Shedding responsibility but not authority

Managing by targets produces the appearance of market disciplines without the substance. "Real contracts are voluntary, mutually beneficial agreements between autonomous agents. And it is only possible to make such contracts in competitive markets where there are creditable alternatives for both buyers and sellers. These arrangements often attempt to shed responsibility but not authority. They enjoy their best chance of success when there is a genuine readiness to delegate power — as when authority to set interest rates is given to a central bank (like the Bank of England). They are least likely to work when there is no real intention of devolving authority ... The alternative is to try to align the interests of the various players.

People who work in health and education, on railways and in water companies, have selfish and material concerns like everyone else, but they also, for the most part, want to provide these services effectively and efficiently. Corporate managers were once concerned to promote the interests of shareholders, and of their business — and generally still are, though some, having been told that greed was the driving force of the market economy, believed it and discovered that very little would be done to stop them helping themselves to the company's money. The objective is not to design institutions that are robust to self interest but to stimulate elements of behaviour that are not purely self-interested. These are divergent objectives: in structures designed around self interest, self-interested behaviour becomes adaptive."[73]

It is contrary to the instinct of most politicians to allow diverse sources of control. Their natural instinct, coming from primitive greed for power and status, is to centralise control and so expand their own territory. So, if leaders are to introduce disciplined pluralism, they have to go against these primitive instincts in the interests of society at large, as Kay explains. "Disciplined pluralism is contrary to the natural instincts of most political or business leaders. For politicians to support it requires them to struggle with their own inner natures. When governments make economic policies, their constant inclination is to suppress pluralism and to override discipline: to favour new ventures that the market will not accept or old industries that the market has already rejected. Frequently, they succumb. This is why the record of government economic intervention, even in rich states, is generally poor.... Centralised structures cannot cope easily with the normal fact of economic life, that it is very difficult to determine what the right thing to do is and the best recourse is to try many things on a small scale and see which few work. Pluralism necessarily conflicts with uniformity. But if government structures genuinely allow pluralism and decentralised authority, variability in the quality of what is provided is inevitable. It is tempting to argue that everyone should receive 'the best' but the consequence is that 'the best' will not be very good. If everyone to whom power is delegated makes the same decision, there is no pluralism and no real delegation. ... Disciplined pluralism in public services requires that there be careful audit — of outcome, not of contribution to process. Disciplined pluralism requires that there be real accountability for these outcomes, of a kind which is only possible when agents have the autonomy which makes them genuinely responsible. The corollary of autonomy is research-assessment exercises, school league tables, hospital performance measures and rigorous accounting standards and corporate-governance rules.

"Performance can be compared because other people are trying to achieve the same goals.... 'Discipline' is perhaps not quite the right word: it is the recognition of error, not its punishment, that matters. Centralised structures find this hard. The democratic will, or the heroic leader — politicians or chief executive — can rarely conceive of making a mistake and still more rarely wish to be told of a mistake. Apparent failures must be failures of implementation, for which those engaged in implementation are responsible. The result is a culture of blame in which it is difficult — and personally costly — to admit mistakes, and therefore few mistakes are admitted to: hence, there is no process of retreating from mistakes or abandoning mistakes. The simplest means of not being blamed for a mistake is not to make a decision. This is a common recourse. Organisations in decay are often simultaneously authoritarian and indecisive."[74]

From the human givens perspective an analysis such as Professor Kay's leads us to think it likely that if a process of managed, systematic decentralisation of authority does not begin soon, our quality of life will deteriorate further and we will become even more dominated by tyrannical processes. To undo the damage currently being done by centralised control of our civil and financial affairs, control should be given back as close as is reasonably possible to the people affected. Local councils should be given back their autonomy; governments in Europe should become more independent of the EU. We need to appoint good people and trust them to do the job. Which brings us to a problem: who are good people?

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