Analytic and Managerial Challenges of Collaborative GovernanceJohn D. Donahue

June 22, 2009

Sequence

Definitions and distinctions Spectrum of public-private delivery models Differentiate by allocation of discretion

Generic advantages and risks Examine selected examples Analytical and management imperatives

Mostly drawn from…

Donahue, The Warping of Government Work (Harvard University Press, 2008)

Donahue and Richard J. Zeckhauser, Leverage: Public Goals, Private Roles (in progress)

Context

Shift toward complicated public missions that invite or require private engagements

Relative erosion in governmental capacityFinancial and (especially)Personnel

Maturation of institutional and technological infrastructure

Mid-20th Century Model

Dominance of Central State Direct Governmental Action Elite Public Service

Diffusion of Governance

For-Profit Public Non-Profit

Supranational

Trans-National Corporations

Inter-Governmental

Organizations

Non-Governmental

Organizations

National

National Corporations

20th Century Model

x

National Non-Profits

Subnational

Local Businesses

State/Local Government

Local Groups

Purchased Services Relative to Employee Compensation, U.S. Government, All Levels, 1930-2005

0%

10%

20%

30%

40%

50%

60%

1930 1940 1950 1960 1970 1980 1990 2000Source: BEA, NIPA Table3.10.5

1/27/2006

SKILLS

PAY

government (then and now)

private economy (then)

private economy (now)

Mid-20th Century Model

Dominance of Central State Direct Governmental Action Elite Public Service

Emerging 21st-Century Model Erosion of Central State Relative to

Supranational and Sub-national Authority

Shift from Direct to Mediated Governmental Action

Greater Role for Private Agents (both for-profit and not-for-profit)

Chronic Public-Sector Talent Shortages

Narrow the Focus: Public-to-Private Diffusion

For-Profit Public Non-Profit

National Corporations

National Non-Profits

Local Businesses

20th Century Model

x

Local Non-Profits

Enlarged Role for Private Agents

Relative to Mid-20th Century Model Return to Historical Norm

Roman Tax AdministrationMercenariesBritish East India Company, other

hybrids

Rationales for Delegating Public Responsibilities to Private Agents

Limits to making government itself more “business-like”

“Extensive” versus “intensive” accountability

Rationales for Delegating Public Responsibilities to Private Agents

Resources Competence Information Legitimacy

Generic Risks of Delegating Public Responsibilities to Private Agents

Diluted Control Financial Exploitation Reputation Vulnerability Diminished Capacity

Architecture of Agency Relationships: Spectrum of Discretion Government Holds Most Discretion =

Outsourcing, Other Contractual or Quasi-Contractual Relationships

Private Players Hold Most Discretion = Philanthropy, Voluntarism, Corporate Social Responsibility

Shared Discretion = Collaborative Governance

“Collaborative Governance”

Not new, not rarebut under-analyzed relative to importance

Shared discretion as defining featuremiddle ground between contract and

philanthropy Broad potential for flexibility, precision Strategic complexity Multiple forms of failure

Forms of Discretion

Production DiscretionMain rationale for collaboration (rather

than direct delivery or contracting) Payoff Discretion and Preference

DiscretionCostly or risky (from government’s

perspective)Often entangled with production

discretion

x*

Point where benefits start to fall

Benefits

Production Discretion

Point of best balance between benefits and costs of discretion

Production Discretion Boosts Benefits (Up To a Point)

x*

Payoff Discretion

Production Discretion

Payoff Discretion as Unwelcome Fellow Traveler of Production Discretion

y*

Generic Challenge of Collaboration

Design delivery models and Select and motivate collaborators To maximize gains from production

discretion Net of losses from payoff/preference

discretion

Resource-Based Collaboration

Common motive, visible category Central Example: New York City

Parks PartnershipsAdditional Examples to Discuss if Time

and Interest: FDA and Pharmaceutical Industry under PDUFA; Statue of Liberty Foundation

Productivity-Based Collaboration

Strongest theoretical case for collaboration

Central Example: Charter School Movement

Secondary Examples to Discuss if Time and Interest: Vaccine development and production, Space Shuttle operations

Information-Based Collaboration

Central Examples:

Infrastructure Security

Job Training

Secondary examples to discuss if time and interest: Securities rating; Management-based regulation

Legitimacy-Based Collaboration

Central Example: US Hospital Accreditation

Secondary example to discuss if time and interest: Federal Student Loan debate

Public Managerial Tasks of Distributed Governance

Appraisal Analysis Assignment Architecture Assessment Adjustment

Note that these functions are:

Fundamentally analytical Complex and demanding, requiring

high-level talent for implementation, not just policy design

Indicators of the convergence of analytics and public management