Theories of Governance
Theories of Governance:
Although interest in governance in the early 21st century owes much to public-sector reforms that began in the 1980s, these reforms and the interest they inspired cannot be easily separated from theories such as rational choice and the new institutionalism. It is important to recognize that the meaning of governance varies according to not only the level of generality at which it is pitched but also the theoretical contexts in which it is used.
- Rational choice:
The neoliberal narrative of governance overlaps somewhat with rational choice theory. Both of them draw on microeconomic analysis, with its attempt to unpack social life in terms of individual actions and to explain individual actions in terms of rationality, and especially profit or utility maximization. Yet, although neoliberals deployed such analysis to promote marketization and the new public management, rational choice theorists were often more interested in exploring cases where institutions or norms were honoured even in the absence of a higher authority to enforce them.
Rational choice theory attempts to explain all social phenomena by reference to the micro level of rational individual activity. It unpacks social facts, institutions, and patterns of rule entirely by analyses of individuals acting. It models individuals acting on the assumption that they adopt the course of action most in accord with their preferences. Sometimes rational choice theorists require preferences to be rational; preferences are assumed to be complete and transitive. Sometimes they also make other assumptions, most notably that actors have complete information about what will occur following their choosing any course of action. At other times, however, rational choice theorists try to relax these unrealistic assumptions by developing concepts of bounded rationality. They then attempt to model human behaviour in circumstances where people lack relevant information.
The dominance of the micro level in rational choice theory raises issues about the origins, persistence, and effects of the social norms, laws, and institutions by which people are governed. One issue is the abstract one of how to explain the rise and stability of a pattern of rule in the absence of any higher authority. Rational choice theorists generally conclude that the absence of any effective higher authority means that such institutions have to be conceived as self-enforcing. Another issue is a more specific interest in the effects of norms, laws, and institutions on individuals’ actions. Rational choice theorists argue that institutions structure people’s strategic interactions with one another; stable institutions influence individuals’ actions by giving them reasonable expectations about the outcome of the varied courses of action from which they might choose. Another, more specific issue is in models of weakly institutionalized environments in which the absence of a higher authority leads people to break agreements and so create instability. Examples of such weak institutions include the international system and nation-states in which the rule of law is weak. Rational choice theorists explore self-enforcing agreements, the costs associated with them, and the circumstances in which they break down.
- System Theories:
Although sociological institutionalism can resemble interpretive theories, it often exhibits a distinctive debt to organizational theory. At times its exponents conceive of cognitive and symbolic schemes not as intersubjective understandings but as properties of organizations. Instead of reducing such schemes to the relevant actors, they conceive of them as a kind of system based on its own logic. In doing so, they echo themes that are developed more fully in systems theory. A system is the pattern of order that arises from the regular interactions of a series of interdependent elements. Systems theorists suggest that such patterns of order arise from the functional relations between, and interactions of, the elements. These relations and interactions involve a transfer of information. This transfer of information leads to the self-production and self-organization of the system even in the absence of any centre of control.
This conception of governance highlights the limits to governing by the state. It implies that there is no single sovereign authority. Instead, there is a self-organizing system composed of interdependent actors and institutions. Systems theorists often distinguish here between governing, which is goal-directed interventions, and governance, which is the total effect of governing interventions and interactions. In this view, governance is a self-organizing system that emerges from the activities and exchanges of actors and institutions. Again, the new governance arose out of the belief that society has become centerless, or at least endowed with multiple centres. From this perspective, order arises from the interactions of multiple centres or organizations. The role of the state is not to create order but to facilitate socio-political interactions, to encourage varied arrangements for coping with problems, and to distribute services among numerous organizations.
- Regulation theory:
Just as sociological institutionalism sometimes draws on systems theory, so historical institutionalism sometimes draws on Marxist state theory. The main approach to governance derived from Marxism is, however, regulation theory. Karl Marx argued that capitalism is unstable because it leads to capital overaccumulation and class struggle. Regulation theorists examine the ways in which different varieties of capitalism attempt to manage these instabilities.
They study forms of governance in relation to changes in the way these instabilities are masked.
Typically, regulation theorists locate the new governance in relation to a broader socioeconomic shift from Fordism to post-Fordism. Fordism refers to a combination of “intensive accumulation” and “monopolistic regulation”—a combination associated with the mass production pioneered by Henry Ford in the 1920s. Intensive accumulation rested on processes of mass production such as mechanization, the intensification of work, the detailed division of tasks, and the use of semiskilled labour. Monopolistic regulation involved monopoly pricing, the recognition of trade unions, the indexing of wages to productivity, corporatist tendencies in government, and monetary policies to manage the demand for commodities. According to regulation theorists, intensive accumulation and monopolistic regulation temporarily created a virtuous circle: mass production created economies of scale, thereby leading to a rise in productivity; increased productivity led to increased wages and so greater consumer demand; the growth in demand meant greater profits because of the full utilization of capacity; and the increased profits were used to improve the technology of mass production, creating further economies of scale and so starting the whole circle going again.
Regulation theorists ascribe the end of Fordism to various causes. Productivity gains decreased because of the social and technical limits to Fordism. Globalization made the management of national economies increasingly difficult. Increased state expenditure produced inflation and state overload. Competition among capitalists shifted the norms of consumption away from the standardized commodities associated with mass production. All of these causes contributed to the end of not only Fordism but also the bureaucratic Keynesian welfare state associated with it. Although regulation theorists can be reluctant to engage in speculations about the future, they generally associate the new post-Fordist era with the globalization of capital, neoliberal politics, contracting out, public-private partnerships, and the regulatory state.
● Interpretive theories:
Interpretive approaches to governance often emphasize contingency. They reject the idea that patterns of rule can be properly understood in terms of a historical or social logic attached to capitalist development, functional differentiation, or even institutional settings. Instead, they emphasize the meaningful character of human actions and practices. In this view, because people act on beliefs, ideas, or meanings—whether conscious or not—their actions can be explained properly only if the relevant meanings are grasped. Some of the elder interpretive approaches suggest that beliefs, ideas, or meanings are more or less uniform across a culture or society. Hence, they inspire studies of the distinctive patterns of governance associated with various cultures. Other interpretive approaches place a greater emphasis on the contests and struggles over meaning that they take to constitute so much political activity. Hence, they inspire studies of the different traditions or discourses of governance that are found within any given society.
Although interpretive theorists analyze governance in terms of meanings, there is little agreement among them about the nature of such meanings. The meanings of interest to them are variously described, for example, as intentions and beliefs, conscious or tacit knowledge, subconscious or unconscious assumptions, systems of signs and languages, and discourses and ideologies. Interpretive theorists often explore many of these varied types of meanings both synchronically and diachronically. Synchronic studies analyze the relationships between a set of meanings abstracted from the flux of history. They reveal the internal coherence or pattern of a web of meanings; they make sense of a particular belief, concept, or sign by showing how it fits in such a web. Diachronic studies analyze the development of webs of meaning over time. They show how situated agents modify and even transform webs of meaning as they use them in particular settings.
The diverse interpretive studies of the synchronic and diachronic dimensions of meaning all have in common a reluctance to reduce meanings to allegedly objective facts about institutions, systems, or capitalism. In this view, patterns of rule arise because of the contingent triumph of a web of meanings. The new governance arose, for example, alongside neoliberalism, which inspired much of the new public management, and discourses in the social sciences, which inspired the turn to networks and public-private partnerships. Sometimes, interpretive studies relate the rise of neoliberalism and network theory to new relations of power, changes in the global economy, or problems confronted by states. Even when they do, however, they usually suggest that these social facts are also constructed in the context of webs of meaning.