Chapter 6. Public Sector Governance: Change, Crisis and Dysfunction

• Pages: 147-169

CHAPTER 6

PUBLIC SECTOR GOVERNANCE

Change, crisis and dysfunction

DERRICK MCKOY

INTRODUCTION

Stripped of fanciful theories and reduced to its essential elements, governance is about

decision-making. This is as true for agencies and authorities in the public sector as it is

for companies in the private sector. It is as true for the board of directors of a private

company as it is for the board of governors of a trade union. In short, it is not possible

to have an administrative structure without having governance. One is a necessary

adjunct to the other. The critical questions are, in our organisations, how should we go

about decision-making processes? Who and what should we take into consideration?

What issues should we consider? In some circumstances, the concern may well be what

issues should defi nitely not be considered as a part of the decision-making process.

While all organisations require governance, not all must go through the same decision-

making process. A governance system that works well for one organisation may be

quite unsuitable for another. The decision-making processes that should govern the

conduct of, say, the governors of the Bank of Jamaica cannot be appropriate for the

management of a hair salon.

PUBLIC SECTOR GOVERNANCE

Decision-making in the public sector, or public sector governance, may be more com-

plicated and more demanding than private sector governance. This is true even when

we confi ne our concerns only to the corporate level. There are many more stakehold-

ers that must be taken into account in the public sector than in the private sector.

Stakeholder management is a challenging responsibility for any organisation, but even

with the most liberal interpretation of that responsibility, private sector stakeholding

can be defi ned with reasonable precision. Most importantly, private sector executive

o cers can with some confi dence defi ne those who are not stakeholders. In the public

sector, on the other hand, we all have a stake in the governance of the public enter-

prise. Our interests are not defi ned by ownership, contract or even citizenship, but by

the mere fact that we share the public sector neighbourhood. Our very existence in the

polity gives us a stakeholding in the management of public resources.

Administrative structures are generally managed by agents. This is so for most of

the private sector, but necessarily so for all of the public sector. In relation to the gov-

ernance of public resources in Jamaica, the Crown does very little in the personality

of Her Majesty but does a great deal in governing the state through the host of agents

representing the Crown. A commonly held assumption is that the public sector govern-

ance structures in developing economies like Jamaica’s are inadequate for the numer-

ous responsibilities that public sector agencies must discharge. This belief applies to

148 Commonwealth Caribbean Corporate Governance

all sectors of public services, but especially so to new emerging executive agencies and

private companies now used to discharge public functions. As Thomas Sowell asserted:

‘Some things are believed because they are demonstrably true. But many other things

are believed because they are consistent with a widely held vision of the world – and

this vision is accepted as a substitute for facts.’1 So it is that public sector governance is

considered to be generally defective because so often it is asserted that it is.

PUBLIC BODIES AND PUBLIC OFFICE

Although there is some debate as to what a public body is or who holds a public o ce,

it must be acknowledged that a broad range of persons are subject to the public sec-

tor rules. The question is particularly vexing when it is considered that, in what is

now described as the new public management, more private individuals and fi rms

are engaged to do the work of public o cers.2 In R v Bowden3 the Court of Appeal

in England had held that the common law o ence of misconduct in a public o ce is

not limited to being committed by o cers or agents of the Crown, but applies gen-

erally to every person who is appointed to discharge a public duty. In Bowden, the

appellant was the chief building maintenance manager of a city council works depart-

ment and his responsibilities included, in addition to the management of subordinate

employees, ensuring that the department’s activities were within the approved budget.

While engaged in this capacity, the appellant dishonestly used the council’s employees

to refurbish premises that he let to one of his friends. Bowden was convicted in the

Crown Court on the charge of misconduct in a public o ce. On his appeal, Bowden

unsuccessfully contended that his appointment as chief building maintenance man-

ager to the city council was not a public o ce and as such he was not subject to the

rules that governed the public services.

The case of Bowden raised some interesting questions on the responsibility of o c-

ers of the new executive agencies introduced in consequence of the new public man-

agement now being pursued by some Commonwealth Caribbean states. In the Bowden

case, the department was a direct labour organisation, set up under Part III of the

UK Local Government, Planning and Land Act 1980. Under Bowden’s contract of

employment with the council, he was responsible for management and direction of

subordinate employees, accountable for the handling of money, and ensuring that his

department’s activities were within budget.4 In addition, it is also the statutory respon-

sibility for each local authority to ensure that its revenue from construction or main-

tenance works show such positive rate of return on the capital employed for carrying

out the works as the Secretary of State may direct.5 Bowden was not taken to task

1 T Sowell, Economic Facts and Fallacies (Basic Books 2008) vii.

2 See, eg, P Aucoin, The New Public Management: Canada in Comparative Perspective (IRPP 1995); E Ferlie

and others, The New Public Management in Action (Oxford University Press 1996).

3 [1996] 1 WLR 98.

4 ibid 100–101.

5 Local Government, Planning and Land Act 1980, s 16.