Trust: the key to social cohesion and growth in Latin America and the Caribbean

Trust is the most pressing and yet least discussed problem confronting Latin America and the Caribbean. Whether in others, in government, or in firms, trust is lower in the region than anywhere else in the world. The economic and political consequences of mistrust ripple through society. It suppresses growth and innovation: investment, entrepreneurship, and employment all flourish when firms and government, workers and employers, banks and borrowers, and consumers and producers trust each other. Trust inside private and public sector organizations is essential for collaboration and innovation. Mistrust distorts democratic decision-making. It keeps citizens from demanding better public services and infrastructure, from joining with others to control corruption, and from making the collective sacrifices that leave everyone better off. The good news is that governments can increase citizen trust with clearer promises of what citizens can expect from them, public sector reforms that enable them to keep their promises, and institutional reforms that strengthen the commitments that citizens make to each other. This book guides decision-makers as they incorporate trust and social cohesion into the comprehensive reforms needed to address the regions most pernicious challenges.

Trust: The Key to Social Cohesion and Growth in Latin America and the Caribbean (Executive Summary)

Trust is the most pressing and yet least discussed problem confronting Latin America and the Caribbean. Whether in others, in government, or in firms, trust is lower in the region than anywhere else in the world. The economic and political consequences of mistrust ripple through society. It suppresses growth and innovation: investment, entrepreneurship, and employment all flourish when firms and government, workers and employers, banks and borrowers, and consumers and producers trust each other. Trust inside private and public sector organizations is essential for collaboration and innovation. Mistrust distorts democratic decision-making. It keeps citizens from demanding better public services and infrastructure, from joining with others to control corruption, and from making the collective sacrifices that leave everyone better off. The good news is that governments can increase citizen trust with clearer promises of what citizens can expect from them, public sector reforms that enable them to keep their promises, and institutional reforms that strengthen the commitments that citizens make to each other. This book guides decision-makers as they incorporate trust and social cohesion into the comprehensive reforms needed to address the region's most pernicious challenges.

Managing competing institutional logics in governance of public-sector entities in Tanzania

PurposeThe paper aims to investigate how the governance practices of public-sector entities (PSEs) in Tanzania are shaped by competing institutional logics and strategies used to manage the logics.Design/methodology/approachIn the paper, empirical evidence was gathered through documentary sources, non-participant observations and in-depth interviews with members of boards of directors (BoDs), chief executive officers (CEOs), internal and external auditors, senior executives and ministry officials. The data were analyzed using thematic and pattern-matching approaches.FindingsThe paper shows that bureaucratic and market logics co-exist and variations in governance practices within and across categories of PSEs. These are reflected in CEO appointments, multiple roles of CEOs, board member appointments, board composition, multiple board membership, board roles and evaluation of board performance. External audits also foster market logic in governance practices. The two competing logics are managed by actors through selective coupling, compromise, decoupling and compartmentalization. Despite competing logics, the bureaucratic logic remains dominant and is largely responsible for variations between the underlying logics and governance practices.Practical implicationsThe findings suggest that public-sector reforms in emerging economies (EEs) must account for the fact that governance practices in PSEs are shaped by different institutional logics embedded in socioeconomic, political and organizational contexts and their corresponding management strategies.Originality/valueFew previous studies explicitly report relationships between institutional logics and the governance practices of PSEs in EEs. The current study is one of few empirical studies to connect competing institutional logics and the associated management strategies, as well as governance practices in EEs in the context of public-sector reforms.

The top-heavy shape of authoritarian bureaucracy: evidence from Russia and China

The prevalence of top-heavy bureaucracies in non-democracies cannot be explained by the theories of Parkinson, Tullock, Niskanen, or Simon or by classical managerial theories. When bureaucracy positions carry rents, the competition for promotion becomes a rent-seeking process. Borrowing the career-tournament theory framework from managerial scholarship, we argue that top-heavy bureaucracy resembles a tournament with too many finalists. When rent is centralized at the top (i.e. power centralization), as is the case in many non-democracies, the optimal bureaucracy should be top-heavy, accommodating and encouraging relatively more finalists at the top to compete for the final big prize. We provide suggestive evidence by analyzing ministry organizations in China (1993–2014) and Russia (2002–2015). After some fluctuations, the shape of Russian ministries eventually converged with that of China. In the steady state, their ministry shapes are far more top-heavy than what is prescribed by managerial theories. At the micro-level, ministry power centralization, measured by the perceived influence of the ministers, is correlated with ministry top-heaviness in Russia. Points for practitioners Our theory suggests that a top-heavy authoritarian bureaucratic structure naturally follows from a back-loaded sequential career tournament and an effort-maximizing bureaucratic leader. Our findings also suggest that Chinese and Russian ministries both converge to a highly top-heavy structure in the long run. We demonstrate that the top-heavy structure first arose during the planned-economy experiment in the Soviet Union. Our research sheds new light on public-sector reforms that aim to reduce bureaucracy top-heaviness in autocracies.

Neoliberal failures and the managerial takeover of governance

The history of neoliberalism is a messy attempt to turn theory into practice. Neoliberals struggled with their plans to implement flagship policies of monetarism, fiscal prudence, and public sector privatisation. Yet, inflation was still cut, welfare slashed, and the public sector ‘marketised’. Existing literature often interprets this as neoliberalism ‘failing-forward’, achieving policy goals by whatever means necessary and at great social cost. Often overlooked in this narrative is how far actually existing neoliberalism strayed from the original designs of public choice theorists and neoliberal ideologues. By examining the history of the Thatcher government's public sector reforms, we demonstrate how neoliberal plans for marketisation ran aground, forcing neoliberal governments to turn to an approach of Managed Competition that owed more to practices of postwar planning born in Cold War US than neoliberal theory. Rather than impose a market-like transformation of the public sector, Managed Competition systematically empowered top managers and turned governance into a managerial process; two developments that ran directly against core precepts of neoliberalism. The history of these early failures and adjustments provides vital insights into the politics of managerial governance in the neoliberal era.

Erratum: Public sector reforms and national development: A situational analysis of post-independent Nigeria

No abstract available.

Bureaucracy, Democracy and Westminster: The Quest for Political Control

<p>This thesis argues that a Weberian process of bureaucratisation poses a serious threat in itself to the central values and ideals of liberal democracy. Such a threat arises not only from the bureaucratic pathology of 'goal displacement' of substantive ends by instrumental means, but also, because of this pathology, its tendency to mask and embed ideological challenges to liberal democracy. An effective liberal political constitution is therefore necessary to maintain the democratic control of bureaucracy while exploiting the efficiency benefits of bureaucratic administration. Such a political constitution is in fact contained in the Westminster tradition of liberal constitutionalism, based on the principles of parliamentary sovereignty, ministerial responsibility and political neutrality. Through this theoretical lens, the thesis proceeds to examine the trajectory of public sector reforms against the changing political contexts in New Zealand over the past 20 years and its constitutional implications. The NPM reforms in New Zealand, whether intended or unintended, displaced the political and constitutional safeguards implicit in the traditional model of public service with managerial norms which simultaneously serve to embed the neoliberal ideology. Despite the claim of NPM reformers to control bureaucracy, the paradoxical effects of the reform have been to accelerate the process of bureaucratisation and attenuate democratic control. Recent initiatives aimed to address some apparent weaknesses of NPM, have not changed the fundamentals of the managerial system, and thus fail to reverse this trend of declining democratic control of bureaucratic power. A reassertion of the fundamental norms of the Westminster system is recommended to arrest this decline of liberal democracy.</p>

Bureaucracy, Democracy and Westminster: The Quest for Political Control

<p>This thesis argues that a Weberian process of bureaucratisation poses a serious threat in itself to the central values and ideals of liberal democracy. Such a threat arises not only from the bureaucratic pathology of 'goal displacement' of substantive ends by instrumental means, but also, because of this pathology, its tendency to mask and embed ideological challenges to liberal democracy. An effective liberal political constitution is therefore necessary to maintain the democratic control of bureaucracy while exploiting the efficiency benefits of bureaucratic administration. Such a political constitution is in fact contained in the Westminster tradition of liberal constitutionalism, based on the principles of parliamentary sovereignty, ministerial responsibility and political neutrality. Through this theoretical lens, the thesis proceeds to examine the trajectory of public sector reforms against the changing political contexts in New Zealand over the past 20 years and its constitutional implications. The NPM reforms in New Zealand, whether intended or unintended, displaced the political and constitutional safeguards implicit in the traditional model of public service with managerial norms which simultaneously serve to embed the neoliberal ideology. Despite the claim of NPM reformers to control bureaucracy, the paradoxical effects of the reform have been to accelerate the process of bureaucratisation and attenuate democratic control. Recent initiatives aimed to address some apparent weaknesses of NPM, have not changed the fundamentals of the managerial system, and thus fail to reverse this trend of declining democratic control of bureaucratic power. A reassertion of the fundamental norms of the Westminster system is recommended to arrest this decline of liberal democracy.</p>