Organisations In Public Administration – Paper I

Organisations In Public Administration

The discipline of public administration is a lot more than just policy implementation. The importance of organization in public administration is as important as implementing government policies. Here are the notes for different types of organisation in public administration, characteristics of organisation in public administration, regulatory authorities, public-private partnerships, etc.

I Regulatory Authorities

The last few decades have seen significant changes in the way in which governments manage societies. The governmental decision-making process in many countries has now become transparent and participative. Committees drawn from elected representatives in legislatures closely scrutinize new legislation and budgets and question government functioning. New global standards of governance are emerging every day. Citizens of developing countries are demanding better performance on the part of their governments and policy-enforcing public institutions, and they are increasingly aware of the costs of poor management and corruption. The media has become vigilant and is playing a proactive role in scrutinizing government policies and suggesting alternative methods of governance.

In this changed scenario, the traditional style of regulation which involved decision making by bureaucrats and ministers in a closed environment’ (and through selective consultation ) is no longer considered appropriate. A new style that imbibes openness, consultation and transparency is the need of the hour. This ‘new-style regulation has taken the form of Regulatory Authorities’ or Regulatory Commissions. w

“A Regulatory Authority or Regulator is a government agency that regulates an area of human activity by codifying and enforcing rules and regulations, supervision or oversight, for the benefit of the public at large”. It usually has statutory authority to perform its functions. Regulatory authorities are commonly set up to enforce standards and safety, oversee the use of public goods and regulate commercial activities.

Independent Regulation

Independent regulation has developed into an alternative form of governance especially in infrastructure and financial services. Its origins are in the U.S.A. but it has been successfully used in the U.K. for electricity and gas and has extended itself to many others

Elements Of The Regulatory Process

The regulatory process has three basic elements:

  • Ensure that the exercise of regulatory power is rule-based.
  • Regulated agencies have an effective means to defend ineffective means to defend themselves against unauthorized or arbitrary requirements or liabilities.
  • The wider interest group have the means to have their views considered and addressed in administration decisions.

Mechanisms Used By Regulatory Bodies

To ensure that it does fulfil its role, a Regulatory body uses mechanisms such as the following:

  • Transparency of information and decision making.
  • Procedures of consultation and participation.
  • The requirement is that administrators give reasons explaining their actions.
  • Requirement that administrators follow principles that promote non-arbitrary and responsive decisions.
  • Arrangements for review of administrative decisions by courts or other bodies

II Public Private Partnerships

Public-Private Partnerships (PPPs) combine the resources of government with those of private · agents (businesses or not-for-profit bodies) to deliver societal goals. The development of these relationships between state and private actors gives rise to a new form of hybrid organization that has both ‘public’ and ‘private’ features.

Five different forms of public-private partnership can be distinguished. The different forms are :

Public Leverage

Public leverage occurs where governments use their legal and financial resources to create conditions that they believe will be conducive to economic activity and business growth. This is also called the “leader-follower” approach since the government is encouraging and inducing private sector decision-makers to align with public policy goals. Public leverage has a particular significance in regeneration strategies for disadvantaged localities. Governments around the world have packaged together infrastructure improvements, financial incentives, business support services, and other measures to promote economic regeneration in a locality. Place marketing within an overall policy to attract footloose capital often supports this approach. This strategy may make sense from the perspective of a single jurisdiction, but there is a danger of over-supply of government inducements at the regional, national and global level as localities compete between themselves. Public leverage also occurs where the government wishes business or not-for-profits to be the means of realising a goal that might otherwise be achieved through public bureaucracies.

Contracting-Out and Competitive Tendering

Contracting-out involves separating the purchaser of service from the provider. Government concentrates on the former, defining what services are to be available and to what standard, and then contracts out the provision to a business or not-for-profit organization. Contracting-out is the logical outcome of a competitive tendering or market-testing process in which the public provider is deemed not to offer the best solution. Fiscally prudent politicians and academic advocates of rational choice theory identified possibilities for efficiency gains by competitively tendering municipal services such as refuse collection, street cleaning and road maintenance. Cost reductions were expected to arise from changes in working practices, employment conditions, and management overheads as a result of exposing the de facto monopoly of the public provider to contestability. 


Franchising involves government awarding a licence to a business or ‘not-for-profit organization to deliver a public service in which the provider’s income is in the form of user fees.”

Under franchising, the government is reallocating its monopoly rights to a private entity. The process of allocating these rights may be undertaken competitively and require potential providers to bid a cash value to acquire the franchise. This was the position with the provision of train services in Great Britain after denationalization. The government auctioned franchises to operate bundles of routes for a fixed time period. The successful train operating companies were then responsible for providing rolling stock and delivering a service subject to price and performance regulation. The customer revenue stream flowed to the franchise holder, but there were also public subsidies to maintain services on socially desirable routes.

Franchising has a particular benefit in the case of a monopoly public-interests service whose revenue is sourced from user charges and where the government does not want to us operate the service directly itself. The monopoly features of the service make privatization ? of ownership into the market), undesirable. Franchising provides a means of operational responsibility to the business sector, with the government taking on the role of a length public-interest regulator. In the case of a new service or facility, franchising also cares some risk to the private sector.

Joint Ventures

Joint ventures occur where two or more parties wish to engage in a command project in a way that retains their independence. They enable the coordination of important decisions by independent actors in respect of a project that is close-ended in terms of its scope and the commitment of partners’ resources. The joint venture may be managed through a partnership agreement or a separate corporate entity-a Special Purpose Vehicle (SPV). Joint ventures are now used extensively to realize public goals for infrastructure provision and renewal, including schools, public transport, ‘hospitals’, roads’, ‘air traffic service’, ‘economic sectors’, and ‘Prisons’. These are typically referred to as public-private partnerships in the European context and as motivate Finance Initiative (PFI) in the UK. The generic nomenclature is DBFO (Design-Build-FinanceOperate).


involves government stating its intentions in output terms and then entering into a long-term contractual relationship with a company or consortium who undertake to design) finance, and build the facility, and manage and deliver some of the services associated with it (typically, maintenance) cleaning, and security). The government pays for the output over the medium to long term through a shadow toll or other revenue formula. The particular solution in any individual case will be a permutation of these DBFO elements and their lesser variants-e.g. DBF (design-build finance) and DBO (design-build-operate). For example, the private partners might design, finance, and build a facility, which would then be redeemed by the public sector through a long-term debt arrangement (the turnkey method).

Strategic Partnering

Strategic partnering between public and private agents involves a situation in which there is boundarylessness in terms of the distinctions between the constituent parties and where there are “permeable organizing practices that are intended to yield mutually beneficial outcomes”. The dominant features are the open-ended nature of strategic partnering’, the full sharing of risks and rewards, and the evolving substantive content of the action that arises. Strategic partnering emphasizes the primacy of trust over legal instruments. From a theoretical perspective, strategic partnering provides a means of reducing the transaction costs of service specification, supplier procurement, and regulation that can arise under contracting-out.

The Institutional form of the PPP has emerged as a highly preferred model of public service delivery as compared to the traditional ‘Bureau model”. Though the roots of the PPP’s can be traced to the 19th century, yet as an institutional form, it is yet to evolve and take shape. The challenge is to combine and retain ‘business efficiency along with democratic control.

Check out public administration notes in detail.

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