There are many ways to govern. Each has its Achilles’ heel.

The Achilles’ heels of governance

Michael Howlett and M. Ramesh

Governance reforms have been on the top of governments’ policy efforts the world over for some decades now, largely due to disappointing results with existing arrangements. Realizing the limitations of hierarchical governance, reforms in the 1980s and 1990s centered on promoting market-based governance while in recent years, efforts have sought to promote network-based governance. Some of these reforms have succeeded while others have not. Understanding why these results have occurred is a key question for both theorists and practitioners.

In a just-published article in Regulation and Governance, we describe one way to approach this issue. We note that every governance mode requires a broad range of capabilities if it is to achieve its optimal theoretical potential. But each mode has an essential type of capacity which serves as its Achilles’ heel. Without this critical capacity, the governance mode is unlikely to perform as expected. Governments need to focus on these essential capabilities if reforms based on the related mode of governance are to succeed.

Capacity in government is at its essence a function of three competences or skills: analytical competences that allow policy alternatives to be effectively generated and investigated; managerial competencies that allow state resources to be effectively deployed for policy purposes; and political competences that allow policy-makers to mobilize the support required to develop and implement their ideas and programs. These three competences need to exist at the individual, organizational, and system levels for governments to succeed.

In general, governments would like to have high levels of competence in all aspects in order to achieve their policy goals. But this is not always possible, and may not be absolutely necessary. While shortcomings in one or a few of the dimensions may be offset by strengths along other dimensions, no government can expect to be capable if lagging along many or all dimensions. (This is a particular problem in some developing countries.)

However, some capacities are especially critical in specific modes of governance. We call these critical capacities the Achilles’ heels of governance. Failing to recognize these critical capacities is a malady which afflicts both developing and developed countries. Governments often try to move from one mode of governance to another without fully understanding the preconditions that need to be met for success.

For many western governments, for instance, the default reform for improving upon hierarchical governance is to turn to a market or network mode of governance. But that shift may require specific additional or existing capacities which may not exist or have not been planned for. Market governance is often thought to be relatively straightforward: all a government has to do is reduce its involvement in the provision of goods or services in question, with the expectation that a market or private operators will emerge to fill the void. In all likelihood, however, the resulting market in the case of many public services will be both inefficient and inequitable due to the deep market failures which may emerge in these contexts.

For markets for public services to function effectively, tough but sensible regulations that are diligently implemented are required. But these are difficult conditions to meet for most governments, due to lack of sufficient analytical, managerial, and/or political competences and capabilities. Analytical skills at the level of individual analysts and policy workers need to be especially high to deal with complex economic and financial issues involved in regulating and steering the provision and financing of many vital public services. Without adequate capacity to regulate private providers, governments may turn to subsidizing users and/or providers in order to offset problems with market-based production or distribution of, for example, healthcare, clean air and water, or social services. While such subsidies may improve conditions in the short term and may be politically expedient, they are vulnerable to explosions in costs that will undermine the long-term viability of the ‘regulatory’ system.

In such circumstances, hierarchical governance need not be as dysfunctional as stylized depictions by proponents of market and network governance may suggest and, in fact, may be superior to the alternatives. But there are, similarly, also inherent limitations to hierarchical governance based on active and effective administration. Legal systems of governance require a high level of managerial skills in order to avoid diminishing returns with non-compliance with government rules and regulations. System-level capabilities are especially crucial in this mode of governance because governments find it difficult to command and control in the absence of the target population’s trust. And the use of public servants to deliver services can be costly and time consuming.

Similarly, network governance may perform well when dealing with sensitive issues such as parental supervision or elderly care when trust and understanding is paramount. In other instances, however, civil society may not be well enough constructed or resourced to be able to create beneficial network forms of governance. Networks, for example, fail when governments encounter capability problems at the organizational level such as a lack of societal leadership, poor associational structures and weak state steering capacities. A recurrent problem faced by efforts to utilize network governance is that the routines, trust, and reciprocity which characterize successful network management take a long time to emerge and cannot simply be established by fiat as is the case with hierarchy, or emerge spontaneously as with markets. Networks are thus hard to establish where none already exist. A very critical capacity issue for network governance is thus the “managerial expertise capacity” needed to establish and/or maintain them.

Each of these gaps highlights the need for adequate capacity in critical areas for a specific kind of governance system to achieve its potential. Specific governance modes are prone to specific types of failure caused by specific capacity shortages in critical areas required for that mode to function. Policy planners and managers, civil society activists and advocates, and business association and interest groups of all kinds must understand these requisites, and diagnose them accurately, if their proposals for reform are to succeed in practice.

Michael Howlett holds the Burnaby Mountain chair in the Department of Political Science at Simon Fraser University and is the Yong Pung How Chair Professor at the Lee Kuan Yew School of Public Policy of the National University of Singapore. M. Ramesh is Professor in the Lee Kuan Yew School of Public Policy, National University of Singapore. They are co-authors, with Xun Wu and Scott Fritzen, of The Public Policy Primer: Managing the Policy Process (Routledge, 2012) and with Anthony Perl of Studying Public Policy: Policy Cycles and Policy Subsystems (Oxford 2009). This column is based on their just-published article, “Achilles’ Heels of Governance: Critical Capacity Deficits and Their Role in Governance Failures.” Regulation & Governance 10, no. 4 (2016): 301–313.