Skip to main content
Article thumbnail
Location of Repository

Public sector added value: can bureaucracy deliver?

By Peter M. Jackson


Also available from the EPRU website at there is a search for a new understanding of the role and function of democratic government and along with it an answer to the question how best might the institutions of government add value to the services that they provide?\ud What is the source of the value added by government bureaucracies and are alternative\ud forms of public sector supply superior sources of value added? These are the\ud fundamental questions which lie at the heart of the contest between public sector\ud bureaucratic supply and arms length decentralised market supply or, simply, hierarchy vs. markets. Answers to the fundamental questions focus upon two issues. First is the effective co-ordination of individual activities and the second is the control of opportunistic behaviour. Are decentralised markets, for example, better at solving these co-ordination and control problems? \ud These questions are a continuation of an agenda found in the works of Adam Smith,\ud who advocated policies that were designed to maximise social welfare subject to the\ud constraints of the administrative agencies of government which implemented the\ud policies. Today much theoretical analysis is being directed at designing suitable\ud incentives for public administration in order to relax the constraints on welfare\ud improvements imposed by the administrative intermediaries of government. In other\ud words, this analytical search is focused upon the optimal structure of government\ud institutions. Central to this analysis are models based upon asymmetric information and\ud agency in which contracts are incomplete as too are constitutions. This reflects the\ud complexity of relationships that exist in the post-fordist and post-modern world of\ud ambiguity and indeterminism.\ud The purpose of this paper is to take stock of our understanding of the “architecture” of\ud public sector resource allocation mechanisms. In particular, the relative efficiency and effectiveness of alternative architectures. This is a speculative venture and a framework rather than a precise theoretical model will be sketched out whilst engaging in a search for the frontiers of understanding by identifying unresolved problems. The vehicle that will be used is a consideration of the success or otherwise of some recently implemented\ud public sector management reforms along with the proposed changes recently announced\ud by the incoming UK Labour Government of 1997. Specifically, the question which will\ud be addressed is whether or not public sector bureaucracy can deliver value for money.\ud The search for improved designs in fiscal systems and the institutions of government is\ud as old as Plato’s Republic. The modernist search for efficient institutional forms of\ud government is based upon some rather old propositions. The first proposition originates in the Scottish moralists and is represented in Adam Smith’s contention that economic decentralisation, especially via market exchange, is more efficient than centralised decision making. The second proposition is found in the French Enlightenment claim that human happiness can be engineered by changing the social order. [Text from the Introduction

Publisher: Efficiency and Productivity Research Unit, University of Leicester
Year: 1999
OAI identifier:

Suggested articles


  1. (1989). (p4) and Dunleavy
  2. (1991). A Bargaining Theory of Privatisation”, doi
  3. (1987). A Design Science Perspective”, in T.C. Miller (ed) Public Sector Performance,
  4. (1998). A Revolution in Social Policy, doi
  5. (1997). a) “The Effectiveness of Modern Bureaucracies: Principals, Agents,
  6. (1992). Accountability To The Public, London:European Policy Forum.
  7. (1776). An Inquiry into the Nature and Causes of the Wealth of Nations Edited by Edwin Cannan. doi
  8. (1997). b) “Planning, Control and the Contract State”, in D Corry (ed) Public Expenditure: Effective Management and Control,
  9. (1998). Best Value in Local Government” Consumer Policy Review Jan/Feb
  10. (1995). British Social Policy Since doi
  11. (1996). Competition and Corporate Performance”, doi
  12. (1997). Competition and Decentralization in
  13. (1982). Contestable Markets and The Theory of Industry Structure. doi
  14. (1977). Democracy in Deficit: The Political Legacy of Lord Keynes. doi
  15. (1990). Deregulating Federal Improvement: Nothing To Fear But Discretion Itself”,
  16. (1993). Developing and Understanding Cultural Change doi
  17. (1989). Does Privatisation Work? Lessons from the UK”. London Business School.
  18. (1985). Economic Action and Social Structure: The Problem of Embeddedness”, doi
  19. (1991). Efficiency Gains Through Privatisation of UK Industries”
  20. (1955). Elements for a Theory of Teams”, doi
  21. (1954). Existence of an equilibrium for a competitive economy” doi
  22. (1995). Foundations of Corporate Success doi
  23. (1993). From Red Tape to Results: Creating a Government that Works Better and Costs Less, Report of the National Performance Review, United States Government Printing Office.
  24. (1971). General Competitive Analysis,
  25. (1997). Impact of Privatisation: Ownership and Corporate Performance in the doi
  26. (1980). Industrial Organisation, Corporate Strategy, and Structure”, doi
  27. (1987). Information and The Coase Theoram”
  28. (1999). Managing Between Markets and Hierarchies mimeo,
  29. (1997). Managing Complex Networks: Strategies for the Public Sector London: doi
  30. (1988). Markets and Government,
  31. (1995). Measures for Success in The Public Sector, Public Finance Foundation.
  32. (1994). Organisation and Management in the Public Sector,
  33. (1998). Organisational Architecture: A Useful Metaphor?” mimeo,
  34. (1986). Performance Measurement and Value for Money in the Public Sector: The Issues”, doi
  35. (1971). Planning vs
  36. (1970). Political and Economic Evaluation of Social Effects and Externalities”
  37. (1997). Power of Incentives in Private vs.
  38. (1994). Privatisation and Regulation,
  39. (1991). Privatisation: A Conceptual Framework”,
  40. (1983). Public and Private Enterprise: Comparative Behaviour and Relative Efficiency”,
  41. (1997). Public Management: Raising Our Game”, doi
  42. (1997). Public Sector Management, doi
  43. (1998). Public Services Under New Labour: Back to Bureaucracy?” Cardiff Business School, doi
  44. (1998). Re-engineering the State in Flight: A Year
  45. (1992). Re-inventing Government,
  46. (1994). Reinvention Reality Check”, Government Executive 26,
  47. (1986). The Architecture of Economic Systems: doi
  48. (1989). The Architecture of the British State, Part 1: Framework for Analysis”, Public Administration Vol 67, doi
  49. (1995). The Careless Society: Community and its Counterfeits, doi
  50. (1982). The Comparative Performance of Public and Private Ownership” doi
  51. (1971). The Design of Inquiring Systems and Organisations, Basic Books. doi
  52. (1995). The Determinants of Price and doi
  53. (1964). The Economics of Discretionary Behaviour: Managerial Objectives in a Theory of the Firm, Engelwoods Cliffs,
  54. (1993). The Effects of Privatisation, Restructuring and
  55. (1995). The Fiscal Crisis of the States, doi
  56. (1996). The New Governance: Governing without Government”, doi
  57. (1994). The New Public Sector Management: Surrogate Competition and Contracting Out”,
  58. (1994). The Performance of the Electricity Distribution Business - England and Wales 1971-1993, Discussion Paper 8, Centre for the Study of the Regulated Industries,
  59. (1982). The Political Economy of Bureaucracy, doi
  60. (1980). The Power to Tax: Analytical Foundations of a Fiscal Constitution, doi
  61. (1960). The Problem of Social Cost”, doi
  62. (1969). The Sciences of the Artificial, doi
  63. (1989). The Theory of Industrial Organisation. doi
  64. (1959). The Theory of Public Finance, doi
  65. (1998). The Third Way, doi
  66. (1998). The Third Way: Summary of the NEXUS on line discussion,
  67. (1945). The Use of Knowledge in doi
  68. (1989). Theories of Oligopoly Behaviour” doi
  69. (1996). Three Deficits of Public Management,
  70. (1977). Towards a Tax Constitution for Leviathan”, doi
  71. (1997). Understanding Governance, doi
  72. (1996). Urban Management: the Challenge of Growth,
  73. (1994). Whither Socialism? doi
  74. (1992). World Development Report, doi

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.