Governance Versus Public Management

The word governance (Greek kubernḗsis—leading, directing) can be already found in Plato, who described the system of government formation. Currently, this term can be defined as “power over formal and informal rules of political game. Governance refers to those media, which are associated with determination of the principles of governance and conflict resolution, whose source those rules may be” (Kjær 2009, p. 11, translated). From the institutional point of view, governance is the possibility of influencing the general structures, where the politics takes place and all the citizens function within more or less shaped civic society (March and Olsen 1995).

The World Bank's definition says that governance is “the institutional capacity

of public institutions to provide goods demanded by citizens of a given state or their representatives in an efficient, transparent, impartial and responsible manner depending on the restrictions resulting from access to resources” (Attacking Poverty 2000).

Rose and Miller (1992) lean toward the opinion that governance is a problematising act. “The ideals of governance are inherently linked to the problems on which they focus, defects they are trying to fix, diseases they are trying to cure. In fact the history of governance can be written as the history of problematizing” (Walters and Haahr 2005). At the same time, in the case of the European Union we can and should rather talk about management than governance, if we acknowledge the fact, that it regards the lack of hierarchy and full sovereignty of the states, non-hierarchical system of political negotiations, administrative structures and regulations, which are to facilitate the decision-making and conflict solving process (Ruszkowski 2007).

Next to modern governance there also has been developing a pre-scientific, but practical management directed at rationalisation of organised activities. Even before our era it regarded three domains: governance and administration, military and joint staff organisations, and socio-economic perspective. Later, in the Middle Ages and the period of trade development, new rationalising techniques appeared, mostly in unverified form. In the era of industrial development supervision and coercion dominated, which through economic development needed to improve the production cycle and required management. Only by the end of the nineteenth century the beginnings of scientific approach to organisation and governance were born (Lachiewicz and Matejun 2012), and the very conceptions of governance developed particularly strongly in the twentieth century.

The reform of public sector aimed at improving its efficiency and the quality of services was initiated more than 30 years ago (the turn of the 1970s and 1980s of the twentieth century) in Great Britain and the United States. Its goal was the greatest marketization of public sector using the private sector management models. In quite a short time it was announced that the new conception is called New public management—NPM (Zalewski 2006). Characteristic for this approach are (Alonso et al. 2013):

(a) introducing larger competition in public sector,

(b) increasing efficiency by cost reduction and increase of activity scale (downsizing),

(c) introducing practices from private sector to public sector,

(d) replacing expenditure control with results control,

(e) decentralisation related to delegating managerial responsibilities to lower levels of management,

(f) creating new agencies on the basis of disaggregation of centralized bureaucracies,

(g) separating buyers from suppliers,

(h) client orientation,

(i) separating political decisions from direct public process management (at the same time it is the most difficult to realise aim of NPM).

Public management is researched and developed mostly on the basis of theory of: organisation and management, public change management and new institutional economy (with large reference to the theory of public choice developed within this theory). Also important are economic analyses, especially in behavioural economy or behavioural finances.

Fra˛czkiewicz-Wronka (2009) and Sudoł (2007a) rightly noticed, that scientific augmentation of this sub-discipline is much broader than reference to theory of management, economics and political science, since it requires not only research in functioning of public sector, but also possibility of catering to social needs or optimising actions from the perspective of efficiency. Therefore, Koz˙uch (2005) emphasises the reference of public management to direction at realising public interest, creating public values or optimal use of possibilities of organised actions. It should research the ways and scope of uniform actions, which provide proper determination of goals and their realisation (Koz˙uch 2006). Those goals, their availability and ability to reach them should be discussed in the perspective of praxeological model of action, taking into account the balance of funds, personnel and property. Actions in public management have to be most of all efficient, which means, that they should be both effective and economical, balance the material and moral costs (Kiez˙un 2011). At the same time improvement of organizational effectiveness of that sector each time needs acknowledging the needs specified in the election procedure and context conditions of actions (Fra˛czkiewicz-Wronka 2010). Therefore, sound is W. Kickert's (2011) position that the reforms of public sector are a big problem, which to be solved requires coordination and leadership. However, central coordination in public management is restricted by various decentralised entities.

In this regard—whether we are dealing with governance or management—an interesting terminological proposition is the Galicek's opinion, who proposed the term managerial executive for the government. It manifests through centralised executive management (executive authority), organised functionally with welldeveloped staff responsible in particular for state's finances and planning, and who is supported by active citizens (Van Riper 1990). Such approach is associated with the fact, that undoubtedly in reference to unitary state, where the Prime Minister plays deciding role, each of members of the government can be assigned a foreground roles in governing and managing the departments they lead. In this sense, the Member of Parliament can be a manager with crucial role in creating democratic results of functioning of each programme, where effective management is a surplus necessary for compensating the higher decision costs in democracy (Meier 2010).

One should fully agree with Talbot (2010), that the period of more than three decades is a revolution in terms of managing the public sector and directing the governments of each state to increase in efficiency. The promotion of effectiveness and reducing the role and significance of the government, also through “slimming down” the administration and cutting the expenses, was meant to be a panacea for good governance and management in different parts of the world. Use of such practices, like efficiency measurement, control and audit, was to guarantee achievement of intended goals. Disaggregation, decentralisation and outsourcing of services were encouraged. Increase in quality of services and introducing new IT solutions in e-administration was rightly followed. Sometimes the solutions from private sector were literally copied to public one, introducing elastic work hours, recruitment and carrier path based on organisation's professionalism and needs, instead of only formal rules. In addition, the trade unions were strongly marginalised (Massey and Pyper 2005).

The aim of such approach was and still is to remove the bureaucratic barriers, which generate too high transaction costs of creating and strengthening cohesion in economic and public dimension. However, low level of social capital or creating too much time-consuming methods of coordination do not facilitate it. More often they lead to improving the methods and techniques of navigating among the complicated procedures and regulations or creating lobby groups oriented at other goals than common good (Woz´niak 2011).

Miller (2012) states that there is a need for scientific research, which will show the capabilities of exchangeable use, both in private and public sector, of management techniques, achieving efficiency and effectiveness, researching reforms of the whole public sector, efficiency management or broader use of public choice theory. It is true. Nevertheless, we cannot agree, that it would be right to completely eliminate traits of both sectors, which would allow to treat them equally. Many authors rightly emphasise, that we still lack appropriate theoretical foundations in new political management (Perry 1986, Frey, Homberg, Osterloh 2013).

Achieving goals by other institutions through coordinated actions, as opposed to general management directed at intentional actions of other people, is a basic trait of new public management (Metcalfe 1993). They are realised by public organs, whose institutions do not always work for a common goal due to a different type of tasks, so they do not contribute to the success of all actions. A mandate for management is the power of state and local governmental institutions or power within law of surveillance over those social entities, which do not have a legal personality Finally, public management is about eliminating inequality of chances, social politics and common good, and thus public institution cannot be evaluated only on the basis of its market value and revenue. The final determinant of differences in public management is the fact, that the activity of this domain is regulated in majority by administrative law and not the generally applicable legal standards in trade enterprises (Sudoł 2007b).

A practical description of public management is proposed by Kiez˙un. It is a dependent “form of establishment of power in democratic elections, the necessity of realisation of a specific programme of winning political party and is a subject of social control and evaluation expressed through the election” (Kiez˙un 2004, pp. 40– 41, translated).

Drawing conclusions from practice, the world of science (but practice too) more often stresses that more attention should be paid to other paradigms: good governance (Van Kersbergen and Van Waarden 2004) or network government (Bourgon 2007), public values, pragmatism, motivation of public services and developing the state according to M. Weber's conception (Neo-Weberian state) (De Vries and Nemec 2013)—high competences of public sector, exceptional status of civil service, high organisational culture of bureaucracy. In the recent years we have grounds to talk about redefinition of new public management (post-NPM). New public management (NPM) is theoretically insufficient. It has numerous faults in the created and distributed paradigm. It has not worked well in practice, particularly with regards to creation of sustainable public service organization and sustainable public services (Osborne et al. 2014). Finally, the conception of new public management has not at all or sufficiently risen the basic issue—public services require management at every level and in all of its parts (Radnor et al. 2014), which allows assuming holistic approach to management, including e.g. managing the state.

It is not known how the introduced reforms focused e.g. on the whole government, joined-up government, strengthening the centre of government, levels of coordination or those focused on culture and value-based economy, will refer to public institution control or autonomy (Laegreid et al. 2008).

Will it be a hybrid model of public management within public service, mutual and simultaneous cooperation of bureaucracy, network and market and will the public services be provided by public, private, non-profit organisations or the service recipients? (Ashworth et al. 2013). The answer may be both positive and negative. Positive, since public management surely will not be hybrid and broad cooperation-oriented. Negative, since it is difficult to expect from the market that it will be oriented at other efficiency than its own, at public service and common good, protection of protected by law and even sensitive information.

In redefined new public management it needs to be remembered that there is a large difference between citizens and clients—even if we call the latter stakeholders. Only clients are fully independent in market sense. They can choose suppliers, manufacturers and market competitors of these companies, which do not satisfy them (Savoie 2006). Citizens—assuming they are the members of given integrative group of states (e.g. UE)—have limited independence in choosing public services, and in some cases are stuck with a monopoly of one organization in the terms of institutions. If they decide on an alternative, available on more advantageous conditions in own expectations, it may fulfil the needs, but with increase of transactional costs of control.

It needs to be noticed, that “many organisations have achieved single breakthrough results, but have not used a formalised management system. Charismatic leadership and the art of management are mighty powers and very often efficient. However, the results which depend from the power of individual leaders cannot be maintained for longer. If the organisation does not link its strategy to management and operation process, it will not be able to succeed sustainably” (Kaplan and Norton 2010, p. 152, translated).

However, a dilemma is noticed by many researchers—when can we talk about governance and when about public management? Do the Prime Minister and his ministers govern or publicly manage? The answer seems quite obvious—they govern and manage, since management regards executing behaviours congruent with previously accepted rules of the game. However, the essence of governance (Staniszkis 1998) is establishing such rules, that will be executed ex post in public management.

Thus it should be assumed, that governance is assigned to public power organs and is an overriding term in relation to public management (Fig. 1.1).

From this perspective both Prime Minister and ministers serve governance and public management functions. It results from the fact, that governance was initially identified with private sector, in terms of organisational ruling at the strategic level of governance (corporate governance) and only then was secondarily transferred and implemented in public sector as traditionally understood governance (public governance). If we assume that governance should be good and should be, then it should refer to democratic representation, abidance of legal norms, effective and efficient public management, special state institutions participating in the process and finally transparency and liability (Raczkowski and Mikułowski 2013). Good governance is “accurate identification and effective resolution of social problems by public authorities, with the participation of stakeholders” (Mazur 2011, p. 21, translated).

It seems that from the point of view of management science, it is appropriate to perceive governance through leadership (leading and motivating) with maintaining other management functions, i.e. planning, organising and controlling. It means that

Fig. 1.1 Definitional determination of the term public management in public governance system. Source: K. Raczkowski 2013, W. Mikułowski, Specyfika i zakres definiowania zarza˛ dzania publicznego, “Przedsie˛biorczos´c´ i Zarza˛dzanie”, Vol. 14, Issue 13, pt. 3, p. 15

perceiving governance in terms of traditionally understood management would be legitimate—of course in a limited form. Griffin (2004) defines management as a set of actions (including planning and decision making, organising, leadership, that is leading people, and controlling) addressed at resources of the organisation (human, financial, material and informational) and performed in the view to achieve organisation goals in an efficient and effective manner. Efficient means the one, where the resources are used cleverly and without excessive waste, and effective is the one where right decisions are made and successfully implemented (Griffin 2004).

From the point of view of the state, we can distinguish three different elements of management representing three different governance structures:

(a) market (which tries to limit the role of government in the culture of competition and independence),

(b) hierarchy (where the bureaucratic apparatus of the state, bound by the employment relationship in line with the idea of subordination supreme, realises public tasks)

(c) network (which enables undertaking cooperation, forces the necessity of establishing contacts with all state stakeholders; network's operation often depends from the coordinator, e.g. state agency, which poses new challenges against the very agency) (Kjær 2009).

Table 1.1 Opposite definitions of public management Public management

Modern public management in general can be identified with governing the state. In many places it is marked with illusion and hypocrisy of making decisions for the sake of the public good. Yes, such good is also a management product, but rather a side one instead of always intentional. In another perspective public management can be related to intentional production of behaviours anomalous to accepted and advocated patterns and models. If the anomalies begin to be generally accepted, they will create new patterns and models, then other interpretation of facts served to society to assimilate may become a distorting reflection of truth.

Thus two definitions of public management should be proposed, which will present opposite positive and negative values (Table 1.1).

Of course such a state should be sought, in which public management will reflect the positive definition in the process of performing certain decisions. In the case of negative approach it may be related to forcing the economic operators and citizens to the informal economy, and even non-existence. The longer the period for governing in negative system, the more havoc can be expected in national economy of the given state. Negative approach creates anomalies, which can be systematically implemented, since “in times of uncertainty the role of experts increases”. Authorities interpreting events also become authorities in feelings. The need of leadership felt by people changing their social status only increases the significance of more fundamental rule: in terms of feelings the people at the bottom of the social ladder usually look for clues in the elite. The authority has a certain power over the roles of feeling. A parent can show to a child, how much it should be afraid of the neighbour's bull terrier. Professor of English literature may suggest the students how they could experience Rilke's First Duine Elegy. Manager can point out to the secretary, that she should put more heart in the words: “Here is today's mail, sir” It is the authorities that protect the rules of feeling (Hochsschild 2009). But who and why is the authority today, in the age of governance and public management crisis? Surely not the politicians, who reached for power in different parts of the world in a more or less democratic way. Power allows them to govern and manage in a specified time and area—does not have to be officially determined and geographically assigned.