governing by network: the new shape of the public sector

Eugene B. McGregor, Jr.Editor

Book Reviews

Journal of Policy Analysis and Management, Vol. 25, No. 1, 229–245 (2006)© 2006 by the Association for Public Policy Analysis and Management Published by Wiley Periodicals, Inc. Published online in Wiley InterScience(www.interscience.wiley.com)DOI: 10.1002/pam.20164

Note to Book Publishers: Please send all books for review directly to the incomingBook Review Editor, Eugene B. McGregor, Jr., Indiana University, School of Public& Environmental Affairs, 1315 E. 10th Street, Bloomington, IN 47405-1701.

Michael Bisesi

Governance as Leadership: Reframing the Work of Nonprofit Boards, by Richard P.Chait, William P. Ryan, and Barbara E. Taylor. Hoboken, NJ: Wiley, 2005, 224 pp.,$39.00 hardcover.

Every standard litany of nonprofit board responsibilities includes the duties ofcare, loyalty, and obedience. It could be argued, however, that no duty may bemore important than what corporate governance expert Nell Minow has referredto as the “duty of curiosity.” Indeed, according to the authors of Governance asLeadership: Reframing the Work of Nonprofit Boards, “Behind every scandal ororganizational collapse is a board (often one with distinguished members) asleepat the switch.”

While scandals may grab the headlines, successful nonprofit organizations stillrequire effective boards, and Governance as Leadership was written with thatrequirement in mind. Three eminently qualified authors worked under the auspicesof the Governance Futures Project, a collaborative effort of BoardSource(www.boardsource.org) and of the Hauser Center for Nonprofit Organizations in theKennedy School of Government at Harvard University (www.ksg.harvard.edu/hauser). Richard Chait is a professor at the Harvard Graduate School of Educationand has published extensively in the areas of nonprofit governance as well as collegeand university management. William Ryan is a consultant to foundations and non-profit organizations and is a research fellow at the Hauser Center. Barbara Taylor isa researcher, consultant to nonprofit organizations, and former vice president at theAssociation of Governing Boards of Universities and Colleges.

While the authors hope to engage scholars and consultants, they consider theirprimary audience to be nonprofit leaders—particularly, trustees, CEOs, and seniorstaff. Our expert authors were driven by constructive frustration to write a “newstory” about governance. Their frustration was fueled by the fulsome rhetoric,

230 / Book Reviews

numerous publications, and laundry lists of new ideas about nonprofit boards—none of which seems to yield any real or sustained improvement in governance.

Rather than developing yet another new theory of governance, the authorsdecided to employ existing theories as “catalysts to produce new concepts and prac-tices.” Accordingly, Governance as Leadership is grounded in several “first princi-ples.” First, the many stakeholders of nonprofit organizations increasingly demandvisionary, results-oriented leadership, and thus force CEOs to take on conventionalgovernance roles. Next, the relentless recruitment of “a Noah’s ark of professionalexperts” to nonprofit boards often produces trustees who act more like conven-tional managers because their expertise makes them “predisposed to attend to rou-tine.” Finally, nonprofit boards tend to exhibit one of three types of governance:fiduciary (stewardship of tangible assets); strategic (in which the board forges apartnership with the management); and generative (in which the board provides theleadership). Enabling and encouraging boards to work effectively in all three modesis one of the central themes of the book.

The authors also contend that those who labor in the governance field may beworking in a barren part of that field. Board conversations frequently center on per-formance issues, including questions about mission, resources, communication,and advocacy. Boards may focus on CEO or board member performance and thusfixate on such matters as job descriptions and other administrative detail. Intrigu-ing as these issues may be, a more fundamental conversation rarely takes place—aconversation about purpose. Yet making the shift from performance-related issuesto an emphasis on purpose exposes several governance realities: some official workis highly episodic, some is intrinsically unsatisfying, some is undemanding, andsome is rewarding but discouraged.

Boards serve many functions. Like firefighters, boards are often “on duty” (inmeetings) but not always engaged in high-level activity. Like substitute teacherswhose primary concern is keeping order, boards must engage in the necessary butunsatisfying task of monitoring and oversight. Like monarchs in a democracy,boards engage in such undemanding but essential activities as legitimizing andsense-making. Ironically, some of the most rewarding work—that is, dealing withday-to-day issues—is discouraged by CEOs in favor of activities (such as fundrais-ing) that keep board members outside the organization. The challenge of reform,then, is not to write new job descriptions, but rather to make governance more con-sequential. It is through understanding the three governance types, the authors con-tend, that boards can govern with purpose.

Type I governing is fiduciary: boards are charged with conserving, optimizing, anddeploying assets in lawful and ethical ways to achieve the organization’s mission.Corporate scandals such as Enron, the passage of the Sarbanes-Oxley Act that placesadditional transparency requirements on corporate boards, and the Senate FinanceCommittee hearings on nonprofit governance have highlighted and reinforced thefiduciary imperative. While no one would dispute the centrality of fiduciary account-ability, the “substitute’s dilemma” would also suggest that boards with such a pri-mary focus will not confront many compelling opportunities for leadership.

Type II governing is strategic: boards focus on organizational strengths and weak-nesses as well as opportunities and threats in the external environment—the so-called SWOT approach. Strategic governance moves beyond the conformance con-cerns of fiduciary oversight to performance concerns. Marketplace requirements(such as changes in service demands and funder interests) and strategic disillu-sionment (such as plans without traction, ideas without input, and unforeseen out-

Journal of Policy Analysis and Management DOI: 10.1002/pamPublished on behalf of the Association for Public Policy Analysis and Management

Book Reviews / 231

comes) have tempered this approach. Boards pursuing strategic governance mustshift from a focus on oversight to a focus on ideas. Examples of such ideas mightinclude a 20-year business model, whether to sustain certain programs, andwhether to spin-off certain programs or to merge with another organization. TypeII boards also may decide to change their board structure (from functional stand-ing committees to ad hoc problem-based task forces), as well as reformat theirboard meetings (focus on “the main thing” rather than rote committee reports).

Type III governing is generative: it enables the board to engage in expressive lead-ership by focusing on values, judgments, and insights. Generative thinking goes byvarious names, ranging from adaptive leadership and emergent strategy to cognitivecomplexity and reflective practice. Whatever the name, the focus is on goal-settingand direction-setting. Board members and CEOs collaborate to initiate and overseegenerative work such as questioning assumptions, probing feasibility, and identify-ing obstacles and opportunities.

But how does an organization put generative governance into action? It is herethat the book is both thought-provoking and frustrating. For the most part, theauthors have succeeded in presenting valuable material for busy practitioners.They have many suggestions and protocols for implementing the generative shift,including: helpful aphorisms (“The opportunity to influence generative workdeclines over time”); recognizing generative opportunities such as ambiguity andstrife; descriptions of internal and external organizational boundaries and therisks associated with not crossing those boundaries; techniques for engaging thecollective organizational mind and having “robust” board discussions; assess-ments of the four forms of board capital (intellectual, reputational, political, andsocial) that may alter the board nominating process; start-up challenges (don’ttake the authors’ advice too literally, don’t overuse one governing mode); diag-nostics that help a board understand the purpose, value, and satisfaction in gov-erning; the necessity of avoiding “attractive nuisances” such as discussions ofboard size, board composition, and term limits, all of which are seen as distrac-tions from vital governance concerns; and the recognition of the CEO as the keyleader in any effort.

The practitioner-reader who wants to adopt the generative mode will be frus-trated by the omission of one very important suggestion—how to start. Every CEOrecognizes an old maxim of organizational sociology: “Routine work always drivesout nonroutine work.” Financial, political, and other pressures make it difficult tosurvive, much less thrive, and daily organizational work makes generative thinkingappear a luxury. Yet it is these very pressures that make generative thinking all themore urgent.

On May 20, 2005, Maj. Gen. Michael D. Rochelle, the Army’s senior recruitingofficer, announced that Army recruiters were taking a pause to refocus on values:“We’re going to have a values stand-down day to take a look at who we are as aninstitution and what we represent.” Perhaps BoardSource and the Hauser Centershould urge a nationwide “nonprofit stand-down day”—a day on which all thenation’s nonprofits would step back from their routine work, reflect on the effec-tiveness of their current governance modes, and start down the nonroutine road ofgovernance as leadership.

MICHAEL BISESI is Professor and Director of the Center for Nonprofit and SocialEnterprise Management at Seattle University. He has held executive positions with alarge nonprofit organization and with a community foundation.


232 / Book Reviews

Steven Cohen

Governing by Network: The New Shape of the Public Sector, by Stephen Goldsmithand William D. Eggers. Washington, DC: Brookings Institution Press, 2004, 224 pp.,$18.95 paperback.

The reader will find that there are two books included within this well-written andwell-organized volume: The first is a superb handbook about how to manage in thecomplex environment confronting today’s public managers; the second is a collec-tion of the usual critiques of contemporary government administration, with typi-cal reflexive complaints about old fashioned bureaucracy and government hierar-chy. The reader should focus attention on the truly superb treatment of “Managingby Network” included in Part Two. That is the important and at times path-break-ing part of this important volume.

Stephen Goldsmith and William Eggers point out that public-private partnershipsare no longer simple relationships between government and a single private organ-ization, but relationships among a variety of public, nonprofit, and private organi-zations, each playing a particular role in implementing a public policy. They pro-vide useful insight in designing networks, including tips on how to select partnersand develop the correct mix of government involvement in service delivery. Theseare not easy choices to make and the authors have thought about the factors thatshould be considered when designing networks, such as the degree of flexibilityrequired in performing assigned tasks. In chapter four, they present a sophisticatedanalysis of who should integrate the work of the network and the relative costs andbenefits of government and contractors playing the role of integrator. Of particularnote is a set of questions posed to help decide if government should itself play therole of integrator, including the central questions of internal capacity and the needfor accountability.

In chapter five, the authors provide an excellent discussion of the work involved inintegrating the discrete elements of an organizational network. These tasks includecommunication, coordination, and relationship building. Each chapter ends with ahelpful one-page summary entitled “The Bottom Line.” For example, chapter five’ssection on the work of network integration makes the following “key points”:

• Integrators must devise ways to establish communication channels, coordi-nate activities between network participants, share knowledge, align valuesand incentives, build trust, and overcome cultural differences.

• Trust is the bedrock of collaboration. Without it, people will not collaborateor share knowledge.

• Technology can help organizations collaborating with others to reduce trans-action costs and build trusting relationships. (p. 119)

The “bottom line” section at the end of each chapter then presents a set of “keypoints,” “pitfalls,” “tips,” and examples—all drawn from the material that precedesit. For example, chapter six, the accountability chapter, does an excellent job of dis-cussing the problems of measuring and managing performance in a complex net-work and provides some practical advice on measuring and monitoring networkperformance. A small section on the use of customer satisfaction data as a form ofperformance measurement (p. 147) links customer data to contract renewal. Theauthors note that the Ohio Bureau of Motor Vehicles uses this data to terminateabout half a dozen low-performance contractors each year.


DOI: 10.1002/pam.20165

Book Reviews / 233

While this reviewer is an advocate for innovative government management(Cohen & Eimicke, 2002), in a representative democracy creative managementmust be done in a way that serves the policy direction enacted by our elected lead-ers and their appointees in the executive and judicial branches of our national,state, and local governments. Networks do not govern. The government we electmust govern and it is important to distinguish the principal from the agent. Net-works can be used in service of public policy, but they cannot replace elected lead-ers responsible for formulating public policy.

This means that public management does not, and cannot, mirror private man-agement. Hierarchy and command-and-control structures are probably overusedby government and, in many cases discussed in this volume, can be augmented bypublic-private networks. Hierarchic governments are not, however, the old-fash-ioned, soon-to-be extinct dinosaurs presented by Goldsmith and Eggers. They arenecessary elements of complex systems of governance that must be used when-ever accountability is a crucial goal—such as, matters of life and death orinstances in which programs can result in ecological or human catastrophe. Insuch cases, efficiency is not the highest value of a program; sometimes, slow andsteady wins the race.

Goldsmith and Eggers base their preference for networks on “models of gov-ernment” they present in Figure 1 (p. 20). This is a classic four-cell figure with“public-private collaboration” on one continuum and “network managementcapabilities” on the other. The “optimal cell” is termed “networked management,”which is characterized by high collaboration and high networked managementcapabilities. The least optimal cell is “hierarchical government,” which is char-acterized by low public-private collaboration and low capacity for network man-agement. While the formulation is clear and helpful, these are not the only vari-ables that one could use to analyze models of organizational structure andinter-organizational relations. Imagine a four-cell diagram with one continuumbeing “probability of fraud” and the second being “certainty of command.” Net-worked management might not rank as high if those were the factors being con-sidered.

The need for speed and flexibility is understandable, but is overstated throughoutthe book. The authors note, for example, that:

Flexibility enhances the speed with which the government responds. Because of theirhierarchical decision structure, inflexible bureaucracies tend to react slowly to new sit-uations. The rigidity of government personnel and procurement systems makes it dif-ficult to move quickly or change directions when circumstances warrant. Networks incontrast tend to be more nimble and flexible than hierarchies. (p. 31)

But what if the value one wishes to maximize is deliberation and care rather thanspeed and flexibility? The book’s treatment of the use of contractors in the war inIraq provides an example of the authors’ uncritical acceptance of the increased useof contractors in government. Citing Peter Singer’s Corporate Warriors: The Rise ofthe Privatized Military Industry, they add to his analysis of the cause of increasedcontracting by stating that:

Private companies have become increasingly skilled at managing sprawling, compli-cated logistics chains (that is, networks), and by using these sophisticated private inte-grators, the military has been able to enhance its core war-making function. Howeverone feels about this development—and there are good arguments on both sides—the


234 / Book Reviews

fact of the matter is that the line between military personnel and contractors duringwar has become blurred. (p. 13)

This blurring of the lines between public and private is not some casual or trivialtechnical issue of contract management; it is a major problem for the accountabil-ity of the military to its own command structure. This, in turn, has implications forthe issue of civilian control of the military. Goldsmith and Eggers were correct inciting Singer, since he is the nation’s preeminent scholar of military contracting, butthey fail to take note of Singer’s deep concern for the trend toward a privatized mil-itary. Singer concludes his own analysis of military contracting in Iraq by stating:

We should also take a step back and examine the overall trend, rather than continue tobreathlessly outsource. Just because we can turn something over to the private marketdoes not always mean we should. Two basic questions must always be asked beforehanding over any public function, most particularly to private military firms: Is thefunction being privatized in symmetry with national security and the public interest?If so, how will this privatization save money and promote efficiency? (Singer, 2004)

The issue of the public interest must be addressed. The use of contractors in com-bat raises a variety of issues related to democratic accountability. First, if their con-duct does not adhere to military rules and priorities, they are not subject to militarydiscipline. The need for strict adherence to orders from a chain of command is obvi-ously more important for military and police officials who are authorized to removea person’s freedom, or even life. In a democratic system, the need for strict account-ability is profound—even absolute—if the values of liberty, free speech, and self-determination are to be preserved while security is maintained.

This review dwells on the issue of accountability because whenever hierarchicalcontrol is discussed in this work it is dismissed as an obstacle to modern, efficientmanagement. Public sector accountability is not simply a well-functioning perform-ance measurement system attached to a contract’s penalty and incentive clause; it isa method for assuring that the public’s voice is represented in public policy. There isa reason that hierarchy and rule-driven processes are developed. It is worth exam-ining the necessity for these rules and hierarchies—because often, perhaps evenmost of the time, they are unnecessary and wasteful. But sometimes they are needed,and even in the private sector we see the persistence of vertical integration and non-network management in certain functional areas, such as the handling of toxic sub-stances and the manufacture and distribution of prescription drugs. We should resistthe temptation to assume that such slow-moving processes—perhaps we should callthem careful and painstaking—are poorly managed.

Despite this critique, the book is useful because of its insightful treatment of thepractical operational issues that public managers face when managing inter-orga-nizational networks. Teachers of public affairs professionals, for instance, canmake good classroom use of this book because, while hierarchies will not disap-pear, we will continue to see government reliance on larger numbers of smallerorganizations tied together by the internet and cellular communications and stim-ulated by the need for increased specialization. Thus, government managers mustlearn to design, develop, integrate, and work with networks. Goldsmith andEggers’s Governing by Network makes an important contribution to the literatureof public management and helps build the base of knowledge available to networkmanagers. It provides guidance on how to form networks, how to select networkpartners, and how to operate networks productively.


Book Reviews / 235

STEVEN COHEN is Director of the MPA Program in Environmental Science and Policyat the School of International and Public Affairs and Earth Institute, Columbia University.

REFERENCES

Cohen, S., & Eimicke, W. (2002). The effective public manager: managing public policy in thegovernment, non-profit and for profit sectors. San Francisco, CA: Jossey-Bass Publishers.

Singer, P. (2004, April 15). Warriors for hire in Iraq. Salon.com. Retrieved September 11,2004, from http://www.brookings.edu/views/articles/fellows/singer20040415.htm

William Eimicke

The Price of Government: Getting the Results We Need in an Age of Permanent FiscalCrisis, by David Osborne and Peter Hutchinson. New York: Basic Books, 2004, 370pp., $25.00 hardback.

The Price of Government is the third book in a trilogy by David Osborne (and twodifferent co-authors). The first, Laboratories of Democracy (1998), presents an alter-native to the popular argument advanced most visibly by President Ronald Reaganand British Prime Minister Margaret Thatcher: that too much government is soci-ety’s central problem and privatization is the solution. Osborne suggests that theproblem is not too much government—good government is essential to a healthysociety. The real problem is that most governments do not work very well. Thus,Laboratories presents six case studies on U.S. state governments and their governorsin the mid-1980s who were innovating to make their governments more effectiveand efficient creators of economic growth in the “new economy.” Among the gover-nors profiled were New York State Governor Mario Cuomo (affordable housing forthe poor and homeless through partnerships between government and nonprofitorganizations) and Arkansas Governor Bill Clinton (performance managementused to improve public schools). Also discussed were the cases of Richard Thorn-burgh (Pennsylvania’s Ben Franklin Partnerships), Bruce Babbitt (rethinking envi-ronmental protection and social services in Arizona), James Blanchard (developingMichigan’s factories of the future), and Michael Dukakis (community revitalizationin Massachusetts).

Next, Osborne teamed with career city manager Ted Gaebler to do the unthink-able—write a best-selling public management book, Reinventing Government(1992). By adding the R-word to public management’s vocabulary, the bookspawned the Clinton-Gore National Performance Review, the major U.S. govern-ment reform effort of the 1990s. Like Laboratories, the book uses case studies fromU.S. state and local governments to suggest that government can work better andcost less. But Reinventing Government goes farther, setting out strategies that inno-vators can use to improve the efficiency and effectiveness of public services. Therecommendations contributed to the enactment of the Government PerformanceReview Act of 1993 and, through the National Performance Review, stimulated awide range of reform initiatives at the federal level, including: streamlined pro-curement processes, greater agency control over human resources administration,and numerous experiments with devolution, decentralization, contracting out, andpublic-private partnerships. In addition, Osborne co-authored two other books withPeter Plastrik—Banishing Bureaucracy (1997) and The Reinventor’s Fieldbook(2000)—that provide additional case studies, tools, and procedures for implement-ing reinvention strategies. Reinventing Government also set off an academic


DOI: 10.1002/pam.20166

236 / Book Reviews

firestorm for daring to make the case that government should both be run like abusiness and dedicated to serving its customers.

While the impact of the reinvention movement is still visible, many initiativeswere derailed by the growth of the U.S. economy in the mid and late 1990s, whenmost U.S. governments were awash in revenues and less concerned with economyand efficiency. Conditions changed, however, with the burst of the Internet stockbubble, the events surrounding September 11, 2001, the wars in Afghanistan andIraq, and spiraling health care costs. Once again, U.S. governments are obsessedwith the need to do more with less and David Osborne is back (this time with co-author Peter Hutchinson) with a book of cures.

Scholars might find The Price of Government more appealing than ReinventingGovernment. Osborne and Hutchinson make a strong case for traditional perform-ance management as the best hope of enabling government to do more of what thepublic wants from government in an environment of highly constrained fiscalresources. At the same time, the book is primarily a manifesto for change, “writtenfor leaders, activists, and concerned citizens from all sections of American life” (p.xiv). It is neither a textbook nor does it present any new theoretical material. Nev-ertheless, the book is provocative and readable, and it presents useful case studiesdocumenting successful applications of performance management and one veryeffective use of performance budgeting. The book is a useful supplement to a moretraditional public budgeting or public management textbook, providing currentcase study materials such as the Washington state, Florida, and Multnomah Countycases that illustrate the potential and challenges of adding performance data to thebudget-making process. In addition, Steve Goldsmith’s experimentation with man-aged competition in Indianapolis provides a provocative alternative to either priva-tization or government-as-usual.

Launched on the heels of fiscal calamity at the state and local levels of govern-ment, the book’s appearance is well timed. The authors argue that a “perfect storm”composed of several factors—such as large federal tax cuts and deficit spending;obsolete state and local tax structures (many services and Internet transactions arenot subject to sales and use taxes); an aging population and partially related explo-sion in health care costs, and a strong public resistance to paying a higher percent-age of their income in taxes (pp. 2–3)—will not pass quickly, nor can the storm beoffset by traditional accounting gimmicks and one-shot revenues. They identify thereal solution as smarter government similar to that of Governor Gary Locke, whichhas accomplished much in Washington State.

According to the authors, Governor Locke used a version of performance budget-ing to make the hard decisions about what to do and what not to do in a time ofsevere fiscal stress. Locke worked with the legislature to agree on a fixed amountthat the state could afford to spend in the upcoming fiscal year. Next, his adminis-tration worked with citizen groups and various stakeholders to establish programpriorities. This led to the elimination of a number of previously funded programsfollowed by a reallocation of revenues across the chosen priorities, with measura-ble results attached to what stakeholders were seeking to “purchase” (pp. 6–7).

The process was difficult and time consuming, and the de-funding decisions wereunpopular, but overall the public and media responses were positive. Osborne andHutchinson use the Locke example, as well as a similar experience in MultnomahCounty (Oregon), to create a five-step roadmap to smarter budgeting. The authorsround out their argument with examples of successful innovations in Indianapolis,Minneapolis, the state of Iowa, the U.S. Military, and General Electric to come upwith a ten-point strategy to create smarter government (pp. 13–21).


Book Reviews / 237

None of the ten steps is new and many are borrowed from earlier reinventionideas—such as separate steering from rowing; reward performance; reduce over-sight and red tape; use flexibility to get accountability—and from Peter Drucker(divest to invest); and from the competition experiments in Indianapolis and SanDiego County. Throw in right-sizing (read downsizing), customer choice (schoolvouchers), a little Total Quality Management, and a touch of reengineering and youhave reinvention updated for the 21st century. The book provides a chapter on eachof the techniques. The authors organize the ten points around three themes—smarter sizing (think smaller); smarter spending (use performance measures, cus-tomer feedback, and competitive sourcing); and smarter management (increaseflexibility, use Total Quality Management, and focus on results). They conclude withtwo chapters on the need for smarter leadership, including issues associated with“telling the truth,” focusing on results, and embracing change.

The biggest weakness of the book is that outcomes-based budgeting is not givenmore attention. For example, the authors recount the accomplishments of SteveGoldsmith as mayor of Indianapolis in the 1990s, but his success had nothing to dowith performance budgeting (pp. 149–162). Goldsmith used competition to reducethe cost of his government and also improve the quality of its services. Performancemeasurement was certainly necessary, but it was secondary to competitive con-tracting. In fact, the candidates for outsourcing were chosen by an appointed panelof outside experts, while the public and their elected legislators were not involvedin choosing the targets. Similarly, the cited success of Lawton Chiles as governor ofFlorida was based on cost saving through contracting out: He used neither a publicpriority setting process nor performance measures to make budget choices. Thebook also retells the success of the Compstat performance management system inthe New York City Police Department and its application in Baltimore and Char-lotte, North Carolina. However, Compstat, in all its various forms in New York Cityand other places, is about using performance measures to drive better outcomes ingovernment agencies. It was not used to set budget priorities or allocate financialresources among agencies.

The final third of the book (pp. 191–336) highlights the success of a variety ofinnovative management techniques such as Total Quality Management, reengineer-ing, pay for performance, and GE’s workout process. The stories are well told andthe successes are impressive. Once again, the case is made for management inno-vation, not performance budgeting. It is the potential of a workable methodology toachieve outcomes-based budgets that is new and exciting in this book and theauthors could have given that aspect much more attention.

The quest to tie budget decisions to performance measurement goes back over60 years to the Hoover Commissions, the Planning-Programming-Budgeting-Sys-tems initiative of the Kennedy Administration, Zero-Based Budgeting under pres-ident Carter, and, more recently, the Government Performance and Results Act of1993. Numerous studies document the efficacy of performance measures but thereis much less evidence to suggest that performance management can create betterbudget decisions (Metzenbaum, 2003, p. 706), since the problem with performancebudgeting is that resource allocation decisions involve more than mere efficiencyissues. They involve value-laden choices about the problems government shouldtackle. Thus, elected legislators often ignore data to fund activities desired by theirconstituents, even though there are more effective ways to spend the public’smoney overall.

In Washington state, where legislative leaders bought into an outcomes-basedprocess, there is evidence and hope that smarter budgeting can work. Other


238 / Book Reviews

research is less encouraging (Forsythe, 2001, pp. 335–416). Not surprisingly, andappropriately, legislators are seldom willing to cede their influence over budgetchoices to a system of measures designed, implemented, and interpreted by theexecutive branch. However, a well-documented set of performance measures,arrived at collaboratively and discussed openly, can lead to a productive budgetnegotiation between the executive and the legislature because performance meas-urement can, as Paul Light has argued, help create accountability by providingrewards for actual accomplishment, evaluate whether management reforms areworking, and restore the public’s faith in government by documenting that publicagencies can perform as well as create pressure on agencies that are under-per-forming to do better (Light, 1997, p. 329).

The Price of Government is a lively and convincing case for change managementand the need for performance measurement to assess the efficacy of those changes.Serious scholars may find that they have seen this all before. But for the audiencetargeted by the authors—“leaders, activists, and concerned citizens”—it is an effec-tive and enjoyable window into the practice of management innovation.

WILLIAM EIMICKE is the Director of the Picker Center for Executive Education of theSchool of International and Public Affairs at Columbia University. He previouslyserved as a senior policy and finance official in New York city and state government.

REFERENCES

Forsythe, D. (Ed.). (2001). Quicker, better, cheaper? Managing performance in American gov-ernment. Albany, NY: Rockefeller Institute Press.

Light, P. (1997). Perspectives on performance measurement and public sector accounting.Journal of Policy Analysis and Management, 16, 328–333.

Metzenbaum, S. (2003). Quicker, better, cheaper? Managing performance in American gov-ernment. Journal of Policy Analysis and Management, 22, 706–709.

Osborne, D. (1988). Laboratories of democracy. Boston, MA: Harvard Business School Press.Osborne, D., & Gaebler, T. (1992). Reinventing government. Reading, MA: Addison Wesley

Longman, Inc.Osborne, D., & Plastrik, P. (1997). Banishing bureaucracy: The five strategies for reinventing

government. Reading, MA: Addison Wesley Longman, Inc.Osborne, D., & Plastrik, P. (2000). The reinventor’s fieldbook: Tools for transforming your

government. San Francisco, CA: Jossey-Bass.

Richard F. Elmore

Standards Deviation: How Schools Misunderstand Education Policy, by James P.Spillane. Cambridge, MA: Harvard University Press, 2004, 205 pp., $39.22 hardback.

A central conceit of traditional, rationalist policy analysis is that policy gets “made”in one place and “implemented” in another. A successful policy, in this view, is onein which the behavior of those charged with implementing the policy is consistentwith the expectations of those who made the policy, and the effects that follow fromthis behavior are consistent with what the policy says they should be. The fact thatthese conditions seldom, if ever, occur seems not to have had much effect on thepractice of policy analysis.


DOI: 10.1002/pam.20167

Book Reviews / 239

James Spillane views this conceit in the context of the idea that has dominatededucation reform in the United States over the past 20 years or so—standards-basedreform. The theory behind standards—based reform is that political jurisdictions-primarily states—should enact broad standards for educational content, by level ofschooling; and standards for student performance, measured by tests consistentwith content standards. Content standards should serve as guidance for schools anddistricts in the design of their curricula and teaching; and performance standardsshould serve as the index by which to evaluate student, school, and district per-formance. Sanctions—positive and negative—and support are meted out based onthe degree to which individuals and organizations approach or exceed performancestandards. Spillane’s study focuses on mathematics and science standards in thestate of Michigan, and their impact on nine diverse school systems in that state. Hepursues standards into classrooms, examining the relationship between how teach-ers understand and enact the standards and the content of standards at the statelevel. He also examines district- and school-level influences on the enactment ofstandards at the classroom level. The study covers a critical phase in the history ofstandards-based reform in the U.S. from 1992 to 1996, a period when relatively spe-cific standards were making their initial inroads into state policy and local practice.Hence, the study gives a picture of early responses to standards-based reforms, rel-atively uncorrupted by the complex issues of federal pre-emption and intergovern-mental politics that were to follow the passage of No Child Left Behind in 2001.

The state of Michigan took the high road in developing math and science stan-dards, incorporating ambitious ideas from national professional organizations andfrom the community of practicing mathematicians and scientists. The nine schooldistricts in Spillane’s study all took the shift toward standards-based reform seri-ously, and each responded to the challenge in different ways. District-level activitytended to be dominated by professionals—curriculum specialists and teachers—butit also involved considerable interaction with school boards and parent groupsaround the consequences of new standards and curricula. Districts tended to berational and deliberate in their responses, looking, for example, at the results of thestate-wide test for evidence of strength and weakness in their curricula and teach-ing. Some districts were actively entrepreneurial in their responses to state reforms,deliberately adopting local standards and curricula that exceeded state expectationsin an effort to maintain and enhance their reputations as leaders in the state.

The dominant theory of action by which state standards were supposed to influ-ence classroom practice, in Spillane’s view, stressed “transmission.” That is, teach-ers would understand and make use of the new ideas embedded in standards byexperts “telling, showing, and modeling” these ideas for teachers (p. 59). Teachers’practice would be “monitored” by their supervisors for consistency with the ideasembedded in the standards (ibid.). A minority view of the theory of action sawteachers as active agents in the construction of standards in the classroom, andviewed “knowledge . . . not [as] a commodity imported from the outside into class-rooms, [but as] constructed through conversations among teachers, administrators,and external experts” (p. 60). The potential for state sanctions, based on student testperformance, played a prominent role in districts’ motivation to engage in focusedreform around math and science.

Embedded in these reforms is an often implicit struggle between what Spillanecalls “procedural” and “principled” views of mathematical and scientific knowledge.The former stresses students’ ability to replicate rules, procedures, and factual recallfrom well-established texts. The latter views rules, procedures, and factual recall asimportant, but stresses students’ capacity to think independently, to engage in active


240 / Book Reviews

problem-solving, and to exercise judgment in the use of algorithms. The Michiganstandards, as well as the dominant professional view nationally, stresses the princi-pled view; existing practice in schools stresses the procedural view. Many districtpolicymakers—board members, high-level administrators, and the like—confessedthat they could not see the difference between the two views. And among practi-tioners there was a tendency to substitute practices associated with proceduralismfor those associated with principled views, and simply re-label the former as the lat-ter. In the dominant culture of schools and school systems, Spillane observes, “sense-making tends to preserve existing frames rather than radically alter them” (p. 89).

The dominant pattern of school district support for teachers tended to rely on tra-ditional hierarchical oversight and control, putting district actors in the position ofboth developing teachers’ knowledge and overseeing the fidelity of their practicewith the standards. A few exceptional districts, called “high-support” districts bySpillane, used a dramatically different model of teacher support. They used theirresources to develop and support a cohort of highly knowledgeable and competentteachers and deployed these teachers to help others integrate standards into theirpractice (p. 97). These latter situations were, not surprisingly, characterized byhigher levels of trust among teachers and administrators around the work of stan-dards-based teaching.

Meanwhile, at the state level, policymakers were systematically reducing theresources available to the state department of education for oversight and supportof standards at the same time they were increasing the visibility and pressure asso-ciated with schools’ test performance. This had the predictable effect of the statefocusing less and less on professional support for schools and districts and moreand more on simpler, less expensive compliance-oriented measures.

Spillane finds an interesting interaction between school districts’ strategies forsupporting reform and the degree to which teachers report that their practices areconsistent with more principled views of instruction in math and science. Teachersreported relatively high levels of knowledge of local standards in all districts. Inhigh-support districts—those that actively developed and incorporated teacherexpertise into their reform strategies—teachers’ knowledge of local standards wasmore likely to be associated with principled practice. In low-support districts,teachers’ knowledge of local standards did not strongly predict principled practice.(pp. 134ff)

In the final analysis, Spillane finds that teachers tend to incorporate those prac-tices associated with the standards that require the least change from traditionalconceptions of content and pedagogy, and teachers’ responses are most variable tothose standards dimensions that required them to make the largest changes in theirthinking about content and pedagogy. This is not a particularly novel finding inimplementation research, but Spillane’s framework for understanding this result isquite powerful and useful. He stresses what he calls a “cognitive view” of imple-mentation. That is, there are common cognitive patterns in how individualsrespond to external pressure to change their behavior, not the least of which is,other things being equal, the tendency to preserve existing behavior patterns and tore-label old behaviors with the rhetoric of the new policy. Under certain circum-stances, however, local practitioners were able to break into these resilient behav-ior patterns, and to create organizational conditions that favored the developmentof new knowledge and practice. These practices tended to take the problems oflearning new behaviors seriously, and to construct organizational systems predi-cated on the development of new knowledge, rather than the “transmission” ofknowledge from one place to another.


Book Reviews / 241

This cognitive view is Spillane’s major contribution to our understanding of imple-mentation. But is the development of a cognitive view of policy even consistent withthe idea of “implementation?” What becomes clear in the course of Spillane’s analy-sis is—not to put too fine a point on it—that policymakers do not have the faintestidea what they are doing when they make policies that require large changes in exist-ing behavior and culture, and that require the development of new knowledge as acondition for policy success. In fact, the institutional conditions of policymakingactively conspire against an understanding by policymakers of the conditions for thesuccess of their ideas. Short electoral cycles, limited knowledge of complex causalrelations, the tendency to rely on external coercion and control as the primaryinstrument of policy rather than investments in human capacity, the tendency tosimplify and ideologize difficult and uncertain ideas, the tendency to adjust the levelof resources and support to political contingencies rather than to the demands of thetask—all these characteristics of policymaking work against any strong or produc-tive relationship between policymaking and the kind of cognitive changes that affectteaching and learning. Implementation as a governing metaphor may have outlivedits usefulness, and may, in fact, be counter-productive in framing how to make large-scale improvements in knowledge-intensive sectors like education.

Those who are interested in this book will find Spillane’s work on leadershipequally interesting. He has developed a strong empirical base for the idea of “dis-tributed leadership.” Consistent with his cognitive bias, he examines how organiza-tions develop, deploy, and structure knowledge, and, not surprisingly, he finds thattraditional notions of leadership that stress the characteristics, traits, and skills ofindividuals are less useful in understanding organizational performance than ideasthat stress the nature of expertise, its distribution in the organization, and how wellorganizations capitalize on these features in their conceptions of leadership.

RICHARD F. ELMORE is Gregory Anrig Professor of Educational Leadership at theGraduate School of Education, Harvard University.

J. I. Mills and P. C. Emmi

Limits to Growth: The 30-Year Update, by Donella Meadows, Jorgen Randers, & Den-nis Meadows. White River Junction, VT: Chelsea Green Publishing Company, 2004,368 pp., $22.50 paperback.

In 1972, a network of scholars known as the Club of Rome published The Limits toGrowth (Meadows, et al.). It immediately became a landmark in policy analysis.Using the World3 (“World3” is the way the computer model name appears in the lit-erature) computer model, The Limits to Growth (LTG) explored global growth sce-narios with an emphasis on offering insights into the consequences of uncheckedgrowth on a finite planet. The book presented a warning, a message of hope, and achallenge. The warning—consequent to continued growth in world population,industrialization, pollution, soil degradation, and resource depletion—was directand sobering: “. . . the limits to growth on this planet will be reached sometimewithin the next 100 years.” More to the point, the consequences of having reachedthese limits would likely be “a rather sudden and uncontrollable decline in bothpopulation and industrial capacity.”

In the language of systems thinking, the mechanism that drives this warning iscalled overshoot. The causes of overshoot in any complex system are always the


DOI: 10.1002/pam.20168

242 / Book Reviews

same. First, self-reinforcing feedback encourages growth of some variable at a per-centage of itself—success produces exponentially more success. Second, con-straints, often hidden or ignored, are inherent in the system; in LTG, these includethe Earth’s finite resource base plus its finite ability to absorb industrial wastes.Third, delayed or mistaken perceptions of inherent limits and their consequenceslead to delayed or inadequate societal response. When action is finally taken, it isoften too little too late.

Warnings are easily served up, but offering hope is a more delicate matter. In LTGthis hope was stated succinctly: “The state of global equilibrium could be designedso that the basic material needs of each person on earth are satisfied and each per-son has an equal opportunity to realize his or her individual human potential.”Thus, hope is generally conditional and takes the form of swift and decisiveresponse to the prospect of economic overshoot.

Twenty years after the publication of LTG the same authors conducted an updateof their original study and published the results in Beyond the Limits (Meadows etal., 1992). According to the authors, “we studied global developments between 1970and 1990 and used the information to update the LTG and the World3 computermodel.” Beyond the Limits (BTL) repeated the same message: “In 1992 we con-cluded that two decades of history mainly supported the conclusions we hadadvanced 20 years earlier.” It is important to note that BTL offered one new findingsubsequently reconfirmed (Wackernagel et al., 2002) by more than a few studies:“humanity had already overshot the limits of Earth’s support capacity.”

Both LTG and BTL issued a warning and laid down a challenge. The Limits toGrowth: The 30-Year Update (LTG-30), by contrast, documents how faithfully wehave responded. For a direct answer, the authors turn to the work of Mathis Wack-ernagel and colleagues (2002), who have introduced the concept of an ecologicalfootprint as an operational measure of human environmental impact. This conceptidentifies the amount of land required to support the environmental servicesneeded to maintain the economic activities of an individual, a city, a nation or aglobal industrial society. Application of the concept leads Wackernagel to concludethat the Earth’s carrying capacity has already been exceeded by some twenty per-cent. However, even at this potentially eleventh hour, LTG-30 provides access tohope and a path forward to a sustainable future.

This path is discerned through the careful application of systems thinking andsystem dynamics modeling. As the authors explain in an excellent review ofmethodology, system dynamics is particularly suited to the analysis of complexinterdependent systems with both information or response lags and self-rein-forcing or counterbalancing feedback loops. The author’s World3 system dynam-ics model has been enhanced with new indices and updated through 2002 withdata monitoring developments subsequent to prior publications. The World3model keeps track of population, land and material resources, industrial output,food, persistent pollution, and now the human ecological footprint and an indexof human welfare. Through time, these vary with changes in births and deaths,investment/depreciation, pollution generation/assimilation, and land use change.World3 tracks historic change from 1900. It simulates future change to 2100under a variety of scenario-based conditions. The logic of overshoot provides themodel’s dynamic organizing principle: self-reinforcing growth responds to inher-ent limits with policies often too feeble and too late to avoid debasing theprospects for subsequent and sustainable growth. The objective is to identify aset of policy responses that deflect the system from collapse and toward sustain-able equilibrium.


Book Reviews / 243

World3 recognizes limitations in material resources as well as pollution sinks.The model provides a simplified description of how globally sourced land, materialand energy supplies feed a global economic system whose by-products find theirway into planetary sinks for pollution and waste. However, global rates of materialsource mobilization and pollution assimilation cannot be continually increasedwithout harm to people, costs to the economy and damage to the biosphere.

The authors use the World3 model to generate ten different future scenarios. Thebook’s publisher provides a CD that can be used to examine the book’s ten globaldevelopment scenarios. While a valuable and recommended resource, the CD lim-its users largely to scenario replication. To produce scenarios other than those pub-lished in the book, one simply needs to acquire a copy of the ithink or STELLA soft-ware from isee systems (www.iseesystems.com), install the software, and importWorld3’s equation list from the CD. Be aware, however, that experience with ithink©

or STELLA© will be necessary for successful experimentation with World3.The base case scenario included in the text, Scenario 0, explores a “business as

usual” set of trajectories. Subsequent scenarios introduce changes in one parame-ter at a time to systematically explore the prospects for sustainable outcomes: whatif natural resource endowments were doubled and extraction technologiesimproved; what if more effective pollution control technologies were combinedwith soil erosion control and enhanced crop yields; what if rapid improvements inmaterial and energy resource use efficiencies were made? Each successive scenario,while progressively more optimistic, eventually founders upon the rising capitalcosts of protecting the population and the economy from resource shortages, soilloss, pollution, declining agricultural yields and starvation.

How then to embark on a transition to a sustainable world? The authors’ lastthree scenarios define the course. As described in Scenario 9, the transition requiresthree policy directives: (1) stabilize population with an average limit of two childrenper family; (2) stabilize industrial output per capita at a level 10 percent higher thanthe current world average; and (3) introduce technologies to control pollution,increase resource use efficiency, control land erosion, and increase agriculturalyields. These three broad policy directives would begin to reduce humanity’s eco-logical footprint by 2020, avoid uncontrolled collapse, and settle society into a sus-tainable trajectory.

Important to understanding patterns observed in all scenarios is a subtle but crit-ical point: the rate of resource depletion is key to the world’s future trajectory.Without reduced resource consumption, agricultural and industrial output issucked under by increased technological innovation costs. Increased efficiency ofresource protection and use plus population and production stability are critical toslowing resource depletion rates and thus to any scenario representing a viablepath forward.

Assuming that the will exists, are these three directives sufficient to attain a sur-vivable development trajectory? Would these three alone suffice to divert two hun-dred years of human history and inertia away from its blissful blundering towardcollapse? The authors’ answer is a cautious no. And in many ways their most pro-found message surfaces as a new set of sustainability tools that humanity mustdeploy as complements to the already-prescribed antidotes:

• Visioning—imagining what you really want, as opposed to what you aretaught to want.

• Networking—preparing for the global distribution of critical informationneeded for system structures to evolve sustainably.


244 / Book Reviews

• Truth-Telling—demanding that information not be distorted, delayed, orsequestered.

• Learning—supporting action informed by knowledge.• Loving—being willing to look beyond the boundaries of our collective, imme-

diate selves and commit to future generations of life on Earth.

Coupling the three policy directives with the five sustainability tools, the authorsoffer the following prescription for sustainability:

• Nurture a global commitment to develop new technologies that addressenergy efficiency, land protection, pollution prevention, and environmentalclean up.

• Nurture drastically changed values related to population, material consump-tion, equity, conflict, and environmental protection.

• Truthfully recognize that economics and markets should be servants, notmasters, and that these same markets can help achieve goals and not usedexclusively to determine goals.

• Truthfully recognize that we must assume responsibility for designing ourown future with deliberation and wisdom.

Thus, the power of the LTG logic is not that it makes predictions, but that it pres-ents the implications of design decisions. As end-state analysis, for instance, LTGsuggests systematic experimentation with all of the institutional structures—suchas, markets, hierarchies, and networks—to encourage intelligent resource steward-ship. As policy process, it provides a mechanism whereby the many relevant disci-plines and stakeholders can hold an intelligent conversation.

Is it possible to extend the value of the Limits canon? Can the World3 logic speakto those future generations who will be most affected by the actions of their prede-cessors? Surely there are many possible approaches, but dissemination through edu-cational outreach should be a first priority. Convinced of this, one of this review’sauthors used LTG-30 text and CD as material for a course. The model’s flow chartsare difficult to interpret and relate to the LTG-30 text without the variable name listprovided in LTG. With LTG in hand; however, and with some modeling experience inpocket, the creative exploration of World3 becomes limited only by creativity and thetime available to the student. Explorations that go beyond the 10 scenarios provedhelpful in developing keener insight into the complex interdependencies amongWorld3 variables. In fact, since the major purpose of World3 is to offer insights andoptions, as opposed to making predictions, the major value of scenario explorationemerges out of the group discussions about the logic behind, explanation of, andpotential response to, the behavior patterns each new scenario generates.

Finally, this review would not be complete without some mention of the conclu-sions reached in LTG-30. The text declares, and students have confirmed, that abounded range of potential futures confronts us. This range of futures is defined bythe initial boundary conditions we have established for ourselves, as well as theability to exercise our future collective will and creativity. Beginning with our cur-rent tenuous state of affairs, the authors conclude:

• “Sustainable Development” is no longer a useful organizing concept for under-standing global policy priorities—now we need “Survivable Development.”

• This is going to be a century of decline of all those environmental and eco-nomic systems that are critical to the state of the Earth that future genera-tions will inherit.


Book Reviews / 245

However, true to the hope and compassion that permeates LTG-30, the authorsare quick to offer a vision about our future that “if we are lucky, foresighted, anddeliberate” can be “traversed without massive conflict and further damage to theglobe’s natural systems.”

To emerge whole from our current dilemma, we must deploy many tools, but edu-cation and commitment are foremost among them. Meadows, Meadows, and Ran-ders have left us a significant body of work, cautionary in nature, but bound in com-passion and wisdom. Now we can only hope that those who can teach will teachand that those who learn will commit.

J. I. MILLS is an Adjunct Associate Professor in the University of Utah’s College ofArchitecture and Planning; he is also an emeritus Science and Engineering Fellow atthe Idaho National Laboratory.

P. C. EMMI is a Professor of Urban Planning and the Urban Planning Program Direc-tor for the College of Architecture + Planning at the University of Utah.

REFERENCES

Meadows, D.H., Meadows, D.L., & Randers, J. (1992). Beyond the limits. Post Mills, VT:Chelsea Green Publishing Company.

Meadows, D.H., Meadows, D.L, Randers, J., & Behrens III, W.W. (1972). The limits to growth.New York: Universe Books.

Wackernagel, M., Schulz, N.B., Deumling, D., Linares, A.C., Jenkins, M., Kapos, V., et al.(2002). Tracking the ecological overshoot of the human economy, Proceedings of the Acad-emy of Science 99, no. 14 (2002): 9266 - 9271. Accessed June 27, 2002 at 1www.pnas.org/cgi/doi/10.1073/pnas.142033699.


governing by network: the new shape of the public sector

Documents