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Structural disaggregation involves splitting up of large bodies into a ‘parent’ body and various subordinate ‘Agencies’- mostly applied to splitting up ‘Ministries’ into a core central body and several Agencies carrying out specific tasks (Talbot 2004). Hence, it is a form of separation of policy details from executioner or purchaser (Talbot, 2004; Wettenhall, 2005). Clearly, this is a radical departure from the traditional public sector which was often highly aggregated and even quite independent regarding policy and strategies issues in some areas, yet equally tightly regulated by external government actors on a range of personnel, financial, purchasing and other matters of management (Graham and Roberts, 2004). According to Fedele et al. (2007) there are three core aspects to structural disaggregation: first, there is institutional distancing between Agency and Parent administration, which is often framed by legal imperatives and features. Pertaining to the legal aspect, the emphasis is on the workings of Agencies, particularly its power to determine the content of its own

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statue, furnished by the presence of a Corporate Board representative, which highlights the plurality of stakeholders (Fedele et al., 2007); Second, the complexity of the task transferred to the Agency in terms of heterogeneity of its activities, functions and outputs. This does not concern the ‘degree’ of disaggregation, but rather the modality of it, which raises questions on whether an Agency operates in more than one policy area. This is especially so with the heterogeneity of the agency’s output and the nature of the public functions performed, respectively, and, third is, the agency specialisation on operational tasks as an indicator of the existence of clear-cut distinctions between the responsibility of policy formulation and the responsibility of policy delivery. All agencies have legal status, given the fact that in legalistic systems it is almost a pre-condition for disaggregation (Fedele et al. 2007). Indeed, structural disaggregation impacts on multi-functional organisations, particularly where it is difficult to discern what funding and actions contribute to which functions.

Other elements of structural disaggregation in literature are: creating an identifiable, separate, organizational structure with its own name; the body has single or small set of functions; functions usually are primarily about delivery, execution or provision and not about policy- making; the body is given a clear ‘constitution’- in the form of some sort of legislation or at least a formal (if not statutory) ‘framework document’- which sets out its purpose, powers, and governance arrangement; it has a single, named individual - usually a Chief Executive (CE) responsible for managing and reporting on the new body. Such a person is, or can be, appointed usually- actually or potentially- through an open process, separate from the normal Civil Service recruitment; the staff of the new body are usually different in some ways from mainstream Civil Servants, most often by changing their formal employment status, and finally, there is a drawing up of formal reporting arrangements and putting in place separate accounts for the new body (Talbot et al. 2000; Wettenhall; 2005; Verschuere and Vancoppenolle, 2012; Dan, 2014; Trondal, 2014).

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Table 1 below provides an illustration of the workings of agency and its administrative doctrines as it applies to key areas of control, independence, specialization and decision making, stressing the idea of structural disaggregation as it applies to agencies.

Table 1: Agency and Administrative Doctrines

Administrative doctrines- Choice areas

‘Ministries’ New style ‘Agencies’ Traditional ‘Boards’

Control Control exercised principally by levers of inputs (budgets) of processes. Control exercised primarily through outputs or outcomes. Control exercised principally by levers of inputs (budgets) or processes. Independence Direct control by the

ministers in integrated classical bureaucracy.

Direct control by the ministers through a mixture of direction and legal or quasi- legal frameworks.

Formally and legally independent

‘boards’ with no direct ministerial control.

Specialization Integration of policy and operations. Separation of policy making and operational implementation functions. Integration of policy and operations. Decision making Decisions made principally by rule and rote.

Mostly local discretion with some general rules.

Mostly externally imposed rules with some local

discretion. Source: Hood and Jackson (1991).

Several other reasons are advanced for disaggregating Ministries into small units called Agencies. According to The Rt. Hon Richard Luce, “by breaking down areas of responsibility in the Civil Service into tailor-made, discrete and clear-cut services, and moving away from a more amorphous body, we are likely to have a more effective Civil Service which will be of benefit to the government of the day and the public,” (cited in Treasury and Civil Service Committee, 1990:52). Structural disaggregation is in the form of 'separateness and differentiated governance structure which allows for specialization of functions and a clearer focus on client needs. It is also referred to in policy circle as the ‘organisation divorce’ (OECD, 2002:6).

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The separation of Agencies from their respective Ministries does not imply autonomy (Talbot, 2004). There is an argument that agencies, in some cases, or Countries, are regulated in areas such as personnel, finance, procurement and other issues that tend to limit managerial autonomy. Also, the complex nature and relationship between public organisations make autonomy very difficult to attain. Questions have also been raised on separateness, with arguments bordering on whether separation is in degrees or absolute, with some agencies being clearly far more ‘separate’ but with none being entirely independent (Talbot, 2004; Verschuere and Vancoppenolle, 2012). Even in situations where there were legal groundings, structural independence and autonomy was mere formalities or, at times, even tokenistic. Talbot (2004), mention that agency ‘separation’ is more often like movement along a spectrum (or multiple spectra) rather than ‘quantum leaps’. (Talbot, 2004; Trondal, 2014). In the UK, ‘agencies’ are said to be separate, but within the parent Ministry, and have no real legal ‘personality’ outside of their Ministry (or formal legal basis) and the staff remain civil servants. By contrast, in Japan and Tanzania, for example, new agencies have been established on a legislative basis, outside of ministries and their staff has ceased to be civil servants (Talbot, 2004). As such, qualitatively, there are different degrees of separations.

The functions (whether single or multi) they perform affect the independence of agencies. Revenue agencies in the UK and some Countries, for example, are multi-functional in character - they deal with tax collection, enforcement and other duties (cited in Talbot, 2004). The varied nature of functions, impacts on agency relationship with Ministries and other bodies and such structural and functional imbalances have consequences on the relationship between Agencies and Ministries in that they are less unbundled and far more powerful than might have originally been intended and in others the reverse is the case (Alexander and Agency Policy Review Team, 2002; Talbot, 2004). Other identified complications include

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the perennial focus - coordination dichotomy - of new bodies created with a greater focus for a single function and matters of better coordination across closely related functions (Talbot, 2004; Trondal, 2014).

How coordination and integration influence the functions of Agencies, are debates that get mentioned in structural disaggregation narratives. This is associated with the ‘multi-agency’ or ‘joined up government agenda’ idea that dominates modern governance approaches. As Talbot, et al. (2004) observed, the growth and spread of agencies in various countries have had significant impact on issues of ‘joined up government’. Although agencification is probably not responsible for this new emphasis on coordination, it has certainly contributed to it (Pollitt, 2003 Wettenhall, 2005; Verschuere and Vancoppenolle, 2012). Furthermore, the division between ‘policy and execution’ or ‘purchaser and provider’ has been generally accepted as part of agency programmes, even though some have always denied this was the aim of agencies (Kemp, 1993).

The appointment of a Chief Executive can impact on the independence of agencies (Painter and Yew, 2012). The Chief Executive, who is solely responsible for a new Agency, is appointed from outside the traditional Civil Service ranks and this can affect accountability. Again, staged changes vary immensely and in some cases employees were removed from the Civil Service, such as in Jamaica and Tanzania whilst elsewhere, they remained fully within the civil service structure, as in the United Kingdom (Manning, 2001; Talbot, 2004). In addition, the issues on reporting arrangements for agencies also vary. This is especially true in cases such as finance and account auditing where formal reporting is a major requirement. Structural disaggregation varies considerably and as such is less universal, being influenced by contextual issues and interpretations (Talbot, 2004).

75 3.1.2. Autonomization

Government-agency relationships are underpinned by both legal and non-legal power, which inadvertently affects the extent of agency autonomy, or, conversely, the extent of government control (Tynne, 2004). Notably, both forms of power are fundamental - as the legal form embraces the agency roles; management of human and financial resources and the non-legal covers all aspects of agency life in one way or another. Just like other public law organisations, Agencies have legal power pursuant to a constitution and/ or statutes (including subordinate legislation), and they can receive this power by a process of either delegation or devolution, each having implications for their autonomy and control (Tynne, 2004:96). On delegation, the power delegated to an Agency is usually power that is vested in a Minister and related to specific role, a central personnel body (such as a Public Service Commission, for human resource matters) and a central financial body (such as Treasury for financial resource and administrative means) without reference to the legislature. This power can be withdrawn or revoked (Tynne, 2004). Notably, in such a situation, the delegator can continue to exercise power even though it has been delegated. What can be deduced from the above is that this represents a situation where there exists a weak form of Agency autonomy because of the existence of strong central control and management. Conversely, regarding delegated power, we have a situation where power is invested in an Agency by Constitution or Statue. Therefore, power is removed from the hands of Minister, personnel or financial body and the Agency can operate with a considerable degree of autonomy from Central or Ministerial control. Due to this type of arrangement, power can only be centralised by constitutional rearrangement. That is why it is argued in some academic literature that to critically examine the autonomy of Agencies, it is imperative to understand the difference between delegation and devolution. The significant task of any research on autonomy and agency is to determine where control lies in individual Agencies-in an

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autonomy graph centralisation-delegation would be placed on the vertical axis and centralisation-devolution on the horizontal (Tynne, 2004).

Certainly, automatization is not entirely new. Autonomization is how much discretion organisations or individuals have in taking decisions, as well as how much they can be circumscribed by specific rules or their own normal standard operating procedures. However, in relation to Agencies and within this context, autonomization applies to issues of regulation within government, that is, how a separated-out, disaggregated organisation be subject to decision making by externally imposed rules and how much discretionary decisions they can make themselves. According to Verhoest et al. (2004), autonomy is the level of decision- making competency (discretion) of an organisation. Equally, there are two types of autonomy, located at strategic or operational level: managerial autonomy and policy autonomy. Managerial autonomy entails the right of an Agency to take decisions on managerial issues, concerning, for example, personnel and financial management independently without recourse to the parent Department or Ministries. This can occur at individual transactions or employees (operational) level or at the level of general rules where criteria apply regarding the use of these resources (strategic). Policy (implementation) autonomy implies the discretionary authority of Agencies to decide on certain aspects of the initiation and implementation of policies without particularly needing the approval of parent Departments or Ministries, e.g. prioritization of activities to be performed (operational), the delineation of the target group of the policy implementation, the quality and quantity of outputs and the policy instruments to be used or deployed (strategic).

Autonomy is also referred to as re-regulation and they have often been confused with decentralisation and independence. Talbot (2004) notes, whilst structural and regulation changes often go together, they are not the same because it is perfectly possible to have structurally separated organisations, which have equal, lesser or even greater levels of

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regulation than their parent bodies. Regulation means the laid down standard operating procedures and rules within government on how public bodies must operate and function. The concept of de-regulating as a government policy, according to Osborne and Gaebler (1992) has come to be associated with structural change represented by agency-type initiatives (Behn, 2001) and wider decentralisations as well as disaggregations, (Hood et al.

1999). The arguments are that public organisations have been Weberian rule-based bureaucracy, which is ideal for creating fair and independent organisations in the past (Barzeley, 1992; Osborne and Gaebler, 1992; Denhardt, 1993). This is necessary considering the mountains of unnecessary ‘red tape’, which hinders efficient management of the public sector.

Therefore, it is assumed that the creation of Agencies should be closely followed by a significant amount of de-regulation because this will allow for the freeing up of new bodies from much of the superfluous accretions of decades of over-enthusiastic rule- makers (Talbot, 2004). Regarding Agency programmes, regulatory change has taken several forms ranging from personnel, finance purchasing, equality, to probity and ethics, etc.

In some cases, it might be freeing Agencies from rules imposed by specific regulatory bodies (e.g. Public Service Commission) and others from central Ministries and in some cases, both. In the case of TETFund for instance, the Federal Character Commission insists on the quota system for appointments, whilst the Wages and Salaries Commission determine and approve salaries and allowances of staff.

Despite the rhetorical discourses and narratives, regulation of public administration cannot easily be entirely abolished or even slimmed down beyond a certain point, without creating problems of accountability, probity and ethics (Osborne and Gaebler, 1992; Wilson, 1994; Pollitt, 2003). Moreover, no matter how hard governments want to effectively abolish or

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strongly minimise regulation, they have the habit of resurfacing in other forms (Hood, et al.

1999). It can be the case that Agency creation leads to effectively greater regulation in some areas than before. A small Agency may have to conform to all sorts of regulatory arrangements which place a disproportionate burden on their management (Talbot, 1996; Alexander and Agency Peer Review Team, 2002), in much the same way as small businesses often complain that generic private sector regulations place a disproportionate burden on them. In the general context of the rising levels of audit and scrutiny of public bodies (Rener, 1997, cited in Hood et al. 1999), the creation of many separate organisations may increase the audit- burden - both for the organisations and for the auditors or inspectors (Hood et al., 1999). Policy changes need to be viewed with caution because they are not always what they appear to be - in some cases de-regulation is less radical or at any rate far more problematic, than it appears at first sight (Talbot, 1997; Pollitt et al., 1998). Finally, where there has been much deregulation, this has caused severe problems (Pollitt, 2004). On a lesser scale, in the UK, several cases of highly questionable management decisions - mostly related to ‘de- regulated’ parts of Public Service - came in for severe criticism from Parliaments (Public Accounts Committee, 1994). The issue of regulation in an Agency context is primarily to liberate management and allow more degree of control - to improve performance. The assumption is managerial freedoms will allow much greater prospects of improving performance, unencumbered by cumbersome rules. A more recent development is the notion of ‘earned autonomy’ (Behn, 2001), where agencies that demonstrate good performance are rewarded by greater de-regulation and increased autonomy. Some have argued that much de- regulation has not produced ‘post-bureaucratic’ organisations, which the authors call a deceptive variant - ‘the cleaned bureaucracy’ (Heckscher and Donnellon, 1994). In other words, the organisations are re-regulated - in simpler, leaner ways - rather than ‘de-regulated’ in the sense of abandoned regulation altogether as some of the extreme ‘de-regulations’ seem

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to suggest. Arguably, in terms of their internal systems, agencies are ‘cleaned bureaucracies’ rather than ‘post-bureaucratic’ organisations.

Conversely, problems have been identified with issues of Agencies and autonomy. Research has established that formal autonomy given to Agency by laws and regulations at times differ from the actual autonomy that Agencies have or perceive to have (e.g. Verhoest et al. 2004; Yesikagit and Van Theil 2008). For example, Agencies are sometime curbed by the control of the parent Department, their Ministers or other Government actors. This control is about constraints imposed to influence the actual use of autonomy or influence Agency decisions by parent Ministers/Departments. Accordingly, control can be encompassing - guidance, control in a strict sense (monitoring) and evaluation of Agency actions. Indeed, the control of Agency by parent Ministries and Departments can be exercised in the form of ex-ante or post-ante, as well as mainly oriented on input or on results.

Verhoest et al. (2004) note that both controls may have their principal focus on the choice and use of inputs or the delivery of results but in actual practice they mostly appear in pairs (ex-ante on inputs and ex-post on results). Traditionally, the control of organisations tends to be mainly ex-ante and input-oriented with focuses explicitly on before the fact such as the formulation of detailed rules, regulations, standard operating procedures and approval requirements that give directions to actors in terms of the attainment of desire objective. In relation to this type of control, the Minister or Parent Departments have the right to veto or annul decisions by Agencies, based on risk assessment and performance oriented issues, (Wirth, 1986). The crucial focus on this form of control is on issues of legality and compliance with rules and regulations (Verhoest et al. 2004). On the contrary, the ex-post control emphasises whether the intended organisational goals and targets set in the first instance have been achieved by the Agency, and if there is the need for further interventions in terms of corrective future action. Objective setting, monitoring, evaluation, audit and

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sanctions are the elements of the ex-post control. Possibly, ex-post control increases the performance of public sector organisations including Agencies.

Apart from the two forms of control mentioned previously, the government also exercises control through appointments, steering and evaluation of the senior management of Agencies and Board members (if it exists) and this is akin to a structural control. In addition, government can control agencies through both formal and informal contacts between the Agency Management and Administrative Principals. Structural control can also take the form of financial control, in the sense that the government can refuse to grant an agency financial resource or autonomy. From the above, agency autonomy is not clear cut, what exists are combination of a range of factors and trade-offs, principally influenced by contextual issues.