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ABSTRACT
Recent developments have seen a paradigmatic shift from the governance of traditional mode of public services
delivery as reflected in the Public Administration towards governance of partnerships involving government and
private/non-profit sector including third sector organizations. The changing nature of the state and dynamics of
governance models is at the helm of the thought process of policy makers and reformers in order to address country
specific problems related to public services delivery. India being a democratic welfare state with meagre economic growth
trajectory needs a revolution in the effective public services delivery in order to achieve all the targets of millennium
development goals especially, to empower its citizens and improving their quality of life in terms of their education, health
responsibility seems to be difficult to achieve considering the ever growing expectations of the citizens and these call for
immediate solutions. Many countries have already initiated the Government-Third Sector Partnerships form of
governance and are delivering requisite public services efficiently and effectively to all their citizen beneficiaries. This
paper attempts to provide an insight into the issues relating to Governance of Government-Third Sector Partnerships for
public services delivery. Further the study also focuses on a few select countries to understand global perspectives on the
contentious issues of delivery of public services in a democratic welfare state like India through case study research
Original Article
and social security needs. The government approach to provide services to all its citizens from cradle to grave as its
methodology.
KEYWORDS: Governance, Forms of Governance, Third-Sector Organizations, Partnerships, New Public Governance
Received: Aug 19, 2016; Accepted: Sep 06, 2016; Published: Sep 12, 2016; Paper Id.: IJBMROCT20161
INTRODUCTION
An Insight of Transition from Public Management to Public Governance
Governance through various Central and State Laws and Regulatory bodies often face challenges due to
the changing dynamics of numerous societal problems in a democratic welfare state. These problems mostly relate
to public services provision and their delivery in the realm of education, health and social services which are
essential for the citizens. The emerging complexity of these problems call for innovative and partnership
approaches for their effective provision and delivery. The pattern and exercise of state authority is changing from
government (rowing) to governance (steering). Traditional Command and Control state which depends more on
regulating behaviour of the citizens by resorting to hard laws is seeing a paradigmatic shift towards a Regulatory
State which steers the behaviour of citizens through the promulgation of soft laws. Various forms of governance
mechanisms are being practiced across the world for better serving the citizen beneficiaries such as New Public
Management (NPM), Corporate Governance (CG), Good Governance, New Public Governance (NPG), Relational
Governance (RG) and Network Governance (NG) where the involvement of voluntary/third sector organizations
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LITERATURE REVIEW
Defining Governance
As per Oxford English Dictionary, Governance is the action or manner of governing i.e. of directing, guiding or
regulating individuals, organizations, nations, or multinational associations-public, private or both in conduct or actions. It
may also be defined as the general exercise of authority(W. Michalski & Stevens, 2001) where authority refers to
institutions, public or private or both for maintaining control and enforcing accountability. It also refers to changing
boundaries between public, private, and voluntary sectors, and to the changing role of the state (Levi-Faur, 2012).
Thus governance is a complex process and is context specific; there is no one ideal type of governance rather
there are forms of governance each highlighting context specific elements.
Governance networks may be defined as a horizontal articulation of interdependent, but operationally
autonomous, actors from the public and/or private sector who interact with one another through ongoing negotiations that
take place within a regulative, normative, cognitive, and imaginary framework; facilities self-regulation in the shadow of
hierarchy; and contribute to the production of public regulation in the board sense of the term(Sorensen & Torfing,
2007).
Governance refers to the interaction processes taking place among various actors within such networks with the
following characteristics (Koppenjan & Klijn, 2004):
Strong focus on the inter-organizational dimension of policy-making and service delivery with interdependencies
of organizations in achieving such aims.
Horizontal types of steering for stimulating cooperation and support by societal actors for a common
cause/objective.
Participation of societal actors with their diversified knowledge leading to innovative policy formulation and
public services delivery.
Initial involvement of societal actors, stakeholders and citizens groups to enhance the democratic legitimacy of
decisions.
FORMS OF GOVERNANCE
Governance as Good Governance
The World Bank looks at governance as the exercise of political power to manage a nations affairs and good
governance involves: an efficient public service, an independent judicial system and legal framework to enforce contract;
the accountable administration of public funds; and independent public auditor, responsible to representative legislature;
respect for the law and human rights at all levels of government; a pluralistic institutional structure, and a free press.
The World Bank in order to achieve efficiency in the public services, seeks to encourage competition and
markets; privatize public enterprise: reform the civil service by reducing over-staffing; introduce budgetary discipline;
decentralize administration; and make greater use of non-governmental organizations.
Establishing transparency, responsiveness, accountability, rule of law, equitability and inclusiveness, an effective
grievance redressal mechanism, participation of various stakeholders in decision making process, and a strong
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where public policy making involve multiple processes. It is concerned with the institutional and external environmental
pressures that enable and constrain public policy implementation and the delivery of public services within such a plural
and pluralist system. As a consequence of these two forms of plurality, its focus is very much upon inter-organizational
relationship and upon the governance of processes, stressing service effectiveness and outcome that rely upon the
interaction of Public Sector Organizations with their environment. The central resource-allocation mechanism is the interorganizational network, with accountability being something to be negotiated at the inter-organizational and inter-personal
level within these networks(Osborne & Kaposvari, 1997).Such networks are characterized with power inequalities that
must be navigated successfully for their effective working.
Core Elements of NPG
Co-production concept coined by Elinor Ostrom is the mix of activities that both public service agents and
citizens contribute to the provision of public services. The former are involved as professionals, or regular
producers, while citizen production is based on voluntary efforts by individuals and groups to enhance the
quality and/or quantity of the services they use.
Co-Management involves participation of the voluntary sector alongside public and for-profit actors in managing
the growing complexity of delivery of diverse mix of publicly financed services.
Co-Governance involves participation of third sector along-with public and private actors in decision making and
planning of public services.
However, it should be noted that these three concepts are not mutually exclusive. We can expect to find different
patterns of cooperation between the public and third sector, both in different service sectors and indifferent countries. Thus,
there exists both co-production and co-management in preschool services in France and Germany, but only co-production
in Sweden (Brandsen & Pestoff, 2006).
Relational Governance (RG) is an approach that focuses on interactions among the public sector, civil
society, the business sector, concerned citizens, and other actors on issues of societal concern. It emphasizes interorganizational networks, collaboration and a broad range of policy tools. Various elements of RG (Rutzen, 2007)inter-alia
are:
Relational Contracting emphasizes on working towards common goals, promoting communication and
flexibility in problem solving and developing trust on a continuous and long term basis. Also, its focus is not on
narrowly meeting the terms of pre-specified deliverables.
Relationship Marketing (RM) acknowledges that sustainable competitive advantage increasingly requires
collaborative activity rather than rivalrous competition (Sharma & Patterson, 1999). RM has been defined as an
organization engaging in proactively creating, developing, and maintaining committed, inter-active and profitable
exchanges with selected customers over time (Harker, 1999).
Relational Capital (RC) has been defined as the level of mutual trust, respect and friendship that arises out of
close interaction at the individual level between alliance partners. The key insight is to focus upon the import of
individuals and individual relationships and their interaction with the organizational level of relationships. As
partnerships are fraught with hidden agendas driven by the opportunistic desire to access and internalize the
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partners core proprietary skills, the relational capital creates a mutual confidence that no party to an exchange
will exploit others vulnerability even if there is an opportunity to do so. This confidence arises out of the social
controls that relational capital creates (P. Kale & Perlmuttur, 2000).
TSOs can easily be integrated into partnership arrangements because they are multifunctional organizations being
based on more than single rationale or mode of operation.
TSOs are partners in public policy formulation and implementation at every level of governance. At the local
level of governance, they are primarily involved in the coproduction of services; at the regional and national
levels of governance, they are active in lobbying and advocacy activities.
Governance and, in particular, the notion of good governance are strongly linked to partnerships in the sense of
non-hierarchical coordination, peaceful conflict resolution, and efficient and effective policy-making. In
governance arrangements, TSOs provide avenues for civic participation. Accordingly, they contribute
significantly to the legitimacy of democratic regimes.
PARTNERSHIPS
The (OECD, 1990)has defined partnerships as System of formalized co-operation, grounded in legally binding
arrangements or informal understanding, co-operative working relationships, and mutually adopted plans among a number
of institutions. They involve agreements on policy and program objectives and the sharing of responsibility, resources,
risks and benefits over a specified period of time.
(Miller, 1999)Effective partnerships can be expected to generate; information sharing; improved
communication; a better understanding of what each stakeholder can offer; the avoidance of duplication and inefficiencies;
and the identification of opportunities for effective sharing of resources.
Partnerships also facilitate innovations through coming together of different stakeholders from different policy
perspectives by sharing of ideas, expertise and practice and minimization of risks, pooling of resources and synergy lead to
reduction in operational cost, information sharing, improvement in communication.
The limitations of partnerships include conflict over goals and objectives of the participant organizations and
individuals belonging to them with those of partnership. The fixation of accountability is very difficult as there is no
centralized control or hierarchy. All participants of partnership are equal. The organizational forms of partnerships also
Impact Factor (JCC): 5.4362
pose difficulties. Power relations need to be continuously negotiated for rules and processes to be followed. Participation
of community remains minimal. Partnerships are key instrument of local governance.
Philanthropic Insufficiency results from inability of the voluntary organization to generate resources on a scale
that is both adequate enough and reliable enough to cope with the human service problems.
Philanthropic Particularism is the tendency of voluntary organizations and their benefactors to focus on particular
subgroups of the population, which is one of the purported strengths of the voluntary sector. But particularism and
the favouritism that inevitably accompanies it leave serious gaps in coverage and also contribute to wasteful
duplication of services.
Philanthropic Paternalism vests most of the influence over the definition of community needs in the hands of
those in command of the greatest resources. Thus the preferences of wealthy members get precedence over the
requirements of the community as a whole. As a consequence, some services favoured by the wealthy, such as the
arts, may be promoted, while others desired by the poor are held back.
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Philanthropic Amateurism is the association of voluntary organizations with amateurs (untrained people) to cope
with human problems.
To fill the gap of unsatisfied demand of public services provision relating to segments of the political community,
some mechanism needs to be devised and government-voluntary/third sector partnerships for public services delivery,
appropriately regulated, qualifies as one possible solution for filling up this gap.
Mechanism of Government-Third Sector Partnerships
Market failure, government failure, contract failure and voluntary failure make it clear that neither market nor the
government can alone provide the public services as desired by all citizens in a democratic welfare state. The provision of
public services in a democratic state is made as per the requirements of the majority population. This leads to a situation
where in demand of some citizens and/or groups of citizens remains unsatisfied. Since neither the government nor the
private sector or the voluntary sector can fulfil such requirements fully on their own, they must enter into partnerships. The
voluntary organizations by virtue of their multifunctional roles viz. of providing public services and strengthening
democracy at the grassroots level, facilitating research work, public policy formulation and implementation, charity work,
advocacy etc. and the trust which the people repose in them due to their non-distribution constraint of profits if any, to their
stakeholders become logical partners with the government for providing public services to the citizens. Thus partnerships
between government, for-profit and voluntary sector appropriately regulated, qualifies as one possible solution for filling
up this gap of unsatisfied demand of public services provision. By resorting to appropriate Risk Management the inherent
risk of failure will be diversified and all actors to the partnerships will ensure as to which of them independently or in
conjunction with the other will deliver public services best to fulfil the requirements of the community.
The study attempts to explore new frontiers of Government Third sector partnerships based on the above
mentioned established facts. Despite the fact that the government still plays important role in public services provision
through its policy formulations and these policies keep on changing from time to time for the suitability and benefits of the
citizen recipients, there remains a gap between the government efforts To Deliver and the beneficiaries To Receive.
This is a common problem in a democratic welfare state considering the different political agendas of political elites and
policy planners. In order to fill this gap of unsatisfied demand there is a need for innovative methods and governance
mechanisms where the responsibility for public services delivery should be decentralized to the related stakeholders who
can then fulfil these requirements with their own capability and functioning by entering into partnerships with
private/voluntary sector organizations.
GLOBAL PERSPECTIVES: A CASE STUDY OF SELECT COUNTRIES
Different countries follow different processes for managing, governing and regulating GovernmentThird Sectors
Partnerships for public services delivery. A study of select developed countries is cited for evaluating a generalized
conceptual model.
United Kingdom: In the UK, partnerships between Government and Third Sector for public service delivery have
been reformed and refined by a combination of hard and soft laws as well as establishment of new forms of regulatory
controls. Statutory definition of charity and a public benefit test for charitable purposes has been given by The Charities
Act, 2006.In addition, the Act covers the assistance and supervision of charities by the court and the Charity Commission
and an independent Charity Tribunal to hear appeals against decisions of the Charity Commission. Legal reform has been
Impact Factor (JCC): 5.4362
supplemented with new soft law provisions. Soft laws include the establishment of Compact in 1997, self-regulation
through voluntary codes for fundraising and governance of relations between government and voluntary sector.
The compact is a general framework and an enabling mechanism to enhance relationship, rather than a legally
binding document. It is a commitment of intent between the parties concerned but less than a contract. The Compact has
formed the basis for the development of five codes of practice in relation to particular areas, each of which lists the rights
and responsibilities to which both sectors should adhere in order to make the partnership work. Separately, in recognition
of the increasingly important role that the third sector has come to play in both society and economy, the Prime Minister
Office created the office of the Third Sector (OTS) rebranded as the Office for Civil Society in the Cabinet Office to
drive forward the governments role in supporting a thriving third sector and to join up sector-related work across the
government. Self-Regulation through Voluntary Codes has been defined primarily in terms of setting standards for internal
governance, administration, and financial management systems so as to ensure compliance with reporting requirements,
laws, and regulations. Examples include development of a Code of Governance by and for the voluntary sector and a selfregulatory scheme for fundraising by the voluntary sector that has its origins in the statute.
United States: In the US, partnerships between Government and Third Sector for public service delivery have
been impacted by the New Public Management and third party government. It has led to greater interest in
accountability and control of non-profits by the government, while at the same time it has increased incentive for
collaboration between government and non-profits as well as among non-profit organizations giving rise to hybrid forms of
organization financing and relationships.
The diversification of policy tools involve greater utilization of tax-exempt bonds by government and non-profit
organizations especially, smaller community based organizations. Another change has been the shifting from the traditional
contracts which were based on a cost-reimbursement basis that paid agencies for their costs based upon the contract terms
and available budget towards performance based contracts whereupon agencies are reimbursed for services only if they
meet specific performance targets thus increasing the pressure to improve their performance. Further, performance
contracting also tends to promote market competition among providers: Government is supposed to hold agencies
accountable for specific outcomes, and if they do not meet these outcomes, government has the option to turn to a different
service provider. Also, the advent of performance contracting and the increased attention to program evaluation and
outcomes has encouraged the government and non-profit agencies to explore ways to achieve accountability through
accreditation and self-regulation.
In order to have long term relationships between the two sectors the government has entered into Relational
Contracting with certain non-profit organizations. Relational Contracting emphasizes on working towards common goals,
promoting communication and flexibility in problem solving and developing trust. Its focus is not only on narrowly
meeting the terms of pre-specified deliverables. This relational contracting does not preclude differences of opinion or
outright conflict, but it does underscore the stability of many contracting arrangements and the importance of cooperation
among the two parties. But this cooperation occurs within a framework established by the more powerful partner which is
obviously the government. For example, non-profit organizations may cooperate with government on a contract for
community care for the chronic mentally ill, but the standards of care, financial regulations, and outcome measures are still
set largely by the government.
Non-profit federalism offers an opportunity to combine the service-delivery advantage of voluntary organizations
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with the revenue-generating and democratic priority-setting advantages of government (Salamon 1995). In many cases
this mechanism makes it possible to match publicly generated funds with privately generated ones to provide a better
service than either side could provide on its own.
Germany: In the German welfare state the interface between non-profit organizations and their environment has
adopted a corporatist institutional character wherein partnerships are governed by formalized inter-sectoral and
intermediary collaborations. Germany has a longstanding corporatist tradition that has included a cooperative relationship
between German governments, at the national and state levels, and third sector. Many third sector organizations are very
large and receive most of their funding from the government.
Government-third sector partnerships are entered through umbrella organizations representing voluntary/third
organizations and are scaled to state/national levels. More recently, the tenets of NPM have pronounced shift towards more
market oriented mechanisms including formal contacting, competitive bidding and greater regulation. The understanding
of the partnerships between the government and the third sector include: First, the growing marketization of welfare
services and hybridization of the corporatist legacy. Second, the regulation of charities and non-profits is closely related to
the nature of the welfare state because much of the regulation that really matters occurs in the specific context of the
welfare markets in which non-profits work. Third, need to pay attention to scale and examine sub-traditions, given growing
differentiation, by geography and by specific welfare services, within Germany.
Canada: The Canadian model of the welfare state has been a developed mixed economy in which services are
delivered by governments, non-profits, and for-profit firms in varying mixes depending on the particular service. The New
Public Management (NPM) reinforced this mixed economy by shifting a greater range of services from governments to
non-profit delivery and by promoting more open competition between non-profit and for-profit providers. In 2009, a new
policy on charitable fundraising was introduced by the federal government which comprised of ethical fundraising
practices through active self-regulation and Financial Management Code is testing plans for a more formal certification
system of good governance.
In Canada, the governance of partnerships are regulatory in nature which is exercised through both rules on
charities and contracting regimes and there is little movement towards institutionalized collaboration. The regulatory
change has been incremental, layered in as new administrative practices and clarified interpretations of existing law. The
national government has thought of the third sector primarily as alternative service delivery, rather than being a force for
democracy, citizen engagement, or community and economic development. As such, the role of third sector needs vision
and clarity at the political level. In a nutshell the UK model in its diluted version is being followed in Canada.
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A CONCEPTUAL MODEL
Flow Diagram based on the above case studies:
Figure 1
The above model illustrates that the transition from traditional mode of governance of public services delivery
towards governance of government third sector partnerships for public services delivery in a democratic welfare state
entails introduction of new elements as well as overlapping of some elements of traditional mode of governance, in
partnership mode of governance.
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13
To explore the nature of Regulatory Framework for governing Government-third sector partnerships for public
services delivery.
To explore the missing link(s) relating to trust/values of government in the third sector for public services delivery
and its functioning.
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