. The result is a very classic dominator/dominated
192 relationship between the expert and the applicant, which is reflected in everyday
© OECD 2000
Symposium Papers
terms in queues, opening times and file processing, and also in the vocabulary
used. Administrative reform results in an inversion of this relationship or, at least, its
management on the basis of equality between the two partners. Once again, this
limits the possibilities of hiding behind the rules, the schedules, “etc.”.
Relationships with those being governed will be based increasingly on the

latter’s terms (individual service) and, unless the organisation is able to meet these require-
ments through suitable working methods, the pressure on the official will increase and finally
become confrontational and painful.
Paths
The crux of the matter is, therefore, how to change organisations and working
methods, given the constraints involved. This is not easy of course, and one can
see why some states balk at the task while, for others, the reform of the state is not
even on the agenda, despite the abstract or inspirational rhetoric. Nonetheless,
the examples available to US point to three possibilities for a process of change:
• The first relates to training for public officials and, more particularly for
those in positions of responsibility. The fact that civil servants are given
specific training can only result in specific behaviours, often characterised
by conventionality and a desire for self-protection. This conventionality,
reinforced by the inward-looking nature which characterises the recruitment
of public officials in some countries, makes the very idea of reform unattrac-
tive, because there is a need to protect the benefits acquired and also
because a dominant intellectual model is imposed, a way of thinking which
is not subjected to competition with another and therefore has no difficulty
in dominating. It is worth noting that, at a time when the United States
wanted to dramatically change the operation of the IRS (Internal Revenue
Service), they appointed a consultant to head this administration, with the
established profile of… a consultant. Other countries are trying to counter-
balance the legalistic platitudes in initial training by developing compre-
hensive programmes meant to introduce “managerial thinking” into these
organisations. In fact, the results sometimes seem quite poor compared
with the resources committed, and there are two main reasons for this. On
the one hand, the implementation of such programmes, when entrusted to
specialised bodies in the administrations themselves, is quickly neutra-
lised and very soon becomes a repetition of the dominant thinking. On the
other hand, if it is accepted that the ultimate purpose of management is to
get “players” to do what you want them to do, then particular levers need to
be brought into play, even beyond the management awareness which can
be acquired through training. 193
© OECD 2000
• These levers, mainly involving human resource management systems, aim

to put “players” in public administrations into new contexts, thereby
changing their behaviour (their strategies). But the actual evolution of these
systems over time has tended to neutralise all the management possibi-
lities which they might offer relating to assessment, promotion or remunera-
tion. Several points deserve mention here:
– Even though it may be a tough statement, no bureaucracy (in the sense
we attribute to the term) has ever been seen to change without a
profound change in the human resource management systems to which
we have just referred. These have, in fact, always tended to protect
officials from politics, arbitration, bosses, etc., to the extent that the
concept of hierarchy is deprived of all meaning. Changing them, and the
opposition which this provokes, greatly contribute to weakening the work
protection function referred to above.
– The privatisation or sub-contracting of services is one way of getting
around the problem. The idea behind this process, which is not only
applied in the Anglo-Saxon countries, is that the distinguishing factor
between public and private is the employees’ level of protection and,
consequently, the number of restrictions (not only financial) which can be
imposed on them. The fundamental idea behind these strategies is that
change in public administrations is an illusion and that one is obliged to
replace and abolish them. At the same time, a possible consequence is
that only the tasks at the lowest level and those of low added-value
remain in the public sector.
– This is why some countries have chosen to implement step-by-step
negotiations for even modest changes in the “regulations”, enabling the
reintroduction of the concept of management and therefore responsibility
into the management of employees. In this respect it is worth noting that,
in a country amongst the least receptive to the concept of administrative
reform, France in this case, it is in the ministère de l’Équipement, on the initia-
tive of its tenacious and skilful personnel director, that most progress has
been made. However, this administration probably has the greatest
proportion of its activities in a competitive marketplace. Here too, neces-
sity dictates the action.
• The last key point in the implementation of change relates to structures.
This has not been given very much attention here so as to avoid going back
to the idea that organisational change means structural change. But
countries such as Australia or New Zealand have shown that there are
alternative structures to those based only on sequences of tasks. The
194 “operations and delivery services” already mentioned demonstrate that
© OECD 2000
Symposium Papers
even an administrative world can be designed according to the users’ logic

and the transition of this logic into concrete working methods, that is to say
the way in which people work together on a daily basis.
In fact, progress is possible and has been achieved, apparent not only in the
civil servant’s friendlier attitude towards the public, which is just one aspect and
very much an individual observation of administrative change. At a recent sympo-
sium devoted to a comparison of tax administrations, the question was raised as
to how an efficient tax administration could be defined. The answer was that
“efficient” does not mean making the client happy by reducing the rate of tax
collection, but rather making sure that the working methods used to recover those
taxes do not increase the cost.
For example, “benchmarking” carried out in 1999 by the French Inspection
générale du ministère de l’Économie, des Finances et de l’Industrie, has shown that this cost
may vary from 1 for the best performing (United States, Sweden) to 3 for the least
exemplary (France). The differences cannot be explained simply by the complex-
ity of the fiscal legislation in the countries concerned. They indicate the extent of
progress made in the very organisation of the work of public administrations.
195
© OECD 2000
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Discontinuous change : leading organisational transformation, Jossey Bass, 1995.
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L’économie mondialisée, Paris, Dunod, 1993.
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© OECD 2000
Evaluation as Usable Knowledge for Public
Management Reforms
Jean-Claude Thoenig
Director of Research at the Centre National de la Recherche Scientifique (CNRS)
(Groupe d’analyse des politiques publiques)
and Professor at INSEAD (Institution européenne d’administration des affaires)
Do public sector reforms use evaluation? What good practices has experience
brought to light? Does evaluation have a future? In the present report, evaluation
shall be defined as an instrument or means for improving the capacity to learn
about conducting successful changes and defining achievable outcomes in the
fields of public efficiency and effectiveness. While many forms exist, evaluation
may be characterised in general as an activity which is devoted to the production
and analysis of rigorous and relevant information about relationships between on
one side public acts and non-acts, and outcomes and impacts on the other side.
A seeming paradox
It is hardly imaginable that reforms of administrative and public sector
management would be developed and implemented blindly, thoughtlessly and
impulsively, solely by order of the hierarchical authorities. This being the case, a
widespread demand exists on the part of practitioners, for there are significant
deficiencies in the monitoring of the changes introduced in the public sector.
There is every reason to believe that evaluation is destined to play a major role in
meeting these expectations, at least in part, since it provides relatively rigorous
tools and a largely rational approach – at least on paper – for producing informa-
tion and advice on a specific public policy.
However, a careful examination of the facts shows that in most countries
evaluation has thus far only been used in a relatively limited and occasionally
sporadic way that has often proved disappointing. What is more, there is reason to
believe that the reluctance to use evaluation more widely is not necessarily or
primarily due to ignorance or unwillingness. As a result, it sometimes happens that
governments publicly affirm the need for evaluation, but fail to practice what they
preach. One example of this tendency is provided by the “White Paper” on 197
© OECD 2000
administrative and staff policy published in Norway, which stressed the importance
of evaluating the specific problems and reforms in these fields. But no initiative was
launched subsequently to assess the ten years of reforms carried out thus far.
Conversely and more surprisingly, one can encounter a relative scepticism about
evaluation, particularly among well-informed and experienced practitioners of
public management reform, some of whom have even spoken of an “allergy” to eval-
uation that seems to prevail in their own government. Such an attitude may derive
from a variety of causes such as the reluctance of policy makers to feel challenged
by experts who are not “hands on”, the arrogance of evaluators in defining the goals
and the content of reforms, the fact that evaluations may require too much time to
be done, the idea that reforms are also a political tool of government, etc. The
demand from policy-makers seems to remain rather flat. Experience suggests that
demand can be a problem : it occurs where policy-makers and their staff gather
information and conduct reviews and assessments of various aspects of their
reforms both before and after they make decisions. This more or less informal and
ad hoc approach is found in varying degrees in many countries.
For example, in the United Kingdom reviews of various reforms have been
conducted addressing specific aspects of reform programmes such as “Next
Steps”, the “Citizen’s Charter” or “Market Testing and Contracting Out”. In Ireland
the Committee for Public Management Research, which is chaired by the Depart-
ment of Finance, has just conducted a partial review of the plans of the customer
service section of departments and offices in a discussion paper. All things consid-
ered, although these results are limited, they are far from negligible.
Two general observations may be made at this stage. The first is that
evaluation is not by nature more characteristic of a specific type of state or admin-
istrative culture, although the examples given above do suggest that it is more fre-
quently used in countries where reforms are more comprehensive or Anglo-Saxon
attitudes predominate. The second suggests that it is not sufficient to have
qualified internal or external experts, reliable tools and ample information for an
awareness of the importance of evaluation to spread automatically throughout the
system and be incorporated into the management of reforms. Evaluation may be
practised even if the public system is not permeated by an evaluation culture.
The lesson to be drawn is a relatively optimistic one: it is not experts or sophisti-
cated systems, that matter, for individual civil servants are free to decide whether
they will carry out an evaluation or not, sometimes even without realising
consciously what they are doing. In other words, any barriers to e valuation are not
so much professional, technical or intellectual, but pragmatic.
Learning from good practices

Under what conditions can evaluation practices be used to develop and
198 implement public sector reforms? The answer is obvious: when they are adopted
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Symposium Papers
and used by policy makers. But this cannot be done by applying a ready-to-use
magic formula or by following a single procedural model of best practice. The
examination of a number of good practices can teach some persuasive lessons.
Observation of evaluation practices makes it possible to refute the clichés or
stereotypes that encourage scepticism or fatalism about the possibility of success-
ful evaluation. For example, one often hears that by nature public organisations
are not self-evaluating (Wildavsky, 1979). At another level, the problem is laid at
the door of policy makers, whose way of thinking is presented as being incompa-
tible with an interest in the practice of evaluation, with rare exceptions. And there
are other supposedly sound arguments to the effect that the problem lies in the
very nature of the reforms undertaken. For example, it is argued that comprehen-
sive, authoritarian policies such as those transferring whole sectors of goods and
services to the market, since they are ideologically motivated, do not encourage
government to focus on the costs and benefits expected and generated. But to
conclude that therefore nothing can be expected of evaluation seems just as
extreme as to state that it is the inevitable wave of the future.
Usefulness for action

The first lesson is that a pragmatic approach is needed to the use of evalua-
tion practices. In other words, they must in each case be focused on specific needs
and opportunities for action.
The needs of policy makers should be kept to the fore in deciding what to
evaluate. This common sense remark is not abstract in its implications. The
decision to evaluate a programme is rarely made unilaterally by decision-makers
alone. The work of the OECD’s expert group suggests two observations. Needs are
often not clearly formulated beforehand by policy makers and, when they are, the
senior officials involved in the reform play a significant role in taking the initiative
to use evaluation practices (the role that the budget department or ministry can
play in this regard should also be mentioned). In some countries the willingness of
senior officials and advisers to use evaluation practices is no coincidence, being
closely linked to the fact that their university and professional training has made
them aware of the contributions of the social sciences and modern management,
unlike staff with strictly legal and administrative training.
There is little likelihood that evaluation will be adopted for its own sake, for it
is not an end, but a means to an end. It will only be credible and acceptable if it
meets three conditions: it must be sponsored by individuals and groups that are
recognised as having practical experience with evaluation as well as direct access
to policy-makers, or even a policy-making role in the reform (both before and after
its implementation); it must be based on a need or concrete problem that policy-
makers face and from which they will derive value added at their level; and it must
be well-timed in relation to reform. 199
© OECD 2000
These windows of opportunity often prove to be essential, especially when

the practice of evaluation is still uncommon within a country, but also in public
systems where it is already more widespread. Poor timing can kill a reform initia-
tive. If evaluation is out of step with the governmental agenda, it will ultimately
have no impact and merely be filed away and forgotten (this is what took place in
France in 1992-1997). By the same token, this also means that evaluation systems
must remain flexible and adaptable to changing needs and that policy-makers
must have easy access, if not close control.
The first priority: to provide information
The second example of good practice concerns the focus and content of
evaluation practices themselves. If the use of evaluation is action-oriented, this
means that evaluation focuses on providing usable knowledge. More concretely, it
is much more likely that evaluation will be accepted and be of use if the aspect of
providing information is stressed, while being cautious about the aspect of reach-
ing an assessment or judgement. In this regard the distinction between evaluation
and quasi-evaluation, although it makes a theoretical distinction that satisfies
methodological purists, is artificial and detrimental.
A usable evaluation is first and foremost one that is aimed at making avail-
able information based on empirical data, as the examination of the practical
experiences of public service reform has repeatedly shown. The reason for this is
clear, and lies in the very nature of the decision-making process. More specifically,
two significant facts can be distinguished.
Public decision makers are much like corporate executives (Mintzberg, 1980).
They give priority to practical or qualitative information obtained by speaking to
individuals they trust. This is a far cry from the theoretical model that assumes
that problem-solvers take the time to think the problem through by analysing and
exhaustively reviewing all the information on the specific empirical situation and
the quantitative merits of the alternatives available. This means that evaluation
will be more credible if it is adapted to the reality of the decision making process.
Be this as it may, policy makers engaged in action do not stop thinking.
Analysis – or evaluation – is one of many inputs they use – ordinary knowledge,
learning, interactive problem solving, etc. Consequently, analysis must compete
with these other inputs (Lindblom and Cohen 1979) and is not automatically given
priority.
These two facts point to a concept of evaluation as an activity that is relatively
limited in scope, focuses on clearly defined problems, employs language policy-
makers can understand, readily uses the data available even if they are not
200 perfect, and aims at describing a state of affairs rather than analysing it. Evaluators
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know how to be responsive to conditions that are different in each case and to use
data, not necessarily as a competing argument, but at the very least as a means of
getting the policy-makers’ attention, by providing information before explanations
and assistance rather than judgements.
This attempt to give evaluation greater credibility assumes that evaluators do
not embark lightly upon making judgements and assessments. This is particularly
true when they must evaluate on-going reforms, for they run the risk not only of
substituting their own judgement for that of policy-makers – a technocratic
deviation – but of failing to give an objective account of the situation, in particular
by focusing on mistakes, dysfunctions or deficiencies, without balancing them
fairly against the achievements, progress and successes, which amounts to a
pessimistic bias.
This selective short-sightedness of on-going evaluation as to the real impact
of a policy is encountered in a number of reform initiatives. For example, the
Canadian government is extremely cautious about auditors’ reports, which tend to
emphasise the shortcomings of a reform – in terms of value for money as well as
external effectiveness – and give the impression that little progress is being made
and a great deal remains to be done. In such cases evaluation is of no practical
help to governments and, because of its overall assessment function, selects
information that makes it difficult to design the next stages of reform, thereby
becoming in a sense self-defeating.
Should evaluations make judgements? The debate remains rather open
inside the professional community and the reform entrepreneurs. Some practitio-
ners prefer that evaluations should not explicitly spend time and energy making
judgements – and instead remain either exploratory or informational, being
nevertheless aware that often judgements are implied even if not spelt out. But
equally strong views expect evaluators to make judgements: not to do so would
reduce the value of learning from evaluation – especially when ministers want to
get a clear view on a situation. Learning implies judgements.
Internal evaluation
The third example of good practice is internal evaluation, which covers self
review as well as external reviews commissioned by academics and private
experts. Policy-makers responsible for public service reforms will be likely to use
evaluation and will find it that much easier to do so if evaluation practices are
developed within the public system itself, in particular at the various levels that
initiate, design and implement the reform.
A number of countries have commissioned private or academic experts to
conduct evaluations. These kinds of evaluations tend to be less useful to
governments. They remain somewhat theoretical at bottom inasmuch as their 201
© OECD 2000
approach focuses on aspects or themes that do not match the specific concerns
of governments, the actual agenda of the reform, the pace of policy implementa-
tion and the capabilities of policy-makers. Their overall evaluation may be
perceived as critical or passive, for it is an ex post assessment made a number of
months or even years after the actual events, and therefore provides few
guidelines and directions for the next stages in the field. The limitations and
frustration are seen more clearly when, as in Finland for example, internal evalu-
ations are carried out concurrently, in particular by groups or networks of civil
servants directly involved in implementing the reforms. The value added for
action is comparatively greater in this case. In all fairness, it must be pointed out
that an external evaluation can be a solution in exceptional cases, as when a
government finds it politically expedient to have outside experts “force” it to
accept a public sector reform agenda that it will then put into in practice. This
was the case with the reform in the management of EU structural funds adopted
in Greece in 1994-1996.
But it is necessary to define just what is meant by “internal” evaluation. Some

countries have administrative bodies, such as the audit board, or ad hoc bodies,
such as administrative reform task forces or public policy evaluation units. This is
or has been the case in France, the Netherlands and the United Kingdom. But the
fact that technical and human resources are available within the public system
does not necessarily guarantee that the evaluation of public sector reforms will be
assigned to them or that their work will be relevant or have a significant impact in
practice. It has sometimes been suggested that evaluation should foster the
development of separate balancing centres of authority within the public system.
This approach is, in the present case, relatively unrealistic. Ownership of evalua-
tion is not the same as ownership of public management reform policies. Internal
professional corps do little to make evaluation more useful to policy-making.
There would still be the same barriers as were mentioned above, since the
evaluator can easily fall into the role of a judge who pronounces a favourable or
unfavourable verdict, without being held accountable.
The operational implications of these observations are clear. In many ways

public management reforms are somewhat different from other policies (which
may concern more visible or tangible social issues such as health, education, etc.),
and are also considered highly symbolic manifestations of government’s discre-
tionary action. Accordingly, if evaluation is to be useful, policy-makers themselves
must take it into account and tailor it to their needs and wishes. The trend towards
internal evaluation reflects the determination of those responsible for reform to
maintain an on-going review of individual agencies and the public sector as a
whole. Otherwise evaluation will become a mere bureaucratic ritual and the
202 reports of experts will simply be filed away.
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An incremental and opportunistic approach
Good practices suggest that public evaluation should be adopted incrementally.

As was mentioned earlier, anyone can carry out an evaluation and a quasi-
evaluation can be a perfectly good way to start. There is no surer way of stifling
evaluation at birth than to confine it in the ghetto of methodology. Moreover, the
practice is not the exclusive prerogative of top policy-makers and their immediate
staff. There are ways of disseminating evaluation throughout agencies and down
the chain of command, provided that it is linked to a problem that is relevant to
those who are carrying out the evaluation. This broad-based evaluation is found in
cases in which the reform is aimed at the internal structures and processes of the
public system and is implemented either through a participatory and decentra-
lised approach or through on-going government monitoring of a reform pro-
gramme. Examples of this kind of evaluation may be found in a specific sector or
ministry – for example, in the ministère de l’Équipement in France – or throughout the
public system – as is the case in Canada for the federal government as a whole.
The incremental approach also means that the information obtained and its uses
for reform make sense to all concerned, from policy-makers down to rank-and-file
staff, and are not perceived either as a threat or a constraint, but as a resource and
an opportunity.
Undue importance should not be attached to the issue of different types of
approaches or methods. Good practices do not reveal that some methods or
mixes of approaches are intrinsically better than others. However, as was stated
above, provided that the issue of usefulness for action remains the basic criterion,
i.e. technical considerations are based on how the evaluation will be used, the
following observations may be made:
• From a technical standpoint, evaluation should take into consideration the
empirical data that are available or can be obtained rapidly at low cost,
knowing that public systems have relatively little data on performance and
effectiveness.
• Evaluation should aim less at providing an overall understanding of a vast
range of parameters than at producing indicators on a few well-defined
aspects that can be considered as reasonably useful proxies.
• Ex post evaluations – evaluations made once a specific reform policy has
been completed and ended – are relatively rarely used for they do not
really meet the needs of government action and are expensive and time-
consuming. Nevertheless they may contribute to fuel a learning perspective
about the reasons why such or such outcomes and impacts were generated
and the relative value of the tools and processes which were mobilised. 203
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• Ex ante evaluations – or evaluations made while reform programmes are

elaborated by the policy makers – are closer to quasi-evaluations or
informal evaluations : they may consider prospectively the comparative
outcomes of various options which could be adopted. They actually remain
a relatively secondary source of information for reasons linked to time
pressure or to the political visions policy makers have in mind.
• On-going evaluations are better targeted as a managerial tool although they
require relatively intensive and well-informed monitoring. This said, they
are ill suited for unilateral “top-down” or “one-shot” policies, in particular
when the reform consists of a transfer to the market sector.
• Policies aimed at ensuring the year-to-year continuity of reforms of the
internal processes and structures of government departments leave greater
leeway for the use of more formal and technically diverse evaluations.
• Evaluation practices can be developed far more easily if there are existing
systems of information on costs and performance, although they do not
stand in the way of developing quasi-evaluation.
Performance management as a learning process

On paper, many aspects of the public sector’s activity can be evaluated, such
as productivity and the quality of services, the ratio of expenditure to goods
produced and services provided, and the extent to which social, economic or
other problems are solved and the goals of reform are achieved. But in practice in
most countries, evaluation tends to emphasise what can be called the internal
aspect, which concerns the performance management of staff and departments.
This is the case in Ireland, Norway, Canada and New Zealand.
This general approach, which is more managerial than strategic and more
oriented towards efficiency than effectiveness, is intended to close the informa-
tion loop and keep policy-makers informed about what is working and what is not.
It is often value-for-money oriented and is designed to provide information that
will be used by decision-makers to improve reforms in the future.
This realistic managerial approach meets decision-makers’ needs. It also
predominates because it is generally difficult and even arbitrary to evaluate
reforms in terms of their overall external effectiveness. This is why the aims and
objectives of public sector management reform are rarely set in a clear and opera-
tionally measurable way when a policy is defined or launched.
It cannot always be assumed that indicators and data on performance will be
available. There are sometimes no structured information systems that measure
time spent, departments’ outcomes, costs and the intrinsic quality of services. It
204 becomes difficult to say objectively what is being done or has been done by a
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given organisation over a given time, not to speak of comparing organisations and
agencies with each other. At times, the attempt to gather information clashes with
existing systems, which are not designed for performance management but for
checking compliance or monitoring budgets. Consequently, there is a risk that
data collection will require extra time and money. The good will of agencies
responsible for monitoring is a far from negligible factor in this regard. But to
argue that it is pointless to undertake evaluation because adequate management
data are lacking is to enter into a circular argument about cause and effect.
The advantage of stressing quasi-evaluation aimed at providing performance
proxies rather than assessing external impacts and overall performance is that it
makes it possible to avoid the data collection/policy evaluation dilemma through
a gradual learning process in successive stages that fosters an information culture
among policy makers and agencies, without calling on statisticians, computer
specialists and accountants from outside the public service. In this way evaluation
has a pump-priming effect. One possible starting point could be to carry out ad hoc
reviews using the available data, while realising the relative value of the instru-
ments being used and the analysis made. A further stage would be to organise
this process on a much larger scale. For example, a central agency could syste-
matically gather performance data on the system as a whole and on the agencies
making it up (as in New Zealand), or an administrative modernisation office might
include performance data on the key public management issues to be addressed
in the coming year in its annual report (as is done by the Clerk of the Canadian
Privy Council Office), etc.
Above all, performance evaluation must not be viewed as consisting of a
comprehensive, centralised system run solely by specialists. Good practices
naturally lead to performance evaluation as a living management tool. In other
words, culture and people are its core components, and production of information
is merely an outcome or means to an end. The goal is to raise people’s awareness,
to disseminate a new kind of focus on performance, cost, quality and the rele-
vance of the services provided, but also to give agencies and staff the capacity to
evaluate themselves. Under this approach, the goal of a structured approach to
performance at all levels of the public system is achieved by enabling each level
to produce the information it needs for its own day-to-day decision-making and to
conduct a self-review that will have an impact on the quality of its everyday work.
Learning-by-doing evaluative performance review makes it possible to give
credibility to evaluation based on factual data.
A response that works particularly well, which is suggested by the experience
of Ireland, Canada and France, consists of a decentralised and participatory
approach to evaluation. A performance culture can only be mastered if agencies
are encouraged to collect and share information on best practices, to promote
these practices and encourage other agencies to do the same and to adopt them 205
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in turn. The sharing of all types of best practices is a major vehicle for reform. It
involves participants and makes it possible to draw lessons as to whether these
practices work in different situations and structures. The lessons will have been
learnt when actors have acquired the capacity to see how a technical innovation is
relevant to a problem they face at their level and can provide new useful solutions
for their day-to-day work.
Central policy-makers and units whose main mission is public management

reform play an important role in this regard. They have a two-fold responsibility
that consists, firstly, of ensuring the accountability of basic units through vertical
reporting, as well as between departments through horizontal communication.
The centre should monitor the “big picture” performance of the public sector.
Secondly, they must help agencies and bureaux to learn how to take initiatives
and give them greater visibility and even provide incentives and support, for
example through training schemes, training seminars or voluntary experiments. In
practical terms, this obviously means that the centre must have the necessary
professional skills at its disposal. It also means that it must be careful to strike the
right balance between uniformity and diversity, combining a mix of approaches
that fits the needs of each national context. Being responsive to local units (their
inventiveness and diversity) goes hand in hand with developing overall
co-ordination. The use of informal evaluations that are designed to be part of
“business as usual” often makes it possible to introduce adjustments and changes
without attracting the attention of internal or external vested interest groups that
might be tempted to use a formal evaluation as an opportunity to resist reform.
In summary, the examination of good practices suggests that evaluation can

increase efficiency (the degree to which goals are reached relative to the available
resources). It also makes it possible to generate other forms of value added that
are far from negligible. It gives visibility to a judgement or a measurement in
terms of adequacy (the degree to which the goals assigned are reached). It
supports the administrative memory of action solutions. It provides skill variety
for decision makers at all levels. It supports an attitude of wisdom (acting with
knowledge while doubting what one knows), helps create competition for status
based on managerial skill. It may to some extent impress users and outside
observers.
Reasonable optimism for the future
The reform of the public sector is now becoming an on-going task of govern-
ments. It is very likely that the days when it sufficed to decree a reorganisation of
government once in a generation and then resume day-to-day routines are gone
206 forever.
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At the same time, the pressures for change are becoming increasingly global
and constraining, which has put countries that have been relatively reluctant to
adopt reforms in a difficult position. Two factors should be underscored in particular.
The first is the extension of forms of partnership in the governance of public

affairs. The best example of this trend is the European Union, which has become a
public entity that exercises responsibilities that until now have been reserved
solely to countries, in particular by allocating financial resources on the basis of
programmes or projects (structural funds, etc.). The development of this partner-
ship among a number of countries has involved a remarkable extension of the use
of evaluation procedures.
The second factor concerns financial constraints. There is every reason to

believe that these constraints, far from lessening, are in fact going to increase in
the public sector and for some time to come. The European Union is again a case
in point. The Maastricht and Amsterdam Treaties establish a macro-budgetary
regulation mechanism that will have a considerable impact. National systems,
including subnational authorities, will thus be forced not only to limit their expen-
ditures, but also to contain their revenues drastically. These trends will reinforce a
centralised approach that will rely on control by budget agencies. As a result,
whether they like it or not, both national ministries and local authorities will find it
necessary to step up their efforts to rationalise, beginning with their internal
efficiency (costs, productivity, quality).
These developments suggest that, although further privatisation of public

services remains operationally possible, efforts will be focused mainly on internal
reforms of the public sector, such as eliminating duplication and simplifying insti-
tutional units in various fields, etc. It will be increasingly difficult and costly for a
country to remain outside this generalised trend of reform. In other words, at least
in OECD countries, the current disparity between a few pioneering countries and
other more cautious countries can be expected to narrow. The competitiveness of
public systems, which has so far been a somewhat rhetorical aspect of reform
policies, is very likely to become a very real imperative that will be felt even in
the day-to-day life of individual government departments. At the same time, it will
become easier to compare the performance of departments and various levels of
government, both at the international level and within each country. Although the
reform of government departments is still a policy in which, compared with other
fields such as health, R&D, etc., comparability (and thus the reference to good
practices and benchmarking) has been relatively rare (as has evaluation), the
situation is likely to change rapidly. It will now be more difficult to refuse to carry
out some public sector reforms by arguing, as is often done, that they are based
on ideological or political considerations. Reform is becoming a functional impera-
tive in and of itself. 207
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Consequently, the overall situation appears to be shifting towards a relative

extension of evaluation practices: comparability, the need for more on-going fine
tuning, large-scale partnerships and macro-budgetary regulation will all play a
role. There is no reason to believe that, as regards the good practices identified
above, there is a substantial change in the profile of evaluation itself. It will remain
more oriented towards internal efficiency than towards external effectiveness,
more internalised than externalised, informal although more systematic, and will
be accompanied by cultural and behavioural changes while being increasingly
linked to solving the concrete problems of policy-makers, etc. Evaluation is and
will remain a valuable tool for anyone willing to take advantage of it.
The lesson to be learned from the experience of evaluation in the late
20th century is one both of realism and of modesty. Some may find it disappoint-
ing. One might have thought that the pressure for democratic accountability would
lead to greater transparency collectively shared by citizens regarding the impact
of public reforms on society or that the use of more “scientific” guidance methods
would make it possible to implement rigorous comprehensive data systems more
rapidly. But there are also reassuring aspects. The guidance of reforms remains
broadly under the realistic control of governments and the use of scientific
methods has not made policy-makers any less accountable. In this regard, evalua-
tion has not gone the way of PPBS, which was a good idea in itself, but proved
unusable because it was alien to policy-making practices and arrogantly ignored
the judgement of public officials. On the contrary, evaluation teaches an optimistic
lesson through its emphasis on the principle of usable knowledge. In this regard,
it is both its focus on describing the specific circumstances of policy action and its
ability to foresee cause and effect – if I choose this solution, it will probably have
this impact – that make evaluation a realistic tool for action. Is it futile, naïve or
arrogant to imagine that reforms of public sector management:
• Are aimed at genuinely changing the “bottom line” of the day-to-day behav-
iour of government employees and in the way organisations really operate.
• Can choose the processes, structures and strategies that actually bring
these changes about.
• Can make these changes lasting.
• Can limit the unwanted effects these changes may have on the efficient and
equitable provision of goods and services to society?
The focus on empirical information and consequences of reform actions,
through modern evaluation methods may offer safeguards against misdirected
efforts, specially in an era in which unsuccessful reform may well prove to be as
unsatisfactory and harmful as the refusal to undertake a reform at all. The optimis-
tic lesson for the future is that more and more countries have entered a process of
208 cumulative learning about reform actions. The quest for efficiency, effectiveness,
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Symposium Papers
transparency and democratic accountability does not any longer stop after one
and only one reform step. Learning means an ongoing and organic process to
which evaluation can offer critical insights, rather than being treated as a one-off
exercise. To some extent, and as suggested by examples given above, the analyti-
cal aspect of government has improved recently even if external, independent
evaluations have lessened. The 21stcentury may show that analysis is part of
government even in the field of public sector reforms. It takes a certain maturity,
sophistication and mindset to use evaluative information well, for instance as a
tool for learning that can help governments and the public to form well-based
views and take informed decisions. Setting up learning bureaucracies has become
a major challenge.
209
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Bibliography
Pollitt C. and others,

“Trajectories and Options: An International Perspective on the Implementation of
Finnish Public Management Reforms”, Ministry of Finance, Helsinki, 1997. See also
“Public Management Reforms: Five Country Studies”, Ministry of Finance, Helsinki,
1997.
Trosa S.,
“La modernisation est-elle évaluable?”, Politiques et Management Public, Vol. 10,
December 1992, pp. 65-84.
Schick A.,
“The Spirit of Reform: Managing the New Zealand State Sector in a Time of Change”,
State Services Commission, Wellington, 1996.
Wildavsky A.,
“Speaking Truth to Power: The Art and Craft of Policy Analysis”, Little Brown, Toronto,
1979.
Mintzberg H.,
“The Nature of Managerial Work”, Prentice Hall, London, 1980.
Lindblom C. and D. Cohen,
“Usable Knowledge: Social Science and Social Problem Solving”, Yale University Press,
New Haven, 1979.
Kessler M.C., Lascoumes P., Setbon M., Thoenig J.C.,
“L’Évaluation des Politiques Publiques”, L’Harmattan, Paris, 1998.
210
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Public Sector Reform Requires Leadership
Jo Brosnahan,
Chief Executive Officer Auckland Regional Council
Introduction
The following paper is based on research which I undertook in the United States
as a Harkness Fellow in the 1995-1996 year, sponsored by the Commonwealth Fund of
New York and based at Duke University, North Carolina. It is also based upon discus-
sions with other public sector managers in different public sector environments and
upon my own experience and practice as a chief executive and leader.
The paper is based upon a journey of personal discovery. I had a belief that
executive leadership was the special ingredient which enables some organisa-
tions to be vibrant, innovative, purposeful and successful environments in which
employees enjoy working and with which clients, the community, shareholders
and other stakeholders enjoy dealing. I believed that good chief executives
nurture leadership throughout their organisations, creating a culture within which
individuals can flourish and grow, but within which the group can also be effective.
Well led organisations appear to be better able to weather change and adversity,
to achieve real outcomes.
I sought therefore to identify leaders of excellence; to ask them just how they
perceived their role; what were those special characteristics which they believed
enabled them to be effective leaders? I concentrated upon those in the upper
echelons of leadership, while recognising that throughout a successful and
responsive organisation, there should be leadership at all levels.
I interviewed a broad variety of leaders from all sectors; leaders identified by
others as being superb in their field. I spoke also with organisations involved with
the creating and nurturing of leaders. And finally, I interviewed those involved
with public sector reform, at local, state and federal levels, to identify the
perceived role of the executive leader in this process.
If a model could be developed of the characteristics and qualities of its
successful leader, I was then interested in how this could be used to further
enhance the process of public sector reform. For throughout the world, there has
been major structural reform of the public sector; creating new models of 211
© OECD 2000
governance and executive management. These reform processes have in turn

liberated some chief executives from ad hoc control by government; and have
provided a new opportunity for leadership. I was interested to identify the form of
organisation that best encourages leadership and enables the achievement of
public sector outcomes. And if good leadership and good leaders create success-
ful organisations, how might such individuals be identified, nurtured and enabled
to carry out their leadership role in the public sector? How can we create leaders
and an environment in which they are able to lead?
Since returning to a chief executive role, I have been able to be somewhat
analytical from a practitioner’s point of view about leadership and the environment
in which it can flourish. And I have been able to put theories into practice in my own
organisation. I am fast concluding that the new world requires new types of organisa-
tions which enable a new form of leadership; the others will stutter and fail.
Within this paper, I have investigated the need for leadership in a world
where there is a huge change occurring in organisational paradigms. I have
discussed the emotional and spiritual dimension of leadership which makes the
very real difference. I have also described the role and characteristics of good
leaders. I have looked at the effect upon leadership of the situation in which a
leader is operating. I have discussed the difference between leadership and
management and have looked at the difference between leadership within the
sectors. I have looked at the way in which we might nurture new leaders. I have
then discussed leadership in the context of the new public sector and have
looked at just how we can create the environment for leadership. Finally, I have
made recommendations as to how leadership can be encouraged, to support
public sector reform.
Why do we need leadership?

Why do we need leadership? Leadership is inherent in every structure that
we have; community, church, politics; and we talk often of leadership in these
areas. And yet in describing executives in the corporate, non profit and public
sectors, we tend to refer to them as managers rather than leaders; we emphasise
only a part of the role that these individuals are required to perform.
John Kotter (1995) in his book “The New Rules” refers more specifically to the
importance of leadership in “today’s post corporate world”. He notes that while
management was the key task to make great hierarchies function, leadership is
necessary to deal with the changes required in the new more volatile networks. He
states (p. 115), “Success in managerial jobs increasingly requires leadership, not
just good management. Even at lower levels in firms, the inability to lead is
hurting both corporate performance and individual careers. Organisations that
212 stifle leadership from employees are no longer winning.”
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Symposium Papers
The world is fluid and rapidly changing. Global competition means that higher
standards are required than in the past. Rapid communications on a global scale
require dispersed decision making. Old tall hierarchies are now too ponderous to
keep up with the new technology. And the hierarchical leader in this context, no
matter how good a technical manager, will not be able to create an organisation of
excellence. Management is no longer sufficient. Peter Drucker (1989) (p. 207) talks
of the “information based organisation” of the future, with only a small proportion
of its managers remaining. He sees it resembling a symphony orchestra or a
hospital. It will be the era of the knowledge based worker, made up of specialists
who will be responsible for their own performance, facilitating feedback from
colleagues and customers. The structures will be flat, with knowledge dissemi-
nated throughout the organisation. Such a structure requires individual self
discipline and an emphasis upon individual responsibility. For an organisation to
be excellent, the individual components will need to be excellent.
The changes in organisational paradigms in the new world in which the leader
must operate are identified by Matthew Kiernan (1996). Some of these key
changes are as follows:
Changes in Organisational Paradigms

20th Century 21st Century
Stability Continuous change

Size and scale Speed and responsiveness
Rigidity Flexibility
Process driven Results driven
Vertical integration Virtual integration
Consensus Constructive contention
Hierarchy Leadership from within
As the value of the human capital of an organisation becomes recognised, more

egalitarian organisations are emerging, where the input of individuals is valued.
There is also a trend towards the use of empowered teams. And individuals too are
expecting to be appreciated; they are now mobile and can be expected to seek
alternative employment if their position is not rewarding. With the move away from
hierarchy, which demands the subservience of one individual to another, there is a
trend towards mutual understanding and responsibility. This in turn will require new
organisational structures (webs rather than pyramids) and a new form of leadership.
Peter Drucker in an interview with T George Harris (1993) stated “You have to learn
to manage in situations where you don’t have command authority, where you are
neither controlled nor controlling. This is the fundamental change”.
Implicit in leadership is the concept of taking others on a journey of self fulfil-
ment and collective achievement. And as the pace of life quickens, the journey
becomes more imperative. Perhaps the question might better be asked; how can
we cope without leadership? 213
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A leader in action – A case study of Harry Nurkin

So what are the qualities, characteristics and values of a leader who is able to
meet the challenges of the future? In talking with the various leaders, I found a
considerable commonality in the attributes which they believe have allowed them
to become successful leaders. In order to demonstrate the qualities of a good
leader in action, I have chosen to describe to you Dr Harry Nurkin. The President
and CEO of the Charlotte Mecklenburg Hospital Authority in Charlotte, North
Carolina, Harry exemplifies a leader of excellence, demonstrating the many
characteristics of good leadership outlined by those whom I interviewed. He has
taken a large non profit organisation serving a wide community through major
change and has been highly successful.
The Charlotte-Mecklenburg Hospital Authority is a regional healthcare
system. It is vertically integrated and comprises an academic medical centre
teaching hospital, 10 acute and speciality hospitals, two nursing homes, a
retirement community, a home health agency, a primary care network of over
300 physicians and ambulatory diagnostic and treatment facilities. The community
served by the hospital authority serves a relatively poor community and relies
upon Medicare and Medicaid (Federal Government funding) for more than half of
its funding. Harry was appointed to his position 16 years ago from a largely
academic background in health administration. He is responsible to a board.
At the time of his appointment, he was confronted with a tired, under
performing medical centre in urgent need of revitalisation and requiring financial
attention. Harry Nurkin describes his arrival at the hospital as “finding a cast of
thousands demoralised”. Harry’s vision was to change the corporate culture,
whereby the staff would have the necessary knowledge, skills and information and
would enjoy working, thereby being able to provide a high quality of health service.
His first objective was to revitalise the workforce. His philosophy was that
most people like to work, but that most only work at 60-70 per cent of their
potential. He wanted his staff to enjoy their work, to be comfortable in what they
do, but also to work hard and at their potential. He saw his role therefore as a
revitalisation of the people within the organisation and of the environment in
which they worked.
His aim was to create attractive and efficient buildings for the long term;
neither the patients nor the staff needed drab surroundings. The upgrading of the
interior brought colour, floor coverings and plants, with the emphasis upon
windows. He replaced equipment and borrowed to do so. Those areas which the
staff indicated were most in need of change were those tackled first. The refur-
bishment was symbolic of change; this, together with the caring professional staff
humanised the health environment. A staff think tank later evolved the “mother-
214 in-law rule” whereby staff now keep the surroundings “as if mother-in-law was
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about to visit.” Harry also tackled the financial system; he hired bright young peo-
ple to be the accountants and to manage the dollars, leaving the medical staff to
care for their patients.
During the early days, Harry spent the majority of the time outside his office;
talking, listening and communicating; being visible. He believes that managers
have traditionally been bad at listening, egos tend to get in the way; and yet the
best ideas come from others. He makes a point of turning up around his organisa-
tion at all hours of the day and night, including the emergency room in the early
morning hours, to ensure contact with both day and night staff. Such actions earn
him followers, because the staff thereby feel that being a follower has meaning.
Harry is concerned too that staff should communicate with their patients. He
says that staff themselves initiated follow up by the emergency staff to their
patients in the wards or at home, and follow up telephone calls by the intensive
care nurses to their patients after discharge. This latter action, initiated by a group
of nurses after a lunch time discussion, has had an unexpected side effect of a
28 per cent decrease in law suits and a 33 per cent increase in the short term
payment of bills, together with a decrease in staff turnover. Harry also encourages
close relationships between the staff.
He says that his role is to inspire his followers, to ensure that they have a
good direction, and to define the boundaries within which they operate. But they
are also involved in formulating the vision and in recommending changes. While
Harry avoids formal processes as much as possible, disliking memos, he encour-
ages staff to communicate their ideas verbally, by note or by Email.
Harry has worked hard to create a culture of innovation, encouraging his staff
to solve their own problems, but providing a support team to assist where neces-
sary. If an individual or a team resolves a problem, he arranges some recognition
or celebration. He believes that such celebrations are important. As an organisa-
tion, the Authority continue to take risks, confident in its own ability to make
projects successful.
There are very few rules in the centre other than those required for North
Carolina licensing requirements. The centre also does not have performance
contracts. Once a year, Harry Nurkin and his directors and managers set individual
and organisational goals which are discussed collectively, and the management
team meets 4 times a year to see whether or not these are being achieved. The
divisional goals are not financial, except for those of the financial division itself.
The Authority also has no structured quality package such as TQM; the culture of
the organisation being such that he believes there is no need for such systems.
Harry undergoes an evaluation by the Board each year of progress in relation
to goals. He says that he has convinced the Board that a business like the health
authority can be run without a major emphasis upon the bottom line, but with an
overarching emphasis upon service. 215
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The Health Authority is now in good health. The revenue has risen 15 fold to
$1.3 billion in Harry’s time as President and makes substantial profits which are
reinvested into the system. The hospital benchmarks itself against others in the
US and despite an initial very low level of health in the community, is competing
well at low cost, with a low rate of readmissions. There is a very high level of
patient satisfaction. However, Harry Nurkin’s goal is to be up with the very best in
the nation; that is part of the future vision for the organisation.
Harry summarises his leadership role as finding the right people and giving
them responsibility and authority to take care of both today’s and tomorrow’s
responsibilities. He says that in the health care system, it is not hard to find
people who care about others, but he considers it essential that they are at one
with the culture of the organisation. His role is also defining the boundaries within
which they operate, creating the potentials (the vision) in terms of quality, cost
and growth and communicating these. It is listening to people and inspiring them
to achieve. It is also providing them with resources to enable them to resolve
problems. Harry says that he makes few decisions; those are made by others in
the organisation. He sees himself primarily as a counsellor and a sounding board.
Harry Nurkin says: “I need to learn how to deal with human beings a little better
each day, learning how to encourage people.” “There are many leaders within my
organisation. My job is to enable them to practice leadership. They must be
allowed to fail. There are many within the organisation who never thought about
being a leader; but with the support of a mentor to provide support and training,
they can become leaders.”
Harry has the range of characteristics that I perceive to be important to be a
successful leader, but most particularly, he has an emotional and spiritual
dimension of leadership. It is a dimension which lifts others in the organisation
(“the followers”) to another plane; in which they can perform to their potential,
enjoy what they are doing and attain a sense of fulfilment in their work. They can
also learn to be leaders. It is an approach to leadership which distinguishes
successful leaders from others.
The emotional and spiritual dimension of leadership
In interviewing the different leaders around the United States, I was struck by
a common humanity. They used words to indicate that they cared deeply about
the people they worked with and served; they used words like caring, empathy,
respect, compassion and even loving. They talked about creating workplaces in which
people look forward to going to work, in which they feel personally fulfilled. They
talked about always being able to put one’s self in the other’s shoes. They talked
about inner strength and higher truth. Fairness was seen to be a particularly important
216 aspect of this relationship. Most of all, they talked about integrity and about trust.
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These all implied a special ability of these leaders to relate to their people; to
establish rich, caring, honest relationships.
• The late US Senator Terry Sanford, former NC State Governor and former
President of Duke University, stated that a leader should always leave
others feeling good; that was something he learned at his mother’s knee.
• Frank Fairbanks, the City Manager of the City of Phoenix, Arizona, stated
that a leader must be willing to deal with the emotional side of an issue;
and not with the detail. An emotional basis is needed for people to commit
to and create change. He believed that leadership basically has an
emotional, spiritual component and needs to be developed.
• Don Keough, the former President of Coca-Cola, talked about “a leader
having a passionate interest in the human condition. There must be some
sense of the creation from which you emerge”.
• Nan Koehane, the President of Duke University stated “The ability to
inspire and maintain trust is important. Support and trust among colleagues
is essential. By contrast, the absence of trust is corrosive. In the times that
we live, trust is becoming more and more important”.
It is this dimension of leadership that is covered only sparsely by the
academic research dealing with leadership, but which has been dealt with in a lot
more detail by writers such as Robert Greenleaf, Max De Pree, John Gardner,
Larry Spears, Peter Senge, Stephen Covey and Rushworth Kidder. It is the human
aspect of leadership, variously described in its different forms as servant leader-
ship, moral leadership, ethical leadership, values based leadership or principle
based leadership.
Larry Spears (1995) in “Reflections on Leadership”, a selection of 10 essays on
servant leadership (p. 4), defines the 10 critical characteristics of Robert Greenleaf’s
servant leader as listening, empathy, healing, awareness, persuasion, conceptualisa-
tion, foresight, stewardship, commitment to the growth of people and the awareness
of the need to build community. In such a relationship, the least important word is I;
for it is those who follow who enable achievements to be made.
Servant leadership has been adopted by a number of corporations and other
organisations in the United States as an institutional model. The traditional
hierarchical organisational structure is replaced by a team oriented approach; with
emphasis upon co-operation, persuasion and consensus. The prime aim of the
business is seen to be to serve the employees, the clients and the community
rather than to produce a profit; (the profit usually comes anyway.) The
Charlotte Mecklenberg Hospital Authority and Harry Nurkin fit well into this
model; Harry sees his role as being there for his people; for his staff and for
his patients. 217
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Max De Pree, in his book “Leadership Jazz”, has a lovely description of a jazz
band as an expression of servant leadership: “The leader of a jazz band is an
expression of servant leadership. The leader of a jazz band has the beautiful
opportunity to draw the best out of other musicians. We have much to learn from
jazz-band leaders, for jazz, like leadership, combines the unpredictability of the
future with the gifts of individuals.”
The importance of values

Values are at the core of good leadership. Individuals have values,
behaviours which they perceive to be important. Organisations too have values;
normally imposed by the leader. Values affect perceptions of situations and they
affect the solutions generated. They also affect interpersonal relations with
individuals and groups, the perception of success, the perception of right and
wrong (ethical and unethical behaviour), and the impact of organisational
pressures and goals. The leader will only be short-lived if there are not basic
values of honesty and integrity. For without these values, there cannot be the
building of lasting human relationships; the basic requirement for leadership.
Implicit within the concept of values based leadership is the understanding
of the relationship between leadership and communities. Successful leadership is
grounded in sound communities; with common values (John Gardner, 1991). Good
leaders are nurtured by the strength and sustenance of these communities, whom
they in turn support. These communities can be within corporations, government,
non profit organisations, or within society at large.
What do good leaders do?

The various leaders whom I interviewed were operating in different environ-
ments and made the point that leadership will vary according to the situation and
according to the type of organisation in which they are operating. However, as
each leader outlined his or her own philosophy of leadership and identified what
they believed to be the key characteristics of leadership, I was intrigued by the
considerable commonality which emerged. Some of the characteristics described
involved clarification of the leadership role. Other characteristics however,
involved the personal attributes of the leader.
The leadership role was seen to require the following:

• A leader must forever be challenging the reality; challenging perceptions.
He or she is a catalyst for change, for leadership is about change. As
Don Keough, the former President of Coca-Cola stated, “A leader must be
constantly restless, always looking to do something better than yesterday,
always looking at what we need to do and how to grow in order to survive
tomorrow”. “He must be able to take people into the unknown.” The
218 creativity required to achieve change is likely to be found in the followers.
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• A commitment to mission. Frances Hesselbein, the President of the Drucker

Foundation for Non Profit Management stressed that management for the
mission is key to good leadership: “A clear and powerful mission statement
that permeates the organisation is a very motivating force.” As the former
Chief Executive of the Girl Scouts of the United States, she turned around
an antiquated organisation by focusing upon the mission, while being
prepared to make bold changes.
• The ability to strategise, to determine the path to the vision, with objective
measures along the way. Brian McNulty, of the Colorado Department of
Education involved parents and staff extensively in preparing and imple-
menting strategies for his department, while emphasising that it was his
role to ensure that such strategies were in place.
• Leading by example is an essential component of leadership; the ability to
“walk the talk”. This also implies an essential knowledge of the task at hand.
• The leader is the keeper of the values of the organisation; the core beliefs that
the organisation lives by. It is important that there is a sense of shared
values; for this is the basis of the culture of the organisation. With a strong
culture, an organisation can overcome a variety of adversities. To assist in
this process, Hatim Tyabji, the President and CEO of Verifone, has
published the Verifone philosophy in a booklet in 7 languages, distributed
to all staff. This booklet is described as “a system of motivating concepts or
principles; the system of values by which one lives”. It is interesting to
note that this is a company which is operating globally; but the corporate
values are consistent around the world.
• The leader must be prepared to accept personal responsibility for what ever
happens and must encourage a similar responsibility among those she
leads. Rebecca Taylor, the Executive Director of the Vocational Foundation
Inc. of New York, stated that a key function of a leader is having confidence
in your own judgement; “being prepared to make a decision and take the
flack for it”.
There are a number of personal attributes that require a special individual

• The ability to inspire people to see a vision, encompassing the aspirations or
goals to be followed by the organisation. This requires the skill to overview;
to have “helicopter vision”, which takes into account the global future. The
leader must be prepared to be at risk for his or her vision.
• The ability to inspire others with the goals of the organisation and to empower
them to reach them. To do this, there has to be a mutual respect between
the leader and the followers; there must be believability, accessibility and
caring. Not all of those interviewed liked the word empowerment, with its 219
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inference of power to give; but there was general consensus that a leader
must be willing to let go of the decision making. Peter Drucker (1993)
termed this “replacing power with responsibility”.
• The ability to provide support and encouragement for others; Barbara Brown
Zigmund, the President of the Hartford Seminary of Connecticut, talked of
this active support as providing purpose for the whole.
• A passion about learning and about teaching, for it is a leader’s responsibility to
ensure that learning never stops. He or she must nurture creativity and
innovation; for it is there that the future lies. To do this, they must provide the
opportunity, the resources, the freedom and the opportunity to fail.
• The ability to communicate with people. Implicit in this is the establishment of
trust through a basic honesty with others. It also involves a significant
presence; a high degree of visibility. Frank Fairbanks gave the example of hav-
ing to talk personally with groups of employees regarding layoffs. Despite the
highly stressful situation, a survey afterwards reflected still high morale,
because of the very honest and open way in which they had been involved.
And the Secretary of Health and Human Services in Washington DC,
Donna Shalala, communicated directly with all of her 65 000 staff during the
time of US Federal budget shutdowns in 1995, in personal letters and a brief
newsletter, and then by organising for all managers to ring their staff members
personally and explain the situation.
• Implicit in the ability to communicate is the ability to listen; for as Senator
Terry Sanford stated: “Everyone else always has better ideas.”
• The ability to take risks. The leader must be prepared to make mistakes, for
he or she must often make decisions when all information is not available. A
leader must also allow others to take risks and to make mistakes. Jolie Bain
Pillsbury, a former Associate Commissioner involved with large scale reform
in the Massachusetts Department of Public Welfare, talked of a culture of
Monday morning debriefings; “to learn from failure”.
• The leader must have the energy and drive to persevere with the leadership
role and to make a difference. Implicit in this is an expectation that others
will also have the same energy and drive; achieving a lot and performing at
high standards. Donna Shalala talks of protecting her stamina; “skilful lead-
ers don’t let people over organise them”; in order to protect her ability to
make good decisions.
• A leader must also have a commitment to the task in hand; a passion for what
he or she is aiming to achieve which is infectious. Karen Davis, the
President of the Commonwealth Fund, talks of “making followers excited
220 about following”.
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• A leader must have integrity. Barbara Brown Zigmund refers to integrity as a

sense of completeness but not uniformity; inherent in this is a trustworthi-
ness; doing the right thing and explaining it.
• A leader must recognise the value in people and be committed to them, for
human relations are the key to leadership. Robert Burkhardt, the Head of
School at Eagle Rock, an experimental school for high school dropouts in
the Colorado Rockies, talks of the importance of accommodating and
celebrating individuality within the values of the organisation. He or she
must truly care about those who are their followers and be able to empathise
with them; for without this caring, the relationship will be diminished and
there will be a limit to how far the followers will follow.
• A good sense of judgement is essential. A leader also requires an unfettered
sense of optimism, for one can only lead if one is positive. It is an unfortunate
aspect of political leadership that there is a very large element of negativity
involved in the concept of “opposition”. And yet, leadership can only be
positive.
It is interesting too, that none of those leaders interviewed made any
mention of power, other than as giving an extra incentive to the reluctant. It is the
very human aspects of leadership, including a sense of humour and the ability to
have fun which I believe distinguish those who can touch and thereby inspire
others. For while many of the important aspects of the leadership role can be
learned, and one can become aware of the required personal characteristics, it is
only where such qualities are fully developed in an individual that there is true
leadership.
What is a leader and how is a leader involved with leadership?

I perceived Harry Nurkin and the others interviewed to be highly effective
leaders; but this begs the question; what is a leader and how is a leader involved
with leadership? Leadership has become a subject of considerable interest,
particularly over the past decade; so the literature is rich with different leadership
models and different concepts of what comprises a good leader. Warren Bennis
and Burt Nanus (1985, p. 4) spoke of more than 350 definitions of leadership,
arising out of decades of academic analysis. There have been many more in the
past decade and a half. Unfortunately, there is still no leadership theory which
integrates findings from the different approaches; human behaviour has proven to
be difficult to predict.
The definitions of a leader and of leadership vary according to the definer
and the defined; many speak wisely on the subject; John Gardner, James
MacGregor Burns, John Kotter, Peter Drucker, Ronald Heifetz, Michael Maccoby,
Max De Pree, Warren Bennis, Robert Greenleaf; the list is endless. And some
talk of the importance of followers; without whom there cannot be leaders; 221
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Robert Kelley and Joseph Rost to name a few. There are those such as Peter Block
who talk not of leadership, but of stewardship; of being “deeply accountable for
the outcomes of an institution, without acting to define the purpose for others,
control others, or take care of others” (Block, 1993, p. 18).
The more traditional, although not necessarily accurate view of the leader has
been a somewhat paternal figure, autocratic, wise and knowing, able to make hard
decisions, to set the direction and lead US into the promised land. I suspect that
this image is still somewhat prevalent among the public at large as they search for
“leadership”. But this is not the picture of the leader, nor the model of leadership
being espoused by any of those above.
In discussing leadership, Frances Hesselbein, defined leadership as a collection
of human attributes; “Leadership is not a basket of tricks or skills. It is the quality
and character and courage of the person who is the leader. It is a matter of ethics
and moral compass, the willingness to remain highly vulnerable”.
Senator Terry Sanford defined leadership as “getting people to move to a
situation that better serves the purpose; to improve on what is at the present time”.
And what of those who write and research on leadership, rather than practice it?
John Gardner defined leadership as “the process of persuasion or example by
which an individual (or leadership team) induces a group to pursue objectives
held by the leader or shared by the leader and his or her followers” (Gardner,
1990, p. 1).
Ron Heifetz from Harvard is more concerned with the process than with the
leader, defining leadership as the mobilisation of people to face, define and solve
problematic realities (Inc. Magazine, 1988).
When one then seeks to define a leader however, it is interesting that there are
few such definitions; the leader being considered to be inherent in the leadership
process. So if a leader is to be defined as one who is involved in the process of
leadership; focusing on the group’s efforts towards a common cause; what is the
leader’s responsibility?
Max De Pree, the Chairman of Herman Miller Inc., in his book “Leadership is
An Art” (p. 11), states; “The first responsibility of a leader is to define reality. The
last is to say thank you. In between the two, the leader must become a servant
and a debtor. That sums up the progress of an artful leader.”
And Robert Greenleaf, in “The Servant as Leader” (1991), defines the servant
leader as the one who is servant first; making sure that the highest priority needs
of others are being served. Those thus served grow themselves as persons, to
“become healthier, wiser, freer, more autonomous, more likely themselves to
become servants”. The wish to serve comes before the desire to lead; it is a long
222 term attitude.
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Leadership and the situation

An essential factor in the success of a leader is the situation in which he or she
is functioning. An effective leader of the model outlined above requires the same
freedom that he or she is expected to give to their followers; the freedom to deal
openly and honestly with their people in a caring, trusting relationship. They must
also have the freedom to develop a vision, to inspire, to empower, to allow risk
taking, to communicate freely and to take personal responsibility. They must be
able to solve problems and to be creative. This implies an independence and an
ability to lead in a manner which is not hindered by unnecessary bureaucracy.
The relationship between the executive leader and those who govern the
organisation is therefore particularly important. There must be a clear mission
defined by the governing body, whether this is a Board of Directors, as in the case
of a non profit, for profit or quasi government organisation, or whether it is the
Cabinet, a Minister, a Council or similar, in the case of a public sector organisation.
If performance contracts are being set, it is obviously important that the responsi-
bilities for the different organisational outputs and outcomes are clear; for there
can only be accountability if responsibility is clearly defined. This in turn makes it
important that there is no political or Board involvement in the day to day running
of the organisation; for otherwise, accountabilities become confused.
There is also a danger that centrally determined outputs for a public sector
organisation might not always be appropriate to achieve the longer term out-
comes. They could, if not properly drafted, inhibit the organisation’s leader from
developing innovative ways to achieve real outcomes.
It is interesting to note the situation within which Harry Nurkin was able to
lead. He had a very able, professional Board who had a clearly focused role; Harry
described their role as essentially being to hire the CEO, to consider his recom-
mendations and to fire the CEO. The Board was crucial in recognising his abilities,
in allowing him the freedom to lead, in being prepared to take risks, and in being
prepared to accept a people focus rather than a fixation with the bottom line. I
would hypothesise that this approach by the Board, together with the inherent
independence allowed to a non profit organisation, created a superb environment
in which Harry was able to lead.
What is the difference between leadership and management?

Leadership is not merely a component of management; leadership is about that
special mix of gifts that include integrity, vision, the ability to inspire others, a deep
awareness of self, courage to innovate, and instant and impeccable sense of judge-
ment. It is about an unfailing sense of optimism, an intellect that can see the way
through and a deep caring about those one leads. Leadership should also not be
equated with position, for it can and should be found throughout an organisation. 223
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By contrast, management is about systems and processes; it is about planning,

budgeting, monitoring and staffing. Leadership and management are not mutually
exclusive and one requires the other. As I will discuss later, organisations which
enable leadership throughout are those with good management systems.
Warren Bennis in “Becoming a Leader” (1989, p. 45) defines the differences
between leaders and managers as “the differences between those who master the
context and those who surrender to it”. He lists other key differences:
• The manager administers; the leader innovates.
• The manager is a copy; the leader is an original.
• The manager maintains; the leader develops.
• The manager focuses on systems and structure; the leader focuses on people.
• The manager focuses on control; the leader inspires trust.
• The manager has a short range view; the leader has a long range perspective.
• The manager asks how and when; the leader asks what and why.
• The manager imitates; the leader originates.
• The manager accepts the status quo; the leader challenges it.
• The manager is the classic good soldier; the leader is his own person.
• The manager does things right; the leader does the right thing.
While these definitions are somewhat extreme and simplistic, they do
emphasise that management is about safe process while leadership is about
inspiration, innovation and people.
There have been numerous leadership models developed to define the
skills, tasks and characteristics of a leader and of a manager. Generally, autocratic
and democratic leadership behaviour have been considered to be extremes, with
autocratic leadership (and the management model) associated with a structured,
centralised and hierarchical system, with a concentration of power. Democratic
leadership in turn has been associated with a decentralised, unstructured system,
with dispersed function and power. Richard Burton and Borge Obel (1995) refer to
those fitting the autocratic and management models as having a high preference
for micro involvement, and those of the democratic model as having a low prefer-
ence. In the model described above, you might say that the autocratic process
more equates with the model of a manager described by Bennis, while that of the
democratic leader better equates with the leadership model so described.
However, it is important not to fall into the trap of believing that leadership
is good and management is bad. Leadership and management are highly
complementary functions and both are required for organisational success. An
environment in which people are empowered, trusted and inspired requires
224 quite sophisticated systems of management.
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Are there differences in leadership between the sectors?

Is there a difference in the leadership characteristics and values required of
the private sector leader compared with those required of a leader in the public
sector? I have identified a great deal of commonality, as indicated by the core
leadership roles and characteristics, including the emotional and spiritual
qualities outlined earlier. One might also suggest that public sector leaders are
likely to care deeply about their communities and those they serve and have thus
chosen a public service career.
The leaders of excellence whom I interviewed did not act differently in the
different sectors. This is supported by research undertaken by various scholars,
including Bennis, Levinson and the Center for Creative Leadership (Kotter, 1988,
p. 19), in which private sector and public sector CEO’s and middle level managers
were compared; all had vision, a strategy for achieving that vision, a co-operative
network of resources and a highly motivated team of people to make the vision
a reality.
A comparison of the roles of the leaders in private and public sectors indeed
indicates that the role of the private sector leader is generally more straight-
forward. The mission of a private sector organisation is usually narrowly defined
and the stakeholders are readily identified and limited in number. By contrast, in
the public sector, leaders are dealing with an ever changing mission, an often hazy
vision imposed from above and a multitude of stakeholders, including the public
at large. Leadership roles between political leaders and chief executives are often
confused: the political leader being the one perceived to have the vision, but with
the chief executive responsible for interpreting this and ensuring the delivery of
outcomes. Public sector CEO’s are acting under guidelines far more confining than
those of the other sectors; they are operating in the public gaze and are far more
likely to be admonished publicly for minor errors than praised for major accom-
plishments. There tends to therefore be an inherent avoidance of risk in public
organisations, which in turn tends to discourage innovation and risk taking. The
environment in which public sector CEO’s currently operate is generally not
conducive to encouraging leadership.
Facing such an unattractive scenario, bureaucracy and hierarchy must often
seem to be an attractive option to the public sector executive; providing a buffer
to direct accountability. This is despite the fact that this approach does not
enhance organisational success. So there is a major challenge to create a public
sector environment which can nourish leadership and create lively, innovative,
publicly responsive organisations.
Unfortunately, the late Jim Gantsoudes who was then Managing Director of
Morgan Stanley Co. Inc. in New York, gave the general private sector viewpoint of
public sector executives; pointing out that such leaders in the United States are 225
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generally viewed to be inferior to those in the private sector. He stated: “the

public sector is seen to be a crummy existence, good people have no interest in
being in government.” This is also, unfortunately, a common perception in our own
countries. While this perception might have changed a little in some countries,
with the gradual introduction of contractual systems in the public sector involving
full responsibility and accountability, the presumed superiority of the private
sector still remains. This is not assisted by public sector salary scales which are
usually greatly inferior to those in the private sector. And yet the leadership role
of those in the public sector is often more difficult, more complex and usually has
far greater community impact. It is not unusual for those chief executives
employed out of the private sector to struggle with the public sector role, with its
multitude of demands. In the past, the expectations of the public sector have
perhaps not been as high as in the private sector, where competition is a demand-
ing factor. But the public sector around the world has been reformed; this is no
longer the case.
The different leadership roles are not always fully understood or appreciated
in the public sector. The leaders are generally perceived to be the politicians
rather than the executives and there is not often any recognition of the importance
of leadership at the professional level. Mark Abramson, the Chairman of Leader-
ship Incorporated in Washington DC who has been involved with leadership
training in public sector reform for many years, comments that training in the US
public sector is lagging behind, with the exception perhaps of the uniform
services. There is not enough time and money being spent on developing people
in leadership roles, either at political or executive levels. There is very little
succession planning such as takes place within the large corporates, to identify
and nurture young leaders. This is not a problem unique to the United States.
Throughout the world, we need and demand leadership but we are not prepared
to invest in fostering and growing it. As both Peter Drucker and John Gardener
emphasise, an excellent public sector is essential to the health of the free society
to provide balance to other interests. To achieve this, we need to recognise,
develop and support new leaders.
Nurturing future leaders

True leadership is a rare but desirable commodity. And yet leadership is
needed at all levels in every public sector organisation. How are such new leaders
to be created?
There is considerable debate about whether leadership can be taught. There
appears to be a general consensus that individuals cannot be taught in the class-
room to be a leader. However, they can be taught about the roles and qualities of
leadership, to raise awareness of what good leadership entails, and to give them
226 confidence to use a more caring and empowering approach.
© OECD 2000
Symposium Papers
The development of leadership qualities can also be assisted by greater

self-knowledge and by a range of differing activities. Such activities include intern-
ships, exposure to a range of different workplace situations requiring leadership,
community roles, and the presence of a good mentor. All raise awareness of the
importance of human interaction in different circumstances and allow learning
from the examples of good leaders in action. One can be taught various skills
which can assist in a leadership role. Students of leadership can also learn more
about their own personalities, values and attitudes in order that they can better
understand themselves and others in a leadership situation.
A broad exposure to life in a wide range of experiences and subsequent

reflection and learning best prepare a leader. Such experience or learning can
range from taking up responsibilities at an early age to coping with personal
tragedy and crisis, to involvement as an aid volunteer, to travel experiences.
There is a growing recognition that such breadth of experience exposes one to a
full range of values and perspectives. This in turn is of greater benefit to those
who are going to be future leaders in their organisation than the traditional
specialisation into singular careers early in life.
It is interesting to note Daniel Goleman’s definitions of emotional intelligence

and the manner in which these can be applied in the identification of leaders.
Goleman (1998) refers to the personal competencies which comprise leadership
as self awareness, self regulation, motivation, empathy and social skills. It is inter-
esting to note that Goleman, in his book “Working with Emotional Intelligence”
(p. 319), refers to the 21 generic competencies identified from star performers in
286 managerial positions in organisations around the world, of which more than
80 per cent related to emotional intelligence. The measurement of these compe-
tencies in the appointment of those taking up new leadership roles is becoming
increasingly important.
It is also essential that the leader has some understanding and empathy with
the community and people around them. There is a need to understand the
different values of society and the fact that the good society requires a balance.
The leader cannot afford to be dogmatic and uncompromising in their own ideolo-
gies. James O’Toole in the “Executive’s Compass” (1993) follows the development
of society values from the days of Plato and Aristotle through to the modern day.
His book, based upon the Executive Leadership course presented at the Aspen
Institute in the United States, presents these values in the form of a compass. The
value of liberty has an opposite tension of quality, while on the other axis the
value of efficiency has an opposite tension with community. An understanding that
there is not necessarily a right or wrong way to view society values increases
tolerance of alternative views and opens the mind of the leader to the possibility
of new and innovative outcomes. 227
© OECD 2000
It is important within organisations to ensure that leadership training is

available for staff at all levels; to ensure that they are exposed to a broad range of
different experiences and to monitor the development of leadership capabilities.
The Leadership Practices Inventory (LPI) put out by James M. Kouzes and
Barry Z. Posner (1993) is one way of enabling an organisation to measure the lead-
ership practice of individuals. This involves staff evaluating their own leaders,
which is in turn compared with a self rating. The practices of exemplary leadership
in this model are identified as challenging the process by searching for opportu-
nities, and experimenting and taking risks; inspiring shared vision by envisioning
the future and enlisting the support of others; enabling others to act by fostering
collaboration and strengthening others; modelling the way by setting an example
and planning small wins; and encouraging the heart by recognising contributions
and celebrating accomplishments. While this is a relatively narrow measurement
of leadership, it does enable an organisation to identify and monitor leadership
practice within an organisation.
It is also a means by which an organisation can fall into the common trap of
promoting staff to leadership positions for the wrong reasons. We are all aware of
those who are leaders in their technical field, but do not have the same special
capabilities in leading people. And yet so often, these people are advanced to
key leadership positions. Too often, safe and mediocre performance is rewarded.
And those talented innovative people who take risks are punished, admonished
or at the very least discouraged. By raising the awareness of good leadership
practice, evaluating leadership practices, ensuring that carefully designed
leadership training and support are available to all, providing mentoring for young
leaders with potential and providing them with appropriate opportunities, one
can change the face of leadership in an organisation.
Finally, in the nurturing of future leaders, it is important that good leaders
should be identified and acclaimed: to set an example for others. All should wish
to be leaders, with the associated responsibility that this involves. The
United States identifies and acclaims its fine leaders, with a variety of leadership
awards given at every level of society, from school communities and grass roots
organisations to state and nation-wide awards. Leadership is used in many
contexts, but everywhere it is recognised as being a key to change. For those
countries which are more egalitarian, such as my own, there is a need for our
communities to rise above the tendency to be all the same and to recognise that
there is an enormous benefit to the community at large if leadership can be
encouraged and awarded. Servant leaders, by definition, are not going to under-
take their leadership role in order to be acclaimed; but their role is that which
most requires acclamation and emulation.
228
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Symposium Papers
Leadership in the reformed public sector

It would have been very difficult for the style of leadership which I have
described in this paper to have been practised within the large, centralised,
regulated, hierarchical and bureaucratic organisations which traditionally made up
the public sector. However, throughout the world, public sector reform is enabling
a new mode of leader to emerge; the emotional and spiritual leader, such as
Harry Nurkin.
Over the past 14 years, much of the world has been through public sector
reforms, often stimulated by financial crisis and involving major structural changes;
changes which have been dramatic and in the main successful. The reforms have
frequently been based on the model described by Christopher Hood of the London
School of Economics and Politics as “new public management”. The reforms have
often had their intellectual roots in two philosophical frameworks; that of institu-
tional economics, which led to the widespread use of contracts, and that of manage-
rialism, involving bringing private sector ideas of management into the public sector
arena. These two models tended to reinforce each other in different ways; particu-
larly in emphasising the hard, contractual side of management and undervaluing the
human side.
In New Zealand, the contractual model has involved the general separation of
policy development from service delivery, with contracts between the various
parties to define and then measure performance according to pre-determined
outputs. Performance contracts between chief executives and Ministers have been
the cornerstone of the model. It is significant that these chief executives are not
politically appointed, there being clear separation between the political and
executive branches of government. The reforms have given far greater responsibil-
ity to the chief executives, allowing them to be responsible for the outputs of their
organisations. Such freedom to act creates an environment of autonomy in which
leadership can better flourish.
Throughout the world, the different state enterprises and the various units of
local government, particularly in the area of service delivery, have been expected
to be more like the private sector, with efficiency and effectiveness in their opera-
tions and a focus upon the bottom line. There has been a major move towards the
contracting out of services and the devolving of many functions to stand alone
agencies.
Public sector reform has tended to accompany major changes in the private
sector, which has been struggling to meet the challenges of globalisation. In
New Zealand, for example, businesses were suddenly exposed to the vagaries of
the international market place. During this time of reform in all sectors, manage-
ment skills were emphasised, as the various public and private sector organisa-
tions struggled to survive and to compete; for limited trade or for limited funds. In 229
© OECD 2000
many ways, it was the quest for good management which led to the public sector
reforms. There were also some able leaders, but with a predominance of these
performing a somewhat traditional, hierarchical leadership role. This somewhat
impoverished private sector management model has tended to be duplicated in
the public sector.
There are two main aspects of reform; structural changes, and the implemen-
tation of the new policies and changed systems to achieve improved outcomes.
Structural changes alone are not sufficient and the traditional managerial model is
not enough. Effective executive leadership is vital in all aspects of the public
service, to continue the transition from the traditional, structured, bureaucratic
organisations which once comprised the public sector to new, less formal, more
independent organisations. These new organisations are required to refocus, to
restate their values, to help the public adapt to changing services, to often
compete with outside contractors, to produce more from less and to cope with the
inevitable human dislocation.
Good management and hierarchical leadership are no longer sufficient. All
stakeholders are demanding that their interests be taken into account; and in the
case of public sector organisations, this means that the public at large must be
listened to. Chief executives are required to present the vision to all stakeholders,
including the public at large; to inspire, to teach, to encourage and to support.
They are expected to provide purpose, to innovate, to communicate and to
empower. There is a need for well rounded public sector leaders with the charac-
teristics described here; there is a need for servant leaders.
The chief executives in the New Zealand public sector have been given more
discretion to manage than those in most other nations; and in return, they have
been required to be accountable for a range of outputs specified in their
contracts. The CEO now has responsibility for the overall form and function of his
or her organisation. Such discretion is an important basis for creating a situation in
which leadership can thrive. However, the contracts between the Minister and the
various departmental heads and Crown enterprises tend to give the chief
executive the responsibility for shorter term outputs, particularly financial targets,
with the Minister as “purchaser” being responsible for the longer term outcomes.
While these have made a valuable contribution to New Zealand’s public adminis-
tration, by clarifying purpose, imposing accountability and providing good quality
information, the performance contracts did not always allow the flexibility
required to deal with the day to day complexities of large people based organisa-
tions. Essentially, the contracts were designed to reward management rather than
leadership; with the central agency providing the “vision”. Thus, we have had
many chief executives meeting their performance contracts, while their staff and
their community were deeply dissatisfied. The incentives to meet the short term
230 deliverables did not encourage the chief executives to look to the long term
© OECD 2000
Symposium Papers
health of their organisations or of their communities. Instead, questions must be

asked beyond the core financial issues; is the organisation responding to the
multiple constituencies; is leadership being provided?
Allen Schick of the Brookings Institution in Washington (1995), in undertaking
a review of New Zealand public sector reforms, made the point that “outcomes
require a broader perspective, a more strategic vision, a capacity to relate this
year’s developments to a longer term framework”. He warned against the contracts
being too focused upon the short term perspective and advocated a change in
focus to the longer term outcomes.
He also commented in a subsequent discussion that the contractarian model
of reform, with its fixation upon short term performance, tends to ignore leader-
ship. Leadership qualities are independent of output. This in turn means that
there has not been a perceived need to focus upon and invest in leadership; and
yet investment in leadership is essential in a reform process.
The challenge therefore with chief executive performance contracts is to
ensure that outputs are appropriately specified; with a clear linkage with out-
comes, a good balance between hard information on intent and achievement, and
the trust and flexibility to allow leadership and imaginative solutions. It is also
important that the outcomes are kept in focus, with investment in appropriate
measurement of these, to ensure that they are having their desired impact on
society. A chief executive in a public sector organisation should be motivating
himself or herself to focus not just upon the quality of the services in their own
area, but upon the contribution to the nation. A chief executive should be respon-
sible for ensuring that the outputs are making the best possible contribution to
outcomes. There is a need therefore for a dual leadership role between the execu-
tive and political leaders.
Creating the environment for leadership

Concurrent with the growing awareness of the importance of a new type of
leader is the realisation of the need for a new type of organisation to enable
leadership to flourish. This will entail a change in the manner in which the public
sector operates.
As a basic requirement, there is a need for a clear understanding of
governance and management roles and the respective roles of both political
leaders and executive leaders. Ideally, there should be a form of partnership, with
each having a well defined accountability for contributing to the achievement of
particular outcomes.
It is essential that organisations should be outcome focused, with a strategic
process required to identify the required outcomes and how these are to be
achieved. If this can be committed to at both political and executive levels, a 231
© OECD 2000
transparent contractual basis for accountability and responsibility between the

respective leaders can be developed. I am not for a minute assuming that this will
always be an easy process; it does tend to make ad hoc decision making and pork
barrel politics difficult.
It is important then to create a flexible, organic organisation which is able to
nurture leadership from within. For leadership as described in this paper cannot
develop in a traditional hierarchical public sector organisation. Leadership
requires flattened structures and the delegating out of responsibility and account-
ability to achieve clearly defined outputs and outcomes. Hierarchy smothers
leadership.
These new organisations require the sharing of information through sophisti-
cated enterprise computing systems such as SAP. They require good internal
communications through email, the intranet, newsletters and most especially, lots
of opportunity for face to face contact. They require good practice guidelines to
enable managers to manage. They also require sound audit and monitoring proce-
dures. Such organisations emphasise constant upskilling and provide training and
support for staff. They encourage and nurture leadership with mentoring schemes
and training programmes. They encourage innovation and risk taking and are
prepared to see a few mistakes made. Most of all, they reward good leadership
and good performance. They are organisations which stimulate and encourage
trust. Finally, they are places where people have fun and like going to work.
A Strategic Management Plan assists in the creation of such new organisa-
tions. This can be based around programmes such as Kaplan’s “Balance
Scorecard” or quality programmes such as the Malcolm Baldridge award criteria,
both of which have an emphasis upon leadership and human capital.
My own organisation, the Auckland Regional Council, has recently finished
going through a major change process to enable the type of organisation that I
have described to evolve. It is an organisation which the community is now
relating to and one that is beginning to achieve real outcomes. Perhaps most
importantly, it is an exciting organisation to be a part of.
In summary, new public sector organisations require the same emphasis on
leadership as has traditionally been spent on systems and processes.
Recommendations to encourage leadership in the public sector

If we require leadership to have dynamic public sector organisations in the
future, how are we going to ensure that this happens? To this end, I have a number
of recommendations to make.
1. When selecting chief executives in any part of the public sector or its
various offshoots, it must be ensured that leadership skills are an
232 essential component of the evaluation. It is not enough to have superb
© OECD 2000
Symposium Papers
technical competence: one can readily measure technical skills, but there
is some unease about how one identifies leadership. In seeking a values
based leader, one needs to look for competencies well beyond those
traditionally sought. There is a need to move away from what has essen-
tially been an impoverished model of leadership, to recognise that a
leader has very human, almost spiritual qualities. There is a need to
identify those special personal traits that enable leaders to deal with
people in a special way and to provide them with vision and purpose.
Organisations need to undertake evaluation of emotional intelligence
characteristics such as those identified by Daniel Goleman, to ensure that
such characteristics are identified and developed in managers and poten-
tial managers.
2. There is a need for public sector leaders in particular to understand the
values of the community around them and the balance required between
these values. To this end, leadership education which focuses upon
values is particularly important. Similar understanding can be achieved
by programmes and partnerships involving work alongside non-profit
groups, as well as the corporate sector; such partnership programmes
should be further investigated by the public sector.
3. There is a need for a careful review of political and executive roles to
ensure both a clear separation of roles, but also a leadership partnership
between the political arm and the executive arm. These roles might well
differ from country to country. However, they need to be clearly defined,
with clear responsibility and accountability and a focus upon outcomes.
4. The systems under which chief executives are operating need to be eval-
uated to ensure that they are allowed to be leaders; with amendment of
any system which stifles leadership. There is a need to carefully examine
performance contracts within the public sector to make sure that they
allow for leadership. Such contracts should be flexible enough to allow a
chief executive to focus upon the longer term implications and outcomes;
to focus upon his or her contribution to the nation. They should also
reflect a degree of trust between a minister and a chief executive, rather
than the hard commercial contractual elements which tend to encourage
adversarial relationships. There is a need for determination of just how
the political and executive leaders will share responsibility for outcomes.
Leaders like Harry Nurkin need to operate within an enabling environ-
ment to enable innovation and inspiration, and to allow the opportunity
for initiative and vision beyond the immediate short term outputs.
I personally have some difficulties with the concept of political
appointments to traditionally executive positions, as is the practice in the
public sector in many countries. However, on further reflection, such 233
© OECD 2000
appointments can work well, providing the roles are clearly defined as I
have outlined above. Such individuals can in fact bring new leadership
skills and new perspective to an organisation, which can in turn bring new
life and new focus.
5. It is essential that time is made for the leadership role; too many chief
executives become immersed in the day to day management responsibil-
ities and do not have time to do the more important leadership role.
There is occasionally justification for clearly separating the leadership
and management roles of a chief executive, where the organisation is
large and where the challenges of the role are particularly great. For
example, the challenges facing the new chief executives in South Africa at
the present time are huge. To steer the organisation and the nation
through major cultural reform requires a significant leadership effort; at
the same time, traditional bureaucratic processes have still to be
followed. It is only a superhuman who could fulfil both roles. The concept
of assigning the day to day management role to another manager while
the chief executive focuses on the strategic role of leading change is
therefore an attractive one; one that allows time for leadership.
6. The incentives for chief executives where they involve bonuses need to
focus on outcomes rather than outputs. In the new leadership model, the
individual is responsible even for the parts which they do not have
control over.
7. Throughout the public sector world, the actual remuneration of chief
executives needs to be renewed. Rarely, if ever, are these salaries in line
with the private sector. This is despite the fact that leaders of the calibre
required to produce excellent public sector organisations are few, and will
be sought also by the private sector as they too adapt to the new model
of leadership. The broader intangible rewards of being involved with the
public sector are not necessarily sufficient to offset the higher salaries
offered in the private sector.
8. Leadership training must be recognised as an important aspect of training
throughout the public sector; not just for the stars but for those through-
out the organisation who at different times will take a leadership role,
however small. This training should also encompass the roles and skills of
the follower, for all of US are of one or the other throughout our lives and
both are inter-dependent.
9. There is a need too to constantly evaluate leadership within an organisa-
tion. I referred earlier to the use of Kouzes and Posner’s Leadership
234 Practices Inventory as one option for doing this.
© OECD 2000
Symposium Papers
10. There must be succession planning within the public sector and its off-
shoots and within local government. This should be aimed at identifying
those who are likely to be able to take leadership roles in the future, to
ensure that they are given a range of experiences in different functions, in
various sectors of the public service, in inter-departmental task forces and
even in the private sector. Advanced qualifications, overseas experience
and involvement in community activities will all help in developing the
leader; quite apart from any formal leadership education. It is of interest
to note here that James Collins and Jerry Poros in “Built to Last” (1994)
indicated that the majority of leaders within the visionary companies
which they investigated in the United States had come from within those
organisations.
11. In association with succession planning, a formal system of mentoring will
enable those with special leadership experience and skills to help young
leaders to develop. Mentoring is perhaps the most important direct assis-
tance that can be given to develop leadership. Mentoring programmes
can be run within organisations, within sectors or just between individu-
als. All leaders have a responsibility to help to create new young leaders.
12. In association with the planning and development outlined above, there
is a need for the public sector to work closely with universities and lead-
ership institutions to ensure that there is formal training available which
is appropriate to the sector. This should be both training for qualifications
and also ongoing career development training.
13. The encouragement of direct comparisons with the private sector will
assist in benchmarking and will help to change the perception of the
public service as inferior. Leadership awards open to all sectors and
participation by the public sector in national quality awards help the
value of good leadership to be recognised and celebrated.
14. It is important too to encourage movement between the sectors; between
the public, private and non profit sectors; to enable breadth of under-
standing. This is becoming more and more important as the sectors move
closer together throughout the world. This can be through exchange,
secondments, seminars, working groups, networking or a multitude of
other ways to encourage relationships. To this end, national leadership
institutes with the objective of nurturing and training leaders from all
sectors are important.
15. The public sector should look to create fellowships to allow young poten-
tial leaders to work alongside Cabinet Secretaries or their equivalent for a
year. As well as encouraging early exposure to the political process and an 235
© OECD 2000
understanding of the public service by potential young leaders in all

sectors, it would also provide the opportunity for the building of
networks, and leadership development.
16. The creation of a mentor programme to enable young people who are
identified at school or university as potential leaders to have a close
association with a leader of note in the public sector would also be of
benefit. This would foster a greater understanding of the public sector,
while providing a mentoring relationship.
17. Finally, recreate your organisations; free them up. Get rid of the hierarchy.
Push out responsibility and accountability. Examine your processes and
systems to ensure that they are compatible with an empowered but well
focused organisation. Only then will you unleash the innovation and
energy of your people; and create an environment for leadership.
These are just some of the steps that we can take to identify, develop and
encourage new leaders. With good leadership, we can create new living organisa-
tions, foster better communities and achieve real outcomes. Without leadership,
our organisations will falter and stagnate. The challenge is ours; there is little
choice.
236
© OECD 2000
Symposium Papers
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© OECD 2000
Beyond Training: Developing and Nurturing Leaders
for the Public Sector
Kevin Bacon
PricewaterhouseCoopers LLP
Introduction
Experience has taught US that vigorous, effective leadership is essential for
implementing significant change in any organisation. In both the private and
public sectors there is widespread recognition that leadership is a key ingredient
in the recipe for creating effective, responsive, and value creating organisations.
Very expensive executive compensation plans, extensive corporate investments
in leadership development programs, and a growing professional literature on
leadership development provide ample evidence that the private sector is aware
of the importance of leadership. The private sector has also focused on the need
for successful organisations to have predictable and reliable supplies of leaders to
fuel future growth (see Tichy).
The public sector has also developed an awareness of the critical importance
of leadership in reshaping government to meet the needs of the 21st century. The
challenge facing the public sector is how it can develop and nurture leaders given
the unique constraints it faces in managing its human resources. These constraints
include tight limits on executive and managerial compensation, civil service hiring
and career path structures, and the restrictions political leaders may impose on
the career service in selecting and grooming future leadership candidates.
Undoubtedly, leadership development should be approached holistically. It
should encompass the entire human resources management process – including
initial recruitment, compensation, retirement arrangements, formal promotions
systems, performance appraisals, and career-long professional education.
Arguably, the widening gap between private sector compensation and public
sector compensation for senior managers and executives may be the single most
important barrier to future recruitment and retention of highly skilled leaders in
the public sector. However, the issues of compensation and the future structure of
the civil service are far more than can be covered in this short paper. Instead, this
paper focuses on practical steps that public sector organisations can take to 243
© OECD 2000
develop and nurture future leaders from among those already in the civil service.
There is ample opportunity for improvement in this area. Such practical actions
can help offset some of these disadvantages while political leaders grapple with
the larger economic and structural issues in government employment.
What attributes are we seeking in future leaders?

Before discussing actions that can be used to develop and nurture future
public sector leaders, it would be helpful to identify the attributes future govern-
ment leaders should possess in order to be successful in the 21st century. The
US Office of Personnel Management (OPM) has identified five core qualifications
for the Senior Executive Service (SES), the top strata of the federal government
career civil service. These core attributes provide a good profile of the public
sector leadership attributes needed in the future. They include:
• Leading change.
• Leading people.
• Being results driven.
• Possessing business acumen.
• Building coalitions and communications skills.
Today’s senior government executives possess a very similar picture of the
attributes the future public sector leader will require. The Pricewaterhouse-
Coopers Endowment for the Business of Government recently published the
results of a carefully designed survey of the US federal government Senior Execu-
tive Service. Respondents were asked to identify the most critical attributes for
future career senior executives. The attributes they identified were very similar to
those noted above. (See Annex for a discussion of this survey.)
Noteworthy is the high importance attached to “softer” attributes such as
flexibility, vision, and customer orientation in contrast to the lower importance
attached to “hard” attributes such as technical expertise or management of infor-
mation technology. Developing leaders with these attributes will predominantly
require “on the job” development rather than training through classroom or
university executive education programs.
Leadership development within the constraints of the current system

Given this picture of the leadership attributes needed in the future, what
steps can be taken within the constraints of the existing civil service structures to
improve the supply of future public sector leaders? The experience of this author
and his colleagues suggests six steps that can increase the supply of leaders in
public sector organisations:
1. Top agency leadership commitment to developing future leaders.
244 2. Building leadership skills through a broad range of assignments.
© OECD 2000
Symposium Papers
3. Build self-awareness of leadership skills through better feedback and skill

building experiences.
4. Encourage and monitor the use of “job enlargement” to develop staff.
5. Build on the ethos of public service.
6. Regularly conduct “leadership audits” within the organisation.
Top agency leadership commitment to developing future leaders

A critical first step for increasing the ability of public sector organisations to
develop and nurture more leaders is for top management to recognize that it must
devote far more time and attention to leadership development than is now the
case. Best practice in the most successful private businesses is for senior
executives to develop a significant portion of their time (up to 25 per cent) to
developing leaders. Such involvement entails more than participating in training
classes. It includes championing rotational assignments, demanding that appraisal
systems incorporate techniques like 360 degree feedback, and monitoring the
number of younger staff involved in special project task forces and other develop-
mental assignments. Extensive involvement of senior executives can send a
powerful signal to the organisation about what qualities are desired in its leaders
and the importance of developing those qualities within its staff.
Building leadership skills through a broad range of assignments

The leadership attributes needed in the future cannot be learned in a
classroom. They must be cultivated through a range of practical experiences
gained in the process of solving real problems encountered by real organisations.
To this end, leadership development in government service must rely heavily on
the conscious cultivation of career mobility for career staff. Such mobility can help
individuals broaden their understanding of the mission, processes, issues, and
stakeholders of important public sector agencies. Such breadth of experience can
help test for and build flexibility and adaptability. It can also give opportunities to
understand strategic issues, the range of possible visions that can be effected in
public agencies, and the value of building networks and alliances to support
change programs.
This mobility and broad experience can be promoted with a number of tools
already available to senior public sector leaders. By making conscious use of
these tools as a mechanism for leadership development, senior executives can
take positive steps to improve the supply of leadership within their organisation.
Examples of these tools include:
• Using lateral transfers, within large departments or between departments,
designed to expose individuals to a variety of problems, work settings, and
managerial issues throughout their careers. 245
© OECD 2000
• Consciously choosing staff to participate on special projects and task forces

in order to give them opportunities to “stretch” their skills and capabilities
by helping solve real problems facing their organisations.
• Rotating key managerial assignments among “up and coming” managers
and executives as a conscious action to broaden their career experience
and test their ability to adapt to new circumstances, manage diverse groups
of staff, and respond to new customer groups.
Organizations such as the various branches of the US military, the Department
of State, and various state government departments the author has consulted with
since the early 1980’s routinely use such tools. They typically have much larger
pools of managers and executives with well developed leadership capabilities
than do agencies with more passive approaches to leadership development. They
have been able to do so within the confines of a heavily regulated government
personnel management system.
Build self-awareness of leadership skills through better feedback and skill building
experiences
Research by Professor Warner Burke of Columbia University has shown that

successful leaders in business tend to be more “self-aware” then their less
successful peers. Self-awareness can be cultivated by providing feedback about
an individual’s managerial and leadership skills through the performance
appraisal process. A very valuable tool in this regard is 360-degree feedback. Such
feedback involves structured collection of input from subordinates, peers, and
superiors. This range of feedback can help the individual gain a better perspec-
tive on their skills in working within and leading teams, the clarity of their commu-
nication, and their particular management style. The questions covered in such
feedback instruments can be tailored to the leadership competencies and values
that each public sector organisation requires. Organizations that are truly commit-
ted to developing more and better leaders have embraced the use of 360-degree
feedback. Since initially such systems are likely to be perceived as threatening to
traditional notions of the relationships between superiors and subordinates, it is
essential that the most senior executives in a public agency support such a system
and participate in it themselves. (Another benefit of such systems is that they pro-
vide hard data on the extent to which an organisation and its managers really prac-
tice the values and principles espoused in many vision and strategy statements.)
Such feedback will highlight areas where developing leaders will need help in
mastering a variety of interpersonal skills. Such skills include giving and receiving
constructive feedback on performance, conflict resolution, forming and working in
teams, and utilizing different management styles to match the needs of different
246 staff. Such skills must be developed through on job experience. However, formal
© OECD 2000
Symposium Papers
training can be helpful in giving developing leaders the tools and insights they
need to develop their capabilities in these areas. Top agency leaders should
ensure that these training resources are available to support the development of
future leaders.
Encourage and monitor the use of “job enlargement” to develop staff

Regular and effective use of “job enlargement” by managers and executives is
a tool that can be used to enhance leadership development within an organisa-
tion. Staff members grow when given the need and opportunity to “stretch” out of
their area of current competence. All too often, managers and executives turn to
the same group of proven performers to tackle a crisis, staff a task force, or lead an
inter-departmental work group. While this might make the executive rest easier, it
misses a golden opportunity to test and develop leadership skills in other staff.
Public agencies must operate on the twin assumptions that leadership is in short
supply within public agencies and that it will be unlikely that leadership skills will
be bought on the external labor market. Consequently, every opportunity to
provide practical leadership development opportunities to existing staff must be
used in order to expand the supply of skilled leaders within public agencies.
Our reluctance to provide such “job enlargement” challenges to younger staff
is usually based on concern about whether such staff are capable of meeting the
challenge. This reluctance is ironic in light of much experience in the public sector.
It is routine for the armed forces of many nations to assign major organisational
responsibilities in time of war to men and women in their mid-twenties. Another
illustration of calling on younger staff to solve a complex problem under crisis
conditions involved the Apollo 13 mission to the moon. In the spring of 1970, the
lives of three astronauts on the mission were in jeopardy due to an explosion in
their space vehicle while it was over 100,000 miles from earth. The solution to the
crisis that brought the three men home safely was developed in a period of
72 hours. The team that solved the many problems involved in the safe return of
the astronauts averaged slightly less than 27 years of age.
Build on the ethos of public service

High performing career public sector executives (at least in the United States)
can usually obtain higher salaries by pursuing private sector employment. By an
overwhelming margin, they indicate that the principal reason they chose to join
and stay with the public service (despite the lower pay) is the social significance
and challenging nature of the work performed by government. Since it is unlikely
that the public sector will ever be able to fully compete with the private sector on
compensation alone, it is essential that it make full use of its major competitive
advantage in this area – the very work it performs. In recruiting, developing, and
nurturing future leaders, the public sector should consciously attempt to give 247
© OECD 2000
promising staff opportunities to test and develop leadership skills by working on

the most complex and important public sector problems. At the same time leader-
ship skills are developed and problems solved, staff commitment to public ser-
vice will be reinforced, making it less likely that they will be enticed to join the
private sector.
Regularly conduct “leadership audits” within the organisation

If leadership development is to be a priority of top management, then it is
necessary to monitor performance and make adjustments in response to such
information. A simple set of performance measures in this area would include:
• Monitoring the number and location of staff currently on rotational or other
developmental assignments.
• Requiring all senior executives and managers to develop succession plans
naming individuals who could assume their post should they retire or move
to another post. (While civil service systems may prevent formal designa-
tion of successors through this process, the act of developing such succes-
sion plans forces discussions about specific individuals and the overall
state of leadership development in an organisation.)
• Reviewing the aggregate results of 360-degree feedback surveys to identify
the specific leadership competencies that are lacking within the organisa-
tion. This information can be used in career counseling, training, and
assignment decisions to help build the missing competencies.
• Monitor the amount of time top agency leaders devote to developing future
leaders and their impact in terms of assisting a variety of younger staff gain
exposure to “job enlargement” opportunities.
Conclusion
Many observers have written about the likely shape of organisations in the
future and how they will be “flatter” or less layered than is now the norm. (See
Kotter or Barzelay for examples.) This “de-layering” of public sector organisations
will create the need for more leadership skills (flexibility, business acumen,
customer focus, etc.) throughout the organisation. The rapid advance of the
Internet and electronic commerce will only accelerate this trend as they break
down the barriers to information flow between and within government agencies.
Consequently, leadership development will have to become a priority of public
sector senior executives. It can no longer be an optional activity of top executives.
The very de-layering of government that makes leadership development a
pressing need also creates a great opportunity for developing new leaders at all lev-
248 els within career government service. Whole new approaches need to be developed
© OECD 2000
Symposium Papers
for managing core business processes, interacting with customers and other stake-
holders, and demonstrating how government functions create value for the public.
In all of these challenges we find great opportunities for current government staff to
develop and exercise the very leadership skills the future requires. Senior political
leaders and senior career executives should seize these opportunities and make
their organisations use them to increase the breadth and depth of leadership skills
in the public sector.
249
© OECD 2000
Annex
Results of the 1999 Government Leadership Survey
In late 1998, the PricewaterhouseCoopers Endowment for the Business of Government

commissioned a survey of a random sample of members of the US Senior Executive Service
(SES). The study was published in June 1999. The survey focused on the attributes needed for
future federal government leaders, the obstacles to recruiting and retaining staff with these
attributes, and solutions to ensure successful leadership in future years. The critical leadership
attributes and the percentage of the sample rating them as “highly important” were:
Per cent rating attribute as highly important

Leadership attributes
(a score of 9 or 10 on a 10 point scale)
1. Adaptability and flexibility 72

2. Accountability 69
3. Vision and strategic thinking 64
4. Customer orientation 58
5. Commitment to public service 55
6. Management of financial resources 44
7. Ability to establish alliances/networks 41
8. Value placed on cultural diversity 39
9. Management of information technology 37
10. Technical expertise 23
N = 347 respondents surveyed between November 1998 and January 1999.
A complete copy of the research study can be obtained from:

PricewaterhouseCoopers Endowment for the Business of Government
1616 North Fort Myer Drive,
Arlington, VA 22209-3195.
Telephone 01-703-741-1733.
Internet address: mark.abramson@us.pwcglobal.com.
250
© OECD 2000
Symposium Papers
Bibliography
Barzelay, Michael,
Breaking Through Bureaucracy: A New Vision for Managing in Government, University of
California Press, 1992.
Kotter, John P.,
Leading Change, Harvard Business School Press, 1996.
Price Waterhouse,
Better Change: Best Practices for Transforming Your Organization, Irwin Professional Publishing,
1995.
Price Waterhouse, G. William Dauphinais and Colin Price, editors,
Straight from the CEO, Simon and Schuster, 1998.
Tichy, Noel M.,
The Leadership Engine: How Winning Companies Build Leaders at Every Level, Harper Business,
1997.
251
© OECD 2000
OECD PUBLICATIONS, 2, rue André-Pascal, 75775 PARIS CEDEX 16
PRINTED IN FRANCE
(42 2000 08 1 P) ISBN 92-64-18448-1 – No. 51425 2000

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GOVERNANCE

Government of the Future

In the face of challenges and opportunities posed by globalisation, rapidly

Government of the Future

© Software: 1987-1996, Acrobat is a trademark of ADOBE.

All requests should be made to:

Head of Publications Division

ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT

Pursuant to Article 1 of the Convention signed in Paris on 14th December 1960,

Publié en français sous le titre :

This book is based on the OECD Symposium, “Government of the Future:

I. Why Public Management Reform? .................................................................................. 17

II. Lessons Learned from Public Management Reform.................................................... 39

Communicate to increase stakeholders ownership in the reform process ................. 56

III. How to Keep Public Management Reform Sustainable ............................................. 65

IV. Where Do We Go from Here?........................................................................................... 87

V. Symposium Papers ............................................................................................................ 89

Contemporary reform is concentrated on operations and service delivery................ 129

Public Sector Reform Requires Leadership

1. Democratisation demands greater participation (The Netherlands)........................... 19

16. Menu of Instruments for Strategic Review ....................................................................... 43

1. The Many Facets of Public Sector Reform........................................................................ 153

The OECD Symposium, “Government of the Future: Getting from Here to

Why public management reform?

Government needs to keep up with society

Technological advances and more knowledgeable citizenry create new opportuni-

Re-establish trust in government

In the face of a changing society, however, many governments seem to keep

Government’s role is changing under new pressures

As society changes, government’s role in society is also changing. People are

Lessons learned from public management reform

Establish the conditions for reform

Communicate to build constituencies for reform

The key to successful communication is to use simple, everyday language that

Create a change culture by changing behaviour

Reform should seek long-term change in government’s behaviour by changing

In response to demands for service and greater responsiveness, governments

How to keep public management reform sustainable

Work to avoid reform fatigue

Stay the path by fostering champions of reform

Where do we go from here?

Delegates who participated in the Symposium are responding to a broad

Government needs to keep up with society

Governments of the future face a number of challenges. If they are to keep up

Societies are more diverse, complex and fragmented

Box 1. Democratisation demands greater participation

Public decisions in the Netherlands have traditionally been prepared in close

Media and education drive perceptions of government quality, accountability

Economic pressures reduce resources while increasing demands

Government’s many constituencies each have a different set of demands from

Technological advances create new opportunities and expectations

Box 3. Addressing economic competitiveness through reform

Reform in Canada was driven, in large part, by a recognition in the mid-1990s of

• More services. Technology allows government to inexpensively tailor

Re-establish trust in government

Box 4. Technological changes can stimulate reform

Box 5. Technology can make services more convenient and accessible

Portugal has created a stand-alone database (INFOCID: the Inter-departmental

When government succeeds in anticipating citizens’ needs, it earns currency in the

Lost opportunity becomes a liability

to better understand and serve citizens and educational opportunities give

Loss of trust increases the cost of governance. Trust in government is

While consultation is something that governments should already be doing