Bureaucracy, Network, or Enterprise? Comparing Models of Governance in Australia, Britain,the Netherlands, and New ZealandAuthor(s): Mark Considine and Jenny M. LewisSource: Public Administration Review, Vol. 63, No. 2 (Mar. - Apr., 2003), pp. 131-140Published by: Blackwell Publishing on behalf of the American Society for Public AdministrationStable URL: http://www.jstor.org/stable/977585 .Accessed: 30/03/2011 13:28

Your use of the JSTOR archive indicates your acceptance of JSTOR's Terms and Conditions of Use, available at .http://www.jstor.org/page/info/about/policies/terms.jsp. JSTOR's Terms and Conditions of Use provides, in part, that unlessyou have obtained prior permission, you may not download an entire issue of a journal or multiple copies of articles, and youmay use content in the JSTOR archive only for your personal, non-commercial use.

Please contact the publisher regarding any further use of this work. Publisher contact information may be obtained at .http://www.jstor.org/action/showPublisher?publisherCode=black. .

Each copy of any part of a JSTOR transmission must contain the same copyright notice that appears on the screen or printedpage of such transmission.

JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range ofcontent in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new formsof scholarship. For more information about JSTOR, please contact support@jstor.org.

Blackwell Publishing and American Society for Public Administration are collaborating with JSTOR todigitize, preserve and extend access to Public Administration Review.

http://www.jstor.org

Mark Considine Jenny M. Lewis University of Melbourne

Bureaucracy, Neiwork, or Enterprise? Comparing

Models of Governance in Australia, Britain, the

Netherlands, and New Zealand

Theories of democratic government traditionally have relied on a model of organization in which officials act impartially, accept clear lines of accountability and supervision, and define their day- to-day activities through rules, procedures, and confined discretion. In the past 10 years, however, a serious challenge to this ideal has been mounted by critics and reformers who favor market, network, or "mixed-economy" models. We assess the extent to which these new models have influenced the work orientations of frontline staff using three alternative service types-corporate, market, and network-to that proposed by the traditional, procedural model of public bureau- cracy. Using surveys of frontline officials in four countries where the revolution in ideas has been accompanied by a revolution in methods for organizing government services, we measure the degree to which the new models are operating as service-delivery norms. A new corporate- market hybrid (called "enterprise governance") and a new network type have become significant models for the organization of frontline work in public programs.

We are all now familiar with the mantra of the business consultant and the reforming politician who wish to an- nounce the end of bureaucracy. They recite from a well- thumbed litany of complaints-public-service agencies are too big, too costly, too rigid, too standardized, and too in- sensitive to individual identities. In whichever OECD (Organisation for Economic Co-operation and Develop- ment) country one travels, the recitation of these alleged deficiencies has an increasingly common ring to it. But we also know that reform rhetoric always tends to merge the actual or empirical with the imagined and the invented (Edelman 1977; Kingdon 1984). The broad sweep of the new reform rhetoric is one important sign that the changes we now are witnessing are more than simply the evolution of better forms of organization. They are also part of a larger cultural contest over the way terms such as "public interest" and "public service" are to be understood in this new century.

In this study and in the paper that preceded it (Considine and Lewis 1999), we start by recognizing that the old bu- reaucratic order is now creaking under the strain of a mighty

assault being waged against it. As Fournier and Grey put it, the new vision "seeks to stigmatise and marginalise bu- reaucracy, in general, and public bureaucracy in particu- lar, as being outmoded and as functionally and morally bankrupt" (1999, 108). For their part, the peripatetic Osborne and Gaebler simply dismiss traditional bureau- cracy as "bloated, wasteful, ineffective" (1992, 12).

While critics seem to be united in their rejection of the proceduralism and supervisory sclerosis of the old bureau- cratic order, no single, coherent alternative has been pro-

Mark Considine is a professor of political science at the University of Melbourne, Australia. His most recent book is Enterprising States: The Public Management of Welfare-to-Work (Cambridge University Press, 2001). His research is concerned with the reform of service-delivery agencies and the use of private contractors. As well as teaching and research in policy and administration, he is a consultant to a number of government and nonprofit agencies. Email: mark 1 @unimelb.edu.au. Jenny Lewis is a senior research fellow at the Centre for the Study of Health and Society, University of Melbourne, and has an adjunct appointment in the Department of Political Science. Her research interests include policy para- digms, professions, and networks. Her main project, which is funded by a Fen ows ip from VicHealth and the Department of Human Services (Victorian State Government), focuses on policy networks and strategic partnerships in health. Email: jmlewis@unimelb.edu.au.

Bureaucracy, Network, or Enterprise? 1 31

posed. Ronald Moe is correct in suggesting that some "theory about the nature of government" (1994, 111) un- derpins reform documents such as the Gore report, but he also shows that reinvention is actually a "heady brew" mixed from rather different ideas about public and private organization. And when viewed historically, the recent episodes of change suggest a number of themes or models struggling for victory over the older bureaucratic order of things (Considine 2001).

The first wave of major change in the middle and late 1970s-such as that brought forward by the Carter admin- istration and by the Fulton Report in the United Kingdom- sought to make public organizations subject to tougher planning and budgeting systems and to elevate the role of managers as agents of both efficiency and accountability. This planning and budgeting ideal emulated the strategies of large corporations, which were themselves struggling to cope with the impact of their own size and more diverse range of activities. A later development in the 1980s saw neoliberal ideals begin to inform the building of new mod- els. The first effects of this trend were felt in pressures to cut the number of employees in the public service and to privatize parts of the public system (T. Moe 1984; Le Grand and Bartlett 1993). Only later, in the early 1990s, did the second wave of neoliberal reforms begin to take root in the form of an incentive-based theory of internal organization. Under these conditions, a single public service was to be replaced by a mix of several purchasers and providers that would act competitively to profit from increased efficiency (Halachmi 1996; Williamson 1975).

A more recent reform set of ideals has emerged from theorizing the role of public and private networks as forms of strategic partnership and collaboration between govern- ment and the private sector. These models suggest ways to have the benefits of greater discretion and flexibility at the front line, but with clearer forms of accountability than might be afforded by overt privatization. According to Mayntz, "a network is a multi-nodal structure, and any whole consisting of connected, but not tightly coupled parts" (1993, 8). In other words, the network ideal is pre- mised upon there being forms of organizational affiliation and history that bind agents to common tasks. The advo- cates of network governance take solace from the new blur- ring of boundaries between firms, nonprofits, and govern- ment agencies and assert that "societal issues can be best addressed through multi-sector collaboration" (Blockson and Van Buren 1999, 64). Like Powell (1991), these ob- servers offer the network as a significant alternative to both markets and hierarchy.

The theoretical underpinnings of these "new gover- nance" ideals are evidently constructed both from the sup- posed virtues of markets and third-sector alternatives to the state, as well as from a belief in the virtue of competi-

132 Public Administration Review * March/April 2003, Vol. 63, No. 2

tion, choice, and multi-agency collaboration. One impor- tant practical manifestation of this new thinking emerged as the Clinton-Blair "Third Way" strategy, which supports a "mixed economy" within the public sector and seeks "a synergy between public and private sectors, utilising the dynamism of markets but with the public interest in mind" (Giddens 1998, 78, 100).

These new accounts view the state as a partner with- not an alternative to-private methods of creating value. To this end, the reinvention movement in the United States has led a reform agenda in which important aspects of cen- tral regulation have been replaced by various forms of in- centive-based self-regulation (Executive Office 1993). This not only involves empowering public managers, but also a specific interest in "enterprise government," defined as an organizational strategy based on separating the roles of principals and agents, setting appropriate incentives for cost minimization, and using competition to empower consum- ers (Halachmi 1996, 4).

If they were found to exist in practice, any one of these new models or ideals of organization would represent a significant change to the architecture of governance. Cer- tainly observers such as Moe (1994, 113) and Coe (1997, 173) see real prospects that the old order may have fallen. However, markets and corporate management techniques within the public sphere also face the criticism that they may suborn civic values and compromise the work of non- profit agencies (Smith and Lipsky 1993). They also may create a new level of incoherence, according to some crit- ics. For example, Naschold and von Otter (1996, 15) iden- tify "paradigmatic conflict" between public welfare and competition during this period in which advanced capital- ist systems are "entering a new phase in the relationship between politics, regulation and competition." In other words, there is no agreement at all about what is really replacing, or should replace, the administrative theory and model that has underpinned systems of governance in most advanced capitalist countries for almost 200 years.

To investigate the structure, organization, and extent of coherence of the possible alternative accounts of public governance, we proceed at two levels. To begin with, we sought to turn the vague reform rhetoric of various coun- tries at the leading edge of change into testable proposi- tions about the way real officials should work in the new systems. This act of classification and boiling down of ide- als, exhortations, gestures, and feints imposes a degree of order and clarity that is necessarily a kind of simplifica- tion. This follows Lazarsfeld's (1937) method of substruc- tion, which proceeds by identifying "the basic dimensions underlying salient types" (Bailey 1994, 47).

Critics may complain that the distinctions are too sharply drawn. However, it is important in any systematic treat- ment of these issues to strive for clarity and precision so

that our propositions about the new governance models are suitably distinct. If these boundaries are wrong, then at least our errors might yield opportunities to improve fu- ture research-and if not, the results may offer insight into paradigmatic change in the governance strategies of the new class of reforming governments.

The second part of the approach was to use a cross- national study of four countries to test the extent of com- mitment to any one or more of these models of new gover- nance. In particular, the test was defined as two sequential propositions: (1) the strength of commitment to the tradi- tional bureaucratic or procedural model of governance; and (2) the strength of any of three new models of governance in these four reform-minded countries.

Governance in Four Types When expressed as norms of governance, these alterna-

tives to bureaucratic governance remain both plausible and also more than a little vague. The proliferation of theories of an emergent "postbureaucratic" world, a "post-Fordist welfare state,' or a 'new governance" system based on nonbureaucratic forms of public organization requires sus- tained consideration by researchers (Barzeley 1992; Kooiman 1993; Rose 1996). The first step is to specify the central claims of each major ideal type formulation of the role of public organizations.

The first three frameworks correspond broadly to phases in the development of public governance in the OECD, from its emergence to its periods of recent transformation in the 1980s and 1990s. These three types are termed pro- cedural governance, corporate governance, and the most recent form, market governance. A fourth ideal type, net- work governance, is also identified (Considine 1996). This last type is prefigured in some recent (if ambiguous) ap- plications of the market type, is identified in recent writ- ing on postbureaucratic organization (Osborne and Gaebler 1992; Barzeley 1992), and is evident to some degree in emergent structures in specific policy fields such as AIDS, pollution control, and city management.

We argue that each of these ideal types has a recogniz- able organizational character that can be viewed through a

Table 1 Governance Types

Source of Form of Primary virtue Service rationality control delivery focus

Procedural Law Rules Reliable Universal governance treatments

Corporate Management Plans Goal driven Target groups governance

Market Competition Contracts Cost driven Price governance

Network Culture Coproduction Flexible Clients governance

four-dimensional analysis of their core elements. These are summarized in table 1, reproduced from an earlier article (Considine and Lewis 1999). Brief summaries of the key attributes of these four governance types are also provided following this table.

The core attributes of the bureaucratic type (procedural governance) are defined as the following of rules and pro- tocols, high reliance on supervision, and an expectation that tasks and decisions will be well scripted, including by information technology systems used in the organization. This captures Ronald Moe's (1994, 112) definition of the traditional administrative model as "a government of laws" and his invocation of the Hoover Commission ideal of "rou- tine administrative services, under strict supervision and in conformity with high standards."

The declining popularity of the procedural model of bureaucracy was certainly evident by the mid- 1970s, even if the range of alternatives were as yet poorly defined. The coherent new model emerged in several countries in the 1980s and, as Hood (1990) points out, involved viewing public organizations as "corporations" run by business managers. This corporate type promoted the idea that offi- cials should respond to targets set by managers and should be guided by a comprehensive performance-measurement regime that made such targets the mainstay of the organi- zation (corporate governance). Management improvement programs, goal-oriented planning systems, and program budget reforms were found in many systems that moved toward this corporate governance ideal.

More recently, some countries have moved this agenda one step further and introduced forms of public organiza- tion in which a "quasi market" takes the place of tradi- tional forms of coordination (market governance). This became the ideal type of the 1990s, when contracting out, competitive tenders, and principal-agent separation were employed to force officials to respond to financial signals and competitive pressures. Sometimes called "contractual- ism" or "entrepreneurial government," the market gover- nance model sought to create greater flexibility, reduced planning, and less regulation. Programs and the agencies running them were to be rewarded through an incentive- based system in which increased performance resulted in - increased reward. In addition, choices made by consum- ers would help to determine whether programs would receive continued public support.

In addition to the corporate and market types, an emerg- ing model of networks and networking also can be iden- tified in the literature. As a means to redress some of the coordination dilemmas posed by multi-actor systems, these recent accounts have posed an alternative in which government continues to rely on outside agencies, but now in a form of stronger strategic partnership. Compe- tition and confidentiality of contracts is supplanted by

Bureaucracy, Network, or Enterprise? 133

joint action or, in the case of the Blair government, by "joined-up-government." This new ideal of network gov- ernance is thus a form of organization in which clients, suppliers, and producers are linked together as coproducers (network governance).

Networkers are hypothesized to be less motivated by rules and less defined by supervision than their peers. In- stead, they are attentive to the means available to win co- operation from others, more interested in building trust, and more likely to see success as a result of joint action. In place of fixed organizational boundaries and roles, the sys- tem promotes a new rationality based on the creation of a shared organizational culture.

Research Design The central aim of this study is to develop measures of

these ideal types in action and to test the existence and explanatory power of these types. Can these four ideal types provide coherent, nonredundant accounts of the work of public officials in nontrivial programs? The ob- jective of this study also can be viewed as testing the con- struct validity of these governance models by measuring the existence of latent dimensions that correspond to those hypothesized and the associations between these latent dimensions. If the relationships appear to be as expected, then the measurement of these concepts of governance will be shown to be working in the way they should be (Ragin 1994).

The core attributes of the traditional type (procedural governance) and the three alternatives of corporate, mar- ket, and network governance outlined in table 1 have been operationalized and tested in a single-country study (Considine and Lewis 1999). The emphasis in the current study is to retest the findings of the previous work in a cross-national setting. It is possible to move from the ear- lier exploratory analysis of these latent dimensions of gov- ernance to a more powerful test of the goodness of fit of a hypothesized model that links the observed variables (scale items) to latent variables (ideal types). Because so much of what passes for debate about governance and gover- nance reform is steeped in political rhetoric and position taking by protagonists, the research focuses on frontline services. This provides a means to test the extent to which broader principles and norms of new governance provide meaningful measures of the way ordinary officials con- duct their interactions with clients, supervisors, contrac- tors, and citizens.

Program and Country Selection Employment services constitute one of the core func-

tions of modern welfare states. They include registration for receipt of unemployment benefits, assessment of train-

134 Public Administration Review * March/April 2003, Vol. 63, No. 2

ing needs, and referral to jobs and skill-enhancement pro- grams. Typically, these services express important ideas about the role of government, and they are fundamental to any concept of social solidarity and public interest. These services are devised by ministers and officials, mandated by law, and implemented by career bureaucrats and other contracted agencies. Therefore, they provide an appropriate site for examining differences in the work of government and in changes in the normative structure of governance.

Recently, these services have been subject to energetic organizational reform and the definition of the roles and responsibilities of both officials and citizen-clients has been changed. Four OECD countries were selected as represen- tative of systems that have sought to implement a major new approach to the organization of public services. Aus- tralia, Britain, the Netherlands, and New Zealand are not the only cases we might have selected, but they can be found in other published accounts of the leading edge of reform in this field (Shand 1996; Kettl 1997).

We also selected countries with different mixtures of organizational types. Two such organizational forms were identified-public and mixed governmental control. The first is the traditional departmental structure, in which a minister and secretary directed a monopoly public organi- zation. In the second, a decoupled public agency acts within a system of contractors that is empowered to deliver pub- lic services or parts of services. We chose Britain and New Zealand as cases of public governmental control and the Netherlands and Australia as examples of mixed govern- mental control.

Following interviews with policy makers and managers, sample surveys of officials were conducted in each country over a four-year period (table 2). It was deemed important to focus attention on frontline staff for two reasons: First, senior managers' views of their own work and that of their subordinates might easily be influenced by their involve- ment in devising and promulgating the "new governance" models being used in their system. Frontline staff are more likely to be independent of the messianic elements of these change programs. Second, the most critical aspect of the reform programs in each of these alternative models was seen to be a changed ideal concerning frontline work. Whether they are expressed as greater discretion, more flex- ibility, increased collaboration between public and private services, or freedom from "red tape," these reform models posit new expectations about the work of staff engaged di- rectly with clients. This was well expressed in the Gore report: "[AIll federal agencies will delegate, decentralize, and empower employees to make decisions. This will let frontline staff and front-office workers use their creative judgement as they offer service to customers to solve prob- lems" (Executive Office 1993, 71).

Table 2 Survey Details

Year Number Sampling method Australia 1996, 97, 99 587 Individuals randomly sampled from

national list of contracted agencies Britain 1997 153 Individuals sampled as groups from

offices in six regions. Netherlands 1999 271 Individuals randomly sampled from

list of two large regions New Zealand 1997 132 Individuals randomly sampled from

New Zealand Employment Service employee list

Clearly, any assessment of their impact would need to ask questions about the way frontline officials perform their jobs under the new circumstances.

The Australian case was oversampled compared to the other countries in order to cover differences in that country's reforms that led to three ownership types (com- pared with only one or two in the other countries) and a larger number of agencies involved. In each of the other three studies, there was one survey iteration, preceded by pilot studies to modify the questionnaire for local differ- ences in terminology.

Structured interviews with frontline staff and their man- agers were conducted in each country. Coded interview responses provided the text for the 28 survey items that make up the scales reported below. These items (see ap- pendix) have been reduced from an initial list of 40 items in the first study (Considine and Lewis 1999). Respon- dents to the survey (frontline staff) were asked to rate the items on a five-point Likert scale ranging from "strongly disagree" to "strongly agree." Common problems and lo- cal governance tasks were found in all four countries. All officials made regular use of similar file-management tech- nology, followed certain forms of performance measure- ment, were subject to standard processes of supervision by managers, and faced similar disciplinary questions re- garding clients who did not meet their obligations to search for work or undertake other duties.

Using answers to standard questions about how they understand these common tasks and their roles in deliver- ing services, we sought to explain the extent to which dis- tinct types of governance are being employed. Each of these was related to the core conventions and norms in the ideal types outlined above.

Results Overall, 1,143 responses were obtained from staff in

the four countries. The numbers of responses from differ- ent countries by ownership type is shown in table 3. While Australian staff are now working in agencies that are ei- ther government, for-profit, or nonprofit types, agencies in both Britain and New Zealand were still all-government agencies, and staff in the Netherlands were divided be-

tween government and for-profit agencies. Overall, 62 percent of respondents were employed by government agencies, 21 percent by for-profit agencies, and 17 per- cent by nonprofit agencies. These 1,143 responses repre- sent a 56 percent response rate.

Survey responses to items expressing the core values were used to develop a scale measuring each of the four governance models. Principal component analysis was used on the 28 scale items in the questionnaire that were used in all four countries to identify the underlying or latent dimensions of each type. The use of varimax (or-

thogonal) rotation indicates the desire to determine each dimension with its own subset of non-overlapping indica- tors. This exploratory factor analysis was used to retest for the three latent dimensions uncovered in the previous, single-country study (Considine and Lewis 1999).

The use of exploratory factor analysis as the initial tool of investigation, followed by confirmatory factor analysis, signals the theory-building nature of this work. We wanted to investigate which items formed coherent and sensible dimensions and then test these against the governance types derived from policy statements, public management plans, and organization theory. Because these sources contain both whimsical ideas about actual reforms and imprecise claims about their core orientations, and because the existence of these across four different countries was uncertain, explor- atory factor analysis was used initially to determine whether similar governance dimensions arose across these four re- form-minded countries.

Table 3 Distribution of Responses by Country and Ownership Type

Government For-profit Nonprofit Total Australia 273 118 196 587 Britain 153 153 Netherlands 152 119 271 New Zealand 132 132

Total 710 237 196 1,143

As in the previous, single-country study, principal com- ponent analysis was used to extract factors from the gov- ernance scale items, and three credible factors appear to exist. The results of this three-factor solution are shown in the appendix. The three-factor solution certainly appears to validate a central claim of this research, although with one important modification. The first factor combines key elements of two separate hypothesized regimes-corpo- rate and market-and so has been labeled "corporate-mar- ket" in the appendix. This indicates that these two orienta- tions toward public service-delivery work are in fact one single approach so far as these officials are concerned.

Earlier results from the single-country study showed that this corporate-market type emerged as a unique dimen- sion of governance. Given that the Australian public sec-

Bureaucracy, Network, or Enterprise? 135

tor was then in the midst of a major pro-market- reform process, this could have been an aberrant case. However, results for the combined data from four countries, only two of which have mixed economies, supports the conclusion that the new type is both meaningful and robust.' It indicates that officials incorporate goals and targets along- side new competitive methods for achieving them. Not only do they not distinguish them as alternate approaches, but they successfully synthesize them into a new hybrid form-which we term enterprise governance (Considine 2001). This resembles the theoretical postulates found in accounts of fran- chising and reinvention (Halachmi 1996), but it adds to these a recognition of the continuing role of centralizing management techniques in contain- ing and defining the use of quasi-market tools.

Enterprise governance is a mixture of the core elements of corporate and market types that con- cern the centrality of targets and financial out- comes. The corporate elements include statements that recognize the organization's output emphasis and its targets for priority clients, while the mar- ket elements include the willingness to maximize financial outcomes and to take note of actions that help to create "payable" outcomes for the organi- zation or staff member. These elements can be summarized as being: * Target driven * Related to organizational goals * Attentive to financial outcomes * Focused on priority groups.

Network Governance The second factor, labeled network governance,

was the most difficult of all to specify precisely. It contained sentiments and values expressed in public state- ments and consultants' reports that favored a range of net- working attributes, including "joined-up government" (Cabinet Office 1999), the breakdown of so-called "silo" distinctions between organizations (Latham 1998), and various forms of case management and fund-holder au- thority. The method for making such speculative and often sentimental virtues actionable as attributes of job roles and work strategies was difficult. Using material from inter- views and site observations, the items expressed this new preference for interagency relationship building and bro- kerage, including the desire to gain the trust of clients, rec- ognition that outcomes are a joint effort, and willingness to help other agencies with problems.

The network dimension was the most exploratory and perhaps the most theoretically interesting. This set of ideas

136 Public Administration Review * March/April 2003, Vol. 63, No. 2

Figure 1 Three Factor Model with Simple Structure for Confirmatory Factor Analysis

el 0 _Supervisor knows about wor

el 9| Refer supervisor A

e~~~z ~Lines of authority clear

e~z Competitors know results Procedural

e3z Don't pay attention to income

e9 ~~~Free to decide on clients

el2 Obtaining assistance important

el 6 ~~Gain trust of client

e24 ~~Keep own records Network e26 * | Team effort

e7 Would help other organizato

el7 Organization has targets

e25 ~~Computer shows steps

e7 Remind clients of sanctioning

e0 Maximize financial outcomes EnterPr se

e3\

Shift clients off benefits

Use IT to track cl~Ii~ents~

e3 Generate payable outcome

e38 ~~~~Priority client groups

e5z Influenced by numerical target

about service delivery in public programs has been less precisely articulated by reformers and often is represented in the literature as an exhortation in favor of "negotiation," "joined up solutions," and various forms of client-centered case management. This ideal type does not seem to have been expressed in the same robust manner as the other models for reform. This lack of clarity in articulation per- haps reflects uneasiness with a system of coordination that does not allow for clear management either by hierarchy or by the market (Kickert, Klijn, and Koppenjan 1997).

Nevertheless, the results indicate the existence of a type with these predicted attributes. Four of the six items com- prising this dimension were expected to indicate network orientations, while two were considered market items (numbers 9 and 24).2 The willingness of officials to define their day-to-day work as based on the development of trust-

ing relationships with other agencies, the high levels of practitioner autonomy, and the willingness to cooperate with other agencies all signal a distinctive governance type.

The third factor, called procedural governance, con- tained items expected to be associated with the classical bureaucratic ideal type. This was predicted to comprise strong forms of supervision, which was of an expert na- ture, together with a preference for treating clients as part of one universal service. Three of the items that consti- tute the procedural dimension relate to supervision. As such, this scale-and the dimension it represents-fol- lows the predicted and much-discussed path of bureau- cratic standardization.

Having identified three dimensions from the exploratory factor analysis, a model with a simple structure (each item loading only on one factor) was then constructed and tested using confirmatory factor analysis (see figure 1). It con- tains three latent variables and 21 observed variables with their associated error terms. These correspond to the three factors and items with loadings of 0.30 or greater on at least one factor, which emerged from the principal com- ponent analysis. To simplify interpretation, the direction of items that were negatively related to the relevant factor (based on the factor loadings) were reversed. These are indicated by a "z" on the associated error terms in figure 1 and in table 4.

Table 4 contains the standardized regression weights generated from the confirmatory factor analysis, using maximum likelihood estimation. Table 5 includes standard- ized parameter estimates for the correlations among the latent variables and information on the goodness of fit of the confirmatory factor analysis.3 The three-factor model with simple structure (figure 1) fits the data well, and the correlation coefficients between these three factors con- firm they constitute separate dimensions.

Obviously, many individual elements within these dif- ferent dimensions might be considered attractive by al- most any public official or even by private officials work- ing as agents of government. It is, therefore, of some importance that the three different images or approaches are in fact separate, insofar as frontline practitioners are concerned. The correlations between the latent variables, also shown in table 5, indicate the procedural dimension

Table 5 Correlations and Goodness of Fit Information for Confirmatory Factor Analysis

Correlations among latent variables

Enterprise Network Network -.32 Procedural .10 -.06 Goodness of fit: X2 = 1,253; degrees of freedom = 186; p< .01; Comparative Fit Index (CFI) = .98; Root mean square residual = .07

Table 4 Confirmatory Factor Analysis of Three Governance Types

Scale items Standardized regression weights Enterprise Network Procedural

17. Our organization has targets for certain types of client. .32

25. Our computer tells me what steps to take with clients and when. .1 7

27. I often remind clients of the sanctioning power to get them to pay attention. .37

28. My job is determined by goals set elsewhere. .51

30. More and more the objective in this job is to maximize the organization's financial outcomes. .54

31. I think the objective in this job is to shift the maximum number of clients off benefits. .54

32. I use our information technology to track priority clients. .37

33. I do tend to take note of those actions with clients that will generate a payable outcome for the .40 office.

38. In my job, clients are organized into formal and informal priority groups. .26

1 5z. In my job, I am NOT influenced by numerical targets (reversed). .37

9. When it comes to day-to-day work, I am free to decide for myself what I will do with each client. .35

1 2. The really important rules in this job are the ones to do with obtaining assistance from other .36 organizations.

16. The main thing you have to do in this job is gain the trust of the client. .42

24. I like to keep my own records and files on clients and programs. .43

26. When you get good results with clients it's usually a team effort by yourself, trainers, and the .26 employer.

37. if an official from another employment organization asked for help in using the computer, I .47 would help them.

10. My supervisor knows a lot about the work I do day-to-day. .63

19. When I come across something not covered by the procedure guide, I refer it to my supervisor. .60

6z. The lines of authority are not clear in my work (reversed). .34

7z. I do not like my competitors knowing how I go about getting my results (reversed). .08

36z. I am aware than my organization pays attention to the income I generate by placing clients .00 (reversed).

Bureaucracy, Network, or Enterprise? 1 37

is weakly related to both of the other dimensions. The enterprise and network dimensions are strongly and nega- tively correlated. These coefficients show the three ori- entations have substantially separate meanings among frontline officials. The goodness-of-fit information in table 5 indicates that the model fits the data well, with a high comparative fit index (0.98) and a small root mean square residual (0.07).4

The information in table 4 indicates that a number of the scale items are contributing little to the definition of the three latent variables. Specifically, one item on the enterprise type is small (with a standardized regression weight of 0.17), and two items on the procedural type are very small (with weights of 0.08 and 0.00). To examine whether the fit of the model could be improved, each item with a weight less than 0.20 was removed, and the simple structure three factor model was rerun. The standardized regression weights changed little under this new model and the correlation between enterprise and network rose in magnitude to -0.46, while the other two correlations changed little. The comparative fit index of the model actually decreased slightly to 0.95, and the root mean square residual rose to 0.13. Hence, this model with three fewer items was not an improvement over the model shown in figure 1, and therefore no adjustments were made to the model.

In the initial survey conducted in Australia in 1996, respondents were asked to rate each of four "core" items of the governance models on a five-point scale, along with the other scale items. The results showed that many re- spondents were rating more than one item-and in some cases, all four items-highly, when it had been hypoth- esized they would only strongly agree with one of the four orientations captured by the items. To explore the extent to which the various elements in each scale might be reduced to a single core value in the manner implied in contemporary accounts of "new governance," we al- tered the governance-item list for the later surveys. The four core items were extracted from the original list and placed in a separate question in which respondents were forced to make a choice between them. That is, we re- quired them to say which aspect of their work was most important: rules (procedural), targets (corporate), com- peting with other service providers (market), or having good contacts (network).

This change in the questionnaire after the first round of surveying means that a smaller number of respondents answered this question-a total of 791. Most of the re- spondents, when forced in this fashion, adopted the corpo- rate value (70.3 percent). Procedural and market values were the next highest (11.5 percent and 10.7 percent of respondents, respectively), with the lowest number of people choosing the network value (7.5 percent).

138 Public Administration Review a March/April 2003, Vol. 63, No. 2

Implications and Conclusions The analyses we have undertaken indicate there appear

to be three dimensions, or governance orientations, rather than the four hypothesized. Each of these can be observed by direct measures. Enterprise and network modes of gov- ernance now operate as norms in practice, in addition to the older form of bureaucratic or procedural organization, in reform-minded countries. The enterprise alternative is broadly consistent with-but not entirely defined by-the precepts of organizational economics (T. Moe 1984). That is, officials recognize their work as determined less by rules and supervision and more by targets and the need to "earn" income, combining important aspects of both corporate and market governance.

Viewed from this perspective, one might be tempted to conclude that we are simply witnessing the dominance of a different purpose or end, with legal-rational norms giv- ing way to economic-rational principles. However, the emergence of the network type as an alternative to the en- terprise model indicates the latter may be subject to im- portant countertendencies. Perhaps the most important conclusion is that the less well developed, and hitherto poorly theorized idea of a network orientation, is never- theless a meaningful concept. The associations between the three types also point to the inverse relationship be- tween enterprise and network norms, which could be ex- pected, and a lack of association between proceduralism and the two new alternatives to it.

Further research is needed to explain the relationship between the latent dimension we are calling the "network type" and the various practical aspects of bureaucratic work. For example, we need to establish the extent to which those who see themselves as networkers also behave as such. Do they actually spend more time negotiating with others, moving between organizations, developing new solutions to problems, or brokering deals between different parts of the public and private service-delivery systems?

More research is also needed to strengthen the network concept as an ideal type. It is possible that the present items measure two different but related aspects of networking- interorganizational brokerage and intraorganizational au- tonomy. Some of these elements may be program specific, such as the desire to maintain one's own records. If so, it seems likely that different measures of autonomy will be more salient in other programs. The difficulty of finding reliable methods to capture the subtle meaning of the net- work orientation also might be indicated in this study by the small proportion of people (7.5 percent) who, when forced to choose between types, identified with the net- work type.

Procedural norms of governance now run parallel to enterprise and network modes in the minds of frontline officials in the public sectors of these advanced capitalist

countries. The most dominant orientation for the vast ma- jority of officials relates to corporate management. Fewer regarded procedural, market, or network orientations as the core rationality when forced to choose. But in practice, as the latent variables that emerged indicated, officials con- ceived of a new hybrid orientation based on selected cor- porate and market norms and was different to either of them.

Because the work of lower-level officials is likely to be less contaminated by political rhetoric or corporate ideol- ogy, we can take these results as a more or less reliable guide to the emergence of a very different form of public organization, in which rules are replaced by targets and, in some cases, by economic incentives or notions of copro- duction with other officials and clients. The evidence points to the emergence of at least two alternatives to the classi- cal type, and thus two paths toward new forms of govern- ment accountability and responsibility, both of which re- quire us to reappraise certain long-held assumptions about the nature and form of democratic governance in these advanced systems.

Notes

1. Principal component analysis was also run separately using the data for each country to assess the stability of the factor structure within each of the four countries. The factor struc- ture was stable, with one item shifting for the Australian data, three shifting for each of Britain and New Zealand, and five for the Netherlands.

2. These items capture the overlapping nature of meanings in some of these dimensions. For example, item 9 could be read as an indication of an orientation that was simply not proce- dural, rather than being specifically a market orientation. Item 24, which indicates flexibility with technology, could argu- ably represent either a network or a market-corporate orien- tation.

3. The confirmatory factor analysis was carried out using Amos 4 by James L. Arbuckle, Smallwaters Corporation.

4. The comparative fit index varies between 0 and 1, with val- ues close to 1 indicating a very good fit (Tabachnick and Fidell 1996). A root mean square residual score of 0.08 or less indi- cates a reasonable level of approximation, while models with a score of 0.10 or above should not be employed (Browne and Cudeck 1993).

References

Bailey, Kenneth D. 1994. Sociology and the New Systems Theory. Albany, NY: State University of New York Press.

Barzeley, M. 1992. Breaking through Bureaucracy: A New Vision for Managing in Government. Berkeley, CA: University of California Press.

Blockson, Laquita C., and Harry J. Van Buren. 1999. Strategic Alliances among Different Institutions: An Argument for Multi- Sector Collaboration in Addressing Societal Issues. In Cross- ing the Borders: Collaboration and Competition Among Non- profits, Business and Government. Washington, DC: Indepen- dent Sector Working Papers.

Browne, Michael W., and Robert Cudeck. 1993. Alternative Ways of Assessing Model Fit. In Testing Structural Equation Mod- els, edited by Kenneth A. Bollen and J. Scott Long, 136-62. Newbury Park, CA: Sage Publications.

Cabinet Office (United Kingdom). 1999. Modernising Govern- ment. London: Her Majesty's Stationery Office. Cm 4310.

Coe, Barbara A. 1997. How Structural Conflicts Stymie Reinven- tion. Public Administration Review 57(2): 168-73.

Considine, Mark. 1996. Market Bureaucracy? Exploring the Con- tending Rationalities of Contemporary Administrative Regimes. Labour and Industry: A Journal of the Social and Economic Relations of Work 7(1): 1-27.

. 2001. Enterprising States: The Public Management of Welfare-to-Work. Cambridge, UK: Cambridge University Press.

Considine, Mark, and Jenny M. Lewis. 1999. Governance at Ground Level: The Frontline Bureaucrat in the Age of Mar- kets and Networks. Public Administration Review 59(6): 467- 80.

Edelman, Murray. 1977. Political Language: Words that Succeed and Policies that Fail. New York: Academic Press.

Executive Office of the President (Gore report). 1993. Report of the National Performance Review, From Red Tape to Results: Creating a Government that Works Better and Costs Less. Washington, DC: U.S. Government Printing Office.

Fournier, Valerie, and Christopher Grey. 1999. Too Much, Too Little and Too Often: A Critique of du Gay's Analysis of En- terprise. Organisation 6(1): 107-28.

Giddens, Anthony. 1998. The Third Way: The Renewal of Social Democracy. Cambridge, MA: Polity Press.

Halachmi, Arie. 1996. Entrepreneurial Government: In Theory/ In Practice. In Enterprise Government: Franchising and Cross- Servicing for Administrative Support, edited by Arie Halachmi and Kenneth L. Nichols, 55-71. Burke, VA: Chatelaine Press.

Hood, Christopher. 1990. Beyond the Public Bureaucracy State? Public Administration in the 1990s. London: London School of Economics.

Kettl, Donald. 1997. The Global Revolution in Public Manage- ment: Driving Themes, Missing Links. Journal ofPolicy Analy- sis and Management 16(3): 446-62.

Kickert, Walter, Erik-Hans Klijn, and Joop Koppenjan, eds. 1997. Managing Complex Networks: Strategies for the Public Sec- tor. London: Sage Publications.

Kingdon, John. 1984. Agendas, Alternatives and Public Policies. Boston: Little, Brown.

Kooiman, Jan, ed. 1993. Modern Governance: New Government- Society Interactions. London: Sage Publications.

Latham, Mark. 1998. Civilising Global Capital. Sydney, Austra- lia: Allen and Unwin.

Lazarsfeld, Paul F. 1937. Some Remarks on the Typological Pro- cedures in Social Research. Zeitschrift fur Socialforschung (Journal of social research) 6: 119-39.

Bureaucracy, Network, or Enterprise? 139

Le Grand, Julian, and Will Bartlett, eds. 1993. Quasi-Markets and Social Policy. London: Macmillan.

Mayntz, Renate. 1993. Modernisation and the Logic of Interorgani- sational Networks. Knowledge and Policy: The International Journal of Knowledge Transfer and Utilization 6(1): 3-16.

Moe, Ronald C. 1994. The "Reinventing Government" Exercise: Misinterpreting the Problem, Misjudging the Consequences. Public Administration Review 54(2): 111-22.

Moe, Terry. 1984. The New Economics of Organization. Ameri- can Journal of Political Science 28(4): 739-77.

Naschold, Frieder, and Casten von Otter. 1996. Public Sector Transformation: Rethinking Markets and Hierarchies in Gov- ernment. Amsterdam, Netherlands: John Benjamins Publish- ing Co.

Osborne, David, and Ted Gaebler. 1992. Reinventing Government: How The Entrepreneurial Spirit Is Transforming the Public Sector. New York: Plume.

Powell, Walter. 1991. Neither Market nor Hierarchy: Network

Forms of Organisation. Research in Organizational Behaviour 12: 295-336.

Ragin, Charles. 1994. Constructing Social Research. Thousand Oaks, CA: Pine Forge Press.

Rose, Nikolas. 1996. Governing "Advanced" Liberal Democra- cies. In Foucault and Political Reason: Liberalism, Neo-Lib- eralism and Rationalities of Government, edited by Andrew Barry, Thomas Osborne, and Nikolas Rose, 22-45. Chicago: University of Chicago Press.

Shand, David. 1996. Are We Reinventing Government? In New Ideas, Better Government, edited by Glynn Davis and Patrick Weller, 64-73. Sydney, Australia: Allen and Unwin.

Smith, Steven Rathgeb, and Michael Lipsky. 1993. Nonprofitsfor Hire. The Welfare State in the Age of Contracting. Cambridge, MA: Harvard University Press.

Tabachnick, Barbara, and Linda Fidell. 1996. Using Multivariate Statistics. 3rd ed. New York: Harper Collins.

Williamson, Oliver. 1975. Markets and Hierarchies. New York: Free Press.

Appendix Scale Items and Factor Loadings for the Three-Factor Solution *

Corporate- Network Procedural Market

5. I find using sanctions against clients can really damage your reputation with clients and others in the employment field.

6. The lines of authority are not clear in my work. -.61 7. I do not like my competitors to know how I go about getting my results. -.41 8. My job can be done by following a few basic rules. 9. When it comes to day-to-day work I am free to decide for myself what I will do with each client. .36

10. My supervisor knows a lot about the work I do day-to-day. .53 12. The really important rules in this job are the ones to do with obtaining assistance from other .57

organizations. 15. In my job, I am NOT influenced by numerical targets. -.36 16. The main thing I have to do in this job is gain the trust of the client. .51 17. Our organization has targets for certain types of client. .40 19. When I come across something not covered by the procedure guide, I refer it to my supervisor. .50 20. The goal in this work is to find a middle ground between the needs of clients, employers, and the

Social Security system. 21. I use a lot of personal judgment to decide what is best for each client. 22. Before reporting a client for noncompliance, I would always consider which target group they

belong to. 24. I like to keep my own records and files on clients and programs. .47 25. Our computer system tells me what steps to take with clients and when to take them. .34 26. When you get good results with clients it's usually a team effort by yourself, trainers, and the .49

employer. 27. I often remind clients of the sanctioning power to get them to pay attention. .46 28. My job is determined by goals set elsewhere. .54 30. More and more the objective in this job is to maximize the organization's financial outcomes. .56 -.40 31. I think the objective in this job is to shift the maximum number of clients off benefits. .58 32. I use our information technology to track priority clients. .48 .35 33. I do tend to take note of those actions with clients that will generate a payable outcome for the .46

office. 34. All my clients receive a similar service. 35. I am often asked to suggest ways to improve things. 36. I am aware that my organization pays attention to the income I generate by placing clients. -.33 37. If an official from another employment organization asked for help in using the computer, I .48

would help them. 38. In my job, clients are organized into formal and informal priority groups. .40 *To simplify this table, only factor loadings with a magnitude of 0.30 and greater are shown.

140 Public Administration Review * March/April 2003, Vol. 63, No. 2