Policy Instruments and Public Management: Bridging the Gaps

The literatures on public management and on the characteristics of policy instruments have developed independently. The two literatures should, however, be related, given that instruments are rarely capable of being effective in implementing policy without adequate management. Further, public management should be understood in the context of achieving policy goals and hence of a relationship to policy. This article makes a preliminary linkage of those two approaches to policy and administration. It demonstrates that each approach helps to illuminate the other and also helps to understand contemporary reforms in the public sector. This article is an attempt to bring together two rather disparate areas of development within the broad area of public administration and public policy. One is concerned with the instruments used by government to influence the economy of society and with the differential impacts that the selection of instruments can have on the success of programs (Peters and Van Nispen 1998; Salamon and Lund 1989; Bemelmans-Vidic, Rist, and Vedung 1998; Varone 1999). The other is concerned with the massive transformation in the practice of public administration/management during the past several decades and with the potential impact of those administrative changes on public policies (Peters 1996; Peters and Savoie 1998). 'For an alternative conception see Peters (1998a). J-PART 10(2000): 1:35-47 The basic argument of this article is that these two literatures (as well as their practical utilization) have developed in isolation from one another and should be brought together in order to develop a more complete understanding of the nature of contemporary policy making. Indeed, in some important ways the development of thinking about public management tends to be opposed to common patterns of thinking about the effectiveness of tools. That is, one famous formulation of new public management (NPM) is that governments should "steer, not row"' 35/Journal of Public Administration Research and Theory This content downloaded from 207.46.13.169 on Mon, 04 Jul 2016 04:52:14 UTC All use subject to http://about.jstor.org/terms Policy Instruments and Public Management (Osborne and Gaebler 1992). On the other hand, much of the instruments literature has an implicit or explicit assumption that the tools that governments themselves control will be more effective than those controlled by third parties. The juxtaposition of the two literatures is also required to understand better the policy performance of government in contemporary political systems.2 Discussions about the relative merits of policy instruments are often conducted as if they were self-implementing and administration was irrelevant to their success or failure. Similarly, many discussions of administrative reform, and of the NPM, have been developed as if the techniques advocated were equally suitable for all types of policy and for all policy instruments (for superior examples see Hood 1991; Pollitt 1993). Even when NPM advocates do discuss the instruments of public policy (e.g., when advocating alternatives to "rowing" in the public sector), they do so without considering the multifaceted nature of instruments and the difficulties of instrument evaluation. The argument here is that the assumptions of independence guiding both NPM advocates and advocates of particular instruments are almost certainly, and equally, incorrect. Indeed the problem may not be so much an assumption of the independence of the two aspects of governing as an ignorance of developments and thinking in the other area of inquiry. 2I owe a debt to Lester Salamon for forcing me to begin to think about the intersection of these literatures (and real world transformations) for a workshop at Johns Hopkins in April 1998. 3This corresponds in a way to the contingentist position in the study of policy instruments, although the usual contingency assumed is the nature of the policy and its relationship to an instrument, rather than a managerial tool. See Linder and Peters (1998). 4In addition to the difference between public administration and public policy, economists have tended to dominate the tools debate while public management scholars and political scientists have dominated the public management discussions. Some notable exceptions to the first generalization are Christopher Hood (1986), Lester Salamon (1989), and Helen Ingram. A second and more practical aspect of this argument is that selections of both instruments and management techniques often are made without reference to the influence of the other factor. This disregard may result in suboptimal decisions simply because of the failure to match effectively instruments and the managerial techniques used to implement them.3 The by-now conventional question of whether form follows function is rarely addressed within these particular segments of the public policy and administration literature. This absence of complete cogitation about linking instruments and management appears to be in part because of the location of the different types of expertise within different academic disciplines.4 The failure to consider the appropriate connection of instruments and management techniques may result as well from their association with different parts of the policy-making apparatus of government. Decisions about instruments are generally made within the programs that will use them, while management issues tend to be more the preserve of central personnel and budget agencies. For whatever reason, the development of these literatures, and practices, in isolation often makes the recommendations that emerge-whether from management or program personnelappear questionable once the additional factor is considered. 36/J-PART, January 2000 This content downloaded from 207.46.13.169 on Mon, 04 Jul 2016 04:52:14 UTC All use subject to http://about.jstor.org/terms Policy Instruments and Public Management TOOLS AND MANAGEMENT The usual perspective adopted in the tools literature is that of government programs employing a particular instrument in an attempt to produce a certain outcome in the economy and in society. As a result, the usual questions about tools are about the effectiveness and efficiency of the tools and about their capacity actually to produce the changes in the target populations intended by their formulators (Ingram and Schneider 1991). Political questions also are asked about the visibility and intrusiveness of instruments, and hence their acceptability to the public (Woodside 1998; Doern and Phidd 1978). It is also not uncommon to consider more normative questions about instruments, including the extent to which particular tools permit individuals to make autonomous choices.5 These are all crucial criteria for understanding policy instruments but they are hardly at all related to the manner of their administration. As I have noted, the question here relates to how the particular instrument functions within the political system, rather than to its external effects. Increasingly, this set of concerns also implies concern about the manner in which the tool works in concert with networks, or "communities," as well as simply within the public service itself (LeGales and Thatcher 1995). Instruments that are effective if government is the principal or sole relevant actor often are substantially less effective when they must work through a large and often largely autonomous collection of actors. For example, an attempt to implement programs through complex networks simply exacerbates all the familiar problems of implementation within the public sector itself. This is even more evident if the actors within the networks are less than fully committed to the programs being administered or if there are (as is often the case) conflicts within the network over goals and mechanisms (see below). 5This question of whether the state should operate in loco parentis remains central to a variety of public policies. For example, a major concern about welfare reforms in a number of countries has been the extent to which it removed autonomy from the recipients. 6Most discussions of the linkage between instruments and policies tends to discuss policy in functional terms, e.g., defense or agriculture, rather than in terms of more analytic categories. See Elmore (1987). 7For a comparative perspective see Walsh et al. (1997). Bringing the question of management into consideration means that the analyst now is required to think about three-way matching: the instrument, the policy problem, and the managerial technique. Bringing in a third criterion also means that the match is all the more difficult, with the technology for linking problems and tools being itself already underdeveloped.6 There is a limited literature that links some types of policy tools to management (e.g., Kettl's [1988] work on the use of contracts in the public sector).7 Likewise, there has been some discussion of the manner in which loans and loan guarantees are used as a means to motivate management decisions (Stanton 1996; Lund 1989), with the choice of instrument at least determining the focus for management of the organization delivering the service. 37/J-PART, January 2000 This content downloaded from 207.46.13.169 on Mon, 04 Jul 2016 04:52:14 UTC All use subject to http://about.jstor.org/terms Policy Instruments and Public Management