Targets, Voice and Choice: Options for Improving Public Service Delivery

19 October - 10 December 2004
Event Series
Description

Discussions on voice and choice in public services are never far from the forefront of UK news today. Not only are these topical issues in the UK, they are also highly relevant to public service delivery in developing countries.

The autumn lunchtime meeting series at ODI aimed to explore these issues in detail, looking at both developed and developing country experiences with regard to targets, voice and choice in the management and delivery of public services. Are targets really helpful? Should increased choice be introduced into the health and education sectors? Which is better, voice or choice? Is there an optimal combination of targets, voice and choice?

The objective of the meeting series was to enhance understanding of the key concepts, and to inform the debate, drawing on experience from a wide range of settings, with a particular focus on the health and education sectors.

Meeting series summary

The question of how to improve the quality of public services is topical in the UK, but is also highly relevant to public service delivery in developing countries. Three options are: (a) the use of targets; (b) greater public participation (voice); and (c) greater competition and choice. The autumn 2004 lunchtime meeting series at ODI aimed to explore the issues in detail, looking at both developed and developing country experiences with regard to targets, voice and choice in the management and delivery of public services. Some of the questions that formed the basis of presentations and discussions included:

  • Are targets really helpful?
  • Is voice an effective means of making public providers more responsive to the needs of users?
  • Should increased choice be introduced into the health and education sectors?
  • Is there an optimal combination of targets, voice and choice?

The objective of the meeting series was to enhance understanding of the key concepts, and to inform the debate, drawing on experience from a wide range of settings, with a particular focus on the health and education sectors.

With respect to targets, the arguments in favour have to do with efficiency and effectiveness, a focus on outcomes and greater accountability. On the other hand, targets are hard to use constructively when there is little administrative capacity, monitoring costs are high, and when targets set up perverse incentives.

Turning to voice, greater participation may be a good response to problems with conventional accountability, for example when democratic structures are not in place. Voice mechanisms could induce a response by public providers. They could also empower clients. On the other hand, there is a real risk of elite capture, particularly where civil society organisations are weak and there is no representative political system. In addition, participation has high costs, especially for poor people.

With respect to choice, although it has received less attention than targets and voice, there may be a case for looking at private provision of public goods, in order to achieve market-based efficiency gains, and in order to overcome demand-side constraints. The concerns, however, are around access and equity, and with the lack of accountability to public policy.

In sum, it seems that targets are not sufficient on their own to reform the quality of public services. Results-based management may however have a role. There are particularly important questions about how to promote effective voice, and about whether or not governments should finance alternative service providers (Paolo de Renzio).

Targets
Jake Chapman outlined the advantages of using targets in public sector management include:

a) a shift of focus from inputs to outputs;
b) the need to collect useful performance data;
c) guidance on policy priorities; and
d) improved accountability.

Targets have been widely used in public sector management in the UK despite some of the problems that they cause. There are contradictions inherent in the use of targets. Not only is the collection of performance information burdensome and a cause for frustration among professionals, but also, when targets are not met, a sense of failure further de-motivates them. There is a need to view organisations as complex and adaptive systems, with a rather low degree of predictability and control. Multiple perspectives need to be taken into account. If targets become the focus of managing an organisation's activities, this will inevitably lead to a focus on operations rather than on the overall objectives and activities of the organisation, to gaming and cheating in order to give the appearance of having achieved targets.

In a developing country context, John Roberts argued that setting targets may be a useful way of focusing attention in the short-term. We can distinguish among global long-term targets (MDGs), national medium-term targets enshrined in development strategies and PRSPs, and short-term targets linked to donor accountability (managing aid for development results). What governments in developing countries need to do is state their overall policy objectives first, then set targets and performance indicators, and finally specify the existing relationships between inputs and outputs and between aid and public expenditure.

There is widespread experience on results-oriented budgeting in various developing countries, including Uganda, Tanzania, Ghana, and Bolivia, and some other very interesting examples in countries such as Thailand, Malaysia and South Africa. Some of the main conclusions from the research are that Results-Oriented Expenditure Management (ROEM):

a) works better with strong Ministries of Finance;
b) is more effective where there is government ownership;
c) helps focus resources on policy priorities;
d) needs to have links to decentralisation policies; and
e) discourages corruption and promotes accountability.

There is however a need for an inclusive and participatory process to define the indicators to be used, and the use of all available evidence to inform policy-making.

In some cases the issues at stake regarding targets in a country such as the UK as compared to developing countries are quite different, with policies in developing countries focused on universality and reach of public service provision, rather than on more specific quality issues which tend to be more prominent in developed countries. However, there is a growing consensus on the need to use targets sensibly in both environments, taking into account some of their possible distortionary effects. The issue of using different instruments alongside targets, such as voice and choice mechanisms, was seen as an avenue to address the identified shortcomings of a target-based approach.

Voice
Some problems exist when introducing "voice" mechanisms in public service delivery, outlined by Marian Barnes. These stem from two commonly held views: on one hand, the view of public managers, professionals and politicians who question the validity and legitimacy of users' opinions. On the other hand, the view of citizens who feel that expressing their views will not lead to any significant changes. In these circumstances, there may be a need to shift from an approach based on "voice" to one based on "dialogue". The main problems with user's voices may be as follows:

a) Are they representative? Who selects them? Do they have legitimate mandate to speak on behalf of a whole category of individuals? Categories often include variables such as ethnicity, age and socio-economic status. However, other personal characteristics and political views are often overlooked;
b) Are they informed? Often the knowledge necessary to express an informed opinion is quite technical, and therefore dialogue between experts and laymen can be difficult;
c) Are they expressed in the right way? People's capacity to express their opinions will depend on the specific format of the voice mechanism, and also on their attitude and capacity to articulate their views. For example, anecdotal evidence may be underplayed, and strong grievances may be dismissed as inappropriate.

A range of other factors also influence the effectiveness of voice. Existing institutions, rules and norms strongly determine opportunities for voice. Professional power and defensive practice can discourage the use of voice. Often professionals feel threatened when more voice is given to users who take away their discretionary powers based on technical knowledge. Also, voice is often expressed outside the service delivery arena, through social movements, and in some cases the public-private divide can be blurred, with individuals playing different roles at the same time. Therefore, what may be needed is a shift from approaches based on voice to others based on a more genuine dialogue between service providers and users. Dialogue, as opposed to voice, contributes to mutual understanding (Marian Barnes).

In a developing country context, the concept of participation has been widely used in recent development discourse (Andrea Cornwall):

a) as a way to improve efficiency, legitimacy and democracy;
b) to improve access and quality of care;
c) to enhance accountability;
d) to influence the type and range of services provided;
e) to build partnerships and influence policies; and
f) to encourage more active citizenship.

Individuals become involved in voice mechanisms with different roles: as beneficiaries, rights-holders and duty-bearers, either invited or selected, and through different spaces of engagement (associational spaces, formal politics, bureaucratic fora, etc.). Their inclusion or exclusion is often influenced by a number of factors, such as agendas and relationships, language and expertise, and the availability of new ways of structuring dialogue.

The future effectiveness of voice mechanisms and of participation more in general will depend on transforming the nature of the discourse, the rules of the game in order to improve voice opportunities. But also, it is important to build capacity to participate, by building the confidence and skills of individuals, give them access to relevant information, etc. The case of Zambia, where local farmers were not aware of wider political and institutional factors that were influencing their livelihoods, is an example of this need.

In comparing developed and developing countries, the issue of voice has similarities although the importance of context and of the political environment in shaping opportunities for voice is important. While in some cases participation and voice are largely dependent on political factors (as in Southern Brazil), in others, such as South Africa, the history and perceptions of disenfranchisement played a more important role.

The experience of participatory budgeting in Porto Alegre is quite significant in this respect (Graham Smith). Despite the wide publicity it has received and the attempts at replication, a closer look reveals the limits of this approach, as it was limited to a small proportion of the investment budget, and did not cover more general expenditure priorities. Moreover, local politics was very important in determining the opening of spaces for popular voice to influence the budget process.

The view of participation and voice based on an assumption that decision-making power resides at the local level may be in fact problematic. Recent development discourse, mostly pushed by donor agencies, has idealised localisation and empowerment without spelling out some of the contradictions involved. The wider institutional framework determines which spaces are open for dialogue, and therefore will define some of the actions that citizens can take to engage with government, and the levels at which they will be most effective in bringing about change. The incentives faced by bureaucrats and professionals often are not conducive to dialogue, even if formal spaces exist for this purpose.

In the UK particularly, the potential for voice and participation on a local level may be difficult as local government budgets are highly inflexible. UK civic engagement has also often proved to be more rhetorical than real, where local incentives to participate are low and there is an unwillingness for local authorities to cede control to citizens (Graham Smith).

Choice
As far as the issue of choice is concerned, on one side there are those who firmly believe in "giving more power to the user", while on the other side there are people concerned with polarisation and marginalisation and the difficulty to exercise choice where basic entitlements (e.g. universal primary education) are not in place (Adam Lent).

Choice is about giving the individual user, as opposed to the provider, precedence in determining some of the characteristics of the service to be provided. There are two major risks related to this:

a) Inequality of access (some individuals have better sources of information and better resources, and therefore are better able to access services);
b) Polarisation of quality in service provision (i.e. cream-skimming practices) with a move towards elite treatment for those who can afford it and under-resourced provision for the poor.

In introducing choice, it is important to remember that there are significant implications for capacity and management: for example, choice-based approaches require complete restructuring of skills and budgets (Adam Lent).

At the same time, choice options are highly complex. For example, the administered price regime proposed for the UK would be difficult to administer. At the same time, the diversity of options would be extremely complex for patients.

In terms of the education sector, there have in fact been significant innovations with regard to choice in the UK since the passage of the 1988 Education Act - and it is worth noting that the negative outcomes foreseen, such as greater segregation, have not in fact occurred. Still, choice is limited, and in education mostly exercised through the housing market. It is notable that house prices in areas close to what were regarded as good schools were on average 12% higher than in other areas. Pupils wishing to select, usually from middle-class households, also had to travel longer distances (Philip Collins).

In developing countries non-state service providers creating options for choice already exist. For example, in Tanzania, 65% of patients seeking treatment for malaria used shops rather than formal medical facilities. This was because access and opening times were better, waiting times were lower, and staff were less rude. On the other hand, diagnosis and advice were sometimes inadequate, and drugs were sometimes of poor quality. In relation to aid flows, a similar trend can be seen where for example funds made available through the Global Fund to fight AIDS, Tuberculosis and Malaria, goes 50% through governments and 50% through other providers, mainly civil society (Anne Mills).

The question then is to focus on the manner in which governments work with other service providers (Richard Batley). Existing literature tends to focus on formal rather than informal Non-State Providers (NSPs), and it highlights problems with defining clear boundaries between different types of providers and about the difficulty of regulating and contracting. In general, NSPs were receiving support in the water and health sectors, but less so in education. There was strong emphasis on promoting community management, but little on how to do that.

An interesting case is that of Pakistan where non-state provision of services has grown in response to government failure, reaching very high levels especially in health and education. For example, 53% of urban primary school enrolment is non-state and 67% of households use private medical practitioners. This is true for both poor and rich communities. Dialogue between government and other providers is very low (Richard Batley).

In general however, evidence points to a relative strength of the public vis-à-vis the private sector both in developed and in developing countries, and on issues of reciprocal "crowding out". While in the case of Pakistan it was clear that the public sector was being challenged by private providers, because of its low quality, in South Africa it seems that the push for broadening the reach of public services in the water sector may have reduced the reliance on private providers.

It is often the case that reforming public services to render them more competitive, also in terms of quality, is heavily constrained by the existence of vested interests and patronage networks. One of the main issues is that of challenging the public sector to be a better provider.

In development country contexts however, where targets may be problematic, and where voice is weak, the issue is whether people could be helped to exercise choice more effectively (for example by providing vouchers for bed nets).

UK experiments have shown that choice instruments (for example, choosing alternative hospitals) had led to faster treatment. However, there were some lessons: there needed to be alternatives (for example, the availability of unused beds), there needed to be good information, transactions costs needed to be kept low, and users not providers needed to make the choices, so as to avoid cream-skimming. It is also important that the system should be sensitive to finance, for example by using administered prices. Systems need to be well-designed, and it is probably necessary to provide special assistance to help the poor navigate a new system (for example through Patient Care Advisors) (Julian le Grand).

Conclusion
An optimal combination of targets, voice and choice is difficult to envisage, but an appropriate mix of the three would in all cases seem the best option in organising public service delivery both in developed and developing countries. Experiences of using targets, voice and choice mechanisms in the UK can provide helpful insights for developing countries, but an awareness of the specificity of circumstances is essential, where context and issues faced are likely be quite different. Setting targets in developing countries may need to focus more on the reach of public services rather than on quality issues, for example, and the political environment may significantly determine the opportunities for voice, participation and the responsiveness of public providers. Therefore, choice seems to be particularly relevant in developing country contexts where targets are problematic and voice weak. Conversely, developed countries may have a lot to learn from developing country experiences, such as with participatory budgeting in Brazil.

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