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2017 - Pratama - Agencification in Asia - Lesson Learnt Form Thailand Hongkong and Pakistan
2017 - Pratama - Agencification in Asia - Lesson Learnt Form Thailand Hongkong and Pakistan
2017 - Pratama - Agencification in Asia - Lesson Learnt Form Thailand Hongkong and Pakistan
Agencification in Asia:
Lessons from Thailand, Hong Kong, and Pakistan
Abstract
This paper discusses the agencification phenomena as one of New Public Management (NPM)-
based administrative reform initiatives. Thailand, Hong Kong, and Pakistan were chosen be-
cause of their similarity on administrative legacy and availability of data. The study uses a re-
view of literature research method, while comparative approach was employed to analyze expe-
riences of agencification in the three selected cases. Research result showed that the three
countries implemented agencification in different ways; rational agency model is not the only
driver for agencification initiatives; and contextual factor that include traditions, cultures,
structures, and values influence the implementation of agencification process as a public sector
reform initiative. Policy implications can be drawn by reading the three countries on agencifi-
cation. Thus, Indonesia, as one of NPM adopters can learn from experience gleaned from the
three polities in conducting its administrative reform agenda.
Hopkin, 2010; Lim, 2010; Peters, 1998) explain. Firstly, comparison is done in order
a. Most Similar System (MSS) design exercise control, which means that the com-
where the locus is countries which parison of cases is designated to verify or
have similar features, falsify their hypothesis. Secondly, a compar-
b. Most Different System (MDS) design , ative study is conducted to understand the
where the locus entails countries phenomena. Lastly, the use of comparative
which have different feature except the approach is to build stronger theoretical ex-
themes under investigation, planation.
c. Generally Similar Group (GSG) de- Drawing from the rationale of this
sign, where a group of homogenous study, the author primarily aims to under-
countries is examined with respect to stand the phenomena of agencification, so
their group similarities. It is akin to that both academic and practitioners can take
MSS design but without strict modes some lessons learned from this study. This
of MSS. purpose focuses on interpretation which be-
d. Structural Functional System (SFS) gins with case selection and use of existing
design, the locus lies in emphasis on theory to analyze the case study.
structural-functional approaches like
political structure, culture, and deci-
sion-making process. RESULTS AND DISCUSSION
e. Global Statistical Analysis (GSA) de- Understanding Agencification
sign which uses statistical variable Agencification has many terms.
comparison within countries under ex- OECD, (2002) calls it ‘distributed public
amination. governance’; Pollitt & Talbot (2003) used
the notion of ‘unbundled government’; while
Most Similar System (MSS) design is Overman & van Thiel (2015) preferred to
used in analyzing similar jurisdiction in refer to it as ‘semi-autonomous agencies’ to
which agencification occurs. Thus, MSS is address the phenomena. The variety of
the most suitable to hold most variables un- names of agencification, regardless agencifi-
der study relatively constant and thus control cation has been a key feature of NPM-
for concomitant variation (Peters, 1998) oriented public sector reform. The disaggre-
gation from monolithic-centred government
According to Lim (2010), the purpose bureaucracy to more business-like, lean gov-
of comparison can be categorized into three ernment agencies is posited to improve effi-
facets, that include control, understand, and ciency in delivering public services (Hood,
43 Copyright © 2017, JKAP, ISSN 0852-9213 (Print), ISSN 2477-4693 (Online)
Arif Pratama — Agencification in Asia: Lessons from Thailand, Hong Kong, and Pakistan….
ferent pattern of control (Dunleavy, Mar- management, policy, structural, financial and
getts, Bastow, & Tinkler, 2006). By implica- interventional autonomy (Verhoest et al.,
tion agencification induces more flexibility 2012). Nonetheless, while agencies are
in personnel systems such as recruitment, structurally autonomous, the real autonomy
training, and promotion. “The iron cage of of agencies with respect to performance is
civil service central regulations will be re- still a contested notion.
laxed” (Pollit et al., 2001: 277). Thirdly, the separation and degree of
In the broader concept of governance, autonomy create accountability and control
the agencification phenomena is in accord- concerns. Thus, the agencification discourse
ance to the notion of horizontal governance. has some bearing to principal-agent theory.
Pratikno (2008) stated that horizontalism is Pollitt et al (2004:39) used the terms of
inter-organizational relation from govern- ‘contractualization’ to denote many respon-
ance actors. Drawing from that understand- sibilities an agent has in carrying out its
ing, disaggregation can also be recognized as business core with the specific contract to
some effort to achieve horizontal govern- the parent ministry as the principal in the
ment. It also leads to the networked- basis of performance. Under this premise,
governance, rather than hierarchical mecha- performance management lies at the center
nism. of agencification through such a process, the
Secondly, the agency which formally parent ministry can steer and control their
separated from their parent ministries is of- agency in the corpus of accountability. In the
ten subject to regulation by other organiza- modern-democracy context accountability is
tion which related with the degree of inde- not only focused on both organizational an-
pendence or autonomy. The concept of au- swerability and macro- sociological level
tonomy or ‘autonomization’ (Pollitt et al., (Wicaksono, 2015). This premise encour-
2004) designates the degree to which an ages public organizations to seriously posit
agency is institutionally separated from par- their public accountability as their substan-
ent ministry and whether the agency is given tial agenda.
freedom to manage the organization to carry From the above features, the idealisti-
out their tasks and core businesses. The ex- cally and logical explanation of agency en-
pectation is that autonomy can enhance per- compasses an agency that is separated from
formance since the public manager is ac- parent ministry, and is vested with autonomy
corded freedom to focus on outcomes rather which limits political influence within for-
than procedures, like their counterparts in mal contractual or quasi-contractual arrange-
private organization. ments. The contract relates to performance
Another argument places the public management as steering and control gears.
managers’ autonomy as an essential factor to This also means that performance manage-
liberalize the conduct of innovations and ment mechanism is used as an accountability
breakthroughs. There is no doubt that public mechanism. Besides, some discretion is re-
managers have more formal constraints. quired in dealing with problems and com-
higher public expectations. And higher po- plexity in operationalization which an agen-
litical dynamic influence than private man- cy faces.
agers (Muchiri, 1999:50) According to Massey & Pyper
Furthermore, OECD (2007) contends (2005:85), the agencification process has its
that autonomy within agencies induces and strenghts and weaknesess. The upshot of
incentivizes the performance of public sec- agencification lies in the evolution of an effi-
tor managers to be output and outcome- cient civil service. Whilst, the downside re-
focused. Usually, agencies have various de- lates to the decline in organizational cohe-
grees of autonomies in carrying out their ac- siveness, which balkanization of service de-
tivities. On a more technical note, some livery into independent components engen-
scholars developed dimensions and indica- ders.
tors that are used in examining organization- The notion of balkanization is used to
al autonomy such as formal Independence of denote the breakup of big government and
Regulatory Agencies (Gilardi, 2002) and splitting up of public tasks into smaller piec-
organizational autonomy map comprises es as independent public bodies that deliver
45 Copyright © 2017, JKAP, ISSN 0852-9213 (Print), ISSN 2477-4693 (Online)
Arif Pratama — Agencification in Asia: Lessons from Thailand, Hong Kong, and Pakistan….
public service. This structural issues linked istration who support this school of thought.
to changes in management as well as the Meanwhile, constructivist theories
practices resulting from new faces in the base their analysis on social construction,
government. Consequently, many new pub- which includes cultures but not limited to
lic bodies were emerged and changed the traditions, structures, norms, and values that
government structures as it becomes more have significantly influences on the agencifi-
decentralized. cation process. The task-specific path de-
A number of model have been devel- pendency model is one of the constructivists
oped to explain the rise of agencification. approach in agencification research (Pollitt
Epistemologically, Pollitt et al (2004: 12- et al., 2004) which challenges both the ra-
31) classified the root of agencification as tional choice and traditional social science
emanating from three streams which include approach, arguing that explaining agencifi-
economic or rational choice tradition, tradi- cation phenomena requires social construc-
tional social sciences, and constructivist ap- tion. Social construction and logic underpins
proach. the way governments decide to establish an
Rational choice emphasises efficiency agency is intricately linked to the central in-
as the justification. This relates to a bloated quiry of agencification research.
government that is required to undertake
economic austerity. It compels governments Comparative Analysis
to cut their budgets and rightsize the bureau- After discussing the theoretical frame-
cracy. Among the scholars who support the work on the core characteristics and ideal
perspective, for instance, encompass the types of agencification, it now the turn to
bureau-shaping model, which entails politi- delving into the actual practice and experi-
cians and senior civil servants creating agen- ence of agencification in Thailand, Hong
cies that are aimed at pursuing work-related Kong, and Pakistan. The comparative study
benefits from different organizational form is accorded special attention landscapes of
(Dunleavy, 1991; James, 2003). In the same agencies, history, drivers and characteristics
vein, principal-agent theory, which by and including autonomy and control mechanisms
large, argues that agencies will carry out in the public service delivery system (Table
functions that are delegated by principals on 1).
the basis of the nature, coverage, and com-
position of the contract (Molander & Nils- Thailand
son, 2002; van Thiel, 2001; van Thiel & Thailand’s agencification is insepara-
Leeuw, 2002); and delegation theory, which ble from external factors. In line with struc-
associates agencification with benefits of tural reform after financial crisis which was
contributing to political credibility due to the facilitated by Iinternational Mmonetary
de-politicization and increase of efficiency Fund assistance, the first initiative on Thai
in decision-making and policy implementa- agencification began in 1999 with the deci-
tion (Majone, 2001). sion of Thai government to borrow the
Traditional social science approach agencification idea and experience from the
emphasizes empirical regularities. Some of United Kingdom’s executive agencies and
the scholars such as Kickert, (2001) and New Zealand’s crown entities. To that end,
Pierre (2004) who are scholars of the stream the adoption of the idea which has its origin
contend that the creation of agencies differs in the United Kingdom and New Zealand
considerably among jurisdictions. That said, implied that Thai administration adopted one
efficiency motives have been identified as form of NPM discipline. This influence be-
some of the key drivers. This is borne out by gan in Thailand in the early 1990s, with the
empirical experiences of agencification. The establishment of various quasi-autonomous
perspective used empirical evidence of organizations for public services, including
agencification to explain the agencification those that were charged with fostering and
phenomena and its consequences. Strong strengthening the industry competitiveness
evidence that is gleaned from empirical re- and capabilities, especially small and medi-
search lends support to the notion that is um supporting industries (Lorsuwannarat,
supported by many scholars in public admin- 2014).
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JKAP (Jurnal Kebijakan dan Administrasi Publik) Vol.21 (1), May 2017 ---- https://journal.ugm.ac.id/jkap
Landscape Growing 2-3 agencies annu- Growing significantly 1980- Growing significantly after
ally 1990 1999
Characteristics Driven by political process Uphold ‘limited government’ Driven by regime power and
Hierarchical accountability principle (rationality) development paradigm
Less controversy in political No result-based measure-
zone ment system
Painter & Yee (2010). In their work, they from the colonial era (Jadoon, 2010). Narrat-
used the structural-instrumental analysis to ed in national good governance doctrines,
study the Autonomy of Hong Kong Govern- the structural adjustment commenced in
ment Bodies. The study used data that were 1999. During this period, agencies were
obtained from a survey of perceptions about dominated new-specific task and public ser-
autonomy of agencies of chief executives of vice deliveries in areas of health, education,
111 Hong Kong government agencies, the training, and research, among other.
study explored a series of propositions on According to Jadoon et al. (2012),
the relationships between structure, task, and agencification in Pakistan mirrored the histo-
perceived autonomy. ry of Country’s development and it can be
In their study Painter & Yee (2010) divided into 4 phases. The four phases in-
determined that explaining the degree of au- clude development administration (1947-
tonomy of agencies required analyzing struc- 1971), development enterprise (1972-1977),
ture and task as variables. However, public development management (1977-1999), and
service delivery organizations face tighter, development governance (1999-2010). The
not looser control, while regulatory agencies agencification landscapes was influenced by
show no tendency becoming more autono- the development paradigm Pakistan adopted
mous. The inference that can draw from this in each phase and period. However, the de-
is that Hong Kong’s constitutional and polit- velopment governance era (1999-2010) has
ical history underscore the importance of the largest number of agencies created (70
contextualization in the implementation of agencies). Of the 70 agencies that were es-
agencification. tablished during 1999-2010, 15 were regula-
As a contract-based organization, an tory bodies.
agency is closely bounded by performance With regards to the external influence
measurement. To control the agencies, per- that bore to agencification in Pakistan,
formance measurement framework was put Ncukwe & Adejuwon (2014) argued that
in place and entailed such mechanism as tar- Pakistan’s agencification was influenced by
get-based management and performance policy guidance of the World Bank. Thus,
measurement system. Thus, in the perspec- international pressure, in part palyed a role
tive of principal-agent theory, the Hong in the nature, number, and the structure of
Kong context fall in the category of an ideal public sector agencies that created which
practice. Another important facet of agenci- followed similar guidelines to other part of
fication in Hong Kong is that the govern- the world.
ment maintained lean government, making The autonomy of agencies depends on
the agencification not a contentious issue. their type of legal-structure. Semi-
Agencies are charged with carrying out both autonomous agencies have a significant level
political and administrative roles (Painter, of managerial autonomy but lack of legal
2012:350). identity. Moreover, policy control was for-
This argument corroborates with Lee mally vested in the federal government with
& Haque (2006) who compare the NPM- agencies under tutelage of the minister. To
based Reform and governance in Hong that end, the span of control went to the
Kong and Singapore. The conclusion drawn minister of the parent ministry, through the
was that political regimes contributed to prime minister and ultimately to the national
shaping NPM reforms the polities imple- parliament. “…all semi-autonomous bodies
mented with defining features including and autonomous bodies are expected to sub-
macroeconomics, political systems, and tra- mit their annual reports to their parent minis-
ditions. tries”(Jadoon et al., 2012: 379). Under the
scheme, agencification which was adopted
Pakistan in Pakistan was characterized by traditional-
Pakistan is one of the former British hierarchical accountability. Thus, the span of
colonies in South Asia which have imple- control and accountability affected agency’s
mented agencification. Like Hong Kong, autonomy, even though the administration
agency is also not something new to Paki- of the agency had managerial flexibility.
stan. Pakistan bequeathed many agencies From the rational choice perspective,
49 Copyright © 2017, JKAP, ISSN 0852-9213 (Print), ISSN 2477-4693 (Online)
Arif Pratama — Agencification in Asia: Lessons from Thailand, Hong Kong, and Pakistan….
Zahra & Jadoon (2016) examined the rela- and had hierarchical accountability. Mean-
tionship between structural arrangements of while, agencification adopted in Hong Kong
Pakistan public agencies and their autonomy was characterized by focus on rationality,
they enjoy. The study was based on a ques- hence was devoid political contentions. Pa-
tionnaire that involved the key informants kistan had also different features influenced
from 70 public agencies of Pakistan. by the regime in power and very much in
Research results identified structural line with the trajectory of development para-
dimensions, horizontal specialization, verti- digm at the time. Further Pakistan agencifi-
cal specialization and the governing board as cation was not based on result-based meas-
key variables. It is only governing board that urement system.
was found to have influenced on the autono- Agencification process in Hong Kong
my of human resource management dimen- was characterized by autonomy in personnel,
sion while vertical specialization bear rela- operations and strategic policy, but limited
tion to autonomy in the realm of financial financial autonomy. Agencification in Paki-
management. Results did not support any stan enjoyed personnel, operational and
one of the three hypotheses entirely. Mean- managerial autonomy. Finally, agencifica-
while, results from the structural instrumen- tion in Thailand had the lowest autonomy.
tal perspective indicated the importance of
other factors related to agencies that include What can Indonesia learn from experienc-
administrative culture and context of state. es of the three countries?
The agencification process in Pakistan Agencification refers to the process of
was implemented under an administrative transferring policies from one jurisdiction to
system that had weak political institutions another, Moynihan (2006) identified three
but a strong entrenched bureaucracy. The processes of interpretation for policy-
strong wave of the bureaucratization can be makers. The three process include (1) adopt
traced to the features of strong colonial bu- superficially similar policy concepts; (2)
reaucratic traditions that was manifested by overlook negative experiential learning; and
the centralization of power exercised by a (3) adopt policies unsuitable to the national
certain class of senior bureaucrats. By and context. He argued that agencification is
large, such bureaucrats, occupy top positions plagued by policy ambiguity, which explains
in federal ministries. varying success across countries that adopt
From the three case studies, an infer- it, with some registering success while oth-
ence can be made that there are similarities, ers fail. By examining agencification phe-
variations and diverse pathways of agencifi- nomena in the case studies, policy makers
cation adopted in three countries. Two simi- are able to adopt policies that fits their re-
larities stand out in three cases. Firstly, spective environment have the ability evalu-
agencification adopted in three countries was ate negative experiences which in the end
influenced by Anglo-Saxon model with the enables them to determine what works and
apogee of agency proliferation occurring what doesn’t.
during NPM heydays after the 1980s. Sec- Reflecting on experiences of three
ondly, context matter in shaping and influ- countries, public administration scholars as
encing agencification process in the three well as practitioners can draw some lessons
countries. learned in agencification process.
However, there were variations in Firstly, the rational agency model is
terms of initiation, characteristics, autonomy not the only driver of agencification. The
and control among these countries. In Thai- ideal suggestions from rational agency mod-
land, agencification came into force under el are not easy to implement in the actual
Act Number 2542/1999, while both Hong practices. Thus, other motives such as tradi-
Kong and Pakistan as former British colo- tions, structures, and political values play an
nies, agencification was already underway important role in agencification process.
prior to attaining their independence and in- Secondly, agencification cannot guar-
corporated into legal structure during antee agency’s autonomy. One of the agenci-
1990’s. The characteristic of agencification fication objectives is to ensure the autonomy
in Thailand was driven by political process of agency, reduce political influence and im-
Copyright © 2017, JKAP, ISSN 0852-9213 (Print), ISSN 2477-4693 (Online) 50
JKAP (Jurnal Kebijakan dan Administrasi Publik) Vol.21 (1), May 2017 ---- https://journal.ugm.ac.id/jkap
prove performance in public service deliver- interplay of politics and administrative envi-
ies. However, the experience from Thailand ronments to shape the implementation pro-
and Pakistan showed us that agencification cess.
does not always ensure expected autonomy Unlike Hong Kong which adopted per-
that is required to increase performance. formance based agencification characterized
Thirdly, the ideal type of agencifica- by limited political intervention, both Thai-
tion which should emphasis contract-based land and Pakistan are still struggling with
performance is not always attainable due to performance issues, modes of accountability,
the retention of control by parent ministry. and political obstacles.
This implies hierarchical accountability con- Lastly, this analysis which captured
tinues to be the key mechanism that links the the condition based on various empirical re-
agency to the parent organization. Thus, the search does have one limitation, which is
agency is not assessed based on performance that its findings can not generalized to all
but political interest. Asian countries that face different settings.
Fourthly, referring to the experience of
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