public sector intervention essay

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9 Government Intervention in the Economy

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• Published: September 1998
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Discusses the attitudes of Western European publics towards economic liberalism and economic interventionism during the past few decades. While beliefs about the desirability of state intervention in the economy, and of state ownership of public assets are central to modern political ideologies, there is scant evidence that interventionism and liberalism constitute opposite positions in the public mind. Questions of whether governments should practice economic interventionism, or whether assets should be removed into government ownership, tend to be answered not in terms of philosophical principle, but in terms of whether the government is felt to be worthy of the powers entrusted to it. Interventionism tends to be supported by those who lose out under laissez‐faire economies, by women, by young people, and by old people. These tendencies can be explained by the fact that, on the whole, it is middle‐aged men who tend to profit most from the liberal capitalist system.

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The Opportunities and Constraints to Collaboration in Public Sector Management

• Published: 22 August 2019
• Volume 20 , pages 495–510, ( 2020 )

Cite this article

• Alex Osei-Kojo   ORCID: orcid.org/0000-0001-5443-9148 1 ,
• Justice Nyigmah Bawole 2 &
• Emmanuel Kojo Sakyi 2  

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This article synthesizes current insights about the opportunities and constraints to collaborative public management. Despite the swath of research on collaboration there has been little attempt to present the opportunities and constraints in a single article that articulates both perspectives coherently. Drawing on an extensive literature review, the main arguments are that collaboration presents opportunities to maximize scarce resources and improve public services delivery. Yet, the difficulty in evaluating the outcomes of collaboration as well as accountability and power-sharing issues remain key constraints. The article concludes that public managers need to critically ponder both perspectives in making decisions.

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Introduction

The concept of collaboration has gained immense traction in recent public management scholarship, ushering in the era of the “collaborative turn in public policy circles” (O’Flynn 2008 , 181). Consequently, the concept has been examined from different empirical and theoretical perspectives, producing a rich and nuanced literature. Yet, the research on the opportunities and constraints to collaboration remains dispersed across research findings. The purpose of this article is to synthesize key insights on the opportunities and constraints to collaboration in public sector management in a single article. By doing so, the article makes two contributions to the collaboration literature. First, presenting both the opportunities and constraints to public sector collaboration offers a quick and easy access to the state of knowledge about the topic. Second, the article contributes to the literature by pointing out areas for future research, such as the application more mixed methods to studying collaboration in order to advance our understanding of the topic.

The research program surrounding collaborative public management represents diverse themes. Some explore the meaning and the factors that facilitate collaboration (O’Leary et al. 2009 ; Bryson et al. 2006 ). Others analyze the dimensions and outcomes of collaboration (Emerson et al. 2011 ; Andrews and Entwistle 2010 ; Ansell and Gash 2008 ). Still, others examine the challenges of collaboration (Ryan and Walsh 2004 ; Edwards et al. 2012 ; McGuire 2006 ). Empirical research on these themes presents different views about the opportunities and constraints to collaboration. Specifically, perspectives on the opportunities of collaboration demonstrate the role of collaboration in solving public problems, while perspectives on the constraints to collaboration emphasize the limitations.

Despite the rich literature on the topic, very little attempt has been made to synthesize what is currently known about the opportunities and constraints to public sector collaboration. Thus, knowledge about the opportunities and constraints to collaboration is dispersed across different research findings. This situation potentially limits efforts to obtain a balanced assessment of the literature in order to chart a future path for researching collaboration. The purpose of this essay is to present the diverse perspectives on the opportunities and constraints in a single article. This is relevant because it provides a quick and accessible knowledge about the potentials and limitations of collaborative public management, providing a balanced perspective to the current debate. At the same time, it helps us to identify gaps in the current literature in order to guide knowledge accumulation around the concept of collaboration

The article is divided into five sections. The first section explains the methodological approach to the article. Section two explains the meaning and rationale for collaboration. The third section discusses the opportunities of collaborative public management, which is followed by a discussion of the constraints to collaboration in section four. Section five concludes the essay, drawing out implications for future research.

This section explains the methods applied in identifying and synthesizing the relevant literature. Four main methods were used including search strategy, study eligibility criteria, report eligibility criteria, and analytical strategy. These methods are discussed below.

Search Strategy

To select articles, we queried Google Scholar using different search terms such as “constraints to public sector collaboration,” “challenges of public sector collaboration,” “opportunities of public sector collaboration,” and “benefits of public sector collaboration.” While no time limit was imposed, we ensured that some of the influential articles on the topic of collaboration such as Ansell and Gash ( 2008 ), Agranoff ( 2007 ), Bingham and O’Leary ( 2006 ), and Provan and Milward ( 2001 ) were included in the search. Given the limited focus of the article, compared to the vast literature on collaboration, avoiding a time limit was more appropriate in order to obtain a significant sample of articles for analysis. To strengthen the results from Google Scholar, we also searched for articles from some top-ranking public administration and management journals such as Journal of Public Administration Research and Theory, Public Administration Review, and Public Management Review. Additionally, some influential books published by recent leading scholars on public sector collaboration were selected including Collaborative Governance Regimes and the Collaborative Public Manager: New Ideas for the Twenty-first Century edited by O’Leary and Bingham ( 2009 ).

Study Eligibility Criteria

For an article to be selected, all search terms had to appear either in the abstract or introduction of the article. Thus, articles that had “public sector” without “challenges of collaboration” were not included. We admit that this approach probably led to the exclusion of some articles that could have been relevant but given the huge swath of literature on the subject, this strategy was the most pragmatic and systematic way of sorting the results. Further, we did not only rely on empirical articles but also theoretical pieces that advanced thought-provoking arguments on the topic. This led to the inclusion of  some book chapters.

Report Eligibility Criteria

To achieve the criteria of report eligibility, we included only articles that were published in English. There are several reasons for this. First, the articles, books and journals we know about the topic were published in English compared to other recognized languages. Second, we have advanced oral and spoken proficiency in English Language. Thus, it was necessary to focus only on articles published in English in order to avert translation problems. Furthermore, we included only articles that have been published in a journal or as a book chapter, since they are more likely to have been peer-reviewed. Thus, we excluded all materials that were not peer-reviewed.

Analytical Strategy

To analyze the selected articles, the thematic analysis technique was used, which allowed for extracting patterns that emerged from the sample of articles. Three steps were used. First, using the abstract and/or introduction, we grouped articles under two broad categories relevant to this paper: opportunities and constraints to collaboration. This was achieved by screening the abstract and/or introduction for relevant key terms such as “challenges of public sector collaboration,” and “benefits of public sector collaboration.” Second, we read each article to identify the main results or ideas that fit under each of the respective broad categories. For instance, if an article focused on the constraints to public sector collaboration, we read and extracted the specific set of constraints that have been discussed. This was usually found under the discussion section of the articles. This process was repeated until all the sampled articles were read. Through this process, several sub-themes were identified for each of the broad categories. For example, under opportunities, we identified sub-themes including but not limited to teamwork, resource exchange, information sharing, enhanced service, and improved service delivery. The third and last step involved aggregating sub-themes into broader themes that represented similar ideas. To illustrate, sub-themes such as enhanced service and improved service delivery were merged into one overarching theme under the opportunities category. The themes were then analyzed and discussed for each of the categories.

Understanding Collaboration: Definition, Rationale and Methodological Approaches

The current literature on public sector collaboration presents a rich variety of definitions, all of which cannot be presented here. However, based on the authors’ experience with the literature, we present some of the popular definitions in Table 1 below.

While the definitions provided in Table 1 do not reflect the number of definitions available in the literature, they adequately capture the fundamental ideas underpinning the concept. First, collaboration is a goal-oriented or strategic activity. This means that parties to a collaborative arrangement come together with the aim of tackling a shared problem. Such problems might include but not limited to managing natural resources, pollution control, and climate change. The problem, in this context, provides the “necessary force” to pull parties together and keeps them aligned to each other. In short, problems provide a rationale for collaboration.

Second, collaboration is an iterative process and a multi-dimensional concept. By being an iterative process, collaboration functions by a give-and-take logic where parties reciprocate desired actions. This suggests that in situations where parties fail to act on agreements or goals that have been jointly agreed upon by all parties, collaboration is less likely to be fruitful. According to Emerson and Nabatchi ( 2015a ), collaboration dynamics comprises three interactive elements: principled engagement, joint capacity and shared motivation. Principled engagement means that participants uphold the core tenets of effective management such as fairness, transparency, diversity, and civil discourse. Joint capacity means that participants take effective steps toward reaching their goal. Shared motivation rests on the assumption that if participants feel that they benefit from collaborative arrangements, then they are likely to continue supporting it. Ansell and Gash ( 2008 ) suggest that collaborative process entails face-to-face dialogue, building on elements such as trust, commitment, shared understanding, and intermediate outcomes. The observation that collaboration is a multi-dimensional concept has implications for how the concept is studied and practiced. In terms of studying the concept, this implies that a deeper understanding of collaboration is more likely to be obtained by examining a wide range of different and relevant dimensions rather than a few. In terms of practice, collaborative arrangements are likely to succeed if its different dimensions appeal to and satisfy the interests of parties to a collaborative arrangement.

Third, collaboration occurs at multi-level, multi-sectoral, and multi-organizational contexts. Multi-level collaboration usually occurs at different levels of operation within the same organization. An example is collaboration between the state and federal levels of the Internal Revenue Service (IRS). Multi-sectoral collaboration is where different entities from the private, public, and non-profit sectors join forces to deal with a shared problem. Multi-organizational collaboration is where different organizations from one sector collaborate to create a shared value. An example of multi-organizational collaboration is collaboration among different organizations within the private sector. The implication is that multi-organizational collaboration is not necessarily multi-sectoral collaboration. But multi-sectoral collaboration is necessarily multiple organizational. Also, given that organizational contexts affect performance, the factors that may support collaboration in the public sector may not necessarily support collaboration in the private sector. This implies that transferring best practices of collaboration from the public sector to the private or vice versa should be approached with caution.

Fourth, for collaborative arrangements to achieve their goals, there is the need for the adoption and enforcement of both formal and informal institutions (rules) to guide the activities and behaviors of actors. Formal institutions are those that are written and documented; informal institutions are not written and they develop over time to reinforce formal institutions (North 1990 ). Both formal and informal institutions interact to assure stability for collaboration, enhancing the prediction of future outcomes. They also communicate sanctions and rewards.

The variety of definitions of collaboration suggests that there is no universal consensus in defining the concept. As different scholars tend to understand things differently, it will be extremely difficult, if not impossible, to arrive at a universal definition. The absence of a universal definition is not necessarily negative, since it reflects the rich diversity of ideas that scholars bring to bear on the topic. What is important, though, is that scholars are clear in the definitions that they develop, thereby ensuring transparency in advancing scholarship on collaboration. At the same time, scholars need to be consistent in their theoretical development and their specifications for empirical work.

Approaches to Collaboration Research

The literature reflects a rich and diverse application of different methods to collaboration research, falling broadly into qualitative and quantitative approaches (Riccucci 2010 ). Some scholars have applied content analysis to study public sector collaboration. For instance, Huxam et al. ( 2000 ) sought to unpack the factors inherent in collaborative forms and their practicality as governance tools. They argued that collaborative forms contain inherent complexites that fall under two main headings: dimensions of structural complexity and diversity. Similarly, Koontz and Thomas ( 2006 ) used content analysis to identify the outcomes of collaborative management in environmental management. They concluded that while variables have been developed to measure process characteristics and process outputs of collaborative management, there is little attempt to link these variables to specific outcomes.

Case studies have also been applied in studying public sector collaboration. Heikkila and Gerlak ( 2016 ) used it to study how the design features of collaboration evolve over time, focusing on the South Florida Ecosystem Task Force. They concluded that while some process elements diminish over time, the structure and interactions that support collaborative processes do not evolve over-night. In another study, Cheng and Sturtevant ( 2012 ) conducted a case study of thirty Federal-related collaborative efforts in the U.S. to build a framework for assessing collaborative capacity. The framework has four main components: available assets and conditioning factors, levels of agency, arenas of collaborative action, and outcomes.

Some studies on collaborative public management also apply quantitative methods. Using a survey instrument, Rubin et al. ( 1999 ) identified the correlates of successful collaboration, testing five hypotheses. The study concluded that six of the independent variables were statistically significant at the level of .10, while four were significant at the level of .01. McGuire and Silvia ( 2010 , 279) also tested the effects of problem severity, managerial and organizational capacity, and agency structure on inter-organizational collaboration. The study concluded that “… variations in inter-organizational collaboration reflect influences from problem severity, managerial capacity, and structural factors."

The main lesson from the diversity of methods is that both quantitative and qualitative methods are relevant to collaborative public management research. With these methods, scholars are better positioned to interrogate diverse questions by choosing the appropriate research design based on the research question(s). On one hand, quantitative techniques are useful for testing hypotheses to confirm (or reject) some of the underlying assumptions and claims about collaborative public management. Indeed, proponents of the “collaborative movement” claim that collaboration has the capacity to improve policy outcomes, enhancing service delivery. And there are some quantitative studies (such as McGuire and Silvia 2010 ; Andrews and Entwistle 2010 ) that empirically verify these claims through hypothesis testing. In both cases, collaboration is positively related to policy outcomes such as effectiveness. On the other hand, application of qualitative approaches is useful for capturing the subtle nuances and complexities surrounding collaborative mechanisms and processes that are extremely difficult, if not impossible, to capture quantitatively.

Despite the application of both quantitative and qualitative methods to studying collaboration, there is the need for more mixed methods research in order overcome the weaknesses inherent in either qualitative or quantitative methods. Mixed methods refer to the application of both quantitative and qualitative methods in a single study so as to overcome the weaknesses that are inherent in mono-method research (Teddlie and Tashakkori 2009 ). Indeed, an influential study by Trend ( 1979 ) helped to resolve inconsistencies in results that were produced by either applying quantitative or qualitative techniques. At the same time, there is the need for more longitudinal analyses in order to achieve causal analysis. This would require more data over time and more observations in future collaborative research. In this regard, stronger identification strategies, such as instrumental variables and randomized trials, would be needed in order to increase our confidence in positing causal claims in future collaborative research.

Collaboration in Public Sector Management: The Opportunities

This section presents the main opportunities of public sector collaboration, which were extracted from the literature including resource maximization, joint action, and improved service delivery. The opportunities that are itemized and discussed in this section do not necessarily capture all the benefits  of collaboration. Rather, they reflect the broad perspectives about the opportunities of collaboration pervading the literature that were sampled for analysis.

One of the main opportunities of public sector collaboration is maximization of scarce resources (Cohen and Eimicke 2008 ). In general terms, resources refer to the inputs, either material or immaterial, that are available to an organization or policymaker to solve problems. Examples of material resources are money and people; examples of immaterial resources are relationships with other organizations and reputation. The notion of scarce resources can be traced to the popular saying in Economics that “human needs and wants are insatiable, but the resources to fulfilling them are scarce.” The problem of resource scarcity is further exacerbated by the observation that organizations cannot always develop their own resources to tackle problems, even if they wanted to, in a timely manner (Selsky and Parker 2005 ). By implication, both policymakers and public sector organizations must confront a multitude of problems for which they have limited resources to handle.

In order to overcome the problem of limited resources, policymakers and organizations must engage in resource exchange, which facilitates resource sharing to support the attainment of organizational objectives. Thus, in the face of resource scarcity, collaboration provides the means for policymakers and organizations to exchange resources in order to advance their collective interests. This is possible because, according to the theory of sectoral difference, public, private and nonprofit sectors possess a unique competitive advantage that are harnessed when organizations come together to deal with a shared problem (Andrews and Entwistle 2010 ; Barney 1991 ). This insight suggest that collaboration provides a solution, at least in part, to the problem of resource scarcity that confronts policymakers and organizations. In the view of Andrews and Entwistle ( 2010 ), resource pooling provides performance benefits. Thus, through collaboration, policymakers and organizations are better positioned to improve their performance.

Another opportunity of public sector collaboration is that it supports the capacity for joint action or effort, meaning that collaboration facilitates teamwork. The emphasis on joint action is important because policymakers who come together may not necessarily work together. Yet, for policymakers to reap the dividends of collaboration, they must work together. In their book Collaborative Governance Regimes , Emerson and Nabatchi ( 2015a , 68, 72) explain capacity for joint action as “the functional dimension of collaboration dynamics that enables collaborative governance regime participants to accomplish their collective purpose as specified in their theory of change.” If one views joint action as the functional dimension of collaboration, then it implies that policymakers must be open and willing to work with each other so as to achieve their goal(s).

The concept of joint action comprises four elements, namely procedural and institutional arrangements, leadership, resources, and knowledge. Procedural and institutional arrangements are the protocols and structures needed to manage repeated interactions among actors. The procedural and institutional arrangements are equivalent to rules that govern the actions of parties to the collaborative arrangement, including specifying reward and punishment. Leadership connotes the idea of individuals taking initiative and exerting influence on actors to act in ways that support the rationale of the collaborative arrangement. Leadership is critical for the survival of collaborative arrangements because it helps to assign tasks to individual members and facilitate the implementation of such tasks for the benefit of all stakeholders. Knowledge refers to “the social capital of shared information that has been weighed, processed, and integrated with the values and judgements of CGR participants” (Emerson and Nabatchi 2015a , 72).  Resources provide the means for actors to translate goals and objectives into reality. By moving beyond coming together to joint action, policymakers are in a better position to solve the common problems affecting them.

Furthermore, joint action promotes esprit de corps among policymakers in a collaborative arrangement. Selsky and Parker ( 2005 ) explain that when different actors act to solve a shared problem, it exudes motivation because different actors bring different perspectives to understanding the problem under investigation. For Donahue et al. ( 2010 , 57) “collaborative governance can serve as what the military calls a force multiplier , which is a method for increasing the impact of government’s effort. It brings together public and private actors to cooperate in an organized, structured way through shared discretion…that discretion to act is what motivates private collaborators…” By harnessing their joint efforts, actors increase the probability of finding solution to the problem, well beyond what they could have individually achieved.

Current public management research suggests that collaboration also leads to effective service delivery. Andrews and Entwistle ( 2010 ) conducted a quantitative exploration of effectiveness, efficiency and equity, using primary and secondary data from 46 UK local government service departments. The results show that public-private partnership positively correlates with effectiveness, efficiency, and equity. Similarly, using data from the Texas school districts over a five-year period, O’Toole and Meier ( 1999 ) found that the frequency of interactions positively correlates with school district performance. They explain that school district superintendents who interacted more with actors had higher performance. The key insight from these empirical results is that collaboration supports effective public service delivery, which is consistent with the broader literature on the relevance of public sector collaboration. As mentioned in previous paragraphs, public problems often transcend the functional responsibilites of individual public organizations. Consequently, they require the attention and effort of several other agencies in order to tackle them effectively. And collaboration provides the means through which the collective efforts of multiple organizations can be harnessed to address public problems effectively and efficiently.

As the foregoing paragraphs have argued, collaboration presents several opportunities such as resource maximization, joint action, and improved service delivery. The list of opportunities that have been identified are by no means exhaustive, but they represent broad themes about the benefits of collaboration that are found in the literature. Despite these advantages and opportunities, collaboration also presents unique challenges and difficulties that cannot be ignored. The next section of this article identifies and discusses some of these challenges.

Collaboration in Public Sector Management: The Constraints

In this section, three main constraints in the literature are identified and discussed, namely the challenge of evaluating and measuring outcomes of collaboration, the lack of consensus about the meaning of collaboration, and accountability and power-sharing issues.

One of the major constraints to collaboration is the difficulty in evaluating and measuring outcomes (Agranoff 2005 ; Rethemeyer 2009 ; Carr and Hawkins 2013 ; Klijn 2005 ). Some scholars have argued that despite the growing popularity of public sector collaboration, there is little empirical evidence to substantiate the claim that the outcomes of collaboration are beneficial to all parties that may be involved (Provan and Milward 2001 ). For Emerson and Nabatchi ( 2015b ), one potential explanation for the gap between collaboration and outcomes is the sheer number of actors that are often involved in collaborative arrangements. They explain that the challenge of having multiple participants is that they often hold diverse perspectives that might be difficult to reconcile. Under such circumstances, the benefits of collaboration may not be the collective experience of stakeholders engaged in the collaborative arrangement. Rather, it may be the experience of a small section of stakeholders, which does not reflect the views of the majority. In the view of Marek et al. ( 2015 ), the lack of empirically valid tools for measuring the success of a collaborative arrangement exacerbates the constraints to collaboration. At the same time, Appleton-Dyer et al. ( 2012 ) have argued that political and organizational structures in which collaboration occurs limit the measurement of its outcomes. In short, the challenge of measuring the outcomes of collaboration clouds the conclusion that it has any real advantages that reflect the views of the majority of stakeholders engaged in a collaborative arrangement.

Another constraint to collaboration is the lack of consensus about its meaning, making some scholars describe it as a buzzword (Fleishman 2009 ). Consequently, collaboration has attracted different labels such as horizontal governance (Philips 2004 ), and collaborative governance (Purdy 2012 ; Emerson and Nabatchi 2015b ). Efforts to unravel the meaning of collaboration appears to have led scholars to embrace a variety of theoretical frameworks. In their article titled Designing and Implementing Cross-Sector Collaborations: Needed and Challenging , Bryson et al. ( 2015 ) present what they consider to be “major cross-sector collaboration-related theoretical frameworks,” which is presented in Table 2 below.

As Table 2 suggests, the attempts to unpack the meaning of collaboration appears to have led scholars to embrace an array of theoretical frameworks. These frameworks draw on different fields such as public administration theory, organization theory, policy studies, planning and environmental studies, strategic management theory, network theory, and communication theory. Consequently, scholars from these fields are likely to view collaboration differently. To illustrate, public administration scholars are likely to view collaboration differently from those in environmental policy and planning. Although some might argue that this situation could promote interdisciplinary research, there is the need to establish some level of agreement over the attributes that are foundational to collaboration across disciplines.

Accountability and power-sharing issues also present significant constraints to collaboration. Bryson et al. ( 2006 , 51) wrote that “accountability is a particularly complex issue for collaborations because it is not often clear whom the collaborative is accountable to and for what. Relationships between the collaborative and home organizations may be abstruse, and multiple stakeholder perceptions typically compete in defining results and outcomes.” Similarly, Ryan and Welsh ( 2004 , 621) argued that “existing accountability mechanisms are designed for vertical accountability relationships, and these are inadequate for horizontal or “networked” accountability across government agencies.” Kettl ( 2008 , 123) couched the accountability problem in collaboration in a question when he wrote that “if, in some complex and interdependent policy and delivery circumstances…no one can be said to be in charge, how can accountability be pinpointed?” The concerns about accountability in collaborative arrangements present two issues.

The first is that traditional and vertical modes of accountability might be ineffective under collaborative arrangements. This arises from the sheer number of stakeholders, and the divergent goals and needs that often characterize collaborative arrangements. Furthermore, Sullivan et al. ( 2002 ) suggest that, in some situations, the accountability frameworks of individual organizations conflict with that of the collaborative. The second issue is that by posing accountability problems, collaboration seems to challenge a fundamental tenet of democratic theory: participation. The logic here is that since participation can make accountability difficult, then collaboration may not necessarily support both democratic ideals.

Closely connected to the problem of accountability is power sharing issues. Purdy ( 2012 , 409) explains that “the growing use of collaborative methods of governance raise concerns about the relative power of participants in such processes and the potential for exclusion or domination of some parties.” Collaborative contexts may not fairly balance private interests and public authority (Sousa and Klyza 2007 ), causing important interests to be underrepresented or unrepresented (Leach 2006 ). At the same time, some actors could hide under the guise of collaboration to advance their parochial agendas (Huxam et al. 2000 ). The main lesson is that power asymmetries could exist in a collaborative context because actors rank differently on the ladder of power. Under such conditions, actors at the lower level of the ladder of power have less authority to assert their views compared to those at the top.

Considering these challenges, scholars have proposed measures to promote accountability in collaborative arrangements. Page ( 2004 , 592) suggests that “an accountable collaborative…needs a measurement system to document its results and how those results change over time. It also needs a ‘managing for results’ system that links the data it measures to specific actors and interventions that provide critical performance information to stakeholders, and that use the information to improve its operations.” Ryan and Walsh ( 2004 ) have suggested that accountability in collaborative arrangements can be improved if there are clear guidelines on reporting. By implementing a measurement system and establishing clear reporting guidelines, collaboratives are more likely to improve their accountability to stakeholders, thereby improving trust and transparency. To deal with power imbalances in collaborative contexts, Purdy ( 2012 ) has proposed a framework that considers the multiple dimensions of power, and how it can be shared for the benefits of participants.

Conclusion and the Way Forward

This article sets out to synthesize key insights on collaborative public management, focusing on the opportunities and constraints. The article contributes to the collaboration debate by bringing both perspectives into one narrative and suggesting areas for advancing scholarship. The wide variety of literature from which this article draws suggests that collaboration has gained deep roots in public management scholarship and practice. In particular, there are varieties of definitions of collaboration, different methods to studying collaboration, and different theoretical frameworks to advance empirical work on the concept.

The article demonstrates that collaboration presents three main opportunities to policymakers and organizations, including maximization of scare resources, the capacity for joint action and improved service delivery. At the same time, there are crucial constraints that obstruct harnessing these opportunities. First, the outcomes of collaboration are difficult to evaluate. This arises, in part, due to the sheer number of stakeholders involved in a collaborative arrangement. Second, there is a lack of consensus on the meaning of collaboration, leading scholars to adopt different theoretical frameworks to studying the concept. While the application of different frameworks for studying collaboration might be useful, it could also undermine systematic knowledge production. The third constraint is accountability and power-sharing issues, which could obstruct effective particpation.

Going forward, there is the need for the scholarly community to work towards attaining some level of consensus on the meaning of collaboration. Admittedly, a universal definition is impossible, but some level of agreement about the definition and general attributes of collaboration is necessary to reduce confusion. Furthermore, additional research is needed to improve our understanding of how both opportunities and constraints interact within collaborative arrangements, and how managers make decisions in between these seemingly polar ends. In particular, it would be useful to understand the values that shape managerial decision-making in these contexts, and what kinds of trade-offs are made, if any. On one hand, understanding the opportunities of collaboration could improve the capacity of managers to align organizational resource in ways that are efficient and effective. On the other hand, understanding the constraints to collaboration could increase the self-awareness of managers, so they can take the necessary measures to mitigate them. Further, more mixed methods studies are needed to help overcome the limitations that are inherent in mono- method research on collaboration. Additionally, the application of longitudinal analyses and stronger identification strategies in making causal claims are needed in advancing scholarship on collaboration.

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Osei-Kojo, A., Bawole, J.N. & Sakyi, E.K. The Opportunities and Constraints to Collaboration in Public Sector Management. Public Organiz Rev 20 , 495–510 (2020). https://doi.org/10.1007/s11115-019-00452-6

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15.1: The Role of Government in a Market Economy

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Learning Objective

• Discuss and illustrate government responses to the market failures of public goods, external costs and benefits, and imperfect competition and how these responses have the potential to reduce deadweight loss.
• Define merit and demerit goods and explain why government may intervene to affect the quantities consumed.
• Discuss ways in which governments redistribute income.

What do we want from our government? One answer is that we want a great deal more than we did several decades ago. The role of government has expanded dramatically in the last 75+ years. In 1929 (the year the Commerce Department began keeping annual data on macroeconomic performance in the United States), government expenditures at all levels (state, local, and federal) were less than 10% of the nation’s total output, which is called gross domestic product (GDP). In the current century, that share has more than tripled. Total government spending per capita, adjusted for inflation, has increased more than six fold since 1929.

Figure 15.1 shows total government expenditures and revenues as a percentage of GDP from 1929 to 2007. All levels of government are included. Government expenditures include all spending by government agencies. Government revenues include all funds received by government agencies. The primary component of government revenues is taxes; revenue also includes miscellaneous receipts from fees, fines, and other sources. We will look at types of government revenues and expenditures later in this chapter.

Source: U.S. Department of Commerce, Bureau of Economic Analysis, NIPA Tables 1.15 and 3.1.

Figure 15.1 also shows government purchases as a percentage of GDP. Government purchases happen when a government agency purchases or produces a good or a service. We measure government purchases to suggest the opportunity cost of government. Whether a government agency purchases a good or service or produces it, factors of production are being used for public sector, rather than private sector, activities. A city police department’s purchase of new cars is an example of a government purchase. Spending for public education is another example.

Government expenditures and purchases are not equal because much government spending is not for the purchase of goods and services. The primary source of the gap is transfer payments , payments made by government agencies to individuals in the form of grants rather than in return for labor or other services. Transfer payments represent government expenditures but not government purchases. Governments engage in transfer payments in order to redistribute income from one group to another. The various welfare programs for low-income people are examples of transfer payments. Social Security is the largest transfer payment program in the United States. This program transfers income from people who are working (by taxing their pay) to people who have retired. Interest payments on government debt, which are also a form of expenditure, are another example of an expenditure that is not counted as a government purchase.

Several points about Figure 15.1 bear special attention. Note first the path of government purchases. Government purchases relative to GDP rose dramatically during World War II, then dropped back to about their prewar level almost immediately afterward. Government purchases rose again, though less sharply, during the Korean War. This time, however, they did not drop back very far after the war. It was during this period that military spending rose to meet the challenge posed by the former Soviet Union and other communist states—the “Cold War.” Government purchases have ranged between 15 and 20% of GDP ever since. The Vietnam War, the Persian Gulf War, and the wars in Afghanistan and Iraq did not have the impact on purchases that characterized World War II or even the Korean War. A second development, the widening gap between expenditures and purchases, has occurred since the 1960s. This reflects the growth of federal transfer programs, principally Social Security, programs to help people pay for health-care costs, and aid to low-income people. We will discuss these programs later in this chapter.

Finally, note the relationship between expenditures and receipts. When a government’s revenues equal its expenditures for a particular period, it has a balanced budget . A budget surplus occurs if a government’s revenues exceed its expenditures, while a budget deficit exists if government expenditures exceed revenues.

Prior to 1980, revenues roughly matched expenditures for the public sector as a whole, except during World War II. But expenditures remained consistently higher than revenues between 1980 and 1996. The federal government generated very large deficits during this period, deficits that exceeded surpluses that typically occur at the state and local levels of government. The largest increases in spending came from Social Security and increased health-care spending at the federal level. Efforts by the federal government to reduce and ultimately eliminate its deficit, together with surpluses among state and local governments, put the combined budget for the public sector in surplus beginning in 1997. As of 1999, the Congressional Budget Office was predicting that increased federal revenues produced by a growing economy would continue to produce budget surpluses well into the twenty-first century.

That rather rosy forecast was set aside after September 11, 2001. Terrorist attacks on the United States and later on several other countries led to sharp and sustained increases in federal spending for wars in Afghanistan and Iraq, as well as expenditures for Homeland Security. The administration of George W. Bush proposed, and Congress approved, a tax cut. The combination of increased spending on the abovementioned items and others, as well as tax cuts, produced substantial deficits.

The evidence presented in Figure 15.1 does not fully capture the rise in demand for public sector services. In addition to governments that spend more, people in the United States have clearly chosen governments that do more. The scope of regulatory activity conducted by governments at all levels, for example, has risen sharply in the last several decades. Regulations designed to prevent discrimination, to protect consumers, and to protect the environment are all part of the response to a rising demand for public services, as are federal programs in health care and education.

Figure 15.2 summarizes the main revenue sources and types of expenditures for the U.S. federal government and for the European Union. In the United States, most revenues came from personal income taxes and from payroll taxes. Most expenditures were for transfer payments to individuals. Federal purchases were primarily for national defense; the “other purchases” category includes things such as spending for transportation projects and for the space program. Interest payments on the national debt and grants by the federal government to state and local governments were the other major expenditures. The situation in the European Union differs primarily by the fact that a greater share of revenue comes from taxes on production and imports and substantially less is spent on defense.

Figure 15.2 Government Revenue Sources and Expenditures: 2007

The four panels show the sources of government revenues and the shares of expenditures on various activities for all levels of government in the United States and the European Union in 2007.

Sources: Survey of Current Business , July 2008, Tables 3.2 and 3.10.5; Paternoster, Anne, Wozowczyk, Monika, and Lupi, Alessandro, Statistics in Focus—Economy and Finance , Eurostat 23/2008. For EU revenues, “Taxes on production and imports” refers mainly to value-added tax, import and excise duties, taxes on financial and capital transactions, on land and buildings, on payroll, and other taxes on production. In the category “Current taxes on income, wealth, etc.” are taxes on income and on holding gains of households and corporations, current taxes on capital, taxes on international transactions, and payments for licenses. Capital taxes refer to taxes levied at irregular and infrequent intervals on the value of assets, or net worth owned, or transferred in the form of legacies or gifts. Social contributions cover actual amounts receivable from employers and employees.

To understand the role of government, it will be useful to distinguish four broad types of government involvement in the economy. First, the government attempts to respond to market failures to allocate resources efficiently. In a particular market, efficiency means that the quantity produced is determined by the intersection of a demand curve that reflects all the benefits of consuming a particular good or service and a supply curve that reflects the opportunity costs of producing it. Second, government agencies act to encourage or discourage the consumption of certain goods and services. The prohibition of drugs such as heroin and cocaine is an example of government seeking to discourage consumption of these drugs. Third, the government redistributes income through programs such as welfare and Social Security. Fourth, the government can use its spending and tax policies to influence the level of economic activity and the price level.

We will examine the first three of these aspects of government involvement in the economy in this chapter. The fourth, efforts to influence the level of economic activity and the price level, fall within the province of macroeconomics.

Responding to Market Failure

In an earlier chapter on markets and efficiency, we learned that a market maximizes net benefit by achieving a level of output at which marginal benefit equals marginal cost. That is the efficient solution. In most cases, we expect that markets will come close to achieving this result—that is the important lesson of Adam Smith’s idea of the market as an invisible hand, guiding the economy’s scarce factors of production to their best uses. That is not always the case, however.

We have studied several situations in which markets are unlikely to achieve efficient solutions. In an earlier chapter, we saw that private markets are likely to produce less than the efficient quantities of public goods such as national defense. They may produce too much of goods that generate external costs and too little of goods that generate external benefits. In cases of imperfect competition, we have seen that the market’s output of goods and services is likely to fall short of the efficient level. In all these cases, it is possible that government intervention will move production levels closer to their efficient quantities. In the next three sections, we shall review how a government could improve efficiency in the cases of public goods, external costs and benefits, and imperfect competition.

Public Goods

A public good is a good or service for which exclusion is prohibitively costly and for which the marginal cost of adding another consumer is zero. National defense, law enforcement, and generally available knowledge are examples of public goods.

The difficulty posed by a public good is that, once it is produced, it is freely available to everyone. No consumer can be excluded from consumption of the good on grounds that he or she has not paid for it. Consequently, each consumer has an incentive to be a free rider in consuming the good, and the firms providing a public good do not get a signal from consumers that reflects their benefit of consuming the good.

Certainly we can expect some benefits of a public good to be revealed in the market. If the government did not provide national defense, for example, we would expect some defense to be produced, and some people would contribute to its production. But because free-riding behavior will be common, the market’s production of public goods will fall short of the efficient level.

The theory of public goods is an important argument for government involvement in the economy. Government agencies may either produce public goods themselves, as do local police departments, or pay private firms to produce them, as is the case with many government-sponsored research efforts. An important debate in the provision of public education revolves around the question of whether education should be produced by the government, as is the case with traditional public schools, or purchased by the government, as is done in charter schools.

External Costs and Benefits

External costs are imposed when an action by one person or firm harms another, outside of any market exchange. The social cost of producing a good or service equals the private cost plus the external cost of producing it. In the case of external costs, private costs are less than social costs.

Similarly, external benefits are created when an action by one person or firm benefits another, outside of any market exchange. The social benefit of an activity equals the private benefit revealed in the market plus external benefits. When an activity creates external benefits, its social benefit will be greater than its private benefit.

The lack of a market transaction means that the person or firm responsible for the external cost or benefit does not face the full cost or benefit of the choice involved. We expect markets to produce more than the efficient quantity of goods or services that generate external costs and less than the efficient quantity of goods or services that generate external benefits.

Consider the case of firms that produce memory chips for computers. The production of these chips generates water pollution. The cost of this pollution is an external cost; the firms that generate it do not face it. These firms thus face some, but not all, of the costs of their production choices. We can expect the market price of chips to be lower, and the quantity produced greater, than the efficient level.

Inoculations against infectious diseases create external benefits. A person getting a flu shot, for example, receives private benefits; he or she is less likely to get the flu. But there will be external benefits as well: Other people will also be less likely to get the flu because the person getting the shot is less likely to have the flu. Because this latter benefit is external, the social benefit of flu shots exceeds the private benefit, and the market is likely to produce less than the efficient quantity of flu shots. Public, private, and charter schools often require such inoculations in an effort to get around the problem of external benefits.

Imperfect Competition

In a perfectly competitive market, price equals marginal cost. If competition is imperfect, however, individual firms face downward-sloping demand curves and will charge prices greater than marginal cost. Consumers in such markets will be faced by prices that exceed marginal cost, and the allocation of resources will be inefficient.

An imperfectly competitive private market will produce less of a good than is efficient. As we saw in the chapter on monopoly, government agencies seek to prohibit monopoly in most markets and to regulate the prices charged by those monopolies that are permitted. Government policy toward monopoly is discussed more fully in a later chapter.

Assessing Government Responses to Market Failure

In each of the models of market failure we have reviewed here—public goods, external costs and benefits, and imperfect competition—the market may fail to achieve the efficient result. There is a potential for government intervention to move inefficient markets closer to the efficient solution.

Figure 15.3 reviews the potential gain from government intervention in cases of market failure. In each case, the potential gain is the deadweight loss resulting from market failure; government intervention may prevent or limit this deadweight loss. In each panel, the deadweight loss resulting from market failure is shown as a shaded triangle.

Panel (a) of Figure 15.3 illustrates the case of a public good. The market will produce some of the public good; suppose it produces the quantity Q m . But the demand curve that reflects the social benefits of the public good, D 1 , intersects the supply curve at Q e ; that is the efficient quantity of the good. Public sector provision of a public good may move the quantity closer to the efficient level.

Panel (b) shows a good that generates external costs. Absent government intervention, these costs will not be reflected in the market solution. The supply curve, S 1 , will be based only on the private costs associated with the good. The market will produce Q m units of the good at a price P 1 . If the government were to confront producers with the external cost of the good, perhaps with a tax on the activity that creates the cost, the supply curve would shift to S 2 and reflect the social cost of the good. The quantity would fall to the efficient level, Q e , and the price would rise to P 2 .

Panel (c) gives the case of a good that generates external benefits. The demand curve revealed in the market, D 1 , reflects only the private benefits of the good. Incorporating the external benefits of the good gives us the demand curve D 2 that reflects the social benefit of the good. The market’s output of Q m units of the good falls short of the efficient level Q e . The government may seek to move the market solution toward the efficient level through subsidies or other measures to encourage the activity that creates the external benefit.

Finally, Panel (d) shows the case of imperfect competition. A firm facing a downward-sloping demand curve such as D 1 will select the output Q m at which the marginal cost curve MC 1 intersects the marginal revenue curve MR 1 . The government may seek to move the solution closer to the efficient level, defined by the intersection of the marginal cost and demand curves.

While it is important to recognize the potential gains from government intervention to correct market failure, we must recognize the difficulties inherent in such efforts. Government officials may lack the information they need to select the efficient solution. Even if they have the information, they may have goals other than the efficient allocation of resources. Each instance of government intervention involves an interaction with utility-maximizing consumers and profit-maximizing firms, none of whom can be assumed to be passive participants in the process. So, while the potential exists for improved resource allocation in cases of market failure, government intervention may not always achieve it.

The late George Stigler, winner of the Nobel Prize for economics in 1982, once remarked that people who advocate government intervention to correct every case of market failure reminded him of the judge at an amateur singing contest who, upon hearing the first contestant, awarded first prize to the second. Stigler’s point was that even though the market is often an inefficient allocator of resources, so is the government likely to be. Government may improve on what the market does; it can also make it worse. The choice between the market’s allocation and an allocation with government intervention is always a choice between imperfect alternatives. We will examine the nature of public sector choices later in this chapter and explore an economic explanation of why government intervention may fail to move market solutions closer to their efficient levels.

Merit and Demerit Goods

In some cases, the public sector makes a determination that people should consume more of some goods and services and less of others, even in the absence of market failure. This is a normative judgment, one that presumes that consumers are not always the best judges of what is good, or bad, for them.

Merit goods are goods whose consumption the public sector promotes, based on a presumption that many individuals do not adequately weigh the benefits of the good and should thus be induced to consume more than they otherwise would. Many local governments support symphony concerts, for example, on grounds that the private market would not provide an adequate level of these cultural activities.

Indeed, government provision of some merit goods is difficult to explain. Why, for example, do many local governments provide tennis courts but not bowling alleys, golf courses but not auto racetracks, or symphony halls but not movie theaters? One possible explanation is that some consumers—those with a fondness for tennis, golf, and classical music—have been more successful than others in persuading their fellow citizens to assist in funding their preferred activities.

Demerit goods are goods whose consumption the public sector discourages, based on a presumption that individuals do not adequately weigh all the costs of these goods and thus should be induced to consume less than they otherwise would. The consumption of such goods may be prohibited, as in the case of illegal drugs, or taxed heavily, as in the case of cigarettes and alcohol.

Income Redistribution

The proposition that a private market will allocate resources efficiently if the efficiency condition is met always comes with a qualification: the allocation of resources will be efficient given the initial distribution of income . If 5% of the people receive 95% of the income, it might be efficient to allocate roughly 95% of the goods and services produced to them. But many people (at least 95% of them!) might argue that such a distribution of income is undesirable and that the allocation of resources that emerges from it is undesirable as well.

There are several reasons to believe that the distribution of income generated by a private economy might not be satisfactory. For example, the incomes people earn are in part due to luck. Much income results from inherited wealth and thus depends on the family into which one happens to have been born. Likewise, talent is distributed in unequal measure. Many people suffer handicaps that limit their earning potential. Changes in demand and supply can produce huge changes in the values—and the incomes—the market assigns to particular skills. Given all this, many people argue that incomes should not be determined solely by the marketplace.

A more fundamental reason for concern about income distribution is that people care about the welfare of others. People with higher incomes often have a desire to help people with lower incomes. This preference is demonstrated in voluntary contributions to charity and in support of government programs to redistribute income.

A public goods argument can be made for government programs that redistribute income. Suppose that people of all income levels feel better off knowing that financial assistance is being provided to the poor and that they experience this sense of well-being whether or not they are the ones who provide the assistance. In this case, helping the poor is a public good. When the poor are better off, other people feel better off; this benefit is nonexclusive. One could thus argue that leaving private charity to the marketplace is inefficient and that the government should participate in income redistribution. Whatever the underlying basis for redistribution, it certainly occurs. The governments of every country in the world make some effort to redistribute income.

Programs to redistribute income can be divided into two categories. One transfers income to poor people; the other transfers income based on some other criterion. A means-tested transfer payment is one for which the recipient qualifies on the basis of income; means-tested programs transfer income from people who have more to people who have less. The largest means-tested program in the United States is Medicaid, which provides health care to the poor. Other means-tested programs include Temporary Assistance to Needy Families (TANF) and food stamps. A non-means-tested transfer payment is one for which income is not a qualifying factor. Social Security, a program that taxes workers and their employers and transfers this money to retired workers, is the largest non-means-tested transfer program. Indeed, it is the largest transfer program in the United States. It transfers income from working families to retired families. Given that retired families are, on average, wealthier than working families, Social Security is a somewhat regressive program. Other non-means tested transfer programs include Medicare, unemployment compensation, and programs that aid farmers.

Figure 15.4 shows federal spending on means-tested and non-means-tested programs as a percentage of GDP, the total value of output, since 1962. As the chart suggests, the bulk of income redistribution efforts in the United States are non-means-tested programs.

Source: Congressional Budget Office, The Budget and Economic Outlook: Fiscal Years 2004–2013 (Jan., 2003), Table F-10p. 157; thereafter January, 2008, Table F-10 with means-tested as medicaid plus income security and non-means tested everything else.

The fact that most transfer payments in the United States are not means-tested leads to something of a paradox: some transfer payments involve taxing people whose incomes are relatively low to give to people whose incomes are relatively high. Social Security, for example, transfers income from people who are working to people who have retired. But many retired people enjoy higher incomes than working people in the United States. Aid to farmers, another form of non-means-tested payments, transfers income to farmers, who on average are wealthier than the rest of the population. These situations have come about because of policy decisions, which we discuss later in the chapter.

Key Takeaways

• One role of government is to correct problems of market failure associated with public goods, external costs and benefits, and imperfect competition.
• Government intervention to correct market failure always has the potential to move markets closer to efficient solutions, and thus reduce deadweight losses. There is, however, no guarantee that these gains will be achieved.
• Governments may seek to alter the provision of certain goods and services based on a normative judgment that consumers will consume too much or too little of the goods. Goods for which such judgments are made are called merit or demerit goods.
• Governments redistribute income through transfer payments. Such redistribution often goes from people with higher incomes to people with lower incomes, but other transfer payments go to people who are relatively better off.

Here is a list of actual and proposed government programs. Each is a response to one of the justifications for government activity described in the text: correction of market failure (due to public goods, external costs, external benefits, or imperfect competition), encouragement or discouragement of the consumption of merit or demerit goods, and redistribution of income. In each case, identify the source of demand for the activity described.

• The Justice Department sought to prevent Microsoft Corporation from releasing Windows ’98, arguing that the system’s built-in internet browser represented an attempt by Microsoft to monopolize the market for browsers.
• In 2004, Congress considered a measure that would extend taxation of cigarettes to vendors that sell cigarettes over the Internet.
• The federal government engages in research to locate asteroids that might hit the earth, and studies how impacts from asteroids could be prevented.
• The federal government increases spending for food stamps for people whose incomes fall below a certain level.
• The federal government increases benefits for recipients of Social Security.
• The Environmental Protection Agency sets new standards for limiting the emission of pollutants into the air.
• A state utilities commission regulates the prices charged by utilities that provide natural gas to homes and businesses.

Case in Point: “Fixing” the Gasoline Market

Figure 15.5

Emily – gas prices in san diego – CC BY-NC-ND 2.0.

Moderating the price of gasoline is not an obvious mission for the government in a market economy. But, in an economy in which angry voters wield considerable influence, trying to fix rising gasoline prices can turn into a task from which a wise politician does not shrink.

By the summer of 2008, crude oil was selling for more than $140 per barrel. Gasoline prices in the United States were flirting with the $4 mark. There were perfectly good market reasons for the run-up in prices. World oil demand has been rising each year, with China and India two of the primary sources of increased demand. The world’s ability to produce oil is limited and tensions in the Middle East were also adding doubts about getting those supplies to market. Ability to produce gasoline is limited as well. The United States has not built a new oil refinery in more than 30 years.

But, when oil prices rise, economic explanations seldom carry much political clout. Predictably, the public demands a response from its political leaders—and gets it.

Largely Democratic Congressional proposals in 2008 included such ideas as: a bill to classify the Organization of Petroleum Exporting Countries (OPEC) as an illegal monopoly in violation of U.S. antitrust laws, taxing “excessive” profits of oil companies, investigating possible price gouging, and banning speculative trading in oil futures. With an overwhelming majority on both sides of the aisle, Congress passed a bill to suspend adding oil to the Strategic Petroleum Reserve—a 727 million gallon underground reserve designed for use in national emergencies. President Bush in 2008 was against this move, though in 2006, when gas prices were approaching $3 a gallon, he supported a similar move. Whether or not to offer a “tax holiday” on the 18.4 cents per gallon federal gas tax stymied some politicians during the 2008 presidential campaign because Hillary Clinton, a Democrat, and John McCain, a Republican, supported it, while Barack Obama, a Democrat, was against it. Mostly Republican proposals to allow offshore drilling and exploration in the Arctic National Wildlife Refuge also received attention.

These measures were unlikely to have much affect on gas prices, especially in the short-term. For example, the federal government would normally in a two-month period deposit 10 million gallons of gasoline in the strategic reserve; consumption in the United States is about 20 million gallons of gasoline per day. World gasoline consumption is about 87 million gallons per day. Putting an additional 10 million gallons into a global market which will consume about 5 billion gallons in a 60-day period is not likely to have any measurable impact.

The higher oil prices were very good for oil companies. Exxon Mobil, the largest publicly traded oil company in the United States, reported profits of nearly $11 billion for the first quarter of 2008. Whenever oil prices rise sharply, there are always cries of “price gouging.” But, repeated federal investigations of the industry have failed to produce any evidence that such gouging has occurred.

Meanwhile, market forces responding to the higher gasoline prices are already at work. Gasoline producers are looking at cellulosic ethanol, which can be produced from materials such as wood chips, corn stalks, and rice straw. Automobile producers are examining “plug-in” hybrids—cars whose batteries could be charged not just by driving but by plugging the car in a garage. The goal is to have a car that could go some distance on its battery before starting to use any gasoline. Consumers are doing their part. Gasoline consumption in the United States fell more than 4% by the summer of 2008 from its level one year earlier.

These potential market responses are the sort of thing one would expect from rising fuel prices. Ultimately, it is difficult to see why gasoline prices should be a matter for public sector intervention. But, the public sector consists of people, and when those people become angry, the urge for intervention can become unstoppable.

Sources: Paul Davidson and Chris Woodyard, “Proposals To Cut Gas Prices Scrutinized,” USA Today , May 11, 2006, p. 5B; Joseph Curl, “Bush Orders Suspension Of Gas Rules; Federal Probe To Look At Price-Gouging Charges,” The Washington Times , April 26, 2007, p. A1; David M. Herszenhorn, “As Gasoline Prices Soar, Politicians Fall Back on Familiar Solutions,” The New York Times , May 3, 2008, p. A16; Richard Simon, “The Nation; Mixing Oil and Politics; Congress Votes To Stop Shipments to the Nation’s Reserve. The Move Could Save Motorists Some Money,” Los Angeles Times , May 14, 2008, p. A18.

Answers to Try It! Problems

• This is an attempt to deal with monopoly, so it is a response to imperfect competition.
• Cigarettes are treated as a demerit good.
• Protecting the earth from such a calamity is an example of a public good.
• Food Stamps are a means-tested program to redistribute income.
• Social Security is an example of a non-means-tested income redistribution program.
• This is a response to external costs.
• This is a response to monopoly, so it falls under the imperfect competition heading.

ECON101: Principles of Microeconomics (2021.A.01)

Public finance and public choice.

Read this chapter to learn how the government provides goods and services in the economy to alleviate problems of the market system.

4. Choices in the Public Sector

Learning objectives.

• Compare public interest theory and public choice theory.
• Use public choice theory to explain rational abstention and why legislative choices may serve special interests.

How are choices made in the public sector? This section examines two perspectives on public sector choice. The first is driven by our examination of market failure. Choices in the public sector are a matter of locating problems of market failure, determining the efficient solution, and finding ways to achieve it. This approach, called the public interest theory of government, assumes that the goal of government is to seek an efficient allocation of resources. An alternative approach treats public sector choices like private sector choices. The body of economic thought based on the assumption that individuals involved in public sector choices make those choices to maximize their own utility is called public choice theory . Public choice theory argues that individuals in the public sector make choices that maximize their utility - whether as voters, politicians, or bureaucrats, people seek solutions consistent with their self-interest. People who operate business firms may try to influence public sector choices to increase the profits of their firms. The effort to influence public choices to advance one's own self-interest is called rent-seeking behavior .

Public Interest Theory

In the approach to the analysis of public sector choices known as public interest theory , decision making is a technical matter. The task of government officials is to locate the efficient solution and find a way to move the economy to that point. For a public good, the efficient solution occurs where the demand curve that reflects social benefits intersects the supply curve for producing the good; that is, the solution at quantity Q e and price P 1 given in Panel (a) of Figure 15.3 "Correcting Market Failure" Because this demand curve for a public good is not revealed in the market, the task for government officials is to find a way to estimate these curves and then to arrange for the production of the optimum quantity. For this purpose, economists have developed an approach called cost-benefit analysis , which seeks to quantify the costs and benefits of an activity. Public officials can use cost-benefit analysis to try to locate the efficient solution. In general, the efficient solution occurs where the net benefit of the activity is maximized. Public sector intervention to correct market failure presumes that market prices do not reflect the benefits and costs of a particular activity. If those prices are generated by a market that we can regard as perfectly competitive, then the failure of prices to convey information about costs or benefits suggests that there is a free-rider problem on the demand side or an external cost problem on the supply side. In either case, it is necessary to estimate costs or benefits that are not revealed in the marketplace. The public interest perspective suggests an approach in which policy makers identify instances of potential market failure and then look for ways to correct them. Public choice theory instead looks at what motivates the people making those policy choices.

The Public Choice Perspective

Public choice theory discards the notion that people in the public sector seek to maximize net benefits to society as a whole. Rather, it assumes that each participant in the public sector seeks to maximize his or her own utility. This section introduces the flavor of the public choice approach by examining two of its more important conclusions: that many people will abstain from voting, and that legislative choices are likely to serve special interests.

Economics and Voting: The Rational Abstention Problem

Public choice theory argues that individuals do not leave their self-interests behind when they enter the voting booth - or even when they are thinking about whether to go to the voting booth. The assumption of utility maximization by voters helps us to understand why most people do not vote in most elections. Suppose your state is about to hold a referendum on expanded support for state recreation areas, to be financed by an increase in the state sales tax. Given your own likely use of these areas and the way in which you expect to be affected by the tax, you estimate that you will be better off if the program passes. In fact, you have calculated that the present value of your net benefits from the program is $1,000. Will you vote? As a utility maximizer, you will vote if the marginal benefits to you of voting exceed the marginal costs. One benefit of voting is the possibility that your vote will cause the measure to be passed. That would be worth $1,000 to you. But $1,000 is a benefit to you of voting only if it is your vote that determines the outcome. The probability that any statewide election will be decided by a single vote is, effectively, zero. State elections that are decided by as many as a few hundred votes are likely to be subject to several recounts, each of which is likely to produce a different result. The outcomes of extremely close elections are ordinarily decided in the courts or in legislative bodies; there is no chance that one vote would, in fact, determine the outcome. Thus, the $1,000 benefit that you expect to receive will not be a factor in your decision about whether to vote. The other likely benefit of voting is the satisfaction you receive from performing your duty as a citizen in a free society. There may be additional personal benefits as well from the chance to visit with other people in your precinct. The opportunity cost of voting would be the value of the best alternative use of your time, together with possible transportation costs. The fact that no one vote is likely to determine the outcome means that a decision about whether to vote is likely to rest on individual assessments of the satisfactions versus the costs of voting. Most people making such decisions find the costs are greater. In most elections, most people who are eligible to vote do not vote. Public choice analysis suggests that such a choice is rational; a decision not to vote because the marginal costs outweigh the marginal benefits is called rational abstention . Rational abstention suggests there is a public sector problem of external benefits. Elections are a way of assessing voter preferences regarding alternative outcomes. An election is likely to do a better job of reflecting voter preferences when more people vote. But the benefits of an outcome that reflects the preferences of the electorate do not accrue directly to any one voter; a voter faces only some of the benefits of voting and essentially all of the costs. Voter turnouts are thus likely to be lower than is economically efficient. In the 2000 presidential election, for example, just 50.7% of the voting-age population actually cast votes. President Bush received 47.9% of the vote, which means he was elected with the support of just 24% of the electorate. Mr. Bush actually received fewer votes than his opponent, Albert Gore, Jr. Mr. Bush, however, won a majority in the Electoral College. The Case in Point essay describes the 2000 election in more detail. Voter turnout was higher in the 2004 and 2008 presidential elections.

Legislative Choice and Special Interests

One alternative to having the general public vote on issues is to elect representatives who will make choices on their behalf. Public choice theory suggests that there are some difficulties with this option as well. Suppose legislators seek to maximize the probability that they will be reelected. That requires that a legislator appeal to a majority of voters in his or her district. Suppose that each legislator can, at zero cost, learn the preferences of every voter in his or her district. Further, suppose that every voter knows, at zero cost, precisely how every government program will affect him or her. In this imaginary world of costless information and ambitious legislators, each representative would support programs designed to appeal to a majority of voters. Organized groups would play no special role. Each legislator would already know how every voter feels about every issue, and every voter would already know how every program will affect him or her. A world of costless information would have no lobbyists, no pressure groups seeking a particular legislative agenda. No voter would be more important than any other. Now let us drop the assumption that information is costless but retain the assumption that each legislator's goal is to be reelected. Legislators no longer know how people in the district feel about each issue. Furthermore, voters may not be sure how particular programs will affect them. People can obtain this information, but it is costly. In this more realistic world of costly information, special-interest groups suddenly play an important role. A legislator who does not know how elderly voters in his or her district feel about a certain issue may find a conversation with a representative of the American Association of Retired Persons (AARP) to be a useful source of information. A chat with a lobbyist for the Teamster's Union may reveal something about the views of union members in the district. These groups also may be able to influence voter preferences through speeches and through public information and political action efforts. A legislator in a world of costly information thus relies on special-interest groups for information and for support. To ensure his or her reelection, the legislator might try to fashion a program that appeals not to a majority of individuals but to a coalition of special-interest groups capable of delivering the support of a majority of voters. These groups are likely to demand something in exchange for their support of a particular candidate; they are likely to seek special programs to benefit their members. The role of special-interest groups is thus inevitable, given the cost of information and the desire of politicians to win elections. In the real world, it is not individual voters who count but well-organized groups that can deliver the support of voters to a candidate. Public choice theorists argue that the inevitable importance of special-interest groups explains many choices the public sector makes. Consider, for example, the fact noted earlier in this chapter that a great many U.S. transfer payments go to groups, many of whose members are richer than the population as a whole. In the public choice perspective, the creation of a federal transfer program, even one that is intended to help poor people, will lead to competition among interest groups to be at the receiving end of the transfers. To win at this competition, a group needs money and organization - things poor people are not likely to have. In the competition for federal transfers, then, it is the nonpoor who often win. The perception of growing power of special-interest groups in the United States has led to proposals for reform. One is the imposition of term limits, which restrict the number of terms a legislator can serve. Term limits were first established in Colorado in 1990; California and Oklahoma established term limits the same year. Subsequently, 18 other states adopted them. They have been found unconstitutional in four State Supreme Courts (Massachusetts, Oregon, Washington, and Wyoming). They have been repealed by the state legislatures of Idaho and Utah. Thus, term limits now apply in 15 states". One argument for term limits from the public choice perspective is that over time, incumbent legislators establish such close relationships with interest groups that they are virtually assured reelection; limiting terms may weaken these relationships and weaken special interests. The Supreme Court ruled in 1995 that individual states could not impose term limits on members of Congress. If such limits are to prevail at the federal level, a constitutional amendment will be required. Arguments against the term limits approach include the fact that term limits automatically remove experienced legislators who could be very effective. They also restrict voter choice. A second type of reform effort is a proposal that campaigns for seats in Congress be federally funded. If candidates did not need to seek funding from special interests, the influence of these groups would wane.

Key Takeaways

• Public interest theory examines government as an institution that seeks to maximize public well-being or net social benefit. It assumes government will seek the efficient solution to market failure problems.
• Public choice theory assumes that individuals engage in rent-seeking behavior by pursuing their self-interest in their dealings with the public sector; they continue to try to maximize utility or profit.
• It may be rational for eligible voters to abstain from voting, according to the public choice theory.
• Public choice theory suggests that politicians seeking reelection will try to appeal to coalitions of special-interest groups.

Here is a list of possible explanations for government programs and policies. In each case, identify whether the explanation reflects the public interest theory or the public choice theory of government action.

• "It is possible to explain much government activity by investigating the public's demand for government services, but one should not ignore the incentives for increased supply of government services".
• "Through careful application of cost-benefit analysis, we can identify the amount of a public good that should be provided by the government".
• "The determination of what are merit or demerit goods is inherently political rather than scientific and more often than not can be traced to the efforts of groups with an ax to grind or some private motive to pursue".
• "While it is possible that policy makers follow some well-reasoned-out application of ability-to-pay or benefit-received principles, it is more credible to recognize that many of the taxes in this country reflect the fact that groups find it in their interest to organize to get tax burdens shifted to others".
• "It is in the public interest to correct the market failure caused by monopoly firms. Therefore, it behooves us to do so".

Planning Forum

The University of Texas

Perspective 1: Crisis Management in Public Administration

Fadillah Putra

In public administration or in the public policy realm, crisis management is given little attention either in the academic or in the professional worlds (Schneider, 1995). Traditional public administration focuses only on planned and programmed activities, meaning those passed through long public policy making phases and procedures. This process creates the general perception of public administration as a science in which organizational and bureaucratic routines become the main concern. However, the most challenging role of government is not to control these routines, but rather to perform well when tested by crisis (Farazmand, 2007). There are many stories that relate government’s failures to cope with crises. At the same time, victims rely heavily on government actions during crisis, because they always think that government is the most responsible institution to handle a crisis (Boin, 2005). However, the literature on crisis management in the public sector is very limited.

This essay explores some strategic topics of crisis management that are relevant to the development of public administration science. Those topics are: (1) the basic understanding of crisis management in public affairs; (2) the role of government in a crisis situation at both national and local levels; (3) the role of international organizations; and (4) the media and civil society involvement in crisis management. Comparative case studies (Hurricane Katrina in the U.S. and the Lapindo Mud Explosion in Indonesia) will be provided in order to give real-world perspective to these four aspects.

Understanding a crisis situation

As commonly understood in much of the literature on the topic, including the U.N. standard, there are two contexts of crises: natural and man-made (Samal, 2005; Schneider, 1995; Nudell, 1988). However, some crisis management scholars are not satisfied with this categorization. Ali Farazmand (2001) argues that there are four contexts of crisis: political, economic, leadership, and environmental. This categorization is very descriptive and provides more details about man-made crises (political, economic, and leadership). The environmental context is still ambiguous because environmental crises could be man-made (such as the Exxon Valdez Oil Spill in Alaska in 1989) or natural (the Asian Tsunami in 2004 or Hurricane Katrina the year after).

On the other hand, Schoff (2004) differentiates crises into three contexts: natural, incidents, and accidents. Through this categorization, he explains the dimensions of man-made crisis, which he defines as accidents (unintentional man-made crises, such as the Three Mile Island case in Pennsylvania in 1979, and Chernobyl in Ukraine in 1986) and incident (intentional man-made crises, such as terrorist attacks or war). These different contexts of crisis are crucial in shaping and evaluating government response.

A further important distinction is the differentiation of incidents when a true crisis situation is present or incidents in which events are in the normal parameters of public sector activity. First of all, a crisis situation relates to a particular situation when government capacity is inadequate to handle a situation using its own resources (Ozerdem, 2006). For example, if a bus accident happens and kills seven people, it is not a crisis, because the police and hospital can handle it with their own resources. But if the bus contains a bomb and explodes right in the middle of downtown, it injures thousands of people, the police aren’t able to handle the panic, and the hospitals don’t have enough space for victims, then that is a crisis. Other characteristics of a crisis are: severe threat (Farazmand, 2001; Rosenthal, 2001); threat to the basic structure (physical and nonphysical) and values (such as security, welfare, or health) of society (Boin, 2004; Farazmand, 2007); the inconceivability and unexpected nature of an event (Dror in Rosenthal, 2001); and an event that generates extreme psychological stress (Schneider, 1995). With this complex explanation of the term “crisis,” the best way to understand it is not to perceive it as the particular calamity moments themselves, but how the event relates to an organization’s capacity to respond to the situation (Smith, 2006). There are many types of crisis situations. In general, we can differentiate crisis into two types: sudden crisis (such as tsunami, terrorist attack, or nuclear reactor explosion) and creeping crisis (such as

spreading of a virus or the global warming threat) (Farazmand, 2001). More details of this typology of crisis can be seen in fi gure 1.

Obviously, the hardest crisis to cope with is a fast-developing one, because the degree of preparedness of the government to handle it is very low. On the other hand, in a slow-developing crisis, such as a cathartic or creeping crisis, if the awareness of the government to the crisis is low, it could create long-term and possibly irreversible damages.

Along with the negative face of a crisis, some crisis events may yield positive outcomes. A crisis could become a triggering opportunity for improvement of the system (Farazmand, 2001; Nudell, 1988; Rosenthal, 2001). A postcrisis reconstruction process could yield outcomes that are better than the precrisis situation, and the government also is afforded the opportunity to learn about its own weaknesses and thus improve upon its substantial ability to respond to future crisis events.

Good crisis management

There are at least three domains in which crisis management is systematically analyzed by scholars: business, international politics, and public affairs. Business is a discipline in which crisis management is a prominent subject of discussion. In this area, crisis management relates to how to make the corporation survive after a crisis, meaning how to “avoid suffering financial losses after the crisis” (Laye, 2002). The study of crisis management is also commonly found in international relation studies, most commonly related to potential war between countries. The main goal of crisis management is ensuring that the tensions between countries do not turn into war, and that good diplomacy will be the main strategy of crisis management in this sense (Winham, 1988, Schoff, 2004). The last discipline that is concerned with crisis management, though not as much as the previous two, is in public affairs/administration. In this domain, crisis management relates to how government can prevent, react to, and rehabilitate after a crisis. This essay will only focus on the discussion of crisis and response from the perspective of public sector intervention and management of domestic crises. Public sector crisis management in general can be defined as the implementation of management principles (such as planning, organizing, decision making, coordinating, and controlling) in a crisis or emergency situation (Samal, 2005; Nudel, 1988; Rosenthal, 2001).

However, crisis management is not merely applying basic management principles into a crisis context. Uriel Rosenthal (2001), for instance, explained that the crucial phases of crisis management are prevention, planning, response, and aftermath actions. The last phase (aftermath action) is not a part of the traditional public management discussion. Indeed, there are some specific phases in crisis management that are not part of traditional management principles.

There are three specific phases of public sector crisis management. The first is the preventive aspect; some scholars describe this aspect using different terms, such as planning, preparedness, and/or mitigation. The second is the rehabilitation aspect; some scholars call this aspect relief, recovery, response, or aftermath actions. This aspect is also the key aspect of crisis management (Ozerdem, 2006; Drennan, 2007; Samal 2005). The third one is coordination; this aspect is not specific to a crisis management context, but “coordination” between institutions in a rapidly changing situation has been emphasized by many scholars. Since an “in-crisis” government may not seek to limit incoming resources (Farazmand, 2007), many organizations may intervene to provide help or goods. Therefore, during or after a calamity, there are often many organizations, institutions, and elements coming into the crisis location. Coordinating those organizations so that the distribution of goods and the activities of each institution will not confl ict or overlap is a major challenge for government (Nudel, 1988).

The next step in analyzing public sector crisis management is evaluating the effectiveness of crisis management in practice. Boin (2008) raises three important requirements for good crisis management, which are: sense making, how to understand the situation quickly; meaning making, how to create solid information for media and the public; and learning, how government can learn from the crisis to improve its capacity. Additionally, Ali Farazmand (2007) emphasizes “creative and agile leadership” as the most important requirement for good crisis management.

There are also some specific crisis management requirements that apply to urban areas. First, local governments need to have their own strong crisis management systems, which will allow them not to rely heavily on central government when the crisis occurs (Rosenthal, 2001). The cases of the 9/11 terrorist attack in New York City in 2001, 11/3 in Madrid in 2004, and the Mexico City earthquake in 1985 showed how important it is for cities to have their own crisis management system. Cities should have their own crisis management system because of the density of inhabitants and because they are the centers of business and government networks. Yet, Kartez and Lindell (in Sylves, 1990) said that while “80 percent of the U.S. local governments have a formal disaster plan and system, their leaders continue to be surprised when the crisis occurs.” Therefore, the existence of a strong system is no longer the issue, but rather how to familiarize relevant agencies and responsible leaders with the system in order for them to use it with efficiency.

The second important requirement for urban area crisis management is multiethnic awareness. Obviously, urban areas have had urbanization and immigration for a long time. Urban areas are the melting pot of many cultures and ethnicities. Every ethnic group has its own standard norms and values; therefore, if the crisis leaders are not sensitive to this aspect, misunderstandings between government and the people could interrupt the process of crisis responses and relief (Rosenthal, 2001). Both ethnic differences of the urban social aspect could disrupt the rehabilitation process and economic gaps. Poor communities (which in some senses are also related to certain ethnic groups) are the most vulnerable groups during a crisis: In New Orleans [during the Katrina crisis], local

government did not provide transportation for the citizens without their own vehicles to evacuate. As it turns out, most of them were in predominately black neighborhoods. Racial and economic demographics in disaster-prone zone has bee shown to be common adjoining hazardous material sties. . . . In July 2005, monsoon rains flooded the Indian city of Mumbai (Bombay) and eight million of India’s poorest were the victims. (Pinkowski 2008, 12)

Good crisis management also strongly depends on decision-making strategies. Figure 2 emphasizes how decision making can achieve maximum accuracy when the decision maker working in a crisis situation makes good decisions rapidly, despite risk and time pressures. The first and the most important step in this method is situation assessment, which involves attending to a selection of the available cues, assembling them into a pattern, and searching long-term memory to recognize the problem (Flin, Youngson, and Yule, 2006).

The second step is choosing decision-making strategies based on the types of crisis (fi gure 1). If the type of crisis is “fast burning,” crisis leaders might choose recognition-primed/intuitive because this method is good for quick action to prevent a rapid cascade to a catastrophic adverse outcome. If the type of crisis is “cathartic crisis,” the leader should use rule-based strategy because he/she has enough time to consult with the procedures manual/checklist to find the given responses. If the type of crisis is “long shadow,” the leader may use analytical strategy because he/she has more time to recall a number of possible courses of action and compares them simultaneously to determine which one best fits the needs of the situation. Lastly, if the type of crisis is “slow burning,” a crisis leader could use creative strategy because there is plenty of time for him/her to try any innovative solutions to solve the problem. However, one still has to keep in mind that evacuating and aiding victims is the first priority regardless of which strategy is chosen.

Ultimately, the fundamental concept of good crisis management is determined by the “gap between bureaucratic norm and emergent norm” (Schneider, 1995). The more government can shrink the gap, the better the crisis management will be. Bureaucratic norms always value regularities, procedures, and blueprints. Public officers are required to follow the procedures and blueprints tightly in order to precede their jobs. However, in emergent norms, the situation is the opposite. Crisis situations change very fast and most of the time are unpredictable. Therefore, instead of following the bureaucratic procedures, emergent norms requires crisis officers to be adaptive to the situation. As there are no regularities in crisis situations, emergent norms require public officers to instead come up with strategies to handle the problem rather than simply use blueprints and regulations. The bureaucratic procedures and the emergent norms contradict each other, posing a big challenge for public management of crises.

In a crisis situation, government needs to be more adaptive (emergent norm). On the other hand, it also has to ensure the legal accountability (bureaucratic norm) of each decision it takes. Dealing with these two norms, of course, is not an easy task. In so doing, governments need to adjust their bureaucratic norms to the realities and needs that exist on the ground during the crisis situation. This is crucially important for public sector leaders when they are facing a crisis situation. Of course, in “long shadow” and “slow burning” types of crisis, government could impose its bureaucratic norm, but not in a “fast burning” crisis.

In sum, there are four main criteria to measure the performance of public sector crisis management. First, the question is whether or not the government has a crisis management system within its organization. The tasks of the system are preventive, rehabilitation, and coordination measures. Second is the question of the sensitivity of government to multi-identities (including ethnic, class, age, and gender) while rescuing the victims. The third criteria is related to decision-making strategy in a crisis situation. And the fourth is the question of how successfully the government can adjust its bureaucratic norms with emergent norms in the crisis situation.

Role of government

Most governments do not pay too much attention to crisis management because they think that a crisis is an unusual and unpredictable situation, so well-planned and organizational actions from government are not needed. Yet, governments have to be the most prepared institutions, because people (especially victims) always expect that governments will play central roles during crises (Drennan, 2007; Boin, 2008). Moreover, the failure of a government to cope with a crisis is not tolerated politically; failure to effectively respond to a crisis situation could destroy the political legitimacy of a regime (Boin, 2005). Crisis, hence, must be seen as a test for government (Farazmand, 2007).

Arjen Boin described four aspects of government that are impacted by crisis. Among them are “effects on key political officeholders, strength of leadership, political institutions and policy changes” (Boin, 2008, 292). Moreover, government is sometimes held responsible in a crisis, especially if it fails to take adequate preventive efforts. For example, when government fails to educate people or to implement important standards about building safer housing for earthquakes (like the tsunami) more people may be killed because of this lack of action (Samal, 2005; Ozerdem, 2006). Indeed, the main idea of crisis management is not to stop the occurrence of calamities, especially from natural crises, but the most critical objective in any crisis is “to contain damages as much as possible and prevent the loss of life and property” (Kalantari in Farazmand, 2004, 619). This is basic criteria to evaluate governments’ core role in the overall crisis management system.

Why do some governments succeed while others fail in handling a crisis? Saundra K. Schneider (1995) reminds us to be careful when judging a government’s success or failure in terms of crisis management, because judgments are usually based on public opinion (media) rather than based on objective evaluation. Of course public opinion is important, but it is not the only instrument of judgment that should be taken into consideration. The other complication of judging the failures of government is to decide if government actions are too slow or if public demand is unrealistic. Therefore, Schneider ended up measuring the gap between the bureaucratic norm and the emergent norm as the main tool to evaluate the quality of a government’s crisis management.

In terms of quality of crisis management, there is an interesting and important argument that claims that the weatlth of a country does not affect the quality of crisis management. A study conducted by Ozerdem (2006) in Japan, Turkey, and India serves as an example for this argument. Japan, as one of the wealthiest countries in the world, has a lack of volunteerism (which is extremely important during a crisis), due to its modern individualized society. In India, on the other hand, there was no lack of volunteerism, but the country does have problems in infrastructure because of economic reasons.

This argument is important because no countries’ leaders should be overconfirmed dent or underestimate themselves regarding crisis preparedness. All countries have the same chance of being successful or failing. The capacity of government to cope with crisis depends on how seriously the government thinks about this particular issue.

Quality crisis management is not only related to fewer numbers of victims, but also to how much government can learn, and then make progressive changes from the crisis. In the case of Japan, there were policy and administrative changes; in Turkey they had bureaucratic paradigmatic shifts after the Marmara earthquake; but in India there were not so many changes after the crises (Ozerdem, 2006; Boin, 2008). Therefore, the point of crisis as an opportunity does not always happen. Sometimes a crisis does not affect anything or even makes the status quo stronger.

The concrete actions that governments can take in crisis management fall into three categories. First are preventive actions. In the cases of slow-developing crises, governments can implement long-term measures, while in cases of fast-developing crises governments can have a high-level preparedness system to minimize victims when a crisis occurs (Samal, 2005). This sort of action calls for rigorous contingency planning, which consists of defining roles of responsibilities and the line of command guidance in a crisis event (Drennan, 2007). Second, during the crisis governments have to create a clear, organized command structure, which can coordinate and control the situation (Kalatari in Farazmand, 2004). Third, after a crisis, management is related to how governments can encourage people to overcome their own problems with government assistance (Samal, 2005).

Some countries already have a good government crisis response system. The U.S., for instance, has a crisis response system that puts community and local government at the forefront. The system also includes coordination at state and federal levels, and it decides when to send FEMA (Federal Emergency Management Agency) to the location after presidential declaration. However, there are some problems, such as overlap of responsibilities within government institutions, public officials who are unable to coordinate all elements, due to the budget constraint, that make the system not work perfectly (Schneider, 1995). In London, responsibilities among local departments for handling crisis situations is stated clearly, and specific job distribution includes what police, hospitals, fi refi ghters, and others should do when a crisis occurs (Drennan, 2007, 131). We can find a good example of a government crisis management system in Iran through a council (NETF/National Emergency Task Force) that has the three main duties of “prevention, relief and reconstruction which are constitutionally stated in article number 5-2” (Kalatari in Farazmand, 2004, 621). From these examples, we can see that in regard to a good crisis management model, the content of intergovernment relations shape the response system.

The relationship between local and central governments is the central issue in the discussion of the government’s role in crisis management. First of all, the capacity of local government has to be clarifi ed. In terms of crisis management, the meaning of capacity is linked with fi nances (how much money should be allocated to maintain the system), authority (how much discretion it has in making decisions), skill (how many experts it has), and administration capacity (how good is the credibility of organization and infrastructure). Some scholars, such as Settle, Cigler, and Vittes, argue that besides these internal aspects (local government capacity) coordination problems between local and central governments have also led to failures of crisis coping elsewhere (Sylves, 1990).

Local governments need to have their own crisis management institutions, especially for big cities (Pinkowski, 2008, 158; Rosenthal, 1994). Therefore, decentralization is important in crisis management. Decentralization in this sense is not only meant to empower local governments so that they have discretion in their decision making, but also provides more money and other resources. In the case of a large-scale crisis, the central government needs to do coordination of interstate borders and aid victims without sacrifi cing local autonomy by government impact (Pinkowski, 2008).

Lastly, governments ought to treat crises and disasters like they treat any other policy sectors such as transportation, education, health, or agriculture. The treatment of crisis implies not only creating specific institutions and organizations to handle them, but also creating a good planning strategy, implementation strategy, and evaluation system regarding crisis management (Schneider, 1995).

The role of media

The role of the media is emphasized in the literature on crisis management. This fact shows the significant part that media plays in the whole context of crisis management study. There are three aspects to present in this section: the basic understanding of the media, the position of media in a crisis situation, and how government should handle media in crisis management.

The media is a news business and they live from selling news. News is always related to unique and unusual events (Nudell, 1988, Rosenthal, 2001); there is massive violence, destruction, and acute human or company culpability in particular accidents (Nudell, 1988, 64; Boin, 2005, 72). Normal and regular events are not considered news in the media’s perspective. Thousands of airplanes landing safely every day is not news, but one failed landing is news. Therefore, disaster and crisis situations always become news, the commodity that media always wants to sell. Network news organizations, along with print journalists, want to report items that will appeal to the widest possible audience. Stories about unmanageable disaster conditions, bureaucratic indifference to human suffering, and the sheer human chaos produced by natural catastrophes are attractive scenarios from a journalistic perspective. (Schneider, 1995, 164–165)

However, the media have been playing a very significant role, especially in providing information to the public. The media does not only provide information about the situation during and after a crisis, but also information regarding preparedness for the crisis. In addition, the media should ensure that they tell a good story and make government look good. The media are crucial for alerts, warnings, and accurate and useful evacuation information.

In general, there are two kinds of media, print (newspaper and magazine) and electronic media (television and radio). These two categories are fundamentally different: electronic media focus on time (the faster the better), while printed media pay more attention to the completeness of the story. On the other hand, there are some similarities between them. First, they always want to get a clear explanation of the events. This nature makes the media always want to find more sources of information, especially when the official sources do not satisfy them. Second, the media has a certain duration for publishing one particular topic, and after several stories they will change the topic. No matter whether the crisis is already resolved or not, the media tend to find another issue if their audience is getting bored with the topic (Nudell, 1988).

In a crisis situation, the media could determine the outcome of government efforts, create the postevent perception, disseminate ideas of what actually happened, assess the authority performance, and promote or squash rumors (Rosenthal, 2001). Therefore, government needs to provide very good and proper information to the media. Yet, the media are usually more interested in getting the information from victims or their families or friends as sources rather than government officials (Nudell, 1988). Indeed, victims and people around them are naturally absorbed with their problem, sadness, and suffering. Then, they usually demand more from the government than it offers. This sort of phenomenon is usually picked up by journalists. On some level, when journalists write this story, they will make the officers work under pressure (Rosenthal, 2001). This is the biggest challenge for government in managing crisis. If government mismanages the media in crisis, the gap between bureaucratic and emergence norms could become larger (Schneider, 1995) or even worse. This also could speed the transformation from crisis to chaos (Farazmand, 2007).

The power of media and yet the media’s tendency to show the negative effects of events are the reasons why, sometimes, government regards the media as an enemy. This is not a good attitude because the media is central to delivering important information to the public, to warning people about the possible dangers, to squashing rumors, and to telling people about how to access government assistance. Government still needs media. It is important for government to find the balance between the negative and positive aspects of media in a crisis situation. Hence the emerging views of the role of media during disasters and crises is a more paradoxical one: yes, they can cause a lot of trouble and consume a lot of attention; but yes, they can also be tremendously helpful to communicate with the public.(Rosenthal, 2001, 127–128)

This point leads us to the question of how the government should handle the media. The most important thing for a government to do is not to avoid the media. If the government fears the media, journalists will think that the government is hiding something, and then they will go to find other sources that government cannot control (Nudell, 1988; Rosenthal, 2001, 103). Therefore, providing systematic, coordinated, and controlled information to the media is extremely important.

In order to provide systematic and controlled information to the media, highly skilled and experienced spokespersons are needed. The main requirement of the spokesperson is a very good understanding of both the outside (rumors and public opinions) and inside (what’s going on in the government response system) situations. Ideally, there is only one spokesperson to avoid inconsistent information (Nudell, 1988). However, in some places this duty is handled by multiple parties. In the Netherlands, for instance, in the 1992 Biljmer disaster, the spokesmen were known as the “triumvirate,” which included the mayor, head of the police department and head of the fi re department (Rosenthal, 1994). The other important thing regarding the control of information to the public is the content of the statement that the spokesperson makes. The statement has to be well prepared, easily understood (does not cause multiple interpretations), comprehensive, and responsible, and the most important thing is the message has to be honest. As Nudell points out:

Honesty is really the best policy in crisis management, if only because of the dangers of being found out. You don’t have to tell the media everything you know, but what do you say should be accurate. This applies not only to the literal accuracy of the facts, but to overall impression you give as well. Don’t try to mislead reporters; tell them what you can and don’t talk about what you can’t. It won’t always be easy, but it will do the most good and the least damage in the long run. (Nudell, 1988, 78).

A press conference should be held every day, at least twice a day, morning and evening (Rosenthal, 2001). By doing so, it will satisfy the journalists’ deadlines and the response of the newest progress of government works will also be announced earlier. By using all of these strategies, the government places the media as an integral part of the crisis management.

Role of civil society

Civil society in this essay means institutionalized and organized private and nonprofit institutions. This could mean the difference between grassroots organizations (GROs) or nongovernmental organizations (NGOs) (Uphoff, 1994), or the more detailed categorization from Kaldor (2003) of social movement, NGOs, social organizations (similar to GROs), and nationalist/religious groups. Therefore, the focus of the role of civil society in crisis management is on the role of these formal organizations, commonly called civil society organizations (CSOs).

There are two main reasons why the involvement of CSOs in governmental crisis management is important. First, CSOs, especially at local and community levels, can think and react more rationally and contextually during the crisis than government because they feel the disaster directly (Boin, 2004, 75). In the case of the supercyclone at Orissa, India, in 1999, CSOs came to the location earlier than government did (Samal, 2005). Moreover, CSOs also can provide experts, basic necessities, and volunteer forces more quickly and with less bureaucratic involvement than government does (Ozerdem, 2006). In some case studies we can see that CSOs played a very important role during Katrina.

The second reason is political and organizational. Public and/ or civil society is the most important stakeholder of public sector organizations (PSOs); therefore, PSOs have a responsibility to public or civil society. This point leads us to the conclusion that governmental response systems have to have public accountability (Schneider, 1995), and also social responsibility. This implies not only answering the public’s questions, but also giving them input and advice, and allowing them to evaluate the whole process of crisis management (Drennan, 2007).

To understand the real action that CSOs could take in a crisis situation is important. As already stated at the beginning of the paper, the key concept of crisis is an unusual and extraordinary situation that attacks the basic structure and values of a society (Boin, 2008). Therefore, the process of reconstruction not only comprises the physical aspect, but also psychological and social aspects. This is the basic argument of “community redevelopment concept” in which citizen participation is emphasized in order “to bring the community back to exactly where it was before disaster” (Sears in Pinkowski, 2008). In order to do so, there are many real actions that CSOs could perform, such as rebuilding the social networks, providing leadership, and recovering people’s psychology. For physical rehabilitation, the real actions could be mobilizing volunteers, providing public goods (foods, shelter, health services, etc.), and providing experts (Samal, 2005; Ozerdem, 2006).

A new model of CSO’s involvement in crisis management has been developed and is gaining support. Alka Dhameja (in Pinkowski, 2008) came up with the community-based disaster management (CBDM) concept, which is a community-based approach. This model emphasizes the involvement of CSOs in crisis management to enable civil society to become directly involved in the formulation, implementation, and evaluation of crisis public policy. Through putting the focus on local community CSOs, Samal (2005) argued that local communities have to be the most prepared element because they are the first element that is directly touched by a crisis and its effects. This is the basic argument of community contingency planning (CCP) that is developed at a village and community level. In India, these small organizations have an umbrella organization at the state level called ODMM. This organization guarantees the ongoing involvement of civil society in an overall government crisis management system (Samal, 2005). This kind of organization is also helpful for government in that it makes coordination easier.

Role of international institutions

Globalization has been widely discussed in the public administration realm. International actors and elements that were not taken into account in governance studies now have become the important elements (Farazmand, 2004). Also in crisis management, the role of these international institutions has become increasingly important. However, there are still some issues regarding their role across countries.

Large-scale calamities inevitably attract world attention. The disaster at Sichuan, China, that caused 69,000 people to be killed is one example, as are the billions of U.S. dollars spent in the Asian tsunami in 2004, Hurricane Katrina in 2005, and the South Asia earthquake in 2005 (Coppola, 2006, 530). Many international institutions were present to give help. However, that is not always the case. No matter how big the disaster is, if there is no permission from the country, it is hard for international institutions to enter the country. The disaster cyclone at Nargis Burma in early May 2008, for instance, also attracted world attention, but no international donors intervened because the domestic political aspect in Burma did not allow it.

International aid for disaster across countries began to increase in the 1970s. That trend was specifically caused by some big disasters happening at the time. The drought in Ethiopia in 1975 and the Tangshan earthquake in China in 1976 that killed over 290,000 people expanded the role of international donors in crisis situations. International institutions were also present to help with man-made crises. For example, aid for Cambodian refugees because of cruelty of the Khmer Rouge regime, or, in the same year and in a similar case, Afghanistan’s refugees because of war in 1979. These disasters are events that promoted the emergence of the “international disaster management” idea (Rosenthal, 2001).

Much like the CSOs, the role of international donors has also been criticized about its narrow relief-oriented approach. Instead of just giving aid for the postdisaster situation, such as food, water, shelter, or health care, now international institutions have started to have a more strategic approach to crisis management: The emphasis given to preparedness measures in operational considerations, the expansion of disaster management into prevention and mitigation issues, as well as the recognition of inherent linkages between disaster and development issues were further reflected in a number of disaster management manual issued during mid-1980s. UNICEF, UNHCR, The World Food Program, as well as larger global NGOs such as CARE, OXFAM, and Save the Children published emergency management manual. Organizations such as The International Committee of the Red Cross, and some bilateral emergency assistance organizations did the likewise during the same period. (Rosenthal, 2001, 318)

Since the 1980s, the importance of international disaster management has evolved. In 1980, International City Management Association (ICMA) conducted a survey about cities’ preparedness for disaster around the world. This survey motivated cities surveyed to improve the quality of their crisis management system (Kartez in Sylves, 1990). The more concrete and significant action was taken when The International Decade for Natural Disaster Reduction (IDNDR) institution was founded in 1989, and then became a formal part of the U.N. (Ozerdem, 2006). Besides coordinating many international disaster donors, IDNDR also has important duties including “reduc[ing] risk of calamities, promotion to apply scientific, technical and other professional abilities to disaster prevention efforts” (Coppola, 2006; Rosenthal, 2001). These international institutions have played a very significant role. The supercyclone at Orissa, India, in 1999 was an accurate example (Samal, 2005).

However, there are still some problems with the role of international donors in crisis, especially for developing countries. First, there is the relationship between international donors and the government where the disaster happened. Sometimes there are “confl icts of interest between government and international institutions” (Coppola; 2006, 531; Rosenthal 2001). The Nargis Cyclone of 2008 case is an example: because of the political tension between Burma’s government and the international community, the government refused aid. This kind of problem needs a high level of political reconciliation. The bottom line is good cooperation and relationships between international institutions and domestic government, which is extremely important. The second problem is related to the dependency of the people who receive aid from these international donors. To avoid this problem, international institutions need to use the more sustainable approaches rather than a charity approach when providing aid (Samal, 2005). By using an empowerment approach, international institutions eventually increase the capacity of community and local institutions, which, at the end of the day, will reduce the dependency of local elements.

Case studies

This section will describe how the four elements (government, media, civil society, and international institutions) play their roles in the real world. The first case study is Hurricane Katrina in 2005 in the United States, and the second is the Lapindo hot mud spurt from 2006 to the present in Indonesia. The reason I have chosen Hurricane Katrina is that there are so many studies about this crisis event, so the validity of the findings is stronger. The Lapindo mud is the opposite: qualifi ed reports and publications on this disaster have been hard to find. Hopefully, this article could attract wider attention from international communities and researchers to the crisis. The other reason I have chosen this disaster is not only because of the uniqueness of the disaster, but also the process of mitigation and response is still going on, so this paper could inspire the actors in the fi eld for better actions. Therefore, this case study is not an attempt to compare those two events, but rather to see how the role of four elements actually works in those two places.

Hurricane Katrina This calamity happened on August 29, 2005, in the Gulf Coast area. It struck three states, Louisiana, Mississippi, and Alabama. This disaster killed around fifteen hundred people and caused 1.2 million residents to migrate to another places. Fifteen to twenty feet of floodwater covered 80 percent of New Orleans and caused total economic losses of more than one hundred billion dollars, not to mention the amount of infrastructure, houses, and buildings that were destroyed (Johnson, 2006; Gerber in Pinkowski, 2008).

One of the crucial questions is whether the crisis gave opportunity to a better situation after reconstruction. A group of scientists raised an important argument a couple months after Katrina, which emphasized that the trajectory of reconstruction should turn New Orleans into a safer and better city. In order to make the city safer, the reconstruction program should rebuild the new levees, a make limited effort to make buildings flood and wind resistant, and prepare a new evacuation plan. In order to make the city better, reconstruction trajectory should provide new and better schools, parks, houses, ports, infrastructure, tourism, economy, and investments (Kates et al, 2006).

However, three years after the disaster the accomplishments of the program still fell far short of the ideal plan. The Henry J. Kaiser Family Foundation released its survey about the evaluation three years after reconstruction. This survey found that 40 percent of the respondents said their lives were still disrupted, and more than 70 percent said there had been little or no progress in making housing affordable or in controlling crime, which they view as the city’s top problem. The survey also showed majorities saw little or no progress in making medical services available, strengthening public schools, attracting jobs, or rebuilding neighborhoods. The results of this survey are largely consistent with an index of progress compiled by the Brookings Institution and the Greater New Orleans Community Data Center. Their third-year report found that the greater New Orleans area has recovered, but that recovery trends slowed during 2008. Tens of thousands of blighted properties, a lack of affordable housing, and thin public services continue to plague the city. Rents are 46 percent higher than before the storm (New York Times, 2008).

The performance of the government’s role in Katrina was generally bad, especially during the crisis. Government did have the crisis management system (FEMA), but the system did not work as it should have. One of the failures of the system was related to preparedness. The federal government did not build proper levees for a level 5 hurricane, while many people had warned about the possibility of that level of hurricane happening in the area (Farazmand, 2007; Sylvester, 2007). The failure of the system can also be found in the inconsistency of the response system and poor planning.

According to national standards, the scale of this hurricane was categorized as an incident of national significance (INS) that should have automatically gotten a federal-level response. In fact, victims had to wait five days to get a federal government response (Farazmand, 2007; Gerber in Pinkowski, 2008). In this case, government failed to balance its bureaucratic norm with emergent norm. The situation required government to react quickly, as the victims could not wait for a long and bureaucratic federal government’s decision-making process. In this situation, federal government should have used a recognition-primed strategy both in making the decision of sending aid to New Orleans and in reacting to the actual problem on the ground. In so doing, sending leaders who have a strong exposure to such a situation is more important than just sending those who have a good political relationship to the central power.

In general, the breakdown of the decision-making system at all levels was because FEMA was politicized. FEMA had been politicized by the federal government and by President Bush by “putting his close colleague as the leader without thoroughly considering the capacity” (Greber in Pinkowski, 2008, 71). The impact of this decision was that the capability of leadership of this institution became very poor. Following this weakness, FEMA also proved to have failed to manage the balance between the bureaucratic norm and emergent norm. The fact that federal assistance came five days after the disaster was proof that there was a sense of a lack of urgency. The White House took too much time to decide whether or not a federal government intervention was needed. The impact was the government’s failure to speed relief to thousands of victims at the Louisiana Superdome in New Orleans, or to rescue residents (Washington Post, 2005).

The role of international donors, however, had a better result in this disaster. It’s true that there was poor coordination among them, but that was more likely due to government nonintervention. Total aid from international donors was around U.S. one billion dollars, not to mention in-kind help (Richard in Ferris, 2008; Coppola, 2006).

The role of CSOs was quite interesting because there were some contradictions. The CSOs, such as NGOs or church groups, performed well because they addressed basic needs. The government relied on these CSOs, especially in immediate service delivery to the victims (Richard in Ferris, 2008). However, in the areas that have stronger local CSOs, the process of rehabilitation went more slowly than in areas that have weaker ones. Providing shelter was the most important thing in rehabilitation; the research found that it was easier to put shelters in the areas in which local communities were weaker. On the other hand, it was more difficult to put shelters in the stronger local community areas.

“You can’t rebuild a community if you are taking sacred parts of that community and destroying it” (quoted in Varney and Carr, 2005). New Orleans Councilman Jay Batt put up campaign posters with an image of a temporary FEMA trailer crossed out by a red circle with a line through it next to the heading, “He protected the integrity of neighbourhoods in district A by not allowing trailers to be placed in parks and playgrounds where our children play” (Batt in Aldrich, 2006, 380).

Media had a very important role during the aftermath of Hurricane Katrina. ABC’s Good Morning America on September 1, 2005, for instance, aired a statement from President Bush that said that nobody anticipated the breach of the levees. After that statement, the program showed the old news from the Times-Picayune Special Report on June 23, 2002, which said that the levees in New Orleans were not strong enough to handle category 4 or category 5 hurricanes. The other big media, NBC, also had concerns about the levees long before the calamity happened (Sylvester, 2007; Gerber in Pinkowski, 2008). The interesting part of the role of media was the different perspectives between the local and national levels of media. Local media, since they were also victims, tell the story about the suffering and survival of the people, while national media, such as the New York Times or Dallas Morning , “publish a regional and national perspective and were instrumental in keeping the country interested in displaced people from the Gulf Coast” (Sylvester, 2007).

Lapindo mud Since May 29, 2006, hot mud has been spurting at up to 150,000 cubic meters per day at Sidoarjo, East Java, Indonesia (Normile, 2007). The hot mud has covered four villages, killed thirteen people, and displaced fi fty thousand inhabitants in the villages (Daily News, 2008). The location of the mud explosion is right in the center of the main transportation route of the East Java province. This disaster has disrupted the connection of the southern part and the eastern part of the province to the northern part. Therefore, the victims of the disaster are not only people who live in the location of disaster, but also people who live in the south and east part of the province. For example, from Surabaya (the capital of the province) to Malang (the second-largest city in the province), before the disaster it only took 1.5 hours driving, but now it could take more than four hours. “The disaster has been happening for two years, but the transportation problem is still the same, the hot mud still spurting, more sadly, thousands of people still live in tents” (Normile, 2008).

For the Lapindo mud explosion in East Java, Indonesia, there are two things that made this disaster unique. The first is this kind of disaster is very rare—volcanic mud spurting from the ground without any clear explanation. Second, regarding the unclear explanation of the cause, since the beginning there has been no agreement whether it is a natural or man-made disaster. Therefore, the policy actions and crisis management have been controversial.

Geologists all around the world have not yet clearly figured out the cause of this disaster. Richard Davies from Durham University said that a gas well from Lapindo Brantas Inc. is the cause. Some Indonesian scientists argued that it was caused by a magnitude 6.3 earthquake at Yogyakarta (280 km from the location) two days before the spurting started. This theory is refuted by Michael Manga, a geologist from Berkeley University, who said that the earthquake was too far and too small to cause this sort of phenomenon. On the other hand, Adriano Mazzini, a geologist from Oslo University, criticizes the scientists (Davies and Manga) who have never gone to the location. Mazzini said that either the earthquake (natural) or Lapindo Inc.’s mistakes (man-made) are still possibilities. Finally, James Mori, a seismologist from Tokyo University, says researchers cannot determine whether the volcano would have formed without drilling (Normile, 2008). However, an Indonesian court has ruled that this disaster is a natural disaster not caused by Lapindo Inc.’s mining activity. This decision has raised controversy since the majority shareholder of the company is Aburizal Bakrie, who is also the minister of welfare of Indonesia and a very influential elite of the Golkar Party, which is one of the largest political parties in the country.

The answer to the question of whether or not the crisis could become a triggering opportunity for improvement of the system is obviously no. The neighborhood has already been buried with mud, and there is no way to bring back the people to their houses and rebuild the area. It is already hard for government to control the stream of the mud flood, not to mention to drain the five meters of frozen mud from the villages. Moreover, as mentioned earlier, three years after the disaster started, thousands of victims still live in tents.

The role of government in this case is actually quite problematic. It is unclear whether or not to declare that the disaster is Lapindo Inc.’s responsibility or declare it a national natural disaster (so the government is held accountable). This position became more complicated when many people tried to connect this problem with political issues. President Susilo Bambang Yudhoyono (SBY) in the early part of 2007 had ordered Lapindo Inc. to pay $420 million. From that order, it seemed that President SBY was quite sure that the cause of the disaster was the gas well of Lapindo Inc. But then the Indonesian court ruled that it is a natural disaster. All aspects of the disaster came under the government’s responsibility with this move.

The central government formed a national body called “Badan Penanggulangan Lumpur Sidoarjo” (BPLS) on September 8, 2007, whose main duty is to handle all impacts of this volcanic mud spurt (Petroleum Watch, 2008). Along this line, the provincial-level government made a plan to actually deal with crisis. There are three actions that the provincial government will focus on, which are stemming the fl ow, minimizing social impact, and reducing environmental destruction. All of the details of these main goals were also well explained in the action plan document (UNDAC, 2006).

It is difficult to categorize this disaster into crises’ typology, for there are no such typologies that it can be fi t into because the beginning of the volcanic mud spurting was fast, but the explosion is still going on more than two years later (150,000 cubic meters per day). However, regardless of the many aspects that make this disaster unique, it seems that “slow burning” is the closest type to the crisis. Therefore, government actually have had quite enough time to rule based on analytical decision-making strategy in terms of coping with this crisis. Though, it does not mean that government has to spend three years only to give compensation to the victims. By April 2009, government still could not find the agreement of compensation between BPLS, Lapindo Inc., and the victims (Kompas, 2009). As a result, thousands of people will still live in tents for quite a while without clear certainty of the future.

The role of CSOs in this crisis can be categorized in several ways. An Indonesian NGO that engages in environmental issues, WALHI, fi led a suit against Lapindo Inc., demanding that the company take responsibility (Normile, 2008). Mass organizations and people around the area help the victims by providing food and nonfood necessities (UNDAC, 2006). Local communities and the victims, with some help from outsider activists, organize themselves, especially to push government and the company to give them compensation. This showed how significant a role the civil society played, although there are not yet positive results of this effort.

The media also did not help much in this crisis management. In fact, the biggest local media, Jawa Pos, and the largest national-level media, Kompas , do not publish articles about this disaster intensively anymore. The public seems to have forgotten about the disaster already. Apparently, there are still thousands of people who suffer every single day, and have been for more than two years. The media acts only based on market demand, so after a while their audience gets bored and they have to find another issue to write about. The absence of this media consistency does not help for crisis recovery, especially for the victims who are asking for justice.

The role of international donors has only been by experts, those who have done research about the cause of the disaster, and technical assistance from the U.N. On June 20, 2008, the Indonesian Ministry of Environment made a request for technical assistance to the United Nations Office of Humanitarian Affairs (OCHA), and then OCHA deployed a United Nations Disaster Assessment and Coordination (UNDAC) team from June 25 to July 6, 2006. The governments of Switzerland and the Netherlands provided the experts for this follow-up mission. Besides those institutions, there are no international institutions at all that help victims and provide basic needs. “No international organizations have been involved in the response activities of this disaster” (UNDAC, 2006).

These two cases (Katrina and Lapindo mud) prove that it is true that crises challenge basic structures and values of society. Hurricane Katrina displaced 1.2 million people, while Lapindo mud caused fi fty thousand people to lose their land and properties. Both cases have taken a long time to move toward the precrisis situations and recover. This poor management of crisis occurred in the first case in a very wealthy country, and in the second in a developing country. Therefore, practitioners need to improve their skills to cope with crises, especially in public administration. The need to study crisis management more deeply is clear.

In the sense of typology of crisis, Hurricane Katrina fell into “long shadow” disaster typology because the speed of crisis development was fast and the speed of crisis termination has been slow. It is difficult to categorize the Lapindo mud case into any crisis type, but “slow-burning” seems to be the closest one. By this categorization, it seems that government has had plenty of time to react, because none of them fall into “fast-burning” crisis. However, it does not mean that the crises were easier to cope with. The cases studies provide very good examples of failures of crisis management even though the nature of the crisis did not give both governments severe time pressure.

Government has played an important role in both cases. In the Katrina case, FEMA had been politicized, and it affected the bad performance of the institution during the crisis. In the Lapindo mud case, political nuance appeared because Aburizal Bakrie, as majority shareholder of the company, is one of the most influential political leaders in the country. Another aspect of crisis politicization results from the fact that the crisis is very politically attractive, as it gets a great deal of attention from the public. Politicization of the crises only resulted from the bad learning process of the two governments, as shown by the slow rehabilitation process, which after more than two years has not allowed recovery to precrisis condition. Therefore, in the future government has to avoid politicization of a crisis, no matter how attractive the crisis is for lifting up the political popularity of certain parties.

The role of media is quite different in both cases. In the Lapindo mud case, the media only perceives the disaster like regular news—after the audience got bored with the issue, the media stopped publishing this news even though the problem is not solved yet. In the Katrina case, the media gave good contributions, not only motivating a better recovery process, but also the media were actively giving warning long before the crisis happened. In this context, the Katrina case is the best practice that media should follow.

The role of CSOs in the Katrina case was interesting because there was a variation of contributions among some kinds of CSOs. NGOs and religious groups contributed very well in providing basic needs to the victims, while local communities, the stronger ones, tended to be resistant to certain crisis response programs. Nevertheless, in both cases, there was no good community-based disaster management (CBDM) implemented. In the future, the involvement of CSOs in crisis management should enable local communities to become directly involved in the formulation, implementation, and evaluation of crisis public policy.

As reported by UNDAC (2006), there has been no aid at all from international institutions in the Lapindo mud case, which is very different from the Hurricane Katrina case, where there was much aid from international institutions (more than one billion dollars) even though government (FEMA) failed in coordinating them. It might be true that in man-made crises (such as in the Lapindo mud case) the parties who cause the crises should be held accountable, so international institutions do not need to take part. However, completely ignoring the case is not the right decision to make. The very limited attention of international institutions in crisis, such as what has been happening in the Lapindo mud case, should not happen in the future.

FADILLAH PUTRA earned his second master’s degree in Local Government and Economic Development at LBJ School of Public Affairs The University of Texas at Austin, in August 2009. In January 2001, he earned a Master’s of Public Administration degree at the Post Graduate School of Brawijaya University in Indonesia and also received a Bachelor of Public Administration degree at the same university in September 1998. He has written six books on the topics of public administration, public policy, and local government in Indonesia. Since 2000, he has been actively engaged in NGO activities related to local government capacity building, poverty reduction, and democratization. He was awarded a grant from International Fellowship Program (IFP) of the Ford Foundation in August 2006.

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