Managing Democracies in Turbulent Times

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1 Managing Democracies in Turbulent Times

2 .

3 Eran Vigoda-Gadot Shlomo Mizrahi Managing Democracies in Turbulent Times Trust, Performance, and Governance in Modern States

4 Eran Vigoda-Gadot Public Administration & Policy University of Haifa, School of Political Science Haifa, Israel Shlomo Mizrahi Public Policy and Administration, Guilford Glazer Faculty of Business and Management Ben-Gurion University of the Negev Beer Sheva Israel ISBN ISBN (ebook) DOI / Springer Heidelberg New York Dordrecht London Library of Congress Control Number: # Springer-Verlag Berlin Heidelberg 2014 This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. Exempted from this legal reservation are brief excerpts in connection with reviews or scholarly analysis or material supplied specifically for the purpose of being entered and executed on a computer system, for exclusive use by the purchaser of the work. Duplication of this publication or parts thereof is permitted only under the provisions of the Copyright Law of the Publisher s location, in its current version, and permission for use must always be obtained from Springer. Permissions for use may be obtained through RightsLink at the Copyright Clearance Center. Violations are liable to prosecution under the respective Copyright Law. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. While the advice and information in this book are believed to be true and accurate at the date of publication, neither the authors nor the editors nor the publisher can accept any legal responsibility for any errors or omissions that may be made. The publisher makes no warranty, express or implied, with respect to the material contained herein. Printed on acid-free paper Springer is part of Springer Science+Business Media (

5 Preface Since the twentieth century, democracy, in its various shapes and models, has become the world s most desired and prevalent form of government. However, democracies around the globe are facing more threats, expectations, and challenges than ever before in human history. These challenges facing modern democracies include the social, economic, and political spheres. Given the growing local needs of citizens, momentous regional developments in societies and global economical changes in a borderless and market-oriented world, such challenges become the prime concern for political leaders, bureaucrats, and ordinary people regardless of class, socioeconomic status, culture, or geographical location. During the first decade of the twenty-first century, our world has become increasingly turbulent. Democracies have been confronted with nature-made and human-made crises of a kind unknown in the past, a trend that has promoted increasing uncertainty and instability. Vicious terror attacks and additional threats to world security, alarming market failures, the disengagement and reengagement of national entities, as well as natural disasters of various types have become major challenges for governments. There are strong indications of a lack of cohesiveness in our social fabrics needed to effectively resist the potentially harmful threats to our lives in the free world. A major indication of this lack of cohesiveness is the lack of trust in political systems as well as greater skepticism in many countries about the effectiveness of democratic mechanisms. In our view, the goal of increasing trust in democracies is crucial for improving the management of the democratic state. The issue of trust is one of the fastest growing concerns for academics, politicians, policy makers, bureaucrats, and future generations of active citizens in our nations. This book is about modern democracies and about management, but most of all it is about the management of modern democracies. It is different both from books written from a political perspective about the problems of democracies and books written from a managerial perspective about how to run organizations more effectively. We believe that at its core, governments are much like organizations (one might say the opposite as well; organizations are much like governments) and thus should be treated as such. We therefore try to bridge the disciplines by exploring a v

6 vi Preface managerial analysis of the modern state. At the heart of our analysis is the idea that running governments effectively means settling the potential conflicts between all of those involved in the governmental process and in the making of public policy and of public actions. We therefore hope to suggest intellectual avenues for strengthening the trust in democratic institutions as well as for improving the trust and cooperation between the main actors in the democratic sphere the politicians, bureaucrats, and citizens without compromising on the need to ensure well-performing and effective governance. The book discusses some of the main challenges facing modern democracies with a focus on the role of individual stakeholders and their interrelations. It suggests both a theoretical and practical framework for dealing with some of the urgent problems that governments confront today: the tension between bureaucracy and democracy, and between political and administrative concerns, the pressing economic concerns in a market-based society, the growing knowledge society, globalization and a borderless world, and most importantly the evolvement and change in the relationship of trust amongst the players. The book is original in that it presents a twofold rationale for restoring trust in the democratic state. We see trust as a key link in the chain that connects the political order to administrative wisdom. Based on this premise, we propose models for understanding and rebuilding trust and test these models with an empirical data. More specifically, the book suggests that bureaucratic agencies are, normatively and practically, major proxies of democracy. This argument may seem at odds with the mainstream literature that views the public sector as a key reason for inefficiency and a reduction in trust. Furthermore, bureaucratic systems are often understood as hierarchal structures that are hardly well suited to promoting democratic behavior. The economic literature adds more arguments supporting a reduction in the role of the public sector. We generally disagree with this observation and suggest some alternative views. To support our arguments we point to claims that in many modern democracies decision-making processes are dominated by professional elites who have neo-liberal views. These views highlight the customer/client form of the public s relationship with the government and marginalize the citizens/ citizenship form of engagement in government. Such an analysis provides further justifications, though from a different angle, for the idea of reducing the power and involvement of public administrators in policy making. However, this book suggests an integrative approach and demonstrates how these developments can be used to leverage the trust in and stability of democratic systems. Thus, the goal of the book is to develop a trust-based theory for the reconciliation between the bureaucratic mechanisms of the modern state and the values of democratic government. We will support this theory with various empirical studies we have conducted since the early 2000s. These studies indicate that the public tends to trust bureaucratic agencies more than elected officials. Indeed, the highest level of trust goes to public servants in their capacity as individuals who deserve recognition for the precious work they do for each one of us. The analysis explores the complex relationship between several variables that influence and are

7 Preface vii influenced by trust in administrative agencies and democratic mechanisms. Based on this analysis, the book will offer suggestions for restructuring bureaucratic agencies in a way that may be able to restore trust in the public sector and in the democratic system. Haifa, Israel Beer Sheva, Israel Eran Vigoda-Gadot Shlomo Mizrahi

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9 Framework of the Book The book is arranged in seven chapters. Chapter 2 sets the stage for the discussion by describing the core challenges of modern democratic states and recent transformations that make it necessary to reevaluate the existing managerial tools for running it more effectively. We deal with the process of globalization and de-centralization, the decline of the universal welfare state and the dominance of the competitive model and free market economy, the ethos of open democracy, and, most importantly, the problem of trust. We also deal with the citizens role in government given the technological revolution and the challenges facing management in the face of e-democracy. Chapter 3 deals with risks and challenges ahead and with the major threats to modern democracies. We discuss the threats to the democratic order, lack of responsiveness to social demands, lack of trust in the political system as representative of its citizens, the public s belief in the declining performance of bureaucracies, and the rise in strategies such as alternative politics and antipolitical orientations designed to bypass the government. Chapter 4 explains the cornerstones for managing the democratic state in our times. These managerial fundamentals differ significantly from the rules that guided the previous generation. We believe that the management of the democratic state in our time is increasingly caught between contemporary political thinking and the current administrative ethos. Therefore, we elaborate on the tension between them. We discuss the problem of political control over the bureaucracy in modern environments where knowledge is borderless and indispensable for better services and for economic sustainability. We also highlight the tension between professionalism and decentralization that is so crucial for management of the modern state. Finally, we explain the dominance of bureaucracy in policy-making processes aimed at improving responsiveness to the needs and demands of the public. Chapters 5 and 6 expand upon the conflict between politics and administration as a paradox between bureaucracy and democracy. Chapter 5 presets the theoretical underpinnings of this argument. Chapter 6 then uses empirical findings from two substantially different democracies, Israel and the USA, to support some of the theoretical principles suggested earlier. We will present various approaches to bureaucracy and democracy, explain the paradox between these realms, and suggest a basic model for empirical study. We will then test the model using data from a 12-year longitudinal study in Israel and a comparative study of the USA and ix

10 x Framework of the Book New Jersey. These chapters will end with an analysis and implications of the basic model. Chapter 7 closes the discussion by offering a conceptual integration of the ideas and insights into what we see as the road to better governance. Trust is revisited as a core concept that serves as the essential glue between thematic ideas, ideologies, policies, institutional decision making, and the global trends of markets and technology. By integrating the conceptual and empirical frameworks, we will suggest lessons, potential reforms, and remedies for the problems of managing democracies in the turbulent days to come.

11 Target Readers Who is the audience for this book? Two major groups of readers are targeted academics and practitioners, mainly those dealing with the business of government, improving the administration of governmental agencies, and making policy in the wider governance arena. Academics and researchers will find the conceptual chapters and the empirical evidence presented to support the ideas and models of greatest interest. However, the general message of the book, that managing the democratic state is a more complicated, demanding, and challenging task than ever before, is in itself a call to practical action. As with most books like this one that targets both academics and practitioners, we anticipate that the first call for change will come from academia and the intellectual stratum of society. The book is therefore primarily aimed at scholars of public administration, business management, political science, and other social scientists interested in policy issues and in the nexus between management, democracy, and state order. It is also intended for students, who will bear the responsibility in the future for the development of our societies. Nevertheless, we also believe that the book offers many practical benefits. We hope that its readers will also include politicians, public administrators, active citizens, and other partners in government those who share the burden of making countries run in an effective and efficient way. For this reason we believe that CEOs in the business sector should also be interested in this book. These individuals, who constitute the managerial elite of our nations, also have the responsibility to promote knowledge about generic management strategies among government officials with the goal of helping them improve the functioning of bureaucracies. Finally, we hope that active citizens themselves will also find the book enlightening, one that contributes to the formation of strong communities that directly influence the policy-making process and the quality of life of as many people as possible. xi

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13 Acknowledgments This book is a result of 13 years of continuous study based on the NAPPA-IL (National Assessment Project of Public Administration Israel) project. This has been a long but very pleasurable period of research in which we spent endless time on data collection, organization, analysis, and interpretation. It involved struggles to understand the meaning of trust, satisfaction, good management, and their implications for citizens and democratic governments across time and continents. However, we were not alone in our efforts. The work could not have been carried out without the help of many who supported this project since its birth in We are especially grateful to those young students and early-stage scholars who worked with us during these years and continue to support this longitudinal effort enthusiastically, showering it with care and attention. They share with us the sense of contributing not only to our knowledge but also to society and to citizens and governments everywhere by determining the positive and negative approaches to the delivery of public services. We are thus thankful to all of our students who supported the study throughout the years. Our special thanks go to our research assistants Ms. Rotem Miller-Mor, Mr. Noam Cohen, Ms. Maya Distel, and Dr. Rafik Hag and to two students who have progressed since then and whom we are proud to call our colleagues: Dr. Taly Birman and Dr. Nissim Cohen. The book was written over a period in which every one of us had the chance to enjoy the collaboration of colleagues at several institutions and universities across the globe. We especially thank Prof. Geert Bouckaert and Prof. Annie Hondeghem at the Institute for Public Management, Leuven University, Prof. Gregg Van-Ryzin and Prof. Marc Holzer at Rutgers University School of Public Affairs and Administration, Prof. Arie Halachmi at Tansy University, Prof. R.T. Golembiewski and Prof. Hal G. Rainey of the University of Georgia School of International Affairs, Prof. Steve Kelman of the Harvard Kennedy School of Government, and Prof. Donna Haig Friedman of the Center for Social Policy at the John W. McCormack School of Policy and Global Studies, University of Massachusetts at Boston. We would also like to thank other colleagues whose observations and suggestions helped us construct the framework of this book. Among them are Prof. Jos Raadshelders, Prof. Jan-Erik Lane, Prof. Mildred Warner, Prof Gerald Caiden, and Prof. Naomi Caiden. We are grateful to the Israel Science Foundation and the Israeli National Insurance Institute as well as the research authorities at the xiii

14 xiv Acknowledgments University of Haifa and Ben-Gurion University for providing financial support for the project. Finally, we wish to thank our colleagues at the Divisions for Public Administration & Policy both at the University of Haifa and at Ben-Gurion University, who were a source of inspiration and fresh critical thinking about this project and its implications. We hope to continue our studies in this area and by doing so improve the abilities and performance of the entire public sector. We also seek to promote citizens involvement and foster their interaction with the public sector. We believe that good governance in democracies is ultimately rooted in the desire, commitment, professionalism, and genuine care of good people such as those mentioned above, to whom we are grateful and very appreciative. Haifa, Israel Beer Sheva, Israel January 1, 2014 Eran Vigoda-Gadot Shlomo Mizrahi

15 Contents 1 Prologue: The Conflict Between Good Governance and Open Democracy: A Crisis of Trust Trust and Democracy: Definitions, Concepts and Approaches Trust and Institutions Good Governance, Open Democracy and Trust... 7 References The Transformation of the Modern State The Rise and Evolvement of the Modern State Modern States in the Twenty-First Century; Why Turbulent? And Why Now? The Modern State and the Players: Between Competition and Collaboration Core Challenges of Modern Democracies Globalization: Both a Challenge and a Threat The Decline of the Global Welfare State The Dominance of the Competitive Model and the Free Market Economy New Public Management: Its Definition and Dominance in Modern States The Transformation of the Modern State Under NPM and the Neo-Liberal Ethos What Makes NPM New? And What Does It Mean for Modern Democracies? New and Newer Public Administration Initiatives for the Modern State The Information Age Revolution: E-Democracy and E-Bureaucracy in Modern States The Open Democracy: Trust, Performance, and Citizens Role in Government Summary References xv

16 xvi Contents 3 The Relationship Between Citizens and Government in Modern States: Threats and Challenges Threats to the Democratic Order: Back to the Domination of Political Trust Lack of Responsiveness to Social Demands Public Sector Performance, Democracy, and the Socio-economic Policy of Redistribution Gaps in Preferences and the Dilemma of Equal Representation Public Preferences in Light of the Risk of Unemployment, Economic Inequality, and Redistribution Class Structure and the Corporatism Argument The Influence of Public Administrators on Redistribution Policy Government Effectiveness in the Interplay Between Equality and Redistribution Preferences Public Responses to Ineffective Government and to Declining Trust: Bypassing Strategies Inefficiencies in Service Provision, Citizen Dissatisfaction and Perceptions About Channels of Influence Citizens Self-Provision of Public Services as an Exit Strategy Citizens Self-Provision of Services: Normative Implications Summary References Managing the Democratic State: Caught Between Politics and Administration Political Control Over the Bureaucracy and the Management of the Democratic State Political Appointments and the Rewards of Top Bureaucrats Relationship Between Politicians and Bureaucrats and Methods of Political Control Relations Between Politicians and Bureaucrats: The Israeli Case as an Illustration Summary References The Bureaucracy-Democracy Paradox Revisited: A Challenge to Democracy in Turbulent Times The Bureaucratic Ethos Classical Approaches Modern Approaches The Bureaucracy Puzzle: Pieces in Construction

17 Contents xvii 5.2 The Democratic Ethos The Democracy Puzzle: Pieces in the Construction Bureaucracy and Democracy: Revisiting the Paradox Governability and Modern Democracy in Turbulent Times Democracy and Bureaucracy in Times of Technological Revolution Summary References Management, Performance, and Democracy in Turbulent Times: An Evidence-Based Analysis A Theoretical Model Perceived Managerial Quality of the Public Sector Public Sector Performance Perceived Democratic Values of the Public Sector Democratic Values: Trust in Public Agencies and in Public Servants Democratic Values: Political Participation In Search of the Bureaucracy-Democracy Nexus: How Do They Relate and Why? The Israeli Case: A 12-Year Longitudinal Study Method Analysis Findings International Comparative Perspective: The American Case Method Findings Analysis International Comparative Perspective: The Case of New Jersey Method Findings Analysis Internal Organization Perspective: The Case of the Israeli National Insurance Institute The Theoretical Model Method Findings Summary References Epilogue: The Road to Better Governance in Modern States Governing Democracies in the Twenty-First Century: Where Is the Road Taking Us? Public Management and the Bureaucracy of Our Times: The Iron Shield for Good Governance

18 xviii Contents 7.3 Rethinking the Management of Democracies in Turbulent Times: Several Final Comments Summary: Managing Democracies in Turbulent Times References Appendix A. Variables and Measures: Israel Appendix B. Variables and Measures: US Appendix C. Variables and Measures: New Jersey Appendix D. Variables and Measures: Israel National Insurance Institute Index

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