LE MANAGEMENT PUBLIC A L’EPREUVE DE LA POLITIQUE · In this working paper I deal with the public...

14ème Colloque International de la Revue

“POLITIQUES ET MANAGEMENT PUBLIC”

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LE MANAGEMENT PUBLIC A L’EPREUVE DE LA POLITIQUE

TITRE DE COMMUNICATION:

« Determinants of organizational autonomy: a political approach of structuring public organizations »

Par

- BRAM VERSCHUERE, Public Management Institute (K.U. Leuven, Belgique) -

SESSION : N°16 (Le management public en question) ------------------------------------------------------------------------------------------------------------ RESUME

In this working paper I deal with the public sector in Flanders, a region in the federal state of Belgium, and

more specific with the public organizations that are at arm’s length of the core government – the so called

“agencies”. The focal question in this paper is why public agencies that formally-legally spoken belong to

the same category of public organizations, have such differing levels of real (factual) autonomy. In order to

answer this question, the paper is built upon three headings: first, I will develop a formal-legal typology of

Flemish public organization, which will be the basis for selecting our research objects, the Flemish

externally autonomized public agencies (EVA). Next, I will show that this seemingly homogenous group of

organizations shows different levels of factual autonomy vis-à-vis their principal organization (oversight

ministry or minister), by building a typology of factual autonomy. Thirdly, I will look for (theoretical and

empirical) explanations for this diversity in autonomy. Therefore, a theoretical framework will be

developed and the resulting assumptions will be tested. I conclude by addressing potential alternative

explanations for the diversity in autonomy, and with suggestions for further research (from a theoretical and

methodological point of view).

Bram Verschuere – Public Management Institute (K.U. Leuven) 1

Public sector organizations can be classified in a formal-legal typology that tells us something

about the formal-legal autonomy a public organization has in relation to its principals (e.g.

minister, steering department). However, recent research In Flanders (Belgium) has revealed that

there are considerable differences in levels of autonomy between organizations, even when they

belong to the same formal-legal category in the typology (Verhoest, Peters, Bouckaert, and

Verschuere, 2004; Verhoest, Verschuere, Peters, and Bouckaert, 2004). The main topic of this

paper is to investigate what determines these differences in autonomy. In the remainder of this

paper I will first present a formal-legal typology of Flemish public organizations. Next, I will

classify organizations that belong to the same formal-legal type based on their levels of real or

factual autonomy. In a final part of the paper, I will look for (theoretical and empirical)

explanations for the variety in autonomy between agencies that formally-legally belong to the

same category.

A formal-legal structure of the Flemish public sector

A paper on the Flemish public sector organization should always start with a little note on the

peculiar Belgian federal state organization. Flanders is one region1 in the Federal state of

Belgium, with its own parliament and government. Successive state reform projects have

distributed powers and responsibilities amongst the Federal state of Belgium and the regions (or

communities). The Flemish governmental level has its own, constitutionally arranged, policy

responsibilities and has developed over time a range of institutions to take up its responsibilities

(e.g. an own parliament, an own government, and an own public sector). To date, the Flemish

public sector can be considered as existing of some concentric circles, with in its core the

Departments and Administrations that are hierarchically structured under the responsible

ministers (the so called core government). The other circles are at a larger distance from this core,

meaning that the organizations that belong to these circles have some levels of autonomy vis-à-

vis the political and administrative principals (they are at arm’s length of the core government).

This concentric character of the Flemish public sector has inspired us to construct a formal-legal

typology of Flemish public sector organizations.

1 Belgium has three regions: Flemish Region, Walloon Region and Brussels Capital Region. Next to that there are also three Communities in Belgium (based on language): Dutch speaking, French speaking and German speaking. The Flemish Parliament and Flemish Government are responsible for the Flemish Region and the Dutch speaking Community.


In the recent past, a growing bunch of literature has been published on the definition and typology

of “state (or public) organizations” in general, and “autonomous agencies” (or wider state

organizations, quango’s, etcetera, hereafter called “agencies”) in particular (Thynne, I,2004;

Pollitt, C, Talbot, C., Caulfield, J., and Smullen, A,2004; Pollitt, C., Bathgate, K., Caulfield, J.,

Smullen, A., and Talbot, C., 2001; Talbot, C., Pollitt, C., and e.a.,2000; Pollitt, C. and Talbot, C.

eds.,2004). Here, I will build a typology of Flemish public sector organizations in a rather

pragmatic way because the typology needs to suit our research purposes. This implies that we

need to be able to tell something about the formal-legal autonomy the organization has vis-à-vis

its political principals. In other words, the typology should be able to tell us something about the

“distance” of the organization from the core government. “Distance from the core government”,

at least in a formal-legal sense, can be measured by looking at criteria such as “legal personality”

and “legal status” (public-private) of the organization, and “ministerial affiliation and/or control”.

Such criteria urge for a “legal” typology, contrary to other criteria to classify organizations that

are used for constructing typologies based on organization theory, political science or economic

for example (for an overview see (Roness, P.,2003)).

Examples of typologies based on formal-legal issues such as legal personality, legal status and

hierarchical subordinations are Bouckaert and Peters (Bouckaert, G. and Peters, G., 2001), who

identify six legal formats for public organizations2, or Thynne who applies two criteria for

typology3: establishment of the organization by a legal instrument and the apex of the

organization (Thynne, I,2004). These typologies tell us something about the legal personality and

the legal status, the hierarchical subordination to the minister and the independence (or

autonomy). In the case of Bouckaert and Peters we find indications about the independence of the

organization by looking at whether the organization has an own governance structure. In the case

2 1. Components of Ministries: hierarchically subordinate to ministry, no legal personality, not autonomous.

2. Independent, within a Ministry: legally subordinate to minister, little independence in policy and financial terms

3. Legal entity within a Ministry: public law status, but subordinate for many purposes to the department. 4. Legal entity, public law: nor legal, nor hierarchically subordinate, own governance structure, considerable

autonomy 5. Legal entity, private law: organized under private law, performing public functions, independent governance

structure 6. Sui generic organizations: performing public functions that are meant to be almost entirely free from

executive control, or are responsible to parliament, or quasi-judicial organizations. 3 1. Ministry or department: established by statute or executive declaration, headed by minister.

2. Executive body: usually established by executive declaration, headed by a non-ministerial office holder. 3. Statutory body: established by statute, headed by a non-ministerial office holder or board. 4. Constitutional body: established by a constitution, headed by a non-ministerial office holder or board. 5. Company, trust, society, etc.: established by own constitution, normally headed by board


of Thynne, indications can be found by looking at how the organization is established (executive

declaration – own constitution) or at whether the organization is headed by a board or not.

Another typology, developed for distinguishing between public and private legal status is Pollitt

et al. (Pollitt, C., Bathgate, K., Caulfield, J., Smullen, A., and Talbot, C.,2001) (Talbot, C., Pollitt,

C., and e.a.,2000). They depart from the idea that one may envisage a two-dimensional spectrum

of types of organizations running from the centre of government out across the public-private

borderline. Along one dimension, one moves from organizations with no commercial purposes to

those that are largely suffused with commercial purposes (e.g. state enterprises) and privately

owned, profit seeking companies. This is the ‘state-market’ dimension. The other dimension

moves from wholly state-owned and public law dominated institutions (e.g. a ministry) through

arm’s length but still public bodies to public-private partnerships and finally to voluntary

organizations that are part of the civil society. This is the ‘state – civil society’ dimension. Pollitt

et al. see autonomous agencies as lying centre left on both the state – market and the state – civil

society dimension. At the left hand pole of both dimensions lie ministries, or core governmental

organizations. At the right hand pole of the state-market dimension lie state enterprises and

private companies. At the right hand side of the state-civil society dimension we can find private

not-for-profit voluntary associations. According to these authors, autonomous agencies are

defined by excluding on the one hand the core ministerial organizations (ministries, departments

etc.), and on the other hand both commercial organizations (state and private owned) and private

(non-profit) organizations. Whereas these typologies are more general in nature and can be used

for classifying the public sector as a whole, there are also typologies for distinguishing between

public organizations that are at arm’s length form the core government. There is an important

distinction between autonomous agencies within departments or civil service proper (e.g. the

“Next Steps Agencies” in the UK) and the autonomous agencies that are outside departments or

the civil service proper (e.g. “Etablissements Publics Nationaux” in France, “Non Departmental

Public Bodies” in the UK, or “Zelfstandige Bestuursorganen” in the Netherlands). Both types of

autonomous agencies can in theory and in practice be typed as an autonomous agency (Talbot, C.

et al.,2000). This distinction is closely related to the distinction between internally and externally

autonomized agencies (see e.g. (Bouckaert and De Corte,1999) and goes directly into the issues

of legal personality and ministerial hierarchical subordination and control. This is crucial, in the

sense that issues such as “legal personality” and “being departmental organizations” are closely

related to each other (a core departmental organization usually does not have legal personality),

but also interrelated to other features such as “ministerial control and subordination”, “being


internally or externally autonomized”, “the regulations concerning managerial freedom the

autonomous agencies are subject to” and the level of “structural disaggregation”.

After this short overview of typologies of public sector organizations, I will construct a formal-

legal typology of Flemish public sector organizations using criteria that are commonly used by

other scholars and of which examples can be found in the literature (cf. supra). Firstly, does the

organization have legal personality or not? If yes, is it public law legal personality or private law?

If not, does the organization has its own budget or own accounts? Secondly, do organizations

with a public law legal personality have a board (board of directors, steering board)? By posing

these questions, we are able to detect whether the organization has legal personality and of what

kind (public-private). By posing the question towards own budgets and accounts, we can detect

whether the organization has some managerial flexibilities. Finally, by asking whether the

organization has a board or not, we get some indications of the degree ministerial control and

oversight towards the organizations (having a board decreases the ministerial oversight, oversight

on organization is done by board). Answering these questions leads to a formal-legal typology of

five organizational types, with an increasing level (from type 1 to type 5) of distance from the

principal. Figure 1 shows how we have constructed this typology, table 1 defines the five types of

organizations.

legal personality?

no yes

public privateown budget oraccounts?

no yes board?

no yes

type 1 type 2

type 3 type 4

type 5

Figure 1: 5 types of organizations


Type Description 1 Core government organizations that are part of the legal person of the Flemish community, and

that are in the budget of the core department to which they belong 2 Internally autonomous agencies with an own budget (some managerial discretion), no legal

personality. 3 Internally autonomous agencies with an own budget (some managerial discretion), legal

personality. 4 Externally autonomous agencies with an own budget, public law legal personality and a governing

board (indicative for decreased ministerial oversight). 5 Externally autonomous agencies with an own budget, private law legal personality and a

governing board (indicative for decreased ministerial oversight).

Table 1: 5 types of organizations

As to the case of Flanders, we can attribute the Flemish public sector organizations to this

typology. The landscape of Flemish arm’s length organizations is very diverse (Bouckaert and De

Corte, 1999; Verschuere and Verhoest, 2003). Some of these organizations are internally

autonomized from the core government (TYPE 2) such as the budgetary funds, some scientific

institutions and the “Diensten met Afzonderlijk Beheer” (“Services with Autonomous Managerial

Competences”). A special category is TYPE 3, which consists of two organizations that are

internally autonomized with legal personality. Other organizations are externally autonomized, a

category that consists of (1) functionally decentralized agencies (TYPE 4) and of (2) private law

agencies that are structured according to corporate legislation (TYPE 5).

I think this typology is useful for our purposes and this for two reasons. Firstly, we are able to

attribute public organizations to a category, based on objective and formal criteria that tell us

something about the autonomy and steering relationship between organization and its principal or

oversight organization. This is especially useful in the light of our research question. Secondly, I

think that this typology will proof consistent over time for the Flemish situation, in the light of the

reform process of the Flemish public sector that is currently taking place. The previous Flemish

Government (1999-2004) has initiated a reform project called “Improved Government

Performance”4. Essentially, this project aims at simplifying the public sector by establishing

4 We are in the middle of this reform process that not is finished yet. Thirteen homogeneous policy fields and (attached to these) ministries have been identified. Twenty-two internally autonomized autonomous agencies without legal personality have been established (approval by Flemish government). Thirty autonomous agencies with public law legal personality have been established (approved by Parliament) to date. If we consider this future Flemish public sector we can link the new organizational types to the deductive typology we developed supra (cf. figure 1): Type 1: Departments and their sub-units Type 2: Internally autonomous agencies without legal personality Type 3: Internally autonomous agencies with legal personality Type 4: Externally autonomous agencies with public law legal personality Type 5: Externally autonomous agencies with public law legal personality


thirteen ministries (with uniform and homogenous responsibilities). Within these thirteen

homogenous policy fields, autonomous agencies will be established (some internally, other

externally autonomous with private or public law legal personality). However, the organizations I

have studied here in this chapter still belong to the older governmental situation

A factual typology of Flemish EVA

The research results I present in the remainder of this paper are based on data from a survey we5

have conducted in 2003, hence before the finalization of the reform process of Improved

Government Performance. We have addressed 151 Flemish public organizations of all five types.

Respondents had to answer to a set of questions concerning identification data, autonomy,

steering & control, culture and performance. The response rate was approx. 60% (we have

received data from 87 organizations, of which 29 TYPE 4 organizations). Based on these data –

and more specifically the data on autonomy – I have constructed a factual6 typology of TYPE 4

organizations (Flemish EVA, externally autonomous agencies with an own budget, public law

legal personality and a governing board).

To a certain extent, these TYPE 4 organizations can be compared with the Etablissements Publics

Nationaux. According to our formal typology (see figure 1), we can see that these organizations

are “public”, have legal personality, are not fully under the hierarchical ministerial control and

direction and thus have some degrees of structural disaggregation (being at arm’s length),

combined with some managerial freedoms (autonomy). Hence these Flemish EVA differ from

private law organizations (TYPE 5), public organizations that have no legal personality (TYPE 1

So due to this change process, some things are changing in a formal-legal way. Not only is the Flemish public sector restructured, also are legal statutes of our research object changing. The most striking example is the abolishment of the control regulations of the Law of 1954, and the general introduction of the management contract that will specify the relationship between EVA and oversight authority. 5 This paper here is part of the output that has been obtained from research that was conducted at the Public Management Institute (KU Leuven) towards public sector organization and organizations. This research is done by the professors Geert Bouckaert and Guy Peters (Pittsburgh), Dr. Koen Verhoest and myself. The research is also part of COBRA, an international network for research in the public sector and its organizations (www.publicmanagement-cobra.org). 6 Whereas the formal-legal typology has been used to classify all Flemish public organizations in 5 types based on formal and objective criteria, the so-called factual-perceived typology can classify organizations within one formal-legal type, based on answers received in the survey. These answers reveal something about the real (factual) autonomy and steering of the organization. From a methodological point of view however, there might be some problems with considering the survey data as reflections of “real” or “factual” autonomy or steering. Further we come back to this issue.


http://www.publicmanagement-cobra.org/

http://www.publicmanagement-cobra.org/

& 2), and public law legal personalities that remain fully under the hierarchical ministerial control

and direction (TYPE 3).

To finish the introduction to this second part of the paper, I have argued that TYPE 4

organizations form a more or less homogenous – at least formally-legally spoken - category of

Flemish public sector organizations. However, I will show that within this seemingly

homogenous category, there is a considerable degree of variation in factual autonomy of the

TYPE 4 organizations (Flemish EVA). Therefore I will construct a “factual” typology of Flemish

EVA in 5 steps.

Step 1: Conceptualization

Autonomy of an organization can be conceptualized in several ways, and is a far more

complicated concept than just formal-legal ties with the principal organization. In general, two

kinds of autonomy can be discerned (Verhoest et al., 2004). First, there is as the level of decision

making competencies of the agency (concerning management on the one hand and concerning

agency policy on the other hand). Second, there is the lack of, or constraints on, autonomy. These

are the constraints on the actual use of decision making competencies of the agency (referring to

structural, financial, legal and interventional constraints on the agency’s decision making

competencies). The table in annex 1 gives an overview of the various conceptual differences of

autonomy. The table shows that the autonomy of an organization is a multi-dimensional concept.

Moreover, it is not always clear whether a dimension (see the table in annex 1) reflects autonomy

of the organization, or whether this dimension reflects control upon the organization by its

principals. ‘Control’ is defined here as the mechanisms and instruments used by the government

to influence the decisions and the behavior of the agency intentionally in order to achieve

government objectives (White, 1991). In our analysis here, I will limit myself to the

interpretations of autonomy that fall under the umbrella of autonomy as the level of decision

making competencies of the agency. Hence, I will operationalize the concepts of managerial

autonomy and policy autonomy (the two columns that are left side in the table in annex 1).

Step 2: Operationalization of the concepts (survey)

An organization can have managerial autonomy, the freedom to the choice and application of

inputs in the primary policy process, on personnel management (HRM) or on financial

management. Managerial autonomy can also be operational, or strategic. Operational

management autonomy is about the decisions on the choice and application of individual inputs,


strategic management autonomy is about decisions on general principles and rules with regard to

a kind of input. Policy autonomy is the freedom to decide on content and/or results of the primary

policy process. If an organization has a low level of policy autonomy, this means that the

oversight authority has the decision right on activities, conduct, policy instruments, outputs,

outcomes and effects. These policy decision making competencies can be vis-à-vis political

oversight authorities (such as the minister), or administrative oversight authorities (such as the

core department from which the agency is autonomized). In annex 2, I explain how these

concepts have been integrated in survey questions7, and how I have measured these concepts. In

annex 3, I show the scores on the original variables of the Flemish EVA that were involved in the

survey.

Step 3: Constructing indexes for cluster analysis

For autonomy, cluster analysis will be performed for the selected cases (Flemish EVA) for six

variables: OPA, SPA, OFA, SFA, PAM and PAD. These variables are indexes that are computed

out of the original data we collected in the survey. See annex 4 for the computation of these

indexes.

Step 4: constructing a factual typology via cluster analysis

Three cluster analyses8 will be performed; (1) with the operational managerial autonomy

variables, (2) with the strategic managerial autonomy variables and (3) with the policy autonomy

variables. Only TYPE 4 organizations – the Flemish EVA, see formal typology – will be included

in the analysis, as the aim is to detect factual autonomy-levels within the same formal-legal type

of organizations.

Operational managerial autonomy

Four types of organizations (clusters of organizations) are found. Statistical analysis shows that

these clusters differ from each other because of significant differences on the OFA-variable.

Organizations that belong to cluster 3 and cluster 4 have the highest level of OFA. Cluster 1 and

to al lesser degree cluster 2 organizations score significantly lower.

7 In this paper, statistical analyses are performed by using data of 25 Flemish EVA (type 4 in our formal-legal typology). If we have a lower N than 24 in some analyses, then this is due to missing data on a specific variable that is included in the analysis in case. 8 I use hierarchical cluster analysis with the squared Euclidian distance method.


OFA-score9 OPA- score10 N Cases Cluster 1 L (MR11=2,5) NS12 4 23, 32, 54, 64 Cluster 2 Aver (MR=9) NS 9 24, 41, 43, 50, 57, 59, 65, 73, 86 Cluster 3 H (MR=18) NS 1 33 Cluster 4 H (MR=18) NS 8 34, 51, 60, 69, 70, 71, 72, 75

Table 2 We can conclude that 9 Flemish EVA have high levels of operational financial managerial

autonomy, 9 have medium levels and 4 have low levels. For operational HRM managerial

autonomy, we cannot make any valid conclusions as to differences between clusters because the

differences between the clusters on OPA are not significant.

Strategic managerial autonomy

Six clusters of organizations are found after cluster analysis. Statistical analysis shows that these

clusters differ from each other because of significant differences on both the SFA-variable and

the SPA-variable.

SFA13 SPA14 N Cases Cluster 1 L (MR=8) L (MR=8,3) 10 23, 24, 32, 33, 43, 50, 51, 54, 64, 73 Cluster 2 H (MR=22) Aver (MR=15,5) 1 34 Cluster 3 L (MR=8) H (MR=19,6) 4 41, 65, 71, 75 Cluster 4 L (MR=8) Aver (MR=17) 1 57 Cluster 5 H (MR=18,5) L (MR=7,5) 5 59, 69, 70, 72, 86 Cluster 6 H (MR=18,5) H (MR=21) 1 60

Table 3 What strategic managerial autonomy is concerned, we can observe that the group of Flemish

EVA is – roughly spoken – divided in three subgroups. Cluster 1 and cluster 4 contain

organizations that have low levels on both SFA and SPA (average for cluster 4). Cluster 2 and

cluster 6 contain organizations that score high on both SFA and SPA (average for cluster 2).

Cluster 3 and 5 contain organizations that have (a) high scores on SFA and low scores on SPA, or

(b) high scores on SPA and low scores on SFA.

9 Differences between clusters for OFA significant (Kruskal Wallis Test: X²=19.9, Sig.=.000) 10 Differences between clusters for OPA not significant (Kruskal Wallis Test: X²=3.55, Sig.=.31) 11 Mean Rank (Kruskal Wallis Test) 12 Not Significant 13 Differences between clusters for SFA significant (Kruskal Wallis Test: X²=21, Sig.=.001) 14 Differences between clusters for SPA significant (Kruskal Wallis Test: X²=18,9, Sig.=.002)


Policy autonomy

Five clusters of organizations are found after cluster analysis. Statistical analysis shows that these

clusters differ from each other because of significant differences on both the PAM-variable and

the PAD-variable.

PAM15 PAD16 N Cases Cluster 1 Aver (M.R.= 7,9) H (M.R.= 14) 6 23, 32, 41, 43, 59, 86 Cluster 2 H (M.R.= 17) H (M.R.= 14) 9 24, 40, 51, 54, 57, 60, 65, 71, 72 Cluster 3 L (M.R.= 5,5) L (M.R.= 1) 1 33 Cluster 4 L (M.R.= 3,5) L (M.R.= 4,1) 4 50, 64, 69, 70 Cluster 5 Aver (M.R.= 11) L (M.R.= 3,5) 1 75

Table 4 Flemish EVA that belong to cluster 2 have high levels of both types of policy autonomy. In

clusters 3 and 4 both PAD and PAM are low. In the 1st cluster, PAM is average (rather low) and

PAD is high. In the 5th cluster, PAM is average (rather high) and PAD is low.

To recapitulate, I have constructed three empirical typologies of Flemish EVA. These typologies

include some relevant autonomy variables, and have been developed based on cluster analysis.

Based on these typologies we are able to attribute some characteristics to a specific Flemish EVA.

Next to that, we are able to differentiate between formally-legally similar organizations on the

basis of some empirical data from survey research that look at the autonomy and steering &

control of the Flemish EVA. The aim has not been to develop a typology that can be generalized,

but rather can enable us to classify within the group of Flemish EVA.

Step 5: Methodological validation of measuring the dependent variables

The question remains whether our measurement of the dependent variables (autonomy) - via the

survey method in which the CEO (or director) of the organization is addressed to fill in the

questionnaire on behalf of his/her organization – reflects the “formal”, “real/factual” or

“perceived” autonomy of the organization. I have addressed this issue already in footnote 5. I

intend to solve this question from a methodological point of view in a later phase of our research

via case study.

15 Differences between clusters for PAM significant (Kruskal Wallis Test: X²=18,44 / Sig.=.001) 16 Differences between clusters for PAD significant (Kruskal Wallis Test: X²=19,81 / Sig.=.001)


In his doctoral thesis, Verhoest (Verhoest, 2002) has investigated the formal17 steering (or

autonomy) of an organization, the factual18 steering (or autonomy) of an organization and the

perceptional interpretations of this formal and factual steering by the involved actors. Formal

autonomy was investigated by looking at formal documents. Factual autonomy was investigated

by means of a complex instrument of analysis, in which steering and autonomy were carefully

operationalized, and measured via semi-structured interviews. The perception of formal and

factual autonomy was measured via structured interviews. From a methodological point of view,

Verhoest found that the perception of steering according to the involved actors to a large extent

corresponded to the formal and factual steering (as measured via instrument of analysis). Next to

that, some initial validation-efforts on our survey data have been done so far. Students have taken

the survey data (the organization has filled in) to interviews in order to check whether the survey-

answers reflect the reality (Verlinden, 2003; Van Osselaer, 2004). The overall impression was

that the interviewees could agree with the observed differences between formal and factual

autonomy. According to the interviewees, these differences are the result of scope for

interpretation that the formal establishment (and other) documents leave. Hence –at least for the

cases that were investigated by the master’s students - factual autonomy is perceived as what

agencies do (or do not) in reality. So, the scores that were given in the survey need to be interpret

as reflections of the interpretation of formal documents in the factual situation – again for the

cases that were investigated in these case studies.

We can conclude, be it carefully as we only deal with validation data of some (4) cases, that the

survey data quite fairly reflect the real-life situation (the factual situation) in the agencies, what

autonomy is concerned. Next to that, Verhoest’s findings (also for a Flemish EVA) point at the

low discrepancy between perceptionalist on the one hand, and factual and formal interpretations

of autonomy and steering on the other hand19.

17 As defined in law, decree, ministerial or royal act and/or in commonly agreed agreements or contracts between principal and agent and that are accepted by both parties (Verhoest 2002). 18 As one can see in reality, or how formal requirements (see formal autonomy e.g.) are followed. The difference between both formal and factual can be observed by looking at the extent to which formal autonomy is (1) surpassed (using more than formally allowed) or (2) not used in reality (using less) (Verhoest 2002). 19 Although, in his case study he also found a difference between formal and factual autonomy.


Determinants of factual/perceived policy autonomy

In the remainder of this paper I will look for an (initial) explanation of what determines the policy

autonomy of a Flemish EVA vis-à-vis its political principal (the functionally responsible

minister). Hence, I narrow my focus (I will not include other kinds of autonomy in my analysis

here). As the cluster analysis for policy autonomy (table 4) has revealed, 10 cases have high

policy autonomy (cluster 2), or average to high policy autonomy (cluster 5) vis-à-vis the minister,

while 11 cases have low policy autonomy (clusters 3 & 4), or average to low policy autonomy

vis-à-vis the minister (cluster 1). This leads to a dichotomous dependent variable PAM2, on

which low autonomy organizations score “0”, and high autonomy organizations “1”.

Nevertheless, all these organizations belong to the same formal-legal category of public

organizations (TYPE 4), assuming they have similar formal levels of autonomy. In other words

some cases declare to have greater levels of freedom for choosing policy instruments and target

groups of the policy concerned, than other cases do. Differences between clusters to which the

cases belong are statistically significant (see Kruskal Wallis tests). The question is here; why do

we observe cases that declare to have higher, while other cases declare to have lower policy

autonomy within the same formal-legal type of organizations?

A principal – agent framework

As this paper essentially deals with the level of autonomy an agency has vis-à-vis its political

oversight authorities, I believe that principal-agent theory – as a root of rational choice

institutionalism – is a valuable theoretical point of departure. Rational choice institutionalism

itself is often regarded as one of three main branches of the neo-institutionalist theories, next to

sociological institutionalism and historical institutionalism ((Hall, P. and Taylor, R., 1996),

(Aspinwall, M and Schneider, G.,2000)). These three branches differ from each other both from

an epistemological and ontological point of view (for an interesting overview of the three

branches, see e.g. (Aspinwall, M et al.,2000)). I choose an institutional approach here, because I

believe that such approach is suited for the research question I pose here. According to Peters, an

institution has following characteristics; they are (formal or informal) structural features of the

society or polity, they are stable over time to a certain extent, they affect (constrain) behavior and

they include some sense of shared value and meaning for the members (Peters, G, 1999). Hence,

based on Peters, Roness (Roness, P., 2001) argues that analyses can be called “institutional” when


these examine how structural features of organizations affect, and are affected by, how actors

behave. In essence, the structural features of the organization we study here are the autonomy of

the agency vis-à-vis its oversight authorities. Autonomy – as structural feature of the

organizations (our research objects) – is, from an institutionalist point of view, affected by the

behavior of the actors that are embedded in the organization (and vice versa; structural features

affect actor’s behavior). More specific and translated to our specific research theme, we could

argue that the determinants of organizational autonomy and steering (structural features) can be

explained by the behavior of actors that are embedded in the organization, according to

institutional thinking. I choose a rational approach, because I believe that a principal-agent

framework (initiated by (Jensen, 1983)) is a clear and parsimonious theoretical framework for

dealing with issues of agencification (relationship between autonomizing principals and

autonomous agents). By using this framework, I hope to explain the differences in institutional

design (in our research context; autonomy) between organizations that were originally and

formally designed in a quasi-identical way. Some argue that problems of info-asymmetry and

goal incongruence are common problems in the public sector, and that this theory allows for

studying problems of organization as a result of a political game. Moreover, our analytical and

empirical framework includes central concepts of the principal-agent theory; organizational

(agent) autonomy vis-à-vis the political oversight authority (minister = principal) of arm’s length

agencies (Verhoest, 2002).

In this principal-agent approach, the institutional design is a means to overcome some potential

problems in the principal-agent relationship. I assume that both the agent and the principal have

their own (policy) preferences, and as rational actors will try to achieve these preferences. For the

principal, it will be important to assure that the agent will comply with the principal’s demands

(the compliance problem). Therefore, not too much leeway will be given to the agent. On the

other hand, for the agent, it will be important to get as much leeway as possible, in order to be

able to also achieve its own preferences. Whether a lot of leeway or not will be granted to the

agent by the principal, will depend on the context of the relationship; this is the level of

information asymmetry between principal and agent and the divergence of preferences between

the two. This context will influence the cost the principal will have to make to bridge the distance

(by monitoring) between the principal and the agent (high information asymmetry to the

advantage of the agent will increase monitoring and other costs) (see e.g. Waterman and Meier).

The argument is that when there is goal conflict between agent and principal, and when the agent

has better access to information than the principal has, the chances for bureaucratic discretion


(that is potentially disadvantageous for the principal) are likely to be bigger then in other

situations.

Whether an agent will be able to increase its political autonomy, hence gaining more influence in

the decision making process, will also depend on the context. But here, as I will argue, also smart

action from the side of the agent will be important. The potential of the agent to gain political

autonomy will depend on contextual factors such as the divergence of policy preferences among

actors in the environment of the agent, the location of the current policy and the location of the

agent’s most preferred policy. But the potential to gain autonomy will also depend upon factors

such as leadership skills in the agency (to deal effectively with the possibilities offered by the

context) ((Hammond, H. and Knott, J.,1999)).

To conclude, and according to rational choice institutionalism, behavior is a function of rules and

incentives. In other words, institutions are systems of rules and inducements to behavior in which

actors try to increase their own utilities or profits (see (Peters, G., 2000)). These institutions

provide the context within which the actor’s decisions are made. Analytically spoken, institutions

do not precede human action, they intervene, as they act as (formal or informal) “situative

constraints” to agent’s or principal’s behavior (see e.g. (Aspinwall, M and Schneider, G.,2000),

(Hall, P. and Taylor, R, 1996)). Actor’s (principals or agents) are seen as utility maximizers or

profit seekers that try to achieve their own preferences. But they are constrained by the

institutional context in which they operate. This context exists of (formal and informal)

institutions that are more or less stable over time. If I translate this to my research question, I

could hypothesize that:

H.1// Agents (Flemish EVA) will have high levels of political autonomy when the political

oversight (the minister) allows the EVA to have a lot of autonomy AND when the EVA

successfully takes advantage of the opportunity

According to a principal-agent framework, principals will allow a lot of autonomy when they

trust the agent, and when they can easily monitor the behavior of the agent (to check whether the

agent behaves in line with the principal’s demands). I assume that the more the preferences of the

agent and the principal converge, the more trust there will be, and that the less information

advantages the agent has vis-à-vis the principal, the less monitoring will be needed and will cost.


Next to that, under the assumption that an actor will always try to increase its own advantages, the

agent will always want to take the opportunity to increase its political autonomy (its political

decision-making capacities). Whether the agent successfully takes the opportunity, will depend to

a great deal of leadership qualities of the agency’s management and other internal characteristics

(see also (Hawkins, D. and Jacoby, W.,2004)).

H.2// Agents (Flemish EVA) will have high levels of political autonomy when the EVA has the

opportunity to gain a lot of autonomy AND when the EVA successfully takes advantage of the

opportunity

According to a principal-agent framework, the agent will have the opportunity to gain political

autonomy when influential actors in the environment of the agent have diverging policy

preferences, which in turn influences the room for manoeuvre of the agent. Next to that, the

opportunity to gain political autonomy will also increase when the status-quo policy diverges

from the agent’s policy preferences (see (Hammond, H. and Knott, J.,1999)). Also here, the fact

whether the agent successfully takes the opportunity, will depend to a great deal of leadership

qualities of the agency’s management and other internal characteristics.

An elaborated principal – agent framework

Although these two hypotheses seem very clear and straightforward, there are some problems

with the assumptions attached to them. One of these problems - the fact that we in essence have to

deal with a political reality in public management research – will be elaborated here, and result in

a third hypothesis. The point that we deal with a political environment here, has been addressed

already by discussing the work of Hammond and Knott (actors in the environment of the agent),

be it only marginal. It is important to mention that actor’s preferences not only will be framed in a

context of actor’s preferences and information asymmetries, but that this context is also shaped

and framed by other factors. Hence, I will have to take the political character of dealing with

public organizations into account.

According to Moe (Moe, 1990), the politics of structural choice20 argues that the structure and the

design of agencies (in our case autonomy) is the product of processes that evolve in a political

20 Although the theory has been designed for the US situation, it is argued (e.g. Kutsal in Bouckaert and Peters 2004) that certain key features also hold in parliamentary systems, as uncertainty and compromise are present in non-presidential systems too.


context that consists of three kinds of actors; politicians, bureaucrats and interest groups. Interest

groups are concerned about the consequences of organizational structures for the issues the

agency deals with. Politicians must deal with strategically operating interest groups. Bureaucrats

(the agency staff) have goals and deploy strategies of their own in using the agency structure

potentialities in their dealings with the environment. Further, Moe argues, the resultant of

organizational (agency) autonomy is the result of two forces; uncertainty and political

compromise.

Political uncertainty is inherent to the democratic system, in that interest groups are never sure

that they will remain in power (e.g. when political opponents win elections). Technical

uncertainty stems from the fact that certain policy problems require expertise which interest

groups do not have. In this situation of uncertainty, “a dominant group is best of, when it resists

telling bureaucrats exactly what to do, and design a structure that affords them substantial

autonomy, although strategically constraining their behavior … (in order to) have the capacity to

pursue policy goals in a world in which opponents have the right to govern” ((Moe, 1990)).

Political compromise means that interest groups not only have to cope with future political

opponents, but also have to struggle with these opponents in present time. Bargaining and

negotiations will have an influence in structuring organizations. Opponents will strive for

structures that allow them for short term influences and participation in forming and

implementing policies. Hence, according to this theory, the design of agencies is a product of

political uncertainty, technical uncertainty and political compromise.

Stemming from this theory of structural choice are two fundamental control problems: the agency

problem and the commitment problem (Horn, M, 1995). The agency problem is about being sure

that the agent acts in line with the principal’s demands and thus retains from shirking (cf. supra

principal-agent framework). The commitment problem is about being sure that the institutional

arrangement that was created for implementing certain policies will remain unchanged, also in the

future (after a regime change e.g.). Overcoming both kinds of problems involve certain costs (see

also (van Leerdam, J., 1999)), for example agency costs (due to the need to control the agent) and

commitment costs.

According to Kutsal, agencies with low degrees of autonomy reflect the agency cost logic. This

agency cost logic (agents need to be monitored closely in order to avoid shirking, adverse

behavior and the like) induces principals to design agencies in which the agent can be monitored


closely, hence low autonomy. Agencies with high levels of autonomy reflect the commitment-

cost logic, as the commitment problem induces principals to design agencies that are insulated

from political interference (Kutsal in (Peters, G. and Bouckaert, G. Eds.,2004)). Kutsal continues

by arguing that politicians will be inclined to follow the agency problem logic, as the agency

problem has immediate short term consequences; politicians benefit from responsive agents

because they can distribute benefits while in office. On the other hand, interest groups will strive

for designs that reflect the commitment cost logic. Interest groups expect long term benefits from

the program, hence they have an interest in the long term duration of the program also when the

regime changes. To conclude his argument, Kutsal argues that the agency logic (low autonomy)

will prevail in situations were the interest representation is dispersed, not well organized (and in

majoritarian systems without compromise21), while the commitment logic will prevail in

situations were the interest representation is well organized and concentrated (in consensus

systems). Thus, the choice of political principals will be dependent on factors such as the

structure of interest organization in the policy sector (well organized, dispersed), the level of

consensus between coalition partners (number of veto players), and resulting from all this; the

logic of action: agency (most likely when single veto player and dispersed interest) or

commitment (most likely when multiple veto players and concentrated interest).

H.3// Agents (Flemish EVA) will have high levels of policy autonomy when there is a strong and

concentrated interest representation with a lot of influence that fosters a long term influence in

the policies the agent deals with AND when consensus is easily reached between different

political groups about the policy in which the agent is engaged.

Initial empirical analysis

In a first step, I will perform some initial statistical analysis on our survey data. I put stress on the

word ‘initial’ here, as I am limited in several ways. Firstly, due to the small number of cases

(small N, itself a result of the relatively small N of Flemish EVA) I am limited in the kinds of

statistics I can apply. Therefore, advanced techniques such as regression-analysis will not be

performed here. Secondly, due to the data collection instrument – the survey, cf. supra – I am

limited in independent variables I can use. Therefore, I will only be able to operationalize some of

the theoretical concepts we discussed above. Thirdly, I will have to be cautious in our

21 This variable is very interesting, but only to test in cross country analysis, hence not relevant here because we deal with Flanders only (a consensus democracy).


conclusions, due to the constraints I face. Therefore, I will in a next step of my research perform

case studies, which will allow me to deal with our small N and which will allow me to carefully

operationalize our theoretical concepts (and related variables).

Notwithstanding these constraints, I believe that I can do a first exploration of the topic, based on

elementary statistical analysis.

As to the analytical method, I will look for features that are different for organizations that belong

to the two different groups of organizations: on the one hand the organizations with high levels of

policy autonomy, on the other hand organizations with low levels of policy autonomy (see our

factual/perceived typology). The analysis techniques will be mainly correlation and crosstabs

analysis. The data I analyze here are derived from the same survey I have mentioned earlier in

this paper. First, I try to operationalize some concepts.

(H.1): Information asymmetry

* I assume that the more complex the task the agent performs, the less obvious it is for the

principal to gain information about the task and its fulfillment by the agent. Therefore intangible

tasks (e.g. (Bouckaert and Halachmi, 1995)), tasks of which the output and outcome is not easily

measurable (e.g. (Wilson, James Q.,1989)) are less controllable for the principal, hence

(potential) information advantages for the agent. I operationalize “task” in two ways:

- policy cycle (TPC): implementation of policy (1; tangible & measurable22) // evaluation,

preparation or deciding on policy (.0; intangible & not easily measurable23)

- content of task (TC): delivering services and/or products, commercial tasks (1; tangible &

measurable24) // exercising authority, doing inspections, issuing regulations (.0; intangible & not

easily measurable25)

* I assume that the more the organization is controlled by its principals, the more information the

principal receives about the agent and its activities. I operationalize control in two ways:

- ex ante control on organizational decisions by having a governmental representative in the board

of the organization or not (“commissaire du gouvernement”) (INDEXA2): .0 (no) // .5

(exercising oversight in a general way) // 1 (exercising oversight in a detailed way). 22 At least more tangible and measurable than e.g. policy preparation or evaluation, we assume. 23 At least more intangible and less measurable than e.g. policy implementation, we assume. 24 At least more tangible and measurable than e.g. issuing regulations, we assume. 25 At least more intangible and less measurable than e.g. delivering products, we assume.


- ex post control by evaluating the results of the organization (EVAL): .0 (results of agent are not

evaluated, or evaluated by agent itself) // 1 (government/minister/oversight authorities are

involved in evaluating organizational results).

(H.1) & (H.2): Goal/preference divergence between principal & agent

An indication for goal divergence between principal and agent could be that the agent is free in

setting its organizational goals. In the survey, we have asked whether the agent has influence in

setting/deciding on the organizational goals. If an agency sets its own goals without interference

of its principals, its score is “1”, as in this situation, the agent potentially will set goals that

diverge from the principal’s preferences. In other cases, where other institutions set the goals, the

score is “.0” (GOAL2)26.

(H.1) & (H.2): Leadership skills within agency

Hammond and Knott (1999) have identified four leadership skills that are necessary for

successful agency behavior (successfully taking advantage of opportunities); perceptive

observation to identify the context, persuasion and influencing other actors in the environment,

anticipation or foreseeing other actor’s moves and issue framing or influencing the perception of

other actors. In the survey, we have asked the CEO’s of the Flemish EVA to score their

organization on some performance criteria from 0 (worst performance) to 1 (best performance).

Criteria that suit our leadership variable could include (1) quality of the management

(QUALMGM), (2) stability of the organization in its environment (STABENV) and (3) flexibility

of the organization to deal with evolutions and changes in its environment (FLEXIBIL).

(H.2): Goal/preference divergence between actors in environment of agent

In the survey, we have no data available for operationalising and measuring this variable in a

valid way.

(H.3): Interest representation in the field were the agent is active

I assume that a strong representation of interest groups and/or stakeholders in the governance

board of an agency, is an indication of a strong and influencive (or at least important) interest

26 A point of critique could be here, I agree, that I am using a kind of a “circular reasoning”; if an agency is free to set the organisational goals, then policy autonomy (being free to decide on target groups and policy instruments, see operationalization policy autonomy) can be assumed as a logical consequence. If an agency has policy autonomy, however, being free to set goals is not a logical consequence, but not unlikely neither.


representation in the field on which the agency is active. In the survey, we have asked for the

composition of the governance board. Agencies that have interest groups or other stakeholders in

their board are scored “1”, others are scored “.0” (STAKE).

(H.3): Level of consensus in the field were the agent is active

In the survey, we have no data available for operationalising and measuring this variable in a

valid way.

Results of the statistical analysis

The results of the statistical analysis are poor for supporting the hypotheses I developed supra. If

we look at the bivariate correlations (Kendall Tau-b) between policy autonomy (PAM2) and the

other variables – TPC, TC, INDEXA2, EVAL, GOAL2, QUALMGM, STABENV, FLEXIBIL,

STAKE – we see that there is a significant relation between TPC and PAM2 (N=21, -.45, sig.=

.04) and between FLEXIBIL and PAM2 (N=18, -.59, sig.= .01). Hence there is a negative

correlation between TPC and FLEXIBIL on the one hand and PAM2 on the other hand. This

means that the lower the policy autonomy, the bigger the chance to perform implementation tasks

and the bigger the chance to perform in a flexible way (being flexible in the environment). There

are no significant correlations found between PAM2 and the other variables. Correlations,

however doe not tell us anything about the direction of the relationship; is X influencing Y or vice

versa? If we look for Somers d, a directional measure of association, we see that PAM2 is more

influenced by TPC than vice versa (Somers d for PAM2 dependent = -.50, sig.=.02 // for TPC

dependent = -.41, sig.=.02). On the other hand, PAM2 seems to influence FLEXIBIL, rather than

the other way around (Somers d for PAM2 dependent = -.47, sig.=.00 // for FLEXIBIL dependent

= -.73, sig.=.00). Finally, statistical tests (multi-layered crosstabs) for measuring the intermediate

influence of flexibility on the relationship between TPC and PAM2 have revealed no significant

results (no significant differences between the influence of TPC on PAM2 for both the groups in

which FLEXIBIL is high (higher than the average) or low (lower than the average). To conclude,

we feedback to our hypotheses:

- There is a relationship between the “tangibility” and “measurability” of the task, and the level of

policy autonomy, be it just the other way around than we expected in the rational choice based

hypotheses: organizations with a task that is intangible or difficult to measure, seem to have

higher levels of policy autonomy. Moreover, there are indications that the influence of task on

autonomy is stronger than the other way around.


- No relationships were found between the content of the task, the level of ex ante or result

control (three indicators for information asymmetry), goal divergence, interest representation and

leadership characteristics on the one hand, and policy autonomy on the other hand. Although

there is a strong correlation between flexibility of the organization, and autonomy, I believe that

this is due to the influence of autonomy on flexibility (not the other way around)

- No significant intermediate effect of flexibility on the relationship between task and autonomy

has been found.

This poor support to our hypotheses can be due to several reasons:

- Due to our method: There is an argument for using case studies in explaining phenomena,

especially when the N in the research field is small (e.g. see (Yin, R. K.,1994)). Therefore, in

future research, I will proceed with case studies for exploring this topic further.

- Due to our data and the operationalization of the theoretical concepts in the hypotheses: Also

here, I am constrained by the survey method and the data I have. This has nothing to do with

quality of data (see e.g. supra in this paper; methodological validation), buth with the fact that our

theoretical concepts cannot be operationalized in-depth, by using our survey data. Again, case

study research will allow for more in-depth operationalization and conceptualization.

- Due to our theoretical assumptions: If the assumptions are wrong, then this will reflect in the

empirical results. Although I do not want to draw any conclusions yet – I await the case studies, I

deal only with Flemish data as well – it might be possible that testing other assumptions will lead

to better results. This brings us to the final part of this paper.

Alternative explanations

As I discussed supra, the theoretical framework I have developed relies heavily on the

assumptions of the rational choice institutionalism. There are however also theoretical approaches

that are grounded in completely different reference schemes. As March and Olsen (1998, in

(Pollitt, C, Talbot, C., Caulfield, J., and Smullen, A,2004) have argued, theories can be classified

according to a logic of consequence or a logic of appropriateness. In the former logic, actors that

are (boundedly) rational choose courses of action that are calculations of expected consequences,

of which the aim is to choose the option that brings least harm or most benefit to the decision-

maker. This is the logic that applies to the theoretical considerations I have developed above. In

the latter logic however, actors act ‘as they are supposed to act’, they try to act appropriate by

applying the relevant norm or rule. This distinction to a large extent corresponds to what Hall and


Taylor (Hall, P. and Taylor, R., 1996) call the divide between a calculus-approach and a cultural-

approach to institutions. Similarly, Peters and Pierre ((Peters and Pierre, 1998) distinguish

between calculations and values as sources of institutional change. If I complete this dichotomy

with another dichotomy – the locus of the action, or the actor that takes the decision (the principal

or the agent) - I have a framework as represented in figure 2. The figure can be divided in four

parts. The two upper parts are discussed and elaborated supra. In the final part of this paper, I will

test some additional hypotheses that are grounded in theoretical traditions that are situated in the

two under parts of the figure 2. These under parts represent theoretical traditions that put

emphasis on culture, norms, appropriateness, values etcetera as drivers for human behavior (as

opposite to self interest in the rational traditions). I will not give an extensive overview here. I

rather want to discuss two additional hypotheses to test an alternative argument.

Log CONS

Log APPROP

PRINC AGENT

Agent behaves pro-active, in order toachieve own preferences. Agent willsucceed when there are opportunitiesand when agent has capacities(e.g. Waterman & Meier, see alsohypothesis H.

Principal behaves pro-active, in orderto achieve own preferences. E.g.principal-agent theory (H.1), orpolitical variant of principal-agenttheory (H.3)

Decoupling"Poor parenting"

Figure 2

H.4 “Poor parenting” thesis

Here, I argue that principals will grant levels of autonomy to an agency that they consider as

appropriate. This appropriateness can stem from contingencies, but also from prescribed

normative frameworks. Examples of contingent factors can be found in the “poor parenting

model” of Pollitt (Pollitt, C,2002). He argues that agencies usually are not harshly steered by their

principals (and thus have more autonomy). Agencies are given leeway, but there are two


exceptions: (1) expenditure, were big (in terms of budget or personnel size) agencies are steered

more strictly and (2) in case of high political salience in the policy field were the agent is active

there will be more steering. In other words, contingencies (here; size of the organization and

political salience) will determine the level of autonomy the principal will grant to the agent. Size

is operationalized by looking at the budget27 of the organization and by looking at the number of

FTE of the organization. Political salience is more difficult to operationalize, especially in terms

of survey data, therefore, I will not include this concept in my hypothesis and analysis. Hence, I

can hypothesize that the bigger the organization, the more it will be steered (or the less autonomy

it will have).

Correlation analysis shows no relationship between policy autonomy (PAM2) and size variables

(nor budget size, nor personnel size).

H.5 “Decoupling” thesis

As a final cluster of approaches, the notion of “de-coupling” is introduced (Meyer and Rowan in

(Lammers, C, Mijs, A., and Van Noort, W.,1997)). This notion stems from sociological neo-

institutionalism. In practice, organizations deliberately decouple from their formal structures (so-

called expressions of rational myths) because formal requirements of the task prompt agents to

behave in another way than prescribed in order to perform well. Formal structures are not always

designed for dealing effectively with the task and processes of the agency, and therefore agencies

“decouple”. At first sight, they resemble the “rational myth”, this is the normative prescribed

“good” structure (cf. Pollitt’s Tripod28) in a kind of “ceremonial conformity”. But under the

surface, in reality and in day-to-day practice, the processes of the agency reflect a different logic.

According to Meyer and Rowan, especially organizations whose output is difficult to measure

and which are not constrained by market forces are eager to conform in a ceremonial way. Hence,

there is a tension between the formal and normative tripod of agencification ((Pollitt, C, Talbot,

C., Caulfield, J., and Smullen, A,2004)), promoted by NPM guru’s in international context, and

assumed to be designed for good performance on the one hand, and the factual design of the

individual agency that differs from the formal one on the other hand.

27 Modified Spending Budget 2000, Ministry of Flemish Community (in million euro). 28 TRIPOD is the set of doctrines that can be found in practitioner theories that aim at finding a rationale for agencification (the process of creating agencies). These doctrines have three – hence tripod – important dimensions; disaggregation, autonomization and contractualization.


I assume that the more factual/perceived autonomy the organization has, the more it is decoupled,

as the organization is free to decide on policy issues independent from the formal structure it is

embedded in. The agent feels the need to perform better (because task and processes e.g. require

this) but feels constrained by the formal structure. Therefore the agent uses a decoupling strategy

that is reflected in greater factual/perceived autonomy. It can only do so, if it has the opportunity

(according to Meyer and Rowan the opportunities are bigger when output is difficult to measure

and when not constrained by market forces). Hence, organizations that have an output that is

difficult to measure and are not into competition will have more opportunities to decouple, and

hence be more autonomous.

Of course, and this is contrary to rational approaches (cf. supra), this decoupling serves a strategy

that aims at better performance for the agency (whereas pure rational approaches argue that

agents are profit-maximizers). Hence, I could assume that decoupled agencies (hence, high

autonomy) are good performers.

Measurability of output has been operationalized supra (TPC & TC), competition is

operationalized by looking whether there are other organizations in the field that deliver the same

or similar services and products as the agency in case (“1), or not (“0”) (COMP). Performance is

operationalized by asking to the respondents to score their organization on a 1-10 scale for 12

concepts29 of performance, where 1 is poorest, and 10 is best performance.

The results of the analysis show following elements:

- We knew already that there is a relationship between TPC and PAM2; organizations with

intangible and difficult to measure tasks tend to have higher levels of policy autonomy. Whereas

this was a contra-intuitive explanation according to our rational hypotheses, here this finding

seems more plausible in the light of our decoupling thesis (task that is hard to measure increases

possibilities to decouple).

- On the other hand, no relationship was found between the level of competition – according to

our decoupling thesis a trigger for higher autonomy – and policy autonomy (N=21, Tau b=-.15,

sig.=.5).

29 Here, we will investigate efficiency, effectiveness, quality of services (E³, newer concepts of performance that are rather situated in economic spheres), and accountability, democracy and responsiveness to society (rather “public service” criteria). As the CEO of the organization was asked to score his/her own organization on a 1-10 scale, we better speak about “perception of organizational performance”.


- Also, no relationship was found between autonomy and performance. There is one exception,

however. If I compute an index of so called “public performance”30, then there is a strong and

significant negative correlation between PAM2 and the index (N=18, Tau b= -.55, sig.= .01). No

conclusions can be made with regard to the direction of the relationship here.

To conclude this part, also the alternative explanations provide poor evidence for the differences

in factual/perceived policy autonomy between organizations that belong to the same formal-legal

type. As I already mentioned, this can be due to our method, data and operationalizations. A more

plausible explanation would be, I suggest, that complex theoretical questions that are embedded

in multivariate theoretical frameworks need more complex analyses.

Conclusions

- The classification of organizations, both formally and on factual/perceptionalist data, reveals a

discrepancy between formal and factual autonomy. This is possible due to room for interpretation

(see also (Verhoest, 2002), (Verlinden, 2003), (Van Osselaer, 2004)). The question remains

however, what are the underlying determinants for this discrepancy?

- Determinants of factual autonomy were investigated here by means of statistical analysis on

survey data, in a theoretical framework we developed throughout the paper. The analysis leads to

one interesting finding as to the relationship of task and autonomy (TPC versus PAM2). This

finding could have possible consequences for the theoretical framework, because this finding

supports the decoupling thesis, rather than the rational actor theses.

- However, the overall poor conclusions as to the explanation of organizational autonomy, are

possibly due to our method (and available data and operationalization of data) or our theoretical

assumptions.

Hence, our conclusion contains a lot of “possibly due to’s” … Further research should therefore

aim at the refinement of both methodology and theory:

- Mixing of survey research with statistical analysis on the one hand, and case studies with

in depth study of and with more variables

30 (Score responsiveness + score accountability + score democracy) / 3; gives the organization a score on this index between 0 and 10. This index is reliable, given the high correlations between the sub items and given an Alpha of .82.


- Mixing of theoretical assumptions, a mixing of logics (cf.(Pollitt, C, Talbot, C., Caulfield,

J., and Smullen, A,2004)) that allows for a robust multivariate theoretical framework

(with independent, dependent and intermediate variables).

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Annexes

Annex 1: conceptualization of autonomy

This table presents the different dimensions of autonomy, showing what a low or high level of autonomy may mean. The table draws heavily on Christensen’s variations in formal bureaucratic autonomy but expands and reshuffles these variables (Christensen, 1999). The conceptual distinction between managerial autonomy, policy autonomy, structural, financial, legal and interventional autonomy provides a taxonomy of ‘autonomy’.

autonomy as decision making competencies autonomy as the exemption of constraints on the actual use of the decision making competencies managerial

autonomy policy autonomy structural autonomy financial autonomy legal autonomy interventional autonomy

Minimum level of autonomy of agency

The decisions concerning managerial actions are taken externally by central government without prior advice of the agency (no managerial autonomy)

The decisions concerning the structure and content of the primary production process, policy instruments and outputs, objectives and effects are taken by central government without prior advice of the agency. The agency may not decide on individual applications of general rules and has no authorisation to set general rules

The agency head is appointed and evaluated by central government. He is directly accountable to central government. There is no advisory or supervisory board involved.

The agency is fully funded by central government, does not have to cover deficits itself and has no ability to extent its funding by product sales or loans on the capital market.

The agency is a part of central government with no own status different from classical bureaus

The operations of the agency are supervised directly by central government against strict norms. Deviations result in severe sanctions and immediate intervention by the central government.

Low level of autonomy of

The agency may take managerial

The agency may take decisions

The agency head is appointed by central

The agency is financed primarily

The agency has a separate status within

The agency has rather extensive reporting




agency decisions concerninge.g. financial transactions within strict procedures set by central government (high operational managerial autonomy)

concerning the structure and content of the production processes within the lines of the policy instruments, output norms, objectives and effect norms set by central government (high operational policy autonomy).

government. He is accountable to central government and to a supervisory board in which a majority of the members is representing central government. The representatives of government in the supervisory board could be resigned by government at any time

through central government, but a minor part of funding stems from budget allocation of other governments, product sale or loans. The agency has to cover only a minor extent of deficits itself.

central government based on delegation acts taken by the cabinet or the spending minister itself. The agency has no own legal personality different from that of central government.

requirements on a quite detailed level against explicit norms. Deviations result in substantial sanctions and possible intervention by central government.

High level of autonomy of agency

The agency may set the procedures for e.g. financial transactions itself within general principles concerning the use of inputs set by central government

The agency may decide upon which policy instruments to use and output norms within the objectives and effect norms set by government. The agency head may decide itself on individual applications of general regulations

The agency head is appointed and evaluated by the supervisory board in which the representatives of government have a majority vote. These representatives could be resigned by government at any time

The agency is financed primarily through income from other sources than central government (e.g. tariffs, contributions and prices), but a minor part of funding stems from central government. The agency has to cover a major extent of deficits itself (e.g. by the imposition of a hard budget constraint)

The agency has a legal personality under public law and is created by a parliamentary act

The agency has only limited reporting requirements on a general level to central governments and is only ad hoc subjected to evaluation or audits commissioned by central government. The norms as basis for evaluation and auditing are neither explicit nor strict. Sanctions and interventions are only possible after consultation of the agency and there is only a limited threat of sanctions or intervention by central government. Sanctions are rather soft.




Maximum level of autonomy of agency

The agency may decide itself upon all aspects of management like the general principle, the procedures and the transactions (high strategic managerial autonomy)

The agency may decide itself upon all aspects of policy like objectives, policy instruments to use and processes. The agency is authorized to issue general regulations (high strategic policy autonomy)

The agency head is appointed and evaluated by the supervisory board in which the representatives of third parties have a majority vote.

The agency is financed exclusively through income from other sources than central government (e.g. tariffs, contributions and prices). The agency has to cover all deficits itself

The agency has a legal personality under private law

The agency has no reporting requirements to central governments and is not subjected to evaluation or audits commissioned by central government. There is no threat of sanctions or intervention by central government


Annex 2: operationalization of the concepts in the survey

Managerial autonomy concerning HRM Operational managerial autonomy concerning HRM: Can your organisation: (a) Give extra legal advantages to personnel member (yes = 1, no = 0) (b) Promote personnel member (yes = 1, no = 0) (c) Evaluate personnel member (yes = 1, no = 0) (d) Appoint personnel member (yes = 1, no = 0) Operational managerial autonomy concerning HRM: Can your organisation decide independently from oversight authorities on: (a) Salary-levels (yes = 1, no = 0) (b) Conditions for promotion (yes = 1, no = 0) (c) Way in which to evaluate staff (yes = 1, no = 0) (d) Way in which to appoint staff (yes = 1, no = 0) Managerial autonomy concerning financial management Operational managerial autonomy concerning financial management: Can your organisation, be it within a regulative framework or after approval of the administrative or political oversight authorities: (a) Take loans for investments (yes=1, no=0) (b) Set tariffs for services and products (yes=1, no=0) (c) Engage in participations in private law legal persons (yes=1, no=0) Strategic managerial autonomy concerning financial management: Can your organisation, independently from the administrative or political oversight authorities: (a) Take loans for investments (yes=1, no=0) (b) Set tariffs for services and products (yes=1, no=0) (c) Engage in participations in private law legal persons (yes=1, no=0) Policy autonomy of the organisation in relation to the oversight minister (political oversight) Decisions concerning target groups of the policy: Organisation decides quasi independently (score=1), Organisation decides after consulting minister (score = .75), Organisation decides within conditions set by minister (score=.5), Minister decides after consulting organisation (score=.25), Minister decides independently (score=0) Decisions concerning policy instruments to be used: Organisation decides quasi independently (score=1), Organisation decides after consulting minister (score = .75), Organisation decides within conditions set by minister (score=.5), Minister decides after consulting organisation (score=.25), Minister decides independently (score=0)


Policy autonomy of the organisation in relation to the oversight department (departmental oversight) Decisions concerning target groups of the policy: Organisation decides quasi independently (score=1), Organisation decides after consulting minister (score = .75), Organisation decides within conditions set by minister (score=.5), Minister decides after consulting organisation (score=.25), Minister decides independently (score=0) Decisions concerning policy instruments to be used: Organisation decides quasi independently (score=1), Organisation decides after consulting minister (score = .75), Organisation decides within conditions set by minister (score=.5), Minister decides after consulting organisation (score=.25), Minister decides independently (score=0)


Annex 3: original data

HRM Autonomy

ID nr smasal smaprom smaeval smaappoi omaadv omaprom omaeval omaappoi 23,00 no no no no no yes yes yes 24,00 no no no no yes yes yes yes 32,00 no no no no no yes yes yes 33,00 no no no no no no no no 34,00 no no no yes no yes yes yes 40,00 . . . . . . . . 41,00 no yes yes yes yes yes yes yes 43,00 no no no no yes yes yes yes 50,00 no no no no no yes yes yes 51,00 no no no no no yes yes yes 54,00 no no no no yes yes yes yes 55,00 . . . . . . . . 57,00 no yes yes no yes yes yes yes 59,00 no no no no no yes yes yes 60,00 yes yes yes yes yes yes yes yes 64,00 no no no no yes yes yes yes 65,00 yes yes yes yes yes yes yes yes 69,00 no no no no yes yes yes yes 70,00 no no no no no yes yes yes 71,00 no yes yes yes no yes yes yes 72,00 no no no no yes yes yes yes 73,00 no no no yes no yes yes yes 74,00 . . . . . . . . 75,00 yes yes yes yes yes yes yes yes 83,00 . . . . . . . . 86,00 no no no no no yes yes yes 87,00 . . . . . . . .

27 22 22 22 22 22 22 22 22


Financial Autonomy

ID nr smaloan smatar smapar omaloan omatar omapar 23,00 no no no no no no 24,00 no no no yes no yes 32,00 no no no no no no 33,00 no no no yes yes yes 34,00 yes yes yes yes yes yes 40,00 no no no no no no 41,00 no no no no yes no 43,00 no no no yes no yes 50,00 no no no no yes no 51,00 no no no yes yes yes 54,00 no no no no no no 55,00 . . . . . . 57,00 no no no yes no no 59,00 no no yes no yes yes 60,00 no no yes yes yes yes 64,00 no no no no no no 65,00 no no no no yes yes 69,00 no yes no yes yes yes 70,00 no yes no yes yes yes 71,00 no no no yes yes yes 72,00 no yes no yes yes yes 73,00 no no no no yes yes 74,00 . . . . . . 75,00 no no no yes yes yes 83,00 . . . . . . 86,00 no no yes no yes yes 87,00 . . . . . .

27 23 23 23 23 23 23


Policy Autonomy

ID nr patamr patadr painmr paindr 23,00 ,50 1,00 ,75 1,00 24,00 1,00 1,00 1,00 1,00 32,00 ,50 1,00 1,00 1,00 33,00 1,00 ,50 ,00 ,00 34,00 ,50 1,00 . . 40,00 1,00 1,00 1,00 1,00 41,00 ,50 1,00 ,50 1,00 43,00 ,50 1,00 1,00 1,00 50,00 ,50 1,00 ,50 ,75 51,00 1,00 1,00 1,00 1,00 54,00 1,00 1,00 1,00 1,00 55,00 . . . . 57,00 1,00 1,00 1,00 1,00 59,00 ,50 1,00 ,50 1,00 60,00 1,00 1,00 1,00 1,00 64,00 ,25 ,50 ,50 1,00 65,00 1,00 1,00 1,00 1,00 69,00 ,50 ,50 ,25 1,00 70,00 ,50 ,75 ,50 ,75 71,00 1,00 1,00 1,00 1,00 72,00 1,00 1,00 1,00 1,00 73,00 ,50 . 1,00 . 74,00 . . . . 75,00 ,75 ,75 ,75 ,75 83,00 . . . . 86,00 ,50 1,00 ,50 1,00 87,00 . . . .

27 23 22 22 21


Annex 4: computation of indexes for cluster analysis

OPA (index of operational HRM autonomy) = sum of scores (0,1) on [omaadv, omaprom, omaeval, omaappoi] divided by four. This calculation results in a score31 on this new variable for the organisation that can be: 0, .25, .5, .75 or 1. SPA (index of strategic HRM autonomy) = sum of scores (0,1) on [smasal, smaprom, smaeval, smaappoi] divided by four. This calculation results in a score32 on this new variable for the organisation that can be: 0, .25, .5, .75 or 1. OFA = sum of scores operational autonomy [omaloan, omatar, omapar] divided by three. This calculation results in a score33 on this new variable for the organisation that can be: 0, .33, .66 or 1. SFA = sum of scores strategic autonomy [smaloan, smatar, smapar] divided by three. This calculation results in a score34 on this new variable for the organisation that can be: 0, .33, .66 or 1.

31 OPA 0: minimal operational autonomy with regard to HR management: for none of the four aspects of HR management (rewards, promotion, evaluation and appointment) the organization has operational autonomy. OPA 0,25: low operational autonomy with regard to HR management: for one of the four aspects of HR management (rewards, promotion, evaluation and appointment) the organization has operational autonomy. OPA 0,5: moderate operational autonomy with regard to HR management: for two of the four aspects of HR management (rewards, promotion, evaluation and appointment) the organization has operational autonomy. OPA 0,75: high operational autonomy with regard to HR management: for three of the four aspects of HR management (rewards, promotion, evaluation and appointment) the organization has operational autonomy. OPA 1: maximal operational autonomy with regard to HR management: for four of the four aspects of HR management (rewards, promotion, evaluation and appointment) the organization has operational autonomy. 32 SPA 0: minimal strategic autonomy with regard to HR management: for none of the four aspects of HR management (rewards, promotion, evaluation and appointment) the organization has strategic autonomy. SPA 0,25: low strategic autonomy with regard to HR management: for one of the four aspects of HR management (rewards, promotion, evaluation and appointment) the organization has strategic autonomy. SPA 0,5: moderate strategic autonomy with regard to HR management: for two of the four aspects of HR management (rewards, promotion, evaluation and appointment) the organization has strategic autonomy. SPA 0,75: high strategic autonomy with regard to HR management: for three of the four aspects of HR management (rewards, promotion, evaluation and appointment) the organization has strategic autonomy. SPA 1: maximal strategic autonomy with regard to HR management: for all of the four aspects of HR management (rewards, promotion, evaluation and appointment) the organization has strategic autonomy. 33 OFA 0: minimal operational autonomy with regard to financial management: for none of the three aspects of HR management (loans, tariffs and participations) the organization has operational autonomy. OFA 0,33: low operational autonomy with regard to financial management: for one of the three aspects of HR management (loans, tariffs and participations) the organization has operational autonomy. OFA 0,66: high operational autonomy with regard to financial management: for two of the three aspects of HR management (loans, tariffs and participations) the organization has operational autonomy. OFA 1: maximal operational autonomy with regard to financial management: for all of the three aspects of HR management (loans, tariffs and participations) the organization has operational autonomy. 34 SFA 0: minimal strategic autonomy with regard to financial management: for none of the three aspects of HR management (loans, tariffs and participations) the organization has strategic autonomy. SFA 0,33: low strategic autonomy with regard to financial management: for one of the three aspects of HR management (loans, tariffs and participations) the organization has strategic autonomy. SFA 0,66: high strategic autonomy with regard to financial management: for two of the three aspects of HR management (loans, tariffs and participations) the organization has strategic autonomy.


PAM = sum of scores of painmr and patamr divided by two. PAD = sum of scores of patadr and paindr divided by two There remains the question whether these newly constructed (computed) variables are internally reliable. Therefore I calculated Cronbach’s alpha for each of the six newly constructed variables (N= total sample of 84 organizations, hence not only the Flemish EVA).

New variable Original variables Alpha SPA Smasal – Smaprom – Smaeval – Smaappoi. .93 OPA Omaadv – Omaprom – Omaeval - Omaappoi .83 SFA Smaloan – Smatar - Smapar .77 OFA Omaloan – Omatar - Omapar .70 PAM Painmr - Patamr .79 PAD Patadr - Paindr .83

Table 5

The more Cronbach’s alpha approaches 1, the more internally reliable our scale is. According to a website of North Carolina State University – as well as other sources – we learn that “the widely-accepted social science cut-off is that alpha should be .70 or higher for a set of items to be considered a scale, but some use .75 or .80 while others are as lenient as .60”. (http://www2.chass.ncsu.edu/garson/pa765/standard.htm). All our indexes seem more or less reliable according to this rule of thumb, although we should be careful with the OFA index.

SFA 1: maximal strategic autonomy with regard to financial management: for all of the three aspects of HR management (loans, tariffs and participations) the organization has strategic autonomy.


http://www2.chass.ncsu.edu/garson/pa765/standard.htm

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