Governance as Networks

- Ayushi Rai-Trina Das

- Sujata Bahot

What is Governance?• Governance is concerned with a network of relationships

between three actors-: the State, Market and Civil Society.*• The word governance became a part of public discourse in

India only after the economic reforms of 1991.• Today, the word governance is heavily relied upon to

explain developmental outcomes.*• There is a web of different meanings of governance. But the

baseline agreement is that the governance refers to the development of governing styles in which boundaries between and within the public and private are blurred.

• The political institutions no longer exercise a monopoly over the orchestration of governance.

Shift in the concept of governance*

• The core idea of governance lays stress on network relationships among the three actors-: the state, the market and the civil society, in steering the society.

• The monopoly of political institutions to provide services is diluted and this place has been overtaken by the private sector and the civil society.

• Attracting private investment for promoting economic development and thus raising the rate of economic growth became the single most important dimension of public policy.

• A new style of governance was sought to encourage and facilitate the achievement of this aim.

“Enabling State”• Enabling state whose role is to create conditions in which

private investment can take place.• The traditional government forms became problematic and

administrative reforms were aimed at relaxing government decision-making processes such that business enterprises can be set up.

• Forging partnership with the other two actors became a measure of good governance and facilitated the increased role of market and civil society in the prime activity of the government.

Policy Network• Rhodes says “Policy networks are sets of formal

institutional and informal linkages between governmental and other actors structured around shared, if endlessly negotiated, beliefs and interest in public policy making and implementation.”

• These actors are interdependent and policy emerges from the interactions between them.

• Policy networks are also strategic alliances forged around common agendas of mutual advantage through collective action.

At Formal Level-:

• Policy Networks have emerged as public institutions wherein interactions between government, business, and civil society takes place.

• These interactions lead to policy outputs.• Government institute advisory bodies and various kinds of

councils wherein representatives of the government and the other actors- business and civil society- are members.*

At Informal level-:• Governance implies the opening up of government activities

to non-governmental actors.• Governance is no longer hierarchical in nature specifically

in decision making.• The three actors- State, Market and Civil Society, interact

more frequently in public domain and attempt to formulate public policies together.

• This type of policy network is a fundamental change towards a more open government that is willing to listen and become one among three participants in policy making.

Operational Networks• Operational networks are implementation tools which

deliver public goods and services, a task that one single actor cannot do.

• Government has adopted the mode of seeking cooperation of one or the other actor in implementing programs of public interest. These are known as “PPP” i.e. Public private-partnership.

• PPP is being promoted all over the world as a strategy of governance in delivering goods and services in many sectors.

Public-Private-Partnership• PPP aims at more effective problem solving mechanisms.• They promise to increase the responsiveness of policies and

create accountability by including other actors (market and civil society) in decision making.

• The partnership also provides opportunities to the partners to learn from each other.

• Shared understandings are, argued by Pingle, vital for economic decision making.

• It helps overcoming the bureaucratic resistance and prevent the state from falling prey to social and political interests.

• The eleventh five year plan emphasizes the strategy of PPP for locating these resources and justifies it.

Critique of PPP

• Critics believe that these partnerships can signify the strategy of the state to evade responsibility.

• Networks carry the risk of weakening the traditional accountability mechanisms by shifting policy decisions to the realm of partnerships that can circumvent parliamentary control.

• If partnership emphasize cost reduction or profit maximization at the price of significant quality compromises, vulnerable population, may not be able to respond appropriately.

Governance in the New Policy • The government sought an alliance with big business to

pursue this goal of implementing PPP projects.• Many policies were initiated that withdrew the controlling

and regulating role of the state and then establish institutional structures that provided a formal forum wherein big business could participate in policymaking.

• This became explicit when the Government of India appointed a three-member Investment Commission in 2004 to enhance and facilitate investment in India.

1- Institutional arrangements for networks2- Response of Industry Association to

Government Overtures 3- Partnerships as Implementing Agencies

• This section talks about roping in corporate sector in the process of policymaking along with the government.

• What are the formal institutions that synchronize the government and in corporate sector in policymaking ?

1. Federation of Indian Chamber of commerce and Industry

2. Confederation of Indian Industry

3. Council of Trade and Industry

4. Council of Ministry of Commerce and Industry

National Advisory Council (NAC)

• It was formed to network civil society at a policy level. It comprised of distinguished professional from diverse fields of economic activities.

• It incorporated several NGOs ,social action and advocacy groups.• Chairperson was Sonia Gandhi.• Ministry of human resource development convened a round table to

discuss policy issues regarding education. In this Analjit Singh of max health care would prepare a concept note on vocational education.

• Sectoral departments have created their own partnership with non governmental actors, these communities have been recognized as ‘ policy communities’, such networks help the department set its agendas and seek stability in policies.

• The key policy communities are in areas of health, law and order, tobacco and transport.

Strengthening of policy networks

• Measures are being adopted to ensure an effective relationship between the bureaucracy and the private sector.

• Example: senior civil servants are being permitted to go for deputation work in large corporate houses and MNC’s in order to promote ‘public interest’.

• Similarly individuals who have held senior policy positions in the private sector have been included at the policymaking level of the government. For instance : Arun Maira who worked with Tata Motors and Aurthur D Little was a senior advisor with the Boston Consulting Group in India.

• According to National Election Watch report around 300 MPs in parliament are millionaires, and guess what 138 belong to the congress party!

• MP like Vijya Mallaya who has business interest liquor and aviation business is a member of the Consultative Committee for ministry of civil avation.

• Similarly Rahul Bajaj a leading industrialist of the country is a member of several committees in India like the committee of labor and Consultative Committee for Ministry of Finance 2007.

Response of Industry Association to Government Overtures

• FICCI is the rallying point of free enterprise in India.

Objectives• To conduct applied research in the fields of economics, public

policy, business and management.• To facilitate policy formulation at the national and sub-national

levels through consultative mechanisms.• To ensure that industry opinion and corporate India’s

perspectives find a reflection in the consensus on developmental issues.

• FICCI maintains the lead as a proactive lead solution provider through research, interactions at the highest political level and global networking.

• The government provides its support to the joint business council formed by FICCI with Indian trading partners. Its termed as ‘track two diplomacy’.

• To open up business opportunities with Indian businessmen with oversea investors, technology suppliers, and multi and bilateral funding agencies.

• CII ( Confederation of Indian Industry)• Objective : The Confederation of Indian Industry

(CII) catalyzes change by working closely with government with policy issues enhancing efficiency, competitiveness and expanding business opportunities for industries through a range of specialized services and global linkages.

• CII has severed as an instrumental body to carry out some political objectives of the PMs example :

• Dr Manmohan Singh as the Finance Minister recommended CII to popularize his ideas about economic reform to the opposition in parliament.

• Tarun Das the Secretrary General described ‘development as a partnership process between government and CII as the junior partner of the government’.

• CII has established several committees and task forces to examine issues in specific sectors and raise them in government interaction.

• Example the national Committee on health care.

• CII also formed the University Industry Council wherein universities and industries come to a single platform to discuss issues and take corrective measures in areas of human resource development.

• Therefore gone are the days where the roles and responsibilities are entrusted only with the government. Thanks to economic liberalization!

• Thus a constructive networking is enabled.

Partnerships as Implementing Agencies • The concept of partnership is applied at a level of providing

good and services also which earlier was the responsibility of the state only.

• PPP is an important tool for the same.• Its argued that massive investment is only possible with the

help of private sector only.• According to the government of India website 139 PPP

projects have been initiated.• Why PPP ?

1. Deficiency of government resources

2.Efficent institutional delivery

3. Adoption of latest technology

4.To draw in more international funding

• The key initiative of the government to promote PPP is the Viability Gap Funding Scheme.

• Involves giving funds to the infrastructure projects that are economically justifiable but to commercially viable.

• India Infrastructure Finance company was set up to play a catalytic role in the infrastructure sector by covering long term debts for financing infrastructure projects.

• Various financial and legal services have been constructed by the government at the centre and the state level to facilitate the implementation of the PPPs.

• The CAG of India has undertaken the task of issuing guidelines and auditing infrastructure projects in PPP mode. This is done to verify the value of public money.

• Quality of work and the level of private profit are important testable features of the PPP projects. Example Committee of public undertakings , questioned the system of collection of toll taxes in the Delhi Gurgaon highway , and regulate the profits being accrued to the private investors.

PPP in Social sector

In country like India, where performance of the social sector has been dismal over the years, the challenges face by Policy makers are different as compare to other sectors:

• Creating physical capital that can provide health & education services equitably.

• Reaching the poor and those who are deprived of these services

Health Sector

Two scenario of health services in India

1st : low government investment with quality of health services provided by the implementers to the poor being of a very low quality

2nd : Super specialty hospitals financed by private sector are growing to serve the rich class and urban elite.

Moreover,

Ministry of health & family welfare has underlined the fact that present health care system is pro-rich.

- poor can’t get adequate health services but when they seek these services from private sector, they face further impoverishment due to the high expenditure.

• As a solution government begun to explore the possibility of PPP in health sector where in private sector provides massive investment for the required infrastructure (hospital, beds, doctors, nurses, equipments, staff etc.) while the government provide infrastructure like land or building.

Pattern of the partnership:• 1- Contracting (with “for the profit” private sector)• 2-NGOs (primary services)• 3- Private practitioners

In addition there were cases when the government has provided land at subsidized rate or reduced import duties on technical equipments to corporate hospital as a partnership venture.

• The purpose of the partnership is to provide free services to the poor & deprived, however monitoring these partnerships remain biggest challenge

• As there is no accountability mechanism that places responsibility for particular decision therefore many cases were seen in such types of collaboration in which poor were been ill-treated, and charged money or denied services

In response of these complaints many state governments made provisions for the transparent partnership.

Problems pointed out in PPP in health sector by Baru and Nundi:• Ill- preparedness of the manger of the government to properly designed the

partnership • Monitor the performance, & provide and enabling environment for the

execution of the project• Accountability and effectiveness

Education Sector• Using PPP mode the government is able to give quality services by

using the expertise of the private sector.• HRD ministry announced that the PPP would be the basis of

educational expansion in the country over next two years.• It will strengthen the human resource base.• FICCI has been holding summits in higher education from 2004.• In the 2008 summit titled ‘Leveraging Partnership in India in

Education Sector’ here the need for PPPs in higher education is highlighted.

• It identified various partnerships and recommended collaborations with foreign universities for research and student exchanges.

• Another reason is fulfilling the commitment of raising literacy level.

• The Centre for Civil Society launched a School choice campaign in 2007 , arguing that what the poor need today is not just ‘ The right to Education , but the Right to Education of Choice’.

• A voucher system was called for to provide choice to the students.• India is in a experimental stage. The forms that partnerships can

take at primary and secondary levels of education are diverse.• Private players can chip in higher education , opening up

partnerships with foreign universities.• The PPP in education is necessary because of the inefficiency in the

delivery system by the government.

Issues and challenges•The advent of governance in in government is taking place within the broad framework of neo liberalism in which the role of state is being recast.•Many responsibilities that were exclusively undertaken by the state are now being given to the other two actors while some are being undertaken in partnership mode.•Neo-liberal framework demands increasing privatization of the provisioning of goods and services, leaving the “core” functions with the state.•The clear demarcation of “core” functions is still fuzzy as many of them are either being privatized or being undertaken in partnership.

• State is seen as a problem in this transformation and there is consistent demands on the part of liberalizers that the state should become an enabling state, a facilitator and not hindrance to the promotion of market.

• Network governance relies on political and social processes at work in the society, which may not necessarily be conducive to the production of public purpose on all occasions.

• Jessop , Sorenson and Torfing have also argued that governance network can fail. They say that “There has been much talk about state failure and market failure, but we should also analyse the conditions for governance network failure .Network governance relies on precarious social and political processes and there are many things that can go wrong and prevent the production of public purpose”.

• The issue of the capacity of the state to negotiate and bargain in these network arises. Both political as well as bureaucratic leadership has been comfortable in taking personal advantages and benefits that the liberalization policies have offered. Thus the capacity to negotiate is weakened.

• With the blurring of boundaries between the public and the private interests, public servants may not feel the urge to carry the burden of pursuing public interest alone. This shows that the partnership are not equal and can allow certain private interests to dominate.

• It is important for the government institutions to have the capacity and capability to deliver high performance. If this does not happen their ability to negotiate with other actors will weaken.

• After independence there has been a gradual decline in the effectiveness of institutions of accountability. It is left to the civil society to raise issues connected with financial probity and administrative responsibility.

• With the advent of a dense web of institutions of governance the new institutions of partnerships with the corporate and voluntary sectors multiply. So it becomes important to strengthen state’s capacity to negotiate and bargain for public interest.

• If the new partnerships institutions are being kept out of the ambit of the government's hierarchy, it becomes difficult to hold them accountable.

• All the problems face by our country like corruption are mainly caused by the faltering efforts at bureaucratic or institutional reform. E.g. Little attention is paid to CAG’s report. Same is the case with CVC and CBI.

Conclusion• Partnerships constitute an integral part of not only the governance

framework but also the neo-liberal paradigm.• Thus we can say the partnerships have come to stay. They can neither be

completely rejected nor can they be completely accepted.• It is important to bring their functioning into public domain for ensuring

transparency and accountability.• Policy makers and practitioners who formulate a partnership programme

focused on the nuts and bolts of the scheme, must also give profound consideration to its socio-political environment and the pitfalls that may lie in the wait there.

Thank You !