I

The Changing Role of Government

Introduction

All of the governments in Canada are making significant changes to their roles and functions. While certain determinants of change are unique to Canada, others are affecting all western nations. One of the most striking features of western democratic nations in recent years has been that they have all been engaged in rethinking the role of government and the organization of their public sectors. In many nations the essence of governance is being redefined.

This phenomenon is not limited to governments which represent a single ideological perspective. Regardless of ideology, there is a high degree of convergence in what is emerging. For instance, recent government reforms in Great Britain and New Zealand are more similar than distinct, although a Conservative government spearheaded change in the former, a Labour government in the latter.

In fact, in redefining the role of government and reforming their public sectors, western nations are experimenting with alternative approaches and in the process are learning from each other. Given that they face similar challenges and pressures, one nation's approach will often influence that of others.

Under the influence of several significant trends ­ globalization, new information technologies, fiscal pressures and the changing fabric of society ­ governments are confronted by ongoing changes to their political, social and economic environments. Because of the sweep of their impact and the type of change they represent, these trends are forcing governments to redefine the way they interact with citizens and even the organization of political systems.

In responding to these trends, governments must serve both as conduits for the forces of change and as catalysts in responding to change. This chapter will briefly review the impact of the major international trends on the role and functions of government and their implications for public sector reform.

The Determinants of Change

This section examines the impact of four international trends on the role and functions of governments. Their implications for Canada will be explored in subsequent sections.

Globalization

Much has been written on how globalization is affecting the ability of governments to pursue their sovereign interests. In the past, a government's policy agenda, with a few exceptions such as trade policy and international conflict, was determined mainly by domestic concerns and interests. In most public policy areas, governments addressed the needs of citizens by looking inward, not outward.

Globalization has changed this. National boundaries can no longer be an exclusive reference point for determining how citizens' needs and interests are addressed in a wide variety of policy areas. Globalization has moved many national public policy issues into the international arena. This phenomenon is not limited to economic policies but extends to many other sectors, such as environmental protection, labour laws and human rights.

As national economies have become more interwoven, they have come more under the influence of international institutions and less subject to the exclusive control of national policies. Nations must be able to make use of international institutions and decision-making processes to manage their interdependence. International organizations, such as the International Monetary Fund and regional trade alliances, are key in responding to certain issues. Globalization, then, has led to a pluralistic decision-making and policy-making international environment. Advancing the interests of each country depends not only on state-to-state relations but on relations within a complex network of international forums.

Governments have a critical role to play in connecting what is happening globally to what is happening in the daily lives of their citizens. They must be able to deal with the local and regional aspects of major national and international issues. Conversely, governments must interpret and communicate to citizens the implications of globalization for public policy decisions. National governments can help connect and reconcile global imperatives and local needs.

In sum, globalization is making governance more difficult and complex. Dealing with the impact of globalization requires governments to assume additional roles:

• to understand the interdependence of national, international and global issues;
• to ensure that local dimensions of public policy issues are reflected in how national interests are represented in the international arena; and
• to ensure that the impact of globalization informs the management of local issues.

To do this well, national governments must focus on core issues.

New Information Technologies

The recent explosion in the use of and access to information and communications technologies has lessened the importance of both national boundaries and time zones and increased the interdependence of nations. For example, through international computer networks, people exchange money across national borders without restraint and instantly transmit the news of the day to each other's homes around the world.

The information revolution will continue, and it would be premature to comment on whether its ultimate impact will be a blessing or a burden for citizens and their governments. It is clear, however, that it is affecting how governments respond to the needs of citizens. It is changing the way policy decisions are made, and is opening new possibilities for the delivery of programs and services.

Policy Development

In developing public policy, governments face an environment where increasing volumes of information are transmitted more rapidly and more widely than ever before. Citizens know instantaneously what is happening in all parts of the world and in their nation. The flow of information outpaces government's capacity to assimilate and address it.

At the same time, citizens and interest groups can influence government and political leaders in more ways than ever before. For example, members of Parliament, through electronic mail, can exchange views with their constituents instantaneously; what was once local becomes national through the tapping of a keyboard.

Governments and citizens are still grappling with how to use this growing volume of information. These technologies provide citizens with more venues to participate in the public policy process; as a result, citizens have greater control over policy decisions and outcomes which directly affect them. The public sector must continue to adjust to the "information society"; it is learning how to structure a rich universe of information and integrate it into policy and decision making.

Program and Service Delivery

The second fundamental impact of the information revolution is on how governments deliver programs and services. New information technologies mean new ways of doing business.

A defining characteristic of traditional public sectors has been the existence of a large physical infrastructure to deliver programs through a network of points of service and offices in communities and towns across the country. This physical infrastructure was the most effective way to deliver public goods and services directly to citizens. A physical presence also helped to bring government into touch with the citizens they served and to promote the exchange of information.

The information revolution challenges the appropriateness of this traditional model of service delivery. New information technologies have allowed governments to experiment successfully with new ways of organizing themselves.

While the information revolution has lessened the need for a large physical infrastructure to deliver programs, it should not mean that governments lose touch with citizens. The legitimacy and relevance of government can actually be enhanced by improved service. New information technologies offer the possibility of close and ongoing interaction between governments and citizens. The use of these new technologies, then, is not only evidence of globalization, but can serve as an antidote to some of its disruptive side effects.

Fiscal Pressures

The 1980s saw a rapid increase in the public debts of most western nations. As indebtedness and deficits grew, international investors became impatient. The globalization of financial markets focussed international scrutiny on how much money governments were spending and what they were spending it on. In the 1980s, the size and sustainability of public debt emerged as a global issue which nations have been forced to address.

In this environment, the fiscal capacity of governments to sustain existing programs and to implement new ones is diminished. Governments have had to establish clear priorities and make hard choices about what existing programs and services to preserve and what new programs to provide.

Many western nations have reexamined the role of government from the perspective of what is affordable. An incremental or gradualist approach to improving the operations of government and reducing cost is being replaced by deeper and more durable reforms. Traditional techniques of modernizing public administration practices through "doing more with less" or "across the board cuts" have proved ineffective in addressing the debt problem. These approaches have to make way for more vigorous measures ­ such as eliminating non-core activities, creating new organizational structures, or privatizing services and functions previously managed by the public sector.

In sum, the weakened state of public finances has contributed to fundamental changes in the role of government. Many national governments have had to address these basic issues:

• What are the primary functions that only governments and only a national government can perform?
• What is the appropriate role of government relative to the private and volunteer sectors?
• How can programs be delivered in the most efficient manner?
• Above all, what is affordable?

While responses vary from nation to nation, and some approaches work better than others, several governments have found that they must seek a new consensus among citizens on the role of government.

The Changing Fabric of Society

Nations are facing far-reaching changes in the fabric of society. Aging populations, higher levels of education, increased heterogeneity resulting from immigration, higher labour market participation rates by women, and chronic high rates of structural unemployment provide some of the context for the changing role of government. To the degree that the basic socio- demographic profile of nations is changing, so are citizens' expectations of government.

The changing fabric of society is redefining the policy agenda of governments and obliging them to reexamine the allocation of scarce resources among competing priorities. Thus, issues that were previously private ­ such as child care and family violence ­ have become matters of public concern. Aging populations increase pressures on public health care services and raise questions about the pension system.

A less homogeneous society combined with increased access to information has broadened the spectrum of perspectives on public policy issues and the range of competing views. Galvanized by the "information society," a participatory and consultative culture has arisen. Citizens and interest groups want their say in what governments do ­ before decisions are made. To the degree that citizens or groups do not see their views taken into account in final decisions, their faith in government is weakened. At the same time, citizens' interests have tended to become specialized and to focus on single-issue agendas. Single- issue groups thus wield significant influence.

The changing fabric of society has made governance and consensus building more complex. Within this environment, governments must understand a diversity of viewpoints; they must help the people with these diverse views understand the consequences of alternative choices; and governments must strike a balance between responding to competing perspectives and speaking to collective interests. It takes time to build consensus. There is a push and pull between perspectives. Governments must know when to listen and when to act.

Changes in Government and the Public Sector

Global trends such as those discussed above are contributing to rethinking the role of government and the organization of public sectors in a number of western nations. National governments, regardless of political philosophy, are experimenting and learning from each other. There are striking similarities in what is emerging.

The first 40 years following the Second World War saw western governments expand to play an increasingly active and interventionist role in the lives of citizens. In contrast, the 1980s and 1990s have witnessed the beginning of a new cycle, one which will likely continue for some time to come. In the past, national governments had come to occupy an ever growing portion of a nation's political and economic space. Today, as issues have become more complex and governance more difficult, national governments are striving to become more selective in the responsibilities they assume on behalf of citizens and are developing clearer priorities in relation to other levels of government and the private and voluntary sectors.

This, in turn, is leading governments to reform their public sectors to ensure that they remain modern and relevant organizations able to fulfil their role in contemporary society. While public sector reform has been unique to each nation, the sheer volume of reform in so many nations in so short a time is striking. No western nation has endorsed the status quo and few have been satisfied with minor administrative or institutional adjustments.

Public sector reform has focussed on both the policy development and program and service delivery functions of government. Among the characteristics of reform shared by various countries:

• Many nations have been experimenting with ways to address horizontal issues more effectively.
  In several nations, the policy development functions of government have been separated from the operational aspects. In many nations, central agencies have increased their strategic planning focus.

• Greater emphasis is placed on delivering high-quality service to citizens and clients.
  The needs of clients have become the focus around which program and service delivery is organized.

• Increased delegation, service performance standards, and accountability have replaced centralized control.
  Many nations have tried to copy private sector management and production methods to improve program and service delivery. However, these nations are discovering that the usefulness of private sector methods is more limited than initially envisaged. In the private sector, firms compete with each other for the loyalty of consumers who are free to purchase services from the supplier of their choice. In contrast, the public sector is the guardian of citizen's rights and entitlements; and it serves them in what is often a monopoly situation. Given its unique role and frequent monopoly, the public sector must develop its own management tools.
• Many new structures and practices are emerging.
  There has been an explosion of institutional models ranging from large public sector organizations sharing a common culture to independent organizations, and from using career public servants to hiring individuals through performance pay contracts.

The Canadian Experience

From the Past to the Present

In Canada, as in other western nations, the 1950s to the mid 1980s marked a period of growth in the role of government and in the size of the federal public sector. In many ways, this growth reflected a widely held view about the role of government as including a growing range of economic, social and cultural responsibilities.

The new trends have brought about, in Canada and elsewhere, a reforming of the role of the federal government and the public sector over the last 15 years. Canada has adopted a gradual, phased approach to permit time for reflection and adjustment. Recent public service reform in Canada can be grouped into two distinct phases.

First Phase

During the first phase, from the early 1980s to the early 1990s, the government sought to modernize public service management and personnel practices and to reduce central agency control over line departments. The government also sought, despite budgetary constraints, to maintain most programs and services by "doing more with less." Many of the achievements of this period, such as Public Service 2000, have been reported in detail in the first and second annual reports to the Prime Minister on the state of the Public Service of Canada.

Second Phase

Public sector reform in Canada recently entered a second phase, which focusses on fundamental questions about the role the federal government must play in the Canadian federation and how the Public Service must be organized to manage these responsibilities. In June 1993, a comprehensive restructuring consolidated 35 departments into 23. The restructuring and a streamlined Cabinet committee system were maintained, albeit with some modifications, by the current government.

With the announcement of the Program Review in the February 1994 budget, the new phase moved on to a fundamental review of all programs and services and an examination of the federal government's responsibilities.

From the Present to the Future

Rethinking the role of government and the modernization of the Public Service cannot be done overnight. Instead there will be an ongoing exercise in renewal and reform. The process and the importance of change will continue to accelerate. In moving forward there are important lessons to be learned both from the experiences of other nations and from past experiences in the Canadian context.

• Reform must be a continuing exercise.
  There is no one right answer. Experimenting and learning from others is the key.

• Integration is essential.
  Public sector reform must be integrated into the government's broader policy and budgetary priorities.
• The strategic policy capacity of the federal public service must be strengthened.
  This is essential, given the complexity of issues that governments must address, and the increasingly horizontal and cross-sectoral nature of these issues.
• Client service is what counts.
  The changing needs and perspectives of clients must be the basis of program and service delivery.
• The concept of "doing more with less" must be replaced with choices about what programs and services should be treated as priorities.
  Focussing the Public Service on its core functions will be a critical step in managing change. Each level of government will have to clarify and modernize its roles and responsibilities in order to serve Canadians better.
• The values of the Public Service must be preserved.
  It is essential to maintain a non-partisan and professional federal public service governed by fairness, integrity and service to Canadians.

The next chapter highlights initiatives begun in 1994-95 and aimed at redefining the role of government and modernizing the Public Service of Canada to meet the challenges of the future.

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