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The Role of Public Workforce Diversity and The Administrative Ecosystem in Advancing Digital Public Service Innovation
The Role of Public Workforce Diversity and The Administrative Ecosystem in Advancing Digital Public Service Innovation
To cite this article: Luciana Cingolani & Diego Salazar-Morales (16 Jan 2024): The role of public
workforce diversity and the administrative ecosystem in advancing digital public service
innovation, Public Management Review, DOI: 10.1080/14719037.2024.2303609
Article views: 81
ABSTRACT
Organizational studies have long built a ‘business case’ for diversity, which today
includes innovation capacity among the benefits of diverse workforces. Diversity’s
impact on innovation has been tested in private firms, yet few systematic studies exist
in public management. We address this challenge using a two-step dynamic panel
data analysis via generalized methods of moment estimation in 36 European coun
tries. The findings confirm that higher public workforce diversity leads to higher public
service innovation. This effect, however, is mediated by the administrative ecosystem,
where greater uniformity in managerial practices makes diversity more salient, an
obstacle to unleash its innovative potential.
KEYWORDS Public sector innovation; digital services; diversity management; representative bureaucracies;
social categorization
1. Introduction
In the last decades, studies of innovation have provided valuable new insights on the
role played by group dynamics in the processes of ideation and problem-solving. Work
group diversity, in particular, has acquired a central role as a booster of collective
intelligence (Surowiecki 2004), and as a lever of ingenuity for new discoveries and
inventions (Johansson 2006).
In organizational studies, scholars and practitioners have long argued that diverse
workforces are better at unleashing creativity (Cox and Blake 1991; McLeod, Lobel,
and Cox 1996; Torchia, Calabrò, and Morner 2015), processing information and
complex thinking (Apfelbaum et al. 2014), and ultimately, at innovating (Østergaard,
Timmermans, and Kristinsson 2011; Ozgen, Nijkamp, and Poot 2012). This seemingly
virtuous link between workforce diversity and firms’ achievements has reinforced a so-
called business case for diversity (e.g. Ely and Thomas 2020), where several mechanisms
are thought to be at play. In an overview of these mechanisms, Galinsky et al. (2015)
mentions, for example, the expansion of organizational competitive advantage, a more
(Han, Park, and Kwak 2021; Houtgraaf, Kruyen, and van Thiel 2021; van Acker,
Wynen, and Op de Beeck 2018) and invites a deeper empirical examination of
whether the theorized benefits of diversity extend to the case of innovation in the
public sector.
Hypothesis 1: Higher levels of public workforce diversity are associated with higher
overall levels of digital public service innovation.
Hypothesis 2a: The effect of public workforce diversity on digital public service
innovation will be negative at high levels of bureaucratic professionalism, and positive
at low levels.
that open bureaucracies will result in greater flexibility (Dahlström, Lapuente, and
Teorell 2012), creativity (Torugsa and Arundel 2016) and innovation (Lapuente and
Suzuki 2020; Suzuki and Demircioglu 2019).
For similar reasons to H2a, we expect the public workforce diversity to bear a non-
linear relation with closedness when contributing to public sector innovation. The
greater permeability and dynamism of open public administrations makes it less likely,
according to the CEM model, for diversity to activate social categorization and in-
group bias. In highly closed public-sector workplaces, in contrast, greater workforce
heterogeneity is more likely to become cognitively accessible and create perceptions of
group dissimilarity (van Knippenberg, De Dreu, and Homan 2004).
Considering this, we formulate:
Hypothesis 2b: The effect of public workforce diversity on digital public service innova
tion will be negative at high levels of bureaucratic closedness, and positive at low levels.
Finally, a third ecosystem aspect is the presence of New Public Management practices.
Among other characteristics, NPM practices involve increased managerial autonomy
at the level of the intermediate administrative echelons, allowing managers to exert
results-control and use performance incentives, improving public sector competitive
ness (Verhoest, Verschuere, and Bouckaert 2007). This managerial autonomy and
outcome-based management is theorized to create a stimulating environment
(Wynen et al. 2014), where creativity and innovation are more likely to flourish
(Bassett‐Jones 2005; van Thiel and van der Wal 2010).
In line with the reasoning in H2a and H2b, we expect that in more heterogeneous
and fragmented environments offered by extended NPM practices, greater workforce
diversity will lead to increased innovation. This is because the focus on performance
and the predisposition to embrace change and heterogeneity, make it less likely for
diversity to trigger the negative effects envisaged by social categorization dynamics.
Accordingly, we formulate:
Hypothesis 2c: The effect of public workforce diversity on digital public service
innovation will be positive at high levels of NPM, and negative at low levels.
4. Research strategy
4.1 Estimation model and variable description
To test our hypotheses, we resort to an Arellano-Bond System Two-Step Generalised
Methods of Moments (2GMM) estimation (also see Roodman 2020). This method
offers more efficient estimations for small samples, especially when there are less
observations across time (t = 15), than panels available (n = 36). This is important
because unlike fixed-effects models, the 2GMM approach facilitates the utilization of
lagged dependent variables to capture endogenous effects and reducing the autocorre
lation with error terms, thereby preventing a downward bias in coefficient estimates
(Roodman 2009, 98). Our model is as follows:
eGovt;i ¼ eGovt 1;i þ β0 Ibut;i þ β1 Webert;i þ β2 Xt;i þ μ þ ε
PUBLIC MANAGEMENT REVIEW 9
where the dependent variable eGov is an indicator developed by the UN that measures
the degree of development of e-government across the world in a range from 0 to 1.
The index is based on a composite score measuring countries’ development of online
public services, the presence of infrastructure and the level of human capabilities for
the construction of e-government (United Nations 2020). Following the global discus
sion about governments being increasingly shaped by digital technologies featuring
internet-enabled platforms, the eGov index is a valid representation of digital public
service innovation, and -as argued earlier- a critical component of public sector
innovation more generally (Bertot, Estevez, and Janowski 2016; Panagiotopoulos,
Klievink, and Cordella 2019; Fishenden and Thompson 2013). For robustness, how
ever, we also employ the specific eGov component capturing innovation on online
public services (see robustness section).
In our preferred model, the independent variable capturing workforce diversity is
the multidimensional Index of Bureaucratic Underrepresentation (Ibu) (Cingolani
2022, 2023). By construction, the index conveys information on bureaucratic repre
sentation and the overall levels of demographic diversity in the public workforce.2 It
accounts for five different demographic diversity dimensions at the country-level:
gender, ethnicity, age, disability, and nationality. These dimensions are widely con
sidered relevant sources of disadvantage by the literature on social representativeness
in the bureaucracy (Bishu and Kennedy 2020). Following other multidimensional
indices, it factors in both the incidence and depth of the underrepresentation of the
five categories. Higher scores indicate higher aggregate underrepresentation, and zero
indicates that none of the five groups are substantially underrepresented.
Among the explanatory variables, we also include measures on the three adminis
trative ecosystem dimensions, namely professionalism, closedness and NPM practices.
For the first two, we draw on Dahlström et al. (2012), and the QoG expert surveys of
2011, 2014 and 2020 (Nistotskaya et al. 2021). In our case, higher scores reflect higher
degrees of professionalism, and the same with closedness.
For the variable New Public Management (NPM) practices, we follow Suzuki and
Demircioglu (2017) based on two QoG Expert Survey questions: (i) to which extent the
salaries of public sector employees are linked to appraisals in their performance’, and
(ii) to which extent public sector employees strive to be efficient. As the authors posit,
these two dimensions with a Cronbach alpha of .87 indicate consistency in capturing
the dimension of ‘performance’ central to the NPM scholarship.
Among the control variables contained in vector X we include the percentage
of the GDP countries spend in Research and Development (RD) in the public
sector. This indicator comes from the European Innovation Scoreboard (EIS)
and in line with authoritative sources (European Commission 2021), it is
expected to have a substantial positive impact on innovation infrastructure,
human capital formation and state-backed innovation. We also consider the
size of the country’s population, taken as a proxy for the size of the bureau
cracy, in view of recent studies showing that small bureaucracies tend to have
a better adaptive capacity to enforce reforms and deliver policy outputs (Jugl
2019). Finally, we have considered other variables such as the median age of
bureaucrats per country, and the ratio of public servants with tertiary education,
acknowledging the literature that suggests age and education as determinants of
innovation (Demircioglu 2020; Dimand et al. 2022). An overview of our data
can be seen in Table 1:
10 L. CINGOLANI AND D. SALAZAR-MORALES
In line with the 2GMM estimation, we have considered a lagged version of our
dependent and independent variables as instruments for specification, following the
idea that they are exogenous to the error term (Bellemare, Masaki, and Pepinsky 2017,
950). The reason behind the lagged instrumental variables in the 2GMM method is to
prevent that long-run estimations are biased by individual short-term dynamics. We
have therefore introduced several tests to control for the long-term correlation of
errors with our coefficients in the robustness section below. Finally, in the model above
μ reflects the error term, while ε the fixed effects (for the fixed control effects
estimation).
Our analysis covers the period between 2003 and 2018. Because we employ
multiple sources, our panel is unbalanced. To overcome this limitation, we
resort to the Amelia II software (Honaker et al. 2011). This method introduces
a novel technique of iterative processes of Multiple Imputations via Chained
Equation (MICE), which imputes missing values based on the structural char
acteristics of the observed data. In contrast to deleting incomplete rows or other
imputation techniques, MICE resamples the entire dataset while safeguarding its
distributional structure (Azur et al. 2011). Currently MICE is recognized as
a superior strategy than listwise deletion because: (i) it helps avoid higher
standard errors and restricted statistical power, which (ii) yields results at
a more ‘reasonable level of uncertainty’ (Lall 2016, 8), and (iii) it produces
more efficient inferences avoiding the assumption that missing data follow no
structure and hence that our resulting sample (after potential listwise deletion)
is completely random.
Scholars in various disciplines increasingly recognize the power of MICE. In devel
oping a long-scale examination of comparative political economy papers in major
journals, Lall (2016), for instance, notes that replicating studies following ‘conventional
statistics’ (without MICE) lead to wrong results. Other scholars have also highlighted
the positive role of MICE in handling ‘endemic missing data points’ in educational
research (Pampaka et al. 2016) as well as public health and clinical research (Austin
et al. 2021). In view of this, we choose this technique for our 2GMM and fixed effects
control models (see the Appendix for more details concerning the imputation process
and imputation diagnostics).
PUBLIC MANAGEMENT REVIEW 11
5. Results
Our results show that countries with lower levels of public workforce diversity tend to
be less innovative, providing support to our hypothesis 1. In practice, as Table 2 shows,
we observe in our results that a 1-point increase in the underrepresentation index (Ibu)
leads to a .-65 reduction in the eGov index. While model 1 shows the effect of
workforce diversity for the entire e-Government advancement, our control model 2
specifies such impact on the development of online public services only, showing
similar results.
With respect to hypothesis 2a, our results show that administrative professionalism
is in both our main and control models negatively associated with innovation, suggest
ing that meritocratic recruitment and tenure security are not directly linked to more
digital innovations in the public sector. Yet, a closer look at this variable based on the
interactions presented in Table 2 (models 5 and 8) shows more nuanced results
(illustrated in Figure 1). Here, the maximum value in our index of professionalism –
all else equal – combined with a rising underrepresentation index might lead to higher
1.
The dataset for analysis, as well as additional robustness checks are available upon request.
12 L. CINGOLANI AND D. SALAZAR-MORALES
Figure 1. Interactions between bureaucratic professionalism and public workforce diversity (model 4).
PUBLIC MANAGEMENT REVIEW 13
Table 3. The effects of bureaucratic professionalism, closedness and NPM on eGov and ePublic services.
Dependent: eGov Dependent: ePublicServices
Figure 2. Interactions between bureaucratic closedness and public workforce diversity (model 3).
considering closedness at the minimum level, lower levels of public workforce diversity
hinder this type of innovation.
With respect to NPM practices, our results are consistent with the literature,
showing that higher levels of NPM tend to lead to more digital public service innova
tion, as seen in both our main and control models 1 and 2. A closer view of the effects
of this variable via interaction with the Ibu index shows similar results, although more
sensitive in model 7, which has as dependent variable the delivery of online services. In
a more nuanced margins plot observation (Figure 3), we also observe NPM’s positive
PUBLIC MANAGEMENT REVIEW 15
6. Discussion
The role of workforce diversity in processes of innovation has sparked multiple studies
and debates in classic management literature (e.g. Cox and Blake 1991). In public
sector management, the topic deserves attention due to the scarcity of empirical
research, as well as two converging phenomena: the increasing pressure public sectors
face to innovate for problem-solving (Criado, Alcaide-Muñoz, and Liarte 2023), and
the demographic and labour market patterns pointing at a substantially more diverse
public workforce in the decades to come (e.g. Jungmann et al. 2020).
Our findings show that in the overall picture, greater levels of diversity in the public
administrations are associated with greater levels of one specific dimension of public
innovation: digital public services (H1). With this finding, we expect to trigger future
discussions on the configuration of factors that explain cross-country variations in
public sector innovation (Suzuki and Demircioglu 2019), while also expanding the
range of administrative outputs that public sector diversity management research has
traditionally explored (e.g. Choi and Rainey 2010, 2014; Pitts 2009). Our study inter
acts and complements other efforts looking at the importance of diversified knowledge
sources for technical innovation in the public sector (Zambrano-Gutiérrez and
Puppim de Oliveira 2022), and the indirect role of demographic and cognitive diversity
during public sector innovation (Demircioglu, Hameduddin, and Knox 2023; Wegrich
2019).
Yet, diversity does not automatically lead to innovation. Our findings show nuances
in the link between diversity and innovation when we include the interacting role of
the administrative ecosystem. We find three specific traits with fundamental power to
shape how diversity impacts digital service innovation: bureaucratic professionaliza
tion, bureaucratic closedness and the spread of NPM reforms (H 2a, 2b, 2c). On one
side of the spectrum, we find a positive impact of diversity in more open, less
professionalized and more NPM-like public administrations. On the other, the oppo
site: a negative impact of diversity in highly closed, highly professionalized, and less
managerially autonomous public administrations.
These complex interactions contribute to both organizational studies and public
management debates in various ways. In terms of organizational studies, we see these
results as supporting the mechanisms suggested by the classic categorization-
elaboration model (van Knippenberg, De Dreu, and Homan 2004), where workforce
diversity is interpreted as less salient against the backdrop of overall heterogenous
organizational ecosystems (in our case less professionalized, more open and with more
mid-level managerial autonomy). The reduced salience of diversity lowers the prob
ability that social categorization dynamics are triggered during processes of collabora
tive ideation. This enables diversity’s potential for virtuous innovation processes and
avoids the conflict-prone dynamics of intergroup biases. Our study suggests the need
to further test and extend the study of social categorization dynamics in processes of
ideation and innovation in the public sector.
On the other hand, the positive impact of team homogeneity on public sector
innovation in contexts of more traditional public administration ecosystems
(more professionalized, more closed, less NPM-like) resonates with recent
16 L. CINGOLANI AND D. SALAZAR-MORALES
7. Concluding remarks
As first of its kind, our study is exploratory and entails limitations. First, we use
a narrow proxy to measure the outcome variable, one that overstresses the recent
attention given to digital public services as one dimension of public sector innovation.
We acknowledge the complexity of the innovation concept, its many types (e.g. Hartley
2005) and its many steps (e.g. Meijer 2014). Another limitation is that while contribut
ing to the gaps in cross-country analyses of the bureaucratic determinants of innova
tion (Suzuki and Demircioglu 2019), we make assumptions about how organization-
level processes aggregate at the country level. Finally, beyond accounting for admin
istrative features that are exclusive of public bureaucracies, we do not discuss in depth
other possible ways in which public innovation differs from private innovation and
that may have an effect on diversity and workforce dynamics.
A future agenda should test the role of public workforce diversity on other aspects
of public sector innovation, aiming to cover the concept’s full complexity. It should
also incorporate a larger number of environmental and organizational factors that we
know shape workforce diversity dynamics, such as leadership, the organizational
climate and culture or decision-making structures, among others.
PUBLIC MANAGEMENT REVIEW 17
Notes
1. For an insightful and comprehensive review of the theoretical foundations, causes and con
sequences of public workforce homogeneity/diversity, see Seidemann and Weißmüller (2022).
2. Conceptually, public workforce diversity and bureaucratic representation are distinct concepts,
the first referring to workforce diversity in absolute terms, the second to workforce diversity
relative to societal diversity. As Groeneveld and Meier (2022) point out, their literatures have
mostly remained separate, with few exceptions. It is here believed that this separation has to do
with the predominantly unidimensional approach to representative bureaucracy, where ratios
of social groups have been studied for single groups (typicaly women and African Americans,
see Bishu and Kennedy 2020). In such fragmented context, measures of representative bureau
cracy do not enable interpretations about the overall levels of diversity in the public admin
istration. By construction, and considering how variables behave in the European cases, our
chosen index conveys information on both dimensions. First, its multidimensional nature
portrays a more complete picture of overall workforce diversity, as it focuses on the diminished
presence (underrepresentation) of various groups from the workforce. This is complemented
by the fact that the index is applied to structurally heterogeneous societies (an index assump
tion), leading to a natural correspondence between multidimensional representation and
multidimensional diversity. While this holds in general, there are a few isolated exceptions.
For example, as the number of non-nationals in Poland in 2018 is very low in the original
survey, a low number of non-nationals in the public administration would be taken by the
index as adequate bureaucratic representation but would mean low diversity. These cases are
very few, and do not affect the overall empirical convergence between low diversity and
underrepresentation.
Disclosure statement
No potential conflict of interest was reported by the author(s).
ORCID
Luciana Cingolani http://orcid.org/0000-0001-9350-1450
Diego Salazar-Morales http://orcid.org/0000-0002-3967-1958
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Appendix
MICE procedure
For the MICE imputation process, we employ our original dataset as of noted in Table A3. The
program we employ, Amelia II, generates its imputation process based on a general model of patterns
within variables across time, thereby creating a sequence of polynomials regarding the time in our
model (Honaker, King, and Blackwell 2011, 17). In our case, we make the assumption that our model
follows a lineal development by formulating a first order imputation model. As a second provision, for
our imputations, we do not consider any interaction with a cross-sectional unit nor with lags or leads,
as we assume, along with Azur et al. (2011), White, Royston, and Wood (2011) that our model is
predictive – seeking to find best fit for missing values – rather than causal. As an additional step, we
also consider as fixed variables, detached from the imputation process to the unique identifiers, in this
case, the countries under our study (36) and the variable time. Finally, and key to highlight is that we
also introduce logical bounds for the imputation of our data. This means that some of our variables as
shown in Table A3, have values between 0 to 1 and others 0 to ∞, and they are reflected in our
imputation whereby values below or above these boundaries are not allowed – as they are not logically
possible.
We have obtained five imputation possibilities, and we have also conducted various diag
nostics process to inspect them. Figure A1 shows a density analysis which compares the
observed values with the imputed valued obtained via Amelia II. As White, Royston, and
Wood (2011) mention, it is not possible to obtain a ‘very similar overlay’ between both
distributions a priori, yet some overlap between the observed and the imputed values is
expected. In the figure below hence, we notice that for almost all the variables considered
in our model we have obtained mostly overlapping imputations. Yet, for variables such as
‘closedness’ we perceive that the observed bimodal distribution of data converges towards
unimodality and moves it positively shifts the mean towards the right. This could be the case
because in our dataset, as expressed by the QoG Expert Survey index, we count with data
starting 2011 –first expert survey–, hence our imputation shifts the values of the dataset
towards later years to accommodate the data distribution to cover our time spectrum analysis.
To further test for the strength of our imputations, in particular of our QoG variables
(closedness, professionalism and NPM), we resort to the over-imputation technique. This
method permits us to judge the fit of our model by scrutinizing our observed values as if
they were missing and hence re-estimating them based on several imputations via MICE. By
treating our observed values as if they were missing, hence we can build a confidence interval
to graphically observe the region where our imputed value could fall had it been missing. In
our analysis, if value that aligns with the premise that y=x (Honaker, King, and Blackwell
2011), hence we have that our imputations are a robust predictor of our true value and that
the range of imputations run will emulate the distributional structure of our observations.
Colors also indicate the percentage of absent covariates (vector X in our case) in the pattern
of missingness of our imputed variable. In the case of the QoG variables we observe a perfect
alignment showing that confidence intervals in their vast majority cover the y=x line. As well,
notable is that the absent covariates are at the minimum level, hence suggesting our imputa
tions fall withing the expected line of the true observed values.
24 L. CINGOLANI AND D. SALAZAR-MORALES
Table A1. Fixed effects estimation of social underrepresentation in the public work
force on eGovernment and ePublic services.
Dependent eGov ePublicServices
Table A2. Fixed effects estimation of Weberiannes and NPM on eGov and ePublic services.
Dependent: eGov Dependent: ePublic Services
Figure A 11. Distributional density analysis of observed and imputed data through MICE.