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Trust, Participation and PerformanceShlomo Mizrahi a; Eran Vigoda-Gadot b; Nissim Cohen c

a Department of Public Policy and Administration, Guilford Glazer School of Management, Ben-Gurion University of the Negev, Beer Sheva, Israel b University of Haifa, Division of PublicAdministration and Policy, School of Political Science, Mount Carmel, Haifa, Israel c Department ofManagement and Economics, The Open University The Dorothy de Rothschild Campus, Raanana,Israel

Online publication date: 16 December 2009

To cite this Article Mizrahi, Shlomo, Vigoda-Gadot, Eran and Cohen, Nissim(2010) 'Trust, Participation and Performance',Public Management Review, 12: 1, 99 — 126To link to this Article: DOI: 10.1080/14719030902817949URL: http://dx.doi.org/10.1080/14719030902817949

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TRUST,PARTICIPATION ANDPERFORMANCEThe case of the Israeli NationalInsurance Institute

Shlomo Mizrahi,Eran Vigoda-Gadot andNissim Cohen

Shlomo MizrahiDepartment of Public Policy and Administration

Guilford Glazer School of ManagementBen-Gurion University of the NegevBeer Sheva, Israel

E-mail: shlomom@bgu.ac.il

Eran Vigoda-GadotUniversity of Haifa

Division of Public Administration and PolicySchool of Political Science, Mount CarmelHaifa, Israel

E-mail: eranv@poli.haifa.ac.il

Nissim CohenDepartment of Management and EconomicsThe Open UniversityThe Dorothy de Rothschild Campus

Raanana, IsraelE-mail: nissimco@openu.ac.il

Abstract

This article studies the possible impact of

citizen and worker participation in decision

making (PDM) in the Israeli National Insur-

ance Institute (INI) on the perceived perfor-

mance of this organization, and trust in it.

Such an impact is expected according to the

rationales suggested by the New Public

Management (NPM) approach. The findings

show that customers and employees of the

INI correlate trust with performance and

outcomes much more than with participation

in decision-making processes. We suggest a

potential explanation for the weak relation-

ship between PDM and trust based on the

idea of alternative politics and segments of

the political culture.

Key wordsTrust, social security organization, participa-

tion in decision making, alternative politics

Vol. 12 Issue 1 2010 99–126

Public Management Review ISSN 1471-9037 print/ISSN 1471-9045 online

� 2010 Taylor & Francis

http://www.tandf.co.uk/journals

DOI: 10.1080/14719030902817949

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INTRODUCTION

In a recent article, Yang and Holzer (2006) explore the performance–trust link, arguingthat the difficulty of empirically demonstrating this link is rooted in the difficulty ofdefining and measuring government performance meaningfully. They suggest thatperformance measurement can improve trust in government directly through citizenparticipation in the evaluation process or indirectly by improving citizens’ perceptionsof government performance. Yang and Holzer’s account of the performance–trust linkcalls for an exploration of the mutual relationship between trust, performance andcitizen participation in decision-making procedures. This article attempts to conductsuch an examination by focusing on the attitudes of Israeli citizens toward the IsraeliNational Insurance Institute (INI).

Some preliminary work in this area has already been done. For example, Fung(2006) developed a framework for understanding the range of institutional possibilitiesfor public participation, albeit from a different perspective, and Fung and Wright(2001) attempted to make several generalizations based on comparative case studiesregarding the conditions shared by successful participation mechanisms. They concludedthat such success is more likely to be achieved when participation is applied at the locallevel to relatively simple policy areas. As will be discussed later, these findingscharacterize large parts of participatory literature. In that respect, studying therelationship between trust, participation and performance in the INI, which operatesnationally and deals with complex issues related to the welfare of society, poses animportant challenge to the generalizing of participation mechanisms.

This challenge should be understood in the broader context of the New PublicManagement (NPM) approach, which has motivated numerous public sector reforms,although some scholars now suggest that NPM has peaked (Hughes 2003) or is even‘dead’ (Dunleavy et al. 2005, 2006). The New Public Management approach, whichemerged in the 1980s and 1990s as part of a reform movement in the public sector,treats bureaucrats as managers and citizens as customers. NPM strategies includecontracting-out or the privatization of services, adopting a customer-oriented approach,measuring performance and efficiency and changing the incentive structure of workersfrom life-long employment to personal contracts (Hood 1991; Ferlie et al. 1996; Lane2000: 147–78).

This article studies the possible relationship between citizen and employeeparticipation in decision making (PDM) on one hand, and perceived performanceand trust in the INI on the other. Such a relationship is expected according to therationale suggested by the NPM doctrine and has been observed in several types oforganizations (Wang 2001; van Ryzin et al. 2004; Vigoda-Gadot and Mizrahi 2008). Inthis article we question whether this relationship is also applicable to the INI as anexemplar of other welfare supply organizations.

The article suggests a model to describe and study the possible relationships betweenvarious variables and studies the Israeli National Insurance Institute (INI), one of the

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pillars on which social policy in Israel rests. The INI operates under the NationalInsurance Law which was passed by the Knesset (Israeli Parliament) in November 1953.We conducted interviews with most of the organization’s board members, interviewswith branch managers and distributed questionnaires among workers and clients.

We found modest relationships between PDM and trust in the INI and we offer acultural-institutional explanation for these findings. The centrality of cultural andinstitutional aspects in measuring performance and trust has been highlighted byrelatively few studies. In a comparative study of executive agencies, Pollitt (2006)shows that the implementation and internalization of performance indicatorsare strongly connected to cultural characteristics of a given society and itsinstitutional setting. In this article, we will follow this approach in explaining theresearch findings, thus pointing to structural limitations in the general implementationof NPM reforms.

The article proceeds as follows. In the next section we present the central argumentsregarding the contribution of participation to performance and trust, and in the thirdsection we present the model and data analysis. The fourth section will conclude theanalysis and will discuss the possible implications as outlined above.

TRUST, PARTICIPATION AND PERFORMANCE IN THE PUBLIC SECTOR

The relationships between trust, participation and performance have been discussed inthe literature from various angles. In this section we discuss each of these variablesseparately and the possible links between them, emphasizing the special characteristicsof the INI as a welfare supply organization. This discussion also explains the possibleimpact of cultural and institutional characteristics on these relations.

Performance in public sector agencies

Over the past few decades, performance indicators (PI) have become a central concernof administrative systems seeking renewal, reform and change. It is a common viewtoday that a better understanding of public sector performance should rely on enrichingand enlarging our ‘toolbox’ of PIs (Mol and Kruijf 2004; Pollitt and Bouckaert 2004;Yang and Holzer 2006). Thus, public sector performance and PIs are evaluatedaccording to various economic parameters with tools borrowed from the policyevaluation field.

However, various studies point to the importance of non-economic parameters inthe measurement of performance. Pollitt (2006) shows that although performancemeasurement tends to focus on economically measurable parameters, there is anincremental growth of more sophisticated performance indicators. In a similar vein,Yang and Holzer (2006) suggest that current performance-measurement practice can be

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improved by measuring what citizens really care about, establishing more systematicand integrated measures across agencies, including other governing entities, and ingeneral by encouraging an ongoing participatory process in which governments andcitizens are both transformed. Such an ambitious project may be realistic in the longterm, yet it clearly points to the centrality of citizen attitudes in the performance-measurement practice as well as in the relations between performance and trust.

Thus, performance evaluation also utilizes the attitudinal-behavioral approach thatuses non-economic parameters as measurements. This approach argues that thetraditional economic approach cannot supply all the required information needed for acomprehensive performance evaluation. Such a comprehensive evaluation must alsotake into consideration the attitudes of the citizens, who are often defined as thecustomers or consumers of public service, as well as the attitudes of the publicadministrators themselves. Our article follows this theoretical line of thinking.

The attitudinal-behavioral approach is applied to many aspects of public sectormanagement and performance. Some of these areas include the scope and quality ofservices offered to citizens and public satisfaction with them, effectiveness andefficiency, fair distribution of public resources, public willingness to contribute to theadvancement of prioritized social and public values that public administration findsdifficult to deal with or does not wish to handle and opinions about the managementstyle and quality of human resources in the public service systems (for more detailedexamples see: National Consumer Council 1986; Local Government Training Board1987; Winkler 1987; Carter 1989; Hart and Grant 1989; Bozeman 1993; Smith 1993;Thomas and Palfrey 1996).

The New Public Management (NPM) approach justifies the ‘new role’ of citizens ascustomers, instead of their past role as subjects or voters (Vigoda 2002). The NPMapproach emerged in the 1980s and 1990s as part of a reform movement in the publicsector (Hood 1995; Ferlie et al. 1996; Lane 2000: 76–98; Barzelay 2001). NPM’s basicargument suggests that central processes in traditional bureaucratic organizations arenot efficient, are politically biased and ill-managed, thus leading to the inefficient supplyof public services as well as citizen dissatisfaction. The NPM approach suggests solvingmost of these problems by applying a managerial, rather than an administrative,approach and adopting managerial strategies developed in the private sector. This ideaclearly expresses a belief change in many countries where public ownership andbureaucratic control have been favored over private ownership and management (Ferlieet al. 1996; Lane 2000: 76–98; Barzelay 2001). Thus, the NPM approach treatsbureaucrats as managers and citizens as customers. NPM strategies include thecontracting-out or the privatization of services, adopting a customer-oriented approach,measuring performance and efficiency and changing the incentive structure ofemployees from life-long employment to personal contracts (Pollitt and Talbot2004; Pollitt et al. 2004). All these changes are expected to increase efficiency as well asthe quality of services provided to the public. NPM stresses response–responsivenessfactors and pays greater attention to the demands of citizens. It is also based on

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psychological aspects of public administration that deal with the unique work withinpublic systems and the difficulties that are associated with them. The common viewtoday is that these factors must be integrated into a broad-based system that formspublic policy and determines the characteristics of administration in government andservice systems (Weiss 1996).

It follows that measuring organizational performance as perceived by customers andemployees (i.e. perceived performance in our study) can provide valuable informationabout the performance of a given organization. Our study applies such measurementsand uses them to examine attitudes of customers of, and employees in, the IsraeliNational Insurance Institute toward this organization in terms of performance, trust andparticipation. In line with recent reforms in public administration, especially thosestemming from the NPM paradigm, two of the most commonly used perceptualmeasures of performance are: (1) attitudes toward the general responsiveness ofgovernments and public administration; and (2) detailed evaluations of citizens’satisfaction with governmental services.

Beyond the idea of measuring the performance of public agencies, there is also a needto more closely evaluate the satisfaction with services received in greater detail. In otherwords, evaluation of administrative performance requires a comprehensive, reliable andcontinuous assessment of citizens’ satisfaction with governmental operation in variousfields. Satisfaction measures make up an important component of the NPM and PIevaluations in both state and federal agencies. They were largely prompted by theNPM’s concept of the citizen as customer and by the vision of ‘putting citizens first’(Caiden and Caiden 2002). Hence, public administration encourages the use ofsatisfaction measures as part of performance evaluations both inside public agencies andaround them (e.g. Poister and Henry 1994; Swindell and Kelly 2000).

It should also be noted that this strategy has been adopted despite some limitations ithas and some criticism it needs to address (Stipak 1979, 1980). Critics argue that whilesample surveys of citizens offer a potentially important method of collecting data forpolicy analysis, there is a danger that such data may be misinterpreted by policy makers(Stipak 1979). The danger stems from two problems: (1) citizens’ response to questionsabout satisfaction and evaluation may not reflect actual service performance; and (2) theuse of subjective data to evaluate service performance poses statistical and conceptualdifficulties. However, such limitations may be overcome by using more specificsubjective indicators than general satisfaction with a service, thus providinggreater potential for evaluating service performance. Such measures are applied inour study.

Citizen and worker participation in decision making

The involvement of citizens in public administration decision making, as well as possiblereforms in that direction, have been the focus of public administration research

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(King et al. 1998; Ebdon 2002; Fung 2006). For example, public hearings are one of themost frequently used methods of participation, yet such public participation oftenproves inefficient in several ways (Berner 2003). Arnstein (1969) and Church et al.(2002) suggest viewing community input as a spectrum or ‘ladder’ of participation. Thelower rungs of the participation ladder comprise processes in which power holders seekto educate the public about particular issues. Higher up on the ladder are processesthrough which power holders consult individuals or groups who could potentially beaffected by a proposed or current policy. Still higher up on the ladder, power holdersand interested parties agree to share responsibilities for decision making. On the toprungs of the ladder, lay individuals dominate decision making. This level of participationrequires a transfer of decision-making power from traditional decision-makers to layindividuals. In accordance with this framework, Cooper et al. (2006) develop aconceptual model of approaches to civic engagement which can range from adversarialto deliberative and citizen-centered, collaborative public management. Basically, we canhypothesize that high levels of participation are more likely to produce trust, yetCooper and Bryer (2007) show that strategies further down the ladder, such asmanipulation, can be used effectively to increase trust and satisfaction. However, theiraccount emphasizes the local level as a central location for citizen participation whereinterpersonal relations and trust have an important impact.

Irvin and Stansbury (2004) weigh the advantages and disadvantages of citizenparticipation and conclude that the ideal conditions for citizens’ participation are basedon strong community ties, small groups organized locally, willingness to volunteer andthe urgency of the issues at stake. A more radical approach characterizes the work ofKing et al. (1998) who, based on interviews and focus group discussions, develop theconcept of authentic participation, that is, deep and continuous involvement inadministrative processes with the potential for all involved to have an effect on thesituation. The key elements of this concept are defined as focus, commitment, trust andopen and honest discussion. It requires that administrators focus on both process andoutcome, meaning that participation is an integral part of administration, rather than anadd-on to existing practices. The public is part of the deliberation process from issueframing to decision making. Authentic participation places the citizen next to the issueand the administrative structures and processes furthest away, while the administrator isthe bridge between the two. However, such an approach requires a completetransformation of organizational culture. It would be very useful to evaluate whethersuch a transformation is likely to increase trust. Such an examination is at the heart ofour study.

Fung and Wright (2001) study several participatory mechanisms operating in avariety of cultures and structural conditions. They point to the usefulness of suchmechanisms for solving particular problems, usually at the local level, yet they alsohighlight the limitations of generalizing such mechanisms to the national level and tocomplex issues. Fung (2006) elaborates on Arnstein (1969) and Fung and Wright(2001) in developing a framework for understanding the range of institutional

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possibilities for public participation. He argues that mechanisms of participation varywith regard to three important factors: who participates; how participants communicatewith one another and make decisions together; and how discussions are linked withpolicy and public action. Characterizing participatory methods according to thesefactors can help us design the proper mechanism for achieving social goals such aslegitimacy, justice and effective administration.

Democratic participatory theory suggests that participation in decision-makingprocesses increases the actors’ responsibility for the outcomes, so the actors tend toaccept and cooperate with the system (Pateman 1970; Putnam 1993). Moreover,participation in decision-making processes may strengthen the sense of group identityand correspondingly, loyalty to the group/organization (Osterman 1999; Bouckaertet al. 2002). In this manner, widespread participation of citizens in decision-makingprocesses helps increase the performance of public agencies and the trust in them.Fornell et al. (1996) show, for example, that monopolist companies receive lower clientsatisfaction ratings than non-monopolists because the use of the latter companiesdepends on free choice. Therefore, the monopolistic nature of many governmentservices alone could explain part of the dissatisfaction.

To a large extent these arguments also apply when we think about the participationof employees in organizational decision-making processes. From the more genericmanagerial perspective, it is frequently argued that a higher level of employees’participation in decision making is strongly related to higher levels of organizationalperformance, achievements and goal attainment (Vroom 1964; Porter et al. 1974;Cohen 2003). Moreover, today, most studies assume that citizens’ participation at theadministrative level can improve public sector performance (King and Stivers 1998;King et al. 1998). The same logic can work for higher levels of employees’ participationin decision making, especially in the public sector (Mizrahi 2002).

Indeed, some studies employed theories of skill and resource transaction betweensocial institutions to argue that the tradition of citizens’ involvement is acquired througha process of political learning (e.g. Pateman 1970; Sigel 1989; Peterson 1990; Sobel1993; Verba et al. 1995; Soss 1999). While these studies related institutional actions orculture to individual political participation, they rarely considered the mutualrelationships among democratic participatory behavior, citizens’ involvement indecision-making processes and trust in public agencies.

In the current study, we assume that since citizens who participate in decisionmaking feel responsible for the outcomes, they are more likely to evaluate managerialquality and the performance of public agencies positively and thus have greater trust inadministrative agencies. In turn, this increased trust motivates citizens to participatemore intensively in decision-making processes. These relationships are at the heart ofthe model proposed in this article.

Similar rationales apply to including citizens in decision-making processes related tochild welfare, the physically and mentally disabled, the elderly and low-incomerecipients of welfare, as well as decisions made about social security institutions and

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health care organizations (Hardina and Malott 1996; Abatena 1997; George et al. 2003).It is often suggested that the inclusion of such populations requires a top–down processwhere administrative officials and politicians initiate, and even enforce, citizenparticipation in decision making (Fung and Wright 2001). It is therefore important toevaluate the experience of employees in welfare supply organizations with PDM and theextent to which they themselves participate in decision making and hence correlate thisactivity with performance and trust. In the next section we examine these variables inan empirical model.

Trust in administrative agencies

With respect to the above description of citizens’ participation, trust in government andin administrative agencies represents a different aspect of the democratic machinery.Trust is a less active but still essential dimension for safeguarding and enhancing thedemocratic ethos. In fact, recent years have witnessed a massive proliferation of theconcept of trust both in public administration and in the social sciences. There are alsonumerous definitions of the term ‘trust’ (Luhmann 1988; Bouckaert et al. 2002).Among these definitions, we chose the one that views trust as the ‘faith people have intheir government’ (Citrin and Muste 1999) and we further applied it to a specificadministrative agency – the INI. Trust differs from satisfaction because it expresses thebelief of an individual in the good faith of others and their future intentions (Hosmer1995), while levels of satisfaction express past and present experience with servicedelivery.

Levels of trust are generally measured by surveys and interviews using severalindicators. As the literature proves, trust may be studied and measured at the macroand/or at the micro level. At the macro level, we refer to trust in the Government as awhole, which is a very relative and vague concept. At the micro level, we refer to trustin governmental and administrative agencies that represent modern bureaucracy, whichis much easier to conceptualize and measure (Bouckaert and van de Walle 2003). Thisresearch focuses on the micro-level meaning of trust.

The common explanation of trust at the micro level is the micro-performancehypothesis about trust in government (Bok 2001; Bouckaert et al. 2002; Bouckaert andvan de Walle 2003). This hypothesis simply states that as citizens grow more satisfiedwith public sector performance, their level of trust in the government increases.A recent study in the Israeli setting found empirical evidence that supports this claim(Vigoda 2002; Vigoda-Gadot and Mizrahi 2008). While this hypothesis may beless theoretically valid when the general term ‘trust in government’ is used, it ismuch more theoretically valid when referring to trust in a specific administrative agencybased on its performance. Therefore, this study will refer to a specific administrativeagency.

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A focus on the organization: The Israeli National Insurance Institute (INI)

The Israeli National Insurance Institute (INI), which is the focus of this research, isone of the largest administrative agencies in the Israeli public sector. As an exemplarof social security organizations and welfare supply agencies in general, it isresponsible for serving a diverse population nationwide under close governmentalmonitoring.

Welfare supply organizations play a significant role in the mechanism of the modernwelfare state. A central type of welfare supply organization includes those organizationsthat provide social security. Their centrality and importance are expressed in variousways. First, they provide individuals with a basic income in case they become disabled,thereby reducing a major risk that everyone faces. Second, they are managednationwide and are responsible for large budgets. Third, they are usually fully orpartially financed by the State. Fourth, they are usually managed or regulated by theState.

The establishment of social security institutions in the nineteenth century wasmarked by motivations and dilemmas similar to those of the modern welfare stateregarding types of financing and the relationship between them and the State (Briggs1969). Labor organizations traditionally demanded managerial autonomy in order toguarantee the workers’ rights, while the State and employers demanded a share in themanagement of these organizations (Therborn 1983).

The question of independence and control is central in measuring satisfaction with,and trust in, social security organizations. Pollitt (2006) shows, for example, thatsocial security agencies are closely monitored by politicians, who try to enforceperformance measurement, due to the fact that this policy area strongly influencespotential voters and is heavily funded by the Government (Korpi and Palme 1998).Thus, customers may be ignorant of the fact that the Government makes the centralpolicy decisions regarding the distribution of funds, allowing social securityinstitutions to simply implement policies. These customers may therefore translatetheir dissatisfaction with outcomes into dissatisfaction with the organization, thusblaming these organizations for low quality services or small social security allowanceseven though these are the results of the Government’s or the Ministry of Finance’sdecisions (Reed and Dixon 2005). This point will be considered in the researchmodel.

However, there are very few clear indications of the Israeli citizens’ expectationsregarding the preferred type, structure and management of welfare supply agencies.The most relevant indication is a study which examined public opinion regarding healthcare funds in Israel, and found that Israelis generally have a low level of trust in, littleparticipation in and little satisfaction with, the four health supply organizations in Israel(Mizrahi et al. 2007). Yet, we have not found any other indications of trust in andsatisfaction with welfare supply organizations.

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PARTICIPATION, TRUST AND PERFORMANCE IN WELFARE SUPPLYORGANIZATIONS

The relations between PDM, performance and trust in Israel have been modeled andempirically examined in a seven-year longitudinal study (Vigoda-Gadot and Mizrahi2008). In this section we rely on the framework suggested by these authors, suggestinga modified model which takes into consideration the special characteristics of welfaresupply organizations. Specifically, we refer to the fact that citizens often do notdistinguish between those who make decisions regarding the allocation of resources andwelfare services (the politicians and bureaucrats in the central government) and theorganizations that actually provide the services. Thus, the citizens usually consider theseorganizations responsible for budget cuts and the reduction of services. Moreover, wewill also utilize this framework to study the attitudes of employees toward theirorganization.

Research model and hypotheses

The research model examines the effect of citizen, and employee, participation indecision making (PDM) on the perceived performance (PER) of the INI and on trust(TRS). We also examine the possible impact of alternative variables on trust, that is, theeffect of perceived performance and client satisfaction (SAT) on trust in the INI as wellas the impact of citizen perceptions about the structural characteristics of the INI ontrust.

Specifically, the model includes three structural variables which were tested asindependent variables – autonomy (AUT), accessibility (AC) to services and equality(EQU) in service provision. Autonomy refers to the level of managerial independenceof the organization as perceived by clients. Accessibility to services refers to clients’perceptions regarding the degree to which they can actually access the INI services.Equality in service provision refers to the degree to which clients believe that the INIservices are provided equally.

The relations between all the variables are presented in Figure 1, which is based onthe theoretical development we have presented so far. In order to study theserelationships relative to the attitudes of employees as well, we adapted most of thevariables for the employees’ sample. We should emphasize that all paths in the modelrepresent correlative relations and no causal relations should be inferred. We start bysuggesting that citizen and worker involvement and participation in decision making atthe administrative level are positively related with the performance of the organizationas perceived by citizens and workers, respectively. As explained earlier, this hypothesisis based on the idea of authentic participation and the works by King et al. (1998) andIrvin and Stansbury (2004). Findings from business studies about the advantages ofemployees’ participation in decision making and the empowerment of both public

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personnel and ordinary citizens in helping make organizational decisions and settingpolicy also bolster our argument (Farh et al. 1990; Skarlicki and Latham 1996).Participation in decision making is also positively related to work outcomes. Schnake(1991) argued that a leader’s willingness to share power may create a need insubordinates to reciprocate. One way to ‘pay back’ a leader for his or her support is bydemonstrating good citizenship through increased levels of trust and politicalparticipation. Based on the logic above, we suggest that when people are heavilyinvolved in practical administrative processes of any kind, they acquire a betterunderstanding and more realistic perspective of specific processes, difficulties anddilemmas that the public sector and its officials face in daily activities. As a result, thesecitizens and employees will tend to have more positive perceptions about the quality ofservices and goods with which they are provided by the organization. In line with thesearguments, we suggest the first hypothesis.

H1: Trust in the INI (TRS) is positively related to involvement and PDM in public administration,

satisfaction with the process and outcomes of the organizations (SAT) and perceived organizational

performance (PER).

With regard to the nature of social security organizations, citizens usually do nothave accurate information about the authority and responsibilities of these organizationsin the area of social policy as compared to those of the Government. Many peoplesimply regard social security as an additional form of taxation, albeit one that they

Figure 1: Research modelNote: Broken-line arrows demonstrate indirect relations between the independent variables and TRS, i.e.,when PER can be an intervening variable.

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approve of more than income tax. However, perhaps the most important advantage ofsocial security is that it remains popular (Hedges and Bromley 2001, cited in Reed andDixon 2005). Welfare supply organizations are often subjected to strict governmentalregulations regarding their budget and the number of services they are allowed toprovide (Chernichovsky 2005). Yet, citizens usually regard the organizationsthemselves, rather than the Government, as responsible and accountable for theservices they receive. The variable AUT is supposed to indicate the extent to which theINI is regarded as independent in its activity and accountable for outcomes. Hence, it islikely to be related to the level of trust in the organization. Accessibility to services(AC) and equality in service provision (EQU) are two system characteristics whichindicate the degree to which customers believe that the organization is willing topromote egalitarian values rather than solely economic values. Given the definition oftrust as citizens’ beliefs in the good intentions of the organization toward its customers,citizen perceptions regarding these system characteristics are likely to be positivelyrelated with trust. Thus, we expect positive relations between these systemcharacteristics and TRS because a high level of autonomy, accessibility and equalitycan guarantee that customer interests will be positively considered. We suggest thesecond hypothesis.

H2: Trust in the INI (TRS) is positively related to organizational autonomy (AUT), accessibility and

connection with citizens (AC) and to equality in service provision (EQU).

However, theories of participation often point to the possible impact of PDM onperceived organizational performance (PER). Vigoda-Gadot and Mizrahi (2008) show,for example, the mediating role of PER between PDM and TRS. In the current studywe examine PER as a dependent variable and test its relations with SAT, PDM andother structural variables as independent variables. We suggest a third hypothesis.

H3: Perceived organizational performance (PER) is positively related to satisfaction with the process and

outcomes (SAT) of the organizations, organizational autonomy (AUT), accessibility and connection with

citizens (AC), involvement and PDM in public administration and with equality in service provision (EQU).

Method: Sample and measures

The model was examined with data gathered in Israel during the winter of 2007. Thedata were collected using questionnaires distributed to citizens nationwide and workersin the Israeli social security organization (INI). The questionnaire was designed toexamine citizens’ perceptions of welfare supply organizations and workers employed bythe organization. All together, 634 individuals participated in the study, 474 citizensand 160 employees. Data from citizens were collected by a random sampling method.Interviewers met the participants in various locations such as public venues,

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governmental institutions and private homes. We sampled various cities and othercommunities based on geographic location and the size and structure of the population.Response rate was eighty per cent due to our direct sampling method. Citizens wereapproached by one of the research assistants and asked if they would be willing to takepart in the study. The response rate was calculated as the ratio between thoseparticipants who ultimately took part in the study and those who agreed to listen to ourexplanation of the study and reviewed the questions. For the employees, we used aconvenience sampling because the labor union objected strenuously to its constituents’participation in the study. Despite that limitation, the employee sample isrepresentative of the overall employee population. The workers answered thequestionnaire at their place of work.

In addition to the questionnaires distributed to citizens and employees, we conductedinterviews with all members of the central management and division heads, and asample of area managers, based on geographical location and population size in eacharea. Overall, we conducted twenty-five interviews which gave us the requiredbackground regarding the organizational culture and informal relations within theorganizations. Such information may help in interpreting the findings, and we will use itin the discussion later in the article.

Of the citizens’ sample we collected, 48.9 percent were men, 51.1 percent werewomen and 51 percent were married (all over 18 years of age). Average age was 30.6years (SD¼ 18.6) and average years of education was 13.2 (SD¼ 2.5). With regard toethnicity, 83.6 percent were Jews, 10.2 percent were Muslims, 4.2 percent wereChristians, 1.1 percent were Druze (members of an Arab group that are neitherMuslims nor Christians) and the rest were ‘others’. The breakdown by income showedthat 57.2 percent had a low monthly net income (up to NIS 4,000/$1,000), 34.1percent had an approximately average income (NIS 4,000–8,000/$1,000–$2,000) and8.7 percent had a high income (above NIS 8,000/$2,000). A comparison of our datawith the annual report issued by the Israeli Central Bureau of Statistics (ICBS) onnational demographics showed minor differences between our data and the nationalaverages. First, the women in this sample were more represented than the men (51.1percent in the sample compared to 50.58 percent in the population). Second, theIsraeli-Arab population was under-represented in our sample (15.5 percent inthe sample compared to 19.9 percent in the population). Third, the fact that thequestionnaires were given to those 18 years and older raised the average age of thesample in comparison to the population. Fourth, ICBS data about income include onlyincome before taxes and only the income of salaried employees, making it difficult tocompare the sample to the general population in that aspect. Overall, however, interms of income we believe that the sample is a good fit with the population, as theaverage monthly income in Israel amounts to NIS 7,662/$1,616 (Israeli Central BureauStatistics Survey 2007).

Of the employees’ sample, 13.8 percent were men, 86.2 percent were women, and49 percent were married. Average age was 42.3 years (SD¼ 9.2) and average years of

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education was 14.4 (SD¼ 2.4). With regard to ethnicity, 100 percent were Jewish.The breakdown by income showed that 11.3 percent had a low monthly net income (upto NIS 4,000/$1,000), 73.1 percent had an approximately average income (NIS 4,000–8,000/$1,000–$2,000) and 15.6 percent had a high income (above NIS 8,000/$2,000). In this case, too, the research sample was very representative of the overallworker population, while the INI employees’ demographics were quite similar to thoseof the total Israeli civil servant population (Interview with the INI’s human resourcesmanager, Y. Dori).

The variables were measured in this study by groups of questions that were verifiedand tested in previous research on trust in the public sector (Vigoda-Gadot and Yuval2003, 2004; Vigoda-Gadot and Mizrahi 2008). Evaluations were provided byrespondents on a scale of 1 to 5.

Referring first to the measurement of citizen participation in decision making,respondents were asked to evaluate: (1) the degree to which the INI considers clientparticipation important; (2) the degree to which they feel that they take part indecisions; (3) the degree to which they are asked to take part in decisions and processesregarding improving efficiency and services; (4) the degree to which they receiveinformation from and provide information to the INI; (5) the degree to which the INIconsults them; (6) the degree to which they are asked to evaluate performance. Theaverage score of these evaluations comprises the subjective evaluation of respondentsregarding the level of client participation in decision making in the INI. In other words,we did not measure specific participatory mechanisms but, rather, measuredthe subjective feelings of the respondents about their opportunity to participate inthe INI’s decision-making process. Such an approach is especially relevant for socialsecurity organizations which operate nationwide and may use various modes ofparticipation.

In order to measure the perceived performance of the INI, respondents were askedto evaluate: (1) the efficiency of the INI; (2) the professionalism of workers; and (3) thedegree to which the INI: (3a) sets and achieves its goals; (3b) provides high quality andfast service; (3c) uses advanced technologies; (3d) initiates new ideas; (3e) allocatesresources in a manner that serves the public. The average score of the answers to thesequestions comprises the perceived performance of the INI.

In order to measure the level of satisfaction, respondents were asked to rate theirsatisfaction with: (1) the services they receive from the INI; (2) the quality of themedical treatment; (3) the quality of administrative services; (4) the quality ofmanagement; (5) the operation of the INI; (6) the outcomes. The average score of theanswers to these questions comprises the level of satisfaction with the INI.

In order to measure trust in the INI, respondents were asked to evaluate their trustin the INI as well as the degree to which they trust their regional INI managers, thegeneral management and INI workers. The relevant measure for our purposes is trust inthe organization, though trust in the various functions of the organization may providesome interesting insights into the nature of trust in welfare supply organizations.

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In addition, the model includes three additional variables which were tested asindependent variables – autonomy, accessibility to services and equality in serviceprovision. Sample questions which measure autonomy are: ‘The INI is the only one thatdecides which welfare services I will receive, of what quality and for how long’; ‘Thereare people and organizations that can obtain services from the INI which I cannot’; and‘The INI, and not the Government or the Parliament, determines social security taxesand allowances.’

Accessibility to services (AC) was measured by questions such as: ‘I feel that I canapproach INI workers and managers any time in order to clarify issues that areimportant to me’; and ‘The INI always explains my rights to me as a customer andmaintains efficient communication channels with its customers.’

Equality in service provision (EQU) was measured by questions such as: ‘The INIprovides equal services for all customers, without discriminating between people’; ‘TheINI discriminates against people like me as compared to other citizens in the country’;and ‘The INI will employ any capable worker, regardless of religion, gender or ethnicorigin.’

Findings

In order to interpret the findings properly, we first present some indications aboutthe general level of trust in governmental agencies in Israeli society. Due to complexsocial and political processes, which occurred during the 1970s and 1980s, Israelicitizens have felt increasing disappointment with public policy in general and withreform programs in particular (Arian 1998; Mizrahi and Meydani 2003). Suchdisappointment with governmental services is not unique to Israel but, rather, hasbeen observed worldwide (Coulson 1998; Glaser and Hildreth 1999; Borre 2000;Bouckaert and van de Walle 2003). As in other societies where dissatisfaction withservices led to a decline in trust, in Israel, fragmentation processes and dissatisfactionwith services also affected trust in administrative agencies. A five-year studyconducted during 2001–5 shows a relatively stable low level of trust in administrativeagencies (2.77 on a scale of 1–5) and political organizations (1.8 on a scale of 1–5) aswell as little trust in politicians and public administrators (1.7 and 2.9 respectively)(Vigoda-Gadot and Mizrahi 2008). The welfare system and the INI are notexceptional in that respect (2.8 on a scale of 1–5). In comparison with other welfaresupply organization such as healthcare organizations, respondents in thatgeneral survey were more trusting of their own health fund (health providerorganization – similar to an American Health Maintenance Organization (HMO)) (3.4on a scale of 1–5) and physicians (3.46 on a scale of 1–5) compared to both thegeneral level of trust and the trust in the INI.

The psychometric characteristics of the research variables, in general and across thecitizens and employees (on a scale of 1 to 5), are summarized in Table 1.

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Through a variety of variables, Table 1 shows that Israeli citizens do not have a highlevel of trust in the INI (2.47). Specifically, on a scale of 1–5 where 1 represents a lackof trust and 5 represents complete trust, 61.7 percent of the citizens’ sample reportedlow levels of trust (1and 2 on the scale), 29 percent reported a medium level of trust (3on the scale) and only 9.3 percent reported high levels of trust (4 and 5 on the scale). Ina similar vein, perceptions about the organization’s performance are relatively low(2.54). Specifically, on a scale of 1–5 where 1 represents a very low level ofperformance and 5 represents a very high level of performance, 65.2 percent of thecitizen sample evaluated the INI’s performance as poor (1 and 2 on the scale), 29.5percent gave it a medium score (3 on the scale) and only 5.3 percent thought the INI’sperformance was quite good (4 and 5 on the scale).

Table 1 also shows that Israeli citizens do not feel that they participate in decision-making (PDM) processes in the social security system (2.25). Specifically, on a scale of1–5 where 1 represents a very low level of participation and 5 represents a very highlevel of participation, 79.4 percent of the citizen sample reported low levels ofparticipation in the INI process of decision making (1 and 2 on the scale), 16.7 percentreported a medium level of participation (3 on the scale) and only 3.9 percent reportedhigh levels of participation (4 and 5 on the scale). This finding was supported by ourinterviews with senior administrators in the organization who claimed that citizens’participation is limited to putting complaints in the suggestion box.

The table also shows that Israeli citizens are relatively dissatisfied with the servicesprovided by the INI (2.47). Specifically, on a scale of 1–5 where 1 represents a verylow level of satisfaction and 5 represents a very high level of satisfaction, 69.6 percentof the citizen sample reported low levels of satisfaction with the INI (1 and 2 on thescale), 25.1 percent reported a medium level of satisfaction (3 on the scale) and only5.3 percent reported high levels of satisfaction (4 and 5 on the scale). The level ofaccessibility to services is considered low (2.1), and the two other structural variables –autonomy in operation and equality in services – are evaluated at a low to medium level(2.74 and 2.87 respectively).

Table 1: Descriptive statistics

Trust

(TRS)

Accessibility

(AC)

Satisfaction

(SAT)

Autonomy

(AUT)

Performance

(PER)

Participation

(PDM)

Equality

(EQU)

Citizens only 2.47

(0.97)

2.10

(0.76)

2.47

(0.87)

2.74

(1.21)

2.54

(0.88)

2.25

(0.80)

2.87

(0.89)

Employees only 3.42

(0.88)

– 3.41

(0.75)

3.56

(1.02)

3.45

(0.70)

2.27

(0.78)

2.60

(0.73)

Citizens &

Employees

2.73

(1.03)

2.10

(0.76)

2.73

(0.93)

2.96

(1.22)

2.78

(0.97)

2.25

(0.84)

2.80

(0.86)

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The employee sample shows a slightly higher level of trust (3.42) than the citizensample. Specifically, on a scale of 1–5 where 1 represents a lack of trust and 5represents complete trust, 21.4 percent of the worker sample reported low levels oftrust (1 and 2 on the scale), 44.7 percent reported a medium level of trust (3 on thescale) and 34 percent reported high levels of trust (4 and 5 on the scale). Similarly, theINI employees evaluated the organization’s performance as relatively high (3.41).Specifically, on a scale of 1–5 where 1 represents a very low level of performance and 5represents a very high level of performance, 20.9 percent of the employees evaluatedthe INI’s performance as poor (1 and 2 on the scale), 49.4 percent gave it a mediumscore (3 on the scale) and 29.7 percent evaluated the INI’s performance as quite good(4 and 5 on the scale).

Table 1 also shows that INI employees do not feel that they participate in decision-making (PDM) processes in the organization (2.27). Specifically, on a scale of 1–5where 1 represents a very low level of participation and 5 represents a very high level ofparticipation, 75.6 percent of the workers reported low levels of participation in theINI’s process of decision making (1 and 2 on the scale), 18.1 percent reported amedium level of participation (3 on the scale) and only 6.3 percent reported high levelsof participation (4 and 5 on the scale).

The table also shows that INI employees are relatively satisfied with the organization(3.41). Specifically, on a scale of 1–5 where 1 represents a very low level of satisfactionand 5 represents a very high level of satisfaction, 23.1 percent of the employee samplereported low levels of satisfaction with the INI (1 and 2 on the scale), 48.1 percentreported a medium level of satisfaction (3 on the scale) and 28.8 percent reported highlevels of satisfaction (4 and 5 on the scale). Employees evaluated the equality in servicesat an even lower level than did citizens (2.6), demonstrating their feeling that theorganization was not committed to equality. Autonomy in operation, on the other hand,was rated at a medium to high level (3.56). Employees were not asked to comment onaccessibility to services because they provide them rather than receive them.

Following the rationale that employees, given their socialization processes and thefact that they depend on their jobs, would tend to trust the organization more thancitizens would, we also tried to control the employees’ sample by measuring theirorganizational commitment. As we assumed, the employees did show a relatively highlevel of organizational commitment (3.72, SD¼ 0.89), but, as we showed above, thetrust level was not as high as we expected it would be.

Interestingly enough, when applying additional statistical tests and the t-test, thedifferences between the citizens’ and the employees’ samples were not found significantfor all variables.

Tables 2a and 2b present zero-order correlations for the research variables for thecitizens’ sample and the employees’ sample respectively. The tables show that most ofthe inter-correlations hold in the expected directions for the citizens’ sample, while forboth samples, participation in decision making is positively related to trust/organizational commitment.

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Referring first to the citizens’ sample in Table 2a, perceived performance (PER)demonstrates positive and quite strong relationships with participation in decisionmaking (PDM) and satisfaction (SAT) (r¼ .5; p5 .01 and r¼ .72; p5 .01respectively). PER also demonstrates relatively medium to strong positive relationshipswith accessibility and equality (r¼ .5; p5 .01 and r¼ .44; p5 .01 respectively). TRSis positively related to PER, PDM and SAT (r¼ .68; p5 .01, r¼ .44; p5 .01and r¼ .64; p5 .01 respectively). TRS is also positively related to two of the structuralvariables – accessibility (AC) and equality (EQU) (r¼ .42; p5 .01 and r¼ .38; p5 .01respectively) – while its relationship with autonomy (AUT) is not significant.

Referring to the employees’ sample in Table 2b, perceived performance (PER)demonstrates a positive, though not too strong, relationship with satisfaction (SAT), buta weak relationship with participation in decision making (PDM) (r¼ .37; p5 .01and r¼ .18; p5 .01 respectively). PER does not have significant relationships withequality (EQU). TRS is positively related to PER, PDM and SAT (r¼ .56; p5 .01,r¼ .28; p5 .01 and r¼ .57; p5 .01 respectively). TRS is also positively related toautonomy (AUT) (r¼ .25; p5 .01) while it has no significant relationships withequality (EQU).

Table 2a: Correlation matrix – citizens only

TRS PER PDM SAT AUT AC

Trust (TRS)

Performance (PER) 0.68**

Participation (PDM) 0.44** 0.5**

Satisfaction (SAT) 0.64** 0.72** 0.56**

Autonomy (AUT) NS 0.1* 0.1* 0.1**

Accessibility (AC) 0.42** 0.5** 0.51** 0.55** 0.11**

Equality (EQU) 0.38** 0.44** 0.25** 0.4* 0.11** 0.25**

*p� .05; **p� .01. NS¼Not Significant.

Table 2b: Correlation matrix – employees only

TRS PER PDM SAT AUT

Trust (TRS)

Performance (PER) 0.56**

Participation (PDM) 0.28** 0.18**

Satisfaction (SAT) 0.57** 0.37** 0.34**

Autonomy (AUT) 0.25** 0.28* 0.48** 0.11**

Equality (EQU) NS NS NS NS NS

*p� .05; **p� .01. NS¼Not Significant.

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Tables 3a and 3b present the results of two multiple regression analyses, for thecitizens’ and workers’ sample respectively, where trust (TRS) was first regressed on allthe independent variables and then perceived organizational performance (PER) wasregressed on all of the variables.

Referring to the citizens’ sample in Table 3a, the first column shows that thedependent variables are generally related to trust to a large extent (R2¼ .506).However, trust was positively related only to SAT and PER (b¼ .291; p5 .001 andb¼ .467; p5 .001 respectively). Trust has no significant relationship with PDM,autonomy, accessibility and equality. Hence, hypothesis H1 is partially supported, whileH2 is not supported by the findings. In other words, satisfaction and performance maybe good explanations for trust, but structural variables such as PDM, autonomy,accessibility and equality are probably not good candidates for predicting or explainingcitizens’ trust.

The second column in Table 3a shows that the dependent variables are generallyrelated to PER (R2¼ .564). The impact of socio-demographic characteristics such asgender, age and education was not found significant. PER was most positively related toSAT (b¼ .547, p� .001). PER was also positively, though weakly, related to equalityand accessibility (b¼ .172, p� .001; b¼ .126, p� .01 respectively). The relation-ships between PER and PDM (and AUT) were not significant and, therefore, thepossibility that PER mediates between PDM and TRS was ruled out. It follows that H3is only partially supported.

Table 3a: Multiple regression analysis (standardized coefficients) for the effect of independent variables on

Trust/PSP – citizens only

Variables

Trust (TRS)a Performance (PER)b

b(t, Sig) b(t, Sig)

(Constant) (0.896, 0.371) (1.457, 0.146)

Performance (PER) 0.467 (8.213, 0)** –

Participation (PDM) 0.065 (1.247, 0.213) 0.107 (2.425, 0.016)

Satisfaction (SAT) 0.291 (4.848, 0)** 0.547 (12.481, 0)**

Autonomy (AUT) 0.06 (0.211, 0.833) 0 (0.005, 0.996)

Accessibility (AC) 0.025 (0.447, 0.655) 0.126, (2.716, 0.007)*

Equality (EQU) 0.077 (1.848, 0.065) 0.172 (4.975, 0)**

R2 0.51 0.57

Adjusted R2 0.51 0.56

F 74.499** 112.147**

Notes:aTRS as explained by the models’ variables.bPER as explained by the models’ variables.

*p� .01; **p� .001.

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These findings call for additional analysis of the relations between PDM, PER andTRS where PER may be a mediating variable. Thus, in light of previous studies thatquestioned the relationships between performance and trust (e.g. van de Walle andBouckaert 2003; Vigoda-Gadot and Yuval 2003) we also examined mediatingrelationships where (1) trust leads to performance and, (2) performance leads totrust. Based on several methods for the test of mediation, including the strategysuggested by Baron and Kenny (1986) and on a test of mediation with StructuralEquation Modeling (SEM) we found that no such mediation can be supported based onour data of both citizens and employees. Therefore, we decided to focus on the maineffects as presented in Figure 1. Additional support for this model can be found in thelack of multicollinearity among the independent variables and between the dependentvariables in both samples. The relatively high correlation between performance andtrust (0.56–0.68) is well documented in other studies and should not be interpreted asmulticollinearity especially due to the different theoretical bases of each variable and thedifferent zero-order correlations they have with other variables in the model.

Referring to the employees’ sample in Table 3b, the first column shows that thedependent variables are generally related to trust to a large extent (R2¼ .443).However, like the results in the citizens’ sample, trust was positively related only toSAT and PER (b¼ .422; p5 .001 and b¼ .418; p5 .001 respectively). Trust has nosignificant relationship with PDM, autonomy, accessibility and equality. Hence,hypothesis H1 is partially supported, while H2 is not supported by the findings for theemployees’ sample. Here again, satisfaction and performance may be good candidates

Table 3b: Multiple regression analysis (standardized coefficients) for the effect of independent variables on

Trust/PSP – employees only

Variables

Trusta Performance (PER)b

b(t, Sig) b(t, Sig)

(Constant) (1.873, 0.063) (4.621, 0)**

Performance (PER) 0.418 (5.552, 0)** –

Participation (PDM) 0.106 (1.531, 0.128) 0.044 (0.558, 0.578)

Satisfaction (SAT) 0.422 (4.76, 0)** 0.356 (3.695, 0)**

Autonomy (AUT) 70.028 (70.414, 0.680) 0.073 (0.972, 0.333)

Equality (EQU) 70.143 (71.882, 0.062) 70.042 (70.49, 0.625)

R2 0.47 0.18

Adjusted R2 0.44 0.15

F 19.696** 5.977**

Notes:aTRS as explained by the models’ variables.bPER as explained by the models’ variables.

*p� .01; **p� .001.

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for explaining trust but structural variables such as PDM, autonomy, accessibility andequality are probably not good candidates for predicting or explaining employees’ trust.

The second column in Table 3b shows that the dependent variables have a generallyweak relationship with PER (R2¼ .180). The impact of socio-demographiccharacteristics such as gender, age and education was not significant. PER was positivelyand significantly related only to SAT (b¼ .356, p� .001). PER was not significantlyrelated to equality or autonomy. In addition, the relationship between PER and PDMwas not significant and, therefore, the possibility that PER mediates between PDM andTRS was ruled out. It follows that H3 is only partially supported for the employees’sample.

TRUST IN SOCIAL SECURITY ORGANIZATIONS AND POLITICAL CULTURE:A DISCUSSION

Relationships of trust are central to the analysis of performance and management insocial security systems, which often provide a social safety net for individuals in difficultsituations. Defining trust as the belief of an individual in the good faith of others andtheir future intentions, trust can lead people who face uncertainty and risk to cooperatewith the organization, thus increasing performance and satisfaction. The fact that PDMis not related to trust either directly or even strongly indirectly may imply that citizens’participation cannot be regarded as a good mechanism for increasing trust. Thisconclusion challenges the common assumption about the normative importance ofparticipation in decision-making processes as a tool for improving performance andtrust.

Our findings highlight the inherent tension between democracy and bureaucracy.Bringing together the ideas of good management and a well-performing administrationon one hand and a prosperous democracy with a high level of citizens’ trust ingovernance and healthy patterns of active participation on the other has become atimely and urgent challenge for our modern societies. Kelly (1998) even suggested thattogether with the common idea of ‘representative democracy’ there might be a place inour modern nations for a ‘representative bureaucracy’ where various citizenry groupsgain representation in public administration bodies and have an influence on thedecisions made within them. By so doing, the gap between bureaucracy and democracycan be narrowed and the potential for conflicts in values and priorities can be reduced.However, few studies have empirically tested the meaning of and change in this gap byrelating measurable elements of effective bureaucracy with those of a stable democracy.

Such a study is the goal of this article. However, our findings do not support thatgeneral line of argumentation. We suggest two possible explanations for the failure ofour findings to support this approach, which also have several implications for NPM andtrust relations. The first explanation refers to structural conditions for applying PDMmechanisms and the second refers to cultural conditions.

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Participation in decision making, NPM and trust: Structural aspects

The study presented in this article focused on the INI as an exemplar of welfare supplyorganizations. Such organizations usually operate nationwide, provide a wide range ofservices and have a high public profile. We showed that in such an organization citizensdo not relate trust with PDM in any meaningful way, implying that the nature of theorganization and the scope of its activity may have significant implications for theefficient application of PDM mechanisms.

The NPM literature, which praises PDM mechanisms, both theoretically andempirically, usually refers to bureaucratic organizations that operate locally and involveissues with a low public profile (King et al. 1998; Fung and Wright 2001; Irvin andStansbury 2004). Thus, our findings correspond to those of Fung and Wright (2001)who pointed to the usefulness of PDM mechanisms for solving particular problems,usually at the local level, but also highlighted the limitations of generalizing suchmechanisms to the national level and to complex issues. In a similar vein, Irvin andStansbury (2004) conclude that the ideal conditions for citizens’ participation are basedon strong community ties, small groups organized locally, willingness to volunteer andthe urgency of the issues at stake.

It follows that there are pre-existing structural conditions necessary for the successfulapplication of PDM mechanisms in order to increase trust in a public organization.Specifically, an organization which operates nationwide should go though decentraliza-tion processes in order to allow efficient implementation of PDM mechanisms. Giventhat decentralization is a key organizational strategy in the NPM literature, our studyprovides additional justification for the usefulness of decentralization. It may not onlyincrease efficiency but also allow for the efficient implementation of PDM mechanismswhich will increase trust in the organization.

Participation in decision making, NPM and trust: Cultural aspects

Like the institutional literature, the NPM literature tends to underestimate the culturalaspects of public management (North 1990; Pollitt 2006). The study of PDMmechanisms refers to organizational culture (Fung and Wright 2001; Fung 2006), yetthe political culture in which the organization operates is barely considered whenstudying PDM mechanisms and trust. We would like to elaborate on this point andsuggest an explanation for the research findings that is grounded in political culture.

As demonstrated by Mantzavinos (2001), any human activity involves problemsolving, where the individual is constantly engaged in learning ways to solve problems –either existing ones or new ones. Individuals are likely to participate in decision-makingprocesses in both the bureaucratic and political arena only after they learn that such astrategy indeed helps solve social problems in their particular society. In a similar vein,the relationship between work and politics has been described as a spillover effect

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(Peterson 1990; Sobel 1993). This notion arose from early research on the work/non-work relationship (Goldthorpe et al. 1971). The spillover model states that the natureof one’s work experiences will carry over into the non-work domain and affectattitudes and behaviors there. It posits transference of beliefs, attitudes and valueslearned in one setting to another. The degree of involvement at work will be directlyrelated to the degree of involvement in social roles outside the workplace (Randall1988). Moreover, influences also flow from family and religion to the community or tothe political system (Price 1985). Sobel (1993) suggested a spillover effect in theopposite direction where intense participation in politics might influence workparticipation, PDM and one’s attitudes toward the organizational environment.

We may thus infer that public sector performance and trust are related to PDM eitherpositively or negatively depending on the nature of the political culture. A participatorypolitical culture will motivate positive relationships between PDM and performance,whereas a non-participatory culture will encourage negative relationships or norelationship at all between PDM and performance. Research on Israeli society shows thatit has gone through learning processes at the national/political level that have led to theinternalization of a problem-solving approach characterized by unilateral solutions(Mizrahi and Meydani 2003; Ben-Porat and Mizrahi 2005). As a result, participation bythe public in the political arena has focused on the use of alternative politics. This modeof behavior significantly differs from democratic participatory behavior, and thereforethe necessary condition for successful implementation of PDM has not been fulfilled.

Israeli political culture can best be described by what we term the alternativeprovision of public services or alternative politics. Specifically, during the 1980s and1990s many groups and individuals in Israeli society employed non-institutionalizedinitiatives to create alternatives, often illegal or semi-legal, to governmental services.The 1980s were characterized by a significant growth in the ‘black-market economy’ –particularly the illegal trade in foreign currency, ‘gray-market medicine’ – expressed inthe semi-legal, private supply of health services using public facilities, ‘gray-marketeducation’ – expressed in the employment of privately paid teachers and the evolutionof independent private schools and pirate cable networks – all of which werealternatives to inadequate governmental services (Lehman-Wilzig 1992). In the 1990s,this mode of behavior spread to other policy areas such as civil marriage (Lehman-Wilzig 1992), internal security (Zinger 2004), social welfare (Gidron et al. 2003) andeven the policy toward the Arab–Israeli conflict (Ben-Porat and Mizrahi 2005). Indeed,during the 1990s, it became clear that, for the most part, only initiatives of this kindcould help people access the services they needed (Mizrahi and Meydani 2003).Furthermore, the Israeli government responded positively to those initiatives bychanging its policies in the direction signaled by these groups (Chernichovsky 1991;Bruno 1993; Yogev 1999). To a large extent, the policy-making process has beentransformed from a top–down orientation into a bottom–up orientation.

This transformed political culture has little to do with conventional democraticparticipatory behavior, meaning that there are no solid grounds for PDM reforms.

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Therefore, contrary to the assumptions made by the studies presented in the secondsection, the Israeli public is also unlikely to believe that PDM mechanisms such as publichearings, citizens’ governing boards and citizens’ conferences will result in better publicsector performance and increased trust in government. This explanation clearlydemonstrates the limits and cultural constraints for generalizing participationmechanisms in general (Fung and Wright 2001) and for improving performance andincreasing trust in particular (Pollitt 2006; Yang and Holzer 2006).

The Israeli social security system is no exception in this regard. For many years it wascharacterized by mechanisms of alternative politics. As the Government continuouslyreduced the budget for social welfare and limited the governmental supply of welfareservices, alternative provisions emerged in the form of NGOs which have graduallyprovided welfare services. Such organizations have also become central mechanismsthrough which weak sectors raise demands. Today, these forms of alternative politicsdominate the supply of welfare services, thus reducing the centrality of official welfaresupply organizations such as the INI. The interviews with executives in the INI revealedthat there is little participation by either citizens or workers. Moreover, when theMinistry of Social Affairs and Social Services solicited the public’s opinion about itsfuture plans, the response rate was very weak (Sinay 2007).

We also believe that the organizational culture of the INI can help explain our findingthat workers did show a relatively high level of organizational commitment, but did notdemonstrate the level of trust that we had expected to find. The INI’s general managerhas adopted a unilateral approach to the organization, attempting to dictate and forceorganizational reforms, which affected almost all the organization’s units, withoutincluding workers and managers at all levels in these decisions. These moves triggered aresistance to change in the INI and probably led to a decline in trust. Indeed, in theirinterviews with us, senior executives expressed very low levels of trust.

Under these circumstances, Israeli citizens do not feel that they have a real say indecision-making processes and do not relate such participation with trust. On the otherhand, they utilize a very effective, direct, do-it-yourself approach in the form of ‘gray’and ‘black’ market medicine, ‘gray’ education and other alternative means for acquiringthe services they need (Lachman and Noy 1998; Mizrahi and Meydani 2003). Thistwofold process calls for careful planning about the possible ways of integrating existingdo-it-yourself initiatives into social security reforms in a positive manner that will alsoincrease levels of trust. Further research will explore this issue.

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