Alan Hudson asked yesterday how I relate my comments about constructing governance indicators to prior work I have done that argues governance is all about producing outcomes. I replied in comments, but let me draw a bit from a 2010 paper I wrote on this subject (in Oxford Development Studies). Think about this as the way I am conceptualizing the process of 'theorizing' governance indicators.
We need to have some idea what governance is, before starting. In a general sense, most see this as the exercise of authority. Which requires us asking: who the authority is exercised by, on behalf of, and for what reason? Answers to such questions will help guide us to appropriate measures of the phenomenon.
I find the literature on corporate governance in publicly traded companies useful in addressing these questions. Tirole defines corporate governance in this context as “the design of institutions that induce or force management to internalize the welfare of stakeholders”. Consider the basic elements of governance implied in this definition: (1) it is focused on how mechanisms (institutions) regulate (2) the way that authority is exercised by one set of agents (managers) (3) who act on behalf of a broad group of principals (stakeholders) (4) with the goal of maximizing the welfare of these principals (stakeholders).
Combining these elements, it can be seen that good governance emerges when specific agents exercise delegated authority in such a way that their specific principals enjoy improved welfare.
This definition has parallels in the political science and public management literature. Kooiman’s characterization of governing, for example, points to “the totality of interactions, in which public and private actors participate, aimed at solving societal problems or creating societal opportunities”. Hill & Lynn describe public sector governance from a management perspective, as “Regimes of laws, rules, judicial decisions, and administrative practices that constrain, prescribe, and enable the provision of publicly supported goods and services through associations with agents in public and private sectors”.
The idea of delegated authority emerges across these definitions, as does the focus on outcomes as the purpose of delegated authority (maximizing stakeholder welfare, “solving societal problems or creating societal opportunities” and ensuring the “provision of publicly supported goods and services.”)
In the public sector context we are obviously dealing with governments as the agents to whom authority is delegated, by citizens (as principals), with the explicit goal of maximizing various kinds of social welfare (as the outcome). Governments can use this delegated authority in many ways: to garner and allocate resources, build capacities (human and physical), regulate via laws or force, and so forth. Governance is superior when authority is exercised in such a manner that social welfare is maximized and governance is inferior when authority is exercised in a manner that does not maximize welfare.
In this way of thinking, governance indicators should assess the degree to which organizations structure their authority relationships to produce outcomes--not just the degree to which they comply with a generic set of best practice processes.
Some roles, interactions and mechanisms might be more effective than others in facilitating better governance outcomes. Some may have generic import to all organizations producing the outcome, some may be relevant contingent on specific contexts, others may be cutting edge ideas we think will have value but are still untested.
These kinds of practices can only be identified after we look at specific organizational fields (e.g. education or health care), measure the outcomes of interactions in these fields, and consider contextual differences between countries. Function must lead form in this respect.
We need to theorize our indicators to make this happen. This starts with us having clear ideas about the outcomes we are looking at (and our normative approach to thinking about such) and the fields in which we are focused. It moves to having some theoretical idea about why we think some practices may facilitate better outcomes. It then goes further to the evidence we have about such relationships. The evidence helps us see which practices fall into which categories, such that we can say:
- “The following governance dimensions (what we measure as the generic base of our indicators) are non-negotiable institutions that we have evidence induce or force agents to produce welfare-maximizing outcomes for principals—in all cases”.
- “The following governance dimensions (what we measure as the contingent segment of our indicators) are negotiable institutions that we have evidence induce or force agents to produce welfare-maximizing outcomes for principals—in a contingent way (being relevant in specific contexts)”.
- “The following governance dimensions (what we measure as the cutting edge segment of our indicators) are untested institutions that we believe may induce or force agents to produce welfare-maximizing outcomes for principals (and we include to facilitate some testing)”.
In all three dimensions, we include the form because we theorize that it leads to better functionality and improved outcomes. I would like to say we are constructing indicators of more effective government...