The project organization as a policy tool in implementing welfare reforms in the public sector

THE INTERNATIONAL JOURNAL OF HEALTH PLANNING AND MANAGEMENT

Int J Health Plann Mgmt (2012)Published online in Wiley Online Library(wileyonlinelibrary.com) DOI: 10.1002/hpm.2120

The project organization as a policy tool inimplementing welfare reforms in the public sector

Christian Jensen1, Staffan Johansson2 and Mikael Löfström3*

1University of Gothenburg, School of Business, Economics and Law, Gothenburg, Sweden2University of Gothenburg, Department of Social Work, Gothenburg, Sweden3University of Borås, School of Business and IT, Borås, Sweden

ABSTRACT

Organizational design is considered in policy literature as a forceful policy tool to put policy toaction. However, previous research has not analyzed the project organization as a specificform of organizational design and, hence, has not given much attention to such organizationsas a strategic choice when selecting policy tools. The purpose of the article is to investigate theproject as a policy tool; how do such temporary organizations function as a specific form oforganization when public policy is implemented? The article is based on a framework ofpolicy implementation and is illustrated with two welfare reforms in the Swedish publicsector, which were organized and implemented as project organizations. The case studiesand the analysis show that it is crucial that a project organization fits into the overallgovernance structure when used as a policy tool. If not, the project will remain encapsulatedand will not have sufficient impact on the permanent organizational structure. The conceptof encapsulation indicates a need to protect the project from a potential hostile environment.The implication of this is that organizational design as a policy tool is a matter that deserves moreattention in the strategic discussion on implementing public policies and on the suitability ofusing certain policy tools. Copyright © 2012 John Wiley & Sons, Ltd.

KEY WORDS: implementation; project; policy tool; welfare reforms; public sector

INTRODUCTION

Many European countries face complex societal health problems concerning, forexample, long-term illness and social problems in the metropolitan areas, relatedto migration and unemployment. Reforms and policies related to these problems thathave been launched the latest decades have in many cases been enabled by time-limited legislation and financed by time-limited funding; the structural funds of theEuropean Union have enabled such ventures in many European countries. Thetime-limited funding model has led to the funded operations being organized as(temporary) project organizations.

*Correspondence to: M. Löfström, University of Borås, School of Business and IT, Borås, Sweden. E-mail:[email protected]

Copyright © 2012 John Wiley & Sons, Ltd.

C. JENSEN ET AL.

Research has shown that the project as an organizational form has been used in anumber of settings, for example, development work in permanent organizations, tempo-rary collaboration between permanent organizations and experimental work in neworganizations (Jensen et al., 2007). Common denominators for such project organizationshave been a will to bring about change in permanent organizations or to develop neworganizational arrangements suitable for emerging and new types of social challenges.Although project organizations seem to have become more frequent as an organi-

zational form, because of the aforementioned functional factors, their prevalencemight also be explained by other factors, such as politics and fashion. The concept“project” signals innovation and entrepreneurship; at the same time, it promisesorder and control (Sahlin-Andersson, 2002). Thus, project organizations could beconceived as a modern and non-bureaucratic form of organizing public-sectoractivities, which enables a certain mode of action that would not have been acceptedin other (permanent) public authorities (Peters, 2002; Sahlin-Andersson, 2002) and isconsequently congruent with the new public management discourse (Hood, 1995).Project organizations have become more frequent and more popular and seem to be

useful to clarify andmanifest intentions and ambitions among policymakers. In the sameway as projects can be understood as innovative and not ingrained with governmentalbureaucracy, so may a new policy be understood as visionary and innovative. Theproblem is, however, that the temporary form and the inherent isolation can create barriersbetween the temporary organization and other public authorities and thus counteract itspurposes. Previous research on policy tools has not analyzed the project organizationas a specific form of organization, and previous research on projects has not given muchattention to such organizations as a strategic choice when selecting policy tools.The purpose of this article is to investigate the project as a policy tool, to examine

how such temporary organizations function as a specific form of organization and toinvestigate how such temporary organizations function when interacting with perma-nent organizations in the social and healthcare sector. More specifically, we will usea framework developed by Hill and Hupe (2009) and Jensen et al. (2006) to inves-tigate the circumstances under which reforms organized as projects could beintegrated into the ordinary governance structure and be implemented in a sustainablemanner. The case studies and the analysis in this article will contribute to knowledge ofpolicy implementation and project management.The context for the article is national reforms in Sweden the past few decades regard-

ing health care, segregation, unemployment, vocational rehabilitation and so forth. Thepurpose of many of these reforms is to implement new forms of organizing andgovernance in public organizations. This includes reforms such as integrated health care(Ahgren and Axelsson, 2011) and choice of healthcare service (Ahgren, 2010). The twocases, The Metropolitan Initiatives and SOCSAM, that are presented further on in thearticle are examples of how local authorities from the health sector, the social sectorand the labor market sector try to coordinate their efforts to implement these kinds ofreforms, and in doing so the local authorities establish different project organizations.In the next section of this article, we examine previous research on organization

design as a policy tool and, especially, research on the project organization as sucha tool. In the third and fourth sections, we will give some accounts from the twoaforementioned public-sector reforms in Sweden. In the fifth section, the two cases

Copyright © 2012 John Wiley & Sons, Ltd. Int J Health Plann Mgmt (2012)

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PROJECT ORGANIZATION AS A POLICY TOOL

are analyzed to examine whether and how the “projectified” reforms have fitted intotheir institutional and organizational settings. In the final section, we draw someconclusions about the conditions for using projects as policy tools.

ORGANIZATION DESIGN AS A POLICY TOOL

Most policies incorporate a variety of means or tools for accomplishing their objec-tives. Whereas there is conceptual agreement that policy instruments are the buildingblocks of policies, there is not much agreement about the number of basic instru-ments (Hill, 2005). Some scholars have offered suggestions of catalogs of suchinstruments (e.g., Salamon, 2002; Howlett and Ramesh, 2003), whereas others havedeveloped models for analyzing different kinds of policy instruments in relation tohow they are chosen (Schneider and Ingram, 1990, 1997; Linder and Peters, 1991;Bressers and O’Toole, 1998; Peters, 2002).

One of the most important and powerful means of implementing public policy is thedevelopment and establishment of different kinds of organizational arrangements.There have been several attempts to develop typologies of such modes oforganization; however, there seems to be agreement that hierarchy/bureaucracy, marketand network/community/clan can be seen as three fundamental modes for coordinatinghuman action (Etzioni, 1961; Lindblom, 1977; Ouchi, 1980; Bradach and Eccles,1991). Policymakers can choose among these profound organization models when theydesign and manage policy implementation. Yet it is necessary that the actual policy iscongruent with the organizational setting.

Hill and Hupe (2009) have developed an analytical framework for assessment ofthe organizational context in which policy is developed and in which implementationis supposed to take place. Their framework is based on earlier research on policyimplementation and the concept “governance” and is highly inspired on studies thathave focused on the institutional and the organizational contexts where policies areinterpreted, mediated and negotiated (such as Barrett and Fudge, 1981; Hjern andPorter, 1981) and studies that have addressed the need for understanding thehorizontal network links in the “implementation structures” (such as Klijn andKoppenjan, 2000). Hill and Hupe’s (2009) governance model consists of threedifferent layers in the political–administrative system and three different levels ofaction. The three layers in the political–administrative system are the policy setting,the institutional setting and the micro-setting. The policy setting refers to nationalgovernment and the central institutions of the state, which are crucial in that the con-stitutional issues and much of the political culture are determined there. The institu-tional setting refers to the structure of the intergovernmental system of vertical andhorizontal relations between different authorities and organizations. The micro-setting refers to the street level and highlights what kind of orientation the street levelstaffs have in their everyday practice. Hill and Hupe (2009) have, furthermore, onthe basis of Kiser and Ostrom (1982), identified constitutional, directive andoperational actions as three levels of action that might occur on each of theidentified layers, in order to clarify how actions on a higher level restrict actionson lower levels.


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These levels and layers constitute the framework for developing constitutionalpreconditions and creating institutional arrangements for different kinds of publicpolicies, and implementation strategies from the policy setting down to the streetlevel. Hill and Hupe’s (2009) model allows for a variety of factors that can becombined and, thereby, create different contexts that may facilitate or constrainimplementation of different kinds of policies. Policymakers can establish (permanentor temporary) organizations and, in doing so, also make choices between fundamentalmechanisms of social coordination (i.e., hierarchies, markets and networks). They can,furthermore, make choices among modes of governance (authority, transaction andpersuasion) and the modes of managing implementation (enforcement, performanceand cooperation) that follow these choices. The choices made at the various layerscan be classed in terms of congruency (Etzioni, 1961), that is, to the extent to whicha chosen mode of implementation is compatible with the logic of the permanentorganization’s mainstream operations. Against the background of the characteristicsof the setting involved, congruency, then, particularly concerns the relationshipbetween the mode of the implementation of a certain project and the mode ofgovernance on the system level (Hupe and Hill, 2007).Research shows that organizational choices are partly determined by considera-

tions about the best way to organize any specific policy delivery process and partlyby ideologies among policymakers (Hill, 2005). It is important to stress that organi-zational choice, to a great extent, seems to be determined by institutional factors; thediffusion of organizational models and management concepts like New PublicManagement can thus be explained by a combination of politics, law and fashion(Meyer and Rowan, 1977; DiMaggio and Powell, 1983; Hood, 1995; Christensenand Laegreid, 2002).Complex societal problems and complex policies demand corresponding and

flexible organizations, including complicated cross-sectorial implementationarrangements. When policymakers are considering how to design organizationalarrangements for implementing a specific policy, they will not look solely at anyof the three aforementioned alternatives. Instead, they will probably try to find suitablecombinations, depending on the specific policy case. In most cases, they have touse existing organizations and try to change those to be better suited to the policyunder consideration.One option not mentioned in the policy literature is to establish a temporary

(project) organization, which could be suitable when there is a high degree ofuncertainty about the policy itself and about the suitability of the organizationalarrangement, which may be easier to disrupt and terminate, if the outcome is notregarded as satisfactory. Research in public administration has not given muchattention to temporary organizations as policy tools, but there is much research on projectsas organizational phenomena.

THE PROJECT ORGANIZATION AS A POLICY TOOL

The project is in itself a very old phenomenon in society. When the concept “project”is used in public administration research, it often refers to administrative reforms or


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complex construction projects. The concept of “project”, understood as a temporaryorganizational form, is, however, almost absent in policy research and implementa-tion research.

Research on temporary (project) organizations seems to follow the same pattern asresearch on permanent organizations. Most early research on project organizationswas done to understand how formal aspects of the organizational structure influenceorganizational behavior and, thus, the outcome of the project. This perspective hasits roots, to a great extent, in the project management literature, in which projectsare viewed more as managerial tools for achieving change and less as a specificorganizational form (Packendorff, 1995; Ekstedt et al., 1999; Engwall and Jerbrant,2003). This approach was followed by research on informal aspects on projects andhow these affected, for example, the conditions for learning (Bresnen, 2006). Thefocus has then gradually shifted towards environmental factors and how theseinfluence structures, processes and outcome of different kinds of projects (Engwall,2002). Some scholars explain contextual influence as the institutional aspects thatshape how we conceive projects and how institutionalized norms and values regulateand standardize project organizing (Sahlin-Andersson and Söderholm, 2002). Othersrefer to it as the local relationships that influence the organizing of projects(Blomquist and Packendorff, 1998; Jensen et al., 2006). Although most researchon project organizations has been done on projects in industrial environments, thereis some research on projects in the public sector that indicates it is important tounderstand the context in order to understand processes and outcomes of differentkinds of projects (Johansson et al., 2000; Jensen et al., 2007).

Although research on temporary (project) organizations has shown that there aremany similarities with permanent organizations, there are indeed some importantdifferences. The most obvious and important difference is how time is perceived(Lundin et al., 1998). Most members of permanent organizations do not think muchabout the establishment and the termination of their organization. Managers andother members of project organizations must, however, relate much of their activityto the fact that the project is expected to be terminated and dissolved someday. Wewill therefore identify some critical aspects and mechanisms related to projectorganizations, which might be important when these are used as policy tools.

Lundin and Söderholm (1995) have, in their outline of a general theory of thetemporary organization, suggested four concepts that are related to different phasesof the life cycle of the temporary organization: action-based entrepreneurialism,fragmentation for commitment-building, planned isolation and institutionalizedtermination. When a project organization is established, it is more or less assumedthat it will possess some degree of identity, hierarchy and rationality (action-basedentrepreneurialism). The process includes constructing an independent organizationalunit which is supposed to be manageable. In this process, different boundaries aredefined as demarcations between the project and the permanent organization. Theboundaries clarify the task, the objective, the project team, the resources and so forth.The project’s identity could be further strengthened by efforts to build commitmentand establish a certain culture within the project (Lundin and Söderholm, 1995).

The project organization is, to some extent, supposed to work separated fromother organizations (planned isolation), but it must also interact with other


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(permanent and temporary) organizations to gain resources necessary to fulfill itstask. When the task is fulfilled, the project organization is expected to be dissolved.The process involves dismantling the boundaries that were created initially anddissolving the identity, hierarchy and rationality. Project teams that have beenclose-knit and highly motivated, specialized and engaged might have a strong interestto continue the project. The outcome of the termination process will thus depend onhow the project was established and how the project team functioned during the lifecycle (Johansson et al., 2007). From the perspective of the permanent organization,the project termination is a question of capturing knowledge gained in the projectand building on lesson learned.Jensen et al. (2006) have developed a framework for analyzing uncertainty in the

environment for different kinds of projects and have identified vertical and horizon-tal uncertainty in a manner similar to Hill and Hupe’s (2009) governance model.Although vertical relationships are legitimate in most organizational settings, theycan cause uncertainty. The vertical relationship between the project and its princi-pal(s) consists of various aspects related to contractual arrangements and authoritybut is also related to trust, image, knowledge and the like. Some projects have a highdegree of autonomy because they enjoy a good image, whereas others are constantlymonitored and called into question. Project organizations may also have horizontalrelationships, that is, relationships that are necessary to fulfill their task, but do notinclude supervision, control or evaluation. Uncertainty in horizontal relations ariseswhen some of those involved find it difficult to predict the outcome of the ongoinginteractions. This kind of uncertainty is common in projects; some projects arehighly dependent on cooperation, whereas others can be operated independently ofother actors and organizations. The two dimensions of the model, vertical andhorizontal uncertainty, draw attention to the ways in which different degrees ofuncertainty affect the conditions of various projects and their accomplishments.Thus, the difference between more and less successful projects might be explainedin terms of the projects’ interactions with the project owners and/or organizationsthat the project is dependent on to fulfill its task. The model elucidates that variousstrategies, and the project structure, process and outcome, are conditioned by thedifferent relationships of the projects (Jensen et al., 2006).

CRUCIAL ASPECTS OF PROJECTS AS POLICY TOOLS

Several scholars have discussed the projectification of welfare organizations and thatthe project has become the institutionalized manner through which authorities man-age increased demand for change (Sahlin-Andersson and Söderholm, 2002; Cicmiland Hodgson, 2006; Löfström, 2010). Hence, using the project as a tool for achievingchange can be understood as a way to reduce complexity when it is difficult to setclear goals (Crawford et al., 2003). Consequently, when we put some knowledgeabout project organizations in the toolbox for policymaking, we can expect that suchtemporary organizations might function like bureaucracies, firms or clans and thatthey will be heavily dependent on their environment. Although they are supposed tobe terminated on a certain day, one can also expect that, to varying degrees, they


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are interested in surviving, that is, in being prolonged, transformed into permanentorganizations or merged with existing permanent organizations (Jensen et al., 2006).

Policymakers can influence the conditions for temporary organizations by differentkinds of actions at each of the three layers that were identified by Hill and Hupe(2009). They can also make choices between creating conditions for fundamentalmechanisms of social coordination (hierarchies, markets and networks), modes ofgovernance (authority, transaction and persuasion) and modes of managing implemen-tation (enforcement, performance and cooperation). The choices made at the variouslayers can be classed in terms of congruency: the degree to which the selected modeof implementation is compatible with the logic within the ordinary operations.

However, if governmental policymakers launch a new policy that is implementedand monitored according to this new projectified model as a selective temporaryinvestment, in an area where there already exists a similar established policy thatis implemented and monitored according to a different model, there is a risk ofincongruence, and with that, the overall implementation fails (Hill and Hupe, 2009).The presence of congruency can be analyzed using analytical models from previousresearch on projects, in particular models for the analysis of vertical and horizontaluncertainty (Jensen et al., 2006).

In the next sections, we describe two cases in the social and health sectors that areapplying selective temporary efforts to societal problems already of concern toexisting organizations. The Metropolitan Initiative is an example of a reform thatis organized as a multi-project, that is, where several parallel projects are launchedto implement various aspects of the reform. SOCSAM is an example of whenvarious authorities and organizations construct a spatial interaction, that is, collabo-ration projects in order to jointly implement the reform.

THE METROPOLITAN INITIATIVE

Like most other European countries, Sweden has some districts in urban areas thatare struggling with escalating segregation. Compared with the general population,social problems among residents with a non-Swedish background in those areasare much higher. Many recently arrived refugees have settled in these areas, but thereare also a large number of labor immigrants who arrived earlier. The unemploymentrate in these areas is very high; 30–50% live on supplementary benefit, almost 100%in some areas. Public health is lower than average. The education level, as well asknowledge of the Swedish language, is low. Participation in elections is also belowaverage in the disadvantaged areas. The growing predicament is of major concern forsociety. The so-called Metropolitan Initiative is an area-based initiative trying tosolve or at least reduce the problem in and around three Swedish metropolitan areas:Stockholm, Gothenburg and Malmö. The following example is based on a longitu-dinal case study conducted in Gothenburg between 2002 and 2007 (Jensen, 2004,2007) based on document studies (investigations, policy documents and projectplans); 55 interviews with politicians, public managers, civil servants and projectmanagers; and participant observations on meetings and conferences on both localand national levels.


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The Metropolitan Initiative is part of the national metropolitan policy adopted bythe Swedish parliament in 1998. The initiative is described (SOU, 1990:36; 1998:25) as a coherent policy that brings together aspects previously handled within manydifferent policy domains, such as an integration, housing, health and employment.The aim was to break down social, ethnic and discriminatory segregation in somemetropolitan areas and to work to bring about equitable conditions for people livingin the cities. As a temporary additional contribution, during 2001–2005, parliamentprovided funds of 2.1 billion SEK (235 million EUR) from the state in return for acommitment of matching funds from participating municipalities. As it was a newpolicy, the government regarded the initiative as an investment in social infrastructure.Extra funding should enable a new way of thinking; additional money would make itpossible to stimulate development work, and the government stressed the importanceof learning and capturing knowledge.As part of the metropolitan policy, the government required the municipalities

concerned to sign local development agreements. These agreements were promotedby the government as a new tool to end segregation, and the overall aims of thepolicy were also broken down into seven operational objectives: (i) to reduce benefitdependency and increase the level of employment; (ii) to strengthen the status of theSwedish language; (iii) to raise the level of education among the adult population;(iv) to raise secondary school performance; (v) to make environments/areas saferand more attractive; (vi) to improve public health; and (vii) to increase democraticparticipation. The time-limited contribution from the government was not to behandled within the regular budget of the municipality; rather, it should be registeredon a separate account. Actors who had ideas about how to solve specific challengeshad to apply for the money by submitting project plans to the local government.According to the local development agreement, the local government had a coordi-nating function within the initiative. The concrete activities were thus organized asprojects with clear-cut goals, time frames and budgets.The multi-project setting was framed within a governance structure guided by the

government’s local development agreement. The initiative at the local level wasorganized as projects in which the policy formation process was open-ended andwas supposed to continue during the implementation and afterwards. For example,in Gothenburg, slightly fewer than 200 projects have been in progress over varyingperiods of time during 2001–2005. The residents’ involvement, influence andparticipation are central elements in many projects; increased democratic involvementis both an objective and a means of realizing the Metropolitan policy. A lot of projectwork has taken place through broad-based collaboration with a range of differentbodies, mainly district administration, local associations and housing companies. Inaddition, bodies at the state level (such as those responsible for employment, socialinsurance and policing), county level (primary health care) and also local businessand industry have taken part in the collaboration. Realizing the Metropolitan policyat a local level has depended on an intricate policy network between mutuallydependent (within the project) but autonomous public, societal and private parties.For government to obtain an overall picture of whether the measures taken hadproduced results in the different projects, the agreement was monitored and evaluated.Meanwhile, regular operations already have been mandated to perform these services,


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so those representatives perceived the initiative more as an increase in resources than asa new way to address social challenges.

The Metropolitan Initiative is an attempt to change the living conditions in deprivedhousing areas. It is, however, complicated to transfer knowledge and new ways ofthinking and doing from the project to other permanent settings. To bridge knowledgebetween different settings (project and permanent organizations) implies finding waysof negotiating this learning. In budget negotiations, for example, it proved difficult togain acceptance for new ideas. There seemed to be an asymmetric distribution ofpower. Representatives of the project had the burden of proof when lessons learnedfrom the project were discussed, and representatives of the regular activities hadprecedence. It was, therefore, difficult to make a change in priorities within the existingactivities, which, indeed, was one of the implicit aims of the initiative.

SOCSAM—FINANCIAL AND POLITICAL COLLABORATION

Resources for social insurance, health and medical care, and social welfare services aretraditionally divided into separate regulations and different responsible authorities.Contacts with various authorities often mean that people are circulated among officialsfrom different authorities, without anyone taking responsibility for the situation as awhole. It turns out that the lack of coordination between different authorities makes itdifficult for individuals to reach the labor market. By creating a temporary speciallaw (SFS, 1994:566), the government has made it possible to try political and financialcollaboration between the national government, the counties and the municipalities.The program was based on legislation that permitted collaboration between differenttransfer systems such as social insurance, social security benefits and unemploymentallowance. The aim was that people who had no access to the labor market wouldnot circulate between the authorities but would instead get vocational rehabilitationand, thereby, increase their opportunities to be employed (Hultberg et al., 2003).Also, this study is a longitudinal case study based on interviews, participantobservations and detailed studies of documents and relies in various parts on workpreviously published in Löfström et al. (2001), Löfström (2001), Kihlström andWikström (2009) and Löfström (2010).

The guidelines for the program state that each local effort should be organizedthrough an association of local authorities, which formally takes over the responsi-bility for the activities in the program. Therefore, the three responsible authorities,the social insurance office (state), the social welfare service (municipality) and thehealth and medical care service (county), established an agreement that regulatestheir activities and agreed on a joint financial contribution to the operations. Thus,they have a common responsibility for the costs of the activities involved in the pro-gram. The program annually budgets and accounts for the financing of the activities.However, they have no responsibility for tasks that directly concern the clients orpatients in the program. This responsibility remains with the respective responsibleauthorities. The Swedish Social Insurance Board and the National Board of Healthand Welfare have the task to execute the national evaluation of the local initiativesand to monitor compliance with the special trial legislation.


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In the City of Gothenburg, the regional health and medical care organization andthe Gothenburg social insurance office launched a local program called DELTA in1997. The budget was 50–60 million SEK a year. The overall purpose of the trialwas to reduce the cost for sickness absence, unemployment and social securitybenefits by giving vulnerable groups better opportunities to enter the labor market.The target group was about 78,000 people of working age. Around 15,000 of themwere unemployed, disabled or welfare recipients. More than 5500 of these haveparticipated in project activities. The program launched 26 projects over the years,and the trial used three different approaches: prevention-oriented, social/medical-oriented and occupational-oriented.Each project was organized with a project manager, a project team and a steering

group. Members of the steering group were local managers from the authorities thathad employees in the projects. Project managers and project staff were recruitedthrough an internal application process within the involved authorities. The staffswere granted leave from regular service within their authorities during the time theyworked in the project. They were still employed by the authority, which paid theirsalaries and charged the program for its costs for the project. During the project,the project management sent in reports to the board of the program every 3months.The reports outlined the status of project, the financial situation and how the projectwas developing. The project managers were also expected to make diary notes of theproject, which were the basis of the project’s self-evaluation report.In addition to assisting the long-term unemployed, the projects dealt with a range

of inter-organizational challenges—different sets of rules, responsibilities, culturesand governance structures. Several projects were also started because of the lackof collaboration between involved agencies; through the projects, a temporarystructure for collaboration was created. But because the projects were demarcatedfrom ordinary operations, the projects had difficulties implementing the results inthe permanent organizations. Facilitators for the process of implementation werehired to inform their colleagues in the regular activities of the projects’ results. Still,the problems implementing the results from projects into the regular activitiesremain. The program had, in other words, great difficulties in building lastingstructures for collaboration.

ANALYSIS AND DISCUSSION

We will here investigate how the projects as an organizational form fit into thegovernance structure when they are used as a means for implementing public policy.The first part of the analysis will highlight how and why the projects were created asa part of the policy formation process and what consequences this choice had for theinstitutional setting (Hill and Hupe, 2009). The second part of the analysis will high-light the focal projects and their relationship to the permanent organizations at thelocal level, with which the projects were supposed to cooperate to fulfill their tasksand we will analyze whether and how implementation occurs. We finally discusshow problems related to boundaries between projects and permanent organizationscould be overcome in order to facilitate policy implementation.


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The creation of project organizations in the policy processes

As was indicated in the case studies, the policies concerning the MetropolitanInitiative and SOCSAM did not contain any explicit information about how theimplementation should be organized; the policies could thus be characterized asopen-ended (Hill and Hupe, 2009). Yet it became obvious to the parties involvedthat it was appropriate to organize the reforms as temporary project organizations,which meant that the prevailing hierarchical mode of governance in the mainstreampublic organization was challenged (Hill and Hupe, 2009).

One important reason for organizing the reforms as projects seems to be political.It was important for national policymakers to signal to the public and to otherstakeholders that they took the addressed problems seriously and, therefore, haddeveloped a special policy with earmarked resources, which were not allowed tobe absorbed among other financial allocations in the general budget process. Thenational policymakers had thus put the policies in some kind of political “displaywindows”, with a different logic compared with the enforced operations funded inthe regular budget processes (Hill and Hupe, 2009), and therefore also stated thatthese allocations must be systematically evaluated. As policymakers both want andneed to show initiative and drive in order to be seen as legitimate representatives,forming a project organization through which to implement policy allows the crea-tion of a boundary around a specific policy and, thus, enables greater symbolicpower (Sahlin-Andersson, 2002). In the Metropolitan case, the different projectswere also embedded in a local development agreement, which was a new gover-nance model to manage the relationship between central and local governments. Thisagreement permits the principal to share the responsibility with local providers—incase something goes wrong.

Another reason for establishing project organizations, which was indicated in thecase studies, seems to be administrative. From the national government administra-tion, there was a need to establish more clear-cut objectives for making the reformseasier to control and to evaluate. Although the outcomes of the reforms are verydifficult to evaluate, there are still demands on some kind of control and evaluation.One way for government to facilitate such hierarchical control and evaluation seemsto be to allocate and earmark funds and organize the implementation in separateprojects in parallel with the recurrent regular operations, and the actors found ittherefore appropriate to establish a project organization for each allocated fund.Opportunities for supervision and control also seem to be better as the policy areais clearly defined in time and space, where project directive, project organizationand various project tools help to enable a firmer control.

A third reason for establishing project organizations seems to be organizational.The case studies indicate that the projects were created in order to get people andinvolved organizations to do things they otherwise would not have done and tosecure the realization of the intentions from interference from other ideas and activ-ities. By organizing the policy into projects, the national policymakers could, onthe one hand, keep the issue separate from existing agencies’ operating activitiesand, on the other hand, create networks in order to involve actors (e.g., voluntaryorganizations) who are difficult to engage within the mainstream hierarchical


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structure (Hill and Hupe, 2009). To organize the policy into projects signals innova-tion, allowing those involved to deviate from traditional operations and to act in newways. This kind of behavior was favored by creating project organizations, but theactivities that were funded by the national policies became in many cases encapsu-lated, to keep them separated from the recurrent operations in the permanent organi-zations (Sahlin-Andersson, 2002).In summary, we have in this section described and explained how and why the

projects were created as a part of the policy formation process. By organizing thereforms in temporary organizations, the hierarchical mode of governance and imple-mentation are challenged by a network mode of governance and implementation(Hill and Hupe, 2009).

The implementation of the policies in the local government organizations

As indicated in the case studies, the permanent local organizations were not so muchaffected by the reforms; several problems occurred when projects were used as anorganizational arrangement to implement policies. According to Hill and Hupe(2009), the possibility of implementing a policy depends on the collaborativearrangements of the inter-organizational processes (see also Hjern and Porter,1981; Klijn and Koppenjan, 2000). We will in this section discuss three reasonswhy these collaborative arrangements between temporary and permanent organiza-tions are difficult to achieve.One reason is that the project imposes clear organizational demarcation rather than

an unlimited exchange with the environment. When activities are organized as aproject, there is a variety of boundaries that define and limit the entry and performance.Organizing projects is about developing structures and processes to coordinate activi-ties and human action. The aim of creating boundaries is to separate the action fromthe regular activities and to create an organizational identity. In our cases, it was clearthat the demarcation was an important issue, both initially and later during the project.For example, through the various demarcations, it was determined who worked in theproject. Demarcation also made clear who was to develop new working methods orpractices by implementing the policy. A common attitude is that a project enables learn-ing, a way to break old routines, discover new methods, achieve change or offer moreflexible solutions than the permanent organization normally does (Bresnen, 2006). Thismakes it suitable to use projects for implementing new policies. However, if the aim isto change the ordinary course of business, it is important that there is a link betweenprojects and regular activities (Johansson et al., 2007).Another reason for the difficulties to achieve collaborative arrangements is the

development of separated parallel activities that are prevailed during the projectcycle. As indicated in both cases, a primary cause of difficulty in implementingthe policy in the regular activities was that the activities in the project were not inte-grated with the regular activities. In our case studies, project management and teamsspent all their time trying to implement the task and working mainly within theproject, whereas the permanent organization’s managers and professionals were fullyengaged with their regular mainstream activities and did not devote much attentionto the project. It was not until the project was about to finish that a serious discussion


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on implementation between representatives from the projects and the permanentorganization began.

A third reason is that the system of monitoring and evaluation of the policy wasdirected towards the projects themselves and not to the permanent organizations.According to project management discourse, projects are expected to be organiza-tionally and financially separated from regular operations mainly because they aretime-bound and have a beginning and an end. In our cases, the project was separatedfrom recurrent regular activities; the only ones who spent time trying to understandthe intentions of the policy and how it could be implemented were those who wereworking in the project. It was also shown that it was difficult to transfer knowledge,and the project outcomes were often limited to individual learning. Furthermore,there were no arrangements in the permanent organizations for receiving theexperience and knowledge from the project, and this was not required in the evalua-tions. The hierarchical mode of governance and implementation is, in other words,not congruent with the network mode of governance and implementation (Hill andHupe, 2009).

Encapsulation—can it be avoided?

We can thus summarize the previous sections by saying that the project as a policytool operates in an environment that can be captured in the relationship between thetwo concepts “government” and “governance” (Hill and Hupe, 2009). The firstsection, in which we adopted a vertical perspective, is more of a governmentapproach, where the national level assumes a “straightforward consequentiality”(Ciborra and Lanzara, 1994). The second section is more of a governance approach:we emphasize the need to study the context of the policy initiative; both the environ-mental context and the horizontal inter-organizational relationships between differ-ent agencies; and the more narrow project context and the relationship between thetemporary organization where the initiative was conducted and the permanentorganization, which in the longer term should be affected by the initiative. Herewe highlight the difficulties in exceeding different boundaries, with the result thatthe policy initiative was isolated and even encapsulated in the project.

A relevant and justified question is whether the policymakers could have organizedthe policy formation in a different manner to facilitate implementation. The analyses ofthe case studies showed that there were fundamental differences between the projectorganization and the permanent organization that created boundaries and that theseboundaries were difficult to cross to avoid the project activities being encapsulated.

Encapsulation can be understood as a metaphor for trying to protect an item froma possible hostile environment, and the concept is used in many different contextssuch as biology and chemistry and sometimes also in computer programming. Thismeaning of the concept is partly applicable also in an organizational context as theremight be a need to secure the boundaries of an organizational unit (such as a project)in order to maintain some kind of control of the activities and survive as anautonomous organization.

Projects are temporary and are goal-oriented and action-oriented, whereas publicadministration is incremental, institutionalized in a long tradition and governed


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C. JENSEN ET AL.

primarily by political decisions and legislation. The various organizational formshave different logic, and they are held accountable and evaluated in different ways.These differences will probably not cause any particular problems if they are keptseparate. Projects as an organizational form that are used in typical one-time tasks,such as, for example, investment in infrastructure, will not create any problemsbecause of their organizational form. However, there is always a risk of implemen-tation problems when the national government runs parallel policies in the samepolicy domain where one policy branch is implemented via the traditional routethrough the existing public administration and the other policy branch is run throughthe project.One possibility for governments to avoid the problems of encapsulation that have

been demonstrated in this article is, of course, to give local authorities temporaryincrease in resources and to allow local authorities to organize their efforts so thatthe integration and implementation is facilitated. But the risk is then that the nationalbody might lose control over the policy initiative and/or that the activities would notbe as innovative as promised. Another possibility for governmental bodies could beto be more active in employing network governance that has been discussed byscholars like Sorensen and Torfing (2007) and Klijn and Edelenbos (2007). Asnetworks cannot be easily controlled, network management is about guiding andfacilitating interactions through process design as well as institutional design, whichinclude joint goal-setting, joint knowledge production and other activities thatgenerate trust (Klijn and Edelenbos, 2007). We suspect that this way of implementingpublic policy is not yet seen as natural in the Swedish welfare sector but should beconsidered by responsible policymakers.

CONCLUSION

The purpose of this article has been to investigate the project as a policy tool toexamine how such temporary organizations function as a specific form of organiza-tion and how they function when interacting with permanent organizations. We havecombined knowledge and insights from two fields: policy implementation andproject management. The reasoning behind this lies in the perceived benefit ofpluralism; that is, because any one perspective offers only a partial account of acomplex phenomenon, multiple perspectives provide, in our case, a more compre-hensive understanding of policy and policy tools.The case studies and the analysis have shown that it is crucial that project organi-

zations fit in the overall governance structure when they are used as policy tools. Byfit, we mean having congruent rules for interaction, coordination and integrationbetween the particular project organization and those organizations the projectorganization depends on to fulfill its task. If such congruence is missing, there is arisk that the project organization will remain isolated and will, like other foreignbodies, be rejected and become “islands in the stream”, and the policy will not beimplemented. Project organizations may, in some cases, even function as barriersthat hamper implementation of urgent policy reforms and thus a favorable devel-opment of society. Hence, the question of fit is also a question of capacity of


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governmental institutions on different levels to “steer” or govern societal develop-ment. When using the project as a policy tool, it is therefore important to incorporatecomplete understanding of the multiple levels of actions and different kinds ofvariables that can be expected to influence both output and outcome. The implicationof this is that organizational design as a policy tool is a matter that deserves moreattention in the strategic discussion both on implementing public policies and onthe suitability of using certain policy tools.

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The project organization as a policy tool in implementing welfare reforms in the public sector