PUBLIC ADMINISTRATION REFORM THEORY IN TRANSITION COUNTRIES; for presentation at the 18th NISPAcee Annual Conference, Working Group on PA Reform, submitted by Donald E. Fuller, Senior Lecturer, Anglo-American University, Prague, Czech Republic, April, 2010.

To reform requires a theory. But what would be a reform theory for public administration? We may consider the past: New Public Management, Max Weber, Herbert Simon, Washington Consensus, homo economicus, World Bank Indicators, rule of law. These have all surfaced along with many others.

What are the issues? What are we trying to reform? Favorite examples include corruption, coordination, predictability, uncertainty, fairness, justice, conflicting values, cultural bias. What research plausibly affects public administration? Social Psychology,1 cognitive dissonance, incentives, moral hazard, repeated trials, status, altruism, greed, norms, rules, governance/good governance, 2 all come to mind.

We cannot propose solutions without discussing inputs. What brings about reform? History, revolution, change in circumstances, intolerable conditions, desire for change, precipitating events, crises, failed states, market failure, and others occur. History reports significant events such as the French Revolution, 1789; multiple European revolutions, 1848; Bolshevik Revolution, 1917; end of World War II, 1945; disturbances in Poland and East Germany, 1953; Hungarian Revolution, 1956; disturbances in France, 1968; Velvet Revolution, 1989. Any pattern? Change occurred in response to state violence.3 Reform in public administration typically occurs without violence. The nexus links frequently, but not always to politics. Weber’s bureaucracy grew from statism. Herbert Simon’s views grew from mathematical economics.4 Public Choice emerged from Mancur Olson and economic epistemology; New Public Management grew from neo-liberalism, particularly market values to the right on the political spectrum including Reagan and Thatcher; Patronage yielded to meritocracy with a revulsion to corruption. Yet problems continue.

1 See Sobis, I. and de Vries, M. (2009), “Restoring Professionalism: What Can Public Administration Learn from Social Psychology?” paper presented for the 17th NISPAcee Conference, Budva, Montenegro, May 14-16.2 The United Nations defines governance as “…the process of decision-making and the process by which decisions are implemented (or not implemented), UNESCAP (2009), “What Is Good Governance?” accessed on June 2, 2009, at http://www.unescap.org/pdd/prs/ProjectActivities/Ongoing/gg/governance.asp; also see Drechsler, W. (2004), “Governance, Good Governance, and Government: The Case for Estonian Administrative Capacity,” TRAMES, 4, 388-396.3 Whether psychological, political, authoritarian or physical.4 Among a number of influences. See Simon, H. (1997), Administrative Behavior, 4th ed.. The Free Press.

1

Theoretical bases encountered ill fits. Marxism, as interpreted by Lenin, could not work;5 Schumpeter’s creative destruction depended on market equilibrium rather than serious recession; Weber’s model had contradictions as pointed out by Simon; New Public Management cannot manage a non-market entity; public choice gets entwined in homo economicus; neo-liberalism assumes trickle down economics is inviolate; post-modernism lacks coordination and control. New conceptualization is needed. This chapter works in that direction. Yet conceptualization labors unless problems are identified. These include corruption, personalized power, non-transparency, arrogance, ethical and moral fragility, conflicts of interest, principal/agent inversion, pseudo-administration (bean counters), malfeasance and illegality, abuse of power. What themes do these problems suggest? Moral hazard, poor incentives, unintended consequences, loss of confidence, greed, cognitive dissonance, nefarious rewards, contagion, loss of trust, instability come to mind. Using the latter as independent variables, we could build models relating to solution of problems such as the above.

POTENTIAL MODELS

Some would argue for an equilibrium model in which a steady state would be pursued. Feedback would realign variables to reduce uncertainty and disruption. This might be the Nordic model. Yet, if equilibrium is the objective, Ford would have produced faster horses rather than produce an automobile. Others would argue that most public administration reform has paralleled exogenous political, economic and social conditions. Nevertheless, despite poverty, unemployment and unemployability, different states have produced different welfare models for the same problem. Bismarck hoped to deter the likelihood of communism by initiating a welfare program. It didn’t work. Was it the market that deterred communism? Not really. Yet Marx had complained to Engels that the proletariat had become bourgeois. Engels replied that the capitalists were paying more money in wages. Is that still true? The Asians like managed democracies. They now challenge western democracies with their own brand of capitalism. Public administration there is top down. Was Weber right? The tradeoff is between liberty, rights and material well being. The west, in 2008-2009, scores very low on these outcomes.

The Rhinish6 model concentrates on material well being at the social safety net level while espousing less interest in liberty and rights. The Anglo-Saxon7 model prefers rule of law and trickle down economics. Public administration tends to follow these models plus the Nordic

5 Przeworski, A. (1991), Democracy and the Market: Political and Economic Reforms in Eastern Europe and Latin America, New York: Cambridge University Press, ISBN 0-521-42335 X.6Social democracies that are essentially welfare states, located on the European continent.7 UK, Ireland, U.S., Canada, Australia and New Zealand.

2

model with some exceptions; the Germans prefer the rechsstaat8, the French like their national champions, but the focus is still on redistribution of income. Central Europe has adopted the post-communist model: path dependent on the social safety net, yet resembling populist models with neglect of civil service systems. Eastern Europe departs very little from prior statist models during communist days with the current failings of a dominant party or coalition. Civil service systems resemble patronage systems without tenure9. When specialists are hired, they leapfrog the “technical core” and follow their ministers to new ministries unless the party or coalition loses, pushing technical cores out on the street.10

CORRELATION MODELS

While not necessarily causal, the above themes suggest that public administration is linked to political change, particularly ideological. As political changes occur, concepts flow into public administration. Accordingly, we examine political, economic and social change in the 21st century to extricate potential determinative factors. There are three: one each for politics, economics and society.

POLITICS

While the world is not flat, with respects to Tom Friedman, the challenge now, since the beginning of the millennium, is how to deal with countervailing forces exacerbated by globalization. These include insurgency, multipolar world, the west’s dependency on oil and gas and Russia’s need to sell it; post-colonial Africa, sustainable environment, radically changing demography, immigration, realignments in the United Nations, the rise of the BRICs;11 weapons of mass destruction, decline of print communications; internet.

ECONOMICS

8 A law based state.9 They tend to be pro forma, legislated, but not implemented.10 Post-communist bureaucrats have discovered the need to form think tanks or NGOs as employment insurance. Their funding can be opaque.11 Brazil, Russia, India and China.

3

Globalization continues to increase the gap between rich and poor; emergence of the knowledge society challenges a demography of nine billion people peaking in 2050; the world recession plunges middle classes into despair; labor markets are divided between those with globalized skills and those with few, if any skills; women in much of the world have become an underclass; hunger, disease and sickness numbs children and adults in substantial parts of the world; human capital is restrained by markets and under investing states; rich states subsidize their commodities at the expense of the poor states; global networks reduce capacities of nation states; criminal activity siphons productive resources from economic capacity; market failures cause state interventions with decreasing returns.

SOCIETY

Several nations12 are seeking self government lacking state boundaries; health care varies from none to high quality without comprehensive distribution to populations; developed country populations are ageing while developing countries are young; adults are living longer changing the population pyramid; labor markets are unable to sustain retirees while depriving useful employment to ageing workers13; migrants seek work in semi-hostile environments while occasionally abandoning the care of children to others; single parents increase steadily; education varies from useless to high quality even within countries; knowledge society has not been internalized in most states.

PUBLIC ADMINISTRATION “PATHOLOGIES” CENTRAL TO REFORM BARRIERS

Marx assumed that in democratic, capitalist countries, the government constituted the central committee of capitalist governance. He had argued that materialism had provided the foundation for government’s superstructure. Therefore, liberal democracy undergirded capitalism to ensure that capitalism survived. Prior to that time feudalism produced kings and queens; the industrial revolution produced elite governments espousing laissez faire liberalism; factories and firms produced a proletariat, kept in place by entrepreneurs and their representatives in parliament; democracy completed the cycle by introducing representative government dedicated to capitalism. Socialism and communism would constitute the next state of material wellbeing. Yet, a bureaucracy would remain in place, before withering away, to make sure it all happened.

12 Defined as a group of people with an identifiable ethnicity, culture, history and, usually, the same language. The Kurdish nation is an example.13 Retirement ages may be inflexible; normative barriers exist past age 65; personnel systems may formalize an age barrier.

4

It didn’t happen. Stalin spoiled it for most communists such as Althusser, Gramsci, and, of course, Trotsky. Only Cuba and Vietnam seem to keep the flame alive14. China is a state oriented form of capitalism, not unknown elsewhere in the world, particularly Russia15. But Marx’s diagnosis was much better than his prognosis. He argued that capitalists were greedy and were exploiting the worker. The surplus value provided by the worker went to the capitalist. Therefore, we needed a revolution and property would inhere to the state. Though his proposed construction of a state seems faulty, it was further exacerbated by Lenin, and ruined by Stalin. Lenin feared Stalin and said we have to go back to the beginning and reform our strategy.16 Marx’s analysis of the problem, at the time, now seems accurate. His psychological analysis of capitalists stressed greed and exploitation. The answer for him: get rid of them and construct a new class. The world has been antagonistic to Robin Hood economics but has labored in attempting to “socialize”17 Marx’s greed and exploitation argument.

Just as Marx struggled with greed and exploitation, pathologies exist in the 21st century. Moral hazard comes to mind. Guaranteeing an individual success without fear of failure seems to have infected a large number of individuals participating in derivatives, hedge funds, credit default swaps, and sub-prime mortgages particularly during 2008-09. The effects of this, linked to a world-wide recession, may worsen before extending well into 2010. Without political reform, the effect could endure for ten years, as in Japan.

Moral hazard not only affects the private and public sector but public administration as well. Serious questions have been raised regarding the rating agencies18 but also the American Securities and Exchange Commission, government regulators, semi-owned organizations such as Fanny Mae and Freddie Mac, as well as the Federal Reserve Bank and U.S. Treasury. Caveat emptor19 is likely to garner a great deal of attention. The essential failing of moral hazard is that once decision making is guaranteed, one not need worry about the consequences. Further, ethics and morality suffer. The activities of many participants in the sub-prime debacle may not have acted illegally, in the absence of definitive law. The answer could reside in new laws. That

14 North Korea is an enigma.15 Often described as a corporate state.16 See Zizek, S. (2009), “How to Begin from the Beginning,” New Left Review, 57, May-June, quoting Lenin, V.I. ‘Notes of a Publicist,’ published posthumously in Pravda, 16 April 1924; Collected Works, vol. 33, Moscow: 1966, pp. 204-07, accessed on June 14, 2009, at http://www.newleftreview.org/?page=article&view=2779. “Those Communists are doomed who imagine that it is possible to finish such an epoch-making undertaking as completing the foundations of socialist economy (particularly in a small-peasant country) without making mistakes, without retreats, without numerous alterations to what is unfinished or wrongly done. Communists who have no illusions, who do not give way to despondency, and who preserve their strength and flexibility to ‘to begin from the beginning’ over and over again in approaching an extremely difficult task, are not doomed (and in all probability will not perish).”17 In a sociological and political sense rather than economic.18 Such as Moody’s and Standard and Poor’s.19 “Buyer beware.”

5

means more public administration, including watchful prosecution, auditors, inspectors general, and a host of finance specialists sprinkled around the civil service as well as among the President’s immediate advisors.

The principal/agent problem tends to surface when public administration provides tacit support, as in Guantanamo Bay, or unclear guidelines as to what constitutes torture. Secondly, it can emerge when agents exceed their own authority in carrying out what they perceive to be orders of their supervisors. This is the “tail wagging the dog” phenomenon. This became infamous at Nuremberg when German bureaucrats argued they were simply carrying out orders. Thirdly, bureaucrats with particular expertise may assume that their advice to supervisors fills a void not defined by elected or appointed officials. Intelligence and police bureaucrats may subscribe to the “thin blue line” precept that it is they who stand between liberty and chaos vs. a safe, orderly society. The reverse condition may exist in cognitive dissonance, in which public administrators may be displeased with exerting authority or dictates of the principal when cognitively, they do not question a failing policy in international aid,20such as the Washington Consensus, even realizing that the fit is bad.

The politics/administrative dichotomy continues to obfuscate public administration despite Weber’s prognostication that the legal/rational approach produces meritocratic excellence. If power corrupts and absolute power absolutely corrupts, civil services are left to fend for their professional reputations. Whistle blowers have seldom survived employment or promotion. Despite their allegations of unlawful or unethical behavior within a government agency, their future is often proscribed even in the presence of an ombudsman. Without them, investigators search for needles in haystacks. While ombudsmen around the world seem inclined to favor the wrongdoers, prosecutors must occasionally impersonate Arab sheiks21 in order to trap a government official in wrongful behavior.22 When the Czech Chief Prosecutor proposed such a system for her government, the politicians reacted in horror should the country implement an ideology of secret police well known to everyone during the Communist period.

To some extent, the phenomenon of cheating the state can create a contagion. Most former communist bureaucrats are aware of the slogan: “He, who does not cheat the state, cheats his family.” Bribes are justified to recompense poorly paid bureaucrats and their supervisors. Whether or not the state ever sees that money is left to moral hazard. Rationalization of acquiring state property is not difficult given many state budgets, particularly in Eastern Europe.

20 See Sobis and de Vries (2009), op cit.21 Used in the prosecution of a Southern California mayor.22 Known as a “sting” operation.

6

If bribes become a normal practice, the civil service becomes co-opted by malfeasance with or without cognitive dissonance. Ostrom has advocated in favor of public choice and polycentric circles of governing, rationalizing that such a structure will reduce the amount of abominations implemented by unitary governments. His preference is for “fragmented and overlapping jurisdictions.”23 In fact, he and others suggest administration (public administration) offers resolution of continuing barriers confronting minority groups, and others, by invoking administrative remedies that might include the inclusion of ethnic and racial groups on administrative boards, either by appointment or election. The concept resonates with subsidiarity. If the problem is local, and even local to a neighborhood, delegate responsibility to citizens residing in the locale.

The Lindblom Legacy

Charles Lindblom, in his seminal article, “Muddling Through,:24 postulated two designs for most public administration theorizing: root and branch. Root was a metaphor for the deductive method; branch was a metaphor for the inductive method. In working toward a theory of public administration reform, it is reasonable to postulate a theory of reform that is embedded either in root or branch. That is, does reform evolve from Lenin’s return to the beginning and deduct the solution, or does reform evolve incrementally, creating new branches from the old tree? The ontology of this question might be construed as contained within realism, empiricism, positivism and/or post-modernism. We have considered history, a bit of empiricism and positivism, and very little post-modernism. Encapsulating these four to deductive and inductive reasoning offers an advantage to prospective public administration reform. So far, our analysis has eschewed a deductive approach. We assume that whatever advantage a manifesto approach might contribute, that realism suggests we will muddle through. Even the Green Party, that explicates a rather similar set of postulates encountered in our discussion such as sustainable environment, changing demography, immigration, world energy, weapons of mass destruction, globalization, would force the Greens to negotiate and compromise in seeking its goals. While public administration is not likely to announce a manifesto to the world, it can propose a set of interconnected postulates grounded in certain empiricism rather than prescription or normative theory. These postulates would constitute a theory of reform for public administration having introduced its best review of human behavior findings in psychology, social psychology, sociology, political science, economics and social science in general. We would consider that philosophy produces germinating alternative views rather than outcomes. We would concentrate on the Marxian approach of diagnosis without contaminating the analysis with 23 See Wagner, R.E. (2005), “Self-Governance, Polycentrism, and Federalism: Recurring Themes in Vincent Ostrom’s Scholarly Oeuvre,” Journal of Economic Behavior & Organization, 57, 173-188, accessed on June 14, 2009.24 Lindblom, C.E. (1959), “The Science of ‘Muddling Through,’” Public Administration Review, Vol. 19, No. 2 (Spring), pp. 79-88.

7

prognosis. There would not be a New Public Administration as much as a surfacing of key concepts that must be addressed. The specific remedies to public administration would flow from the concepts. The chapter now turns to such concepts.

Theory Conceptualization

Without a theory of public administration, any reform is elusive. The problem must first be identified; a theory of public administration should be postulated; then reform becomes possible. Before that time, the usual indicators ring a bit hollow: voice and accountability; political stability and lack of violence; government effectiveness; regulatory quality; rule of law; and, control of corruption.25 These indicators attach themselves to conditions that are somewhat circular. They prescribe ingredients for good governance. Yet no one really knows what good governance is. Secondly, the indexes constructed for such indicators presume that the computations reflect a meaningful distance among countries. Yet what variables might intervene? The Scandanavian countries invariably score quite high on all indicators yet contrived by the IFIs (international financial institutions). Is it the Scandanavian mentality? Per capita income? Gini coefficient?26 The U.S. has the most expensive health care system in the world ; the best health care is costly; some 47 million citizens have no health insurance. Yet the per capita income is high. What do we then know about the U.S.? On the basis of the six indicators shown above, the U.S. may score well. However, Its HDI (Human Development Index) score is not particularly impressive. This includes health care. What does this say about the level of good governance in the U.S.? Is it only an illusion?

Secondly, we are troubled by output indicators that may assume they are ends in themselves.27 Suppose the indicators had a western bias. We now know that the Washington Consensus was conceived for South America that already had “functioning” market economies. When applied to Central and Eastern Europe, it fell flat. Probably because they did not have functioning market economies. Nor did the transition prove that the Consensus was correct. It failed to consider the impact of institutions. Thus, our search will be to identify input variables that hopefully describe the current state of public administration. Those input variables will be based on prior empirical research. We emphasize behaviors. Reform must address behaviors. That was the crux of Marx’s diagnosis. It informs ours.

25 World Bank (2008), “Worldwide Governance Indicators: 1996-2007,” June. Accessed on June 15, 2009, at http//go.worldbank.org/ATJXPHZMHO.26 Dispersion of income in society by quintiles.27 Of course, margins of error are also troublesome.

8

Behaviors Informing Public Administration

We now know that moral hazard influences decisions both in the public and private sectors. We have the 2008-09 recession to remind us. It also affects public administration. Harrison, for example, reported “ghost workers”28 as an element in Sub Saharan Africa countries working with funds from the World Bank. Accordingly, he identified a more rigourous audit program as an ingredient of administrative reform in Bank–supported programs. We don’t have to go to Africa to find “ghost” expenditures. We can follow the antics of British Members of Parliament and their woebegone explanations for billing the government for mysterious personal expenditures in 2009.

We know from the Milgram experiments that individuals will obey authority despite their cognitive assumption that a simulated electrical shock was electrifying unseen participants despite protestations by the experimenters that they should continue with the experiment.29 Eventually, some 28% of participants in the experiments, replicated, in Germany as well as elsewhere, refused to continue their participation. This is the Nuremberg example supra of “just carrying out orders.” Guantanamo may or may not have illustrated the same obedience to authority. Yet, if torture was not ordered by American officials, it represents the principal/agent problem, in which the agents enthusiastically tortured their victims assuming that supervisors would applaud the information obtained. Cognitive dissonance has been verified by Sobis and de Vries30 among aid-giving bureaucrats that continued with their protocols despite cognition that the design was flawed. They were not appreciative of collecting reimbursement for work they considered to be inappropriate. Tannenbaum has shown the presence of a hierarchical gradient dividing management from workers regardless of ideological influences. His sample included capitalist and socialist countries.31 The gradient applied not only to professional workers but was replicated with blue collar workers as well. His findings illustrated the difference in satisfaction as well as desire for increased decision making among sub-management employees. Organizations seem to generate levels of personal esteem and self-actualization at management levels as opposed to the contrary experience of those working below the dividing gradient. Where does this fit in Weber’s hierarchy?

28 Funds allocated to unidentified workers. See Harrison, G. (2001), “Administering Market Friendly Market Growth? Liberal Populism and the World Bank’s Involvement in Administrative Reform in Sub-Saharan Africa,” Review of International Political Economy, 8:3, Autumn, pp. 528-547.29 Milgram, S. (1963), “Behavioral Study of Obedience,” Journal of Abnormal and Social Psychology, 67: 371-78.30 Op. cit.31 Tannenbaum, A.S. and Rozgonyi, T. (1986), Authority and Reward in Organizations, Michigan Institute for Social Research.

9

Harrison used such an analysis of “key words” of the World Bank’s discourse emerging after reforming its “language” of intervention leading to reformed normative practices and actual actions. Language such as the following informed the reformed discourse. It became the genesis of a reformed theory: participation, ownership, stakeholders, sustainable, citizenship, customer, civil society, community. From this discourse, it became possible to construct a theory of World Bank interventions.32

To fashion a state which facilitates market-based economic growth which derives from the liberalization of markets and an integration into the world economy…The state’s administrative apparatus…must become appropriately skilled (capacity building) and motivated (ownership). This is effected through dialogue and partnership between the Bank and the government…33

CHANGING CONDITIONS

A primary consideration is whether or not conditions have changed affecting public administration. This would suggest the potential for change and perspicacity of reform. Conditions have changed. Networks describe key patterns of communication.34 Globalization increases its influence, challenging the viability of nation/states, particularly in response to strategies having globalizing effects. Knowledge societies are developing in ways affecting work practices, organizational rigidities and managing strategies. Confidence in political performance declines. Trust in institutions is precarious. Right to work approaches universal urgency. Market failures challenge state interventions. Failed states prompt societal reform agendas. All “isms” are burdened by limits: institutionalism, individualism, collectivism, communitarianism, humanism, regionalism, anarchism, voluntarism, libertarianism, jihadism, fundamentalism, moralism, ethnocentrism, centrism, globalism, and others.

Public administration has been an illusion. In some countries, it is “we pretend to work and they pretend to pay us.” The conventional wisdom is that elected officials construct the grand narratives and public servants carry out the details. Details have a way of becoming crucial. Few are attracted to public service. Government is seen as the enemy. The public considers

32 Harrison (2001), op. cit. (I have shortened the quote).33 Harrison questions whether one can conceive of a sub-Saharan country existing in a real “partnership” with an aid giving institution considering the power distance between them.34 Castells, M. (2000), The Rise of the Network Society, The Information Age: Economy, Society and Culture, Vol I., 2nd ed., Cambridge, MA; Oxford, UK: Blackwell, ISBN 978-0631221401. Also see Erlanger, S. (2009), “A Green Coalition Gathers Strength in Europe,” The New York Times, June 20, accessed on June 21, 2009, at http://www.nytimes.com/2009/06/20/world/europe/20greens.html?_r=1.

10

bureaucracy to be a pejorative term. Experiments with private sector adaptation to the public service have failed. Credentialism has increased to the point of strangulation. Only the “license raj” in India has surrendered some power. Talented youth seek work in the private sector. Worse, as the Financial Times has argued, “…the entire financial system went wrong as a result of flawed incentives within banks and investment funds, as well as the rating agencies; warped regulatory structures; and a lack of oversight.” 35 Julian Jett observes, “…young hotshots there (J.P. Morgan) placed a premium on ‘innovation’ and ‘creativity,’ “causing revulsion at how “…their Frankensteinian brainchild had become a ‘rapacious scourge…’” 36 Will youth respond to restoring Humpty Dumpty as civil servants? Not without reform and new incentives.

INCENTIVES

Too often incentives have been perverse. Motivation fuels incentives. Maslow’s hierarchy of needs reaches self actualization at its apex. Self actualization involves intrinsic and extrinsic rewards. Today’s society involves risk.37 Many seek stability. They wish to reduce uncertainty. Yet security can involve economics, safety, quality of life, retirement, peace, the maintenance of a job or profession. Along the way, a feeling of making a contribution may emerge. A knowledge society requires a different worker and different projects. Networks bombard populations with the latest findings, or presumed findings. Money illusion can befuddle many.38 People seek to reduce risk and uncertainty by making decisions about their own lives whether it be occupational, financial, or personal. Yet the interconnected world creates impacts beyond control of each income class. The rich may lose their riches; the middle classes may lose their dignity and occupations/professions; and the lower classes may observe that the gap is widening between rich and poor. Recessions can obviate an individual’s best planning. Whole age groups may become insulated from the job market.39 Cotton farmers in Africa may be forced to abandon farming and seek work in the crowded, polluted cities. To some extent, they are victims of developed world subsidies permitted by governments and their public administrators.

35 Kakutani, M. (2009), “Books of the Times; Greed Layered on Greed, Frosted with Recklessness,” New York Times, June 16, accessed on June16, at http://www.nytimes.com/2009/06/16/books/16kaku.html?hpw=&pagewanted=print.36 Ibid. See Jett, J. (2009), Fool’s Gold: How the Bold Dream of a Small Tribe at J.P. Morgan Was Corrupted by Wall Street Greed and Unleashed a Catastrophe, New York: Free Press.37 Giddens, A. (1999), “Risk and Responsibility,” The Modern Law Review, Vol. 62, No. 1, January, pp. 1-10.38 Akerlof, G.A. and Shiller, R.J. (2009), Animal Spirits: How Human Psychology Drives the Economy, And Why It Matters for Global Capitalism, Princeton and Oxford: Princeton University Press.39 Many of those who were skilled professionals in Soviet countries found themselves, after 1989, sitting in front of television sets unable to participate in the post-communist economies.

11

Incentives need to change. Self actualization is important. We now know that the Prisoner’s Dilemma results in different findings after repeated trials. Initially we protect ourselves despite knowing that working together would raise the reward to more than ourselves. Yet we do not trust others nor institutions to facilitate systems for pursuing individual goals coincidentally with organizational goals. Public administration witnesses the same phenomenon.

In many countries public administration is an illusion that plays upon the concept that government is the enemy. Often it is. Yet, altruism is not entirely dead. Unfortunately it often is forced aside by moral hazard. Incentives that seek to exclude are debilitating as opposed to those that seek to include. Great political leaders such as Gandhi, Martin Luther King, and Nelson Mandela, understood this. Though political leadership seeks to address public problems, great success can result if the call to action inspires others. The tone set for public administration can be set by leadership. Yet today’s potential participants in reforming public administration will be led by leaders having emotional intelligence.40

President John Kennedy inspired Peace Corps workers to assist developing countries build capacity. They did this for altruistic reasons. Their pay was miniscule. Yet some of the brightest and most committed individuals self actualized not having known what this could mean. Most had not done so before. Discounting the technical skills of many volunteers, the primary accomplishment may have been to unleash a corps of people in the 1960s dedicated to making a change. They did. The most important change was to show promise and opportunity and potential to populations that had been inured with poverty and colonialization. Many of those countries have raised themselves up. They found dignity and hope. Many of the Peace Corps volunteers chose public service when they returned. Times have changed, but not entirely. It is not the accumulation of assets and high salaries that will stimulate talented people to enter public service. It is the opportunity to do something with their skills, latent or tacit, and to contribute while at the same time self-actualizing. This, however, may be culture bound. Recruiting youth into many bureaucracies, particularly in post-communist countries has been a challenge.41

40 See Annual Review of Psychology 2008, “Human Abilities: Emotional Intelligence,” Vol. 59:507-536, January, accessed on June 23, 2009, at http://arjournals.annualreviews.org/doi/abs/10.1146/annurev.psych.59.103006.093646?journalCode=psych; defining emotional intelligence as “…the ability to carry out accurate reasoning about emotions and the ability to use emotions and emotional knowledge to enhance thought.” 41 Personalized public administration systems are often politically oriented. Further, their management systems are typically patriarchal and hierarchical. Today’s youth often eschew such systems. These systems extend well beyond the post-communist countries. Fred Riggs labeled these as ascriptive systems.

12

CONTROL

Public administration frequently encounters the need to control. Pathologies such as corruption, illegality, malfeasance, non-feasance, unethical behavior, and arrogance, often invite state intervention. Such functions are performed by police, prosecutors, judges, ombudsmen, regulators, agency heads and supervisors. In some countries, such activity is vigorously opposed by criminal elements. Death and violence can often occur as a reaction to government interventions. Courage and protection is critical to minimize criminal responses to public employees. Italy, and now Serbia have achieved success against organized crime by seizing assets of those involved in criminal actions.42 Italy has done the same. In 2009, asset seizures from Italian criminal groups amounted to four billion euros.43 After Serbia passed a law modeled after the Italian law, prosecutors began extricating assets from defendants who must prove asset ownership as well as “…all other assets out of proportion to a defendant’s legal income.”44 Only the public sector can provide legalized extortion of criminal assets.

COMPARATIVE PUBLIC ADMINISTRATION SYSTEMS

Reform of public administration systems requires contextual considerations.45 Reform is contingent upon public administration theory and practice as embedded in various political systems. Variations exist across each continent including but not limited to Europe, North America, Indian sub-continent, Africa, Mid East, Asia as well as Anglo Saxon derivatives in Australia and New Zealand.

It is possible to sketch key ingredients of public administration design. First, one evaluates the interaction of state and civil society. This continuum may extend from a police state to substantial laissez faire design such as India in its present development. Second, state intervention and management in society may reach deeply as in China, or less so, as in Costa Rica. Third, the rechsstaat in Germany and much of Europe reflects the nature of governing: in this case, the model is legal/rational based significantly on a Weberian model. Fourth, the

42 See Carnic, D. and Djorelijevski, M. (2009), “Serbia: Hitting Criminals Where It Hurts,” Transitions Online, June 17, accessed on June18, 2009 @http://www.tol.cz/look/TOL/print.tpl?IdLanguage=1&IdPublication=4&NrIssue=326&NrSection=1&NrArticle=20645&ST1=2d&ST_T1=job&ST_AS1=18&ST_T2=letter&ST_AS2=1&ST3=text&ST_T3=aatol&ST_AS3=1&ST_max=3.43 Ibid.44 Ibid.45 See Peters, G.B. and Pierre, J. (1998), “Governance without Government? Rethinking Public Administration,” Journal of Public Administration Research and Theory: J-PART, Vol. 8, No. 2, April, pp. 223-243.

13

relationship of the private sector and private interest groups may resemble the neo-liberal model of the U.S. and UK. Fifth, the civil service may be organized as a meritocracy, familiar to the American states and Anglo-Saxon governments or, as in much of the world, ascriptively stressing personal and political loyalty as in Africa and numerous Asian states.

A second demarcation of public administration is its philosophy or ideology of administering: public or private sector oriented. The latter is located in states practicing New Public Management (NPM). The former is just about everyone else. The dichotomy focuses on a presumed normative advantage of private sector methods of management versus preference for state methods, typically oriented toward command and control. The latter eschews the supposition that market efficiency is central to improving bureaucratic performance. The former assumes that governance of government differs insignificantly from the private sector. Those espousing state intervention argue that because of market failures, the state must either intervene or provide the service. Secondly, only the state can ultimately protect human rights particularly in appeals by private citizens for remedy against civil transgressions.

CIVIL SERVICE SYSTEMS

We consider four civil service typologies: political/patronage; meritocracy; ascriptive; pro forma. We seek a benchmark for each type. Russia acts as the benchmark for patronage/personal systems in Central/Eastern Europe. Brym and Gimpelson gathered statistics on the Russian Bureaucracy during 1994-2001.46 Recognizing extreme difficulty in aggregating and segmenting Russian data, they conclude as follows:

Nearly 90% of all employees are attached to the executive branch; Of five ranks, about 91% of category C employees are in the bottom three ranks47

Public servants constitute 1.2% of the labor force; ranking 36th out of thirty-seven countries considered;

Most civil servants are women but they are concentrated at the lowest ranks; A bi-polar distribution exists: there are young at the bottom and older, even pensionable

employees, at the top levels (and some even at the bottom);

46 Brym, R.J. and Gimpelson, V. (2004), “The Size, Composition, and Dynamics of the Russian State Bureaucracy in the 1990s,” Slavic Review, Vol. 63, No. 1, Spring: 90-112.47 Ibid., p. 93. Category C posts are “…established by state bodies for the execution and maintenance of their powers.” This is the nucleus of the civil service.

14

Turnover of young employees at the bottom is high; turnover at the top is virtually non-existent;

Young at higher levels only appear in ministries created to regulate the market; The young have considerable education but little work experience; the old have

substantial experience and low educational background; Compensation depends on tenure: it is highest among the older employees causing

constant private job sector searches by young public employees; Few young wait for promotions assuming that vacancies were even available; Educational degrees concentrate in social sciences; yet half of Category C consists of

engineers and agronomists; A comparison with changing elites among Russia, Poland, Hungary, Bulgaria and the

Czech Republic show that continuity of elites in Russia (upper levels of bureaucracy) was far higher in Russia: more than two thirds was composed of elites from 1988;

As of January 1, 2001, every second federal employee at the central level was a holdover from the Brezhnev era, having been hired 15 years or more years earlier; combining with those from the Gorbachev era, 60% of employees at the central level was hired by the Communist Party;

Even at the lowest ranks, 40-50% started working in Soviet times; The authors conclude: “It is a highly politicized process.”48

OECD completed a useful study of EU civil service systems comparing them with “European Principles of Administration Reform Programs.49 Accordingly the study categorized various member countries as follows: Table 1 indicates to what extent each country matches EU “Principles” and whether or not the country has retrogressed backward since accession. The Czech Republic has a decrease in “fit” and is categorized as “Destructive reform reversal.” Lithuania has the best fit with EU principles and is categorized as “Constructive continuation of reform.” Latvia and Estonia are labeled as a “medium fit’ for constructive reform; Hungary, Slovenia, Slovakia and the Czech Republic have lower levels of fit. Linking this typology to the earlier format, though different, we might say that Lithuania represents the meritocracy model, Latvia and Estonia might be a modified meritocracy, Hungary, Slovenia and Slovakia might be the politicized model and Czech Republic would resemble the pro forma type. That is because, Czech Republic is the only EU member not to have passed its draft civil service law in the parliament. A new law is contemplated but hardly certain of introduction and implementation.

48 Ibid., p. 112.49 Meyer-Sahling, J-H.(2009), “Sustainability of Civil Service Reforms in Central and Eastern Europe Five Years After EU Accession,” OECD, Public Governance and Territorial Development Directorate, Sigma Paper No. 44, GOV/SIGMA (2009), May 7. The EU principles include rule of law (legality, reliability and predictability); openness and transparency; legal accountability; efficiency and effectiveness; these are further subdivided into eleven domains and three levels of institutionalization; see pp. 11-13.

15

Table 1. Fit with European Principles of Administration

Current Fit & Post-accession

pathways High fit Medium to

high fit Medium

fit Medium to low fit Low fit

Constructive continuation of reform

Lithuania Latvia Estonia

Constructive reform reversal

Hungary Slovenia

Destructive reform reversal

Slovakia Poland

Czech Republic

Source: Meyer-Sahling, J-H. (2009).50

Figure 1, below, shows Sigma’s survey of civil service attitudes compared with the qualitative categorization for each country done by Sigma. Czech Republic is excluded since it was not included in the attitude survey. Source: Meyer-Sahling, J-H. (2009)51

Figure 1.

50 Ibid., p. 71.51 Ibid.

16

Collapsing all countries for which data have been included, we show a summary according to the earlier typology.

Table. 2. CIVIL SERVICE TYPOLOGY

COUNTRY MODEL COMMENTS

Russia Politicized Slow transition from nomenklatura

Hungary Politicized Despite early academic interest in meritocracy, system has slid backwards

Serbia Politicized Employees typically replaced following elections; senior positions politicized : aversion to a senior civil service; low recruitment of qualified younger employees

Kazakhstan Modified meritocracy Not meeting private sector

17

wage competition; high turnover; wage system lacks equity, accountability and transparency

Macedonia Politicized Ministerial decentralized wage setting; few prospects for career advancement; compressed wage levels

Czech Republic Pro Forma Had draft civil service law: not submitted nor implemented

Poland Politicized Despite early promise, trend toward repoliticization; Civil Service Office abolished

Lithuania Meritocracy Consolidated its reforms; best record in region

Latvia Modified meritocracy Reforms in salary system, performance appraisal; some problems in examinations, retention of mgt. contracts, wide salary ranges

Estonia Modified meritocracy Professionalism, political neutrality; some technical problems in examinations and coordination structures

Kyrgystan Ascriptive with roving bandits52

Kinship and clan based

52 See Olson, M. (2000), Power and Prosperity: Outgrowing Communist and Capitalist Dictatorships, New York: Basic Books.

18

Sources: Brym and Gimpelson (2004),53 Meyer-Sahling, J.H. (2001),54 Meyer-Sahling, J.H. (2009),55 Drechsler, W. (2004),56 Meyer-Sahling, J.H. (2004),57 Eyal and Townsley (1995),58 World Bank (2002),59 World Bank(2005),60 Zarkovic-Rakic (2007),61 Engvall (2007),62Collins, K. (2003),63 Kubicek, P. (1998),64 Transitions Online, (2009),65 Edmunds (2009),66

PROTOTYPE PUBLIC ADMINISTRATION AGENDAS

53 Brym, R.J. and Gimpelson, V. (2004), “The Size, Composition, and Dynamics of the Russian State Bureaucracy in the 1990s,” Slavic Review, Vol. 63, No. 1, Spring, pp. 90-112, accessed on July 4, 2009, at http://www.jstor.org/stable/pdfplus/1520271.pdf. 54 Meyer-Sahling, J.H. (2001, “Getting on Track: Civil Service Reform in Post-Communist Hungary,” Journal of European Public Policy, 8:6, December, 960-979, ISSN 1466-4429, accessed on July 4, 2009, at http://web.ebscohost.com/ehost/results?vid=3&hid=9&sid=129bed8e-1352-4225-b8d1-ff096bad25a%40sessionmgr1028&&bquery=(Getting +on+Track%3a+Civil +Service+Reform+in+Post-Communist+Hungary)&bdata=JmRiPWEzaCZOeXBIPTAMc210ZT1aG92dC1saXZI.55 Meyer-Sahling, J.H. (2009), OECD, Public Governance and Territorial Development Directorate, Sigma, A Joint Initiative of the OECD and the European Union, Principally Financed by the EU, “Sustainability of Civil Service Reforms in Central and Eastern Europe Five Years After EU Accession,” accessed on July 3 , 2009, at http://www.olis.oecd.org/olis/2009doc.nsf/LinkTo/NT00002C4A/$FILE/JF03264288.PDF.56 Drechsler, W. (2004), “Governance, Good Governance, and Government: The Case for Estonian Administrative Capacity,” Trames: A Journal of the Humanities & Social Sciences, 8(58/53), 4, 388-396, accessed on July 4, 2009, at http://web.ebscohost.com/ehost/pdf$vid=4&hid=101&sid=d1ac7c9d-0967-4df1-a548-7845e20c5e22%40sessionmgr4.57 Meyer-Sahling, J.H. (2004), “Civil Service Reform in Post-Communist Europe: The Bumpy Road to Depoliticisation,” West European Politics, Vol. 27, No. 1, January, pp. 71-103, accessed on July 4, 2009, at http://web.ebscohost.com/ehost/pdf?vid=5&hid=108&sid=2136abd0-9100-4ecd-98c4-517e90344fdd%40SRCSM2.58 Eyal, G. and Townsley, E. (1995), “The Social Composition of the Communist Nomenklatura: A Comparison of Russia, Poland, and Hungary,” Theory and Society, 24: 723-750, accessed on July 4, 2009, at http://jstor.org/stable/pdfplus 657849.pdf.59 World Bank (2002), “Civil Service Reform: Strengthening World Bank and IMF Collaboration: Former Yugoslav Republic of Macedonia,” June, accessed on July 1, 2009, at http:www-wds.worldbank.org/external/default/VIDSContentServer/WDSP/IB/2002/0823/000094946_02082304053329/Rendered/PDF/multil0page.pdf.60 World Bank (2005), “Kazakhstan’s Reforming The Public Sector Wage System; Policy Paper,” April 1, (Report No. 31707 – KZ), accessed on July 1, 2009, at http://www--wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2005/06/20/000012009_20050620094639Rendered/PDF/31707rev.pdf. 61 Zarkovic-Rakic, J. (2007), “Bureaucratic Behavior: A Review of the Theory and Its Application to Serbian Public Administration,” Panoeconomicus, 2: 235-242, accessed on July 4, 2009, at http://www.panoeconomicus.rs/casopis/sestibroj/jelena%20zarkovic%20rakic%20bureaucratic%20behavior%202%20review%20of %20the%20theory%20and%20its%20application%20to%20serbian%20public%20administration.pdf.62 Engvall, J. (2007), “Kyrgyzstan: Anatomy of a State,” Problems of Post-Communism, Vol. 4, No. 4, July/August, pp. 33-4563 Collins, K. (2003), “The Political Role of Clans in Central Asia,” Comparative Politics, Vol. 35, No. 2, January, pp. 171-190.64 Kubicek, P. (1998), “Authoritarianism in Central Asia: Curse or Cure?” Third World Quarterly, Vol. 19, No. 1, pp. 29-43.

19

The chapter now postulates a public administration agenda that illustrates a domain of substantive responsibility. If reform is to be hypothesized, we wish to juxtapose a reform model against potential agendas deriving from changed conditions postulated earlier.

ONGOING GOVERNING PROCESSES requiring public policies and employment of public workers:

Intervening in market failures and negative externalities Protecting citizens’ rights Maintaining security: financial/military/economic/employment Responding to natural disasters (such as Katrina) Pushing beyond the status quo: FDR created government competition for private sector

activity such as utilities (TVA)67

Leading to potential public sector activity affecting public administration:

Sustainable development Monitoring health and safety Addressing environmental pollution Addressing population-wide health care services Stimulating research and development Addressing sustainable energy Addressing sustainable food supply Maintaining social safety net

VARIABLES OR FACTORS AFFECTING RESOLUTION OF PROTOTYPE AGENDAS:

Potential organizing models: Equilibrium, Nordic; Rhinish; Anglo-Saxon; post-communist; China and Asia; post-colonial

65 Transitions Online (2009), “Kyrgyzstan: West Must Keep Despots at Arms’ Length,” July 3, accessed on July 7, 2009, at http://www.tolcz/look/TOL/printf.tpl?IdLanguage=1&IdPublication=4&NrIssue=328&NrSection=2&NrArticle=20677.66 Edmunds, T. (2009), “Illiberal Resilience in Serbia,” Journal of Democracy, Vol. 20, No. 1, January. pp., 128-142.67 Tennessee Valley Authority.

20

Input or independent variables: moral hazard; principal/agent; politics/administration/dichotomy; cognitive dissonance; contagion; hierarchical gradient; may be moderating variables

Leading to an incremental or inductive method of analysis:

And

Considering changing conditions:

Globalization Networks Knowledge societies Perverse incentives vs. rewarding incentives Intrinsic/extrinsic values Public/private philosophy

And

Considering public administration civil service models (to reflect global diversity):

Patronage/personal Meritocracy Ascriptive Pro Forma

We may now turn to the process of bringing about reform.

NATURE OF CHANGE

We have said that reform evolves, or bursts in revolution, from such factors as history, revolution, changing circumstances, intolerable conditions, desire for change, precipitating events, crises, failed states, and market failure. 68 Obviously, timing is important. For our purposes we concentrate on changing conditions. The pursuit of reform in public administration, if plausible, will require a clientele, timing, and changing conditions. The clientele may include those in praxis (practice) as well as in academic conceptualizing. Yet the cause is critical. Research must continue or more “Washington Consensuses” will occur. Emerging countries need the best we can do, including their suggestions. The alternative is to struggle with

68 Page 1.

21

normative indicators such as rule of law, neo-liberal marketizing of public administration, decentralization, public/private partnerships and principal/agent discourses that mask reality.

In addition to clienteles the potential obstacles to reform present barriers. Those favoring New Public Management will stress revivification of market solutions.69 Those preferring the rechsstaat will prefer direct services. A host of states will have centralized most public administration. For that purpose, we include four civil service models: patronage/personal; meritocracy; ascriptive; pro forma. This permits us to create a generalized model that accounts for indigenous differences.70

We have seen how EU candidate and accession countries have prepared their accession chapters regarding public administration. Promises are made and some are kept. Where compliance has been intolerable, such as in Bulgaria and lesser so in Romania, the EU simply withheld funds. Perhaps the aid giving donors will do the same in other countries. Thus, we seek a generalized model that can be constructed or de-constructed to suit state needs. The actual reform process will then emerge, if at all, within a political/economic/social milieu, according to disparate national interests. Despite national interests, external sources will participate in the discourses. The recent elections for the Members of the European Parliament produced a French Green71 representation of 16.28% of the vote, behind only the Socialists, 16.48%, and Sarkozy’s center right party at 27.87%. Said the Green’s leader, Daniel Cohn-Bendit, “We have a project for Europe, an idea; the ecological transformation of our way of production and way of life, with a social shield to protect the people who are negatively affected by the process of transformation.”72

We are saying then that changing conditions permit us to construct a general model. Those changing conditions include globalization, networks, knowledge societies, perverse vs. rewarding incentives, changing intrinsic/extrinsic values, changing public/private philosophy. The model would be based on the following assumptions:

69 While the UK and the American states have such interests, many of the applications have been at local levels. This interest in subsidiarity, also of interest to the EU, may have its logic when local services including police, fire, education, welfare and employment are locally based. Many states centralize these functions. Their interest in NPM is lesser. 70 See Figure 2.71 Europe Ecologie coalition of European Green parties.72 New York Times (2009), June 20, op cit.

22

Crises exist in the world and in individual states: pollution of the environment; continuing un-sustainable use of hydro-carbons; substantial under provision of health care services; collapsed financial institutions; an ageing planet and continued demographic imbalance reaching nine billion persons by 2050; under-expenditures in research and development;

Individual public administration systems will differ: ascriptive, patronage, meritocracy and pro forma;

Systems will be affected by the general intervening variable of corruption that includes mistrust, malfeasance and non-feasance;

Existing instrumental variables would include market failures, protection of citizens’ rights, security, disasters and limitations of system capacity;

The input variables will be mediated through agendas, containing their own technical unique qualities;

The system will then produce outcomes pertaining to system satisfaction, productivity, morale, efficiency and effectiveness.73

Figure 2.

Barriers Incentives

73 See Figure 2.

23

moral hazard; cognitive dissonance; principal/agent; politics/PA dichotomy

Intrinsic/extrinsic; satisfiers/dissatisfiers; self actualization

Civil Service Systems

Instrumental AGENDAS

OUTCOMES

CONCEPTUAL: BARRIERS + INCENTIVES + (ascriptive/patronage/meritocracy/ pro forma) +

INSTRUMENTAL + AGENDAS = OUTCOMES

NOTE to Figure 2: The simplified model displays the theoretical, aggregate result of multiple independent variables: barriers, incentives, civil service systems, and instrumental variables mediated through prototype agendas to the dependent variable combining the outcomes of satisfaction, productivity, morale, efficiency and effectiveness.

THE PROCESS OF CHANGE AND REFORM

24

Sustainable Development; Health and Safety; Environment; Health Care; Research and Development; Sustainable Energy; Sustainable Food Supply; Social Safety Net

Market failures; citizens’rights;

Security; disasters; limits

Satisfaction; productivity; morale;

Efficiency; effectiveness

ascriptive Patronage

meritcracy pro forma

corruption; mistrust; malfeasance;

non-feasance (intervening)

The chapter focuses on the process of change and reform: first, whether or not present day literature accurately describes what is extant in public administration; secondly, what conditions may have causal valences related to change. We concentrate on trying to describe changes that have occurred and that therefore, could serve as the basis for change. Rather than predict change, we stress the normative case of focusing on the gap between what has been the conventional wisdom versus what now needs to be recognized.

Peters and Pierre observe that “Reforms that aim at altering the normative framework and modus operandi of public administration, and thus profoundly74 challenge established norms and practices, may at best accomplish minor changes and at worst bring to the public service confusion, conflict, and discrepancies between organizational culture and external role expectations, thus causing stalemate. …incremental but consistent changes – are more likely to bring about less dramatic change but without major dysfunctional consequences.”75 Rattso and Sorensen pursue a reform explanation in the “political decision making system.”76 Haque observes that in Singapore, “…due to the current economic slowdown and job losses since this crisis in 1997, the logic of rapid economic growth cannot be used to reject the liberal welfare-state model, especially when low-income households…need economic support and when state policies need to be widely discussed.”77 Reform seems to oscillate and coalesce around what might be called the latest conventional wisdom. More recently status quo arguments have centered upon New Public Management versus European statist models, corporatist in nature, that have tended to emphasize law, such as the Rechsstaat.

Essentially, the current debate is about modifying the public administration discourse to reflect private sector values embedded in New Public Management vs. a focus on state intervention particularly in cases of market failure. The current financial recession in 2008-2009 has caused increased public intervention in capital markets, particularly banking. These events have, at least temporarily, lengthened the arm of governments and central banks to invoke counter-cyclical78 activity while at the same time considering new regulatory measures. The pendulum may then shift weight toward public antidotes rather than private sector management concepts. Neo-liberal and laissez faire capitalism have momentarily lost their appeal. This latest change in ideology could eventually recede. Yet, the dampening economic effects that remind most observers of the 1930s depression suggest significant interest in legislative and administrative changes to the prior status quo.

74 My emphasis.75 Peters and Pierre (1998), op. cit., p. 240.76 Rattso, J. and Sorensen, R.J. (2004), Public Employees As Swing Voters: Empirical Evidence on Opposition to Public Reform,” Public Choice, 119: 281-310.77 Haque, M.S. (2004), “Governance and Bureaucracy in Singapore: Contemporary Reforms and Implications,” International Political Science Review / Revue international de science politique, Vol. 25, No. 2, April, p. 227-240.78 Countercyclical refers to action that would counter a current economic spiking such as recession or high inflation. The converse would be a procyclical action that exacerbates the current malady.

25

Melchor has identified receptivity as a potential antecedent to change.79 He isolates four components of receptivity: ideological vision, leading change, institutional politics, and implementation capacity. He derives these from Pettigrew (1997) and Butler (2003).80 He tests these against six countries, though his primary interest is testing for managing change. He hypothesizes that change will not occur in a vacuum. It must be managed to be successful. Our focus is on pursuing the theoretical potential of change/reform ingredients, ex ante. This would then permit further empirical work particularly in Central/Eastern Europe and Central Asia. Melchor’s countries were all in western Europe. His conclusion was that among the six countries, “…there was no evidence of a coherent strategy to manage change that accompanies the reform efforts.” Further, he concludes that while receptivity appears to be a useful theoretical construct, it cannot “…provide a full account of the actual occurrence of change.” He further concludes that additional empirical testing would be useful.

Table 3, below, encapsulates selected public administration activity since the 1930s depression.

ACTORS/STATES CONDITIONS EFFECT ON BUREAUCRACY ACTIONS TAKEN

F.D. Roosevelt, U.S. Depression; high unemployment; collapse of financial markets; decline in production

Many lawyers joined the government; critical education created new public agencies

Regulation of banks; government challenged private sector, e.g. in utilities such as TVA

J.F. Kennedy/L.B. Johnson, U.S.

Civil rights activism More lawyers joined the government as civil rights law implemented

Affirmative action; hiring quotas; school bussing; legal activism

Reagan/Thatcher, U.S./UK

Government seen as “the problem”

Emphasis on private sector managerial practices; NPM

Fired striking air controllers; “trickle down economics”

Post-Communism,CEE

Collapse of Communism;

New CEE bureaucracies were

A vetting81 process was established to

79 Melchor, O.H. (2008), “Managing Change in OECD Governments: An Introductory Framework, OECD Working Papers on Public Governance, No. 12,” OECD Publishing, © OECD, doi:10.1787/227141782188. 80 Pettigrew, A. (1997), “What is a Processual Analysis,” Scandinavian Journal of Management, 13(4), Elsevier Science Ltd., pp. 337-348; Butler, M. (2003), “Managing form the Inside Out: Drawing on ‘Receptivity’ to Explain Variation in Strategy Implementation,” British Journal of Management, Vol. 14, special issue, Blackwell Publishing Ltd., pp. S47-S60.

26

privatization; structuring market systems

formed despite probable path dependencies

attempt to screen out former police and security personnel

NATO/EU Common market; integrative procedures; accession requirements

Politicized bureaucracies required merit oriented, technical skills

Negotiations between EU and members created organizational challenges in Brussels and in member states

EU ACCESSION OF EU 12

Partial division of EU 15 and EU 12; old vs. young members; western vs. eastern Europe; some antagonism to “Democratic Deficit”

Certain members of EU 12 had continuing difficulty in eliminating corruption; NPM created horizontal and vertical coordination problems

EU withheld funds from Bulgaria and struggled with Romania’s perceived corruption; EU members moved away from NPM & toward JUG and Whole of Govt.

Note: CEE = Central and Eastern Europe; NPM= New Public Management; JUG = Joined Up Government, later known as Whole of Government.82

DISCUSSION

Change and reform are dependent on timing, internal and external pressures, civil service blockages, path dependencies, and visions of stakeholders. More specifically, public administration reform is linked to political urgencies, economic pressures and social adaptability. Psychology, particularly social psychology, can be a factor. We argue that input variables must be identified. Relying only on output variables such as rule of law, privatization, liberalizing the economy, and enforcing anti-corruption programs, may lead to procyclical outcomes. An

81 The Czechs have, perhaps, been the most active with their lustration law in pursuing former Communist “informers” now active in government or seeking public positions. Those accused have often retorted that their names had been listed by the Party without their knowledge or approval. 82 Middle range strategy to compensate for fragmentation occurring after NPM. Coordination capacity strengthened through renewed hierarchy, market and network type mechanisms. See Verhoest, K., Bouckaert, G. and Peters, B.G. (2007), “Janus-Faced Reorganization: Specialization and Coordination in Four OECD Countries in the Period 1980-2005,” International Review of Administrative Sciences, 73(3): 325-48; Verhoest, K., Verschuere, B., and Bouckaert, G. (2007), “Pressure, Legitimacy, and Innovative Behavior by Public Organizations,” Governance: An International Journal of Policy, Administration, and Institutions, 20(3), July, pp. 469-97; Christensen, T. and Laegreid, P. (2008), “The Challenge of Coordination in Central Government Organizations: The Norwegian Case,” Public Organization Review, 8: 97-116, accessed on July 10, 2009, at http://www.springerlink.com/content/c476443026621362/fulltext.pdf.

27

American model, such as the Washington Consensus, may be grounded in prior market economies rather than linking to pseudo economies in Central/Eastern Europe.

While prior public administration ideologies have tended to emerge from changing political preferences, that is not the only paradigm contributing to understanding. Most observers consider corruption as a negative public outcome. A solution may involve regulation, a priori, or prosecution, ex post. Yet moral hazard is a temptation that may cause an imbalance between reward vs. punishment. Incentives that dissipate the tradeoff may be fortuitous. Nash/equilibrium postulates that when one knows the expected behavior of others, and that they will not change, an actor can calculate a decision. If it is known that an act will definitely cause a significant punishment, the decision maker may not pursue the hazard. This requires an effective organizational response that is well known to decision makers. If a politician or bureaucrat contemplates an unethical or illegal act and he/she must resign from political office if caught, there is an incentive to deny pursuing the hazard. The incentive is affected by prior cases that increase the certainty of punishment. Accordingly, the ex post outcomes tend to immunize future a priori decisions.

Incentives to do good rather than bad are few (altruism is one). Regulations and rules are often put in place to reduce the moral hazard. Yet they must be enforced. It is easier to measure outputs as opposed to inputs. We do not know the susceptibility to moral hazard of person A vs. person B. We can only deal in aggregates. We promulgate rules and laws to all actors irrespective of their inclinations. The Italian/Serbian law seizing assets not proven to be crime-free, reminds potential offenders that violation will result in punishment. The free rider on a European tram has calculated the fine vs. the probability of being caught without a ticket. Enforcement is not ubiquitous, but does occur.

Public agendas in the 21st century appear to be turning toward several sets of externalities: sustainable development, health and safety, environment, sustainable energy, sustainable food supply, as well as knowledge society ingredients such as research and development, social safety nets, demographic imbalances, education and training. All of these agendas are likely to include significant public involvement. A second set of activity will focus on public leadership in casting new frameworks for market failures such as the 2008-2009 economic recession. Each of these agendas seems likely to enhance the likelihood of attracting public servants inclined toward intrinsic as well as extrinsic motivations.

28

CONCLUSION

Reform is a process occurring when key stakeholders, public/private sectors and reform minded societies find the means to reach agreement. The process tends toward negotiation since many will favor the status quo. Those that are consistently disempowered, and their supporters, will argue for change. Bureaucratic pathologies act to derail reform. Public administration will research and consider behaviors not previously incorporated in organizational structures. Such reform is likely to examine questions of public finance, quality control, comprehensive economic distribution and redistribution as well as the centrality of human beings in public equations. As public administration focuses on public goods, entrepreneurs can benefit from government outsourcing and spinoffs. Societies will follow public leadership when it is in their own best interests.

We argue then, that neither the Weberian Model nor New Public Management, seen as contrasting etatist vs. market oriented models, sufficiently describes the status quo nor does it reflect organizational research elucidating behavioral findings of relevance to public administration. Altruistic behavior is possible depending on incentives. Obedience to authority, whether bureaucrats or rules, can be moderated by repeated behaviors and/or education and training in values expectations. Moreover, security of individuals and populations has been neglected. Such security includes protection against Hobbes’ brutish state of nature that seems to have deteriorated toward questions of race, ethnicity, tribe, nationality, religion, gender, class, elitism, and the ‘other’ stereotype. Further, security must include protection of health, safety, food, employment, pensions, welfare, education, and human dignity.

REFERENCES

Akerlof, G.A. and Shiller, R.J. (2009), Animal Spirits: How Human Psychology Drives the Economy, And Why It Matters for Global Capitalism, Princeton and Oxford: Princeton University Press.

Annual Review of Psychology, 2008, “Human Abilities: Emotional Intelligence,” Vol. 59: 507-536, January, accessed on June 23, 2009, at http://arjournals.annualreviews.org/doi/abs/10.1146/annurev.psych.59.103006.093646?journalCode=pscyh.

29

Brym,R.J. and Gimpelson, V. (2004), “The Size, Composition, and Dynamics of the Russian State Bureaucracy in the 1990s,” Slavic Review, Vol. 63, No. 1, Spring: 90-112.

Carnic, D. and Djorelijevski, M. (2009), “Serbia: Hitting Criminals Where It Hurts,” Transitions Online, June 17, accessed on June 18, 2009, at http://wwwtol.cz/look/TOL/print.tpl?IdLanguaage=1&IdPublication=4&Nrissue=326&NrSection=1&NrArticle=20645&ST1=2d&ST_T1=job&ST_AS1=18&ST_T2=letter&ST_as2=1&st3=TEXT&st_t3=aatol&ST_AS3=1&ST_max=3.

Castells, M. (2000), The Rise of the Network Society, The Information Age: Economy, Society and Culture, Vol. I., 2nd ed. Cambridge, MA; Oxford, UK:L Blackwell, ISBN 978-0631221401.

Christensen, T. and Laegreid, P. (2008), “The Challenge of Coordination in Central Government Organizations; The Norwegian Case,” Public Organization Review, 8(2), June, pp. 97-116, accessed on July 10, 2009, at http://www.springerlink.com/content/c476443026621362/fulltext.pdf.

Collins, K. (2003), “The Political Role of Clans in Central Asia,” Comparative Politics, Vol.35, No.2, January, pp. 171-190.

Drechsler, W. (2004), “Governance, Good Governance, and Government: The Case for EstonianAdministrative Capacity,” Trames: A Journal of the Humanities and Social Sciences, 8(58/53), 4, 388-396, accessed on July 4, 2009, at http://web.ebscohost.com/ehost/pdf$vid=4&hid=101&sid=d1ac7c9d-o967-4df1-a548- 7845e20c5e22%40sessionmagr4.

Edmunds, T. (2009), “Illiberal Resilience in Serbia,”Journal of Democracy, Vol. 20, No. 1, January, pp. 128-142.

Engvall, J. (2007), “Kyrgyzstan: Anatomy of a State,” Problems of Post-Communism, Vol. 4, No. 4, July/August, pp. 33-45.

Erlanger, S. (2009), “A Green Coalition Gathers Strength in Europe,” The New York Times, June 20, accessed on June 21, 2009, at http://www.nytimes.com/2009/06/20/world/europe/20greens.html??_r=1.

Eyal, G. and Townsley, E. (1995), “The Social Composition of the Communist Nomenklatura: A Comparison of Russia, Poland, and Hungary,” Theory and Society, 24: 723-750, accessed on July 4, 2009, at http://jstor.org/stable/pdfplus657849.pdf.

Giddens, A. (1999), “Risk and Responsibility,” The Modern Law Review, Vol. 62, No. 1, January, pp. 1-10.

30

Haque, M.S. (2004), “Governance and Bureaucracy in Singapore: Contemporary Reforms and Implications,” International Political Science Review/Revue international de science politique, Vol. 25, No. 2, April, pp. 227-240.

Harrison, G. (2001), “Administering Market Friendly Market Growth? Liberal Populism and the World Bank’s Involvement in Administrative Reform in Sub-Saharan Africa,” Review of International Political Economy, 8:3, Autumn, pp. 528-547.

Jett, J. (2009), Fool’s Gold: How the Bold Dream of a Small Tribe at J.P. Morgan Was Corrupted by Wall Street Greed and Unleashed a Catastrophe, New York: Free Press.

Kakutani, M. (2009), “Books of the Times; Greed Layered on Greed, Frosted with Recklessness,” New York Times, June 16, accessed on June 16, 2009 at http://www.nytimes.com/2009/06/16/books/16kaku.html?hpw=&pagewanted=print

Kubicek, P. (1998), “Authoritarianism in Central Asia: Curse or Cure?” Third World Quarterly, Vol. 19, No. 1, pp. 29-43.

Lindblom, C.E. (1959), “The Science of ‘Muddling Through,’” Public Administration Review, Vol. 19, No. 2 (Spring), pp. 79-88.

Meyer-Sahling, J-H. (2001), “Getting on Track: Civil Service Reform in Post-Communist Hungary,” Journal of European Public Policy, 8:6, December, 960-979, ISSN 1466-4429, accessed on July 4, 2009, at http://web.ebscohost.com/ehost/results?vid=3&hid=9&sid=129bed8e-1352-4225-b8d1-ff096bad25a%40sessionmgr1028&&bquery=(Getting+on+Track%3a+Civil+Service+Reform+in+Post-Communist+Hungary)bdata=JmRIPWEzaCZOeXBIPTAMc210ZT1aG92dC1saXZI.

______________(2004), “Civil Service Reform in Post-Communist Europe: The Bumpy

Road to Depoliticisation,” West European Politics, Vol. 27, No. 1, January, pp. 71-103,

accessed on July 4, 2009, at http://web.ebscohost.com/ehost/pdf?

vid=5&hid=108&sid=2136abd0--9100-4ecd98c4-517e90344fdd40SRCSM2.

______________ (2009), “Sustainability of Civil Service Reforms in Central and Eastern Europe Five Years After EU Accession,” OECD, Public Governance and Territorial Development Directorate, Sigma Paper No. 44, GOV/SIGMA (2009), May 7.

Milgram, S. (1963), “Behavioral Study of Obedience,” Journal of Abnormal and Social Psychology, 67:371-78.

Olson, M. (2000), Power and Prosperity: Outgrowing Communist and Capitalist Dictatorships, New York: Basic Books.

31

Peters, G.B. and Pierre, J. (1998), “Governance without Government? Rethinking Public Administration,” Journal of Public Administration Research and Theory: J-PART, Vol. 8, No. 2, April, pp. 223-243.

Przeworski, A. (1991), Democracy and the Market: Political and Economic Reforms in Eastern Europe and Latin America, New York: Cambridge University Press, ISBN 0-521-42335X.

Rattso, J. and Sorensen, RJ. (2004), “Public Employees As Swing Voters: Empirical Evidence on Opposition to Public Reform,” Public Choice, 119: 281-310.

Simon, H. (1997), Administrative Behavior, 4th ed. The Free Press.

Sobis, I. and de Vries, M. (2009), “Restoring Professionalism: What Can Public Administration Learn from Social Psychology,” paper presented for the 17th NISPAcee Conference, Budva, Montenegro, May 14-16.

Tannenbaum, A.S. and Rozgonyi, T. (1986), Authority and Reward in Organizations, Michigan Institute for Social Research.

Transitions Online (2009), “Kyrgyzstan: West Must Keep Despots at Arms’ Length,” July 3, accessed on July 7, 2009, at http://www.tolcz/look/TOL/printf.tpl?IdLanguage=1&IdPublication=4&NrIssue=328&NrSection=2&NrArticle=20677.

UNESCAP (2009), “What Is Good Governance?” accessed on June 2, 2009, at http://www.unescap.org/pdd/prs/ProjectActivities/Ongoing/gg/governance.asp.

Verhoest, K., Bouckaert, G. and Peters, B.G. (2007), “Janus-Faced Reorganization: Specialization and Coordination in Four OECD Countries in the Period 1990-2005,” International Review of Administrative Sciences, 73(3): Verhoest, K., Verschuere, B., and Bouckaert, G. (2007), “Pressure, Legitimacy, and Innovative Behavior by Public Organizations,” Governance: An International Journal of Policy, Administration, and Institutions, 20(3), July, pp. 469-97;

Wagner, R.E. (2005), “Self-Governance, Polycentrism, and Federalism: Recurring Themes in Vincent Ostrom’s Scholarly Oeuvre,” Journal of Economic Behavior & Organization, 57, 173-188, accessed on June 14, 2009.

World Bank (2002), “Civil Service Reform: Strengthening World Bank and Collaboration: Former Yugoslav Republic of Macedonia,” June, accessed on July 1, 2009, at http:www-wds.worldbank.org/exsternal/default/VIDSContentServer/WDSP/IB/2002/0823/000094946_02082304053329/Rendered/PDF/multiI0page.pdf.

__________(2005), “Kazakhstan’s Reforming The Public Sector Wage System; Policy Paper,” April 1, (Report No. 31707 – KZ), accessed on July 1, 2009, at http//www-

32

wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2005/06/20/000012009-200506200946639endered/PDF/31707rev.pdf.

_________ (2008), “Worldwide Governance Indicators: 1996-2007,” June, accessed on June 15, 2009, at http//go.worldvbank.org/ATJXPHZMHO.

Zarkovic-Rakic, J. (2007), “Bureaucratic Behavior: A Review of the Theory and Its Application

to Serbian Public Administration,” Panoeconomicus, 2:235-242, accessed on July 4, 2009,

at http://www.panoeconomicus.rs/casopis/sestibroj/jelena%20zarkovic%20rakic

%20bureaucratic%20behavior%202%20review%20of%20thetheory%20and%20its

%20application%20to%20serbian%20public%20administration.pdf.

Zizek, S. (2009), “How to Begin from the Beginning,” New Left Review, 57, May-June, quoting Lenin, V.I. “Notes of a Publicist,” published posthumously in Pravda, 16 April 1924; Collected Works, Vol. 33, Moscow: 1966, pp. 204-207, accessed June 14, 2009, at http://www.newleftreview.org/2page=article&view=2779.

33