Public Management and Administration - Owen E.hughes

theoretical arguments. It is also easier to deregulate, as capture theory predicts that
any government regulation or regulatory agency will only make matters worse.
Political leaders can declare they will not be captive to special interests and can
use these arguments to cut their power.
The importance of theory for policy
Interest group theory has implications for the work of public managers. Reich
argues that there are two related but conceptually distinct ‘procedural visions’
of how public managers should decide what to do: the first being ‘interest
group mediation’ and the second being ‘maximizing net benefits’ (1988,
p. 129). For the public manager, interest group mediation is as ‘a referee, an
intermediary, a skilful practitioner of negotiation and compromise’ (1988,
p. 129): in other words, this model is clearly related to pluralism.
Net benefit maximization is more analytical, related to decision theory and
microeconomics. According to Reich (1988, p. 132):
Here the public manager was less a referee than an analyst. His responsibilities were,
first, to determine that the market had somehow failed and that intervention might
improve overall efficiency; second, to structure the decision-making process so as to
make explicit the public problem at issue, alternative means of remedying it, and the consequences
and tradeoffs associated with each solution; and third, to choose the policy
option yielding the highest net benefits – where there was the greatest social utility.
Reich argues that in practice there has been an amalgam between the two and
advocates more public meetings and deliberations. But there is a problem in
allowing interest groups to have a greater role: public policies are more likely
to be characterized by interest group mediation – pluralism – rather than consideration
of net benefits, a school in which both Olson and Stigler would find
themselves as would other ‘rational’ policy analysts.
Problems with the external constituency function
Managing External Constituencies 215
It has been argued that, unlike the traditional model of administration, public
sector managers are now active participants in the external relations of their
department or agency. There is a trend towards an active partnership between
interest groups and the bureaucracy, a relationship in which each party needs
the other. For the most part these have been beneficial changes, but not without
some problems.
There are potential problems of accountability, as discussed in Chapter 13.
When the politicians were nominally responsible for any problem arising from
outside relationships, at least there was someone to blame. There may be gaps
in the accountability system with the changes described here, because accountability
can be evaded altogether. If a problem arises from the bureaucracy’s