PUBLICPOLICY

AND PRIVATE
MANAGEMENT
SYMPOSIUM

A Public Management Road Less Travelled: Clients

as Co-producers of Public Services

John Alford
Melbourne Business School
Universityof Melbourne

Since the end of the 1970s,alternatives to internal governmentproduction ofpublic services

have assumed increasing prominence. The most important of these has been contracting
out, but a less travelled road has been co-production: the involvement of citizens, volunteers
and clients in producing public services as well as consuming them. This article focuses on
client co-production. It argues that by ignoring this option, governments have closed off
one important option in the repertoire of management appmaches. It demonstrates the
necessity of client co-production to service-delivery and legal compliance, and considers
examples of government agencies which have sought to harness it in positive ways.

My title comes not from a ‘new age’psychology
book of the 1980s but from its original source,
a poem by Robert Frost. In it Frost encounters
‘two roads diverged in a yellow wood’, and
ponders which to take. He notices that one seems
to be less worn, and despite knowing that having
chosen one, he is unlikely to ever come back,
he ‘took the one less travelled by, and that has
made all the difference’ (Frost 1971:5 1).
At the end of the 1970s, public
administration in advanced industrial nations
also faced a choice of roads. Until then,
government functions were largely performed
by government employees (Mosher 1980541)
usually organised in administrative or technical
bureaucracies. But from about that time, a
combination of antipathy to big government,tax
‘revolt’, de-regulationist sentiment and
budgetary constraints prompted consideration
of alternatives to internal governmental
production (Salamon 1980).
One set of such alternatives entailed the
marketisation of public sector activities. Most
prominent among these were privatisation and
contracting out (Savas 1982; Pirie 1986;
Kristensen 1987;Wolf 1988;Hughes 1994). But
paving the way for them were various initiatives
AustralianJournalolPuMicAdministralio~57(4):
0 National Council of the Institute01 Public Administration, Australia 1998. Publishedby Blackwell Publishers, 108 Cowley Road, Oxford OX4 1JF, UK,
and 350 Main Street, Malden02148, USA.
adopted from the private sector, known
collectively as ‘managerialism’ (Pollitt 1990;
Considine and Painter 1997).
The other set of alternatives emerged under
the general rubric of co-production, which refers
to the involvement of citizens, clients,
consumers, volunteers and/or community
organisations in producing public services as
well as consuming or otherwise benefitting from
them (Brudney and England 1983). It appealed
less to market incentives and more to the
voluntary co-operationof individuals and groups
in the community, and dovetailed with support
for greater levels of citizen and client
participation in community and public affairs,
popular since the 1960s (Levine 1984).
But since the mid-l980s, co-production has
been the road less travelled. In the late 1970s
and early 1980s, it attracted almost as much
interest in popular discourse and in public
administration literature as marketisation (Savas
1982; Levine 1984, 181; Kiser 1984,505). But
whereas privatisation and contracting out have
been enthusiastically adopted by governments
around the world, co-production has attracted
little official interest after the initial flurry. In
the battle for practical acceptance, marketisation
128-137, December 1998
Clients as Co-producers of Public Services
decisively won the 1980s round.
This is reflected at the level of intellectual
endeavour. Privatisation and contracting out
continued to generate a tlourishing theoretical
and empirical literature (for overviews, see:
Donahue 1989; Smith and Lipsky 1993; Prager
1994) whereas co-production research has
languished since the mid-1980s. The major
concepts and theories of co-production were
largely established between 1977 and 1984
(Whitaker 1980; Sharp 1980; Parks etal. 1981;
Brudney and England 1983) but there has been
little further theoretical development since then
(see Hupe 1993; Wirth 1991; Moore 1995).
Instead, the focus of the subsequent literature
has largely been on applying concepts
empirically, in a fairly narrow domain.
Perhaps the major reason for the atrophying
of official interest in co-production is that it has
been perceived as being about using volunteers:
that is. people supplying time, effort or money
to public agencies on a voluntary basis. Indeed,
this has overwhelmingly been the focus of the
empirical research (see Brudney 1989). It is seen
as being much too dependent on altruism which,
in a climate where market incentives are the
dominant currency, seems far too unreliable a
motivation on which to base important public
functions.
But this emphasis on co-production by
volunteers overshadows another form: co-
production by clients. Whereas volunteers are
analogous to the suppliers of inputs to the firm,
clients are analogous to its buyers yet this
conception of co-production has been almost
entirely overlooked. While some of the early
theoretical literature mentioned clients, or
‘consumer producers’ (Parks et al. 1981), it
usually collapsed them into ‘citizens’ or slid into
the notion of volunteers.
At t h e same time, there is growing
questioning of managerialism, contractualism
and other reforms imported into government
from the private sector (Donahue 1989; Walsh
1995; Smith and Lipsky 1993; Stewart 1993;
Self 1993;Alford and O’Neill 1994). Although
no one is seriously suggesting a return to an
emphasis on direct government production,
there is increasing scepticism about the ‘contract
state’. Ideas like ‘social capital’ (Putnam 1995),
‘communitarianism’ (Etzioni 1993) and others
which informed the elections of Clinton in
America and the Blair in the UK suggest that
0 National Council of the Institute 01 Public Administration.Australia 1998
129
people are looking for new ways of thinking
about the role of government.
This article starts from the premise that there
is no ‘one right way’ that should replace the
previous approaches to managing the public
sector. Instead we should utilise a variety of
approaches, trying different ones in different
circumstances. Included in our repertoire should
be the techniques w e have already tried; but it
should also include new ways of doing things.
On this basis, I argue that by ignoring client
co-production, governments have closed off one
important option in the repertoire of public
management approaches. Moreover, they have
failed to come to grips with certain inescapable
realities in public sector activity, which have
limited the effectiveness of their managerial
reforms. Client co-production is not just a nice
thing to have like volunteer assistance. Many
public activities are actually impossible to do
without it. It therefore raises much more hard-
headed imperatives for public managers than
volunteerism.
The argument starts by suggesting that the
patchy implementation of key managerial
reforms i n the last two decades is due in part to
a failure to take client co-production into account
in some public sector circumstances - a
problem also exhibited by traditional thinking
about legal compliance. It demonstrates the
necessity of client co-production to service
delivery and legal compliance, and considers
examples of government agencies that have
sought to harness it in positive ways.
Service Delivery: The Patchiness of
Public Management Reform
Movements
The major public management reforms in
Anglo-American governments since the 1980s
- managerialism, contractualism and the call
for customer focus - tended to be ‘one-size-
fits-all’ affairs. They were usually adopted by
governments to be uniformly applied across the
whole public sector (Davis 1991). Their
advocates have hailed them variously as
improving efficiency,enhancing responsiveness,
heightening accountability and increasing
transparency. By contrast, numerous critics have
challenged the appropriateness of these models,
which they see as unwelcome importations from
130
the private sector, to public sector activity
(Considine 1988; Pollitt 1990; Hood 1991;
Stewart 1993; Ernst 1994; Kettl 1996; Weaver
1996).
Yet the actual practice of these reforms has
been a story of neither complete failure nor
complete success. Contrary to the critics’
warnings of the dire consequences that would
follow from their adoption, some of the reform
experience has been positive and useful. But
contrary to the managerial reformers’ hope of
embedding them uniformly across each
government, their implementation has been
patchy (Pollitt 1990;Jordan and O’Toole 1995;
Industry Commission 1996; Alford and Baird
1997).
To the critics, the patchiness of these
management reforms is proof of their inherent
inapplicability i n the public sector. The
proponents, on the other hand, attribute the
unevenness of their implementation to cultural
resistance on the part of some agency managers
and staff, who have therefore lacked the will to
invest the creativity and effort required to
overcome obstacles to carrying out the changes
(Kemp 1990; Keating 1989). The solution, in
this view, is to fine-tune the reforms,
communicate their rationale to staff more
effectively, and redouble efforts to implement
them (Lewis and Jones 1990; Osborne and
Gaebler 1992; Wholy and Hatry 1992).
But another reason for the patchiness may
be that these managerial approaches simply
cannot be applied ‘acrossthe board’ in the public
sector. Each may be suitable to particular types
of circumstances in the public sector, but
inappropriateto others (Alford 1993). Many of
these circumstances have been canvassed in the
critical literature - for example, whether it is
easy to specify and monitor outputs, or to
identify paying customers (Pollitt 1990;
Donahue 1989).
There is one factor contributing to the
patchiness of the reforms which neither their
proponents nor their critics mention, since they
both share the same inadequate conception of
how the provision of public services occurs.
They both see public services in terms of them
being delivered to members of the public by
government organisations or their contracted
agents. In other words, they conceive of the
organisation as the producer and the client as
the recipient. The latter may be active in
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advocating levels or types of services, but is
passive in their delivery.
The Necessity of Client Co-production
What is inadequate about this conception is that
in some types of public sector activity, value
cannot be created or delivered unless the client
actively contributes to its production. This is
the phenomenon of client co-production
(Whitaker 1980; Sharp 1980; Parks etal. 1981;
Brudney and England 1983). Let me give three
examples.
The first is a very simple one. It concerns
the role that Australia Post customers play in
the processing of mail, by filling in postcodes
in the orange squares on the front of envelopes.
This is a very trivial task, but it is crucial to
Australia Post’s whole production process. It
was necessitated by the introduction in 1990 of
optical character recognition machines in mail
sorting centres. These machines, which cost
some $40 million, were installed in order to
bring about much needed efficiencies; they were
capable of doing much of the work previously
done by 3000 mail sorting staff. They have
enabled the organisation to reduce labour costs’
and thereby to hold the cost of stamps at 45 cents
since 1992, and to dramatically increase the
speed of mail sorting (Mathews 1991).
In order for these machines to function, the
addresses on envelopes have to be in a form that
they can read. This is fairly straightforward for
typewritten addresses, but it is quite problematic
for hand-written addresses, which make up 40%
of standard letters. An Optical Character
Recognition (OCR) machine is much more
readily able to read a handwritten address in
which the postcode is entered in a particular way,
namely that it is in a particular location on the
envelope and that the postcode numerals are
clearly separated. In other words, a vital
prerequisite to meeting customers’ expectations
of faster delivery and cheaper stamps was that
customers write postcodes in a particular way,
and thereby contribute to the processing of the
mail. The massive investment i n OCR
technology simply would not pay off unless
Australia Post’s paying customers engaged in
this co-productiveeffort. The challenge for the
organisation was how to influence customers to
enter the postcodes properly. It successfully did
so by getting stationery manufacturers to print
 Clients us Co-producers of Public Services
little orange squares on envelopes, and by
mounting an extensive advertising campaign.
The second example concerns an important
group of clients of the Department of
Employment, Education and Training (DEET)’ :
the long-term unemployed people whose ranks
tragically swelled i n the 1980s to more than
300,000 by 1992 (Committee on Employment
Opportunities 1993). One way we could look
at DEET’s role is that it delivered services to
these clients (or arranged for contractors to do
so). It provided them with job referrals and,
increasingly from the late 1980s onwards, labour
market programs, such as skills training and
work experience, in order to enhance their ‘job-
readiness’, that is, their attractiveness to
employers. In this sense, they were consumers
of DEET’s services, even if they were not paying
customers like those of Australia Post.
But to conceive of them simply as consumers
would be to miss a crucial aspect of their
relationship with the organisation. The desired
outcomes of DEET’s programs could not be
achieved unless the clients contributed to their
realisation by doing certain tasks.
First, DEET’s labour market programs could
not achieve one of their objectives (heightening
the attractiveness of jobseekers to employers)
unless their clients also put in some time and
effort, not just in taking part in these labour
market programs but in actively engaging them
in a committed fashion. The programs entailed
conjoint work by the organisation and the
clients, in transforming the clients into a more
job-ready state.
Second, the output which the
Commonwealth Employment Service (CES)
provides to the client, in the form of a job
referral, cannot be transformed into a valuable
outcome until the job-seeker actually secures the
job, by making a positive impression on the
employer at the interview on the job. This effort
cannot be performed by DEET, but it is essential
to the realisation of the desired outcome, namely,
being in employment for some period after the
job referral or labour market program provided
by DEET.
Thus, the challenge for DEET is not only to
provide particular services to its clients but to
encourage those clients to act in particular ways.
What heightens this challenge is that most of
these clients have been profoundly demotivated
about searching for work, precisely because they
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are long-term unemployed. A prolonged period
of failure to obtain a job often instils a sense of
hopelessness and resignation. Consequently,not
only does the client have to be ‘job-ready’, but
also what we might call ‘job-willing’ -that is,
to be motivated to engage in labour market
programs and to look for work. Encouraging
such willingness is, as we shall see, a much more
complex process than simply applying sanctions
such as threatening to cut off the dole for those
not actively searching for work.
The third example concerns public housing
tenants on two high-rise estates in inner
Melbourne I have studied. As clients of the
Victorian Housing ministry, public housing
tenants are, like long-term unemployed people,
beneficiaries rather than paying customers. At
first sight, it seems obvious that they are
consumers of the flats that the Ministry provides
and maintains. But if we look more closely, we
see a more complex picture.
According to extensive surveys conducted
by the Ministry in 1994, tenants attach particular
value to three things (over and above the physical
structures and their locations): they want
facilities in a reasonable state of repair, security
of persons and property, and clean surroundings
(McNair-Andersen 1994). Some of this value
is provided by the ministry to the individual -
for example, repairs to a tenant’s stove or kitchen
tap, or secure locks on their doors and windows.
But what complicates the picture is that much
of this is of collective value. Maintenance of
the lifts in a 12-storey block is a collective
service to all its tenants. Repairs to a washing
machine in the communal laundry on a floor is
valuable to all the occupants on that floor.
Security and cleanliness in the foyers, lifts and
grounds of the estate are collectively valued by
all its residents.
The staff and contractors of the ministry -
its tradespeople, security guards and cleaners
- play an important role in the provision of
these collective values. But without prohibitive
expenditure, they can never achieve high-quality
outcomes in these aspects of the service unless
the tenants themselves contribute to them by
their actions. Specifically, on the estates I have
studied, ministry staff cannot reduce
breakdowns in lifts and laundry equipment to
acceptable levels unless some tenants take more
care of these facilities and stop vandalism.
Buildings and grounds will not reach an
132
acceptable level of cleanliness unless some
tenants are more careful about littering and other
unclean behaviours. Some tenants’ sense of
security in the public spaces of estates will not
be sufficient unless certain neighbours act in a
less threatening or anti-social manner.
Thus, the delivery of acceptable levels of
value to tenants depends in part on how some
of the tenants themselves behave. In this sense,
not only personal safety but also maintenance
and cleaning are security issues; they require
tenants to comply with certain norms of
behaviour.
Tenants’ compliance might be enforced by
ministry security staff policing their behaviour,
backed up by security cameras and access
controls. However, it is very difficult to detect
and interdict misbehaviour in the hundreds of
specific locations on an estate without
employing very large numbers of staff - and
more importantly without imposing such a
repressive atmosphere that it outweighs any
benefits obtained.
But there is another scenario in which
tenants might be inclined to refrain voluntarily
from anti-social behaviours. This is where they
feel a strong attachment to the estate community
of which they are a part, and that community
applies clear norms proscribing those
behaviours. In such a community, tenants
develop greater respect and regard for each other,
and become more solicitous of each other’s
security. Insiders are more likely to incur social
opprobrium if they violate the norms, and
outsiders are more likely to be detected as
intruders. Such a community cannot be
constructed unless the tenants put time and effort
into neighbourhood development processes,
such as attending block or floor meetings, or
organising social activities. Thus the delivery
of acceptable levels of maintenance, cleanliness
and security depends on the clients carrying out
certain work.
In each of these three cases, client co-
production is necessary both for the organisation
to achieve its purposes and for the client to
receive value. In those circumstances, some of
the basic assumptions of managerialism,
contractualism and customer service look
distinctly out of place. In the managerialist
conception, the job of line or program staff is to
deliver services to clients, to a standard laid
down i n performance indicators. But if we
0 NationalCouncil of the Institute of Public Administration.Australia 1998
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acknowledge the necessity of client co-
production, their job is more accurately one of
influencing clients to co-produce. So too must
the providers in the contractualist conception.
For example, contracted labour market program
providers must somehow influence the
behaviour of their clients to become job-ready
as specified in the providers’ contracts.
The necessity for co-production also belies
some of the assumptions underlying the
customer service model. Derived as it is from
the customer in the private sector market, that
model assumes an exchange, i n which the
organisation provides goods or services and the
customer provides money to the amount of the
purchase price. Aside from the fact that many
public sector clients are beneficiaries who do
not pay for the services they receive, client co-
production means that the provision of the
service is not simply done by the organisation
i n a one-way transfer, but rather is partly done
by the client.
In summary, some of the patchiness
observed in the actual implementation of the
management reforms may be because their
models fail to take account of the necessity in
some circumstances for clients to contribute to
the achievement of program outcomes, rather
than simply be passive recipients of them.
Client Co-productionand Public Sector
Compliance Functions
So far, I have been considering the role of client
co-production in the service delivery functions
of public sector agencies. But this role turns
out to be just as significant in another key
function of government: the imposition of legal
obligations on citizens, as applied not only by
regulatory agencies but also by all government
organisations which make some use of public
power as part of their work (Sparrow 1994;
Moore 1995:37).
Take, for example, one of the basic coercive
functions of the state: taxation. The Australian
Taxation Office (ATO) is engaged in the activity
of obliging taxpayers to comply with its
requirements, and in this respect is similar to all
compliance agencies. But in the case of the
ATO, compliance is not just a matter of citizens
refraining from certain harmful behaviours. It
necessarily involves p o s i t i v e a c t i o n s by
taxpayers, especially in the tax return process.’
 Clients as Co-producers of Public Services
In a modern democratic society, it is impossible
to administer a tax system effectively and
equitably without affirmative and repeated work
on their part, particularly in lodging returns on
time, reporting income truthfully and claiming
deductions honestly, as well as assembling and
maintaining accurate records to support their
claims (Klepper and Nagin 1989:127; Long and
Swingen I99 ~ 6 4 1 ) . ~
This need for positive work rather than
simply passive abstention by those regulated is
a feature of many regulatory and compliance
agencies. Yet the need for positive work has
attracted almost no specific recognition in the
scholarly literature on regulation and
compliance, not even in the very creative
contributions on ‘responsive regulation’ or
‘interactivecompliance’ which have been made
in the last decade or so (eg Bardach and Kagan
1982; Hawkins 1984; Braithwaite 1985; Ayres
and Braithwaite 1992; Sparrow 1994).
The ticklish question, of course, is whether
citizens being subjected to legal obligations can
be called ‘clients’. On the one hand, each of
them seems to be in some sort of interaction with
the obligation-imposing agency at its ‘business
end’ as an individual; he or she is not simply
part of the collective citizenry which ‘consumes’
public value. In that sense they have client-like
relationships with government organisations
(Vardon 1997).
But on the other hand, the relationship each
of them has with the organisation seems to
abrogate the conditions of the customer in a
private sector market exchange in fundamental
ways. Firstly, there is no exchange of value in
the market sense. The ‘client’ does not receive
valued goods, but on the contrary usually
receives what he or she reasonably regards as
‘bads’. A prisoner, for example, mainly
‘receives’restraint of liberty. Nor does the client
usually pay for the service itself. As Weller
1997:126-7) points out, a prison is not seeking
to obtain repeat business, and therefore the
satisfaction of inmates is not its first objective.
Second, and relatedly, the assumption in the
private sector market exchange, or even in the
case of the public sector beneficiary, that the
customer has a positive preference for the
service falls down when the ‘service’ entails
coercing the client against his or her will (Pollitt
1990:126-7). To take the example of prisoners
again, typically they have a definite aversion to
0 National Council01 the Instituteof Public Administration,Australia 1998
133
the service being delivered - indeed, some of
them are actively engaged in trying to avoid
receiving it! (Lamb 1987:59; Flynn 1990:134;
Moore 1994:301; Weller 1997: 126). As
Whitaker explains:
Not everything that teachers or doctors or
police officers do is ‘service’ ....Expelling a
student, isolating a patient with contagious
disease, and arresting a robber are all
activities in which the subject of the agent’s
attention is not expected to benefit
( 1 980:246).
It seems quite wrong in a descriptive sense,
therefore, to refer to these ‘obligatees’ (Moore
1994) as ‘clients’. However, the fact that many
regulatory and enforcement agencies do so
suggests that there may be something useful
about the idea in a prescriptive sense.5
One way of making sense of this is to
broaden the notion of exchange, drawing on
concepts from social exchange theory (Kotler
1972; Bagozzi 1975). In this broader
conception, the client provides not money but
compliance - specifically, positive actions
consistent with the organisation’s requirements.
The organisation is seeking not repeat sales but
ongoing compliance, without which it cannot
effectively function. For example, it is very
difficult to operate a prison unless the prisoners
at least acquiesce in its procedures and routines.
Similarly, it is much easier to run a tax system if
taxpayers are more willing to comply. As I will
explain subsequently, clients are very unlikely
to grant this ongoing compliance if they feel
alienated from, and hostile to, the organisation.
Treating them as clients in the sense urged by
advocates of a customer focus is therefore the
best way to elicit their willingness to contribute.
In general, prisoners are more likely to co-
operate with prison authorities if they are treated
firmly but with respect and dignity than if they
are simply coerced. This argument will be
picked up in more detail below.
Thus, although taxpayers, prisoners and
other obligatees differ descriptively from the
concept of the ‘client’ we might derive from
private sector market transactions, there is
prescriptive benefit in treating them as clients,
in order to elicit from them their willingness to
contribute to achieving organisationaloutcomes.
134
Organisation-client Interdependency
In each of the cases I have referred to, and in
many Others I there is an
interdependency between the work Of the
organisation and the positive actions of the
client. The organisation’s purposes cannot be
achieved without some contribution of time and
effort by the client.6 This interdependency can
take at least three forms, each corresponding to
a different part of the ‘production process’.
First, organisationsmay require inputs from
clients, especially information, in order to
perform their tasks, as shown in the Australia
Post example or in the case of taxpayers filling
in their tax returns correctly.
Second, organisations may rely on clients
performingpmcesses (ie converting ‘inputs’into
‘Outputs’ by transforming
themselves in Some way. As Whitaker
this is an essential feature of many service
transactions. The organisation can encourage,
advise and facilitate the change, but it cannot
bring i t about on its Own. Insteadl the
organisation and the client ‘togetherproduce the
desired transformation’ (1980:240) as
by job-seekers
participating in labour market programs to
enhance their job-readiness, or public high-rise
tenants influencing their neighbours’behaviour
through the construction of community.
The third form of interdependency is where
the client must convert organisational outputs
into desired outcomes in order for organisational
objectives to be realised, as demonstrated by
CES clients utilisingjob referrals to securejobs,
by making positive impressions on employers.
In s u m m a ~ini each Of the four I have
examined, the organisation faced circumstances
at Odds with what the management reform
assumed. They not
produce and services Or
enforcement to passive clients. It was not
possible to achieve their organisationalpurposes
without some contribution of time and effort by
their clients, defined broadly.
Faced with this problem, each of these
organisations took a public management road
less travelled. It pursued a course of action not
prescribed in the orthodox models of service
delivery and enforcement: it sought to tap
clients’ co-production. We have already seen
how Australia Post had Postcode Squares Printed
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Alford
on envelopesand extensivelypromoted their use
by letter-senders. In the other three cases, even
elaborate strategies were followed.
In the case of the long-term unemployed,
the government adopted the notion of a
recip meal &ligation between the job-seeker
and DEET, followingthe SocialSecurityReview
of 1988 (casS 1988). It was explained thus by
DEET
Along with the greater concern to help the
long-term unemployed came the concept of
reciprocal obligation - if the Government
is Providing i~-~comeSuPPrt, LMPS and other
services, it is only fair that clients take U P
any reasonable offer of assistance and do
whatever they can to improve their
employment prospects (DEET 1992121-2).
This notion of reciprocal obligation underpinned
increasingly elaborate strategies for the long-
term unemployed under the rubric of
NEWSTART, introduced in February 1989,
revised and expanded i n ~~l~ 1991 and
continued under Working Nation from July
1994.
NEWSTART entailed the provision to the
client not only of income support but also of
positive assistance through intensive individual
interviews and labour market programs,
intended to demoralisation and
enhance ‘job-readiness’. In return, the client
was expected to activelyengage in and
look for work, an expectation increasingly
codified in bactivity for each
individual.
In the of public housing tenants, the
Housing Ministry began in the early 1980s to
encourage the establishment of tenants’ councils
on high-rise estates. Elected by tenants and
supported by full-time workers funded by the
Ministry, these councils primarily functioned as
advocacy bodies. But on afew estates, they also
played a community development role. mey
organised floor and block meetings which had
the effect of facilitating and enforcing mutual
understandings among tenants about their
behaviour towards each other, and more
generally created a greater of
neighbourliness,reinforced by organised social
activities.
In the case of taxpayers, the AT0 embarked
on a whole new approach to eliciting taxpayer
compliance after the mid- 1980s, when it found
 Clients as Co-producers of Public Services
that its traditional assessment methods simply
were not keeping up with burgeoning tax
evasion. This new approach went by the name
of ‘self-assessment’, since its initial gambit was
to abandon detailed assessment of each return.
But in fact, individual taxpayers never really got
to assess their own taxes. Much more important
than self-assessment was that the AT0 began to
deploy a variety of strategies to encourage
greater voluntary compliance by taxpayers,
partly making use of the staff freed up by
abandoning assessment. They were directed
initially to post-period auditing, which was
intensified and targeted in the late 1980s at more
likely non-compliers, such as large corporations.
At the same time, a greater effort was made to
help taxpayers comply, with the provision of
extensive advice, information and assistance
services.
In each of these cases, the organisation was,
as Moliere would put it, speaking prose without
knowing it by accommodating the need for co-
production. This need challenges our traditional
understanding of the work done by agencies
performing service delivery and compliance
functions. Their role is not only to provide
services and apply legal sanctions, but also to
influence clients to engage in co-productive
work.
Conclusion
Both the managerial reforms of the last two
decades and more traditional public
administration are founded on the conception
that when public sector managers produce
outputs or deliver services, they do so with
resources which they can command, within the
statutory limits of their authority. They can
purchase equipment and materials, hire staff,
assign them to particular tasks and direct them
to perform them. The reformers’ prescriptions,
such as the output focus, performance
monitoring, the purchaser-provider split or
contract specification, are predicated on these
assumptions.
However, sometimes it is not possible for
government organisations to bring about their
mandated outcomes without the contribution of
time and effort by their clients. In those
situations, their managers cannot command the
requisite resources i n the same way. To
encourage clients to contribute their time and
0 NationalCouncil 01 the Institute01 Public Administratim,Australia 1998
135
effort, managers and their staff must exercise
not direct authority but indirect influence. This
role is less amenable to the reformers’ nostrums.
It calls for more open-ended, less measurable
approaches to managing.
Rather than trying to shoe-horn everything
into a ‘one-size-fits-all’ model such as
contractualism, we need a variety of approaches
to governing, one of which is client co-
production. This suggests a broader conception
of government - not only as producer,
purchaser, regulator and subsidiser, but also as
organiser, enabler, and catalyst of the efforts of
individuals and groups. It also suggests a more
intricate notion of citizenship - not only as
voting, exercising rights, and taking part in
public deliberation, but also as assisting in the
production of public services.
Notes
1. Not all of the potential labour savings have
been achieved, because of an industrial
agreement with the unions covering AP em-
ployees (see Mathews 199 I :44).
2. This analysis focuses on the predecessor to
the current DEETYA.
3. Interestingly, the tax collection process for
most individual taxcpayers, under the PAYE
system, entails co-production by another
party - the employer.
4. Long and Swingen (1991:642) report re-
search which estimated that in the USA in
1988, the work done by taxpayers on indi-
vidual federal income tax returns amounted
to 25 times the work-hours expended by In-
ternal Revenue Service (IRS) staff.
5. The Office of Corrections of the Victorian
Government refers to its inmates as ‘clients’,
as do the prison services of many other gov-
ernments (see Office of Corrections 1994).
6. More generally, in some circumstances an
organisation may gain from client co-pro-
duction even when it can do the work i n
question itself - that is, even when
organisational production and client co-pro-
duction are substitutes for each other. It can
gain where clients are more able to perform
the task than the organisation, but not when
they are less able.
136
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