Wiesel 2014

Financial Accountability & Management, 30(2), May 2014, 0267-4424
From New Public Management

to New Public Governance?
Hybridization and Implications
for Public Sector Consumerism
FREDRIKA WIESEL AND SVEN MODELL∗
Abstract: This paper examines how variations in the notion of public sector
consumerism become embedded in diverse governance practices. To this end, we
extend the literature on public governance logics with insights from research on
public sector consumerism and hybridization in public sector management reforms.
Through a comparative, multi-level analysis we trace the development of two
governance logics largely corresponding to the distinction between New Public
Management (NPM) and New Public Governance (NPG) in Swedish transport
infrastructure policy. In contrast to research predicting or prescribing a relatively
radical shift between such governance logics we show how they partly co-evolved along
two reform paths entailing notable variations in the degree of hybridization and the
embedding of consumerist notions in emerging governance practices. In doing so,
we draw attention to how the hybridization of governance logics is contingent on
the alignment of diverse interests and differences in the process through which
such logics are brought together. We discuss the implications of these findings for
future research into public sector consumerism and hybridization in public sector
management reforms.
Keywords: consumerism, governance, hybridization, public management
∗
The first author is from Stockholm University School of Business, Sweden. The second
author is from Manchester Business School, University of Manchester, UK and NHH –
Norwegian School of Economics, Bergen, Norway. Earlier versions of this paper were presented
at the 32nd Annual Congress of the European Accounting Association, Istanbul (2010), the
6th International Conference on Accounting, Auditing and Management in Public Sector
Reforms, Copenhagen (2010) and a research seminar at Ritsumeikan University, Japan
(2012). The authors are grateful for the insightful comments of Gustav Johed and two
anonymous referees on earlier drafts. The research was funded by the Swedish Research
Council and the Jan Wallander and Tom Hedelius Foundation. The paper was partly
completed whilst the second author was a Visiting Professor at the University of Sydney
in 2011.
Address for correspondence: Sven Modell, Manchester Accounting and Finance Group,
Manchester Business School, University of Manchester, Crawford House, Booth Street West,
Manchester M15 6PB, UK.
e-mail: Sven.Modell@mbs.ac.uk

C 2014 John Wiley & Sons Ltd, 9600 Garsington Road,
Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA. 175
176 WIESEL AND MODELL
INTRODUCTION
Over the past decade the emphasis in the literature on public sector
management reforms has gradually changed from focusing on the management
of individual organizations to broader concerns with the governance of complex
systems of service provision. This development has been described in terms
of a shift from New Public Management (NPM) to New Public Governance
(NPG) or similar acronyms signaling a rather fundamental change in reform
ethos across a number of countries.1 However, the broad and variegated
literature on public governance provides mixed evidence of whether such a
shift is indeed manifest in practice. Some authors have prescribed or predicted
a relatively linear development where such changes fulfill the movement away
from traditional, hierarchical forms of governance instigated through the earlier
shift from Progressive Public Administration (PPA) to NPM (e.g., Denhardt and
Denhardt, 2000; Dunleavy et al. 2005; and Entwistle and Martin, 2005). On the
other hand, several commentators see considerable continuity and suggest that
governance practices associated with diverse reform movements often overlap or
develop in tandem without fully replacing PPA (e.g., Ferlie and Andresani, 2006;
Hill and Lynn, 2005; Hood and Peters, 2004; Lapsley, 2008; and Newman, 2001).
One manifestation of such continuity is the tendency to conceive of citizens and
beneficiaries of public services as ‘customers’ or ‘consumers’. Whilst earlier NPM
reforms often tended to equate such changes with the ability of beneficiaries to
exercise choice under competitive market conditions, the idea of public sector
consumerism has since expanded to assume broader meanings and does not
necessarily require the existence of market-like arrangements (Clarke et al.,
2007; Fountain, 2001; Modell and Wiesel, 2008; Powell et al., 2010; and Tuck
et al., 2011). This development has also entailed hybrid forms of governance
blending consumerist notions with diverse public management practices (Clarke
et al., 2007; and Fotaki, 2011).
Whilst the emergence of hybrids in the wake of public sector reforms is
a widely documented phenomenon (e.g., Brown et al., 2003; Jacobs, 2005;
Joldersma and Winter, 2002; Koppell, 2001; Meyer and Hammerschmid, 2006;
and Thomasson, 2009), the literature on this topic has been dominated by static
analyses of organizational forms or professional identities. Few studies have
examined the process of hybridization in any greater detail (e.g., Kurunmäki,
2004; and Kurunmäki and Miller 2006 and 2011). The present paper contributes
to this process-orientated stream of research by examining how the hybridization
of diverse governance logics affected the embeddedness of consumerist notions in
the field of Swedish transport infrastructure policy. The notion of governance
logics has emerged as a key concept for examining variations in public
governance practices over the past decade (Heinrich et al., 2004; Hill and Lynn,
2005; and Lynn et al., 2000) and can be used to derive analytical archetypes that
enhance our understanding of how such practices shape the idea of public sector
consumerism. We argue that the governance logics underpinning the notions

C 2014 John Wiley & Sons Ltd
FROM NEW PUBLIC MANAGEMENT TO NEW PUBLIC GOVERNANCE 177
of NPM and NPG, respectively, entail relatively distinct conceptions of public
sector consumerism but recognize that more context-specific manifestations of
this phenomenon emerge as a result of hybridization. Hybridization is defined as
the process through which elements of diverse governance logics are integrated
into context-specific configurations of governance practices (cf. Haveman and
Rao, 2006). Differences in the process of hybridization are seen as key driving
force for the propensity of different conceptions of public sector consumerism
to become more or less strongly embedded in the organizations under deeper
examination.
We start by developing an analytical framework specifying how diverse
conceptions of public sector consumerism relate to the governance logics
underpinning NPM and NPG. We also explicate how shifts between such
logics may be understood as a process of hybridization. This is followed by a
presentation of the research design. The ensuing empirical inquiry starts with
a brief overview of key governance reforms in Swedish central government and
then charts the development of the NPM and NPG logics, respectively, in the
field of transport infrastructure policy. We conclude the paper with a discussion
of our main findings and their implications for future research.
ANALYTICAL FRAMEWORK
The notion of public governance is elusive and has been conceptualized in

a variety of ways by scholars adopting narrower or wider definitions of this
phenomenon (see e.g., Newman, 2001; Osborne, 2006 and 2010; Peters and
Pierre, 1998; Pierre, 2000; and Rhodes, 1996 and 2007). The identification of
distinct governance logics is one way of making analytical sense of this diversity
whilst recognizing that evolving governance practices may form more context-
specific configurations that blend elements of such logics. To derive analytically
distinct governance logics, we use a modified version of the taxonomy developed
by Lynn et al. (2000). Individual governance logics are viewed as constituted
by coherent, interdependent sets of citizen interests, legislative preferences,
structures and forms of organizing, primary tasks of agencies and aspects
of control and performance.2 Table 1 summarizes what we see as distinct
governance logics emerging from the alleged shift from NPM to NPG and
contrasts them with the logic underpinning the earlier idea of PPA (cf. Denhardt
and Denhardt, 2000; Hood, 1991 and 1995; and Osborne, 2006). For the purpose
of our empirical analysis we mobilize these logics as analytical archetypes whilst
recognizing that deviations from such archetypes emerge through the process
of hybridization and give rise to differences in public sector consumerism.
In what follows, we first outline how variations in the idea of public sector
consumerism are embedded in different governance logics and then describe
how shifts between such logics may be examined as processes of hybridization.
The shift from PPA to NPM in the 1980s and 1990s arguably entailed
changes in the conception of citizen interests from those of constituents or

Table 1
Governance Logics Associated with PPA, NPM and NPG
PPA Logic NPM Logic NPG Logic
Conception of Constituents/tax Customers/consumers Co-producers

citizen interests payers
Main legislative Regulation Improving economic Enhancing citizen
preference performance orientation
Structures and Unified bureaucracies Competitive markets Collaborative
forms of networks
organizing
Primary tasks of Policy execution Market exchange Network
agencies coordination
Main focus of Inputs and Outputs Inter-
control intra-organizational organizational
processes processes and
outcomes
Key performance Compliance with rules Efficiency and Effectiveness and
aspects and regulations financial results citizen/ customer
satisfaction
tax-payers with well-defined constitutional rights and obligations to those of

customers or consumers freely choosing service providers to satisfy their needs
and preferences (Alford, 2002; and Lowery, 1998). Such emerging notions of
consumerism were often underpinned by reform programmes aimed at signif-
icant deregulation as a means of improving the economic performance of the
public sector (Hood, 1991 and 1995). Deregulation signifies a shift in legislative
preferences whereby concerns with economic performance improvements, often
expressed in terms of enhanced efficiency, take precedence over the more
traditional roles of public agencies in enforcing citizens’ compliance with the
rule of law (Hood, 1995; Meyer and Hammerschmid, 2006; and Newman,
2000). To reinforce the incentives to this end, public agencies were increasingly
transformed from unified bureaucracies charged with policy execution into
more autonomous units contracting with each other and external customers
under competitive market conditions (Hood, 1995; Le Grand, 2007; and Peters
and Pierre, 1998). Notions of customer choice were often seen as pivotal
prerequisites of such competition, amplifying the efficiency-inducing pressures
stemming from market-like arrangements (Greener, 2008; and Osborne, 2006).
The overriding concerns with efficiency also became manifest in control practices
heavily geared towards devolved accountability for financial, output-focused
performance aspects, as opposed to the detailed political regulation of inputs
and intra-organizational processes allegedly characterizing PPA (Brignall and
Modell, 2000; Hood, 1991 and 1995; and Norman and Gregory, 2003). Whereas
detailed monitoring of operating-level processes was required to safeguard

organizational compliance with rules and regulation, clearly defined output
indicators were introduced to enable market exchange and assess organizational
efficiency (expressed as some relation between outputs and inputs) and financial
results (Hood, 1995).
The governance logic associated with NPM thus tends to subsume the
notion of consumerism under market-centred efficiency concerns. This differs
significantly from the conception of citizen interests underpinning the emerging
NPG logic. Several observers have noted how the discourse surrounding the
shift from NPM to NPG entails a change in the views of citizens from relatively
passive and anonymous consumers to co-producers, more actively involved in
service provision and decision-making and requiring coordinated services from
multiple agencies (e.g., Bovaird, 2007; Fotaki, 2011; Powell et al., 2010; and
Simmons et al., 2007). Such changes have been tied up with reforms revealing
stronger legislative preferences for enhanced citizen orientation and the more
qualitative aspects of service provision as opposed to a one-sided emphasis on
efficiency and economic performance improvements (Denhardt and Denhardt,
2000; McGuire, 2001; and Osborne, 2006). This has been accompanied by a
growing critique of market-like arrangements and the propagation of network-
based forms of organizing placing stronger emphasis on inter-organizational
collaboration than competition to meet customer needs (Dunleavy et al., 2005;
Entwistle and Martin, 2005; Newman, 2001; and Osborne, 2006). Effective
network coordination, rather than efficient market exchange, thus becomes a
primary task of public agencies and the idea of customer choice as a precursor of
competition gives way to broader concerns with whether agencies jointly meet
the needs of citizens. This necessitates a re-orientation of control practices from
a narrow focus on the outputs of individual agencies to inter-organizational
processes and aggregate outcomes of service provision (Heinrich, 2002; Norman
and Gregory, 2003; and Osborne, 2006). Such outcomes are generally seen as
indicative of whether agencies meet broader, societal objectives and thus denote
an emphasis on effectiveness rather than efficiency as a key performance aspect
(Heinrich, 2002; and McGuire, 2001). However, the difficulties in identifying
‘objective’ outcome indicators coupled with the pressures to demonstrate how
public agencies meet citizen needs and preferences have led to widespread use of
citizen or customer satisfaction indicators as proxy measures of effectiveness (see
e.g., Higgins, 2005; Kelly, 2005; and McGuire, 2001). This reinforces consumerist
notions of citizen interests (Fountain, 2001; and Watkins and Arrington, 2007).
The variations on the idea of public sector consumerism associated with the
shift from NPM to NPG may thus be summarized as follows. The NPM logic
entails a relatively narrow focus on customer choice under competitive market
conditions as a means of enhancing the efficiency of individual agencies. By
contrast, the NPG logic represents a transition towards growing recognition
of the wider and more pro-active involvement of citizens as co-producers
in more collaborative systems of public service provision. The embedding of
these contrasting notions of consumerism in organizations may be manifest

in different patterns of change. As noted in the introductory section of the

paper, some authors have prescribed or predicted a linear development whereby
the notion of NPG largely replaces some previously entrenched NPM logic.
Analytically, such changes will be manifest in relatively radical and complete
shifts between these governance logics. The prospects of hybridization offer
a different scenario, however, according to which elements of diverse logics
are combined into more or less stable configurations through less punctuated
and discontinuous processes of change (Haveman and Rao, 2006). This will be
manifest in more partial transitions from one governance logic to another and
the retention of key elements of extant logics in emerging configurations. Such
transitions may also imply that elements of long-established PPA logics continue
to influence governance practices. However, the process of hybridization is
rarely free from conflicts and tensions and the extent to which it produces
more lasting changes in governance practices requires close empirical attention
(Kurunmäki and Miller, 2006 and 2011). Whether shifts between the NPM
and NPG logics occur and whether emerging configurations will include long-
established governance practices, such as those associated with PPA, thus need
to be approached as open-ended, empirical research questions.
To examine these questions we adopt a largely exploratory research
approach. Rather than tracing the hybridization of governance logics to pre-
defined conceptual categories, we investigate the context-specific mechanisms
influencing such processes to explain how variations in the notion of public sector
consumerism occur. Following Haveman and Rao (2006), we distinguish broadly
between the blending and segregating mechanisms fostering and hampering
hybridization. Blending mechanisms are constituted by planned and unintended
changes through which various governance logics are brought into contact with
each other and cause elements of such logics to hybridize into new configurations
of governance practices. Conversely, segregating mechanisms are the social and
political structures and processes preventing such blending from taking place
by keeping diverse governance logics separate. This may be expected to foster
polarization, rather than hybridization, of governance logics (cf. Jacobs, 2005).
Blending and segregating mechanisms may also co-exist and generate complex
dynamics underpinning processes of hybridization and polarization (Haveman
and Rao, 2006). We now turn to describe the research design adopted to explore
such dynamics.
RESEARCH DESIGN
The research design guiding our empirical study is based on a comparative,

multi-level approach exploring how different governance logics emerged and
shaped notions of public sector consumerism in Swedish transport infrastructure
policy which is, in turn, part of the larger field of Swedish central government.
The use of multi-level approaches has been recommended in the literatures on
public governance logics (Lynn et al., 2000) as well as hybridization (Kurunmäki

and Miller, 2011). However, to track the process of hybridization requires

close attention to the evolution of concrete governance practices in their
organizational context. Whilst the antecedents of hybridization may partly
be traced to the salience of various governance logics in policy discourses
that are common to a particular jurisdiction, we also need to examine the
more organization-specific contingencies conditioning this process. The main
emphasis of our analysis is thus on two organizations – the Swedish Rail and Road
Administrations – within the broader jurisdiction under examination. These
organizations are the two largest agencies in the field of transport infrastructure
policy and have been subject to largely similar reforms since the late 1980s.
The agencies also have similar operating-level responsibilities which primarily
include infrastructure construction, maintenance and planning on a nation-wide
basis for rail and road transports, respectively.
Our multi-level analysis was part of a larger research programme examining
governance and control practices in Swedish central government and encom-
passing case studies in a broad range of government agencies (see Modell et al.,
2007; and Modell and Wiesel, 2009). For the purpose of this paper, we examined
relevant policy discourses evolving since the late 1980s with particular emphasis
on the area of transport infrastructure policy. This entailed a systematic review
and content analysis of key policy documents (e.g., parliamentary proceedings,
government bills and government-initiated inquiries), documents issued by other
relevant actors and interviews with civil servants and policy advisors directly
involved in compiling such documents. The analysis of the policy discourse was
also complemented with a review of prior empirical research on reforms in
Swedish central government over the relevant time period.
The case studies in the Swedish Rail and Road Administrations were
conducted on a parallel basis over a period of three years (2004-07) and were
followed up through a smaller number of interviews a few years later. The case
studies comprised both real-time investigations of ongoing change processes
and retrospective analyses of the emergence of new governance practices. The
primary data sources were interviews, observations and various documents
(e.g., planning documents, external reports and internal documents describing
agency-specific change projects). Following a theoretical sampling approach,
interviews were conducted with managerial and administrative support staff
at organizational headquarters and across a representative cross-section of
all operating areas of the two agencies. In both cases, interviews and other
forms of data collection were undertaken in three consecutive phases until a
reasonable degree of theoretical saturation was achieved (Eisenhardt, 1989).
Key informants in both agencies were interviewed on more than one occasion
throughout the duration of the case studies and emerging findings were validated
through repeated member checking and debriefing sessions. The interviews at
the policy level as well as within the two case organizations generally lasted
between one and two hours and followed a semi-structured format. Out of the

Table 2
Overview of Interviews
Level of Analysis Policy Level Intra-organizational Levels
Civil Servants/ Senior Management/

Interviewee Policy Headquarters Middle
Position Advisors Staff Management Total
Organization
Ministry of Enterprise, Energy and 2 2
Communications
Other government departments 1 1
National Audit Office 1 1
Swedish Agency for Public 1 1
Management
National Council for Quality and 1 1
Development
Other policy advisors/consultants 2 2
Swedish Rail Administration 10 19 29
Swedish Road Administration 7 31 38
Total 8 17 50 75
75 interviews, all but six were recorded and transcribed verbatim. Table 2 shows
the distribution of interviews across different levels of analysis.
For the purpose of the present paper, we analyzed the data with an eye
to how the diverse governance logics became manifest in evolving governance
practices and shaped notions of consumerism, or customer orientation,3 across
the two agencies. Given the multifaceted nature of the concept of public sector
consumerism we first searched for diverse manifestations of this phenomenon,
such as those outlined in the preceding section, and then sought to locate such
variations in the broader development of governance logics. To this end we
searched the data for manifestations of shifts between each of the constituent
elements of the governance logics outlined in Table 1. As explicated in the
foregoing, we regard partial shifts between these constituent elements (as
opposed to more complete or no shifts) as indicative of hybridization. The
analysis, summarized in Tables 3 and 4, revealed great similarities between
the two agencies in this regard but also uncovered notable variations within
the two organizations attributable to their division into distinct purchaser
and provider units in the 1990s. These reforms produced a relatively forceful,
though not complete, shift towards the NPM logic in the provider units of both
agencies. By contrast, the purchaser units were less affected by this NPM logic
and rather underwent a partial shift towards the NPG logic emerging in the
wake of later government reforms. Whilst both reform movements entailed
elements of hybridization, they fostered very different conceptions of public

Table 3
Shifts Between the PPA and NPM Logics in the Provider Units of the
Swedish Rail and Road Administrations
PPA Logic Shifts NPM Logic
Conception of citizen Constituents/tax Customers/consumers

interests payers
Main legislative Regulation Improving economic
preference performance
Structures and forms Unified bureaucracies Competitive markets
of organizing
Primary tasks of Policy execution Market exchange
agencies
Main focus of control Inputs and Outputs
intra-organizational
processes
Key performance Compliance with rules Efficiency and
aspects and regulations financial results
Legend:
Relatively complete shifts.
More partial shifts.
Table 4
Shifts Between the PPA and NPG Logics in the Purchaser Units of the
Swedish Rail and Road Administrations
PPA Logic Shifts NPG Logic
Conception of citizen Constituents/tax Co-producers

interests payers
Main legislative Regulation Enhancing citizen
preference orientation
Structures and forms Unified bureaucracies Collaborative

of organizing networks
Primary tasks of Policy execution Network coordination

agencies
Main focus of control Inputs and Inter-organizational

intra-organizational processes and
processes outcomes
Key performance Compliance with rules Effectiveness and
aspects and regulations citizen/ customer
satisfaction
Legend:
Partial shifts.
No shift.

sector consumerism. We subsequently deepened our analysis of the blending and

segregating mechanisms underpinning differences in hybridization by drawing
on data from the policy level as well as the two agencies.
GENERAL GOVERNANCE REFORMS IN SWEDISH CENTRAL GOVERNMENT
Before delving into the development of varying conceptions of consumerism

in the two case organizations, it is necessary to consider some changes in
governance practices that are common to all central government agencies
in Sweden. The most notable governance reform during the period under
examination was the gradual evolution of ‘Managing for Results’ (MFR) as
a new, over-riding governance mechanism ostensibly replacing the earlier
emphasis on annual budgets and detailed planning to regulate resource
allocation and operating-level processes. Consistent with the NPM logic, the
Government introduced MFR in the late 1980s as a vehicle of deregulating and
improving the efficiency of agency operations through a transition towards more
output-focused control practices based on a limited number of clearly articulated
objectives and performance indicators (Sundström, 2003 and 2006).
The introduction of MFR thus heralded a departure from key elements of
the PPA logic such as a reduction in detailed control of inputs and intra-
organizational processes and enhanced emphasis on economic performance
aspects rather than direct regulation of agency operations. However, its
subsequent evolution during the 1990s was fraught with considerable difficulties
in achieving such an ideal. In general, the Government proved reluctant to
wholeheartedly subscribe to a governance logic solely based on devolved account-
ability for outputs (Holmblad Brunsson, 2002; Modell, 2006; and Sundström,
2003). The backdrop to this can partly be sought in the limited availability of
alternative governance mechanisms for controlling agency operations besides
annual budgeting and the general legislative process. In contrast to many other
countries, Swedish central government has long been renowned for the autonomy
afforded to agencies (Pierre, 1993 and 2004). Constitutional frameworks make a
clear distinction between policy-making and the executive branch of government
and seriously curtail the possibilities of elected politicians to regulate agency
operations through direct interventions. Hence the use of MFR as a vehicle of
deregulation marked a less radical break with extant governance practices for
enforcing the rule of law although it initially signaled some change in legislative
preferences in line with the NPM logic. Rather than replacing annual budgets as
a key control mechanism it also evolved into an integral part of extant resource
allocation practices and fostered detailed reporting requirements covering intra-
organizational processes as well as outputs (Modell, 2006; Modell et al., 2007;
and Sundström, 2003). Taken together, this rendered MFR less distinct from
the practices it initially purported to supplant and effectively resulted in some
hybridization between elements of the PPA and NPM logics.

Similar tendencies towards hybridization are discernible within individual
agencies. Since the early 1990s, government agencies have made considerable
efforts to extend the notion of MFR from external governance to internal control
practices. However, rather than being crystallized around a few output-focused
objectives and performance indicators such practices have continued to entail
a broad range of operating-level aspects of long-standing concern to individual
agencies as well as the Government. In many cases, MFR was also conflated with
detailed, internal regulation of operating-level processes derived from rules laid
down in legislation and other external frameworks (Modell, 2006 and 2009;
and Modell et al., 2007). The Swedish Rail and Road Administrations were
no exceptions to this pattern. Similar to many other government agencies
(see Modell, 2009 and 2012), both organizations adopted balanced scorecard-
inspired frameworks for disaggregating government objectives into more specific
targets and reporting requirements for organizational sub-units. The over-riding
systems of MFR evolving in both agencies thus continued to be regulated by
external reporting requirements to a significant extent. The balanced scorecard-
inspired frameworks provided some structure for tracing the connections
between a range of input-, process- and output-focused performance indicators.4
However, it also prevented MFR from developing into a more parsimonious
control mechanism solely focused on outputs. The balanced scorecard-inspired
frameworks were also integrated with the hierarchically structured planning and
budgeting processes within the two agencies and were widely seen as cementing
such control practices. As explicated in the following sections, however, these
hierarchically focused governance practices varied in their amenability to
hybridization with the broader governance logics evolving in the provider and
purchaser units, respectively.
THE DEVELOPMENT OF THE NPM LOGIC IN TRANSPORT INFRASTRUCTURE

POLICY
The Development of Consumerism and Hybridization

The development of notions of consumerism in the provider units of the
Swedish Rail and Road Administrations was intimately linked to the gradual
introduction of competitive market contracting since the late 1980s. As
explicated in this section, this development entailed some hybridization between
such arrangements and extant, hierarchically focused governance practices and
reinforced efficiency-centred notions of consumerism pivoting on the ability of
customers to exercise a degree of choice. Table 3 summarizes the shift between
governance logics underpinning this development.
The genesis of competitive market contracting in the field of transport
infrastructure policy can be traced to the formation of the Swedish Rail
Administration and its separation from Swedish Rail in 1988. Whereas the

two agencies had long been part of a unified organization – the Swedish
Rail Transport Agency – this re-structuring took place against the backdrop
of an escalating financial deficit and growing government concerns about the
competitiveness of rail transports being hampered by regulatory constraints.5
To address such problems, the Swedish Rail Administration retained a monopoly
position and was left in charge of rail maintenance and various regulatory
tasks (e.g., allocation of rail capacity, enforcement of safety standards), whilst
Swedish Rail was to operate train services and develop more ‘business-like’
ways of responding to competitors. This represents an attempt to separate
policy execution from more commercially focused operations. A clearer focus
on customer needs and preferences was seen as an integral part of aligning
agency operations with the latter, commercial ethos:
With the new model, the task of Swedish Rail to develop attractive and competitive
transports of humans and goods will become clearer. The ability of Swedish Rail
to continuously meet inter alia customer demands for service and punctuality is
paramount in this respect. In this context, it is worth noting that the Swedish Rail
Transport Agency is currently engaged in operations that are not directly related to rail
transports. The new Swedish Rail should more clearly orientate its operations towards
business-like development of rail transports than is presently the case. (Swedish
Parliament, 1987/88, p. 103).
The separation of rail maintenance and train service operations was

followed by government reforms gradually deregulating the market for rail
transports and enabling private sector operators to compete for contracts with
Swedish Rail to reap further efficiency gains in the early 1990s (Swedish
Parliament, 1993/1994a). Consistent with the NPM logic, the initial emergence
of consumerist notions in transport infrastructure policy was thus underpinned
by a changing policy discourse emphasising the need for deregulation and
enhanced market competition to address economic performance problems.
The idea of enhanced customer choice and market competition as important
drivers of efficiency also spilled over into other agencies over the following
years. This development started with the adoption of an internal purchaser-
provider model in the Swedish Road Administration in 1992 and was followed
by a similar initiative in the Swedish Rail Administration in 1998. In both
organizations, this entailed the creation of relatively independent provider
units primarily in charge of infrastructure construction and maintenance and
diverse support functions (e.g., information systems services, training). Similar
to the earlier division of the Swedish Rail Transport Agency, this shift marked
a separation of commercially focused operations from policy execution which
continued to be vested in organizational headquarters and the purchaser units.
Whilst the revenue streams of most of the provider units continued to be
dominated by internal contracting with the purchaser units, they were gradually
exposed to external competition with private sector contractors. Many provider
units also expanded their services to external customers. Interviewees in both
agencies emphasized the need for efficiency gains (especially cost savings) as the

dominant rationale for these reforms. There was also ample evidence of the shift
away from direct reliance on taxpayers’ money as parts of unified government
bureaucracies reinforcing such concerns across the provider units. For instance,
the manager of one of the provider units in the Swedish Rail Administration
explained:
The customers don’t just come by themselves and we need to have something attractive
to offer them and keep our prices down and start thinking in financial terms – we
haven’t done that as an old government agency. – ‘What do you mean keeping costs
down, if the budget is over-spent we just call for the Minister and then we get a little
extra.’ – So it has probably been a rather difficult journey to get all staff to understand
that we live under certain financial premises and that without the customer we are
nothing.
Similar remarks, indicating how emerging notions of customer choice reinforced

the pressures for enhanced efficiency, featured in the Swedish Road Adminis-
tration:
I think it’s very simple because we don’t have any government grants. We have to
make sure we have customers who demand our products and to provide services that
will be in demand. Because if there is no demand, we get no cost coverage. So it’s a
very simple relationship that creates the driving force for focusing on the customer
. . . for us, it’s a matter of survival to be customer-orientated.
First and foremost, we need show some profitability and we can only do that by having
satisfied customers.
The relatively forceful and complete transition towards market-like arrange-

ments was accompanied by a more partial shift in the hierarchical control
practices underpinning MFR aimed at devolving accountability for financial
results (see Table 3). Interviewees in both agencies repeatedly referred to
organizational headquarters and the Government as ‘owners’, to which they are
primarily held accountable for meeting financial targets. Since the introduction
of purchaser-provider splits, each provider unit has been held accountable for
financial, output-focused performance aspects, such as profitability, full-cost
coverage or return on capital, and are expected to break even or generate a
surplus that is comparable to that of private-sector competitors. In contrast to
the purchaser units, they have also been less constrained by external reporting
requirements to the Government and have enjoyed greater discretion in tailoring
the balanced scorecard-inspired systems of MFR to their unique operating-
level requirements. This enabled them to develop customized performance
indicators, such as lead times in service delivery and customer response times,
reflecting operating-level processes. However, such performance aspects were
widely seen as subordinate to financial results. The need to prioritise efficiency
gains also appears to have increased over time as a result of the pressures for
financial accountability replacing direct political regulation of operations, or as
the manager of one of the provider units in the Swedish Road Administration
argued:

I have never experienced any political pressures to do things this way or another. But
on the other hand we have very transparent financial accounts. . . . and [customer
orientation] is more focused on the concept of profitability today than earlier. So we
work a lot on efficiency – on becoming more efficient.
However, the transition towards devolved accountability for financial results

did not fully replace the regulatory arrangements governing the field of
transport infrastructure policy. As explicated below, this fostered an element
of hybridization between extant and emerging governance logics and generated
some tensions.
One manifestation of such tensions was the conflicting relationships between
the provider units and organizational headquarters evolving from lingering
requirements to comply with various forms of political regulation. Interviewees
within the provider units complained about the propensity of headquarters to
occasionally transmit regulatory pressures from the Government and how this
prevented them from meeting wider customer demands and detracted from
their identity as fully independent entities. The manager of one of the provider
units in the Swedish Rail Administration summarized the resulting tensions as
follows:
The more we move forward, the more our employees tend to view the rest of the
Swedish Rail Administration as very alien and the more young people we hire the
greater the distance . . . We are so incredibly focused on the customer and our business
and pay very little attention to such [regulatory requirements] as keeping official
records . . . the latter doesn’t really exist, even if we are obliged to do it.
Such concerns were often accompanied with requests to increase the autonomy
of the provider units through further devolution and deregulation. Lingering
elements of political regulation were seen as particularly problematic in so far
as they constrained the possibilities to raise prices or develop novel services
to meet customer requests. Interestingly, however, such constraints seemed to
sharpen rather than detract from the focus on efficiency enhancement. For
instance, the manager of a provider unit in the Swedish Road Administration
explained:
It’s very difficult to raise fees so we continuously need to become more efficient [to
meet financial targets]. This is good but perhaps we will end up pressuring staff too
much rather than letting costs increase.
Similar efficiency-inducing pressures were discernible from the occasional

encroachments of regulatory constraints on the provider units’ systems for MFR.
The manager of a provider unit in the Swedish Road Administration offered
an illustrative example of how such regulatory constraints interacted with the
threat of market competition to stimulate efficiency gains. His unit had long
struggled to meet its financial targets as well as government-imposed process
targets, such as customer waiting times. As the failure to meet the latter targets
started to attract public criticism, the weight attached to them in the system for

MFR increased. In elaborating on how he mobilized such pressures to enhance
efficiency as well as reinforcing the level of customer orientation he explained:
Our political objectives say that we can’t have waiting times longer than 21 days and
we hadn’t achieved that for 15-20 years. Now we are down to 10-15 days and we haven’t
hired more people and the inflow of customers is much higher but we have become
more efficient. . . . The important argument [to accomplish change] has been that
the customers are not there for our sake, but we are there for them and we have to
adjust to their demands . . . sometimes agencies feel that they are invulnerable and
then nothing happens. But I know what competition means . . . and I would argue
that it works in much more sinister ways in government agencies. If you don’t meet
your targets in a way that the owner or the Government find satisfactory you may be
finished over night and your responsibility may be transferred elsewhere. . . . So those
arguments are important to emphasize.
The process of hybridization underpinning emerging notions of consumerism

in the provider units was thus manifest in a partial transition from detailed
regulation of operating-level processes to devolved accountability for financial
results. This effectively caused the pursuit of economic performance improve-
ments to be subject to regulatory constraints despite the relatively complete
shift towards competitive market arrangements (see Table 3). However, this
did not detract from the strongly embedded, efficiency-centred notions of
consumerism emerging from such arrangements. We now turn to investigate the
blending and segregating mechanisms underpinning this development in greater
detail.
Blending and Segregating Mechanisms

As noted in the foregoing, the relatively complete shift towards market-like
arrangements in the provider units of the Swedish Rail and Road Administra-
tions was underpinned by clear political ambitions to separate commercially
orientated operations from the more traditional roles of government agencies in
policy execution. As such, political reforms constituted an important segregating
mechanism fostering some polarization of governance logics. However, there
was also evidence of important blending mechanisms reinforcing the tendencies
towards hybridization.
At the policy level, a wholesale shift from the PPA to the NPM logic
was prevented by the transformation of MFR from a being heralded as a
means of reducing detailed regulation of operations to encompass a mix of
reporting requirements focused on both intra-organizational processes and
outputs. An important blending mechanism underpinning this hybridization was
the reluctance of the Government to concede to the criticisms of MFR levied
by other influential actors such as the National Audit Office and the Swedish
Agency for Public Management. Whilst the latter actors repeatedly castigated
the failure to crystallize MFR into a more output-focused governance mechanism
throughout the 1990s, the Government tended to renege its commitment to this

ideal for fear of reducing its flexibility in policy-making and circumscribing

the possibilities of regulating agency operations (Holmblad Brunsson, 2002;
and Sundström, 2003). However, as far as the introduction of market-like
arrangements was concerned, the interests of the Government and the National
Audit Office as well as the Swedish Agency for Public Management were more
closely aligned. The latter actors strongly endorsed such arrangements as a
means of enhancing the efficiency of agency operations (e.g., National Audit
Office, 1992, 1993 and 1998; and Swedish Agency for Public Management, 1994)
and the Government quickly incorporated their advice in policy documents
prescribing how to further such a development in the area of transport
infrastructure policy (Ministry of Enterprise, Energy and Communications,
1994a and 1994b). This supported the gradual blending of MFR and market-like
arrangements into more context-specific configurations of governance practices
although the introduction of such practices progressed as separate reform
programmes.
This incremental transition towards some NPM logic also facilitated the
blending of market-like arrangements with the hybrid governance practices
evolving under the banner of MFR in the provider units of the Swedish
Rail and Road Administrations. Interviewees in both organizations attributed
the organizational acceptance of market-like arrangements to the largely
‘voluntary’ adoption of purchaser-provider splits. Whilst the consistent support
for such arrangements at the policy level was recognized, the lack of direct
government interference enabled the provider units to establish customer-
focused managerial positions and information systems that were adapted to
and relatively tightly integrated with the hierarchical structures embedded in
MFR. For instance, several of the provider units have long had managers with
clearly defined responsibilities for marketing and customer service aspects as
key members of their senior management teams and at lower echelons. These
managers were also given considerable decision-making authority to act on
customer requests within extant, regulatory constraints and were given a clear
mandate to promote the idea of customer orientation in strategic planning.
Despite the occasional tensions associated with the process of hybridization,
interviewees saw the creation of such managerial positions as an important
reason for reduced resistance to market-like arrangements. Another important
blending mechanism reinforcing staff attitudes in favour of such arrangements
was the growing tendency to hire staff with commercial experience from the
private sector. For instance, a manager in one of the provider units in the
Swedish Road Administration explained:
[Customer orientation] is not in the backbone of everybody quite yet despite the fact
that we have been here for 13 years. But the new people who are joining us have a
very different attitude, especially those who have grown up in private companies.
Similar findings emerged in the Swedish Rail Administration where a manager

in one of the provider units explained the change in ‘culture’ as follows:

Some people felt awkward about becoming more business-like and some of them quit
as they didn’t fit in. But now we have recruited a lot of new people so that’s no longer
a problem.
Other interviewees described how changes in staff attitudes in favour of

market-like arrangements were reinforced by the general trend to conceive
of citizens as customers in central government and other parts of the public
sector. The hybridization underpinning the embedding of consumerist notions
in the provider units thus seemed to be reinforced by mutually supportive
blending mechanisms bridging the policy and intra-organizational levels. As
explicated next, this contrasts sharply with the emergence of some NPG logic
in the purchaser units.
THE DEVELOPMENT OF THE NPG LOGIC IN TRANSPORT

INFRASTRUCTURE POLICY
The Development of Consumerism and Hybridization

The notions of consumerism evolving in the purchaser units of the Swedish Rail
and Road Administrations since the late 1990s were very different from that
developing in the provider units. In the absence of fee-paying customers, they
were much less affected by the market-centred efficiency concerns emerging in
the provider units and the influence of the NPM logic was largely confined to
the development of MFR as a hybrid arrangement within extant, hierarchical
structures of control. As explicated below, however, they did respond to the
NPG logic emerging in the wake of citizen-focused governance reforms in the
late 1990s and gradually developed a view of citizens as active co-producers of
services as a vehicle of enhanced effectiveness. Hence the shift in governance
logics is best described as a partial transition from PPA to NPG. However, this
development, summarized in Table 4, ultimately fostered less strongly embedded
notions of consumerism.
The impetus behind the NPG logic emanated from emerging criticisms
of MFR for hampering inter-agency collaboration and the development of
integrated service provision from a more citizen-focused perspective in Swedish
central government in the late 1990s. Concerns were raised that such tendencies
were reinforced by the organization of central government agencies around
narrowly defined jurisdictions and the lack of emphasis on measures of wider
outcomes and effectiveness in external reporting requirements (Ministry of
Finance, 1997; see also Sundström, 2003). A comprehensive policy review was
followed by an influential government bill which proclaimed that the foundation
for continuing reforms would be that:
The Government exists for the citizenry and shall be further developed from a citizen
perspective (Swedish Parliament, 1997/98a, p. 14).
Whilst such citizen orientation was to be pursued within extant regulatory

frameworks and in accordance with the rule of law, the Government was

particularly keen on extending citizens’ roles as co-producers through enhanced

self-service and more active involvement in service provision. Similar to other
countries (cf. Dunleavy et al., 2005), it placed considerable emphasis on the
use of information technology to this end. Growing reliance on information
technology was also seen as a vehicle of improved coordination across agencies,
or as the bill proclaimed:
Central government should, with due attention to integrity and security aspects, reap
the benefits of information technology to simplify and improve the contacts with
citizens and companies, to increase the transparency of agency governance, and to
render more effective the collaboration between agencies, other parts of the public
sector as well as EU institutions and the governments of other countries (Swedish
Parliament, 1997/98a, p. 54).
Continued deregulation and crystallization of control practices around a smaller

set of output- and outcome-focused indicators were regarded as necessary to
support such a development. Even though the use of MFR as a basic governance
mechanism was not questioned, the government bill spelled out a need for it
to foster ‘a more holistic view counteracting the tendencies of too many and
detailed objectives being imposed on agencies’ (Swedish Parliament, 1997/98a,
p. 45).
The reform agenda emerging in Swedish central government in the late
1990s thus mirrored the NPG logic relatively closely. It also entailed relatively
far-reaching initiatives to achieve such an ideal. In 1997, central government
departments were re-organized with the aim of improving collaboration and
coordination across various policy areas and agencies working across diverse
jurisdictions. A few years later, a new advisory agency – the National Council for
Quality and Development – was established to disseminate knowledge of how the new
reform agenda might be furthered within government agencies. To this end, the
agency drew considerable inspiration from Total Quality Management (TQM)
practices diffusing across individual government agencies and reinforcing key
aspects of the NPG logic, such as cross-functional coordination and process
orientation to meet customer needs and an over-riding emphasis on customer
satisfaction (rather than financial performance or efficiency) as an indicator
of organizational effectiveness (National Council for Quality and Development,
2003a, 2003b and 2004).
The use of TQM as a means of translating the Government’s NPG-inspired
reform agenda into more concrete change initiatives was particularly notable
in the field of transport infrastructure policy. Under the influence of non-
governmental standard-setters, such as the Swedish Institute of Quality Assurance
(SIQ), individual government agencies primarily came to pursue the emerging
reform agenda under the banner of customer orientation programmes aimed
at better satisfying customer needs through streamlining of operating-level
processes rather than market-like arrangements. This development started with
the Swedish Airport and Air Navigation Agency (in 1995) and the Swedish
Road Administration (in 1998) adopting the SIQ Model for Performance

Excellence, which evolved into one of the dominant TQM templates across
the private and public sectors in Sweden (Modell, 2009; and Quist et al., 2007).
Similar quality management practices subsequently emerged in the Swedish
Sea Transport Agency (in 2001) and the Swedish Rail Administration (in 2002).
References to the process-orientated view of customer orientation embedded in
such practices also permeated government bills translating the Government’s
NPG-inspired reform agenda to the field of transport infrastructure policy
(Swedish Parliament, 1997/98b and 2005/06). For instance, the first of these
bills proclaimed that:
. . . change initiatives in public transports must be permeated by enhanced customer

orientation. Such an approach requires a holistic view of the whole journey including
all its elements from door to door from the customer’s perspective. The whole
journey shall be perceived as efficient, safe, comfortable and of high quality. (Swedish
Parliament, 1997/98b, p.64).
At the same time, the Government was reluctant to develop more specific
guidelines prescribing how agencies should interpret the notion of customer
orientation. For instance, a civil servant in the Ministry of Enterprise, Energy
and Communications explained:
Well, you know, we use these types of political concepts. [Customer orientation] is such
a political concept today and it’s quite hot and it includes a little bit of everything. . . .
So you have to see it as more of a means of positioning [the policy agenda] – a point
of gravity rather than something that is definitely distinct.
Hence, in comparison with the clearly articulated focus on customer choice

permeating the earlier introduction of market-like arrangements, the notion
of consumerism embedded in the NPG-inspired reform agenda remained
rather ambiguous. This ambiguity enabled the purchaser units in the Swedish
Rail and Road Administrations to nurture somewhat different approaches to
customer orientation. The most forceful efforts to this end were discernible
in the Swedish Road Administration, where a new Director General (from
2001) harnessed the SIQ Model for Performance Excellence to change the
allegedly technical and internally focused culture traditionally permeating the
organization. Having implemented the model in the Swedish Airport and Air
Navigation Agency (which he previously headed) he used it as a platform for
a range of initiatives, including enhanced emphasis on measures of customer
satisfaction and the appointment of customer managers with cross-functional
responsibilities for various customer segments as a complement to the extant,
hierarchical management structure. A manager at organizational headquarters
described how these changes signaled a rather different view of citizens as
customers compared to that evolving in the provider units:
Earlier we had another definition of the notion of customers and it was really only
when [the new Director General] came that this changed. Earlier we only talked about
customers in terms of those who were paying for themselves – that is those who had

a real choice and they were really only [the customers] of the provider units. . . .
But I guess we have listened to the broader trends in society and pursue [customer
orientation] more actively now.
The notion of customer orientation was widely seen as a means of enhancing

the receptiveness of the purchaser units to the surrounding society in the absence
of fee-paying customers. Consistent with the NPG logic, the notion of customer
orientation embedded in the SIQ Model for Performance Excellence was seen as
a superior means of involving citizens and the business community more actively
in important decision-making processes and adjusting to customer demands
through other mechanisms than choice. To this end, a number of customer
networks entailing regular consultations between the newly appointed customer
managers and representatives of different customer segments were established
across the purchaser units. A member of headquarters staff underlined how
such initiatives reinforced the emphasis on citizen orientation embedded in the
Government’s emerging reform agenda:
The good thing about customer orientation is that it’s in line with [citizen orientation].
We may have politically governed operations and we interpret notions of customers
and customer orientation in ways that are wholly consistent with such a system. It’s
just another way of capturing democratic values and representation.
The notion of customer orientation evolving in the purchaser units in the

Swedish Rail Administration placed less emphasis on involvement of individual
citizens in service provision although it entailed similar efforts to extend
consultations with relevant user groups. Whilst originating in similar TQM
models, senior management attached less weight to customer orientation as
a vehicle of cultural change and saw it as subordinate to other government
demands. The Chief Financial Officer explained:
We mustn’t forget that we are a government agency and that we are authorized by
the Government to do certain things and I really see the customer perspective as a
complement to all the rest. After all, we just can’t have a customer objective that can’t
be derived from the task assigned to us by [the Government]. . . . Everything we think
about as far as customers are concerned, when we think of our capabilities, when we
think about operations, shall, in principle, support and improve our ability to do what
[the Government] wants us to do.
Similar to the Swedish Road Administration, the adoption of TQM entailed

the introduction of customer managers with cross-functional responsibilities
for distinct customer segments and increasing reliance on measures of
customer satisfaction. However, these practices mainly aimed at improving the
relationships with train service operators and other commercial service users,
whilst individual citizens were rather seen as ‘the customers’ customer’ for whom
the Swedish Rail Administration had no direct responsibility.
Regardless of such differences between the two agencies, consumerist notions
only became weakly embedded in the governance practices permeating the

purchaser units of both organizations. Throughout our study, operating-level
managers struggled to render the information originating from the customer
networks and measures of customer satisfaction useful for initiating concrete
improvement efforts. The customer managers appointed in both agencies also
complained about the problems of making information about customer needs a
more integral part of key governance practices such as strategic planning and
budgeting.
These problems of rendering consumerist notions more firmly embedded
can partly be explained by the rather limited hybridization between the
emerging NPG logic and extant governance practices. Even though the customer
orientation initiatives entailed a partial shift towards a view of citizens as co-
producers and the implementation of cross-functional structures to facilitate the
enactment of such roles, they failed to engender any noticeable change in the
predominantly financial and technical orientation of planning and budgeting
practices. Although the customer managers were supposed to act as advocates
for customer orientation in conjunction with planning they were not authorized
to make any spending decisions. The customer managers also raised concerns
about how the highly regulated and long-term nature of infrastructure planning
reduced the flexibility required to respond to customer requests. For instance,
a customer manager in the Swedish Rail Administration explained:
The problem is that our budgeting process is based on fixed budgets and projects
that were initiated long ago and when more immediate customer requests emerge our
plans are carved in stone. So many of us have claimed that we need to be more flexible
and have unallocated funds available [to meet customer requests] without that being
perceived as poor planning.
However, ‘earmarked’ budgets to meet specific customer requests were

not forthcoming in either of the agencies. The problems of integrating
considerations of customer needs into planning and budgeting were also
exacerbated by the absence of a powerful shift towards more network-based
forms of organizing. The customer orientation initiatives did not entail any
fundamental changes in the structures governing inter-agency collaboration or
the policy execution roles of the purchaser units of the two agencies. Even though
these roles entail an element of nation-wide coordination of infrastructure
planning in collaboration regional and local government authorities, there were
suggestions that the customer orientation initiatives were too internally and
narrowly focused to have any real impact on such tasks. An interviewee in the
Swedish Rail Administration explained:
I don’t think customer orientation is enough to assume our over-riding responsibility

for nation-wide infrastructure planning because this also entails initiatives that may
not always be requested by the customers.
Similar concerns were raised in the Swedish Road Administration. One

interviewee described how the lack of flexibility in the plans governing

nation-wide coordination of infrastructure reduced the impetus behind the

customer orientation initiative:
This is a threshold we somehow have to climb because it’s a real barrier for employees
to see how we could become more customer-orientated when resources are already
locked up in plans covering ten years. . . . This is really the greatest source of resistance
[to customer orientation] and the question is ‘what does it matter’ when our resources
are already allocated and limited.
Contrary to the policy discourse initially underpinning the NPG logic in

Swedish central government, the emerging notions of consumerism in the
purchaser units were thus largely disconnected from concerns with inter-agency
collaboration and coordination. This restricted the possibilities of hybridization
between the NPG logic and extant governance practices. Organizational
structures and control practices remained firmly focused on intra-organizational
processes (see Table 4). The only major sign of hybridization emerging in
the purchaser units was the partial shift towards more customer-focused
performance evaluation practices as an integral part of MFR. Interviewees
in both agencies attributed this to the inclusion of measures of customer
satisfaction in the customer perspective of the balanced scorecards devised for
the purchaser units. Customer satisfaction was primarily measured through
aggregate customer satisfaction indexes including a broad range of perception-
based indicators of service quality. Consistent with the TQM models in
which these indexes originated, they were also heralded as key measures
of organizational effectiveness. This was especially the case in the Swedish
Road Administration, where the Director General attached significant weight
to customer satisfaction as an over-riding indicator of the success of the
customer orientation initiative and was reluctant to abandon the SIQ Model
for Performance Excellence despite the problems of reconciling it with the
hierarchical governance practices embedded in MFR. However, in both agencies
operating-level managers were unable to disaggregate the customer satisfaction
indexes across various customer segments and translate them into more
meaningful information for decision-making. Moreover, these measures did
not replace the more technically focused process indicators (e.g., compliance
with safety standards and measures of maintenance levels) directly derived
from government objectives to concretize the customer perspective of the
balanced scorecards. We now turn to examine the reasons for this rather limited
hybridization between the NPG logic and extant governance practices in greater
detail.
Blending and Segregating Mechanisms

The above analysis suggests that the consumerist notions associated with
the NPG logic only become weakly embedded when they are separated from
other elements of this logic, such as the strengthening of network-based

forms of organizing, as this reduces the propensity for hybridization with
extant, hierarchically focused governance practices. As our study progressed,
it became increasingly clear that such tendencies towards segregation were
reinforced by the Government’s reluctance to wholeheartedly subscribe to the
NPG logic. Despite the re-organization of government departments to improve
inter-agency coordination in the late 1990s, the Government soon started to
veer from this reform path (see Jacobsson, 2001). An important reason for
this was the difficulties in reconciling network-based forms of organizing with
the hierarchical orientation of MFR. A comprehensive government proposal
outlining further reforms of governance practices in 2007 saw inter-agency
collaboration and coordination as subordinate to refining MFR and relegated
such issues to be resolved on an ‘ad hoc’ basis where necessary (Ministry of
Finance, 2007, p. 16). Similarly, individual government agencies have been wary
of network-based forms of organizing encroaching on their autonomy and have
been reluctant to adopt such forms on a large scale (Modell, 2012; and Quist
and Fransson, 2009). For instance, the Swedish Road Administration lobbied
against more far-reaching efforts to implement such forms of organizing as it was
consulted in a Government-initiated inquiry into the issue (see Swedish Agency
for Public Management, 2005). The only forceful advocate of such governance
practices turned out to be the National Council for Quality and Development,
which persisted in its adherence to relatively standardized TQM templates
to improve inter-agency collaboration despite the chequered experiences of
implementing these. However, this organization gradually lost much of its
influence (see Modell et al., 2007) and was eventually dissolved in the wake
of some re-organization of advisory agencies in 2006.
In contrast to the NPM logic, the translation of the NPG logic into evolving
governance practices was thus hampered by the lack of consistent support from
influential actors at the policy level. This failure to align diverse interests
around some emerging governance logic was also manifest in the purchaser
units of the Swedish Rail and Road Administrations. Even though we did
not observe any overt power struggles or deliberate attempts to undermine
the customer orientation initiatives, customer managers in both agencies
complained about how the dominance of staff with a strong engineering-based
background reinforced the internally focused ‘planning’ or ‘expert culture’ and
detracted from considerations of customer needs as an integral part of planning.
Interviewees in the Swedish Road Administration explained how this effectively
led the idea of customer orientation to be marginalized despite the forceful
support from the Director General:
[Managers with an engineering-based background] don’t really understand why this

is important. They are here to build roads. Customer orientation isn’t really cool.
The idea was that customer needs should be clarified in different ways by our experts
[involved in strategic planning]. . . . But it’s very difficult to add what customers want
because they don’t think that is part of their role and say that, as an expert, ‘I can only

make judgments based on my expert area and then someone else will have to include
the customer aspect’.
In the Swedish Rail Administration, such reluctance to incorporate a coordi-

nated view of customer needs into planning permeated the whole organization
including the senior management team. Although a relatively comprehensive
project aimed at strengthening the relationship between customer orientation
and governance practices was initiated in 2004, senior management reduced the
resources allocated to the project as pressures for spending cuts grew. This forced
the project team to reduce its level of ambition and prevented it from refining
the information solicited from customers for planning purposes. A customer
manager involved in the project vented his resignation by saying that:
Well, [senior management] has cheered us on, but as far as the customer orientation
project is concerned we haven’t really felt much support.
In contrast to the provider units, the prevalence of diverging managerial

mindsets and interests thus continued to constitute an important segregating
mechanism detracting from the embedding of consumerist notions in extant
governance practices. Such conflicts also exacerbated the production of any
consensus around the exact roles of customer orientation in the purchaser
units. The negative consequences of such ambiguity for hybridization became
particularly noticeable in the Swedish Road Administration. In 2004, the agency
launched a comprehensive project aimed at incorporating trade-offs between
various customer needs and segments into extant planning and budgeting
practices.6 The project team was constituted by customer managers as well
as representatives of other functional areas. However, the project was fraught
with conflicts over the exact meanings of diverse customer needs and their
relative importance. Whereas customer managers tended to draw attention to
relatively broad lists of customer needs, other project members often disputed
the possibilities of meeting them within extant resource constraints. Hence
it proved exceedingly difficult to reconcile prioritizations with the objectives
governing planning and budgeting and the project largely failed to influence
such governance practices.
CONCLUSIONS
This paper set out to examine how variations in the notion of public sector
consumerism become embedded in diverse governance practices and how this
may be understood as a phenomenon conditioned by the hybridization of various
governance logics. Our findings clearly repudiate claims that recent governance
reforms in the public sector might follow a largely linear path entailing a radical
transition from NPM to NPG (cf. Denhardt and Denhardt, 2000; Dunleavy et al.
2005; and Entwistle and Martin, 2005). Even though there were some signs of
such a shift in the policy discourse emerging in Swedish central government

in the late 1990s, we found little evidence of this materializing in actual
policy implementation and the governance practices evolving in our two case
organizations. Rather, we document how two divergent reform paths partly co-
evolved and fostered varying degrees of hybridization whereby elements of the
PPA logic were preserved. This development entailed notable variations in the
notion of public sector consumerism.
A rather distinct conception of consumerism, pivoting on customer choice
and competition as vehicles of reaping efficiency gains, first emerged through
the relatively complete shift towards market-like arrangements. Over time,
this notion of consumerism became firmly embedded in the policy discourse
as well as in the provider units of the Swedish Rail and Road Administrations,
whilst regulatory constraints associated with MFR continued to condition control
practices and the pursuit of economic performance improvements and fostered
a degree of hybridization. Interestingly, this lingering element of regulation
seemed to reinforce rather than detract from the efficiency-centred notion of
consumerism emanating from market competition. These findings support the
view that a pronounced element of hybridization is necessary for emerging forms
of governance to penetrate the operating core of public sector organizations
(Brown et al., 2003; Kurunmäki, 2004; and Kurunmäki and Miller, 2006 and
2011). However, they also suggest that the process of hybridization needs to be
supported by a relatively forceful and complete shift towards particular elements
of the NPM logic, such as increasing reliance on market mechanisms, for
consumerist notions to become more firmly embedded. An important blending
mechanism supporting this process of hybridization was the converging, though
not perfectly aligned, interests at the policy level as well as within the provider
units (cf. Haveman and Rao, 2006). This contributed to the sustained yet
‘voluntary’ and incremental transition towards the NPM logic in the Swedish
Rail and Road Administrations.
By contrast, a much more contested and weakly embedded notion of
consumerism emerged through the evolution of the NPG logic. This entailed
some relatively concerted efforts to incorporate novel conceptions of citizens
as more active co-producers into extant governance practices (especially in the
Swedish Road Administration) but resulted in little hybridization. In contrast to
the evolution of the NPM logic, NPG-inspired practices never enjoyed forceful
support from a larger collective of actors across different levels of Swedish central
government. The prevalence of powerful, segregating mechanisms grounded in
an engineering-based culture prevented consumerist notions from having any
major influence on key control practices, such as planning and budgeting, in the
purchaser units of the Swedish Rail and Road Administrations (cf. Haveman and
Rao, 2006). This is similar to the role ascribed to firmly embedded, professional
enclosures as a barrier to hybridization in prior research on public sector
reforms (Kurunmäki, 2004; and Kurunmäki and Miller, 2006). Moreover, the
introduction of consumerist notions in the purchaser units was not supported
by the same, forceful shift in governance logics observed in the provider units.

In particular, the limited efforts to link the view of citizens as co-producers to a

wider transition towards network-based forms of organizing detracted from the
evolution of a more pronounced NPG logic. This reinforced the polarization of
governance logics (cf. Jacobs, 2005) and implied that hybridization was largely
confined to the integration of measures of customer satisfaction into extant
systems of MFR.
These contrasting findings have important implications for the literature on
public sector consumerism as well as hybridization in public sector management
reforms. Our findings underline the merits of broadening the scope of analyses
of public sector consumerism to theorize how different manifestations of this
phenomenon become more or less firmly embedded. Whilst much previous
research on public sector consumerism has paid relatively one-sided attention to
the varying ability of citizens and beneficiaries to exercise choice under market-
like conditions (Lowery, 1998; and Powell et al., 2010), we demonstrate how
our understanding of its evolution might be extended by also examining it as
implicated in the emerging notion of NPG. Even though our findings suggest
that consumerist notions are more likely to become firmly embedded when they
evolve as an integral part of some NPM logic our comparative analysis sheds new
light on why this is the case. We argue that this is largely due to the seeming
amenability of the NPM logic to hybridization with extant, hierarchical forms of
governance associated with PPA, whereas the NPG logic presents a more radical
challenge to such practices through its emphasis on network-based forms of
organizing. Our findings also extend emerging accounting research seeking to
understand how NPG-inspired governance practices evolve. Whilst this research
has mainly focused on inter-agency collaboration and coordination (see Barretta
and Busco, 2011; and Hodges, 2012), we argue that our understanding of these
phenomena may be enhanced by considering their interactions with the idea
of public sector consumerism. This follows from our emphasis on how diverse
governance logics are constituted by broader sets of interdependent elements
and how the interplay between such elements causes particular logics to be
more or less closely reproduced in evolving governance practices. In other
words, it becomes equally important to examine the internal consistencies and
complementarities within distinct governance logics as the shifts between logics.
We believe that future accounting research may benefit from broadening the
conception of governance logics along these lines as it provides a more holistic
understanding of seemingly disparate reform initiatives.
Our findings also suggest new directions for the broader literature on
hybridization in public sector management reforms by highlighting variations
in the blending and segregating mechanisms affecting this phenomenon.
Similar to prior research, we show how hybridization is intricately intertwined
with some alignment of interests (see e.g., Koppell, 2001; Kurunmäki, 2004;
and Kurunmäki and Miller, 2011). However, we also demonstrate how the
alignment of interests is contingent on differences in the process whereby diverse
governance logics are brought together. The hybridization of the NPM logic

owed much to the close integration of customer-focused managerial positions
into the hierarchically focused governance practices embedded in MFR and the
increasing propensity to hire staff in favour of this logic. This contributed to
mould the emerging NPM logic into firmly embedded governance practices.
By contrast, the relatively rigid adherence to standardized TQM templates
by some actors, such as the National Council for Quality and Development
and senior management in the Swedish Road Administration, failed to muster
support for the NPG logic from a broader range of constituencies. This suggests
that the propensity for hybridization is not only contingent on the alignment
of interests but also the malleability of emerging governance logics. However,
further empirical research is required into the possibilities of hybridization
where the evolution of governance logics follows different trajectories to those
observed in our study. We believe that such research will benefit from adopting
a multi-level approach similar to ours. Examining the alignment of interests
requires longitudinal analyses of the maneouvering of multiple actors in and
around individual organizations to fully grasp the complex interplay through
which potential conflicts are muted or amplified.
NOTES
1 Whilst the term NPG was ostensibly coined by Osborne (2006 and 2010), other concepts
denoting similar transitions away from NPM include Digital Era Governance (Dunleavy et al.,
2005), Network Governance (Andresani and Ferlie, 2006), Citizen Governance (Simmons et al.,
2007) and the emergence of a New Public Service ethos (Denhardt and Denhardt, 2000). We
use the notion of NPG as an analytical concept whilst recognizing the considerable variations
in observable governance practices attributable to context-specific differences and the choice
of analytical categories for describing such practices.
2 Our conceptualization of governance logics differs somewhat from that of Lynn et al. (2000)
in that we collapse the two analytical categories of formal structures of authority and management of
organizations, programmes and administrative activities into that of structures and forms of organizing. We
see this as a necessary modification to enhance the parsimoniousness and analytical tractability
of the notion of governance logics given the main focus of our study (ie., the specific logics
underpinning differences in the notion of public sector consumerism).
3 In the context of Swedish central government, consumerist notions have primarily evolved
under the banner of customer orientation (Swedish; kundorientering, see Wiesel, 2008). Hence
in the empirical parts of the paper this term is used as largely synonymous with that of public
sector consumerism.
4 Examples of input-focused indicators were budgetary allocations and various staff-related
measures (e.g., skills and training). Process-focused measures mainly comprised indicators
of service levels across various operating areas. As explicated in the following sections, the
emphasis on output- (and outcome-) focused measures varied significantly across the provider
and purchaser units in the two agencies.
5 Competition with the Swedish Rail Transport Agency was mainly seen as emanating from other
means of transport, especially road and air transports.
6 A more detailed analysis of this specific episode can be found in Wiesel et al. (2011).
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Financial Accountability & Management, 30(2), May 2014, 0267-4424

From New Public Management

FREDRIKA WIESEL AND SVEN MODELL∗

Keywords: consumerism, governance, hybridization, public management

The notion of public governance is elusive and has been conceptualized in

PPA Logic NPM Logic NPG Logic

Conception of Constituents/tax Customers/consumers Co-producers

tax-payers with well-defined constitutional rights and obligations to those of

in different patterns of change. As noted in the introductory section of the

The research design guiding our empirical study is based on a comparative,

and Miller, 2011). However, to track the process of hybridization requires

Level of Analysis Policy Level Intra-organizational Levels

Civil Servants/ Senior Management/

PPA Logic Shifts NPM Logic

Conception of citizen Constituents/tax Customers/consumers

PPA Logic Shifts NPG Logic

Conception of citizen Constituents/tax Co-producers

Structures and forms Unified bureaucracies Collaborative

Primary tasks of Policy execution Network coordination

Main focus of control Inputs and Inter-organizational

sector consumerism. We subsequently deepened our analysis of the blending and

GENERAL GOVERNANCE REFORMS IN SWEDISH CENTRAL GOVERNMENT

Before delving into the development of varying conceptions of consumerism

THE DEVELOPMENT OF THE NPM LOGIC IN TRANSPORT INFRASTRUCTURE

The Development of Consumerism and Hybridization

The separation of rail maintenance and train service operations was

Similar remarks, indicating how emerging notions of customer choice reinforced

The relatively forceful and complete transition towards market-like arrange-

However, the transition towards devolved accountability for financial results

Similar efficiency-inducing pressures were discernible from the occasional

The process of hybridization underpinning emerging notions of consumerism

Blending and Segregating Mechanisms

ideal for fear of reducing its flexibility in policy-making and circumscribing

Similar findings emerged in the Swedish Rail Administration where a manager

Other interviewees described how changes in staff attitudes in favour of

THE DEVELOPMENT OF THE NPG LOGIC IN TRANSPORT

The Development of Consumerism and Hybridization

Whilst such citizen orientation was to be pursued within extant regulatory

particularly keen on extending citizens’ roles as co-producers through enhanced

Continued deregulation and crystallization of control practices around a smaller

. . . change initiatives in public transports must be permeated by enhanced customer

Hence, in comparison with the clearly articulated focus on customer choice

The notion of customer orientation was widely seen as a means of enhancing

The notion of customer orientation evolving in the purchaser units in the

Similar to the Swedish Road Administration, the adoption of TQM entailed

However, ‘earmarked’ budgets to meet specific customer requests were

I don’t think customer orientation is enough to assume our over-riding responsibility

Similar concerns were raised in the Swedish Road Administration. One

nation-wide coordination of infrastructure reduced the impetus behind the

Contrary to the policy discourse initially underpinning the NPG logic in

Blending and Segregating Mechanisms

[Managers with an engineering-based background] don’t really understand why this

In the Swedish Rail Administration, such reluctance to incorporate a coordi-

In contrast to the provider units, the prevalence of diverging managerial

In particular, the limited efforts to link the view of citizens as co-producers to a

Barretta, A. and C. Busco (2011), ‘Technologies of Government in Public Sector’s Networks:

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