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Equity Or Efficiency? Explaining Public Officials' Values in European Countries 1

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Equity Or Efficiency? Explaining Public Officials' Values in European Countries 1 EQUITY OR EFFICIENCY? EXPLAINING PUBLIC OFFICIALS’ VALUES IN EUROPEAN COUNTRIES 1 PAPER IN PROGRESS. PLEASE DO NOT CITE Marcos Fernández-Gutiérrez & Steven Van de Walle 1 The research leading to these results has received funding from the European Union’s Seventh Framework Programme under grant agreement No. 266887 (Project COCOPS), Socio-economic Sciences and Humanities. Public officials’ equity-efficiency trade-off EQUITY OR EFFICIENCY? EXPLAINING PUBLIC OFFICIALS’ VALUES IN EUROPEAN COUNTRIES Abstract This paper analyses the value trade-offs leading public servants make in European counties. Top civil servants’ views, attitudes and behaviours exemplify the values public institutions cherish. By studying the values held by top civil servants one can deduct the dominant value approaches of public institutions. Using the 17- country COCOPS population study among central government top civil servants, this paper maps and explains the value trade-offs they make (Hammerschmid et al., 2016). More in particular, the paper analyses the classic equity- efficiency value trade-off (Okun, 1975). The paper will first provide a descriptive picture of top civil servants’ value preferences across 17 European countries. It will then try to explain differences by looking at the context within which these civil servants work. To explain civil servants’ personal position between equity and efficiency, we explore four distinct hypotheses. Keywords: Public values, efficiency, equity, top civil servant 2 Public officials’ equity-efficiency trade-off PUBLIC SERVICE VALUES: FACTORS EXPLAINING PUBLIC OFFICIALS’ VIEWS ON EQUITY IN EUROPEAN COUNTRIES Introduction Conflicting and incommensurable values have received a lot of attention in philosophy and economics, but less so in public administration where attention is limited to a fairly small group of scholars interested in public values. Yet, attention for public values appear to be on the rise (Box, 2015), and substantial progress has been made in relation to mapping, categorising and conceptualising public values (DeForest Molina and McKeown, 2012; Van der Wal & Huberts, 2008; Van Wart, 1998). This paper adds to the body of work on public values body by using data from 14 different countries. Easton famously described politics as the authoritative allocation of values (Easton, 1965). Government has to make choices between conflicting values. These tensions between values can be found everywhere within the public sector, especially when there is allocation and redistribution. The ‘uneasy compromises’ between values are represented in institutional arrangements (Okun: 1975: 1). Public management is about managing contradictions (Greener, 2013; Pollitt and Bouckaert, 2014). Civil servants want to achieve values and objectives that may be incompatible (De Graaf et al., 2014; Andrews and Van de Walle, 2013; Andrews & Entwistle 2010) and thus have to choose in daily administrative practice. This paper analyses the value trade-offs top civil servants make, and more in particular the equity- efficiency trade-off, and the determinants of this trade-off. We follow Molina’s definition of value – ‘as a complex cognitive-emotional preference for some object, quality, or characteristic that serves as either a means to an end (instrumental value) or an end in itself (terminal value).’(Molina, 2015: 50). The equity-efficiency trade-off The efficiency-equity trade-off is one the perennial questions in the social sciences. A trade- off refers to situation where one has to balance or choose between two objectives that are opposite or that cannot be had at the same time (Merriam Webster dictionary). If one goes up, the other goes down. In a trade-off situation, two objectives cannot be achieved simultaneously. Examples of the efficiency-equity trade-off can for instance be found in the allocation of landing slots to planes, or in the order of serving clients in an administrative office, where it may be more efficient not to allocate in order of appearance. The issue is also very salient in school reforms, where officials have to find a balance between school efficiency improvements and avoiding social segregation. 3 Public officials’ equity-efficiency trade-off The academic beginnings of the debate on the efficiency-equity trade-off have been attributed by Le Grand (1990) to Barry (1965), who was discussing the evaluation of social outcomes in politics and policy. Barry argues that, if there’s for someone a trade-off between equity and efficiency, this means that ‘If it’s a question of choosing between efficiency and equity, it takes a large potential increase in equity to make him accept a potential reduction in efficiency (and vice versa)’ (Barry, 1965: 7). While different concepts, equity and equality are often used interchangeably. Equality refers to a situation where everyone is given equal resources (here, public services), whereas with equity, the resources are related to need, in order to achieve an equality of outcomes. Okun’s 1975 ‘Equality and Efficiency: The Big Tradeoff’ is probably the best known treatise on the efficiency-equity trade-off. Okun discussed the observation that society often prefers equality-based approaches over market-based efficiency-oriented ones; and that checks on markets are common and sometimes desirable. He argues that there are parts in society where society opts for more equality, thereby compromising efficiency (Okun: 1975: 5). The opposite is not discussed in great length in Okun’s book, because, addressing economists, he assumed economists would be familiar with such market logic already. Markets pursue efficiency ‘But that pursuit of efficiency necessarily created inequalities. And hence society faces a tradeoff between equality and efficiency’ (Okun, 1975: 1). In other words – ‘We can’t have our cake of market efficiency and share it equally’ (Okun:, 1975: 2) The book is written with distributive policies in mind, and introduced the image of a ‘leaky bucket’. The leaky bucket refers to efficiency losses that occur during redistribution aimed at reducing inequality. These efficiency losses are due to changes in incentives following the redistribution and administrative costs involved in redistribution (Okun: 1975: 92). For Okun, the size of the leak – or how much efficiency loss one is willing to tolerate to increase equality, is a matter of taste. Okun compared a Rawls who would always prefer equality no matter how large the leak, to a Friedman who would give priority to efficiency, and would have a very low tolerance for leaks (Okun, 1975: 92). This article contributes to explaining differences in this taste among key policy makers: Central government top civil servants in 14 European countries. Okun’s equality/efficiency trade-off has become a classic, but not everyone agrees there is actually a trade-off. Osberg (1995), for instance, refers to the observation that countries with high equality also tend to grow fast, and that hence the trade-off probably does not exist. Le Grand elaborated a convincing argument ‘that the notion of a trade-off is meaningless. For acceptance of this interpretation implies that efficiency can be defined only in relation to the ability of forms of social and economic organization to attain their primary objectives and that therefore efficiency cannot itself be one of those primary objectives. In this sense, if equity is 4 Public officials’ equity-efficiency trade-off one of the objectives it is meaningless to talk of a trade-off (either in value or production) between equity and efficiency. Efficiency is not an objective in the sense that equity is an objective; rather, it is a secondary objective that only acquires meaning with reference to primary objectives such as equity’ (Le Grand, 1990: 560). Trade-offs, he argues, ‘can only occur between [..] primary objectives, of which efficiency is not one’ (199: 566). He (Le Grand, 1990) further argues that when people talk about the equity-efficiency trade-off, they probably don’t mean efficiency in its technical sense, but instead think about economic growth or Pareto-optimality. Efficiency as a value following the NPM? Technically, Le Grand is right. Yet, Rutgers and van der Meer (2010) argue that efficiency has always had a more substantive meaning in public administration (mainly up till the 1960s) beyond the mere technical one (as also used in Le Grand’s argument). Especially in recent decades, we would argue that efficiency in the public sector has also become a primary objective of itself. Efficiency improvements have been at the core of the NPM, and the big NPM reforms such as consumerism, agencification, performance management, or competition were all implemented with an aim of improving efficiency (Andrews, 2011: 282). Bozeman similarly posits the primacy of efficiency within the NPM: ‘It seems clear that, according to almost all descriptions of NPM, the driving values are performance and efficiency, while fairness, by any definition, rarely received much emphasis in NPM’ (Bozeman, 2007: 80). In the same book/article, he argues: ‘The values embodied in privatization and NPM […] are efficiency and effectiveness values, not equity, fairness, or communal values’ (Bozeman, 2007: 82). NPM’s focus on efficiency in this way stands in sharp contrast to e.g. the New Public Administration in the 1970s, where social equity was the core value (Box, 2015). Efficiency is a core administrative value (Andrews & Entwistle, 2013; Rutgers and van der Meer, 2010). The traditional bureaucratic model
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