Patterns of organizational tool use: direct and indirect
Despite some moves towards the increased use of procedural tools more compatible with network modes of governance – like public hearings, task forces and the establishment of clientele agencies – most policy sectors in most governments remain firmly based in legal or corporatist modes of governance established decades ago and featuring a prominent role for direct government goods and service delivery: also described as the ‘forgotten fundamental’ of policy instruments and policy designs (Leman 1989; Majone 1997). In recent years, direct forms of government goods and service delivery have continued to grow in most sectors, although the attention paid to this continued growth has often been overshadowed in the academic literature by that paid to continued experimentation with alternate forms of indirect government organization (Aucoin 1997). However, the pattern of change in the use of this dominant policy tool has been very uneven as governments have expanded in spurts and starts punctuated by major crises, especially in times of war or financial crises and their aftermath when more corporatist modes of governance have often flourished (Bird 1970; Hodgetts 1973).
Public enterprises, for example, grew dramatically in many countries, both in the developed world in association with war efforts and in developing countries as a function of decolonization and drives towards economic development. The spread of privatization in almost every country over the last three decades reflected a rapid and fundamental change in expert attitudes towards the use of this instrument, as governments tried to move many sectors away from corporatist modes of governance under the pressure of cost and other constraints (Le Grand 1984; Walker 1984; Savas 1987; Veljanovski 1988; Kamerman and Kahn 1989; MacAvoy et al. 1989; Salamon 1989; Starr 1989; 1990a; Ikenberry 1990; Richardson 1990; 1990b; Suleiman and Waterbury 1990; Kemp 1991; Marsh 1991).
The term ‘privatization’, however, carries at least two different, albeit related, meanings (Starr 1989; 1990a; 1990b). In one common usage, the term is sometimes inaccurately used as a shorthand reference for general efforts made to reduce the scale or scope of government. In this sense, the term is used to denote a basic shift in the overall relationship or governance mode existing between a government and its constituent society towards a more market mode of co-ordination. In the second sense, however, privatization refers only to those specific efforts made by the state to replace organizational instruments based on government ownership with those based on more indirect controls – like independent regulatory commissions – which does not necessarily entail a corresponding shift towards a market governance mode. In this more restricted sense, for example, a government’s commitment to an existing mode remains unchanged; what changes instead is the general manner in which it meets its commitments: shifting from the use of organizational resources to more authoritative ones. Similarly, instead of regulating a company’s, to provide another example, polluting activities, the government may offer it a financial incentive to modernize its equipment and curb pollution. Again this does not represent a shift in the fundamental governance mode but rather a change of regime logic within an existing one.