2017 - Pratama - Agencification in Asia - Lesson Learnt Form Thailand Hongkong and Pakistan

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JKAP (Jurnal Kebijakan dan Administrasi Publik)

Vol.21 (1), May 2017, 40-54


ISSN 0852-9213 (Print), ISSN 2477-4693 (Online)
Available Online at https://journal.ugm.ac.id/jkap

Agencification in Asia:
Lessons from Thailand, Hong Kong, and Pakistan

Arif Budy Pratama


Public Administration program, Universitas Tidar
arifpratama@untidar.ac.id

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.

Keywords: administrative reform, agencification, NPM

Copyright © 2017, JKAP, ISSN 0852-9213 (Print), ISSN 2477-4693 (Online)


JKAP (Jurnal Kebijakan dan Administrasi Publik) Vol.21 (1), May 2017 ---- https://journal.ugm.ac.id/jkap

INTRODUCTION varied forms. Accordingly, the three case


The creation of agencies has been one studies are considered to be representatives
of the megatrends in New Public Manage- of countries that follow individualist man-
ment (NPM)-based administrative reform. agement ideologies adopted from Anglo-
The increasing number of agencies in many phone countries such as the the UK, the US,
countries (James, 2003; Jordana, Levi-Faur, Australia, and New Zealand. Secondly, the
& i Marin, 2011; Pollit, Bathgate, Caulfield, availability of data and research reports,
Smullen, & Talbot, 2001; Smullen, 2007; sourced from Comparative Public Organiza-
Verhoest, van Thiel, Bouckaert, & Lægreid, tion Data Base for Research (COBRA) Pro-
2012) and supra-national level (BUSUIOC, ject allows the author to conduct a compara-
2016; Egeberg & Trondal, 2016; Ongaro, tive analysis among them since the three
Barbieri, Belle, & Fedele, 2012) shows how used a similar framework.
this idea has been spreading around the Whilst, the COBRA report (Verhoest
globe. et al, 2012) analyzes 30 countries in broader
This form of organizing is known as contexts, this essay aims to conduct an in-
agencification, which refers to the establish- depth report on Thailand, Hong Kong, and
ment of autonomous bodies within the Pakistan. The three case studies were cho-
framework of performance contract-based sen to reflect the Asian perspective on
result control instead of political intervention agencification.
as the main feature. This is in line with the The paper begins with a discussion of
essence of reengineering, which is based theoretical aspects and debates of agencifica-
on the premise of altering outdated rule and tion , which is aimed at obtainining a com-
replacement with a new one (Muchiri, prehensive understanding of agencification.
1999) the agencification can also be catego- Subsequently, empirical studies and experi-
rized as public organization reengineering. ences of some selected countries from litera-
The process of reengineering is aimed trans- ture will be presented and compared based
form and minimize outdated-hierarchical on the main aspect of agencification. This
mechanism and change public organizations comparative analysis showed that the NPM
become flatter and more efficient. agency model is not the only major factor
During the zenith of the popularity of that is perceived to be the driving force of
the NPM paradigm, governments were con- agencification, but also contextualization
fident that the creation of agencies that were and localism also play an important role in
detached or separated from parent ministries the agencification process in the three coun-
would generate economic, institutional, and tries studied. In the discussion section, I will
political benefits (Pollitt & Talbot, 2003; analyze major findings of the three case
Pollitt, Talbot, Caulfield, & Smullen, 2004; studies from which Indonesia can draw les-
Verhoest et al., 2012). sons from their experiences.
Similar to other doctrines such as pri-
vatization, agencification soon became a RESEARCH METHODS
buzzword in public administration reform
literature and practice (Wettenhall, 2005). This study used literature review as
Many developing countries especially in the main research method. Data were drawn
Asia, immediately jumped on the bandwag- from Comparative Public Organization Data
on to adopt agencification as a reform agen- Base for Research (COBRA) on agencifica-
da. Thailand, Hong Kong, and Pakistan are tion, which is documented in Verhoest et al
chosen as the locus of this study for two rea- (2012) that compares agencification process
sons. Firstly, both Hong Kong and Pakistan in 30 countries. The literature review process
have British legacy in their administrative was conducted through a snowball technique
system and Thailand is perceived to be one and considered all the works published in
of South East Asian countries that adopted relation to the major themes of the study that
NPM agencification (Haque, 2013). To that included agency, agencification, semi-
end, the case studies have a wealth of experi- autonomous agency, Thailand, Hong Kong,
ence in the realm of agencification, albeit in and Pakistan.

41 Copyright © 2017, JKAP, ISSN 0852-9213 (Print), ISSN 2477-4693 (Online)


Arif Pratama — Agencification in Asia: Lessons from Thailand, Hong Kong, and Pakistan….

With regards to agencification process In addition, the overarching objective


in Thailand, empirical case studies conduct- of the study was to conduct a comparative
ed by Bowornwathana (2012) which drawn analysis of the agencification process in the
from COBRA project were the main litera- selected case studies by highlighting similar-
ture source. While, supporting literature ities and differences among them. That way,
were obtained from A utonomisation of the the researcher was able to identify the main
Thai state: Some observations features that were common and those that
(Bowornwathana, 2006) and A utonomy and were different, across agencification pro-
Performance of Agentification: Cases of cesses in the three case studies. Subsequent-
Nine Independent Agencies in Thailand ly, the research was able to draw some les-
(Lorsuwannarat 2014). sons from their agencification experiences.
Meanwhile, for the case of agencifica- As Rihoux & Ragin, (2009) noted, human
tion in Hong Kong, empirical case studies reasoning is very much driven by compari-
that were conducted by Painter (2012) (also son, and went on to suggest that comparison
part of COBRA project) served as the main is a key approach in any empirical scientific
literature source. To supplement the main efforts. Understanding phenomena is facili-
literature sources, other articles were used tated by recognizing and comparing one to
that included Coordinating the government others.
bureaucracy in Hong Kong: An institutional Comparative case study approach has
analysis (Lam, 2005); Budgetary reforms in been used for a long time in social and polit-
two city states: impact on the central budget ical science discipline. Aristotle, conducted
agency in Hong Kong and Singapore a comparative social analysis of constitu-
(Cheung, 2006); The new public manage- tions of 184 city-states in Mediterranean,
ment reform and governance in Asian NICs: hence considered as one of the pioneers of
A comparison of Hong Kong and Singapore the approach. However, the systematic com-
(Lee & Haque 2006); Statutory bodies as parative study is relatively new, hence has
instruments of government in Hong Kong: not been that much used (Peters, 1990).
Review beginnings and analytical challenge Through comparison, political phenomena
ahead (Thynne, 2006) ; and Task Matters: A can be theorized as general preposition
Structural-Instrumental Analysis of the Au- (Hopkin, 2010:289).
tonomy of Hong Kong Government Bodies Following Jreisat (2011), this study
(Painter & Yee, 2010). studies attributes and performance of admin-
As regards agencification in Pakistan, istrative systems in order to identify and
empirical case studies conducted by Jadoon, recognize similarities and differences of
Jabeen, & Rizwan, (2012) (also part of CO- agencification process adopted in each case
BRA project) served as the main literature study. Additionally, the study places empha-
source. Like in the other two cases, supple- sis on successful or failed practices, thus,
mentary literature was used. The literature guiding alternative strategies for improving
included among others, A gencification in administrative reform outcomes.
Pakistan: A Comparative Study of Regulato-
ry and Service Delivery Agencies (Jadoon, Comparative Design
2010) ; Agencification of Public Service De- Practically, this study is a cross-
livery in Developing Societies: Experiences national comparative study as it compares
of Pakistan and Tanzania Agency Models several countries and specific institutions at
(Ncukwe & Adejuwon 2014); and A utono- a certain point in time (Figure 1). Thus, it is
my of public agencies in Pakistan: does different from a longitudinal study, which
structure matter? (Zahra & Jadoon, 2016) emphasizes time frame (Peters, 1990). Dur-
The above multiple case studies were ing the analysis process, institutions, states,
treated as literature sources that were used to and central processes were combined to have
obtain deeper understanding of the main and a better understanding of the similarities and
supplementary features of respective agenci- differences of the agencification process im-
fication processes that in turn provided in- plemented among them.
sights into the forms that different cases took Five basic approaches in comparative
as well as complexity. research are generally used (Fleming, 1970;

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JKAP (Jurnal Kebijakan dan Administrasi Publik) Vol.21 (1), May 2017 ---- https://journal.ugm.ac.id/jkap

Figure 1. The Comparative Design Anatomy

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….

2001). department and that carries out public tasks


The idea of agencification allows gov- at a national level on a permanent basis, is
ernments to divide ministerial and depart- staffed by public servants, is financed main-
mental portfolio institutions into smaller- ly by the state budget, and is subject to pub-
disperse units, which operate at arm's length lic legal procedures”.
of government and are responsible for carry- Similarly, Verhoest, Peters, Bouckaert,
ing public tasks like education, social wel- & Verschuere (2004) argued that an agency
fare, market regulation and other public af- will gain autonomy due to its separation with
fairs. The agency model can be distinguished ministry or central government and is freed
from the traditional bureaucratic model in from political affluence. They argued that an
that it combines expertise, autonomy, and agency as a structurally disaggregated body
specialisation of tasks in a narrow range of is formally separated from the central gov-
policy issues (Majone, 1997) and character- ernment. Agency carries out public tasks at
ised by structural devolution but still part of the national level on a permanent basis, is
public domain, funded and financed by pub- staffed by public servants, is financed main-
lic (James & van Thiel, 2010). ly by the state budget, and is subject to pub-
Nonetheless, creating a uniform defini- lic legal system. However, they also noticed
tion of agencification concept is truly a diffi- that the agency is not totally independent,
cult task. This is due to the fact that despite because executives normally have ultimate
the proliferation agencies, contextual factors political responsibility for its operations.
that underpin such a process has hampered
efforts to create single definition of the con- In addition, Verhoest et al (2004)
cept. In any case, not all type of agencies in statement on characteristic of an agency
many countries fit every case of agencifica- does not cover agencification in many coun-
tion phenomena. tries where the operation of agencies is not
In practice, differences in administra- handled by civil service system, but non-
tive systems make standardization of struc- civil service system or those funded by the
ture of agencies and their procedural system money mobilized from society. Further, the
difficult. Nonetheless, there is a common definition that consider agency to operate at
pattern which characterizes most agencifica- national level is no longer relevant. The
tion process wherever it occurs. The notion agency model now practiced at the local lev-
that agencification involves the creation of el as well.
separate agencies with the goal of imple- Overman & van Thiel (2015) offered
menting a policy or tackling special affairs is more generic and practically simple exposi-
supported and accepted by many scholars. In tion by stressing on the structural disaggre-
addition, the separate agency is accorded gation of the structure of the agency from
special privilege to operate within a semi- the ministry, carries out public tasks, and
autonomous framework. operates under more business-like conditions
However, to understand the concept of than traditional government bureaucracies.
agencification requires a good understanding Thus, agencies possess managerial autono-
of what the agency is. It is widely argued my to shape their own organizational struc-
that agencies are at arm's length from the ture and have autonomy in managing their
main hierarchical spines of ministries, and personnel and financial matters.
carry out public tasks (service provision, From the above definition, three main
regulation, adjudication, and certification) at components of agencification which will
a national level. Many of them have core prominently appeared in the body of litera-
staff who are public servants and are fi- ture can be identified. Firstly, the concept of
nanced by the state budget. From the legali- disaggregation refers to the degree of agency
ty perspective, agency is subject to at least that is separated from parent ministries. This
some administrative laws (Pollitt et al., component underpins efforts to split up large
2004). public sector hierarchies from unitary to
Trondal (2014:545) defines agency as multi-firm structures; achieving wider, flat-
“an administrative body that is formally sep- ter hierarchies internally; and specifying in-
arated from a ministerial, or cabinet-level, formation and managerial systems lead dif-

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JKAP (Jurnal Kebijakan dan Administrasi Publik) Vol.21 (1), May 2017 ---- https://journal.ugm.ac.id/jkap

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).
Copyright © 2017, JKAP, ISSN 0852-9213 (Print), ISSN 2477-4693 (Online) 46
JKAP (Jurnal Kebijakan dan Administrasi Publik) Vol.21 (1), May 2017 ---- https://journal.ugm.ac.id/jkap

Table 1. Comparison of Agencification

Thailand Hong Kong Pakistan


Initiation Autonomous Public Organi- Emerged in 1960’s with From 1946 and legally struc-
zation Act of 2542/1999 structural adjustment in 1997 tured after 1999

Role Model UK and New Zealand UK UK

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

Autonomy Low Low in financial manage- Adequate autonomy in per-


ment sonnel, operational and
High in personnel, operation- managerial
al and strategic policy
Control Highly control through par- Steering and monitoring Traditional control by parent
ent minister performance ministry
Absent of performance-
based control

Contextualization yes Yes yes

In Thailand, the agency is called Au- ramifications are established.


tonomous Public Organizations (APOs) Thus, based on the above description,
which are managed by committees or Thai agencification can be described as op-
boards. They mainly operate in the fields of erationalization of bureaucratization within
education, training and development, art and the agencification. It influences the degree of
culture, sports, research and environment, autonomy and control over APOs. Further-
health and social welfare. The establishment more, increasing numbers of APOs in Thai-
of APO does not require approval of the par- land has largely generated more benefits to
liament, rather authorization of the King is politicians and high-level bureaucrats than
sufficient. Thus, by eliminating the need for improvement in public service deliveries
the approval of Thai legislature, the regula- (Bowornwathana, 2006, 2012).
tion vested the executive arm of government Moreover, based on research conduct-
with more authority to establish new APOs. ed by Lumtanshub (2011) in Verhoest et al.,
Nonetheless, from the perspective accounta- (2012:387), APOs in Thailand used ‘Strong
bility, absence the vital role of parliament in Board, Weak CEO’ model. In Thailand, the
establishing APO signals reduced- management of APOs consisted of two man-
accountability. agerial entities. Based on the locus of ac-
After one decade, Thai agencification countability, agencies can be distinguished
has proliferated as the government has on as boards which are accountable to the min-
average been creating at least two to three ister and the Chief Executive Officer (CEO)
agencies annually and by 2006 only two who is charged of day-to-day APOs’ admin-
agencies have had their operation terminat- istration. ‘Strong Board, weak CEO’model
ed (Bowornwathana, 2006: 27). The passion underpins the asymmetrical relationship be-
to create new APOs emerged when high tween board members and CEO in which
government officials have a strong motiva- board members have a stronger influence
tion to do so. To that end, the process of than CEO in managing APOs. In this case,
agencification in Thailand can be described the hierarchical accountability is very evi-
as being based on bureau-shaping model dent, which contrary to NPM principle that
(Dunleavy, 1991). Whenever bureaucrats requires agencies to conduct their tasks on a
wish to expand their organizations, new contractual basis rather than following the
APOs that have new authorities and budget traditional hierarchy.
47 Copyright © 2017, JKAP, ISSN 0852-9213 (Print), ISSN 2477-4693 (Online)
Arif Pratama — Agencification in Asia: Lessons from Thailand, Hong Kong, and Pakistan….

However, the Thai government sub- Hong Kong


jects APOs to the same rules, regulations Hong Kong -the city state- was re-
and particular monitoring system that apply turned to China from British rule in 1997.
to other government organizations. The im- China adopted ‘one country two system’
plication of the above mechanism is that the policy in which Hong Kong has its own le-
autonomy of APOs is questionable. In fact, gal system, police, tax, and budget authority
Bowornwathana (2012) calls it as ‘Thai-style except defence affairs. In fact, the people of
agencification in a bundled government’ Hong Kong have never achieved democracy.
which is characterized by the expansion of Administrative structures are strongly influ-
bureaucracy and not managed at arms-length enced by the British system and wider Com-
rather under the arms of parent ministries. monwealth practices, yet familiar Westmin-
Therefore, it is contrary to the ideal type of ster systems of democratic political control
agencification which involves reducing the and accountability were not transplanted.
size of bureaucratization, emphasizes effi- However, Hong Kong’s bureaucracy has
ciency and operates under flexible- vast experience in automatization and or-
autonomous features. ganizational differentiation albeit being cen-
Another study conducted by Lorsu- tralized and undemocratic government
wannarat (2014) applied the concepts of (Painter, 2012: 342).
agentification of NPM to examine the multi- The notion of agencies is not some-
dimensions of autonomy and to evaluate the thing new in Hong Kong, and it can be
performance of the 9 agencies, with respect traced to the British administrative system
to effectiveness, financial self-reliance, and inherited in 1960’s. The system is character-
the impact on industrial development. The ized by spate of voluntary associations and
study used both qualitative and quantitative business organizations providing service de-
approaches in collecting data using three fo- livery to the society (Painter, 2012; Painter
cus groups, 37 in-depth interviews, and 3428 & Yee, 2010; Thynne, 2006).
questionnaire surveys. Study findings The increasing number of agencies in
showed that agencification in Thailand gen- Hong Kong was very evident after 1980
erated side effects whenever actors who when 60% of existing bodies were created.
were involved with the transformation did To that end, the above phenomena corrobo-
not always act rationally. rates the argument that NPM has led the pro-
There was no clear-cut division be- liferation of agencies in terms of numbers
tween the central department and the agen- and types (James, 2003). From the autonomy
cies. While the department was expected to perspective, Hong Kong has enjoyed autono-
transfer its duties to the new agencies, such mous agencies. Based on the COBRA online
duties remained under the control and over- survey of 111 government bodies which are
sight of departments. Thus, the process was product of agencification, attest to the exist-
plagued by overlapping of duties since the ence and achievement of autonomy. None-
departments continued to carry out similar theless, autonomy of agencies varied by
functions that had ostensibly been trans- function with lowest autonomy identified in
ferred to the agencies. financial management and higher autonomy
To overcome the problems, Lorsu- found in realms of personnel, operational,
wannarat (2014) recommended two policy and strategic policy.
suggestions. Firstly, the need to restructure The above condition is attributable to
both organizational structures and the rela- the fact that Hong Kong government laid
tionship framework between the ministry emphasis on budgeting and financing the
and the agencies. To eliminate duplication delivery of public services (Cheung, 2006)
problems, there should be coordination motivated by the need to maintain low tax
mechanism between ministries and agencies regime. In addition, the high participation of
in the conduct of their duties. Secondly, the voluntary associations and business organi-
need for clear policy guidelines to regulate zations which is a legacy of British adminis-
ministries and agencies in conducting their trative system also help to enhance the au-
duties and delivering public services. tonomy of agencies.
Another explanation is attributed to
Copyright © 2017, JKAP, ISSN 0852-9213 (Print), ISSN 2477-4693 (Online) 48
JKAP (Jurnal Kebijakan dan Administrasi Publik) Vol.21 (1), May 2017 ---- https://journal.ugm.ac.id/jkap

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-
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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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