Chapter 7

Globalization and the rise of network governance

The world is changing—and changing fast! As public administration continues to evolve in the globalization era, many of the problems contemporary governments must confront domestically originate in countries and regions outside their borders. Constrained in their ability to directly tackle such problems at their foreign source, local public administrators must adapt to working in environments that are increasingly unstable and hence much less predictable. Indeed, a new era characterized by ‘unreason’ and ‘confusion’ where ‘no one is in charge’ is quickly eclipsing ‘rationalized’ processes that have characteristically been associated with the relatively stable nation-state-centric system.

Many of the administrative activities associated with public governance and administration, which traditionally fell under the control of nation-states, are now being carried out by loosely knit networks of governmental and non-governmental organizations (NGOs), private corporations, independent agencies, and citizen groups. Usually organized around a specific set of related policies or administrative issues or concerns, such international networks may include individuals and groups operating simultaneously at the local, regional, national, and international levels. Commonly referred to as ‘network governance’ or ‘governance by network’, the participation of multiple domestic and international actors can frustrate the efforts of sovereign governing authorities to successfully implement public policy. Forced to operate under such multifarious environments, contemporary public managers are compelled to develop new consensus-building skill sets in order to bring otherwise disparate sets of domestic and international groups together in the pursuit of collective goals. Let us look at some of these network approaches in more depth.

As we have discussed, the forces of globalization are compelling public administrators to direct their attention increasingly towards transnational forms of governance. Here again, traditional top–down organizational systems are poorly structured to address complex global problems and crises requiring international cooperation. In the last few decades loosely organized networks of public and private agencies operating through multiple layers of government have been playing an increasing role in public administration.

In network-governance-type systems, power and authority tends to be decentralized and dispersed among a variety of autonomous stakeholders operating beyond the scope and control of national governments. Organized around values, concerns, issues, and problems ranging from global climate change to human security, governing networks can vary widely in their size and scope. Flexible and fluid in their organizational structure, they allow participants to flow in-and-out of a network as circumstances change. In order to address a given terrorist threat emanating from abroad, for example, the United States Department of Homeland Security must communicate and coordinate with domestic organizations such as the FBI, CIA, NSA, and local police agencies as well as with international intelligence agencies such as INTERPOL. As circumstances surrounding the threat may change, new partnerships may be forged with other agencies and groups. Let us now look at some examples of how governing networks organized at the municipal, regional, and national levels have been particularly influential in addressing the climate change crisis (Box 11).

Box 11 Types of policy and administrative networks

1. Informational: Members share ideas and knowledge, which they use to inform their own work in their home organizations.
2. Developmental: Members exchange information and ideas. Educational resources provided to assist employees develop capacities to improve performance.
3. Outreach: In addition to helping members engage in informational and developmental activities, network members share client contact information and resource opportunities.
4. Action: Members work to alter their home organization’s policies and routines to help achieve the network’s common goals. Formal collaborations include sharing of funds, service delivery, or development of common resources for the network’s future use.

Source: Robert Agranoff, Managing Within Networks: Adding Value to Public Organizations, p. 10.

Today the majority of the world’s seven billion people live in cities and other large metropolitan areas. Not surprisingly, the world’s largest cities are responsible for producing most of the world’s waste and pollution. More specifically, large metropolitan regions now collectively produce more than two thirds of the world’s CO2 emissions—the main cause of global climate change. Encumbered by the large size of their bureaucracies and onerous political processes, national governments have characteristically been slow to respond with substantive policy changes and administrative action. Diminishing national power associated with recent globalization trends has emboldened municipal and regional agencies across the world to assume a leading role in reducing their aggregate CO2 levels. A number of local leaders and administrators representing the world’s largest cities have been collaborating through organizations known as ‘transnational municipal networks’ (TMNs) to accomplish this goal. Comprised of subnational governments that have partnered with international organizations and private corporations, politically powerful TMNs, such as the World Association of Major Metropolises, and international development organizations, such as the United Nations Conference on Environment and Development (UNCED), have been highly successful in mobilizing cross-national efforts to address climate change and related challenges confronting major urban areas. Originating with only three cities in 1992, UNCED had swelled during less than two decades to over one hundred members. Keen that his own city should take the lead on this pressing issue, London’s mayor, Ken Livingstone, founded a consortium of major municipalities that later become known as the C40. Today one of the most influential municipal-based networks governing the issue of climate change, the C40 employs a variety of market and planning instruments to circumvent traditionally rigid and formal state-centric bureaucracies. Having grown to nearly seventy cities of various sizes and scope, the C40 successfully collaborated with the World Bank in 2011 to establish ‘a common standard for measuring greenhouse gas emissions’. The C40 claimed victory when these standards were adopted by the Bank’s Climate Investment Fund to help better inform their funding and investment decisions.

City leaders are not the only ones who have been tapping into international networks to combat the causes of global climate change. State and regional leaders in the United States, for example, have initiated governing networks of their own. Determined to make timely and substantive policy strides to reduce CO2 levels in the Western region of the United States, Arizona Governor Janet Napolitano boldly proclaimed that ‘in the absence of meaningful federal action, it is up to the states to take action to address climate change and reduce greenhouse gas emissions in the country’. Alarmed that Western states were ‘being particularly hard hit by the effects of climate change’ the Arizona leader joined five other regional governors from California, Oregon, New Mexico, and Washington in imposing strict regional limits on greenhouse gas emissions. To make sure that more heavily industrialized states were treated proportionately, the enterprising group adopted a regional ‘cap and trade’ scheme which would allow member states to purchase and sell CO2 emissions credits that kept within these regional limits. In 2009, California’s Governor Arnold Schwarzenegger hosted a global climate change summit in cooperation with the United Nations Development Programme (UNDP) and the United Nations Environment Programme (UNEP) to develop cooperative initiatives to promote sustainable energy production and use. The conference was impressively attended by more than thirty governors, local officials, business leaders, and policy experts representing more than seventy states and provinces from all over the world.

International networks are becoming important players in transnational water governance in the developing world as well. The overexploitation and excessive contamination of vital water sources has created public health and sustainability crises in parts of Asia, Africa, and Latin America. In its inaugural Water Development Report released in 2003, the United Nations pronounced that the ‘water crisis is essentially a crisis of governance and societies are facing a number of social, economic and political challenges on how to govern water more effectively’. Relatedly, the World Summit on Sustainable Development emphasized the importance of developing private–public sector partnerships to carry out the administrative functions related to the regulation, maintenance, and distribution of essential water resources.

Over the last two decades India’s national government has undertaken bold privatization initiatives to improve water management throughout the country. As part of this effort, the country’s federal and state governments have been partnering with international financial institutions (such as the World Bank and Asian Development Bank), private sector firms, and NGOs. In a monumental effort to modernize the country’s antiquated water infrastructure, the Central Ministry of Urban Development eliminated protectionist barriers against Foreign Direct Investment (FDI) funding for new capital projects and removed import restrictions on foreign-sourced potable water facilities and equipment. Relatedly, the Confederation of Indian Industry (CII) and the Indian Business Alliance on Water (IBAW) have been working collaboratively with international agencies such as the UNDP and the United States Agency for International Development (USAID) in broadening business-sector participation and engagement. India’s central government has simultaneously been working with international expert consultants operating out of Geneva, Stockholm, and Washington, DC, to provide much needed technical and administrative expertise related to the monitoring and distribution of potable water.

Let us wind up our discussion on network governance with a brief examination of how information technologies have been shaping new patterns of administrative processes. Governments around the globe have been adopting new information and communication technologies (ICTs) to improve administrative efficiency consistent with NPM principles as well as strengthen citizen–government relationships in line with democratic values emphasized by the NPS. The phenomenon known popularly as ‘e-governance’ is reshaping public administration as we have known it. In its general usage, the term ‘e-governance’ refers to the various uses of information technology related to public sector governance. Relatedly, management experts Grant and Chau suggest that the core purposes of e-governance are ‘(1) to develop and deliver high quality, seamless, and integrated public services; (2) to enable effective constituent relationship management; and (3) to support the economic and social development goals of citizens, businesses, and civil society at local, state, national, and international levels’.

Recognizing that its industrial competitiveness was dependent upon creating continuous and unlimited access to publicly maintained sources of information, in 2000 the Swedish government passed a historic law promising ‘An Information Society for All’. In an effort to dismantle administrative divides between organizations, the Swedish Public Management Agency adopted a comprehensive ICT programme to transform traditional hierarchical public agencies into so-called ‘e-networked’ open agencies. Today, national and local governments all over the industrialized world have followed Sweden’s lead by investing heavily in e-governance infrastructure to promote open access to public information resulting in improved democratic oversight and accountability. As a result, citizens enjoy virtually unlimited access to public records and official government documents such as property tax records, historical maps, minutes from public hearings, and public employee salaries.

Managing and protecting the personal data of citizens contained within many public documents, however, has proven to be a daunting challenge for administrators operating at all levels of government. Integrating separate sources of public information and making them widely available can pose serious threats to personal privacy. A number of countries have responded by passing strict laws governing how public administrators may handle, transmit, share, store, and access certain kinds of sensitive information. At the same time, as noted earlier, in many specific instances it is essential that public employees and citizens alike are afforded access to vast information systems and databases managed by public sector organizations. Consequently, these systems are particularly vulnerable to attacks initiated by Internet hackers and criminal networks. Indeed, untold amounts of taxpayer dollars and countless manpower hours are now expended on security systems and employee data management training to reduce these threats. Criminal attacks on public agency data systems are costing countries and their subnational governments hundreds of millions of dollars per year.

In various forms and guises, governing networks have been playing a major role in public administration. The notion of the ‘modern state’, as established at Westphalia, and its traditional means and methods of providing public services are being redefined. New forms of public–private ‘collaborative’ relationships have been emerging in its place. A new breed of reflective public managers must be groomed with new skill sets if they are to lead their organizations through ever-shifting global environments. As we have seen, governing networks can serve a number of important functions in a democratic society. Innovation, for example, is often facilitated through supplemental knowledge and expertise through the participation of institutions and individuals that operate outside of the official offices of government. Moreover, owing to their fluid and flexible organizational structure, networks can adapt and respond quickly to pressing problems immediately as they arise. At the same time, however, given their highly complex and decentralized structure, organizational goals and objectives can become blurred and convoluted. Moreover, official oversight of public goods and services, formally provided by governments, can no longer be guaranteed when administrative processes are transferred to either the private sector or semi-public institutions. With government no longer at the helm to steer the policy and administrative process, public accountability and responsibility can easily be sacrificed.