From Private Choice To Public Value
By John Benington
Reproduced by permission of the Public Management and Policy Association.
Greater choice in public services has been one of the mantras for both Labour and Conservative parties for the 2005 general election. This has provoked a flurry of debate in both academic and policy circles, and has divided thought across the political spectrum.
Some argue that the private market sector demonstrates the benefits of greater choice for consumers, while others respond that greater choice does not necessarily produce either greater quality or fitness for purpose. For example, the proliferation of choice in private television channels in the USA has arguably reduced, rather than improved, the quality of broadcasting. Bodies like the Consumers’ Association and their periodical Which? have been set up because consumers are often overwhelmed by too much choice, and want guidance to discern where quality and fitness for purpose are to be found.
In addition, choice in the public service sector is inherently more complex than choice in the private consumer sector:
• First, many public services are not directed at individual satisfaction but at the communal good (for example sewerage, traffic lights). Models of choice derived from retail shopping (where individual preference and satisfaction are paramount) are therefore misapplied.
• Second, many public services are regulatory and imposed on their users (for example prison, child protection), rather than directed at willing customers.
• Third, individual choice in the public service sector can deprive or restrict the choices of others (for example in relation to schooling), because resources are often finite rather than expandable as in the retail sector (where increased demand leads to expansion of production). Choice operates best in a context of abundance or surplus; otherwise it increases inequity.
There has therefore been a growing critique of choice as the concept to motivate and mobilize a further wave of public service reform. There is widespread acceptance that greater personalization of certain services (for example care for older people) is sensible; but this may involve tailor-making public services, rather than extending choice between providers.
The debate about choice has left behind a trail of questions: choice for whom, by whom, with whom, and for what end? These focus attention on choice as a means to an end, rather than as an end in itself and bring me to the central argument of this article. A more potent concept than choice, to motivate and mobilize public service reform, is ‘public value’, precisely because public value is concerned with ends as well as means.
Three Competing Paradigms
There are three main paradigms for public service reform in the UK. The reforms of the post-war welfare state were informed by Keynesian economics, Weberian sociology, Fabian public administration and a theory of public goods. New public management, which has dominated academic and practitioner debate over the past two decades has been informed by neo-liberal politics and economics and rational choice theory.
The patterns of governance and public service which have emerged under New Labour since 1997 have lacked the support of an equivalent economic and social theory, apart from rather generalized notions of a ‘third way’ between a centralized bureaucratic state and a private competitive market.
The ‘third way’ philosophy provides a broad vision for change and stresses the need to link individual and social strategies. However, it does not provide a clear enough theory or strategy to drive reform at the institutional and organizational level. In the absence of a clear overall theory of change to provide coherent logic and clear strategic direction, public service reforms can easily amount to little more than a plethora of pilot programmes and a succession of piecemeal initiatives, which do not add up to more than the sum of their many parts (and, indeed, may contradict each other through their incoherence).
By contrast, the theories of ‘public goods’ and of ‘rational choice’, which respectively informed the Keynesian and Neo-Liberal reforms, were each effective not only in driving macro-economic strategy, but also in providing a clear logic and strategic focus for policy development, institutional reform and organizational and cultural change.
I and others at Warwick University have been working with Professor Mark Moore and colleagues at the Kennedy School of Government at Harvard University to develop a stronger theory of ‘public value’ to provide a clearer conceptual framework and overall strategic purpose for public service improvement and reform. At its most basic level, public value can be thought of as the value added to the public sphere by any activity, service or relationship, or any investment of human, financial or technical resources.
The public sphere can be thought of as the web of values, places, organizations, rules, knowledge, and other cultural resources held in common by people through their everyday commitments and behaviours, and held in trust by government and public institutions. It is what provides a society with some sense of belonging, meaning, purpose and continuity during times of change, and which enables people to thrive and to strive amidst uncertainty.
Developing a Practical Theory of Public Value
There is a now a danger of ‘public value’ being used as an aerosol term sprayed around to freshen up tired ideas and institutions. However, the definition of public value needs to be sharp in order to be effective in providing conceptual clarity and strategic direction for a practical programme of radical reform and continuous improvement of public services. How this concept can be translated into both policy and programmes is crucial, with a range of practical examples that make sense both strategically and operationally. A good starting point is to define the key terms—‘public’ and ‘value’ and ‘public value’.
What Do We Mean by ‘Public’?
Raymond Williams (1976) notes that the word ‘private’ derives originally from the Latin privare: to deprive of access to the public sphere. It was originally used to describe those excluded from, or separated from, the public community. ‘Public’ derives originally from the Latin pubes: all people of pubic age. The root idea behind ‘public’ is therefore ‘the whole community’ (although in Roman democracy this excluded women and slaves).
If we follow this logic, the public sphere should not be equated with the state sector alone. The public sphere should be seen as potentially including civil society, the market and the state. This wider idea of the public is consistent with the crucial debates about how to restore and sustain the public sphere, public debate and public democracy in the writings of Habermas (1962), Sennett (1977) and Marquand (2004).
Another key idea behind the concept of public value is that ‘the public’ is not given but made—it has to be continuously created and constructed. Part of government’s role is to take the lead in shaping and responding to people’s ideas and experiences of ‘the public’, of who we are, and what we collectively value: what it means to be part of, and a participant in, the public sphere, at this moment in time and in this place/ space, and what adds to and detracts from public value.
This involves a constant battle of ideas and values, because the public sphere is heavily contested territory, with many competing interests and ideologies in play. The ‘public realm’ is under current challenge from tendencies towards, for example, racism, sexism, fascism, fundamentalism, brutality, commodification and consumerism, each of which fragment what we have in common as human beings and as a public.
What Do We Mean by ‘Value’?
Some economists have distinguished between:
• Use value, which reflects how useful an item is to a given
person or situation.
•Labour value, which reflects the amount of human effort invested in its production.
•Exchange value, which reflects its price on the open market.
Neo-classical economics (including public choice theory) have over-concentrated on the measurement of exchange value, at the expense of use value and labour value. The notions of use value and of labour value may both contribute to the concept of public value.
Political, Economic and Social Dimensions of Public Value
Public value has at least three dimensions:
•Economic value—adding value to the public realm through economic activity and employment.
•Social value—adding value to the public realm through social capital, social cohesion, social relationships, and social meaning and identity.
•Political value—adding value to the public realm through stimulating and supporting democratic dialogue and active participation.
Key Features of Public Value
Focus on Outcomes and Processes
Public value emphasises the importance of better outcomes and processes, not only higher productivity. For example, in health, this would include improvements in public health and in the respect accorded to patients, as well as reductions in waiting lists. Public value creation, according to Moore (1995), can be thought of as an open system in which inputs are converted, through activities and processes, into outputs and outcomes, often with the active help of co-producers. The assessment of value includes public satisfaction, but also goes beyond this, because public value outcomes are expressed in terms of economic, social and political value added. Public value outcomes can therefore include factors not easily registered in public satisfaction surveys (for example investment in the maintenance of clean water supplies, or the repair of sewerage systems, not visible to the individual service user). Public value outcomes may also include factors that some sections of the public experience as negative (for example control of drug dealing or under-age drinking). Public value outcomes are therefore complex and contested, and frequently involve trade-offs not only between ‘goods’ and ‘bads’, but also between competing priorities. Public value is a concept that stimulates democratic debate between competing interests and perspectives, and involves dialogue about who gains and who loses, and about relative benefits and costs.
Longer Term Perspectives
Public value focuses on, and is measured over, the medium to longer term, rather than solely in the short term. For example the impact of high-quality primary education in disadvantaged neighbourhoods in raising aspirations and achievements within the community will only become apparent over a five- to ten-year period, but needs to be recognized as well as results in annual exams and tests (Winkley, 2002).
Public Value is Created by a Range of Organizations
Public value can also be created by the private sector and by the voluntary sector and informal community organizations. One of the potential roles of government is to orchestrate the powers and resources of all three spheres (the state, the market and civil society) behind a common purpose and strategic priorities in the pursuit of public value goals. The Cabinet Office-led programme of Better Government for Older People is a good example of such joint working between central and local government, health authorities, the private sector, the voluntary sector and pensioner action groups, to achieve a clear goal and agreed outcomes.
The Public Value Chain Varies from Service to Service
The concept of public value can and has to take account of the fact that the public service sector is a conglomerate of very different kinds of activities and operations. For example public value creation in largely technical services may be very different from its creation in people-facing services. Clarifying the nature of the production process is crucial, followed by consideration of how public value can be added at various stages in the value chain. In some cases, starting with the group of people concerned is essential (for example older people; or cancer patients), engaging them in discussion and definition of how they can both contribute to and benefit from the creation of public value.
The ‘Co-Creation’ of Public Value
The definition and measurement of value in many public services needs to take account of the complex processes of ‘co-creation’ between producers and users of the service within which value is created. The focal point for the production of value in education, health or social care lies in the inter-relationships between teachers, pupils and parents; doctors, nurses and patients; clients, carers and local community organizations. This blurs the traditional distinction between producers and consumers, and focuses on the quality of the inter-relationships established.
Co-Creation of Public Value at the Front Line
The public value created in education, health and social care depends crucially upon the quality of these inter-relationships and processes of co-creation at the front line—for example in classrooms, hospital wards, and neighbourhood communities. Many other factors influence the quality, effectiveness and productivity of these front-line relationships and processes, including the policy context, organizational culture, resource base, levels of knowledge generation and transfer, training and development. Medical staff and patients cannot generate a context and culture of healing and health unless the staff are backed up by proper training, support, good buildings and equipment, and unless the patients have proper housing, sanitation, diet, information and support.
Public value is a credible alternative to rational choice theory. It provides a conceptual framework to analyse, inform and inspire reform and improvement of public services. Public value contributes to defining and operationalizing the concept of added value in the public sphere, as well as in the private market. Public
value focuses attention both on what society values and also on what strengthens the public sphere—not just what producers value. Public value highlights the processes of value creation, and the longer term outcomes for the public sphere, not just short-term activities and outputs. Governments cannot create the public value or the public realm on their own—it depends on a far wider network of institutions, actors and cultures. However, it cannot be achieved without imaginative leadership from government and other actors.
To be useful in the longer term, we need to undertake research and development work to define and analyse public value more tightly in theoretical terms and apply and test it rigorously in particular service areas.
This article draws on research carried out for the University of Warwick Health Service Partnership (UWHSP). I am grateful for their partial financial support and for helpful comments from Yve Buckland, Jean Hartley, Mark Moore, Kevin Morrell and Jonathan Tritter.
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John Benington is with the Warwick Institute of Governance and Public Management (IGPM), Warwick Business School