CHAPTER 3 SD Public-Private Dichotomy of the discussion in the previous chapter, that government has to function within defined constitutional rules and regulations, There is a cértain legalism inherent in government operations. Business administration is not as hamstrung as public administration by innumerable rules and regulations that are supposed to control the working of the public sector in public interest. The distinction between the public and the private sector is greatly influenced by the political philosophy of each nation. In the USA, for instance, the private sector plays a very important role in the American economy and society. The public sector is in many ways dependent on the private sector for the supply of goods and services. Hence, the tendency in that country is towards blurring of lines rather than a distincr bifurcation of responsibilities. In India, by contrast, the public sector had earlier been the dominant sector in a situation of mixed economy, The steady diminution of the public sector in India, if it continues as a matter of new public policy, is expected to draw in course of time a sharper distinction between the public and private management. In a nutshell, it may be suggested that considerations of general welfare should be the common concern of public and business administration. Private management can ignore the larger public interest only at its peril. At the other end, public administration can hardly I: needs to be emphasised, in continuation ignore the needs of efficient management. Continued maladministration may ultimately lead to the shrinkage of its areas of concern. The current advocacy of ‘privatisation’ is indicative of this trend. istinction between business and public mn has broadly been summed up as major purpose of public administration is to serve the public; hhence general welfare and, in specific cases, cliental satisfaction are the ends that public administration must serve. Business administration, by contrast, is basically oriented toward earning profit for the business proprietors, Inability to eam profits will soori drive a private enterprise out of business. 2, Public administration has to operate strictly according to laws, rules and regulations, Adherence to law brings in a degree of rigidity in operation in the public sector. There is always the fear of audit or other aberrations from regulations that act as a constraint on performance. Contrastingly, business administration is relatively free from similar constraints of law and regulations, There are of course general laws regulating business, but individual business firms have considerable flexibility to adapt their operations to changing situations, This is possible because of their relative freedom[New Horizons of Public Administration from specific laws and rules that abound in public administration. The actions of public administration agencies are much more exposed to the public gaze. An achievement rarely gets publicity, buc a little faule hits the newspaper headline. Organisations like the police have to be on their toes to make sure that their operations do not incur the public wrath. This wide publicity is not to be found in business administration, nor is it so very closely watched by the public and the publicity media. In public administration, any show of discrimination, or partiality will evoke public censure or legislative commotion. Hence, the administrators are to be very consistent and impartial in their dealings with the public. In business administration, discrimination is freely practised. In the choice of products and in fixing prices, business administration overtly practises discrimination which is almost a part of business culture. Public administration, especially at high- er reach of government, is exceedingly complex.There are many pulls and pres- sures, many minds have to meet and discuss, consultations go on in several rounds of meetings. Activities in, one department have ramifications that spread over several other departments. By contrast, business administration is, generally speaking, much more well-knit and single-minded in operation, There is much less complexity in organisation and operations, The pulls and pressures are certainly much less, as compared to public sector operations. It is political direction that gives public administration its special character. Politics is at the core of public ad- ministration and at higher echelons the civil servants must have the tact and mature understanding to work and live with politicians. This speciality of public administration marks it out cleatly from business administration. ‘The distinction between public administration and business or private administration need not, however, be blown out of proportions, There are several aspects of public management that are generic; that is, they are similar in both public administration and private management. There are many grey areas where the line of separation. between the two is not so marked. For instance, a publre organisation like a milk dairy or a state transport undertaking has to function on business or commercial lines. It has, therefore, to emulate some of the methods and practices of business management. At the other end, . private business is increasingly being subjected to government regulation in public interest:The kind of mixed’ economy that:prevails in India under strong government direction is practically an endorsement of public-private coexistence and cooperation. Privarisation MoveMENT ‘At this stage, a note on the recent “privatisation” movement will be in order. ‘Privatisation’ as it emerged in the lexicon of management in the eighties, came to be defined narrowly as ‘to make private, especially to change from public to private control or ownership’. It has now come to acquire a broader meaning symbolising a new way of looking at society's needs and redefining the role of government in meeting them, It means relying more on society's private institutions and less on government to satisfy the needs of the people.New Horizons of Public Administration 31 ‘The Privatisation movement has been spurred by at least four major forces: i) Pragmatic: The goal being better government and a more cost-effective one; ii) Ideological: ‘The goal being to ideologically reduce the role of government in societal needs fulfilment vis-a-vis private institutions; iii) Commercial: The goal being to get more business by having more of government spending redirected towards commercial interests; iv) Populist: The goal being to achieve a better society by giving people greater power to satisfy their common needs. Privatisation has been conceived as a strategic approach to improve governmental productivity and thereby to give people more for their money. Attempts to improve governmental performance have taken many forms such as budgeting reform, introduction of management techniques and even large-scale reforms through reforms committees and commissions. In terms of consequences, however, such reform efforts have generally been unsuccessful. The latest move to ‘privatise* is not to belitde the importance of ‘government’ but to improve the productivity of public organisations. Cost-conscious public officials and other productivity-oriented groups are now favouring privatisation ‘as an important tool for better public management and as the key to more cost-effective government’. METHODS OF PRIVATISATION Cesowing are the categorisation of E.S. Savas', different methods of privatisation can be broadly classified as: (a) Divestment, (b) Delegation, and (©) Displacement Divestment stands for shedding an enterprise or asset. This involves a positive step by government whereby an enterprise or asset is either sold or given away as an ongoing business, or an enterprise may be closed down and the assets sold away. Delegation requires a continuing, active role for government. In this method government delegates to the private sector part of or all of the activity of producing goods and services, but retains responsibility for overseeing the result. Delegation can be carried out by contract, franchise, grant, voucher, or mandate, Local government, for instance, often contracts for services such as solid waste collection. The third = method—Displacement—is somewhat passive process that leads” to a government's entity being displaced more or less gradually by the private sector as markets develop to satisfy needs. Displacement may occur by default (government not being able to provide services such as transport), by withdrawal (deliberately government vacates an area and allows private sector to take it up) and by deregulation—a method enabling the private sector to challenge a government monopoly and even displace it altogether. The discussions here point towards a new way of looking at privatisation, which is government- strengthening and not quite anti-public sector. How Dirrerent 1s Pustic Sector? Public-private distinction, as Dwight Waldo has remarked, is no longer a sharp one, at least in the United States and there is a movement ‘towards a ting and mixing of the two"? An extreme view taken by Barry Bozeman is that ‘all organisations are public because public authority affects some of the behaviour or process of all organisations. All organisations, in his view, share public’ and ‘private’ features?32 New Horizons of Public Administration It is understandable that as government gets more and more involved in business and as business-like approaches are increasingly taken in governmental operations, there is bound to be the blurring of lines between the public and private sectors, On the other side, there are scholars who point out the special nature of public administration. Note, in this connection, Wallace Sayre’s comment: ‘Business and public organisations are alike only in all unimportant respects’, The crucial distinction has been identified as public administration’s basis in rule of law. Public organisations do publics business in terms of law. They administer law. ‘Every clement of their being - their structure, staffing, budget and purpose - is the product of legal authority. Every action taken by a public administrator ultimately must be traceable to a legal grant of authority’ Also public organisations have distinctive processes and they work in different environment, Public scrutiny, balancing of political interests and accountability through a variety of agencies and processes such asthe legislature, the judiciary, the media and the public mark out public administration as a distincly different enterprise and very importantly, itis the challenge of public service that’ distinguishes public from private administration. A Batancep View Public administration as practical governmental activities for societal management is carried on at different levels—centre, state and local —within the broad governing philosophy as delineated in the constitution, Thus, the Indian Constitution provides the philosophical frame- work and major conditions (eg, fundamental rights of citizens, directive principles etc) that public administration in India at any level has to reckon with, The Constitution creates both opportunities and constraints for administration, For insiance, there are oppcrtunities created fy reservation of public appointments. The office of the Comptroller and Auditor General looks after the accounts and audit of governments at all levels. The legislatures both at the centre and in the states pass the budget and hold the executive accountable, Under the Constitution, the judiciary listens to cases against governmen, agencies lodged by aggrieved citizens, Thus, the basic principles of government and some of the major control mechanisms are laid down in the Constitution-This is something unique to public management, Secondly, the public agencies and private business face the ‘market’ very differently. The Private firms’ face the market more ditecdy. If the firms are unable to produce products or services at competitive prices, their clients move to alternative sources and this affects the firms income badly. Public agencies, by contrast, do not fice competitive markets for their products and services. The prices of government ‘goods’ ae usually fixed through budget exercises. Through taxation, resources are raised by government. User charges are also imposed on certain occasions, bur the general trend is that government agencies operate as legal monopolies, sometimes services are provided to everyone at a fixed cost. For instance, the charge for ‘Speed Post’ is the same for everybody. In public interest, government has to product certain goods and services which would otherwise not be provided by private firms. ‘These goods and services are called ‘public goods or collective goods.’ Highways, education, watet supply, public welfare are some examples of ‘public goods’. Society as a whole derives benelt from these; hence, the cost of these goods and services is borne by the society as a whole.New Horizons of Public Administration 33 For this kind of fiscal management, the mar- kee is less constraining in the public than in the private sector. Thirdly, public administration enjoys position superior to private. management because of its direct link with the state's sovereign power."The actions of public administrators have the forces of law and the coercive power of government behind them’, Private firms can approach the courts for any wrong doing, but their actions are not binding in the same sense and cannot be enforced through legitimate coercive power, as in the case of a government agency. ‘As Rosenbloom has emphasised the distinctiveness: “Public administration is concerned with administration of the public interest. It is constrained by constitutions and relatively unconstrained by market forces atid it is considered a public trust exercised on behalf of the sovereign”.* The social complexities of modern age have been generating newer pressures for government control and regulation. Environmental manage- ment, pollution control, natural resources con- servation, child labour prohibition, regulation of information network and broadcasting—all these and many more activities are increasing the burden of public management. Private man- agement has no, such parallel macro-social man- agement. Hence, there is considerable truth in the statement that public administration is not simply a kind of technology but a special form of moral endeavour. In a moral and basic sense, Public administration has to serve ‘a higher pur- pose’, ‘What is clearly discernible is that the nature of public service management is hanging fast, The change is from a system characterised by bureaucratic hierarchies to one with a much more diversified pattern. There is now much more focus on quality of services, there is more emphasis now on the role ofmarket’ and there is emphasis now on multi-agency partnerships. Government is now being called upon to play more and more ‘enabling’ role than the traditional ‘doing’ role. At the same time, old management themes and styles persist. Obviously, the ‘new’ and the ‘old’ sometimes coexist and sometimes conflict with each other. REFERENCES 1. E,S.Savas, “ATaxonomyofPrivatizationStrategics”, Policy Studies Review, 1990. 2. Dwight Waldo, TheEnterprseofPublicAdminisration: A Summary View Chander and Sharph1980. ~ 5. BarryBozeman,AllOrganisationsarePublic Bridging Publicand Private Organisation Theories Jossey-Bass, 1987. ‘Wallace Sayre, “The Unhappy Bureaucrats: Views Ironic, Helpful, Indignant’, Public Administration Review, 18 Summer, 1958. JamesW.Feslerand Donald Kerth, ThePoliticsofihe ‘Administrative Proces, Chatham HlousePublications, Inc,, New Jersey, 1991. Rosenbloom, Public Adminisration, op.cit.