Public Management and Administration - Owen E.hughes

72 Public Management and Administration
Governments have a variety of roles and their full scope is not easily measured.
It is no exaggeration to say the public sector affects the entire economy
and society. Without a legal framework to enforce contracts, private business
activity would not work. Regulations, taxes, permits, infrastructure, standards,
conditions of employment all affect decisions made in private markets. The
public sector is a large purchaser of goods and services from the private sector.
Government redistributes income from better-off members of the society to
those who are not. The public sector has a crucial role to play in determining
real living standards which depend for most people on government services –
the quality of schools, hospitals, community care, the environment, public
transport, law and order, town planning, and welfare services – at least as much
as the quality of consumer goods and services.
It is increasingly realized that good government is needed for economic
development. As Stiglitz argues (2001, pp. 346–7):
There is a ‘special responsibility’ for government to create the institutional infrastructure
that markets require in order to work effectively. At a minimum, this institutional infrastructure
includes effective laws and the legal institutions to implement them. If markets
are to work effectively, there must be well-established and clearly defined property rights;
there must be effective competition, which requires antitrust enforcement; and there must
be confidence in the markets, which means that contracts must be enforced and that
antifraud laws must be effective, reflecting widely accepted codes of behavior.
The debate is now not whether governments should have no role, but what that
role should be.
There is a broader ideological subtext behind particular arguments about the
public sector. The 1980s saw an extensive debate about privatizing public enterprises,
starting in the United Kingdom. This might be regarded as a narrow
debate about government business activities, but the positions of the participants
were fundamentally determined by how they viewed the public sector in a general
ideological sense. The same broad debate may be behind attempts to
reform public sector management and to control spending better. The trend
towards a market-based public sector may reflect concerns about the role of
government, as much as worries about the efficiency and effectiveness of the
bureaucratic model (Chapter 2).
The 1980s debate over the public sector became, at times, an intense ideological
struggle in some countries, one in which the last vestiges of socialism
were to be rooted out by new Right governments (Isaac-Henry, Painter and
Barnes, 1997). Opposition to change was no less intense as public sector workers,
unions and supporters tried to maintain government activities at their previous
levels. The Reagan and Thatcher governments of the 1980s led the way,
but were only part of sustained theoretical and practical attacks on the command
or bureaucratic part of society in favour of the market principle.
However, as the reforms continued through changes of government it became
clear that party-political considerations were only a minor part of the public