DgerenL IVqs Lo T t ~ i n k about Govmnancc 15

and economic institutions that have been created over time is that esigned (or evolved) to address problems of governance.

of the four structural arrangements we be discussing oblem of providing direction to society and

Different Ways to Think ay. Each appears effective in solving some problem, but each also has its weaknesses. lutions' is bound in cultural and temporal

about Governance ' rms so they may be effective in some places and at some times, but ay not be a panacea for all problems.

ernance as hierarcf~ies

mance conducted by and through vertically integrated state alized model of democratic government and the

Governance can be a confusing term. It has become an umbrella e bureaucratic sphere, the Weberian model concept for such a wide variety of phenomena as policy networks e characterized most of the advanced western (Rhodes, 1997), pb l i c management (Hood, 1990), coordination e than a century if not longer. This was essen- sectors of the economy (Campbell el al., 199 1 ; HoUingsworth et ale, governance by law; instead of bridging the public-private 1994), public-private partnerships (Pierre, 19984, corporate gover- overnance strictly upheld that distinction. The nance (Williamson, 1996), and 'good governance' as a reform obJec- s the epitome of the collective interest - was tive promoted by the World Bank and'the IMF (Leftwich, 1994). from the rest of society but governed Furthermore, there is a tendency to confuse governance as an law and other forms of replation, Other empirical phenomenon with theories about how this phenomenon were also entangled in a hierarchical system

operates and can be understood. mand and control. Subnational governnlent enjoyed some

Given the confusion about the term, we need to examine of autonomy but the state never surrendered its legal and evaluate the different ways to think about governance and the over these institutions which, while 'autonomous', different definitions of that concept existing in the contemporary creatures of the state. Thus, hierarchy characterized both political science and economics literature. Chapter 2 d l address exchange with society as well as its internal organization these issues in more detail. Here we will discuss governance as struc- ture and process. We begin with four common governance arrange- ch of the current governance literature is dismissive of hier- merits that have existed historically as well as at present: hierarchies, as a model of governance. Hierarchies, critics contend, were markets, networks and communities. In addition We will discuss gov- titutional order in the days of standardized ernance as the processes of steering and coordination, which are ces, a 'Fordist' economy, domestically controlled markets two dominant dynamic perspectives in the current literature. led state strength. With most of these factors profoundly

ered, SO must hierarchies fall, the argument goes. The emphasis is instead on smaller scales, flexibility, diversification, informal

Governance as structure ange rather than formal control, and 'sharing power' between Kettl, 1993) rather than maintaining a strict divi-

we begin by thinking about governance in structural terms. etween the public and the private.

That is, one reasonable assumption about the variety of political ther along this argument, western society is said to be

14

1 6 Perspectives on Governance Lhferent W q s to Think about Governance 17

becoming increasingly horizontal (SOU, 1990:44). N was an attractive target for organized bringing together a variety of actors are emerging as increas they controlled vast economic resources. powerful coalitions of interests. Such networks are somet considerable economic and fiscal prob- said to be powerful and cohesive enough to sustain pres nd hence are less interesting in the eyes of most societal the state and to perform an autonomous regulatory role within t Societal actors may indeed now invest more effort in sector (Rhodes, 1997). While some of these accounts of olvement with the state than in pursuing such involve- works may exaggerate the powers and capabilities of these ts as they may have at one time. That having been said, tions, it nevertheless suggests that hierarchies no longer reflect ever, there are still areas of economic and social action in which relations in society. Governance, so the argument goes, must rnment remains a crucial actor. fore depart from another model of social and political organiz a keystone argument against hierarchies as a mode of The hierarchical state is believed to be 'too big to solve the ce holds that cities and regions are acquiring more effective problems in life and too small to solve the big problems' (Bell, e state. To some extent, this process

Also, the state is said to be too weak to maintain the same con ate-driven decentralization which has it exercised only a couple of decades ago. This is partly due to advanced democracies, such as France, shrinking resource base of the state and partly because of chang an countries and the Netherlands in the state's external environment. The globalization e, 1988; Smith, 1986). In addition, in regions like Quebec in and other markets during the 1990s has to a considerable a and Catalonia in Spain, ethnic and cultural sentiments have reduced the state's control over its economy. The more an instrumental role in driving demands for increased nature and extent of the changes brought about by globalizat 1996). The argument goes beyond this topics of a heated current argument (Boyer and Drache, 19 olitical power, however, and asserts that subnational Camilleri and Falk, 1992; Evans, 1997; Hirst and Thompson, 1996 re becoming the most appropriate form of political Scott, 1997). It is difficult to argue that nothing has changed, but it ation in the 'post-strong-state society'. is also easy to assume that everythmg has changed, so this debate tional wisdom has to a large extent become the cri- must be considered carefully. against hierarchies, but dismissing formal hierarchies as

Critics of the globalization thesis argue that states have responded rnance is unfortunate, for several reasons. First of to the market globalization by developing transnational institutions opment towards 'horizontalization' of and organizations which exercise effective control over the deregu- s - and indeed of political life more lated markets, such as the EU or the WTO (Helleiner, 1994; Mann, een a spontaneous and organic development which 1997; Peters, 1990; Strange, 1986). However, the leverage which onfirmed by changes in legal and constitutional these transnational institutions control is to a significant extent sur- discrepancy between these frameworks and actual rendered by the nation states. Therefore, the emergence of transna- and institutional behaviour cannot be sustained over an tional institutions tend to pull in the same direction as globalization to the extent that they reduce nation-state sovereignty and hierarchies is the benchmark against autonomy. As will be argued later in this book, however, linkages erging forms of governance and we upward towards transnational governance institutions and down- e the nature of hierarchical governance in ward towards subnational government should be more thought of as e current literature on governance there is state strategies to reassert control and not as proof of states surren- dency to equate traditional modes of governance with a sterile dering to competing models of governance. on political institutions and their exchanges with the sur-

In addition, actors in the state's environment are said to be ~ounding society, and reserve the concept of governance for the new increasingly reluctant to conform to the state's interests and objec- or emerging forms of such exchange. We believe this to be an unfor-

18 Perspectives on Governance Dflerent W q s to Think about Governance 19

tunate way to think about governance. Governance, strictly define not allow for politics to allocate resources where they are not is as old as government. What is novel - and what is the overarch in the most efficient way. theme of this book - is recent changes in governance. For th s are also believed to empower citizens in the same way as reasons, hierarchies should be thought of as one of se rclse powers as consumers. Instead of having elected officials modes of governance. It is not likely to disappear in the fores may or may not be responsive to their constituencies - make future although it is increasingly being accompanied by other ns about what services the state should provide and at what of governance. a market-like situation for such services allows

Finally, governance through hierarchies still to choose directly, hence the final say on public services rests role in a surprisingly large number of national and ins texts. In Britain, state-local relationships remain contested f the market has many different meanings in the politicized and central government still exercises ance. One understanding of markets is that of a control over local authorities (Goldsmith and Newto mechanism, or, more broadly, the employment ideas of the Labour government, for example the in onetary criteria to measure efficiency. In its idealized form, audits (Power, 1997), are tending to centralize power even m er elected officials nor managers actively make any detailed Similarly in Germany, although the federal govern isions are made within the framework of over- drawn some control over public services, d o regional and local control (Derlien, 1995), it is ning of markets in the governance context is as federal government, if it so chooses, can resume such d mic actors. Here, governance emerges as a problem powers. In Japan, a growing interest in local government is consi se of the atomistic and anonymous nature of the market and ered fprogressive' and a 'politics of participation' (Muramats If-interest which is typical of economic theory gen- 1997:6) because it challenges the hegemonic power of th it cannot resolve problems and needs which all state. Even in the Scandinavian countries where local gove hich no one can see an economic incentive in and local autonomy have always been extensive and have lly Governance, here, refers to various mecha- increased over the past decades, the state retai conomic actors can cooperate to resolve common through legislation and grants. Thus, hierarchi distorting the basic mechanisms of the market. important role indeed in the political and ins need to be aware of the difference between markets as a gov- of the advanced western democracies. It co ce mechanism and the governance of markets. In the latter zontal networks are becoming more important b , actors in markets, although they compete against each other, significant than the hierarchical relations between inst ordination. Companies in an industrial sector, actors. need for coordination in order to have some

ective control over prices, foreign competition and production Governance as rnarhts umes (Hollingsworth et al . , 1994).

If our image of hierarchies is that of prematurely dismissed struc- emance as networks tures of governance, then the contemporary image of markets is almost the opposite. The market as a governance mechanism is very t familiar forms of contemporary governance is much in vogue, indeed so much so that it is probably believed to be ch networks comprise a wide variety of actors - the solution to more problems than it can resolve. The market has organized interests and so on - in a given policy come to be seen as everything Big Government is not; it is believed or. Networks vary considerably with regard to their degree of to be the most efficient and just allocative mechanism available since esion, ranging from coherent policy communities to single-issue

20 Pm~echues on Governance Dgerent Ways to Think about Governance 2 1

(or issue-specific) coalitions (Rhodes, 1997). Policy networks facili nce as communilies

coordination of public and private interests and resources and that respect, enhance efficiency in the implementation of pu model of governance which has generated a great

policy. ebate in the social sciences over the past decade or so

Networks are by no means novel features of contemporary polit ts from the socio-economic homogeneity and common inter-

ical life. 'Iron triangles' and 'policy communities' comprisin hich characterize small communities and raises the question of

with common interests in given policy sectors have been reported overnment is at all required to resolve common problems.

a couple of decades (see, for example, Jordan, '1981, 1990 is that communities can - and should - resolve Similarly, the state has always had some form of continuou on problems with a minimum of state involvement. Care

exchange with key actors in their environment, either in the form o and the elderly, the argument goes, is better and more

corporatist models of interest representation or on a mor ore or less spontaneously at the community

level. What is more novel, however, is that - in the extreme form r perspective, communitarian governance builds

these networks are said to have become sufficiently conce consensual image of the community and the positive involve-

cohesive to resist or even challenge state powers; they are e of its members in collective matters. The state - or, for that

self-regulatory structures within their policy sector (M ment - is believed to be too big and too bureau-

Rhodes, 1992). hese issues. More importantly, communitarians Networks in the 'new governance' thus regulate and coordinate ent which emerged as an instrument for the

policy sectors more according to the preferences of t of political conflict now breeds or encourages such

involved than with consideration to public ~olicy. There are over matters which in and by themselves are not controver-

important consequences of such governance. Public policy b us for communtarians government generates at least as many

shaped more by the interests of self-referential actors in the networ t resolves. The communitarian solution to this problem

than by the larger collective interest. Furthermore, policy change nce without government.

initiated by the state d be obstructed by the networks which try to ommunitarian view on governance is sup-

insulate the policy sector from cut-backs. In addition, while networks those who think that there is too much and by those

effectively control the policy sector, citizens still hold the state is too little government. For the former, communitar- accountable for what happens in the sector. Networks, in this per- active alternative to having government at different

spective, short-circuit the democratic process by separating control ecide on matters which are better resolved by members of

and responsibility. mmunity whereas for the latter it is a means of introducing

The relationship between the networks and the state could b sense of collective responsibility into the community. described as orie of mutual dependence. From the ~ o i n t of view o munitarian governance seems to resolve common problems

the state, networks embody considerable expertise and interest rep- foster a civic spirit in the community without breeding large

reskntation and hence are potentially valuable components in the cies. It is a political theory which purportedly has

policy process. However, networks are held together by common standpoint between the state and the market. It

interests which tend to challenge the interests of the state. The s both of these models of governance.

development from government towards governance - the decreasi is view on what the members of a community can accomplish

reliance on formal-legal powers - has clearly strengthened the po acting in a humane, concerted and enlightened way may

tion of the policy networks. One of the dilemmas of the r overly idyllic and philanthropic and, much as we regret to

rary state is that while it needs networks to bring societd ac great extent it is bu t see Etzioni, 1995). Individuals have

joint projects, it tends to see its policies obstructed by th uently proved to be less inclined to make personal sacrifices to

works. common good than communitarians would like to think they

22 Perspectives on Governance Dflerent Wys to Think about Governance 23

are. Also, for all its consensual virtues, communitarian governance has problems enforcing the common wiU on those who oppose spe- cific proposals to that effect. Most importantly perhaps, communi- tarianism tends to exaggerate the blessings of consensus and the evils of disagreement; conflicts over specific issues would not be seen as something negative but rather as something refreshing by most observers of local politics. In Chapter 7 we will discuss this approach to governance in much more detail.

Dynamic views of governance

The above four ways of thinking about governance have empha- sized the impact of structures and institutions. The assumption is that if you want to get governance 'right' you need to manipulate the structures within which it is presumed to be generated. The alter- native assumption is that governance is a dynamic outcome of social and political actors and therefore if changes are demanded then it is those dynamics that should be addressed. This view, like that of the structuralists, provides some insights into governance but also leaves some aspects in doubt.

Governance as process

The governance approach is often argued to focus more on process and outcomes than on formal institutional arrangements. This is largely because governance, with its encompassing and contextual approach to political behaviour, often is less concerned with institu- tions than with outcomes (Peters and Pierre, 1998). However, institu- tional arrangements remain important not least because they determine much of what roles the state can actually play in gover- nance. Even so, thinking about governance in a process perspective is important because governance is not'so much about structures but more about interactions among structures. We should expect gover- nance to be dynamic with regard to both configuration and objec- tives: the inclusion and influence of different actors could well change over time and across sectors.

There seems to be an increasing interest in many countries in altering the policy process. For instance, a number of western

democracies are experimenting with new models of policy consults- n. Such experiments include citizen engagement in the policy iberation process, an increasing reliance on consultants and think ks, and websites where anyone can present their views on public

policy (Pierre, 1998b). At the same time, traditional models of interest representation seem to have been weakened over the past decade or so, arguably as a consequence of the fiscal crisis of the state. For these reasons, perceiving governance as a dynamic process is essential: we need moving pictures more than snapshots.

vemance as steering and coordinating

he conception of governance as 'steering' is at the heart of much current research in governance in different subfields of polit- ience (Pierre, 2000). Lexicographically, 'governance' derives

om.the Latin 'cybern' which means 'steering', the same root as in emetics', the science of control. (For a political application, see tsch, 1963.) The notion of the state as 'steering' society is still al to theories of governance (see, for example, Kooiman, 1993,

9). What is at issue here, however, are two related problems. t, the governance perspective typically argues that states are still

deed capable of 'steering' society, only now its authority is less ed in legal powers and more due to its control over critical

sources and its Gestalt of the collective interest. The second ques- is towards what objectives states can 'steer'. Much of the gover-

literature has been fairly quiet on who defines the objectives rnance; its main concern has been with the relationship

n the actors involved in governance. ernance sometimes refers to coordination of a sector of the

or of industry (Hollingsworth et al., 1994),. and sometimes process through which a government seeks to proactively the economy (Gamble, 2000). In either of these manifesta- governance is still being considered in a dynamic manner,

to understand how actors, public and private, control eco- tivities and produce desired outcomes. Both views see gov- as having a central role in producing economic outcomes

elping to manage the tensions of modern economies in the

24 Perspectives on Governance D@erent W q s to Think about Governance 25

Analytic framework analysis because the state, despite persistent the contrary remains the key political actor in society

Finally, we can move from more output-oriented predominant expression of collective interests. We believe nance to consider it strictly in intellectual terms. That .role of the state is not decreasing as we head into the third being 'something', governance is a way of viewing the worl but rather that its role is transforming, from a role based tics and government. It makes us focus attention on th stitutional powers towards a role based in coordination and happen and the ways in which they happen. By. so doing resources (Evans, 1997; Payne, 2000). the study of politics away from formal concerns ahd to some e g globalization challenges the traditional returns us to the classic question raised by Lasswell (1935) - ' not necessarily a threat to the nation state gets what?' es have proved to be surprisingly resilient and innovative

enges, for example financial constraints, Governance as ana~ticuljamework sts or even political protest and legitimacy

ould expect to see various forms of transnational coop- A common source of confusion in the governance literat ecome increasingly important as markets become global. ,between governance as phenomenon and governance eess of state reorganization as a response to changes in their analytical framework. It is unfortunate, in some ways, environments is about as old as the state itself and we nance has been given this dual meaning. Much as we are awar of any reason why that process would not continue. this problem, we acknowledge that the concept may be given unportantly, however, we argue that in order to be able to ferent meanings in different contexts. Unfortunately in e full nature of governance and its effects on the new concept to replace that of governance in one of the two me d structures and processes of power and control in society, ings is hot a viable strategy depart from the state of affairs before these challenges

The analytical framework in theories of governance differs . We have already discussed the dangers in dismissing the several important aspects from traditional political science fr source of political authority and financial resources. works. In governance theory many political science postulates ing the causes and consequences of governance requires cerning political institutions and their capacity to of 'benchmark' against which these changes can be accepted at face value. The extent to which they most obvious 'benchmark' in such an analysis is the powers is, we argue, largely a matter of context. it was prior to the emergence of the contemporary interest science has a natural interest in political power and a such power rests exclusively with political structures, transformations in the role of the state are a key research theories are more wary of political power as a bas for political scientists. Approaching the state in a gover- Instead, in governance, leverage is frequently derived fro ive helps us understand the new or emerging roles of neurialism and political skiU. Different forms - or modes - of governance will charac-

e pursuit of collective interests in the foreseeable future more than alternative forms of the exercise of formal, consti-

The importance of governance a1 powers. The gradual shift from 'government' towards gov- ce has significant ramifications both within the state (see, for

The perspective on governance outlined in this book is and Savoie, 1995; Peters and Pierre, 1998a) and its the state: on its role in governance and how the emergence unding society (Rhodes, 1997). This book challenge of governance affect the state in different respects. to stimulate our thinking about these changes and how we are choice of analytical perspective is not chosen arbitraril

26 Perspectives on Governance @&rent Wys to Think about Governance 27

process and outcomes: the state as independent and depen- The alternative research stratem - looking at the state as the dent variable e~endent variable' - raises questions about how the emergence of

overname alters the powers and capacities of the state. The As mentioned earlier, this book considers governance from a state- easing reliance on various forms of public-private coordinated centric perspective. Some might object that if one of the defining ects, or on v~luntary forms of joint action with subnational gov- characteristics of governance is the downplaying of the state in the men4 or the challenges posed by transnational forms of gover- pursuit of collective interests, focusing on the state is an ziwkward ce, put tremendous straili on the institutional arrangement of approach. However, in order to understand'he role of the state e state and the management of these institutions (Kooiman, which, we see emerging in various modes of governance, and before 93). This is primarily because political institutions are signihanrly dismissing the state as a leading actor in this governance, we must nstrained by the 'due process' and can not move financial have a clear picture of the historical role of the state. The state- urces as easily as corporate actors. While public-private partner- centric perspective allows us to look at the'state as either the inde- aim precisely at granting institutions such discretion, this is pendent or the dependent variable. In a less positivist language, we used as an q u m e n t against such partnerships (Keating, 1998; can look at the state either as a cluster of factors which explain gov- rs, 1998d). Thus, while partnerships may be a comfortable way ernance, or we can observe how emerging modes of governance increasing the state's points of contact with the surrounding

' affect the state in different respects. etY it also feeds back into the state apparatus and causes strain

In the f ~ s t perspective the role of government in governance is, in een the 'due process' and the need to be as flexible as the other fact, one of the key aspects of governance. The role of the state governance can vary from being the key coordinator to being one the state to be able to engage in different forms of gover- several actors. To be sure, we can think of governance many of the traditional models of public sector command processes in which the role of the state is close to non-existent. Also, nt1-01 need to be replaced by more relaxed and decentralized as subsequent chapters will discuss in detail, the role of the state in ement models. Furthermore, the extensive decentralization governance derives to a significant extent from the role which th a-es which have been implemented in a large number of state has played historically in society and the institutional stren democracies over the past decades have helped facilitate of the state. rice at the local level. Even if the traditional assumptions are

The role which the state plays in governance depends on a lar ed, we should remember that it is still the state which is the number of factors such as the historical patterns of regulation

of the particular policy sector; the institutional interes o u s l ~ whatever perspective on the state we choose, it is ,-Iear maintaining control; the degree to which governance requires 1 en it is observed over time we need to incorporate elements and political authority; and the strength of societal organizations approaches. The role which the state can play in future gov- networks. ,The actual role which the state plays in governance is 0 e is to a considerable degree explained by how past gover- the outcome of the tug-of-war between the role the state wants as impacted on the state and its institutions. play and the role which the external environment allows it to play. the economy literature on governance we find several ex pies of persistent self-regulation of market sectors and a co interest among corporate actors to minimize state presence in governance of industrial sectors (Campbell et al., 199 1 ; Hollingswo el 1994). Similarly, the network approach to governance substa ates the capacity of cohesive networks to fend off state interests in governance of policy sectors (Marsh and Rhodes, 1992).