innovations in public governance [electronic resource]

A well-functioning public governance backing up a responsive regulatory framework, high-performing public policy programs, highly productive public service delivery, and high-performing

PUBLIC GOVERNANCE

Innovation and the Public Sector

The functioning of the public sector gives rise to considerable debate Not only the efficiency and efficacy of the sector are at stake, but also its legitimacy At the same time we see that in the public sector all kinds of innovations are taking place These innovations are not only technological, which enable the redesign of all kinds of processes, like service delivery The emphasis can also be put on more organizational and conceptual innovations In this series we will try to understand the nature of a wide variety of innovations taking place in the public sector

of the 21st century and try to evaluate their outcomes How do they take place? What are relevant triggers? And, how are their outcomes being shaped by all kinds of actors and influences? And, do public innovations differ from innovations in the private sector? Moreover

we try to assess the actual effects of these innovations, not only from an instrumental point of view, but also from a more institutional point of view Do these innovations not only contribute

to a better functioning of the public sector, but do they also challenge grown practices and vested interests? And what does this imply for the management of public sector innovations?

Series Editors:

Prof Dr Victor J.J.M Bekkers

Erasmus University, Rotterdam, The Netherlands

Prof Jean Hartley

The University of Warwick, Coventry, United Kingdom

Prof Sharon S Dawes

University at Albany/SUNY, Albany, NY, USA

Volume 15 Recently published in this series Vol 14 A Meijer, K Boersma and P Wagenaar (Eds.), ICTs, Citizens and Governance:

After the Hype!

Vol 13 D Griffin, P Trevorrow and E Halpin (Eds.), Developments in e-Government – A

Critical Analysis

Vol 12 V Bekkers, H van Duivenboden and M Thaens (Eds.), Information and

Communication Technology and Public Innovation – Assessing the ICT-Driven Modernization of Public Administration

Vol 11 M Lips, J.A Taylor and F Bannister (Eds.), Public Administration in the

Information Society – Essays on Risk and Trust

Vol 10 M Veenswijk (Ed.), Organizing Innovation – New Approaches to Cultural Change

and Intervention in Public Sector Organizations

This series is a continuation of “Informatization Developments and the Public Sector” (vols 1–9, ISSN 0928-9038)

ISSN 1871-1073 (print) ISSN 1879-8454 (online)

Innovations in Public Governance

University of Tampere, Finland

Amsterdam • Berlin • Tokyo • Washington, DC

All rights reserved No part of this book may be reproduced, stored in a retrieval system,

or transmitted, in any form or by any means, without prior written permission from the publisher ISBN 978-1-60750-726-0 (print)

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IOS Press, 2011

© 2011 The authors and IOS Press All rights reserved

Preface

Public governance is one of the most important hot topics in the world of

public administration It depicts the profound changes both in government

and public services caused by both external pressures and internal tensions

Administrative and bureaucratic hierarchies are being transformed into

complex settings of public governance Our question in this book is how

these governance processes and structures should be changed in order to

achieve better results from social, political and economic points of view

This is where ‘innovations’, another buzzword of our time, comes into the

picture We provide a contextual view for innovations in public governance

in which the main purpose is to introduce innovations which make a real

difference in public governance

February 12, 2011, in Tampere, Finland and Glasgow, Scotland, UK

Editors

Ari-Veikko Anttiroiko Stephen J Bailey Pekka Valkama

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IOS Press, 2011

© 2011 The authors and IOS Press All rights reserved

Acknowledgements

The editorial team of this book wishes to express gratitude to all facilitators

and partners who have supported our research work and editorial activities

The University of Tampere, Finland and Glasgow Caledonian University,

Scotland, UK provided academic settings for the team The Academy of

Finland and the Finnish Funding Agency for Technology and Innovation

(Tekes) provided funding for members of the team

This book on innovation in public governance is the outcome of the

work done by experts and researchers from the USA and Europe We want

to express our warm thanks to all authors who have contributed to this

book Special thanks go to Professor Mark Bevir of UC Berkeley,

Profes-sor John Zysman of BRIE, UC Berkeley and ProfesProfes-sor Gerald E Caiden of

the University of Southern California, Los Angeles for their collaboration

during the editing process

We would also like to thank Ms Marita Alanko, M.A Virginia Mattila

and M.A Bentley Mathias from the University of Tampere Marita set up

the camera-ready version of the manuscript Virginia and Bentley acted as

language consultants Finally, we would also like to thank IOS Press for

smooth and fruitful collaboration

February 2, 2011, in Tampere, Finland and Glasgow, Scotland, UK

Ari-Veikko Anttiroiko Stephen J Bailey Pekka Valkama

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Senior Researcher, Institute for Strategy and Competitiveness,

Harvard Business School, Boston, MA, USA

Victor Bekkers

Professor, Center for Public Innovation, Erasmus University

Rotterdam, The Netherlands

Professor, School of Policy, Planning, and Development (SPPD),

University of Southern California, Los Angeles, California, USA

Helmut Drüke

Researcher, University of Applied Labour Studies of the Federal

Employment Agency, Mannheim, Germany

Stuart Feldman

Vice President, Engineering, East Coast, Google, USA

Tuula Jäppinen

Senior Adviser, Service Innovation, The Association of Finnish

Local and Regional Authorities, Helsinki, Finland

Peter Klinger

Former Head of the IT Department of the City of Hagen, Germany;

Lecturer, The FernUniversität of Hagen, Germany

Kenji E Kushida

Stanford University; Research Fellow, BRIE, UC Berkeley,

California, USA

Jonathan Murray

Founding Partner, Innovia Ventures, Zurich, Switzerland

Niels Christian Nielsen

Director, Mondaymorning, Copenhagen, Denmark

Innovations in Public Governance in the Western World 1

Ari-Veikko Anttiroiko, Stephen J Bailey and Pekka Valkama

Putting Public Governance Innovation into Perspective: From Administrative

Gerald E Caiden and Pushpinder S Puniha

The New Challenge to Economic Governance: The Digital Transformation

John Zysman, Stuart Feldman, Jonathan Murray, Niels Christian Nielsen and

Kenji Kushida

The Evolving Governance of Public Services in England: Extending Competition,

Stephen J Bailey

Innovation in the Microfoundations of Governance: Explaining the Flaws

in the UK New Labour Government’s Reform of Public Services 89

Gerry Stoker

Reform Begets Reform: How Governments Have Responded to the New

B Guy Peters

State-Level Health Care Reform and Innovation in the United States:

Jennifer F Baron

Networked Public Administration for Better Service: New Production Model for

Helmut Drüke and Peter Klinger

New User-driven Innovation Policy: The Key to Finnish Local Government

Tuula Jäppinen

Mark Bevir and Quinlan Bowman

Three Faces of E-Government: Innovation, Interaction, and Governance 194

Innovations in Public Governance

in the Western World

University of Tampere, Finland

In this book we discuss innovations in public governance Public governance is about

coordination and the use of various forms of institutional arrangements in the

policy-making and related processes to pursue collective interest As this book provides

highlights from two continents and various societal contexts, we pay special

atten-tion to contextual differences and global interacatten-tions The approach applied in this

book can thus be called contextual in the sense that innovations in public governance

are discussed in their societal and political contexts

Introduction

Effective public policies have long been recognized as a precondition for success in a competitive global arena A well-functioning public governance backing up a responsive regulatory framework, high-performing public policy programs, highly productive public service delivery, and high-performing public organizations have become indispensable to any large or small territorial community striving for sustainable economic development and smart growth Just like in the business world, success in public sectors is increasingly dependent on innovativeness and creativity and, thus, on public sector organizations’ transformative and innovative capability Besides such a growth agenda, governments have also started to pursue innovations due to various domestic challenges, such as the provision of high quality services with reduced resources and a need to improve respon-siveness and citizen participation (Alberti & Bertucci 2006)

Proper theorization of innovation in governance is thin in both innovation literature and governance literature (Moore & Hartley 2008), allowing us to conceptualize innova-tion in public governance and approach those innovations in a contextual way This is also

why our interest is not only in innovations per se but also in the conditions in which they

are created Some major contextual changes are quite common in many Western countries but their societal structures and governance systems are different This explains why ap-parently similar global challenges are met with differing responses and why particular public sector innovations have gained ground at the expense of others in a given polity

IOS Press, 2011

© 2011 The authors and IOS Press All rights reserved

doi: 10.3233/978-1-60750-727-7-1

The key concepts and main types of innovation in public governance will be sented and reviewed in this chapter Since the early 1990s, the governance innovation agenda has revolved around New Public Management (NPM), which has been framed

pre-by the overall liberalization trend of our time On the other hand, even if NPM-inspired ern world and have attracted a lot of attention in the current literature, they provide only

a partial view of on-going innovation-intensive public sector transformation What needs

to be taken into account in particular are new forms of public governance that aim at building on consensus orientation and community dimension as a response to side-effects

of business-like and market-oriented governance models Indeed, current developments are characterized by various kinds of underlying tensions that are likely to increase the diversity of responses to the challenges for public governance, the most fundamental being between global instrumentalism and community-oriented localism (e.g Castells 1997) Other similar tensions include market-orientation vs democratic values, techno-optimism vs radical environmentalism, developmentalism vs welfarism and top-down

vs bottom-up perspectives on development processes

As a general term, governance refers to all patterns of rule It is a set of principles adopted

by an organization like a company or a state expressing how to rule and what kind of principles to apply in internal and external stakeholder relations As a concept and a prac-tical system, governance is very old and widely diffused across different organizational contexts, sectors of society and different industries In this respect, corporate governance, global governance, urban governance, internet governance, banking governance, envi-ronmental governance, European economic governance, etc., are illustrative examples of cal concept which can be used in order to develop and carry out abstract analysis of social coordination (Bevir 2010)

Sometimes concepts of both old and new governance are used in public policy ies in order to point out radically different eras of governance According Bevir (2009, 3,

stud-22), in public management studies, old governance refers to bureaucratic and hierarchic

‘golden era’ of the welfare state 1945–1979, people thought that governments take care

of them ‘from the cradle to the grave’ (Osborne 2010, 3; Bailey 2008) New

govern-ance has its origins in radical changes of public policies in the 1980s and 1990s, when

marketization of public administration started gradually and private sector management practices were adopted in public bodies State government is not anymore so superior in society and has to cooperate with other stakeholders in order to promote political goals effectively (Pierre & Peters 2000)

As a general concept public governance refers to a ruling system applied in the lic sector Public governance is a distinct form of rule which is peculiar only for state,

pub-regional and local governments According to Osborne (2010), public governance can be

and without government in order to promote the public interest

New public governance refers to steering, coordination and the use of institutional

ar-rangements in the policy-making and implementation processes in a polycentric sectoral stakeholder context to pursue the collective interest Modern governments need new public governance in order to implement public policies in different sectors of soci-

multi-public governance differ from one context to other Moreover, new multi-public governance

is also developing fast because national and international stakeholders are growing in number and innovations and recurrent policy reforms are changing elements of public governance

Innovation in public governance is a new mechanism or institutional arrangement which is successfully implemented to solve governance problems or to gain better govern- ance outcomes The public sector is keen on innovations because of the endless need for

improve productivity and effectiveness Innovation represents novelty in public action and the art of doing things in a better way than before in public administration Public

or facilitate accountable relationships between the general public and public

administra-1986; Lynn 1997, 7, 86; Altshuler & Zegans 1997, 73; Sapolsky 1967; Wilson 1966; Becker & Whisler 1967, 462–463; Elmore 1997, 248; Moore, Sparrow & Spelman 1997, 276–277)

and informal rules, standards and established traditions are key factors which build up an institutional framework of public policy making and public service delivery These mech-anisms embody a dynamic part of public governance regulating functional and technical factors of governance Differences in and cohesion between institutional arrangements

supervision of enterprises to promote the public interest related to the activities of these enterprises These enterprises are usually privatized former state-owned companies or

a main element of that institutional arrangement Another key element is a regulatory agency which is a public body (for example a quango) whose duties are set down in

legislation Activities of the regulatory agency like supervision, control and authorizing actions, are the ways in which these duties are carried out and the tools used in operative functions are all dynamic elements of the system of new public governance (Hodgson 1988; Hallikainen 2003, 48; Harding & Preker 2003, 25; OECD 1992).

Innovation in public governance represents newness Non-innovative reforms and changes are introduction of old, already well-established mechanisms which may not

easy to evaluate long-term success of R&D and innovations by examining market shares,

same time, disadvantage other stakeholders

The World Bank has developed general governance indicators which judge quality of the governmental system by assessing rule of law, control of corruption, political stability, absence of violence and other such indicators (Bevir 2009, 97) In sharp contrast, there are obvious, acute and challenging needs for public administration studies to develop criteria for and indicators of innovation in public governance Indicators could be used particularly to describe the public sector’s ability go generate, apply and diffuse innova-tions across all levels of administration Assessment criteria are necessary for evaluation

of how new and successful innovations have been These criteria include factors such as satisfaction and ‘creative destruction’ in the Schumpeterian way of thinking However,

a lot more research needs to be done with these criteria before a wider consensus can be built concerning what is the essence of successful innovation (Kallio & Valkama 2009)

The context of innovation

The external challenges faced by governments

The construction of welfare services since the 1960s took place at the same time as the Cold War (between the Western allies and the former communist block) and the heyday of Keynesian economics, which, together with fairly steady economic growth, made it pos-sible to increase state intervention and to expand the public economy Public policy mak-ing did not need the help of other stakeholders in order to pursue nationally-motivated common interests However, when economic growth slowed down and emergence of plu-ralistic economic relations shook up conventional ways of production and trading, the tra-ditional system of governing based on direct government interventions began to struggle Challenges to public governance have their roots in the changing role of the public sector in a globalizing world Globalization is the most pervasive megatrend of our time and it conditions government policies by increasing interorganizational linkages It is a process which embodies a change in the spatial sphere of social relations and econom-

2008, 4–6) Increased market operations, internationalization of trade and emergence of multinational conglomerates are forces, which gradually diminish traditional powers of

political leadership in territorial communities In economic policy, Keynesianism was deemed to come to an end as its ideas of state intervention did not work as expected in the new international economy, the result of globalization of production and increased interdependency (Axtmann 1998; Barnet & Cavanagh 1995; Zysman 2004) However, the general view of these developments is not indisputable For example, Osborne (2010, 2–5) noted that although the reality of public administration is complex, the dominant regime is still based on hierarchy Zuleeg and Martens (2009, 148, 159) have pointed out

Globalization is not only due to technological advancements, improvements of portation systems and cheaper international communication possibilities It is also due

trans-to adaptation of more free-market oriented policies and public support for ship (Graham & Richardson 1997; Brecher & Costello 1994; Barnet & Cavanagh 1995) Regulatory frameworks have been renewed and relaxed in order to support expansion of rights have spilt over national and regional boundaries (Anttiroiko 2009; Maskell et al 1998; Huggins 1997; Castells 1989)

entrepreneur-In many European countries there was a ‘post-war settlement’, which was the nomic, social and political consensus established after the Second World War (1939–1945) between trade unions, employers and governments This was particularly strong

eco-in the UK and the Nordic countries This social contract had its roots eco-in the rise of the working class, the construction of the welfare state and its universal service concept, together with a fairly strong inclination towards political consensus Development of the European single market, breakdown of East-European socialist and communist re-changes preferring market forces to public policy as a means of allocating resources and distributing welfare in society These developments gave rise to the idea of welfare mix, which assumes a transition from largely monopolistic and state-centric public service provision to a broader base of service providers, including private companies, self-help groups, families and voluntary associations It also paved the way for a change in the overall conception of how government should work with its stakeholders and respond

to its environment: crystallized in the phrase ‘from government to governance’ mental bodies started to see themselves network-like government organizations that are

Govern-& Horton 1996, 3–23; Argyriades 2002) This implies that the concepts such as catalytic state, network state and intermediary state aptly depict the very nature of government in

In recent decades, there has also been growing pressure from local communities on the legislature and political elite concerning distribution of political power between dif-ferent levels of government Local policymakers have insisted that there should be more autonomy in localities Central governments agreed to decentralize public duties, increase countries, for example Spain and the UK, political devolution has created new regional layers of government between local and central government The issue has not been so much about strengthening local authorities within existing structures of local govern-

ment, but, instead, to strengthen their governance and service capacity by mergers and extensive cooperation in order to create stronger economic regions These processes have forced governments to learn and adopt new governance systems in order to allow freedom

to grow in localities but, at the same time, create incentives and guidelines for local sion makers and actors

deci-The neoliberal tone of globalization and pro-market emphasis of public policy is not the complete picture As stated by Alberti and Bertucci (2006, 2), when market forces and drastic economic cycles have caused some bitter disappointments people have started

to look back at government and the public sector as a driving force Despite this return

to government, the institution of government cannot remain the same because both its internal structures and external environment are not what they used to be This is where networked government with catalytic and intermediary functions comes into the picture Modern welfare states do not support only disadvantaged members of society but also support entrepreneurship, private sector investments and third-sector activities, which are supposed to generate multiplicative effects and enhance national competitiveness Such modern industrial policies can be seen in how public sector organizations work and inter-act with their stakeholders and customers (Deighton-Smith 2001; Steinert 2003) Some critics have claimed that this kind of ‘growth machine’ orientation has a dominance at the expense of redistributive and solidarity-oriented welfare policies (Logan 1999, 64) This can be seen as a logical consequence of globalization, as there is an apparent need

to increase the attractiveness of countries and local communities regarding the global

(‘welfare-oriented policy’) and developmentalism (‘development-oriented policy’).Figure 1 Examples of contextual factors affecting new forms of governance

From bureaucracy to co-existing governance models

services In all these areas the viability of bureaucratically organized public

administra-Control mechanisms do not work properly Public choice theorists have put a lot of effort into revealing such government failures A new agenda was set by Osborne and Gaebler (1992) with their idea of ‘reinventing government’ Its main message was to help us see government in a new light They propagated a transition from a bureaucratic culture to-wards entrepreneurial government which, in essence, is high-performing, business-like and enabling government (Osborne & Gaebler 1992; Osborne & Plastrik 1997)

Historically, the basic theory to describe government’s way of working was the ory of bureaucracy derived from the work of Max Weber In more recent theorization, traditional public administration has been seen as governance by hierarchy which is one

the-there was a need to control multi-faceted principal-agent relations with special reference

to the control of the allocation of resources; second, the need to safeguard accountability, impartiality and civic rights and also some degree of popular control over public policies and their implementation The main ethos was thus based on control orientation rather potential mismanagement within which public policies were designed and implemented cal change in the societal context of public administration after the development of liberal democracy The new paradigm itself is an expression of the conviction that bureaucratic, incrementalist and particularistic managerial functions should be superseded by a more economics-based, rational and generic model (Farnham & Horton 1996, 37, 43)

still the key governance body at all institutional levels (Caiden 2007, 264) It serves to maintain the legitimacy and democratic control of the system As emphasized by John (2001, 17), local governance will not replace the established institutions (laws, municipal budgets, political parties, etc.) of local governments Yet, as emphasized earlier, this does not mean that the role of public administration remains unchanged Besides, even if the main target of criticism of public administration is associated with the fundamental idea and practices of bureaucracy, there have been also some apologies for bureaucracy It is not necessarily a Weberian relic that is giving way to networks, partnerships and market mechanism, as the simplistic historical extrapolation suggests

What is essential to note here is the fact that the picture of modes of governance is not

as black-and-white as it may appear Rather, different forms of governance can be found side-by-side in different settings (cf Caiden 2007, 262) In this picture bureaucracy, as the rational implementation of commonly-accepted principles, is an integral part of the functioning of modern society (Olsen 2004) We live in the new phase of a political-

is understood today in a pragmatic way and its rationality is gaining new dimensions way to describe the model of public governance because a large part of publicly-organ-ized services and activities is not based on hierarchically-organized in-house production

As pointed out by Olsen (2004, 14), bureaucratic public bureaus co-exist with cial organizations and network-organizations because they are supplementing as well as

commer-competing with each other Such a governance mix is a result of increased pluralism and

widening reform horizons and which creates stimulating environment for innovations in public governance

Politicians, bureaucrats and people as innovators

As public governance is about the steering and coordination of stakeholder relationships

in the context of public policy, it is important to consider the roles of key actors in public governance and related innovation processes Key actors in the representative system of government are people as electorates and their political representatives who have a man-date to make formal political decisions within the given polity Civil servants or ‘bureau-crats’ are needed to implement those political decisions In such a setting, different roles tend to lead to different approaches to innovation It seems that the most active innovators within public administration are middle managers and front-line staff (Borins 2001) This

is rather surprising in that the standard model of public bureaucracy does not encourage innovativeness and entrepreneurship in order to ensure duly regulated processes and to minimize corruption On the other hand, there is increased autonomy and capacity to in-novate in modern bureaucracies In addition, it is worth noting that the smaller the local authority, the more frequently initiators of innovative actions are politicians and high-level public managers

Another important observation in the literature on innovations in the public sector is that actors’ positions and roles affect the motives for innovation For example, politicians internal problems or take advantage of technological development (Borins 2001) As to the fundamental reason behind innovative actions in the public sector, the most frequent cause seems to be internal problems faced by public organizations, as in the cases of

that threatens the existence or the realization of the main mission of the organization (Borins 2001, 15)

citizens, customers, and users – in the governance of public affairs and in the ment of public policies and services These innovations range from fairly widely applied innovations in planning and participation to more focused customer involvement and new forms of open and user innovation (von Hippel 2005; Chesbrough et al 2006)

develop-From governance theories to governance innovations

Governance theories as a window to innovations

Theoretically speaking, we can distinguish four fundamentally different approaches to public governance as depicted in Figure 2, which includes the connections of those ap-proaches to their ideological foundations:

    – use of market mechanisms and business-like trading of

public services favoring the idea of wide participation of private sector tions;

organiza-    – improving productivity and a clear orientation

to-wards corporate-style result-based management

      – strong reliance on public authorities, public-public

col-

of community governance and grassroots democracy

Figure 2 Perspectives of governance theories on innovations

  #$ Here, there is a tendency to see public administration as akin to a

business, providing a choice of services to citizens with the help of a market mechanism and capitalism Market-based and entrepreneurial approaches have absorbed ideas from

a range of ‘New Right’ ideologies, doctrines and theories which profoundly affected the intellectual and ideological landscape They became an integral part of political life and provided powerful arguments for radical neoliberal public sector reform Such contribu-tions include both old and more recent theorizations, such as classical liberalism (Adam Smith), the Austrian School (Ludwig von Mises, Carl Menger, Friedrich von Hayek), public choice theory (James Buchanan, Gordon Tullock, William Niskanen, Mancur Ol-son, Vincent and Elinor Ostrom), monetarism (Milton Friedman) and to some extent also neoclassical economics in general

The common denominator of this tradition is that market-based coordination and entrepreneurship, as well as customer choice, is given priority over collective decisions and actions Most of the supporters of this market-based approach to governance prefer a minimal state paradigm and, at least in the case of public choice theorists, also a decen-side of the coin is that equity and the redistributive side of public policy pursuing social criticized by those who claim a stronger role for government Such dissent concerning fundamental values and government’s role in society correlates to some extent with the sectors report the best economic performance while countries with large public sectors show more equal income distribution (Afonso et al 2003)

 #$This is associated with New Public Management (NPM),

which is disputed and its newness questioned NPM is a wide collection of the growth of the public sector and break barriers between the private and public sectors (Hood 1991; Bevir 2007, 368–369; Olsen 2004) NPM-inspired public sector reforms are contracts for the provision of public services by private companies, quasi-marketization, private funding of public infrastructure, output and budgetary targets, performance au-dits and, especially, the utilization of corporate management techniques These corporate management techniques have close connections with a range of innovative management techniques which have their roots in the early 20th

multipur-erations research, group problem-solving, management by objectives, SWOT analysis, excellence theorizations, strategic windows, Balanced Scorecard, Total Quality Manage-ment [TQM], etc.)

Many OECD countries (e.g USA, Canada, UK, Australia, New Zealand, Sweden, Finland and Denmark) introduced extensive but locally-customized NPM reforms during the 1980s and 1990s Based on these changes, we may even claim that NPM has been

the most innovative public management doctrine in the public sector in the past few

de-cades as it has been the framework within which were introduced many of the then ‘new’ management techniques that are now in everyday use Nevertheless, NPM has been much criticized and some new authoritative conceptions claim that NPM was a short-lived and intermediate phase in the development of public administration (Osborne 2010, 2) This criticism may be due to the many macro-level problems, such as serious market failures

that international organizations were not able to correct (Kaul & Conceição 2006) and, more importantly, numerous micro-level problems, such as those relating to the imple-mentation of Public-Private Partnerships (El-Gohary et al 2006) and contract failures

in local government (Warner 2006; Lamothe & Lamothe 2006) One of the reasons for micro-level problems is that, as a reform agenda of the 1980s and 1990s, NPM was fair-force through a top-down restructuring within local agencies Such a policy neglected the bottom-up and lateral components of public governance (Ferlie & Steane 2002, 1461) Such criticism has gradually changed NPM itself and also stimulated discussion about its alternatives

Stakeholder Relations This third approach to public governance is an

institutional-ist or governmentalinstitutional-ist approach New Public Governance highlights the role of

govern-New Public Service is a more recent approach which focuses on how to realize the

col-lective public interest in providing public services to citizens and other target groups

Its theoretical foundation is public value theory which is to reconnect the public and its

values with public managers through a democratic process of deliberation and public 1995) The proponents of this approach thus believe that there are considerations that factor in decisions and also in service provision They see the role of the administrator

as complex, synthesizing the needs of citizens, interest groups, elected representatives and other stakeholders in a polity (Denhardt & Denhardt 2000; Moore 1995) Such an approach has a close connection with network governance theories, and many similar governance-related theorizations These all also connect with user involvement and citi-

izen-centric approach, which relies more on direct citizen power A representative case

of more radical citizen-oriented approaches is communitarianism, which starts from the

conviction of the importance of community in the functioning of political life, in the analysis and evaluation of political institutions, and in understanding people and their

orientations Some forms of the social capital approach are closely related to this

orien-tation Putnam (2000) in his seminal work, shows how Americans have become ingly disconnected from one another and also how social structures have disintegrated, as seen in institutions ranging from churches to political parties The other side of the coin is

increas-to see social capital as a producer of civic engagement and also as a broad societal sure of communal health Such community and citizen-oriented approaches emphasize synergy between citizen participation and governmental effectiveness, placing attention

mea-on the former in the policy process (Skocpol 1996)

It goes without saying that many of these normative stances have a lot in common, ertheless their categorical differences are rooted in their perceptions of coordination and decision-making in the public domain: 1) market orientation, 2) managerial performance orientation, 3) political-administrative system, or 4) direct citizen power

Around the mid-1990s, American political, business and professional elites erately pulled out of locally-rooted associations and activism and caused a high degree

delib-of local civic disengagement (Skocpol 1996) These elites argued that less privileged Americans must themselves reinstate social connectedness from below without much help from government or their privileged fellow citizens Very similar discussions can be tion and decentralization trends and of elitism and democracy Innovations in governance tion processes favor managerialist innovations and ‘harmless’ democratic innovations in public governance, whereas bottom-up social movements and activists favor more radical emphasis has clearly been on the side of the former

Managerial and democratic dimensions of governance

Finger and Langenberg (2007) characterize governance as the growing involvement of cation of the connection between government and its broader environment (Grönlund 2007) All such relationships of public organizations with the external environment can

be constructed following managerial or democratic principles providing a dichotomous view of public governance and also a sketchy perspective on the application areas of governance innovations

Democracy has an inherent connection to governance, because government-citizen

interaction is at the core of public governance, sometimes referred to as democratic

gov-ernance This aspect of governance is rooted in democratic control, inclusiveness and

the forms of citizen participation The other side of governance, here called managerial

service provision, development, procurement and transaction processes, relying mainly

on networks, partnerships and competitive outsourcing These concepts are schematically illustrated in Figure 3 (Anttiroiko 2008)

Figure 3 Typologies of innovation in public governance (Anttiroiko 2008)

Analyzing innovation in public governance

Innovation in public governance focuses on the ‘public domain’ to solve problems or to create new opportunities and, in recent decades, has led to an increase in market- and network-oriented forms of governance, such as vouchers, citizen charters, competitive novation networks

Innovation in public governance is fundamentally distinct from innovation in products

and process, the latter usually being the focus of discussions in the innovation literature (Moore & Hartley 2008) In particular, governance innovations tend to:

ˆ +  @  $   ... Guido (2006) Replicating Innovations in Governance: An Overview In: United

Nations (Ed.) Innovations in Governance and Public Administration: Replicating what works, 1–21... reorganization, process improvement, Business Process Redesign

Innovation in public governance in the foreseeable future

Innovations in public governance seem to focus on two aspects... co-creation of public value, service innovation becoming increasingly endogenously dynamic as distinct from simply being exogenous add-on static service-silo innovations

Some innovations