Planning Analysis and Political Steering with New Public Management

Abstract

Interviews with members of the Norwegian national assembly's Standing Committee for Transport and Communications were conducted in 1995, 1997, 2001 and 2004. The politicians were asked about the usefulness of analytic input that planners contribute to national plans, first the Norwegian Road and Road Traffic Plan and later the National Transport Plan. Questions related to steering, coordination, delegation and the inclusiveness of the planning process were also posed. Changes in the politicians' attitudes to types of analytic planning input are outlined. Furthermore, the last round of interviews sheds light on the apparent paradox that parliamentarians accept delegation of highway investment decisions despite their profound scepticism regarding the cost–benefit analyses and impact calculations that are essential to management by objectives and results (MBOR), which was to give them continued political control despite delegation. Another conundrum is the parliamentarians' willingness to renounce the right to decide over most highway projects, even if these were seen as politically important, in order to obtain a strategic overview which they have been unable to use for changing the priorities set by the Government. The political concentration on strategic steering, the concomitant delegation, and MBOR are central components of New Public Management.

Acknowledgements

Sager wants to thank the School of Architecture and Planning at the University of Auckland, New Zealand for providing facilities and an inspiring working environment while writing this article. In connection to the research behind the article, Claus Hedegaard Sørensen thanks then senior researcher Ravlum and the interviewees for valuable collaboration.

Notes

The transport sector has undergone NPM reforms in several countries. The road sector is discussed by Dunlop (1999), Haynes and Roden (1999), Robinson (2006) and Talvitie (1996)—the latter providing an overview of road sector reforms in several countries. The NPM-inspired road reforms in the UK aim to expand the use of Build, Operate and Transfer schemes. Many roads are built and operated by the private sector, and transferred to the public sector when the contract period expires. Public–private partnerships are used more often than in Norway. Reforms in New Zealand saw the abolition of the Ministry of Works and Development in 1988, with the commercial activities being transferred into a Government-owned company. Further reform saw the client function of roads transferred into an independent Crown agency. Different from Norway, roads are funded from a dedicated National Roads fund. Steering problems similar to the NPM-related problems analysed in the present article are not discussed in the road-oriented articles mentioned in this note.

A similar development took place at the local political level. Vabo (2000, p. 343) writes that: “Inspired by the concept of New Public Management, recent organisational alterations in Norwegian local councils have aimed to change the role of local politicians from a traditional to a strategic political one”.

The deep-rooted belief in the holistic approach and top-down coordination in the Norwegian transport sector is partly due to the influence on macro-economic planning exerted by Johansen's (1979) textbooks and the two Nobel Laureates Ragnar Frisch and Trygve Haavelmo. This tradition has received a fresh impetus with the recent focus on sustainability and environmental planning. The trend towards fragmentation has now stalled in countries on the leading edge of NPM, and there is a tendency towards reintegration, needs-based holism and joined-up governance (6, 2004; Dunleavy et al., 2005).

Ravlum was project manager when the members of the Standing Committee were interviewed in 1997, 2001 and 2004. In all these cases, she also wrote the Norwegian research reports in cooperation with colleagues at the Institute of Transport Economics.

The Standing Committee is aware that forecasts deviating from actually realized traffic can have political consequences. The Committee writes that “(t)oo low forecasts give too low calculated net benefits [of the projects], which might over time cause the dimensions of the transport system to be set too low, and to underestimation of the resources needed for maintenance” (Samferdselskomiteen, 2004, p. 25).

It is clear from Christensen and Lægreid (2002a) that problems of articulating political goals in ways making them suitable for MBOR are not peculiar to the transport sector in Norway.

Far more comprehensive sets of performance indicators have been proposed internationally (see Talvitie, 1999), who reports on work done by the OECD. That work was also meant to be part of a system of MBOR.

Another textbook recommendation is to always present a reference alternative. It is usually a “0-alternative” displaying the social consequences of doing nothing, or it is a minimum alternative where only plans that are already sanctioned are followed up. The reference alternative turned out to be of no greater use than the other alternatives to the Government's proposal.

Variants of MBOR are discussed by Brignall and Modell (2000), Brunsson (2002), Moynihan (2006) and Talvitie (1995).

The problem of achieving consistent and coordinated ranking of transport projects proposed and assessed by agencies with different practices is also recognized by others (see Berechman & Paaswell, 2005).

The use of CBA in public agencies was recently studied by Posner (2001) from a principal–agent perspective. He holds that: “Evaluation of cost-benefit analysis should be based on its usefulness for disciplining agencies and enhancing the control of elected officials, not on its instantiation of ethical principles that elected officials may or may not share” (Posner, 2001, p. 1141). This points to political aspects of institutionalized use of CBA rarely mentioned in planning literature.

There is an abundance of literature on how to set the social discount rate(s). See Caplin and Leahy (2004) and Rambaud and Torrecillas (2005) for recent viewpoints and further references.

A change of discount rate can have dramatic effect on social net benefits of transport projects. The trunk road project E6 Vinterbro-Assurtjern in Akershus county gives net benefits of NOK −170 million with 8% discount rate and NOK 313 million with 5% discount rate. The railway project Kolbotn-Ski, also in Akershus, gives social net benefits of NOK 1179 million with 5% discount rate and NOK −63 million with 7% discount rate (Samferdselsdepartementet, 2004, p. 24).

Swedish parliamentarians seem to have retained a somewhat more favourable view of CBA. In 2004, Holmberg and Nylander (2005) interviewed six members of the Standing Committee (Trafikutskottet), one from each of the political parties represented in the Swedish parliament. The politicians agreed that CBA is needed, although there are different opinions about the appropriate use of the analysis. Some would employ CBA just to differentiate between the very good and the clearly inferior projects. However, the value of formal criteria as a background for political choice is acknowledged.

Similar results are found outside Norway. For example, the Swedish research institute SIKA (2004) found it “obvious that the part of the main goal of transport politics related to economic benefits for society has little significance for the overall selection of investment projects” (p. 46).

See especially Chapter 2.3 on methodological questions and impact assessment in Samferdselsdepartementet (2004, p. 27).

James's (2002, p. 232) definition is that “a Principal ‘trusts’ an Agent if she assigns a task to him and then allows him to act without direct monitoring or supervision”. James models trust in a principal–agent relationship in which the alternative to trusting is a costly action taken by a principal to observe and verify an agent's performance. This corresponds to the relationship between the Storting and the executive making delegated decisions on highway projects.

It is difficult to gain votes by inserting a new project near the top of the ranking list or by moving an already included project many places closer to the top. Voters in the county where the promoted project is located might be thrilled, but voters in most other counties, seeing their projects set back one place on the ranking list, will presumably be less than enthusiastic.

Figures on the first row of Table 2 are from the white papers referred to in Table 1. The table only contains grants from the Norwegian state. Figures on rows 2 and 3 are calculated by adding budget items from several official documents from the MoTC and the Ministry of Fisheries and Coastal Affairs. The resulting percentages on row 4 are the figures important to the main text of the present article. These figures are checked against official sources as follows: the fulfilment ratio for 1994–1997 is shown to be 91.9% in Samferdselsdepartementet (1997, Ch. 2, Table 2.1). For 1998–2001, the percentage 97.2 is displayed in Samferdselsdepartementet (2001) (see the table on p. 65). For 2002–2005, the table in Chapter 3.5 of Samferdselsdepartementet (2005) shows the fulfilment ratios 96.7% for highways and 89.9% for railways. For 2006–2008, the table in Chapter 5.4 of Samferdselsdepartementet (2008) shows fulfilment ratios of 74.9% for highways and 71.6% for railways. The ratio for harbours, etc., is above 75%.

In 2004, three parties then in opposition prepared a red–green alliance for the parliamentary election in 2005, which they expected to win (as they did). They wanted the programmes for action, made by the central transport agencies to implement the NTP, to reflect the transport policy the alliance planned to put into effect after the election. For example, the three parties wanted higher railway investments. As the programmes for action are based on the NTP budget sanctioned by the Storting, the red–green alliance found it rational to vote for expansion of the transport budget proposed by the Government.

A similar result was found by Kleven (1993) in a different Norwegian context. He studied the introduction of management by objectives, programme budgeting and outcome appraisal techniques into existing municipal planning and budgeting procedures. Kleven concludes that rational planning methods did not contribute to a more consistent and coordinated approach to political decision-making.

 Tiili studies the more strategic role assigned to Finnish government ministers after NPM reforms. She found that:

• Politicians are not eager to define goals and to set priorities, nor are they motivated to consider issues that are not realized in the immediate future. In addition, they tend to focus on specific issues and to intervene in details. This is a true challenge for those who develop strategic tools for politicians, and in general, rational managerial models for politics. (Tiili, 2007, p. 82)

Additional information

Notes on contributors

Claus Hedegaard Sørensen

Claus Hedegaard Sørensen was at the Institute of Transport Economics in Oslo when conducting the empirical research for this article.