The performing State: reflection on an idea whose time has come but whose implementation has not
Kudo to Professor Allen Schick for presenting a technical paper on performance which is a page-turner as in the best tradition of successful thrillers where you crave to discover if the protagonist (a performing State) will survive at the end. There is the historical context of management fads (i.e. New Public Management and the Balance Scorecard) and the main players (developed, developing, transitional and emerging countries) are clearly depicted.
The paper is not new but still so relevant. It was presented at 24th annual meeting of OECD senior budget officials, held in Rome in 2003. It talks about pathways to performance dealing with: (i) Performance as ethic; (ii) Performance as focus; (iii) Performance as measurement; (iv) Performance as management; (v) Performance as contract; (vi) Performance as right.
On performance as contract he provides the ultimate explanation on the true value of management contracts in public administration:
‘Clearly, contracts within government are not real contracts. Nevertheless, these formal agreements may enhance performance by spurring the parties to the contract to focus on results. In fact, when this writer questioned senior managers in New Zealand and other countries, almost all referred to the relationships facilitated by the contract rather than to its formal terms. In other words, despite their formality, within government agreements are actually relational contracts. In contrast to formal contracts, which are discrete agreements bounded by fixed terms, relational contracts are on-going; they extend as long as the parties to the relationship continue to interact. These contracts derive their force from the incentives of the parties to behave in a co-operative, trustworthy manner because they are interdependent. Ministers need managers to produce public services, managers need ministers to get them resources and political support. Writing and implementing a formal contract may strengthen rather than displace this relationship by giving the two sides periodic opportunities to discuss progress and problems. Managers gain access to ministers, ministers gain opportunity to obtain better information on results. When the relationship works well, the parties may review progress under the contract, but they certainly may discuss other matters affecting the relationship as well. They are not confined to the matters formally specified in the agreement’.
I worked in several ministries in different countries and where these relational contracts were working, I felt that performance budgeting was a meaningful management tool. Two countries very much separated by their geographical and economic size but united (mutatis mutandis) in this aspect are Albania and Brazil.
