Resource Allocation in the Public Sector: Values, Priorities and Markets in the Management of Public Services

305 Pages·1998·1.94 MB·English

by  Colin Fisher

RESOURCE ALLOCATION IN
THE PUBLIC SECTOR

This volume analyses the ways in which public services are allocated and
delivered. It examines the competing values that underlie the public service
ethic, as well as the role of markets and quasi-markets, in public service provision.
The ‘rules of thumb’, or heuristics, that people use when making resource
allocation decisions are explored in great detail. The author identifies a number
of different heuristics, such as deservingness, individual need, ecology, fairness
and utility and describes the conflict in culture and rhetoric between these.
Equal importance is given to the nature of markets and the mechanisms used to
marketise public services such as vouchers and quasi-markets. In a detailed
overview, the author analyses the enormous changes in the public sector over
the last decade and predicts the future development of public services.
C.M.Fisher is Principal Lecturer in HRM at Nottingham Business School.

RESOURCE
ALLOCATION IN
THE PUBLIC SECTOR

Values, priorities and markets in the
management of public services

C.M.Fisher

London and New York
First published 1998
by Routledge
11 New Fetter Lane, London EC4P 4EE
This edition published in the Taylor & Francis e-Library, 2002.

Simultaneously published in the USA and Canada
by Routledge
29 West 35th Street, New York, NY 10001

© 1998 C.M.Fisher

All rights reserved. No part of this book may be reprinted or
reproduced or utilised in any form or by any electronic,
mechanical, or other means, now known or hereafter invented,
including photocopying and recording, or in any information
storage or retrieval system, without permission in writing from the
publishers.

British Library Cataloguing in Publication Data
A catalogue record for this book is available from the British
Library

Library of Congress Cataloguing in Publication Data
Fisher, C.M. (Colin M.), 1951–
Resource allocation in the public sector: values, priorities and
markets in the management of public services/C.M.Fisher.
p. cm.
Includes bibliographical references and index.
1. Public administration. 2. Markets. 3. Resource allocation.
I. Title.
JF1351.F57 1998
352.3 941—dc21 97–45127
CIP

ISBN 0-415-17873-8 (hbk)
ISBN 0-415-17874-6 (pbk)
ISBN 0-203-00982-7 Master e-book ISBN
ISBN 0-203-19340-7 (Glassbook Format)
CONTENTS

List of figures vii
List of tables viii
Acknowledgements ix
1 The problematics of public service resource allocation 1
Public service problems and priorities 1
A summary of the chapters 6
Approaches to the definition of values 10
On heaps: the nature of the book 23
2 The heuristics of resource allocation: how people determine
priorities 26
Values and resource allocation 27
Understanding resource allocation and priority setting decisions 37
Monksbane and feverfew: a management development exercise 49
Decision making and the heuristic use of values 57
Addendum: monksbane and feverfew 64
3 The apologetics of public sector organisations 79
Deservingness 79
Individual need 86
Fairness 94
Utility 102
Ecology 109
Personal competence and gain 117
v
CONTENTS
4 The rhetoric of resource allocation: arguments about how
priorities should be set and resources allocated 121
The rhetorical perspective 121
Agonising as individuals: the Resource Allocation Preferences
Survey (RAPS) 125
Arguments within public sector organisations 134
Arguments about the dysfunctions of markets and hierarchies 148
Arguments about the workings of markets 156
Conclusion 168
Addendum: Resource Allocation Preferences Survey (RAPS) 169
5 The mechanics of making markets 174
An overview of the mechanisms 174
The mechanisms in detail 181
The mechanisms and the heuristics 208
6 The dialectic of resource allocation 213
The private client relationship: the dialectic of patron and client 215
The professional relationship: the dialectic of need and worth 221
The managerial relationship: the dialectic of objective and subjective
good 223
The quasi-market relationship: the dialectic of governmental
purchasing and proxy purchasing 228
The regulated market relationship: the dialectic of segmentation
and universality 236
A summary 243
7 A polemic: conclusions about resource allocation and
public services 249
The changing pattern of preferences for the heuristics 251
The polemic 255
The ending 263
Appendix: cave rescue 266
Bibliography 271
Index 288
vi
FIGURES

1.1 Rokeach’s classification of beliefs and values 14
2.1 The rational model of decision making 30
3.1 Equity as choice 83
3.2 Framework for analysing provision of residential services for
the elderly 100
3.3 A programme structure 107
4.1 The joint planning game 133
4.2 How decentralists and service society advocates and members
(SSAMs) see themselves and one another 135
4.3 The value heuristics of resource allocation 137
4.4 The three domains of human service organisations 141
4.5 The organisational location of the value heuristics in public
sector organisations 145
4.6 The stakeholder power matrix for education 150
6.1 The provision of public services relationships between
principals and agents 216
6.2 The delivery of public services: a phenomenology of the
goods heuristics for allocating public 217
7.1 Balancing formal and informal heuristics when markets are
used to provide public services 264

vii
TABLES

2.1 Marginal benefits (additional lives saved) as a result of extra
expenditure on monksbane and feverfew 50
2.2 The statistical model underpinning the monksbane and
feverfew instrument 54
2.3 Responses to the value heuristics: % of managers responding
high, medium or low to each value heuristic 55
2.4 Ranking of middle managers’ heuristic preferences 56
2.5 Analysis of the responses to the value heuristics by the three
sub-groups in the sample of middle managers 56
2.6 An illustration of subjective expected utility technique 59
2.7 The contrasts between the rational and the heuristic
approaches to decision making 62
4.1 Analysis of middle managers’ responses to the Resource
Allocation Preferences questionnaire 128
4.2 Middle managers’ heuristic preferences: espoused values 128
4.3 Middle managers’ heuristic preferences in ‘hard cases’ 129
4.4 Salaries and earnings in the privatised utilities 158
4.5 Forecast consumer price reductions for electricity 158
5.1 Private, common, public and toll goods 195
6.1 The geographical location of works by major artists 233
6.2 The phenomenology and dialectics of public services:
a summary 244

viii
ACKNOWLEDGEMENTS

The publisher and the author would like to thank the following for permission
to reproduce copyright material:
Blackwell Publishers for figure 4.6 from Winstanley, D., Sorabji, D. and
Dawson, S. (1995) ‘When the pieces don’t fit: a stakeholder power matrix to
analyse public sector restructuring’, Public Money and Management, 15, 2; the
Controller of Her Majesty’s Stationery Office for figure 3.2 from the Audit
Commission for Local Authorities in England and Wales (1985) Managing Social
Services for the Elderly More Effectively; Gower Publishing for the appendix, Cave
Rescue, from Woodcock, M. (1989) 50 Activities for Teambuilding; NTL Institute
for figure 4.4 from Kouzes, J.M. and Mico, P.R. (1979) ‘Domain theory: an
introduction to organisational behavior in human service organisations’, Journal
of Applied Behavioral Science, 15, 4; Wiltshire County Council, Social Services
Department and Wiltshire Health Authority for figure 4.1.
Every effort has been made to trace all the copyright holders but if any have
been overlooked the publisher will be pleased to make the necessary arrangement
at the first opportunity.
Thanks to the AV staff at Nottingham Business School for preparing the
figures.
ix