1. Resistance to change in government Risk, inertia and incentives Felix Ritchie Bristol Business School University of the West of England, Bristol

2. Overview Stereotypes of government activity Sources of resistance to change – Bureaucracy – Risk aversion – Incentives Implications What next? Felix RitchieResistance to change in governmentPage 2

3. Public administration stereotypes Two characterisations: – doing as little as possible – doing as much as possible But – working for their own interest – doing as little as possible for the public – doing it very inefficiently Is there any basis for this? Felix RitchieResistance to change in governmentPage 3

4. Problems with the stereotype Government is big – Is it a ‘big organisation’ problem? Governments do different things Even for schools, hospitals, social care etc Can we demonstrate government is – Inefficient? – Resistant to change? We will assume the latter Felix RitchieResistance to change in governmentPage 4

5. Sources of resistance (1): Bureaucracy In popular stereotype: bureaucracy=failure In academia, more nuanced: – Feeney and Hart-Davis: bureaucracy = centralisation, ‘red tape’, formality – Red tape bad for organisational effectiveness – Centralisation probably bad but necessary – Formalisation essential … maybe even good..? Felix RitchieResistance to change in governmentPage 5

6. Sources of resistance (2a): Risk aversion Are public sector and private sector workers different? – Yes …Does it matter? – does individual risk-aversion mean corporate RA? – Windsor Castle fire – are private sector firms paragons of risk management? – banks, railways, Y2K, dot-com – Green Book (UK) formalises risk-aversion Felix RitchieResistance to change in governmentPage 6

7. Sources of resistance (2b): Risk aversion and status quo bias positive outcomes: – risk aversion encourages status quo negative outcomes: – humans become risk-takers Unresolved problems: – do the more risk-averse become more risk-taking when faced with adversity? – shouldn’t the risk-averse be more likely to take decisions in government? Felix RitchieResistance to change in governmentPage 7

8. Sources of resistance: so far Bureaucracy – Not proven Risk averse public administrators – Existence proven – Effect not proven Felix RitchieResistance to change in governmentPage 8

9. Sources of resistance (3): Incentive structures Government adversely affected by ‘fear of failure’ – Few positive incentives for individuals – Few positive incentives for organisations – Notable negative incentives for organisations – Engagement with government largely negative – Identification with employer – Perception of ‘blame culture’ Source: government! Felix RitchieResistance to change in governmentPage 9 “We are however concerned that public sector reward and assessment systems may emphasise the impact of failure rather than the gains from success”. House of Lords (2006)

10. Sources of resistance: putting it together Bureaucracy + natural caution not sufficient Add asymmetric incentives  increases risk aversion  provides procedures for avoiding decision-making Can also explain ‘catastrophe response’ (avoiding unpleasant decision until status quo is not an option) – extends the risk aversion literature Felix RitchieResistance to change in governmentPage 10 “…substantive failures in government seemed to be punished quite harshly, particularly if the substantive failure were combined with a process failure to acquire the appropriate degree of authorization to make an innovation.“ Moore (2010), pp43-44

11. Implications Can ‘empowerment’ improve govt. efficiency? – Yes for risk-takers – No for risk-averse Can outsourcing improve efficiency? – yes, by requiring expectations to be specified Felix RitchieResistance to change in governmentPage 11

12. Where next? (Is the public sector inefficient?) (How does risk aversion manifest itself for negative outcomes?) Is the public sector uniquely prone to fear of failure? Do public administrators identify more closely with their employer? Felix RitchieResistance to change in governmentPage 12

13. Thoughts and suggestions?

14. Epilogue [the Prime Minister wants to enact a policy that Sir Humphrey opposes] Bernard WoolleyBernard Woolley: He's going to say something new and radical in the broadcast. Sir Humphrey ApplebySir Humphrey Appleby: What, that silly Grand Design? Bernard, that's precisely what you were there to avoid! How did this come about, I shall need a very good explanation. BWBW: Well, he's very keen on it. SHASHA: What's that got to do with it? Things don't happen just because Prime Ministers are very keen on them! Neville Chamberlain was very keen on peace. BWBW: But he's the Prime Minister! SHASHA: Indeed he is Bernard. He has his own car, a nice house in London, a place in the country, endless publicity and a pension for life. What more does he want? BWBW: I think he wants to govern Britain. SHASHA: Well stop him, Bernard. “Yes, Prime Minister”, BBC, 1986 Felix RitchieResistance to change in governmentPage 14