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Managing Chaos in the Public Sector: Keeping Open Government Consistent through Expansion of the Micro-Economics Role of Public-Private Partnership

A note for our readers: the views reflected by the authors do not reflect the views of ASPA.

By David Chapinski

This is part one of an article on open government and public-private partnerships.

Chapinski julySome government services yield public or collective benefits that are of value to society as a whole, whereas individuals and specific organizations usually consume corporate products. One person’s use of the good or service does not diminish another person’s use. More importantly, few topics in public finance and budgeting are more contentious or more consequential than the federal budget. Still, leadership is about making others better because of your presence and making it last in your absence.

Besides the tremendous pressure for strategic change, governance demands competence with integrity — one without the other won’t work. Deciding whether economics is more a “science” or just common sense takes us re-engineering work and evaluation of capacity to allow organizational systems to respond to change. Strategy in the public sector, along with revenue and expenditure forecasting, is often overlooked in the budget process. Herein lies the problem or more specifically, the ‘storm.’ How do we weather this storm?

Weathering the Performance Measurement and State Outcomes Storm

There are two separate questions we must address in public performance analysis. The first is how to know whether economic knowledge leads in fact to rules of better quality. As a junior economist talking to economists, I simply assume we share in the same answer: yes. The second question would be how to know whether the benefits of economics can justify public provision of a certain level of this good. Here the contractarian exchange paradigm applies: the only test of the legitimacy of an institutional arrangement. Here, some level of public financing of economics can be the voluntary and informed consent of the citizens. Just as the efficiency of market outcomes is not measured by some external qualities of these outcomes, but by the process of agreement of the market participants to the market trades they partake in, in the political process the efficiency of the political outcomes lies in the process of voluntary consent of the citizens to the “political trades” being made.

In principle, I think that there are good arguments that can be brought forward to the citizens to convince them that it is worthwhile for them as taxpayers to give up x dollars, because they would get something in return which would exceed their outlay. Some of those arguments could be empirical, for example, the correlation between economic freedom and economic well-being. Some arguments could be more logical-argumentative, for example, thought experiments. Nonrivalry and nonexcludability would be central in these arguments.

On the other hand, the decision of the public provision of a certain quantity of the good “economics” cannot be separated from the institutional arrangement, which governs the allocation of these public funds. Decisions to be made on what is the tax-money to be spent, what organizations are it’s recipients and what are the rules which govern them is the bigger question. South Floridians, for example, are taking on more debt as the economy improves, but they still have less than people in most metropolitan areas. The average debt of $24,884 per person in Broward, Palm Beach and Miami-Dade counties in February 2014 is the third lowest of the 20 largest metro areas in the United States. Meanwhile, Solano County, California is moving forward into fiscal year 2014-15 with a multimillion dollar balanced budget. The budget is still balanced using a combination of funding from state, federal and local revenues, tax revenues, fees for service, transfers from designated reserves and fund balance carry-over from fiscal year 2013-14. The most significant of the increases is the construction of the adult local justice facility.

At the same time, young people are becoming digital natives. Many groups are exploring the possibilities. Boston is leading the way by letting young people help decide how the city will use its money. Called “Youth Lead the Change,” the program is the country’s first youth-driven participatory budgeting effort. Boston has long been at the forefront of engaging young people in politics. It started the New Urban Mechanics, an outfit dedicated to civic innovation that uses cutting-edge digital tools to help people share ideas and collaborate on governance. For example, working with Code for America, it generated a Where’s My School Bus app.

Youth Lead the Change, a partnership with the Participatory Budgeting Project, takes it one step further, allowing young people to decide how to spend $1 million of the city’s capital budget. The allotment is for brick and mortar infrastructure, such as parks, schools and transportation. Projects must cost at least $25,000 and have a life span of at least five years. A steering committee, composed of youths representing diverse community groups, decided who could participate — in this case, residents of Boston, as opposed to neighboring areas such as Cambridge, and those aged 12 to 25.

To sum up, the uncertainty and difficulty seems to lie in the practical institutional difficulties that follow from an affirmative answer. In part two, I will discuss my specific model for change.


Author: David M Chapinski is a doctoral candidate in the School of Public Affairs and Administration at Rutgers University. He is also an adjunct professor at both Felician College and Long Island University. Chapinski can be reached at [email protected]

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