Joe Wallis

Market Failure, Government Failure, Leadership and Public Policy

The economic rationale for government intervention in a market economy has traditionally been provided by the theory of market failure. This article reviews the market failure paradigm in the light of the more recent literature on government failure. One implication of the theory of government failure is that a contractualist approach to public service reform is the best method of improving public sector productivity. However, we argue that this view overlooks the potentially crucial role of leadership in public agencies and the ways in which transformational leadership can stimulate efficiency. We argue that communitarian conceptions of leadership can be incorporated into conventional economic approaches, and that this can have significant implications for public policy formulation.

Social economics and social capital

This paper evaluates key developments in the social capital literature over the past decade. It then examines empirical work on the purported the link between social capital and economic performance. Although these results indicate that good governance and social cohesion make a measurable contribution to economic development, the offer little guidance for policy formulation. Early contributors to the social capital field were pessimistic about the ability of the state to stimulate social capital formation. More recently, there has been a groundswell of interest in the application of community development principles to foster social capital at the micro level. This paper incorporates a critical evaluation of the mainstream social capital literature from a social economics perspective. The various strands within the social economics tradition share a common concern with the “disembedding” of social context from mainstream economics.

The Debate that Had to Happen But Never Did: The Changing Role of Australian Local Government

The past few decades have witnessed a significant transformation in the composition of Australian local government service provision away from its traditional narrow emphasis on ‘services to property’ towards a broader ‘services to people’ approach. This process has occurred by default in an ad hoc incremental manner with virtually no debate on the changing role of local councils, unlike the New Zealand experience where a similar transition in service delivery generated public debate. In an effort to stimulate a ‘debate that had to happen but never did’, this paper seeks to establish whether a significant shift in the service mix of Australian municipalities has indeed taken place and then evaluates three stylized models of local government that could be adopted in Australia: minimalist councils; optimalist councils; and maximalist councils. The views expressed in this paper do not necessarily reflect the opinions of the Independent Inquiry into the Financial Sustainability of NSW Local Government and are attributable solely to the authors alone.

Social Capital and Local Government Capacity

Local authorities vary considerably in their capacity for governance. The dimensions of this capacity can only be developed by drawing on local stocks of social capital. The seminal theories of social capital tend to conceive it as a community resource that is built up through a long tradition of civic engagement. We take issue with the laissez-faire implications of these theories, highlighting ways in which local governments can positively contribute to social capital formation by opening their ‘political opportunity structure’ and engaging voluntary organisations and community groups in trust-based partnership arrangements.

Leadership, Accountability and Public Value: Resolving a Problem in “New Governance”?

Abstract Governance has been made more complex by New Public Management-type reforms that have changed the balance between political and managerial accountability. Leadership that takes responsibility for mobilizing networks in pursuit of initiatives that create public value can be seen as a response to accountability deficits. Institutional and policy changes may be needed which will create an environment in which public value-seeking leadership can be encouraged.

Community consultation in public policy : the case of the Murray-Darling basin of Australia.

Community consultation is widely employed in contemporary Australia as a means of improving the formulation and implementation of public policy. However, little is known about the optimal expenditure of effort required for any given consultation. This article develops a rational choice model of community consultation that seeks to encapsulate the major elements involved in optimising consultation effort. The framework is particularly useful for understanding and explaining why actual community consultation processes may be sub-optimal. The rational choice model is then applied to the Living Murray debate over water resources in the Murray-Darling Basin of Australia.

A diagnosis of leadership effectiveness in the Irish public sector

Abstract As Ireland has followed other countries in modernizing its public sector according to the principles of ‘new public management’ (without introducing market mechanisms on the same scale as its Anglo-Saxon counterparts), the capacity of its public managers to supply the leadership required to drive this programme forward has been identified as a crucial factor affecting its sustainability. A broadly representative sample of Irish public managers has been surveyed using the Leadership Effectiveness Analysis diagnostic instrument to identify those behaviours that need to be developed since they are infrequently used or can moderate the liabilities associated with frequently used behaviours. The findings of this study are interpreted within the context of a broader literature that debates the distinctiveness, significance and malleability of organizational leadership, in general, and the possibility of achieving a balance between different and, at times, conflicting public leadership behaviours, in particular.

Understanding the role of leadership in economic policy reform

Abstract A demand for coherent policy leadership characterized by its commitment to advance a consistent set of policy principles arises from the various sources of “governance failure” that account for the observed unevenness in implementing the “Washington consensus.” This paper examines how a “conspiratorial” network established itself as a collective source of such leadership in New Zealand by interacting in a way which developed a high level of mutual trust and by penetrating and reconstituting a fragmented structure of insulated policy networks.

One Size Does Not Fit All: The Special Case of Remote Small Local Councils in Outback Queensland

Abstract The analysis of Australian local government reform almost invariably focuses on systemic changes that can be wrought by the application of various policy instruments, like the structural reform of the scale of local councils or changes to the enabling legislation governing local government. Scholars typically use this approach and differentiate the efficacy of reform measures according to classifications of council by generic type. While this approach has been exceedingly fruitful in the past, this paper argues that small, remote and isolated Australian local authorities are sui generis in the sense that they are not amenable to standard reform policies because their unique circumstances and special characteristics. The paper considers the case of local shires in the Central West outback region of Queensland that comprise the Remote Areas Planning and Development Board (RAPAD) group of councils and attempts to draw some general lessons for local government policymakers. Despite the recent limited forced consolidation experienced by some RAPAD councils, we find that the ‘tyranny of distance’ afflicting RAPAD members means that it is not amenable to ‘top-down’ reform measures, like council amalgamation, and policy makers should instead focus on ‘local solutions to local problems’ and encourage feasible forms of resource sharing.

Revitalizing the contribution non‐profit organizations can make to the provision of human services

Purpose – At present no satisfactory economic theory of non-profit organizational leadership exists. The purpose of this paper is to develop an economic theory of non-profit leadership and apply this theory to the problem of non-profit failure or “voluntary sector failure.” Design/methodology/approach – The paper draws on the economic literature on the non-profit sector to critically examine this approach to theorizing about non-profit organizations (NPOs). It then considers the contribution that Lester Salamon has made to the understanding of NPOs. It is argued that the very sources of non-profit “distinctiveness” identified by Salamon are also simultaneously associated with “voluntary sector failure.” An economic theory of non-profit leadership is developed and it is held that appropriate leadership can reduce voluntary failure. Findings – The major comparative advantages of NPOs make these agencies particularly prone to various forms of “voluntary failure” that present challenges not only to NPOs, but also public policy makers. This paper presents a theory of non-profit leadership that seeks to demonstrate that appropriate forms of non-profit leadership can overcome, or at least ameliorate, voluntary failure. Research limitations/implications – Future research could determine empirically whether leadership plays a decisive role in the performance of the non-profit sector. This would assist in assessing the empirical validity of the presented in this paper. Originality/value – The literature on non-profit failure is incomplete without an adequate theory of non-profit leadership. This paper develops a theory of non-profit organizational leadership and argues that appropriate leadership can reduce the extent and severity of non-profit failure.