In many western states the preference for policy implementation by core government agencies has changed in favour of alternative arrangements such as contracting out, privatization or the creation of quasi-autonomous non-governmental organizations. This study focusses on the proliferation of these so-called quangos (Barker, 1982). LeGrand and Bartlett (1993:7) predict that, from 1990 on, the provision of public goods and services will be very different than in earlier decades. Under the old system governments owned, funded and provided public services through government bureaucracy. In the new system, although still paying for the services, governments will no longer provide them. Quangos will be charged with this task, operating at arms length of the government. Instead of a bureaucracy, we will have a quangocracy. This process is labelled quangocratization,1 by analogy to bureaucratization (Hood, 1984).
Quangocratization can be viewed as one of the most recent stages of state development in the western world. Modern-day government is characterized by the replacement of the central, hierarchical structure with a complex network of organizations with which governments jointly develop, implement and evaluate policies.
This chapter gives an introduction to quangocratization. First, a theoretical perspective is offered on the rise of this phenomenon. Then, I will go into the definition of quangos. Next, the assumptions underlying politicians preference for quangos are analysed. Some previous research findings are presented as well as some theories on quangos. To conclude this chapter, the central research questions are presented, along with the outline of the book.
State Development and Quangocratization
According to North (1981:2032), no analysis of state development can be meaningful if no attention is paid to the distribution (i.e., the allocation) of property rights (see also Hardin, 1997). Property rights are broadly defined as the right to use assets and resources in any way actors see fit (Eggertson, 1990:3340). The right to walk about freely, to earn an income, to own a house or land, to be safe from violence in the streets, to get an education, and to speak ones mind all can be considered examples of the rights individuals have in contemporary western societies.
However, the enforcement of rights is not always easy. Take, for example, the right to safety, for which an army and a police force are necessary. Such provisions are difficult, if not impossible, to establish by an individual alone. Also, rights are often difficult to realise for all individuals at the same time, because advantages to one individual may mean a disadvantage to another. Collective goods, such as national security, will not be optimally provided by the market, due to two properties of these goods (Mueller, 1989:11). First, jointness of supply, which means that production costs are more or less fixed. Addition of one consumer will not lead to additional production costs. And second, non-exclusiveness which means the impossibility to exclude individuals from consumption of the good.
A well-known example to illustrate the properties of collective goods is national defence (see Stiglitz, 1988:75). The cost of defending a country of one million individuals or a country of one million and one are the same (jointness of supply), and when national defence is successful all inhabitants benefit from it (non-exclusiveness). This example also shows why individuals are not easily prepared to invest in collective goods. If you invest, others who do not invest may benefit as well. You can also acquire these goods without investing in them, therefore, individuals are disinclined to invest. This phenomenon is known as the free-rider problem (cf. Hendrikse, 1993:144) or the problem of collective action (see Olson, 1965; Coleman, 1990:937938; Ostrom & Walker, 1997). However, no investments means no provision of collective goods and no enforcement of citizens rights.
One way to solve the problem of collective action is to establish an overarching authority (a ruler; North, 1981), for example, a sovereign or a group of representatives. Todays overarching authority is usually referred to as the government. It acts on behalf of all individuals (constituents; North, 1981) and establishes the conditions that enable people to exercise their rights. The following example illustrates this (for more examples see De Swaan, 1989):
In the Netherlands in the nineteenth century, waterworks and sewerage were initially constructed by private entreprises commissioned by prosperous citizens. However, these citizens found out - although the chance of infection with cholera was reduced - that risks of infection still existed, because the poor were not connected to the waterworks and sewerage and kept using non-purified water. Therefore, they supported plans of the city council to oblige every citizen to connect to the waterworks and sewerage. The citizens had discovered that besides ones own health national health exists as well. And when national health is bad, ones own health is in danger, in spite of what measures already may have been taken (Ultee, Arts & Flap, 1992:255 [my translation, SvT]).
In the course of time the governments activities have expanded. Modern welfare states provide goods such as education, social security and national health besides the more traditional goods such as national defence and the tax system (Den Hoed, 1992). These goods are not all purely collective goods as they do not always have the two forementioned characteristics. Therefore, they are usually referred to as impure or quasi-collective goods or publicly provided private goods.
Nowadays, in most western democracies citizens pay taxes and give votes to political parties, in exchange for which elected politicians will pass legislation to implement citizens rights. An executive is charged by the politicians with the implementation of policies. Thus a cascade of principals and agents (Moe, 1984:765; Coleman, 1990:146156; Pratt & Zeckhauser, 1991) is created (see box 1.1). Voters are the principals of politicians (the agent) when they give politicians the right to act on their behalf. Politicians become principals in their turn, when they charge an executive agent with policy implementation.
