How Entrepreneurial Should a Government Be?

The views expressed are those of the author and do not necessarily reflect the views of ASPA as an organization.

By Laila El Baradei
October 7, 2022

Several things got me to start thinking about how entrepreneurial a government should be. It started with a discussion with my graduate students about the book Reinventing Government, by Osborne and Gaebler, published in 1992, and continues to be relevant up until the present day. The next trigger was the debate currently starting once again in Egypt over the optimal way to manage national properties/assets -AKA a privatization program. And the third trigger was a visit to Egypt’s New Administrative Capital. Let me elaborate.

According to the advice given by the two esteemed authors, David Osborne and Ted Gaebler, in total sync with the principles of New Public Management, governments should borrow ideas from the private sector, be risk takers and be entrepreneurial. Their book Reinventing Government was so influential that Vice President Al-Gore used it as the basis for the National Performance Review Initiative in 1994. Twenty years after they wrote their book and were interviewed again to check whether anything might have changed in their original ideas, they still maintained the emphasis on entrepreneurship.

In Egypt, we are back again to revitalizing the privatization program, but are no longer using the term. Selling out government-owned property and buildings is being referred to differently, either as part of the National Assets Management Program or the Government Property Management Program, but the essence of the Asset Management Program, or Property Management is privatization. The government is keen on shifting more functions and properties towards the private sector.

As for the New Administrative Capital currently being built in Egypt, and to which government ministries, banks, embassies and main activities will be moved shortly, the relationship between the government and the private sector is blurry. The New Administrative Capital is being managed by a private sector company owned by the government. The company was established by the New Urban Communities Authority, but actual ownership of the land is for the Armed Forces Land Projects Authority. The owning company/corporation is running the operations as a private sector company should, and trying to maximize profits. Meanwhile, the ministries that will be moved to the New Administrative Capital will have to pay out substantial amounts of money as rent for the new buildings they will occupy over there, after moving from their earlier occupied premises in old Cairo. There are a number of puzzling issues here. The first, and the least worrisome, is that the government owns a private sector profit-maximizing company managing the New Capital of the republic. Second, the traditional ministries who had access to buildings and palaces in old Cairo rent-free, after moving to the New Capital, will have to pay a huge rent that will be deducted from their already strained budgets. Strained budgets are always mentioned by the government especially for the Education and Health Ministers when the quality of the service they provide is below the required standard. Third, the military owns the land of the Administrative Capital and the relationship between military and civil government organizations in Egypt is not very transparent.

The notion being promoted by the government more and more, is that nothing is free anymore. And the question is: should that be the case? Shouldn’t governments serve citizens and provide them with basic health and educational services by using the tax money collected? Is this what Osborne and Gaebler had in mind?

Osborne and Gaebler’s notion of governments implementing a greater degree of entrepreneurship in managing their programs has received lots of support over the years. “Governpreneurship” was even a term coined in 2013 by a scholar named Robert Hisrich, and used as a book title, to denote how governments should imbed entrepreneurship, and how compelling it is. However, the main message in the aforementioned book was that, yes governments should try to be innovatively entrepreneurial, but only to “help public sector managers undertake their public mission”.

Meanwhile, in explaining what is meant by a government as an entrepreneur, the two scholars Link and Link in 2009 explained how this is applicable only in some subsets of policies, and that not all government actions should be entrepreneurial. And this brings us back again to the first lessons of public administration in an attempt to define public mission as working on enhancing the values of efficiency, effectiveness and responsiveness.

Government working and acting as an entrepreneur in some sectors is good. During these difficult economic times across the globe, there is a need for governments to be more creative in generating additional resources. However, the key is achieving the right balance between the government’s aspirations to be entrepreneurial and business-like, and the need to cater to all citizens’ needs and serve them well. That is the main mission of governments and we should not lose the forest for the trees.  

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Author: Laila El Baradei, Ph.D. is a Professor of Public Administration at the American University in Cairo, Egypt. She is a regular contributor to PA Times Online. Email: [email protected] Twitter: @Egyptianwoman

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