Chapter Twelve
The Future of Cross-Sector Collaboration

The growing complexity of today’s public policy problems and a lack of confidence by citizens in adopting government-only solutions have led to an expansion of a variety of governmental collaborations with private and nonprofit sector organizations. New approaches to governance—collaborative contracts, partnerships, networks, and independent public-services providers (IPSPs)—have emerged to fill the void left by ineffective, underperforming, and underfunded government agencies. Governments now are beginning to rely on the private and nonprofit sectors to bring to the table expertise, experience, and capacity that many public agencies lack.

A high-visibility example that underscores the need for effective cross-sector collaboration (CSC) is the stark failure associated with the initial implementation of the website for the Patient Protection and Affordable Care Act of 2010, popularly known as Obamacare. Once US government agencies sent astronauts to the moon; now the question is whether they can even build a website. If government agencies cannot properly design and establish something as basic as a customer-based website, what confidence can people have that government is able to take care of much more complex endeavors? CSC should not be viewed as a luxury or a governance add-on; it may, in some instances, be the only viable option to deliver quality public services. The urgency of the challenges we face, however, has motivated practice to race ahead of theory. It is fair to say that the collaborative cart is out in front of the governance framework horse.

This book makes the case that sufficient experience and research exist to guide public managers to engage all forms of CSC successfully. Like any other public service delivery model administered by federal, state, or local governments, CSCs should meet citizens’ expectations for performance and create public value. Meeting citizen expectations for performance through CSCs requires new ways of conceptualizing citizen engagement and reinvigorating the values of democratic accountability. Creating public value through CSCs means reimagining the ways public services can be produced and distributed and rethinking how innovative approaches can generate mutual benefits to citizens and to all collaborators.

Some public managers, public administration scholars, and citizens are not convinced about the merits of CSC, particularly when they involve the private sector. Part of the explanation for the antagonism toward such collaborations is embedded in a philosophy that does not approve of nongovernmental entities operating in what is viewed as the public sphere. From this perspective, government is the proper and only legitimate actor to conduct and mediate certain collective actions that aim to meet the public interest. It is government that has the authority and responsibility to decipher and serve the public interest for the benefit of all. This is an interesting debate and one that is likely to continue for a long time.

Skepticism of CSC involving both private and nonprofit organizations also is rooted in more practical concerns: Will fees for services be imposed on users? Will government officials be less responsive to citizens’ complaints and problems? Will the quality or availability of services decrease? Will access to services become restricted and unavailable to particular groups in society, such as low-income, rural residents or minorities? Will public officials be able to control their collaborators, or will they be co-opted or even corrupted? Will our government “sell out” our national interests to foreign companies? These are all good questions and should be addressed fully by public managers before engaging in CSC. In earlier chapters, this book examined numerous issues that can arise when engaging different forms of CSC and offered guidance to public managers on how to ensure accountability and to protect the public interest.

Before considering the various forms of CSC, public managers need to recognize their strengths and weaknesses. While in some cases, public managers may have no choice because of lack of capacity to address the problem solely through agency actions, in other cases, deciding to engage in CSC is a strategic decision or deliberate choice about the best way to maximize public resources to achieve a public purpose (and create public value). Table 12.1 provides a summary of the major advantages and disadvantages of public managers engaging in CSCs.

Table 12.1 Advantages and Disadvantages to Public Sector Use of CSC

Advantages Disadvantages/Cautions
Innovation Private and nonprofit actors have more flexibility and incentives to experiment and try innovative solutions. Public managers lose direct control; innovations may create a backlash from the public.
Interactions with citizens Private providers typically are more customer focused and responsive to customer needs, providing more choices to citizens.
Nonprofits are able to respond to particular constituencies that often are underserved by the public sector.		 Public managers have a broader interest than serving “customers”; they have equity concerns; the democratic process provides a means for negotiating citizen interests, indirectly and directly; and the process of delivery of goods and services to citizens may be important.
Access to funding The private sector can access private funding and may be able to borrow more easily than government.
Nonprofits have access to foundations, donors, and others sources of support. Use of volunteers may lower the cost of service.		 Government can usually borrow at rates lower than the private sector, though such borrowing may be subject to constitutional or statutory limitations or voter approval.
Expertise The private sector can engage specialized expertise more easily than government because of its flexible hiring policies and ability to provide upward mobility.
Nonprofits may have access to volunteers or have local knowledge that is valuable in serving a certain clientele.		 The reliance on outside expertise can result in a public sector that is unable to appropriately manage and supervise cross-sector relationships.
It also can create undesirable information asymmetries between government and potential CSC partners.
Motivation The private sector is motivated by efficient operation of programs and by creating shared value.
Nonprofits are motivated to fulfill their mission in a cost-effective manner; their mission often aligns with government policies and goals.		 Private and nonprofit goals and objectives may not align with public sector goals and objectives.
Negotiating divergent goals is a challenge, and the risk is that public interests may be co-opted by private or nonprofit interests.
Ownership relations Private sector ownership creates an incentive for efficient and profitable execution of programs.
Donors encourage efficient allocation of nonprofit resources, and nonprofit members can influence program priorities.		 Public sector ownership is diffused among the citizens; however, ultimately public managers are responsible for stewarding public resources and achieving the public interest.
Moving to principal-principal relations Private and nonprofit organizations no longer see themselves as mere agents but as trusted partners with public organizations in solving public problems. Public managers are used to working in an arm’s-length principal-agent environment and are challenged to move beyond hierarchical controls to negotiated principal-principal relations.

EVOLVING NATURE OF THE GOVERNANCE CHALLENGE

The challenges of governance today are substantial enough when governments operate within the framework of the traditional bureaucratic model, let alone when they move to more collaborative arrangements that anticipate less direct government control. Figure 12.1 shows how different approaches to collaboration have evolved over time as governments (and others involved in governance) seek new ways to gain access to resources, expertise, and market-driven management as a way to solve the emerging complex problems that public managers face.

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Figure 12.1 Governance Evolution

As public managers have moved from the traditional provision of services, to contracting out, to partnerships, networks, and now IPSPs, each form of collaboration is seen as having some additional benefits to public service delivery. At the same time, these engagements mean an incremental loss of direct control by government and greater discretion and autonomy on the part of the collaborators. The IPSP is the extreme case—near autonomy from government, but with the greatest potential for responsiveness, flexibility, and innovation.

The evolution of these alternative approaches produces interesting choices for public managers: promising for their potential and threatening for what they take away. The paradox for public managers is that in order to gain full access to the benefits of these new approaches—collaboration, flexibility, innovation, and adaptation—public managers must relinquish the very essence of the conventional idea of what it has come to mean to act as government managers: formal control over the production and delivery of public services. Even public managers who endorse CSC are reluctant to step back from the view that government’s prerogative should prevail in all such arrangements—even under the most extreme circumstances, where government is contributing minimal or no resources at all.

CONTRIBUTIONS TO NEW PUBLIC GOVERNANCE

A governance framework to guide expectations for engagements with CSC is now emerging, with a variety of opinions and proposals that do not yet represent a fully formed concept (Eggers and Goldsmith 2004; Salamon 2002; McGuire 2006; Osborne 2010; Hale and Held 2011). CSCs are growing as routine practice, yet a governance model to address them is still developing. Under such circumstances, some might counsel caution and argue it is best to wait until a more complete governance framework has been developed before embracing CSC.

New Public Governance seeks to address many of the issues raised in this book. CSCs have emerged out of the pressure to provide public services that are more responsive to citizens, but they have created a governance gap—between policy problems and mechanisms to address them—that has become a permanent fixture on the government/governance landscape. While New Public Management (NPM) proponents have presented some interesting ideas and challenges to conventional thinking about governance, New Public Governance scholars see NPM as an incomplete set of theories and research that do not fully address the governance challenges public managers now face. NPM may serve as a transition from “the statist and bureaucratic tradition of public administration and the embryonic plural and pluralist tradition of new public management” (Osborne 2010, 2); however, it is inadequate to fully explain the expansions and governance challenges involved in collaboration.

New Public Governance scholars continue to develop new concepts and practical approaches for public policy implementation and public service delivery, incorporating CSC theory and practice. Earlier chapters of the book advance several key propositions as contributions to a future New Public Governance paradigm:

  1. A continuum of four CSC options or models. Three of the four CSC options of contracting, partnerships, and network governance have been studied by public administration scholars. We propose that these forms of collaboration, plus IPSPs, are better viewed as four related approaches public managers may choose for collaboration based on the existing conditions and expectations. The four forms of CSCs are related in the extent to which public managers seek to draw on collaborators’ expertise, government capacity, and the complexity that is part of service delivery.
  2. IPSPs. These entities are being established and operated to provide public services like government but are independent and self-directed collaborations, bringing together multiple organizations across sectors to address public policy problems. Typically IPSPs organize themselves as networks, but their autonomy from government direction and their commitment to collaboration are distinctive characteristics that distinguish them from the other forms of CSCs.
  3. Principal-principal relationships in CSC. The tradition of viewing relationships involving government and collaborators as principal-agent is challenged by CSCs that often involve principal-principal relationships; this is explicitly the case for IPSPs, and it is true in most partnerships and networks. Principal-principal relationships complicate fundamental ideals of public accountability, but that is often a more accurate description of the relationship between governments and collaborators in CSCs.
  4. The bureaucratic model’s incompatibility with CSCs. CSCs have emerged in part due to frustrations with the classic public administration approach to governance and its inability to consistently provide high-quality and responsive public services. The innovativeness, flexibility, and dynamism that are the appeal of CSC are incompatible with the requirements for traditional methods of control and accountability that are the foundation of the bureaucratic model.
  5. A new accountability structure for CSC. To gain the optimum benefit for CSC, a new model of administrative governance needs promulgating. Because traditional forms of accountability are not as successful in CSC, we propose four pillars of mutual accountability: agreeing to common outcome measures, creating value, promoting a trusted partnership, and engaging citizens.
  6. The importance of citizen engagement to ensure legitimacy and accountability. CSCs, perhaps more than any other form of government public service delivery, place public managers in a position where they must represent the views of citizens served by these arrangements. Thus, managers must find ways to engage citizens through social media and other formats to ensure that the collaboration is producing public value for the constituents they serve.

These propositions are consistent with looking at CSC as part of a pluralistic form of governance that depends more on successful collaborations among entities with different missions and values and less on the formal authorities granted government agencies through legislation and executive order. With these issues in mind, we make one more proposition that may aid the development of a New Public Governance paradigm: the significance of public value.

CSC AND PUBLIC VALUE

Prior presentations on CSCs have positioned them as an extension of traditional modes of public governance. Experts on contracting, partnerships, and networks acknowledge the challenges in collaborating in ways that advance the public interest. A central theme of this book is the natural tension between the expectations for governments to control and maintain close accountability for collaborations and the expectations for CSCs to be responsive, flexible, and innovative. One approach for public managers who develop and work with CSCs and must manage the tensions between expectations and performance is the concept of public value.

Defining Public Value

The idea of public value is a relatively new concept in public administration. We build off the foundational ideas of Moore (1995), discussed in chapter 10, in developing a rationale for the role that public value can play in helping public managers gauge the success of CSCs. Just as the goal of private managers is to create private (economic) value, the goal of public managers can be seen as creating public (social) value. The definition of public value provides a unifying idea of what public managers should aspire to in CSCs and can guide decisions on the appropriate collaborative solution to meet a public need.

The idea of public value, however, remains elusive. Moore’s (1995) definition of public value equates managerial success in the public sector with initiating and reshaping public sector enterprises in ways that increase their value to the public in both the short run and the long run. Many have found the idea interesting but difficult to pin down. Much of the debate has been predicated on the assumption that public value is created, or at least identified, by public agencies. Examining CSC contributions to public value allows greater flexibility in determining what constitutes public value and where it originates. Talbot’s (2006) economical consolidation of a complex set of considerations over what public value means may work best: “Public value is what the public values” (7). It allows the concept to be debated and resolved within any given CSC, with the presumption that most, if not all, participants will have a sense of what the public values in their communities. Public managers thus play a key role in helping CSCs to better understand how to translate their activities into public value. This recognizes that ultimately citizens do determine public values either directly, through citizen participation, or indirectly, through elections.

Moore’s concept of public value as an analogy to private value remains the most useful touchstone for assessing CSC performance. For business, creating private value is the goal, but one with a purpose. Private value created and captured by firms can be passed along to the buyers of their products and captured in various measures of financial return. Firms attempt to create private value that is useful and profitable, but there is no guarantee of success. For CSCs, creating public value is the goal, but one with a purpose as well. Public value can be created and captured by citizens, whether through the services provided by CSCs or by additional spillover impacts that CSCs have on society. By applying Moore’s concept to CSCs, public managers make a pragmatic assessment of the value of a CSC. Public managers might assess public value through four different lenses:

  1. A public policy perspective. To what extent is the CSC advancing goals and objectives already adopted as public policy? It is reasonable to assume that public value is generated when public policy goals are furthered. Through this lens, public managers can work to maximize the extent to which CSCs meet articulated public policy goals.
  2. The organizational perspective. To what extent has the CSC accomplished the purposes and results it has set for itself? The core rationale for CSCs is their capacity to provide public services, meeting some unmet public policy need. Through this lens, public managers can work to make sure that the efforts of CSCs do not drift from a generally accepted view of what is in the public interest.
  3. The better governance perspective. To what extent has the CSC created innovative and adaptive approaches to providing public services? The public value created by such innovations is not limited to the specific CSC, but in its potential replications and adoption as regular practice by other CSCs and by government agencies.
  4. The citizen perspective. To what extent do citizens perceive that the CSC is creating public value for them, either directly or indirectly? It is reasonable to assert that the efforts of CSCs are likely aligned with public policy. Active engagements of citizens, through various phases of a CSC (not only in the lead-up to a project but also once a project has begun), can provide an answer to whether citizens’ expectations are met.

In all four aspects, public value becomes a touchstone for public managers to assess the contributions of CSCs and a guide for influencing the design, decisions, and operations of CSCs. As a practical matter, the assessment may have to come as CSCs are operating, and the values identified can provide useful evaluative tools. Examining public value created by CSCs becomes an approach for public managers to compare and contrast the efforts.

Illustration: A PPP for Infrastructure

The DC Capital area I-495 Beltway Hot Lanes project represents an effective use of a PPP in many respects and can be assessed in terms of public value. This project built fourteen miles of new express lanes (two in each direction) on I-495 between the Springfield Interchange and roadways north of the Dulles Toll Road—one of the busiest stretches of the Capital Beltway. These express lanes allow the beltway to offer high-occupancy vehicle lanes (HOV-3) connections with I-95/395, I-66, and the Dulles Toll Road for the first time, with enormous potential for reducing traffic congestion. It also made a significant contribution to the beltway’s forty-five-year-old infrastructure, replacing more than fifty aging bridges and overpasses, upgrading ten interchanges, and improving new bike and pedestrian access. Toll prices for the 495 Express Lanes change according to traffic conditions, which regulate demand for the lanes to keep them congestion free even during peak hours (Virginia Department of Transportation 2013). Some of the values for traveling citizens include reduced travel times, improved safety on modernized infrastructure, and expanded pricing options to meet their individual traveling needs.

The private sector partner (Capital Beltway Express LLC) committed $349 million in equity financing (matching state and federal government financing) of the total $2 billion project costs, which was seen as essential for adding the new lanes (AASHTO 2014). Capital Beltway Express LLC also took on the risk that the fees and tolls they collect from managing the road would be sufficient to provide an attractive return on investment. Capital Beltway Express has experience financing and managing other highway projects and brought that expertise to this project. The expansion of that portion of the beltway meant the repair and replacement of numerous overpasses along that stretch, a significant and pressing capital improvement cost that the State of Virginia shifted in part to private partners.

Examining this project through a public value perspective, public managers could respond positively that they were fulfilling a clear Virginia public policy objective and creating an innovative approach to expanding highway capacity. If everyone involved in the CSC achieves their objectives and the mutual outcomes of the collaboration are achieved as well, we would consider the CSC to be a success.

Citizen acceptance of this PPP remains to be seen. Users of the 495 Express Lanes pay a variable congestion toll, depending on the length of the trip and the amount of traffic—generally ranging from about $1.50 to $5.00, but there is no cap on the maximum toll that could be charged. Carpools and taxis with three or more passengers, motorcycles, emergency vehicles, and some hybrids and buses are exempt from the tolls. The congestion fares have taken many drivers by surprise—despite public relations efforts by VDOT to inform the public of how the rates can speed up travel times. Paying a fee for what some may consider a reasonable commute time will seem a burden to many drivers—one they are likely to feel they have already paid for through their taxes. However, even for those who do not use the express lanes, the expansion should reduce overall commuting time, taking some travelers off the existing lanes and onto the express lanes. This PPP structure is similar to many under consideration nationally and internationally; tolls are critical to cover the interest and principal on the borrowed funds, whether publicly or privately financed, that paid for the expanded highway. Public managers will need to examine whether citizen expectations were met and whether they perceive that the public value created is commensurate with the tolls paid.

Illustration: An International IPSP

The self-direction and financial independence of the Global Network for Neglected Tropical Disease (GNNTD), discussed in chapter 6, is a reflection of the public value offered by IPSPs. The GNNTD established its own mission and goals consistent with its members’ view that neglected tropical diseases (NTDs) had not received enough attention from global health care funders. US programs directed at global diseases and pandemics had settled on the priorities of HIV/AIDS, malaria, and tuberculosis. GNNTD has received funding support from the Gates Foundation and is implementing in-country programs that cure NTDs. The program efforts are consistent with the global health community’s recognition of the importance of NTDs, but GNNTD supports programs well beyond those that the US government supports. For those who advocate greater attention to NTDs, an IPSP approach fits very well and creates value to the affected populations served.

However, GNNTD’s relative independence also means its efforts may be seen as separate from a larger global policy context. Would the funding generated by GNNTD have been better spent on priorities already recognized by the United States and the global health community? The GNNTD also strives to be the strongest advocate for NTD support, but other organizations (such as the UK Coalition against NTDs) remain active, and it is not clear how to resolve mission overlap among the different groups.

Can public managers assess the public value created by GNNTD? In a broad sense, GNNTD is fulfilling a public policy goal of improving the health of people in developing nations. While not supporting the specific priorities of US health care spending for developing nations, it is not inconsistent with broad policy objectives, and it is providing services in an innovative, cost-effective manner. Because of its independence, it is not a public manager’s responsibility to monitor outcomes. A public manager’s advocacy for public assistance for GNNTD, however, would center on the idea of the results achieved and maximizing the public’s dollars through the use of this IPSP.

MOVING FORWARD WITH CSC

CSCs have the potential to help governments do their jobs better by creating more public value. It is a way to close the gap between what politicians promise and what governments deliver. Accomplishing this goal successfully means building long-term relationships among the public, private, and nonprofit sectors in CSCs as trusted partners. Such collaborations should be built around basic tenets: allocating risks to the partners in the best position to manage them and to ensure that all partners have a stake in the game, sharing information voluntarily to help partners make collaborative decisions in the public interest, agreeing on measurable outcomes for the collaboration to create public value, productive engagements with citizens, and a willingness of all collaborators to hold themselves accountable for their performance.

CSCs at their best are not mere extensions of government programs but a fundamental change in the way public services are provided. They offer opportunities to create innovative and responsive public service: those that create more public value than other approaches. With the proper design, CSC participants are motivated to generate the maximum public and shared value possible. However, such an approach calls on public managers to rethink the way public services are identified and provided and to manage the feedback and expectations of citizens regarding the quality, access, and cost of those services.

We should all insist on public services that are responsive to citizens’ needs and of the highest quality regardless of one’s wealth or influence. The notion that government provides a one-size-fits-all, take-it-or-leave-it kind of service is not only unacceptable but violates democratic principles. Increasingly, the lack of innovation found in the government’s delivery of public services contrasts with the adaptive customer-oriented modes of service delivery found in the private and nonprofit sectors, with their strong motivations to serve their customers and clients. One has only to think of the kind of customer service received at Amazon versus most state departments of motor vehicles to appreciate the difference. Successful businesses continually seek to provide value to their customers. Public agencies should be no different in a quest for increasing public value.

With this in mind, CSCs are rightly understood as one way of organizing for better governance that improves the public services provided to citizens (Milburn 2007). CSCs have the potential to transform the way in which we view and deliver public services when guided by the appropriate vision and principles. Although there is no one best approach, Milburn argues for three principles: (1) choice and voice, emphasizing customer services and making standards matter; (2) empowerment, or allowing partners to be innovative and responsive; and (3) diversity of supply, or encouraging a robust market and entrepreneurial nonprofit organizations to test new ideas.

At the operational level, CSCs must employ approaches that spotlight their performance in creating public value. It is achieved through monitoring and evaluating services based on an agreed level of performance. Using new capabilities available through ICTs and social media, monitoring and evaluation could be done daily, or hourly, or in real time, not annually. Technology also expands the options for considering citizen input on projects after a CSC is up and running. Monitoring and evaluation could be repositioned to explain how well a CSC is achieving public value, improving transparency and accessibility for citizens. Such real-time accountability provides a prospect for adjustments and modifications of CSCs, with new opportunities to create more public value and develop more ongoing relationships and trust between government and citizens. Transparency throughout this process is key. The level and quality of public services provided, their costs, and the extent to which they meet expectations can be recorded and provided through websites and other social media so that the public can see exactly what they are paying for and what they are receiving.

As the use of CSCs expands, they exacerbate the tensions that already exist within public administration over the best way to deliver public services. CSCs challenge government to consider citizen interests beyond direct and indirect public sector involvement, to also include values for citizens identified and addressed from outside government. The four CSC approaches described and analyzed in this book have emerged and evolved during the past few decades. The strains they place on traditional ideas of accountability, public interest, and public values are growing pains as a slow but steady transformation takes place. Until a new public governance paradigm emerges, however, CSC will continue to face the challenge of being an innovative form of public service delivery that does not comport with traditional principles and ideals most familiar to public managers. Regardless, it is clear that CSCs are here to stay. They have the potential to deliver public services in ways that satisfy citizens’ needs otherwise unimaginable.

CONCLUSION

A century ago, public administration principles and practices were codified in legislation and formalized through academic curricula to safeguard democratic accountability as public governance was revolutionized in response to a transforming society. Today public administration needs to be reconceptualized again to adapt to the reality of a new approach to governance: cross-sector collaborations.

We have emphasized throughout this book the challenges public managers face in identifying which form of CSC will be of greatest value in meeting their goals. One practical way to think about engaging CSC is to draw on Kettl’s (1993) notion of government as a “smart buyer.” He cites three basic prerequisites:

  1. Government must know what it wants to buy.
  2. Government must know who can sell what it wants.
  3. Government must know how to judge what it bought.

Kettl’s smart buyer approach is an apt lesson for public managers considering using CSC. Privatization and public-private relationships have been emerging, and public managers have been encouraged to find more market-based approaches to solving public policy problems since at least the 1980s. Kettl’s advice fits well with an analogous awareness of government being asked to embrace methods of governance for which it may lack the capacity. We propose three parallel prerequisites for engaging CSCs:

  1. Government must know what public value outcomes are achievable through CSC.
  2. Government must know which participants can make the best contributions to a CSC.
  3. Government must know how to monitor and evaluate public value in CSC.

Kettl’s concern over the government’s shortcomings in the procurement skills and acumen should be heeded for CSCs as well. Master’s programs of public administration and public policy should be educating future public managers with the skills and analytics required to design and manage CSCs. Public managers will find the following skills increasingly important: understanding how to negotiate successfully with private and nonprofit organizations, managing and inspiring collaborative relationships, generating and measuring public value, engaging citizens and their preferences through social media and in-person events, developing innovative solutions that gain buy-in from collaborators, and participating in CSCs using the right level of government participation to optimize success.

This book has documented experiences of successful (and unsuccessful) CSCs and provided analytics that public managers can use to assess the trade-offs of using one form of CSC over another. The overall approach we advise public managers to take regarding the use of CSCs is trust but verify. The phrase, made famous by President Ronald Reagan when describing his approach to nuclear arms negotiations with the Soviet Union, captures the need to balance enthusiasm with caution and the need to monitor results.

Public value as envisioned by Moore (1995) presents an inspiration for public and nonprofit managers engaged in CSCs. Considering public value as a metric has caused public administration scholars no shortage of consternation as they struggle to conceptualize what such a thing as public value is and how to account for it in practice. At some point in the future, perhaps all public managers will be measuring the public value of government and nongovernment CSC programs just as we now do revenues and costs.

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