The Only Game in Town? New Steering Models as Spaces of Contestation in 1990s Public Administration

Since the 1980s, variations of administrative models have been circulating in Western industrialized countries, taking the organizational form of a company as a role model. Publications by the Organization für Economic Co-operation and Development (OECD) conceiving of the state administration as »public service« changed the administrative paradigm and established the model of »New Public Management« (NPM).

OECD: Administration as Service. The Public as Client, Paris 1987. On national variations of the NPM cf. Christopher Hood: »The New Public Management« in the 1980s. Variations on a theme, in: Accounting, Organizations and Society 2/3/20 (1995), pp. 93–109.

While the history of the administrative steering models the emerged in the late 20^th century certainly deserves a monograph, historical research on the German administrative reform movement has remained surprisingly scarce. Political and administrative scientist Werner Jann presented convincing historicized accounts of changing paradigms in administrative discourse.

Werner Jann: Wandel verwaltungspolitischer Leitbilder. Vom Management zur Governance, in: Klaus König (ed.): Deutsche Verwaltung an der Wende zum 21. Jahrhundert, Baden-Baden 2002, pp. 279–303.

This article will highlight hitherto understudied facets of administrative history by broadening the view on the variety of ideas and actors fuelling new steering models in public administration. To this end, it will analyse two intermunicipal performance contests that began in the early 1990s: the »Speyer Quality Contest« of 1992 and the »Carl Bertelsmann Price« of 1993. Respectively hosted by the Research Institute for Public Administration at the University for Administrative Sciences Speyer and the Bertelsmann Foundation, the contests honoured cities and public bodies who used particularly »innovative« problem-solving approaches to cope with tightened budgets. They applauded cities that, rather than requesting more funds and more staff to handle the increasing public task demands, restructured their inner workings. In the absence of market mechanisms in the public sphere, the Speyer Quality Contest and the Carl Bertelsmann Price functioned as »quasi-markets«. They figured as simulated competitions in which municipalities were supposed to question their own organizational functioning and adhere to standards that mimicked a professional service firm.

I conceive of simulated competitions as comparative practices meant to anchor market elements in a societal sphere beyond the private economy. The notions of competition and innovation figure as source terminology. That is, I do not inquire into the conditions that might make innovations »successful« or not.

The German-speaking historiography of innovation, in contrast, has produced enlightening accounts of technological development and detailed case studies of individual firms. Recently, authors have explored the notion of »cultures of innovation«, examining the institutional frameworks that enable and constrain technological advances: Thomas Wieland: Innovationskultur. Theoretische und empirische Annäherungen an einen Begriff, in: Reinhold Reith / Rupert Pichler / Christian Dirninger (eds.): Innovationskultur in historischer und ökonomischer Perspektive. Modelle, Indikatoren und regionale Entwicklungslinien, Innsbruck 2006, pp. 21–38.

The simulated competitions of the Speyer Quality Contest and the Carl Bertelsmann Price do not neatly correspond to Ringel and Werron’s notion of a ranking. In fact, they did not follow the idea of »zero-sumness« that the authors highlight.

Ringel / Werron: Where do rankings come from?, p. 142.

To elucidate this, the article will address the following questions: What notions of competition and innovation did the Speyer Quality Contest of 1992 and the Carl Bertelsmann Price of 1993 make prominent in German municipal administration? Compared to that, what meanings did practitioners and interest groups in the public sector attribute to notions of competition and innovation? I claim that while actors like the Research Institute for Public Administration and the Bertelsmann Foundation were driven by the genuine belief in the superiority of the organizational model of the firm, city treasurers and heads of administrative departments were looking for a way to continue to offer public services even under financial constraints. Public-sector unions and staff councils, in turn, struggled to avert the threat of privatization to preserve jobs in the public sector and continue to play a role in administrative development.

Previous accounts on new steering models, particularly the NSM, have focused on prescriptive types of sources such as programmatic reports and mission statements by reform-oriented actors, mostly because of the high visibility these publications achieved. The present account takes a different approach by scrutinizing sources that show new steering models »in the making«. The Research Institute for Public Administration and the Bertelsmann Foundation published conference proceedings as edited volumes, and these captured the debates held at the symposia and workshops taking place during the award ceremonies. The extensive documentation of the speeches and discussions held at the Speyer Quality Contest of 1992 and the Carl Bertelsmann Price of 1993 holds great potential for the historian in that they offer insights into the heterogeneous views on new management philosophies in the municipality.

I will first situate the phenomenon of intermunicipal performance contests in its context. Who were the actors driving the creation and diffusion of »new steering models« in German municipal administration of the 1990s? Then, I will shed light on intermunicipal performance contests as a unifying tool across administrative theory and practice. The phenomenon of simulated competition represented the temporary blossoming of business semantics in the German public administration of the 1990s. Rather than indicating an unequivocal reform process, however, it revealed the heterogeneity of actors and their motives.

Ideas of the »managerial city« in Germany took shape against the background of increased financial constraints following reunification. Between 1989 and 1995, the German national debt rose from 929 to 1,996 billion marks.

Foundational: Gerhard Ritter: Der Preis der deutschen Einheit. Die Wiedervereinigung und die Krise des Sozialstaats, München 2006.

What was new about the emerging »new steering models«, compared to earlier attempts at administrative reform? For one, prescriptive guidelines like the ones issued by the KGSt in its NSM implied a significant redefinition of what public administration ought to be: a service provider to be likened to a professional service firm. In the company-like decentralized management structure, politics and administration were supposed to be separated from one another. Politics, i.e., the mayor and the city council, were to set political objectives that the administration was to execute. In this way, the administration was to be prevented from setting its own costly agenda. In addition, each administrative branch was supposed to be in charge of its own budget, thus incentivizing public servants to make more conservative spending decisions. Decentralized budget responsibility, in turn, implied a new way of valorising public services in the form of »products«.

For a comprehensive summary of the NSM cf. Werner Jann: Neues Steuerungsmodell, in: Bernhard Blankeet al. (eds.): Handbuch zur Verwaltungsreform, Opladen 32005, pp. 74–84.

The novelty of the »new steering models« cannot be solely explained by their content and objectives, however. Their impact primarily resulted from their originators’ ability to forge alliances with vastly heterogeneous actor groups. The approach towards implementation differed from reform attempts made, for instance, by the Project Group Governmental and Administrative Reform on the federal level between 1969 and 1972 or by the state governmental commission »New Leadership Structures for Baden Wurttemberg« in 1984–1985. While the Project Group made up of sociologists and political scientists had been tasked by the social liberal government to suggest measures for organizing the ministerial administration more efficiently, civil servants in the ministries resisted externally induced change.

Winfried Süß: »Rationale Politik« durch sozialwissenschaftliche Beratung? Die Projektgruppe Regierungs- und Verwaltungsreform 1966–1975, in: Stefan Fisch / Wilfried Rudloff (eds.): Experten und Politik. Wissenschaftliche Politikberatung in geschichtlicher Perspektive, Berlin 2004, pp. 329–348. Cf. also Rudolf Fisch: Widerstände gegen Veränderungen in Behörden. Sozialpsychologische Perspektiven, in: Klaus König (ed.): Deutsche Verwaltung an der Wende zum 21. Jahrhundert, Baden-Baden 2002, pp. 547–584.

Rather than drawing up a temporal intervention, the actors advocating for »new steering models« in the 1990s made a structured attempt at long-term changes, resting primarily on cross-sectoral cooperation.

Silomon-Pflug: Verwaltung der unternehmerischen Stadt, p. 74.

The KGSt was established as a »self-help organization for municipalities« in Cologne in 1949.

Harald Plamper: Die Kommunale Gemeinschaftsstelle (KGSt) in Köln, in: Organisationsentwicklung 1 (1996), pp. 62–63, at p. 62.

In an initial report, the KGSt laid out the »Tilburg Model« which then developed into the NSM.

KGSt: Wege zum Dienstleistungsunternehmen Kommunalverwaltung. Fallstudie Tilburg, Köln.

Professors from the University for Administrative Sciences Speyer fuelled the debate on municipal reform on an academic level. Founded by the allied forces in 1947 according to the French model of the »Ecole Supérieure d’Administration«, the university focused on the education of civil servants. In the 1960s, the Research Institute for Public Administration was anchored at the university to produce, in the words of the temporary director Carl Böhret, »research on and for public administration«.

Heike Amos: Zur Geschichte des Forschungsinstituts für öffentliche Verwaltung bei der (Deutschen) Hochschule für Verwaltungswissenschaften Speyer 1956/1962–2001, Speyer 2002, p. 73.

The Bertelsmann Foundation joined the debate on organizational models in public administration as a third influential player. Founded in 1977 by Reinhard Mohn, the CEO of the media conglomerate Bertelsmann Inc., the think tank sought political influence by addressing a broad array of societal issues: culture, health, and higher education policy among others.

Hans-Dieter Weger: Die Bertelsmann Stiftung, in: Rolf Hauer / Jürgen Rossberg / Winfrid Pölnitz-Egloffstein (eds.): Stiftungen aus Vergangenheit und Gegenwart, Tübingen 1986, pp. 167–182.

The efforts by the KGSt, the Research Institute for Public Administration, and the Bertelsmann Foundation relied upon involving the audiences concerned with public administration. Among these, they counted the »customers«, i.e., the citizens, as well as the civil servants. Both the citizens and the civil servants constituted much more heterogeneous actor groups than the reform-oriented bodies: While a significant part of staff members and representatives resisted adopting renewed organizational elements, others considered internal reforms necessary to avert the privatization of public services. Chiefly among the civil servants’ representatives, the trade union ÖTV and staff councils of individual municipalities got involved in the debates. In 1988, the ÖTV had started the initiative »Future Through Public Services«, laying out demands to reduce hierarchies and increase participative elements in public administration.

Nikolaus Simon: Die Initiative »Zukunft durch öffentliche Dienste« heute. Erfahrungen und Erfolge, in: Ulrich von Alemann / Josef Schmid (eds.): Die Gewerkschaft ÖTV. Reformen im Dickicht gewerkschaftlicher Organisationspolitik, Baden-Baden 1998, pp. 197–204.

Two concerns propelled the unions’ engagement for administrative reform: the threat of the privatization of municipal services in the face of increased financial constraints and the threat of losing even more significance due to a dwindling membership base. Before reunification, the ÖTV had retreated from its traditional sphere of collective bargaining policy and counted on cooperating with legislators and employers in the public sector.

A pronounced critic of the cooperative course was the ÖTV secretary Michael Wendl: Michael Wendl: Zwischen Arbeitgeberinteresse und Mitgliederunmut. Die Tarifpolitik der ÖTV, in: Rolf Fritsch (ed.): Elemente der Erneuerung. Zukunft des öffentlichen Dienstes - Gewerkschaftspolitik im Umbruch, Hamburg 1991, pp. 47–63.

Staff councils of municipalities were more concerned with how administrative reforms as envisioned by the triad would impact day-to-day operations and job security in the public sector. Redefining the municipality as a company involved a redefinition of the role of pressure groups and the negotiation of staff interests. Decentralised financing responsibility implied decentralised staff member representation, thus entailing the risk of eroding staff councils’ possibilities to mobilize for overarching staff interests.

Gewerkschaft ÖTV (ed.): Das Neue Steuerungsmodell der Kommunalen Gemeinschaftsstelle. Position der Gewerkschaft ÖTV, Frankfurt am Main 1997, p. 111 f.

German municipal administration at the turn of the 1990s saw a surge in managerial semantics. Conceptual frameworks created by actors surrounding and intently impacting public administration provided blueprints on how to remodel municipalities according to the professional service firm. What was new about the »new steering models« (advocated for by the KGSt, the Research Institute for Public Administration, and the Bertelsmann Foundation) was the diverse set of actor groups they managed to tie together. Practices of comparing such as the Speyer Quality Contest and the Carl Bertelsmann Price provided the setting for think tanks, researchers, mayors, treasurers, and staff representatives to come together and negotiate their views on how the administration was supposed to function.

In this endeavour, the notions of »competition« and »innovation« were as omnipresent as they were elusive. In the eyes of the actors spreading new managerial approaches, competition could cure many ills of noncommercial organizations. Simulated competitions were supposed to make participating public bodies »innovate«, i.e., develop alternative ways to overcome financial constraints rather than demand more funds from higher levels in the federal system. »Innovation« to organizations like the Bertelsmann Foundation seemed like a promise: a promise of a more efficient, output-oriented, »customer«-friendly functioning of public services. For mayors, city treasurers and public sector trade unions, in contrast, »innovation« in the form of the firm model promised a way to cope with dire financial constraints following reunification. While the wave of »new steering models« had subsided by the early 2000s, the debate highlighted shifts in power relations and areas of responsibility that occurred in the public sector. The ÖTV and staff councils participated in the reform discourse but did not shape it in a significant way. As the impact of administrative staff decreased, decisions on the direction of the municipality were increasingly left at the discretion of individual city councils, mayors, and treasurers. The history of intermunicipal performance contests thus elucidates broader changes unfolding in the urban administrative landscape of the 1990s.