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January 24, 2007

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Marcin

Consider: Top management may become more effective, as they are closer to the top of a smaller organisation.

In fact, having the same people as before that probably won't happen.

chris y

I don't see why it should make a ha'p'orth of difference organisationally, except to generate an extra Permanent Secretary (boo!) and an extra private office (hiss!) for the extra minister (throws vegeable matter).

Politically, I predict that the new departments will join the traditional Whitehall pastime of competing for resources with gusto. And that will result in the Justice department losing out big time.

dearieme

Wrong split anyway. The obvious split to discuss is between the English (e.g. jails) and British (e.g. immigration) functions.

Alex

It doesn't go far enough. But there is a good reason for it, though, which you haven't covered. Your framework here seems to assume that interests are aligned within the organisation.

I think it's quite likely - even a racing certainty - that the police/surveillance-industrial complex at Marsham Street is inimical to the probation and prison services, which it tends to frame as soft, weak etc and anyway competes with for the same budgetary niche.

Of course, if you really wanted to improve this system, you'd abolish that core security bureaucracy itself.

Alex

The obvious split to discuss is between the English (e.g. jails) and British (e.g. immigration) functions.

If you're obsessed with little union jacks and the Daily Mail.

Matthew

I was reading Alan Clark's Diaries last night and it reminded me that the Department of Health and Social Security used to exist. It was split in the late 1980s into the Department of Health and the Department of Social Security, which is what it had been before they merged, I think in the 1960s.

Will Davies

Surely the point about Coase and transaction economics is to compare the efficiency of market relations with the efficiency of cooperative/hierachical relations (as you point out). Hence, where it becomes more efficient to buy something on the market than to produce it in-house, it becomes logical to out-source it.

But the two sections of the Home Office are not about to start trading with each other, so I think you've chosen the wrong theory.

If you insist on using neo-classical tools to understand the state, public choice theory would seem more suitable. This would raise questions about how to rearrange incentives within the Home Office, so as to produce certain politically chosen outcomes. But given that there is no question of privatising either wing of the Home Office, the market is scarcely relevant.

chris

Will - I'm in favour of applying public choice theory too (I think). It's just that there's no obvious reason to apply it more to the Home Office than any other department.
The Coase-Williamson approach isn't irrelevant here. It can help explain why big organizations can be inefficient, even if the alternative of using market contracting doesn't apply, surely?

Glenn Athey

Chris,

Maybe you could look into principles of fiscal federalism - this considers the efficient levels of government administration, and has some criteria for how to decide how big, small, centralised or decentralised one should go for. Unlike a lot of other theoretical stuff, some folks have attempted to do this pseudo scientifically, with numbers etc.

Other useful stuff - theories of government failure. Usually lumped in with market failure books etc. But its important to understand why and how government fails, and what you can do about it.

Discussions on issues such as subsidiarity etc also useful.

james higham

Profit-related pay often won't do, as individual performance is only loosely related to overall profits.

Is the answer perhaps to split into franchises, so there are small firm related incentives?

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